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Home My WebLink About1995 09-25 CCP Regular Session CITY COUNCIL AGENDA CITY OF BROOKLYN CENTER SEPTEMBER 25, 1995 .7� � 7 p.m. 1. Call to Order 2. Roll Call 3. Opening Ceremonies � c _ � (4i. �J 4. Council Report —k& w) t�(.` l j` ( �f2 � � C` C �Z '✓l t� ' 5. Presentation 6. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the City Council and will be enacted by one motion. There will be no separate discussion of these items unless a Councilmember so requests, in which event the item will be removed from the consent agenda and considered at the end of Council Considerati n Items. rn a. Approval of Minutes aj - Councilmembers not present at meetings will be rec 'rded as abstaining from��'�' the vote on the minutes. D14 Ki ✓) &iq_Cd Cr.�cr k zE b. Development Performance Guarantee Release /Reduction: 1. Omni Tool, Inc. - 3500 48th Avenue North 2. Randy Rau - 6849 Brooklyn Boulevard 3. Lutheran Church of the Master - 1200 69th Avenue North C. Resolution Declaring a Public Nuisance and Ordering the Removal of Diseased . Trees �" es (Order No. DST 09/_5/9" ) 2)14 -� 6� f d. Licenses �D /J -- 7. Open Forum - aj 8. Council Consideration Items Z a. Resolution Accepting Bids and Awarding a Contract, Improvement Project No. 1995 - 18, Contract 1995 - New Electric Cont is at Wells 5, 6, and 7 26 b. Resolution Providing for Hearin` on Proposed Special Assessment for Public Nuisance Abatement —: Resolution Amending the Schedule for Animal Impound Fees CITY COUNCIL AGENDA -2- September 25, 1995 Resolution Authorizing Extension of the Anoka Hennepin EM Narcotics Violent Crime Task Force Joint Powers Agreement p�j' ��} �N— e. Staff Report on the Metropolitan Livable Communities Act ligm J am - 21 I�f. Resolution Declaring Discover the Center Rally Nights as a Civic Event g. Appointment of Meniber to the Ad lJoc Cqm `m� ns ask F rce h. Appointment to Housing Commission km ) 'f4 �� n � i. Private Kennel License Rene 1 at 6421 %ant Avenue on - a4*A0L Report on the Analysis of Liquor Store Operations WS -4 t('n k. 1995 -96 Labor Agreement between City of Brooklyn Center and LELS \82 4. 7 (Police Officers and Sergeants) J �{(�, K Discussion Item: Earle Brown Heritage Center m. Items Removed from the Consent Agenda 9. Adjournment �_rn EDA AGENDA CITY OF BROOKLYN CENTER SEPTEMBER 25, 1995 (following adjournment of City Council meeting) 1. CaII to Order 2. Roll Call C�o � y MX I o I KC i e L V 3. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the Economic Development Authority and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. b + 7 cLp p ft � a. Approval of Minutes: Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. K 1 Lo . CITY COUNCIL AGENDA -3- September 25, 1995 4. Commission Consideration Items a. Resolution Providing for a Public Hearing Regarding the Sale of Land by the C'Zf� Economic Development Authority in and for the City of Brooklyn Center and Authorizing the Executive Director to Negotiate a Purchase Agreement for the Sale of Such Land Located at 6601 Bryant Avenue North in Brooklyn Center K6 65CAdA&A, b. 69th and Brooklyn Boulevard c� RFP Report v 5. Adjournment r� E t �. " 0 nAiackr. '" e "' Y EDA AGENDA CITY OF BROOKLYN CENTER . SEPTEMBER 25, 1995 (following adjournment of City Council meeting) 1. Call to Order 2. Roll Call 3. Approval of Agenda and Consent Agenda -The following items are considered to be routine by the Economic Development Authority and will be enacted by one motion. There will be no separate discussion of these items unless a Commissioner so requests, in which event the item will be removed from the consent agenda and considered at the end of Commission Consideration Items. a. Approval of Minutes - Commissioners not present at meetings will be recorded as abstaining from the vote on the minutes. 4. Commission Consideration Items a. Resolution Providing for a Public Hearing Regarding the Sale of Land by the Economic Development Authority in and for the City of Brooklyn Center and Authorizing the Executive Director to Negotiate a Purchase Agreement for the • Sale of Such Land Located at 6601 Bryant Avenue North in Brooklyn Center b. 69th and Brooklyn Boulevard RFP Report 5. Adjournment Council Meeting Date 9 -25 -95 3 City of Brooklyn Center Agenda Item Number Request For Council Consideration Item Description: Performance Guarantee Release /Reduction Department Approval: eo / �. LAj Ronald A. Warren, Planning and Zoning Specialist Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: It is recommended that the City Council take action to release the below listed financial guarantees in the amounts listed. • Summary Explanation: (supporting documentation attached ) The Following development performance guarantees are recommended for total release: 1. Omni Tool, Inc 3500 48th Avenue North Planning Commission Application No. 92012 Amount of Guarantee - $2,500 (Certificate of Deposit) Obligor - Omni Tool, Inc (Walter Waffensmith) All site improvements related to this 1992 addition have been installed in accordance with the approved plans. The City Council took action to reduce the original $25,000 Performance Guarantee to $2,500 in August, 1994. This amount was retained in order to assure the viability of all landscape improvements. The landscape improvements to the site have not only survived the winter but the summer of 1995 as well and it is recommended that the Performance Guarantee be released by the City Council in its entirety. 2. Randy Rau 6849 Brooklyn Boulevard Planning Commission Application No. 93003 Amount of Guarantee - $1,000 (Cash) • Obligor - Randy Rau All work related to this 1993 car wash addition to the Mobil station at the southwest quadrant of 69th Avenue North and Brooklyn Boulevard have been completed. The City Council authorized reduction of the original $10,000 Financial Guarantee to $1,000 approximately one year ago. The reason for retaining the $1,000 guarantee was to assure the viability of all landscape improvements. The Request For Council Consideration Page 2 landscaping has not only survived the winter but the summer of 1995 as well. It is recommended that • the City Council release the Financial Guarantee for this project in its entirety. 3. Evangelical Lutheran Church of the Master 1200 69th Avenue North Planning Commission Application No. 94003 Amount of Guarantee - $37,000 (Letter of Credit) Obligor - Corporation of Evangelical Church of the Master All site improvements and landscaping relating to the 1994 parking lot expansion of the church have been completed. The City Council reviewed this Performance Guarantee approximately one year ago and recommended a reduction in the amount of the guarantee from $37,000 to $5,000 pending the completion of some minor maintenance items and to assure the viability of the landscape improvements through the winter. All items requested of the church with regard to the parking lot addition have been completed and the various landscape improvements have survived the winter and summer of 1995. The Lutheran Church of the Master chose not to submit a reduced Financial Guarantee, therefore, the city is still holding the original $37,000 Letter of Credit obligation. It is recommended that the City Council authorize the total release of this Financial Guarantee. • • Council Meeting Date 09/25/95 3 City of Brooklyn Center Agenda Item Number Request For Council Consideration Item Description: RESOLUTION DECLARING A PUBLIC NUISANCE AND ORDERING THE REMOVAL OF DISEASED TREES Department Approval: 4 Diane Spector, Di c or of Public Services Manager's Review /Recommendation: V Z26f I No comments to supplement this report Comments below /attached Recommended City Council Action: It is recommended the Council adopt the attached resolution. • summary Explanation: (supporting documentation attached ) The attached resolution represents the official Council action required to expedite removal of the trees most recently marked by the City tree inspector, in accordance with approved procedure's. It is anticipated that this resolution will be submitted for council consideration each meeting during the summer and fall as new trees are marked. Member introduced the following resolution and moved its adoption: • RESOLUTION NO. RESOLUTION DECLARING A PUBLIC NUISANCE AND ORDERING THE REMOVAL OF DISEASED TREES (ORDER NO. DST 09/25/95 ) WHEREAS, a Notice to Abate Nuisance and Diseased Tree Removal Agreement has been issued to the owners of certain properties in the City of Brooklyn Center giving the owners twenty (20) days to remove diseased trees on the owners' property; and WHEREAS, the City can expedite the removal of these diseased trees by declaring them a public nuisance: NOW, THEREFOR, BE IT RESOLVED BY THE CITY COUNCIL of the City of Brooklyn Center, Minnesota that: 1. The diseased trees at the following addresses are hereby declared to be a public nuisance: TREE PROPERTY OWNER PROPERTY ADDRESS NUMBER ---------------------- - - - - -- ----------------------- - - - - -- -- - - - - -- KEITH & PATRICIA OLDFATHER 7216 RIVERDALE RD 120 ® KENNETH SYMBAL 5321 BRYANT AVE N 121A FRANKLIN SMITH 5315 BRYANT AVE N 121B FLOYD KIRBY 6240 BRYANT AVE N 122 ELROY BARTHEL '5640 FREMONT AVE N 123 LOREN CROWE 6234 LILAC DR N 124 ARLIE & ANNA MAY GALLUP 6001 ALDRICH AVE N 125 2. After twenty (20) days from the date of the notice, the property owner(s) will receive a second written notice providing five (5) business days in which to contest the determination of the City Council by requesting, in writing, a hearing. Said request shall be filed with the City Clerk. 3. After five (5) days, if the property owner fails to request a hearing, the tree(s) shall be removed by the City. All removal costs, including legal, financing, and administrative charges, shall be specially assessed against the property. Date Mayor ATTEST: Deputy City Clerk RESOLUTION NO. The motion for the adoption of the foregoing resolution was duly seconded by member , and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • • Camcil Meiling Date / 9/25/95 City of Brooklyn Center Agenda Item Number CJ Description: Item Descri P Request For Council Consideration • Licenses Department Approval: poj� Patti Page, Interim ministrative Assistant ,- Manager's Review/Recommendation: `J` - %�.'✓ No comments to supplement this report Comments below /attached PP Po Recommended City Council Action: Approve attached list of licenses. Summary Explanation: ( sup po rti n g documentation attached NO • I'Y P � PPo g ) MECHANICAL SYSTEMS Kalmes Mechanical Inc. '15440 Silverod Street NW Northwestern Service Inc. 791 Hampden Avenue • �. (r'� Building Official RENTAL DWELLINGS Initial: Greg & Kathleen Voge 5018 Ewing Ave. N. Tracy Rice 7037 Logan Ave. N. Renewal: Casmir & Doris Stachowski 5329 Queen Ave. N. Scot & Michal Frenzel 5256 E. Twin Lake Blvd. Arlene Johnson 7218 -24 W. River Rd. 9-{ Director of C munity W Development SIGN HANGERS Imaginality 6182 Olson Memorial Hwy. .0-. Building Official , Council Meeting Daze 9/25/95 Q City of Brooklyn Center Agenda Item Number v a-1 Request For Council Consideration • Item Description: Resolution Accepting Bids and Awarding a Contract, Improvement Project No. 1995 -18, Contract 1995 - I, New Electric Controls at Wells 5, 6, and 7 Department Approval: Diane Spector, Director of 14pic Services Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Consider a resolution accepting the low bid and awarding a contract to Bacon's Electric of Fridley, MN. • Summary Explanation: (supporting documentation attached Yes ) The 1995 Capital Improvement Program (CIP) includes a maintenance -type water utility project to replace certain electric controls at wells 5, 6, and 7. These controls include the replacement of circuit breakers and motor starters for well pumps, chemical feed pump motor starters, and the upgrade of power factor correction capacitors. The purpose of this replacement is to provide for reliable, energy - efficient control of the major electrical equipment at these three wells. The seven other wells are adequately served or have also previously been so upgraded. On September 20, 1995 bids were received for Improvement Project No. 1995 -18. The results were as follows: Bidder Bid Amount Bacon's Electric $26,390.00 The Engineer's Estimate for these improvements was $30,000. Only one bid was received. Utility staff had previously sought quotes from several vendors for various components of this package prior to determining that under the purchasing policy and public bidding laws in should be handled as a single package. While only one vendor chose to bid on the • package as a whole, we have reviewed the unit prices submitted and believe they are fair and competitive. Bacon's Electric has extensive experience in performing this type of work, and has ample resources available to perform the work required of this contract. Accordingly, staff recommends acceptance of the bid and award of the contract to Bacon's Electric of Fridley, MN. Member introduced the following resolution and moved its • adoption: RESOLUTION NO. RESOLUTION ACCEPTING BIDS AND AWARDING A CONTRACT, IMPROVEMENT PROJECT NO. 1995 -18, CONTRACT 1995 -I, NEW ELECTRIC CONTROLS AT WELLS 5, 6, AND 7 WHEREAS, pursuant to Resolution 95 -189, the following bids were received and opened on September 20, 1995, for Improvement Project No. 1995 -18, Contract 1995 -I, New Electric Controls at Wells 5, 6, and 7; and Bidders Bid Amount Bacon's Electric $26,390.00 WHEREAS, it appears that Bacon's Electric of Fridley, MN, is the lowest responsible bidder. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center, Minnesota that: 1. The Mayor and City Manager are hereby authorized and directed to enter into a contract with Bacon's Electric of Fridley, Minnesota in the name of the City of Brooklyn Center, for Improvement Project No. 1995 -18 according to the specifications therefor approved by the City Council and on file in the office of the Deputy City Clerk. 2. The Deputy City Clerk is hereby authorized an directed to return forthwith to all bidders the deposits made with their bids, except that the deposit of the successful bidder and the next lowest bidder shall be retained until a contract has been signed. 3. All costs for Improvement Project No. 1995 -18 shall be financed by the Water Utility. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: • and the following voted against the same: whereupon said resolution was declared duly passed and adopted. 73RD AVE. w. � ta. - _ ` � A . ...... .... .. AV Ix 72ND AVE, WELL N4 E . ..... . ..... . .... .. A VE Ni T�s 7j,� 7- i .. ...... ... . .... . .. . 1A 71ST AVE t 7 i Elyi 7 o T —,, 70TH AVE. . .. ... : L—LI a 'ELI. ANNEX ti z m qso P? HAVE F L " r A 68TH AVE. t 12f 67TH AVE. I 66TH AVE. t 0i, �1 65TH AVE. V-1 / .. . ..... ... 64TH AVE. N A 63 RD AVE. N 62ND AVE,N 0 i F4 1 otS t AVE. N- j < 60TH AVE-N IMPROVEMENT PROJECT 1995-18 ELECTRIC CONTROL 59TH AVE.N . ...... ..... .�� ( , L4 _ Q) 58TH AVE. N Council Meeting Date 9/25/95 3 City of Brooklyn Center Agenda Item Number Request For Council Consideration • Item Description: Resolution Providing for Hearing on Proposed Special Assessment for Public Nuisance Abatement Department Approval: Diane Spector, Direc y Public Services Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: It is hereby recommended that the City Council adopt the attached resolution to hold a public hearing on this special assessment. • Summary Explanation: (supporting documentation attached --)Les— The purpose of this resolution is to order a public hearing on Monday, November 13, 1995, at approximately 7 p.m. or as soon thereafter as the matter may be heard, to hear and pass upon all objections, if any, to the proposed special assessment for public nuisance abatement. On August 8, 1994 the City Council adopted Resolution 94 -170 ordering the abatement of public nuisances, safety and health hazards and building and maintenance and other ordinance violations with respect to that real estate located at 4746 Lakeview Avenue North. Attached is a memo from Clay Larson dated September 20, 1995 referencing the matter of events in chronological order. Note: Public nuisances are generally assessed as a one -time charge. However, since the amount to be assessed is in excess of $5,000, the Council may wish to consider a longer assessment period. If so, the action to take would be to by motion establish the number of years over which the assessment would be levied (for example, three years, five years, etc.). For the Council's information, the annual amount due on a special assessment is the amount of the principle divided by the number of years of the levy, plus interest on the outstanding principle. For example, if the assessment is $5,000 and the levy period is 5 years, the annual amount due would be $1,000 plus interest on the unpaid balance. Future council actions include the public hearing at the specified date and adoption of the resolution to • certify the special assessment levy rolls with Hennepin County. (7 �J Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION PROVIDING FOR HEARING ON PROPOSED SPECIAL ASSESSMENT FOR PUBLIC NUISANCE ABATEMENT BE IT RESOLVED BY THE CITY COUNCIL of the City of Brooklyn Center, Minnesota, that: 1. A hearing shall be held on the 13th day of November, 1995 in the City Hall at approximately 7 p.m. or as soon thereafter as the matter may be heard, to pass upon the proposed assessment for abatement of public nuisances. 2. The Deputy City Clerk with the assistance of the Director of Public Services shall forthwith prepare assessment rolls for the above charges, and shall keep them on file and open to inspection by any interested persons. 3. The Deputy City Clerk is directed to cause a notice of the hearing on the proposed assessment to be published once in the official newspaper at least two • weeks prior to the hearing. 4. The Deputy City Clerk shall cause mailed notice to be given to the owner of each parcel described in such assessment rolls not less than two weeks prior to the hearing. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. i • CITY OF BROOKLYN CENTEOECIAL ASSESSMENT ROLL • September 25, 1995 PROJE INFORMATION LEVY INFORMATION Improvement Project No.: N/A Levy No.: 13432 Description: Public Nuisance Abatement Fund /Code No.: Levy Description: PUBLIC NUISANCE ABATEMENT Levy runs one (1) year at an interest rate of Location: 4746 Lakeview Avenue ( ) percent. First payment, with property taxes payable in 1996 shall include fifteen (15) whole months' interest. Improvement Ordered On: August 8, 1994 Date of Assessment Hearing: By Resolution No.: 94 -170 Adopted On: Assessment District: N/A By Resolution No.: Method of Apportionment: Direct cost and administrative costs Corrections. Deletions. Or Deferments: i Cost Summary From N/A Resolution No: TOTAL IMPROVEMENT COST: $5,356.29 Less Direct City Share: Less Other Payments: TOTAL TO BE ASSESSED: $5,356.29 City Property: Other Public Property: Private Property: $5,356.29 CITY OF BRCMYN CENTER SPECIAL ASSESSMEMWERTIFICATION ROLL • PUBLIC NUISANCE ABATEMENT 95 MUNICIPAL CODE NO. 22 Levy runs one (1) year PROPERTY ASSESSED OWNER LEVY PROPERTY ADDN. Address Name NO. IDENTIFICATION NO. NO. AMOUNT Legal Description Mailing Address 13432 10- 118 -21 -32 -0027 89495 $5,356.29 4746 Lakeview Ave LEONARD MARTIN 4746 Lakeview Ave Brooklyn Center, MN 54429 $5,356.29 ! I I i II MEMORANDUM TO: DIANE SPECTOR FROM: Clay Larson, Building Official DATE: 20 SEPT 95 RE: 4746 LAKEVIEW AVE, LEONARD MARTIN RESIDENCE Current action was initiated in 1993 but this property has a long history of complaints, police and housing code actions. Sept 1993 - Orders issued to Mr. Martin. r Oct 1993 - No compliance, orde r eissued eissued Nov 1993 - No compliance or progress Dec 1993 - Request to City Attorney Clelland for formal complaint Feb 1994 - Jury trial set for March 17, 1994 March 1994 - Agreement reached with Mr. Martin's attorney, new clenn-un schedule with dates issued. May 1994 - Civil procedings against Mr. Martin begin, June 1994 - No compliance Z.ua s7- 19 - COu.rcil _ -volut -ion 94 -' r0 4 - 6 Jak�-,7 declared a put ndIS:an e Fall 1994 - Attempts ma�e b� Mr. Martin's attornev to et him, to _ _ _ g Ilea ^< up and -herefore sta l 1 City action, no compliance. April 1 995 - Clean up wCrk done on April 18. Proper notice given to Mr. Martin. i CITY OF BROOKLYN CENTER DEPARTMENT OF PLANNING AND INSPECTION (612) 569 -3344 FAX (612) 569 -3494 • BUILDING MAINTENANCE COMPLIANCE ORDER DATE: September 20, 1993 COMPLIANCE DATE: October 5, 1993 TO: Leonard Martin 1 4746 Lakeview Avenue North Brooklyn Center, MN 55429 cc: Housing File cc: Police Department LOCATION: 4746 Lakeview Avenue North First Notice COMPLIANCE OFFICIAL: David Fisher The following violations of the Building Maintenance and Occupancy Ordinance were cited during a recent inspection of the above premises. You are hereby informed that these violations must be corrected on or before the COMPLIANCE DATE indicated. Failure to correct violations or to make satisfactory arrangements to correct violations acceptable to the compliance official, may result in suspension or revocation of your rental dwelling license if applicable. In. addition, failure to comply may result in the issuance of a citation which, upon conviction, is punishable by fine and /or imprisonment. Section 12 -1202 of the Ordinance provides for Right of Appeal, when it is alleged that a Compliance Order is based upon erroneous interpretation of the Ordinance. The Appeal must be submitted to the Inspection Department, in writing, specifying the grounds for Appeal, within five (5) business days after service of the order, and must be accompanied by a filing fee of $15.00 in cash or cashier's check. If you have any questions or comments, please contact me at 569 -3344, Monday through Friday, between 8:00 a.m. and 4 :30 p.m. DESCRIPTION OF VIOLATIONS AND ORDINANCE SECTION t Remove all the auto parts in yard or store them within a building. Remove oil pans by driveway and any soil that has been contaminated by the oil. Remove bags of garbage, wood piles, brush, appliances, tires and debris. ,.) Remove vehicle being used for sheds or remove storage. Section (1 -108) Keeping of Dogs is Limited- No family or family members shall keep, harbor or have custody of more than two dogs exceeding six months of age in the family dwelling or on the family premises without obtaining a private kennel license. Make the necessary correction to be in compliance with Section (1 -108). 6� Section (12 -711) Fill all holes in yard with dirt and seed or sod as needed. CITY OF BROOKLYN CENTER DEPARTMENT OF PLANNING AND INSPECTION (612) 569 -3344 FAX (612) 569 -3494 BUILDING MAINTENANCE COMPLIANCE ORDER DATE: October 6, 1993 COMPLLANCE DATE: October 22, 1993 TO: Leonard Martin 4746 Lakeview Avenue North Brooklyn Center, MN 55429 cc: Housing File cc: Police Department LOCATION: 4746 Lakeview Avenue North Final Notice COMPLIANCE OFFICIAL: David Fisher The following violations of the Building Maintenance and Occupancy Ordinance were cited during a recent inspection of the above premises. You are hereby informed that these violations must be corrected on or before the COMPLIANCE DATE indicated. • Failure to correct violations or to make satisfactory arrangements to correct violations acceptable to the compliance official, may result in the issuance of a citation which, upon conviction, is punishable by fine and /or imprisonment. Section 12 -1202, of the Ordinance provides for Right of Appeal, when it is alleged that a Compliance Order is based upon erroneous interpretation of the Ordinance. The Appeal must be submitted to the Inspection Department, in writing, specifying the grounds for Appeal, within five (5) business days after service of the order, and must be accompanied by a filing fee of $15.00 in cash or cashier's check. If you have any questions or comments, please contact me at 569 -3344, Monday through Friday, between 8:00 a.m. and 4:30 p.m. DESCRIPTION OF VIOLATIONS AND ORDINANCE SECTION 1. Remove all the auto parts in yard or store them within a building. 2. Remove bags of garbage, wood piles, brush, appliances, tires and debris. 3. Remove vehicle being used for sheds or remove storage: 4. Section (1 -108) Keeping of Dogs is Limited- No family or family members shall keep, harbor or have custody of more than two dogs exceeding six months of age in the family dwelling or on :the family premises without obtaining a private kennel license. Make the necessary • correction to be in compliance with Section (1 -108). 5. Section (12 -711) Fill all holes in yard with dirt and seed or sod as needed. MEMORANDUM TO: William A. Clelland, Brooklyn Center Attorney FROM: David Fisher, Building Inspector DATE: December 3, 1993 RE: Leonard Martin, 4746 Lakeview Avenue North, junk vehicles, debris and yard maintenance. See all past correspondence from 1985 to present and check cases. On September 20, 1993 I went to the referenced address on a complaint made by the neighbor. During my inspection violation of the Building Maintenance Ordinance and Occupancy and Public Nuisances and Petty Offenses Ordinance were noted: 1. Section (19 -1304) Remove all the auto parts in yard or store them within a building. 2. Section (19 -1304) Remove oil pans by driveway and any soil that has been contaminated by the oil. 3. Section (19 -103 sub. 3,4 & 11) Remove bags of garbage, wood piles, brush, appliances, tires and debris. 4. Section (19 -1303) Remove vehicle being used for sheds or remove storage. 5. Section (1 -108) Keeping of Dogs is Limited- No family or family members shall keep, harbor or have custody of more than two dogs exceeding six months of age in the family dwelling or on the family premises without obtaining a private kennel license. Make the necessary correction to :be in compliance with Section (1 -108). 6. Section (12 -711) Fill all holes in yard with dirt and seed or sod as needed. On October 5, 1993, 1 conducted a follow -up inspection and found auto parts, tires, debris, 4 dogs and the vehicles still on site. The oil pans were removed. On October 6, 1993 a final notice was sent to Mr. Martin for the following items: 1. Section (19 -1304) Remove all the auto parts in yard or store them within a building. 2. Section (19 -103 sub. 3,4 & 11) Remove bags of garbage, wood piles, brush, appliances, tires and debris. 3. Section (19 -1303) Remove vehicle being used for sheds or remove storage. 4. Section (1 -108) Keeping of Dogs is Limited- No family or family members shall keep, harbor or have custody of more than two dogs exceeding six months of age in the family dwelling or on the family premises without obtaining a private kennel license. Make the necessary correction to .be in compliance with Section (1 -108). 5. Section (12 -711) Fill all holes in yard with dirt and seed or sod as needed. • On October 22, 1993, 1 conducted my second follow -up inspection nothing to be done. See photos taken. December 3, 1993 Martin, 4746 Lakeview Ave. N. Page #2 i Therefore, I am requesting a formal complaint for failure to meet the following: 1. Section (19 -1304) Remove all the auto parts in yard or store them within a building. 2. Section (19 -103 sub. 3,4 & 11) Remove bags of garbage, wood piles, brush, appliances, tires and debris. 3. Section (19 -1303) Remove vehicle being used for sheds or remove storage. 4. Section (1 -108) Keeping of Dogs is Limited- No family or family members shall keep, harbor or have custody of more than two dogs exceeding six months of age in the family dwelling or on the family premises without obtaining a private kennel license. Make the necessary correction to be in compliance with Section (1 -108). 5. Section (12 -711) Fill all holes in yard with dirt and seed or sod as needed. Formal Complaint issued to: Leonard Martin 4746 Lakeview Avenue North Brooklyn Center, MN 55429 CARSO'N' N'�TD CLEI L -AIN - D ATTORNEYS AT IaW 6300 SHINGLE CREEK PARKWAY, SUITE 305 JEFFREY A, CARSON MINNEAPOLIS, MINNESOTA 5S430-2190 TELEPHONE WILLIAM G. CLELLAND (612) 561.2800 STEVEN C. HEY FAX ELLEN M. SCHREDER (612) 561 -1943 16 February 1994 Mr. Barry Marchant, Public Defender District Court, Division II Brookdale 6125 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 - 2181 RE: City of Brooklyn Center v. Leonard Martin Dear Mr. Marchant: I At your request, I have directed City Building Inspector, Clay Larson, to contact your client and to personally point out to him, explicitly, all of the zoning and building code violations and to instruct him as to what debris, motor vehicles and other refuse must be removed. I have suggested that he give Martin a schedule within which to remove these items so that Martin will have an obligation to begin the cleanup immediately and we can thereby better follow his progress. As I advised you, this has been a: longstanding problem with Martin and I am committed to cleaning up this property once and for all at this time. Should Martin fall to clean up the property to the satisfaction of the City, I intend to bring a civil proceeding under Chapter 463 of the Minnesota Statutes which permits the City to correct hazardous conditions and to charge all of the costs, including attorneys fees, appraisal fees, and the like back against the property. It would not surprise me if those costs would total more than several thousand dollars since a great deal of rubbish would have to be removed frog,, the yard and probably the house and I would charge back not only the attorneys fees and the cost of the rubbish removal itself.but all of the administrative time incurred by the City staff which is specifically recoverable under the terms of Minnesota Statute §463.22. At the present time, we are concentrating on the cleanup of the yard but the inspectors are aware that the home is filled with refuse and debris. At the present time,:we will limit our efforts to cleaning up the yard and hopes that other action may be deferred or 'avoided. If your client has the property cleaned up and in full compliance by the trial date, I will offer a disposition involving a plea of guilty under §609.135 with minimal prosecution costs, the Mr. Barry Marchant, Public Defender 16 February 1994 Page 2 stay of imposition condition upon no uncorrected building code or zoning violations in the future. By "uncorrected" I mean that we would give your client notice of any violations with an opportunity to correct them prior to bringing revocation proceedings. Sincerely, CARSON AND CLELLAND William G. Clelland WGC:ajb cc: Mr. Clay Larson b.p.s. Dear Clay: Please let me know when you've had an opportunity to reinspect the premises with Martin and give me a copy of the Compliance Order that you will write up for and serve upon him. Please also contact the neighbors who have complained most vigorously and let them know of the enforcement action. If the property is cleaned up, a plea of guilty under §609.135 permits him to avoid punishment as long as he complies with all building requirements in the future and will pay some money toward prosecution costs. If he violates his probate on, then, tha C is ailt -d to — mpose the maxim= or fine of $700.00 and 90 days in jail. Obviously, compliance is the objective but we do need something of a "carrot- and - stick" approach in dealing with someone like Martin. Thanks for your help. Sincerely, CARSON AND CLELLAND William G. Clelland WGC :ajb GARSON AN GLEL LA.�TD ATTOBNEYS AT 1.&W • 6300 SHINGLE CREEK PARKWAY, SUITE 305 JEFFREY A. CARSON MINNEAPOLIS, MINNESOTA SS430 TELEPHONE WILLIAM G. CLELLAND (612) 561 -2800 STEVEN C. HEY FAX ELLEN M. SCHREDER (612) 561 -1943 22 February 1994 Mr. David Fisher City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, Minnesota 55430 Re: State of Minnesota, City of Brooklyn Center vs. Leonard Martin Dear Mr. Fisher: We are the prosecutors for the City of Brooklyn Center and in that capacity are charging the above Leonard Martin with the offenses of ten counts of public nuisance, two counts of harboring more than two dogs and two counts of failing to maintain ground cover stemming from an incident which occurred on 6 and 22 October • 1993. Please be advised that Mr. Martin's jury trial is scheduled for 17 March 1994 at 8:30 A.M. at the Brooklyn Center Courthouse, 6125 Shingle Creek Parkway, Brooklyn Center, Minnesota, and we may need your testimony. It is difficult to determine before the hearing the exact time we will be needing your testimony. Therefore, in order to avoid waiting unnecessarily at the Courthouse for your appearance, we request that you call our office (561 -2800) and leave a number where you can be reached the day of trial. We will call you approximately 45 minutes to an hour before we actually need you at the Courthouse to allow ample travel time. 1 4z Ql.l V i1 lla 1..111 la N.iV e,.CZ YI .L 1.L GAL G+riG li: t.V 1a4 i1 . ia� t..v Y..L efficient use of your time and minimize any inconvenience. Thank you. Sincerely, CARSON AND CLELLAND L LLU C � j William G. Clelland Brooklyn Center Prosecutor • 1 isnti iL� CITY OF BROOKLYN CENTER . DEPARTMENT OF PLANNING AND INSPECTION (612) 569 -3344 FAX (612) 569 -3494 BUILDING MAINTENANCE COMPLIANCE ORDER DATE: March 9, 1994 COMPLIANCE DATE: (SEE ORDERS) TO: Leonard Martin 4746 Lakeview Avenue North Brooklyn Center, MN 55429 cc: Housing File LOCATION: 4746 Lakeview Avenue North Notice COMPLIANCE OFFICIALS: David Fisher & Clay Larson n The following violations of the Building Maintenance and Occupancy Ordinance were cited during a recent. inspection of the above premises. You are hereby informed that these violations must be corrected on or before the COMPLIANCE DATE indicated. Failure to correct violations or to make satisfactory arrangements to correct violations acceptable to the compliance official, may result in suspension or revocation of your rental dwelling license if applicable. In addition, failure to comply may result in the issuance of a citation which, upon conviction, is punishable by fine and/or imprisonment. Section 12 -1202 of the Ordinance provides for Right of Appeal, when it is alleged that a Compliance Order is baser/ upon erroneous interpretation of the Ordinance. The Appeal must be submitted to the Inspection Department, in writing, specifying the grounds for Appeal, within five (5) business days after service of the order, and must be accompanied by a filing fee of $15.00 in cash or cashier's check. If you have any questions or comments, please contact me at 569 -3344, Monday through Friday, between 8 :00 a.m. and 4 :30 p.m. DESCRIPTION OF VIOLATIONS AND ORDINANCE SECTION COTNI PLY BY APRIL 17, 1994 1. Remove all vehicles that are not currently licensed or store them within a building. 2. Remove all vehicles that are not operable or store them within a building. 3. All vehicles parked on boulevard easement .must be removed and properly parked on improved surface. 4. Remove inoperable trailer. • COMPLY BY JUNE 30, 1994 1. Remove from premises all the auto parts or store them within a building. 2. Remove all couches, furniture, bikes, snow blowers, lawn mowers, and appliances in yard and behind fence or store within a building. This includes all items which can be damaged by weather exposure. 3. Remove bags of leaves, scrap wood, scrap iron, and debris. March 9, 1994 Leonard Martin 4746 Lakeview Ave. N. • Page #2 of 2 COMPLY BY AUGUST 30, 1994 1. Repair fence around yard. Structural repair and painting is required. 2. Repair garage and shed to make them weather tight. Scrape and paint garage and shed. 3. Scrape and paint house. 4. Trim trees rubbing on roof of house. 12 APRIL 95 Mr. Leonard Martin 4746 Lakeview Ave Brooklyn Center, MN 55429 NOTICE NOTICE IS GIVEN HEREWITH THAT PURSUANT RESOLUTION 94 -170, DATED AUGUST 8, 1994, APPROVED BY THE BROOKLYN CENTER CITY COUNCIL, YOUR PROPERTY, 4746 LAKEVIEW AVENUE, IS DECLARED A NUISANCE AND IS SUBJECT TO CLEAN -UP OF OUTDOOR AREAS. THIS CLEAN -UP WILL BE DONE ON TUESDAY APRIL 18, 1995. THE FOLLOWING ITEMS ARE SUBJECT TO REMOVAL: - FURNITURE, BIKES, LAWNMOWERS, SNOWBLOWERS, AND APPLIANCES. - WOOD, BRUSH, SCRAP IRON, AND DEBRIS. - AUTO PARTS, TIRES, AND OIL. - SHEDS, DOGHOUSES, AND OTHER STRUCTURES WHICH ARE IN DISREPAIR. - VEHICLES WHICH ARE NOT CURRENTLY LICENSED. - VEHICLES WHICH ARE NOT OPERABLE. - VEHICLES WHICH ARE FILLED WITH STORED ITEMS. - OTHER ITEMS WHICH ADD TO THE NUISANCE DESIGNATION. IT IS EXPECTED THAT YOU WILL PROVIDE ACCESS TO THE FENCED AREAS OF YOUR PROPERTY AND THAT YOU WILL NOT INTERFERE WITH THE CLEAN -UP. ITEMMS WHICH ARE STORED IN BUILDINGS ARE NOT SUBJECT TO REMOVAL. DO NOT STORE ITEMS IN BUILDINGS WHICH ARE SUBJECT TO REMOVAL. SIGNED, CLAYTON A. LARSON, BUILDING OFFICIAL Council Meeting Date 9 /,S `.7 / City of Brooklyn Center Agenda Item Number O ci Request For Council Consideration Item Description: AMENDING THE SCHEDULE FOR ANIMAL IMPOUND FEES Department Approval: , N \.* x- Scott Kline, Chief of Police Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: The City Council approve the amended schedule for animal impound fees. • Summary Explanation: (supporting documentation attached Boarding and impound fees have been in effect since 1990 and costs associated with impounds have increased annually. It is felt that the city should come close to recovering its costs associated by the new fee rates requested. • �C. Member introduced the following resolution and moved its adoption: RESOLUTION NO. RESOLUTION AMENDING THE SCHEDULE FOR ANIMAL IMPOUND FEES WHEREAS, Chapter 1 of the City Ordinances requires the payment of an impounding penalty and boarding fees for redemption of impounded animals; and WHEREAS, Chapter 1 of the City Ordinances further authorizes the setting of such fees by City Council resolution; and WHEREAS, the City Council finds it appropriate to modify the fees required for these services. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center to adopt the following fee schedule: ANIMAL IMPOUND FEES 1. Boarding Fee $15 per day 2. Impound Fee $25 first impound $10 additional - to be added to previous impound fee (i.e. $25, $35, $45 etc.) BE IT FURTHER RESOLVED that the above schedule of Animal Impound fees shall become effective on January 1, 1996. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. Council Meeting Date 91;Z:5 City of Brooklyn Center Agenda Item Number O L.It Request For Council Consideration Item Description: RESOLUTION AUTHORIZING EXTENSION OF THE ANOKA HENNEPIN EM NARCOTICS VIOLENT CRIME TASK FORCE JOINT POWERS AGREEMENT Department Approval: Scott Kline, Chief of Police Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: The City Council approve Brooklyn Center's continued participation in the Task Force. • Summary Explanation: (supporting documentation attached The 1996 Joint Powers agreement is an expanded agreement which has grown to include participants from more communities /police agencies than in the past which should allow them to be more versatile and et allow more complex investigations y p s gations to be undertaken. Member introduced the following resolution and . moved its adoption: RESOLUTION NO. RESOLUTION AUTHORIZING EXTENSION OF THE ANOKA HENNEPIN EM NARCOTICS VIOLENT CRIME TASK FORCE JOINT POWERS AGREEMENT WHEREAS, drugs have become a significant problem in their own right and have led to an increase in violent crime; and WHEREAS, the City of Brooklyn Center does not possess the resources to independently impact drug trafficking; and WHEREAS, a cooperative agreement allows the merging and sharing of resources for the organized investigation and prosecution of criminals throughout the north metro area, including north Hennepin and Anoka counties. • NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that it agrees to join in the Joint And Cooperative Agreement For The Formation And Administration Of The Anoka- Hennepin EM Narcotics And Violent Crimes Task Force. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • JOINT AND COOPERATIVE AGREEMENT FOR THE FORMATION AND ADMINISTRATION OF THE ® ANOKA- HENNEPIN EM NARCOTICS AND VIOLENT CRIMES TASK FORCE I. PARTIES The parties to this agreement are political subdivisions of the State of Minnesota. This agreement is made pursuant to Minnesota Statutes Section 471.59, as amended. II. PROBLEM AND PURPOSE The parties hereto find that drug abuse, and related violent criminal activities, have increased significantly within and between their communities in recent years. As first ring suburban communities located on or near the northern borders of Minneapolis and St. Paul a significant amount of drug traffic, violent crime and organized criminal gang activity has emerged and migrated into their communities. Linked by the 610, 694 and 169 bridges over • the Mississippi River, the communities share common borders with easy access which has provided a conduit for drug traffickers and criminal elements to utilize. The nature of drug law enforcement, violent crime and the criminal enterprise associated with them does not adhere to jurisdictional boundaries. In addition, the individual parties hereto face the difficulty of limited resources and ever increasing demands for service which make effective organized drug enforcement difficult on an individual basis. The general purpose of this agreement is to provide coordination and joint enforcement efforts within the jurisdictional boundaries of the parties, of controlled substance crimes as defined in federal, state and local statutes as well as related violent crime and the criminal enterprise associated with them. • 1 III. AFFILIATION 40 This joint enforcement project will have an affiliation with the East Metro Coordinated Narcotics Task Force through the participation of Anoka County in the East Metro Coordinated Narcotics Task Force Joint Powers Agreement. As a part of this affiliation activities of this project may be coordinated with East Metro Coordinated Narcotics Task Force activities. IV. NAME This joint enforcement project shall be known as the Anoka- Hennepin EM Narcotics and Violent Crimes Task Force. V. MEMBERSHIP The parties to this agreement shall be the Cities of Anoka, Blaine, Brooklyn Center, • Brooklyn Park, Coon Rapids, Lino Lakes and Maple Grove and the County of Anoka (herein collectively referred to as "the parties "). VI. ADMINISTRATION A Task Force Advisory Board is formed consisting of the Chiefs of Police and Sheriff, or his or her designee, from each party. The Task Force Coordinator and supervisors will serve in an advisory capacity and shall have responsibility for administration of the Task Force. A prosecuting attorney from Anoka and Hennepin Counties will act in an advisory capacity to the Board. The County of Anoka will provide the day to day administration of the Task Force through the assignment of the Investigative Lieutenant, assisted by Sergeants assigned to the Task Force by the Coon Rapids and Brooklyn Park Police • 2 Departments. 40 The Task Force Advisory Board members which have voting authority will be the Chiefs of Police and the Sheriff or his or her designee from each party. The votes shall be weighted based on the number of officers assigned to the Task Force. In any issue requiring a vote of the Advisory Board, a quorum of five voting members must be present to vote. In order for a motion to pass, a majority vote shall consist of at least eight votes. The Advisory Board shall elect a chair to conduct board meetings and serve as liaison between the parties, the coordinator and the board. VII. OPERATION Section 1. Composition The Task Force shall initially consist of 15 full -time peace officers POST licensed to practice law enforcement as defined in Minnesota Statutes, Chapter 626. These officers will be assigned to the Task Force by the parties as follows: Anoka Police Department 1 Officer Anoka County Sheriff 3 Officers 1 Lieutenant Blaine Police Department 1 Officer Brooklyn Center Police Department 1 Officer Brooklyn Park Police Department 2 Officers 1 Sergeant Coon Rapids Police Department 2 Officers 1 Sergeant • 3 Lino Lakes Police Department 1 Officer Maple Grove Police Department 1 Officer Each officer will remain an employee f p oyee o the party assigning the officer to the Task Force. The Advisory Board may approve a change in the composition of the Task Force upon the request of any party. No party may be required to assign additional officers to the Task Force without the consent of the affected party. Section 2. Chain of Command Coordinator /Lieutenant: The Task Force Coordinator shall be the head of the Task Force. The Criminal Investigation Lieutenant of the Anoka County Sheriff's Department will act in this capacity at the onset of this agreement. The Coordinator shall serve at the pleasure of the Advisory Board and may be removed by • a majority vote of the Board. The Coordinator reports directly to the Advisory Board. The Coordinator will make the day to day operational and administrative decisions of the Task Force. SupervisorsfSergeants• One Sergeant each shall be assigned to the Task Force by the Brooklyn Park and Coon Rapids Police Departments. The Sergeants operate at the direction of the Task Force Coordinator. They are responsible for the direct supervision of officers assigned to the Task Force by the parties. I Officers: Officers assigned to the Task Force operate at the direction and under the supervision of the Task Force Coordinator and supervisors while assigned. • 4 Clerical: The Task Force may hire clerical support for the Task Force from the grant budget. The City of Brooklyn Park agrees to act as the employer of the person hired. Section 3. Equipment Equipment purchased by the Task Force during the grant period for Task Force usage shall be divided amongst the parties by the Advisory Board at the end of the grant period if this agreement is not renewed. Upon a mutually agreed dissolution of this Task Force, all equipment owned by the Task Force will be distributed between the parties as decided by the Advisory Board. Parties are expected to also utilize their own equipment such as body transmitters and surveillance vans on an as needed basis. All equipment brought into Task Force use by an agency will remain the property of the agency supplying said equipment. • Section 4. Facilities Each Task Force member will work out of a centrally located office furnished and maintained by the Task Force as provided in the annual grant budget. Section 5. Policy and Procedure Operational policy and procedure may be developed for the Task Force based on an examination of operational goals and administrative need. These policies and procedures will be proposed to the Advisory Board by supervisory staff who will conduct ongoing evaluations of Task Force operations and need. Policies and procedures will be implemented at the direction of the Advisory Board. • 5 Section 6. Purchase of Evidence /Information The Task Force Coordinator will maintain an accounting of all confidential funds utilized • for the purchase of evidence and information and to pay investigative expenses incurred by the Task Force. The administration of confidential funds will undergo review by the Task Force supervisory personnel prior to implementation of the following procedure. In the event changes of procedure are deemed necessary, they will be reflected in policy and procedure developed for the Task Force. At present each Task Force officer will fill out a "Confidential Funds Receipt" when obtaining advances of confidential funds from the Coordinator or Supervisor. Upon expenditure of confidential funds by a Task Force officer, a "Payment for Evidence and Information" form will be completed by the officer making the expenditure and this form will be forwarded in a timely fashion to the Coordinator. The Coordinator will maintain a master expenditure log for all Task Force officers. Each individual officer will maintain an individual expenditure log for confidential funds. i The Coordinator will audit the confidential funds on a regular basis and will file the necessary quarterly, report with the Office of Drug Policy of the Minnesota Department of Public Safety. Any evidence obtained or seized by the Task Force will be maintained in the Department Property Room of the officer assigned as the case agent. Section 7. Supplies. Office supplies will be provided by the Task Force under the grant annual budget. Any supplies not itemized in the grant annual budget will be provided by that officer's employing agency. • 6 Section S. Sworn Personnel. Each party is providing licensed peace officers under the conditions outlined herein. Wages and benefits for these officers will be the primary responsibility of the officer's employing agency during the grant period. Wage and benefit reimbursement, to include overtime costs, may be reimbursed through the grant as approved by the Advisory Board. An officer assigned to the Task Force by a party may be removed from the Task Force by the appointing party or through a majority vote of the Advisory Board. The party shall then appoint a suitable replacement for the removed officer. Peace officers assigned to the Task Force shall be equipped by their employing parties with appropriate police credentials and suitable firearms. The employing party will be responsible for providing any P.O.S.T. required training to their officers assigned to the Task Force. The Coordinator may direct additional, specialized training to be paid through the grant budget. Section 9. Vehicles. The Task Force shall lease up to one vehicle for each officer assigned to the Task Force. Each party will be responsible for fuel, insurance, and maintenance costs incurred by the vehicle(s) leased for the officer(s) assigned by that party. Upon termination of this agreement, the vehicles will either be absorbed by the parties agreeing to assume leasing obligations or returned to the leasing agency. Vehicles owned by a party and utilized by the Task Force will remain the responsibility of the party as will costs incurred for the vehicle's use and maintenance. • 7 VII. TASKS Section 1. The primary function and responsibility of the Task Force is to detect, • investigate, gather evidence, and apprehend drug traffickers within the geographic area of the parties. As a result of the nature of covert undercover operations, it is anticipated that undercover operatives may detect or become aware of other crimes. The Task Force will pursue other avenues of investigation only upon recommendation of the Task Force Coordinator and by permission of the Chief of Police or Sheriff of the particular party involved. In addition, the Task Force may be used for other investigative purposes under exigent circumstances or in a capacity wherein the nature of the investigation being undertaken requires undercover officers. Section 2. It is the mission priority of this Unit to investigate drug wholesalers (those individuals who bring drugs into the Task Force area), street level drug distributors, those • persons involved in the clandestine laboratory manufacturing of illicit drugs, and individuals who attempt to acquire pharmaceutical drugs in violation of the provisions of Minnesota Statutes, Chapter 152. Section 3. A function of the Task Force will be to gather and to disseminate controlled substance intelligence information. The Task Force will maintain an ongoing intelligence filing system. The Task Force will attempt to investigate those leads, maintain on file that information, and upon request disseminate that information to the parties hereto. Section 4. With permission of the Task Force Coordinator, the Task Force will provide training to member parties requesting that service. Requests for community drug education g and drug awareness will be provided only upon permission of the Task Force Coordinator and the department of that particular party. Section 5. Public announcements concerning the function of the Task Force will be made only by permission of the Advisory Board in conjunction with the parties to this agreement and by approval of the Chief of Police or Sheriff of the party in which that release is to be made. Section 6. Public announcements concerning arrests or investigations conducted by the Task Force will be made by the Chief of Police or Sheriff of that party or his or her designee where that arrest was made and upon approval of the Task Force Coordinator. News releases concerning the Task Force's function, investigations, and /or arrests will not be made by any Task Force officer unless specifically requested by the Chief of Police or Sheriff with permission of the Task Force Coordinator or the Advisory Board. I VIII. FINANCIAL MATTERS Section 1. The fiscal year of the Task Force shall be the calendar year. i Section 2. The Finance Department of Anoka Count will be responsible for the P Y P administration of all funds coming under the direct supervision of the Task Force whether Federal grant funds or contributions of the parties. Section 3. The Task Force Advisory Board shall direct the Coordinator to prepare an annual grant application including proposed budget which will be presented to the parties' • 9 on or before the application deadline set by the Office of Drug Policy, Department of Public Safety. The Task Force Coordinator shall submit the approved grant application and budget to the Office of Drug Policy by the deadline established by the Office of Drug Policy. Section 4. Funding shall be in the form of a matching grant from the Federal government. The contributions of the parties shall be at least 25% of the total budget established for the current year. An individual party's financial contribution shall be proportioned to the number of officers committed to the Task Force as shown in the grant application budget. The matching funds will be submitted to the Finance Department of Anoka County by the parties at the beginning of the grant period. Any unused match funds will be returned at the end of the grant period in a manner determined by the Advisory Board. Section 5. Any assets seized by the Task Force and awarded to the Task Force through • administrative or judicial proceedings shall be distributed to the parties on a periodic basis as determined by the Board. The formula for distribution of these assets shall be proportioned based on the number of officers assigned for each participating agency. The Task Force Coordinator will be responsible for the distribution of funds or assets seized or forfeited by the Task Force. Section 6. The Coordinator, upon direction and approval of the Advisory Board, is authorized to sign and enter into contracts on behalf of the Task Force as may be necessary. IX. DEPUTATION Officers assigned to the Task Force, while performing their assigned duties as Task Force 10 officers in a jurisdiction other than their own jurisdiction, shall have the same powers, duties, privileges and immunities as conferred upon them by their own jurisdiction. The authority granted hereunder does not constitute employment by the Task Force or by the city or county in which the duty or duties are being performed. Any worker's compensation claim or work related injury that may occur as a result of working with the Task Force shall be the sole responsibility of the officer's home jurisdiction. Further, the authority granted hereunder extends only so far as may be necessary to complete the duties assigned to the officers, and terminates at the expiration of this agreement and any extension thereof. X. INSURANCE The Task Force shall purchase insurance to provide liability and property damage coverage in the amount determined by the Advisory Board. In no event will the insurance coverage be less than the League of Minnesota Cities Insurance Trust standard liability coverage. • The insurance shall provide coverage for all authorized Task Force operations by Task Force members. XI. DURATION , Section 1. The Task Force shall commence operations on January 1, 1996, and continue through December 31, 1996. The Task Force may then be renewed on a year -to -year basis throu the execution of a new agreement. XII. CONTRACTS AND PURCHASES Any contracts and purchases made pursuant to this agreement shall be made by the County and shall conform to the requirements applicable to Anoka County. • 11 XIII. STRICT ACCOUNTABILITY Pursuant to Minn. Stat. §471.59, a joint powers agreement is to provide for strict accounting • of all funds and report of all receipts and disbursements. Any party to this agreement may request a strict accounting at any time. XIV. ENTIRE AGREEMENT This joint powers agreement constitutes the entire agreement of the parties on the matter related hereto. The agreement shall not be altered or amended, except by agreement in writing signed by the parties hereto. XV. SIGNATURES All parties to this Agreement need not sign the same copy of the Agreement. An original Agreement signed by each party to this Agreement shall be maintained in the Office of the Anoka County Sheriff. • 12 i DATED: CITY OF BROOKLYN CENTER By Its Mayor By Its Interim City Manager • 13 DATED: CITY OF BROOKLYN CENTER By Its Mayor By Its Interim City Manager ® IJ Council Meeting Date 9/ City of Brooklyn Center Agenda Item Number U E Description: Item Descri P Request For Council Consideration • Staff Report on the Metropolitan Livable Communities Act Department Approval: To liblitz, Community Development Spec' ' t Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: • Summary Explanation: (supporting documentation attached Yes ) The Metropolitan Livable Communities Act was passed by the 1995 legislature and is the state's major piece of legislation addressing affordable housing. The primary goal of the Act is to provide a mechanism whereby each community in the seven county metropolitan area addresses the issue of affordable housing. The mechanism is a negotiated agreement with the Metropolitan Council on affordable housing goals in each community. The definition of affordability used by the Metropolitan Council is a housing unit is affordable if it is no more than 30% of a family's income. The homeownership affordability level of $115,000 is based on 80% of median income for a family of four, which is approximately $41,000 based on 1994 data. The rental affordability amount is based on 50% of median income for a family of four, which in 1990 was approximately $20,000, or an affordability of $500 per month, and in 1994 dollars this amount would be approximately $25,500 for income and $637 for an affordable rent. The Metropolitan Council has drafted a housing goals agreement for each community. A copy of the draft agreement for Brooklyn Center is attached to this memorandum. The housing goals agreement specifies the "city index ", which is the current breakdown of affordable housing in the city and a "benchmark" which is the goal recommended by the Metropolitan Council for the city. According to the draft housing goals agreement, the City of Brooklyn Center currently meets all the benchmark goals set forth by the Metropolitan Council with regard to affordable housing in the city. From a procedural standpoint, the City of Brooklyn Center, along with all other metropolitan cities, • would need to address the following items in order to participate in the Livable Communities Act: • By November 15, 1995, the city would need to pass a resolution of intent to participate in the Metropolitan Livable Communities Act. A copy of a draft resolution is included with this memorandum. Request For Council Consideration Page 2 • By December 14, 1995, the city would need to adopt a housing goals agreement with the • Metropolitan Council. The draft housing goals agreement included with this memorandum would be the document used to establish our goals. As an example, one way to approach the goal setting would be to set the goal of staying within the benchmark ranges for affordable housing. The city already meets or exceeds the ranges in the benchmark goals. The housing goals are negotiated on a onetime basis and are not renegotiated. • The last part of the process would require that the city prepare an action plan by June 30, 1996. The action plan would set forth the policies and programs the city would use to reach or maintain its affordable housing goals. If the city adopts the benchmark ranges as its goals, the action plan would be a document which would provide for the maintenance of the benchmark numbers set forth in the housing goals agreement. The action plan developed under the Livable Communities Act can also be used for the housing element in the city's Comprehensive Plan, which by statute needs to be updated within the next year. As an incentive for communities to participate in the Livable Communities Act, the Metropolitan Council will be developing several grant programs to assist cities in meeting their affordable housing goals and dealing with other issues in the city, such as polluted site cleanup, transit issues, etc. However, all of these programs will tie into affordable housing in some manner. The following funding accounts will be developed as an incentive for cities to participate in the Metropolitan Livable Communities Act: • TAX BASE REVITALIZATION PROGRAM • This program would provide grants to cities to address cleanup of contaminated land for commercial and industrial redevelopment to make it available for redevelopment, job retention, and job growth. There will be approximately $6.5 million in funds available in grants annually under this program. • LIVABLE COMMUNITIES DEMONSTRATION PROGRAM The purpose of this program will be to provide grants to fund projects that create certain linkages with housing and transit, housing and employment, and other projects that involve creative mixes of land use, density, and housing value mixes. The amount of funds available under this program is approximately $4.6 million in 1996 and $4.1 million in 1997 and subsequent years. • LOCAL HOUSING INCENTIVES ACCOUNT The purpose of this program is to make grants available to communities to meet negotiated affordable and life cycle housing goals that promote the policies of the Metropolitan Council. Use of grant funds under this program could provide for activities such as acquisition, rehabilitation, and construction of permanent affordable and life cycle housing. One of the major goals of this program is to propose home ownership opportunities for families with low and moderate incomes. Also, the funds offered under this program muit be matched on a dollar- for - dollar basis by the municipality receiving the funds. In addition to the incentives described above, the legislature will be monitoring the participation of • metropolitan communities in the Livable Communities Act. In a sense, the legislature has offered this program as a "voluntary" program to address affordable housing in the metropolitan area. Should the legislature find the Livable Communities Act is not meeting their expectations, there is always the possibility of the legislature moving towards a more mandatory and punitive approach to affordable housing. The guidelines for the grant programs are currently being developed, and at this point it is unclear as to where issues such as housing rehabilitation will stand as a priority in comparison to the Request For Council Consideration Page 3 creation of new affordable housing. One of the questions that is unknown at this point is whether the • Act will promote the creation of new affordable housing in outlying suburbs over the rehabilitation of existing affordable housing in the inner ring suburbs. While there are incentives set forth in the program for cities participating in the Livable Communities Act, for those cities choosing not to there is still a provision that those cities must spend a certain dollar amount to create affordable and life cycle housing or to maintain existing affordable and life cycle housing. This is called the "Affordable and Life Cycle Housing Opportunities Amount" (ALHOA amount). This is a dollar amount established by a specified formula in the Act that a participating or nonparticipating community must spend each year to create affordable and life cycle housing. The Brooklyn Center Housing Commission was introduced to the provisions of the Metropolitan Livable Communities Act at their September 19, 1995 meeting. I would recommend the Housing Commission review the provisions of the Act again at their October meeting and make a recommendation on participation in the Act for the Council's consideration at the November 13, 1995 City Council meeting, which would allow us time to meet the time frame goals of participating in the program. I believe one of the major issues the Housing Commission should address is how the effect of our current policies on housing, including both rehabilitation and removal of some of the blighted multifamily properties, would have on the stated benchmark goals set forth by the Metropolitan Council. In other words, would adopting the benchmark goals of the Metropolitan Council restrict our activities with regard to our current approach to housing redevelopment: in the city. • As additional background information, attached is a question and answer summary of the Act prepared by the Metropolitan Council. Staff will be prepared to discuss this item at Monday's meeting. DRAFT HOUKI G GOALS AGREEMENT METROPOLITAN LIVABLE COMMUNITIES ACT • PRINCIPLES The city of Brooklyn Center supports: 1. A balanced housing supply, with housing available for people at all income levels. 2. The accommodation of all racial and ethnic groups in the purchase, sale, rental and location of housing within the community. 3. A variety of housing types for people in all stages of the life - cycle. 4. A community of well- maintained housing and neighborhoods, including ownership and rental housing. 5. Housing development that respects the natural environment of the community while striving to accommodate the need for a variety of housing types and costs. 6. The availability of a full range of services and facilities for its residents, and the improvement of access to and Iinkage between housing and employment. GOALS To carry out the above housing principles, the City of Brooklyn Center agrees to use benchmark indicators for communities of similar location and stage of development as affordable and life -cycle housing goals for the period 1996 to 2010, and to make its best efforts, given market conditions and resource availability, to maintain an index within the • benchmark ranges for affordability, life -cycle and density. CITY LtiZ3E� CENCHtii LARK GOA Affordability - Ownership I 99 77% Rental ( 46% 41-45% Life- Cycle Type (?Von - single family I 37 °0 I 34 detached) Owner /renter Mix { 63132% (6:3 -72) / (23 -36)% Densitv Single - Family Detached 2.9lacre 2.4 -2.9 /acre Multifamily 4 11 /acre 4 11- 15iacre To achieve the above goals, the City of Brooklyn Center elects to participate in the :Metropolitan Livable Communities Act Local Housing Incentives Program, and will prepare and submit a plan to the Metropolitan Council by June 30, 1996, indicating the • actions it will take to carry out the above goals. CERTIFICATION Mayor Date • Affordable and Life -Cycle Housing Opportunities Amount For Brooklyn Center Your ALHOA Amount for: Brooklyn Center 1996 s0 Not required 1997 (Estimate) so • • J _ - 4p 011' RESOLUTION NO. A O� RESOLUTION ELECTING TO PARTICIPATE IN 4 THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT CALENDAR YEAR 1996 WHEREAS, the Metropolitan Livable Communities Act (1995 Minnesota Laws Chapter 255) establishes a Metropolitan Livable Communities Fund which is intended to address housing and other development issues facing the metropolitan area defined by Minnesota Statutes section 473.121; and WHEREAS, the Metropolitan Livable Communities Fund, comprising the Tax Base Revitalization Account, the Livable Communities Demonstration Account and the Local Housing Incentives Account, is intended to provide certain funding and other assistance to metropolitan area municipalities; and WHEREAS, a metropolitan area municipality is not eligible to receive grants or loans under the Metropolitan Livable Communities Fund or eligible to receive certain polluted sites cleanup finding from the Minnesota Department of Trade and Economic Development unless the municipality is participating in the Local Housing Incentives Account Program under esota Statutes section 473.254; and WHEREAS, the Metropolitan Livable Communities Act requires the Metropolitan Council to negotiate with each munici- pality to establish affordable and life -cycle housing goals for that municipality that are consistent with and promote the policies of the Metropolitan Council as provided in the adopted Metropolitan Development Guide; and WHEREAS, by June 30, 1996, each municipality must identify to the Metropolitan Council the actions the municipality plans to take to meet the established housing goals; and WHEREAS, the Metropolitan Council must adopt, by resolution after a public hearing, the negotiated affordable and life - cycle housing goals for each municipality by January 15, 1996; and WHEREAS, a metropolitan area municipality which elects to participate in the Local Housing Incentives Account Pro- gram must do so by November 15 of each year; and WHEREAS, for calendar year 1996, a metropolitan area municipality can participate under Minnesota Statutes section 473.254 only if: (a) the municipality elects to participate in the Local Housing Incentives Account Program by November 15, 1995; (b) the Metropolitan Council and the municipality successfully negotiate affordable and life -cycle housing goals for the municipality; and (c) by January 15, 1996 the Metropolitan Council adopts by resolution the negotiated affordable and life -cycle housing goals for each municipality; NOW, THEREFORE, BE IT RESOLVED THAT the [specific municipality] hereby elects to participate in the Local Housing Incentives Progm ra under the Metropolitan Livable Communities Act during calendar year 1996. B y : By: Mayor Clerk LIVABLE COMMUNITIES QUESTIONS AND ANSWERS 1. What is the Metropolitan Livable Communities Act? The Metropolitan Livable Communities Act ("Act") was enacted in June 1995 and is the Legislature's attempt to address various issues facing the seven - county metropolitan area. The Act establishes a Metropolitan Livable Communities Fund which consists of three accounts: the Tax Base Revitalization Account; the Livable Communities Demonstration Account, and the Local Housing Incentives Account. Metropolitan municipalities are not required to participate in the programs under the Act, but the Act provides incentives and funding to those municipalities that do participate. • 2. What is the incentive to participate? The benefits are clear. Cities, towns and, in some cases, counties have access to resources that will improve their communities and neighborhoods. In addition, the legislation puts local units of govern- ment in the driver's seat. Communities can not only choose whether to participate; they also have flexibility in determining how they're going to use the resources available. 3. What is the incentive to provide lower -cost housing in our community? Affordable housing is an investment in communities and their residents. It fulfills a commitment to young families, single people and older residents that they can find a home they can afford in the com- munity of their choice. 4. What are "affordable" housing and "life - cycle" housing? • Housing is "affordable" if it costs no more than 30 percent of a family's income. For ownership hous- ing this income amount is 80 percent of median, an amount that in 1994 could afford a home costing approximately $115, 000. For rental housing this income is 50 percent of median. In 1990 this was is approximately $500 per month. "Life- cycle" housing refers to housing available for people at all stages of their lives, offering a choice and variety of housing types and cost to accommodate people's changing needs and preferences as their incomes and circumstances change. 5. What are the affordable and life -cycle housing opportunities amount? The Affordable and Life -Cycle Housing Opportunities Amount ( "ALHOA amount ") is an amount, established by formula in the Act, that a participating municipality must spend to create affordable and life -cycle housing or to maintain existing affordable and life - cycle housing. A participating municipality's ALHOA amount is established each year 6. Does the ALHOA amount have to be a property tax levy? No. The ALHOA amount can be derived from a levy, or it can be derived from fundsfrom another source. Regardless of the source of funds for the municipality's ALHOA amount, a participating munici- pality that did not meet its negotiated affordable and life - cycle housing goals, and did not spend 85 percent of its ALHOA amount to create affordable and life- cycle housing opportunities in the previous year, must distribute the entire ALHOA amount to a local housing and redevelopment authority to create affordable and life -cycle housing opportunities in the municipality, or to the Metropolitan Council for distribution through the Local Housing Incentives Program. 7. If my municipality elects by November 15, 1995, to participate in the Local Housing Incen- tives Account Program, must the municipality spend an ALHOA amount in calendar year 1996? No. Because of various timing provisions in the Act, the ALHOA amount requirement does not apply until your municipality's election to participate in the Local Housing Incentives Account Program made by November 15, 1996, for calendar year 1997. 8. If my municipality elects to participate in the Local Housing Incentives Account Program by November 15, 1995, but is unable to agree on housing goals with the Metropolitan Council, • must the municipality participate in the program? No. A municipality is not participating in the Local Housing Incentives Account Program unless two conditions have been met: • a. The municipality has elected to participate in the program; and b. The Metropolitan Council and the municipality have negotiated and agreed on affordable and life -cycle housing goals for the municipality. If the municipality and the Metropolitan Council do not successfully negotiate housing goals, your municipality may not participate in the Local Housing Incentives Account Program. 9. Must my municipality participate in the Local Housing Incentives Account Program? No. Participation in the program is voluntary, but a municipality that does not participate may at some later time elect to participate in the program. However, a municipality which later elects to participate must establish that it has spent or agrees to spend on affordable and life-cycle housin P S P .ff g an amount equivalent to what it would have spent on affordable and life -cycle housing had goals been established for the period in which the municipality was not participating. • 10. If my municipality has met its housing goals in the previous calendar year, may my munici- pality participate in the Local Housing Incentives Account Program? Yes. However, your municipality will not be eligible to receive grants from the Local Housing Incentives Account Program if it met its affordable and life -cycle housing goals. Your municipality still will be eligible for grants and loans under the Livable Communities Demonstration Account and Tax Base Revitalization Account programs. 11. What if my municipality chooses not to participate in the Local Housing incentives Ac- count Program? Municipalities that elect not to participate in the Local Housing Incentives Account Program are not eligible to participate in the Tax Base Revitalization Account and Livable Communities Demonstration Account programs under the Act. The Metropolitan Council is required by the Act to take into account your municipality's participation in the Local Housing Incentives Account Program when making • discretionary funding decisions. In addition, your municipality will not be eligible to apply for funds under the Department of Trade and Economic Development's polluted sites clean -up program if your municipality is not participating in the Local Housing Incentives Account Program. • 12. If my municipality elects to participate in the Local Housing Incentives Account Program, but does not have the capacity to create additional affordable and life - cycle housing opportunities, can my municipality give its ALHOA amounts to other municipalities to meet negotiated housing goals? Yes. A municipality that has negotiated housing goals, but might not have adequate resources to create or maintain affordable and life -cycle housing opportunities still could be considered a participating mu- nicipality. However, the municipality would be required to distribute its ALHOA amount to the Metro- politan Council for distribution to other participating municipalities or distribute its ALHOA amount to a local housing and redevelopment authority for creating affordable and life -cycle housing opportunities within the municipality. The Act permits municipalities to enter into agreements with adjacent municipali- ties to cooperatively provide affordable and life -cycle housing. The Metropolitan Council will work with municipalities to help municipalities create affordable and life -cycle housing opportunities and avail themselves of the incentives and funding available under the Act and from other sources. 13. If my municipality is using local resources to make payments on a mortgage for an afford- able or life -cycle housing opportunity created prior to the Act, can these resources count toward expenditures of the municipality's ALHOA amount? Yes. As long as the use of the funds is directly related to your municipality's efforts to meet its afford - able and life -cycle housing goals, these local resources can be considered an expenditure of ALHOA amounts. 14. Are the goals for affordable and life -cycle housing, as proposed by the Metropolitan Coun- cil, achievable? The goals proposed by the Metropolitan Council are intended to be "long- term" goals. Your munici- pality will establish an action plan that identifies the steps your municipality intends to take to move toward its long -range goals. Beginning in 1998, your municipality's annual progress in meeting its negotiated affordable and life- cyclehousing goals will be measured against the annual goals your municipality sets forth its action plan. Progress toward the goals, will depend on private marketplace efforts, the availability of affordable and life -cycle housing resources and the use of local controls to • create an environment to meet goals. 15. Do the Metropolitan Council and a municipality negotiate and set housing goals annually? i No. The Act envisions negotiated housing goals as a one -time process. That is why the goals are long term in nature. The Metropolitan Council will propose affordable and life -cycle housing goals that encourage your municipality to address key housing benchmarks. 16. After the Metropolitan Council and a municipality negotiate and set affordable and life - cycle housing goals for the municipality, what happens next? The municipality must prepare an action plan that describes how it intends to meet its negotiated goals. The municipality has until June 30, 1996, to submit the action plan to the Metropolitan Council. 17. Does the Metropolitan Council have to approve the action plan? The Act does not require the Metropolitan Council to approve a municipality's action plan. However, the Metropolitan Council will comment on the plan's content in relation to the negotiated goals that have been established, and it will attempt to identify potential resources available to the municipality to help the municipality meet its negotiated affordable and life -cycle housing goals. 18. What should the action plan look like? The suggested format will be modeled after the one used for the housing element of your comprehensive plan. • Council Meeting Date September 25, 1995 G 3 City of Brooklyn Center Agenda Item Number / Request For Council Consideration Item Description: Resolution Declaring Discover the Center Rally Nights as a Civic Event. Department Approval: I..,- �� U Terri Lee Swanson, communications coord' n Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Appoint a member to ad hoc communications task force Summary Explanation: (supporting documentation attached X • • Member introduced the following resolution and • moved its adoption: RESOLUTION NO. RESOLUTION DECLARING DISCOVER THE CENTER RALLY NIGHTS AS A CIVIC EVENT. WHEREAS, the purpose of Discover the Center Rally Nights is to bring community leaders, residents and businesses together to provide a forum for getting involved WHEREAS, Discover the Center Rally Nights will generate increased commitment and ownership among the community for solving problems and celebrating and sharing community efforts WHEREAS, in order for Discover the Center Rally Nights to promote the event under the City - issued administrative land use permit requirements, it is necessary for Discover the Center Rally Nights to be declared a civic event. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center that Discover the Center Rally Nights is declared a civic event from October 1, 1995 though October 31, 1995. • Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • Council Meeting Date September 25, 1995 Q' 31 City of Brooklyn Center Agenda Item Number V Request For Council Consideration Item Description: Appointment of member to the Ad Hoc Communications Task Force Department Approval: 0 Terri Lee Swanson, communications c ordi a r Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Appoint a member to ad hoc communications task force • Summary Explanation: (supporting documentation attached X Currently, the Ad Hoc Communications Task Force has two vacancies. A Notice of Vacancy was placed in the Brooklyn Center Sun -Post and on Cable Channel 37 from August 30 to September 11. One application was received. (See attached). The Task Force has reviewed the application of Melody Hanna and based on her background and interest recommends her appointment to the task force. Current task force members are: Bernie Gaffney, chair 5918 Upton Avenue N. Dawn Sommers, vice chair 5315 L• yndale Avenue N. Julie Doth Executive Director, North Metro Convention and Visitors Bureau Roxana Benjamin Northwest News Philip Gray 6919 Regent Avenue N. • Coamcil Meeting Date p 9 // 2 2 5/95 3 City of Brooklyn Center Agenda Item Number d Request For Council Consideration • Item Description: Mayoral Appointment: Housing Commission (One Vacancy) Department Approval: Pa�P Patti Page, Interim ministrative Assi t Manager's Review/Recommendation: ' No comments to supplement this report Comments below /attached Recommended City Council Action: Appoint one member to the Housing Commission: • One member to fill the vacancy of Jack Kelly whose term would expire December 31, 1995. Summary Explanation: (supporting documentation attached _ Yes ) • Notice of vacancy n the Housing Commission was published in the August 2 1995 Brooklyn Center Y g P g � Y Sun -Post and was posted at City Hall and Community Center and aired on Cable Channel 37 from July 26 through August 25, 1995. A letter was sent to those persons who previously had submitted an application for appointment to a Brooklyn Center advisory commission informing them of the vacancy on the Human Rights and Resources Commission and encouraging them to call Sharon Knutson if they are interested in applying for the commission. They were given the choice of either reapplying or having their application previously submitted be considered. Notices were also sent to present advisory commission members. At your March 27, 1995, Council meeting, you approved the following process for filling Commission vacancies: Vacancies in the Commission shall be filled by Mayoral appointment with majority consent of the City Council. The procedure for filling Commission vacancies is as follows: 1. Notices of vacancies shall be posted for 30 days before any official City Council action is taken; • 2. Vacancies shall be announced in the City's official newspaper; 3. Notices of vacancies shall be sent to all members of standing advisory commissions; Request For Council Consideration Page 2 4. Applications for Commission membership must be obtained in the City Clerk's office and must be submitted in writing to the City Clerk; 5. The City Clerk shall forward copies of the applications to the Mayor and City Council; 6. The Mayor shall identify and include the nominee's application form in the City Council agenda materials for the City Council meeting at which the nominee is presented; 7. The City Council, by majority vote, may approve an appointment at the City Council meeting at which the nominee is presented. Mayor Kragness recommended appointment of Lloyd Deuel at the September 11, 1995. At the September 11, 1995, meeting the Council requested additional information from each of the applicants. Attached for City Council members only are the original applications and the additional information received from each of the applicants listed below: Lloyd Deuel 1606 72nd Avenue North Naomi Ische 7213 Kyle Avenue North Rex Newman 3107 61st Avenue North Mark Yelich 6018 Beard Avenue North • The table on the following page outlines the geographical distribution of the current members of the Housing Commission and the applicants. • Request For Council Consideration Page 3 Geographical Distribution Housing Commission (Chairperson and Eight Members) Applicants and Current Members September 6, 1995 : ?:::: ? } ? ?S i:::: ;:A;:;: {i: }'::: i:: j: ::::i ?: i::i :::? ::i:<( {` ::: : ::: Nei ds h n can urre t Members <�� C e bers Southeast Todd Cannon 2205 Brookview Drive North east n >' Am Go ea €I.. 6925 Humboldt Avenue North Northwest Ernie Ernie Erickson Xevenun Forth 6800 e Aven North West Central Henry Yang 6207 Regent Avenue North Jonathan Carter 4700 Eleanor Lane n t ra I • . Reeti><� »< >_< Ce Maria O lek €3Q st en E 6612 Ewing Avenue North ince Op at 12 York A n <: c' '' '<< ate: > »<> > >` <> 60 o ve ue North Southwest One vacancy. Council Meeting Date 0 9/25/95 3 City of Brooklyn Center Ageoda Item Number O Request For Council Consideration Item Description: Private Kennel License Renewal Department Approval: P2:ff2, 0 0 — C�L Patti Page, Interim Aministrative Assistant Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Council discuss approval of this license renewal. Summary Explanation: (supporting documentation attached no ) • On May 23, 1994 the City Council a p p roved a p rivate kennel license for the ke of four cats at Y � Y PP P P g the residence located at 6421 Bryant Avenue North. The applicant, Jana Lynn Roberts, has applied for the second year renewal. Private kennel licenses are limited to three years. The Police Department has indicated there have been no complaints from the neighborhood regarding this license. If approved, this license would expire on September 30, 1996, at which time the applicant could apply for the final renewal of this license. Co mcil Meeting Date c 9/25/95 3 CitY of Brooklyn Center Agenda Item Number o Request For Council Consideration r Item Description: REPORT ON THE ANALYSIS OF LIQUOR STORE OPERATIONS Department Approval: Cam Andre, Interim City Manager Manager's Review/Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Summary Explanation: (supporting documentation attached YES ) • The City ouncil has requested a report n ty eq po o the financial feasibility of the Liquor Stores operations. This memorandum summarizes the studies and analyses prepared by staff and from other resources and outlines the choices to be considered by the Council. Basically there are three possibilities 'regarding the City's liquor retail enterprises: 1. Retain the Present Operations. Future profits, in the range of $120,00 to $140,000 per year increasing annually at a modest 2% can be expected. The annual amount transferred to the general fund could be increased within a few years to $120,000 to $140,000. 2. Retain the Present Operations and Move the Boulevard Liquor Store to a New Location at 69th and Brooklyn Boulevard. Increased sales with a new site would pay for the cost of opening a new store and net profits should be greater. The existing store building facility would be remodeled to meet at least partially the space needs of the fire department. The existing building facility was financed in 1959 from the Liquor Fund and probably should be credited for that cost. 3. Liquidate the Liquor Enterprise The memo from Brad Hoffman projects a sale price of $550,000 for the liquor operations including the Humboldt store land and building, the transfer of lease for the Northbrook store, and the furniture and fixtures for all three stores. The City • would make a commitment not to issue additional licenses for some period of time. Inventories are not included in the $550,000 and could probably be sold for slightly less than the City's cost of about $300,000. Request For Council Consideration Page 2 The sale would produce a gross of $800,000 to $900,000 less the $100,000 needed for the • budget for the General Fund. The Liquor Fund also reimburses the General Fund for $42,366 of administrative costs which could not be completely covered by a reduction in those services. In addition, $136,000 would be required to pay off the balance of the current mortgage or loan to the Liquor Fund to pay for the acquisition of the Humboldt Store site. As indicated in the analysis, the proceeds invested in a reasonable basis would provide monies to offset the current yield for general fund transfer and administrative costs for only four to five years. In that case, property taxes in 1997 and later years would have to be raised to replace the $100,000 or more for transfers and administrative costs to the General Fund. These calculations are basically fairly conservative; and actual experience in the sale process may produce more or less than indicated. Several reports from the staff and outside sources are attached to provide supporting detail for the various options. Materials attached are: 1. Charlie Hansen's report 2. Brad Hoffman's report 3. Financial data on municipal liquor store operations in other Minnesota municipalities 4. Material from Coon Rapids and New Brighton relating to the liquidation of City liquor stores in those cities. I recommend that the City continue to operate the stores and possibly consider relocating the Boulevard Store to 69th and Brooklyn Boulevard. • • MEMORANDUM • TO: Cam Andre, Interim City Manager FROM: Charlie Hansen Finance Director DATE: September 20, 1995 SUBJECT: Report on the possible sale of the Liquor Stores At your direction I have tried to do at least an initial version of this study using only staff resources, not utilizing any outside consultants. In some instances, an outside consultant would have additional expertise not available on staff. In some instances, even the advise of an outside consultant would be nothing more than a guess because of the many variables involved. The costs of remodeling the fire station, building a new Boulevard Liquor Store, and what someone would be will to buy the stores for are examples. By far, the most difficult thing to estimate is goodwill. In other words, what is a buyer willing to pay for the fact that a business is already a going concern with an established customer base. It may come down to how badly does the buyer want to buy verses how badly does the seller want to sell. No one can tell until you match up a particular buyer and seller. Maximizing the goodwill portion of the sale price is the way to get the greatest total sale price for the city. We developed a scenario for this in which the assets of the three stores and three liquor licenses would be sold to a single buyer along with a promise that no additional licenses would be sold for a period of time, such as five years. This would give a buyer a period of time during which to maximize their profits. Expectations of future profits are one of the prime determinants of what a buyer is willing to pay for a business. Further investigation indicates that we would probably be challenged in court if we tried to create this sort of a monopoly situation where one business would own all liquor outlets within the city for a long time period. We apparently could make the promise to sell no additional licenses for a time as long as the three existing licenses had different owners. One of the ideas which precipitated the study request is that the Fire Department is requesting an expansion and remodeling of the West Fire Station as part of the proposed bond issue. This bond issue cost was estimated at $1,031,592 by the Fire Department. The thought was that if the Boulevard Liquor Store space could be given to the Fire Department, then the $1,031,592 cost could be avoided. That is incorrect. The additional space requirements of the Fire Department exceed the space of the liquor store, so an addition would still need to be constructed. All of the existing fire and liquor space would need to be remodeled. The Engineering Department has estimated that the savings from using the liquor store space would be no more than $200,000. Another question that has come up is if the stores are being charged the full cost of their operations. Staff has carefully reviewed this and found that the only cost not currently being charged is some building maintenance time and snow plowing costs which total no more than $1,000 per store per year. These costs are now included in the 1996 Proposed Budget. As part of the same review, it was found that the stores were being overcharged for Finance staff time and LOGIS charges . The overcharge exceeded the undercharge. This has also been corrected in the 1996 budget. In 1994, the Liquor Stores had income before transfers of $139,036. Of this, $100,000 was transferred to the General Fund, thereby reducing the tax levy. In 1995 and future ears, I expect profits to be in the same 130 000 to 150 000 y $ $ P P � per P year range. A logical question is: Couldn't we transfer more to the General Fund each year? In the past we have been vary aggressive in making transfers, essentially transferring profits even before they were made. The Liquor Fund ended 1994 with $44,488 in cash and $108,813 in accounts ,payable. It had a negative cash position in February and March of 1995 and had to borrow money from the Investment Trust Fund. We want to keep the transfer below the expected profits for a few years to get the Liquor Fund into a positive cash position. Then it would be prudent to increase the transfer. For this study, we have used a transfer of $100,000, which really understates the long term value of the stores. Another question which must be resolved is whether the City would invest the proceeds of selling the liquor stores and use the investment income to reduce future taxes, or would the proceeds be spent on desired capital improvements elsewhere in the city. You have to do one or the other. Both can not be done. One of the reasons given for studying this issue is the feeling that the sale of liquor isn't a proper or moral business for the city to be in. But discussions have always been in the context of selling the stores to a private business, not of closing the stores. Even if we could close the stores and not allow others to open, the only effect would be stores opening just across the border in neighboring cities. Liquor sold by private stores, inside or outside the city is no more moral than liquor sold in a city owned store. City owned stores do have one advantage in that we are more diligent in guarding against sales to persons who are already intoxicated or who are under legal drinking age than privately owned stores are likely to be. Comparative Rankings One of the attached reports is data drawn from a report titled "An Analysis of Minnesota's Municipal Liquor Store Operations in 1993 " by the Office of the State Auditor. The first two pages rank stores by gross sales. Brooklyn Center is tenth on this list. The next page is a ranking I did by Net Income. I excluded cities which had both on -sale and off -sale operations since on -sale operations typically have much higher net income. Brooklyn Center ranked thirtieth on this list. Several factors influence this ranking. First is that 1993 was a bad year for Brooklyn Center. We had net income of only $90,067 that year compared to $139,036 in 1994. Many of the stores ranked higher had very low operating expenses as a percent of sales. This leads me to wonder if they did as good a job as we have of allocation all costs to the liquor stores. Finally, many of these stores are in rural area where they may have no nearby competition. I didn't attempt to get information from privately owned liquor stores. They consider us to be their competitors and if I owned such a store, I wouldn't give information to my competitor. The Study The first attachment is a study titled "Liquor Stores Scenarios" prepared by the finance staff of two scenarios for keeping the liquor stores and one scenario for selling the stores. It is possible to develop other scenarios, but we feel these are a good start at exploring the options. Each scenario contains many assumptions and projections. Outside experts could help us refine some of these. Others can never be known for sure without going through with the scenario. The second attachment is a study done by Brad Hoffman titled "Liquor Store Cash Flow Analysis." He has tried to do this report from the perspective of a private buyer and project what such a buyer would pay the City for the stores. His best estimate is about $550,000 plus the value of the inventories. The next attachments are reports from the cities of Coon Rapids and New Brighton on their experiences in having sold municipally owner liquor stores to private operators. Their reports aren't as informative as we might wish. Apparently both cities had liquor operations which broke even or lost money. Another interesting note is that Coon Rapids had two municipal liquor stores but there were six private licenses in 1993. By the same token, we would probably have increase the number of licenses to more than our current three stores at some point. By state law, we would only be able to charge a license fee of $200 per store per year. Other attachments include a Preliminary Cost Estimate from Mjorud' Architecture for remodeling fire stations, and Liquor Store Financial Statements dated August 31, 1995 and December 31, 1994 and a record of financial activity of the Liquor Stores for the period from 1985 to date. • Liquor Stores Scenarios This report analyzes three scenarios concerning the three municipal liquor stores of the City of Brooklyn Center. It will present what each scenario is and then proceed to explain the financial implications of each one. The assumptions used in the process of analyzing each situation will be explained within the scenarios. There are some basic facts that should be noted as a basis for this report. The City of Brooklyn Center operates three municipal liquor stores: Humboldt Liquor ( #1), Boulevard Liquor ( #2), and Northbrook Liquor ( #3). Humboldt Liquor is operated in a City -owned building that was purchased and remodeled in 1985. Boulevard Liquor is operated in a City -owned building that is one section of a building occupied largely by the City's West Fire Station. Northbrook Liquor is operated out of a building leased within the Northbrook Shopping Center. The West Fire Station is in need of some upgrades to meet new regulations and code standards. Scenario #1: The City's Municipal Liquor Stores would stay in business as they are. The West Fire Station would be added on to in order to meet the required specifications of code. Scenario #2: The City's Municipal Liquor. Stores would stay in business with no changes for Humboldt Liquor or Northbrook Liquor. Boulevard Liquor, however, would be relocated up to Brooklyn Boulevard and 69th Avenue and would operate there. The West Fire Station's expansion would be reduced due to the space it could use from the original Boulevard store. Scenario #3: The City's Municipal Liquor Stores would be sold piecemeal with the agreement that no other liquor licenses would be issued for 5 years. Humboldt Liquor would be sold as is (land, building, contents, business goodwill). Boulevard Liquor would have its contents sold and the space it occupied would be used for the West Fire Station's expansion. Northbrook Liquor's lease would be assigned to the buyer and the City would sell its contents and business goodwill. • Scenario #1 involves maintaining the municipal liquor stores as they are. Humboldt Liquor, Boulevard Liquor, an q d Northbrook Liquor would continue operation. Based on this assumption, activity has been projected to establish future net income for the entity as a whole as well as for each individual store. Projected Net Income Combined Humboldt Boulevard Northbrook 1995 $141,817 $31,281 $61,277 $49,259 1996 $144,653 $31,907 $62,502 $50,244 These projections are based on 1994 actual figures. The liquor market is currently fairly flat; thus a 2% increase is being used. This 2% increase is applied to both 1995 and 1996. This projected activity would allow the Liquor Store Fund to make an operating transfer to the General Fund each year. This transfer has been made in past years as another source of revenue for General Fund operations. . The City's West Fire Station's expansion would be completed b adding on the Y 9 necessary space to meet the new requirements. This expansion would involve the addition of 5,141 new square feet and the remodeling of existing facilities. The preliminary cost estimate of this project, based on estimated 1995 costs, is $1,031,592. s � • CITY OF BROOKLYN CENTER LIQUOR STORES TEN YEAR SUMMARY OF OPERATIONS 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985 BUDGET BB DGET A CTUAL ACTUAL ACTUAL A ACTUA ACTUAL ACTUAL ACTUAL AC TUAL ACTUAL SALES $2,795,850 $2,715,300 $2,698,373 $2,615,955 $2,664,667 $2,678,840 $2,455,551 $2,414,126 $2,583,594 $2,527,159 $2,465,749 $2,388,513 COST OF SALES 2,121,950 2,047,561 2,023,603 1,976,173 2,011,103 2,025,288 1,863,843 1,844,619 1,977,728 1,930,254 1,890,311 1,841,870 NET OPERATING REVENUE 673,900 667,739 674,770 639,782 653,564 653,552 591,708 569,507 605,866 596,905 575,438 546,643 OPERATING EXPENSES 520,979 526,011, 526,645 537,247 519,237 516,901 490,545 458,353 457,079 434,311 435,763 415,409 OPERATING INCOME 152,921 141,728 148,125 102,535 134,327 136,651 101,163 111,154 148,787 162,594 139,675 131,234 NON - OPERATING EXPENSE 10,622 12,640 9,089 12,468 15,442 15,575 7,471 8,916 13,050 16,948 9,521 5,909 INCOME BEFORE TRANSFER 142,299 129,088 139,036 90,067 118,885 121,076 93,692 102,238 135,737 145,646 130,154 125,325 TRANSFERS 100,000 100,000 100,000 100,000 65,000 130,000 110,000 135,000 90,000 110,000 100,000 103,500 NET INCOME $42,299 $29,088 $39,036 ($9,933) $53,885 ($8,924) ($16,308 ($32,762) $45,737 $35,646 $30,154 $21,825 TENYEAR.XLS 9/19/95 Scenario #2 would maintain current operations at Humboldt Liquor and Northbrook Liquor. Boulevard Liquor would be relocated to Brooklyn Boulevard and 69th Avenue and operated from there in 1996 or 1997. Relocation of Boulevard Liquor would include the acquisition of a site, the improvement to that site, the construction of the building, and the purchase of necessary equipment inside the building. The total cost of this relocation is estimated to be $630,000 based on a site size of 30,000 square feet and a building size of 5,000 square feet. Based on these assumptions, activity has been projected to establish future net income for the entity as a whole as well as for each individual store. Projected Net Income Combined Humboldt Boulevard Northbrook 1995 $141,817 $31,281 $61,277 $49,259 1996 $150,849 $31,907 $68,698 $50,244 These projections are based on 1994 actual figures. Currently, the liquor market is fairly flat; thus a 2% increase is being used for 1995. A relocated Boulevard Liquor would increase sales at a higher rate. Per Engineering, traffic passing the current r store is 26,000 vehicles each day. Traffic passing the relocation area is 41,000 vehicles each day. This would be a 58 %incr ease in passing traffic; thus a 30% increase:is being used for 1996 operating revenues and cost of sales. The original 2% increase is applied to 1996 operating expenses and nonoperating revenues /expenses except for utilities, depreciation, bond interest, and property insurance expenses that would increase 1996 operating expenses by $58,113 due to the relocation. Revenue bonds would be issued at an estimated 6% interest rate to finance this relocation project. This projected activity would allow the Liquor Store Fund to make an operating transfer to the General Fund each year. This transfer has been made in past years as another source of revenue for General Fund operations. The City's West Fire Sta'tion's expansion would be completed by scaling down the original plan to account for the space the station could expand in to due to the liquor store's relocation. Some expansion of the building would still be required and all existing spaces remodeled. The preliminary cost estimate of the project with the liquor store remaining in place is $1,031,592. It is estimated that using the liquor store space would save $200,000, resulting in a project cost of $831,592 based on estimated 1995 costs. • ONE TIME BENEFITS: e Fire station remodeling savings $200,000 ANNUAL BENEFITS: Increased profits and transfers $9,032 Note that the cost for the relocation of Boulevard Liquor Store, financed with revenue bonds, has been included in the calculation of the net income. The bond interest payments have been deducted to arrive at this net income figure. The one time benefit amount of $200,000 and the annual benefit amount of $9,032 would add up to $245,160 in five years. Scenario #3 involves selling the three Municipal Liquor Stores on a piecemeal basis. • Humboldt Liquor would be sold as a complete store. Boulevard Liquor would have its contents sold and its space would be used for the West Fire Station's expansion. Northbrook Liquor would have its contents and business goodwill sold with the current lease being transferred to the buyer. A transfer of the lease is permissible after obtaining written consent of the Landlord. These sales would be completed with the agreement that no other liquor licenses would be issued for 5 years. Based on these assumptions, sales figures have been projected for the business as a whole as well as for each individual store. Humboldt Boulevard Northbrook Combined Liquor Liquor Liquor Projected Sale Price $672,916 $429,401 $80,722 $162,793 The City's West Fire Station's expansion would be completed by scaling down the on inal la an to acco unt forth P q 9 P e space the station could ex and in to due to the li uor store's relocation. The preliminary cost estimate of the project would be reduced by $200,000 resulting in a project cost of $831,592 based on estimated 1995 costs. • Based on the sale of the liquor store operations, there would be no o eratin transfer P 9 of liquor store profits to the General Fund. This would reduce the available revenues for General Fund operations. There would also be additional costs that the City would incur in relation to the close of the liquor store operation. These costs would include displacement benefits for the Liquor Store employees and a reallocation of City-shared P costs currently allocated to the Liquor Stores. The detail of these items are listed below. Displacement Costs (based on 1995 salary figures) Unemployment Benefits: Full -time $29,115 Part-time 32.478 $61,593 Lay -off Benefits (full -time only): Outplacement Services (Max. $2,000 X 3 FT) $6,000 Three Month's Insurance (Max. $335/mc. X 3 FT) $3,015 Severance Pay -- Salaries $7,714 Employer's taxes 1,090 $8.804 $17.819 • Costs to be reallocated (based on the 19 budget) There are certain costs currently paid for by the Liquor Stores which would continue even if the stores were sold. The largest of these is Administrative Services, which is a reimbursement for the time of five Finance Department personnel spent supporting the Liquor Stores. This varies from 8% of the Finance Director's time, to 10% of the Payroll Technician's time, to 20% of the Staff Accountant's time. Because it is a small part of many people, it wouldn't be possible to eliminate a position. The reimbursement from the Liquor Stores would stop and the General Fund would pick up the cost. The Liquor Stores are allocated a small percentage of LOGIS costs for the financial and payroll systems. If the Liquor Stores were eliminated, these costs wouldn't go down and the General Fund would have to cover the cost. A percentage of the fee for the annual audit is also charged to the Liquor Stores. Again, that fee wouldn't be reduced in the absence of Liquor, and the General Fund would have to pick up the cost. Administrative Services $35,100 LOGIS Charges 4.035 Audit/Financial Fees 3,231 $42.366 Please note that the oroceeds`rom the sale of the Humboldt Liquor Store would be used to pay off the interfund loan,to the Capital Improvements Project Fund. This would then make those funds available for other capital improvement projects. At December 31, 1995, that outstanding loan balance would be $136,172. The City would collect liquor license fees far the off -sale liquor operations in Brooklyn Center. These off -sale licenses have a charge limit of $500 per operation per year (per State of Minnesota mandate). ONE TIME BENEFITS: Projected sale price $672,916 Fire station remodeling savings 200,000 $872.916 ONE TIME COSTS: Unemployment benefits $61 5g3 Lay -cff benefits 17,819 . $79.412 ANNUAL BENEFITS: Property taxes $10,336 Liquor store license fees ($500X3) 1,500 $11,836 ANNUAL COSTS: Lost profits and transfers $120,000 Costs shifted to General Fund 42.366 $162,366 The net one time benefit would be $872,916 minus $79,412 equaling $793,504. The annual net cost would be $162,366 minus $11,836 equaling $150,530. The annual net cost would exceed the one time benefit within five and a half years. • • MEMORANDUM • TO: Cam Andre Interim City Man ger b FROM: Brad Hoffman, Director of Community Development DATE: August 30, 1995 SUBJECT: Liquor Store Cash Flow Analysis At your request, I have done a cash flow analysis of Brooklyn Center's liquor store operation. I have done it from the perspective of a potential buyer. Any buyer would assess the value of the business based upon the sum total of benefits over a specific period of time. In the case of the liquor store, the primary benefits are cash flow and appreciation. An investor would calculate a sum total of the benefits, discounted to achieve a given internal rate of return and hence arrive at the value for the business. Obviously, there are a number of variables for which the investor has to make certain assumptions. As the assumptions vary so does the price offered. However, for purposes of this exercise the difference that would be derived would not be significant enough to even remotely change one's observation of the business. The following assumptions were made in this analysis: 1. Revenues were inflated at 3 % annually. Enough to hold for inflation, however, the liquor industry has been relatively flat so that a more aggressive inflation would not be used by an investor. 2. The City cannot contract away its legislative authority. Hence an investor will assume future competition. However, I minimized the impact on the assumption that a prudent buyer would control key locations in Brooklyn Center. I assumed only a 5 % impact. 3. Cost of sales is maintained at 75 %. 4. SGA costs were adjusted to include a new lease on the Northbrook Liquor Store, property taxes, payroll and bookkeeping expenses,while eliminating such costs as our administrative service charge, LOGIS, and audit charges. I assumed a 18% margin. 5. I assumed a debt service for real estate and improvement including equipment. • A loan of 5367,500 at 9% for 15 years was used. The loan to value ratio was 70%. 6. Depreciation of the building and improvements was done over 39 years. • Equipment over 7 years. 7. A tax rate of 35 % was used. In reality this number is probably low. 8. I assumed an initial value for the business of $525,000 and inflated that at 3 %. This was done in order to determine a future value needed for a total net cash flow estimate. With these assumptions, I have arrived at a net cash flow of $1,619,000. An investor would offer the following for the business based upon a 15, 17, and 20% internal rate of return respectively. Internal Rate of Return Offer Price 15% $660,260 17% $599,640 20% $523,580 I believe Brooklyn Center would receive about $550,000 for its liquor operation including the real estate. Inventory is not included. Our investment rate is generally tied to treasury notes. Notes are currently around 6.8 %. If the liquor store return to the general fund over the next 10 years was a average $150,000 • annually then the City would have to sell the liquor store business for approximately $2,206,000 to replace the cash flow. If you have any further questions on this matter or would like to have me do a spread sheet with other assumptions, I , would be happy to provide them. [amounts in thousands) YEAR 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Revenue $2,863 $2,948 $2, $2.972 $3,061 $3,153 $3,247 $3,345 $3,445 $3,548 3% Cost of Sales 2,147 2,211 2,141 2,229 2,295 2,365 2,435 2,509 2,584 2,661 75% Operating Expenses 515 531 514 535 551 568 584 602 620 639 18 % margin Net Operating Income 201 206 200 208 215 220 228 234 241 248 Debt Service 45 45 45 45 45 45 45 45 45 45 $367,500 IVR 70 15 years 9% Cash Flow 156. 161 155 - 163 - 1 70 175 183 189 196 203 Depreciation 19 19 19 19 19 19 19 11 11 11 425,000 39 125,000 _ 7 Amortization Fees 1 1 1 1 1 Principal 1 0 11 12 13 14 15 17 19 20 22 principal balance 214 EIl Tax 146 152 147 156 164 171 181 197 205 214 Tax 51 53 51 55 57 60 63 69 72 75 35% rate Cash Flow After Tax 95 99 96 101 107 111 118 128 133 139 Sale 491 3 % inflation on 525 Net Cash Flow $ 95 $ 99 $ 96 $ 101 $ 107 $ 111 $ 118 $ 128 $ 133 $ 630 Total Cash Flow = $1,619,000 NPV = 15% _ $660,260 17% _ $599,640 20% _ $523,580 STATISTICS OF LIQUOR STORE OPERATIONS IN MINNESOTA MUNICIPALITIES l __ 1 1 TABLE 4 ANALYSIS OF CITY LIQUOR STORE OPERATIONS - 1993 RANKED BY GROSS SALES TRANSFERS _ PROFI TO/FROM) FOOT POPU- COST OF PCT OF OPERA NONOPERAT NET OTHER NAME OF CITY TYPE OF STORE NOTES LATION SALES SALES - AMOUNT SALES EXPENSES INCOME REV ENUES EXPENSES INCOME FUNDS HICI IFIEt.D OFF SALE ONLY 35,538 0,753,106 5,294,233 1,458,875 21.60% 924,773 534,102 90,028 10,824 007,900 646,040 EDINA OFF SALE ONLY 40,084 5,557,278 4,285,916 1,271,382 22.88% 859,301 412,001 .... 501 411,560 380,000 COt UMBIA I IEIGI ITS OFF SALE ONLY 18,000 5,204,404 4,273,140 031,264 17.89% 742,246 189,018 61,459 1,504 248,913 189,022 EDEN PRAIRIE OFF SALE aNt_Y 42,442 4.141,080 3,152,789 088,911 23.88% 670,095' 308,916 5,011 314,527 315,000 LAKEYILLE OFF SALE ONLY 30,149 4,088,A19 3,077,558 1,010,801 2412% 728,843 282,018 98,583 26,201 352,400 978,965 ST, AN "fHONY ON A OFF SALE,' ' 8,019 3,513,427:: .2.435.733 1,077,694 30.07% ; 1,135,785 (58,091) 88,253: 24,181 4,001 65,000 APPLE VALLEY OFF SALE ONLY 38,261 3,444,064 2,556,220 888,438 25.79% 750,170 132,208 .... 1,315 130,953 100,000 FRIDL.EY OFF SALE ONLY 28,287 2,783,011 _ 2,214,710 568,805 20.44% 492,512 76,383 56,120 .... 132,503 SPRING LAKE PARK OFF SALE ONLY 6,523 2,766,878 2,247,139 510,539 18.78% 420,828 98,711 102,417 21,011 170,517 135,000 BROOKLYN CENTER OFF SALE ONLY 28,533 2,015,955 1,076,173 639,782 24.48% 537,247 102,535 3,725 16,193 90,007 100,000 EL.KHIVER OFF SALE ONLY 12,405 2,272,238 1,755,020 517,218 22.70% 254,160 263,038 34,718 .... 297,758 153.450 BEMIDJI OFF SALE ONLY 11,102 2,144,282 1,591,168 553,124 25.80% 343,752 209,372 81,553 .. 200,925 180,513 ANOKA OFF SALE ONLY 17,481 2,135,020 1,660,034 474,988 22.25% 400,242 74,744 8,881 .... 83,605 46,800 ROBBINSDAI E ON d OFF SALE 14,410 1,882,550 1,148,966 715,584 38.42% 017,937 97,047 01,472 159,119 105,791 TI RD: RIVER FAL LS OFF SALE ONLY 8,008 1,837,542 1,300,738 446,804 24.32% 237,851 208,953 22,817 29,849 201,921 174,900 WAYZATA ON d OFF SALE 3,830 1,835,075 1,150,879 684,196 37.28% 856,599 27,507 14,505 27,030 15,066 47,500 Ch AL- EXANDRIA OFF SALE ONLY 8,183 1,823,154 1,432,275 390,879 21.44% 251,169 139,710 _. 10,953 8,887 143,776 80,000 DETROlfI. AKES OFF SALE 0N_Y 7,258 1,814,131 1,431,090 382,132 21.00% 230,320 151,812 28,505 2,259 178,059 145,000 MARSHALL OFF SALE ONLY 12,229 1,783,807 1,312,542 471,325 20.42% 182,294 289,031 10,958 .... 305,989 315,000 FERGUS FALLS OFF SALE ONLY 12,468 1,778,398 1,324,803 453,505 25.50% 287,512 185,993 45,221 1,995 209,219 147,272 HUTCHINSON OFF SALE ONLY 11,060 1,587,780 1,224,225 363,564 22.90% 231,820 131,744 18,307 19,685 128,368 120.000 SAVAGE OFF SALE ONLY 12,880 1,578,775 1,212,392 368,383 23,21% 285,895 80,488 41,621 .... 122,100 76,800 MONTICELLO OFF SALE ONLY 5,203 1,484,488 1,140,352 344,130 23.18% 209,521 134,615 17,088 44 151,659 31,654 FAIRMONT OFF SALE ONLY 11,352 1,451,450 1,113.676 337,782 23.27% 244,419 93,383 41,132 .... 134,495 125.000 CAMBRIDGE OFF SALE ONLY 5,182 1,349,387 1,089,005 259,302 19.22% 218,421 40,971 29,071 10,894 53,148 50.000 NORTI FIELD OFF SALE ONLY 15,143 1,340,811 086,864 353,947 26.40% 189,550 184,397 48,743 0,583 200.557 120,000 SHOREWOOD OFF SALE ONLY 8,430 1,338,773 1.071,829 264,944 19.82 233,353 31,591 15,399 1,882 45,108 40,000 LEXINGTON OFF SALE ONLY 2,198 1,335,103 1,105,503 229,690 17.20% 177,228 52,464 2,280 .... 54,74.1 PARK RAPIDS OFF SALE ONLY 2,060 1,323,020 097,270 325,750 24.62% 167,510 158,240 10,251 .... 168,401 161,622 MOUND OFF SALE ONLY 0,643 1,305,720 1,007,545 298,175 22.84% 188,228 109,949 14,881 .... 124,830 102,940 MORA OFF SALE ONLY 2,971 1,103,714 932,599 281,115 21.87% 152,543 108,572 43,081 .... 151,653 82,500 CHAMPIIII OFF SALE ONLY 111 18,565 1,100.107 877,096 223,011 20.27% 208,508 14,413 9.003 477 23,929 71,355 WORTIIINGTON OFF SALE ONLY 10,183 1,032,256 770,404 281,782 25.36% 175,662 86,100 5,742 .... 01,842 75,000 PRINCETON OFF SALE ONLY 3,810 1,009,586 750,386 250,200 24.78% 147,111 103,089 27,096 130,165 08,500 SANK HAPIDS OFF SALE ONLY 8,835 1,003,277 786,175 217,102 21.84% 131,012 85,490 21,971 14,000 93,461 25,000 BUFFALO OFF ME ONLY 7,578 977,276 609,640 277,630 28.41% 182,081 94,955 2,280 85 97,170 00.000 BIG LAKE OFF SALE ONLY 3,331 069,977 767,004 202,973 20.93% 124,427 78,546 8,814 .... 85,160 85,160 TWO HARBORS OFF SALE ONLY 3,630 952,814 711,381 241,433 2534% 184,782 58,871 6,485 .... 83,158 201,500 MONTEVIDEO OFF SALE ONLY 5,526 807,070 682,097 234,973 26.19% 148,238 88,735 5,030 1,644 92,121 90,000 HOSEAU ON d OFF SALE 2,558 874,132 632,231 241,001 27.87% 136,258 105,845 6,780 .... 112,425 45.000 DELANO ON $ OFF SALE 2,833 832,472 539,847 292,625 35.15% 205,805 (3,180) 19,174 .... 15,994 52,050 + '� i..r A `' ° •;t T TABLE 4 ANALYSIS OF CITY LIQUOR STORE OPERATIONS - 1993 RANKED BY GROSS SALES TRANSFERS ----,,GROSS PROFIT _ TO /FROM) FOOT POPU- COST OF PCT OF O _ NONOPERATING, NET OTHER NAME OF CITY _ _ TYPE OF S TORE NOTES LAT SALES _ SALES A MOU NT SALES EXPENSES INCOME RE VENUES EXPENS I NCOME FUNDS _ LITCIIFIELD OFF SALE ONLY 8,073 815,781 611,475 ` 204,300 25.04% 134,958 09,348 12,009 .... 81,357 47,535 NISSWA ON & OFF SALE 1,430 803,795 457,271 340,524 43.11% 231,881 114,843 2,705 .... 117,808 (77,500) ROGERS ON & OFF SALE 759 803,248 504,440 298,808 37.20% 275,908 22,840 2,010 .... 25,450 GRAND MARAIS OFF SALE OIJLY 1,217 780,011 552,744 228,107 29,22% 150,800 77,358 4,287 81,645 BAUDETTE ON &OFF SALE 1,148 770,459 481,288 295,181 38.02% '202,007 93,174 9,513 102,687 57,031 PINE CITY OFF SALE Of&y 2,753 737,132 502.822 144,319. 19.5896 - ;182,285': (17,975)' 4,073 394 (13,896) .... WARROAD ON & OFF SALE 1,711 730,848 555,644 175,204 23.97% 158,052 17,152 27,527 44,679 54,000 ISANTI OFF SALE ONLY 1,857 728,780 527,848 200,932 27.57% 117,692 83,240 28,442 .... 111,682 24,000 NORTH BRANCH OFF SALE ONLY 2,200 720,000 572,532 147,584 20.49% 129,881 17,883 2,113 8,169 11,827 29.050 FARMINGTON OFF SALE ONI_Y 0,574 709,343 .!' 52.7,102 182,151 25.68% .. 160,173 21,978 68 430 21,600 (2,500) WADENA -OFF SALE ONLY 4,251 606,082 547,875 149,087 21.39 %" 133,787 15,300 40 15,316 35,000 MILACA ON A OFF SALE 2,273 095,948 451,401 244,547 3514% 252,117 (7,570) 15,013 14,442 (6,399) 50,000 BENSON ON & OFF SALE 3,228 805,075 401,705 293,970 42.28% 240,118 53,852 19,208 .... 73,120 50,000 MOOSE LAKE ON & OFF SALE 1,614 688,862 430,733 258,129 37.47% 160,202 97,927 0,942 ..., 104,869 70,000 GLENCOE OFF SALE ONLY 4,758 050,604 529,905 120,789 18.56% 75,904 44,885 3,511 .... 48,396 5,000 PERHAM OFF SALE ONLY 2,174 848,201 453,850 194,405 29.88% 102,449 91,950 2,978 10,505 78,429 52,000 a VVINDOM OFF SALE ONLY 4,348 842,882 460,578 182,300 28.36% 148,930 33,370 450 .... 33,826 35,000 HINCKLEY ON & OFF SAL 1,004 830,870 379,729 260,141 40.66% 210,693 49,448 23,435 12,522 00,361 27,000 ZOMBROTA ON & OFF SALE 2,372 632,629 387,076 245,553 38.81% 248,948 (3,395) 17,640 247 14,004 15,000 AITKIN OFF SALE ONLY 1,700 014,421 500,808 107,613 17,51% 101,384 0,229 18,145 .... 22,374 50,000 BAG.EY OFF SALE ONLY 1.431 589,034 436,214 152,820 25.94% 84,188 08,652 2,447 .... 71,099 57,956 LONG PRAIRIE OFF SALE ONLY 2,826 583,604 435,823 147,781 25.32% 79,930 67,851 14,839 8,817 73,673 40,000 REDVNDODFALIS OFF SALE ONLY 4,803 579,004 430,604 148,400 25.84% 113,455 35,035 7,452 1,003 41,484 10,000 HOWARD LAKE ON & OFF SALE 1,523 567.358 353,113 214,245 37.76% 108,278 47,967 15,068 .... 63,635 (14.313) WELLS ON & OFF SALE 2,449 567,311 373,068 193,343 34.08% 148,560 44,783 12,052 973 55,862 25.000 OLIVIA ON & OFF SALE 2,633 561,761 348,582 213,179 37.95% 187,850 25,329 7,189 7,809 24.619 100 MORRIS OFF SALE ONLY 5,506 558,473 413,804 144,579 25.89% 112,958 31,621 4,150 .... 35,771 53,200 LE CENTER ON & OFF SALE 2,074 550,102 335,946 214,216 38.94% 189,365 44,851 7,007 51,858 110,000 WATERTOWN ON & OFF SALE 2,495 528,857 321,201 207,566 39.25%6 201,730 5,830 9,055 .... 14,885 42,117 BLUE EAHTII OFF SALE ONLY 3,727 522,349 301,560 130,789 25.04% 121,803 8,986 3,628 .... 12,614 .... COOK ON & OFF SALE 668 521,240 314,195 207,045 30.72% 182,138 44,909 11,190 .... 56,009 40,000 MAHNOMEN ON & OFF SALE 1,203 500,782 336,183 164,599 32.87% 144,371 20,228 15,697 250 35,675 1 ISLE ON & OFF SALE 589 499,643 301,552 198,091 39.85% 169,065 29,020 17,757 .... 46,783 62,167 PIPESTONE OFF SALE ONLY 4,559 409,401 368,501 132,800, 28.01% 90,988 41,912 2,103 44,015 44,000 GLENVVOOD OFF SALE6N[_Y 2,583 406,248 387,308 108,940 21.95% 63,092 15,848 4,313 .... 20,181 20,000 MAPLE l -AKE ON 6 OFF SALE 1,418 405,228 318,149 177,079 35.7896 145,082 31,997 5,844 .... 37,841 35,000 GRANITE FALLS OFF SALE ONLY 3,053 473,900 336,855 137,051 28.92% 74,417 62,834 19,136 .... 81,770 50,353 LONGVLLE ON & OFF SALE 101 233 470,011 274,550 196,361 41.70% 101,185 35,190 10,950 48,140 40.493 PINE ISLAND ON & OFF SALE 2,179 464,522 253,219 211,303 45.49% 200,259 11,044 14,150 .... 25,194 .... FRAZEE ON & OFF SALE 1,164 459,127 263,420 195,707 42.63% 200,722 (5,015) 19.355 2,040 12,300 8.000 MENAHGA ON & OFF SALE 1,075 457,852 201,023 160,220 38.31% 149,985 18,244 2,578 .... 18,822 25,000 LIQUOR STORE 1993 OPERATIONS • RANKED BY NET INCOME Richfield 6,753,108 607,906 Edina 5,557,278 411,560 Lakeville 4,088,419 352,400 Eden Prairie 4,141,680 314,527 Marchall 1,783,867 305,989 Elk River 2,272,238 297,756 Bemidji 2,144,282 290,925 Columbia Heights 5,502,404 248,913 Fergus Fails 1,778,398 209,219 Northfield 1,340,811 206,557 Thief River Falls 1,837,542 201,921 Spring Lake Park 2,766,678 179,517 Detroit Lakes 1,814,131 178,058 Park Rapids 1,323,020 168,491 Monticello 1,484,488 151,659 Mora 1,193,714 151,653 Alexandria 1,823,154 143,776 Fairmont 1,451,458 134,495 Fridley 2,783,611 132,503 Apple Valley 3,444,664 130,953 • Princeton 1,009,586 130,185 Hutchinson 1,587,789 128,366 Mound 1,305,720 124,830 Savage 1,578,775 122,109 Isanti 728,780 111,682 Buffalo 977,276 97,170 Sauk Rapids 1,003,277 93,461 Montevideo 897,070 92,121 Worthington 1,032,256 91,842 Brooklyn Center 2,615,955 90,067 Anoka 2,135,020 83,605 LIQRANK.XLS 9/18195 Ilk LL 0000 *Q > ' RAPID August 24, 1995 Cam Andre Acting City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 Re: Liquor Store Divestiture Dear Mr. Andre: Enclosed please find copies of documents and other information the City of Coon Rapids used when it divested itself of its municipal off -sale liquor stores in 1987. The issue had arisen on several occasions throughout the years, but in 1987 the Council decided to look more seriously at the possibility of getting out of the business of selling; liquor. Obviously, much discussion occurred between Council and staff before the Council directed staff to proceed with the sale. At the time the Council decided to take this action, the City was operating two stores. Store number one was located in a building leased by the City and store number two was located in a City owned building. Both structures were quite new at the time. The first formal step taken by the Council was to adopt a resolution approving the divestiture of the operation. At the same time, an ordinance providing for the issuance of off -sale licenses was also introduced. The ordinance introduced at that time limited the number of available licenses to two, one in the west part of the City and one in the east. The purpose of the limitation was to enhance the value of the stores by protecting the buyers from.an influx of competition. The bidders were advised that such a situation was not likely to last forever, but the City would jive them a few years to establish themselves before more licenses would be issued. The number of available licenses was increased to six in 1993. The next step was to prepare the specifications and the advertisement for bids. The City established minimum bids for each of the stores. The staff also brought its lessor into the picture to work out an assignment of the City's lease. The City obviously wanted the new owner of the i operation to take over the City's obligations under the lease. 1313 COON RAPIDS SOULEVARD, COON RAPIDS, MN 55433 -5397 (612) 755 -2880 • FAX (512) 754 -9403 Cam Andre Acting City Manager City of Brooklyn Center August 24, 1995 Page 2 Each store was sold separately although a party was allowed to bid on both. The stores were sold to two different buyers. Bidders were required to submit along with the bid information about their experience and past history in operating liquor stores. They were also required to include an application for a license and all license fees. The City received at least three bids on each of the two stores. Staff then analyzed the bids and made recommendations to the Council based on the amount of the bids and the bidders' experience and history. The Council adopted formal resolutions accepting each high bid and the buyers then worked with staff to execute the necessary contracts for the sales. Because of the real estate involved, the sale of store number two took a little longer to complete. The Coon Rapids City Charter requires that an ordinance be adopted authorizing the sale of any City real estate. Dates of transfer were established so that the City ended business on a Saturday night and the • new owners took over on the following Monday. On the intervening Sunday the City and the new owners conducted inventories of remaining stock and the actual purchase price was then adjusted accordingly. One other issue the City dealt with was the employees. Since the City was no longer going to be in the liquor business, the employees of the liquor stores were not longer needed. The Council provided some serverance pay and, as it turned out, some were hired by the new owners, some retired and others found new positions elsewhere. Once the process began, it actually went smoother than we had anticipated and I believe both of the buvers are still operating the stores although more licenses have been issued since 1993. I hope this information will be useful. If I can be of any further assistance please let me know. Good luck in your endeavor. Very truly yours, Alden C. Hofstedt City Attorney • mn TO: Mayor, City Councii, City Manager O FROM: Lyle Haney, Finance Director Al ORA p 1 DD. SUBJECT: Liquor Store Divestiture DATE : t o r Sep ��mbe, 1, 1987 BACKGROUND The City Council has discussed divestiture of the liquor stores. A tentative time table and several documents are attached to begin that process and are submitted for Council consideration. DISCUSSION Divestiture Decision There are a number of reasons cited for divestiture including: c g. ° Public vs. private ownership; ° Liability insurance; 0 Coverage limitations, coupled with casts of available insurance; Return on City investment; ° Potential changes in legislation regt:rding sale of wine and beer; Competition from the private sector; and ° Reduced per capita consumption. Early divestiture is recommended to enhance the possibility of increased :return :to the City for the sale of these businesses and to limit the risk of potential liability resulti from Y g _,.1r insurance over our current liability policy limits of $500,000. If the City Council chooses to proceed with divestiture, the earliest time table is attached which would begin that process with approval of an ordi- nance amending the licensing of off sale stores and calling for bids. The transfer of the businesses could become effective November 16, 1987. (See attached time table.) Ordinance Amending Licensing Procedures -The City Attorney's Office has drafted a proposed ordinance amendment and has prepared a cover memo detailing the changes. The ordinance as pro- posed limits the number of off sale stores at present to two stores. Since the Council has the latitude to limit the number of off sale stores, we are suggesting that the City Council may wish to study the issue next year and evaluate the criteria- to be used if additional stores are to be .licensed. in addition, the Council will have the option of evaluating the criteria for on sale licenses which are now restricted to hotels, restaurants with • seating capacity over 150, and clubs, which may be studied with the off sale issue at some future date. 1313 COON RAPIDS BOULEVARD, COON RAPIDS, MINNESOTA 56433 -5397 (612) 755 -2880 Liquor Store Divestiture September 1, 1987 Page 2 • Employee Severance Benefits We have put together a benefits package for the employees, which varies depending upon full -time or part -time status, as follows: Transfer within the City If openings become available in other City departments and if the employees can qualify, they will be given preferential hiring treat- ment. Employment with new owners Prospective bidders have indicated they want to hire existing employees. We will encourage, but cannot demand, that the new owners retain all existing employees. Severance Pay Cash pay offs will be provided for earned vacation, 1/3 of accrued sick leave (maximum of 320 hours), accrued holiday time and sick leave incentive. i Health Insurance Optional insurance continuation for up to 18 months, at the employee's expense. PERA Withdrawal of employee contributions with interest if they desire. Unemployment Compensation Fifty percent of weekly wage up to 5250 benefit for 26 weeks. Contracted Out Placement Service Interest /skills testing, building interview skills, resume writing and individual career counseling. Continuing Education Reimbursement of up to 5450 for training /retraining courses if recom- mended by out placement couns2lor which must be completed within one year. Administrative Assistance The City will provide secretarial assistance for job search correspondence and copying. Liquor Store Divestiture September 1, 1987 Page 3 • Sales Plan If the City Council approves the divestiture, the City staff will prepare advertisement e for bid s and a d bi d specifications f or consideration by the City Council on September 8th. SUMMARY The divestiture process will take several months but is possible to accomplish and is desirable if the Council concurs. ACTION RECOMMENDED If the City Council approves the divestiture of the liquor enterprise, the following actions are recommended: 1. Adoption of Resolution No. 87 -98 approving ivestiture of the liquor uo r enterprise; and q 2, Approving on first reading the ordinance amending:licensing procedures. 3. Authorize staff to prepare advertisement for bids and plans and • specifications. Respe,:tfully, Lamle L Te Haney Finance Director ja attachments pc: Kevin Vouk Doug Johnson Denny Montague Mickey Ferrian • MEMORANDUM o il TO: Mayor and Councilmembers FROM: Dave Childs, City Manager DATE: January 19, 1990 SUBJECT: STATUS REPORT - MUNICIPAL LIQUOR OPERATIONS On October 30, 1989, Liquor Manager Gary Ellis submitted a memo detailing the sales trends and declining (nearly non - existent) profits at the Powerhouse bar (attachment "A "). The report contained several options for the City to consider regarding the future of the Powerhouse. It was decided at that time to postpone any detailed discussion of these options until the year -end figures for 1989 became available. It was also felt that discussions of the future of the Powerhouse should also include analysis of the Brandywine /Palmer Drive facility since many factors involving them are interrelated. i As of the date of this memo, the 1989 year end figures for all three r �- � v view operat erat -ons are available and are attached for our re attachment i { " u .r � owns for 1988 attachment C . I have also included some breakdowns { ), as well as the portion of December 31, 1988 audit report from Voto, Tautges & Redpath (attachment "D "). Attachment "E" shows the operating revenues, operating expenses, operating income and net income for the combined locations from 1982 to 1988 as shown by the State Auditor, and an estimate for 1989 based on the procedures used by the State Auditor. It should be noted that net income includes non - operating income as well as operating income (or loss) . Non - operating income includes such things as check cashing fees, rents from charitable organization for pull tab operations and other similar revenues. Attachment " E " shows a trend of declining net income for the operation with net income below $50,000 for three of the last four years. The following report will attempt to spell out several major alternatives available to the City while discussing various factors and issues surrounding these possible choices: Alternative 1. Continue to overate under current practices Issues: Low traffic -and sales levels in and around the Brighton Village Shopping Center due to empty store spaces have contributed to flat sales at the Palmer Drive /Brandywine facility. Liquor Operations • January 19, 1990 Page 2 The small size of both the on -sale and off -sale portions of the Palmer Drive /Brandywine facility limit sales growth somewhat. It is believed that the value of all three facilities exceeds $750,000. For purposes of this report, however, the $750,000 figure will be used for illustrative purposes as the value of the three locations. If the City received 80 interest on its assets of $750,000 ($60,000 per year), and if the structures paid property taxes (approx. $40,000 - $50,000 per year), and if the liquor licenses were issued ($10,000 per year), the City could expect to earn a return of $110,000- $120,000 per year on its investment in these buildings. Each day that the operation is open, the City takes on a liability exposure with the sale of alcoholic beverages. This exposure, although insured, still represents an element of risk to the City. In the 50's and 60's municipal liquor operations were a way to "control" the sale of alcohol (thus the term liquor dispensaries). With only 20 or so cities in the 7- County metro area still in the municipal liquor business, the element of control by the City is greatly diminished. The continued level of control still desired by the City is a policy issue which continues to face the City Council. High labor costs, an aging facility and its location in a redevelopment area all serve to make the Powerhouse a less desirable location than in previous years. Serious limitations on live bands at the Powerhouse due to restrictions by the City's dramshop in insurance carrier continue to erode the customer base. On the other hand,. will the lack of a municipal facility at either the Brandywine /Palmer Drive location, or the Powerhouse location, cause a ripple effect which might speed up further decline of either of these two areas? Alternative 2. Keep both operations open, but make mayor chances in management policy. Issues: Renegotiate contracts with bargaining units. Major management changes and scheduling changes. I - Liquor Operations January 19, 1990 Page 3 It is also believed that price adjustments in conjunction with cost controlling efforts might increase profits, but that the goal of $110,000 - $120,000 in annual profits (the ongoing income from selling the operation) would be difficult to achieve even with all these changes. Alternative C. Close the Powerhouse and make major management . changes at the Palmer Drive /Brandywine facility. Y Issues: The issues for this alternative are similar to those in "Alternative B ". Alternative D. Close the Powerhouse and sell the Palmer Drive /Brandywine facility. Issues: The benefits of sale include: 1. A stable and substantially higher return on investment due to interest earnings on cash on hand rather than an unprofitable real estate asset. 2. Return of the parcels to the tax rolls. 3. Income from liquor license fees. 4. Elimination of the City's potential exposure to unlawful sales or dramshop claims. On the other hand, there are some costs related to the sale, including: 1. Potential exposure to unemployment compensation claims. 2. Loss of traffic in both areas (ripple effect). 3. Loss of charitable gambling proceeds by the Lions at the Powerhouse and the Chamber of Commerce at the Brandywine (unless agreement can be reached with a potential buyer to continue the current lease arrangements isimilar to that at the "Main Event "). 4. The City would have less "control" on the sale of alcoholic beverages in the City and would be on par with other municipalities not having municipal � • liquor operations. Along with reduced control comes the possibility of increased costs for enforcement efforts. Liquor Operations January 19, 1990 Page 4 The question of what procedure would be used for sale and what method would be used to market the Palmer Drive /Brandywine facility must be addressed. The major options are: 1. List with a real estate agent. 2. General publicity and staff efforts to seek out a buyer. 3. Utilize some type of bidding process. 4. A "blind" listing with an agent. Also to be considered are the possible spinoffs of having the business up for sale- -these could include: 1. Employee morale and turnover and accompanying change in stability. 2. Falling sales often result from declining service levels due to lower employee morale and staff turnover. • 3. The possible decline in value of the business if a considerable amount of times goes by before a sale is accomplished. At the zero profit levels currently - not be significant encountered--this decline should if g management controls are carefully monitored. The municipal liquor operation in New Brighton has a long standing place in the community. The decision to make major changes, or the decision to leave the business altogether should not be made lightly. Unfortunately, however, the situation requires attention and requires action. The council is charged with the decision - making power regarding leaving the business. I submit that, at an absolute minimum, major changes are needed in the operation if it is to continue. David Childs, City Manager Attachment ''A'' MEMORANDUM TO: David Childs, City Manager FROM: Gary Ellis, Liquor Manager DATE: October 30, 1989 SUBJECT: POWERHOUSE The Powerhouse Bar, a venerable Olde Towne New Brighton institution, is in trouble. Declining sales and rising costs have left the operation with little profit and raise serious questions about the City's continued operation of the on -sale facility. These circumstances require a thorough assessment of the current situation and possible options. Sales In 1988 sales at the Powerhouse Bar reached a decade low of $241,730. Sales traditionally have been near the $300,000 mark with a peak of $350,000 in 1985. This downward trend in sales (see attached graph) is the • result of two primary conditions. 1. A declining customer base in the trade area. As the northern suburbs have grown and developed, firms whose employees patronize a Powerhouse style bar have left the area. As these trucking and industrial operations are replaced by office parks and residential areas, the market for potential new customers shrinks. Additional new competition in the area further exacerbates this difficult situation. 2. Social trends which that fewer people are drinking, and those who do are drinking less. These trends are a function of demographics, healthier lifestyles, incipient neoprohitionism, and tougher laws against drinking and driving. These trends in society coupled with negative factors in the immediate trade area make it difficult to expect anything more than modest sales increases (less than 10 %) in future years. Gains of this size on a critically low base will _yield marginal profits in the $3,000 to $10,000 over the next five years. These profit projections preclude some type of major repair bills. Current 1989 sales figures as of September are running 2% ahead of 1988. Larger sales gains are being seen during the second 'half of the year resulting from the investment in remodeling at the Powerhouse. Significant additional sales increases at this location would require the addition of a kitchen. This type of investment would not be practical given the age of the building and its location in a redevelopment area. David Childs t October 30, 1989 Page 2 Current Operational Concerns The largest single expense at the Powerhouse is labor. Last year this expense topped out at more than 50% (more than twice the national average for labor costs in bars w /out food services). At the Powerhouse in 1988, 52 cents of every sales dollar went to pay for labor costs. Labor costs are running at roughly the same rate in 1989. The high labor costs are a result of high labor rates for full -time bartenders which run (w /benefits) close to three times the norm. The Powerhouse is a union bar with two full -time bartenders, three part -time bartenders, three part -time stock people and 2 part -time waitresses. Scheduling changes to reduce this staffing levels with have marginal impact since most staffing is done at a minimal level, i.e. one bartender, one stocker, and one waitress. While other costs like dramshop insurance coverage and other supplies have risen or are rising, these are faced on a similar basis with other competitors and can be reflected in increased prices. High labor costs, on the other hand, are limited to the few bars with unions while the vast majority of bars and restaurants have significantly lower labor costs. The elimination of two full -time bartender positions would significantly reduce this disadvantage and bring the Powerhouse more in line with normal labor costs. In any scenario to continue the operation of the Powerhouse this issue must be raised and addressed with the union. Over the course of the past year every effort has been made to reduce and minimize costs wherever possible. These efforts will continue and should be monitored very closely. Recent cost cuts involve the elimination of outside cleaning services and the reduction of some operating hours in an effort to minimize labor expense. Additionally, a price increase of approximately 7% was implemented at the end of October. Options The continuation of the current situation (flat sales /high labor costs) offers little chance for any significant improvement in the profitability of the Powerhouse operation. Five year projections show returns in the $3,000 - $10,0,00 range with no major repairs. These annual figures plus last year's losses have raised the issue of whether to continue the operation of the Powerhouse. Is our risk /investment worth the City's return? i One possible option, selling the business, is effectively ruled out at this point. Minnesota Statutes specify that cities operating a municipal on- sale facility may only issue on -sale liquor licenses to operators of clubs, hotels, and /or restaurants (see attached letter). This precludes David M. Childs • October 30, 1989 Page 3 transfer of the business it its current form to a private party. Additionally, because of the bar's location in a redevelopment district the City would not want to make a long -term commitment to a buyer. The lack of such a commitment by the City would make investment in a kitchen too risky for a potential buyer. The other option open to the City and the only really viable alternative to continued operation is locking the doors and going out of business. In addition to the internal operating factors addressed in this report, there are more significant costs which should be considered in addressing this option. 1. The loss of jobs for 10 people and the unemployment liability which could run as high as $40,000. 2. The loss of the Lions pull tab operation and $30,000 in direct donations to the City and $50,000 in additional donations to the community at large. 3. The good will lost from the customers at that location and the traffic that this operation does generate in the Olde Towne area., GE:pl Attachments UNI S[: - FLEMEN r FORM PUBLIC EMPLOYER: CITY Or BROOKLYN CENTER LELS 82 POLICE E17- / c EXCLUSIVE Rfl'RESfNTA7lV[:- ��J11U & sg ie ,)' f 1 ts Base Year 1 Year of Contract 2nd Year (lase ` 7e(;Q f1[' -- fear of Ccndracl jif applicable) 31d Year Ilase Year of Contract jif app!ieabie) Dates t) 1- 1- 94- 1 ?/,�,�,�5 1- 1- 95- 12/31 /96 1- 1- 96- 12/31 -96 Dales 3) 11 - 1 ase Wage 5) , 54_,1 ,2_8_ New S by Wage Schedule [lase wage 28) 1 709 Improvement 14) _ 49 , Flew S by Wage Sche Dales 4) er e 903 Base Wage 51) IJew $ by Wage Schedule New $ Wage Schedule - Movement Irnprovernent 37) r Improvement 60) Mote en New•$ by Wage Schedule t 15) Movement - 3it) _� # X00 New $ by Wage Schedule Base Social Security New $ Social Securit Movement 61) Y (lase Social Securit Contribution SA) 1 7 916 Contribution ISA) 773 Y 121,689 Mew $ Social Security 3 986 Ilase Social Securit Conitibutiun 28A) > Contribution 38A) ' Y Idew $ Social Security Base Slate or Conlribuliun S IA) _ Local Retirement Contribution 6 A) New S Slate a Dase Slate or New Stale or Local Retirement Local Retirement Dase State or New $ Slate or Contribution SV) 175, 71 8 Contribution 1511) 5, 623 181 , 340 Local Retirement 5, 940 Local Retirement local Rethernent Contribution 2811) Contribution 3011) Conlribuliun 5111) Contribution 6111) Base Medical 112,536 Nerc S for Medical 3,960 Dase Medical 114,876 3 960 Insurance 6) Insurance 1 G) New $ for Medical Base Medical Medical 29) Insurance 39) Insurance S2) New S for Base Dental 8 280 New $ for Dental 0 Insurance 62) Dase Dental 0 , 280 New S for Dental 0 lance 1 Insurance 7) htsu7) _,___ (lase Dental New $ for Dental Insurance 30) — Insurance 40) Insurance 53) (lase Life 73 4 New $ for Life 0 Insurance 63) Insurance 8) Base Life 734 New S for Life 0 Insurance 10) Insurance 31) (lase Life flew $ for life Insurance 41) _ Insurance 54) Insurance 64) _ Base Shift _ New $ for Shift (lase Shift Differential 9) Differential 19) - New $ for Shift - Rase Shift New S for Shift Differential 32) Di(tetenlial 42) Base Extra- Differential 511) _ New $ (or Extra Differential 65) - [lase Extra- New $ for Extra- (lase Extra- Curricular' 10 )— Curricular 20) Curricular' 33) New $ for Extra- curricular 43) Curricular* 56) Curricular 66) • Base Deferred New S fur Deferred - (lase Deferred Compensation I1)_ Conslsensalion 21J - New S for Deferred Uric Deferred New $ for Deferred Compensation 34j_______ -_` Cornpensalion 44) .Corn tensatiun 57) Base Other New S for Other l Compensation 67) Dase Other New Forms of 1 200 Forms $ for Other New $ for 01her Forms 0f nts of 1 200 Base Other 1 Compensation 12) __' Compensation 22) Fa)nts of Forms of Founts of 1 Compensation 35) Compensation 45) Compensation 5I)) Total New S Change 63 880 I Compensation 681 r Tidal New $ Change 65, 989 from Baseline 23) burn Vaseline 46) total New S Change Change 3.26 hum Baseline 69) "/° 3.27 % Change (1011) Baseline 24) �.-__._.-__ % Change C �° born Baseline 47) __ __ ^/„ Base Year total First Year from Baseline 7t1) % Total Baseline 13) Dase Year Tola) Second fear 101,11 195$ 51 9 2 022 399 2,018,828 2 ,08 4 ,817 Base Year lislal Third Year S Settl ement 25) __? _ -_? _— laseline 36) $ Settlement — — — — — — Settlement 48) - total Baselin 59) _ , Applies to Lump Sum Vayment 26 Lump Sun, Payrnenl 49 — — — — — — — — — — — — — — — — — — — — — — — -' educalion, % Increase over ( -unsp Sun) Vaymeol 72 units only. Baseline 27) % % Increase over °S. Increase over 5 -18.94 M�"'s Baseline So) Vaseline 73) % ' r ' UNIFORM SETTLEMENT rom PUBLIC EN11 CITY OF I3ROOKLYN CENTER LELS 82 POLICE EXCLUSIVE REI'RESEhITAI1VE :_ UtBIO FFICERS & sgt Base Year C YSf Year of Conlrac( 2nd Year ( lase Secon(� �', ( Year of Conlracl f if applicable) 3rd Year Ilase ��C1 fear of Contract (if aphlicablel Oates 1) 1 . - 1- 94— ? 2 /t��,Gs 1- 1- 95- 12/31/9 1 -1 -96- 12/31 -96 ` Oates 3) Vase Wage 5) 1 , 54 1 38 5 New $ by Wage Schedule Base Wage 211) 1,590,709 New Improvement 14) 2, 3 cw S by Wage ScheMe 903 base Wage Dales 4) 51) New $ by Wage Schedule Improvement 37) ' Improvement 60) New $ by Wage Schedule -- New-S by Wage Schedule Movement 15) J�lovement 311) _1 , Q2 Q New $ by Wage Schedule Base Social Security New S Social Securil Movement 61) Y Rase Social Securil y 3 986 Ilase Social Se�curily New j Social Security Contributlon 5A) 17 Y tJe S Social Securil 916 Conlihulion 15A) 773 ContrihulJur, 28A) 1.21 , 689 ( 38A) ' Base State or ConUihuJian 28B) Nev,• $ Slate or Rase Stale or Conlrihulion 5 1 A) Conlribulion 61A) Local Retirement local Reliremenl Local Relhen,enl New $ Stale or Base Slate or New $ Stale or Contribution 50) 175, 71 8 Contribution 15B) 5, 623 181 , 340 local Retirement 5,940 Local Itetiremenl Local Retirement Contributlon 3810 Contribuliun 5111) Conlribulion 6111) Base Medical 112 , 536 Nevv S for Medical 3,960 ease Medical 114,876 3,960 960 Insurance 6) Insurance 16) New $ for Medical (lase Medical Insurance 2J) Insurance 391 Insurance 52) _ Insurance 62) New S for Medical !lase Dental 8 , 280 New j for Dental 0 (lase Dental Insurance 7) Insurance 17) 0,280 New; for Dental 0 Ilase Dental New j for Dental Insurance 30) .. _ Insurance 40) - !lase Life Mew; for life Base Life Insurance 53) - Insurance 63) Insurance 8) 734 Insurance 18) New S for Life' 0 Ilase Life Insurance 31) View Insurance 41) S for life Insurance 541 Insurance 64) [lase Shift _ New $ for Shi ft (lase Shift Differential 9) Differential 19) – – New $ for Shiil – Base Shift Differential 32) Uifferenlial 42) Uifferenlial 65) New $ for Shift Base Extra. _ blew; for Extra- _ Rase Extra- Uifferenlial 55) Curricular' 10) Curricular 20) – New S for Extra- – Rase Exlla- Mew; for Extra - Curriadar' ]3)_ Curricular 43) Curricular 56) Curricula New or Deferred GG) Base Deferred – N S f Dferred – Base Deferred Compensation 11) Compmnsation 21) – (dew S for Deferred Base Uefenecl New $ for Deferred ( Compensation 34) Compensalion 44) Compensation 57) Base Other New S for Other Compensation Compensation 67) (lase Other New $ for Other forms rl 1 , 950 Forms of 1,200 Forms of 1 , 200 Forms of Base Other New; for Other Compensation 12) Compensation 22) Com ,ensalion 35) Forms of Forms of i - Compensalion 451 _ Compensation 513 _ Corn ,ensalion 68) Total New $ Change 63, 880 Total New $ Change 65, 989 from Baseline 23) from Baseline 46) Total New $ Change %Change 3.26 from Vaseline 69) Iom Baseline 24) 3.27 % Change % Change from Uaseline 47) , Base Year Total First Year (lase Yea '° born Baseline 70) /° Total Baseline 13) 1958 ,51 $ Selllenrenl 25) 2,022 2,018,828 total Second Year 2,084,817 [lase Year Total Baseline 36) $ Settlement 48) total third Year — — ^ — — — — — — — — — — — — — — — — — — — — — — — Total Baseline 59) $ Settlement 71) ' 'Applies to Lurnp Sum Payment 26 Lurnp 511111 Payment 49 — — — — — — — - — — — — — — — — — — — — — — — — — — — — — — — education, % Increase over Lurnp Sum Payment 72 units only. Increase over Y• Uaseline 27) ^/° %Increase over 5 -18.94 Baseline 50 ) i.. M " Baseline 73) q ° • LABOR AGREEMENT BETWEEN THE CITY OF BROOKLYN CENTER AND LAW ENFORCEMENT LABOR SERVICES, LOCAL NO. 82 JANUARY 1, 1995 - DECEMBER 31, 1996 • TABLE OF CONTENTS ARTICLE 1. PURPOSE OF AGREEMENT ............................. ............................... 1 ARTICLE 2. RECOGNITION .............................................. ............................... 1 ARTICLE 3. DEFINITIONS ................................................. ..............................1 ARTICLE 4. EMPLOYER SECURITY .................................... ..............................2 ARTICLE 5. EMPLOYER AUTHORITY ................................ ............................... 2 ARTICLE 6. UNION SECURITY ......................................... ............................... 2 ARTICLE 7. SAVINGS CLAUSE ......................................... ............................... 2 ARTICLE 8. CONSTITUTIONAL PROTECTION ..................... ............................... 3 ARTICLE9. SENIORITY .................................................. ............................... 3 ARTICLE 10. WORK SCHEDULES ....................................... ............................... 4 ARTICLE 11. DISCIPLINE ................................................... ..............................4 ARTICLE 12. EMPLOYEE RIGHTS - GRIEVANCE PROCEDURE . ..............................5 ARTICLE13. OVERTIME .................................................... ..............................7 ARTICLE 14. COURT TIME ................................................ ............................... 8 ARTICLE 15. CALL BACK TIME ......................................... ............................... 8 ARTICLE 16. WORKING OUT OF CLASSIFICATION ............... ............................... 9 ARTICLE 17. STANDBY PAY ............................................. ............................... 9 ARTICLE 18. LEAVES OF ABSENCE .........................,............ ..............................9 ARTICLE 19. SEVERANCE .................................................. ..............................9 ARTICLE 20. INJURY ON DUTY ........................................... ..............................9 ARTICLE 21. FALSE ARREST INSURANCE ......................... ............................... 10 ARTICLE 22. TRAINING .................................................. ............................... 10 ARTICLE 23. UNIFORMS ................................................. ............................... 11 ARTICLE 24. LONGEVITY AND EDUCATIONAL INCENTIVE ... .............................11 ARTICLE 25. HOLIDAY LEAVE ........................................... .............................12 ARTICLE 26. VACATIONS .................................................. .............................12 ARTICLE 27. , SICK LEAVE ............................................... ............................... 13 ARTICLE 28. ' INSURANCE .................................................. .............................14 ARTICLE 29. WAGE RATES ............................................. ............................... 14 ARTICLE 29. AGREEMENT IMPLEMENTATION......... ................... ..................... 16 ARTICLE30. WAIVER ..................................................... ............................... 16 ARTICLE 31. DURATION ................................................. ............................... 16 MASTER LABOR AG REEMEN T t BETWEEN CITY OF BROOKLYN CENTER AND LAW ENFORCEMENT LABOR SERVICES, LOCAL NO. 82 ARTICLE 1 PURPOSE OF AG REEMEN T This AGREEMENT is entered into between the City of Brooklyn Center, hereinafter called the EMPLOYER, and Law Enforcement Labor Services, Local No. 82, hereinafter called the UNION. It is the intent and purpose of this AGREEMENT to: 1.1 Establish procedures for the resolution of disputes concerning this AGREEMENT'S interpretation and /or application; and 1.2 Place in written form the parties' agreement upon terms and conditions of employment for the duration of this AGREEMENT. ARTICLE 2 RECOGNITION 2.1 The EMPLOYER recognizes the UNION as the exclusive representative, under Minnesota Statues, Section 179A.03, Subdivision 14, for all police personnel in the following job classifications: Sergeant Police Officer 2.2 In the event the EMPLOYER and the UNION are unable to agree as to the inclusion or exclusion of a new or modified job class, the issue shall be submitted to the Bureau of Mediation Services for determination. ARTICLE 3 DEFINITIONS 3.1 UNION: Law Enforcement Labor Services, Local No. 82. 3.2 UNION MEMBER: A member of Law Enforcement Labor Services, Local No. 82. 3.3 DEPARTMENT: The City of Brooklyn Center Police Department. 3.4 EMPLOYEE: A member of the exclusively recognized bargaining unit 3.5 EMPLOYER: The City of Brooklyn Center. 3.6 CHIEF: The Chief of the Brooklyn Center Police Department. 3.7 UNION OFFICER: Officer elected or appointed by Law Enforcement Labor Services, Local No. 82. 3.8 INVESTIGATOR/DETECTIVE: An employee specifically assigned or classified by the EMPLOYER to the job classification and /or job position of INVESTIGATOR/DETECTIVE. 3.9 OVERTIME: Work performed at the express authorization of the EMPLOYER in excess of the employee's scheduled shift. 3.10 SCHEDULED SHIFT: A consecutive work period including rest breaks and a lunch break. 3.11 REST BREAKS: Period during the SCHEDULED SHIFT during which the employee remains on continual duty and is responsible for assigned duties. 3.12 LUNCH BREAKS: A period during the SCHEDULED SHIFT during which the employee remains on continual duty and is responsible for assigned duties. 3.13 REGULAR BASE PAY RATE: The employee's hourly or monthly base pay rate, including educational incentive pay, longevity pay, and differential for investigator (detective) and school liaison officer excluding any other special allowance. 3.14 STRIKE: Concerned action in failing to report for duty, the willful absence from one's position, the stoppage of work, slowdown, or abstinence in whole or in part from the full, faithful, and proper performance of the duties of employment for the purposes of inducing, influencing, or coercing a change in the conditions or compensation or the rights, privileges, or obligations of employment. ARTICLE 4 EMPLOYER SECURITY The UNION agrees that during the life of this AGREEMENT the UNION will not cause, encourage, participate in, or support any strike, slowdown, or other interruption of or interference with the normal functions of the EMPLOYER. ARTICLE 5 EMPLOYER AUTHORITY 5.1 The EMPLOYER retains the full and unrestricted right to operate and manage all manpower, facilities, and equipment; to establish functions and programs; to set and amend budgets; to determine the utilization of technology; to establish and modify the organizational structure; to select, direct, and determine the number of personnel, to establish work schedules, and to perform any inherent managerial function not • specifically limited by this AGREEMENT. 5.2 Any term and condition of employment not specifically established or modified by this AGREEMENT shall remain solely within the discretion of the EMPLOYER to modify, establish, or eliminate. ARTICLE 6 UNION SECURITY 6.1 The EMPLOYER shall deduct the wages of employees who authorize such a deduction in writing an amount necessary to cover monthly UNION dues. Such monies shall be remitted as directed by the UNION. 6.2 The UNION may designate employees from the bargaining unit to act as a steward and an alternate and shall inform the EMPLOYER in writing of such choice and changes in the position of steward and /or alternate. 6.3 The EMPLOYER shall make space available on the employee bulletin board for posting UNION notice(s) and announcement(s). 6.4 The UNION agrees to indemnify and hold the EMPLOYER harmless against any and all claims, suits, orders, or judgments brought or issued against the EMPLOYER as a result of any action taken or not taken by the EMPLOYER under the provisions of this Article. ARTICLE 7 A S VINES CLAUSE This AGREEMENT is subject to the laws of the United States, the State of Minnesota, -2- and the City of Brooklyn Center. In the event any provision of the AGREEMENT shall be held to be contrary to law by a court of competent jurisdiction from whose • final judgment or decree no appeal has been taken within the time provided, such provisions shall be voided. All other provisions of this AGREEMENT shall continue in full force and effect. The voided provision may be renegotiated at the written request of either party. ARTICLE 8 CONSTITUTIONAL PROTECTION Employees shall have the rights granted to all citizens by the United States and Minnesota Constitutions. ARTICLE 9 SENIORITY 9.1 Seniority shall be determined by continuous length of service in all of the job classifications covered by this AGREEMENT. Employees promoted from classifications covered by this AGREEMENT to a position outside the bargaining unit will continue to accrue seniority under this AGREEMENT until the completion of their promotional probationary period or for no longer than twelve (12) months. The seniority roster shall be based on length of service in all of the job classifications covered by this AGREEMENT. Employees lose seniority under this AGREEMENT under the following circumstances: resignation, discharge for cause, or transfer or promotion to a classification not covered by this AGREEMENT after completion of the promotional probationary period or for no longer than twelve (12) months after transfer or promotion. 9.2 There shall be an initial probationary period for new employees of twelve (12) months. During the probationary period, a newly hired or rehired employee may be discharged at the sole discretion of the EMPLOYER. During the probationary period a promoted or reassigned employee may be replaced in their previous position at the sole discretion of the EMPLOYER. 9.3 A reduction of work force will be accomplished on the basis of seniority. The EMPLOYER shall give the UNION and the employees at least two (2) weeks written notice in advance of any layoff. Employees shall be recalled from layoff on the basis of seniority. An employee on layoff shall have an opportunity to return to work within two (2) years of the time of his layoff before any new employee is hired. 9.4 Senior employees will be given preference with regard to transfer, job classification assignments, and promotions when the job - relevant qualifications of employees are equal. 9.5 Senior qualified employees shall be given shift assignment preference after eighteen (18) months of continuous full-time employment. Except as noted in the preceding sentence, shift assignments shall be bid on the basis of seniority at least annually and after any permanent change in the work schedule. Employees will not be subject to shift rotation more often than every four (4) months. - 3 - 9.6 The EMPLOYER shall recognize reverse seniority by classification as the primary factor when calling off -duty employees to duty and when considering scheduled duty changes if such employees are qualified. 9.7 One continuous vacation period shall be selected on the basis of seniority until April 1 of each calendar year. 9.8 The EMPLOYER shall recognize senority as the primary factor when authorizing holiday leave and compensatory time leave. 9.9 No time shall be deducted from an employees senority accumulation due to absences occasioned by an authorized leave with pay, any military draft or government call -up to Reserves or National Guard, or for layoffs of less than two (2) years in duration. ARTICLE 10 WORK SCHEDULES 10.1 The normal work year is two thousand and eighty (2,080) hours to be accounted for by each employee through: a. hours worked on assigned shifts, b. holidays, C. assigned training, and d. authorized leave time. • 10.2 0. Holidays and authorized leave time is to be calculated on the basis of the actual length of time of the assigned shifts. 10.3 Nothing contained in this or any other Article shall be interpreted to be a guarantee of a minimum or maximum number of hours the EMPLOYER may assign employees. ARTICLE 11 DISCIPLINE 11.1 The EMPLOYER will discipline employees for just cause only. Discipline will be in one or more of the following forms: a. oral reprimand; b. written reprimand; C. suspension; d. demotion; or e. discharge. 11.2 Suspension, demotions, and discharges will be in written form. 11.3 Written reprimands, notices of suspension, and notices of discharge which are to become part of an employee's personnel file shall be read and acknowledged by • signature of the employee. Employees and the UNION will receive a copy of such reprimands and /or notices. -4- 11 .4 Employees may examine their own individual personnel files at reasonable times under direct supervision of the EMPLOYER. • 11.5 Discharges will be receded b a five 5 day suspension without . a P Y O Y Pe pay. 11.6 Employees will not be questioned concerning an investigation of disciplinary action unless the employee has been given an opportunity to have a UNION representative present at such questioning. 11.7 Grievances relating to this Article shall be initiated by the UNION in Step 3 of the grievance procedure under ARTICLE 12. ARTICLE 12 EMPLOYEE RIGHTS - GRIEVANCE PROCEDURE 12.1 DEFINITION OF A GRIEVANCE - A grievance is defined as a dispute or disagreement as to the interpretation or application of the specific terms and conditions of this AGREEMENT. 12.2 UNION REPRESENTATIVES - The EMPLOYER will recognize REPRESENTATIVES designated by the UNION as the grievance representatives of the bargaining unit having the duties and .responsibilities established by this Article. The UNION shall notify the EMPLOYER in writing of the names of such UNION REPRESENTATIVES and of their successors when so designated as provided by 6.2 of this AGREEMENT. 12.3 PROCESSING OF A GRIEVANCE - It is recognized and accepted b the UNION and g P Y the EMPLOYER that the processing of grievances as hereinafter provided is limited by the job duties and responsibilities of the EMPLOYEES and shall therefore be accomplished during normal working hours only when consistent with such EMPLOYEE duties and responsibilities. The aggrieved EMPLOYEE and a UNION REPRESENTATIVE shall be allowed a reasonable amount of time without loss in pay when a grievance is investigated and presented to the EMPLOYER during normal working hours provided that the EMPLOYEE and the UNION REPRESENTATIVE have notified and received the approval of the designated supervisor who has determined that such absence is reasonable and would not be detrimental to the work programs of the EMPLOYER. 12.4 PROCEDURE - Grievances, as defined by Section 12. 1, shall be resolved in conformance with the following procedure: Step 1. An EMPLOYEE claiming a violation concerning the interpretation or application of this AGREEMENT shall, within twenty -one (21) calendar days after such alleged violation has occurred, present such grievance to the EMPLOYEE'S supervisor as designated by the EMPLOYER. The EMPLOYER- designated representative will discuss and give an answer to such Step 1 grievance within ten (10) calendar days after receipt. A grievance not • resolved in Step 1 and appealed to Step 2 shall be placed in writing setting forth the nature of the grievance, the facts on which it is based, the provision or -5- provisions of the AGREEMENT allegedly violated, the remedy requested, and shall be appealed to Step 2 within ten (10) calendar days after the EMPLOYER - designated representative's final answer in Step 1. Any grievance not appealed in writing to Step 2 by the UNION within ten (10) calendar days shall be considered waived. Step 2 . If appealed, the written grievance shall be presented by the UNION and discussed with the EMPLOYER- designated Step 2 representative. The EMPLOYER- designated representative shall give the UNION the EMPLOYER'S Step 2 answer in writing within ten (10) calendar days after receipt of such Step 2 grievance. A grievance not resolved in Step 2 may be appealed to Step 3 within ten (10) calendar days following the EMPLOYER- designated representative's final Step 2 answer. Any grievance not appealed in writing to Step 3 by the UNION within ten (10) calendar days shall be considered waived. Step 3. If appealed, the written grievance shall be presented by the UNION and discussed with the EMPLOYER - designated Step 3 representative. The EMPLOYER- designated representative shall give the UNION the EMPLOYER'S answer in writing within ten (10) calendar days after receipt of such Step 3 grievance. A grievance not resolved in Step 3 may be appealed to Step 4 within ten (10) calendar days following the EMPLOYER - designated representative's final answer to Step 3. Any grievance not appealed in writing to Step 4 by the UNION within ten (10) calendar days shall be considered waived. Step 3a. If the grievance is not resolved at Step 3 of the grievance procedure, the parties, by mutual agreement, may submit the matter to mediation with the Bureau of Mediation Services. Submitting the grievance to mediation • preserves timeliness for Step 4 of the grievance procedure. Any grievance not appealed in writing o Ste 4 b the Union within ten 10 calendar days of g P y ( ) Y mediation shall be considered waived. Step 4. A grievance unresolved in Step 3 or Step 3a and appealed to Step 4 by the UNION shall be submitted to arbitration subject to the provisions of the Public Employment Labor Relations Act of 1971. The selection of an arbitrator shall be made in accordance with the "Rules Governing the Arbitration of Grievances" as established by the Bureau of Mediation Services. 12.5 ARBITRATOR'S AUTHORITY a. The arbitrator shall have no right to amend, modify, nullify, ignore, add to, or subtract from the terms and conditions of this AGREEMENT. The arbitrator shall consider and decide only the specific issue(s) submitted in writing by the EMPLOYER and the UNION, and shall have no authority to make a decision on any other issue not so submitted. b. The arbitrator shall be without power to make decisions contrary to, or inconsistent with, or modifying or varying in any way the application of laws, rules, or regulations having the force and effect of law. The arbitrator's decision shall be submitted in writing within thirty (30) days following close of the hearing or the submission of briefs by the parties, whichever be later, unless the parties agree to an extension. The decision shall be binding on both the EMPLOYER • and the UNION and shall be based solely on the arbitrator's interpretation or application of the express terms of this AGREEMENT and to the facts of the -6- grievance presented. c. The fees and expenses for the arbitrator's services and proceedings shall be borne equally by the EMPLOYER and the UNION provided that each party shall be responsible for compensating its own representatives and witnesses. If either party desires a verbatim record of the proceedings, it may cause such a record to be made, providing it pays for the record. If both parties desire a verbatim record of the proceedings, the cost shall be shared equally. 12.6 WAIVER If a grievance is not presented within the time limits set forth above, it shall be considered "waived ". If a grievance is not appealed to the next step within the specified time limit or any agreed extension thereof, it shall be considered settled on the basis of the EMPLOYER'S last answer. If the EMPLOYER does not answer a grievance or an appeal thereof within the specified time limits, the UNION may elect to treat the grievance as denied at that step and immediately appeal the grievance to the next step. The time limit in each step may be extended by mutual written agreement of the EMPLOYER and the UNION in each step. 12.7 CHOICE OF M RE EDY If, as a result of the written EMPLOYER response in Step 3, the grievance remains unresolved, and if the grievance involves the suspension, demotion, or discharge of an employee who has completed the required probationary period, the grievance may be appealed either to Step 4 of Article 12 or a procedure such as: Civil Service, Veteran's Preference, or Fair Employment. If appealed to any procedure other than • Step 4 of Article 12, the grievance is not subject to the arbitration procedure as provided in Step 4 of Article 12. The aggrieved employee shall indicate in writing which procedure is to be utilized — Step 4 of Article 12 or another appeal procedure — and shall sign a statement to the effect that the choice of any other hearing precludes the aggrieved employee from making a subsequent appeal through Step 4 of Article 12. ARTICLE 13 OVERTIME 13.1 Employees will be compensated at one and one -half (1 /a) times the employee's regular base pay rate for hours worked in excess of the employee's regularly scheduled shift. Changes of shift do not qualify an employee for overtime under this Article. 13.2 Overtime will be distributed as equally as practicable. 13.3 Overtime refused b employees will f r record purposes under Article 13.2 be 0 os Y P rP considered as unpaid overtime worked. 13.4 For the purpose of computing overtime compensation, overtime hours worked shall not be pyramided, compounded, or paid twice for the same hours worked. 13.5 Overtime will be calculated to the nearest six (6) minutes. • 13.6 Employees have the obligation to work overtime or call backs if requested by the -7- EMPLOYER unless unusual circumstances prevent the employee from so working. 13.7 When uniformed patrol employees have less than twelve (12) hours of duty -free time between assigned shifts, they will be compensated at a rate of one and one -half (1 1 /2) times the employee's regular base pay rate for the next shift. For purposes of this Article, shift extensions, elected overtime, voluntary changes of shifts, City - contracted work, training, and court time are considered as duty -free time. The twelve (12) hour requirement may be waived by mutual agreement between the Employee and the Police Administration. 13.8 As an option to monetary compensation for overtime, a uniformed patrol officer may annually elect compensatory time off at a rate of one and one -half (1 1 /2) time, and an employee qualifying for investigator differential on a long -term basis may annually elect compensatory time off at a rate of straight time plus one -half ( 1 /2) hour monetary compensation. An employee's compensatory time bank shall not exceed forty (40) hours at any time during a calendar year. On or about December 1 of each year, the City will pay off by check the balance of compensatory time accumulated by each police officer. No compensatory time will be accumulated or used during the month of December. Special overtime duty assignments made available to all positions by the Chief of Police at the police officer's rate of compensation will not be eligible for compensatory time. Compensatory time off shall be granted only at the convenience of the EMPLOYER with prior approval of the EMPLOYER - designated supervisor. 13.9 Employees given less than sixteen (16) hours notice of a scheduled duty change other than their regularly scheduled work period shall be compensated at one and one -half • ( 1' /z ) times the employee's Pa Y rate for hours worked outside of the scheduled regular work period. ARTICLE 14 COURT TIME An employee who is required to appear in court during their scheduled off -duty time shall receive a minimum of two (2) hours pay at one and one -half (1 /z) times the employee's base pay rate. An employee reporting to court after a scheduled "dog- watch" shift or any other shift ending between 0300 and 0600 hours shall receive a minimum of three (3) hours' pay at one and one -half (1 1 /7) times the employee's base pay rate. An extension or early report to a regularly scheduled shift for court appearance does not qualify the employee for the two (2) hour minimum. Employees shall not be required to work office or street duty to qualify for the court time minimum. ARTICLE 15 CALL BACK TIME An employee who is called to duty during their scheduled off -duty time shall receive a minimum of two (2) hours pay at one and one -half (1 /2) times the employee's base pay rate. An extension or early report to a regularly scheduled shift for duty does not • qualify the employee for the two (2) hours minimum. -8- ARTICLE 16 WORKING OUT OF CLASSIFICATION Employees assigned by the EMPLOYER to assume the full responsibilities and ® authority of a higher job classification shall receive the salary schedule of the higher classification for the duration of the assignment. ARTICLE 17 STANDBY PAY Employees required by the EMPLOYER to standby shall be paid for such standby time at the rate of one hour's pay for each hour on standby. ARTICLE 18 LEAVES OF ABSENCE 18.1 In cases of demonstrated need and where sick leave has not been abused, the EMPLOYER shall grant to employees a leave of absence without pay for extended personal illness after the accumulative sick leave has expired. Such leaves of absence shall not exceed ninety (90) calendar days. Upon granting such unpaid leave of absence, the EMPLOYER will not permanently fill the employee's position and the employee's benefits and rights shall be retained. 18.2 An employee called to serve on a jury shall be reimbursed the difference between the amount paid for such service (exclusive of travel and expense pay) and his compensation for regularly scheduled working hours lost because of jury service. 18.3 Employees ordered by proper authority to National Guard or Reserve Military Service • not exceeding fifteen (15) working days in any calendar year shall be entitled to leave of absence without loss of status. Such employees shall receive compensation from the EMPLOYER equal to the difference between his regular pay and his lesser military pay. 18.4 Employees called and ordered by proper authority , to active military service in time of war or other properly declared emergency shall be entitled to leave of absence without pay during such service. Upon completion of such service, employees shall be entitled to the same or similar employment of like seniority, status, and pay as if such leave had not been taken, subject to the specific provisions of Chapter 192 of the Minnesota Statutes. ARTICLE 19 SEVERANCE 19.1 An employee shall give the EMPLOYER two (2) weeks notice in writing before terminating his employment. 19.2 Severance pay in the amount of one -third (1/3) the accumulated sick leave employees have to their credit at the time of resignation or retirement, times their respective regular pay rate, shall be paid to employees who have been employed for at least five (5) consecutive years. If discharged for just cause, severance pay shall not be allowed. • ARTICLE 20 INJURY ON DUTY Employees injured during the performance of their duties for the EMPLOYER and -9- thereby rendered unable to work for the EMPLOYER will be paid the difference between the employee's regular pay and Workers' Compensation insurance payments • for a period not to exceed ninety (90) working days per injury, not charged to the employee's vacation, sick leave, or other accumulated paid benefits, after a three (3) working day initial waiting period per injury. The three (3) working day waiting period shall be charged to the employee's sick leave account less Workers' Compensation insurance payments. ARTICLE 21 FALSE ARREST INSURANCE The EMPLOYER will provide each employee and pay 100% of the premium due thereon, with false arrest insurance provided, however, that the EMPLOYER will not be obligated to contribute to the purchase of coverage for any punitive damage claims which may constitute a portion of such false arrest insurance. In the event that separate coverage cannot be obtained (i.e., for false arrest insurance coverage not including punitive damage claims), then the EMPLOYER shall not be obligated to pay for any premium which may become due for such insurance. In that event, the UNION may, on behalf of its members, obtain quotes for such insurance, including insurance containing separate coverage for punitive damage claims arising out of false arrest, and the EMPLOYER shall make contributions to the purchase of such insurance as shall be otherwise required according to the first sentence of this Article. i ARTICLE 22 TRAINING 22.1 The EMPLOYER shall reimburse each employee who is required to maintain a license as a law enforcement officer under Minnesota Statutes, Section 626.84, et sec ., for: actual expenses of tuition, meals, travel, and lodging incurred in meeting the continuing education requirements of the Minnesota Police Officers Standards and Training Board, not to exceed 48 hours of such training every three (3) years. The EMPLOYER need not make such reimbursement for attendance at a course located more than sixty (60) miles from the City of Brooklyn Center and such reimbursement shall not exceed similar allowances for state employees. If the EMPLOYER provides in- service training to its employees which meets the continuing education requirements of the Minnesota Police Officers Standards and Training Board, and if the EMPLOYER provides its employees with an opportunity to attend such in- service training courses, to the extent, that such opportunity is provided to each employee, the obligation of the EMPLOYER . to reimburse such employee for expenses incurred in attending continuing education courses shall be reduced. 22.2 The EMPLOYER shall pay each employee their regular salary while attending continuing education courses whether or not such courses attended are in- service training courses or courses given by instructors other than the EMPLOYER. The obligation of the EMPLOYER to pay such salaries shall not exceed a total of forty - eight (48) hours every three (3) years. - 10- ARTICLE 23 UNIFORMS The EMPLOYER shall provide required uniform and equipment items. In addition, the EMPLOYER shall pay to the uniformed officers a maintenance allowance of $85.00 per year. Plainclothes officers, including the trainee, shall be paid a clothing allowance of $400.00 per year. ARTICLE 24 LONGEVITY AND EDUCATIONAL INCENTIVE Effective January 1. 1995, the following terms and conditions are effective: 24.1 After four (4) years of continuous employment, each employee shall choose to be paid supplementary pay of $102 per month or supplementary pay based on educational credits as outlined in 24.6 of this Article. 24.2 After eight (8) years of continuous employment, each employee shall choose to be paid supplementary pay of $169 per month or supplementary pay based on educational credits as outlined in 24.6 of this Article. 24.3 After twelve (12) years of continuous employment, each employee shall choose to be paid supplementary pay of $237 per month or supplementary pay based on educational credits as outlined in 24.6 of this Article. 24.4 After sixteen (16) years of continuous employment, each employee shall choose to be paid supplementary pay of $305 per month or supplementary pay based on educational credits as outlined in 24.6 of this Article. • 24.5 Employees may choose supplementary pay either for length of service or for educational credits no more often than once every twelve (12) months. 24.6 Supplementary pay based on educational credits will be paid to employees after twelve (12) months of continuous employment at the rate of: Educational Credits Stated in Terms Percentage Pay of O College uarter Credits Increment � 45-89 $102 per month -1 90 3 4 $169 pe r month 135- 179 $237 per month 180 or more $305 per month Not all courses are to be eligible for credit. Courses receiving qualifying credits must be job related. (Thus, a four -year degree is not automatically 180 credits; or a two -year certificate is not automatically 90 credits.) Job - related courses plus those formally required to enter such courses shall be counted. If Principles of Psychology (8 credits) is required before taking Psychology of Police Work (3 credits), completion of these courses would yield a total of 11- qualifying credits. C.E.U.'s (Continuing • Education Units) in job - related seminars, short courses, institutes, etc. shall also be counted. -11- The EMPLOYER shall determine which courses are job - related. Disputes are grievable based on the criteria outlined in the award of Minnesota Bureau of Mediation Services Case No. 78 -PN- 370 -A. ARTICLE 25 HOLIDAY LEAVE 25.1 Holiday leave shall be granted for the following holidays: New Year's Day Columbus Day Martin Luther King Day Veterans' Day Presidents' Day Thanksgiving Day Memorial Day Christmas Day Independence Day Two (2) floating holidays Labor Day 25.2 Employees shall receive compensatory time off for each of the earned and accrued holidays. Such time off shall be taken as soon as practicable before or after the holiday for which it is accrued and as approved by the EMPLOYER. 25.3 An employee who works on New Year's Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, Memorial Day, Veterans' Day, Columbus Day, Martin Luther King's Day, or Presidents' Day shall receive time and one -half (1 /2) his regular pay rate for all hours worked in addition to straight compensatory time off for the holiday. a 25.4 Except as provided in 25.3, overtime shall not be authorized for employees for to • PY P Y hours worked on holidays when such work is part of the planned schedule. 25.6 An employee may request a holiday off, which he /she is required to work, prior to fourteen calendar days before the holiday. The employer shall post the open holiday shift to be filled by another employee at the holiday rate of pay. The employee making the request for the holiday off is responsible for working the holiday if the posting is not filled five (5) days prior to the holiday. ARTICLE 26 VACATIONS 26.1 Permanent full-time employees shall earn vacation leave with pay as per the following schedule: - 0 through 5 ears of service eighty y e g ty (80) hours per year (accrued at 3.08 hours per pay period) 6 through 10 years of service - one hundred twenty (120) hours per year (accrued at 4.62 hours per pay period) eight (8) additional hours per year of service to a maximum of one • hundred sixty (160) hours after fifteen (15) years of service -12- 11 years - 4.92 hours per pay period 12 years - 5.23 hours per pay period • 13 years - 5.54 hours per pay period 14 years - 5.85 hours per pay period 15 years - 6.15 hours per pay period 26.2 Employees using earned vacation leave or sick leave shall be considered working for the purpose of accumulating additional vacation leave. 26.3 Vacation may be used as earned, except that the EMPLOYER shall approve the time at which the vacation leave may be taken. No employee shall be allowed to use vacation leave during his initial six (6) months of service. Employees shall not be permitted to waive vacation leave and receive double pay. 26.4 Employees with less than five (5) years of service may accrue a maximum of one hundred twenty (120) hours of vacation leave. Employees with more than five (5) but less than fifteen (15) consecutive years of service (uninterrupted except for layoff not exceeding two (2) years duration in any single layoff period) may accrue a maximum of one hundred sixty (160) hours of vacation leave. Employees with fifteen (15) consecutive years or more of service (uninterrupted except for layoff not exceeding two (2) years duration in any single layoff period) may accrue a maximum of two hundred (200) hours of vacation leave. 26.5 Employees leaving the service of the EMPLOYER in good standing, after having given the EMPLOYER proper notice of termination of employment, shall be compensated for vacation leave accrued and unused. ARTICLE 27 SICK LEAVE 27.1 Sick leave with pay shall be granted to probationary and permanent employees at the rate of eight (8) hours per month or ninety -six (96) hours per year (computed at 3.69 hours per pay period) of full -time service or major fraction thereof, except that sick leave granted probationary employees shall not be available for use during the first six (6) months of service. 27.2 Sick leave shall be used normally for absence from duty because of personal illness or legal quarantine of the employee, or because of serious illness in the immediate family. Immediate family shall mean brother, sister, parents, parents -in -law, spouse, or children of the employee. Sick leave may be used for the purpose of attending the funeral of immediate family members plus brothers -in -law, sisters -in -law, grandparents, grandparents -in -law, and grandchildren of the employee. In addition to the preceding conditions, supervisors may approve the use of sick leave, up to a maximum of four (4) days (32 hours) per calendar year, for the care of the employee's children or spouse when the employee's supervisor determines that the situation requires the employee's presence. The four (4) special -use days (32 hours) cannot be • accumulated from one year to the next, and if they are not used, they are included in the employee's normal sick -leave accumulation. -13- 27.3 Sick leave shall accrue at the rate of eight (8) hours per month or ninety-six (96) hours per year until nine hundred sixty (960) hours have been accumulated (shall be computed at 3.69 hours per pay period). Effective January 1, 1994, after nine hundred sixty (960) hours have been accumulated, sick leave shall accrue at the rate of four (4) hours per month or forty -eight (48) hours per year (computed at 1.85 hours per pay period), and simultaneously vacation leave, in addition to regular vacation leave accrual, shall accrue at the rate of two (2) hours per month or twenty -four (24) hours per year (computed at .925 hours per pay period). Employees using earned vacation or sick leave shall be considered to be working for the purpose of accumulating additional sick leave. Workers' Compensation benefits shall be credited against the compensation due employees utilizing sick leave. 27.4 In order to be eligible for sick leave with pay, an employee must: a. notify the EMPLOYER prior to the time set for the beginning of their normal scheduled shift; b. keep the EMPLOYER informed of their condition if the absence is of more than three (3) days duration; c. submit medical certificates for absences exceeding three (3) days, if required by the EMPLOYER. 27.5 Employees abusing sick leave shall be subject to disciplinary action. • ARTICLE 28 INSURANCE 28.1 Effective January 1, 1995 the EMPLOYER will contribute up to a maximum of three hundred thirty five dollars ($335) per month, per employee, for calendar year 1995 for general health, life, long -term disability, including dependent coverage. 28.2 Effective January 1, 1996 the EMPLOYER will contribute up to a maximum of three hundred fifty dollars ($350) per month, per employee, for calendar year 1996 for general health, life, long -term disability, including dependent coverage. 28.3 If for 1995 and 1996, the unit employees vote to use thirty dollars ($30.00) of the maximum ($335 per month 1995, $350 per month 1996), per employee, of health and life insurance for dental insurance for all unit employees, then such thirty dollars ($30.00) can be used to bid out a dental insurance program, provided that the bidding process would-be in compliance with State law and that this would not otherwise be precluded by State law. ARTICLE 29 WAGE RATES REGULAR BASE PAY RATE: The employee's hourly or monthly base pay rate, including educational incentive pay, longevity pay, and differential for investigator (detective), and school liaison officer; and excluding any other special allowance. • -14- 29.1 Effective JanuaU 1. 1995 Police Officer base rate: (P5) After 36 months of continuous employment $3,496 per month (P4) After 24 months of continuous employment 93% of After 36 months rate (P3) After 12 months of continuous employment 86% of After 36 months rate (P2) After 6 months of continuous employment 79% of After 36 months rate (PI) Starting rate 72 % of After 36 months rate Sergeant $345 per month above the P5 monthly rate for police officer Administrative Sgt $400 per month above the P5 monthly rate for police officer Community Services Sgt $400 per month above the P5 monthly rate for police officer 29.2 Effective January 1, 1996 Police Officer base rate: (P5) After 36 months of continuous employment $3,608 month (P4) After 24 months of continuous employment 93% of After 36 months rate (P3) After 12 months of continuous employment 86% of After 36 months rate (P2) After 6 months of continuous employment 79% of After 36 months rate (Pl) Starting rate 72% of After 36 months rate Sergeant $345 per month above the P5 monthly rate for police officer Administrative Sgt $400 per month above the P5 monthly rate for police officer Community Services Sgt $400 per month above the P5 monthly rate for police officer 29.3 Employees classified or assigned by the EMPLOYER to the following job classifications or positions will receive one hundred fifty dollars ($150) per month or one hundred fifty dollars ($150) prorated for less than a full month in addition to their regular wage rate in 1995; and one hundred seventy five dollars ($175) per month or one hundred seventy five' dollars ($175) prorated for less than a full month in addition to their regular wage rate in 1996: Investigator (Detective) School Liaison Officer 29.4 Employees classified by the EMPLOYER to the canine handler classification will receive the following in addition to their regular wage rate: a. The officer will receive the last thirty (30) minutes of each scheduled shift for dog . maintenance and care at the officer's home. b. The officer will receive forty-five (45) minutes of overtime pay for dog maintenance, care, and training for each of the officer's scheduled days off. c. When the officer uses time off (sick, vacation, or comp time) for any whole scheduled shift, he must take time equivalent to one -half hour less than whole shift and be paid for whole shift. d. When the officer uses holiday time for any whole schedule shift, he must take eight (8) hours of leave time and will be paid for eight (8) hours. e. When the officer uses a portion of a scheduled shift as sick or vacation time, which is less than the full eight (8) hours, he must take the actual time used in leave time. f. When dog is out of the care of the canine officer, all above items do not apply. -15- ARTICLE 30 AGREEMENT IMPLEMENTATION • EMPLOYER shall implement the terms of this AGREEMENT in the form of a resolution. If the implementation of the terms of this AGREEMENT require the adoption of a law, ordinance, or charter amendment, the EMPLOYER shall make every reasonable effort to propose and secure the enactment of such law, ordinance, resolution, or charter amendment. ARTICLE 31 WAIVER 30.1 Any and all prior agreements, resolutions, practices, policies, rules, and regulations regarding terms and conditions of employment, to the extent inconsistent with the provisions of this AGREEMENT, are hereby superseded. 30.2 The parties mutually acknowledge that during the negotiations which resulted in this AGREEMENT, each had the unlimited right and opportunity to make demands and proposals with respect to any term or condition of employment not removed by law from bargaining. All agreements and understandings arrived at by the parties are set forth in writing in this AGREEMENT for the stipulated duration of this AGREEMENT. The EMPLOYER and the UNION each voluntarily and unqualifiedly waives the right to meet and negotiate regarding any and all terms and conditions of employment referred to or covered in this AGREEMENT or with respect to any term or condition of employment not specifically referred to or covered by this AGREEMENT, even though such terms or conditions may not have been within the knowledge or contemplation of either or both of the parties at the time this contract was negotiated or executed. ARTICLE 32 DURATION This AGREEMENT shall be effective as of January 1, 1995, and shall remain in full force and effect until the thirty -first (3 1) day of December, 1996, as noted in the contract. IN WITNESS THERETO, the parties have caused this AGREEMENT to be executed this day of , 1995. FOR THE CITY OF FOR LAW ENFORCEMENT BROOKLYN CENTER LABOR SERVICES NO. 82 -16- Council Meeting Date September 25, 1995 3 City of Brooklyn Center Agcnda Item Number S k Request For Council Consideration • Item Description: 1995 -1996 Labor Agreement between City of Brooklyn Center and LELS /82 (Police Officers and Sergeants) Department Approval: Nancy Gohman, Assistant City Manager /Personnel Coordinator Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Approve Resolution 1995 -96 Labor Agreement between City of Brooklyn Center and LELS /82 (Police • Officers and Sergeants) Summary Explanation: (supporting documentation attached ) The City of Brooklyn Center has recently received an Interest Arbitration Award with Law Enforcement Labor Services Local 82 (police officers and sergeants) for Labor Agreement for 1995 -96. Attached is a copy of the agreement. Also attached for your information is a summary of changes to our current 1995 -96 contract. Once the contract is signed it will be forwarded to LELS for signatures and implementation. I will be present at the Council meeting to answer any questions you may have. • Member introduced the following resolution and is moved its adoption: RESOLUTION NO. RESOLUTION APPROVING THE 1995 -96 LABOR AGREEMENT U O BETWEEN CITY OF BROOKLYN CENTER AND LELS /82 (POLICE OFFICERS AND SERGEANTS WHEREAS, the City of Brooklyn Center has recently received an Interest Arbitration Award for the 1995 -96 Labor Agreement between the City of Brooklyn Center and LELS /82 (police officers and sergeants), and the contract is to be approved by the City Council. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Brooklyn Center approves the 1995 -96 Labor Agreement between the City of Brooklyn Center and LELS /82, and further, authorize the Mayor and City Manager to sign such agreement. Date Mayor ATTEST: Deputy Clerk The motion for the adoption of the foregoing resolution was duly seconded by member and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resolution was declared duly passed and adopted. • City of Brooklyn Center Memorandum To: Mayor and Councilmembers FROM: Cam Andre, Interim City Manager DATE: September 1, 1995 SUBJECT: Arbitration - City of Brooklyn Center and Law Enforcement Services Police Officers /Sergeants Contract 1995 -1996 We have just received the arbitration award for the 1995 -1996 contract for police officers and police sergeants with the City of Brooklyn Center. A copy of the arbitration award document is available for your review upon your request. A summary of the award is as follows: Issue No. 1. Duration. This contract is for two years commencing January 1, 1995, through December 31, 1996. Issues 2 &' 3. pages. Increase wages 3.2% for 1995, and increase wages 3.2% for 1996, effective January 1 of each respective year. Issue Nos. 4 & 5. Administration Sergeant and Community Services Ser Pay Differential. The arbitrator awarded 5400 per month above the top rate for patrol for pay differential for administrative and community services sergeant for 1995, and 5500 per month above top patrol for 1996. (Sergeants receive 5345 per month above top patrol). Issue No. 6. Pay Differential for Field Training Officer. No additional pay differential was added for FTO. Issue No. 7. Pay Differential for Investigator and School Liaison Officer. We currently have a pay differential for both investigator and school liaison officer, and it will remain at $150 per month for 1995 and raised to $175 per month for 1996. Issue No. S. Longevity and Educational Incentive. We currently have percentage rates for longevity and education incentive. The arbitrator ruled in favor of the City and chanced from a percentage rate for longevity to a dollar cap; capping the rate that employees receive at the 1994 longevity and educational incentive pay rate. Previously, percentages were as follows: After four years employee will be paid an additional 3% of the base rate. After eight years, an additional 5 %; after twelve years, an additional 7 %; after 16 years, an additional 9 %. This is now converted to after four years, 5102 per Memorandum to Mayor and Councilmembers September 1. 1995 Page _' • month; after 8 years, S169 per month; after 12 years, 5237 per month; after 16 years, 5305 per month. Converting from percentage to a set dollar amount on longevity and educational incentive is a major cost savings for the City. Issue No. 9. Court Time. No change. Issue No. 10. Call Back No change. Issue No. 11. Overtime. The 12 hour requirement may be waived by mutual agreement between the employee and police administration. Issue No. 12. Overtime - Hours of Notice. No change. Issue No. 13. Senior Officer in Char Pm Differential. No differential added. Issue Nos. 14 & 15. Health Insurance 1995 and 1996. Currentiv, we are asking for clarification on this item from the arbitrator. The arbitrator's award stated that the City's position was adopted, and the City's final position was that it remain consistent with insurance in contributions • of S335 per month for 1995 and an additional S15 per month for 1996, but the arbitrator incorrectly stated that the 1995 contribution will be a maximum of 5350 per month and the 1996 contribution will be a maximum of 5365 per month. In order to clarify this, the City has written the arbitrator and the union for clarification on this issue. Issue No. 16. Insurance Premiums - Difference for Other Insurance. No difference in insurance allowed. Issue No. 17. Injury on Duty - Eliminate. No elimination of injury on duty. Issue No. 18. Holidays. Posting as open shift. Contract language will be amended so if employees want the day off, the City will post the open shift allowing for others to fill the opening. Issue No. 19. Funeral Leave. No additional leave was added to the contract language as funeral leave. Issue No. 20. Reclassification of School Liaison Officer. The union proposed reclassifying the positions of school liaison officer and juvenile • officer as school liaison /juvenile officer. No change was made. The classification will remain as school liaison officer. Memorandum to Mayor and Councilmembers September 1, 1995 Page 3 Issue No. 21. Job Classifications. Eliminate juvenile officer. The arbitrator agreed with the Citv that since the classification of juvenile officer has not been used, it will be eliminated from the contract. Issue No. 22. Eliminate Paramedic Classification. The City's position was granted to eliminate the paramedic classification since we have not used this classification. Issue No. 23. Establish Promotional O*eiia. The union wanted to have contract language with regard to establishing promotional criteria. This was denied. Several other agreements were made regarding the contract prior to arbitration. The first is to reorder the contract so it is more organized. Another is to eliminate recognition of corporal in the contract since we do not have this position or classification. Also, to increase plain clothes officers' allowance to 5400 per year. We will be adding a step in the grievance process allowing for mediation. Finally, that one continuous vacation period shall be selected on the basis of seniority until April 1 of each calendar vear (previous language was May 15 of each calendar year). The contract is in the process of being rewritten and will be forwarded to you at a Council meeting in the near future for signatures. • BARD AND BARD, M. 6 , ATTORNEYS AT LAW STEPHEN A. BARD SUITE 2424 * OWARO M. BARD OFFICES AT CENTRE VILLAGE TELEPHONE: (612) 333 -6691 AMY L DUMOND 431 SOUTH SEVENTH STREET FAX:(612) 3441683 MICHAEL L BERDE MINNEAPOLIS, MINNESOTA 55415 SEPTEMBER HOLMBLAD, PLS CHARTERED, OF COUNSEL LEGAL ASSISTANT September 6, 1995 Ms. Nancy Gohman Assistant City Manager City of Brooklyn Center 6301 Shingle Creek Parkway Brooklyn Center, MN 55430 -2199 RE: In the Matter of the Interest Arbitration Between the City of Brooklyn Center and Law Enforcement Labor Services, Inc., Local 82 BMS Case No. 95 -PN -858 Dear Ms. Gohman: I am in receipt of _your letter of September 5, 1995 requesting a clarification of the award made on August 21, 1995. Due to a typographical error with regard to Issues No. 14 and 15, the award was incorrect. I am herewith amending the Decision and Award of Issues No. 14 and 15 to read as follows: The City's position is adopted. The Employer's contribution for 1995 shall be up to a maximum of $335 per month per employee - for dependent coverage in 1995 and up to a maximum of $350 per month per employee for dependent coverage for the calendar year 1996. Very truly yours, BARD AND BARD, LTD. V �- Stephen A. Bard SAB /lfb cc: Thom Skelly, LELS Business Agent Bureau Of yledJation Services Council Meeting Date 9/25/95 3 City of Brooklyn Center Agenda Item Numbe Request For Council Consideration • Item Description: Discussion Item: Earle Brown Heritage Center Department Approval: Grimm —� Cam Andre, Interim City Manager Manager's Review /Recommendation: No comments to supplement this report Comments below /attached Recommended City Council Action: Summary Explanation: (supporting documentation attached Yes ) • Staff reports on the Earle arle Brown Heritage Center operations are submitted for your information. It is suggested that the Council indicate some preferences for action on the various options and on what basis the staff can prepare a more detailed analysis of possible decisions on these issues. MEMORANDUM Date: September 20, 1995 To: Cam Andre, Interim City Manager From: Brad Hoffman, Community Development Director Subject: Inn on the Farm Options Since its inception, the Inn on the Farm has always operated with a deficit. There has been improvement in its financial position, but given the physical limitations of the facility (as noted by Marquette Partners in their management report on the Heritage Center) the Inn, as well as the convention center, suffer primarily from a lack of size. The facility has had to maintain basic minimum levels of operating costs which could be offset with additional space if it were available. As it relates to the Inn specifically, the Marquette report suggested that an additional eight to ten rooms would be necessary to operate in the black. It had been anticipated that the convention center would generate sufficient revenue to offset the .Inn losses. At this point, I find it improbable that this will happen. As a result, Council has asked for options available • to them relative to this item. First, the Council /EDA could continue to operate the Inn in its current manner. To do so, the Council will have to determine that the Inn, which is experiencing a 75 -80% occupancy rate, is beneficial to the overall image of the community. While the Inn has been selected as one of the ten best inns in the United States and receives high marks from its guests, to continue requires the recognition on the part of the community that it will require some annual level of subsidy from the City. There is no doubt that the Inn reflects positively of Brooklyn Center and the recognition of a subsidy would be the equivalent of calling it a it . Second, following the logic of Marquette Partners, the Inn could get bigger. The now - leased D Barn could be converted to additional rooms (see attached memo from Judith Bergeland). This would require a loan from the TIF district. Before undertaking this option, it would have to be determined that the TIF district could support it. The convention center has a tremendous need for additional parking which would also be a TIF expense. Third, the Inn, along with Earle's, could be closed down. Assistant Finance Director Tim Johnson has prepared a report on the savings that could be realized if that option is selected (see attached). Note, however, that 1996 would result in an even greater loss. Savings will not be experienced until 1997. • Fourth, Brooklyn Center belongs to the North Metro Tourism Bureau. A local tax generates approximately $230,000 annually to promote conventions and tourism. The amount will increase with the likely addition of two new hotels in Brooklyn Center. The City could withdraw from the current Bureau and establish its own. The bureau could underwrite as Memo to Cam Andre September 21, 1995 • Pag 2 much as $100,000 of the Heritage Center's budget. Again, it would take time to withdraw from current obligations before the Heritage Center would directly benefit. Such a move would also be opposed by our local hotels. Fifth, we could explore other uses of the Inn. Other uses could encompass such things as executive office suites. There is a potential for ten or eleven offices. Conversion costs would be minimal; however, we would want to be sure there is a market for this before undertaking it. The Inn could be used for meeting space much the same as the C Barn is. The cost of this conversion could be small to significant depending on how aggressively we were with restructuring the facility. It should be noted that the loss of the Inn or the availability of the rooms will have a significant impact on the facility's wedding business. The wedding business, with its heavy food use, is a major profit center for us. At the Council's direction, I will provide them with a more detailed report on any of the options that are of interest or other options Council may suggest. GBH: Enclosures: Judith Bergeland memo Tim Johnson memo P TA E • AN HISTORIC RESTORATION INN • EXHIBIT HALL- CONVENTION CENTER MEMORANDUM TO: Mayor Myrna Kragness; Councilmembers Kristin Mann, Barbara Kalligher, Kathryn Carmody, Deb Hilstrom; Interium City Manager Cam Andre; Community Development Director Brad Hoffman FROM: ITudith Bergeland, General Manager RE: \ \ Earle Brown Heritage Center DATE: August 29, 1995 Ongoing discussions regarding the Heritage Center, its booking and financial pictures and its place in the community should be part of continued dialogue between us. I understand some • of you have asked the question "Should the City continue to 'loose' money through this project?" is this question I would 1' P " J Ike to address ss in the following comments: ts. What does the Heritage Center contribute financially to the City revenue picture? And the other side of the coin, what would the impact be on the community if the Heritage Center were not a part of the City holdings (budget)? The Center contributes to the City in the following manner: Cash Flow By: 1995 Budget 1994 1993 1992 Property Taxes $ 66,750 $ 64,548 $ 65,679 $ 62,510 Interest Paid to City 22,832 20,104 12,956 9,142 Administrative Services 51,916 42,192 38,160 54,240 Insurance 24,213 27,202 27,385 24,412 $165,711 $154,046 $ 144,180 $1 50,304 City Held Events Cost* 45,325 70,408 61,996 28,149 *The Center holds rental space for City functions like the DARE awards program, Earle Brown Days Festival site, City Craft 'Bazaar, and a variety of other smaller meetings over the course of each year. In order to provide this service, the Center looses potential room rental and catering revenue as well as covering the expenses (staffing, utilities, etc.) which are a part of these events. 6155 Earle Brown Drive, Brooklyn Center, ;SIN 55430 (612) 569 -6300 FAX: (612) 569 -6320 Council Memo /August 29, 1995 - Page 2 The Marquette Partners Management Audit of September 1993 (page 14) recognizes the treatment of these costs, whether paper transfers or potential revenue losses, as being inconsistent and preventing a clear understanding of the financial picture of the Center. It is my understanding that the Heritage Center complex was designed and restored to be a centerpiece for economic redevelopment, an identification of innovation by the city, and a way to create a positive economic impact on the community. The hospitality industry in the North Metro area, particularly in Brooklyn Center, has benefited greatly from the presence of the Heritage Center as a conference complex - despite early misgivings on the part of the area hotels. In 1994 we began tracking hotel occupancy generated by the Center's presence. The Minnesota Office of Tourism materials indicate that a typical "conventioneer" spends on the average $135 per day in hotel, restaurant and shopping expenses. (The Greater Minneapolis Convention and Visitors Association recently announced an average figure of $770 per three - day stay, or $257 per day.) This :amount is in addition to the money spent by a company or individual on facility rental and food and beverage. In 1994 we were able to track the use of 8,141 room nights. This does not count the "casual" room used for weddings, etc. where our sales department wasn't involved in the booking of the room nights. Anticipated room nights during 1995 are 13,650. This creates an economic impact on the community (aside from the facility income) of: 1994 - $1,099,035 (8,141 x $135) 1995 - $1,842,750 (13,650 x $135) There is also to be considered what is called "spin off' revenue which affects both the City of Brooklyn Center and the North Metro area. In 1994 the local hotels contributed through a three percent hotel room tax an amount of $221,032 to the City's revenue picture. Soon the Comfort Inn will open, a welcome addition to the hotel offerings which the Center will help to fill. Consider also the prospective Carlson Inn and Suites and accompanying restaurants. Loss of the Heritage Center would most certainly affect these properties, causing at the very least no new development, and at the worst, closing of existing properties who are impacted by this facility. • Council Memo /August 29, 1995 - Page 3 There is a "trickle- down" effect generated by this facility: wages of the employees spent on gas, shopping, etc., purchase of printing, shipping, draping, rentals, secretarial services, etc. by the facility and its clients, hiring of City police officers by clients to police their events, and the ability to attract new corporate rental clients (such as MECC) who moved into the area because of the services offered by the Inn and the Heritage Center. The Marquette Partners Management study indicated that "growing the business" was necessary to prospering the Heritage Center. The Inn occupancy level consistently runs more than 75% in an industry where the norm is 43 %. The Convention Center rental revenues during 1990 (first partial year of operation) were less than $70,000 compared with actual rental revenues in 1994 of $452,558. Commercial office space has been 100% occupied since the facility opened. Clearly we are "growing the business ". Yes, there are growing costs involved too. This industry is highly labor intensive and service oriented. One of the reasons for the growth we've experienced is because the facility is so well maintained (thanks to a very diligent staff) and the clients so well waited upon that the return rate is very high. Getting clients to experience the Center the first time takes time (in tours, food tastings, promotional materials, etc.), keeping them here takes service and dedicated staff who believe in the product and service they provide. Both the Maxfield Research Study (done before the facility was restored) and the Marquette Partners Management Study (done in September of 1993) indicate that the facility will need to be subsidized by its owner, the City of Brooklyn Center. Currently, the Center is subsidizing the City through items identified on page one of this memo. We are happy to continue to do that provided you will recognize the cost to the bottom line when it continues to show negative numbers. You are welcome at the Heritage Center whenever your busy schedules will allow. If you will call me first, I'll free my schedule to take you around the facility and answer any questions either you or a constituent may have about the operation here. Thank you! JB MEMORANDUM Date: July 27, 1995 To: Charlie Hansen, Finance Director Brad Hoffman, Director of Community Development From: Tim JohnsonJ'sst. Finance Director Subject: Closing of Earles and Inn on the Farm As requested, I have reviewed the financial implications of closing Earles Restaurant and the Inn on the Farm in 1996. My estimates are based on current staffing levels, financial projections from the first six months of 1995 and a review of the years 1992 - 1994. The Inn on the Farm has incurred a net loss each year since its opening. I project the Inn will lose approximately $115,000 for fiscal year 1995. The loss in 1994 was $122,400 and $138,000 in 1993. Based on my analysis, the Inn on the Farm will never break even based . on its current revenue and expense structure. Therefore, it would not be unreasonable to conclude the Inn will produce a net loss in excess of $100,000 for 1996. Earles Restaurant opened in April 1994 and finished the year with a net loss of $46,500. Based on the first six months of 1995, I project the restaurant to produce a net loss of $10,000 for fiscal year 1995. This projection is based on the fact that Earles will achieve only 42% of its expected revenue budget for 1995. Even if Earles were to achieve its revenue budget, Earles would be expected to generate only $5,500 in profits. Based on current and possible future results, Earles will not produce substantial profits to help offset losses at the Inn. I have prepared an estimated budget for 1996 based on the premise that Earles and the Inn would discontinue operations as of December 31, 1995. The items detailed below are based the assumption that two full -time and all part-time employees directly associated with Inn and Earles would be laid off. The amounts listed below are in place of the typical operating budgets for Earles and the Inn on the Farm. Inn/Earles 1996 Budget Utilities $18,000 Insurance 4,250 Building Maint. 5,000 1996 Property Taxes 30,050 Unemployment Benefits 25,000 Return Gift Certificates 5.000 • Total $ 87,300 July 27, 1995 Page 2 Convention Center 1996 Budget Increase for mgmt. salaries once coded to the Inn $ 4,000 Telephone 6,900 Audit & Logis Fees 575 Total $ 11,475 General Fund 1.996 Budget . Re- allocation of Admin. Services $ 17,280 Employee Retirement Fund 1996 Budget Salaries $ 2,225 Health Insurance 1 Outplacement Services 4,000 Total $ 7,425 GRAND TOTAL $123,480 . Based on my analysis, the total cost to closing the Inn and Earles in 1996 would be $123,480. For analysis purposes, I project the Inn and Earles will lose approximately $110,000 for 1996. Using a short-term approach to the financial problems at the Earle Brown Heritage Center, it will cost the City $13,480 more to close the Inn and Earles in 1996 than to operate. However, using a long -term approach, the costs detailed below will not be incurred in 1997 or future years. Property Taxes $30,050 Unemployment Benefits 25,000 Return Gift Certificates 5,000 Lay -off Benefits 7,425 Total $67,475 .After subtracting the one -time costs of $67,475, the annual cost to the City would be reduced to $56,005 in 1997. This amount compares more favorably to an expected operating loss in excess of $100,000 if the Inn and Earles were to continue based on its current revenue and expense structure. In summary, I project it will cost the City more to close Earles and the: Inn than to operate in 1996. However starting in 1997, I believe the City will save over $50,000 per year with Inn and Earles closed and not operating under its current structure. I believe this is one possible approach to solving the long -term financial problems occurring at the Earle Brown Heritage Center. As always, I am available to discuss the assumptions and details involving this report. • �B O VT AN HIS RE� RATION 'V MEMORANDUM INN - EXHIBIT RUL-CONVENTION CE \TER TO: Brad Hoffman, Community Development Director FROM: Judith Bergeland, General Manager RE: The Inn and D Barn DATE: September 18, 1995 We have had several discussions over the last two years regarding the Inn, its occupancy, its financial condition, and possible venues which would bolster revenues to offset expenses. Last week I asked Steve Barrett and Bruce Ballanger to meet with me to lay out cost versus revenue in a variety of plans. As I have mentioned to you ber the only plan which would add enough revenue to offset expenses is the one which removes the D Barn from Commercial Office space. The current tenant lease runs out June 30. 1996. I have not begun negotiations with the tenant yet for ongoing use of the space. The commercial office space as a whole is not quite breaking even with one small office (former EDA) standing ernpry. • Chanainz the D Bar n to eight ht addluonal overnight rooms could gene. r ate the necessary dollars to put the Inn at a break even point. Occupancy trends in the B &B industry indicate that the greater the number of rooms. the hi_Qher the level of occupancy. Consider the following information: 8 rooms at S85 ADR (average daily rate) = S680 a day = S248,200 revenue The Inn currently runs an average of 75-80% occupancy on ten rooms. Occupancies on eight additional rooms would gross: at 60% occupancy - S 1'. 8.920, at 65 % occupancy - 161.330, at 70% occupancy - 173,740 in addition to the revenue currently generated by the existing structure. Additional expenses would be minimal: S 19,710 = housekeeping /laundry - 6 hrs. daily @ S9 16.425 = hostess - 5 hrs. daily @ S9 4.015 = maintenance - 1 hr daily @ S l l 7,000 = utilities 1.500 = insurance • 20.000 = taxes (currently paid as commercial office space) S 68.650 6155 Earle Brown Drive. Brooklyn Center. NIN 55430 (612) - -6300 FAX: (612) =69 -631-0 • Hoffman /Page 2 - September 18, 1995 Given the afore mentioned occupancy levels the net increase could be: at 60% - $ 80,270 at 65% - $ 92,680 at 70 % - $106,090. There needs be a small meeting room for 8 -10 people in the D Barn to support corporate meeting business. Breakfast would be served daily in the main house using the Sunroom and the Earle Brown room. Anticipated cost for change -over and furnishings figured at $325,000 (based on S70 per square foot plus furniture). This revamp of space could put the Inn at a break even point within three years (figuring payback of the change -over investment). ON -SITE INNKEEPER: Another option would be to make the Innkeeper an on -site position thereby saving the part -time hours currently worked from 8 p.m. to 6 a.m. I have never seriously considered this option because we w A living quarters or would need to remove a bedroom from serti ice to create minimal livin • �q rebuild the bunkhouse into a small efficiency living area. Removinc a current bedroom would lower revenues overall approximately $24,820 (to provide the Innkeeper's quarters) while saving part -time salaries of approximately $30,000 (since we would still need evening weekend coverage to free Innkeeper). Then we would need to increase the Innkeeper's salary to compensate for the 24 -hour work day. CHANGE THE INN INTO SMALL MEETING SPACE /NO OVERNIGHT ROOMS: Creating small meeting space from the existing overnight rooms could be another option. Two of the rooms are too small to consider: Gwen Brown and Grace Matson. The two rooms in the Carriage House would have to be combined into one to hold 12 -15 people (removing one bath). Counting the Sunroom and Earle Brown (existing meeting rooms) would bring the potential available meeting space to 9 rooms (three on second floor levels non - accessible to the h sically PY 1 challenged). Earle's would probably have to close to accommodate this change. Staffing levels would require three "hostess" positions. One hostess for the four meeting rooms in the farmhouse, one hostess for the other three houses, and one hostess at the front desk for booking and contract writing, etc. Catering would have to pick up the food service part of the equation. Hoffman /Page 3 - September 18, 199 The rental as meeting space would run S80 -100 per room. Figuring a $90 average on 9 rooms a day times five days a week (weekend meetings are very rare) at an occupancy level of 30% would gross $64,180. Staffing costs would run approximately: 1 hostess 10 hours daily times 5 days wkly times $9 = $23,400 2 hostess 8 hours daily based on 30% mtg. room occupancy = $11,500 Maintenance hours = $20.281 (1994 year end figure) All current expenses including equipment repair and maintenance, telephone, snow /grass care, utilities, insurance, etc. would continue as they are currently. In addition, the shift from overnight rooms to meeting space would remove the Inn rooms from the property tax rolls thereby decreasing revenue to the City by 528,911 (1994 figure). These figures do not speak to the transition costs of enclosing bathrooms (to separate them from meeting room space), purchasing furnishings .to convert to meetings environment, or to the loss of convention facility bookings (especially weddings) because there are no overnight accommodations on -site. • SUMMARY: It appears as though there are currently two viable alternatives. One is to accept the current uses of the Inn, Commercial Office, Conference Center, Earle's. and Catering by acknowledging that there is not enough rental space available to cover cost. This alternative then acknowledges that the 3 % bed tax currently paid by the hotels to the City will more than cover any funds the Center is unable to generate. The other alternative is to acknowledge the need for additional overnight rooms to bring the Inn into a break even situation. This would be accomplished by investing in a revamp of the D Barn from Commercial Orrice to overnight room space. Closing the Inn does not seem a viable option because of the negative impact on the balance of the facility. We will loose both social and 'corporate business if there are no on -site rooms available for overnight stays. Consider also the loss of the positive image the facility has created in the Metro area. The unease with which the corporate and social market would view this move will hinder the growth the facility has experienced in the last five years and have a marked effect on the community as a whole. 3B •