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HomeMy WebLinkAbout2013 04-22 CCM Study Session MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND THE STATE OF MINNESOTA STUDY SESSION APRIL 22, 2013 CITY HALL-COUNCIL CHAMBERS CALL TO ORDER The Brooklyn Center City Council met in Study Session called to order by Mayor Tim Willson at 6:00 p.m. ROLL CALL Mayor Tim Willson and Councilmembers Carol Kleven, Kris Lawrence-Anderson, Lin Myszkowski, and Dan Ryan. Also present were City Manager Curt Boganey, Finance Director Dan Jordet, Public Works Director/City Engineer Steve Lillehaug, Director of Business and Development Gary Eitel, Assistant City Manager/Director of Building and Community Standards Vickie Schleuning, and Carla Wirth, TimeSaver Off Site Secretarial, Inc. CITY COUNCIL DISCUSSION OF AGENDA ITEMS AND QUESTIONS Mayor Willson requested discussion on Item 10a, Consideration of Type IV 6-Month Provisional Rental License for 5949 York Avenue North, in particular the property owner's address. Assistant City Manager/Director of Building and Community Standards Vickie Schleuning responded the owner lives in St. Louis Park. Councilmember Lawrence-Anderson requested discussion on Item 10a, Consideration of Type IV 6-Month Provisional Rental License for 5949 York Avenue North, in particular why the Phase II security assessment is not checked off. Ms. Schleuning explained the applicant may have forgotten to check that item but it will be required regardless. MISCELLANEOUS Brooklyn Center Prayer Breakfast Councilmember Ryan stated he was contacted by the minister organizing the Brooklyn Center Prayer Breakfast who requested the City's proclamation this week so it can be included in that program. City Manager Curt Boganey stated he will follow up on that request. Cars Parked on Street during Snow Plowing Councilmember Myszkowski stated she was approached about the number of cars parked on the street that prevented snow plows from clearing the snow. Mr. Boganey indicated that overnight parking is prohibited and can be ticketed. 04/22/13 4- Boulevard Turf Damage Councilmember Lawrence-Anderson stated she was contacted by former Councilmember Kay Lasman about the turf along Woodbine and France that was damaged by snow plows. Public Works Director/City Engineer Steve Lillehaug stated it is the City's policy to repair turf damage to boulevards caused by the City's plows and it will be resolved when weather permits. Centerbrook Golf Tournament Councilmember Lawrence-Anderson stated she is collecting sponsorships for the golf tournament. Mayor Willson stated he gave his sponsorship payment to the City Clerk for submittal. Posting of Meetings Councilmember Ryan stated he had received an invitation to the Community Mediation Services 30'' Anniversary Celebration Volunteer Appreciation Dinner and Liberian Nobel Laureate Leymah Gbowee's speaking event. He noted that should more than two Councilmembers be in attendance,those events need to be posted. Mr. Boganey stated those events will be posted. Councilmember Myszkowski's Schedule Councilmember Myszkowski stated she will be out of town next Monday and Tuesday and unable to attend the Board of Appeal and Equalization. DISCUSSION OF WORK SESSION AGENDA ITEMS AS TIME PERMITS DEBT PLANS FOR 2013,2014,AND 2015 FISCAL YEARS Mr. Boganey stated during the last budget discussions, a variety of funding scenarios and anticipated deficits in the Street Reconstruction Fund were considered. At that time, the City Council's general consensus was to consider debt as an option for covering those expenses. Based on that direction, staff prepared scenarios based on further analysis. Finance Director Jordet presented an overview of the history of the Street Reconstruction Fund derived from franchise fees negotiated with Xcel Energy and CenterPoint Energy, comprising about $660;000 per year. He explained that the maximum it can increase is 3% once every three years. Due to foreclosures, funding has been lower than anticipated but it is expected to reach $660,000 in 2013. Mr. Jordet stated the Five Year Capital Improvement Plan (CIP) first cash flow protection showed deficits beginning in 2009 and the 15-year CIP first presented for 2006 showed deficits beginning in 2011 so it has been known that funding projects would be a challenge. In addition, project cost increases have driven cash needs from $12.2 million in total program funding to $19.5 million. Mr. Jordet described the option of issuing Government Obligation(GO) Improvement bonds that would provide cash flow while awaiting assessment payments for street reconstruction. He then presented projected repayment schedules should the City issue GO bonds. Mr. Jordet noted there are reserves up to 2019. Mayor Willson stated that the $153,000 needed would equal 2%of the overall levy. 04/22/13 -2- Mr. Jordet stated it compares to $720,000 on the police and fire bond levy. He explained that one of the reasons there is room to address this problem with a levy, is that the police and fire bond levy is going off in 2013. That allows the option to replace the levy without a huge impact to taxpayers. Mr. Jordet presented an option for an every other year issue of$2.2 million deriving $2 million in proceeds. He reviewed the cash flow analysis for that option, noting repayment goes over 16 years so the money issued would get the City through the first rebuild of the City's streets. The cash projections through 2028 show it would provide the needed cash. Mr. Jordet stated the police and fire buildings were levied at $720,000 and the basis was estimated market value and spread at a rate of 4.4 mills per dollar of value. If the street reconstruction levy is lower, at $655,000, the basis is tax capacity and calculated at a lower rate of 3.562%. Mr. Jordet stated the City's overall levy is about 71.2%. That means it would be about 4% to 4.5% of the overall levy. If all remains-the same (value/general levy/rate) and the only variable is the debt levy, an average residential property ($120,000) would pay $10.05 less, an average commercial property ($875,000) would pay $208.63 more; and, an average industrial property ($1,810,000) would pay $466.34 more. That is because it would be spread on tax capacity instead of estimated market value. f Mr. Boganey clarified that the percentages of change identified in the PowerPoint presentation relate to the amount of increase. Mr. Jordet stated the City may be getting an increase in LGA that could be used to reduce debt issuance, which would lower the levy. But if the City then determines to issue debt for other projects, that debt cannot be issued without a referendum. Only improvement debt can be issued without a referendum. Mr. Jordet stated there is a TIF distribution beyond the frozen rate to reduce debt issues of over $100,000 per year. However, if used and cash flow is needed for some other project, the City cannot issue debt to fund it. In addition, LGA and TIF will come to an end or could be reduced so they are unreliable revenue sources and the City may not want to issue ten-year bonds based on those types of revenue streams. Mr. Jordet stated the Council had considered delaying the projects until cash is available, which would not require issuance of debt but would extend the project b six to seven ears. Another q p J Y Y option is to levy the cash needed for each construction year beyond what is received through the franchise fee. That option would pay off the projects without debt but the disadvantage is that it varies from year to year and would affect the levy. In addition, if there is a levy limitation the City could not increase the levy without a referendum. Councilmember Ryan asked if an advantage to the bonding scenario is that residents can anticipate a levy amount adjusted for the cost of living index but the special assessment would remain constant. Mr. Jordet stated special assessment would be one of the sources of cash for the project. 04/22/13 -3- Councilmember Ryan stated the advantage is that it would smooth out the years of projected deficits through the bonding. He noted the community survey showed residents were accepting of the current property tax levels but to increase property tax significantly may be a"tough sell." He indicated levying would have a minimum impact on the tax rates. Mr. Jordet stated the City can replace one levy with another. Councilmember Ryan stated there is also a benefit with lower cost for borrowing. Mr. Jordet agreed and indicated that GO improvement debt is selling at in the 2%range. Councilmember Kleven reviewed the amount that would be collected if assessed. Mr. Jordet stated that is already figured into the cash flows and paying back the bond. He explained that the City has handled assessments in two ways: issue GO bonds for that amount and make payments with collected assessments; and, internally fund the project and keep the 6% interest on assessments. Councilmember Kleven asked if MSA funds can be used. Mr. Jordet stated MSA has been used every year. ADJOURN STUDY SESSION TO INFORMAL OPEN FORUM WITH CITY COUNCIL Councilmember Ryan moved and Councilmember Myszkowski seconded to close the Study Session at 6:44 p.m. Motion passed unanimously. RECONVENE STUDY SESSION Councilmember Ryan moved and Councilmember Myszkowski seconded to reconvene the Study Session at 6:53 p.m. Motion passed unanimously. DEBT PLANS FOR 2013,2014,AND 2015 FISCAL YEARS-CONTINUED Mayor Willson noted LGA may impact this decision and though it may not be a guaranteed revenue stream, is an option to fund streets without issuing GO bonds and allow this decision to be made in the future. He stated there will be more information in June when this topic is next discussed. Councilmember Kleven asked if this will be addressed by the Financial Commission. Mr. Jordet stated it will be discussed when the Financial Commission meets jointly with the City Council Councilmember Ryan stated when looking at the bonding scenarios, it is important to keep in mind the City's other capital needs. He noted that while it may be appealing not to incur debt, in 04/22/13 -4- principle, the City can smooth out the tax impact to residents and have potential one-time money to address other capital needs. Mr. Jordet stated additional information will be presented in June as well as impacts to those decisions. Mayor Willson stated a concern with GO bond funding is that once used, the City is not able to issue another bond should another priority project come forward. Mr. Jordet stated that is correct and the use of GO Improvement Funds is also restricted to this kind of capital improvement (street projects). Mr. Boganey stated staff will provide a broader scope of the City's capital needs, beyond the street improvements,prior to the June meeting. It was the majority consensus of the City Council to discuss this issue again in June. ADJOURNMENT Councilmember Ryan moved and Councilmember Lawrence-Anderson seconded to close the Study Session at 6:59 p.m. Motion passed unanimously. 04/22/13 -5- STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. That attached hereto is a full, true, and complete transcript of the minutes of a Study/Work Session of the City Council of the City of Brooklyn Center held on April 22, 2013. 2. That said meeting was held pursuant to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its May 13, 2013, Regular Session. City Clerk Mayor 04/22/13 -6-