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HomeMy WebLinkAbout2011-10-19 PACKET 03.A.t,; COTTAGE GROVE CITY COUNCIL City of Cottage Grove, Minnesota Special Meeting July 6, 2011 CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota, held a special meeting on July 6, 2011 at the Cottage Grove City Hall, 7516 80`" Street South. Mayor Bailey called the meeting to order at 6:04 p.m. ROLL CALL The following were present: Mayor Myron Bailey, Council Member Justin Olsen, Council Member Dave Thiede, and Council Member Jen Peterson. The following were absent: Council Member Also present were: Ryan Schroeder, City Administrator; Caron Stransky, City Clerk; Corrine Heine, Danette Parr, Community Development Director; Zac Dockter, Parks and Recreation Director; City Attorney- Kennedy &Graven; Craig Woolery, Public Safety Director; Jennifer Levitt, City Engineer; and Les Burshten, Public Works Director, Senior Planner John McCool. Mayor Bailey presided over the meeting. COMMUNITY CENTER FINANCING Finance Director Roland;higt packet on the Community CE stating that staff would discu ? on the referendum. She note bonding authorized, by a refe $80,000 (at 4% for 20 years) and tax capacity values, the Ihted the contents of her report included in the Agenda art YMCA Referendum which included a memorandum the financing scenarios resulting from an affirmative vote hat at this time, staff estimates that for $1 million in dum, there would be an increase to the City's tax levy of urthermore, using these assumptions, current tax levies y's tax rate would increase by 0.31 % per million. Finance Director Roland stated that the agenda packet also includes a preliminary election timeline, a sample resolution calling for an election on general obligation bonds, a notice of election, sample ballot, a letter to the Washington County Auditor to formally advise them that the City would be holding an election on the date of the General Election on November 8, 2011, and a memorandum from Parks and Recreation Director Dockter on the Community Center referendum ballot questions. Cottage Grove City Council 2 July 6, 2011 Special Meeting Finance Director Roland distributed a commentary from Ehlers & Associates noting that the back page states that municipal rates are moving upward. They do caution that even though rates are creeping up, we should not be concerned at this point because they are still at record lows and there is really no reason not to go to the market at this point because we would get an extremely good rate. Parks and Recreation Director Dockter stated that his memo details the cost of the improvements proposed. He stated that some of the proposed improvements are at Hamlet Park, Lamar Park, Splashpads, and Oakwood Park. Council Member Lehrke asked if the improvements at Oakwood Park include lighting and Parks and Recreation Director Dockter responded affirmatively. Finance Director Roland stated that if the City Council were to decide to roll any and /or all of the Park improvements into a second question, we would have to lay out what the question or questions would be. She stated that they asked the bond attorney and the representative of Ehlers whether they had any experience with a one (1) question versus two (2) questions. They said that they do not see a lot of two (2) question referendums although they do see them in school districts. Finance Director Roland stated that issuing this much debt right on the heels of issuing the debt for the Public Safety /City Hall facility, is a significant amount of money. There could be ramifications from Moody's and /or Standard & Poors on our bond rating. It might be to the City's advantage to wait and go through the process of actually coming up with the building and so forth before issuing the bonds in 2013 so that we could at least have a distance between issuing debt for the Public Safety /City Hall facility in 2011 and then issuing debt in 2013. We really could not build it any faster than that anyway. Mayor Bailey stated that a part of the discussion that they had was that the YMCA would want to do their own fundraising on their end and if we gave them a year to fundraise while we work on designing the building, he thinks that the citizens would be fine with that. Council Member Lehrke stated that if we received a request from someone interested in holding a large tournament at Hamlet Park, could we construct the improvements knowing that the referendum has already passed but not to bond for it until later. Council Member Thiede stated that a community center would cost about $12 million or an additional $37.00 in property taxes. Add an additional $11.6 million for the park improvements would result in an additional $70.00 in property taxes. Council Member Thiede stated that he would tend to back off on the park improvements unless there were some extremely good benefits to do so now. Cottage Grove City Council July 6, 2011 Special Meeting Council Member Olsen stated that the School District is also planning on having a referendum at some point, most likely in November 2012. Finance Director Roland stated that the proposed park improvements could be as high as $11 million or as low as $1.4 million. No matter what the City Council decides, there would be a financial effect. She stated that for the referendum, we would not be allowed to lobby or market the referendum. The City cannot spend City funds to do anything other than educate the public. Senior Planner McCool stated that the next Community Center Task Force meeting was scheduled for July 12 at 7:00 p.m. and they have some ideas about how to get information out to the public. Finance Director Roland stated that the YMCA understands what it takes to promote a referendum and to fundraise. We need to be very clear with the residents that they are going to receive a tax increase; the YMCA is going to contact them for a contribution; and that there would be a fee to join the YMCA. Council Member Olsen stated that if the YMCA is going to include resident and non- resident rates, we should include that as part of the information brochure. Mayor Bailey stated that if we are going to build a community center and the other amenities, he would like to see two (2) separate questions. He stated that he wants the community center to stand on its own as a sole question and if he were to pick and choose from the list, he would select Hamlet Park first and then the purchase the land next to Lamar next. Everything else could wait. Council Member Olsen asked Parks and Recreation Director Dockter what level of diligence have we ramped up relative to any potential outside funding mechanism, whether that be grants, federal sorts of funds that might help contribute to the construction or maintenance of a community center facility. Parks and Recreation Director Dockter stated that he has not looked into that but he would start. Mayor Bailey stated that the first question for the City Council is do you support separate questions. Council Member Peterson stated she was in support of having separate questions and that she was more interested in moving forward with Oakwood Park and Hamlet Park. Council Member Lehrke stated that it sounds like there is consensus on having two (2) questions. As far as the park improvements, what he always hears about is Hamlet Park. He stated that he likes the idea of allocating the proceeds we receive from the sale of the parcel of land next to Ruby Tuesday to complete the work at Hamlet Park and pay off the Cottage Grove City Council July 6, 2011 Special Meeting �F bond debt. If we take out this $4.8 million for a referendum question and we sell that property for $3 million, could we pay off that amount on the bond debt? City Administrator Schroeder advised the City Council that the property is now valued at about $600,000. Council Member Olsen stated that he was in favor of the question on the community center but did not know if he was in favor of a second question. He would like to receive more information of the various funding mechanisms before he makes a decision. Council Member Thiede stated that he is definitely interested in the community center. He commented that while people understand that there are plans for enhancing some of the parks, even if we started educating them now that would take away the focus from the community center. Council Member Olsen stated that with respect to the Community Center Task Force, his suspicion is that a vast majority of the members feel like their work is done. They spent a significant amount of time and they feel that they have reached the end of their original assignment. Mayor Bailey recommended that we solicit new volunteers to educate the public on the community center bond referendum. Finance Director Roland commented that we have a couple of months to get started on the referendum process. Economic Development Director Parr stated that you do not want to start too early because if you saturate everyone, it becomes a negative message. Finance Director Roland stated that when we proceed, we need to make it clear that the City is not going to promote a referendum in any way that we are simply going to educate the public. Mayor Bailey stated it sounds like there is consensus among the City Council on holding a referendum on the community center and a majority of you would be interested in some kind of second question. He stated that personally speaking, he would not increase taxes anymore than $80.00. Council Member Thiede stated that during the YMCA's survey, most people would support anywhere from $40 to $50 for a community center. City Administrator Schroeder commented that it was too bad that we have not been able to meet with the YMCA. He stated that if the YMCA comes back and says they need $8 million net, Staff would probably advise the City Council not to ask a second question. Cottage Grove City Council 5 July 6, 2011 Special Meeting Council Member Peterson asked if it would make sense to look at other referendums, school - related or otherwise, for those that passed what the dollar amounts were and for those that did not pass what the dollar amounts were. Finance Director Roland stated that she could contact the other cities and see how they presented their questions and what dollar amounts they went with. The special meeting adjourned to the regular meeting. Prepared by, Caron M. Stransky City Clerk