Loading...
HomeMy WebLinkAbout2022-08-31 Minutes MINUTES COTTAGE GROVE CITY COUNCIL August 31, 2022 COUNCIL CHAMBER 12800 RAVINE PARKWAY SOUTH SPECIAL MEETING - 6:30 P.M. TRAINING ROOM - Open to the Public 1. CALL TO ORDER Mayor Bailey called the Special Meeting to order at 6:30 p.m. Pursuant to Minnesota State Statute 130.02, Subd. 1, Council Member Khambata will be attending remotely at the following location: One Casino Drive, Nassau, Bahamas, Meeting Location: Library. Phone: 242-363-6800 2. ROLL CALL City Administrator Jennifer Levitt called the roll: Council Member Khambata-Here; Council Member Olsen-Here; Council Member Thiede-Here; Council Member Dennis- Here; Mayor Bailey-Here. 3. CONSENT AGENDA A. Approve the additional workspaces for the City Hall/ Public Safety building for an estimated amount of $131,261.97. B. Authorize Resolution Number 2022-114 adopting the Fencing Consortium Joint Powers Agreement. C. Authorize Resolution Number 2022-115 rejecting all bids for the River Oaks Golf Course Improvement Project. D. Approve the Mobile Food Licenses for Thai KC Cuisine and Chip Thai Gourmet Kitchen. E. Authorize issuance of a massage therapist license to Andy Teng Yang, who will be working at Whole Health Massage, 8800 East Point Douglas Road South. F. Approve proposal for the preparation of a Long-Term Financial Management Plan. Council Member Thiede wished to pull Item F, Long-Term Financial Management Plan, for further discussion. He wanted to verify with what we’re approving tonight that we still have some ability to give some direction on some things. With projecting growth, there are other things that could happen like new housing starts slowing way down, etc. We CITY OF COTTAGE GROVE  12800 Ravine Parkway  Cottage Grove, Minnesota 55016 www.cottagegrovemn.gov  651-458-2800  Fax 651-458-2897  Equal Opportunity Employer City Council Special Meeting Minutes August 31, 2022 Page 2 need to be planning for those impacts with any associated costs. We weren’t really prepared for the County to increase the value of homes as much as they did this past year. We can’t look at every possibility, but he’d like to see them focus on some of those things or be able to have some discussion with them before they dive in; he noted something was mentioned about discussions with staff. Finance Director Brenda Malinowski stated they can address that with Ehlers; if it’s too much outside the scope of the study, there would be an additional cost. We can tell them that we’d like to see some of that in the study, and she thought they would give us options if growth does not happen, as has happened with previous recessions. We’d gone back and looked at staffing positions and vacancies; things on which we can hold back we’d do at that point. We would have those identified as part of this study. Mayor Bailey stated part of the purpose for doing this was Council wanted to better understand debt and how that played into future needs within the community. We’ve discussed good debt, bad debt, no debt, and he thought Ehlers giving us their financial analysis of the business was a positive thing. Council Member Olsen asked Council Member Thiede if he had specific variables that he wanted them to dig deeper into. Council Member Thiede replied yes, as he looked through this he didn’t really see any of those what ifs. They said they’d create projections and tie things to that, but what if this happens or that happens; what do they see as ultimately some of the results from that, that we’d want to be more attuned to, etc. Council Member Olsen stated so he’s asking for what the path forward looks like, but also what are the branches to that path should we run into obstacles. Council Member Thiede stated that’s correct, as certain things, like hiring staff, might be a lot harder to change should something shift significantly. Council Member Olsen stated Director Malinowski raised a good point; when we previously dealt with recessionary budgeting in 2008 and 2009, we had several open staff positions that we just didn’t fill. That’s how we saved money at that point. Maybe we can look at that, based on our staffing plan, if there are positions where we know there will be attrition. The question is at what point do we choose to either fill or not fill those based on the other market conditions. He asked if that’s what Council Member Thiede was saying; Council Member Thiede agreed. Motion by Council Member Olsen to approve Consent Agenda; second by Council Member Dennis. Administrator Levitt called the roll: Council Member Khambata-Aye; Council Member Olsen-Aye; Council Member Thiede-Aye; Council Member Dennis- Aye; Mayor Bailey-Aye. Motion carried: 5-0. 4. WORKSHOP A. 2023 Budget and Property Tax Levy Director Malinowski stated we’ve met several times in workshops. Tonight, we want to bring information requested by Council in the workshops so you can see the effect that has had on the levy. Since we last met, we received values from the County; that was a positive change for us. City Council Special Meeting Minutes August 31, 2022 Page 3 At the last meeting, there was feedback on things affecting the levy. These changes have been made:  Delayed the Public Works Streets position start until April 1.  Added back in the Parks position, to start April 1.  Added back the warning siren to replace an existing 1986 siren at 95th and Islay.  Added back the plants price increase.  Added the Red Dot for Public Safety.  Debt Levy: Recommend reducing that by $250,000, using funds out of the Closed Debt Fund. With those changes, the levy increase has decreased from 13.09% to 12.60%. We recommend keeping the Public Safety/City Hall at $250,000 but reducing our Debt Levy by $250,000 in Pavement Management. If there would be levy limits at some point in the future, the Debt Levy is usually outside the levy limits; that’s why we’re recommending the $250,000 reduction being done there instead of in our Operating and other General Levies. Council Member Olsen asked Director Malinowski to explain her comment about Pavement Management. Director Malinowski stated the Pavement Management debt line is our various Pavement Management bonds, so that’s where we’re recommending a reduction of the $250,000 increase. We would do a transfer from the Closed Debt Fund into that Pavement Management Fund debt, and that’s how we’d repay it. Director Malinowski stated even with the 12.60% levy increase, our City tax rate continues to decline; we’re at 33.65% for 2023. Council Member Olsen asked how that compared to other cities; Director Malinowski replied in Washington County we think we’re comparable to many of the cities. Regarding our sample properties with the 33.65% tax rate, the 2023 tax increase was $60 more than what was requested in our change; our nine-year change for the first two properties was $27 per year, property three is $51 per year over nine years, and property four is $35 per year. She noted property three sold in the last nine years, so that reset its market value higher. Director Malinowski stated she’d take any questions. Council Member Olsen thanked staff for listening to Council feedback. Knowing that they captured the feedback and applied it to the final number, he asked staff if they were comfortable and confident that these things would be sufficient; perhaps there are other things that they’ve analyzed since we last met that they think are important. Parks and Recreation Director Zac Dockter stated with the added Parks worker position, he’s good. Public Works Director Ryan Burfeind stated Public Works is good. Public Safety Director Pete Koerner stated he’s very satisfied and very happy. Council Member Olsen asked if staff had received any feedback from Community Development or any other department; nothing was mentioned. He stated that it seems City Council Special Meeting Minutes August 31, 2022 Page 4 everyone seems to be on the same page. He thanked staff for the reduction in the initial proposed levy; it sounds like our friends in Washington County gave us some additional information that worked in our favor. He stated it’s nice to see the City tax rate continuing to come down. Considering that Cottage Grove doesn’t get any Local Government Aid, compared to other communities that do, to be able to manage the budget to that number is pretty impressive. Director Malinowski stated she should point out that inflation is no different here in the City than it is in our homes, and it was 8.5% in July. That’s the increase we’re seeing in our commodities, fuel, contractual services, etc. Council Member Olsen asked if they had set our fuel and commodities forecast at what they’d initially forecasted; Director Malinowski confirmed that. Mayor Bailey told Director Burfeind in the budget discussions we’d talked about an extra driver for the plow route; he asked him when they hoped to hire that person. Director Burfeind stated that’s the person who will be starting on April 1, and it will be a year-round Streets position. Mayor Bailey stated he didn’t know if they needed that person for 2022. Director Burfeind replied no, as there’s not yet a truck for that person. Once we get those trucks here the following year, we’ll sell some of the really old ones and keep some others; that will give us the extra truck. Council Member Olsen asked since those are all purchased through the State contract if we’d gotten any feedback on when we can expect delivery; Director Burfeind replied we have not. We’re hoping for the winter of 2024, as they’re looking at a two- year turnaround, which is a year longer than normal. Council Member Olsen asked Director Koerner if they were also looking at leased vehicle delays or cancellations on some of the orders; Director Koerner replied yes, on both. Council Member Olsen stated we’ll just have to keep our fingers crossed. Council Member Khambata asked if the City Tax Rate was calculated to the average property value; Director Malinowski replied it’s calculated by taking our total tax capacity throughout the City. Mayor Bailey stated we have more people and more businesses coming to Cottage Grove, so the taxes are being spread out among more property owners and business owners than previously. Council Member Khambata stated if you took our proposed levy for 2023 and divided it by 2014’s tax capacity, would we get closer to that 43% or exceed it. He felt there were people who’ve lived here since 2014 who would say they didn’t necessarily realize the increase between that and the tax capacity of their home. He asked are the taxes flat or going down relative to the historical norm. Previously, an average-priced home taxes were $900 annually, now they’re at $1,100, which represents a $27 per year increase. That’s something that he feels confident going back to a constituent to say that we’ve been keeping our spending in check; if you go back eight years, we’ve averaged a $27 dollar increase per year. Not a lot of communities can say that. In terms of what we’re doing with the budget, he’s happy to see that. He just wanted to measure that against what people used to pay versus what they’re paying now. There City Council Special Meeting Minutes August 31, 2022 Page 5 are certain people who are going to say my house doesn’t feel it’s worth $330,000 because I bought it for $230,000. We need to be cognizant that many of them are going to feel cost burdened, so it would be nice to be able to put that in context; he thought the $27 average per year is a good way to give them the context that most people will feel comfortable with. Mayor Bailey thanked staff for all of their hard work on this. Council Member Olsen stated this was very well done, and they did a good job. B. 2023 Budget - Communications Plan Administrator Levitt stated we provided to Council a sample of the schedule for the actual Communications Plans: September 7: Council adopts the preliminary levy, which means it can’t go any higher than that before the final adoption in December. October 5: Mayor’s Moment, which would feature just the budget discussion and narrative, talking about Council’s commitment to level of service to our residents from all departments; specifically, snowplowing, public safety response times, and being able to maintain those levels of service. October 15: Cottage Grove Reports would outline the budget in more detail. November 9: Truth in Taxation will be a little bit different this year, so we’ll prepare a video to explain to residents what they will see. She asked Director Malinowski to speak further about this, as it might cause confusion for residents. Director Malinowski displayed a separate sheet that will be included with the Truth in Taxation; it will have the Washington County levy, our City levy, and the School District levy on the top. For the County levy, their budget information will be here, ours will be here, and then the School District. When you look on the right side, that’s what ours is going to look like; we have to include not only our General Fund, but we have to include all of our Special Revenue Funds and she’s suggesting we include our Debt Service Funds, too, because we levy property taxes. We’re not only including the General Fund, but also our Recycling Fund, Stormwater Fund, Road Maintenance Fund, Forfeiture Fund, Ice Arena Fund, Golf Course Fund, and EDA Fund. Those will all be in the numbers that are listed on the right. If we don’t include the Debt Service Funds, our residents will see the property tax up above for us, which will be larger than what’s down below. Director Malinowski stated our residents have never seen this before, so we probably need to do some education now because we have to use these categories. We all understand property taxes and special assessments, but then anything that doesn’t land in one of those top four goes into All Other Revenues; we have $10.9 million in other revenue, including our Golf Course charges, our Ice Arena charges, our franchise fee for our Road Maintenance Fund, all of those, which our residents will see. In the expenditures, we have to group them into categories, and All Other Current Expenditures, the bottom line, is $4.1 in 2022, up to $5.2 in 2023; that’s our Capital Outlay for our Equipment Replacement, it’s our squads, and then it’s our Debt Service City Council Special Meeting Minutes August 31, 2022 Page 6 payments. Our residents are going to see all of this, and she doesn’t know if it will prompt questions or not. We don’t have any opportunity to do any other sorts of lines. When we publish this every year, we have more revenue lines, so we’re able to identify the various fees and charges for services; our permits are in All Other Revenues, so we’re able to do more detail than we’re able to put on this sheet. Council Member Olsen asked if they’d recommend that we do some enhanced outreach and education through videos, Facebook Live, etc. in order to help explain some of that. He asked if that had been discussed as part of the Communication Plan. Administrator Levitt stated we will probably publish a video on the Truth in Taxation, explaining all of this, so residents could see and understand it. We’re thinking on November 29 we would hold an open house; all of the directors would be here, we’d have a board that talks about those different categories, so people understand what’s in those. We’d also talk about the budget, how are we maintaining our level of service, what value are you getting for that; that will give residents an opportunity to engage directly with staff and get their questions answered. She thought this new sheet will look very scary for residents; especially when you see the numbers for Washington County and the School District, ours should pale in comparison. Council Member Olsen stated residents are going to be overwhelmed with data that isn’t explained. Administrator Levitt noted unfortunately we can’t elaborate on those columns the way we would in our own budget information, to be able to explain it. Council Member Olsen stated we could that in a video, at an open house, and on a Facebook Live; we could potentially do all those things. Mayor Bailey asked Director Malinowski the approximate timeframe when citizens will receive this information; she replied on November 15. Mayor Bailey asked Administrator Levitt if his Mayor’s Moment would be better suited for November or October. Administrator Levitt replied the Mayor’s Moment should be in October; just focus on and explain the budget in October, as the preliminary levy will be adopted by then. She didn’t think we should confuse the Truth in Taxation with the budget because the Truth in Taxation is giving that very transparent look to the public, and we want them to understand what’s in the numbers and be available to answer questions and explain those. She hopes other organizations will be as open and transparent with their communications and strategy so their residents will feel connected; it’s going to be really important to be available to answer residents’ questions. Council Member Olsen stated in speaking with friends from other cities in Washington County, some on City Councils, it sounds like we’re still going to be quite a bit lower than others. We’re typically the second or third lowest in the County in terms of tax per capita, and he thought we’re going to be in the same position; he asked if that’s something we should also try to tie in or if that would be too much information. Administrator Levitt replied she thought that would be key in November because by then everybody will have adopted their preliminary levy, so we could base that discussion on it. Cottage Grove per capita pays $521, Woodbury pays $551, Forest City Council Special Meeting Minutes August 31, 2022 Page 7 Lake $584, Lake Elmo $590, Stillwater $820 per capita. So, we really see the value that Cottage Grove residents have in their property taxes. Council Member Olsen felt that was the key message. People are concerned with value; what am I getting for what I’m paying? We provide tremendous value to the taxpayers in this City. Council Member Olsen asked Communications and Marketing Specialist Julie Prior- Miller who had the Council Updates for September and October; Specialist Prior-Miller stated she believed Council Member Olsen had October. Council Member Olsen stated he was originally going to speak about the pet ordinance, but if Council wants him to speak about some of this, he’ll do so. Administrator Levitt stated maybe he could speak more specifically about Parks and Public Works and the level of services that are needed there; how long it takes us to clear all the streets in Cottage Grove, what we’re trying to maintain with our parks and how many we’ve added, the 335 flower beds, etc. She felt that was a key level of service for our residents. She stated we have to remember that our parks bring us revenue with tournaments we host, which supports our local businesses; those are huge things because players and their families are spending money in Cottage Grove. Administrator Levitt asked if there were any other key messages or points you’d like us to really highlight as we draft the Cottage Grove Reports and as we prepare for the open house; she asked if there were specific questions residents would like to know more about that we should prepare for. Council Member Thiede stated for those who are numbers people, he thought they’d like to learn more about the tax capacity percentage and numbers. If we show them the chart of it going down, they can figure what it would have been if that hadn’t gone down. Council Member Olsen felt that would speak to not only the increase in total tax capacity, but also its evidence of the hard work that everybody’s been doing for years to take the burden off the property owner; we really balance it out further with our commercial development, which has been a good thing. Mayor Bailey felt the graph that Director Malinowski had displayed with the four properties and the average increase over the last nine years would be a good picture to share with them. Council Member Thiede stated it’s good, but it’s still going up; he’s saying just in terms of the tax capacity and the rate coming down, that’s something going down, and how they calculate that. They can then see what the difference would have been if that hadn’t been coming down. Council Member Olsen stated when the valuations came out earlier this year, we heard people saying my house value increased 22%, so now my taxes are going to go up 22%. Clearly, they have not, so he thought Council Member Thiede made a good point, and a good way to illustrate that. Council Member Khambata stated he had a chance to look over everything, staff put a lot of time into this budget, hard decisions were made, and cuts and sacrifices were made. When we compare our budget to similar-sized cities in the metro area, we’re going to see that we manage to keep a lower overall tax increase than many other City Council Special Meeting Minutes August 31, 2022 Page 8 cities. He’s happy with that; it’s something he can be proud of, and still say that we’re being fiscally responsible. Council Member Dennis stated it all comes down to having the responsibility to provide the best level of quality service that we can that’s equal to what people have come to expect from us over the years. It’s more than just the core level of service, Police/Fire/ EMS; it’s clean water, having our roads plowed safely for people to pass, roads patched and maintained, those are the basic things. We have so many more amenities, including our parks. There are things we do that provide a different level for people to find happiness and pride in living here. He thinks that’s very important, and that’s why many people have moved into traditional neighborhoods that have been here for a while; one of the things that draws them are those extra added opportunities. It’s what makes this community appealing; value is certainly there because our housing prices are good, compared to other communities where you’re going to carry more debt load on mortgages. We offer many positive things, but while the levy in increasing, that number is commensurate with the value as assessed to our properties. He felt we did a very good job going through and meeting the needs and delivering the level of service and quality that people have come to expect. He thinks that’s our job, and it’s good. 5. ADJOURNMENT Motion by Council Member Olsen to adjourn; second by Council Member Thiede. Administrator Levitt called the roll: Council Member Khambata-Aye; Council Member Olsen-Aye; Council Member Thiede-Aye; Council Member Dennis-Aye; Mayor Bailey- Aye. Motion carried: 5-0. The meeting adjourned at 7:08 p.m. Minutes prepared by Judy Graf and reviewed by Tamara Anderson (City Clerk).