Anoka City Council

October 26, 2020 (Worksession) Page 1 of 6 WORKSESSION OF THE ANOKA CITY COUNCIL ANOKA CITY HALL CITY COUNCIL CHAMBERS OCTOBER 26, 2020 1. CALL TO ORDER Mayor Rice called the worksession meeting to order at 5:04 p.m. 2. ROLL CALL Present at roll call: Mayor Rice, Councilmembers Barnett, Freeburg, Skogquist, and Wesp. Staff present: City Manager Greg Lee; Police Chief Eric Peterson; Police Captain Andy Youngquist; Engineering Technician Ben Nelson; City Planner Clark Palmer; Community Development Director Doug Borglund; Housing and Redevelopment Manager Darin Berger; and City Attorney Scott Baumgartner. Absent: None. 3. COUNCIL BUSINESS and/or DISCUSSION ITEMS 3.1 Discussion; Small Business Loans. Community Development Director Doug Borglund shared a staff report with background information stating in May of 2020, the City Council approved the “COVID-19 Revolving Small Business Loan Program.” Since the creation of the loan earlier this year, there has been very little interest and the City has not loaned any funds under this program as of the current date. The City did receive one incomplete application. There has been some interest in converting this existing loan program into a different loan program for small businesses that would focus on loans that could fund things such as equipment such as commercial kitchen equipment, a walk-in cooler, machining equipment for a small machine shop, outside seating platforms downtown for outdoor seating are just some examples. He noted fire suppression could be included if requested by the one final property that was not sprinkled then spoke about the WAC/SAC program which would apply and how Ambi and Club 300 took advantage of the program to pay for those costs. He asked for Council direction on continuing the program or creating something different so businesses would be able to access these funds for equipment or other items. Councilmember Freeburg asked what happens if the funds are not used. Mr. Borglund explained the revolving loan fund of $1.1 million would remain in place and funds would not be lost. October 26, 2020 (Worksession) Page 2 of 6 Councilmember Skogquist said to contact ABLA and the Chamber for their input then reviewed other cities’ programs of matching funds for exterior items and even interior items to cover gaps. Housing and Redevelopment Manager Darin Berger explained more about the fire suppression loan program and explained how the program would remain in order to allow everyone to take advantage of the program to have the entire downtown business district protected and how they may now be able to make it a requirement then spoke about interior items for possible inclusion for general safety improvements versus cosmetic or not permanent and how this program could assist with concepts such as parklets. Councilmember Barnett spoke about not wanting to double up on programs and having the City become a bank with potential for litigation and having to address should a business not being able to pay when the HRA had something already in place. She said she wanted to use the funds for parklets for expanded seating and asked what the City would be able to offer versus a bank at a better rate then expressed concerns about taking on that burden. Mayor Rice explained how the City would be motivated as it would help a business in Anoka be successful and bring more people to Anoka. Councilmember Barnett disagreed. Councilmember Skogquist asked what items a bank would be less apt to provide loans for. Councilmember Barnett said she would feel less comfortable having an established business use this funding because they have extended all other financing options and suggested other funding instead that invests in an ongoing program investing in the downtown area to bring in more business. Councilmember Skogquist noted if the funds were making interest even if the money was not used, we would be making interest revenue. Councilmember Wesp suggested getting input from the Economic Development Commission (EDC) on funding ideas. Mr. Berger commented how the program has worked well then shared specifics of how establishing fire suppression as mandatory prior to qualifying for any other loan programs, creation of permanent exterior and interior improvements and addressing general public health safety issues and how parklets could qualify in addition to the $100,000 maximum commercial loan per year. Councilmember Barnett said she would support expanding the program for specific items such as parklets as they add to the aesthetics and impact Anoka but not for a broad range of interior items. October 26, 2020 (Worksession) Page 3 of 6 Mr. Borglund said a survey would be conducted then discussed at the EDC meeting for further review for future consideration by the Council. 3.2 Discussion; Street Renewal Program; 2021 Assessment Rates. Engineering Technician Ben Nelson shared a staff report with background information stating in 2015, 2016, 2017, 2018, 2019, and 2020 the assessment rates were increased approximately 4%, 6%, 2.5 %, 3.5%, 5.8% and 6% respectively for the Street Renewal Program (SRP). Based on the average Construction Cost Index (CCI) published by Engineering News-Record from 2019 to 2020, overall general construction costs on average have increased approximately 1.7%. To better understand how construction costs have increased over the past year, the 2019 SRP low bid construction cost was compared to the 2020 Bob Ehlen Area SRP bid construction cost. Based on this, the construction cost has increased approximately 24%. It has been the general goal of Council to assess approximately 25% of the overall project cost which has generally worked. Over the past couple of years, the program has had a higher percentage of “exempt city owned” properties, large “campus” type and other communities’ parcels in the project limits, and higher trunk storm sewer costs. This has resulted in the percentage of the project assessed to be lower than the desired 25%. Increased assessment rates help address increases in construction costs and will keep this program financially sustainable. It is staffs’ opinion that even with the proposed assessment increase the benefit to the property owners will exceed the assessment. Mr. Nelson shared three options for the 2021 assessment rates based on a typical 80-foot residential lot (R-1 & R-2) and reviewed the City’s Street Reconstruction Assessment Policy and staff was recommending a 3% increase for proposed assessment rates for 2021 City projects. Mayor Rice asked if we had reached the 25% rate and if we felt this amount was fair to ask for our residents. Mr. Nelson said the highest assessment rate charged was 23%. Councilmember Wesp asked if we will see more exempt properties going forward and confirmed schools were still assessed but not parks. Mr. Nelson said the City assessed one school this year and explained parks and Green Haven was not assessed but everything else was assessed at double the rate of residential parcels with no parks planned for 2021. Councilmember Skogquist said if we are not keeping up, we are doing a disservice to future Councils and residents and noted other cities charged 33% - 50% and that very few were 25%. Councilmember Freeburg agreed, stating we were already lower on assessments compared to other cities. October 26, 2020 (Worksession) Page 4 of 6 Councilmember Barnett said she supported a 5-10% increase but understood these were large payments and stressed the need to notify residents as early as possible to plan for the payment then asked about future bidding environment predictions. Mr. Nelson explained the City’s current program that outlined neighborhood meetings with no payment due until the following November and financing available for 10 years at 5%, adding approximately one third of residents pay off their assessment within the first year. He spoke about the potential for positive bids this year and noted this year’s decrease in the number of bids was likely due to the project being in the downtown area. Council consensus was to increase the 2021 street renewal program assessment rate by 6%. 3.3 Discussion; Bars Downtown and COVID-19. Mr. Lee shared a staff report with background information stating the City has been made aware that some of the bars in the Anoka Entertainment District are not following the Governor’s orders relating to COVID restrictions. He shared a letter Chief Peterson sent to the establishments regarding potential consequences for not abiding by the Governor’s Order which also advises the City will consider suspension or revocation of a liquor license if violations continue. Earlier this year, the City Council agreed to giving a partial refund on Intoxicating Liquor License fees as long as establishments abide by the Governor’s order and asked Council to discuss whether not establishments that violate the Governor’s orders should qualify for this partial refund. Councilmember Barnett spoke about the need for proof before any action was taken then asked about the process for liquor license revocation. Police Chief Eric Peterson explained any license action was up to Council based on recommendation from staff on observed or charged violations. Councilmember Wesp asked about differences between the order and law and enforcement. Chief Peterson explained the differences and difficulty in enforcement. Councilmember Barnett referred to social media regarding one particular establishment and how that was not for the police to manage but the State. Chief Peterson explained the process and said advertising large events and allowing ticket sales would be considered blatant but understood the difficulty in controlling customer behavior at times especially when drinking then spoke about differences in enforcement based on the activity and letting the State address violations. Councilmember Wesp spoke about the upcoming Halloween holiday and the unlevel playing field for restaurants with regard to enforcement. October 26, 2020 (Worksession) Page 5 of 6 Councilmember Skogquist shared he had been contacted by business owners who follow the order while others do not and the result revenue loss and referred to a past tobacco violation situation. Discussion was held regarding a video shared from a particular location disregarding the order and patron safety which was sent to the State for follow-up and about the State’s process for enforcement and the number of bars violating the order. Chief Peterson noted two locations had complaints while the others were in compliance. Councilmember Freeburg asked about police response if a complaint was received to reduce capacity. Chief Peterson said he would report to the Council for direction as officers would not have the capacity to enforce on a nightly basis, adding the key was owners should know expectations and follow the order. Councilmember Wesp asked if there have been any COVID-19 outbreaks in any bars. Chief Peterson said he was not aware of any but would not be informed by the Department of Health unless they felt it was necessary. Paul Justen, Billy’s, referred to some bars not following the order but that he was and how the Department of Health will enforce but with no consequences and that he was being punished for following the order. The Council asked questions regarding capacity of the establishment prior to COVID-19 and reservations and encouraged Mr. Justen to identify capacity and count people at the door. Erin Justen, Billy’s, spoke about the difficulty in managing the reservation process and how they would like to have live music like others but still feel safe and shared her frustrations with enforcement by the State. Mr. Justen agreed, stating enforcement needs to be fair across the board. Chief Peterson noted he had not received a complaint regarding Billy’s or the other establishment being spoken about but was aware of the concerns at the local level and will work to provide better patrol to address. Councilmember Freeburg requested the police speak with establishments and state they are being monitored for compliance. Councilmember Wesp suggested the fire marshal reiterate capacity at each establishment and shared his appreciation for Billy’s following the order. Councilmember Skogquist spoke about the need to document violations as well for potential consequences. Ms. Justen spoke about how they can plan for the upcoming Halloween business. Chief Peterson noted the department was planning for the worst with regard to capacity on Halloween and that they will have extra patrol to monitor but would be focused only on criminal behavior but would report any violations of those establishments purposely exceeding customer limits then shared about other cities’ outbreaks because of increased capacity violations. October 26, 2020 (Worksession) Page 6 of 6 Councilmember Freeburg asked about outside capacity. Chief Peterson confirmed capacity was up to 250 for both inside and outside and how guidelines had recently changed to allow up to 10 people per table with live music but dancing was discouraged. 4. ADJOURNMENT Motion by Councilmember Freeburg, seconded by Councilmember Wesp to adjourn the Worksession at 6:39 p.m. Motion carried. Submitted by: Cathy Sorensen, TimeSaver Off Site Secretarial, Inc. Approval Attestation: Amy T. Oehlers, City Clerk