City Council Workshop

WORKSHOP MINUTES OAKDALE CITY COUNCIL November 7, 2022 The City Council held a workshop on Monday, November 7, 2022 at Oakdale City Hall, 1584 Hadley Avenue North, Oakdale, Minnesota. The meeting began at 5:00 PM. Present: Mayor Paul Reinke Council Members: Jake Ingebrigtson Susan Olson Colleen Swedberg Kevin Zabel City Staff Members: Christina Volkers, City Administrator Jim Thomson, City Attorney, Kennedy & Graven Sara Ludwig, City Clerk Andrew Gitzlaff, Community Development Director Nick Newton, Police Chief Lori Pulkrabek, Communications Manager Jim Romanik, Public Works Manager Kevin Wold, Fire Chief Jason Zimmerman, Finance Director Other: Jenny Boulton, Kennedy & Graven Roger Green, Board Chair, Washington County CDA Mikaela Huot, Baker Tilly Stan Karwoski, County Commissioner Andy Morcomb, City Council Candidate Karly Schoeman, Deputy Executive Director, Washington County CDA Kristen Scobie, Community Development Assistant Director, Washington County CDA Melissa Taphorn, Executive Director, Washington County CDA Prior to any presentations and/or discussion, Mayor Reinke reminded the Council, staff and guests these workshop meetings are for information gathering, question clarifying, and no decision making will be made as a Council body. HELMO STATION FLATS Community Development Director Andy Gitzlaff began by stating that the Washington County CDA would present on the proposed development plans for Helmo Station Flats (formerly Cornerstone Village). The Washington County CDA took over the project after Able Light, the previous applicant, withdrew commitment in early 2022. The request from staff was that Council provide feedback to the CDA regarding if the project would be a good fit within the City at this location and express its concerns or support with the proposed payment in lieu of the property tax (PILOT) and give direction to the CDA on what may be considered acceptable. Mr. Gitzlaff continued with the financial considerations stating this would be a tax-exempt project for the CDA who would provide a PILOT. He reiterated there is not a formal application for land use approvals at this time. WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE TWO Melissa Taphorn, Executive Director for the Washington County CDA, recapped the previous CDA staff disussions and provided a brief overview of the CDA’s background and oversight. Ms. Taphorn shared information on the CDA’s new strategic plan and current activities. Ms. Taphorn touched on three key aspects of the CDA’s goals, which are to offer affordable housing, strive to be a good neighbor and community partner, and build quality assets that serve a public purpose and contribute to the tax base. Council Member Zabel stated his opposition to the tax burden from the proposed property being shared with existing residents. He continued that he would not support this project as proposed. Council Member Swedberg was in favor of the proposed project. She shared her support of the multigenerational housing options. She referenced the goal of Oakdale to provide affordable housing and noted this project is one way to meet that goal. Council Member Olson stated she would have a hard time supporting the project as proposed due to the difficult economic situation. She continued with the other reason being the reduction in the number of apartments from the previously approved plan with Able Light for adults with intellectual and development disabilities. In reference to the proposed funding, Council Member Olson was not confident about the PILOT being enough to cover the City’s expenses such as police, fire, and public works. Council Member Swedberg noted that all 60 units would be affordable housing as opposed to Able Light’s initial proposed plan in which only some of the 71 units were planned as affordable housing. Council Member Ingebrigtson stated he is not opposed to the project itself; however, he stated it is not for the City of Oakdale, especially at a time when the residents were asked to vote on a local option sales tax (LOST) at the upcoming election. He clarified that his opposition is purely financial. He said he would support a project that provided affordable housing at market rate taxes payable. Mayor Reinke complimented the CDA as an organization for the work they have done and the way the information was presented. He continued that for the proposed location and situation he does not support the project. He would be in favor of more market rate residences in this particular location. Mayor Reinke suggested a possible partnership between Patrick McGlynn of McGlynn Partners and the CDA on a project near Hudson Blvd N and Greystone Ave N. He offered to connect both parties by sharing their contact information with one another. He concluded that he is not in favor of moving forward with the CDA project at the proposed site (Helmo station). Ms. Taphorn, in response to the financing comments from Council, asked if one of the alternate financing options provided in Baker Tilly’s memo would be acceptable as opposed to the current proposed PILOT. Council Member Ingebrigtson suggested the applicant pay full-assessed value of property taxes due to the value of that piece of property at Helmo station. Board Chair Roger Green agreed that the proposed property is valuable which means this development decision would come down to the strategic perspective of the City. WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE THREE Mayor Reinke shared that the Council’s desire has always been to have varying types of housing for varying incomes. County Commissioner Stan Karwoski added the potential 100+ residents within the Helmo Station Flats would support local businesses, pay sales tax, and possibly even work for the local businesses in the area. He asked Council to keep the workforce piece of this project in mind when making a decision. Ms. Taphorn recapped several points from the discussion including the desire to increase the cost sharing, the concern about the shrinking number of units for adults with intellectual and development disabilities, and the possibility of making contact with Patrick McGlynn. Mayor Reinke indicated he would provide City Administrator Chris Volkers with the contact information for Patrick McGlynn so she could send it along to Ms. Taphorn and her colleagues. TIF SPENDING PLAN Mr. Gitzlaff began by reminding the group of the March 29, 2022 Special Council Workshop in which Mikaela Huot with Baker Tilly and Jenny Boulton with Kennedy and Graven, presented a TIF district management report. It was recommended that the City create a TIF Spending Plan for Districts 1-4 (Eastwood Village) and 1-6 (Presbyterian Homes), which contain unobligated tax increment revenues, to take advantage of recently enacted special legislation that provides the City with greater flexibility on the use of TIF funds. He further explained that once the TIF districts pay off all their obligations then they start to make revenue that can be deemed “excess” and are distributed back to the taxing authorities or can be put toward other projects. Without this special legislation, pooling from these districts would be limited to only affordable housing projects. In order to use these funds for other housing or economic development, the ‘but for’ test would still apply. He continued that the City has until December 31, 2022 to transfer the funds to another designated City fund, and the dollars must be expended by December 31, 2025, or they will revert back to the original TIF fund. He requested that City Council approve the spending plan attached in the packet to be able to transfer up to $2.2 million of unobligated TIF funds. He mentioned Tanners Lake as a potentially eligible redevelopment site, but noted that other sites would be eligible within the City, and staff was interested to hear from Council if there are additional priorities. To wrap up, he said that if Council would like to move forward, the public hearing would need to be advertised and scheduled for either the November 22, 2022 or the December 13, 2022 Council meeting. Jenny Boulton with Kennedy & Graven added clarification about the increments that are not spent by December 31, 2025, stating they would go back to the TIF district if it were not decertified. She further explained that if they have been decertified then the increment would go back to the taxing jurisdictions, and would not be available to use for affordable housing. In response to a question from Mayor Reinke, she said the money has to be spent by December 31, 2025 as opposed to the commitment to spend the funds by December 31, 2025. Mikaela Huot with Baker Tilly stated due diligence had been done with these projects to keep the TIF districts open and able to accumulate funds, and to show they have complied with income WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE FOUR certification. Further, she explained because of this, these funds can be transferred and used for other City development purposes. In response to Council Member Zabel’s question about the process to use the surplus funds for identified development projects, Ms. Boulton stated the City would solely need to hold a public hearing to approve the plan. Ms. Huot added that if a future development project was identified, and the developer had a financial gap, the City would only have to apply the ‘but for’ test to provide financial assistance with these funds. Mayor Reinke identified the removal of the storm sewer at Tanners Lake as one example of a good use for TIF funds generally. Council Member Olson asked if the removal of the storm drain could be done in preparation for a future development. Ms. Boulton stated there is a risk in doing that if the City does not know if the development will be completed by December 31, 2025. If the development project were not completed by the spending deadline then it could be deemed an unauthorized use of funds. Ms. Volkers said the excess TIF funds would be a great opportunity when presenting eligible sites to developers. Council Member Zabel asked about the process for decertifying districts. Ms. Huot explained that one district is statutorily decertifying at the end of 2022, meaning, in 2023 the capture tax capacity is added to the tax base for all entities. She continued stating the other district decertifies in 2023 so if the City does nothing with this district it would collect increment through 2023 and the same process would take place in 2024. However, if the City would decide to decertify and transfer the district at the end of 2022 then it must pass a resolution authorizing early decertification of that district so that both districts would be decertified by the end of 2022. Ms. Volkers’ preference would be to voluntarily decertify the second district early. Ms. Huot explained that the two TIF districts decertifying estimate to approximately $2.2 million in funds that are available today, and the captured tax capacity that would be available once the districts are decertified. Naturally, they would be for 2023 and 2024, or if the second district is decertified at the end of 2022, then potentially they could both be for 2023 monies. Council Member Olson asked what happens to the housing currently in the TIF districts in relation to the decertification process and timeline. Ms. Boulton explained that at the end of the receipt of increment the property owners have the option to change the housing to market-rate, however some agree to keep affordable housing because of the Section 42 tax credit. She continued stating District 1-6 (Presbyterian Homes) has an agreement through a date certain, but if it is tied to the end of the TIF district then that would mean they are also not obligated to maintain affordability, however due to their non-profit status they have their exempt purposes they have to maintain. Council Member Olson asked about using the $2.2 million to help the CDA’s proposed Helmo Flats Station development. Mayor Reinke confirmed it could be used for this purpose. Council Member Ingebrigtson stated it would meet the ‘but for’ requirement. Mr. Gitzlaff suggested using the funds WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE FIVE for the Greenway BRT site. Council Members Olson and Swedberg, and Mayor Reinke were in favor of Mr. Gitzlaff’s suggestion. Council Member Zabel shared his caution about making a hasty decision about where to spend the funds. Council Member Ingebrigtson suggested having a designated discussion about where the $2.2 million funds should be spent. Mayor Reinke stated there was consensus from Council to move forward with the TIF Spending Plan as presented in the packet. He asked Council, Mr. Gitzlaff, and Ms. Volkers to continue to propose development sites in which the funds could be used. Council Member Ingebrigtson would be in favor of looking into Tanners Lake as a possible eligible site. Ms. Huot pointed out that if the December 31, 2025 deadline passes without spending the funds and the money goes back to the taxing authorities, the City would still get their portion of the rates like in the current process. Mayor Reinke asked if the TIF law requires an automatic deadline for spending the funds or can specific language be added to a new TIF that would allow for an extended spending deadline. Ms. Boulton confirmed that this a temporary authority until December 31, 2025. Council Member Olson stated that there is a need for affordable housing in the community, and it would be nice if the $2.2 million could be designated toward that effort. Ms. Huot explained the flexibility that comes with this TIF Spending Plan in relation to the number of affordable versus market-rate housing options for specific developments. Mayor Reinke asked if Able Light is completely out of the picture or if they could come back to the project given this new financial circumstance. Mr. Gitzlaff said they still own the land. Mayor Reinke asked that Mr. Gitzlaff follow up with Able Light on the matter. DRONE POLICY MIS-015, REVISED Fire Chief Kevin Wold began by providing background on the drone program that was initiated several years ago. The City purchased two drones, but since then they have rarely been used. Beginning January 1, 2022, the Oakdale Fire Department took over the drones and developed a program to provide services to the City from a community development and public safety perspective. Two members of the Fire Department have attended training and obtained their FAA Commercial Drone Pilot Certification. He noted that the current policy is outdated and does not meet FAA guidelines. He asked Council if they would like to proceed with replacing the existing drone policy with the new proposed policy. Council Member Zabel raised a concern with Section 4.0 of the previously approved policy that explains the authorized uses. His concern was about lumping public and private uses together. He suggested having a higher threshold to use the drone over private property for planning, marketing, and public works activities. Ms. Volkers asked for examples of acceptable uses over private property. Council Member Zabel used language such as, ‘assessing the nature, scale, and scope of emergency situations by first responders,’ found in Section 4.0 of the previously approved policy. Mayor Reinke agreed with Council Member Zabel on having a distinction between public and private use. WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE SIX Chief Wold indicated the privacy language was carryover from the previous policy and other cities’ policies. He said the Fire Department cannot intentionally fly a drone directly over an individual’s head without notifying them prior. He used the example of flying a drone over Summerfest from a distance away. The Fire Department would be able to do that without notifying anybody, however if they intentionally wanted to fly the drone over the street above residents’ heads then there would have to be a public notification sent out ahead of time. In response to Council Member Zabel’s question, Chief Wold noted Sections 5.0 and 6.0 of the proposed revised policy does address the issue of privacy. Mayor Reinke referenced Google and Washington County’s use of aerial imaging devices and publication on websites thus he said he is not overly concerned about the privacy language. Council Member Ingebrigtson suggested extending the proposed policy into a City ordinance that dictates residents’ use of small Unmanned Aircraft Systems (UAS). Mayor Reinke proposed formalizing the revised policy as presented and have staff look into additional language about private property uses and bring back to Council if necessary. Chief Wold shared confidence in the Fire Department’s ability to operate within the proposed revised policy guidelines and manage any privacy concerns. In response to a question from Council Member Olson, Chiefs Wold and Newton explained that from a logistical standpoint it makes more sense for the Fire Department to manage the drone program versus the Police Department especially for the uses needed within the City of Oakdale. POLICE STAFFING STUDY Police Chief Nick Newton began by stating the Police Department received two proposals, one from The Axtell Group and the other from BerryDunn. He continued that BerryDunn is a very large nationwide company and has good references, while The Axtell Group is a new consulting business started by the former Police Chief of Saint Paul, Todd Axtell. Chief Newton shared his desire to have The Axtell Group conduct the staffing assessment because of their strong connection to Minnesota and the Twin Cities Metropolitan area. The Axtell Group would have a greater understanding of the current situation and climate than a larger company would. Within their proposal, they touched on four core areas and offered extended service at an additional cost of $18,000. Chief Newton opted not to proceed with the extended service options at this time, which includes areas of training, recruitment, and retention. He expanded on The Axtell Group’s community engagement proposal which includes listening sessions and engaging with the community, from which recommendations for the City’s Police Department would be crafted. WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE SEVEN Moving onto the financial consideration section, Chief Newton explained the two options presented, Option A includes funding from the vehicle maintenance, forfeiture, and special projects funds; Option B includes funding from the vehicle maintenance and forfeiture funds. He explained if Option B were selected, which includes using $29,000 from forfeiture, there could be an issue with funding body worn cameras in 2024 if further forfeiture funds are not received. Council Member Olson was in favor of the staffing study and funding Option A. Council Member Ingebrigtson agreed on the selection of The Axtell Group to conduct the study. He did not have a preference on a funding option. Council Member Zabel was supportive of the selection of The Axtell Group, but was not in favor of either funding option presented. He suggested covering the entire cost using the special projects fund or the general fund balance. Council Member Swedberg was in favor of funding Option A, but stated if there are additional forfeitures then less could be taken from the special projects fund. Mayor Reinke was supportive of the selection of The Axtell Group and funding Option A. 2023 OPERATIONAL BUDGET UPDATE Finance Director Jason Zimmerman provided an update on the 2023 operational budget. The Council approved the 2023 property tax levy on September 13, 2022. The updates since then were a direct impact of insurance. Although only the General Fund was brought forth for discussion, all funds were updated on OpenGov. He noted that the numbers are reflective of actual employee elections. The city-sponsored medical and dental premiums increased greater than what was initially budgeted in the proposed levy. Ms. Volkers added that although they increased, the percentage was significantly less than the forty-percent average increase experienced by some cities in the metropolitan area. The overall impact to the General Fund was $237. In response to a question from Council Member Zabel, Ms. Volkers stated the City covers 100% of dental premiums if Single Medical Coverage is elected; and about 80% of medical premiums of the most expensive Family Coverage plan if that is the choice elected. Ms. Volkers stated the current monthly HSA employer-contributions are likely to be discussed in the next year as they are low compared to other municipalities. Mr. Zimmerman noted the 2023 deductibles did increase from 2022; however, the HSA contribution did not increase to offset that increased deductible. Council Member Ingebrigtson complimented Mr. Zimmerman on the accuracy of the proposed budget versus the actual budget. In response to a question from Council Member Ingebrigtson, Ms. Volkers stated the City did bid other insurance companies, but Medica was the cheapest option for Oakdale when bid at the end of 2021. WORKSHOP MINUTES NOVEMBER 7, 2022 PAGE EIGHT In response to a question from Council Member Zabel, Ms. Volkers stated the City is part of a co-op government pool with thousands of other employees, which increases buying power. Mayor Reinke noted the fact he likes that OpenGov can be updated in real time. In response to a request from Council Member Swedberg, Ms. Volkers stated the staff would work on putting together an email of high-level talking points for the Council Members on the 2023 budget but also OpenGov has a summary outlined already for that use. COUNCIL TOPICS Council Member Olson brought up a conversation that was had at the Planning Commission meeting on November 3, 2022, about a business owner tenant being pushed out of their current location because of the Gold Line project. Mayor Reinke provided background context for this particular situation stating there was a private sale between the building property owner and the Met Council, which ultimately will lead to the business owner tenant having to relocate. Mr. Gitzlaff added that the Met Council has to provide tenant assistance services to tenants who have to relocate due to the Gold Line project. Council Members Zabel and Swedberg reiterated that in this particular situation it is not eminent domain. Council Member Swedberg said that Dallas Pierson and Lee Stolarski have stated that due to attending an LMC training as Commissions on City Commissions, the City receives insurance discounts for staff. Ms. Volkers indicated this is not accurate as there were no such discounts found in the most recent insurance audit. Council Member Zabel asked the group how they felt about the student representative process. There was consensus that the current process is going well. Council Member Zabel stated he has an “open call out” to a point of contact at Tartan High School for any additional student representatives for our Commissions. Council Member Swedberg also mentioned a call was put out for student representatives at the most recent Planning Commission meeting. ADJOURNMENT The workshop was adjourned at 6:37 PM. Respectfully submitted, Sara Ludwig City Clerk