City Council Workshop

WORKSHOP MINUTES OAKDALE CITY COUNCIL November 22, 2022 The City Council held a workshop on Tuesday, November 22, 2022 at Oakdale City Hall, 1584 Hadley Avenue North, Oakdale, Minnesota. The meeting began at 5:01 PM. Present: Mayor Paul Reinke Council Members: Jake Ingebrigtson Susan Olson Colleen Swedberg Kevin Zabel City Staff Members: Christina Volkers, City Administrator Sara Ludwig, City Clerk Brian Bachmeier, Interim City Engineer Greg Brady, Chief Building Official Andrew Gitzlaff, Community Development Director Nick Newton, Police Chief Lori Pulkrabek, Communications Manager Katie Robinson, Deputy City Clerk Jim Romanik, Public Works Manager Jason Zimmerman, Finance Director Other: Mikaela Huot, Baker Tilly Andy Morcomb, Council Member-Elect Matt Yetzer, MWF Properties, LLC 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. MWF SENIOR HOUSING PROPOSAL Community Development Director Andy Gitzlaff began by stating that MWF Properties, LLC is proposing a senior living multifamily development consisting of a 168-unit apartment building on a vacant 10.3 acres lot north of Hy-Vee and The Waters of Oakdale. The development will include an affordable component with household incomes averaging 60% of the Area Median Income. A concept plan was discussed at the City Council Workshop meeting on June 28, 2022. At the workshop, MWF Properties also requested support from the City to obtain conduit bond financing for this project. The original request letter from MWF Properties dated June 17, 2022, indicated they were not seeking any City financial assistance as part of this project, however there are some tax implications due to the affordability component of the project. Later, it was confirmed that they would be seeking 4d tax classification status from Minnesota Management and Budget (MMB) which would have tax implications on the year-over-year revenue for the City. Mr. Gitzlaff told the Council he should have asked about 4d status at the time of the June 2022 workshop discussion so that Council could have made a more informed informal recommendation. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE TWO He highlighted terms of the recently passed conduit debt policy: x A $3,000 flat application fee plus the covering of legal or financial costs to process the application. x An ‘Issuance Fee’ equal to the greater of $10,000 or 0.5% of new bond issue amount. Increasing the ‘Issuance Fee’ to 1% was discussed with MWF. At 0.50%, the ‘Issuance Fee’ paid to the City would yield up to $125,000 of unrestricted funding if the project was valued at $25 million. If the value of the project is at $22.5 million then the ‘Issuance Fee’ would be slightly less. The increase to 1% would provide up to a $250,000 ‘Issuance Fee’ which would offset City taxes/costs for the first few years of providing City services. Mr. Gitzlaff asked for updated Council direction and intent given the recent information on 4d tax implications which were not known at the time of the June 28, 2022 workshop. He explained that if Council would like to move forward with the project a resolution would have to be passed before the end of the year indicating to MMB that the City will serve as the tax-exempt bond issuer. Mayor Reinke made note of the 4d status and the implications it would have on the amount of property taxes paid by MWF to the City. He provided context about the proposed property and why it has remained vacant over the last 10-12 years, noting some unique infrastructure issues with the sewage flow and underground storm sewer. Despite these things, he would still consider this to be a viable project. Matt Yetzer, Senior Development Associate with MWF Properties, LLC, began by apologizing for the miscommunication regarding the 4d status. He provided a brief overview of MWF Properties’ background which includes their experience working in the Metro and within Washington County. Mr. Yetzer shared the value of having an in-house and local management company that will strive to be a good neighbor. Mr. Yetzer moved on to discuss the Baker Tilly memo. He explained that the 4d status is used to tie the assessed value to the actual market value of the affordable project to make the project financially viable. Due to the 4d status of this project, MWF would not need to seek out other financial contributions such as TIF, County funds, or fee waivers. For this specific project, MWF leveraged County funds that could be applied to the City of Oakdale in the amount of $750,000. Mr. Yetzer continued by referencing the Housing Chapter of the City’s 2040 Comprehensive Plan which establishes a goal to create an additional 791 affordable housing units, stating this proposed project would help fill that existing housing gap. Other benefits identified include the rollover of existing family homes to entry-level homes for new residents, a new tax revenue stream, and the doubling of the ‘Issuance Fee’ which would be over and above any administrative costs the City would have throughout the issuance of the bonds. Mayor Reinke asked about the timeline of the project. Mr. Yetzer summarized the timeline as follows: WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE THREE x A Resolution would go to Council for approval on December 13, 2022. x MWF would submit for bond financing by the end of the year. x MWF would receive financing status mid-January 2023. x MWF would close on financing by the end of June 2023, per state statute. x Construction would begin in June 2023 and complete by fall 2024. x Given a 15-month construction period, first occupancy could take place in fall 2024. Council Member Olson stated for future reference, whether or not Section 42 tax credits are listed in memos or proposals that Council should keep in mind the possibility of 4d status. City Administrator Chris Volkers explained that due to the lack of development with this type of housing in the last few years, City staff may not have asked all the necessary questions during the process, but will ensure this question is asked going forward. Council Member Zabel stated his concern with the reduction in paid property taxes due to the 4d status, however due to the unique circumstances of the proposed site, especially as outlined by Mayor Reinke, he does not think it would develop as a market-rate project. He addressed concern over seniors aging in place due to the inability to downsize or move into a different setting because of lack of affordability. He agreed that this type of development would provide a financial benefit to the City in terms of keeping the natural housing progression moving. Overall, he would be willing to take a leap of faith on this project. Ms. Volkers stated that the City’s current property tax income for the vacant lot is $4,800. Mayor Reinke pointed out that the proposed development would increase this income by twelve times. Council Member Zabel added that it is difficult to compare these property taxes to a hypothetical market rate projects property taxes. Council Member Swedberg agreed with Council Member Zabel about the desirability of the proposed site, and as such, was supportive of the project. She asked if the 4d classification has to remain indefinitely. Mr. Yetzer explained the 4d status remains as long as the Section 42 tax credits are on the property. Mikaela Huot, Director at Baker Tilly, added that MWF Properties will have to apply for the Section 42 tax credit program every year. Mr. Yetzer assured the Council that the housing will be affordable for at least 30 years as MWF Properties committed to that through the financing entity. Council Member Olson agreed with Council Member Zabel’s point about seniors being unable to find affordable housing, and was in favor of the proposed project. Mayor Reinke fully supported the proposed project. He indicated the general consensus is in support of the project moving forward as proposed. Council Member Zabel asked the group if they are comfortable with the new proposed 1% fee structure that staff negotiated for this project. All were supportive. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE FOUR RENTAL HOUSING LICENSING UPDATE Chief Building Official Greg Brady began by recapping his reevaluation of the City’s rental housing program. The City stopped all rental inspections during 2020 and 2021 due to the pandemic. In order to understand the entirety of the rental housing program, historical information includes that 664 rental units were inspected in a five-month period during 2022. From the findings, a plan was developed to improve the rental housing program. The current Code of Ordinance – Chapter 7 Article II has not been updated since 2013. There are several proposed changes to the code to help with administering and defending the enforcement of the ordinance. Additionally, starting in 2023, City staff recommends a three-year inspection rotation by dividing the City into three areas of approximately 225 units each. A map was provided in the packet as a visual aid, but the three areas include: x North of 34th Street – 260 locations x In between 34th Street and 15th Street – 205 locations x South of 15th Street – 225 locations Mr. Brady added that any outstanding corrections from 2022 will be the exception with those units being inspected in 2023 to resolve open code corrections. The plan includes a built-in incentive to come into compliance so that another inspection would not be required for three years. This incentive also applies to the new multifamily developments at Willowbrooke and Helmo Station, in which those units would not need an inspection for three years after the initial building inspection process has been completed. Mr. Brady continued stating that the current fees will remain in place for 2023 as the Building Inspection and Code Enforcement Department is going to reevaluate fees and revenues during 2023. He added that anticipated revenue will go up due to the multifamily projects coming in with the current license application fee at $320 plus each additional unit fee of $10. In response to Mayor Reinke’s question about the anticipated increased revenue, Ms. Volkers clarified that even though an inspection is not required for three years, a rental license application is required every year. It was noted by Council Member Zabel that the same license fee cannot be charged during years when there is not an inspection. A fee chart was handed out to Council to provide context for the 2023 fees. Council Member Zabel recommended having the inspection fee and rental license fee as separate line items. Mr. Brady reviewed the proposed annual license application fee section with Council. x Single-family townhome or condo – $135 x Duplex – $190 x Triplex – $240 x Fourplex or 5+ units – $320 He talked about the efficiency that OpenGov will provide as the current process involves physical mailings and individual emails. Due to this efficiency, Mr. Brady proposed reducing the individual unit fee of $15 to $10 for the 66 multifamily apartments in the City which would provide some savings to the property owners. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE FIVE Mr. Brady mentioned that some tenants and property owners request yearly inspections for legal purposes which could fall out of the three-year inspection rotation. Ms. Volkers handed out the proposed amended ordinance in which Section 7.9 designates several Wisconsin counties as eligible residency locations for a rental agent. Mr. Brady explained the addition of St. Croix, Polk, and Pierce Counties as eligible Wisconsin counties. Currently, there are 54 rental owners who reside in Wisconsin. Some of these owners reside in Hudson, Amery, and Prescott, and have complained because their current residency is closer to the rental property than some West Metro Cities. An alternative solution was offered instead of the addition of specific counties, stating language could be added about residing within a 50-mile radius of the City of Oakdale. This alternative would encompass additional Wisconsin cities such as Clear Lake, Amery, Glenwood City, Spring Valley, and areas out near Menomonie. Ms. Volkers asked Council which option they preferred in regards to the eligible residency locations for a rental agent – the addition of three Wisconsin counties or the inclusion of the 50-mile radius language. Council Member Zabel was supportive of the 50-mile radius option. Mayor Reinke was supportive of the 50-mile radius option, but added that Council has the ability to make an exception for someone who resides outside of the 50-mile radius. Council Members Swedberg, Olson, and Ingebrigtson were all in agreement about implementing the 50-mile radius option. Council Member Zabel asked if a condition of the rental license can be the requirement of electronic notification only. Mr. Brady explained that OpenGov will bring everything into an electronic format. For applicants who do not want to use electronic forms they can provide their cell phone number for communication purposes. Ms. Volkers mentioned a new in-person CPU mirroring tool that will be available to allow applicants to verify information that is entered in by City staff while being helped at the counter at City Hall. Mr. Brady circled back to the proposed changes within Chapter 7 Article II and mentioned adding a new definition of an owner and qualifying relative within Section 7-5.1. Mayor Reinke recapped the support for the 50-mile radius language and the proposed adjustments to the rental housing program and corresponding ordinance. He praised the Building Inspection division for their work with the large number of permits that have been issued over the last several months. Mr. Brady stated there are still 2,000 roofs left to inspect, but the application phase has passed. In response to Ms. Volkers question about the length of the temporary roofing contractors’ agreements, Mr. Brady said one of the contractors’ agreement is only through 2022 while the other contractors’ agreement is through 2023. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE SIX FEE SCHEDULE PROPOSED CHANGES Ms. Volkers thanked Deputy City Clerk Katie Robinson on the work she did to update and clean up the fee schedule. She explained the last official review of the fee schedule occurred in 2015 so the process was lengthy and onerous. She then asked Council to review and point out any errors or inconsistencies, or any item they may have questions on. A legal size sheet was handed out to each Council Member with an explanation of changes or rationale behind the fees. Ms. Robinson asked Council to point out any justifications that do not make sense to them. In response to Council Member Olson’s question about the 1% increase in electrical fees for electrical permits, Mr. Brady stated this was due to the increase from the Contract Electrical Inspector to offset increased fuel costs. The contracted inspector used the State of Minnesota’s Fee Schedule and increased it by 1% as essentially a fuel surcharge. Mayor Reinke asked for clarification on what the State inspects versus what municipalities inspect. Mr. Brady said the City can do fire sprinkler inspections, but the State would do all electrical inspections as well as all State-funded project inspections, i.e., MnDOT projects and public schools. Additionally, the State of Minnesota Plumbing Review Team inspects all installed plumbing except for 5-unit or less multifamily homes. Council Member Swedberg referenced the questions asked about Curb Stops and whether Council would like to use ‘Cost plus 5%’ or a flat fee of $150 for the 2023 fee schedule. Public Works Manager Jim Romanik said that in years past $100 was enough to cover the costs, but this past year the City has lost money on the last batch that was picked up. Because of the varying cost, Mr. Romanik proposed the ‘Cost plus 5%’ as a safe way to cover the administrative costs and servicing fees. The Council was comfortable with the use of ‘Cost plus 5%’ for the Curb Stops line item for 2023. Council Member Swedberg continued with the Public Works line items and asked about the term ‘Varies’ for the Road Cut Permit. Mr. Romanik explained it is based on footage of the area they are working on. There is a formula on the permit that calculates the fee. Ms. Volkers asked if this line item needs more explanation in the fee schedule. Mayor Reinke offered the wording ‘See Permit Formula’ or something similar. Council Member Swedberg addressed another line item in the Public Works section, ‘Water Filling Station – Minimum Charge Applies’. Public Works proposed a $10 minimum fee per vendor plus the cost of water per 1,000 gallons to be billed quarterly. Mr. Romanik explained this is to cover the wear and tear on the water hydrant used as the fill station at Public Works. Council Member Swedberg and Mayor Reinke were supportive of this proposal. Ms. Volkers brought up the Temporary Outdoor Patios line item as those temporary licenses issued to D-Spot and Ugly Putters are set to sunset as of December 1, 2022. She asked Council if they would like to continue issuing these types of licenses and if the $100 should be left on the fee schedule. The consensus was to leave the $100 fee for Temporary Outdoor Patios in 2023. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE SEVEN Council Member Zabel asked the group to discuss the Security Contracts fee for churches and schools. Ms. Volkers stated the current 2022 fee, $73.50, is less than the city hourly cost of $94.50. She asked the Council if they would like to continue charging churches and schools less than the cost of the service while continuing to charge other businesses at cost for the Security Contracts service. Police Chief Nick Newton shared that the 2023 hourly fee for commercial Security Contracts on non-holidays was increased, and a line item was created specifically for Security Contracts on holidays, but he was open to suggestions about all line items related to Security Contracts, including the fee for churches and schools. Mayor Reinke provided insight into the origins of the original fee for churches and schools for Security Contracts citing the concept of non-profits receiving a reduced rate due to the goodwill done in the community. Council Member Zabel expressed support for a standard fee across the board for Security Contracts for both commercial and churches and schools. Council Member Olson agreed. In response to Council Member Zabel’s question about examples of a school utilizing police staff, Chief Newton said schools can hire police staff for football games, basketball games, or any after- school event. He added that churches do not secure City police services; they use the Off-Duty Program through Washington County. Mayor Reinke asked the group if they support having two-line items under Security Contracts (Police) – Commercial/hourly and Commercial/hourly/holiday. Council Member Olson clarified that the question is about charging churches and schools $104.50, for the non-holiday rate, just like any other business. Ms. Volkers stated the Churches & Schools line item would be removed if Council would like to charge them the same as the Commercial rates. Mayor Reinke suggested charging all entities equally at $104.50, for the non-holiday rate. Council Member Swedberg was in agreeance to maintain consistency. Council Member Zabel reminded the group that only schools utilize these services as churches go through the County. Council Member Ingebrigtson asked Chief Newton if he was supportive of entities securing police staff for events. Chief Newton said he was fine with the policy as long as the businesses pay for the service. He added the City of Oakdale Police staff is too small to force officers to work overtime so there is a voluntary sign up for overtime opportunities. Moving to another line item, Ms. Volkers pointed out the background check fee is $375 across the board because the cost to the City to run a background check is $375. License renewals that do not require a background check would not incur this charge. She added this fee is separate from the license fee itself. Ms. Volkers concluded that the desire is to bring the proposed fee schedule to Council for approval at the December 13, 2022 meeting so it can be posted online for 2023. She asked Council to send over any other changes in the meantime. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE EIGHT RAISED GARDEN BEDS Mr. Romanik began by stating Council Members approached the City a few weeks ago about the possibility of purchasing or building a couple of raised garden beds and placing them in a City park. Due to the City’s Age Friendly designation, there is a possibility to obtain a one-time grant to pay for all or part of the garden beds through the Washington County Public Health Department. He continued that City staff did research for commercially-made garden beds and did not find any that were reasonably-priced. Park Superintendent Jeff Koesling was willing to look into plans to have these made over the winter so they would be ready for use in the spring of 2023. City staff looked into various materials including cedar boards and timbers or pressure-treated boards and timbers. Either one of these materials would last the longest given the exposure to soil and moisture. The rough estimate presented by Mr. Romanik was approximately $1,000 per 4’ x 8’ and 16” deep garden bed which includes materials and labor cost. Mr. Romanik addressed some concerns with raised garden beds being placed on public property. x What is the standard of maintenance? x What happens if a gardener does not maintain their part of the garden? x The raised garden beds would need to be designed to hold the weight of the materials which would be roughly 3,300 pounds. x If the beds are built internally, should an engineer be involved in the design of the raised garden beds? x What type of liability would the City have for building and placing these planters in a park or on public property? Mr. Romanik added that City staff has not consulted legal about the City’s liability. He asked Council for their feedback and intent on whether raised garden beds should be built and placed in a designated City park or on public property. Council Member Ingebrigtson asked if Public Works has the staff capacity to maintain these garden beds if the gardener who agreed to maintain it no longer wants to. Mr. Romanik said it would have to be removed if it was not maintained by a volunteer. Council Member Swedberg stated the grant would cover the entire cost of the project upfront. She added that the gardeners can use mulch or Styrofoam underneath the soil to decrease the weight of the materials. Ms. Volkers stated that a water source would need to be identified, a location would need to be identified, and a process would need to be identified for a lack of maintenance by the volunteer. She asked Council if there is an expectation for City staff to maintain these beds. Council Member Swedberg and Mayor Reinke said there is no expectation. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE NINE Council Member Zabel was not supportive of having the proposed raised garden beds on public property. He added that he anticipates future problems and would like to avoid them altogether. Mayor Reinke would consider this project if the Maplewood/Oakdale Lions or Master Gardeners could manage these raised garden beds or the volunteers that take care of them. Council Member Zabel pointed out there have been past issues with Lions-maintained projects at the Oakdale Nature Preserve. He suggested that residents of multifamily housing who do not typically have access to gardens work with their property managers to create something on their property, void of any City involvement. Council Member Swedberg said that the 2022 Age Friendly Community group survey revealed a desire for community engagement. She added the raised garden beds would be cared for by the Age Friendly Community, not Public Works. The grant money would go toward the building of the beds. A decision would need to be made about having access to water. Council Member Zabel brought up the current policy that addresses City-owned and operated projects and not committing to anything that outside entities state they will maintain. Council Member Ingebrigtson suggested asking a private business if they would house the raised garden beds on their property. His concern lies with the liability to the City for a lack of maintenance. Council Member Swedberg said she is not familiar with any issues regarding current community gardens in the City or surrounding areas. Council Member Ingebrigtson provided a hypothetical situation in which a resident walking by picks a flower to take home and the potential issues this may cause. Council Member Olson said that if Paris can figure out a way to do it then there must be a way to do it, whether it involves the City or not. Ms. Volkers asked about the application process. Council Member Swedberg said the application closes in January or February of next year, and the Age Friendly Community group would find out if they received the grant relatively quickly. Ms. Volkers tried to get clarity on Council’s intent for the raised garden beds. Council Member Ingebrigtson shared concern about depending on volunteers for the upkeep. He also pointed out if this project is pursued it would be contrary to current policy. If the garden beds are on City property then the City owns them and has a responsibility to maintain them. Mayor Reinke recapped the change in sentiment to say the project would not proceed unless there is a change to City policy. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE TEN In response to Council Member Zabel’s question about the application of the grant if the City built the raised garden beds and maintained them themselves, Council Member Swedberg said they could not apply for the grant because there would be no community engagement aspect without citizen involvement. Ms. Volkers reiterated what was heard – that the group sentiment is to put the project on pause unless there is a way to update the current City policy. Mayor Reinke asked if the Age Friendly Community group can apply for the grant and then if awarded, the City Council would need to figure out a plan for the project at that time. Council Members Zabel and Ingebrigtson were not supportive of the project at this time given the current City policy. Council Members Swedberg and Olson were supportive of the project moving forward. Mayor Reinke was supportive of the project if the grant was awarded and the policy could be revised. Ms. Volkers suggested applying for the grant, and if awarded, then the Council could change the policy if they want. Council Member Ingebrigtson reminded the group of the previous discussions about the drafting and passing of the current City-owned policy and the reasons behind it. Mayor Reinke asked if the City can still apply for the grant at present. Ms. Volkers confirmed that the Age Friendly group could certainly apply and the grant could be turned down if desired. Council Member Zabel stated the grant application has to align with current City policy. Council Member Swedberg asked for clarification on the word ‘maintain’. Council Member Zabel said it means “planting, maintenance, watering, everything” because that is what City policy states. She asked about the planting done by volunteers each year in the Oakdale Bark Park. The group stated that this differs because it is a one-time event and those plants are not maintained by the volunteers throughout the year. Council Member Ingebrigtson was in favor of keeping the current policy and not moving forward with the raised garden bed project. Mayor Reinke asked if the Age Friendly Community group can find a church that will support this project to avoid the use and involvement of City property and staff. 2023 – 2027 CAPITAL IMPROVEMENT PLAN (CIP) UPDATE AND PROPOSED CHANGES Finance Director Jason Zimmerman and Interim City Engineer Brian Bachmeier provided an update on two large elements of the Capital Improvement Plan (CIP). The first item discussed was the 2023 Streets Project. Mr. Bachmeier noted that the draft CIP discussed at the August 31, 2022 workshop did not include the replacement of the water main on Glenbrook Avenue North. Additionally, upgrading of streetlights on 9th Street North, Gershwin Avenue North, and Glenbrook Avenue North, was included in the draft CIP, however he explained this lighting is owned by Xcel Energy and has already been upgraded to LED so this work will be removed from the program. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE ELEVEN Another discussion at the August 31, 2022 meeting was the addition of the cost to remove and replace the curb and gutter along with the asphalt. This increased the asphalt removal and repair assessment from $53/foot to $77/foot, a significant change. The final noted change was the correction to the CIP spreadsheet equation. Originally, the spreadsheet was charging the Utility Reserve fund for all project costs not covered by assessments instead of just charging the fund for the utility replacement costs. With this calculation correction, some of the funds from the Utility Reserve fund were shifted to the General Obligation Bond. Mr. Zimmerman provided a handout to Council to review the financial aspects of the proposed 2023 – 2027 CIP. He explained that on the last page, 2/1/2025 is the principal due date for the first payment. The ‘levy required’ language is in reference to the collected payments in 2024 for that initial payment. He recapped the timeline as the project happens in Year 1, the property taxes are collected in Year 2, and the first debt payment is due in Year 3. He noted the estimated levy for the 2023 project is $314,000 and would be collected in 2024. The final levy year for the 2013A bond issuance is 2023, and the approximate levy to support this debt service is $145,000. With the 2013A bonds expiring, and the addition of the bonds to support the 2023 street improvement project, the net levy is anticipated to increase by nearly 1% or $170,000 in 2024. Ms. Volkers confirmed that these bonds will be issued in 2023 for levy in 2024 which is a 1% increase. Mr. Zimmerman noted there are general assumptions with what the interest rates are going to be. In response to Council Member Zabel’s question about the small debts that are anticipated to be coming off, Mr. Zimmerman explained that it does not have to do with prepayment, but that he could look into the size of those debts. He recalled a number of the associated projects were shy of $2 million throughout the 2000’s. He stated this debt is about 2.6% greater. The current interest rate is a large factor of the overall cost. Council Member Zabel recalled that historically what has come off and what goes on are relatively close so there is not as much of a levy hit. Mayor Reinke asked about the various options in regards to the financing. Ms. Volkers stated there are several options, but this is the suggested financial path proposed by City staff. Council Member Zabel asked about the logic in using General Obligation bonds versus the increased funds from the Reserve Utility. Mr. Zimmerman noted a strain on the utility funds in the next ten years. Ms. Volkers further explained that the utilities under the streets are aging out so there will be upcoming expenses in that regard. Ms. Volkers stated this is $175,000 of over 1% additional tax levy for those that have to vote on this. Council Member Olson asked if there is any other choice than the proposed option. Council Member Zabel suggested buying down the amount of bonds. Council Member Ingebrigtson pointed out that there is uncertainty in regards to market interest rates so it is not always best to postpone something like this. Ms. Volkers asked if these bonds can be refinanced. Mr. Zimmerman said the City's bond rating is high due to the short amortization periods. Even though the City issues debt annually, it is paid off within ten years. Council Member Zabel asked if there are longer amortization schedules. Mr. Zimmerman stated it is possible to have an amortization schedule that spans the life of the asset. He added there is an option to build in a call provision but that typically coincides with a higher interest rate. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE TWELVE Ms. Volkers moved on to the facilities portion of the CIP discussion and began by stating the levy- supported debt includes additional costs for the facility improvement projects due to inflation. She pointed out the $6 million difference for the new Public Works facility, $22 million versus $28 million. She told the group that the CIP on the City Council agenda on December 13, 2022 would include the fast-forwarding of the Public Works project with the approved budget amount. The only other budgetary decision point would be when the contracts come up on a future Council agenda. She asked the group if they are comfortable with the $22 million versus the $28 million for Public Works and hence tax levy supported bonds for the difference of $6 million. Council Member Zabel clarified that the $6 million beyond the $22 million would not be covered by the L.O.S.T. Ms. Volkers explained that the additional $6 million would provide the necessary amenities discussed previously such as the parking, garage, and storage. Council Member Swedberg asked if the City is still pursuing the additional $6 million as part of L.O.S.T. Ms. Volkers stated that at the December 13, 2022 City Council workshop the 2023 legislative agenda proposal will be discussed. It is expected as part of this discussion, the Council will be asked if Flaherty & Hood, P.A. should pursue going to the legislature and asking for authority to go beyond the $22 million. Ms. Volkers referenced another recent election in which the City of Fergus Falls put the higher budgeted amount on the ballot without legislative approval and received a passing vote from their residents. They have since certified it to the State and are moving forward with their proposed project. Ms. Volkers stated the CIP coming to vote on December 13, 2022 will have the $28 million budget for Public Works. The Police facility project will have the $18 million budget, which is $3 million above the voter-approved $15 million. An additional $8 million for a City Hall improvement project in the future will also be included. Mayor Reinke clarified this is the worst case scenario even using the longest amortization allowable with the City still going back to the legislature to ask for approval. He would like to use a financial approach that alleviates the burden on resident taxpayers. Council Member Zabel reminded the group that there are interest costs to consider so it is not strictly $6 million plus $3 million, but it is more likely to be $12 million once interest is factored in. Ms. Volkers moved on to the last item for CIP discussion, the Willowbrooke parks. She stated that before the December 13, 2022 Council meeting she will bring some alternative proposals for the Commons Park for about $3 million which could be bid at the end of 2023 to get ahead of the 2024 construction season. The proposal will also include the building of Neighborhood Park West in 2024- 2025 which will include pickleball courts and soccer fields. Alternatively, she said the project could be split by doing a core part of Commons in 2023 and finishing up that park in 2024, then starting half of Neighborhood Park West in 2024, putting in the pickleball courts, and finishing that park up in 2025 with the addition of soccer fields for example. Ms. Volkers suggested taking a hard look at the development agreement for Neighborhood Park North. She added that City Attorney Jim Thomson is working on this. Council Member Ingebrigtson asked what happens to the land that was going to be used for Neighborhood Park North if a park is not built there? Mr. Gitzlaff suggested it be made into a passive park using the guidance from the 2040 Comprehensive Plan and the PUD Zoning Ordinance language. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE THIRTEEN Council Member Ingebrigtson asked who would be opposed to not building Neighborhood Park North. The consensus was the developer and some of the residents. Council Member Ingebrigtson suggested giving the land back to the developer so they can build more units. Ms. Volkers stated she and Mr. Zimmerman are going to look into possible savings to buy down the tax levy burden of issuing debt for Willowbrooke parks. Mayor Reinke was in favor of splitting the Commons Park over the course of two years. Council Member Zabel asked if any part of the 2023 work can be done now, i.e. grading, utility work, etc. to show a good faith effort to the developer and the residents. Ms. Volkers agreed this would be in the City's best interest. Council Member Olson asked about the potential legal issues that were discussed in a previous meeting. Ms. Volkers stated there is still a risk. Council Member Swedberg pointed out that non- Willowbrooke residents may push back on the lack of a third park. Ms. Volkers stated the City is working hard on the long-term financial plan for the Willowbrooke parks. Council Member Zabel suggested keeping a part of the project on the books for 2023 and setting a budget. He used the example of $1.5 million. With that set budget, he asked what can be accomplished in 2023 to make headway on the Willowbrooke parks. Council Member Ingebrigtson pointed out that one drawback to pushing out these projects is that the interest rates have the potential to be higher than they are now. Mayor Reinke said they should pick a budgetary number the City is comfortable with and bring it to Council for approval. Ms. Volkers stated regardless of what the CIP looks like, it will be brought for approval at the December 13, 2022 Council meeting. Council Member Zabel reiterated his support for starting some part of the project in 2023, i.e. something physical or tangible. Council Member Olson agreed with this suggestion. Ms. Volkers said 10-foot wide trails are currently in the CIP. She asked if the trails could be reduced to 8-foot wide instead which would cut 20% of the costs. Mayor Reinke agreed with a reduction in trail width. The Council was in agreement with this suggestion. RECESS FOR REGULAR MEETING 6:54 PM WORKSHOP RECONVENED 7:30 PM after the Economic Development Authority Meeting COUNCIL TOPICS Council Member Swedberg made a clarifying point from an earlier discussion about the raised garden beds. In order to receive the grant, the Age Friendly Community group must partner with the City of Oakdale versus partnering with a church or some other entity. WORKSHOP MINUTES NOVEMBER 22, 2022 PAGE FOURTEEN Council Member Olson asked Mr. Gitzlaff if he has heard from any of the business owners about the need for affordable housing for their employees during any of the Business Retention Expansion and Attraction (B.R.E.A.) visits. He responded that no specific example comes to mind, but transportation needs have been brought up during these visits. He added that this question can be asked at one of the future BREA visits. Mayor Reinke commented that he has received two text messages and one email expressing concern about the proposed 12% tax levy rate increase. Ms. Volkers stated that she has seen examples of three other cities where the supplemental tax rate does not accurately reflect the levy tax rate. Additionally, ISD 622 and other school districts have been unable to complete their section of the supplemental budget information insert that was included in the truth-in-taxation notice explained with that their fiscal year financial information isn’t audited at the time of mailing but other school districts have included the information on the supplemental budget form included with property tax statements. Council Member Zabel asked about the penalty if a taxing entity does not record their information. Ms. Volkers stated there is no known penalty. Mr. Zimmerman said the difference with school districts is that they run on a fiscal year and not a calendar year so they do not have audited financials for the 2021 school year. He added some of the school districts submitted estimates or incomplete information or previous years data so to complete the required form. Ms. Volkers stated it is expected there will be several bills passed this legislative session to fix the many errors seen with the current process. Council Member Zabel, in regards to the 12% tax levy rate increase, said some residents may notice the 99.2% reduction in the government aid account and understand that when there is an elimination of a revenue source which has to be made up somewhere else. Council Member Olson asked about the state categorical aid that went up $205,000. Mr. Zimmerman explained that the City gets a supplemental payment from the state which was in the Ambulance Fund, but is now reflected in the General Fund. It looks like there is an increase in the Enterprise Fund – water, sewer, street maintenance, etc., however those expenses used to be within the governmental funds, but had to be transferred over. Mayor Reinke praised the City’s first responders for how they conduct themselves. They tended to an emergency in his neighborhood, and the neighbor complimented their professionalism, efficiency, and kindness. ADJOURNMENT The workshop was adjourned at 7:39 PM. Respectfully submitted, Sara Ludwig, City Clerk