City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, August 22, 2022 7:00 pm AGENDA: 1. City Infrastructure/Buildings/Facilities Planning – ABM 2. Fire District Discussion 3. Employee Service Recognition Policy 4. Water Treatment Plant – Well #3 5. Discussion on disposition of 2021 General Funds excess fund balance 6. Preliminary 2023 Property Tax Levy and Budget Follow-Up 7. Council Comments & Questions A CITY COUNCIL/EDA WORKSESSION AGENDA REPORT DATE: August 22, 2022 1 DEPARTMENT: ADMINISTRATION Prepared by: Ryan Garcia ADMINISTRATOR: RG Agenda item: City Infrastructure/Buildings/Facilities Planning Desired Meeting Outcomes: • Revisit 2022 Action Plan related to “Master Plan for City Buildings (Facilities)” and “Infrastructure Master Plan” Goals • ABM Building Solutions, LLC Presentation and generate discussion/questions • Consider next steps in implementation of Goals, provide staff with direction For Discussion: On June 6, 2022, the City Council approved an Action Plan related to one of the 5 principal goals identified through the City’s goal-setting process – a “Master Plan for City Buildings (Facilities)”. The key preliminary tasks in this action plan related to a discussion of needs and priorities, as well as a review of financing options. Monday’s worksession is intended to bring this discussion back to the front burner and to lay out our approach for moving this highly important initiative forward. ABM Building Solutions, LLC, outreached to the previous City Administrator in late 2021, and I had the opportunity to have a follow-up discussion with them in early July. ABM expressed an interest in learning more about the City’s 2022 Goal Setting Priorities (specifically Infrastructure and City Buildings) and how they might leverage their expertise and deep resources to serve the City in our efforts to plan for and implement smart and efficient investments in our infrastructure and facilities. Staff is hopeful that – if nothing else – the worksession discussion serves to motivate and inspire Staff and the Council as we launch our assessment and analysis of our community’s broad-ranging infrastructure and facility needs and priorities. As a primer for this discussion, we are attaching the Action Plans as approved by Council in June.  2022 Action Plan MASTER PLAN FOR CITY BUILDINGS (FACILITIES) Responsible Target Task: Party Date Discuss Needs & Priorities for Major Facilities Public Works - $22 million Current Library (Full Renovation was estimated at $2,892,300 in 2016 by LSE Architects. At 5% per year construction inflation, that number equals $4,0275,000 in 2024. Wall Replacement and renovation of the 27 building was estimated at $1.5 million in 2019 by Wold. That would be City Council & Staff 5/23/22 About $1.91 million in 2024.) Fire Department – ($7.6 million in 22 - Study Commencing) Pools (best guess $5 million to $7.5 million) City Hall ($8.3 million in 22) Police Department ($17.8 million in 22) Woog Arena (TBD) Other (?) Review Financing Options City Bonding Capital Project Funds City Council & Staff 5/23/22 State Appropriations Other Grants Donations Other? Conduct Analysis of City Bonding on Levy Ehlers & Staff 6/08/22 Review Analysis/Provide Direction City Council & Staff 6/13/22 Develop Master Plan as Part of CIP Staff 10/05/22 Review/Approve Master Plan as Part of 2023 Budget City Council Fall of 2022 Implement Plan City Council & Staff On-Going  2022 Action Plan INFRASTRUCTURE MASTER PLAN Responsible Target Task: Party Date Agree on Plan for Infrastructure Financing - $3.5 million annual revenues by 2027 Use of MSA Dollars - $550,000/yr. Special Assessments - $500,000/yr. Library Levy Savings - $350,000 yr. by 24 City Council July 18, 2022 Concord TIF Decertification - $1,000,000 yr. by 25 $125,000 levy increase per year (23-27) - $975,000 yr. by 27 $125,000/yr. (LGA/Excess TIF/other) Total $3.5 million Note: This still leaves $460,000 of debt levy reduction available for other uses. Continue to Prioritize Overall Infrastructure Needs Based Upon Available Funding and Factoring In - Staff 9/30/22 & On-going Digital traffic signs EV charging stations Security fencing at City Hall Outside funding sources Mill & Overlays Full Depth Reclamations Alley Reconstruction Creating Thriving Communities Dan Choi ABM Building Solutions, LLC. August 22 2022 1  Key Takeaways Share what makes Discuss challenges Partner to overcome communities thrive that get in the way these challenges 2  Top 5 Priorities for Suburban Cities 1. Infrastructure 2. Budget and Management 3. Public Safety 4. Economic and Workforce Development 5. Housing Top 5 Positive/Negative Conditions 3 Essential infrastructure enables community resilience… 4 City budgets beginning to stabilize with federal funding… 5 Funding for infrastructure remains a top challenge… 6 How is infrastructure funding impacting your community? The International City Management Association, in partnership with the Alliance for Innovation, found through a recent survey of 5,450 local governments: - 39%: current infrastructure adversely impacts quality of life and needs additional local, state, and/or federal funding to meet community needs - 48%: current infrastructure does not adversely impact quality of life, but still needs additional local, state, and/or federal funding to meet community needs - 13%: current infrastructure meets the community needs and adequate funding is currently available 7 How ABM Can Help 8 Innovative Funding: Revenue & ✓ Assess All Operational Spend Expenditure ✓ Measure Exposure to Deferred Maintenance Analysis ✓ Identify Revenue Opportunities ✓ Inspect Enterprise Divisions ✓ Build Equitable Spending in Neighborhoods ✓ Healthy Building Analysis ✓ Design a Fundable Solution ✓ Prioritize Strategic Action Plan 9 Comprehensive Turnkey Solution: 10 Lowest Risk for Best Result: Capital Volatility Analysis 11 Let’s create more of these moments. . . 12 Solution Timeline Concept Data & Analyze Fiscal Procurement Project Solution Meeting Documents Data & Potential & Selection Development Implementation Collection Facilities Verification Analysis 08/22 8/29 9/12 11/1 12/1 1/1 4/1 13 Thank you! 14 A CITY COUNCIL/EDA WORKSESSION AGENDA REPORT DATE: August 22, 2022 2 DEPARTMENT: ADMINISTRATION, SOUTH METRO FIRE Prepared by: Ryan Garcia & Mark Juelfs ADMINISTRATOR: RG Agenda item: Fire District Discussion Desired Meeting Outcomes: • Provide City Council members with an overview/summary of the Fire Protection Special Taxing District approach to fire protection services • Develop consensus approach to future consideration of a Fire Protection District Discussion: In May 2022, the South Metro Fire Department Board (shortened to “the Board” for this memo) discussed the potential of making changes to its taxing and governance structure in light of recent Statutory changes that now authorize local municipalities to create a “Fire Protection Special Taxing District” (shortened to “Fire District” for this memo). The Board’s initial response indicated an interest in continuing to explore this possibility. In July 2022, the Board invited members of both the South St. Paul and West St. Paul City Council to a follow-up discussion on the topic. Additional considerations and questions were raised at this meeting, and the Board and Staff from both Cities committed to bringing the topic to each of our respective worksession settings in order to further the discussion. Staff is interested in using the Worksession to establish a mutual basis of understanding among Council members, answer any questions that Council may have about the “pros” and “cons” of changing to a Fire Protection District, and importantly to advocate for a thoughtful, methodical approach to further exploration of this possibility. What is a “Fire District” As established in 2021 Minnesota Statutes, fundamentally a “Fire District” authorizes two or more local government units to establish, via City Council Resolution, a special purpose taxing district for the provision of fire protection services. In this model, the most notable change versus our current model is that rather than having the South St. Paul and West St. Paul City Council work directly with South Metro Fire and their respective administrations on an annual Fire Protection budget and then each City applying the property tax levy to support that budget, the “Fire District” would independently establish its budget and have the statutory authority to levy against real and personal property located within the District’s boundaries. In theory at least, each City’s property tax levy (as adopted by the City Councils) would decrease although individual property tax payers might not see significant change on their annual property tax statement’s “bottom line”. One important financial consideration is that a fire district would need approximately $1-2 million in operating fund balance (not inclusive of capital) immediately upon creation to effectively operate. In a practical sense, it is almost inevitable that the District if established – will need a short-term (up to 1 year) infusion of cash from both of the cities so that the organization can cash flow its operations until collecting upon its first property tax levy. In addition to obtaining the authority to establish an annual levy, a Fire District is also empowered to independently assume debt through bonding. Similar to the operating budget and levy issue mentioned above, currently major capital asset acquisitions that would be specifically used in fire protection need to be sourced from each participating City, potentially to include bonding as a financing mechanism. This change would appear to provide more transparency and direct accountability to the Fire District/Fire Board for such critical decisions. A final key distinction of the Fire District model is that, potentially, additional local government units (besides South St. Paul and West St. Paul) could opt-in to this model by adopting resolutions of their own, thereby expanding the Fire District’s boundaries. Again in theory, this would seem to provide some economies of scale and potentially have the impact of reducing the individual impact on tax payers in South St. Paul and West St. Paul by “spreading” the cost of fire protection services on a wider base of benefitting property. Next Steps From staff’s perspective, the City Council(s) and Fire Board would do well to complete a thoughtful review and justification prior to committing to a Fire Protection District model. In May 2022, the Fire Board authorized South Metro staff to work with a consultant on a Station Needs Assessment Study with the intention of exploring the needs assessment on the existing stations, determining the feasibility of building a new station, and conducting a response time analysis. It is staff’s opinion that the results of this study will go a long way towards “guiding” South Metro Fire’s decision-makers towards the most effective and sustainable approach to governance, operations, and investment in the future. Staff anticipates that this study will be complete in late 2022. Pending the recommendations provided through the Station Needs Assessment Study, Staff anticipates the need to evaluate and plan for an appropriate staffing approach. Staff would suggest that this evaluation, too, should precede any commitment of transition to a Fire District model; as such, Staff anticipates using the first half of 2023 to conduct this assessment in follow-up to the Station Study. To date, there has been limited – and very casual/high-level – conversation with neighboring/nearby communities about the Fire District model. Staff’s opinion is that the appeal and necessity of a Fire District model is relatively limited if it’s really just a “status quo” operational change. However, if the potential exists to expand the boundary (and thereby, number of communities) of the Fire District beyond its current limits, Staff can see the potential for such a change to make significantly more practical and financial sense. Staff would suggest that concurrent with the aforementioned Station Needs and Staffing studies, we would be afforded additional time to examine the potential of the Fire District having a wider and more meaningful reach. Armed with this information, Staff will feel much more well-equipped to articulate the potential “pros” and “cons” of making a change from the current structure to a Fire District, in particular by being able to assign potential cost implications and how (if at all) either approach provides greater benefit to impacted taxpayers and the sustained fiscal health of South Metro Fire (and both Cities). Fire Protection Special Taxing District August 22, 2022  Amendment of Minnesota Statute § 144F.01 • On July 1, 2021, Minnesota Statutes, section 144F.01 was amended to include authorization for local municipalities to create fire protection special taxing districts (“District”). • This is in addition to the existing authority under the statute to create special taxing districts for emergency medical services.  Creation of Fire Protection Districts • Under the amended statute, any two or more local government units may create a District through a resolution adopted by each City Council. • The District’s governing body must be comprised of elected officials from each participating city’s governing body in the proportion set in the District’s enabling resolution.  Authority to Levy Tax • Once created, a District has the authority to levy a tax on real and personal property in the District, the proceeds of which are used to provide fire protection services to the residents of the property located within the District. • The property tax levy to finance District operations may be spread and collected in one of two ways:  Establishing a Fire Protection Special Taxing District • Step #1: Resolution. To establish a District, each City Council must pass a resolution authorizing the creation of the District. The resolution must establish the following: 1. The boundaries of the District. 2. How any liabilities and assets of the District will be distributed if the District is dissolved. 3. The method for apportioning the levy of the District among participating jurisdictions. 4. The Board of Directors to serve as the governing body of the District. The District’s Board would be comprised of elected officials from each City Council. 5. Any other terms the participating municipalities determine to be appropriate.  Establishing a Fire Protection Special Taxing District • Step #2: Joint Powers Agreement. • In addition to the resolution, creation of the District requires a joint powers agreement (“JPA”) and bylaws for the District’s Board. This can be accomplished in one of the following ways:  Differences: Fire Protection Special Taxing District v. Current SMFD Structure • Funding Method • The District’s Board may levy a tax on the real and personal property in the District. • The County Auditor will collect and distribute the proceeds of the tax at the same time and in the same manner as all other property taxes. • This method would differ from the budget and approval process currently in place. • The special taxing district funding method would allow the SMFD to use the proceeds of the levied taxes to provide fire protection services and become more of an independent entity.  Differences: Fire Protection Special Taxing District v. Current SMFD Structure • Reporting Requirements • The District would be responsible for following certain statutory reporting requirements, including submission of the resolution establishing the District and the levy and expenditure reports to the Minnesota Department of Revenue and House and Senate Tax Committees.  District Implementation • There is a timing element to the implementation of the District. Certain actions need to be taken by both the SMFD Board and Fire Protection District Board in order to fund the District. • Important dates: • July 1st • Notice to County Auditor that District may be certifying a levy. • September 30th • District must certify to the County Auditor the proposed property tax levy for taxes payable in the following year. • December 20th • District must certify the final levy to the County Auditor on or before five (5) working days after December 20th in each year.  District Implementation: Notice to County Auditor – July 1 st • July 1st serves as the deadline for two actions: • Creation of the District. The District must be organized on or before July 1st in the current calendar year in order to certify a levy to the County Auditor for taxes payable in the following calendar year. Minn. Stat. § 275.067. • Notice to County Auditor. The District is authorized to certify a levy to the County Auditor for taxes payable in the following calendar year only if the County Auditor receives written notice from the District on or before July 1st of the year the District may be certifying a levy. Minn. Stat. § 275.067.  City Council Worksession Report Date: August 22, 2022 3 Department: Administration/HR Administrator: ________ Agenda Item: Discuss Employee Service Recognition Program Desired Meeting Outcomes: Discuss implementation of Employee Recognition Program and establish written policy. Overview: In July of 2017, City Council approved the Employee Service Recognition Program Policy. The current policy provides service awards for those employees who have reached years of service milestones (i.e., 5, 10, 15, 20 years). Based on years of service, employees are awarded points which can then be redeemed to purchase items from the approved SSP catalog of merchandise. Unfortunately, the catalog of merchandise is no longer an option and cost of ordering through other sites is not efficient and costs for merchandise have risen substantially. In reviewing how other cities handle employee recognition gifts, the majority provide a cash payment or gift card for a certain amount. For example, St. Louis Park provides $10 for each year of service and Woodbury provides $50 for each 5-year block of service. Staff would like to revise our current policy and award employees who reach service milestones with a gift card to a South St. Paul establishment of their choice, provided the establishment offers gift cards. Attached for discussion is the policy reflecting the recommended changes. If council agrees with the recommended changes, the revised policy would be placed on the next council agenda for approval.  Department: HR City of South St. Paul Subject: Years of Service Awards ADMINISTRATIVE POLICIES AND PROCEDURES Approved: Revised: N/AAugust 2022 SUBJECT: EMPLOYEE SERVICE RECOGNITION PROGRAM I. PURPOSE The City of South St. Paul will recognize the service of its employees by presenting awards for years of service. This policy is intended to maintain a consistent practice for the type and amount of each service recognition award. II. DEFINITIONS Service Awards. Service awards are based on length of service at regular intervals defined as five-year blocks of service. Length of Service. Defined as the total amount of continuous years of service that an employee has had with the City of South St. Paul in a regular part-time (20 hours or more) or full-time position. Length of Service does not include service time worked in a seasonal, temporary, or variable hour position. Award PointsValue. Award pointsvalues are based on years of service as defined in the policy. III. POLICY Eligibility for Service Awards. Service awards are given for length of service at regular intervals defined by this policy. Employees will receive the first award after five years of service and will continue to receive awards every five years thereafter. Length of service is defined as the total amount of continuous years of service that an employee has had with the City of South St. Paul in a regular part-time or full-time position. Length of service does not include service time worked in seasonal, temporary, or variable hour positions. Employee Appreciation Luncheon. If approved during the annual budget process, the City will host employee appreciation luncheons, which shall be open to all employees. At the luncheon the City Council, City Administrator, or other staff representatives will recognize employees with years of service awards. IV. PROCEDURE Service Awards. Service Award Certificates and awards points will be presented to employees within the year they are earned. For instance, an employee who has 10 years of service on June 1, 2017 2022 will be granted their service award certificate and award points at the annual Employee Appreciation Luncheon or other employee recognition program within the same year. Award Points/Value. Service award point values are equal to $1.00 (i.e. 10 points = $10). Employees are eligible for service award points based on length of service as listed below: ▪ 5 years of service: 10 points ▪ 20 years of service: 40 points ▪ 10 years of service: 25 points ▪ 25 years of service: 50 points ▪ 15 years of service: 30 points ▪ 30+ years of service: 75 points  Redemption of Points. Employees may use their point values to purchase or offset purchases from the approved South St. Paul catalog of merchandise. All items purchased must include the city logo. Employees may not transfer or give their points to another employee. Employees have until January 31st following the year in which the award was received (i.e. Award presented in June 2017, employee has until January 31, 2018 to redeem points). Employees are eligible for service awards based on length of service, in five-year increments. Eligible employees who are employed on the day of the annual Employee Recognition Event will receive a gift card to a South St. Paul establishment of their choice, provided they offer gift card, in the following amounts: ▪ 5 years of service: 25 dollars ▪ 25 years of service: 125 dollars ▪ 10 years of service: 50 dollars ▪ 30 years of service: 150 dollars ▪ 15 years of service: 75 dollars ▪ 35 years of service: 175 dollars ▪ 20 years of service: 100 dollars ▪ 40+ years of service: 200 dollars V. AUTHORITY FOR IMPLEMENTATION AND ENFORCEMENT The Human Resources budget will include funds for annual employee appreciation programs and awards. The City Council will review and approve the budget annually. Human resource personnel, along with the assistance of the Wellness Committee shall be responsible for the planning and coordination of the employee appreciation luncheons and employee awards program. A CITY COUNCIL WORKSESSION REPORT DATE: August 22, 2022 4 DEPARTMENT: PUBLIC WORKS & ENGINEERING Prepared by: Sue Polka, Public Works Director/City Engineer ADMINISTRATOR: ____ AGENDA ITEM: Well #3 Water Treatment Plant – 30% Design DESIRED OUTCOMES: • Provide feedback on the proposed building layout and architecture. • Provide feedback on the proposed modifications to the existing well house. • Input on building signage. OVERVIEW: In the City’s Water System Planning Report completed in 2020, the Well #3 Blending/Treatment Study was listed as a high priority. Well #3 has been identified to have radium levels higher than regulatory levels and is blended within the distribution system to meet regulatory levels. In July of 2020, the City Council authorized SEH Inc. to complete a feasibility study to determine whether the water from Well #3 could be properly blended to meet the acceptable water quality or determine the feasibility of providing treatment. SEH determined that blending alone was not feasible and both a Water Blending and Treatment Feasibility Study and the Pilot Study Report for the reduction of radium at Well #3 were completed. Staff presented the findings at the January 10, 2022 work session. On April 18, 2022, the City Council authorized SEH Inc. to complete the design of the Well #3 Water Treatment Plant. SEH has completed the 30% design plans. Staff is seeking input from the Council regarding the building layout, architecture, and signage. Staff will provide a 3- dimensional rendering at the work session for council input. The site plan and floor plan are attached. Currently the proposed treatment plant site is an outlot in the Wentworth Hollow plat. In order to build on the site, staff is proposing to re-plat the property as Wentworth Hollow 2nd Addition (see attached plat). Staff will be bringing the plat and PUD forward at a future meeting. A PUD is required to allow two buildings – the existing well house and the treatment plant – on one lot. In addition, staff is requesting input on modifications to the existing well house building at the site. The existing building contains a tower through which the well pumps are removed via crane when maintenance is required. By removing the tower, access to the pumps would be simplified. The tower is also not energy efficient. Removal would allow for installation of insulation that would increase efficiency. The estimated cost for the modification is $35,000 and would be proposed as a part of the water treatment plant project. SOURCE OF FUNDS: Water Utility, Potential grant funding  WENTWORTH HOLLOW 2ND ADDITION S 89°49'47" W 888.94 VICINITY MAP NOT TO SCALE NW COR. OF SW 1/4 SEC. 22, TWP. 28, RGE. 22 (DAKOTA CO. ALUM. MON.) .40 457 60 E NORTH LINE OF SW 1/4 4" KNOW ALL PERSONS BY THESE PRESENTS: That City of South St. Paul, a municipal corporation under the laws of the State of Minnesota, owner of the following described property situated in the County SEC. 22, TWP. 28, RGE. 22 4'2 of Dakota, State of Minnesota: 8°2 S6 3°4 N2 Outlot A, WENTWORTH HOLLOW, according to the recorded plat thereof, Dakota County, Minnesota. 8 7.7 '59" E 9 WE Has caused the same to be surveyed and platted as WENTWORTH HOLLOW 2ND ADDITION and does hereby dedicate to the public for public use the drainage and utility easements as created by this plat. NTW L= AV ORTH E. 1/2 " IR R = 3 6 8 . 51 SPI 6TH AVE. N. Δ =1 3 0 . 0 In witness whereof said City of South St. Paul, a municipal corporation under the laws of the State of Minnesota, has caused these presents to be signed by its proper officer this RLS ON P 1/2 1°5 0 RLS KE W #16 IPE " IR 3' 4 0 # 1 /DI ______ day of ________________, 20_____. PA R 099 RLS ON P " 60 64 SK LN K . #19 IPE 64 KAPOSIA BLVD. 527 1/2" IRON PIPE S 75° City of South St. Paul 3RD ST. N. 42'39 RLS# 19527 "E 1 01.97 L= By: , its Mayor Δ = R= 70 9 .6 SEC. 22, TWP. 28, RGE. 22 57 .0 2 5" By: , its Clerk DAKOTA COUNTY, MINNESOTA 4 7 17'4 ° 75 1/2" IRON PIPE 77. RLS# 16099 STATE OF MINNESOTA E2 COUNTY OF _______________ 4'2 4" The foregoing instrument was acknowledged before me this ______ day of ________________, 20_____, by , its Mayor and by , its 8°2 Clerk of the City of South St. Paul, a municipal corporation under the laws of the State of Minnesota. N2 By: _______________________________________ Printed Name: ______________________________ 1/2" IRON PIPE RLS# 16099 Notary Public, _______________ County, Minnesota EAST LINE OF 60 My Commission Expires: _______________________ 1/2" IRON PIPE SURVEYOR'S CERTIFICATE RLS# 16099 OUTLOT A, W I, Eric R. Wilfahrt, do hereby certify that this plat was prepared by me or under my direct supervision; that I am a duly Licensed Land Surveyor in the State of Minnesota; that this plat is a correct representation of the boundary survey; that all mathematical data and labels are correctly designated on this plat; that all monuments depicted on this plat have been, or will be correctly set within one year; that all water boundaries and wet lands, as defined in Minnesota Statutes, section 505.01 Subd. 3, as of the date of this certificate are shown and labeled on this plat; and all public ways are shown 1/2" IRON PIPE OLLOW RLS# 19527 and labeled on this plat. 1 ENTWORTH H 1/2" IRON PIPE RLS# 16099 Dated this ______ day of , 20___. __________________________________ 60 60 Eric R. Wilfahrt, Licensed Land Surveyor Minnesota License No. 46166 STATE OF MINNESOTA 387.98 COUNTY OF __________ 9" This foregoing instrument was acknowledged before me on this day of ___________________ 20____, by Eric R. Wilfahrt, Licensed Land Surveyor. 1 2' 4 528.98 37° By: _______________________________________ 1 Δ= S 05°24'54" E 47 9 . 2 Printed Name: ______________________________ 2 1 L= 50" Notary Public, _______________ County, Minnesota L = 3 6 5. 9 8 R = 3 3 7 . 5 0 Δ = 6 2 ° 0 7 ' BLOCK 1 My Commission Expires: _______________________ CITY COUNCIL, CITY OF SOUTH ST. PAUL, STATE OF MINNESOTA C H = 3 4 8 . 31 C B = N 1 ° 4 4 ' 5 9 " W This plat of WENTWORTH HOLLOW 2ND ADDITION was approved and accepted by the City Council of the City of South St. Paul, Minnesota at a regular meeting thereof held this day of_____________________ 20____ and said plat is in compliance with the provisions of Minnesota Statutes, Section 505.03, Subs. 2. City Council, City of South St. Paul, Minnesota By: , Mayor 146.00 N 85°16'26" W 322.16 10 By: , Clerk 77.78 10 55.01 10 43.37 N 27°16'23" E 10 14.67 10 COUNTY SURVEYOR, COUNTY OF DAKOTA, STATE OF MINNESOTA 10 DRAINA " I hereby certify that in accordance with Minnesota Statutes, Section 505.021, Subd. 11, this plat has been reviewed and approved this day of_____________________ 20____. 5 5' 01 03.22 8" W 1 ILITY EA 7 Δ By: _____________________________________ E 139.73 GE & UT =2 4 ° Todd B. Tollefson, Dakota County Surveyor 109.43 63. '1 N 09°55 56 4 6.7 2 N 05°43'58" E1 DEPARTMENT OF PROPERTY TAXATION AND RECORDS, COUNTY OF DAKOTA, STATE OF MINNESOTA SEMEN 141.00 L =1 9" 47 4'5 9°2 T Pursuant to Minnesota Statues, Section 505.021, Subd 9, taxes payable in the year 20__ on the land hereinbefore described have been paid. Also pursuant to Minnesota statues, Section 272.12, there N2 are no delinquent taxes and transfers entered this day of_____________________ 20____. DRAINAGE & UTILITY EASEMENT 10 10 By:___________________________________________________________ 1/2" IRON PIPE RLS# 19527 10 Amy A. Koethe, Director, Department of Property Taxation and Records N 29°18'56" E N 73°08'24" W 31.57 10 N 23°11'01" E 37.37 29.21 6.43 10.60 10 10 COUNTY RECORDER, COUNTY OF DAKOTA, STATE OF MINNESOTA 1/2" IRON PIPE 146.44 129.48 1/2" IRON PIPE RLS# 19527 L =1 0 8 . 59 S 89°52'11" W 282.35 1/2" IRON PIPE RLS# 16099 I hereby certify that this plat of WENTWORTH HOLLOW 2ND ADDITION was filed in the office of the County Recorder for public record on this day of_____________________ 20____, at R =1 9 8 2 . 05 RLS# 19527 o'clock .M., and was duly filed in Book _______ of Plats, Page __________ as Document Number _______________. Δ = 3 ° 0 8 ' 21 " By: _______________________________________ Amy K. Koethe, County Recorder R LEGEND 0 40 80 BEARING BASIS, EAST LINE OF OUTLOT A, 60 WENTWORTH HOLLOW IS ASSUMED TO BEAR 1/2" IRON PIPE MONUMENT FOUND, UNLESS OTHERWISE NOTED SOUTH 05 DEGREES 24 MINUTES 54 SECONDS EAST SCALE IN FEET (ORIGINALLY ASSUMED TO BEAR SOUTH 05 DEGREES 1/2" IRON PIPE MONUMENT SET & CAPPED BY MINNESOTA LICENSE NO. 41466 18 MINUTES 13 SECONDS EAST) THIS PLAT PREPARED BY BOLTON & MENK, INC. A COUNCIL WORKSESSION REPORT DATE: August 22, 2022 5 DEPARTMENT: Finance PREPARED BY: Clara Hilger ADMINISTRATOR: RG AGENDA ITEM: Discuss the transfer of the excess Unassigned Fund Balance in the General Fund at the end of 2021 DESIRED MEETING OUTCOMES:  Discussion as to the disposition of the excess Unassigned Fund Balance in the General Fund at the end of 2021 OVERVIEW: In December 2014, the City Council updated the Liquidity-Fund Balance Policy to state that, “The General Fund shall enter a new budget year with an unassigned fund balance that is in the range of 35-50% of the new year’s budgeted expenditures…” A copy of this policy is attached. At the end of 2021, the General Fund had an Unassigned Fund Balance of $10,066,816 which exceeded 50% of the 2022 General Fund budgeted expenditures by $1,097,255. Historically, the City has allocated these excess funds to the Capital Programs fund to pay for the projects that are scheduled in the Capital Improvement Plan. Other options for the use of these funds include:  Move the funds to the Capital Programs Fund and designate them to pay for one-time or short-term expenditures, like the purchase of equipment or tree management and EAB.  Move the funds to the Capital Programs Fund and designate them to be used for a specific purpose, i.e., buildings, parks, etc.  Move the funds into the Infrastructure Fund.  Leave the funds in the General Fund to future cover future shortages.  Leave the funds in the General Fund and reduce the property tax levy for 2023. o Staff recommends caution if this option is chosen. These are one-time funds; there is no guarantee that we will have a surplus in future years. Staff believes that the disposition of these funds is closely linked to the 2023 budget discussion on this agenda and should be considered in tandem. We are requesting direction on what to do with the $1,097,255 of the excess fund balance. SOURCE OF FUNDS: 2021 General Fund Unassigned Fund Balance  APP Department: Finance City of South St. Paul City Administrator Approval: ADMINISTRATIVE POLICIES AND PROCEDURES City Council Approval: Issue Date: Revised 12-1-14 Date: SUBJECT: POLICY NAME – LIQUIDITY-FUND BALANCE I. PURPOSE The fund balance in the General Fund plays an essential role in the overall financial management of the City. The General Fund’s fund balance indicates the City’s overall financial condition and also helps illuminate the City’s financial management practices. The fund balance is essential to financing annual operations. A basic premise for the maintenance of the fund balance is that it should be capable of financing the City’s cash flow requirements for roughly the first half of the budget year. The subsequent receipt of property tax and other large revenue sources should then normally relieve this role for the fund balance. In addition, the presence of sufficient fund balance helps the City respond to unexpected expenditure spikes; provides a temporary escape hatch from precipitous State or Federal legislative action that can abruptly reduce budgeted aid payment revenue; provides revenue base stabilization; and, can help maintain or improve the City’s bond rating. II. DEFINITIONS • The General Fund is the City’s basic operational fund and provides financial accounting for the basic municipal services typically relying on property tax revenues for primary funding. It encompasses many of the most common operational functions of City government including Public Safety, Public Works, Parks/Recreation, Community Development, City Engineer and other general Management/Budget activities. • Fund Equity (Fund balance) is the measure of financial resources available in a governmental fund. Fund equity is divided into five classifications based primarily on constraints imposed upon the use of those resources. The classifications in order of constraint are: Nonspendable, Restricted, Committed, Assigned, and Unassigned. III. POLICY The General Fund shall enter a new budget year with an unassigned fund balance that is in the range of 35-50% of the new year’s budgeted expenditures, which should ensure sufficient cash flow funds for the first half of the operating year. IV. PROCEDURE The Finance Director shall monitor and analyze the General Fund on a monthly basis and shall provide status reports to the City Administrator and Mayor/Council on at least a quarterly basis. If concerns are identified with fund balance trends, the Finance Director shall notify the Administrator and Mayor/Council and formulate recommendations for addressing the concerns.  The calculation to determine the annual policy percentage is made at the close of each fiscal year by the Finance Director, under supervision of the City Administrator and Mayor/City Council. If the year-end fund balance exceeds the amount specified in this Policy for the following year, the Mayor/City Council shall specifically consider retaining the excess in the fund balance before making a decision to allocate the monies to other uses. If the year-end balance falls short of the thresholds specified in this Policy, the Finance Director will develop and recommend a plan to replenish the fund balance level. V. AUTHORITY FOR IMPLEMENTATION AND ENFORCEMENT The Finance Director is responsible for the ongoing implementation and enforcement of this Policy, with general supervision by the City Administrator and Mayor/City Council. The Mayor/City Council is solely responsible for specifying committed or assigned fund balance and for allocating unassigned fund balance that exceeds the minimums established by this Policy. A CITY COUNCIL/EDA WORKSESSION AGENDA REPORT DATE: August 22, 2022 6 DEPARTMENT: ADMINISTRATION, FINANCE Prepared by: Ryan Garcia & Clara Hilger ADMINISTRATOR: RG Agenda item: Preliminary 2023 Property Tax Levy and Budget Follow-Up Desired Meeting Outcomes: • Discuss potential refinements in approach to Preliminary 2023 Property Tax Levy and Budget. • Generate Council consensus around Preliminary 2023 Property Tax Levy and Budget in anticipation of late-September approval. Overview: As discussed at the August 8, 2022 worksession, the City’s management team worked throughout the summer to prepare a 2023 Budget reflecting the Council’s priorities and the need to maintain of a high level of public service. As shared on 8/8, these efforts led us to arrive at a preliminary proposed Property Tax Levy for 2023 of $15,961,003. This represents an increase of $1,340,397 – 9.17% - over the Revised 2022 Budget. Based upon the Council’s feedback at the 8/8 worksession, Staff has endeavored to identify several potential avenues to reduce the year-over-year increase as shared earlier this month, which we present for consideration below: • Separation / Retirement payouts (Library) – potential 0.28% reduction: in the Preliminary budget, separation and retirement benefit payouts totaling $40,849 are proposed in anticipation of the separation and/or retirement of Library employees as the transition to the Dakota County Library System takes place. The City maintains a dedicated, non-levy supported fund (the Compensated Absences fund) for these purposes that has sufficient resources to remove this one-time expenditure from the General Levy. • Wages/Benefits (Library) – potential 0.26% reduction: with anticipated separations and retirements in 2023, a recalculation of total wages and benefits reveals an anticipated reduction of $37,384. • Tree Management/Emerald Ash Borer Response (Public Works) - potential 0.68% reduction: in the Preliminary budget, Public Works is proposing $100,000 in professional services expenses to retain services to conduct street tree management and response to diseased/dead trees. The Emerald Ash Borer response is expected to be a temporary phenomenon, and considering this Staff is reasonably comfortable with designating “one-time” monies towards this expenditure rather than levy support. As discussed earlier on tonight’s agenda, the City has $1,097,255 in 2021 undesignated fund balance which could be a potential source for these expenditures in order to reduce the levy impact. • “Hold the Line” of Levy Support to the Infrastructure Fund at $375,000 – potential 0.85% reduction: in keeping with the Council’s commitment to continue to increase its contribution to the infrastructure fund each budget year, the preliminary 2023 proposal shows $475,000 in levy support for this purpose. The 2022 Budgeted Figure for this purpose was $350,000. It is anticipated that in 2023, the City will earn at least $125,000 in lease payments from Blue Ox  Media for a proposed electronic message board (in addition to a $50,000 “activation” payment per location). By directing all or most of this new income to the Infrastructure Fund, the Council could still meet (or exceed) its previously stated goal of increasing (by $125,000) its investment into infrastructure, albeit from a non-levy supported source. • Designate Year-Over-Year Increase in Local Government Aid to support 2023 Expenditures – potential 0.30% reduction: at the 8/8 meeting, it was suggested that rather than designate the additional $43,638 (over 2022 LGA) in LGA towards the Capital Programs Fund, which has been the customary approach, this increase be directed towards the General Fund for 2023. The downside to this approach is that the Capital Programs Fund – which is used to support a variety of asset acquisitions each year (technology, xx, xx) – does not have any additional stable/reliable sources of funding, so it requires all the help it can get. • Other Potential Options (Generally not ideal from Staff’s perspective): if the Council’s consensus is that the above measures are not desirable or insufficient given Council’s expectations, the next layer of potential solutions likely involves a reduction in service levels and/or the allocation of other revenue sources. Some of these options might include: o Delay filling of “new” positions – by and large, the budgeted increases in personnel costs are related to what we’ve referred to as the “tail” of positions that were not funded for a full-year in the 2022 Budget but would need to be funded for the full-year 2023. Nonetheless, there is one Police Officer position and the Assistant City Engineer position whose start date could be delayed for some period of time in 2023 to realize some one-time savings in 2023. The downsides to this approach are clear: PD is already understaffed and playing “catch-up” to get to full staffing level; delaying the start of the Assistant City Engineer will inevitably impact the department’s ability to do project design in-house; and the savings ultimately are something of a mirage come 2024 (when the positions need to be funded for a full year). The actual (numerical) impact of this approach would obviously depend upon how many – and for how long – positions are delayed. o Direct additional 2021 Fund Balance to offset 2023 levy – Council could, at their discretion, direct some greater portion of the 2021 Undesignated Fund Balance of $1,097,255 towards 2023 Budgeted Expenditures to reduce the Levy impact. Staff cautions against this approach of using what is essentially “one-time” funding towards budgeted, ongoing operations of the City which will likely last well beyond the coming budget year. o Increase Operating Transfer From EDA – as has been the policy each budget year since 2015, in 2023 the EDA Budget proposes a $30,000 operating transfer to the general fund for Administration and Planning. This transfer is intended to account for the amount of staff support that City Admin (HR, IT, Finance, etc.) and Planning/Zoning provide the Economic Development Authority in a given year. Potentially, this operating transfer could be increased, although Staff believes that we’d need to conduct some deeper analysis and assure that there is reasonable justification for such an approach. While the impacts of inflation and previously committed expenditures have a pronounced effect on the 2023 budget and property tax levy, Staff remains sensitive to our collective responsibility to minimize the impact of these challenges on South St. Paul’s property tax payers. We are confident that among the approaches introduced in this memo – and potentially other approaches – we have outlined ways to continue meeting our community’s evolving needs for public service in the most cost-effective way possible. We look forward to Council’s input and feedback.