City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, November 27, 2023 7:00 pm AGENDA: 1. Utility Rate Study – Ehlers 2. Third Quarter 2023 Financial Report 3. Concord Exchange Design 4. Proposed 463 Action for Hazardous Building at 119 10th Avenue South 5. Performance Recognition Awards (No Attachment) 6. Council Comments & Questions  COUNCIL WORKSESSION REPORT A DATE: NOVEMBER 27, 2023 1 DEPARTMENT: FINANCE Prepared by: Clara Hilger ADMINISTRATOR: RG AGENDA ITEM: Review draft update of the Utility Rate Study DESIRED MEETING OUTCOMES:  Review the draft update of the Utility Rate Study.  Provide direction to Staff and the City’s Municipal Advisor on next steps in the rate analysis and recommendations OVERVIEW: The Utility Rate Study Plan was originally developed in 2010-2011 by the City’s Municipal Advisors, Ehlers. It has been updated several times since, as a periodic review of this study is a good financial practice. The City’s municipal advisors, Ehlers, Inc. were contracted to do an update of the plan. The analysis provided what was expected. In the Water fund, larger increases in the rates for the next two years are proposed to fund the capital requirements over the next several years, but smaller increases are recommended for the future. Similarly, these same projects will also effect the balances in the Sewer and Storm Sewer funds over the same time period. Again, an increase in the rates for 2024 is proposed but smaller increases are recommended for the future. Brian Reilly, Ehlers Inc., will present the draft Utility Rate Study at the Worksession. SOURCE OF FUNDS: N/A •   •     •        Collection System Capital Operations Improvements Treatment System Capital Improvements Project Amount Year Financed Water Treatment Plant $9,986,235 2023* 7th Ave S Improvements $2,600,000 2024 I-494 Watermain Crossing $ 600,000 2024 Marie Ave Reconstruction $1,500,000 2025 Chlorination Equipment $2,400,000 2025-2026 12th Avenue Reconstruction $ 500,000 2026 Hydrant Replacement $ 250,000 Annually •   •    •  •  •   •   Existing Proposed Existing Proposed 2023 2024 2023 2024 Usage Rates Meter Service Charge Residential 5/8" 17.58 25.70 0-7,000 2.71 2.71 3/4" 17.58 25.70 7,001-16,000 3.37 3.37 1" 25.12 31.06 >16,000 5.02 5.02 1.5" 38.34 44.34 Commercial 2" 60.33 60.34 0-60,000 2.71 2.71 3" 83.53 97.70 60,001-325,000 3.37 3.37 4" 130.47 151.06 >325,000 5.02 5.02 6" 202.28 284.34 Multi-Family All Usage 3.37 Existing Proposed High Volume (Industrial) 2023 2024 0-5,000,000 2.66 2.66 Usage Rates 5,000,001-10,000,000 2.94 2.94 Discounted Rates 10,000,001-20,000,000 3.25 3.25 0-6,000 1.36 1.36 >20,000,000 3.54 3.54 6,001-15,000 1.69 1.69 Irrigation >15,000 2.51 2.51 All Usage 5.02 5.02 MPFA Charge - All Users All Usage 0.00 0.89  Residential Property - 5/8" Senior Discount - 5/8" Meter Multi-Family - 1.5" Meter (48 units) Meter (15,000 gallons/quarter) (3,000 gallons/quarter) (185,000 gallons/quarter) 2023 Quarterly Water Bill $ 63.51 $ 23.02 $ 622.19 Proposed 2024 Quarterly Water Bill $ 84.98 $ 32.45 $ 832.44 $ Increase $ 21.47 $ 9.43 $ 210.25 % Increase 33.8% 41.0% 33.8% Commercial Property - 2" Meter Heavy Industry - 6" Meter (45,000 gallons/quarter) (10,000,000 gallons/quarter) 2023 Quarterly Water Bill $ 182.28 $ 28,202.28 Proposed 2024 Quarterly Water Bill $ 222.34 $ 37,184.34 $ Increase $ 40.06 $ 8,982.06 % Increase 22.0% 31.8% •    •    Collection System Capital Operations Improvements Sewer Treatment (Met Council) Project Amount Year Financed Relining of Sanitary Sewer as Part of I/I $ 730,000 2024 7th Ave S Improvements $ 450,000 2024 Concord Exchange Improvements $ 300,000 2024 Marie Ave Reconstruction $ 600,000 2025 Relining of Sanitary Sewer as Part of I/I $ 735,000 Bi-Annually (2026) •   •    •  •   •    Existing Proposed 2023 2024 Base Fee Per Bill 10.50 16.40 Usage Rates Residential/Commercial Per 1,000 gallons 7.68 7.95 Discount Rate Per 1,000 gallons 5.76 5.96 High Volume Per 1,000 gallons 6.99 7.24 Sewer Only Flat Rate 125.57 135.65  Residential Property - 5/8" Meter Senior Discount - 5/8" Meter Multi-Family - 1.5" Meter (48 units) (8,000 gallons/quarter) (3,000 gallons/quarter) (185,000 gallons/quarter) 2023 Quarterly Sewer Bill $ 71.94 $ 27.78 $ 1,431.30 Proposed 2024 Quarterly Sewer Bill $ 80.00 $ 34.28 $ 1,487.15 $ Increase $ 8.06 $ 6.50 $ 55.85 % Increase 11.2% 23.4% 3.9% Commercial Property - 2" Meter Heavy Industry - 6" Meter (45,000 gallons/quarter) (10,000,000 gallons/quarter) 2023 Quarterly Sewer Bill $ 356.10 $ 69,910.50 Proposed 2024 Quarterly Sewer Bill $ 374.15 $ 72,416.40 $ Increase $ 18.05 $ 2,505.90 % Increase 5.1% 3.6% •    •     Collection System Capital Operations Improvements Project Amount Year Financed 7th Ave S Improvements $ 265,000 2024 Concord Exchange Improvements $ 300,000 2024 Marie Ave Reconstruction $ 900,000 2025 12th Avenue Reconstruction $ 200,000 2026 •   •    Existing Proposed 2023 2024 Flat Rates Single and 2-Family Residential 16.34 19.12 Per Acre Rates Multi-Family 90.41 105.78 Commercial 114.51 133.98 Industrial 120.55 141.04 Churches, Private Schools 72.35 84.65 Airport Hangers 120.55 141.04 Vacant Land 24.11 28.21  Residential Property Senior Multi-Family - 2 Acres 2023 Quarterly Storm Bill $ 16.34 $ 16.34 $ 180.82 Proposed 2024 Quarterly Storm Bill $ 19.12 $ 19.12 $ 211.56 $ Increase $ 2.78 $ 2.78 $ 30.74 % Increase 17.0% 17.0% 17.0% Commercial Property - 5 Acres Heavy Industry - 6 Acres 2023 Quarterly Storm Bill $ 572.55 $ 723.30 Proposed 2024 Quarterly Storm Bill $ 669.88 $ 846.26 $ Increase $ 97.33 $ 122.96 % Increase 17.0% 17.0% •   •    Prelim Budget Projected Rate Increases 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Water Fund: 35.85% 16.35% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% Sanitary Sewer Fund: 17.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Storm Sewer Fund: 17.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%  Impact Analysis on Rate Payers Existing Proposed 2023 2024 2025 2026 2027 2028 Sample Quarterly Bill Residential Property - 5/8" Meter Water (15,000 gallons/quarter) $ 63.51 $ 84.98 $ 97.78 $ 99.47 $ 101.19 $ 102.95 Sewer (8,000 gallons/quarter) 71.94 80.00 84.80 89.89 95.28 101.00 Storm Sewer 16.34 19.12 19.69 20.28 20.89 21.52 Total Quarterly Utility Bill $ 151.79 $ 184.10 $ 202.27 $ 209.64 $ 217.36 $ 225.46 $ Increase/(Decrease) $ 32.31 $ 18.17 $ 7.37 $ 7.72 $ 8.10 Commercial Property - 2" Meter Water (45,000 gallons/quarter) $ 182.28 $ 222.34 $ 254.02 $ 258.30 $ 262.67 $ 267.12 Sewer (45,000 gallons/quarter) 356.10 374.15 396.60 420.39 445.62 472.36 Storm Sewer (5 acres) 572.55 669.88 689.98 710.68 732.00 753.96 Total Quarterly Utility Bill $ 1,110.93 $ 1,266.37 $ 1,340.60 $ 1,389.38 $ 1,440.29 $ 1,493.44 $ Increase/(Decrease) $ 155.44 $ 74.23 $ 48.77 $ 50.91 $ 53.15  Impact Analysis on Rate Payers Existing Proposed 2023 2024 2025 2026 2027 2028 Sample Quarterly Bill Senior Discount - 5/8" Meter Water (3,000 gallons/quarter) $ 23.02 $ 32.45 $ 35.89 $ 36.55 $ 37.23 $ 37.92 Sewer (3,000 gallons/quarter) 27.78 34.28 36.34 38.52 40.83 43.28 Storm Sewer 16.34 19.12 19.69 20.28 20.89 21.52 Total Quarterly Utility Bill $ 67.14 $ 85.85 $ 91.92 $ 95.35 $ 98.95 $ 102.72 $ Increase/(Decrease) $ 18.71 $ 6.07 $ 3.44 $ 3.60 $ 3.77 Heavy Industry - 6" Meter Water (10,000,000 gallons/quarter) $ 28,202.28 $ 37,184.34 $ 42,562.77 $ 43,236.03 $ 43,922.75 $ 44,623.21 Sewer (10,000,000 gallons/quarter) 69,910.50 72,416.40 76,761.38 81,367.07 86,249.09 91,424.04 Storm Sewer (6 acres) 723.30 846.26 871.65 897.80 924.73 952.47 Total Quarterly Utility Bill $ 98,836.08 $ 110,447.00 $ 120,195.81 $ 125,500.89 $ 131,096.57 $ 136,999.72 $ Increase/(Decrease) $ 11,610.92 $ 9,748.81 $ 5,305.09 $ 5,595.68 $ 5,903.14  Impact Analysis on Rate Payers Existing Proposed 2023 2024 2025 2026 2027 2028 Sample Quarterly Bill Multi-Family - 1.5" Meter (48 units) Water (185,000 gallons/quarter) $ 622.19 $ 832.44 $ 981.17 $ 997.50 $ 1,014.16 $ 1,031.15 Sewer (185,000 gallons/quarter) 1,431.30 1,487.15 1,576.38 1,670.96 1,771.22 1,877.49 Storm Sewer (2 acres) 180.82 211.56 217.91 224.44 231.18 238.11 Total Quarterly Utility Bill $ 2,234.31 $ 2,531.15 $ 2,775.46 $ 2,892.91 $ 3,016.56 $ 3,146.76 $ Increase/(Decrease) $ 296.84 $ 244.31 $ 117.45 $ 123.65 $ 130.20 •  • • •    A COUNCIL WORKSESSION REPORT DATE: NOVEMBER 27, 2023 2 DEPARTMENT: FINANCE Prepared by: Clara Hilger ADMINISTRATOR: RG AGENDA ITEM: 2023 Third Quarter Financial Report DESIRED MEETING OUTCOMES: Discussion on the 2023 Third Quarter Financial Report OVERVIEW: 2023 Third Quarter Financial Report The third quarter of 2023 is complete and financial results are available. The Finance Director prepared the attached third quarter financial report for Council review. The following items are important to note when reviewing the report: • The Benchmark is roughly 75% and is based on a fluid calendar year of operations. • Many of the variances result from seasonality and not all financial transactions occur evenly throughout the year. Some are one time or periodic activities that do not occur in each quarter. • Investment income is recorded and allocated to the funds on a semi-annual basis. • Large revenue sources (i.e., tax settlements and LGA) are received in July and December, which underscores the importance of a strong fund balance as a tool to avoid General Fund borrowing for operations. Finance has not noted any worrisome variances in the operating funds for the third quarter. There are some corrections that will be made which will not significantly affect the ending balance in any fund. The variances that have occurred are noted in the attached report. There are no proposed budget adjustments for the third quarter. Status of 2022 Financial Audit Findings 2022-001 Wait list at the Senior Housing buildings – City staff has been monitoring the retention and review of the wait list for the Senior Housing Buildings. Since the management of the buildings was taken over by the City in September 2022, the wait list was added to the tenant software and is functioning properly. We do not anticipate that this comment will repeat for 2023. 2022-002 Contract Performance and Payment Bonds – City staff will monitor all contracts in excess of $175,000 for the receipt of the required performance and payment bonds. NEXT STEP: The third quarter financial report will be placed on consent for formal council action at the December 4, 2023 meeting. SOURCE OF FUNDS: N/A  Benchmark 2023 2023 Actual thru 75% Description Original Amended September Percent Budget Budget 2023 of Budget GENERAL OPERATING FUND GENERAL FUND - REVENUES Taxes 12,948,118.00 12,936,168.00 7,152,671.76 55.29% A Fees 1,821,335.00 1,821,335.00 1,432,849.50 78.67% B Intergovernmental 2,354,888.00 2,394,888.00 2,274,897.97 94.99% Charges for Services 1,708,457.00 1,708,457.00 1,357,471.55 79.46% Other Revenues 57,000.00 57,000.00 125,240.94 219.72% C Transfers In/Fund Balance 190,000.00 190,000.00 142,515.00 75.01% Total Revenues 19,079,798.00 19,107,848.00 12,485,646.72 65.34% GENERAL FUND - EXPENDITURES General Government Mayor & Council 171,531.00 171,531.00 119,692.72 69.78% Administration 571,179.00 570,219.00 425,872.86 74.69% Human Resources 263,617.00 272,627.00 189,319.45 69.44% City Attorney 90,000.00 90,000.00 113,639.31 126.27% D City Attorney - Criminal 170,000.00 170,000.00 124,119.72 73.01% E City Clerk 247,761.00 253,508.00 167,736.78 66.17% Information Technology 763,266.00 763,565.00 550,834.10 72.14% Recycling 28,596.00 28,596.00 5,781.52 20.22% F Finance 469,651.00 469,976.00 350,244.16 74.52% Total General Government 2,775,601.00 2,790,022.00 2,047,240.62 73.38% Public Safety Police 7,532,734.00 7,711,216.00 5,215,304.13 67.63% Fire 2,751,031.00 544,043.00 22,752.00 4.18% G Total Public Safety 10,283,765.00 8,255,259.00 5,238,056.13 63.45% Public Works Engineering 574,997.00 674,956.00 480,594.52 71.20% Streets, Alley's and Blvd's 2,082,982.00 2,022,439.00 1,530,185.57 75.66% Buildings 273,246.00 271,535.00 168,896.94 62.20% Parks Facilities and Maintenance 1,269,114.00 1,294,632.00 888,374.92 68.62% Total Public Works 4,200,339.00 4,263,562.00 3,068,051.95 71.96% Community Development Development Services 539,948.00 550,452.00 413,807.50 75.18% Code Enforcement 180,056.00 171,310.00 108,221.13 63.17% Total Community Development 720,004.00 721,762.00 522,028.63 72.33% Leisure Services Parks Administration 304,913.00 287,671.00 206,189.05 71.68% Splash Pool 74,606.00 75,318.00 105,754.14 140.41% H Northview Pool 98,906.00 99,618.00 56,943.21 57.16% H Recreation Programs 271,569.00 244,425.00 197,333.28 80.73% Community Affairs 129,712.00 129,901.00 97,629.61 75.16% Total Leisure Services 879,706.00 836,933.00 663,849.29 79.32% Nondepartmental Contingencies 220,383.00 33,322.00 Transfers out 0.00 2,206,988.00 2,206,988.00 100.00% I Total Nondepartmental 220,383.00 2,240,310.00 2,206,988.00 98.51% Total Expenditures 19,079,798.00 19,107,848.00 13,746,214.62 71.94% Revenues Over (Under) Expenditures 0.00 0.00 (1,260,567.90)  Benchmark 2023 2023 Actual thru 75% Description Original Amended September Percent Budget Budget 2023 of Budget OTHER OPERATING FUNDS LIBRARY FUND Revenues 816,362.00 828,312.00 410,747.22 49.59% A Expenditures 816,362.00 828,312.00 644,220.77 77.78% Revenues Over (Under) Expenditures 0.00 0.00 (233,473.55) DOUG WOOG ARENA Revenues 1,079,500.00 1,079,500.00 879,763.33 81.50% Expenditures 1,045,845.00 1,062,077.00 876,963.81 82.57% Revenues Over (Under) Expenditures 33,655.00 17,423.00 2,799.52 AIRPORT OPERATING FUND Revenues 1,456,142.00 1,456,142.00 1,257,339.30 86.35% J Expenditures 1,501,275.00 1,530,602.00 1,054,640.07 68.90% Revenues Over (Under) Expenditures (45,133.00) (74,460.00) 202,699.23 STORM WATER UTILITY FUND Operating Revenues and Grants 725,920.00 725,920.00 415,674.58 57.26% K Expenditures - Operating 600,724.00 600,724.00 385,546.69 64.18% Transfers - Capital 67,300.00 67,300.00 51,306.00 76.23% Revenues Over (Under) Expenditures 57,896.00 57,896.00 (21,178.11) STREET LIGHT UTILITY FUND Revenues 349,840.00 349,840.00 207,502.24 59.31% K Expenditures 272,952.00 272,952.00 162,753.10 59.63% Revenues Over (Under) Expenditures 76,888.00 76,888.00 44,749.14 WATER AND SEWER UTILITY FUND Revenues Administration 31,000.00 31,000.00 64,756.94 208.89% C Water Utility 10,286,775.00 10,286,775.00 1,713,055.45 16.65% K, O Sewer Utility 4,629,750.00 4,629,750.00 2,808,450.70 60.66% K Total Revenues 14,947,525.00 14,947,525.00 4,586,263.09 30.68% Expenditures Adminsitration 524,389.00 512,811.00 379,874.63 74.08% Water Utility 1,088,147.00 1,097,559.00 961,984.21 87.65% Sewer Utility 4,015,672.00 4,024,878.00 3,223,870.87 80.10% L Total Expenditures 5,628,208.00 5,635,248.00 4,565,729.71 81.02% Transfers Water Utility 110,500.00 110,500.00 85,603.00 77.47% Sewer Utility 174,500.00 174,500.00 135,453.00 77.62% Total Transfers 285,000.00 285,000.00 221,056.00 77.56% Net Income (Loss) 9,034,317.00 9,027,277.00 (200,522.62) CENTRAL GARAGE - INTERNAL SERVICE FUND Revenues 1,664,188.00 1,664,188.00 1,341,025.26 80.58% Expenditures 1,489,151.00 1,498,434.00 920,767.65 61.45% Net Income (Loss) 175,037.00 165,754.00 420,257.61  Benchmark 2023 2023 Actual thru 75% Description Original Amended September Percent Budget Budget 2023 of Budget OTHER OPERATING FUNDS ECONOMIC DEVELOPMENT AUTHORITY Revenues 357,081.00 357,081.00 211,187.24 59.14% A Expenditures 357,081.00 357,081.00 108,285.36 30.33% Revenues Over (Under) Expenditures 0.00 0.00 102,901.88 EDA - HOUSING (HRA LEVY) Revenues 1,088,227.00 1,088,227.00 720,139.00 66.18% A Expenditures 1,088,227.00 1,088,227.00 573,366.64 52.69% Revenues Over (Under) Expenditures 0.00 0.00 146,772.36 HRA - PUBLIC HOUSING Revenues 2,084,500.00 2,084,500.00 784,190.82 37.62% M Operating Expenses 1,863,000.00 1,863,000.00 1,500,172.14 80.52% Capital Expenses 0.00 0.00 114,639.97 100.00% N Net Income (Loss) 221,500.00 221,500.00 (830,621.29) Tickmark Explanations for Budget VS Actual Variances A Taxes will be received in June/July and December/January B 3rd quarter Franchise fees payment is received in October C Interest earnings are posted semi-annually and other minor revenues are unpredictable D Legal service invoices for eight months, legal fees for rental issues in 2023 E Legal service-criminal invoices for eight months F Compost site costs occur May through October; clean up day invoice paid in October G Fire Department invoices to be paid from ARPA funds in 2023 H Pools are only open June through August; re-allocations will be made in November I Transfer of funds that would have paid Fire invoices to Capital Programs Fund recorded in July J Certain revenues come in at the start of the year at the Airport (land leases) K Utility revenues are based on service delivery, bills issued in Jan, Feb, Mar of 2023 are accrued back to the 2022 books as they are for services delivered in 2022. This is an annual occurrence. L Sanitary Sewer has 10 months of MCES charges M Activity from the tenant software has not been updated for 2023 N Capital expenses for Public Housing is not budgeted O Budgeted revenues included State bond money for the water treatment plant A COUNCIL WORKSESSION REPORT DATE: NOVEMBER 27, 2023 3 DEPARTMENT: ENGINEERING Prepared By: Nick Guilliams, City Engineer ADMINISTRATOR: RG AGENDA ITEM: Concord Exchange Improvement Project – Design and Cost Considerations DESIRED OUTCOMES: Council direction regarding the design and construction cost for the Concord Exchange Improvement Project. OVERVIEW: Background At the November 13th City Council Work Session, staff brought forward design considerations for Council input and direction. Council direction was to place concrete in lieu of sod along the boulevard on both sides of the road and to expand parking lanes from 8 feet to 9 feet. Staff has run a new cost estimate with these modifications and the result is a rather substantial increase in construction costs. Factors contributing to this cost increase include the following: • Concrete is significantly more expensive than sod. An additional 6 feet of concrete on each side of the road for the entire length of the 4100-foot corridor adds approximately $400,000 to the project. • Placing concrete in the boulevard in lieu of sod creates additional impervious surface which increases storm runoff. This requires upgrades to storm sewer facilities to handle the additional drainage. Approximately $300,000 in additional storm sewer costs are needed to accommodate this change. • Increasing the parking lane width from 8 feet to 9 feet requires 2 feet of additional road base and pavement. This not only increases the road construction costs by $25,000 but also creates additional storm runoff. Other design changes that have been made since the initial cost estimate was prepared have resulted in approximately $600,000 in additional costs. This is mainly from needed upgrades to the sanitary sewer and watermain systems that were discovered during preliminary design. Concord Exchange Streetscape Improvements – Design and Cost Considerations November 27, 2023 Page 2 of 2 The tables below summarize the construction estimate and how the project will be funded. Concord Exchange Improvement Project City of South St. Paul, MN Opinion of Probable Cost Proposed Improvements Current Estimated Costs Previous Estimated Costs Schedule A - Surface Improvements $4,276,300 $3,427,500 Schedule B - Sanitary Sewer Improvements $612,000 $134,300 Schedule C - Watermain Improvements $185,300 $60,500 Schedule D - Drainage Improvements $891,100 $590,000 Total $5,964,700 $4,212,300 Concord Exchange Improvement Project City of South St. Paul, MN Funding Summary Proposed Funding Source Current Estimated Funding Assessments $691,200 Tax Incremental Financing (TIF) Funds $2,200,000 Municipal State Aid (MSA) Funds $1,000,000 Infrastructure Fund $385,100 Utility Enterprise Funds $1,688,400 Total $5,964,700 ACTION NEEDED Council direction regarding the design and associated cost impacts for the Concord Exchange Improvement Project. A CITY COUNCIL WORKSESSION REPORT DATE: NOVEMBER 27, 2023 4 DEPARTMENT: Community Development-Planning Prepared By: Michael Healy, Planning Manager and Amanda Johnson, City Attorney ADMINISTRATOR: RG AGENDA ITEM: Proposed 463 Action for Hazardous Building at 119 – 10th Avenue South BACKGROUND The property at 119 – 10th Avenue South is a vacant residential home located in South St. Paul (“Property”), owned by Westchester Investments, Inc. (“Owner”). In August of 2020, the property received a siding permit to remove the exterior stucco and install new siding material. Since that time the stucco was removed, but no new siding material has been installed. This means that the exterior sheathing has been exposed to the elements since sometime in 2020. Based on the lack of water usage at the property, it appears the home has not been inhabited since early 2020. The outside gas meters are locked by the gas company and the electrical mast has been removed from the side of the house. The Owner received a warning letter and 6 administrative citations for violating City Code Sections 106-56 (work without a building permit), 106-65 (exceeding time limit for a building permit), and 118-244 (failing to be reasonably maintained). It does not appear that the Owner is going to resolve any of the issues with the Property. On October 26, 2023, the City Building Official, Joe Heimkes, posted the building uninhabitable. Because it does not appear that issuing additional administrative citations will motivate the Owner to resolve the issues with the Property, Staff is suggesting the City pursue a 463 Action against the Property. 463 ACTION The City has statutory authority to require a property owner demolish, raze, and/or remove a hazardous building under Minn. Stat. Ch. 463. The process to pursue an action against a hazardous structure is articulated in Minn. Stat. § 463.15 through Minn. Stat. § 463.251 and is as follows: 1. Official Report. City Staff prepares a report on the status of the structure to present to the City Council, articulating the facts that make the structure or property hazardous. The statute defines “Hazardous building or hazardous property” as “any building or property, which because of inadequate maintenance, dilapidation, physical damage, unsanitary condition or abandonment, constitutes a fire hazard or a hazard to public safety or health.” (Minn. Stat. §463.15, subd. 3) The report includes pictures to support the conclusion. 2. City Council’s Resolution and Order. Based on the Official Report, the City Council then issues a Resolution and Order (“Order”) requiring the owner to repair or remove the hazardous condition(s) or demolish, raze and/or remove the structure. The Order must also provide a reasonable time for the Owner to do so. City Council Worksession Report – Proposed 463 Action for Hazardous Building at 119 – 10th Avenue South November 27, 2023 Page 2 of 5 3. Service of the Order. Once approved by the Council, the Order is served on the owner, any tenants, and all lienholders in the same manner as a civil court action but the Order is not filed with the court yet. The owner or a lienholder has 20 days to serve an Answer specifying any facts in dispute. 4. Default Judgment. If no Answer is served and the owner does not comply with the timeframe in the Order, then the City files the Order with the court and asks the court to enforce the Order as a default judgment. The court typically hears a presentation of the evidence, affirms or modifies the Order, and enters a judgment. 5. Enforcement of Judgment. Sometimes the court’s judgment will give the owner additional time to complete the work required in the City’s Order before allowing the City to do the work and assess. However, often the court will simply recognize that the owner failed to complete the work in the time provided by the City and authorize the City to perform the work and assess the costs as a special assessment against the property following the procedures in Minn. Stat. Ch. 429. 6. Contested Cases. If an Answer is served, then the action must follow the Rules of Civil Procedure, which involves discovery, trial, and a judgment. If the City’s Order is upheld following a trial, the court would enter a judgment and set a time after which the structure must be demolished or repaired, or the hazardous condition removed or corrected. ACTION NEEDED Attached for your review is the November 8, 2023 report from Building Official Joe Heimkes, declaring the building a “hazardous building/structure” and recommending it be removed/demolished. Staff is looking for informal approval from Council to bring the Order and Resolution to the December 11, 2023 Council meeting to begin the 463 Action against 119 – 10th Avenue South. ATTACHMENT A- November 8, 2023 Building Official Report ATTACHMENT A