City Council - Workshop Meetings

City Council Workshop Meeting Ash Conference Rooms April 30, 2025 | 5:30 PM This City Council Workshop meeting is taking place virtually and at Woodbury City Hall in the Ash Conference Rooms. Members of the public may attend the meeting in person and may also join the meeting using a computer, tablet, or smartphone and accessing the virtual meeting link at woodburymn.gov/VirtualMeetings. Watch the Live Meeting Public comments will be accepted during the meeting both in person and virtually. Virtual questions should be submitted via the online Q&A feature within the virtual meeting link. Questions regarding the meeting will be taken between the hours of 8:00 a.m. to 4:30 p.m. at 651-714-3524 or at council@woodburymn.gov. Questions received after 4:30 p.m. will be responded to in the next three to seven business days. Please note that all agenda times are estimates. 5:00 p.m. Dinner – Birch Conference Room The intent of the workshop session is to provide a forum for City Council and City staff to discuss more in-depth Council items, exchanging viewpoints and visions prior to the item being set for Council action at a regular meeting of the City Council. Workshop sessions are neither a public hearing nor an open microphone session. No formal votes will be taken and any direction from Council will be in consensus format. The workshop session is not recorded. Workshop Agenda 1. Workshop Discussion Items 1A. City Administrator Recruitment and Selection Process - 5:30 p.m. 25-124 1B. Housing Action Plan Update - 6:15 p.m. 25-125 1C. Discussion of 2050 Comprehensive Plan Process; Timing of Opening Sub- 25-126 Phase 2D - 7:00 p.m. 2. Administrator Comments and Updates* - 8:00 p.m. 3. Mayor and City Council Comments and Commission Liaison Updates* - 8:05 p.m. 4. Adjournment - 8:10 p.m.  Woodbury City Council Agenda April 30, 2025 | 5:30 PM  Items under comments and updates are intended to be informational or of brief inquiry. More substantial discussion of matters under comments and updates should be scheduled for a future agenda. The City of Woodbury is subject to Title II of the Americans with Disabilities Act which prohibits discrimination on the basis of disability by public entities. The City is committed to full implementation of the Act to our services, programs, and activities. Information regarding the provision of the Americans with Disabilities Act is available from the City Administrator's office at 651-714-3523. Auxiliary aids for disabled persons are available upon request at least 72 hours in advance of an event. Please call the ADA Coordinator, Clinton P. Gridley at 651-714-3523 (TDD 714- 3568) to make arrangements.  1A City of Woodbury, Minnesota Office of City Administrator Council Workshop Letter 25-124 April 30, 2025 To: The Honorable Mayor and Members of the City Council From: Angela Gorall, Deputy City Administrator Subject: City Administrator Recruitment and Selection Process Summary The Council initiated Woodbury’s City Administrator recruitment process at its November 20, 2024, workshop, followed by the selection of Baker Tilly on January 8, 2025. A recruitment brochure was developed for the position and outreach began at the end of February with the first review of applications beginning on April 7. Baker Tilly is continuing its process of screening candidates. The purpose of this discussion item at the Council’s April 30th workshop is to review and finalize an interview format, identify the finalists for on-site interviews, and confirm dates for the process to be completed. Next steps in the City Administrator selection process include:  May 15: City receives Finalist Report  TBD: In-person interviews with finalists and selection of top candidate  TBD: Baker Tilly assists Council in extending an employment offer  TBD: Council approval of employment agreement  TBD: New City Administrator start date with City Recommendation Staff requests the Council to advise on the following at this meeting: 1) Review and finalize a design for the interview process (see sections below) 2) Determine the (three to five) finalists for on-site interviews 3) Confirm dates for the interview process Interview Process Design Interview processes for department heads and administrators typically use similar formats. However, the City Administrator recruitment should be customized based on Council preferences, ensuring that every facet of the process is meeting the purpose of assisting in decision making. Council Workshop Letter 25-124 April 30, 2025 Page 2 The following matrix of options is provided to assist the Council in making decisions regarding the interview process. Baker Tilly’s recruitment consultant will also be available virtually to respond to any questions regarding “best practices” for similar recruitments he has conducted. Process Option Description 1 Estimated Time Priority Required Council Interview Interview each candidate by 1.0 hour 15 minutes High Council (each candidate) Department Head Interview with all Department 1.0 hour 15 minutes High Interview Panel Heads (each candidate) Community Panel Interview with select community 1.0 hour 15 minutes Moderate members or Advisory Body (each candidate) members Community Tour Tours led by staff (non-department 1.5 – 2.5 hours (all Moderate heads) with 1-2 candidates per tour finalists) End of Day Feedback Planned time for spokesperson for 1.0 hour High Session each process selected to provide feedback to Council Second Council Conduct a follow-up interview to TBD High Interviews answer additional questions. Can be accomplished on another, later date Leadership Performed by third-party TBD Medium Assessment professional evaluation service Staff Panel or Lunch Opportunity to include 5-10 non- 1.0 hour Lower department head staff that regularly interact with the Administrator; Could be a group lunch with limited Q&A Meet & Greet or Non-structured time for informal 1.5 – 2.5 hours (all Lower Social (public) discussions; social/appetizers or a finalists) full meal; invite list would need to be pre-determined Open House (public) Open house format with no 1.5 – 2.0 hours (all Lower planned invite list or formal finalists) presentation. 1 Any process option selected should include a step for those participating or a spokesperson to provide feedback to the City Council. Governance Mode  Generative - Identifying key questions, anticipating future challenges, framing of issues, development of options. Problem-framing. What to pay attention to, what it means, and what to do about it. How does it fit with our mission, vision and values? Fiscal Implications The 2025 Budget includes $40,000 for professional services for this process. Services with David Unmacht have been completed for a total of $5,000. Baker Tilly services have been contracted for $29,500, not including other project and travel expenses for the consultant, as Council Workshop Letter 25-124 April 30, 2025 Page 3 applicable. It is anticipated there will also be expenses related to the final interview phase including, but not limited to, candidate travel reimbursement. Policy Not applicable Public Process The following are public meetings completed to date for the process:  November 20, 2024 Council workshop  December 11, 2024 Council workshop  January 8, 2025 Council meeting  February 12, 2025 Council workshop  April 30, 2025 Council workshop Background City Administrator Clinton Gridley will retire on June 6, 2025 after 21 years of dedicated public service to the City of Woodbury. The City Council is now in progress with the important task of ensuring a smooth transition to a new leader for our City by implementing a recruitment process to support this goal. Written By: Angela Gorall, Deputy City Administrator Art Davis, Director, Baker Tilly Attachment: 1. Recruitment Brochure (for reference) 2. ICMA Recruitment Guideline: Sections 1, 8-11 CITY ADMINISTRATOR WOODBURY, MINNESOTA PUBLIC SECTOR EXECUTIVE RECRUITMENT THE COMMUNITY The City of Woodbury, Minnesota is a thriving, dynamic community located just eight miles east of Saint Paul, offering the perfect blend of urban accessibility and suburban charm. As Minnesota’s eighth-largest City and one of its fastest-growing, Woodbury is home to nearly 80,000 residents and is projected to reach 90,000 by 2040. With a strong local economy, top-rated schools, and extensive park and trail systems, Woodbury continues to be recognized as one of the best places to live, work, and thrive. Woodbury serves as the economic hub of the East Metro, featuring a diverse business landscape that includes major employers in healthcare, high-tech industries, and retail. The City is home to major companies such as 3M, Target.com, HealthPartners, and Fairview’s Woodwinds Hospital, as well as three industrial parks that have seen tremendous growth in recent years. Notable developments include the opening of Kindeva Drug Delivery’s international headquarters and Amazon’s new distribution center. In addition, Woodbury boasts a strong base of small businesses across retail and non-retail sectors, further enhancing its economic vitality. Continued commercial and industrial development is attracting even more businesses to the City. Woodbury is known for its attractive residential neighborhoods, which are connected by more than 180 miles of multi-use trails, and approximately 3,500 acres of parkland with public parks and pathways throughout the City. The City’s location near the St. Croix River Valley provides a beautiful natural setting and year-round recreational opportunities. Woodbury’s vibrant cultural scene features local festivals, community events, and access to the arts, sports, and entertainment attractions of the Twin Cities. Year after year, Woodbury proves itself to be a fantastic place to live, work and thrive. The City Council conducts a community survey every two years, followed by a strategic planning and policy setting retreat to provide priority setting guidance to the staff and community. According to the City’s 2022 Community Survey, 94% of residents rated the quality of life as “Good” or "Excellent” and Woodbury schools are often among top ten lists in the state. Woodbury continues to be a well- educated, stable, and professional community with a growing workforce in the medical and high-tech fields, making it an ideal destination for those seeking a balanced and fulfilling life. THE ORGANIZATION Woodbury’s City Council consists of the Mayor and four Council Members; all are elected at-large and serve four-year, staggered terms. The City Council provides legislative guidance for the City and sets administrative policy. The Council, recognized for its “good governance” and stability, appoints the City Administrator who serves as the City’s chief operating officer responsible for the day-to-day management of the City, its operations, and overall financial administration/condition. The City Council and City Administrator enjoy a strong, positive working relationship. Since its incorporation in 1967, Woodbury has had just three administrators. When fully staffed, the City employs approximately 372 full-time and regular part-time equivalents, plus 150- 200 seasonal employees. Woodbury’s total combined funds budget for FY2025 $139.4 million. Click here to view the City’s 2025 Adopted Annual Budget Woodbury is known for its commitment to community engagement, sustainable development, and high quality of life. The City Council has identified six components that are essential to the success of the community. These are the guiding principles that govern the Council's strategic planning for Woodbury's future. The six components, together with the results the City wishes to achieve, are: • Safety • Quality of Life • Business Climate • Youth Development and Education • City Services • Environmental Stewardship Click here to watch a video about working and living in Woodbury Mission A premier community in which to live, work, and thrive. Vision Woodbury will continue to be a leading community where everyone has the opportunity to thrive. Through professionalism, responsive service and leadership, we will strengthen our tradition of public trust and effective resource management. Values Exceeding Expectations: Professional - Responsive - Leaders THE POSITION The City Administrator serves as the chief administrative officer, overseeing all municipal operations and ensuring the effective delivery of City services. With the upcoming retirement of the current City Administrator after 21 years of dedicated service, this position presents a unique opportunity for a new leader to build on a strong foundation while shaping the City's future. Reporting to the City Council, this position provides strategic leadership, advises on public policy, and directs financial and administrative functions to promote efficiency, transparency, and long-term fiscal health. This role requires a forward-thinking leader committed to collaboration, innovation, and maintaining the City's reputation for excellence in governance and service delivery. Key responsibilities of the position include: • Providing professional guidance to the City Council in policy development, strategic planning, and decision-making. • Managing the day-to-day operations of the City and ensuring that policies and laws are effectively implemented. • Supervising department heads and fostering a high performing, engaged workforce. • Developing and administering the annual budget and capital improvement plan with a focus on fiscal responsibility. • Promoting transparency, accountability, and ethical governance in all City operations. • Cultivating partnerships with regional agencies, community organizations, and business leaders. • Anticipating future community needs and developing long-term strategies to maintain and enhance City services. • Representing the City in negotiations, public meetings, and intergovernmental discussions. • Ensuring open and effective communication with the City Council, staff, and residents. • Assuming other responsibilities as apparent or as delegated by the City Council. EDUCATION AND EXPERIENCE This position requires a master’s degree in public administration or a related field, along with ten (10) years of experience as a City Administrator or Manager, or as an Assistant Administrator or Manager in a similarly sized City. The ideal candidate will have a deep understanding of municipal governance, public administration, and organizational leadership, with a proven track record of managing complex City operations, fostering collaboration, and driving strategic initiatives. CANDIDATE PROFILE The City Council is seeking a highly regarded local government professional with outstanding communication skills to serve as its next City Administrator. The selected candidate will possess comprehensive knowledge of the principles and practices of modern public administration and local government processes, including public finance. The ideal candidate will exhibit strong leadership and organizational skills to set and achieve goals, effectively utilize resources, motivate employees while maintaining a focus on key priorities. The ideal candidate will possess a demonstrated ability to communicate effectively -- both in writing and in public presentations. Candidates should be politically astute, but politically neutral, and able to provide guidance, advice, and counsel in a manner that is impeccably objective and based on facts. An ability to exhibit confidence and sound judgment based on experience in navigating the many complex issues facing local government will be important. A strategic thinker, the next City Administrator will guide the City Council and staff in long-term planning, ensuring alignment with the City's mission, vision, and values -- in a community with high customer-service expectations and demand for government transparency. Above all, the City Administrator must be a decisive, fair, and diplomatic leader who fosters collaboration, respects diverse perspectives, and ensures that the City's goals are achieved effectively and efficiently. CANDIDATE PROFILE continued The next City Administrator will also possess and demonstrate the following attributes, qualities, and abilities to: • Build trust through honest, equitable, transparent, and consistent communication to create a strong and effective working relationship with council members. Respect and understand the importance of clarity in the roles and responsibilities. • Exhibit genuine passion for public service in local government with a core belief in the values of ethics and integrity, transparency, personal leadership, professional accountability, and building and sustaining a strong teambuilding culture. • Provide energetic, self-confident, and mature leadership that values listening, learning, and understanding all viewpoints, while pursuing the best interests of the city, its present and future; will genuinely care for and support the mental and physical well-being of the organization and its employees, and leads by example. • Make decisions with confidence, clarity, and purpose and create expectations for staff that allows for risk- taking, innovation and creativity with the objective being the priority of outcomes, results, and performance; manage a crisis if called upon. • Be a quick study and learner, possess a curious mindset, be an inclusive decision-maker, that prioritizes communication and respect for understanding and valuing generational differences in the workplace; manage conflict in a positive and constructive manner. • Exhibit effective and strong oral and written communication skills, placing an emphasis on connecting with people; Understand the tools and means to connect with residents, partners, and businesses; represent and market the City as a brand ambassador. • Demonstrate visionary and strategic thinking – understanding the broad scope of services and programs provided by a growing and maturing City; be fluent and knowledgeable about the role of technology, municipal policy, programs, and services within all aspects of City government. • Support and embrace the value and importance of diversity and changing demographics (abilities, race, age, religion, socio- economic, etc.) in the organization and community, with a commitment to equity, inclusivity, and creating a safe and welcoming workplace and community for everyone. • Understand, based on experience, the dynamics involved in a growing and developing and redeveloping City and how comprehensive planning, land use and zoning pressures can change, impact and influence the community. • Actively participate in and build collaboration and strong relationships with Washington County, neighboring cities, three local school districts, non-profits, community groups, state and federal legislators, regional entities, and others to strengthen the partnerships and collaborations in mutual areas of interest. • Understand public sector budgeting and financial management, and the ability to probe and assess the variables impacting the City’s budget and finances; utilize financial skills, based on experience, to balance the day-to-day operations with short and long-term capital needs in a lean organization. • Be an authentic approachable leader, earning respect and trust throughout the organization and community; provide a visible presence that is engaged in the community by participating in activities and events. • Understand the value of futuristic thinking; envision how social, economic, and political trends impact the City today and in the future; work in partnership with the City Council and staff to explore creative ways to engage in strategic planning to ensure Woodbury continues as a “Premier City.” • Build on the current strengths of the organization, through succession planning, continuous review and assessment of the City’s pay and classification plan, recruitment and retention efforts, strategic communication, support for employee leadership and professional development throughout the organization. • Lead - based on experience - a dynamic and growing organization with a desire and capacity to assess its strengths and needs, including understanding the nexus of how departments work together to support each other; manage change in a thoughtful and deliberate manner. 2025 – 2028 STRATEGIC INITIATIVES The next City Administrator will be tasked with ensuring that ongoing projects and priorities continue to be advanced in a positive direction. Understanding the status of each, the current and anticipated work of the staff, and the role of many partners in support of these and other projects will be a priority. Water Treatment Plant and Distribution Pipelines Construction and Plan Implementation As of August 2022, the Minnesota Department of Health has issued health advisories on nine of our 19 groundwater wells as a direct result of per- and polyfluoroalkyl substances (PFAS). A temporary treatment facility is currently treating water from six of the affected wells and the City removed the remaining three wells from service. In addition, three additional wells are being treated with standalone treatment at their respective sites. While our drinking water continues to meet state standards and guidelines for PFAS, the well production loss due to PFAS will continue to strain the City's water supply system, particularly during summertime peak demand, until the permanent treatment plant is operational. This strategic initiative will provide the necessary research, detail and information to help the City Council make informed, long-term and strategic decisions regarding the future of our water quality and treatment, as well as the water system's financial sustainability. Safer Community through Culture, Connections & Crime Prevention – Implement Public Safety Plans While overall feelings of safety in our community have fluctuated on recent community surveys, the per capita data shows people and property crime rates in Woodbury have remained level. However, we recognize that the safety of the community and public safety services should be continually evaluated, adjusted and enhanced to meet the changing needs and expectations of the public. That is why, for the next couple of years, we will focus on enhancing crime prevention and education efforts and increasing public safety connections with the community. Throughout the years, the Public Safety Department has evolved in a proactive and forward-thinking manner while providing exceptional public safety services to our community. Council is confident work on this initiative will yield similar results. Bringing the Environmental Stewardship Vision to Life – Plan Advancement Staff began having conversations with community members and the Parks and Natural Resources Commission and found there to be significant community enthusiasm for developing an action plan for environmental stewardship. As a result, the City Council directed staff to explore this topic more as a strategic priority. This effort led to the creation of a comprehensive Environmental Stewardship Plan, which is now in the implementation phase as a multi-year, incremental process. A few items that are included in the action plan include: • Actions the City and community can take to sustain and improve the natural environment. • Specific goals and strategies that support sustainability and resilience into the future. • A prioritization guide that weighs potential to advance mitigation, adaptation and community equity, including related risks and rewards. COMPENSATION AND BENEFITS The starting salary range for this position will be $220,000 - $260,000, depending on the selected candidate’s qualifications and experience. The City provides a competitive wage and benefits compensation package to include employer provision and participation to group medical, dental and life insurance; employee assistance services; short-term and long-term disability insurance; as well as multiple voluntary benefits. All employees working thirty (30) hours or more per week (average) and their dependents are eligible for insurance benefits on the first of the month following date of hire. Eligible dependents include legal spouse and dependent children, up to age 26 for medical and dental insurance. Click here to view the full benefits package. The City Administrator is not required to reside within the City of Woodbury. Relocation cost reimbursement will be negotiated on a case-by-case basis. APPLICATION AND SELECTION PROCESS Qualified candidates please submit your cover letter and resume online at: www.governmentjobs.com/careers/bakertilly This position is open until filled; however, interested applicants are strongly encouraged to apply no later than Monday, April 7, 2025. For more information, please email Art.Davis@bakertilly.com or call 816-868-7042. For more information about the City of Woodbury, please visit: https://www.woodburymn.gov/. The City of Woodbury is an Equal Opportunity Employer (EOE) and is committed to a diverse workforce 5440 West 110th Street | Overland Park, KS | 816-333-7200 | bakertilly.com  1B City of Woodbury, Minnesota Office of the City Administrator Council Workshop Letter 25-125 April 30, 2025 To: The Honorable Mayor and Members of the City Council From: Clinton P. Gridley, City Administrator Subject: Housing Action Plan Update Summary In 2024, Council directed staff to develop recommendations for how the City should allocate its Local Affordable Housing Aid (LAHA) based on service gaps that exist and community needs. Additionally, Council expressed concerns regarding the sustainability of the HRA’s First-Time Homeownership Program and directed staff to reevaluate the program and provide policy recommendations to ensure long term sustainability of the HRA and its programs. During this workshop staff will present recommendations for the use of LAHA and potential changes to the HRA’s First-Time Homeownership Program. The recommendations are based on input from Council to date, staff research, and consultation with the Washington County Community Development Agency (CDA). Staff believe the recommendations will address Council’s concerns and requests in the following ways:  Address service gaps and unmet community needs  Efficiently use HRA funds to assist more households  Improve long term sustainability of HRA programming  Reduce reliance on the HRA fund balance as a revenue source  Incorporate LAHA into the City’s affordable housing strategy  Establish a funding level which meets state law requirements for LAHA related to supplementing versus supplanting. Recommendation Staff recommends the Council approve the following actions: 1. Adjust assistance levels of the HRA First-Time Homeownership loan t0 3.5 percent of the purchase price.1 2. Pause the home improvement loan program. 3. Appropriate up to $300,000 of LAHA to the HRA’s First-Time Homeownership Program and continue to dedicate the $250,000 HRA Levy to the HRA’s First-Time 1 The minimum down payment required to qualify for a conventional mortgage is typically 3% and 3.5% for an FHA mortgage. Council Workshop Letter 25-125 April 30, 2025 Page 2 Homeownership Program, to comply with LAHA funding requirements, for an annual loan disbursement budget of $550,000. 4. Appropriate loan principal repayment and interest revenues to cover loan administration and HRA expenditures not eligible for LAHA funding. 5. Enter into a contract with CDA to provide HRA loan underwriting services. 6. Direct staff to begin the development of policies and procedures regarding land banking and development assistance and to provide a progress update at the July 16, 2025 Council Workshop. Governance Mode Generative (identifying key questions, anticipating future challenges, framing of issues, development of options). Fiscal Implications This workshop item will not have any specific fiscal implications but may lead to policy conversations regarding HRA fund balance (Fund 295), the HRA property tax levy, Local Affordable Housing Aid (Fund 296), and the role and nature of city investments in affordable housing. Policy 2021 Housing Action Plan 2040 Comprehensive Plan Public Process April 14, 2021 – Council adopts 2021 Housing Action Plan March 13, 2024 – Council Workshop 2021 Housing Action Plan Update August 28, 2024 – Council Workshop 2021 Housing Action Plan Update November 11, 2024 – Council Workshop HRA Budget April 30, 2025 – Council Workshop 2021 Housing Action Plan Update Background HRA First-Time Homeownership Program Sustainability (Recommendation 1) Staff’s recommendation to adjust the maximum loan amount to 3.5 percent of the purchase price is based on research of other down payment assistance programs and what makes financial sense for the HRA. Most down payment assistance programs utilize a percentage of the purchase price to cap loan amounts. This practice provides a strategic focus on the mission of down payment assistance, which is to remove the largest barrier to homeownership for low-to- moderate income households, which is the ability to provide the minimum required down payment. Under the current program guidelines, Most loan recipients, are opting for the maximum loan amount (currently set at $30,000) regardless of their purchase price, which means buyers are taking on more debt than needed for their down payment and trading off Council Workshop Letter 25-125 April 30, 2025 Page 3 home equity for lower mortgage payments. The $30,000 amount has been determined to not be sustainable for the funding levels of the HRA. Furthermore, staff recommend a cap of 3.5 percent of the purchase price because it is the minimum down payment required for an FHA mortgage. Adjusting the maximum loan amount for the program will have trade-offs, which are stated in the Pros and Cons table below. This more targeted approach to lending will also have financial benefits such as the ability to assist a much higher number of households without the need for budget adjustments or utilizing the HRA fund balance. The table below illustrates the potential number of loans that could be issued at a 3.5 percent cap based on 2024’s average home purchase price of HRA buyers, compared to the current loan program. In most years, the HRA realistically would not issue 51 loans, and unused funds would be returned to the fund balance or allocated to another project. Sustainable Program Budgeting (Recommendations 2 and 3) Furthermore, staff will be recommending establishing an HRA budget as described in the table below. Implementing the loan cap of 3.5 percent and appropriating revenues, as shown in the table, will ensure annual HRA revenues are aligned with expenditures and the need to rely on the fund balance in high activity years, as has been the case historically, will be reduced. The HRA levy in combination with interest/principal payments and LAHA funds will ensure operations of the HRA are fully funded without pauses or reduction in service. It is important to note that many down payment assistance programs offered by other agencies annually run out of funds. The recommended funding approach was designed to ensure the revised loan program will have sufficient funding to the meet the annual assistance needs of low-to-moderate-income homebuyers. Council Workshop Letter 25-125 April 30, 2025 Page 4 The chart below is an updated five-year HRA fund balance projection based on the funding and program changes recommended by staff. Staff anticipate the fund balance will grow by approximately $285,000 from 2025 through 2029, compared to fully exhausting the fund by 2028 if HRA expenditures and programming go unchanged. Furthermore, 2024 loan principal revenues ended the year higher than anticipated. The ten-year average for loan principal revenue is approximately $285,000 while interest payments have averaged $80,500 in the past five years. Historically, HRA principal revenues benefit from low or decreasing mortgage interest rates, and during periods of higher rates revenues still come in as projected in the budget, which is typically estimated at $200,000 annually. HRA First-Time Homebuyer Program Overhead Cost (Recommendation 4) In addition to balancing HRA revenues with expenditures, staff also explored options to reduce administrative overhead costs associated with the loan program. Staff approached the CDA with a partnership opportunity in which the CDA could leverage its current staff who provide Council Workshop Letter 25-125 April 30, 2025 Page 5 underwriting for existing CDA programs, to provide underwriting for the HRA’s loan program. Partnering with the CDA will also allow HRA first-generation buyers to easily access the CDA’s first-generation homebuyer grant of $5,000. The CDA provided a quote to underwrite the HRA’s loans at half the cost of the HRA’s current contractor. The cost quoted would mean the HRA could issue 46 loans for less than the current cost to issue 26 loans. Additionally, the HRA can maintain its conservative underwriting practices, even at the lower price point offered by the CDA. First-Time Homebuyer Program Service Gap In addition to the HRA’s program, there are currently four primary down payment assistance programs available to households purchasing a home in Woodbury. However, these programs tend to target low-income or first-generation buyers, as shown in the table below. Based on income alone, approximately 52 percent of buyers served by the HRA’s existing program between 2022 and 2024 were not eligible for MHFA’s Start Up assistance program. Additionally, one of the two new State funded first-generation programs has exhausted its one- time appropriation, and 69 percent of the HRA’s buyers between 2023 and 2024 were not eligible for the second State funded program. It is also unknown whether the State’s new first- generation programs will continue to be funded in the future. The CDA created a new first- generation homebuyer grant utilizing some of its LAHA revenue. To qualify for the grant, a homebuyer must be utilizing a first-generation assistance program administered by an approved partner agency. The CDA has planned to prioritize the creation and preservation of rental housing for its LAHA revenue, and as such, direct assistance for homeownership is limited. The conclusion that can be drawn from researching available programs is that a Woodbury specific service gap exists for moderate-income households earning between 80 and 120 percent of area median income, and but-for the HRA’s program, many households in this income range would not have access to assistance. Moderate-income households typically have the monthly income to afford a mortgage payment, but face challenges achieving homeownership due to not being able to adequately save enough for a down payment to qualify for a mortgage. The challenge of saving has been exacerbated by quickly increasing home prices and general cost of living expenses, including rental rates. Households in this income range typically need a lower level of assistance to access homeownership, and do not require much higher levels of Council Workshop Letter 25-125 April 30, 2025 Page 6 assistance, beyond the minimum down payment, to make ownership affordable long term. Therefore, staff believes moderate-income households should be the target population of the HRA’s homeownership program and the recommended program changes will still adequately serve these households. LAHA Land Banking (Recommendation 5) In addition to expanding the HRA’s existing programs, land banking was introduced as a policy to pursue via LAHA funding. Land banking is the acquisition and holding of land to guide for future affordable housing development. The cost of the land can be utilized as a subsidy to a developer in exchange for affordability and other conditions or could serve as a revenue stream for the HRA depending on future goals. Land banking has been financially difficult to achieve previously due to its high cost and the limited resources of the HRA. Staff recommend pursuing this policy with LAHA funds for the following reasons:  Land banking is identified as a potential tool to facilitate the development of affordable housing in the Housing Action Plan  Funds can be leveraged in partnership with the CDA to achieve land acquisition goals  The City can exercise local control for future affordable housing projects and prioritize projects that best meet the community’s needs (i.e. affordability level, family or senior, etc.)  Consistent with the City’s growth and planning strategies and will provide transparent future locations of affordable projects in advance of market rate investments LAHA Development Assistance (Recommendation 5) Development assistance can come in many forms to facilitate the development of affordable housing by closing financing gaps with tools such as fee waivers, grants and loans. The City has a long history of aiding projects including providing capital via loans. However, the funds historically used by the City to provide capital have typically been grant funds awarded to the City. Grant funds are highly competitive and are not reliable solutions for funding gaps. Additionally, grants come with requirements that can add costs to projects or prioritize projects not aligned with the City’s housing needs or goals. The City has also greatly benefited from the Difficult Development Area (DDA) designation of the 55129 zip code. The designation has been successfully utilized by the City’s four most recent affordable housing projects (Meadow’s at Prairie Ridge, Reserve at Settlers Ridge, Orville Commons and Legends of Woodbury). As the City learned in 2023, this designation can be removed which will increase financial gaps and challenges for future projects. Almost all affordable housing developments have a financing gap, even after securing tax- exempt bonding, tax credits and private equity, and there is almost always an ask for local assistance. According to the CDA, their average gap financing award through their GROW program is $483,000, while gap financing sources other than GROW for projects have averaged $2.1 million. So even with GROW funds available for projects in the City, there are still sizable gaps to fill, which are only expected to increase as costs continue to rise. Staff recommend the City establish development assistance as a policy within the Housing Action Plan and a comprehensive separate policy and procedures manual to clearly identify the scenarios in which local development assistance would be provided and the amount and form of Council Workshop Letter 25-125 April 30, 2025 Page 7 assistance based on the project. Direct capital assistance utilizing LAHA revenue should be funding of the last resort for projects that have exhausted all other avenues for financing. The City has experience structuring loans to assist affordable developments (Orville Commons, Glen at Valley Creek, Reserve at Settlers Ridge, etc.) and can leverage its partnership with the CDA to determine the appropriate amount of assistance for projects they are reviewing for the receipt of tax credits or GROW funds. Workshop Questionnaire Results Attached to this workshop letter are the results from the questionnaire that was circulated to all Councilmembers prior to the workshop. Written By: Jamie Fritts, Housing and Economic Development Coordinator Approved Through: Eric Searles, Assistant Community Development Director/City Planner Janelle Schmitz, Community Development Director Attachment: Housing Workshop Questionnaire Results Workshop Questionnaire Results  1C City of Woodbury, Minnesota Office of City Administrator Council Workshop Letter 25-126 April 30, 2025 To: The Honorable Mayor and Members of the City Council From: Clinton P. Gridley, City Administrator Subject: Discussion of 2050 Comprehensive Plan Process; Timing of Opening Sub- Phase 2D Summary Woodbury, along with all other cities in the metropolitan area, is required to update its Comprehensive Plan by the end of 2028 based on the anticipated release of Systems Statements from the Metropolitan Council in September of 2025. Cities are required to have Comprehensive Plans approved within three (3) years of the issuance of final System Statements, and the updated comprehensive plan will guide development and infrastructure planning within the City through the year 2050. At the workshop, staff will present an overview of the Comprehensive Plan process and request Council direction related to an advisory task force structure. Discussions will also be held related to the completion of a master plan for the properties located near Cottage Grove Drive and Dale Road in advance of opening Sub-Phase 2D for development to facilitate construction starting in Spring of 2026. Recommendation 1. City Council feedback on the desired advisory task force structure. 2. Authorize staff to begin the Cottage Grove Drive and Dale Road (Sub-Phase 2D) Master Plan. Governance Mode Generative - Identifying key questions, anticipating future challenges, framing of issues, development of options. Problem-framing. What to pay attention to, what it means, and what to do about it. How does it fit with our mission, vision and values? Fiscal Implications The 2024 Budget allocated funds to complete master plans, which were carried forward into the 2025 Budget. As part of the 2026 Budget, staff will be proposing the first of an anticipated three-year budget allocation for consultant support to complete the 2050 Comprehensive Plan. Council Workshop Letter 25-126 April 30, 2025 Page 2 Policy State Statutes 2040 Comprehensive Plan CD- COMDEV- 3.1- Phase 2 Growth Management Strategy Public Process This is the first public process for these items. Background 2050 Comprehensive Plan The 2050 Comprehensive Plan process is anticipated to be different from previously adopted comprehensive plans due to the significant proactive planning that the City has completed or plans to complete across many of the required plan elements. It is anticipated that the 2050 Comprehensive Plan will continue to focus on the following categories:  Land Use;  Transportation;  Water Resources;  Parks and Trails;  Housing;  Resilience;  Economic Competitiveness; and  Implementation The categories above are anticipated to be significantly informed by existing or soon to be completed policy work completed by the City outside of the Comprehensive Plan process. Some of these impactful policy projects include:  Bicycle and Pedestrian Plan;  Environmental Stewardship Plan;  Long Range Park Plan (Future);  South of Dale Master Plan;  Natural Resource Management Plan;  Future Development Environmental Planning Study (ongoing);  2025 Housing Action Plan Update (ongoing); and  Drinking Water Strategic Initiatives Due to the volume of policy work that has been completed within the plans and studies listed above, it is anticipated that the 2050 Comprehensive Plan will shift from a document that establishes policy to a document that brings previous policy direction identified within the stand-alone documents under a single transparent plan. The 2050 Comprehensive Plan will also leverage the previous planning and policy work to inform the future infrastructure and land use needs of the community. Council Workshop Letter 25-126 April 30, 2025 Page 3 For past comprehensive plans, the City Council has appointed an approximately 15-member citizen advisory task force to assist with the updating of the City’s comprehensive plan. The task force has historically consisted of members of the Planning Commission, Economic Development Commission, Park and Natural Resources Commission, Woodbury Chamber of Commerce, school districts representatives, Council liaison, and included several residents at large. It is recommended that the City Council continue with a similar approach and appoint the 2050 Comprehensive Plan Task Force at their annual commission appointment process later in 2025. Timing of Opening Sub-Phase 2D In July of 2023, the City Council approved changes to the Phase 2 Growth Management Strategy (CD- COMDEV- 3.1) that delayed the start of development in some areas of the city until the permanent water treatment plant was closer to completion. As Council is well aware, the water treatment project is under construction and remains on schedule for a 2028 opening. Due to this information and the status of the existing lot inventory, staff is recommending the completion of a master plan be completed for the Cottage Grove Drive and Dale Road area of the city to position the opening of Sub-Phase 2D for grading and utility construction activities beginning in the Spring of 2026. Development has occurred on multiple parcels within Phase 2 to provide the inventory of lots for home construction in 2025 and 2026. However, upon review of the number of existing available lots and lots available in future phases of existing preliminary platted projects, the City will not meet the annual growth demand for the City for the years 2026 and beyond unless additional lot inventory is created. The 2040 Comprehensive Plan identifies an annual growth rate of 400 housing units per year for Phase 2 . Since the opening of Phase 2 in 2012, the City has averaged 345 units of housing per year across the various sub-phases of Phase 2. As of the beginning of April, the lot inventory report showed there were 409 units of inventory existing with approximately 110 additional units in the development pipeline for 2026 for a total of roughly 520 units. In comparison, Metrostudy, an independent leading housing data and research firm, considers a three-year lot inventory as healthy for developing city. The lower lot inventory for 2025 and 2026 was an anticipated outcome from the growth management decisions made in 2023 and lot inventory levels can be increased for 2027 housing construction if grading and utility work begin in early 2026. In most cases, limited home building occurs in the first year of construction and full home construction activity is generally not seen for at least a year after construction begins. When evaluating impacts to water infrastructure, it is appropriate to assume 6 months for home construction. Therefore, if development in Sub-Phase 2D begins grading activity in the early part of 2026, we would not anticipate any meaningful impacts to water consumption until after the 2027 summer peak water demand season. With the expected completion of the permanent water treatment facility in 2028, authorizing staff to proceed with the master planning of Sub-Phase 2D at this time, would be consistent with the spirit and intent of the changes that Council made in 2023 to the Phase 2 Growth Management Strategy to postpone the opening of Sub-Phase 2D until the water treatment plan is closer to completion. Written By: Eric Searles, Assistant Community Development Director/City Planner Approved Through: Janelle Schmitz, Community Development Director Attachment: None