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IV.3. Minutes of the October 11, 2016 Work Session Proceedings HOPKINS CITY COUNCIL WORK SESSION PROCEEDINGS OCTOBER 11, 2016 CALL TO ORDER Pursuant to due call and notice thereof a regular work session of the Hopkins City Council was held on Tuesday, October 11, 2016 at 6:30 p.m. in the Raspberry Room at City Hall, 1010 First Street South, Hopkins. Mayor Cummings called the meeting to order with Council Member Campbell, Gadd, Halverson and Kuznia attending. Staff present included City Manager Mornson, Hopkins Center for the Arts Executive Director Anderson, Community Development Coordinator Beekman, Finance Director Harkess, Assistant City Manager Lenz and Public Works Director Stadler. RESOURCEWEST In addition to City staff, a representative present for the item was, ResourceWest Executive Director Tarrah Palm. Ms. Palm gave an overview of the services and programs that ResourceWest offers to Hopkins and surrounding communities. Ms. Palm discussed the poverty statistics in the Twin Cities and suburban areas, explaining that 1 out of 10 households live at or below the poverty line. ResourceWest served 472 unduplicated Hopkins households to date. Ms. Palm discussed ResourceWest’s role in the community and collaborations with other agencies. Ms. Palm commented that the co-location with Hennepin County has worked well to best serve clients. Ms. Palm discussed the appointment of members and role of the ResourceWest Board of Directors. City Manager Mornson asked for an overview of the Board of Directors. Ms. Palm commented that the 12-member board meets the last Wednesday of the month requiring a 2-4 hour per month commitment. The City of Minnetonka has decided to meet with ResourceWest for quarterly updates rather than appointing a board member. Ms. Palm explained that ResourceWest wants to continue to maintain a relationship with the City of Hopkins whether with an appointed Board Member or with a good working relationship with city staff. Council Member Gadd asked about the co-location with Hennepin County and housing issues. Ms. Palm commented that staff at ResourceWest and Hennepin County meet regularly and that the shared space assists the clients in getting to needed services. Ms. Palm commented that there is a need for housing for larger families. Council Member Kuznia commented on the importance of collaborations with other organizations. Ms. Palm explained that ResourceWest is working on a Community Needs Assessment to better understand the needs, strengths and weaknesses within the community. Mayor Cummings asked about language needs and board representation. Ms. Palm explained that they continue to best work out ways to communicate with the many different languages and translations. Ms. Palm explained that ResourceWest would like a representative from the City of Hopkins, whether it is an appointed member, staff or community representative. Staff and Council will continue to discuss ways to be supportive of ResourceWest’s critical role in the Hopkins community. HOPKINS CITY COUNCIL WORK SESSION PROCEEDINGS OCTOBER 11, 2016 ART CENTER UPDATE Assistant City Manager Lenz and Hopkins Center for the Arts Executive Director Anderson gave an update on the Hopkins Center for the Arts. Ms. Anderson gave an overview of staff organization, concert season, rentals, marketing and next year’s event planning at the Hopkins Center for the Arts (HCA). Ms. Anderson explained that she is itemizing the upcoming concert programming to compare tickets sold, artist fees and memberships in order to stay competitive with other theatres and keep expenses down. Ms. Anderson discussed the community engagement activities and the visual arts program and explained that staff is working on building the art exhibition program. Ms. Anderson discussed the mission and vision of the Friends of HCA. The Friends board continues to work on strategic development and raising funds. Ms. Anderson provided a breakdown of yearly visitors to HCA and fundraising efforts. HCA has doubled their business sponsorships and will continue to grow the program. Ms. Anderson discussed grants received and explained that staff is researching other grant opportunities. The rd Theatre Seat Campaign has raised $12,000 to date. The 3 Annual Art from the Attic event is scheduled for Saturday, June 17, 2017. Ms. Anderson explained that the new data base system will assist HCA to better track patron participation and statistics. Ms. Anderson commented that HCA revenues are currently at 73% and expenditures at 75% for 2016. Without the needed capital improvements the budget would be close to being balanced for 2016 except for the exciting deficit. Staff is continuing to looking at ways to increase revenues through grants, rentals and fundraising goals. Assistant City Manager Lenz gave an overview of the projected HCA budget and a general outlook of a plan to figure out how to pay off the HCA deficit. Ms. Lenz commented that the goal is to balance the budget, align costs and increase fundraising. Finance Director Harkess discussed the Financial Management Plan, Capital Improvement Plan and the plan to assess the true operating costs at HCA. Council Member Kuznia asked about liquor revenue generated by rentals. Ms. Anderson explained that staff is investigating the option of requiring a percentage of liquor sales. Mayor Cummings asked about the revenue breakdown by concert. Ms. Anderson explained that staff is working on the report of expenses by concert in order to have a breakdown of expenses going forward. Mayor Cummings commented that HCA is a valuable asset to the community but that is important to analyze the concert expenses and not perpetuate further losses. Mayor Cummings asked about the goals for the Director of Development. Ms. Anderson explained that staff is looking at a 3-5 year plan to develop a donor base and increase grant funding. Ms. Anderson explained that HCA has received $94,720 to date in rental income and explained that staff estimates that rental income will be down $10,000 due to the loss of the church rental. Ms. Anderson explained that a portion of the Friends fundraising efforts and budget is transferred to the city budget. Mayor Cummings commented on the large budget steps for 2017 and asked about the basis for the budgeted numbers. Ms. Anderson explained that staff has analyzed the budget numbers and will be itemizing each concert and evaluating the numbers. Assistant City Manager Lenz commented that the fundraising goal is to raise $50,000 through grants or corporate donors. HOPKINS CITY COUNCIL WORK SESSION PROCEEDINGS OCTOBER 11, 2016 Mayor Cummings asked about ticket sales for upcoming concerts. Ms. Anderson commented that the first concert sales are moving slower than anticipated and Ms. Lenz commented that staff will be looking at all expenses associated with the concert to determine costs and that the goal is to increase the amount of grants, leases, rents and fundraising to make up differences in costs. Mayor Cummings asked about fundraising activities. Ms. Anderson commented that staff is evaluating fundraisers to determine that activities are cost effective, looking at building the donor base and corporate sponsorships and increasing the base of the direct appeal program. Mayor Cummings commented that HCA is an amenity to the City of Hopkins but it is critical to look at the operations and reduce the deficit. Mayor Cummings has a business contact who has expertise is art venues, concerts and finances and will discuss this option with staff further. Council Member Campbell commented that she has a background in marketing research. Ms. Anderson commented that staff would like to discuss additional marketing options. Council Member Kuznia asked about the theater seat campaign. Ms. Anderson commented that staff has a guide to the seat locations and a plaque will be installed in the future. City Manager Mornson asked about sponsorship and naming rights. Ms. Anderson commented that staff is working on a plan. Mayor Cummings commented on the importance to work together and recognize the challenges to creatively look at the direction of HCA so staff can plan and vision for the future. Ms. Anderson commented that staff appreciates Council ideas and feedback. City Manager Mornson explained that HCA staff would keep the Council updated at a Work Session twice a year as well as periodic updates. 2017 BUDGET – SPECIAL REVENUE AND ENTERPRISE FUNDS Finance Director Harkess gave an overview of the 2017 Special Revenue and Enterprise Funds.  The Chemical Assessment fund grant revenues cover the expenditures.  The Economic Development fund is budgeted for the maximum levy. The fund is used for developer assistance and includes funding for 25% of the Communications position.  The Parking Fund expenditures will include a rate increase for 2017 and no capital expenditures. Staff is creating a new renewal form for permit sales.  The Communications Fund revenues include an increase to the Franchise Fees and expenditures include technology upgrades in the Council Chambers.  The Depot Coffee House Fund continues to be supported by the City, Three Rivers Park District and the Joint Recreation Department. The coffee operations support the youth project.  Ms. Harkess discussed the Tax Increment Funds and explained that the funds are administered pursuant to the TIF Management Plan as developed by Ehlers, Inc. Ms. Harkess provided an explanation of the TIF district decertification process that is monitored by Ehlers, Inc. Ms. Harkess will update the Council on the value of the TIF districts.  Water Fund tiered rate structure is scheduled to be implemented January 1, 2017. Council HOPKINS CITY COUNCIL WORK SESSION PROCEEDINGS OCTOBER 11, 2016 reviewed the top five highest consumers and the production rate. Staff discussed the marketing and informational notices for residents and businesses regarding the rate increase. Council and staff recognize that there will be an impact to some businesses and the city staff will send a letter to the top users with an explanation and an offer to meet with city staff. Residents will receive notice in the December Hopkins Highlights and new rates will be in effect January 1, 2017. Council consensus was to proceed with the rate increases in order to maintain the city’s water system and fund needed projects. The ordinance change will be on the upcoming City Council agenda.  Sanitary Sewer Fund will be experiencing a 3% fee increase from the Met Council. Ms. Harkess gave an overview of street improvement projects and equipment needs.  No rate increase is proposed for the Storm Sewer Fund. Ms. Harkess gave an overview of the street improvement projects.  Ms. Harkess explained the programs under the Refuse Fund and that staff is investigating organic recycling.  Ms. Harkess gave an overview of the Pavilion Fund revenues, expenditures and the request for additional staffing hours. 2017-2021 CAPITAL IMPROVEMENT PLAN (C.I.P.) Finance Director Harkess gave an overview of the C.I.P. and challenges to the fund. The fund supports improvements at city buildings and the scheduled projects are not sustainable. Council and staff need to decide how to fund the projects going forward. Ms. Harkess explained that Council and staff will need to explore options to reduce the C.I.P by $600,000 or look at other funding sources such as an internal loan. Ms. Harkess explained that staff reevaluates the C.I.P each year. There was Council discussion regarding the scope of the projects, importance of maintaining city facilities and possibly combining projects into one bid. Staff will investigate the possibility of combining projects. Ms. Harkess commented that the scheduled project costs are placeholders and are reevaluated each year. 2017-2021 EQUIPMENT REPLACEMENT PLAN (ERP) Finance Director Harkess gave an overview of the ERP and explained the challenges to the fund. Ms. Harkess explained that the short-term shortfall to the fund could be covered by interim financing as recommended by Ehlers, Inc. Ms. Harkess commented that staff reevaluates the ERP each year and that the proposed levy fits within the FMP. The ERP will be on the Council agenda in November or December and staff will continue to review and adjust the fund. UPDATES  Council Member Halverson showed the new Hopkins American Legion bumper stickers.  Council Member Kuznia gave an update on Interlachen Neighborhood.  Mayor Cummings and some Council Members will be attending the Is White Privilege Real or Imagined discussion on October 24, 6:30 pm at Hopkins Center for the Arts.  Mayor Cummings will attend the School & Community in Partnership (SCIP) Meeting on October 28, 9 am.  Mayor Cummings reminded Council Members to be conscientious regarding social media.  Mayor Cummings will be meeting with Wilkus Architects as part of her continued mission to develop relationships with Hopkins businesses. HOPKINS CITY COUNCIL WORK SESSION PROCEEDINGS OCTOBER 11, 2016  City Manager Mornson discussed Chief Reynolds cake and coffee on Friday, October 14.  City Manager Mornson reminded Council to meet at 4:30 pm on Tuesday, October 18 for the bus tour.  City Manager Mornson updated the Council on the Hopkins Police Officer that was involved in an accident with the squad car.  Captain Johnson will be sworn in as Chief at the October 18 City Council meeting. ADJOURNMENT There being no further business to come before the City Council and upon a motion by Campbell, second by Gadd, the meeting was unanimously adjourned at 9:13 p.m. Respectfully Submitted, Debbie Vold ATTEST: ___________________________ ____________________________ Molly Cummings, Mayor Amy Domeier, City Clerk