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08-12-03 WSAugust 12, 2003 Page 1 MINUTES CITY COUNCIL WORK SESSION -August 12, 2003 A work session of the Hopkins City Council was called to order by Mayor Gene Maxwell at 6:30 p.m. on August 12, 2003, at the City Hall. Council members Brausen, Jensen, Johnson and Rowan were present. City personnel present were: City Manager Steve Mielke, Public Works Director Steve Stadler, Finance Director Lori Yager, Police Chief Craig Reid, Assistant to the City Manager Steve Stahmer, and Depot Director Kathleen Taber. Also present were David Chase of Kraus-Anderson and Fran and Herb Hesch. Award Bid Package # 4 Mr. Stadler said bids had been opened August 6. While the estimated cost had been 2.4 million dollars, the total cost now will be 2.9 million dollars, which includes construction management costs, steel and landscaping that are not in the bid total of $2,525.360.00. While no bids were received for the structural steel and landscaping, he is comfortable they will be in the estimated amounts. Mr. Chase said the electrical bid was the one which overran the estimate the most, largely due to generator costs being higher than anticipated; he feels, however, that rebidding it would result in higher bids being submitted. He said the police renovation turned out to be more complex than anticipated, and the necessary phased construction also contributed to -- - overrun figures. Answering Mr. Brausen, he said the doors simply were higher than anticipated and that the tiling ran over because they had not estimated enough tile. He answered Mayor Maxwell's question about using old doors by saying it was possible, but he did not recommend it. Mr. Stadler said he felt he had a company interested in the steel who hadn't been able to meet bid deadline; this might be able to be handled by a change order. The landscaping was too small to interest the major companies. Mayor Maxwell suggesting going through Kraus-Anderson for this; Mr. Chase will check this out. . Mr. Mielke said normally the city doesn't charge inspection fees for its building projects; this could probably be done here; also credits are available for WAC and SAC. Mr. Stadler said he will meet Wednesday about the police security system, which he feels will be under $100,000. Mayor Maxwell asked about construction scheduling. Mr. Stadler said phase 1 would start September 2; this is the courtyard underground work. Phase 2 will start in February 2004. Phase 3 will start in July 2004. Mr. Mielke said the fact bids for the fire department and public works facilities were under estimates and the police station is over has created a need for different financing as the monies from the separate bonds cannot be interchanged. The current idea is to internally borrow for the needed additional money for the police facility. The fire station/public works bonds could be refunded early and capital notes used for the police station. Mayor Maxwell asked that the possibility of leasing the fire station back to the fire department from the police department during construction be looked into. Mr. Chase updated the Council on progress on the fire department building. Mr. Brausen moved adoption of Resolution 2003-070, as revised, resolution for award of bids, City Facilities improvement project bid package #4, Police Station Renovation. Ms. Johnson August 12, 2003 Page 2 seconded. Approved 5-0. Chief Reid announced his department has been awarded a grant of $169,000.00, which will pay half the cost of the mobile and portable casts. Only 8 awards were given in the entire metro area. There are still a couple grant applications in process. Depot Finances Mr. Stahmer said that through July the Depot/Teen Center has a $6,771 positive fund balance. The profit is due to the grant money income and the school district lease money. The Depot has received about $76,000 in grants and several thousand dollars in donations for police presence on event nights. For 2004 it has already been awarded grants for $60,000 ($10,000 from the McKnight Foundation and $50,000 Title V JJAC). Mr. Hesch then presented the "cash in, cash out" finances of the Depot Coffeehouse, as contrasted to Mr. Stahmer's accrual figures. He explained half of Ms. Tabor's salary is charged to the Coffeehouse and half to the Center. In his system the Coffeehouse is not credited with any grant money so that a clear picture of actual income/ expenses can be seen. His figures show the Coffeehouse regularly loses money, but he feels it is possible for it to turn a modest profit. However, it will never, in his opinion, support the Teen Center as was originally hoped, as he feels $1000-2000 per month is all the Coffeehouse could make, and the Center costs $3000-$4000 per month. While Hopkins will not need to subsidize the Center in the near future, due to the ------ grants and school lease, now is the time, he feels, to start deciding how important the Center is to Hopkins and planning what to do if grants do not keep coming in. A general discussion was held on the salary/responsibilities of the manager. Mr. Brausen said the discussion is particularly important now because people have asked him why the city subsidizes the Coffeehouse when it is faced with so many budget cuts. Ms. Hesch said she and Herb had felt it was very important the finance set-up for the Coffeehouse be done by volunteer work rather than Ms. Yager or her staff for that reason. She stressed now was the time to evaluate the programs and find solutions for the future if grant money disappears. Mr. Mielke said the Depot was started for social values; first efforts to run it like a business, such as advertising, were criticized. He feels the school using it for educational purposes is helping. The key is "What is its mission -business or facility?" Mr. Hesch said the Taxpayers League of Minnesota featuring the Depot in their tax issue ads will put focus on the Depot. Ms. Tabor explained some of her recommendations for the Coffee House: she will be behind the counter more herself and cut flex time benefit; the part-time position will be eliminated. She would like to see pizza added; this can be done without financial risk as the oven would be paid for based on pizza sales. Several Council members said they would like to discuss the police cost. Ms. Taber said she felt cost was not the only issue in comparing it to security guards; she feels teens and the police are getting to know each other personally, which is a community asset. Mr. Stahmer said this also involves the JJAC grant. General Consensus: Further discussion needs to be held. Mr. Hesch will update the Council in October. August 12, 2003 Page 3 Discussion, 2004 Budget Mr. Mielke said he feels he is "90% there" with a proposal for 2004. He has tried to do a 50% cuts/50 % added revenue proposal. He does not like some of his own cuts and knows the Council will want to suggest or substitute others. He briefly summarized the various departments. He added eliminating police dispatch is physically impossible for 2004, even if desired. Ms. Jensen and Ms. Johnson were concerned the "thank you" events were being cut; Mr. Mielke noted the police reserve banquet was still in the budget. Public Works cuts involve total reorganization, from 7 to 5 divisions and with 2 superintendent positions eliminated and 3 less workers. General Consensus. Ms. Jensen and Mr. Rowan asked it be made clear that the one less policeman is an absence for a year of a present policeman, not a "cut position. " Ms. Johnson and Mr. Brausen suggested the Park Board be brought in on the cutting back of ice rinks. Ms. Yager explained the levy limit issue. The state would allow a $661,000 levy increase. Council must vote on this in September. The limit voted in need not be implemented; a lower levy could be actually passed when the budget is finished. However, history shows any levy power not used is probably never going to be available again. The Council would need to pass an 8.5 % levy increase just to cover facilities and HRA. Mr. Brausen said he finds the issue extremely difficult as he feels the Council promised they would look into making cuts when the levy for the facilities ----- was passed. Ms. Jensen noted people have told her they would prefer a franchise fee to a higher levy increase. Mayor Maxwell added they prefer a straight fee rather than a percentage fee. Mr. Mielke summarized the possibilities by saying as things are there is an 8.5 % levy increase and no franchise fee. The maximum could be a 17.5% levy increase and $10 per meter franchise fee. His proposal is that there be a 12.7% levy increase and a $2 per meter franchise fee. He added the $2 was a residence fee; commercial and industrial users would pay more, with the heaviest industrial being $25. Ms. Yager said the franchise fee issue must be settled soon as in September Minnegasco must inform their "no surprise" contract holders about any such fees. Mayor Maxwell asked if franchise fees could be applied to water bills; Ms. Yager said no as franchise fees are for use of right-of--way and the city can't charge to use its own right-of--way. Mr. Rowan said the projections show a decreasing fund balance each year; he feels more revenues must be generated now. Ms. Yager noted the 2003 figures show a $10,000 positive net rather than the huge deficit the city started with. Salary/benefit expenses were discussed generally. Mr. Brausen said he would still like discussion on furloughs, closing 2:00-4:00 on Fridays, selling parkland. He added people are asking why Hopkins needs an Assistant City Manager and Assistant to City Manager; Mr. Mielke agreed Mr. Stahmer's job needs to be re-named as he works in a different capacity now . General Consensus. The levy limit should be at its highest level for the vote in September to allow Council the latitude necessary to figure the best city budget. The next three work sessions should be devoted to budget; one of these should include past elected officials. August 12, 2003 Page 4 Other Ms. Jensen noted she will not be here Sept. 9. Mr. Mielke said staff feels Buffer Park is possible to sell for $500,000 for residential development. Mr. Mielke announced Luther Honda has bought Knox property. They have approached the city as what they need to do to be able to move the business there. They seem to be supportive of doing redevelopment on their Mainstreet property if they can get the rezoning necessary to move. He cautioned that rezoning to B3 must be done carefully because of future developments. A PUD agreement may be an option. . Mr. Brausen moved adjournment. Ms. Johnson seconded. Meeting adjourned at 10:55 p.m. Kasey Kester, Secretary COUNCIL MEMBERS: ATTEST ,~ Euge ' J. IV~`xwell, Mayor ~,