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08-26-2008 WSAugust 26, 2008 Page 1 MINUTES OF THE CITY COUNCIL WORK SESSION Tuesday, August 26, 2008 Mayor Maxwell called the meeting to order at 6:00 pm at the L.A. Fitness property in Hopkins. The City Council received a tour of the L.A. Fitness property. Present were Mayor Maxwell and Council members Halverson, Brausen, Youakim and Rowan. City personnel present were City Manager Riclc Getschow, Fire Chief Dale Specken, Finance Director Christine Harlcess and Ron Mehl, Bill Beard and the Beard Group. The meeting resumed at City Hall at 6:50 p.m. Marketplace and Main Project: Ron Mehl and Bill Beard of the Beard Group provided an update on the Marketplace and Main project. Their reservations are holding around 12 or 13, however, when talking to their lenders the previous 50% pre-sale commitment may have risen to 80%. This is an indication of their lenders being reluctant to fund mixed use condominium projects at this time. However, if they due reach 50% pre-sales they may go to other lenders or press their lenders on beginning construction on this project. The Council then discussed the development agreement with the Beard Group which had several deadlines occurring in August and into the fall. Council and staff felt that there needed to be some flexibility in these deadlines and the development agreement may need to come back for revision extending some of the deadlines and providing some flexibility to the developer. Some of that flexibility includes potentially starting on Phase II, which was the townhome portion before Phase I, which was the mixed use condominium development. The Beard Group discussed potentially starting the townhomes first before building the main condominium/retail buildings. Council and staff felt that this would be a positive step and would show progress in the project on Mainstreet. There was also discussion about the grants that are part of this project. Extensions may be needed on the grants for this project to occur, however, if there is work done on the townhouse project and demolition occurs on the condo site, the grants could be utilized yet in 2008. The Beard Group discussed their increased marketing efforts and potential changes that may be made to the plan based on the market demand for the types of units that people may want to purchase. Council consensus was for staff to work with the Beard Group on revising the redevelopment agreement to come back to an HRA meeting at a later date. Equipment Replacement Plan: The Council discussed the Equipment Replacement Plan which is scheduled for approval at the September 2nd City Council Meeting. Fire Chief, Dale Specken attended the meeting to answer questions in the Equipment Replacement Plan related to the Fire Department. There are three issues involved: 1. Duty Chief Vehicle 2. Replacement of other equipment 3. Fitness Center equipment replacement August 26, 2008 Page 2 Specken answered Council question and the staff will move ahead for ERP approval on September 2"d meeting. 2009 Budget: Finance Director Harlcess provided the Council with information about the levy, the budget itself, savings and efficiences that the staff and Council have worked on to lower the budget and also unfunded mandates that the City must work under. The staff will provide education to the community on the savings and efficiencies and unfunded mandates portion of the budget. The staff is proposed to move ahead to the September 2nd City Council meeting with a preliminary tax levy of 3.9%. The Finance Director has spent a lot of time with City staff working to trim the budget to get to 3.9% tax levy. She discussed all of the factors that led to an increase in the general fund budget for 2009, which include payroll, health insurance benefits and the cost of fuel. Council consensus was to move ahead with the 3.9% preliminary levy increase and to set atruth-in-taxation hearing for Monday, December 8. Council also discussed the need to educate the community on the factors on the budget increase and the levy increase. The Finance Director stated that based on the current information that she has on tax capacity, a 3.9% levy increase equates to a 1.9% tax rate increase. Therefore, with a small exception of a few properties, this means that property with lower values will see lower taxes and a higher property valuation would mean an increase in taxes. Council also discussed the need going forward in these tough economic times to evaluate all City services/programs moving forward if the budget situation gets to be more difficult in future years. Other: • City Manager Getschow provided an update on the Blake Rd. corridor meeting that had occurred Monday evening regarding the creation of the small area plan and the LRT station proposed for that area. Council member Rowan stated that there seems to be a lot of train switching activity in his neighborhood. • City Manager Getschow discussed the Excelsior Crossing Project. The second and third building will be constructed at the same time from now into 2009. Opus and Cargill has approached the City stating that this creates problems with the first building employees having proper access to their building from Excelsior Boulevard. They would like to talk with staff and the Council about a proper plan for employees to get to the current building that is constructed in the midst of all the construction. August 26, 2008 Page 3 There being no further business, a motion was made by Brausen, seconded by Youakim to adjourn the meeting. The motion passed unanimously. The meeting was adjourned at 9:40 pm. Rick Getschow, Secretary ATTEST: ,r Euge . M well, Mayor CITY COUNCIL