08-29-00 WSMINUTES
CITY COUNCIL WOlZI~ SESSION -AUGUST 29, 2000
A work session of the Hopkins City Council was held at 6:30 p.m. on August 29,
2000, at the City Hall. Present were Mayor Maxwell and Council Members Brausen, Hesch,
Jensen and Johnson. City personnel present were City Manager Mielke and Lori Yager. Also
present was HCA director Jay Strachota.
Arts Center Funding, Steve Mielke, presenter
There is a $155,000 fund raising shortfall left ($212,000 balance with $70,000 pledges
due over next three years), and an operation shortfall of $145,000, which is about $100,000
for actual operation and $45,000 for interest on the $573,000 mortgage. The operation
shortfall is due mainly to salary expense and less income than expected, especially in 2000.
Answering Council Member Jensen, it was noted salaries go to the manager (Jay), scheduling
coordinator (Ellen), arts coordinator (Susan), custodian and part-time help for nights and week-
ends. Some of Ellen's salary used to be charged to the Pavilion, but she is now an HCA
employee. Part of Jay's salary is charged back to facilities.
Council Member Hesch noted $78,000 of the shortfall is depreciation. Ms. Yager said
depreciation had been put in budget to keep the Center non-profit and is really a "paper loss."
Mr. Mielke added that is one reason in support of having operations go to the general fund.
While the city had promised no construction debt would go to the general fund, operations
could. In response to Ms. Jensen, it was noted that maintenance expense is below that of the
Pavilion, which has the same square footage; operations includes advertising, printing,
postage, staff training, travel, memberships, etc; professional services includes attorney fees
(reorganization really inflated this figure in 2000), costs for large performances, etc. Ms.
Yager said the 2000 income was less mainly due to reorganization, which basically lost 3/a of
the year. Basically, the situation is if new sources of income are not found, the general fund
will need to be used. Ms. Jensen noted that the situation was partly due to the Council not
acting on Jim Parsons' suggestions.
Current revenue sources include the Economic Development Account, TIF, Park
dedica- Lion fund, and the HAC fund; the latter will be depleted in 2000-2001 at current rate of
loss. Mr. Mielke outlined the requirements to be met for the following possible funding
sources: Sales taxes (general, food and beverage, lodging, entertainment, liquor and
automotive); utility franchise fee; park dedication fee; HRA levy; general fund levy;
contributions (utility bill check-off/round-up; campaign). State legislation and referendums
would be required for all taxes except lodging tax. Lodging tax of up to 3 % is allowed by law
and is in place in 84 Minnesota cities; it would only require an ordinance. The utility franchise
fee could be up to 4% and requires only an ordinance. The Park dedication fee is eligible for
use on recreational/cultural facilities, such as the Activity Center (already subsidized at
$230,000) and HCA; $475,000 is anticipated on the North Annex, Walgreens and Perishable
sites.
General discussion followed. The logic for utility franchise is "Utility companies use
public right of way so should pay for public works." Ms. Hesch said she feels strongly there
is no need to apologize for the HCA debt; it was not a mistake because it has greatly improved
Hopkins' image. Mayor Maxwell said he could envision the franchise fees being used to also
build the police building but also expressed concern that a 4 % rate could really hurt
businesses; Ms. Hesch added this could be the way to fund the "public wishes" the vision
process brought out; the rest agreed the "big picture makes this an easy sell" (as Mr. Brausen
worded it). Mr. Mielke said such fees could realistically be in place in six months. Economic
Development funds have a current balance of $260,000; the Beard balloon payment of
$950,000 is due in 2011, but if the loan is extended, that would be pushed further out. Ms.
Yager noted that the $155,000 construction shortage should not be paid now as it would affect
the general fund bond rating. The $155,000 would be better spent decreasing the mortgage.
Park Dedication funds could be used for the construction fund shortage in the future.
Discussion also included the idea that funds need to be allocated to Boards on the basis
of activities sponsored.
General Consensus: Franchise fee (to be used for HCA, police building and "vision
wishes"), lodging tax, utility bill check-off/round-up, moving HCA to the general fund after
other monies are in place, using $150,000 of ED funds now to lower the mortgage, deferring
payment of the construction fund shortfall to future Park Dedication income, and Food and
Beverage tax met with general approval. Staff shall provide more information on the franchise
fee, including possibilities of different rates for commercial/residential and possible incomes at
different rates within 30 days. Staff should draft an ordinance for lodging tax as well as
getting better income estimates within 30 days. State legislators should be further consulted on
food and beverage tax legislation, including reverse referendum. A meeting should be held
Oct. 10 with the Park Board. Action should be started immediately on utility bill check-off
and putting $150,000 ED funds against the HCA mortgage. Nothing should be done about the
$155,000 fund shortfall for the present.
City Manager Evaluation Process, Steve Mielke, presenter
There is a strong need to have a process in place to avoid the timing problems that are
currently an issue. The 2000 evaluation is now just getting started instead of being completed.
General discussion followed.
General Consensus: The following timeline shall be followed:
9/1/00 Start evaluation for 2000, finish in October.
10/00 Have 2001 merit system in place
7/01 Start evaluation, finish in August
The following format shall be used for all future evaluations:
1. City Manager shall send out "360° forms" in early July to designated people and
provide Council with written summary of his performance and accomplishments, along
with comments on his job description.
2. Council will review the job description and results of 360° form results.
3. Council will review and discuss Manager's performance, including: general
performance, meeting of merit goals, decision of amount of merit pay (if any)
4. Results shall be compiled and presented to City Manager in a meeting open to all
Council members. At this meeting the next year's merit goals shall be set.
5. Council shall determine the set-up for the next year's merit bonus.
It was further agreed that the list of expectations should be further discussed. One hour
was scheduled for after a future Council meeting. If needed the second Tuesday of September
will also be used.
Other
Citizens' Academy
The following "assignments" were agreed upon: 9/6 Mr. Maxwell; 9/20 Ms. Hesch,
10/4 Ms. Jensen, 10/18 Mr. Brausen, 11/1 Ms. Johnson, 11/15 (celebration) all. Mayor
Maxwell encouraged all to attend on 9/6.
Railroad and Teens
Ms. Johnson expressed dismay at the idea of a "teen sting" in relation to teens crossing
the CP tracks to get to the Depot. Mr. Mielke said City staff had vetoed that idea
immediately. CP has the attitude that the city should fix their problem for them. Staff feels
they are willing to help -they indicated to CP that if they wanted to put up a preventive fence
they would get City approval -and will do what they can in educating teens as to the dangers,
etc. A legitimate crossing should be tied into the bike trail.
Ms. Hesch moved adjournment; Ms. Johnson seconded. Meeting adjourned at 9:57
p.m.
Kasey Kester, Secretary
ATTEST:
d/lam
Eug ne J~Iaxwell, Mayor
COUNCIL MEMBERS: