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2020-04-16 Council Work Session PacketCITY OF MENDOTA HEIGHTS CITY COUNCIL WORK SESSION AGENDA April 16, 2020 2:00 pm Mendota Heights City Hall MN Stat. 13D.021 - Meeting by telephone or other electronic means: Conditions - MN stat. 13D.021 provides that a meeting of a public body may be conducted via telephone or other electronic means if meeting in a public location is not practical or prudent because of a health pandemic or declared emergency. At its meeting on March 17, 2020, the Mendota Heights City Council declared a local emergency due to the COVID- 19 pandemic. As a part of this action, until further notice all City Council and committee meetings will be held by telephone, through other electronic means, or with social distancing measures in place. All public meetings will continue to follow the requirements of the Minnesota Open Meeting Law. Please note, to comply fully with the Governor’s Executive Order No. 20-20 and stay-at-home guidelines, the Council Chambers will not be open to the public during the April 16, 2020 meeting. Interested individuals may access the meeting by using the dial-in information below. With the dial-in option, the line will be muted, so no outside comments or noise will be recorded. Note that long- distance telephone charges may apply. Because of technological limitations, the number of participants using dial- in cannot exceed 100. Dial in information 1-312-535-8110 Access Code: 283 012 487 # 1) Call to Order 2) Discussion of COVID-19 related issues on City operations and finances 3) Adjourn DATE: April 16, 2020 TO: Mayor and City Council FROM: Mark McNeill, City Administrator SUBJECT: COID 19 Issues/Finances Comment: Introduction: The Council will hold a workshop on Thursday, April 16th, at 2 PM, for the purposes of discussing the impacts of COVID 19 on the City’s operations, and finances. The meeting will be held remotely. Individuals who are interested in listening to the discussion should call into the telephone number which is listed on the meeting agenda, found on the City’s website. Background: State and local governments across the country are making preparations to deal with the financial fallout of the COVID-19 pandemic. Some cities rely heavily on lodging taxes, others on sales or use taxes, and other cities which operate sewer or water utilities as enterprise funds have seen drops in their fees as the economy has slowed. Most others, including Mendota Heights, rely to a great extent on property taxes. If previous recessions are good barometers, as people lose their sources of employment, their ability to pay property taxes is reduced. As a result, tax distributions to school, counties, and cities also begin to slow. In Minnesota, the first half of property taxes are due on May 15th. The County usually makes its property tax distribution to cities around the first week of July. Staff is checking with Dakota County to see what percentage of property tax payers in Mendota Heights pay their taxes along with their monthly mortgage payment, vs. writing a separate check. That can be a relative indicator of whether there will be a delay in payment, as compared to someone who makes a separate property tax payment. As a result, there are some changes that we will recommend to implement until July 1. Depending on the revenue picture then, we will then have a second set of options to pursue. That tax revenue information will also be key to the preparation of the FY 2021 budget. Those decisions will need to take place this summer, in time for the setting of the levy in September. The second half of property tax payments is due October 15th. From a positive standpoint, the FY 2019 results appear to be favorable. Preliminary indications are that the City took in $100,000 more than expected in revenues, and spent $400,000 less than what was budgeted. That additional $500,000 will be reflected in a greater General Fund balance to start the year. Revenue Property Taxes--The City has budgeted a net certified levy of $10,048,724 for taxes payable in 2020. We will begin to monitor the rate of collection after they are due May 15th. Fees and Permits--There are $384,700 in fees and revenues budgeted in 2020. Of that, $270,000 is estimated from building permits alone, but those revenues are to be used for inspection and permit-related activities. Nonetheless, a slowdown in permit activity is expected. Recreation Fees—Some programs (golf and tennis lessons) typically break even, or even show a slight positive for revenue generation. Should the City continue those programs? The Par 3 is currently being maintained and readied for use, but it is unlikely that it will be “business as usual”, even assuming that the Governor allows play after May 4th. There will be a social distancing policy needed; it is likely that that will incorporate several recommendations from professional golf organizations. Those would have impacts on the five leagues that we have had traditionally hosted—the Par 3 may not be able to accommodate as many participants as in the past. The bigger unknowns are with the youth sports organizations and leagues which use the city’s ball fields. The impact will be hard to determine until some decisions are made regarding schedules for youth and league sports. We know that the Catholic Schools Athletic Association has cancelled its spring sports, but we haven’t heard definitively from the other users. In previous years, the Council has approved MHAA paying on a per user charge; we don’t know if that amount of revenue will remain in the instance of a shortened season. If the May 4th Governor’s order includes limitations on gatherings of more than 10 people, that will impact team athletics as well, and the seasons could be shortened or cancelled outright. If, however, larger gatherings are approved, a social distance policy should first be required from the user groups before the fields are opened. When the fields are opened will impact staffing. If fields aren’t to be used until later in the summer, it is possible that the City would not have to hire seasonal employees in Public Works in 2020. It should also be noted that, as of this writing, most other cities are wrestling with these same problems and unknowns. Changes will need to be considered frequently as new information becomes available. Notable General Fund Expenditures (Non-General Fund capital expenditures are shown in Attachment A) Status Police: • Space Needs Study at City Hall $15,000 Not yet ordered • Pole Camera (Police) 5,000 Not yet ordered Public Works: • Chipper (Public Works) repair recommended 5,000 Repairs completed • Mack Truck (Streets) 186,682 Ordered • ¾ Ton Pickup Truck (Public Works) 24,200 Delivered • Asphalt Hot Box Trailer (Streets) 43,000 Taking delivery 4/15 • Sprayer (Streets/Par 3) 62,329 Delivered • Skate Park Repairs 10,000 Not Started Natural Resources • Native Plantings 10,000 Not yet ordered Par 3 • Greens Mower (Par 3) 47,000 Delivered Other Major Expenditures Budgeted 2020 • Marie Avenue Project/2022 Levy Impact (Bid opening April 15th. Results @ work session) • Natural Resources Plan Update $75,000 • Travel/Conference (two National & one state conference) 5,000 • Summer Concerts 4,000 • July 4th Fireworks 14,000 Personnel Issues Police Vacancies • One Patrol Officer vacancy currently exists. Not filling that will reduce those 2020 line items by $108,000; however, the net savings amount will be less, as there will be more overtime which will need to be paid. • The Department-wide savings realized from the promotion of a police officer to a sergeant, and the hiring of a replacement entry-level officer, amounts to $25,000. This is separate from the $108,000 noted above. PW Seasonal Employees • If seasonal positions in Public Works are not filled, there is a savings of $25,000. However, that assumes that field preparation for youth and adult users is cancelled, or severely limited. Engineering Intern • This is budgeted at $10,000 in the 2020 budget, but can be eliminated. Compliance with Governor’s Directives—Until May 4, 2020 Public Works employees are scheduled to begin nearly full-time work, beginning the week of April 20th. Several protective measures have been implemented to assure optimal safety considerations. Department Heads are working on a plan to reopen City Hall, which is likely to be after the Governor’s next update is received. The plan will consider social distancing responsibilities, including physical separations for both staff and the public, the wearing of personal protective gear, the possibility of working split shifts, and similar practices. Any updates to the existing order or other changes will be monitored during the interim, and modified as needed. Policy Questions for the Council to Discuss: 1. Is the Council OK with keeping the current Police vacancy unfilled until July 1st, when the property tax revenue picture will be more clearly known? 2. Should the City proceed more aggressively now with expenditure reduction operations, and not wait until after July 1st? 3. Grass mowing operations will take place as normal. However, should the City make provisions to prepare recreation fields for baseball, soccer, and the like? If so, to begin on what date? 4. Should the summer recreation programs and the summer concert series be eliminated? 5. The Par 3 has two seasonal employees who will do turf cutting and maintenance. Public Works could be trained as backups to mow. Rather than hiring seasonal Club House employees, would Council consider the use of interim staffing by City Hall workers in a much-scaled back operation as time permits? 6. Is Council OK with keeping the decisions for the capital expenditures from the Special Parks Fund on hold until a joint meeting with the Commission can be scheduled? Action Required As the April 16th meeting is a work session, no decisions should be made at that time. Formal decisions will need to be made at a future meeting of the City Council. Appendix A Non-General Fund Expenditures Sanitary Sewer Fund • Sewer Jetter Truck 190,000 Delivery Summer 2020 Special Parks Fund • Skate Park Improvements $10,000 Approved but “on hold” • Friendly Hills Backstop 30,875 Work is underway • Wentworth Tennis Court Replacement 80,000 Not yet ordered • Wentworth Warming House 175,000 Not yet ordered* • Wentworth Parking Lot 90,000 Not yet ordered* • Dog Park Feasibility Study 10,000 Not supported by CC • Ivy Hills BB expansion 20,000 Not supported by CC • Hagstrom-King/Friendly Hills Baseball Fencing 31,000 Not yet ordered • Friendly Hills Tennis Court Resurfacing 15,000 Not yet ordered • Marie Park Playground Replacement 150,000 Not yet ordered • Valley Park Dedicated Pickle Ball Court 80,000 To Be Discussed • Mendakota Dugouts 96,000 Not yet ordered * Funded in part by a DNR grant, which must be used by 12/31/2021. The other items under Special Parks are to be discussed in a joint Parks and Recreation Commission/City Council meeting.