HomeMy WebLinkAbout2021-07-21 City Council Work Session Metting PacketAgenda
City Council Work Session
City of Edina, Minnesota
Community Room, City Hall
Call 800-374-0221, enter Conference ID 9148708 to listen to meeting
Wednesday, July 21, 2021
5:30 PM
I.Call To Order
II.Roll Call
III.2022-2023 Budget & Budget Work Plan Process
IV.Adjournment
The City of Edina wants all residents to be comfortable being part of the
public process. If you need assistance in the way of hearing ampli)cation, an
interpreter, large-print documents or something else, please call 952-927-8861
72 hours in advance of the meeting.
Date: July 21, 2021 Agenda Item #: III.
To:Mayor and City Council Item Type:
Reports / Recommendation
From:Scott H. Neal, City Manager
Item Activity:
Subject:2022-2023 Budget & Budget Work Plan Process Discussion
CITY OF EDINA
4801 West 50th Street
Edina, MN 55424
www.edinamn.gov
ACTION REQUESTED:
None. Discussion only.
INTRODUCTION:
Staff will be presenting a recap of the City Council Retreat and 2022-2023 preliminary budget.
ATTACHMENTS:
Description
2021 City Council Retreat Summary
Staff Presentation
SARA A. PETERSON, JD – MANAGEMENT CONSULTANT
P| 812.822.2122 F | 812.205.2987 C| 651.260.0273
www.sarapeterson2consulting.com peterson@sarapetersonconsulting.com
City of Edina – Council Planning Summary
March 4 & 13, 2021 (Virtual)
PARTICIPANTS
City Council Staff & Facilitator
James Hovland, Mayor
Ron Anderson
Carolyn Jackson
James Pierce
Kevin Staunton
Scott Neal, City Manager
Lisa Schaefer, Assistant City Manager
Risi Karim, City Management Fellow
Don Uram, Finance
Sara A. Peterson,
Management Consultant
March 4 only
Jennifer Bennerotte,
Communications
Grace Hancock, Sustainability
MJ Lamon, Community Engagement
Heidi Lee, Race & Equity
March 13 only
Chad Milner, Engineering
Tracy Petersen and
Perry Vetter, Parks &
Recreation
AGENDA
Part I: March 4, 2021 (am)
5:00 Introduction
5:20 Setting the Stage
Staff will present an overview re:
− Budget/Work Plan Process
− Past Highlights and Future Trends
− 2022-23 Staff Recommendations
(Council to discuss 3/13)
Council Discussion to re-affirm or revise:
− Four Budget Goals & Objectives
− Values Statements & Code of Conduct
(as time allows)
7:00 Edina’s Communication Strategies
Staff will present an overview re:
− How We communicate Priorities & Activities
− Communication Vehicles & Channels in Use
− Their Reach & Limitations
− New Ideas Being Explored
− How the Council Can Engage
Council Discussion
9:00 Adjourn
Part II: March 13, 2021 (pm)
8:00 Introduction
8:15 Financing City Streets
Staff introduction and presentation
Council Discussion:
− Remaining needed to make decisions
− Action on specific recommendations
10:00 Future of the Arts Center
Staff introduction and presentation
Council Discussion:
− Current use, financial situation, and facility
− Future: what trying to do and for whom
− Near term action steps
11:00 2022-2023 Budget Process
Council Discussion:
− Work Plan Objectives
− Expectations in a Post-Pandemic City
12:00 Adjourn
2
PART I
Setting the Stage
The retreat began with an overview of Edina’s planning and budgeting process, a quick grounding in its financial position,
and a presentation of senior staff perspectives related to the past year, including:
1. Overview of Process
2. Overview of the Consolidated Budget and Measures Over Time
3. Budget Challenges
• Deferred Building Maintenance
• COVID Impacts – Enterprise Funds; Possible Decline in Tax Base
• Matching staffing and resources to service-level expectations
4. And a Look Back at 2019-2020
• Significant Events: 9/19 OIS, 3/2020 COVID Stay at Home Order, 5/20 Death of George Floyd, fall elections
• Changes to Internal Operations and to City Services
• Community Resources Launched, Projects Completed and other Work Plan Projects
Edina Consolidated Budget $131M
Governmental Funds $76M
General Fund $49M
Debt Service Fund $7M
Construction Fund $11M
Special Revenue Funds, inc. HRA $9M
Enterprise Funds $49M
Utility Fund $22M
Liquor Fund $14M
Park Enterprises $13M
Internal Service Funds $6M
Risk Management $1M
Equipment Operations $2M
IT $2M
Facilities $1M
3
5. Q&A: The Council asked questions of staff following the presentation, with particular emphasis on understanding
what the City learned about itself and its needs during an extraordinary year so that it might emerge stronger.
Given recent changes to City Council composition, the retreat agenda included time for discussion of the City’s goals as well
as its values statements. The purpose was to re-affirm or revise both with the benefit of time and fresh eyes. Overall, the
reaction was one supporting the four goals and the way they are presented “a crisp way to communicate and socialize” the
City’s goals. Council members also pointed out the apparent connections between City goals and Vision Edina. Discussing
each goal in turn, Council members homed in on the message or connotations of specific language while ensuring that the
language was sufficiently forward thinking. As a result, they explored the following:
Maintain Physical Assets & Infrastructure
The core message of “keeping the bones of the house strong” is good. But how
does it align with questions of sustainability or possible interpretations of
“maintaining” as a minimum standard? The latter question was reinforced by a
discussion of “deferred maintenance” as a budget consideration.
The Council asked for a way to measure asset stewardship – to be able to
predict/project for longer view, not just maintaining but forward thinking to
identify hot spots for action. And going further still, how can it drive policy that
anticipates infrastructure needs 50 years from now?
Maintain Service Levels that Best Meet the Needs of the Community
Again, the Council appreciated the core message of “reliable” service but asked
the next question: what is the standard beyond maintaining? Service needs,
wants, and standards continue to change. This is especially true for “after” covid
times in which we may be missing items, providing too much or little.
The community expects the City to be forward thinking and preparing for future
needs. How can Edina best communicate that element of the goal while
acknowledging that any given service need not be the best available to meet
community needs?
Plan for Connected & Sustainable Development
The struggle identified here is that of balancing the long-term macro answer for
the community against the micro questions asking why something about the City
is changing when new development occurs. How to communicate the bigger
picture and bring the community to an understanding of the future.
Foster Inclusive & Engaged Community
Finally, discussion of Goal 4 asked who was missing from the text. For example,
are apartment-dwellers clearly included? Then the conversation shifted to
questions of how Edina can welcome everyone into the fabric of the community
so that that they are proud to be Edinans.
When the Council moved to the values statements, they made similar observations.
4
Community Engagement
If we want to see everyone in Edina
engaged, who is missing from the text?
In addition, trust in government in 2021 is
very different from what it was a few short
years ago. Do we in fact have a foundation
of trust given the larger context of the Twin
Cities?
As the Edina City Council, we are dedicated to fostering an engaged
community built on a foundation of trust. We will do this by
intentionally focusing on equity, diversity and inclusion and creating a
dialogue of perspectives. We will build trust by demonstrating our
engagement principles of Relationships, Equity, Inclusivity, and
Accountability.
Relationships: make relationships foundational; strengthen relationships and
build new ones; develop a trust between the City and residents
Equity: engage with residents where they are; remove barriers for
participation; provide multiple options for participation
Inclusivity: strive to provide meaningful engagement opportunities; invite
underrepresented groups to participate; make all feel welcomed and valued
Accountability: make a plan; do what we say we are going to do; don’t change
the rules; make a decision; communicate how participation influenced decision
Equity
Council expressed appreciation for the ways
in which staff and this statement have
broadened their understanding of equity.
Even traffic and the ability to design
roadways that allow everyone to share the
road safely includes questions of equity.
Finding ways to deepen this sense in the
community goes hand in hand with
engagement.
Regarding the language of the statements,
one pointed out how “equitable
opportunities to participate” might be
misconstrued when there are, practically,
limited seats on boards and commissions.
As the Edina City Council, we are dedicated to creating an environment
in our community where residents have equitable opportunities to
participate in their city government and access the City’s institutions,
facilities and services.
Our commitment to diversity, equity and inclusion will be a continuous
process of learning and adapting to the multiple needs of all in the
community, while consistently applying an equity lens in all decisions
and interactions. Our vision of a welcoming Edina includes removing
systemic and institutional barriers to create opportunities for all in the
community to thrive.
Sustainability
Time did not allow for extended discussion of
this statement during the retreat.
As the Edina City Council, we are dedicated to building a sustainable
environment where current and future generations benefit from clean
air and water, climate and community resiliency, and access to nature.
We recognize that the City’s natural environment, and the health and
quality of life of its residents are just as, or even more, important, than
the financial factors. We will ensure that our policies, decisions and
future plans have a positive impact on people and the planet, in
addition to profit.
Communications Strategies
The second half of Part I focused on the scope, scale, and vehicles through which the City communicates with
stakeholders; followed by a discussion of ways both City and Council can respond to misinformation in the community.
What follows is an overview of that discussion.
City Communications & Communicating Priorities
Similar to the goals and values discussion, Council asked questions related to
equity in engagement:
• Can we consider choice of language for mailings?
Do we understand what do / don’t
do and when?
Are our strategies robust?
Effective? Equitable?
5
• If social media is reaching under 55 and the city is largely over 55, how
do we ensure equitable access to information?
• Are there ways in which we can measure access across modes of
communication for more targeted success winning hearts and minds?
Do you have any feedback on the
City’s mass communications or how
City Council priorities and activities
are communicated?
Misinformation
This discussion began with an understanding that NextDoor constrains the City,
as an agency account – the City actually cannot see conversations or respond in
the way many believe it can. This underscores the importance of other
communication vehicles.
More to the point, the question of “misinformation” can be divided into two
categories: inaccuracies that require immediate response and those based in a
broad misunderstanding of process.
In the former instance, the City needs to have a way to identify/triage potential
items for response at the staff level.
In the latter, the focus is better placed on trusted community relationships,
networks of trusted connectors/communicators (e.g., Rotary, Edina Indivisible,
neighborhood groups), and capitalizing on the strengths of individual Council
members (e.g., Mayor’s Minute, Anderson blog).* Success requires equipping
partners with policy messages that they can use, and engaging Council in
shaping and promoting those messages.
When to respond; defining the
problem; know the difference?
What makes a PRODUCTIVE
response? Who, how, where?
Different roles for different people;
tools for different needs
Do you have any feedback on the
City’s social media or how we might
make it easier for you to engage
with the community online?
* The fields of community organizing and health communication have deep, evidence-based, experience to learn from in these regards.
PART II
Financing Edina Streets
During the 2019 retreat, staff presented a review of Edina’s street assessment approach. The Council then discussed the
pros and cons of the various financing options presented. At the time, Council Members agreed that if they were starting
from scratch, they would not choose the current system. The overarching concern for all in considering any potential change
is how to manage transition in an equitable way, simultaneously ramping down the current approach and ramping up any
replacement without overly burdening the implementation system. Staff committed to investigate options in greater detail
and return to the Council for further discussion during the coming two years. Since then, a task force was convened and
completed its work, returning recommendations to Council. Now in 2021, all are looking for a long-term resolution to the
issue. Discussion began with an overview from staff as well as its own next step recommendations.
The Council expressed a similar desire to resolve the issue, agreeing that it should:
• Place removing subcuts and retaining walls on the April 6 agenda
• Revisit final street funding decision with 2022/2023 Budget
• Engage in a process that allows Council to approve a final funding methodology in/by August
Council framed the questions to be answered and then decisions to be made as follow:
• Better understand the experience of other communities to plumb all the options:
o What methodology do they use (e.g., Minnetonka at 100% franchise fees, Bloomington at 75/25)?
o Why was it chosen (e.g., staff time in assessments, resident fairness and “skin in the game”)?
o How was it implemented? (16 years seems too long. Does 5-10 years make more sense?)
o How was it communicated/transitioned?
o What has been the result?
6
• Develop additional information:
o Develop side-by-side models showing impact of methodologies between the extremes
o Map projects/assessments that have been done and those that need to be completed
o Outline equity principles for city and apply to tax structure
o Outline messages (e.g., tax transparency, city/city comparisons, efficient subsidizing less efficient, legal
risks, resident mobility, non-deductibility of assessments, decision process)
• Define the destination (i.e., where between 50-100% levy) and timeline (i.e., how fast from assessment to new?)
• Develop the change management plan
o Set a methodology to mitigate impact of transition (steps for a “soft landing” and fairness)
o Plan communication and engagement to educate and bring the community along before a final decision
Arts Center
While the City has wrestled with the future of the Edina Art Center for some time, the covid-crisis has brought the
question into more stark relief. Closed for more than a year (but programming out of other locations), the Center iss in
need of significant facility improvements (approximately $1.6 million). Those improvements encompass aspects in five
areas; 1) Code compliance, safety, and mandates; 2)Projects that protect people, property, and infrastructure; 3) ADA
Improvements; 4) Betterment of operations, new services, support programming (FFE); and 5) Replacement of
infrastructure past due, aging or inefficient (near failure or could fail).
Our mission is to build a vibrant community by
fostering common bonds,
nurturing talent and
creating venues for expressing and
appreciating art and culture in Edina.
The Edina Art Center provides the community with a place to
1) view exciting exhibitions,
2) enjoy artistic and cultural events and
3) a place to learn how to express their creativity through
artmaking.
Staff and Council discussed the Center’s offerings, financial position, and use; ultimately agreeing that a $1.6 million
investment in the current facility did not make sense. However, in the course of discussion they were excited by the
possibilities of a re-envisioned Center for Edina. For example:
• Bringing a Race & Equity lens to the conversation could expand its reach and impact
• With a focus on visual arts (especially pottery) it could be relocated to the industrial park
• Maximizing benefit/cost could lead to consideration of a park location that connects generations (e.g., Braemer)
• It could maximize its pottery assets (wheels and kilns) for a more visible destination drawing across the metro
• It could expand its scope beyond visual arts to explore STEAM (arts + STEM, technology, and gaming) for kids
By the close of the discussion, the Council directed staff to take the question of the Center’s future back to the Edina Arts
Commission for next step planning.
2022-2023 Objectives & Post-Pandemic
At the close of the retreat, staff and Council discussed expectations in a Post-Pandemic City – understanding that they
must differentiate among those changes they can control versus those they can influence, or ones they must simply adapt
to before agreeing on specific action. Items that arose in discussion included the following:
Business Residents
The crisis accelerated retail changes including small retail decline and hollowing of regional
shopping. It is changing the commercial real estate market as 25% of work force may not return
to the office. It has changed the structure of medical facility needs. It has changed technology
choices and we decouple work/home. Restaurants will resurge, but business travel may not.
All of this affects,
and places greater
burdens on,
residential areas
7
In response, cities will need to think about competition differently in order to attract and maintain businesses and
residents – to make livability more competitive. This will affect city services, how they are delivered, and how the built
environment must adjust. For example:
• Thinking about public assets:
o Work from home increases walks during the day
o Transportation infrastructure will adjust to changes in local traffic
o Alternative modes for exercise or getting around becomes more intense need
o Stress on greenspaces increases
• Thinking about key commercial areas:
o Will market take care of 50th/France?
o Will Minneapolis offices shift toward us?
o Impact on property values (same for suburbs and core?)
Overall, the timing of some of these questions depends on letting the economics evolve more; but this is the time to be
shaping the question. And, citizen engagement will be important. The discussion will be picked up at a later date for
integration into the budget process.
The CITY of
EDINA
2022-23 Budget and Preliminary Levy
July 21, 2021
The CITY of
EDINAAgenda
•Budget
•Process and Timeline
•2022-2023 Preliminary Budget and Levies
•Tax Comparisons
•Discussion
www.EdinaMN.gov 2
The CITY of
EDINA
www.EdinaMN.gov 3
Edina Consolidated
Budget $131M
Governmental Funds $76M
General Fund
$49M
Debt Service Fund $7M
Construction
Fund $11M
Special Revenue Funds, including
HRA $9M
Enterprise
Funds $49M
Utility Fund
$22M
Liquor Fund $14M
Park Enterprises
$13M
Internal Service
Funds $6M
Risk Management
$1M
Equip. Operations $2M
IT $2M
Facilities
$1M
The CITY of
EDINAEstimated Market Value (B)
9.1 8.9 9.0 9.8 10.4 10.9 11.6 12.4 12.9 13.3 13.8
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
www.EdinaMN.gov 4
The CITY of
EDINA
Budget Timeline
www.EdinaMN.gov 5
Date Topic Presenter(s)
March City Council Retreat Staff
June 1 Department Heads submit Budget Requests
July 7 ELT Reviews 2022-2023 Budget Draft ELT Discussion
July 21 2022-2023 Draft Budget Work Plan & Scenarios CC Work Session
Aug. 17 2022-2023 City Manager proposed budget CC Work Session
Sept. 9 CC consent to two-year HRA levy CC Meeting
Sept. 10 Preliminary HRA Levy Adoption HRA Meeting
Sept. 21 Preliminary CC Levy Adoption CC Meeting
Oct. 19 2022-2023 Budget Discussion/Update CC Work Session
Nov. 16 Open (Another 30 mins with CC?)CC Work Session
Dec. 7 TNT Budget Presentation CC Work Session
Dec. 7 TNT Budget Hearing (CC and HRA)CC/HRA Meeting
Dec. 21 Last Day to Adopt Budget CC/HRA Meeting
The CITY of
EDINABiennial Budget Process
2021 (Odd Year)
Second year of 2020-
2021 Budget
Approve 2022-2023
budget, including CIP
levy
2020 (Even Year)
First year of 2020-
2021 Budget
Review/approve of
2021-2026 CIP
www.EdinaMN.gov 6
Vision Edina
(Twenty-year)
Budget Work Plan Operating Budget
(Two-year)
Department Work
Plans (Annual)
Employee Work
Plans (Annual)
Commission Work
Plans (Annual)
Comprehensive
Plan
(Ten-year)
Capital
Improvement Plan
(Five-year)
Strategic Policy
Implementation
Level
Work
Plan Budget
Two-Year Budget Work Plan
City-Wide Performance Measures
Approval: City Council
Accountable: City Manager
Annual Department Work Plans
City-Wide Performance Measures
Approval: City Manager
Accountable: Department Director
Individual Work Plans
Annual Performance Reviews
Approval: Manager
Accountable: Employee
Annual Commission Work Plans
Approval: City Council
Accountable: Commission
Budget Work
Plan
Other Work
Plans
2022-2023 Budget & Work Plan
GOALS
OBJECTIVES
STRATEGIES
Broad Outcomes
(Evergreen)
Measurable Results
(This Budget)
Specific Actions
(This Budget)
Goals
•Fire Stations 2 and 3
•Begin implementation of Street Financing
•Implement Morningside flood infrastructure
•Design & construct Lift Station #6
•Roof replacement plan for City facilities.
•Expand GIS capabilities
•Technology Security
2022-2023 Budget Work Plan
www.EdinaMN.gov 10
•Evaluate post-pandemic remote work and service
delivery.
•Re-assess City Hall Space Needs Study for post-
pandemic service delivery.
•Increase resources for mental health calls for
service.
•Art Center –long-term plan for building &
programs
•Implement new elections agreement with EPS
2022-2023 Budget Work Plan
www.EdinaMN.gov 11
•Implement Green Building Policy
•Implement Climate Action Plan
•Affordable Housing
•Blake Road Construction
•Consider PARC recommendation for alternate
funding.
2022-2023 Budget Work Plan
www.EdinaMN.gov 12
•Continue Racial Equity Implementation Plan
•Assess post-pandemic community engagement
strategies (evaluate what to keep, stop, expand)
•Implement Board & Commission diversity
strategy.
•Administer 2023 Quality of Life Survey
2022-2023 Budget Work Plan
www.EdinaMN.gov 13
The CITY of
EDINAProposed 2022-23 Budget
www.EdinaMN.gov 14
Proposed Proposed
2021 2022 2023
General Fund 34,036,471$ 37,130,486$ 39,038,281$
6.29%9.25%5.14%
Arts/Culture 20,000$ -$ -$
0%-100%0%
Debt Service 3,651,400$ 3,657,000$ 3,653,000$
-20.56%0.15%-0.11%
Construction 4,080,000$ 5,190,000$ 5,560,400$
44.17%25.67%7.14%
HRA 230,400$ 237,300$ 244,400$
20.00%2.99%2.99%
Total Tax Levy 42,018,271$ 46,214,786$ 48,496,081$
% Increase 5.95%9.99%4.94%
The CITY of
EDINA2022 –23 Budget Proposal
•New for 2022
•-Street reconstruction ($950,000)
•-Service level increases ($500,000)
•Item to consider:
•-Move Centennial Lakes Park to General Fund
www.EdinaMN.gov 15
The CITY of
EDINAPreliminary Tax Levy for 2022
www.EdinaMN.gov 16
Change Reason
4.06%Wages & benefits cost increases
3.39%Internal service fund charges, service level
changes & all other changes
2.26%Street Reconstruction levy ($950,000)
0.26%Increased Equipment levy ($100,000)
0.02%Increased HRA levy ($6,900)
9.99%Total 2022 City + HRA levy increase
The CITY of
EDINA2022 Estimated Levy Impacts
•In 2021 the median home pays about $136 per month in property
taxes to fund all City provided services.
•Total EMV is increasing by about 3.7% for taxes payable in 2022. The
median value single family home is now $571,800.
•With an 9.99% property tax levy increase, the effect on the 2022
median valued home would be about a:
•-6.5% increase in City property taxes.
•-$105 increase per year, or about $8.75 per month.
•-$144 payment per month in 2022 City property taxes.
www.EdinaMN.gov 17
The CITY of
EDINA
•$6.8 million added back to tax base
•Tax impact (incl SD II TIF) -$105
•Tax impact (w/o SD II TIF) –$189
www.EdinaMN.gov 18
Southdale 2 Tax Impact
The CITY of
EDINA2022 HRA Levy
•State law allows an HRA to levy up to 0.0185% the previous year’s
taxable market value of all property in the City. This limit would
produce tax revenue of about $2.5M in Edina.
•An HRA raises its own levy separate from the City.
•HRA levies must be used only for purposes listed in the HRA Act.
•A $237,300 HRA levy in Edina would be $9.00/year for a median
single-family home ($571,800)
www.EdinaMN.gov 19
The CITY of
EDINAProperty Tax History
www.EdinaMN.gov 20
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
City tax $1,082 $1,102 $1,140 $1,195 $1,266 $1,319 $1,393 $1,474 $1,566 $1,623 $1,728
Total tax $5,410 $5,449 $5,606 $5,835 $6,276 $6,367 $6,715 $6,982 $7,251 $7,247
Median Value $403,100 $396,300 $399,700 $438,800 $457,300 $466,500 $501,000 $530,650 $548,500 $551,300 $571,800
$1,082
$1,728
$5,410
$7,247
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
"Median" Value Home
The CITY of
EDINACentennial Lakes Park
•Accounting definition of an enterprise fund is one that may be used
to report activity for which a fee is charged to external users for
goods or services.
An enterprise fund is required when fees are designed to recover costs
•While Centennial Lakes Park does charge for paddle boats,
miniature golf, ice skating and park maintenance fees, these user fees
only cover 59% of total park expenses
www.EdinaMN.gov 21
The CITY of
EDINAAnnual budgeted cash flow
www.EdinaMN.gov 22
($600)
($500)
($400)
($300)
($200)
($100)
$0
$100
$200
$300
Art Ctr Golf Aquatic Ctr EP Arena Field CLP
in 000's2021 2022 2023
The CITY of
EDINALiquor subsidies
•Liquor subsidy of P&R enterprises has historically been about $650k
with another $150k going to the construction fund
•Liquor profits range from $650k (2015) to $1.4M (2018)
•Projected cash deficit for P&R enterprises is $1.3M and $1.2M for
2022/23 budgets
•Relying solely upon liquor subsidy to maintain positive cash balances
in the P&R enterprises is risky and not sustainable
•Recommend phasing Centennial Lakes into the General Fund
www.EdinaMN.gov 23
The CITY of
EDINANext Steps
•Based on Council Input, continue to refine 2022-2023 Budget
•City Manager proposed budget on Aug. 17
•Consent to HRA Tax Levy on Sept. 9
•Certify Preliminary Tax Levy on Sept. 21
•Budget Discussion/Update to Council at Work Session on Oct. 19
•Public Hearing for 2021 Budget on Dec. 7
•Final Date to Take Action on 2021 Budget is Dec. 21
www.EdinaMN.gov 24
The CITY of
EDINAQuestions/Discussion
www.EdinaMN.gov 25