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Northfield City Special Council Meeting & Work Session - August 28, 2012

August 29, 2012 at 11:21 am
By Jane McWilliams
SPECIAL MEETING

Safety Center Financing:  In spite of negative comments about the process from five members of the public (three of which are city council candidates), the councilors approved a motion authorizing a lease agreement with U.S. Bank to “finance the design, construction, installation and equipping of a public safety building. . . “  Councilor Rhonda Pownell cast the lone negative vote, saying she was concerned about the potential of four new council members later shifting what this council has done.

Candidate David Ludescher said if he is elected he will not appropriate money for this, and predicted that there will be a reverse referendum and a lawsuit. He believes the voters should have a chance to vote on funding the center.  David Delong, also a candidate, objected to the funding method and to the council’s avoiding asking the taxpayers to vote on it. Frank Balster, the third candidate said the financing method is too expensive, and an end around the taxpayers.

The council reversed its course in June when it failed to approve capital improvement bond funding (which is subject to reverse referendum). When the HRA declined to participate in a lease revenue plan alternative, the present system was selected by the council.

Working with the city’s financial advisers, Ehlers, Inc., their bond counsel, Kennedy & Graven, underwriter Dougherty & Company and the city attorney, City Finance Director Kathleen McBride provided background materials and relevant documents for this meeting. Pricing of the debt (2.85% interest for 20 years) occurred this afternoon.  U.S. Bank will own the facility until the debt ($6.28 million) is paid at which time ownership reverts to the city. There is a five-year call provision which means the city will be able to refinance the debt should it desire to do so.

Rather than taxing for the premium and interest payments as in other bonding methods, the city will include these annually in the budget, financed by the general operating levy.  This will add $451,505 to the 2013 budget. In addition to the bond revenue, the city has appropriated $1 million from cash on hand for the project. According to McBride, should the city default on the bond payments, the bank could force it to move from the facility, and the default would have a dramatic impact on its bond rating.

City Administrator commended McBride for her work on the long and thoughtful decision and said this is a strong financing mechanism, carefully laid out. McBride wrote in the background materials: The process for Fire facility will be addressed in 2013 by the new mayor and city council with the expectation that a Fire facility will be funded in the next three to five years. This time frame will allow for the Police facility to be started and financed now. It will also permit discussions with surrounding township and cities on fire service delivery to progress.

Materials for this decision are available at the city’s web site: http://www.ci.northfield.mn.us/assets/p/Packet-item-1.pdf 

For a readable summary of the vast background materials, consult Betsey Buckheit’s blog: http://www.betseybuckheit.com/posts/safety-center-financing-big-update/

WORK SESSION

Hospital Task Force Report:  Councilor Betsey Buckheit, a member of the task force appointed by the council and hospital board, had prepared an interim report of the task force deliberations. (http://www.ci.northfield.mn.us/assets/p/Packet-items-2-6.pdf  #5)

The task force sought guidance on whether the direction it is taking is acceptable, and it asked the council to consider whether the recommendations would need formal action. Mayor Rossing questioned the recommendation that the current ownership/management model be continued until a significant change in the delivery and/or reimbursement of health care causes the topic to be revisited received mixed responses. She asked what benefit there is to the city to own the hospital, noting that under different ownership, the jobs won’t go away.  She asked whether the staff had vetted the report and recommendations and reminded others that the discussion came from the study of the Finance Advisory Group to find ways the assets can benefit the city. In response to her question whether the city is budgeting again for assistance from the hospital for Community Education and Recreation, Mr. Madigan said a formal request had been made.

The task force would also like to have staff assistance in surveying city resources for public health related programs as a basis for future collaboration between local entities toward public health.

This being a work session, no action was taken on the report. Councilor Ivan Imm, a member of the task force and of the hospital board said the latter would see the report at its meeting on Thursday. In addition to Councilor Buckheit, Councilors Ganey and Imm represent the city on the task force. James Schlichting, Brett Reese and Charlie Austin represent the hospital board.

Read more about the task force in Dave Emery's report on the the August 13, 2012 meeting.

Other discussions:

Council met with the Environmental Quality Commission to review the EQC’s work on:  Urban Forestry, Greenstep Cities, Storm water Incentive Program, Solid Waste, Park Redesignation and Membership. Full documentation of their work is at: http://www.ci.northfield.mn.us/assets/p/Packet-items-2-6.pdf

2013 Budget: The report provided information about the need for increases in sewer and storm water as well as garbage rates for the 2012 budget. The preliminary tax levy and general fund budget preparation are under way. At their September 4 meeting the council will adopt a preliminary levy and budget. A budget calendar is included in the packet. (http://www.ci.northfield.mn.us/assets/p/Packet-items-2-6.pdf)

Councilor Erica Zweifel presented information about a community anti-hunger program, CHAMPS, which she hopes the city can consider working on with other partners to provide after school meals. St. Paul provided free meals this summer through their park and recreation department, public library and schools for youth 18 and under.

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