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Home My WebLink AboutCity Council Packet 11-25-2014 SpecialCITY OF PLYMOUTH AGENDA SPECIAL COUNCILMEETING NOVEMBER 25, 2014, 5:30 p.m. MEDICINE LAKE CONFERENCE ROOM 1. CALL TO ORDER 2. TOPICS A. Economic development funding B. Update on risk management fund C. Set Future Study Sessions 3. ADJOURN Special Council Meeting 1 of 1 November 25, 2014 City of Agenda 2APlymouthNumber: 7 Adding Quality to ofe To: Dave Callister, City Manager STUDY SESSION Prepared by: Jim Barnes, HRA Manager November 25, 2014 Reviewed by: Steve Juetten, Community Development Director Consider Replacing a Portion of HRA Tax Levy Assistance to Item: Plymouth Towne Square with Excess Tax Increment from TIF District 1-1 and Repurpose the HRA Tax Levy for Economic Development 1. ACTION REQUESTED: Consider replacing a portion of HRA tax levy assistance to Plymouth Towne Square with available tax increment from Tax Increment Redevelopment District 1-1 and repurpose the HRA tax levy for economic development. 2. BACKGROUND: In 1994 the Plymouth Housing and Redevelopment Authority (HRA) opened Plymouth Towne Square (PTS), the first of two independent senior apartment buildings owned and operated by the HRA. The property was, and still is, envisioned to provide affordable housing opportunities for seniors. Over the past 20 years, the HRA has used a portion of its tax levy to assist the building and keep rents at an affordable amount for the residents. Currently the HRA will levy $218,000 to assist the property in 2015. During the 2015 budget discussions, funding was budgeted for an economic development position. The source of funds for this position was shown to be tax increment from existing districts. After further discussion with legal counsel it was determined that tax increments could not be used to fund this position unless it was directly related to a specific redevelopment/economic development project. In considering options, staff has determined that available tax increment in TIF District 1-1 could be used to assist PTS with its capital improvements. This would allow the redirection of a portion of the tax levy for personal services for economic development. It should be noted that the use of available increment in district 1-1 will not extend the life of the district as approved back in 2004, which is scheduled to end in 2031. TIF District 1-1 and the HRA tax levy are both under the control of the HRA Board. As the City Council has been closely involved in economic development planning and discussions, staff felt it was important for the City Council to provide feedback on this action before presenting the concept to the HRA. For the 2015 budget year, staff is proposing to exchange $80,000 in HRA tax levy with available increment from TIF District 1-1. If the Council is supportive of this option, staff will bring this request before the HRA Board in January for its consideration. Below is a table showing the current and proposed funding. Page 1 3. RECOMMENDATION: Staff recommends that the City Council support utilization of tax increment from TIF District 1-1 to replace a portion of the HRA tax levy. Staff also recommends the City Council support maintaining the HRA levy at its current level and apply the remaining levy capacity towards economic development operations. Page 2 Plymouth Towne Square Economic Development Current Budget HRA Tax Levy 218,000 0 TIF 1-1 Excess Tax Increment 0 60,000 Total 218,000 60,000 Proposed Budget HRA Tax Levy 138,000 80,000 TIF 1-1 Excess Tax Increment 80,000 0 Total 218,000 80,000 3. RECOMMENDATION: Staff recommends that the City Council support utilization of tax increment from TIF District 1-1 to replace a portion of the HRA tax levy. Staff also recommends the City Council support maintaining the HRA levy at its current level and apply the remaining levy capacity towards economic development operations. Page 2 w rp)City of To: Nymouth 1dd,.9 Quoilty to Life From: Memorandum Date: Dave Callister, City Manager Givonna Kone, Human Resources Manager Jennifer Moreen, Human Resources Coordinator November 25, 2014 Item: Update on Risk Management Fund The Risk Management Fund is an internal service fund designed to support the City's workers' compensation and property/casualty insurance programs. Fund revenues are primarily charges to other funds and investment earnings. The cash balance in the Risk Management Fund is currently $6,924,145. After consulting with the League of Minnesota Cities Insurance Trust and the city's insurance consultants, staff recommends maintaining a balance of $7,000,000 in the Risk Management Fund for the purposes outlined below. Please note that this report addresses items that are above and beyond premiums, copays, deductibles and claims, which are budgeted items. Based on information gathered during this review, staff will be making recommendations to set the 2016 — 2017 budget accordingly. Workers' Compensation - $4,700,000 The City is self-insured for workers' compensation and purchases required reinsurance from the Workers' Compensation Reinsurance Association (WCRA) at the $960,000 reinsurance level. (Beginning in 2015, the City's reinsurance level will increase to $980,000.) This means that the City would be responsible for the first $980,000 of a workers' compensation injury and the WCRA would be responsible for any remaining expenses. In addition to being responsible for the first $980,000, the City would also be responsible for the Special Compensation Fund (SCF) assessments on wage loss claims. The assessment is currently 20%. The industry standard recommends having four to ten times the reinsurance level available for catastrophic claims. Using this standard as a guide, staff recommends reserving $4,700,000 in risk management funds for workers' compensation claims. This amount is four times the reinsurance level plus 20% for the Special Compensation Fund assessment and enables the City to pay for up to four $1.1 million dollar claims. Workers' Compensation Reserves (IBNR) - $600,000 Liabilities of the Risk Management Fund are reported when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported (IBNR). The City's IBNR for workers' compensation claims at the end of 2013 was $587,738. The IBNR is calculated by adding the amount of pending claims and 50% of the previous year's activity. Staff recommends that, in the future, the workers' compensation reserve amount be adjusted to reflect IBNR figures in the City's most recent CAFR. Page 1 Property/Casualty Litigation Costs - $350,000 With regard to litigation related to land use and other special risks, the City's financial exposure varies depending upon the amount of the claim. If the city were involved in litigation costing $1,000,000, the City's expense above and beyond the copay and deductible would be approximately $350,000. Staff recommends retaining $350,000 in the Risk Management Fund which is adequate to fund one 1,000,000 lawsuit. Uninsured Property (e.g., roads, bridges, culverts, mailboxes, street lights) - $1,000,000 Staff recommends reserving $1,000,000 for unexpected damage to uninsured property. The culvert on Fernbrook Lane that failed this past spring is a recent example of the city incurring expenses to replace uninsured property. The culvert was in the CIP for repair in 2014, but ultimately needed to be replaced. The replacement cost the City approximately $500,000. This is an example of a cost that could be covered with Risk Management funds in the future. Health insurance - $350,000 The City has put measures in place to limit its exposure under Health Care Reform, however, staff recommends reserving $350,000 to respond to any unexpected fees or penalties or to renegotiate with unions over contract terms related to health insurance. In conclusion, please be advised that the recommendations in this memorandum are intended to support the current cash balance in the Risk Management Fund. They are not intended to dedicate funds for certain purposes. This approach will allow the City greater flexibility to address issues as they may arise. Staff will be in attendance at the November 25 meeting to answer questions and seek City council input regarding the recommendations outlined in this memorandum. Page 2 rp)City of Plymouth Adding Quality to Life SPECIAL COUNCIL MEETING November 25, 2014 To: Mayor and City Council Prepared by: Dave Callister, City Manager Item: Set Future Study Sessions Agenda 2CNumber: v Council should also review the list of pending study sessions below and set meetings as desired. Calendars are attached to assist with scheduling. Pending Study Session Topics at least 3 Council members have approved the following study items on the list) Median improvements on Vicksburg Lane Other Council requests for Study Session Topics: Council goals and legislative priorities 2015 (suggested date January 20, 2015) Update on prosecution services (JW) Health insurance premiums (JW) City's role in economic development and redevelopment Review hourly rate vs. participant rate for use of playfields (2016 budget) Staffs requests for Study Sessions: Underground power on Vicksburg Lane Police staffing needs for 2016 Page 1 r City of Plymouth Adding Quality to Life December 2014 Modified on 10/ 15/2014 CHANGES ARE MADE IN RED Page 2 1 2 3 4 5 6 6:00 PM 7:00 PM SPECIAL COUNCIL PLANNING MEETING COMMISSION Board and Commission MEETING Interviews Council Chambers Medicine Lake Room 7 8 9 5:30 PM 7:00 PM10 11 12 13 2:00-5:00 PM SPECIAL COUNCIL CHARTER COMMISSION 7:00 PM Old Fashioned MEETING ANNUAL MEETING PARK iY REC Christmas Rental Housing Medicine Lake Room ADVISORY Plymouth Historical Ordinance Medicine Lake Room 7:00 PM COMMISSION Society Building ENVIRONMENTAL PRAC) MEETING7:00 PM QUALITY Council ChambersREGULARCOUNCILCOMMITTEE (EQC) MEETING MEETING Council Chambers Medicine Lake Room 14 15 16 17 18 19 20 7:00 PM Cancelled PLANNING HRA MEETING COMMISSION Medicine Lake Room MEETING Council Chambers Hanukkah Begins at Sunset 21 22 23 24 25 26 27 CHRISTMAS EVE CHRISTMAS DAY CITY OFFICES CLOSE AT CITY OFFICES 12:00 PM CLOSED 28 29 30 31 NEW YEAR'S EVE NEW YEARS DAY 6:00-9:00 PM New Years CITY OFFICES Eve Event CLOSEDPlymouthIce Center Modified on 10/ 15/2014 CHANGES ARE MADE IN RED Page 2 rCity of Plymouth Adding Quality to Life January 2015 Modified on 11 / 19114 CHANGES ARE MADE IN RED Page 3 1 2 3 NEW YEAR'S DAY CITY OFFICES CLOSED 4 5 6 7 8 9 10 7:00 PM 7:00 PM PLANNING PARK 8 REC COMMISSION ADVISORY MEETING COMMISSION Council Chambers FRAC) MEETING Council Chambers 11 12 13 14 15 16 17 7:00 PM 7:00 PM REGULAR COUNCIL ENVIRONMENTAL MEETING QUALITY Council Chambers COMMITTEE EQC) MEETING Medicine Lake Room 18 19 20 21 22 23 24 7:00 PM 7:00 PM PLANNING HRA MEETING MARTIN LUTHER COMMISSION Medicine Lake Room KING JR. MEETING BIRTHDAY Council Chambers Observed CITY OFFICES CLOSED 25 26 27 28 29 30 31 7:00 PM 7:00 PM REGULAR COUNCIL PLYMOUTH MEETING ADVISORY Council Chambers COMMITTEE ON TRANSIT (PACT) MEETING Medicine Lake Room A Modified on 11 / 19114 CHANGES ARE MADE IN RED Page 3 rCity of Plymouth Adding Quality to Life February 2015 1 2 3 4 5 6 7 7:00 PM 3:00 - 7:00 PM PLANNING Fire 8 Ice COMMISSION Festival MEETING Parkers Lake Park Council Chambers 8 9 10 11 12 13 14 7:00 PM 7:00 PM 7:00 PM REGULAR COUNCIL ENVIRONMENTAL PARK Ft REC MEETING QUALITY ADVISORY Council Chambers COMMITTEE COMMISSION EQC) MEETING PRAC) MEETING Medicine Lake Room Council Chambers 15 16 17 18 19 20 21 7:00 PM 5:30 PM PRESIDENTS PLANNING BOARD AND DAY COMMISSION COMMISSION MEETING RECOGNITION Council Chambers EVENT CITY OFFICES Plymouth Creek CLOSED Center Ash Wednesday 22 23 24 25 26 27 28 7:00 PM 7:00 PM REGULAR COUNCIL HRA MEETING MEETING Medicine Lake Room Council Chambers Modified on 11 / 19114 CHANGES ARE MADE IN RED Page 4 r City of Plymouth Adding Quality to Life March 2015 1 2 3 4 5 6 7 7:00 PM PLANNING COMMISSION MEETING Council Chambers 8 1:00 PM 9 10 11 12 13 144:00 PM Healthy Living 7:00 PM 7:00 PM 7:00 PM 9:00 AM - Fair REGULAR COUNCIL ENVIRONMENTAL PARK £t REC 12:00 PM Plymouth Creek MEETING QUALITY ADVISORY City Sampler Center Council Chambers COMMITTEE (EQC) COMMISSION Plymouth City Hall MEETING PRAC) MEETING Daylight Savings Medicine Lake Room Council Chambers Commences Set Clocks Ahead 15 16 17 18 19 20 21 7:00 PM PLANNING COMMISSION MEETING Council Chambers 22 23 24 25 26 27 28 7:00 PM 7:00 PM 12:00 PM -3:00 PM REGULAR COUNCIL HRA MEETING Spring Bridal Expo MEETING Medicine Lake Room Plymouth Creek Council Chambers Center 29 30 31 Modified on 11 / 19114 CHANGES ARE MADE IN RED Page 5