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Home My WebLink About11-07-07 Council Packet7:10 p.m. III. Visitors/Public Continent Recycling Award (1) This is an opportunity for the public to address the Council with questions 01- concerns on issues not part of the regular agenda. (Please limit cornmonts to 3 minutes in length.) 7:15 p.m. IV. Consent Agenda (Roll Call Vote) A. Approve Bills & Investments B. Approve City Council Minutes — October 23, 2007 (2) 7:15 p.m. V. Public Flearing Public Hearing Regarding the Possibility of Issuing Bonds to Fund a New Municipal Facility or a Rehabilitated and Expanded Facility (3) 7:45 p.m. VI. Old Business A. City Hall Facility (3) B. CVB and Lodging 'lax (4) C. Iighway 36 Frontage Roads (no enclosure) 8:00 p.m. VII. New Business None 8:00 p.m. VIII. Closed Session A. Labor Negotiations 8:20 p.m. IX. Adjournment Page 1 of 42 CITY OF OAK PARK HEIGHTS WEDNESDAY, NOVEMBER 7, 2007 CITY COUNCIL MEETING AGENDA 7:00 P.M. 7:00 p.m. I. Call to Order/Pledge of Allegiance/Approval of Agenda Estimated times 7:05 p.m. II. Department/Council Liaison Reports A. Planning Commission B. Parks Commission C. Cable Commission D. Water Management Organizations E. Other Liaison/Staff reports 7:10 p.m. III. Visitors/Public Continent Recycling Award (1) This is an opportunity for the public to address the Council with questions 01- concerns on issues not part of the regular agenda. (Please limit cornmonts to 3 minutes in length.) 7:15 p.m. IV. Consent Agenda (Roll Call Vote) A. Approve Bills & Investments B. Approve City Council Minutes — October 23, 2007 (2) 7:15 p.m. V. Public Flearing Public Hearing Regarding the Possibility of Issuing Bonds to Fund a New Municipal Facility or a Rehabilitated and Expanded Facility (3) 7:45 p.m. VI. Old Business A. City Hall Facility (3) B. CVB and Lodging 'lax (4) C. Iighway 36 Frontage Roads (no enclosure) 8:00 p.m. VII. New Business None 8:00 p.m. VIII. Closed Session A. Labor Negotiations 8:20 p.m. IX. Adjournment Page 1 of 42 This Page Is Left Intentionally Blank. Page 2 of 42 Oak Park Heights Request for Council Action Meeting Date November 7, 200 Agenda Item Reacling Award Time Required o Agenda Placement Visitors Public Comment Originating Departmei Requester's Signature Action Requested Receive Information _ Background/,Justification (Please indicate any previous action has been taken or if other public bodies have been advised). Page 3 of 42 CITY of OAK PARK HEIGHTS _................... 14168 Oak Park Boulevard No. • P.O. Box 2007 • Oak Park Ifeights, MN 55082-2007 • Phone: 651/439-4439 •l=ax: 6511439-0.574 November 1, 2007 Richard and Karla Keller 14140 Upper 54'x' Street N. Oak Park Heights, MN 55082 Dear Mr. and Mrs. Keller Thank you for participating in the City's recycling program. As an incentive to recycle and to increase fire prevention awareness, the City rewards two residents each month with their choice of an award of $25.00 or a fire extinguisher and/or smoke detector(s). Your residence was checked on Thursday, November 1, 2007 to determine if you had your recycling bin out with your regular garbage. Your recycling was out and ready for collection; therefore, you are one of this month's winners. Please contact me at 439-4439 at your convenience to arrange for delivery of the reward of your choice. On behalf of the Oak Park Heights City Council, thank you for participating in the City's recycling program. Congratulations! Jennifer Thoen Administrative Secretary/Deputy Clerk Tree City U.S.A. Page 4 of 42 l Oak Park Heights Request for Council Action Meeting Date November 7, 200 Agenda Item Approve City Council Minutes — Octob.er.23, 200Time Required o Agenda Placement Consent Agenda Originating Departme Requester's Signature Action Requested . Approve Background/Justification (Please indicate any previous action has been taken or if other public bodies have been advised). Page 5 of 42 CITY OF OAK PARK HEIGHTS 7:00 P.M. TUESDAY, OCTOBER 23, 2007 CITY COUNCIL MEETING MINUTES I. Call to Order/Pledge of Alle fiance/A royal of A enda: The meeting was called to order at 7:00 p.m. by Mayor Beaudet, Present: Councilmembers Abrahamson, Doerr, McComber and Swenson. Staff present: Administrator Johnson, City Attorney Vierling, City Engineer Postler, City Planner Richards, and Finance Director Holst. Absent: None. Mayor Beaudet moved the Public Hearing; to after the Consent Agenda. Councilmember McComber, seconded by Councilmember Doerr, moved to approve the Consent Agenda. Carried 5-0. II. Department/Council Liaison Reports: A. Planning Commission: City Planner Richards reported that the last meeting of the Planning; Commission was on October 11, 2007. He stated that at that meeting the Planning; Commission discussed the B-3 zoning; district amendment. Ile stated the Comprehensive Planning Committee also met on that date. I -Ie reported that the Comprehensive Plan is almost completed. Richards reported that the next meeting of the Planning Commission is November 8, 2007. He stated that there is one Public Hearing on the Agenda regarding the Brackey/Best Buy development. B. Parks Commission: Councilmember McComber reported that the Parks Commission met on October 15, 2007. She stated that prior to the meeting they had the Fall Wlkthrough and the Autumn Hills Park Shelter Ribbon Cutting Event. McComber reported that the next meeting of the Parks Commission is on November 19, 2007 at 6:30 p.m. C. Cable Commission: Councilmember Doerr reported that there have not been any recent Cable Commission meetings. He stated that he has attended two cable task force meetings. D. Water Management Organizations/Middle St. Croix: Mayor Beaudet reported that the Middle St. Croix WMOs next meeting; is set for November 8, 2007 at 7:00 p.m. at the Washington Conservation District Office. L. Other Liaison/Staff Reports: Councilmember McComber reported that she attended the Washington County Groundbreaking Ceremony. She stated that the City now has a gold shovel from that ceremony. She also reported that she received the new policies for the League of Minnesota Cities. She reported that comments on the policies are due by November 19"' Page 6 of 42 City Council Meeting Minutes October 23, 2007 Page 2 oI' 7 Administrative Secretary Thoen reported that there were 340 loads at the Fall Clean-up and that the loads were much smaller in volume than at the Spring Clean-up. Mayor Beaudet thanked Administrative Secretary Thoen and Public Works Operator Kegley for their work at the Fall Clean-up. 111. Visitors/Public Comment: Recycling, Award: Administrative Secretary Thoen reported that Quentin Nordeen of 5565 Oakgreen Avenue North was chosen as the recycling award winner. 1V. Consent Agenda: A. Approval of Bills & Investments B. Approval of City Council Minutes — October 9, 2007 C. Payment Request #1 to LeadCon, Inc. for Rehab of 250,000 Gallon Elevated Tank D. Approve Kennel Permit Application made by Susan Roettger E. Approval of $225,000 Interfund Loan from the Capital Revolving Fund to the Water Rehabilitation Fund F. Appoint Mary McComber as Voting Delegate to National League of Cities Annual Business Meeting Councilmernber Swenson, seconded by Councilmember Doerr, moved to approve the Consent Agenda. Roll call vote taken. Carried 5-0. V. Public Hearinj4s: Mayor Beaudet opened the public hearing and stated that there will be presentations by the architect, financial advisor, and the bond counsel. Randy Engel from Buctow and Associates reviewed the space needs and options that were reached as part of the study completed in early 2007. He provided a presentation including drawings of four options for a rehabilitated or new facility. He noted that cost estimates ranged from 1.5 million for a rehabilitated facility to 6.5 million for a new facility on the sante campus as the existing facility. Steve Mattson from Northland Securities informed the public that Minnesota Statute requires that Capital Improvement General Bonds be issued for this type of project. lie informed the public that if the City issued bonds in the amount of $7,500,000, the increase for a property owner having a property value of $200,000 would be approximately $139.00 per year, and that figure would be less if bonds were issued in a lesser amount. He reported that the City of Oak Park Heights is in a great financial position which will allow for the City to obtain a lower interest rate. Councilmember Swenson stated he would like to continue the public hearing to allow the public time to read about this issue in the newspaper. Councilmember Doerr stated that a Page 7 of 42 City Council Meeting Minutes October 23, 2007 Page 3 o1`7 resident informed him that his only concern is that the parking lot access be east in/east out and west in/west out. Councilmember Doerr also stated that continuing the public hearing will allow residents to find out the results of the school district referendums. Councilmember McComber, seconded by Councilmember Swenson, moved to continue the Public Hearing to the next council meeting. Carried 5-0. City Administrator Johnson stated that lie spoke with a representative from Andersen Corporation regarding the possibility of leasing or purchasing; space from them at the former St. Croix Mall site. He stated that Andersen Corporation felt it was an interesting idea and that they will discuss it. 1- le stated that Andersen Corporation is not opposed to having the City send an architect to view the space. Councilmember Abrahamson requested that the walkthrough take place prior to the next council meeting. Councilmember McComber requested that the walkthrough be posted in the event that councilmembers want to attend. Councilmember Doerr stated that a drawback to occupying that space is that the public works department and police department may be located in a separate location than the rest of city staff. Councilmember Abrahamson stated there are other areas within in the City that may work so he encouraged staff and the council to keep that in mind. Mayor Beaudet stated that on an annual basis it may look like the City would be saving money to lease a space rather than to build a new facility, but over a 50 year span it would end up costing; more money to lease. City Administrator Johnson stated that if the council desired, staff would send out postcards to residents inviting them to the public hearing. Councilmember McComber stated that would be a good idea. Mayor Beaudet stated the cards would need to be mailed that week in order for them to reach the residents in a timely manner. VI. Old Business: A. City Hall Facility: No action taken. B. STH 36 Frontage Roads: City Engineer Postler reported that the estimated cost of maintenance of the Highway 36 Frontage Roads would be $36,000 which does not include possible liability issues. Councilmember Swenson stated he was concerned with trucks parking on the ditches along the frontage roads. Councilmember Swenson, seconded by Councihncrnber Doerr, moved to direct staff to make a request with MnDOT in the form of a Resolution that `No Parking' signs be installed on the north side of the south frontage road. Roll call vote taken. Carried 5-0. Councilmember Swenson, seconded by Mayor Beaudet, moved that the City will pay for the no parking signs. Carried 5-0. Page 8 of 42 City Council Meeting Minutes October 23, 2007 Page 4 of 7 Mayor Beaudet, seconded by Councilmember Doerr, moved to continue this item and request that staff write a letter to MnDOT requesting that MnDO`1' provide the City with a written statement that they have money in their budget next year for the frontage roads. Carried 5-0. C. STH 36 1 St. Croix River Crossing — Municipal Consent Lawsuit: City Attorney VierIing reported that on October 18, 2007, the District Court in Washington County issued a Summary Judgment in favor of the City of Oak Park Heights in the municipal consent lawsuit against MnDOT. D. B-3 Highway. Business and Warehousing District — Proposed Amendments: City Planner Richards reported that the Planning Commission reviewed the proposed amendments to the B-3 Zoning District and that their recommendation was included in the packet for the City Council. He stated that this originated from the Denny Hecker Group's request to rezone their site to B-2. He stated that the City Council expressed they were not comfortable with that but would consider an amendment to the B-3 Zoning District Ordinance. Mike Runk, a member of the Planning Commission, came forward and stated that it was the intent of the Planning Commission that the ordinance be worded such that existing buildings and businesses would not be considered non -conforming. City Planner Richards stated that they could word the ordinance to say that it affects only new businesses coming in after the date of adoption of the amendment. Councilmember Doerr stated lie wasn't sure why the Council would be in favor- of sit-down restaurants and not drive through type restaurants. He stated he wasn't sure what the difference would be and what the complaint is against fast food. Mayor Beaudet responded that there would be a traffic impact related to allowing fast food restaurants in the area. Councilmember Abrahamson stated that lie was concerned about foot traffic across Highway 5 if there were convenience food establishments in that area. Mayor Beaudet was opposed to having restaurants in the area because most businesses in that area are closed on weekends and evenings. Iie stated that there is very little traffic in the area and very few police concerns. He stated that if restaurants are allowed in that area, the streets would then need to be urbanized and he was concerned about the cost to add curb and gutter and storm sewer in that area. Councilmember McComber stated she would like to see more restaurants in Oak Park Heights and does not see why drive through restaurants could not be allowed. She stated that the vision for that area has changed and this amendment request provides the City Council the opportunity to carry out the vision. Mike Runk came forward and stated that the Comprehensive Planning Committee has considered urbanizing that area as part of the Comprehensive Plan. City Attorney Vierling stated that if the B-3 zoning district is amended to Page 9 of 42 City Council Meeting Minutes October 23, 2007 Page 5 of 7 allow all restaurants, including those with a drive through, the City Council would essentially be amending the zoning district to B-2 because there would not be any distinguishing features of consequence between the two zoning districts. Councilmember Swenson asked City Engineer Postler if he could prepare a cost and assessment estimate for urbanizing the area. Mayor Beaudet questioned whether the council would like to postpone this issue to allow for the City Engineer to obtain those figures. Eric Dove from Denny Hecker Automotive Group came forward and stated they would like to have fast food restaurants as a permitted use in that area. Ile stated that the Planning Commission has worked towards the applicant's request for the area with the exception of not allowing fast food, and they would like the City Council to adopt the Planning Commission's recommendation for the B-3 zoning amendments. Ile requested that the City Council act on the request rather than postpone the issue. Councilmember Abrahamson, seconded by Mayor Beaudet, moved to approve the B-3 amendment proposal. Councilmember Abrahamson, seconded by Councilnnember Swenson, moved to amend that existing landowners are allowed to make changes to their buildings in the future and that they will not be classified as non -conforming. Carried 5-0. Councilmember Abrahamson, seconded by Mayor Beaudet, moved to clarify issue of take-out based on a reasonable percentage of sales. Carried 5-0. Primary motion Carried 4-1, McComber opposed. Councilmember Swenson, seconded by Councilmernber Abrahamson, moved to deny B-2 rezoning request made by Denny Hecker group. Carried 5-0. E. Ordinance 1101.08: City Administrator Johnson reported that staff noticed all omission of certain language in Ordinance 1101.08. Ile requested that the City Council amend the language to the proposed language in that evening's council packet with one clarification that the maximum fine is now $1,000.00. Councilmember Swenson, seconded by Councilmember McComber, moved to approve the amendment. Roll call vote taken. Carried 5-0. F. Ordinance 1103.02.13: Councilmember Swenson, seconded by Councibriember McComber, moved to approve the amendment of the definition of firearm in Ordinance 1103.02.13 as proposed in that evening's council packet. Roll call vote taken. Carried 5-0. Page 10 of 42 City Council Meeting Minutes October 23, 2007 Page 6 of 7 G. Ordinance 601 — Pet Leash Law: Councilmember McComber reported that the Parks Commission recommended that Ordinance 601 remain unchanged. She stated that she disagrees with the Commission. McComber suggested that the definition of "at large" in Ordinance 601 be amended to remove the language, "or by voice." She further suggested that the City Council give direction to the Parks Commission to come up with a recommendation on areas that could be designated as dol; parks. Mayor Beaudet, seconded by Councilmember Doerr, moved to accept the Parks Commission recommendation. Carried 4-1, McComber opposed. V11. New Business: A. Schedule Budget Worksession: Mayor Beaudet, seconded by Councilmember Doerr, moved to set a budget worksession for Wednesday, November 7, 2007 at 5:30 p.m. Carried 5-0. B. Schedule Worksession wl Parks Commission to Discuss 5502 Os ,00d Ave. Property: Councilmember Swenson, seconded by Councilmember McComber, moved to set a joint worksession for November 27, 2007 with a property walkthrough at 5:30 p.m. and a meeting at 6:00 p.m. Carried 5-0. Councilmember Abrahamson suggested the City Administrator obtain ideas from the Parks Commissioners and the City Councilmembers ahead of time to help facilitate discussion. C. Rental Housing Re istration and Inspections: Mayor Beaudet turned this item over to Councilmember Doerr because of a possible conflict of interest. Councilmember McComber stated that other cities in Minnesota have implemented a Rental Housing Registration and Inspections program. Councilmember McComber, seconded by Councilmember Doerr, moved to direct staff to look into the program further and to provide a recommendation. Carried 4-0, Mayor Beaudet was not present and did not vote. VIII. Closed Session: City Attorney Vierling stated that at this point in the meeting the City Council would adjourn to a closed session regarding matters of pending litigation. City Attorney Vierling stated that during the closed session, the City Council discussed issues regarding City of Oak Park Heights vs. Secure Mini -Storage and City of Oak Park Heights vs. MnDO'f. He stated that issues of strategy were discussed and that no action was taken during the closed session. Page 11 of 42 City Council Meeting Minutes October 23, 2007 Page 7 of 7 IX. Adjoumment: Councilmember Swenson, seconded by Councilmember McComber, moved to adjourn at 9:36 p.m. Carried 5-0. Respectfully submitted, Jennifer Thoen Administrative Secretary/Deputy Clerk Approved as to Content and form, David Beaudet Mayor Page 12 of 42 Onk Park 1-11 1,gia h Rcggaest for ('oaanci.l Acfdon Mocting, Date - -- ..._.Octer2Wi'`� IMJ `){1'i 'fim(e Required: Agenda hem Title: Q Agenda Placement 1'c Originating Department/ Requester's Signature: Action Requested.—Di. Background/Justification bodies have advised): indicate if any previous action has been taken or if other public As part of the continuing process fora poteantia,4 City �laall project, the City t'aaaaexcil oaxaast hold the public hearing to receive public t°tsa-sawcaat 0" the City 41,111 facility and the related faanatlinng Scenarios and possible ftataaa•e boanci issuaaaoeea Cenaen•aallyy we will have a pn°Mataation by Randy Engel Of Buetow & Associates -- the City's Architect oantlinainng oxatnre advance options for the City MIR Project—Steve Mattson of Northland Securities —the City's IFfilaaanc Taal Advisor and Hara°y tppcl of Briggs ,seed Morg,ana — tlae City's Bond Counsel will also he present to review proces's a,H(l �,eg,li -eox outs. As I Wave been aativised, tiaere is no paartieulaar action the City roaast taalce following thatpaaoblit hearing, rather only hold tine Meeting to gaatloer paaablic c��nnaaneaot, 'l he City finaast patavvever as sonnna point adopt the related 5 -yeas' Capital Improvement i'la it its it relffates to this possible project. This may be adopted now or at some future daate, It is however best to preserve that adoption to as latter (Rate until as more defined project is available. The current laaongeaaage contains the full scope of options considered by the City, again ranging fronoa 1.75 Million fora retrofit to 7.5 million, for as new facility. f+ oelosetla 1. Drawings and Plan Options from Randy Engel, 2. Copy of the Public Notice as published, 3. Current 5 — Year Clp Update for the City Hall Facility Page 13 of 42 di - - `------- - TO �D L-1 Page 14 of 42 '13 172 x w I'll 111-d VO Page 15 of 42 I Page 16 of 42 . .......... WJ (D 4.1-- (D Page 16 of 42 I A,lolj Iwo iU6 . .... ...... ... . .. - -- - ---- - -------- ------- --------- - LJ �_ ljAO} CITHICIAV UDIAH,() ---------- DOO:j- 0( Om (D Page 17 of 42 An, PW 500,( LJ �_ ljAO} CITHICIAV UDIAH,() ---------- DOO:j- 0( Om (D Page 17 of 42 I I ... _.... _.. m { �r rr -tt srEtc r ta- - 173 ..-_ -..- iESio�y anuany uo?.ia C)i 000 .. 1 s 11111flill r lm ! C 0 ce � 0 L— LL I psi Page 18 of 42 ............. -- --------- ............... .. MITI. -ij I Di -------- ---- ,..OAV till IE1.0 .... . ... ..... . ... 0 0 LIM Page 19 of 42 CITY OF ()AK PARK HEIGHTS NO'1'1(','E Of, PUBLIC HEARING ON INTI N"TION `fO ISSUE 01 NI: RAI:_ OBLIGATION CAPITAL IMPROVEMENT PLAN BONDS AND THE PROPOSAL TO ADOPT A CAPITAL 1MPROVEM} NT PI AN 'I,I-IEREFOR NOTICE IS I IEREBY GIVEN, that the City Council of the City of Oak Park Heights, Minnesota, will meet on October 23, 2.007, at 7:00 p.m. at the City Mall, in Oak Park Heights, Minnesota, for the purpose of conducting a public hearing on (a) the intention to issue; general obligation capital improvement plan bonds in an amount not to exceed $7,500,000 and (b) the proposal to adopt a. capital improvement plan therefor. The proceeds of the bonds will be used to finance a municipal center facility, consisting of a city hall, library, public works and police station to be located at or near 14168 Oak Park Boulevard North in the City pursuant to Minnesota Statutes, Section 475.521. All persons interested may appear and be heard at the time and place set forth above. If a petition requesting a vote on the issuance of the bonds is signed by voters equal to five percent of the votes cast in the City in the last general election and is filed with the City within thirty days after the public hearing, the bonds may only be issued upon obtaining the approval of the majority of the voters voting on the question of issuing the bonds. Individuals unable to attend the public hearing can make written comment by writing to the City Administrator, Oak Park Heights City Hall, 14168 Oafs Park Boulevard, Oak Park Heights, Minnesota 55082-3007. Written comments must be received prior to the date and time of the public bearing. BY ORDER OI if1 VCI'fY COUNCIL City Admin [Submit October 1, 2007; Publish October 4, 20071 2089234v] Page 20 of 42 2008 through 2012 Five-year Capital Improvement Plan for City of Oak Park Heights, Minnesota 10/16/07 Prepared by: Eric Johnson, City Administrator City of Onk Park Heights, MN Page 21 of 42 Table of Contents 1. Introduction 2 1I. Purpose 2 III. The Capital Improvement Planning Process 3 IV. Project 51Fmmary _ 4 V. Financing the Capital Improvement PIa3� �_. _ 5 Project Costs ................................................ . .............. Appendix A Proposed CIP Bond Issue ............................................... Appendix B MAMMA .......................................................... Appendix C Page 22 of 42 CITY OF OAK PAW( HE Gl TS DIVE -YEAR CAPITAL IMPROVEMENTPLAN 2008 `I TROUGH 2012 1. INTRODUCTION ION In 2003; the Minnesota State Legislature adopted a statute that generally exempts City bonds issued under a capital improvement program from the referendum requirements usually required for city halls, town halls, public works, libraries and Public safety facilities. II. PURPOSE A capital improvement is a major expenditure of City funds for the acquisition or betterment to public lands, buildings, or other improvements used as a City Hall, town hall, public safety, or public works facility, which has a useful live of five years 01' 11101'e. For [lie purposes of Minnesota Statutes, Section 475.521, capital improvemenis do not include light rail transit or related activities, parks, road/bridges, administrative buildings other than City Hall or town hall or land for those facilities. A Capital Improvement flan (CIP) is a document designed to anticipate capital improvement expenditures and schedule them over' a five-year period sa that they may he purchased in file most efficient and cost o f-ective method possible. A CIP allows the matching of expenditures with anticipated Income. As potential CXpCnditni'Cs M'C reviewed, the City considers the benefits, costs, alternatives and impact on operating expenditures. The City of Oak Park Heights, Minnesota (the "City") believes the capital improvement process is an important element of responsible fiscal management. Major capital expendittnfes can be anticipated and coordinated so as to minimize potentially adverse financial impacts caused by the timing and magnitude of capital outlays. ']'his coordination of capital expel€dittn'es is important to the City in achieving its goals of adequate physical assets and sound fiscal managcment. In these financially difficult times, good planning is essential for the wise use of limited iinaneial resources. The C111 is designed to be updated on an annual basis. In this manner, it becomes an ongoing fiscal planning tool that continually anticipates future capital expenditures and Funding sources. Page 23 of 42 III. Tf lk CAPITAL, 1MPROVE'MENT PLANNING PROCI SS The capital iniprovement planning process is as follows: the City Council authorizes the preparation of the C1P. City staff is instructed to assemble the capital expenditures to be undertaken within the next five years. The City Council then reviews the expenditru•es according to their priority, fiscal impact, and available fi3nding. From this information, a preliminary capital Improvement plan is prepared. Changes are made based oil that input and a final project list is established. The City Council then prepares a plan based on the available funding sources. If general obligation bonding is necessary, the City works with its financial advisor to prepare a bond sale and repayment schedule. Over the life of the CII', once the funding, including proceeds from the bond sales becomes available; the individual capital expenditures can be made. ]n subsequent years, the process is repeated as expenditures are completed and new needs arise. Capital improvement planning looks five years into the future, For a City to use its authority to finance expenditures under Section 475.521, it must mec€ the requirements provided therein. Specifically, the City Council must approve the sale of capital improvement bonds by a three -fifth majority of its membership. In addition, it must hold a public hearing fOl- public input. Notice of such hearing must be published in the official newspaper of the City at least fourteen, but not more than twenty-eight clays prior to the date of the public hearing. The City COLInCil approves the CHP following the public hearing. Although a refcrendurTr is not required, a reverse referendum is allowable. 11' a petition hearing the signatures of at least five percent of the votes cast in the last gencral election requesting a vote on the issuance of bonds is received by the municipal cleric within thirty days after the public hearing, a referendum vote on the issuance of the bonds shall be called (if a vote is taken and the referendum passes, the taxes would be levied on market value rather than tax capacity). Page 24 of 42 IV, P1ZC JL"C'T SUMMARY The expenditui-es to be undertaken with this UP are limited to those listed below. All other- foreseeable capital expenditrires Within the City governmer)t will come through other means. The following expenditures have been submitted for inclusion in this C1 P: Rehabilitation and/or Replacement of the City I -fall 1"acility, including the Police Department and Public Works Areas There are not other projects constituting a capital improvement within the meaning of' Minnesota Statutes Section 475.521 contemplated at this time. To be undertaken within the next 5 years. The statute has established certain criteria that must be met. Under these criteria, the City has considered the following eight points: 1. Condition of the City's infrastl-LIO re and need for the project. 2. Demand for the improvement. 3. Cost of the improvement. 4, Availability of public resources. 5. Level of overlapping debt. 6. Cost/benefits of alternative uses of funds. 7. Operating costs of the proposed improvements. 8. Options for shared facilities with other cities or local governments. The CIP is composed of projects that will allow the City's departments more space in an expanded area. The City has analyzed the eight points rogLlic-ed per statute f<n' each project on an individual basis and as a whole. Their findings are as follows: PROJECT: Rehabilitation and/or Replacement of the City Hall Facility Conditions of City Infrastructure and Need for the Project The currc111. City 11,111 facility, hereafter referred to as the "f=acility" is in average condition and large approximately 35 years old with major updates in 1980 and 1989 Howcver, duc to continued growth in the area, additional space is needed to house personnel, equipment and supplies necessary to continue to provide adequate public services for the next 50 years. (please see ExIiibit A) Demand for Project As mentioned above the current facility does not provide adequate space for personnel, equipment and supplies. Moreover, in the next few years, the current Facility will need major repairs to its roof; HVAC systems, compliance with Americans with Disabilities Act and other improvements to bring the City facilities into compliance with its own zoning codes. Page 25 of 42 Estimated Cost of, the Project The project is estimated to cost of the project ranges between 47,5 Million for a new Facility to approximately 41.75 million for a rehabilitation and expansion ofthe Current Facility, Availability of Public Resources The City's portion of the project may be funded by a combination of general property tax levy and available resources on hand. Relative Costs and Benefits of Alternative Uses of the Funds The need for additional space and pending building repairs has been discussed for several years. T'he space limitations with the current Facility make this project necessary for the City. There are no significant alternatives for funds designated for this project. Operating Costs of the Proposed Improvements A larger Facility will likely require higher maintenance costs, but it is hoped that through the application of LEED certified building elements, these cost differential will be minimal. The current Facility is not economical nor energy efficient by current standards. Options for Shared Facilities with Other Cities or Local Government The Facility is and will be entirely owners by the City. Page 26 of 42 Level of, Over -lapping Debt "I'hc City does not have any other capital improvement bonds outstanding. Indirect Dept' 2006/2007 Net Indirect Deft: $ 7 288,728 Only those jurisdictions with outstanding bond imlebtedness are sllo+vn above. (I} Tax capacity Values are after tax increment, 10% of 200kV transmission line, and fiscal disparity connibution a<liusilnerlts and before fiscal disparity distribution adjustnlcrlt. (2)1Vaslli}17 tnit Caunty has bo11d imlebtedoess of$54.295,000 as of December 31, 2006. (3) ISD No. 834, Stillwater, has bond indebtedness of.$74,990,000 and sinking funds of $9,426,53(1 as of }tine 30, 2007. (4) Northeast Metro Imermediate School DiO-iel No. 916, reported bond indebtcdness of 512,320,000 as of December 31, 2006, (5) Deduclions: (A) M82,450,000 Metropolitan Waste Control Commission Debt as of Marcel 15. 2007. Note l: Debt Service on (A) above is 100% self supported from revenues of the Metre Sallitary Sewer System, although the bonds are full 1,111111 and Credal bands. Sinking hinds o1 $1W,639,920 and escrow fonds of $8,016.458 Have not been deducted because said funds are attributable to (A) above. Sinking fuml/escrow balances are os of December 31, 2006, Note 2: The only fax supported bond indebtedness is $18,775:000 as of March 15, 2007 and sinking 113nds of $10;101,073 as of December 31, 2006. (6) Metro Transit hits bond indebtedness of $162,505,000 as of March 15, 2007 as well as sinking fiends of $16,281,7851 and escrow funds of $16,629,535 as of December .31, 2006. This clebl is issued by the Metropolitan Council for all public transit operatlow; 117 [lie (ransit dlslrlct, of which Metro Transit is the hargesl public transit provider, and is payable Imm ad valorem taxes Icvied on all taxable property within the Melropolitan Transit Distrid. Page 27 of 42 2000/2007 Tcr_v Tcu C'apacily Percentage Tcrxperyer,s Capacity Value Applicable SWlare 1s.Ytwr K-dueifl in ('1711) rr7 %113 Net Debt of Debt Washington County S 273,358,492 `67,356,523 2.69% S 54,295,000(2) $ 1,460,536 !SD No. 834, Stillwater 85,874,241 7,356,523 5.57 65,563,464(3) 5,618,789 NM1SD No. 916 261,805,893 7,356,523 2.81 12,320,000(4) 346,192 Metropolium Council 3,038,442,757 7,356,523 .24 8,673,927(5) 20,817 Metro Transit 2;583,170,505 7,356,523 .28 122,283,681(6) 342 3}4 Net Indirect Deft: $ 7 288,728 Only those jurisdictions with outstanding bond imlebtedness are sllo+vn above. (I} Tax capacity Values are after tax increment, 10% of 200kV transmission line, and fiscal disparity connibution a<liusilnerlts and before fiscal disparity distribution adjustnlcrlt. (2)1Vaslli}17 tnit Caunty has bo11d imlebtedoess of$54.295,000 as of December 31, 2006. (3) ISD No. 834, Stillwater, has bond indebtedness of.$74,990,000 and sinking funds of $9,426,53(1 as of }tine 30, 2007. (4) Northeast Metro Imermediate School DiO-iel No. 916, reported bond indebtcdness of 512,320,000 as of December 31, 2006, (5) Deduclions: (A) M82,450,000 Metropolitan Waste Control Commission Debt as of Marcel 15. 2007. Note l: Debt Service on (A) above is 100% self supported from revenues of the Metre Sallitary Sewer System, although the bonds are full 1,111111 and Credal bands. Sinking hinds o1 $1W,639,920 and escrow fonds of $8,016.458 Have not been deducted because said funds are attributable to (A) above. Sinking fuml/escrow balances are os of December 31, 2006, Note 2: The only fax supported bond indebtedness is $18,775:000 as of March 15, 2007 and sinking 113nds of $10;101,073 as of December 31, 2006. (6) Metro Transit hits bond indebtedness of $162,505,000 as of March 15, 2007 as well as sinking fiends of $16,281,7851 and escrow funds of $16,629,535 as of December .31, 2006. This clebl is issued by the Metropolitan Council for all public transit operatlow; 117 [lie (ransit dlslrlct, of which Metro Transit is the hargesl public transit provider, and is payable Imm ad valorem taxes Icvied on all taxable property within the Melropolitan Transit Distrid. Page 27 of 42 V. 1'INANC'1NG '1"] I1 C:AI'I'I'Al.. 1MRP(:)V]:iM1 N"1' P1,AN The total amount of requested expenditures under the CII' is $7,358,000. 14' these expenditures are to be funded, that amount of money is anticipated to be generated through the tax levy and the sale of$7,500,000 in bonds over the five-year period. In the financing of the CIP, two statutory limitations apply. Under Chapter 475, with few exceptions, cities cannot incur debt in excess of 2% of the assessor's 'Taxable Market Value ('TMV) for the City. In the City, the TMV is $579,089,800. Therefore, the total amount of outstanding debt cannot exceed $11,581,796. As of October 23, 2007, the City had no debt subject to the legal debt limit. Another limitation on bonding under the C11' Statute (475.521) is that without referenduM, the total amount of principal and interest in any one year for CII' debt cannot exceed 0.16% of the 'I'M V for the City. Fir the City of Oak Park Heights, the amount is $926,544 ($579,089,800 x .0016). The principal and interest payments for the City portion of the debt are estimated to be approximately $657,500 in collection year 2008, gradually increasing to $820,000 in collection year 2022 (this 11110LInt takes into account the required 105% debt service coverage for the City's portion of the bonds). Under the CIP, the City will secure $7,500,000 in 20 -year general obligation bonds in the year 2007 to finance the Municipal Government Center. The par amount of the Bond Issue is based on [Ile amounts listed in Appendix A. The City's proposed general obligation capital improvement bonds (including issuance costs) are shown in Appendix 11. Continuation of the Capital Improvement Plan This CIP should be reviewed annually by the City Council using the process outlined in this plan. The City Council should review proposed expenditures, make priority decisions and seek funding for those expenditures it deems necessary for the City. If' deemed appropriate, the City Council should prepare an update to this plan. Page 28 of 42 APPENDIX A PROJECT COSTS (Capital Expenditures to be Funded with Bond Proceeds) 2008 Expenditures Estimated Hard Cost of New City Fla II Faciiity S 7,358,000 Eslimated Soft Costs 253,900 Less: Estimated Constriction Interest Draw (--Ll 1y900) "Total Uses of WICIS: x..7,500 �0(} Page 29 of 42 APITNllIX 13 PROPOSED CIP BOND ISSUE 2007 General Obligation CIP Issue Net Debt Set -vice Schedule )'E'AR PRINCIPAL. EST. IN'I'L'IZ1;ST RATES INTEREST TOTAL DEBT SERVICL: 2,007 2008 $340,000.00 3.55% 286,087.50 626,087.50 2009 350,000.00 3.55`%4 274,017.50 624,017.50 2010 365,000.00 3.55% 261,592.50 626,592.50 2011 385,000.00 3,60% 248,635.00 633;635.00 2012 400,000.00 3.60% 234,775.00 634,775.00 2013 425,000.00 3.60% 220,375.00 645,375.00 2014 440,000,00 3.65% 205,075.00 645,075.00 2015 475,000.00 3.75% 189,015.00 664,015.00 2016 500,000.00 3.80% 171,202.50 671,202.50 2017 540,000.00 3.85% 152,202.50 692,202.50 2018 575,000.00 3.90% 131,412.50 706,412.50 2019 615,000.00 3.95% 108,987.50 723,987.50 2020 650,000.00 4.00% 84,695.00 734,695.00 2021 690,000.00 4.05% 58,695.00 748,695.00 2022 750,000.00 4.10% 30,750.00 780,750.00 2023 0.00 0.00% 0.00 0.00 2024 0.00 0.00% 0.00 0.00 2025 0.00 0.00% 0.00 0.00 2026 0,00 0.00% 0.00 0.00 2027 0,00 0.00% 0.00 0.00 7,500,000.00 2,657,517.50 10,157,517.50 Page 30 of 42 APPENDIX C: 5 -Year City Cal)ital I1111m.ovement Plan Bond Issuance City of Oak Park Heights, minuesota The City COLlncll must take t11e folla\ving actions before bonds can be issued: 0 City Council directs preparation of a 5 -year Capital Improvement flan 0 City Council conducts a Public I Ic.aring on 1ssriance of bonds and Capital Improvement Plan City Council approves bonds and Capital Improvement Plan by at least a three-fifths vote of the Council 111e13tbership The table belaW lists the steps in issuing process: 9/12/07: City Council adopts Resolution Calling for Public Idearing on Issuance of Bonds and on Capital 1 nprovement Plan. 9128107: Close date to get Notice of Public 1-Iearing on Issuance of Bonds and on Capital Improvement Plan to official newspaper for pusblication. 10/4107: 11111flish Notice of Public Hearing an Issuance of Bonds and on Capital Improvement Plan (publication no more than 28 clays and no less than 14 days prior to hearing date). 10/23/07 (rs7 7:00 p,m.: City Council 1101Cls Public I scaring on Bonds and on Capital Improvement Plan and adopts resolution giving preliminary approval for their issuance and approving Capital Improvement Pian by at least a three-fifths vote of the Council membership. 11/22/07: Reverse referendum period ends (Within 30 days of the public licaring). 12/10107: City Council accepts offer fbr bonds and adopts resoluitson approving sale of bonds. 1/8/08: 'Tentative closingh-cceipt offends. Net Debt Limit Assessor's 'T'axable Market Valine $ 579,089,800 Multiply by 2% __ 0.02 Statutory Debt Limit 11,581,796 Less Debt Paid Solely from Taxes --------- 0 Unused Debt Limit S 11,581,796 Annual Levy Limit I3el• County Value Assessor's Taxable Market Value $ 579,089,800 Multiply by .16% —_0.0016 Statutory Levy Limit 926,541 I,ess City Debt Issued untlef CTT' 0 Unused levy I,imit S 926,.544 Page 31 of 42 t . oo s.-�.O F 6 s > 8 8 >7 >i -- - -- - - - - - - - - - - > > V4 0 c > n 0. 0 - zo o t . oo s.-�.O F 6 s > 8 8 >7 >i -- - -- - - - - - - - - - - > > V4 0 c > n 0. 0 o � w F,T a a - - - -- - - - - - - - - -- - - - -- - 65 ;r7 eta � � it t . oo s.-�.O F 6 s > 8 8 >7 >i -- - -- - - - - - - - - - - > > V4 > - n 0. 0 o � w F,T a a - - - -- - - - - - - - - -- - - - -- - ) rN 10 Pi F Page 32 of 42 0. 0 � w F,T a a ) rN 10 Pi F Page 32 of 42 l,_ry M,. Oak Park Heights Request for Council Action Meeting Date November 8th,.2007....._..__ Agenda Item Title: Convention and Visitor Bureau Room Tax Time Required: 10 Minutes Agenda Placement Old Bus' ess Originating Department/Re pester %' Eric Johnson Cfty Administrator Requester's Signature'"" Action Requested Discussion Po ible Action Background/Justification (PleasVindicate if any previous action has been taken or if other public bodies have advised): Please see the enclosed as received from. Jennifer Severson, Executive Director of the Greater Stillwater Chamber of Commerce: 1. Emailed -- Introducing the Request for the Establishment of a 3% Room Tax 2. CVD Formal Proposal 3, CVB Frequently Asked Questions It is my understanding that the City of Stillwater has approved the 3% room tax on all room types. As of this date, the City of Oak Park Heights has not yet been provided a copy of a proposed ordinance or procedural requirements to implement the room tax nor drafts of possible joint -powers agreements. The City Council may simply desire to comment generally on the implementation of the room tax and come back at a later date with the formal action. Mark Vierling has indicated that he will be examining the statutory provisions required for the City to implement the room tax prior to the meeting on Nov 8th, Page 33 of 42 Page 1 of 2 Eric Johnson .......... ........ From: Jennifer Severson [director@ilovestillwater.com] Sent: Friday, November 02, 2007 2A0 PM To: Eric Johnson Subject, Request for Lodging Tax Ordinance Attachments: 2007CVBProposalFinalOPHpdf.doc.pdf; CVBFrequentQuesiions.pdf November 2, 2007 City of Oak Park Heights 294 North Third Street Bayport, ISN 55003 Dear Mayor Beaudet, Council Members, and City Administrator Eric Johnson, The Greater Stillwater Chamber of Commerce Board, the CVIS Task force, lodging, property owners, and other Chamber members, are asking for your consideration of a lodging tax ordinance to fund a Convention & Visitor Bureau for the communities of Oak Park Heights, Stillwater, and possibly Bayport. Tourism is one of Minnesota's leading; industries and has an economic impact comparable to agriculture. For many years, our area has been a popular destination for visitors. Unfortunately, we're losing ground in the regional and national travel markets because vire don't have adequate funding for advertising and promotions. We don't want "losing ground" to turn into "losing businesses." Developing a CVIS is the first step of econon-fic development for the Chamber and area communities, so it is important that we plan for a future that is based on economic stability. Tourism not only affects hospitality businesses, but also restaurants, dry cleaners, grocery stores, car dealers, hardware; stores and many others. The money spent by visitors filters through a community many times over. 11/2/2007 Page 34 of 42 Page 2 of 2 The Chamber is committed to create a Convention & 'Visitor Bureau to promote the wonderful area we live in and to benefit all businesses in our region. Our hope is to begin collecting lodging taxes on January 1, 2008. A detailed proposal and answers to frequently asked questions are enclosed_ letters of support from the Americann and. Cover Park Manor will be mailed separately. It will take continued hard work and cooperation with the cite governments of the three communities involved to achieve our goal. We look forward to working with you and appreciate; your feedback and suggestions. Best Regards, Jennifer Severson Executive Director Greater Stillwater Chamber of Commerce Jennifer Severson Executive Director d i rector@ i lovesti I (water. coni Greater Stillwater Chamber of Commerce Bayport - Lake Elmo - Oak Park Heights - Stillwater www. i love sti I (water. corn 106 South main Street - P.G. Box 516 Stillwater, Minnesota 55082 Phone: 651-439-4001 - Fax: 651-439-4035 - Cell: 651-238-6727 The Chamber's Priorities: - Enhance Member's return on investment. - Determine the Chamber's role in tourism. - Develop a communication and marketing strategy. - Advocate effectively for member issues with all levels of government. - Increase non -dues revenue to keep membership dues down. 11/2/2007 Page 35 of 42 CVB PURPOSE The purpose of the Greater Stillwater Convention & Visitor Bureau (GSCVB) shall be to 1) attract business meetings and small conventions to the area, 2) draw leisure travel guests for overnight stays, 3) promote raid -week and off-peak travel, 4) provide successful and sustainable resources for tourism -related businesses, and 5) offer quality service to members, visitors and travel industry representatives. LODGING TAX REQUEST The Greater Stillwater Chamber of Commerce, represented by a Board -appointed Convention & Visitor Bureau Task force, requests the cities of Stillwater, Oak Park Heights and Bayport enact an ordinance that imposes a lodging tax on the gross receipts of all existing and future lodging establishments within their respective communities. furthermore, the proceeds from the lodging tax would be used to fund a regional Convention & Visitors Bureau (CVB) with the purpose of promoting the area as a business -travel and tourist destination. The proposed lodging tax will: • Impose a 3% tax on all lodging properties • Begin collecting lodging taxes on January 1, 2008 The proposed CVB will: • Function under a 3 -year operating agreement with full program review • Search out additional non -tax revenue through non -lodging memberships and other programs • Receive guidance from an advisory committee made up of city, lodging and other representatives • Share facility and administrative costs with the Greater Stillwater Chamber of Commerce BENEFITS Lodging tax funding will provide a stable and sustainable income to help launch the area's tourism -related initiatives. The primary benefits of establishing the Greater Stillwater Convention & Visitor Bureau are: • Increase in overnight stays, which translates into more money spent in the area. This revenue filters through the community to both tourism and non -tourism related businesses. • Increase in off-season and mid -week travel through seasonal promotions and focus on niche markets such as sporting events, business meetings and small conventions • Better service to all area business — dedicated staff for tourism -related businesses and a shift in focus by the Chamber to more traditional functions such as economic and business development The CVB will position the area to reap the benefits of projected increases in the tourism industry and emerging niche markets. A sample of new services which could be provided by the GSCVB includes dedicated staff, grant writing/matching, coach tour and convention sales and marketing, meeting planning assistance, cooperative advertising opportunities, and increased participation in regional tourism groups. Current tourism - related Chamber services would transfer to the CVB program of work; including the visitor guide, web site, inquiry fulfillment services, and visitor information. Page 36 of 42 POTENTIAL PROJECTS 2008: Republican National Convention (RNC) The Greater Stillwater CVB could work with the local planning committee to bring RNC guests to Stillwater for official events, provide daytrip opportunities for non -delegates and promote add-on vacations before and alter the convention held Sept. 1-4, 2008, in the Twin Cities. 2009: Governor's Fishing Opener Event The Governor's Dishing Opener event provides the Greater Stillwater area with an opportunity to highlight local fishing and other recreational activities, attractions and points of interest. Over the years, media participation has expanded to include state, regional and national print and broadcast media estimated at over $600,000 in coverage. The event will be held on May 7-10, 2009, ESTABLISHING THE CVB AS A NON-PROFIT ORGANIZATION Based on recommendations by the Minnesota Council of Non -Profits, the following steps will be taken to establish the GSCVB as a non-profit organization: 1. Elect initial board of directors 2. Tile request for reservation of organization name 3. pile articles of incorporation 4. Draft the corporate bylaws 5. Hold first official Board meeting, elect additional Board of Directors 6. Apply for 501(c)(6) status with Internal Revenue Service 7. Create a business plan and budget BOARD OF DIRECTORS SELECTION Members of the initial board of directors will be elected by their peers and shall serve until the first official Board meeting, at which time their successors will be duly elected and qualified, or removed as directed by the bylaws. These bylaws shall include the Board structure approved by participating City Councils. The initial Board of Directors shall be comprised of: • one (1) representative from the Hotel, Motel and Inn category; • one (1) representative from the Bed and Breakfast category; and • one (1) member of the Greater Stillwater Chamber Board of Directors or designee. The official Board of Directors shall be comprised of: • three (3) representatives from the Hotel, Motel and Inn category; • one (1) representative Irom the Bed and Breakfast category; • one (1) at -large representative from the Associate Membership; and • ex-officio/non-voting members, including: 0 one (1) representative from the Chamber Board of Directors or designee 0 one (1) representative from the City Council of each participating community, or designee. Page 37 of 42 ESTIMATED LODGING TAX REVENUE: By Community & Lodging Type PROJECTED 5 -YEAR BUDGET: 2008-2012 Hotels & Motels B&Bs Total Stillwater $109,226 $22,995 $132,221 Bayport $0 $0 $0 Oak Park Heights $20,312 $1,725 $22,037 Total $129,538 $24,720 $154,258 PROJECTED 5 -YEAR BUDGET: 2008-2012 Y Like Elmo, which is also in the Greater Stillwater Chamber's service area, leas opted out of the proposal. Projected lodging tax revenues are based on Travel Industry Association forecasts for travel expenditures from 2008-2010-12011 & 2012 were calculated using a three-year average increase of 3.9% from 2008-2010. + Projected expenses are based on GSCC historical data; calculated a1+3% annually; City administrative fees are calculated at 2% of lodging tax revenue. * Non -Tax Revenue will include associate/non-lodging nicmbership, visitor guide royalties, web advertising royalties arld other Programs ** Net Cash Reserve Goal = $50,000 Page 38 of 42 2008 2009 2010 2011 2012 Forecasted Increase hi Trav'1 >:ype'ndifures" --- 3.7% 4.0% 3.9% 3,9% Lodging Tax Revenue $154,258 $159,966 $166,365 $172,853 $179,595 Non -Tax Revenue` 20,000 25,000 30000 35,000 40,000 Total Revenue $174,258 $184,966 $196,365 $207,853 $219,595 Program Expenses:+ Admin Fee to Chamber (15%) $25,300 26,059 26,840 27,645 28,475 Admin Fee to City (2%) 3,085 3,199 3,327 3,457 4,392 Annual Audit 5,000 5,150 5,304 5,464 5,628 Staff, Promotion and/or Advertising 123,448 132,062 146,815 171,287 181,100 Net Cash Reserve" 17,425 18,496 14,0.79 01000 0 000. Total Expenses $174,258 $184,966 $196,365 $207,853 $219,595 Y Like Elmo, which is also in the Greater Stillwater Chamber's service area, leas opted out of the proposal. Projected lodging tax revenues are based on Travel Industry Association forecasts for travel expenditures from 2008-2010-12011 & 2012 were calculated using a three-year average increase of 3.9% from 2008-2010. + Projected expenses are based on GSCC historical data; calculated a1+3% annually; City administrative fees are calculated at 2% of lodging tax revenue. * Non -Tax Revenue will include associate/non-lodging nicmbership, visitor guide royalties, web advertising royalties arld other Programs ** Net Cash Reserve Goal = $50,000 Page 38 of 42 What is a Convention & Visitor Bureau? Convention and Visitor Bureaus (CVBs) are not-for-profit organizations charged with representing; a specific destination and helping the long -terns development of communities through travel and tourism strategy. CVBs are usually membership organizations bringing together businesses that rely on tourism for revenue. For visitors, CVBs are like a key to the city. As an unbiased resource, CVBs can serve as a broker or an official point of contact for convention and meeting planners, tour operators and visitors. They assist planners with meeting preparation and encourage business travelers and visitors alike to visit local historic, cultural and recreational sites. Why is the Chamber proposing a CVB? The Greater Stillwater Chamber of Commerce has brought the CVB initiative forward in cooperation with and on behalf of a vast majority of its tourism -related businesses. The Chamber has been serving as the tourism promoter and visitor information center for many years, but feels the tourism industry will be better represented and funded by a traditional CVB based on a lodging tax. Will the Chamber manage the CVB or lodging tax funds? No ---- the Chamber recommends a separate organization be established with a new Board of Directors to manage the CVB operations and finances. What will the Chamber work on if it is not involved in tourism? The Chamber will focus on a more traditional program of work, including economic and business development, networking and advocacy. The organization will be able to provide benefits to both tourism- and non -tourism - related businesses by assisting them with their- core business issues. The Chamber will also provide more comprehensive service to the communities outside of Stillwater, but within its primary service area Bayport, Lake Elmo and Oak Park Heights. Who pays a lodging tax? Lodging taxes are fees paid by overnight guests in lodging; facilities such as hotels, motels, bed and breakfasts, and resorts. The money collected is a pass-through tax — the lodging owners collect it from their customers and pay it to the city. The city then distributes the funds to a designated Convention & Visitor Bureau. The fees are used for marketing the community as a destination, Is it fair to tax only the lodging customers? While lodging customers would be the only individuals being taxed, they would also be receiving direct and additional benefits and services from the Convention & Visitor Bureau through specialty publications, a visitor information center- and inquiry fulfillment. The Minnesota legislature has established the lodging tax as a viable resource for the promotion of tourism destinations, whereas an "entertainment" or "bed and booze" approach would tax local residents and also take state legislative action to enact. Since they're also benefiting, shouldn't attractions, restaurants and retail stores financially support the CVB? Area businesses are contribute nearly $50,000 annually to the Stillwater Area Visitor Guide and support other tourism -related programs throughout the year with man-hours, donations and financial support. The Chamber Page 39 of 42 recommends that these projects continue as CVB initiatives. We anticipate the business support to grow as associate memberships, additional programs and other opportunities are developed by the Convention & Visitor Bureau. How will the CVBs performance be measured? The Chamber suggests the CVB Board and participating; city governments utilize the performance reporting; standards established by the Destination Marketing Association International (DMAI) to measure its success, and the DMAI's Accreditation Program Readiness Checklist as an industry roadmap. These efforts would provide the transparency and accountability needed for a successful non-profit organization. The Chamber also supports a 3-5 year operating agreement and the potential sunset of the lodging tax should the organization's efforts prove to be ineffective. After administrative expenses are paid, is there enough money left over to make a difference? Yes — the Chamber recommendation includes very low overhead costs. These costs are approximately 15% of the anticipated CVB budget and include rent, utilities, furniture, phone, equipment and receptionist shared with the Chamber. We recommend the balance of remaining funds be spent on a (marketing position, marketing materials and other marketing -related functions. Ultimately, the CVB Board of Directors, not the Chamber, will determine how the organization's ft€nds are spent. By Minnesota statute 469.190, "ninety-five percent of the gross proceeds ... shall be used by the statutory or home rule charter city or town to fund a local convention or tourism bureau for the purpose of marketing and promoting the city or town as a tourist or convention center." How many CVB staff would there be? And what would they do? The Chamber recommends one half-time receptionist, shared with the Chamber of Commerce and included in the administrative expenses, and one full -tithe marketing professional, who will guide the marketing program, work with local business and build relationships with travel industry representatives through one-on-one meetings and travel shows. The expense for this position would be taken from the program revenue, as it is directly related to program function. Why not hire an advertising agency instead of staff? CVBs provide a wide variety of marketing functions — promotion, publicity, public relations, sales and advertising. Because advertising is the €host expensive marketing option, the Chamber recommends the CVB staff pursue an appropriate mixture of all functions to generate leads. Furthermore, the Chamber feels inquiry fulfillment is best managed by individuals with local knowledge and dedication to the community. The Greater Stillwater Chamber of Commerce personally responds to over 7,000 phone, e-mail and written requests annually. Doesn't this plan "line the Chamber's pockets"? No, the Chamber recommends two separate organizations with separate management and finances. Tourism - related projects — including revenue — will shift to the CVB, leaving the Chamber to focus on other priorities such as advocacy, networking and business development. Is there enough space in the area for a convention? The Greater Stillwater area has approximately 385 rooms available to out-of-town guests. While these rooms are not centrally located or enough for a large convention, efforts can easily be tailored to accommodate small - and medium-sized conventions and business meetings. The real benefit to bringing more business travelers to the area is the ability to bring in more off-peak and mid -week visitors. What about park renovation, traffic, the Stillwater Lift Bridge and other needed projects? Lodging tax revenue may only be used for marketing and related expenses and cannot be used for capital improvements or "bricks and mortar" projects. Tourism promotion is just one part of the overall solution that Page 40 of 42 will keep Downtown Stillwater and other areas vital. The Chamber of Commerce, the Cities of Stillwater and Oak Park Heights, the business community and residents must all work together on the larger issues facing our communities. Is the CVB proposal a reaction to the business closings in Downtown Stillwater? No, however, a strong tourism industry will help improve the area's business climate. Over the past 15 years the Chamber has made previous attempts to enact a local lodging tax. In Spring 2006, the Chamber Board of Directors developed and adopted a strategic plan that determined the organization would move toward "determining the Chamber's role in tourism." A CVB Task Force studied the organization's options and brought forward an initial proposal and various options since March 2006. Page 41 of 42 This Page Is Left Intentionally Blank. Page 42 of 42