02-17-05 Worksession
CITY COUNCIL MINUTES
Richfield, Minnesota
Special Worksession
February 17, 2005
The meeting was called to order by Mayor Kirsch at 5:35 p.m.
Staff Present:
Martin Kirsch, Mayor; Bill Kilian; Fred Wroge; Susan Rosenberg; and Sue
Sandahl.
Steven Devich, Acting City Manager; Dan Scott, Public Safety Director; Mike
Eastling, Public Works Director; Jim Topitzhofer, Recreation Services
Director; Brad Sveum, Acting Fire Services Director; Bill Fillmore, Municipal
Liquor Operations Director; Bruce Nordquist, Acting Community Development
Director; Chris Regis, Finance Manager; Tom Foley, Transportation
Engineer; Cheryl Krumholz, Recording Secretary; and Corrine Thomson, City
Attorney (arrived at 6:50 p.m.).
Members Present:
Item#1
Acting City Manager Devich stated tonight's discussion was to provide an in-depth review of
the City's capital improvement projects planning and long-term financial planning for the projects.
The City needs to have a pro-active approach with the confluence of State and County projects
around Richfield.
Acting City Manager Devich stated the project categories include:
. Transportation
. Redevelopment
. City infrastructure
Acting City Manager Devich explained the goals of the discussion is to prepare the City
Council to be in a position to meet the challenges for decisions on significant projects. He added a
different paradigm for major funding than what was worked with in more recent history needs review.
Public Works Director Eastling made a Power Point presentation the major issues for 2005 for
the capital improvements (Clerk's File No. C-407).
Council Member Sandahl stated residents asked the Transportation Committee about the
City's vision for the 66th Street/Portland Avenue project.
Council Member Kilian stated it is apparent how much more land would be needed for any
real, viable use, including medians.
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February 17,2005
Public Works Director Eastling added there has been an open process with the Transportation
Committee and residents. The $1.9 million in federal funds for this project require a design be in
place by September 2006. There is heavy competition f<;>r these funds. The County funds do not
have as critical a timeline.
Council Member Wroge asked if the Lakes at Lyndale project involves only the Lyndale
Garden site.
Acting Community Development Director Nordquist stated the neighborhood north of the
Lyndale Garden site will remain viable.
Council Member Kilian asked about the status of the Crosstown/I-35W project mediation.
Public Works Director Eastling stated the hearing had taken place. The contract is scheduled
to be let in 2006.
Council Member Wroge asked how the funding sources for the Lyndale Avenue bridge project
are determined. If Bloomington paid nothing for the Penn Avenue bridge project and says only $1.4
million for the Lyndale Avenue bridge project, Richfield residents would be right to be in an uproar
about a special assessment.
Public Works Director Eastling explained the level of Bloomington's involvement in the Penn
Avenue bridge.
Sid Inman, Ehlers & Associates, explained Richfield's bonding history and special and general
assessment options. A Citywide levy is an option when the redevelopment or huge projects benefit
the entire community. He reviewed an analysis of the tax impact of potential borrowing.
Council Member Kilian asked about market value assessment.
Mr. Inman explained tax capacity and special assessment districts. He also discussed the
"look back" provision of developer agreements.
Public Works Director Eastling stated the City Council will need to decide if special
assessments should be pursued for the 66th Street/Cedar Avenue, 66th Street/Portland Avenue,
Lyndale Avenue/Crosstown/Lakes at Lyndale projects. (The Lyndale Avenue bridge would not be
included at this time.) They are all tied together.
Council Member' Kilian stated the City needs to spend money to maintain the investment and
plan for maintenance. He asked about the value of the City's infrastructure.
Acting City Manager Devich discussed the need for the Water Plant renovation. Richfield
residents take the quality of the City's' water very serious.
Public Works Director Eastling explained that the funding shortfalls need serious
consideration.
Acting City Manager Devich stated many projects are facing the City. Some maintenance of
City facilities has been deferred but decisions now need to be made. County and federal funding
availability needs to be considered.
Acting City Manager Devich said the Cedar Point project (66th Street/Cedar Avenue) will be
discussed at the April 22 Worksession so this is the first project to come before the City Council.
Each project needs to be reviewed to determine how it effects the next project. Discussion on each
project will occur again if the City Council desires.
Mayor Kirsch thanked staff for the presentation. He added that it is important to review the
projects due to the magnitude.
Council Member Kilian asked if the $5 million shortfall, if no Lyndale Avenue bridge
reconstruction is included, was a mid or low end estimate.
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Public Works Director Eastling stated it depended upon the ame;nities but .the amount i~ the
low-end estimate for only the essentials. The gas tax comes on board In four to five years, which
could offset some of that amount. ,.. ,
Council Member Kilian asked if the gas tax could be against the bond.
Acting City Manager Devich said yes, to finance the bond.
Council Member Wroge asked about the land sale proceeds on the current garage site.
Public Works Director Eastling explained the three parts of the proce~ds.
Finance Manager Regis added the amount, $~.1 million, is the initial Rr<;>ceed? of the sale plus
interest with the amount of the existing site as an estimate. Currently $2.8 million eXists.
Mayor Kirsch stated that these projects are mostly gateways to the community and more than
just the basic redevelopment needs to be done.
Council Member Rosenberg said the 66th Street/l-35W bridge is a good example of more
than basics. She added there needs tq be a legacy for coming generations.
Public Works Director E~9tnng said a menu of costs will be provided to the City Council for
each project.
Council Member Sandahl stated she concurr~d with the comments of Mayor Kirsch and
Council Member Rosenberg. Quality is needed.
Council Member KiliCln said using City money for projects may influence leverage to get what
the City wants and result in a better project.
Acting City Manager Devich said the challenge is finding local funding and opportunities to
leverage for federal funds for potenti(:lld~velopment. It is a City Council policy decision brought to
them by staff on an one-by-one basis.
Item # 2
Jim Lynn, Lynn & Associates, distributed information to the City Council regarding the City
Manager recruitment. He reviewed the three options available to the City Council at this time as
stated in the memo from the City Attorney dated February 14, 2005:
. request additional information on the current candidate;
. enter negotiations with the present candidate; or
. decide to chCjnge from an internal search process to an external search process and, in
doing so, either formally reject the current candidate or do not reject the current candidate
but simply expand the search to external candidates.
City Attorney Thomson clarified the memo was provided to ensure the City Council and
consultant were on the same page and to provide clear direction in the recruitment process.
Council Member Wroge stated that, originally, he was in favor of the recruitment being open
only to Richfield employees. He said not one person came forward to him with support of the current
process except City employees. He suggested tbe recruitment now be made open locally and four to
six weeks longer should not hurt anything. An answer to what happened with former City Manager
Samantha Orduno was never developed and now someone involved in that process may be the new
City Manager.
Council Member Wroge said Steve Devich is a great, qualified candidate but the recruitment
process used is flawed.
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February 17,2005
Council Member Sanaahl asked Council Memp~r Wroge how many people didn't like the
process.
Council Member vvmge said 100. The comments were not for oragainst Mr. Devich but
rather why the recruitment .was not put to the outside. He said he explained to these individuals that
an internal recruitment was useddue to economics and thatthere was a qualified internal candidate.
He added that the niore he thoUght about it, the more he thought everybody should receive the same
chance. Since it's not known who complained about the past situation, it could create the same
situation. ..'
Council Member Rosenberg stated she has received comments from many people about why
the process was undertaken at all. She said she ha.s been patient, but it is now time to move forward.
Mr. Devich is an ab.soJutely qualified candidate.
Council Member Wroge said it is the perception versus reality in the system that is being
questioned. Mr. Devich's qualifications are not question13d.
Council Member Sandahl staled the comments she has received include "why waste time, just
hire him". At the January goalset11ng the recruitment prOcess was established. She said she believes
it is important to hire frpm within an org~nization, but if no one internally is qualifi.ed, then do an
outside search.
CouncilMember Sand.ahl said she is cpmfortable with Mr. gevich as an excellent candidate.
Council Member Rosenberg sta~edsheis. no longer patient with the recruitment and there is
no need to do an outside se,gr<:;h. Wh<:1t'spastis past and it's time to move forward.
Mayor Kirsch statecLallhis cPI1veq3atipn regarding therrecruitment has been positive, with the
question being why it's taking so long.
CounciL Member Kilian stated he has not heard any co'mments, positiye or negative, and it is a
non-issue. He s~JdJle,Wc;iJlted the re.cruitment process initic;illy because three City Council Members
had worked previou~ly with Mr. Oevi.c~h QuU\i\fo had not and he wanted to understand where there
could be gaps. He nQwhassome ide<.ls - no one is perfect.
Council Member Kilian agreed with promoting from withillan organization, but if there is no
qualified candidate, then do an outside search.
Council Member KiHc;in stated the City Council started down this road on this recruitment
process, and there is 1)0 other fork inthc;it fgad unJessthe City Council says no to Mr. Devich.
Council Member Rosenbergsaia that the other City Council Members agreed to this
recruitment process out of respect t6 Council Member Wror;Je. and G,ohtncil M~mber Kilian.
Counqil Member Sandahl stated that it appears some City COllndl Members had discomfort
with Mr. Lynn working.directlywiththe Mayor in seJectingJnt~ryiewquestions. She had no real
concerns but f(;lulted Mr. Lynn for not involving the others. .
Gouncil Member Rosenbergr~iJ~ t~e interview was open and additional questions were asked.
Council Member Wroge stated, he would support Mr. Devich for City Manager, but wanted to
disC4sS the process so it V)fas out in the open and everyone was comfortable.
Mayor Kirsch said the final decisionwollJd tie made at the February 22 Reglllar City Council
meeting.
Council Member KiliarLaskedaboutconducting a performance review on Mr. Devich sooner
rather than later, since it's been over :a year since. one waS done.
Cify Atto'rney Thornsohexplainedthe CityCouncil conducts the performation review of an
employee SUbject to the CityC,oyncil's.a.ythority, Le.City Manager. The review can be conducted in
close.d,.se.ss!onb,ut.it.is.Qot reql.!ired. Theper.s.olJ"b.eingreyIewed,can requestan open meeting. The
co,nGIl,Jpipn of th.eeV8.,lu?Ugn isrequi(i:;d to pesul1)marize.d pupIiGly..
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February 17,2005
Council Member Sandahl asked if the Acting City Manager could be evaluated by the City
Council if they desired.
City Attorney Thomson said yes, but that is unusual because the evaluation is typically for the
purpose of a continuing role and Acting City Manager is not a continuing position.
Council Member Kilian said if the City Council hires Mr. Devich as City Manager, an evaluation
can be done anytime.
City Attorney Thomson agreed.
Council Member Wroge asked about developing the employment contract publicly or in closed
session. He stated the City Council had seen the contract.
Mr. Lynn said Mr. Devich has not seen the contract yet. The contract can be developed
publicly or the consultant can work with the entire or partial City Council.
Mr. Lynn added that 90% of the contract is similar to the two previous City Manager contracts
and standard according to the International City Manager's Association.
Council Member Wroge stated he had a disagreement with the contract regarding severance
pay and a voluntary resignation. The resignation notice and pay should be the same.
Council Member Kilian explained the contract appears to be a standard industry severance
package. There is less risk with someone well known versus unknown. He said, in his opinion, to
tighten the package would be a slap to Mr. Devich.
Council Member Wroge asked if the City Manager was an at-will employee.
City Attorney Thomson explained the City Manager serves at the City Council's discretion.
The City Council could terminate the employment, but the City Manager has procedural guidelines. If
employment terminated, the employee is entitled to severance. If there is a resignation resulting from
a formal or informal request, it is an involuntary resignation. If the employee voluntarily resigns, there
would be no severance.
City Attorney Thomson stated a provision could be included in the contract to state there is no
severance paid for a voluntary resignation but there is entitlement to customary benefit payments.
Council Member Wroge stated he does not want the same package as what the previous City
Manager received.
Council Member Kilian asked abut the salary cap based upon the Governor's annual salary
($114,286). He added that benefits may be provided in lieu of salary.
Acting City Manager Devich explained the salary cap guidelines. The only employees subject
to the cap are PERA members - City or County employees - not the school district or the State. The
automobile allowance and benefits offered to other employees are not included in the cap. Deferred
compensation is included in the cap.
Council Member Kilian asked about the salary compression and differential of top
management employees and the City Manager.
Acting City Manager Devich stated the salary is close to the same but the City Manager has
accommodations to address the cap. Minnesota doesn't attract or retain good City Managers
because more money is made in other states.
City Attorney Thomson said the City will negotiate with the City Manager for a fringe benefit
package that effectively makes up some of the lost salary opportunities.
Council Member Kilian asked for a salary survey for the staff or next level down from the City
Manager.
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February 17,2005
City Attorney Thomson explained the Governor's salary has not changed in eight years and it
is not expected to do so in the near future. There are bills in the Legislature to eliminate the cap or
revise the cap but their status is unknown.
Acting City Manager Devich explained the State Al..lditor's position on the cap is that it is going
to destroy the CittM~nager system because the Governor's salary has been static for so long and
only certain employee groups are tied tothat cap.
Council Member Wroge said the City Council needs to know the average salary of the
Department Directors because the City Manager's salary may be too high.
Acting City Manager Devich stated he will provide salary/benefit parameters to Mr. Lynn.
Council Member Kilian said Mr. Devich's expectations need to be known.
Council Member Wroge invited the expectations because Mr. Devich is in charge of
everything.
Acting City Manager Devich stated he is not asking for the salary cap, but rather a reasonable
package amenable to everyone. He said he is not doing the job for the money, but does want to be
fairly compensated.
Council Member Rosenberg stated she trusts Mr. Lynn and Mr. Devich to establish fair
parameters. She added future City Manager agreements need to be considered so packages need
to be fair and just.
The City Council consensus was to have Mr. Lynn and Mr. Devich prepare an employment
agreement.
Council Mernber Wrogereqlie5ted the agreement be provided to the City Council prior to the
February 22 City CounCil meeting. .
City Attorney Thomson stated that assuming employment agreement is acceptable, the City
Council.could make the City Manager appointment on February 22.
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Recording Secretary