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07-10-2018 CCM Workshop (Use of Hospital Money)HUTCHINSON CITY COUNCIL SPECIAL WORKSHOP MEETING MINUTES TUESDAY, JULY 10, 2018, AT 4:00 PM CITY CENTER — COUNCIL CHAMBERS Call to Order Mayor Forcier called the meeting to order. Members present were Mary Christensen, Steve Cook, Chad Czmowski and John Lofdahl. Others present were Matt Jaunich, City Administrator and other city directors. DISCUSSION/REVIEW ITEMS 1. Discussion of Use of Hospital Money Matt Jaunich, City Administrator, presented before the Council. Mr. Jaunich reviewed that in April the City received a $6.2 million payment from Hutchinson Health as a payoff of their lease. The money has been sitting in an investment fund and accruing favorable interest. The money is currently designated in the community improvement fund but is not designated towards any specific projects. After using $260,624 of the money to account for the City's 2018 hospital lease payment and receiving approximately $24,352 in investment interest, the current balance sits at $5,963,728. The City's revenue policy states that non -recurring revenues or one-time payments like this hospital money "shall not be used to fund ongoing programs or operations of the City". The policy further states that these types of funds "should be used to build reserves or for projects that will result in long-term operating cost savings". The workshop today is an opportunity for Council to give staff direction on where to allocate these funds. To assist discussion, staff has identified five potential uses for these funds: 1. Spend monies on City Council approved projects; 2. Use some of the funds to replenish General Fund reserves; 3. Use some of the funds to build the Community Improvement Fund, Capital Projects Fund, and/or Public Sites Fund; 4. Invest long-term and utilize the investment earnings in the Capital Projects fund or other city fund; 5. Combination of Options 1-4. Council Member Cook suggested using funds for development of athletic fields at the City property northeast of town or elsewhere, river dredging, wayfinding signage and public safety facility. Mr. Jaunich noted that development of athletic fields will depend largely on plans of the schools. Cook suggested that even if the fields aren't developed on the property northeast of town previously purchased from the Bernhagen family, perhaps future fields developed could still recognize the Bernhagens in some fashion. Jaunich noted that staff is not asking the Council for definite decisions this evening from the Council on specific amounts of funds designated for specific projects, but rather more of a general direction on where they would like to see funds allocated. Jaunich spoke about the public safety facility improvements that have been discussed. Jaunich shared that after staff further reviewed plans for improvements, their recommendation is not to move forward with improvements to the fire department at this time. This recommendation is mainly because the fire station is in very solid shape and doesn't necessarily need improvements in the short-term and no changes of any kind are really needed for 10-15 years. However, the police department is in need of improvements sooner than later. Jaunich did note that as discussions proceed with the architects and engineers and Council and more sense is made of the fire department being included with the police department, staff would of course then consider pulling the fire department back into the plan. Mayor Forcier expressed that focus should be spent on improvements to the police station and he would also like some focus put on improvements to the Recreation Center. Jaunich noted that as part of the master park plan, he is certain there will be suggested improvements to the Recreation Center. Lofdahl spoke of the sunset on the local sales tax for the water/wastewater debt. He asked if perhaps when that money is sunset, perhaps a new local sales tax should be consider for Recreation Center and other public uses. Christensen feels the funds should be used for improvements to the police station. Lofdahl expressed he doesn't feel if the entire amount should be sent on the police station, but first look at potential sites. Cook spoke about purchasing of the State Theater and using it for the Arts Center and other activities. Jaunich spoke about heavy equipment needs and the Ameresco project. Jaunich noted that he can tell the Council would like the hospital money put towards the police station improvements, but not necessarily all of the hospital money. Jaunich spoke about committing funds and assigning funds. Committing funds is done by Resolution and is more formal. Jaunich noted that the intention of staff is that within a year a site for the police station is identified and hopefully purchased. Cook offered out a potential site of the old medical clinic on Franklin Street. He spoke of some advantages to this potential site. Morgan Baum — Ms. Baum expressed that she feels that the safety of the community along with being healthy and economically -viable. She feels that the use of funds towards the police station are important, along with health -improvements for indoor facilities as well as mental health/public health facilities uses. Hanneman agreed with use of funds for a community center or an indoor facility for use in the winter for health/fitness options. Jaunich spoke of the study completed in 2012 that was regarding an indoor facility and at that time the cost was $16 million. Baum noted that she hears from people that the money should be used in the general budget and just lower taxes. She feels that it is important that the Council inform residents that by using the monies on projects, it essentially does keep taxes down so that those funds don't have to be used for projects. Andy Reid spoke about investment options including the money market and CDs. Jaunich — does Council want to commit any of the hospital money? If not, it will stay assigned in the community improvement fund and earn investment earnings. Put money into reserve fund? Lofdahl would like to see $2-3 million committed to the police station improvements. Cook - $3 million to PD, transfer $500,000 to reserves and leave rest in community improvement fund. Czmowski, Christensen and Forcier all agreed with committing $3 million to police station improvements. Jaunich noted that a Resolution will be before the Council at a future meeting. Cook spoke about state grants available to aid in daycare costs. Cook asked if that is something to look into. Jaunich asked if a "study" needs to be completed on daycare needs. Jaunich will pose that to the business community. Motion by Czmowski, second by Christensen, to adjourn at 5:10 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator