5.5. SR 08-08-2005
Item 5.5.
MEMORANDUM
TO: Mayor and City Council
FROM: Pat Klaers, City A~rpil?~'rator
:Pflr^"l/i:lll/&"'j.,/,~~
DATE: August 8, 2005 (
SUBJECT: YMCA
Introduction
~A presentation on the YI:vlCi\ project was made at the lYlay 9, 2005 City Council meeting by
Northstar YMCJ.\ Conununity Board Chair Bill Helli\vell. At this meeting Bill made a request
to dle City Council for a financial commitment for a YIvlCA building. It was indicated by Bill
that the YIvfCJ.\ project llad mo,red fonvard \vith programming as much as possible \vithout
a building to pro\ride more options. The direction I received from the City Council \vas to
"in\7estigate \vhere tlle city could come up \vith funding for the YIvfCJ.\." In tills regard, there
is some good ne\vs to report to the City Council but whedler the funds a,railable are
sufficient is uncertain. .l\S al\vays, funding for a project like the x1vlC~A building is a matter of
City Council priorities.
YMCA Background
In early 2000, \vhen the city was \vorking to\vard an expansion of dle City Hall and Police
facility, discussion took place about an Elk River Community Center. I \vas directed by the
Council to contact possible partners for a s\vimming/health club component of a
cOlnmunity center project. Simultaneously, representatives of the YIvICi\ contacted the city
regarding a possible partnership and YIvlCA building project in Elk Ri\ler.
In the summer of 2000 I sent a letter to the YIvlC_A indicating the city's interest to partner
~vith the Th-iCA for a facility in Elk Ri\Ter. In this letter I indicated that dle city had t\vo site
options available for a YIvfCi\ facility. In late 2000-early 2001, a YIvlCA sU1\7ey \vas
conducted and the results \.vere presented to the public in IvIay 2001. The results were
generally positive in terms of membership and participation \vith the biggest uncertainty
being related to capital funding and fundraising. After this public presentation of the SUl\rey
results, a ThfCi\ Committee \vas founded, a staff representati\re \vas appointed from the
YlvlCi\ of ~fetropolitan Ivlinneapolis, and programs began to be established shortly
thereafter. ~\fter some progress and momentum \vas built up, in later 2002, SherbUlTIe
County considered a proposal that \vas presented by Sheriff -L\nderson to substantially fund a
s: \ Council \ Pat \ 2005 \ \Yj orksessions \ \1\1 CAP un ding. doc
\1VICA facility using money that "\vas generated by the housing of federal prisoners at the
county jail. This proposal was ultimately rejected by the Sherburne County Board. To date
there llas not been any capital funding campaign established.
There are a number of issues in play regarding a YIvlCj\ facility and site. The site selected by
the YIvlCA is tile Northstar Business Park site, \vhich is, generally speaking, south of the
Home Depot area. This site has been offered "free of charge" by the city to the Y1vfCJ.\. J.\s
improv-ements take place in the N orthstar Business Park tllere ,vill be assessments against
this site for utilities and the street. This ,vill be a city eA'}Jense if the "free land" is to be
pro\rided to the YIvfCA. The YIvfCA Chair and Committee still hope to obtain financial
support from the county for a YMCA facility. Part of this financial support may include land
that the county owns adjacent to its GO\Ternment Center. This would likely be acceptable to
the YIvlCJ.~ of Ivletropolitan of Ivlinneapolis and to the city.
City Funding Sources
TIle t\vo main funding sources R\Tailable for a YIvfCA building project are the landfill host fee
reserve and the RDF reserve. Both of these resel\Tes are currently undesignated.
..t\..nnually the city receives money from the RDF project as a payment in lieu of taxes.
j-\.pproximately half of tllls money goes to the 1993 City Hall project and an additional
$39,500 annually goes into tlle general fund budget. The remaining balance, approximately
$100,000 per year, has been left undesignated. Currently this undesignated fund has a
balance of approximately $650,000. (This balance amount assumes that monies \vill come
frolll this fund for the last payment to the School District for the Iitde Theater.) Historically
this undesignated portion of the RD F reserve has gone toward land acquisition, park
de\relopment, and tlle Little Theater payments. It should be noted that the RDF contract
expires in 2009 but I anticipate that this funding commitment \vill continue beyond 2009.
The landfill host fee, \vruch is $1 per cubic yard, goes into the street reset\Te, the gO\Ternment
buildings reserve, the library resel,re, and 25~ of this total is currendy going into an
undesignated resel,,\Te. This 25~ generates approximately $225-250,000 per year, depending
upon the \Tolume of activity at the landfill. The undesignated portion of the landfill host fee
currently has a balance of approximately $450,000.
TIle final cell of tlle landfill is being opened in the near future and it is projected tllat the
landfill \vill be "full" by around 2009. Currently landfill expansion plans are being processed
thrOUgll the :tvIPCJ.\ and an environmental impact statement is scheduled to be completed in
early 2006. J.\t this time there is no indication that an expansion will not be approved, but
nothing is certain and this funding source may not be a~lailable after 2009 or so.
~Assuming a ThfCA is constructed in mid-2007, the city could Ilave approximately $1.5
million av.ailable in cash from the RDF reset\Te and the part of landfill host fee that is
currently undesignated. Additionally, from these t\vo sources, the city could plan on
providing an additional $250,000 in 2008 and in 2009. After 2009 all bets are off until we
lmo\v more about the landfill expansion plans and the future of the RDF project. If a
commitment by the city is made to the YIvICA for monies abo\re the $2 million noted above,
then the \vorst case scenario would be that the city ,vould have to make payments from its
s: \ Council \ Pat \ 2005 \ \Y./ orksessions \ )?\I C.t\Funding. doc
annual tax levy that currendy pro'lides funding for general fund activities. Ho\v much money
abo\Te $2 million is needed from the city for this project is unkno\vn.
Other funding sources for a ThICA project could be from the go'vernment buildings resel\le,
liquor store enterprise fund, and the fund balance in the general fund. HO\Ve\Ter, there are
many needs for the money in the go\remment building reserve, including the pending library
project. i\lso, the liquor enterprise fund has a debt to payoff for \Y/estbound tllat ,vill take a
number of years before funds are truly a\railable for another project. Finally, regarding the
fund balance in the general fund, this source of money is necessary for casll flo\v purposes
and has been viewed as an emergency reserve. Additionally, through the natural growth of
the city budget, tlle city \vill have difficulty maintaining its current 41.50/0 level, regardless if
funds are taken out of this resenre for a special project.
Other Considerations
The YIvfC..A. facility is not identified in the city Capital Improvement Program (CIP). There
are many needs for city funds identified in the elP, including streets, public buildings, and
parks. One of dle most immediate projects on the horizon is the libral)T building project and
it is unkno\vn ho\v much that project \vill ultimately cost. By not ha\ring the YIvlCA in the
elP and "finding" a large amount of money for this project reduces the flexibility that is
built into the CIP.
It is uncertain as to \vhether or not there \vill be a positi\re or negative public reaction to the
city pro\riding substantial casll for a YIvlCA building project. It \vas al\vays anticipated tllat
the YIvICA \vould need and request some funding from the city in addition to land, but it
\vas ne,Ter kno\vn how mucll or whedler or not the city could meet this request. In the past
tlle city has funded some projects, \vluch were not city projects, such as providing $560,000
to sa,Te the Little Tlleater in the Elk Ri\rer Senior High.
Conclusion
In order for the city to prov-ide funding for a YIvlCA building \'ve \vill ha,re to become
partners 'v;.th the ThlCJ.~ in order to adequately address legal issues about pro\riding monies
direcrly to a YlvlCA organization. As noted earlier in this memo there is money a\Tailable that
the city use for the \1YICJ.'\ project. It is uncertain e\Ten with these city monies \vhether or
not the ThlCJ.'\ can get a building project completed. Details of a city-YIvfCA partnerslup
\vould need to be \vorked out in order to ascertain what the city "gets" for their capital
dollars. Tllese details may include space for the seniors or reduced rates for a period of time
for residents
s: \ Council \ Pat \ 2005 \ \Y../ orksessions \ YlvI CAFunding.doc
S.S.A.
MEMORANDUM
TO:
Mayor and City Council
FROM:
Pat Klaers, City Ad~,~~i~~r;'tor
j / /J/~" ..is,",./
,..1/1 ,~."A.'.,~'( .... . I.f... c..//.?,ii /1 )i'; /'"
J tlf . \,r lA.,I,;/ "'--
August 8, 2005 i" l ,:t
DA TE:
SUBJECT:
Library Project
Tllere l1a\re been a number of questions raised regarding \vllether or not city financial
participation in a Y1vICA building \vill impact other projects tllat are in dle Capital
Impro\rement ProgralTI (elF). Specifically this question was direct to\vards the proposed
2007 Libra1~Y project.
There is no question that additional Library space is needed. J.\ report and recommendation
\~vill be coming to the City Council at a later date regarding Library space needs and \vhat
type of project sllould be considered. This memo is intended to re,rie\v ho\v the city could
finance a Library project.
The Library project is in the CIP at $1.5 million with the monies to come from tlle Library
Reserve and dle Government Buildings Resenre. Both these Reserves receive dleir money
from the Landfill Host Fee.
The Library Reserve started 2005 \vith a balance of approximately $320,000. This Reserve
should be about $450,000 by the time the project begins in 2007, assuming that no
significant expenditures take place for sucl1 things as demolition of the Bailey llouse and
expansion of the parking lot.
TIle Gov'ernment Buildings Reserve began 2005 ,vith a balance in excess of $1.1 million.
Re\lenues o,rer the next t\vo years are anticipated to approacll $1 million. The Street
Department anticipates needing approximately $750,000 in 2005 and 2006 for external and
internal projects at dleir facility. There will also be some smaller miscellaneous building
related expenditures that \vill need to come out of this reserye over dle next fe\v years.
If \ve spend all the monies in both these reserve funds in 2007, we sllould have about $1.5
million for the Library. Ho\vever, if a ne\v Library facility is built, and this includes
impro\rements sucll as parking lots and landscaping (and some community r001TI space in
s: \ Counci1\Pat\2005 \ \\iorksessions \LibraryYj\fCA.doc
the building), it could easily ha"\Te a budget of $2.5 million or more. This \vould require all of
the funds in both tllese resel"\Tes through 2009.
In conclusion, the Library project sllould be able to be financed \vith reserves; but by doing
so dlere may be limited funds being sa'\red for future projects until 2010. ~Again, the funding
source for these reserves is in the landfill host fee. .i\ worst case scenario is that some
funding \vould ha\Te to come from tax re\Tenues by way of the annual general fund budget if
we run out of reserve monies or the Landfill expansion is not approved.
s: \ Council\Pat\2005 \ \Vorksessions \LibraryY-i\ICA.doc