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10.1 SR 07-15-2024The Elk River Vision A welcoming community with revolutionary and spirited resourcefulness, exceptional service, and community engagement that encourages and inspires prosperity Request for Action To City Council Item Number 10.1 Meeting Date July 15, 2024 Prepared By Joe Stremcha, Business Services Director/Assistant City Administrator Item Description Multipurpose Facility Commission Purpose and Authority Reviewed by Cal Portner Tina Allard Action Requested Discuss the role of the Multipurpose Facility Advisory Commission (MFAC). Background/Discussion At the March 18, 2024, Work Session, all commission and board ordinances, bylaws, powers and duties, and conflicts of interest were reviewed by the Council. City Attorney Jared Shepherd provided a memo with findings concerning conflicts of interest within the MFAC membership. Staff was directed to bring future rate increases and contract agreements directly to the City Council for consideration based on those findings. During the July 1, 2024, Work Session, the Council expressed an interest in inviting MFAC members to participate in a collaborative discussion with Jared to help redefine appropriate roles and responsibilities for the commission. Financial Impact None. Mission/Policy/Goal Ethical, efficient, and responsible. Attachments 1. Multipurpose Facility Commission Purpose and Authority 2. Campbell Knutson Memo 03-18-2024 Page 373 of 389 Multipurpose Facility Commission Sec. 2-250. Established. There is hereby continued, as heretofore created, a multipurpose facility advisory commission. Sec. 2-251. Membership. The commission shall consist of nine members appointed by the council to include: (1) A city resident and member in good standing of the Elk River Senior Center. (2) Two members in good standing representing turf-use associations, which use the facility, including: a. Elk River Youth Football Association. b. Elk River Youth Baseball Association. c. Elk River Youth Softball Association. d. Elk River Youth Lacrosse Association. e. Elk River Flag Football Association. (3) Two members in good standing representing ice-use associations, which use the facility, including one each from: a. Elk River Youth Hockey Association. b. Elk River Figure Skating Club. (4) A sitting member of the city council. (5) A designee of ISD #728. The School District may have a proxy representative in case of absence of the appointed designee. The proxy’s name shall be provided to the staff liaison prior to a meeting. The proxy representative does have voting rights. (6) Two at-large residents of the community with no affiliation to the former organizations for at least five years. Representatives of the ice and turf-use associations and the ISD #728 designee may be nonresidents of the city, but there shall be no more than three nonresidents of the city serving on the commission at any one time. Sec. 2-252. Purpose. The commission shall set goals and expectations for the community use and enjoyment of the multipurpose facility. The commission shall seek community input regarding the use and development of the facility and make recommendations to the city council to protect and preserve the facility as an asset to the community. The commission shall recommend an operational budget and capital plan that meets or exceeds the goals, values, and vision of the facility. Page 374 of 389 Sec. 2-253. Powers and duties. The multipurpose facility advisory commissions authority shall include, but not be limited to, the study and recommendation to the city council on the following: (1) Develop a value statement and a mission statement for the commission. Review each statement annually and amend as so desired. (2) Serves as a conduit to the public to gain feedback on the effectiveness of the facility and services provided. Holds at least one annual public hearing to receive community comments regarding the operation, use, and future development of the facility. (3) Develop and provide a verbal annual report on the outcomes and activities of the facility to the city council. (4) The commission shall review facility rental rates annually and recommend a fee schedule for incorporation into the annual budget. (5) The commission shall recommend a budget that balances facility revenue and expenses. The budget will include projected revenue, expenses, transfers, and capital improvements. The budget shall be completed no later than November 1 of each year. (6) The commission shall annually provide a draft capital improvement plan to the city council that includes capital replacements, repairs, and additions. The plan shall project improvements over a rolling ten-year period. The capital plan shall be completed no later than September 1 of each year. (7) The commission shall review and recommend operational policies for the facility and review all policies at a minimum every two years. Sec. 2-254. Meetings. The commission shall meet regularly at least three times each calendar year at such time and place as established per their bylaws. The sitting council member and the designee from ISD #728 are excluded from holding chair or vice chair positions. Sec. 2-254. Reports. Reports, conclusions, and recommendations shall be made to the City Council throughout the year as needed. An annual meeting shall be held with the City Council to review commission vision, goals, tasks, and accomplishments. Page 375 of 389 1 230334v3 M E M O R A N D U M FROM: JARED SHEPHERD, CAMPBELL KNUTSON, P.A. DATE: MARCH 18, 2024 RE: POTENTIAL CONFLICT OF INTEREST MFAC FACTS In 1996, to help manage the ice rink, the City created an advisory Arena Commission. The commission membership included members of the city council, as well as designated seats for representatives of groups that frequently used the ice rink such as the school district. As the ice rink grew over the years to include new types of facilities, the commission expanded to include designated members representing these new uses, and, in 2020, the City established the Multipurpose Facility Advisory Commission (MFAC) to replace the Arena Commission. Current membership on the MFAC includes designated seats representing facility users, ice uses, the city council, the school district, the senior center, and two at-large members. At the same time as its uses and membership expanded, the MFAC also expanded its duties, which currently include recommendations about use fees and discounted rates. QUESTION PRESENTED Does the scope of the MFAC, with representatives from user groups advising on the fees their own groups will be required to pay, create a likely conflict of interest for Commission Members? ANALYSIS State law prohibits public officers from participating in contracts with the city (such as a rental agreement for using city facilities) if the officer has any personal financial interest. Minn. Stat. § 471.87. Years after creating the MAFC structure, the City also enacted a conflict of interest ordinance that is stricter than statutes. City code § 2-132 aims to protect the “credibility of local government” by prohibiting any financial or business interest in matters city officials and employees oversee in an official capacity. The city code directs employees and officials to be cautious, and to avoid any activity which even “suggests a conflict of interest.” City Code § 2-131 explicitly states that commission members are subject to these requirements The MFAC currently advises on both the base rates and any potential discount rates for use of the City’s facility. MFAC members, however, explicitly represent certain groups that will be responsible for paying those rates. There is clear logic in having facility users—who will be most familiar with the facility and what services are needed—provide input on how best to operate the facility. But their inclusion on a City commission could create the appearance that certain groups have been given the power to set their own terms. This is especially true given the City Council’s more recent directions to have the facility become revenue-neutral. As the facility needs to raise Page 215 of 229Page 376 of 389 2 230334v3 more money to cover its operating cost, any discount given to one group will need to be made up by fees paid by others. This at least creates the appearance of a direct conflict over what base rates and discounts the MFAC recommends. RECOMMENDATION We recommend altering the MFAC to remove the user groups. This change will prevent the appearance of a conflict of interest or a conflict, in factor, that is institutionally-created for Commission members User groups should be, of course, still welcome and able to submit suggestions and apply for discounted rates. But this change would clarify that they are doing so on their own behalf as facility users, and that no user group is being given unfair access to the City’s decision-making process. Page 216 of 229Page 377 of 389