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072406 CC WS Min CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, JULY 24,2006 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. MINUTES 1. CONVENE CITY COUNCIL WORK SESSION Mayor Love called the meeting to order at 6:00 P.M. A. Roll Call Present: Mayor Love, Councilmembers Callies, Lizee, Turgeon, and Wellens; Administrator Dawson; Finance Director Burton; and Planning Director Nielsen Absent: none B. Review Agenda Without objection from Council, Mayor Love proceeded with the Agenda for the meeting. 2. SENIOR COMMUNITY SERVICES AND FRIENDS OF THE SOUTHSHORE CENTER RE: FUTURE FUNDING Administrator Dawson stated there had been discussions between Senior Community Services (SCS), staffs of the five South Lake Minnetonka cities, and the Board of the Friends of the South shore Center with regard to SCS's financial situation, and the services SCS provided to the Southshore Center. SCS stated it had been running deficits at the Southshore Center for several years. SCS proposed levels of funding from the five cities that would phase-in increases 320%, from $16,500 to $69,355, by 2009 to support Southshore Center programming activities. The City's payment would increase from $6,500 to $27,322 by 2009. For 2007, the City's payment would increase to $13,411. Dawson stated Ben Withhart, Executive Director for SCS, was present this evening to review SCS's financial situation. Also present were Linda Prybylo, the Director of the Southshore Center, and Bob Gagne, the Chair of the Friends Board. Dawson commented there was merit to discuss who should be responsible for long-term South shore Center building maintenance costs; a discussion that must take place amongst all five cities. Ben Withhart stated the Southshore Center had been very successful, and it had exceeded expectations during its ten-year existence. He stated SCS services were originally provided at the former Excelsior High School for approximately ten years. It then moved to Mount Calvary Lutheran Church until the current Southshore Center had been constructed. Mr. Withhart explained SCS had received general funds from the five cities when it was located at the high school. Then there had been a period of time when SCS services had been funded entirely through funds the cities received from the federal Community Development Block Grant (CDBG) program and other organizations. Approximately five years ago CDBG funds basically became unavailable. Therefore, SCS was now asking for the five cities to increase their contributions so they would entirely fund the SCS services, as it had done years before. CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MEETING July 24, 2006 Page 2 of 4 Mr. Withhart stated he had met with the Greenwood Council, and it had suggested the five cities meet during the next year to discuss the current funding allocation formula. He commented the information used to determine the formula was approximately 20 years old. He offered to convene and moderate the meeting. Mr. Withhart stated the Friends had contributed significantly to the construction cost of the Southshore Center. The Friends also assumed responsibility for operating and maintaining the Center. He commented SCS had assisted the Friends with its fundraising efforts. Bob Gagne stated he was a City resident and had been a member of the Friends Board during its entire existence. He stated the Friends had maintained the Center as had been agreed upon. It had replaced a stove for a cost of $4,500; it had replaced one of the seven air conditioners for a cost of $8,000; it had painted the building; and it had landscaped around the building. There were seven furnaces in the Center, and the Center's roof and carpeting were getting close to needing to be replaced. He commented the Friends' combined fund balance of $50,000 (which was gained through fundraising efforts) would not be sufficient to cover a number of major repairs. Gagne explained the building was built by contributions from the five cities, and funds raised by the Friends (its funds equaled $100,000). He noted the building was valued at over $700,000 when it was originally built; it was now appraised at $1,250,000. Gagne stated that only Shorewood had contributed to any cost of the building maintenance since it had been built. The Shorewood Public Works staff had plowed the driveways, and provided the maintenance support when something wasn't functioning correctly. Gagne asked Council to consider contributing funds to the Friends for building operations and maintenance in addition to the City's contribution to SCS. Councilmember Turgeon stated the Friends' 2006 operating budget was overspent by more than $5,000 through June 2006. The proposed year-end budget reflected a balance of $4,000. Therefore, the Friends would need to raise over $40,000 by 2006 year-end in order to break even. She explained rental income was down 17%, custodial expenses for rentals were down 39%, and custodial expenses for daily operations and general maintenance were up 61 %, all in comparison to 2006 budgeted amounts. She then explained SCS turned over the responsibility for rental coordination to the Friends (this was currently being done by volunteers). The expense for that responsibility would need to be funded by the Friends. Turgeon went on to explain the income from rental of the facility had flat-lined, and was averaging approximately $24,000 annually over the last three years; 48% - 51 % of that income had come from one renter. She commented August, September and November had historically proven to be the least revenue- generating months. Turgeon reviewed the statistics regarding the congregate dining program costs per participant. She stated there were a number of fee-based programs conducted at the Center. The Center did not receive any income from those programs, yet the Friends funded the building expenses incurred as a result of those programs. Turgeon stated the five cities had not been responsible for maintenance, operations, programming or staffing of the Center or any other costs, expenses or capital investments relating to the Center, as specified in the Cooperative Agreement. CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MEETING July 24, 2006 Page 3 of 4 Turgeon acknowledged all five cities had been generous with their support of the Center. She then asked the cities include all of the costs incurred to keep the Center functioning when they determine how they are going to financially support South shore Center. Turgeon stated the Friends did not have the materials or experience to aggressively promote the Center as a "community center" versus just a "senior center". In response to a question from Councilmember Callies, Councilmember Turgeon explained she thought the cities should consider either allocating some portion of the proposed increase to SCS for building maintenance or contribute an additional amount to cover building maintenance expenses. She also suggested that the cities could consider assuming responsibility for the building operations and maintenance; if the proposed increase comes to fruition (she commented the cities would be paying 85% of the expenses by 2009). She noted the Friends' budget had $14,000 available for capital improvements. Mayor Love stated he strongly agreed the five cities need to determine if they want to continue to be a supportive partner; and if so, they need to examine how to sustain the Center. Councilmember Lizee concurred, and she stated the Center had been an asset. Mr. Withhart stated he either had met or was scheduled to meet with all but one of the cities. He stated he appreciated many of Councilmember Turgeon's concerns. He also stated he supported the suggestion to have the cities fund major capital repairs and replacements for the building, which Administrator Dawson had identified as a possible option. He then stated the Cooperative Agreement seemed appropriate at the time it was entered into; things had changed over the last ten years, and the agreement should be revisited. He stated he hoped the cities thought the services SCS provided (including the outreach program and management of the dial-a-ride services) were a good value. Mayor Love stated there was a need to examine how to ensure the sustainability of the Center. Administrator Dawson stated his understanding was the Friends believed they were running out of energy, and it was difficult to identify innovative fund raising alternatives that would increase the funds available for expenses. Also, many of the Friends were tiring of participating in the fund-raising efforts. Councilmember Wellens suggested maybe the SCS services should return to operating out of a school or church as it had previously done; thereby eliminating the operating and maintenance costs. He stated the Center and churches were in competition for rental revenues. He commented the existing building could possibly be considered for a new City Hall. Mayor Love stated Councilmember Wellens's solution was very creative. He stated from his perspective that approach would become similar to a charitable service, rather than the responsibility of the community to support the services. He believed the community should be responsible for providing the services, much in the same way it was responsible for providing recreational facilities. Discussion ensued with the demographics of the current population, and how the demographics would evolve over the upcoming years. Mr. Withhart stated the church facility had not been conducive to operating a good program. Participation rates had dropped because some individuals were uncomfortable going to a church other than their own for those services. He then stated the participation rates increased after the building had been built and occupied. He stated he would discourage relocating to a church. Councilmember Callies stated the members of the Parks Foundation were also tiring of their fund-raising efforts, and she did not have a solution to the problem. She stated the spirit of volunteerism was not an CITYOF SHOREWOOD CITY COUNCIL WORK SESSION MEETING July 24, 2006 Page 4 of 4 effective means for ongoing-maintenance of an organization; it was much easier to raise money for new endeavors or needs than it was for on-going operations. Mr. Withhart stated all the senior centers in the area SCS worked with were owned by municipalities, with the exception of the Gillespie Center. Those cities also reimburse SCS for part of the staffing costs for the centers. Councilmember Callies questioned why the Center was built if the senior population was as low as it was. Councilmember Turgeon stated she thought the population had declined, and she did not foresee it . . mcreasmg. Mayor Love questioned if Councilmember Turgeon was suggesting the Center be closed. Councilmember Turgeon stated the Long Lake center had been closed. Mayor Love stated the cities must get together to determine if they want to keep the Center functioning; and if so, determine how to ensure that would happen. Mr. Withhart stated the congregate dining numbers had dropped at all the centers they were involved with. He stated at the centers where the congregate dining program was still operational, an attempt was made to coordinate it with home-delivered meals to achieve economies of scale. He then stated the Hennepin County suburban population was one of the fastest growing in the country; not in terms of percentages, but in terms of quantity. There were more seniors in suburban Hennepin County than there were in Anoka, Washington, and Dakota counties combined; and more than in Ramsey County. Councilmember Turgeon stated a challenge for the Center was to determine how to attract the 62 - 65 years-old age groups to the Center. Councilmember Lizee questioned if the Center could partner with Community Education, cooking classes, etc. Linda Prybylo explained there were efforts underway to evaluate potential partnerships with other organizations. Prybylo stated there was a changing trend between those seniors that had used the Center and future seniors. There was consensus amongst the council members to have a session with the other four cities convened through SCS, to discuss how to fund the Center operations and maintenance. 3. OTHER None. 4. ADJOURN Lizee moved, Wellens seconded, Adjourning the City Council Work Session Meeting of July 24,2006, 2006, 6:45 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Woody Love, Mayor ATTEST: