City Council Meeting 11-9-16

After that eventful election night the City Council met yet again to get down to a long agenda's worth of important items for the City. But first of all:

Thank you to everyone that wrote me in to be your mayor for another two years. It has been a trying time and I have made many mistakes and have learned many lessons, but I am very grateful for the opportunity to represent you all again. I am committed to keep doing my best to represent the unique needs of Grand Marais and the area around it to all of the different agencies and jurisdictions that we have to work with on a daily basis.

Congratulations to Councilors Benson and Kennedy who both won another 4 years on the Council! Be sure to congratulate them when you see them around town!

Ok, on to the meeting!

The meeting was called to order at 6:30 with everyone in attendance.

I then opened up the Public Forum for community members to speak. No one was in attendance to speak, so I closed the Public Forum and we moved on!


We then brought up the Consent Agenda, which had the usual three things on it and an application for the Oh Ole Night Parade on November 25th: the approval of bills, the previous meeting's minutes, and the current meeting agenda. Not seeing anything out of the ordinary, the Consent Agenda passed unanimously.


Our first real item on the agenda was a presentation from members of the Creative Economy Working Group, a group of local artists and administrators that have met for over the past year to get down to the nitty gritty on what our local creative economy is based on and where it needs to grow and how it can do that. They have put together the Cook County Cultural Plan, which is a comprehensive exploration and explanation of the growth that we can actualize in our community. There are three major tenets of the plan:

1. Telling Our Story--This is the marketing/branding conversation where we work together with local artists and craftspeople to write a unified story about the creative world in Cook County... and then market that to the region and country as something to come and see. The power of a well written story is pretty compelling, and it is something that we currently have, but don't have formalized.

2. Working Together--This section has to do with getting the full support of the community through government policies (a potential City/County Arts Commission or something of the like), creation of more marketplaces for Grand Marais art, and support services (education, studio space, etc) to enable the creative economy to grow. We already do some of these things, but developing them with this in mind is where the effectiveness is.

3. Placemaking--This has to do with how we can make this a place that creative people want to be... and CAN be. This includes long-term and short-term housing for artists/craftspeople/students with access to studio space, it includes developing new focal point facilities that highlight the creative economy in our area, and it includes improving public spaces and streetscapes with public art and other installations.

**Cook County is already a regional destination for arts and crafts and culture. This plan desires to build upon that concept and expand our reach and impact to grow our local economy year-round. The art's and crafts economy already contributes over $10 million annually to our local economy.


The next conversation we had was with the Cook County/Grand Marais EDA to discuss how much money the City will be contributing to the proposed housing developments in Grand Marais through OneRoof out of Duluth.

For those just tuning in, the EDA has been working for over a year to develop plans with an affordable housing developer out of Duluth, OneRoof. They have decided that the best way to do this project is based on a land trust model where an owner purchases the home, but not the land under it (It is a secure lease though, so there is no chance of getting kicked off of it). The plan is to build 4-7 single family homes in the northwest corner of town next year to be sold in the 80-120% of median income range. This may sound expensive, but the EDA did a study that showed that we need to build houses in ALL of our income ranges, thus this is a way to start and to hopefully free up some lower income housing when people move up into these.

The required "local match" for the project is roughly $25,000/unit, which sounds like a lot, and is, but that investment is used to leverage almost 3 to 1 funds to make the project affordable. The question is, who is going to pay this money? The two major players in this conversation are the County and the City.

Why do houses have to be subsidized you may ask... Well, here is a little story about Naturally Occurring Affordable Housing, or NOAH:

NOAH doesn't happen anymore. It can't really. This is why:

1. Construction Costs will NEVER again be equal to low income rent without some subsidy of some sort. You just can't build cheap housing that is quality enough to promote for people to live and thrive in over time. It sounds pretty disheartening, but there are a few solutions here:
a. Mixed income housing units are more likely to succeed because they have some people who pay more for their (more luxury) accommodations in the same building as lower-income folks, but share the same infrastructure.
b. Density makes this more likely. Single family homes are the most expensive thing to build. At some point you have to come to grips with increasing density to lower cost.

2. Naturally Occurring Affordable Housing (NOAH) is something from the post WWII era. This means that most of the affordable type homes available now were built then. (Most of those were built with GI Bill money anyway).  If they haven't had proper maintenance, that means that they are disappearing... and as I said before, the economics of building lower-income homes doesn't work out right now and probably won't without some sort of subsidy.

3. Value added development depletes NOAH. This means that people with greater means like to buy cheap houses and make them expensive. This is the whole real estate flipping thing. Buy a house for $70,000, put $30,000 of repairs and updating into it, sell it for $165,000 because the market is there. OR, around here it is more like buying a cheap house for $165,000, putting some time and energy into it, and selling it for $220,000.

**So that's it. If we want housing for lower income people, we have to develop it ourselves or help facilitate it because the market won't ever allow the economics to work out again and we either need to build higher density developments (which was very unpopular when we did our focus groups on this a few years ago) or we need to subsidize it. The Land Trust model is good because it guarantees that the value of the home stays affordable through re-sale stipulations in the original purchase. For more information on these homes (which I believe that they will be pre-selling...), please contact the EDA.

The conversation hinged on what the proper amount the City should contribute to this project. At an earlier joint meeting of the City and County there was a resolution made that the local match would be provided. We didn't say how much each would give. There was a long consideration about whether or not the City residents would be double paying for this project, which we were not in favor of. It was also pretty clear that the City felt that it wasn't appropriate for the City to contribute a full half because of the county's responsibility in housing development and the fact that EDA levy funds are levied evenly across the county.
Many numbers were thrown out there, but the eventual number that was moved upon was $75,000 for the project. There was some conversation saying that this number was too high, but the desire to see the project go forward and to fulfill our responsibility to the project eventually was enough for the vote to pass. This passed contingent on the County/EDA providing the remainder of the project match. There was also a caveat put on the conversation that the City and County need to sit down and decide how to fund more projects like this in the future without it being a surprise or a huge hike in levy.


Our next piece of business was from the Planning Commission. The item for action that the Planning Commission brought forward was a recommendation to pass an ordinance that allowed the City to opt-out of a new state law that was put in place regulating "temporary family health care dwellings," or Granny Pods. The idea is that you build or adapt an accessory building on your property as a place for a family member to live while they are ill or recovering from an injury, or just living while infirm. This ordinance would exempt Grand Marais from the regulations that the state made on these particular units. Since we already have an ordinance that oversees accessory building use this was seen as redundant, thus the Council voted in agreement with the Planning Commission to opt-out.


The next conversation was a lively one to select the City's construction manager for the upcoming Public Works Facility project set to start next spring. The City interviewed two companies who put in bids on the project: McGough Construction out of Duluth and Kraus-Andersen of Duluth.

The two companies had similar, but in some ways significantly different proposals for the project. Both proposed that the project would be roughly a 5-7 month project and their bids for the work differed by $180,000. The McGough proposal had many more man hours involved in it and had a part time project superintendent who would also be working as a craft person on site, so he would be there full time for the extent of the project. Kraus-Andersen, who is currently doing work on the Grand Portage Lodge and Casino, had a lot less man hours included in their project, but included a full-time project superintendent who's only responsibility would be the oversight of the project.

There was some unclearness about McGough's proposal as they mentioned that the cost of their bid could be cut significantly under certain circumstances. All of the City Council members who were present at the interviews were much more impressed with the professionalism of the McGough workers that came for the interview as well.

The conversation was based on some concerns about each of the bids. For Kraus-Andersen the pros were that they have done work in this area and already have relationships with local contractors and know how to do business in the area. The cons were that there is some uncertainty about the finish date of the Grand Portage project and because they would be using the same team that is up in Grand Portage for our project we didn't want to be forced to start our project later because of delays on that project.

Concerns for McGough was cost largely. In their interview McGough made it clear that they work extensively with local contractors preferably and put a large focus on planning ahead for contractor schedules. Another concern is that they haven't done a large project up in this area yet.

In the end, the Council voted to offer the contract to McGough Construction contingent on them accepting our offer of a 2.5% construction manager fee, which is significantly lower than they originally bid.


Our next piece of work on the agenda was a very simple one. Last year we agreed to be the financial agent for a grant to the hospital through the DEED program (Dept. of Employment and Economic Development). The hospital has pursued and arranged for an extension of this grant so that they can use that funding throughout September 30th, 2017 instead of December 31st, 2016. The Council agreed to this extension unanimously.


Following that was another pretty simple one. This was a contract with our auditor for this year's auditing services, which will be performed early next year. The contract is for $300 more than last year, which is a very modest increase considering that we are expecting to have an increase in revenues from the Rec. Park and have additional expenses due to the Public Works Facility project. Overall the expense for the audit comes to just over $30,000, which is a lot of money, but it is a state requirement for cities to do this to make sure that there is no funny business in the City's numbers.


Then we moved on to Council Reports;

Councilor Mills attended the Park Board meeting, 1.3% increase in rates at the Rec Park for just about everything. There was conversation about a larger increase in the expense of the sites, but the Board approved roughly a 1.3% increase across the board.

Councilor Moody attended an ARDC meeting where he was able to be a part of the conversation in the re-organization of the ARDC Board even though it was his first meeting. This will hopefully improve the efficiency of their ability to get projects done.

Councilor Kennedy had a Planning Commission Meeting on Non-Conforming Use conversation. They were looking at changing some of the language of the Non-Conforming Use and the Planning Commission is being very careful to re-write this language so that it captures the meaning of the ordinance and so it is easily understandable to residents (and is very clear).
Also, a PUC meeting where they spoke about utility rates. Looking to the future, they are looking at a 2% increase on electric and water as well as a 3% increase on sewer. These increases are to accommodate utility increases that the PUC has to pay as well.

Councilor Benson had a question about a planning update.

I had two meetings of the Creative Economy group to try and create an idea of what is next and of how implementation of the Cook County Cultural Plan will go. We also chatted with ArtSpace, an organization that specializes in developing live/work spaces for artists. Their ideas seemed to be pretty well tailored to our plan and to what we are looking for.

I had a meeting with the North House board where they looked at potential program expansions in the coming year and another staff hire, so stay tuned to their website for more updates on that!

I also have an update from CCLEP, who's Residential Energy Efficiency Program (REEP) has been so successful that it has used up the appropriated money for the program and will continue to be offered through use of general fund monies. They are starting to plan next year's Builder's Workshop as well. Summer Solar Kid's Program and they would like to help gather information regarding renewable energy options for the Public Works Facility.

I also have been doing some Community Visioning activities at gatherings around the City. If you would like to host one, or know some people who have a lot to say about the City, let me know and I will come to where you are and work through one of the activities!

On that note, the Steering Committee for the Community Visioning will be meeting again in November and going over the first round of activities that were done and we will start digging in more to figure out how to reach people that we haven't yet reached!

That was all. As always, let me know if you have any questions or comments.