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HomeMy Public PortalAbout05.02.2023 Work Session Meeting Packet Posted 5/29/2009 Page WORK SESSION AGENDA MEDINA CITY COUNCIL Tuesday, May 2, 2023 5:30 P.M. Medina City Hall 2052 County Road 24 I. Call to Order II. Common Bond TIF Update and Fee Reduction Request III. DDA Classification and Compensation Discussion IV. Adjourn Posted 04.28.2023 Melrose Commons Page 1 of 3 May 2, 2023 Affordable Housing Discussion City Council Worksession TO: Mayor Martin and Members of the City Council FROM: Dusty Finke, Planning Director DATE: April 27, 2023 MEETING: May 2, 2023 City Council Worksession SUBJECT: Melrose Commons – Affordable Housing Fee Waiver Discussion Background On June 21, 2022, the Medina Economic Development Authority (MEDA) adopted resolution 2022-03, which supported use of Tax Increment Financing (TIF) assistance for development of Melrose Commons, a 50-unit affordable housing project proposed by CommonBond Communities. The project is proposed north of Highway 12, east of Baker Park Road. TIF assistance was intended to support CommonBond’s application for tax credit support from Minnesota Housing, which would provide a much larger amount of support. Applications for tax credits are extremely competitive, and Minnesota Housing did not approve CommonBond’s request in 2022. CommonBond intends to submit an application again in July 2023. Information on the project is attached for reference. During the past four months, CommonBond, Interfaith Outreach, City staff, and Ehlers (the City’s municipal advisor), have had a series of discussions related to potential City support for the application and the project. CommonBond and Interfaith Outreach have also had discussions with Mayor Martin and Councilmember DesLauriers. MEDA supported TIF not to exceed $306,000 over an anticipated term of 15-years. This resolution is still in place, but will likely need to be updated to account for updated assumptions. There are still several datapoints which CommonBond and staff are waiting on to finalize the TIF analysis. Most significantly, CommonBond has requested substantial funding from Hennepin County for the project. Additionally, rent assumptions will be updated by the Federal and State government in May. As such, staff intends to present updated TIF information at the June 6 MEDA meeting. Fee Waiver Request In addition to the TIF support, there have been discussions with City Council related to potential fee waivers for additional local financial support. While MEDA considers TIF requests, fee waivers are at the discretion of the City Council. CommonBond has requested that the City waive $115,000 in sewer connection and park fees for the project. This request is consistent with discussions that the City Council held in December 2022 related to strategies to support affordable housing. MEMORANDUM Work Session Agenda Item II Melrose Commons Page 2 of 3 May 2, 2023 Affordable Housing Discussion City Council Worksession Council Discussion on Affordable Housing Support A copy of the staff report from the December worksession is attached for reference. As discussed, the City has been allocating and setting aside approximately $57,000 per year with the intention of supporting affordable housing. The $57,000 annual amount is equal to the minimum amount which the City is required to allocate to support affordable housing to be active in the Livable Communities Act (LCA) programs. During the discussion, staff suggested that a straight-forward way to utilize these funds may be to pledge fee waivers of approximately $2300 per affordable unit. This amount was determined by dividing 10 years of affordable housing funding (approximately $570,000) by the City’s affordable housing allocation for 2021-2030 (244 units). Staff’s impression from the December discussion was that the Council may be supportive of a $2300/unit support based on this formula. As a result, staff suggested that CommonBond limit its fee waiver request to $115,000 (50 units x $2300). Relationship between Fee Waivers, TIF, and MN Housing Scoring Fee waivers can provide additional “points” for the Minnesota Housing application to make the request more competitive. TIF assistance is subject to the “but for” analysis because TIF can only be provided if it is shown that project would not be constructed but for the TIF support. Essentially, the TIF is limited to the minimum amount to make the project viable. As such, all other variables being fixed, if the City (or any other agency) provides fee waivers or other financial support, the maximum amount of TIF assistance would decrease. Because fee waivers and TIF financing are considered in different categories, there is strategy between the amount of fee waivers vs. TIF to maximize points in Minnesota Housing scoring. There are also many factors that may still affect the remaining “gap” for development of the project such as interest rates, construction costs, annual TIF increment produced (which is impacted by tax rates, market values), etc. City Council Feedback Requested Staff requests Council feedback on Council support for the $2300/unit fee waiver in general for affordable housing proposals, and also for feedback for $115,000 specifically for the Melrose Commons project. Staff anticipates that TIF assistance for this and other projects may be considered in certain cases as well, but would be considered by MEDA in addition to fee waiver support. If the City Council agrees, staff would intend to prepare a letter of support or resolution of support as necessary related to the $115,000 in fee waivers for the Melrose Commons project and present on a future consent agenda. As noted above CommonBond’s TIF request is scheduled to be reviewed at the June 6 MEDA meeting. Ehlers is awaiting additional information to finalize their analysis. This analysis is Melrose Commons Page 3 of 3 May 2, 2023 Affordable Housing Discussion City Council Worksession likely to change the maximum amount of TIF assistance which may be permissible and MEDA will be able to determine the desired level of support. Attachment 1. Melrose Commons information 2. December 2022 Worksession memo NOTES Advantage Services Interfaith Outreach Construction Lender TBD Compliance Jill Lee Investor TBD Property Management TBD Perm Lender TBD Construction Management Tammie Fallon General Contractor TBD Asset Management Henry Parker Attorney Winthrop & Weinstine DEVELOPMENT TEAM INTERNAL TEAM EXTERNAL TEAM Acquisitions & Development Sally Rabban Architect UrbanWorks Placed in Service 4/1/2026 Stabilization Start 7/30/2026 Stabilization Deadline 12/1/2026 Tax Credit Closing / Construction Start 4/1/2025 Construction Completion 4/1/2026 Lease-Up Start 1/1/2026 Parking Closest CBC Community? TIMELINE Acquisition 4/1/2025 Maple Terrace50 underground, 50 surface # of Buildings 1 Difficult to Develop Area? No Gross SF 64,536 Qualified Opportunity Zone? No MHFA Project Number (M#) M19122 HTC # TBD BUILDING & SITE INFORMATION # of Stories 3 Qualified Census Tract? No AMI 30% - 60% AMI CBC Property Number hd0804 Tax Credit Pool Metro MHFA Property Number (D#) D8514 Tax Credit Allocator MHFA County Hennepin Ownership Entity TBD Type of Tax Credits 9% Provided by Interfaith Outreach MELROSE COMMONS PROJECT SUMMARY Development Name Melrose Commons Total # of Units 50 Resident rent shown below reflects 2022 rents plus 4% increase (2023 rents to be published in mid-May). Budget below reflects 26 years TIF ($360,000) and SAC and Park Dedication fee waivers ($115,000). This new construction 50-unit project is located in Medina, MN. It will include 12 one-bedrooms, 20 two-bedrooms, 12 three- bedrooms, and 6 four-bedroom units. Affordability levels will vary from 30% to 60% AMI and target families. Of the 50 units, 7- units will be restricted to formerly homeless individuals and 8-units to people with disabilities (utilize Housing Support). Supportive services will be provided by Interfaith Outreach & Community Partners. State MN Programs & Set-Asides 7 HPH, 8 PWD Zip Code 55359 Service Level Address Baker Park Road and US-12 Population Family City Medina PREDEVELOPMENT Date of Report 4/25/2023 *PWD = People with Disabilities, HPH = High Priority Homeless, HS = Housing Support % of Total % of Total Gap to be filled by TBD Sources 617,579$ 12,352$ 3% City of Medina - Fee Waivers (SAC and Park) 115,000$ 2,300$ 1% Reserves and Non-Mortgageable 376,195$ 7,524$ 2% Total Development Cost 21,066,708$ 421,334$ 100% Financing & Syndication Costs 930,340$ 18,607$ 4% Developer Fees 1,800,000$ 36,000$ 9% Professional Fees 1,732,536$ 34,651$ 8% Contractor Fees 1,050,468$ 21,009$ 5% Contingency 725,126$ 14,503$ 3% Acquisition (inclds land write down of $220k) 1,000,000$ 20,000$ 5% Construction 13,452,043$ 269,041$ 64% Funding Gap -$ -$ Permanent Uses Amount Per Unit Deferred Developer Fee (CBC contribution) 288,000$ 5,760$ 1% Total Permanent Financing 21,066,708$ 421,334$ 100% Hennepin County HOME (pending application) 980,000$ 19,600$ 5% Tax Credit Syndication Proceeds 14,815,194$ 296,304$ 70% Sales Tax & Energy Rebate (CBC contribution) 421,835$ 8,437$ 2% First Mortgage 3,469,000$ 69,380$ 16% General Partner Cash 100$ 2$ 0% City of Medina - TIF for 26 years 360,000$ 7,200$ 2% Net Operating Income 270,151$ 5,403$ SOURCES & USES Permanent Sources Amount Per Unit Services -$ -$ MIP 0.00% Total Expenses 444,606$ 8,892$ Construction Loan Rate 7.06% Reserves 22,500$ 450$ Perm Loan Rate 6.20% Insurance 40,000$ 800$ Property Taxes 50,126$ 1,003$ DCR Year 1 1.15 Utilities 56,000$ 1,120$ DCR Year 15 2.15 Administration/Management 159,285$ 3,186$ Maintenance/Operating 116,695$ 2,334$ Income Inflator 2.0% Expense Inflator 3.0% Expense Amount Per Unit Cap Rate 7.0% Vacancy (53,799)$ (1,076)$ Total Revenue 714,757$ 14,295$ Rental Income 763,056$ 15,261$ 2 BR 10 925 50% MTSP 50% MTSP1253 120 1373 HPH, HS 2 BR 3 925 30% MTSP 30% MTSP PWD, HS 1 BR 3 650 30% MTSP 30% MTSP636 98 734 865 120 985 UNIT SUMMARY Program Type 1 BR 5 650 30% MTSP 30% MTSP PWD, HS Unit Type # Units Approx. SF Rent Limit Income Limit 887 Resident Rent Utility Allowance Gross Rent 98 985 1385 140 1525 3 BR 7 1100 1446 140 1586 50% MTSP 50% MTSP 3 BR 3 1100 1763 140 1903 60% MTSP 60% MTSP 4 BR 4 1300 1608 161 1769 50% MTSP 50% MTSP Parking Vacancy 0.0% Other Income 5,500$ 110$ Commercial Vacancy 0.0% INCOME & EXPENSE UNDERWRITING Income Amount Per Unit Residential Vacancy 7.0% TOTAL 50 4 BR 2 1300 1962 161 2123 60% MTSP 60% MTSP 1 BR 4 650 887 98 985 30% MTSP 30% MTSP HPH, HS 50% MTSP 50% MTSP HIGH HOME 2 BR 2 925 1200 120 1320 50% MTSP 50% MTSP HIGH HOME 60% MTSP 60% MTSP2 BR 5 925 1527 120 1647 3 BR 2 1100 OVERALL SITE US-12 BA K E R P A R K R D MEDINA, MN / 01.17.2023 / 22-0022 Melrose Commons 1CONCEPT PLAN SITE PLAN PLAY AREA COURTYARD BICYCLE RACKS TRASH / SERVICE SURFACE PARKING DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 4 BIKE STORAGE MANAGEMENT COMMUNITY ROOM 852 SF WELLNESS / ACTIVITY 417 SF ELEC WATER LOUNGE 285 SF 2 BR UNIT 944 SF 2 BR UNIT 944 SF 2 BR UNIT 890 SF 2 BR UNIT 890 SF TRASH / RECYCLING 2 BR UNIT 900 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 3 BR UNIT 1,104 SF 4 BR UNIT 1,358 SF 1 BR UNIT 640 SF 2 BR UNIT 900 SF 1 BR UNIT 640 SF MA I L LA U N D R Y 0 5 10 SUPPROTIVE SERVICES OFFICE MANAGEMENT OFFICE COMPUTER LAB - --- 4 BR UNIT 1,351 SF 3 BR UNIT 1,158 SF MAIN LEVEL DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 5 PACKAGE BIKE STORAGE MANAGEMENT COMMUNITY ROOM 860 SF WELLNESS / ACTIVITY 417 SF ELEC WATER LOUNGE 285 SF 2 BR UNIT 944 SF 2 BR UNIT 944 SF 2 BR UNIT 890 SF 2 BR UNIT 890 SF TRASH / RECYCLING 3 BR UNIT 1,158 SF 2 BR UNIT 900 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 3 BR UNIT 1,104 SF 4 BR UNIT 1,358 SF 1 BR UNIT 640 SF 2 BR UNIT 900 SF 3 BR UNIT 1,158 SF 1 BR UNIT 640 SF MA I L LA U N D R Y 0 5 10 OFFICE OFFICE COMPUTER LAB - --- LOUNGE 285 SF 2 BR UNIT 944 SF 2 BR UNIT 944 SF 2 BR UNIT 890 SF 2 BR UNIT 890 SF 3 BR UNIT 1,081 SF 4 BR UNIT 1,318 SF 3 BR UNIT 1,042 SF 3 BR UNIT 1,158 SF 2 BR UNIT 900 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 3 BR UNIT 1,104 SF 4 BR UNIT 1,358 SF 1 BR UNIT 640 SF 2 BR UNIT 900 SF 3 BR UNIT 1,158 SF 2 BR UNIT 869 SF LA U N D R Y 1 BR UNIT 640 SF 0 5 10 - --- UPPER LEVELS DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 6 EXTERIOR RENDERING DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 11 LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" 0 5 10 TOP OF FOOTING 794'-0" LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" 0 5 10 EXTERIOR ELEVATIONS SOUTH ELEVATION WEST ELEVATION DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 12 LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" TOP OF FOOTING 794'-0" 0 5 10 LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" 0 5 10 EXTERIOR ELEVATIONS NORTH ELEVATION EAST ELEVATION DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 13 LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" TOP OF FOOTING 794'-0" 3 BR UNIT 1,158 SF 3 BR UNIT 1,158 SF 3 BR UNIT 1,158 SF 2 BR UNIT 900 SF 2 BR UNIT 900 SF 2 BR UNIT 900 SF 1 BR UNIT 627 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 1 BR UNIT 640 SF 4 BR UNIT 1,358 SF 4 BR UNIT 1,358 SF 4 BR UNIT 1,358 SF 2 BR UNIT 869 SF 2 BR UNIT 869 SF LAUNDRY LAUNDRY LAUNDRY CORRIDORWELLNESS / ACTIVITY 417 SF 3 BR UNIT 1,081 SF 3 BR UNIT 1,081 SF LEVEL 1 800'-0" LEVEL 2 810'-5 7/8" ROOF 830'-0 7/8" LEVEL 3 820'-11 3/4" TOP OF FOOTING 794'-0" 0 5 10 BUILDING SECTION DESIGN SUMMARYMEDINA, MN / 07.14.2022 / 22-0022 Melrose Commons 14 Affordable Housing Page 1 of 3 December 20, 2022 Discussion City Council Worksession TO: Mayor Martin and Members of the City Council FROM: Dusty Finke, Planning Director DATE: December 13, 2022 MEETING: December 20, 2022 City Council Worksession SUBJECT: Affordable Housing Discussion Background The City of Medina has identified certain goals related to housing within its Comprehensive Plan and in connection with the decision to participate in the Livable Communities Act (LCA). One of the Goals of the Comprehensive Plan is to “provide opportunities for a diversity of housing at a range of costs to support residents at all stages of their lives.” For the 2020-2030 decade, the Metropolitan Council projected Medina’s share of the regional affordable housing need at different income levels to be: To participate in LCA, Medina agreed to the following housing goals for 2021-2030: Decade Affordable Housing Goal Life-cycle Housing Goal 2021-2030 134-244 282 The LCA goals are similar to the allocation of affordable housing need projected by the Metropolitan Council. Actions to Support Creation and Preservation of Affordable Housing There are various actions and programs which a community may take part in to support the creation and preservation of affordable housing. A list of common tools and resources is described in the Housing Chapter of the City’s Comprehensive Plan (attached for reference). There is also additional information available on many of the tools on the Metropolitan Council website: https://metrocouncil.org/Handbook/Resources.aspx#tab_3 Many of these actions and program include the provision of funding. Such options include • Tax Increment Financing (city) • Tax Abatement (city, multi-jurisdictional) • Fee reductions, direct support (city) • Minnesota Housing Consolidated Request for Proposal (state) • Livable Communities Act Demonstration Account (Met Council) # of units 3-BR Rent Owner- Occupied Price At or Below 30% AMI 142 $915 $129,100 From 31 to 50% AMI 102 $1,525 $227,100 From 51 to 80% AMI 0 $2,440 $355,600 Total Units 244 MEMORANDUM Work Session Agenda Item #3 Affordable Housing Page 2 of 3 December 20, 2022 Discussion City Council Worksession • Community Development Block Grants (CDBG – funds pooled from communities and administered by Hennepin County) • Affordable Housing Incentive Fund (AHIF), HOME Program (Hennepin County) • Grants/interest-free loans for home improvements (Hennepin County, city) The City has budgeted approximately $57,000/year since 2020 for local funding support of affordable housing. These funds have been aggregating and staff seeks Council discussion on how best to allocate the funds (see discussion below). The Medina Economic Development Authority (MEDA) has also pledged support for TIF financing for a 50-unit affordable housing project located west of Baker Park Road, north of Highway 12. This project intends to request assistance via tax credits from Minnesota Housing’s Consolidated RFP. City policy can also support affordable housing. For example, the City has enacted the following regulatory incentives for affordable housing: • Allowance for additional density in R3 and R4 district • Points within the staging plan flexibility • Allowance of accessory dwelling units Other regulatory/policy options which are not currently adopted but could be investigated by the City include: • Inclusionary zoning/Mixed-Income requirements – several communities have adopted requirements that certain types of developments provide some amount of affordable housing. Generally, this requirement is triggered on projects where the community provides funding assistance, or has a higher level of discretion such as Comp Plan Amendments, PUDs. These requirements vary in terms of their applicability and how high the requirement is. Some of the communities also allow a payment in-lieu to an affordable housing trust fund. • Increasing maximum density allowances, reducing/eliminating minimum lot size requirements Council Direction Requested As a condition of enrolling in LCA program, the City is required to create a plan which describes the actions the City intends to take over the next eight years to meet the LCA goals noted above. Staff intends this discussion as a kick-off for this work. Discuss Goals The Housing Chapter of the City’s Comprehensive Plan (attached for reference) includes some general objectives in addition to the LCA goals. Communities often identify more specific goals within a Housing Action Plan. Following is a list of other types of goals which may be considered: • Support development of new senior housing options – may specify independent or supportive • Support the ability of seniors to stay in their homes • Support creation of additional market-rate rental options with more than 2 bedrooms • Support development of owner-occupied housing affordable to households at 100%- 125% of AMI Affordable Housing Page 3 of 3 December 20, 2022 Discussion City Council Worksession • Support preservation and improvement of owner-occupied naturally occurring affordable housing Staff seeks feedback from the Council on what goals, if any, the Housing Action Plan should concentrate on beyond supporting development of units consistent with LCA goals. Affordable Housing Fund Since 2020, the City Council has budgeted approximately $57,000 annually to support affordable and lifecycle housing. These funds have been set aside within reserves for this purpose, and are set based upon the minimum ALHOA (affordable and lifecycle housing opportunity amount) that communities which enroll in LCA are supposed to spend on an annual basis. Depending on the housing goals which are of interest to the Council, staff seeks Council direction on how to utilize these funds. Preliminarily, staff has considered whether to tie these funds specifically to the City’s affordable housing allocation and LCA goals of creating 142 units affordable at 30% AMI and 102 units affordable at 50% AMI. For example, the City could earmark the $570,000 estimated to be levied over the decade to provide approximately $2300 of financial support ($570,000/244 units=$2,336/unit) for each unit created. Rather than a direct payment, this amount could be provided in fee waivers, and reimbursed from the amount. The Council could have a less formulaic strategy to expend these funds, but staff believes it is important to provide some guidance on how the funds are to be utilized. Staff believes pledging a specific amount per unit would be straightforward to administer. Depending on the goals the Council would like to invest in, these funds could be used for other programs. Certain programs (such as home rehabilitation loans) could require significant administrative costs. TIF Guidance Staff would intend to include general guidance within the action plan related to Tax Increment Financing (TIF). TIF is one of the most common and significant tools which the City can consider to meet its housing goals. Staff believes it is in the City’s interest for the housing action plan to provide at least general guidance in the type of projects where the City would prioritize TIF. Additional information on programs/policies Staff seeks feedback on whether there are programs/policies noted above which the Council would like to hear more information. Conversely, if there are policies which the Council does not want to investigate further, staff would request that feedback. Next Steps Staff will take the feedback provided by Council to begin the draft Housing Plan for Council review at a future date. If the Council would like additional details on any programs or policies in the meantime, the Council can request that as well. Attachment 1. Housing Chapter MEMORANDUM TO: Mayor Martin and Members of the City Council FROM: Erin Barnhart, Finance Director DATE: May 2, 2023 SUBJ: Classification and Compensation Discussion Background Historically, the City of Medina organizational philosophy values a smaller staff that fulfills a wide variety of roles in the organization. The City of Medina’s approach to staffing has involved recruiting and retaining highly qualified, highly productive, dedicated employees to the workforce. Historical retention efforts have included exceedingly competitive benefits and compensation, utilization of new technologies to provide better efficiencies, and providing a quality work environment. Consultants have been used frequently to assist staff and Council to achieve goals and meet demands for services. The result of this strategy has allowed for a smaller team-oriented and efficient staff by comparison to similar municipalities in the number of full-time equivalent (FTE) employees. The proposed DDA plan is based on comparable organizations and the recommendations outlined in the DDA report to incorporate the continuance of this historical strategy by the City of Medina. Mark Goldberg from DDA will be at the Work Session to present the findings of their classification and compensation study for the City of Medina. Work Session Agenda Item III City of Medina Employee Total Compensation Pay Scale 2023 Pay Grade Step 1 Step 2 Step 3 Step 4 Step 5 Step 6 Step 7 Step 8 1 PT CSO  ($28,174)PD Office Asst ($75,975) PT Office Asst Admin ($36,907) 2 3 Permit Tech ($85,08)  Accounting Tech ($87,159)PW Admin Asst ($100,150) PD Admin Asst ($100,141) 4 PW Tech ($86,160)                          PT PW Tech ($42,554)PW Tech ($113,287)Non‐exempt; except City Clerk 5 City Clerk/Asst to CA ($90,706)Acctountant ($105,525) PW Feld Insp ($121,469)                PW Water Tech ($119,732)    6 Officer       ($139,973)            Officer       ($115,735)            Officer       ($126,011)            Officer       ($132,478)            Officer       ($124,328)            Officer       ($134,377)            Officer       ($133,562)            Officer       ($133,912)             Officer       ($130,453)     Associate Planner ($124,855)     PW Foreman ($114,141) 7 8 Sergeant ($149,893) 9 Finance Director ($139,781)         Planning Director ($151,377)        PW Director ($157,913) 10 Public Safety Dir ($171,762)Exempt  11 City Administrator ($171,675) Police Officers Union Contract Step 1 Start $32.47 Step 2 After 1 Year $36.02 Step 3 After 2 Years $39.53 Step 4 After 3 Years $43.12 Grade Position Longevity in Years Base Salary PERA Health Premium HSA Contribtion Dental Life Insurance Total PT CSO 0.5 $26,208.00 $1,965.60 $28,173.60 PT CSO 0.5 $26,208.00 $1,965.60 $28,173.60 1‐2 PT Office Assistant 3 $34,332.00 $2,575.00 $36,907.00 1‐2 Police Office Assistant Vacant $54,080.00 $2,643.80 $15,000.00 $3,000.00 $1,225.00 $27.00 $75,975.80 3 P.W. Administrative Assistant 2.5 $67,828.25 $5,087.12 $22,983.00 $3,000.00 $1,225.00 $27.00 $100,150.37 3 Police Administrative Assistant 15.75 $72,107.11 $5,408.03 $18,987.00 $3,000.00 $612.00 $27.00 $100,141.14 3 Accounting Technician 0.1 $63,169.60 $4,737.72 $15,000.00 $3,000.00 $1,225.00 $27.00 $87,159.32 3 Planning/Building Permit Technician 0.2 $64,076.13 $4,805.71 $12,562.00 $3,000.00 $612.00 $27.00 $85,082.84 3‐4 Public Works Tech 8 $78,618.10 $5,896.36 $23,988.00 $3,000.00 $1,758.00 $27.00 $113,287.46 3‐4 Public Works Tech 1 $71,853.36 $5,389.00 $5,279.00 $3,000.00 $612.00 $27.00 $86,160.36 3‐4 PT Public Works Tech 1 $39,585.00 $2,968.88 $42,553.88 4‐5 Field Inspector 13 $85,669.33 $6,425.20 $25,122.00 $3,000.00 $1,225.00 $27.00 $121,468.53 4‐5 Public Works Water 16.5 $85,671.02 $6,425.33 $23,384.00 $3,000.00 $1,225.00 $27.00 $119,732.35 5 Accountant 8.7 $80,733.47 $6,055.01 $14,485.00 $3,000.00 $1,225.00 $27.00 $105,525.48 5‐6 City Clerk 1.5 $76,196.88 $5,714.77 $5,155.00 $3,000.00 $612.00 $27.00 $90,705.64 5‐6 Officer 20 $96,047.42 $17,000.39 $22,122.00 $3,000.00 $1,758.00 $45.00 $139,972.82 5‐6 Officer 7.5 $89,696.88 $15,876.35 $6,505.00 $3,000.00 $612.00 $45.00 $115,735.23 5‐6 Officer 5.7 $89,696.88 $15,876.35 $15,635.00 $3,000.00 $1,758.00 $45.00 $126,011.23 5‐6 Officer 25 $89,696.88 $15,876.35 $22,102.00 $3,000.00 $1,758.00 $45.00 $132,478.23 5‐6 Officer 19.5 $89,696.88 $15,876.35 $14,485.00 $3,000.00 $1,225.00 $45.00 $124,328.23 5‐6 Officer 0.5 $92,696.88 $15,876.35 $21,001.00 $3,000.00 $1,758.00 $45.00 $134,377.23 5‐6 Officer 19 $89,696.88 $15,876.35 $23,186.00 $3,000.00 $1,758.00 $45.00 $133,562.23 5‐6 Officer 3 $89,696.88 $15,876.35 $23,536.00 $3,000.00 $1,758.00 $45.00 $133,912.23 5‐6 Officer 2 $89,696.88 $15,876.35 $20,077.00 $3,000.00 $1,758.00 $45.00 $130,453.23 6 Associate Planner 15 $91,662.48 $6,874.69 $21,533.00 $3,000.00 $1,758.00 $27.00 $124,855.17 6 P.W. Foreman 15 $91,662.90 $6,874.72 $11,351.00 $3,000.00 $1,225.00 $27.00 $114,140.62 8 Sergeant 22 $104,913.92 $18,569.76 $21,606.00 $3,000.00 $1,758.00 $45.00 $149,892.68 9 Finance Director 15.5 $120,640.00 $9,048.00 $6,454.00 $3,000.00 $612.00 $27.00 $139,781.00 9 P.W. Director 29 $120,640.00 $9,048.00 $23,973.00 $3,000.00 $1,225.00 $27.00 $157,913.00 9 Planning Director 17 $120,640.00 $9,048.00 $16,904.00 $3,000.00 $1,758.00 $27.00 $151,377.00 10 Public Safety Director 22.5 $123,492.51 $21,858.17 $22,033.00 $3,000.00 $1,351.00 $27.00 $171,761.69 11 City Administrator 11.5 $137,280.00 $10,296.00 $19,314.00 $3,000.00 $1,758.00 $27.00 $171,675.00 $2,653,890.53 $303,691.64 $493,762.00 $84,000.00 $37,144.00 $936.00 $3,573,424.16 Market Study Update May 2023 Overview of Market Analysis Market Data and Analysis General Observations Answer Questions Agenda Peer OrganizationsGeographic Proximity Population Size Services Provided To whom are you losing employees? From where do you recruit employees from? DDA has partnered with the City to select a group of cities and counties with whom the City competes for talent. Here are some factors that were considered when selecting this group: Market Analysis When DDA reviews the positions in other organizations, we only use the match if at least 80% of the duties are close to the position at the City. In reviewing the salary information, if one of the organizations pays significantly more or less than the others, we will remove that data point from the analysis (but will still show the data) so the City can decide if they want to include the information. The data and related analyses were reviewed by a Consultant who has been involved in the project and other staff members to ensure applicability, validity, accuracy, and consistency of the data. Market Analysis DDA gathered updated rosters for all survey participants All data is from 2023, most of it was collected in April 2023 All positions have at least 5 market matches. DDA will never report on the market for any position that has less than 5 respondents, as there is too strong a possibility of one organization affecting the results. Market Analysis Salary Ranges A salary range is the range of pay established by employers to pay employees performing a particular job or function. Salary ranges have a minimum pay rate, a maximum pay rate, and a midpoint The salary range is determined by conducting a market analysis. Market Analysis Salary Range Width This is the distance between salary range minimum and maximum. Range width varies widely by organization due to different compensation philosophies. Market Analysis DDA gathered data from the following Cities Market Data Albertville Belle Plaine Corcoran Dayton Delano Mahtomedi Minnetrista Mound Rockford New Prague North Oaks Orono Victoria Shorewood Wayzata South Lake Minnetonka Three Rivers Park West Hennepin Rogers Deephaven For Police Market Comparison For each position the percentage difference has been calculated between the City’s figure and the market. If the figure is: ‒Positive (+) : Figure indicates that the City pays above the market ‒Negative (-) : Figure indicates that the City pays below the market The following guidelines are used when determining the competitive nature of current actual compensation: +/-5% (Highly Aligned with the market) +/-10% (Aligned with the market) +/-11-15% (Possible misalignment with the market) > 15% (Significant misalignment with the market) Market Data –Base Salary Market Comparison When DDA compares the actual salaries of survey benchmark positions to the median of the market we find that the City, on the aggregate is: Based on these comparisons the City would be considered “aligned with the market” Details for the market for all positions are included on the next few slides. Cells in green are more than 10% above market, cells in red are more than 10% below market Market Data –Base Salary Median Actual Pay City Range Min Compared to Market Min City Range Max Compared to Market Max All 2.86%-3.22%-0.91% Market Data –Base Salary Job Title Medina MIN Medina MAX Medina Actual Bench MIN Bench MAX Bench Actual Curr Min % of Bench Min Curr Max % of Bench Max Medina % of Bench Actual Medina Range Spread Bench Range Spread CSO $21.00 $25.00 $25.20 $21.90 $27.76 $25.56 96%90%99%27% Office Assistant (Grade 1-2)$22.56 $31.80 $23.90 $31.03 $26.01 94%102%41%30% PD Admin Asst $24.58 $34.67 $34.67 $27.51 $34.60 $33.10 89%100%105%41%26% PW Admin Asst $24.58 $34.67 $32.61 $25.92 $31.61 $27.81 95%110%117%41%22% Accounting Technician $26.82 $34.67 $30.81 $27.28 $35.38 $30.87 98%98%100%29%30% Public Works Tech $29.22 $41.19 $36.17 $26.62 $34.00 $31.20 110%121%116%41%28% Public Works Water $29.22 $41.19 $41.19 $28.27 $35.90 $32.14 103%115%128%41%27% P.W. Foreman $31.82 $44.07 $44.07 $33.20 $42.12 $39.96 96%105%110%38%27% Assistant to CA / City Clerk $32.33 $44.07 $36.63 $34.44 $43.20 $38.82 94%102%94%36%25% Associate Planner $32.33 $44.07 $44.07 $30.73 $38.62 $34.91 105%114%126%36%26% Accountant $32.33 $41.19 $38.81 $31.92 $45.60 $39.48 101%90%98%27%43% Patrol Officer $32.47 $43.12 $43.12 $33.51 $45.96 $46.36 97%94%93%33%37% Investigator $40.97 $44.56 $44.56 $36.96 $47.58 $46.13 111%94%97%9%29% Sergeant $39.61 $50.44 $50.44 $43.77 $53.34 $56.06 91%95%90%27%22% Finance Director $45.52 $58.00 $58.00 $50.72 $64.55 $60.94 90%90%95%27%27% P.W. Director $45.52 $58.00 $58.00 $50.50 $65.52 $60.68 90%89%96%27%30% Planning Director $45.52 $58.00 $58.00 $46.23 $59.61 $57.14 98%97%102%27%29% Public Safety Director $48.05 $61.24 $59.37 $52.85 $70.03 $65.24 91%87%91%27%33% City Administrator $53.35 $67.99 $66.00 $59.81 $75.43 $69.59 89%90%95%27%26% 96.78%99.09%102.86%32.16%28.52% Market Data –Base Salary $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 Pay Ranges: Medina & Benchmark Averages Medina MIN Medina MAX Bench MIN Bench MAX General Observations The overall structure is market competitive currently, but we are expecting more salary structure movement in 2023 and beyond as more contracts are settled and cities adjust their existing structures Public Works positions are well positioned against the market General Observations Management level positions are, in general, paid lower compared to the market. Options to address this could include: Adding steps to the structure Adding grades to the structure Adjusting the differential from one grade to the next It is generally not recommended to only adjust one grade or position and no other, as it can cause compression or inequity within the salary structure Questions