HomeMy WebLinkAbout[03a] Minutes - July 22, 2009CITY OF ST. JOSEPH
ECONOMIC DEVELOPMENT AURTHORITY
Meeting Minutes -Wednesday, July 22, 2009
Present: EDA Board Members Carolyn Yaggie-Heinen, AI Rassier, Tom Skahen, and Dale Wick.
Absent: Ken Jacobson.
Also present: St. Joseph City Administrator Judy Weyrens, College of St. Benedict Vice President
of Finance and Administration Susan Palmer, St. Joseph residents Mike McDonald, Ellen
Wahlstrom and Margy Hughes, St. Joseph City Council Member Steve Frank and Sister
Thomasette Scheeler.
Chairperson Wick called the July 22, 2009 regular meeting of the St. Joseph EDA to order at 3:00
p.m.
Agenda.
Chairperson Wick introduced the agenda.
Moved by Skahen and seconded by Rassier to approve the agenda as presented. Motion carried
4-0.
St. Cloud State University Economic Impact Study
Chairperson Wick introduced the agenda item.
Strack stated that last fall, following an EDA recommendation, the City Council authorized and
directed Dr. Mary Edwards, Director of the St. Cloud State Economic Development Center and
two graduate students to conduct a study regarding the economic impact of the College and
University on the local economy and to attempt to quantify the economic impact of a residency
change on the local economy.
The EDA's interest in the. study is to better understand the scope of economic impact of the
educational intuitions and a potential residency change. The City Council has directed the EDA to
proactively assist with the conversion of student rental properties to other productive uses in the
event they become vacant due to the policy change. A reduction in student housing units
provides the EDA/City with an opportunity to build on efforts to revitalize areas within the
Downtown and adjacent to Hwy. 75.
To those ends, the study was to provide quantitative data on which to base future economic
development policy decisions, conduct outreach to regional entities who could potentially partner
in redevelopment activities, and to attract project funding from resources external to the City of St.
Joseph.
Following study authorization, EDA Board Member Heinen approached the College/University to
inquire about sharing costs/data for the study. After securing support from the college/university,
the study began in late winter and included the distribution of three surveys. One to students, one
to faculty/staff, and one to local landlords. Information was obtained from local business owners,
the college & university, the city, and other available sources.
Two economic models, the Caffery Isaacs Model (a model often used to determine the impact of
a higher education facility on local economies) and an input/output statistical model known as
IMPLAN were used. The models were applied to data received from various sources for the two
following economic scenarios:
If the College/University ceased to exist locally, what kind of economic hole would be left;
and,
2. What is the quantitative impact of a change in residency policy.
Strack stated that the EDA is today taking receipt of the draft study. The resulting conclusions
vary widely depending on the quality of the underlying assumptions on which the study is based,
including but not limited to the number of students renting housing in St. Joseph and Collegeville
Township and the number of full time equivalent employees. One can imagine several different
scenarios upon which the base number of rental properties/students impacted could be
calculated. The studies distributed today include three different assumptions as described in the
handout. Dr. Edwards is present to review the studies and answer questions. Prior to generating
the final study input is requested on basic assumptions underlying the study such as student
rental population within St. Joseph / Collegeville Township and how to provide for full time
equivalent employee statistics. Strack introduced Dr. Mary Edwards from the Economic
Development Center, St. Cloud State University.
Edwards noted that variations in the model data were evident. Under IMPLAN all rental impacts
were under heading of "Real Estate" and couldn't be further apportioned. Landlords will be most
affected. Student spending is not as deeply impacted so local businesses, except those landlords
frequent, will not be significantly impacted by residency change. Students will continue to spend
locally whether or not they move back to campus. Visitor spending changes a little bit because
people visiting those living on campus often most stay in a hotel vs. rental unit. Significantly under
estimating the economic impact of the 75,000 visitors to campus. Disn't include any dollar figures
since this would presumably be the same before and after residency change.
Chairperson Wick asked Edwards to explain the impact of the study and to clarify what she
thought will result?
Edwards stated that $1.6 million in rent will be gone. Landlords will definitely be hit; but the impact
on other businesses is not as clear. Looked at two scenarios: one based on the number of beds
that CSB/SJU are projecting to create or 208; the other scenario is based on the number of
students suggested by campus who live within St. Joseph or Collegeville zip code or 598. We've
probably over-compensated for those living on campus. The report illustrates local college-related
business will drop by $2.3 million, most of that in revenue to landlords.
Wick inquired of Strack whether or not she thought the study answered the questions it was
designed to answer and whether the purpose of the study was achieved.
Strack indicated the draft study did not currently answer the questions it was designed to answer
due to the impact of the assumptions on which the study was based. Strack noted she was not
comfortable speaking on behalf of the City as to what assumptions we used for the number of
renters impacted and/or full-time equivalent employees. Strack noted the original report assumed
1,100 students living off-campus could be moved to campus whereas the revised report relied on
two scenarios, 208 students impacted or 598 students impacted.
Susan Palmer from the College of St. Benedict stated a concern regarding the number of full-time
equivalent employees. She stated the institutions had operated in good faith relating to
information supplied.
Wick questioned some of the local spending categories included in the reports, specifically
taxi/bus fare. Wick noted local taxi cab operators did not exist in St. Joseph and that Metro Bus
service was not yet available in St. Joseph.
EDA Minutes -July 22, 2009 2
EDA Member Rassier noted that the students riding buses to-from both institutions paid bus fare
to St. Johns University and/or the College of St. Benedict.
Wick inquired as to what portion of the dollars spent locally were directly from CSB/SJU and what
assumptions were employed as to the portion of CSB/SJU spending that was local.
Edwards stated the number of dollars spent locally by CSB/SJU were included in the study but
could change depending on future construction at both institutions.
Rassier asked Strack whether or not the EDA should recommend approval of the study to the
City Council at this time.
Strack stated both the original study and the revised study were distributed due to the draft nature
of the document and to illustrate the importance of the assumptions which were used for the
number of students potentially impacted by the residential policy change.
Palmer stated a concern regarding the discussion. She stated CSB agreed to the study at the
request of the EDA and that she felt the data supplied was being questioned. Palmer stated CSB
will never house 100% of students on-campus and that the College would not build enough space
to house 100% of the students. Palmer recommended the EDA/City consider the number of beds
CSB/SJU were planning on adding - a total of 208. She stated this was the best data to use and
that she did not know how to give data that would be more accurate.
EDA Member Heinen stated there were several numbers discussed and suggested the EDA give
Edwards some direction as to what number of students should be assumed to be impacted by a
residency change.
Rassier inquired as to how to arrive at a number. Wick noted Palmer had suggested 208 is the
best number; he then asked Palmer how many students were currently living on campus as a
means of determining an appropriate assumption.
Edwards stated that if the EDA was to embrace the 1,100 students she would request her name
be removed from the study because the number included students studying abroad. She
indicated that unless the EDA had a crystal ball the 598 number would be adequate. She
suggested the most accurate could be the 208 figure which is based on the number of beds
CSB/SJU are currently planning on adding.
Heinen inquired as to whether the EDA thought the 208 figure was too low.
Palmer noted that the 208 figure is the number of students CSB/SJU were planning on creating
beds for on-campus.
Edwards stated the 208 figure will be used and the revised study updated by:
1. Deleting the following paragraphs from the executive summary contained in the revised
study:
"Given the policy statements posted on the Websiies of the College of St. Benedict and
St. John's University requiring all students to live on campus, one can understand the
angst felt by local landlords. For the second scenario, we still keep the study abroad
students out of the picture since they ore counts of students who are studying overseas
for Fall Semester. We assume the number of Spring study abroad students is equal to
that of the fall term, when in fact more students prefer to take their adventure in Spring.
Given the reported numbers of students by distance to the College and Universify, the
EDA Minutes -July 22, 2009
3
numbers of off-campus students that we used in the first scenario seems prudent to use
in this scenario as well.
If all students were required to live on-campus, of course the local landlords would be
hardest hit. However, the projected total spending would decrease by $2.6 million, with
again, almost all of the decrease falling on local landlords. Local government revenues
and expenditures would remain basically unchanged."
2. Deleting the following from Page 5 of the report:
"The differential impact is calculated in Appendix D. To estimate this impact, we make a
few more assumptions. First, while not all students will be living on-campus, the College
and University assume that about 95% of them will. Since the size of the survey sample is
too small to partition further, so we cannot determine the spending differences of those
who will be moving to campus from the few who probably will not, (students with their
own families, students living with their parents, etc.J Thus, this part of the study assumes
that all students will live on-campus."
3. Deleting the following from Pages 7-9 of the revised report:
"Two assumptions seem to cause consternation given the scenario presented in the
report so far, and the disagreements stem from a suspicion that the College and
University actually want to require all of the students to live on campus as is suggested
on the CSB link to a pdf file entitled: Four-Year Residential Experience, Rationale and
Research dated October 2008, which says in part:
"The College of Saint Benedict, as part of amulti-dimensional plan to
be recognized as a premier liberal arts institution, plans to establish a
four-year residency requirement and an enhanced, complementary
four-year residential experience beginning in fall 2010. The four year
residential experience is about more than room and board. It is the
total campus experience that includes student activities and
opportunities, campus policies, dining, recreation and fitness, and
academic collaboration. Saint John's University has implemented a
corresponding program beginning with the class that entered in Fall
2008." (Italics are ours)
(httn://www.csbsiu.edu/csbreslife/pdfs/4%20year%20residency%20re
search%20and%20rationale%20October%2008%20version.pdf)
The policy stated on the SlU website expresses similar requirements:
"Our policy beginning with those enrolling in the Fall 2008 semester
(Class of 2012), Saint John's students are required to live on campus,
all 4 years, unless granted permission, from the Campus Life/Housing
Office, to live at home (with parents) or off campus (during their junior
and senior year). Students requesting to live off campus must file a
Request to Live Off Campus Form with the Campus Life/Housing
Office. A Housing Committee will determine, based on specific
criteria, which students will be granted an exemption to live off
campus." (Italics are ours.)
(http://www.csbsiu.edu/siureslife/4yearreauirement.htm)
EDA Minutes -July 22, 2009 4
Thus this section will estimate the impact of this policy proposed online as opposed to
the policy where only 208 students move to campus. To do this, one must first gauge the
number of students living off-campus in FY 2008.
One question is the total number of students studying abroad. In the first part of this
study, we assumed 1,538 CSB students and 1,460 SJU students lived on-campus. In
addition, we ore not counting in the total number of students studying abroad those
include students who lake classes overseas over break. The 156 and 97 siudenis
classified as study abroad come from the 10`h day enrollment figures for students who
chose to study abroad in Fall. These will thus correspond to the total enrol/men[ figures
we were given. Since more students who study abroad prefer io do so in Spring rasher
than in Fall (a[ CSe, SJU and SCSU), this underestimates the yearly average of study-
abroad students, thus underestimating the actual number of students buying goods and
services in Si. Joseph or Collegeville. The College and University count study abroad
students as in-residence rather than off-campus students.
A second question is where students actually live when they report a zip code that is not
local. The Student Development Residential Life Office ran the zip codes of all students
living off-campus. Students ai CSB, SJU and SCSU sometimes will not provide their local
addresses to school officials no matter how often they ore asked. Table three gives a
compilation of numbers of students living within a commute distance of 30 minutes or
less, an hour, 1.5 hours, 2 hours, 2.5 hours and longer. Ninety-six and ninety-three
percent of students from CSB and SlU live within a 30 minute drive. If we assume that
students living over 90 miles from campus (past the Twin Cities) are actually renting in
Collegeville or the City of Si. Joseph, the estimated figures from the study are potentially
overestimating the impact on landlords.
Table 3. Number of students by distance from campus
Source: CSB SBJ Student Development Residential Life office
CSB SJU
Live within zip codes 56321 and 56374 306 292
Live within 30 miles from respective campus 41 41
Live between 31 and 60 miles from campus 4 8
Live between 61 and 90 miles from campus 7 8
Live between 91 and 120 miles from campus 1 4
Live between 121 and 180 miles from campus 1 1
Lives more than 181 miles away 2 5
362 359
Total living over 1 hour away 11 18
Proportion off-campus living over 90 miles away 0.011 0.028
Proportion living within 30 miles of campus 0.96 0.93
Proportion living in zip codes 56321 and 56374 0.85 0.81
Throughout the first part of the study, we calculated 678 students respectively living off-
campus and renting housing locally. These figures suggest 598 students may actually
rent locally, thus our original figures may slightly over estimate the impact on local
landlords, and the numbers do not seem to need adjusting for siudenis who do not give
accurate information when asked for the Iota! addresses.
EDA Minutes -July 22, 2009
A summary of the calculations of the economic impact under this scenario are as follows.
Details are in Appendix E. For this scenario, we forced all students to live on campus and
adopt to on-campus spending rather than off-campus spending habits. The result was
another $1 million decrease in College-and University-related local expenditures, and a
decrease in local business property committed to college-related business of $2.7.
Table 4. Changes in estimates of the impact of a proposal by CSB/SJU to require all students to live on-
cam pus
Current totals Projected totals Decreased
amount
Model a-1. College related local
$13.6 million
$11 million
$2.6 million
expenditures
Mode18-2. Value of local business
property committed to college-related $22.3 million $19.6 million $2.7 million
business
Model G-1. College related revenues
53.7 million
$3.7 million
--
received by local governments
Mode/ G-2. Operating costs of
government due to College-related $1.4 million $1.4 million ---
influences
Total $41 million $35.70 million $5.3 million
More subtle changes are apparent with this scenario. First, estimates of student
spending for non-housing related goods only decreased by 72%. CSB students living on-
campus reported that they spent $95 less per month for non-housing expenditures than
their cohorts living off-campus. However, SIU students living off-campus reported that
they had $63 per month after paying rent, heat, water and garbage. Their on-campus
counterparts spent $185 per month for non-housing related items (Tables A-Al and A-
A2J. Estimated visitor spending increases by 51,000 annually under this las[ scenario
(Model B-1.1.4). This is due to the slightly larger proportions of on-campus students'
guests who stay overnight.
However, even with these changes, a $2.7 million drop in the value of local business
property is not large enough in this model io cause enough firms to go out of business
and thus change property tax receipts. As before costs of government are constant.
a. Adjusting the Appendices accordingly.
St. Joseph Council Member Steve Frank asked Edwards for clarification of the survey results.
Frank asked Edwards whether the survey results constitute a sample or a population. He noted
the response rates were low in his estimation and that weighting data could be problematic.
Wick stated that from a business standpoint, the company he works for makes decisions on a
response rate of five percent. He then inquired of the EDA as to what the next step should be:
accept the study, don't accept the study, or postpone action.
Rassier noted there was something to be said for moving forward with this item.
EDA Minutes -July 22, 2009
6
After general discussion relating to student rental population, Wick stated the revised draft study
will assume 520 students live off-campus after the residency change with 208 moving on-campus
for a total of 728 students living off-campus at this time.
Frank opined as to the distinction between assisting landlords and assisting business owners and
the legitimacy of the EDA/City in assisting landlords.
Wick stated the next EDA meeting is scheduled for August 26'". He inquired as to whether or not
Edwards could get the revised study to EDA members two weeks prior to the meeting or on
August 12'" so as to allow time for review of the study.
Rassier suggested moving the next meeting date to August 12'" so as to allow expediency in
review of the study.
Heinen suggested EDA members take a few days to review the study and forward suggested
changes to Edwards by Wednesday, July 29'"
General discussion regarding the release of data relating to timing and volume released. No
decisions or conclusions were made.
Strack confirmed EDA members with comments for Edwards could either forward them to her by
noon on Monday, Juty 27'" or EDA members could email, phone, or send them directly to Dr.
Edwards by Wednesday, July 29'". The revised stud is to be completed by Edwards and
distributed on August 12 and reviewed at the August 26" meeting.
Approval of Minutes.
Chairperson Wick introduced the minutes from the May 27'", 2009 joint EDA/City Council
meeting, from the June 15, 2009 special EDAICC meeting, and from the June 24'" regular EDA
meeting. Wick noted a discrepancy in the meeting date references within the June 24'" regular
meeting minutes.
Motion by Rassier, second by Skahen to approve the minutes from the May 27, 2009 joint
EDA/Cit~r Council meeting as presented, the June 15"' joint EDA/City Council meeting, and the
June 24 regular meeting minutes with the adjustment as noted by Wick. Motion carried 4-0.
EDA Accounts Payable.
Wick introduced the topic. Wick noted accounts payable for the month which totaled $2,817.10.
Motion by Heinen, second by Jacobson to approve the EDA accounts payable for the month of
July 2009 in the amount of $2, 817.10. Motion carried 4-0.
Financial Report.
Wick introduced the agenda item. Strack noted the June 2009 year to date Treasurer's Report
illustrates expenses of $22,489.84 as of the close of June, year to date revenue for 2009 is
$21,320.60.
Motion Heinen with a second by Rassier to approve the financial reports as presented. Motion
carried 4-0.
TIF Disbursement Request.
Wick introduced the agenda item. Strack reported the City received the initial settlement for 2009
property taxes which included revenue for TIF 1-4 (Fabral/Gohman). Finance Director, Lori
Bartlett has processed the payment and requests approval of the following disbursement: TIF 1-4
- GohmanNicwest with payment to lender Minnwest Bank in the amount of $29,786.46.
EDA Minutes -July 22, 2009
Strack noted TIF 1-3 Borgert has been decertified with the last increment received in Dec. 2008
and TIF 2-1 Millstream will not begin receiving increments until 2010 due to their construction
completion date and TIF certification date.
Motion Rassier with a second by Heinen to approve the disbursement request as presented.
Motion carried 4-0.
2010 Preliminary Budget
Wick introduced the topic. Strack noted the City's Finance Director, Lori Bartlett has convened the
2010 budget process. The EDA must submit a preliminary budget to the City Council for
consideration at budget workshop(s) in August. A preliminary budget will be adopted and certified
to the County in September and a final budget to be adopted in December, 2009. Strack
referenced a worksheet illustrating a preliminary budget for the EDA Fund 150 which was
contained in EDA packets.
Strack stated the 2010 proposed budget is markedly different from the actua12009 budget for two
reasons.
The 2009 preliminary budget included $28,000 within the "Professional Services" line
item. The item was moved to the General Fund for a staff Community Development
Director position. Since a staff CDD hasn't yet been hired, the actual 2009 EDA Fund
150 line item for "Professional Services" will be credited from a transfer from the
General Fund CDD staff position line item later this year to amend the 2009 budget.
A similar occurrence may be anticipated for the 2010 budget depending on the timing
of a CDD hire.
2. The EDA developed a capital improvement program (CIP) request in 2009 and
presented the five year plan to the City Council. The requested amount for 2009 was
reduced to $20,000 in the final budget. As you know, state local government aid
(LGA) unallotments ensued which resulted in CIP projects for 2009 being placed on-
hold. The amount for "EDA Projects" included in the 2010 budget worksheet is the
amount identified in the EDA CIP submittal. The EDA should expect the request to be
reduced, potentially to zero given additional LGA unallotments.
Motion Skahen, second Heinen to approve the EDA General Fund expenditure request in the
amount of $103, 840. Motion carried 4-0.
Land/Streetscape Design Update
The agenda item was introduced by Chairperson Wick. Strack noted the EDA received
notification from Stearns Electric, Inc. Round-Up Program denying a funding request for the
downtown land/streetscape design project. The Chamber did not meet in July.
Board Member Announcements
Skahen thanked EDA members for sending a greeting card.
Wick noted the SCAEDP has been approved for federal stimulus dollars to create a CED's plan
and complete an application. Dr. Edwards (SCSU), Dr. Lindstrom (CSB/SJU), and Dr. Diedrich
(CSB/SJU) will be assisting the SCAEDP in creating the comprehensive economic development
strategic plan.
Rassier stated he has been approached by a group concerned about parking within the
downtown. Rassier indicated he has asked the group to put ideas in writing and present to the
EDA and/or Planning Commission prior to bringing the idea to the City Council.
Rassier also noted the St. Cloud APO has reduced fees so that cities may remain part of the
organization despite reductions in local government aid and extremely tight budgets.
EDA Minutes -July 22, 2009
r,
Adjournment.
Motion to adjourn by Skahen, second by Heinen. Meeting adjourned by consensus at 4:45 PM.
Cynthia Smith-Strack
EDA Director
EDA Minutes -July 22, 2009