07-23-18 CC Spec Mtg/WS Agenda Packet
CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD
CITY COUNCIL SPECIAL MEETING/WORK SESSION COUNCIL CHAMBERS
MONDAY, JULY 23, 2018 5:30 P.M.
AGENDA
1. CONVENE CITY COUNCIL WORK SESSION
A. Roll Call
Mayor Zerby _____
Johnson _____
Labadie _____
Siakel _____
Sundberg _____
B. Review Agenda
2. BUILDING OFFICIAL INTERVIEW: WADE WOODWARD
3. 2019 STREET PROJECT
4. ADJOURN
#3
MEETING TYPE
City of Shorewood Council Meeting Item
WORK SESSION
Title / Subject: Discussion on 2019 Street Project
Meeting Date: July 23, 2018
Prepared by: Alyson Fauske, City Engineer
Reviewed by: Greg Lerud, City Administrator
Attachments: Map, Letter from David Drown, Sample Debt Service Schedule
Staff would like direction on what project area(s) the council would like to complete in 2019. Based on
street condition, drainage concerns and potential watermain extension, staff presents the project
groups shown on the attached map. Estimated street, utility, and right of way acquisition costs (if
necessary) are noted on the map.
Historically the Street Capital Outlay Fund has been used to fund street improvement projects. The
projected fund balance for 2019 is $1.39 million. At the February work session, David Drown gave a
presentation about funding street improvement projects, and one of the options involved issuing bonds
for street projects to improve the city’s infrastructure at a faster rate. A bond funding scenario is
attached to this memo for your consideration.
Staff presents two options for council discussion and consideration:
Option 1: Continue funding projects by using only the Street Improvement Reserve Fund and
select one project grouping shown on the map for a 2019 project. If the council prefers this
option, staff recommends the Glen Road/Manitou Ln./Amlee Road project area.
Option 2: Utilize General Obligation Street Reconstruction Bond to secure additional funding.
Under this scenario, staff recommends that the council consider a reclamation project on the
islands and on Woodside Drive, and a reconstruction project on Glen Road, Amlee Road and
Manitou Lane (Groups A, B and C shown on the attached map).
The sample debt service schedule is in the amount of $2.5 million dollars. This estimate was based on
rough costs. The actual amount would be determined as we work to develop a formal plan. As the
letter from Mr. Drown states, the type of bonding proposed requires a public hearing and approving a
five-year street reconstruction program. The advantage of using Street Reconstruction Bonds to fund a
project is property assessments are not required as they are under 429 projects. At the meeting, staff
will also have a tentative timeline detailing the steps to complete this work in 2019.
Staff’s goal for Monday’s work session is to receive direction from the council on your preferred option.
Mission Statement: The City of Shorewood is committed to providing residents quality public services, a
healthy environment, a variety of attractive amenities, a sustainable tax base, and sound financial
management through effective, efficient, and visionary leadership. Page 1
Cologne Office:
DDA
10555 Orchard Road
Cologne, MN 55322
David Drown Associates, Inc.
(952) 356-2992
Public Finance Advisors
shannon@daviddrown.com
July 18, 2018
City of Shorewood
Attn: Greg Lerud, City Administrator
5755 Country Club Road
Shorewood, MN 55331
RE: Street Reconstruction Bonds
Dear Greg:
Attached for your review is a preliminary debt service schedule for a General Obligation Street
Reconstruction Bond that would fund $2,500,000 in street reconstruction costs in 2019. There
are several procedural requirements that must be addressed prior to the issuance of Street
Reconstruction Bonds that we can assist in navigating.
Prior to the issuance of these bonds, Minnesota Statute requires the adoption of a street
reconstruction plan following a public hearing on this matter. The Street Reconstruction Plan
must include estimates for projects to be funded with General Obligation Street Reconstruction
Bonds for a five-year period. The plan must be approved by a two-thirds majority of the City
Council members present when the plan is adopted. The bonds are subject to referendum voter
approval only if a petition requesting a vote signed by five percent of the votes cast in the last
municipal general election is filed with the City Clerk within 30 days of the public hearing (reverse
referendum).
If a petition is not received within 30 days of the public hearing, the City Council can initiate the
process to issue bonds to finance street reconstruction activities. Please note that statute is
specific in indicating that these bonds can only be issued for reconstruction of existing
improvements and they do not allow for enhancements such as new curb and gutter where it did
not previously exist. Given the significant levy that the City makes for street improvements, it is
likely that any enhancements could be funded with cash.
These bonds are also subject to the Statutory Debt Limit which is 3% of the estimated market
value of taxable property in the municipality. As the City’s statutory debt limit is approximately
$48,000,000, and there is no existing debt that counts toward the statutory debt limit, there is
amply capacity to accommodate the project as proposed.
Please feel free to contact me with any questions regarding this information or the attached
preliminary schedule. The interest rate used in the schedule was based on a conservative
estimate of current market conditions.
Thank you again for your time and consideration.
Sincerely,
Shannon Sweeney, Associate
David Drown Associates, Inc.