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03-09-20 CC WS Agenda Packet CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL WORK SESSION COUNCIL CHAMBERS MONDAY, MARCH 9, 2020 6:00 P.M. AGENDA 1. CONVENE CITY COUNCIL WORK SESSION A. Roll Call Mayor Zerby _____ Johnson _____ Labadie _____ Siakel _____ Sundberg _____ B. Review and Adopt Agenda 2. CIP City Administrator Memo 3. ADJOURN City of Shorewood Council Meeting Item #2 Title/Subject: Infrastructure Capital Improvement Plan Meeting Date: March 9, 2020 MEETING Prepared By: Greg Lerud, City Administrator; Larry Brown, Director TYPE of Public Works; Joe Rigdon, Finance Director; Andrew WORK SESSION Budde, City Engineer Attachments: Draft plan documents Background: When Andrew Budde and Bolton & Menk came on board as the city engineer, they were tasked with taking a very critical look at the city’s capital improvement plan. They have spent the last three months going over the plan, updating cost estimates to current market conditions and working with finance, public works, and administration staff to develop an updated draft plan, based on the most recent planning discussions, for council discussion. That draft is before you tonight. The city’s CIP has been fluid for the last several years. One of the goals staff wanted to accomplish is bring a plan forward that can be feasibly implemented, addresses the infrastructure needs while trying to minimize the financial impact to residents as much as possible. The primary reason for an aggressive schedule is that many of the roads contemplated for action were last redone when the Met Council installed sewer throughout the city in the 1970s. The overlay work done late last year has bought some time on these streets. We have also incorporated the information from the western Shorewood storm water plan that was discussed at the last work session. This memo includes the planned schedule of work as well as a high-level look at sources and uses of funds. We look forward to hearing council feedback on the plan as presented and will be happy to revise the plan as needed, based on the direction of the council. Engineering Considerations: Many of the items included in the plan have been updated from past CIP documents, or have been discussed with the council during various work sessions. In general, the roadway and utility projects have been extended out to a 10-year plan, largely to help finance the proposed improvements. The recommended projects from the draft Western Shorewood Drainage Study have been 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 incorporated to coincide with adjacent or complementing roadway projects. The recommended drainage improvement projects that are independent of roadway projects are slated to be constructed within the first couple of years to begin addressing these concerns. Projects that may be new or worth noting are as follows: Lafayette Ave. Reclaim: Lafayette Avenue is a border roadway with the City of Excelsior. Excelsior has notified the City of Shorewood that they are proposing reclaiming the roadway in 2020 in addition to performing improvements to the utilities. Highway 7/Old Market Road Signal: This signal was added, due to the age and condition of the signal. There are several logistical issues with this signal system that warrant its replacement. Sweetwater Curve Watermain Replacement: There exists a segment of watermain on Sweetwater Curve that has had numerous watermain breaks, due to the highly corrosive soils in the area adjacent to Silver Lake. The segment proposed to be replaced, does not have any water services present. Therefore, staff is proposing abandoning the existing main in place and directional boring a new segment adjacent the existing main. Connections would be completed on each end of the newly constructed pipe. The CIP includes 5.0 miles of reconstruction and reclamation of streets and 5+/- miles of mill & overlay over the next 10 years. Financial or Budget Considerations: The attached “Street Reconstruction Plan” spreadsheet is a high-level summary of the estimated sources and uses of implementing the plan. The capital projects include streets estimated costs of $22,089,977, of which $20,037,600 are considered to be eligible for financing from General Obligation (G.O.) Street Reconstruction Bonds. The difference of $2,052,377 is considered to be ineligible for financing from the bonds and would need to be funded with city cash reserves from its Street Improvement Fund. Street bonds would be issued each year from 2020 to 2029 and each would have a proposed duration of 10 years. To repay the streets bonded debt, sources include an annual property tax levy (currently levied through the City’s General Fund and transferred to the Street Improvement Fund). The annual streets levy is currently projected to increase 4% per year from 2021 to 2029 to fund street construction activities. Other sources consist of electric and gas franchise fees, MSA road funds, and the aforementioned use of cash reserves. The utilities portion of the improvements are estimated at $18,860,489 and include the following:  Water improvements: $5,867,544  Sewer improvements: $1,657,289  Stormwater improvements: $11,335,656 While a portion of the stormwater costs are considered to be eligible for financing from G.O. Street Reconstruction Bonds, the City has the option to finance part or all of the utility improvements through the issuance of G.O. Utility Revenue Bonds. Annual utility bonds would be issued with a proposed duration of 20 years (versus a 10-year duration on the G.O. Street Reconstruction Bonds). The utility sources to repay the revenue bonds include operating revenues generated through user fees. Additionally, water access charges are projected at greater than $3.5 million from 2000 to 2029, reflecting an approximate count of new water users for the proposed watermains, as well as increases to the City’s water access charge (currently at $10,000). To provide funding sources to pay for debt service on the revenue bonds, annual utility rate increases from 2021 to 2029 are currently projected as follows:  Water revenues: 10%  Sewer revenues: 7%  Stormwater revenues: 12% The attached “Pro Forma” spreadsheets provide detail of projections and forecasts for the Streets, Water, Sewer, and Stormwater funds. Information is included from 2020 through the duration of the proposed bond maturities. Options: The plan is only in draft form, so no formal adoption is needed – just looking for council input. Next Steps and Timeline: The city has been working with Shannon Sweeny at David Drown and Associates on financing this program through reconstruction bonds, with a public hearing anticipated to be held in April.