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111896 CC WS Min . . . CITY OF SHOREWOOD WORK SESSION NOVEMBER 18, 1996 COUNCIL CHAMBERS 5755 COUNTRY CLUB DRIVE 7:30 P.M. MINUTES 1. CONVENE WORK SESSION MEETING Mayor Bean called the meeting to order at 7:30 p.m. A. Roll Call Present: Mayor Bean; Councilmembers Benson, McCarty, Shaw, and Stover; City Attorney Tim Keane; City Administrator Hurm; Engineer Larry Brown and Finance Director Al Rolek. B. Review Agenda There were no changes to the agenda as noticed. 2. DISCUSSION OF THE 1997 ENTERPRISE BUDGETS FUND: Water SUBFUND: Water Operations FUND NO.: 60 Finance Director AI Rolek distributed a Cash Flow Analysis for the Water Fund and explained it in detail. Mayor Bean asked if additional projects had been built into the budget. Rolek stated they had not been included. Councilmember Stover inquired if additional projects do occur, how would that affect the budget. Rolek explained some projects generate more revenue which would in turn be used in later projects. Councilmember Stover asked what plans the City of Victoria may have for future water availability. Engineer Brown noted with the interconnection between Shorewood and Victoria, the City of Victoria was able to postpone the addition of a well and water tower for approximately ten years. Victoria will purchase water from Shorewood only in emergency situations. Mayor Bean related his understanding that water operations is the utility fees and the expenses related to maintaining the system and the debt service is more of a capital budget. Rolek explained the debt service pays for the debt of the projects. Councilmember Shaw noted a significant increase in supplies and materials budgeted for 1996 as opposed to the prior two years. Administrator Hurm noted this figure includes the maintenance and repair of the southeast well. Councilmember Stover inquired how often the maintenance and repair would occur. Engineer Brown noted the recommended time frame to be every five years, however, the City has been performing this maintenance approximately every seven years. Councilmember Stover asked if water rates would need to be addressed. Rolek stated the figures provided are based on the current water rates. With respect to the increase in cash flow from operations which is transferred to debt service, if the projection begins to decrease, at that time the rates would need to be reviewed. . . . CITY COUNCIL WORK SESSION MINUTES NOVEMBER 18, 1996 - PAGE 2 FUND: Sanitary Sewer SUBFUND: Sanitary Sewer DEPT. NO.: 61 Councilmember Stover inquired as to the increased revenue in 1994 as opposed to 1995. Rolek explained a refund reimbursement had been received in addition to more SAC charges than had been expected. Rolek explained the support services noting the City will be undertaking a manhole sealing program with which a $10,000 grant will be received from Metropolitan Council. In addition, there have been discussions relative to implementing a sewer televising and 1&1 reduction type program. Hurm explained a study analysis would need to be completed and a project presented in order to be considered for a grant or loan program. He further explained the funds become a grant if the project is successful. Rolek noted that support services reflects the Metropolitan Council charges and other charges involved in that support. Hurm pointed out the main difference between 1996 and 1997 is the additional work on inflow and infiltration. Televising and lining are the two major components of that. Councilmember Stover stated she would prefer the water and sewer rates not be raised. FUND: Recycling SUBFUND: Recycling FUND NO.: 62 Councilmember Shaw inquired with respect to income from the recycling program. Rolek noted there had been revenues in the amount of $5,000 in the previous year, however, this year, to date, there has not been any revenue generated. Councilmember Shaw felt the City should be receiving a better return in this regard and perhaps a better contract could be negotiated relative to this program. FUND: Stormwater Management SUBFUND: Stormwater Management FUND NO.: 63 City Engineer Brown noted he attended a meeting with 17 other cities with the Watershed District. Councilmember Stover inquired as to the cooperation of the Watershed District and commented on the Glen Road project and problems which had been encountered in gaining the approval of the Watershed District. Brown explained the Watershed District indicated if the cities create a small water management plan on a regional basis, the Watershed District will credit that city with a certain amount of storage such that it will allow that city to complete a particular project. Brown commented the Watershed District has indicated they would consider making funds available to cities who are willing to take on some of the regional projects the Watershed District is interested in seeing completed. Mayor Bean asked if each Watershed District is authorized to establish its own rules. Brown stated this to be the case. CITY COUNCIL WORK SESSION MINUTES NOVEMBER 18, 1996 - PAGE 3 . Mayor Bean asked what the budgeted $100,000 would be spent on. Brown explained a large portion of the funds will be spent on aerial photography. Hurm inquired why this management plan is needed. Brown explained the purpose is to identify the primary areas of the regional stormwater ponds and how they operate with the existing system. Councilmember Shaw asked if this is a requirement of the Watershed District. Brown responded the City is required to have a stormwater management plan. The City has a plan, however, it is outdated. Mayor Bean was in agreement with updating the plan, but expressed his surprise at the $100,000 allocation for updating the current plan. Brown stated two-thirds of the cost is aerial photography followed by technical analysis. Councilmember Shaw asked what aerial photograph would reveal today that would not be visible on the aerial photographs which are on file. Brown explained it would be difficult to use the aerial photography from 1966 in attempting to identify stormwater problems. Mayor Bean also pointed out there are contours, in addition to an extensive tiling system which is failing, and which will not be identified by aerial photography. Mayor Bean questioned if the $88,000 allocated for easement acquisition was specifically for Glen Road or if it would include other projects. Brown stated this figure would be allocated to the Glen Road easement acquisition. . Mayor Bean commented he did not feel the $20,000 which has been allocated for purposes of drainage problems would provide much assistance. Brown explained the $20,000 would enable staff to solve somewhere in the area of 10 to 12 problems per year. He noted in the spring of this year, approximately 60 drainage complaints were received. Hurm commented with respect to the easement acquisition, of the total project cost, only 30 percent of the cost will come out of the fund. The balance would theoretically be reimbursed through the special assessments as well as funds which will hopefully be obtained from the Watershed District. Mayor Bean noted the City needs to adopt a guiding philosophy with respect to storm water management which takes into account the aspects of rural street design and budgetary constraints. Motion passed 5/0. FUND: Liquor SUBFUND: Tonka Bay FUND NO.: 71 FUND: Liquor SUBFUND: Shorewood Plaza FUND NO.: 72 FUND: Liquor SUBFUND: Old Market Road FUND NO.: 73 . Councilmember McCarty inquired with respect to previous discussions regarding the possibility of renegotiating the current lease on Old Market Road. Rolek explained the only option would be to sublet the space. The lease is a seven year lease which will expire in five years. Rolek explained it is anticipated the net income between the three stores will be approximately $24,000. He pointed out that two of the stores are making money and one is not, however, it is improving. The store is currently $127,000 ahead oflast year. Rolek noted the goal would be to achieve a 23 percent gross profit margin. . . . CITY COUNCIL WORK SESSION MINUTES NOVEMBER 18, 1996 - PAGE 4 Mayor Bean pointed out in two stores there is a modest to significant increase in the cost of goods sold, however in Shorewood, there is actually a reduction in the cost of goods sold, but a significant increase in gross sales. Mayor Bean recalled in the past he has asked to see a more definitive business plan for the stores and noted an actual business plan has never been presented reflecting marketing or sales projection plans. He stated this raises the question of whether the City should be in the liquor business. Councilmember Stover commented there are people who are very opposed to liquor and people who feel any way to make money for the City is not money which had to come out of their pocket. Councilmember Shaw added there is another group who would feel government should not be involved in private enterprise. Mayor Bean noted the public hearing relative to the 1997 Enterprise Budgets will be held on Wednesday, December 4, 1996. 4. ADJOURNMENT Shaw moved, Benson seconded to adjourn the Work Session Meeting at 9:24 p.m. Motion passed 5/0. RESPECTFULLY SUBMITTED, Cheryl Wallat, Recording Secretary TimeSaver Off Site Secretarial ATTEST: ) . / t. .' .' ") .. <; r--stL~:;t.i:j 1 J.f ex \----' ROBERT B. BEAN, MAYOR . I (oj III (.' ..\ 01 <ptL./l ~ It . / v~'v V'<] . JAMES C. HURM, CITY ADMINISTRATOR 1,./