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040797 CC WS Min . . . CITY OF SHOREWOOD WORK SESSION MEETING MONDAY, APRIL 7, 1997 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD 7:30 P.M. MINUTES 1. CONVENE CITY COUNCIL WORK SESSION Mayor Dahlberg called the meeting to order at 7:34 p.m. A. Roll Call Present: Mayor Dahlberg; Councilmembers Stover, McCarty, O'Neill and Garfunkel; Administrator Hurm; Planning Director Brad Nielsen; Engineer Larry Brown; Finance Director Rolek; Planning Commissioners Turgeon and Pisula; Attorney John Dean. B. Review Agenda The agenda was approved as presented. 2. DISCUSSION ON 1997-2001 CAPITAL IMPROVEMENT PROGRAM A. Municipal Water System Commissioner Turgeon explained the history of the discussions held and actions taken by the Planning Commission relative to the municipal water system. Councilmember Garfunkel did not feel there is a majority of support for the municipal water system based on his review of the survey which was completed in 1991. Mayor Dahlberg felt there to be indications the demand for the water system is, at a minimum, limited. He felt to some extent the election was a referendum on water. Councilmember McCarty noted her disagreement. She further noted there had been comments made at the Board of Review in which residents stated they could understand an increase in their property valuations if municipal water were available since it is an amenity. Councilmember McCarty stated the Council needs to look long-term at what is best for the City rather than individual people. She felt the Council should discuss the subject in practicalities as opposed to philosophically. Mayor Dahlberg felt there to be three questions to be addressed relative to the municipal water system: (1) is there a demand for municipal water; (2) can the municipal water system, as it exists today, be financially managed; and (3) can the system be expanded on the basis of demonstrations of demand in certain neighborhoods and managed successfully from a financial point of view. He suggested proceeding toward the question of how to financially manage the system if it were to be expanded on a piece-meal basis. Finance Director AI Rolek explained the original 1995/96 Water Cash Flow Analysis in detail. Councilmember Garfunkel inquired what dollar amount has been collected on trunk charges where property owners will not have access to water in the foreseeable future. Rolek stated no assessments had been levied at this point. Nielsen pointed out there have been three or four property owners who have petitioned to have water assessed. CITY COUNCIL WORK SESSION MINUTES APRIL 7, 1997 - PAGE 2 . Hurm stated there is no consideration of inflation for revenue or expenses reflected in the ending cash balances. Rolek noted the analysis simply reflects cash flow and does not take into consideration depreciation or future replacement of the system. Depreciation, including all new improvements, would be approximately $130,000 per year. Rolek explained there is presently a retained earning deficit which will remain under the various scenarios since the revenues are not sufficient to cover all of the noncash expenses. Scenario 1 Finance Director Rolek reviewed the assumptions which were made under this scenario. He noted the scenarios assume there has been no assessment of the costs of the project. He pointed out the beginning cash balance does not reflect the prepayment of assessments. Commissioner Turgeon inquired if water treatment equipment would become necessary for the western well. Brown stated if deemed necessary that would be a project which would need to stand on its own merit. It was noted under this scenario the City would begin to go into a deficit in the year 2003 and this would continue. Rolek pointed out new developments would be assessed $10,000 per unit consisting of a $5,000 trunk charge and a $5,000 water assessment. Scenario 2 . This scenario assumes 10 percent of the lots would be hooking up. At the time of the hook up, they would pay $5,000. This assumes 10 percent will hook up over ten years. Hurm noted inflation is not included for expenses or revenues. The City would begin to go into a deficit in the year 2004. Scenario 3 This scenario is similar to Scenario 2 with additional antenna revenue being assumed in this scenario. A new antenna is projected in 1998 and 1999. The City would go into a deficit in the year 2006. Scenario 4 This scenario considered a 7 percent hook up as opposed to a 10 percent hook up based on the assumption that approximately 50 percent of the housing stock will turn over every seven years resulting in new residents. Under this scenario, the City would begin to go into a deficit in the year 2004. Councilmember Stover inquired whether petitions had been considered in this scenario and Rolek stated they had not. Scenario 5 Scenario 5 is similar to Scenario 4, however assumptions were made in an effort to recover from the deficit. Alternatives considered in which additional revenue could be derived in an effort to recover the deficit include additional annual antenna rental revenue, transfers from other funds, and . possibly some internal borrowing if available. ,. . . . CITY COUNCIL WORK SESSION MINUTES APRIL 7, 1997 - PAGE 3 Councilmember O'Neill inquired if there would be legal challenges from people who had been assessed if the assessment process were to cease. Attorney Dean explained there would be an issue of people on the line of projects who chose not to hook up and who would be subject to a connection charge when they ultimately do hook up. Rolek stated that would include approximately 35 homes. Mayor Dahlberg questioned whether or not Scenarios 1 through 5 exclude the 1995-1996 assessments. Rolek explained that would be true for existing lots. Scenario 1 excludes the assessment for existing lots, however, new developments would be assessed. Mayor Dahlberg requested a scenario in which the 7 percent plus the 1995-1996 assessments are left in place. He felt hook ups should be voluntary. Hurm stated this would be very similar to the original analysis. Councilmember O'Neill questioned whether the Council wants to pursue this matter. He stated he would be willing to table it, but did not want to spend a significant amount of time on this issue. He did not feel there to be a quorum to warrant further discussion at this time. Councilmember Stover felt the assessment to be a reasonable price based on projections she has seen over the years. She noted the system is in place and needs to be paid for and this is the best way to pay for it. Councilmember O'Neill commented at some future time a bank could require the hook up to municipal water prior to considering a loan and the property owner could at that time be subject to a much higher assessment based on the actions of some future Council. Mayor Dahlberg stated he would like to have the other scenario reviewed. He remarked he did not feel scenarios 4, 5, and 6 were bad models. He further remarked he had campaigned on the idea of making the system voluntary. Councilmember McCarty commented the Council needs to do what is best for the City. Mayor Dahlberg stated from an ethical point of view, the Council is obligated to do its best to look at that policy because he felt it to have been a campaign promise. Councilmember O'Neill stated he had not made that promise and did not campaign on that theory nor did he express that opinion. Councilmember Stover noted many campaigners make promises until they find out why it cannot be done. Councilmember McCarty commented the Council needs to do the best for the City rather than what is best for the people who voted for the councilmembers. She stated she would hope what is ethically right would be done for them as well, however, she would not support a deficit. Councilmember Garfunkel remarked if something came out that made financial sense, he would consider it. Councilmember McCarty stated she will not compromise the financial stability of the City. Mayor Dahlberg felt the idea that Scenarios 4, 5, and 6 are not necessarily viable would be a controversial issue. Councilmember O'Neill remarked on the potential for lawsuits and stated if a plan that works or has potential to work is presented, he will consider it. He felt that to be the opinion of four out of five of the councilmembers. Councilmember O'Neill did not feel Mayor Dahlberg had considered the legal issues and the issue with rebating everyone in Shorewood who has been assessed. Mayor Dahlberg wanted to ensure all the issues are brought forth for consideration. ,. CITY COUNCIL WORK SESSION MINUTES APRIL 7, 1997 - PAGE 4 . Mayor Dahlberg suggested moving on to the question of whether the Council can agree on some extremely clear policy about the system, articulating that policy and then passing it on to staff so they have a clear picture of what the objective actually is. Mayor Dahlberg felt it to be a clear cut objective to make the water system as voluntary as possible. Mayor Dahlberg suggested discussing the possibility of selling off parts of the system. Hurm explained this had been considered and was unsuccessful. One consideration was to keep the system voluntary by not installing more lines unless there is a demand for them. Commissioner Turgeon felt this would be pitting neighbors against each other. Councilmember Stover did not feel the petitioning process happens very often, however, she felt a basic policy should be in place. Engineer Brown commented the priority of the implementation plan was to interconnect the system. Since a limited amount of trunk main has been completed, it will be difficult for various neighborhoods to request water and still be able to afford the trunk cost. Brown felt it would be highly unlikely any neighborhood would pursue that route. Mayor Dahlberg recommended the Council could either embody objectives relative to how the system is expanded or the Council could adopt a policy keeping the system voluntary. As a practical matter, the City needs to have a policy relative to expansion of the municipal water system. . Hurm stated this could be further considered at a work session relative to the Comprehensive Plan. Councilmember O'Neill felt this would be similar to using the prior policy. Mayor Dahlberg inquired relative to the preference on the part of the Council to leave the 1995-1996 assessments in place despite the fact there are differing opinions relative to this issue. Hurm commented on the removal and replacement of the Badger Well building. Brown stated the building does not meet code and is somewhat deficient. It would be replaced with a smaller building. (Planning Commissioners Pisula and Turgeon left at this time.) B . Parks and Trails Administrator Hurm commented on the Park Capital Improvement Plan which the Park Commission has recommended approval of. With respect to the asterisked items such as sod and seed for the football field, it was noted some donations are expected. Hurm noted the asterisked items have been rebudgeted because they were not completed in previous years. Mayor Dahlberg recessed the meeting at 9:20 p.m. and reconvened at 9:31 p.m. (Attorney Dean left at this time.) C . Storm Water Mayor Dahlberg noted there will be a meeting with five of the six South Lake Minnetonka mayors relative to a regional storm water management plan. . Brown stated there will be a strong commitment from the Watershed District in addressing a storm water management plan. Mayor Dahlberg inquired if the Watershed District is an enforcement officer for rules which are established by the legislature as opposed to being a regulatory agency which establishes regulations. Brown stated that legislative rules mandate there be a storm water management plan. The Watershed District's charge is to decide how to manage that district. CITY COUNCIL WORK SESSION MINUTES APRIL 7, 1997 . PAGE 5 . Mayor Dahlberg stated an issue which arises in an enforcement situation is whether the agency is clearly interpreting the law. Planning Director Nielsen pointed out that Glen Road is an opportunity to solve a problem and possibly expand solutions to other nuisance type ponding situations which currently exist. The Capital Improvement Program identifies the Glen Road and Grant-Lorenz projects as two larger projects to be addressed. Councilmember Stover inquired whether this regional storm water management plan would alleviate the water problem in Shorewood. Nielsen stated the Watershed District is looking at a total volume of clean water which would represent money better spent than requiring the smaller NURP ponds. Councilmember Stover questioned whether this would help solve the water drainage problems on Glen Road. Nielsen confirmed it would. Brown stated one of the larger expense items is the aerial photography. He explained he is currently looking for alternatives to this such as obtaining information from other agencies such as the DNR or Hennepin County. Brown noted there are three steps to the aerial photography which include surveyors going out and setting points of elevation, conducting a flight, and then putting the flight into contours. The contours would be the expensive portion of the project. He explained for $5,000 to $6,000 a flight date can be earmarked. The aerial contouring can then be completed at a future date. . Brown asked for input on how to proceed if alternatives cannot be secured. Councilmember O'Neill stated his belief the storm water management plan needs to be addressed. Brown reported some drainage issues have been addressed, however, there are a number which remain. Brown believes an active role must be taken in first concentrating on cleaning out and establishing the major drainageways within the City. After this has been completed, the smaller issues and complaints can be dealt with. He stated his goal would be to establish primary drainageways and set out a plan to address those issues first. ~urm suggested funds could be transferred from the street fund to address some of the drainage Issues. Councilmember Stover stated she did not want to lose track of the smaller complaints which could readily and easily be resolved. Brown stated there have been a number of complaints which have been resolved with quick and easy fixes. Relative to watermain and Watershed District issues, Brown commented he could see a justification in using roadway funds to address these complaints. Councilmember O'Neill stated he would like to proceed on a storm water management plan as quickly as possible. Mayor Dahlberg stated he would like to proceed with the entire plan and would like a plan from Brown on how to solve the problems which arise with individual home owners. Brown felt the Watershed District would entertain the idea of using Glen Road as an offset to Strawberry Lane which is deteriorating very rapidly. Hurm stated there has been discussion relative to a public information meeting relative to this issue. . . #' . . . CITY COUNCIL WORK SESSION MINUTES APRIL 7, 1997 - PAGE 6 Councilmember McCarty noted there is a speed problem on Strawberry Lane and the residents prefer a more bumpy surface as a control mechanism. In addition, she did not feel the residents of Strawberry Lane would be in favor of curb and gutter. Brown suggested moving ahead on Strawberry Lane with a pavement reclamation project. D . Sanitary Sewer This agenda item was not considered due to the lateness of the hour. 3. ADJOURNMENT Mayor Dahlberg moved, Stover seconded to adjourn the work session meeting at 10:30 p.m. Motion passed 5/0. RESPECTFULLY SUBMITTED, Cheryl Wallat, Recording Secretary TimeSaver Off Site Secretarial ATTEST: