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102907 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, OCTOBER 29, 2007 MINUTES CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS IMMEDIATELY FOLLOWING THE 6:00 P.M. SPECIAL MEETING Mayor Lizee called the meeting to order at 6:40 P.M. A. Roll Call Present. Mayor Lizee; Councilmembers Callies, Turgeon, Wellens, and Woodruff; Administrator Dawson; Finance Director Burton; Director of Public Works Brown; and Engineer Landini Absent: None B. Review Agenda Wellens moved, Woodruff seconded, Approving the Agenda as presented. Motion passed 5/0. 2. 2008 ENTERPRISE BUDGETS Director Burton commented that a preliminary Liquor Budget had been prepared. The budget could be updated and finalized as needed, depending on the sales of the liquor operations. Councilmember Callies asked for clarification on the action that was taken at the Council special meeting held prior to this meeting. She stated it was her understanding that during the special meeting Council authorized entering into binding purchase agreements. Councilmember Woodruff stated he heard Attorney Keane say to enter into binding negotiations to sell the liquor operations. Callies stated that was not what she heard, although both thoughts were essentially the same. Woodruff stated in the minutes from the August 6, 2007, Council special meeting it was very clear that Council authorized Staff to locate a broker for selling the stores. Councilmember Wellens stated the next thing Council had to do was amend the City's Ordinance to authorize the licensing of off-sale liquor operations. Woodruff stated the August 6, 2007, vote enabled the process, and at the special meeting held prior to this meeting, the vote accepted the offers. Director Burton stated the Liquor Committee had considered four offers at its October 25, 2007, meeting and two of those were the offers Council had considered at its special meeting. Dawson stated the action taken was to enter into binding agreements with the closings scheduled for November 27, 2007; the Ordinance must be amended and no public hearing is necessary regarding the Ordinance or potential licenses. The following noteworthy clarifications and comments were made regarding Water Debt Service. - The "paper" transfer between Water Operations and Water Debt Service was made consistent. The following noteworthy clarifications and comments were made regarding Water Operations. SHOREWOOD CITY COUNCIL WORK SESSION October 29, 2007 Page 2 of 6 - 2007 Actual Revenue would increase in October because water was billed quarterly. - A water rate increase was not planned for 2008. A restructuring of rates may be considered based on Councilmember Wellens's proposal. That proposal would reward conservation, and it appeared to be revenue stable. - The 2008 Staffing budget amount was approximately $109,700 and the projected annualized actual Staffing for 2007 was approximately $85,000. Staffing included benefit costs, and a 3 percent salary increase. Staffing expenses and headcount allocations were updated (based on an audit of year-to-date) to more realistically reflect how staff would be utilized in 2008, with the most significant change being an increase in the Public Works Director's time. There were increasing demands on staff's time as the result of the increased number of mandates. After taking the salary increase into consideration, Councilmember Woodruff stated he thought the increase between the 2008 budget amount and the 2007 annualized amount was too significant, but he would accept it as presented. - The 2008 Supplies and Materials budget amount was approximately $77,700 and a projected annualized actual amount for 2007 was approximately $48,000. The 2007 budget of $62,525 was approximately $9,000 more than 2006 actual and $4,000 more than 2005 actual. The expenses included some maintenance of the water system, and things such as chlorine and fluoride. The 2008 budget reflected an anticipated $11,000 water purchase from Chanhassen which did not occur in 2007; and, there was an increase of $2,000 for equipment maintenance. Equipment maintenance was done less frequently during summer months than the rest of the year. The amount for equipment maintenance varied significantly from year to year (the actual was $22,000 in 2005 and $9,600 in 2006). The level of maintenance for all of the City's building structures, including water, need to be increased. If the budget funds were not needed, the funds would remain in Water Operations reserves because it was an Enterprise Fund. Staff provided its best estimate of what was likely to occur. The budget for Supplies and Materials would remain as presented. - Miscellaneous Revenue included cellular antenna space rental income was from 5-year leases that could be renewed 5 times. The 2008 budget reflected $85,000 for cellular antenna rental income. - Capital Outlay had been changed to reflect an accounting misclassification. - Charges for services in the current draft budget were $25,000 less than the last draft discussed. The previous draft budget included water connection fees and they were removed from Water Operations because they were also included in Water Debt Service. The following noteworthy clarifications and comments were made regarding Sanitary Sewer. - The transfer-in amount would be changed to $55,000 to reflect a repayment from the General Fund to the Sewer Fund for the City-owned property. - The proposed ending cash balance for 2008 was approximately 3 times the amount of the 2008 budgeted expenses and more than 5 times the amount of the 2006 actual expenses. - The budget reflected 15 percent of the Public Work Director's time. - $55,000 for engineering fees for Infill & Inflow was taken out of Support Services and Charges because it was also included in Capital Outlay. - The 2007 budget included $236,000 for the Christmas Lake Point lift station project but the project had been delayed. There were pay estimates that had to be paid in 2007 for equipment that had been delivered to the project contractor. There was question as to whether the 2008 budget should be revised to reflect costs for that project that were not incurred in 2007. SHOREWOOD CITY COUNCIL WORK SESSION October 29, 2007 Page 3 of 6 The following noteworthy clarifications and comments were made regarding Recycling. - There was very little time spent by staff on recycling related activities. A small portion of time was spent responding to residents' calls, and filing reports to Hennepin County. The Senior Accounting Clerk devoted little time on utility billing. The following noteworthy clarifications and comments were made regarding Storm Water. - The proposed ending cash balance for 2008 was approximately 3 times the amount of the 2008 budgeted expenses; yet, there was a $25,000 transfer from the General Fund proposed (such as had been done in previous years). The transfers had been done to increase the Storm Water cash balance to fund smaller drainage projects. It was questioned if the transfer was appropriate because Enterprise Funds were supposed to be self-funded and there were sufficient reserves. If the transfer were removed it was prudent to ensure that the storm water rates were sufficient to fund future projects. - The Amlee Road, Manitou Lane and Glen Road project had been canceled. There was a suggestion that one of the projects planned for 2009 be advanced to 2008; which one could be determined later. Some of the proposed projects were to be done in concert with road projects. - Staffing increased significantly because of National Pollutant Discharge Elimination System (NPDES) requirements. That explanation would be included in the budget narrative. - Miscellaneous Revenue reflected $23,000 from cellular antenna space rental revenue; in the past this revenue had been used to supplement the Storm Water Fund repay internal loans for the Gideon Glen property, The payments are received late in the year. - There was a question as to whether or not adequate staff resources were budgeted to perform the necessary Storm Water Pollution Prevention Program (SWPPP) compliance tasks. - The $25,000 transfer-in from the General Fund would be removed and $100,000 would be transferred in from Capital Improvement for a to-be-determined project. Director Burton stated Staff was hoping to make the changes just discussed to the Enterprise Budgets and they would be the final changes prior to the Truth-In-Taxation public hearing. The General Fund Budget would be presented to Council for further review on November 5, 2007. The final draft budgets would then be presented at the Truth-In-Taxation public hearing on December 3, 2007, and the budgets would need to be adopted on December 10, 2007. 3. STORM WATER POLLUTION PREVENTION PROGRAM (SWPPP) Engineer Landini explained that as part of the federal Clean Water Act, the City was required to obtain a National Pollutant Discharge Elimination System (NPDES) permit. The City first received this permit in 2003, at which time the City completed a Storm Water Pollution Prevention Program (SWPPP). He noted the Minnesota Pollution Control Agency (MPCA) had been granted the permitting authority from the U.S. Environmental Protection Agency; the MPCA was responsible for reviewing the permit the City had submitted. Due to a legal challenge, the MPCA had been required to make changes to the 2003 permit, hence the need for a new permit in 2007. Director Brown explained for construction site storm water permits the City conducted the permit review, the MPCA authorized the permits, and the City was responsible for enforcement and status updates. If a contractor failed to maintain erosion control requirements, the City and contractor would receive a citation from the MPCA and the City would be responsible to resolve the issue with the contractor. SHOREWOOD CITY COUNCIL WORK SESSION October 29, 200'7 Page 4 of 6 Engineer Landini reviewed the tasks that must be done by 2011 for the City to be in full compliance. The 2007 goals were: to implement documentation and tracking procedures for inspections of outfalls, structural pollution control devices, sediment basins, and ponds. The 2008 goals were: to develop an ordinance or other regulatory mechanism for illicit discharge and detection; and implement documentation and tracking procedures for the inspections. The 2009 goals were: to review planning and zoning policies and update them as needed to comply with the Post Construction Stormwater Management Minimum Control Measure (MCM); and implement the long-term operation and maintenance of best management practices (BMPs). The 2010 goals were: to perform a City audit of the program to ensure all the requirements were met for the 2011 deadline. Mayor Lizee asked Engineer Landini if there were partnerships that the City could form to help the City fulfill some of its requirements (e.g. public education). Landini stated he had contacted Julie Westerlund, with the Minnehaha Creek Watershed District (MCWD), for assistance with education but her workload did not permit that. He noted that the City and MCWD had applied for a grant to conduct 2 - 3 classes in 2008. Engineer Landini stated one purpose this evening was to introduce Council to a model Illicit Discharge and Connection Storm Water Ordinance. Councilmember Callies stated almost every municipality would be required to adopt a similar ordinance. Landini suggested the ordinance be developed on a section-by- section basis. Administrator Dawson stated Staff had wanted to provide Council with more information regarding what the City had to do by 2011. Director Brown explained the City had 1,2901ocated structures that would have to be inspected annually. Public Works personnel already inspect the known trouble areas after a storm. The City would now be required to provide the MPCA with supporting documentation for each inspection; and, an inspection of each structure was required each time there was aone-inch or better rainfall. Councilmember Woodruff questioned if the budget reflected adequate staff resources to perform the required tasks that must be done in 2008. Director Brown stated resources were light, but close, to what would be needed; that amount was expected to increase over the next few years. Director Brown stated with regard to the 2007 goals, documentation for all of the City's storm water structures had been created. The documentation included an identification number and location for each structure. He then stated Engineer Landini had refined the inspection form to simplify it. Brown stated the documentation and tracking procedures would be implemented yet this year. 4. RIGHT-OF-WAY ORDINANCE Engineer Landini explained one of the 2007 Goals and Priorities for the City of Shorewood was to update the City's Right-of--Way (ROW) Ordinance. The purpose was to attain better records of infrastructure in the right-of--way and to provide a better use of the City's right-of--way resources. The updates to the ordinance were a first draft and were intended to initiate discussion. Director Brown stated the impetus for that effort was the Redwood Falls versus Qwest Communications Minnesota Supreme Court Case. The case resulted in the Supreme Court granting communications companies some rights over public right-of--ways, After that ruling cities then started to identify what controls they needed to manage their public right-of--ways. SHOREWOOD CITY COUNCIL WORK SESSION October 29, 2007 Page 5 of 6 Brown explained the City's ROW Ordinance would be modified to identify: what authority the City had to permit companies; how the City could recoup its costs for processing the permit; how the restoration of City streets would be paid for; the insurance requirements; and, to establish a requirement for utility companies to annually register their locations in right-of--ways with the City. Brown stated there were a few companies that had on-line permitting databases which would allow someone to find out what company had been issued a permit to be working in aright-of--way. An amiual subscription would be required. In response to a question from Councilmember Turgeon, Administrator Dawson stated there had been little change since 2000 other than the Federal Communications Law had taken away much of the City's right to control for these utilities in its rights-of--way. Director Brown stated the League of Minnesota Cities, the Public Utilities Commission, and the Federal Conununications Commission had all established controls which would allow the City's ROW Ordinance to be a smaller document. Councilmember Callies questioned if the Ordinance would include a provision that would aIlow the City to enter into a franchise agreement. Director Brown stated there was. Councilmember Callies stated although it was important for the Ordinance to identify the City's insurance liability requirements, she suggested the ROW Ordinance refer the Statutory requirements rather than restate the insurance limits. Councilmember Woodruff indicated he had many comments to discuss with Engineer Landini later. 5. OTHER Councilmember Woodruff stated he would like Council to be provided an update on the 2007 Goals and Priorities. Administrator Dawson stated that would be scheduled for November 5, 2007. Councilmember Woodruff stated he had received comments about the City publicizing the coffee with the mayor sessions that Mayor Lizee. There was question as to whether the meetings were City meetings or private meetings. He suggested Council discuss what the policy was on things of that nature, if there was one. Administrator Dawson stated that would be discussed on November 5, 2007. Councilmember Callies stated she understood the question to be were the sessions for political or public purposes (e.g. Governor Pawlenty's radio show). Councilmember Woodruff questioned when the AFSCME contract would be discussed. Administrator Dawson stated that would be discussed on November 5, 2007. Councilmember Turgeon suggested it be in closed session. Councilmember Wellens suggested the City put a water meter at one of its parks and then water usage for the other parks could be estimated based on the use at that park. Mayor Lizee and Councilmember Callies stated water usage was different at different parks. Director Brown stated Freeman Park was the only park with an irrigation system; therefore, water was not being used at the other parks. Councilmember Woodruff questioned when there would be a discussion regarding administration of salary increases. Administrator Dawson stated that would be discussed with review of the budget on November 5, 2007. In response to a comment from Councilmember Woodruff, Mayor Lizee stated the Friends of the Southshore Center had achieved the $25,000 fund raising goal. The funds were net expenses. SHOREWOOD CITY COUNCIL WORK SESSION October 29, 2007 Page 6 of 6 Councilmember Woodruff stated the City had received a letter from the State Auditor's office in response to an anonymous inquiry regarding the City's appreciation event; the letter stated that would be a violation. Administrator Dawson stated that would be discussed on November 5, 2007. 6. ADJOURN Wellens moved, Woodruff seconded, Adjourning the City Council Work Session of October 29, 2007, at 8:08 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder /'~ Christine Lizee, Mayor ATTEST: ~ ~ r ~~' Craig ~'~'; Dawson, City Administrator/Clerk