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111609 CC WS Min5755 COUNTRY CLUB ROAD COUNCIL , C A BEDS 5830 P.M. Mayor Lizee called the meeting to order at 5:30 P.M. A. Roll Call Present. Mayor Lizee; Councilmembers Bailey, Turgeon, Woodruff, and Zerby; City Administrator Heck; Finance Director Burton; Planning Director Nielsen; Director of Public Works Brown; and Engineer Landini Absent: None B. Review Agenda Turgeon moved, Woodruff seconded, approving the agenda as presented. Motion passed 510. 2. ENTERPRISE BUDGET DISCUSSION Director Burton stated the first draft of the budgets for the Enterprise Funds for 2010 would be presented this evening for discussion. The documents consist of the budgets for Water Operations and Debt Service, Sanitary Sewer, Stormwater Management, Recycling and Southshore Community Center Funds. She noted the first draft of the capital improvement program (CIP) was discussed during Council's November 9, 2009, work session and any changes discussed have not been incorporated into the documents being discussed this evening. Water Budget Director Burton explained the Water Fund budget is comprised of two parts: the Water Debt Service budget and the Water Operating budget. The 2010 Water Debt Service budget includes principal and interest debt service payments for the existing bond issues. Over the years the City had issued water revenue bonds to fund improvements. Director Burton explained the 2010 Water Operating budget revenues are projected to be approximately $828,000, while expenses (including depreciation) are forecast to be approximately $1,228,500. This amount includes capital expenditures of $412,000. The programmed capital expenditure component would fund the installation of water main in conjunction with the reconstruction of Meadowview Road and part of Wild Rose Lane in 2010. The City would pay the up -front installation costs. These costs would be recaptured when property owners connect to the system or through special assessment charges. Burton then explained Council has discussed water rates during a series of utility rate study work sessions. Council expressed its support for changing the rate structure to include a lower minimum consumption amount of 5,000 gallons with a minimum charge of $17.50 per month. The current lowest amount is 10,000 gallons with a per quarter cost of $35. Users who consume more than 50,000 gallons per quarter will be charged a higher rate of $4.25 for each additional 1,000 gallons consumed above CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 16,2009 Page 2 of 10 50J000 gallons; the current rate for this is $3.75. The proposed cote changes are revenue neutral when compared bothe current rate structure, They should benefit lower consumption users and encourage water Burton explained for each of the enterprise budgets she intends N add u column tode �� ��d� projected 2009yeureudbn)nouu. ' The following comments and suggestions woremude with regard to the Water Operations � Director Burton explained the 2009 charges for service amount does not include the 2009 third quarter billing. If the third quarter billing amount was included the year-end projection could be close to the $677,000 adopted amount for 2009, noting water consumption is greater iuthe third quarter. )� Counci|muonnhur Woodruff uonnnnoutodthe service indicator for connections is 1 for 2007 — 2010. Director Burton aia1od all of the p/u1or service indicators need to be updated. She explained the data iataken from water reports prepared bv Public Works for the State. Counoi|nuenuherTur8eon questioned what io needed tohelp Staff provide better service indicator data. She expressed her disappointment with them not being more accurate. )� Counui|nn000bor Woodruff stated the staffing chart indicates there iea slight decrease in headcount yet there water main extension planned. He was not sure that was realistic. Director Burton explained the installation of radio read meters in u|rnoot complete and {hers is some labor savings from that. Director Boop/u explained 1he majority of the water system labor costs are associated with the plants. There )u not o significant increase in labor costs for adding u few water users; there would bca more noticeable increase for adding lO0 additional users. Counci|ouennbe, Bailey asked if the costs for rehabilitation ofthe S.2. Area Water Tower are roflou1od in this budget. l]o thought that expense was $400,000 —$500,000. Director Bvovvu akdud he thought the outotundiog closeout amount was o|ouo to $50,000, and uppu`zinnu1c|y $475,000 in payments has been onudo. The oomim were incurred during 2008 and 2009. Bailey stated he can't see where those costs are reflected in capital outlay. Director Burton oxy|uiund when fixed aemcia are capitalized they are taken out of the expense reporting line. Burton stated Staff will prepare u spreadsheet showing what's been expended and outstanding for the project. 8ui|cy stated he uanunnod those numbers should impact the oaob balance. Burton explained the 2008 you,-end cash balance numbers in the budgets are correct; they were taken off the 2008 audited financials. Tile 2008 costs have been capitalized. She thou explained the uzpeumc reports are used to provide data for these budgets; bheroConc the capitalized fixed uooc1a are not included in them. She stated Staff will clarify the budgets on they reflect what fixed assets have been capitalized at the end of each year. C0000i|nnenobor Woodruff stated he thought it prudent to have ouab Oovv projections v/hiob include the expenses for these types of projects, noting he thought the accounting practice Burton explained is appropriate from un accounting perspective. The following clarifications, comments and suggestions were made with regard Wthe Water Debt )` Director Burton noted the 2UOD year end debt service ba of$755,6|2. )� CoonuUooembor Woodruff questioned the $10 increase in revenues froin opouid assessment and connection charges for 2010 over 2009. Director Burton explained the CITE' OF SHOREWOOD WORK SESSION MEETING MINUTES oveinber 16, 2009 Page 3 of 10 City has a number of special assessments that have been certified for other projects. There are possibly 2 — 3) connections charges anticipated. Mayor Lizee commented that she was pleased with Councilmember Turgeon's support in wanting Council to discuss the City's water policy. She stated it's apparent that the current policy is not very effective. The best time to extend water main is when a road is reconstructed; it's the most cost effective way to accomplish that. She recommended water main be extended, where feasible, and lots be stubbed out as part of every road reconstruction project where water main is not currently installed. The City would up -front the installation costs out of the Water Fund and property owners would pay they cost when they connect to the water system or are assessed for it. An assessment policy or water connection policy can be written to reflect that. She thought making this change would benefit current water users and expand the system, and it may encourage more property owners to connect to City water. She commented she had spoken with Administrator Heck about this topic earlier in the day. Administrator Heck stated he and the City Attorney reviewed the City's current ordinance relating to City water and they think the ordinance is quite restrictive with regard to the expansion of water services. He explained that before the water policy can be changed the ordinance needs to be amended to allow Council to authorize the extension of water main as part of road reconstruction projects. A section should be added to the ordinance regarding a connection charge that would be applied when a property owner connects to the water system. He noted it cannot be called an assessment; an assessment requires a public hearing be held under Minnesota Statute Chapter 429. He explained the only thing he found in the current ordinance that provides flexibility for the Council has to do with modifying policies to provide for a "....fair, equitable, and consistent allocation of the cost of water improvements... ". This speaks to fees and charges for connecting to the water system. Currently the City must follow the Chapter 429 process unless 100 percent of the property owners petition to have want water main installed. He stated in his quick search of the ordinance earlier in the day he was not able to find anything about how the $10,000 connection charge was arrived at. Director Nielsen explained the ordinance contains a formula that the $10,000 connection charge is based on. Director Brown explained the ordinance refers to the base rate. The resolution that was adopted establishing the connection charge is inconsistent with the ordinance. The connection charge is reflected in the municipal fee schedule. Brown recommended the ordinance be updated. Administrator Heck stated it appeared the connection charge is at the discretion of the Council. If Council was to pursue installing water main in conjunction with a road reconstruction project and not charge the property owners until they connect to water, staff can draft an amendment to the ordinance giving Council the discretion to authorize that. The ordinance could continue to allow property owners to petition to have water main installed. Councilmember Turgeon stated if Council is going to consider changing the City's water policy she suggested the discussion get started right away in 2010. She indicated she thought the current water brochure was confusing. She questioned what might entice those property owners who have already paid a $5,000 fee for the installation of water main to want to spend another $5,000 to connect to the water system, noting there is an additional cost to them to run the line to their house and make the connections. Mayor Lizde stated it would have been nice to have had this discussion in time to have an impact on the 2010 road improvement projects. Councilmember Woodruff reminded Council the proposed CIP budgets prepared by Staff assume water main will be installed in conjunction with road reconstruction projects. What's currently being discussed is the cost for property owners to connect to the water system. He asked Staff when a decision would CITY OF SHOREWOOD WORK SESSION MEETING MIN 0TES November 16, 2009 Page 4oflO have to he nmuJa as to whether or not to install water main as part of the Mem]mnvievv Road and Wild Rose Lane road reconstruction project. EugioeerLoudini explained during the public hearing for the project scheduled for November 23 2009, Council can require the plans and mpeoifiootiaom include the installation of water main. An uanemmmneut can be ordered at a later date. The actual decision to install water cnuio has to be made hebrn: the bid is let out in March — April 2810. Director Bnovvu noted {beuc would be some additional oumt for designing the specifications to include the installation of water nuuiu that eventually may not have been needed. Woodruff confirmed he understood that. Administrator Heck ato1od with regard 0n those property owners who have already paid the owauamroeut for the installation of water main he thought Council has the prerogative to change the connection fee with u simple action through resolution. He indicated be will verify this with the City Attorney. He noted the ordinance vvon|d not have to be changed to do that. He stated Staff will commit to having adraft amendment no the ordinance written sometime iu early January 20|O. Coonui\nnonnbor Woodruff asked Staff tu xrouio an exhaustive list of property nvvuem who have been uaaeusod for water main installation but have not yet connected to the system and identify what amount they were assessed. This information will be needed to analyze the impact of any policy changes on those property owners. Coouui|nuonnberTurgoon commented some of those property op/uem may have already paid their assessment infull. Sanitary Sewer Budget Director Burton explained the City currently has approximately 2,800 connections to its Sanitary Sewer system. The proposed operating expenditures are contemplated at approximately $14 million, including depreciation, prior to any tcuoab:re. This amount includes oupi\u| improvements of approximately $420,5OO for rehabilitation of Lift Stations 15 and 17 (which are carried over from 2009); lift station communication devices; and, sanitary sewer segments in certain roadway projects. Burton {bcn explained the concot Sanitary 8ep/u, ,utc is a fixed rate of $70 per quarter. Council uxpncuocd little interest in u uoomonnp{ion rate during the utility ,u1e study work aoaVioua. The utility rate study recommendation suggests that sanitary sewer fund reserves be used to offset the need for user rate increases for u number ofyears. Because of the significant level of sewer reserves Council has indicated its support for establishing u Community Infrastructure Fund via u transfer of $l million from the sanitary sewer fund. This new fund would be used provide internal loans for very specific projects and initiatives; the loans would bc repaid with interest. Burton stated Metropolitan Council Environmental Services (MCES) provides the City with information about the sanitary sewer flow in millions of gallons annually. She explained MCES determines the 2010 oomL by uu|xu|u1ing each city's share using u formula based on the last actual known flovvm from the period }oh/ \, 2008 - June 30 2009. The MCCS *uatevvu1or charge is expected to inon:uoe druoduu||y over the next several years. The City expects to be exempted from the lnDop/ 8t lo§|toKiou ([8t D surcharge pnug,uon in 2010. In order to uouduuc to be exempted fronu this program the City will have to poouodvc]y nudigu1c l &s {; therefore, funds have been designated for this purpose. Burton explained if the 2009 projects carried forward to 2010 and the $\ nni||iun transfer out tothe proposed Community Infrastructure Fund are factored in the 2010 ending balance for in 8uodury 3u"/mr Fund io estimated tobo approximately $3.5 million. The fbUovvioA clarifications, comments and suggestions were made with regard to the Sanitary Sewer budget. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES ES November 16, 2009 Page 5 of 10 Councilmember Woodruff questioned what the $125,000 transfer into the Sanitary Sewer Fund in 2009 was for. He questioned if it was really needed. He asked Staff to verify the capital outlay amounts are correct. ➢ Woodruff questioned the need to budget $29,500 for supplies and materials in 2010 when the actual amount spent in 2006 — 2008 was significantly less then that, and the 2009 year -to -date amount approximates one -sixth of that amount. Director Burton explained $25,000 of that is for inspection and maintenance of lift stations, not including those to be rehabilitated. She stated although that line item is listed in the CIP it is included in the supplies and materials category in this budget. Director Brown explained that is to cover the repair or replacement of impellers and pumps as needed. Councilmember Turgeon stated she thought the amount was too high. Burton explained in 2006 the City spent $14,000 for that purpose, noting other expenses are included in this line item. Burton and Brown suggested reducing the amount to $15,000 and using reserves in the Sanitary Sewer Fund should more funds be needed. Councilmember Woodruff requested any inspection portion of this expense be placed in support services. ➢ Councilmember Zerby stated it appears the Enterprise CIPs are prepared based on projecting five years out. ➢ Director Brown explained he tries to build predictability in the CIP. The CIP is fluid and changes during the year. The rehabilitation of Lift Stations 15 and 17 was not done in 2009 as was planned in late 2008. The projects were postponed for a very specific reason. He stated the purpose of this work session is to inform Council of what has changed regarding upcoming capital projects. ➢ Councilmember Woodruff stated this budget indicates there was no capital outlay in 2006 — 2008 for sanitary sewer. He didn't think that was accurate. Director Burton explained Staff would revise the budget summary sheets, , noting the information is pulled from other reports. ➢ Councilmember Woodruff stated it's frustrating to him that he can't make sense out of some of the information the budgets. Staff indicated the amounts budgeted for sanitary sewer improvements done in conjunction with the 2010 Nelsine Drive reclamation project are correct. Stormwater Management Budget Director Burton explained the 2010 Stormwater Management budget revenues are projected at approximately $526,000. Expenditures are contemplated at $495.500, including proposed capital expenditures of $305,265. The capital outlay is for the Meadowview Road, Wild Rose Lane and Nelsine Drive roadway improvement projects as well as three projects identified in the WSB Drainage Report. An internal loan equal to the amount of these CIP projects is included in this budget, as is corresponding debt service. The loan will originate from the Community Infrastructure Fund. Charges for service revenues are programmed at an 1 I percent increase. This increase is consistent with Scenario 2 identified in the utility rate study. She noted that Council needs to decide how it wants the City to find stormwater projects and what level of rate increase is appropriate. The following clarifications, comments and suggestions were made with regard to the Stormwater Management budget. ➢ Councilmember Woodruff asked why the revenues from charges for service are budgeted to be $10,000 less in 2010 then in 2009, and almost $4,000 more then 2008 actual. Director Burton explained this was taken off of the utility rate study spread sheets prepared by the consultant. Burton noted the 2009 year -to -date amounts do not include the third quarter billing. CITY OF SHOREWOOD WORK SESSION MEETING 1 JTES November 16, 2009 Page 6 of 10 Councilmember Turgeon noted budget discussions have to be completed on November 23' because there is a Truth -In- Taxation hearing scheduled for December 7, 2009. Director Burton stated Staff does it's best to prepare draft documents for discussions with, and recommendations from Council. She stated it's beneficial if Council emails Staff some of their questions in advance in order for Staff to be better prepared for the meeting. Councilmember Turgeon asked what time the November 23r work session must start to ensure there is adequate time to complete the 2010 budget discussion. She expressed her strong disappointment with what's occurred to date. Director Burton stated Council will be provided with documents for the November 23` meeting that should help expedite the discussion. Recycling Budget Director Burton distributed a revised Recycling budget as well as a recycling tonnage report through September 2009 provided by Veolia, the current recycling service provider. Through September 2009 655 tons have been collected. Burton explained the 2010 Recycling budget contemplates expenditures of approximately $172,600. This amount is almost twice the amount of the 2009 budget. This increase is attributable primarily to an increase in provider services starting January 2010. The City anticipates it will again receive approximately $21,000 in grant monies from Hennepin County Grant Funds. The current rate of $1.75 per month per household generates approximately $58,800 in revenue. A rate increase to $4.50 per month is needed to generate the revenue required to fund the new recycling contract with Allied Waste and to offset the increased costs for recycling and cleanup activity. If this rate increase was implemented, to $151,000 and total revenues would increase to $174,000. That would result in a year end cash balance of approximately $87,000. Burton stated the City will implement a RecycleBank Program in 2010 which awards credits to recycling participants to purchase items. The goal is to increase recycling participation by 10 percent in 2010. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 16, 2009 Page 7 of 10 The following clarifications, comments and suggestions were made with regard to the Recycling (m8geL � CounoUmember Bailey stated the RecycleBank Program effectively gives participants u way to offset the rate increase. Hu asked Staff ifk could determine what the monetized amount ofthe average credits could be based on other cities' experiences. MoyurLiz6e eiu1ed in addition to credits uu,00d for recycling, increasing one's amount of recycled waste could u|dnnute)y reduce uno`o onnuuut of solid vvantu vvhiob in torn could reduce solid waste pickup costs. )� /\dnniuiu{zutur Heck stated Staff could again provide Council with the costs for the new n:oyo|e program with and without the option of the Recyo}oBunk Program, noting there was an increase in cost for services with hodb options. Heck then stated he will contact Allied Waste k/ get information on credits earned in typical Rooyo|eBouk9roArama. ConocilnnonnherTurgconnoted she did not vote in favor ofthe new recycling program. She stated she thought it important to educate the residents about the new program and why the costs have to increase. Couuoi|rncnnbe, Woodruff a\u1ed if there is no ru10 increase in 2010 the Recycling Bntoqzdoe will operate in at dcOuii by year end. He suggested transferring $30 in from General Fund roanrvoa in order to achieve u positive year end cash ho|unoc of approximately $25,000. Counoi|noenohor Woodruff recommended Council discuss recycling rates in December. He stated that boouuuo new ru1oo *ou}d take effect January {* the rates must be advertised in Dooennboc He considered the Keoyo|cBouk Program an experiment for the City. Therefore, he thought it appropriate for the City to share the increased cost of the new recycling program in 2010. If the Dcoyc|cBunk Program works well (i.e., the residents eono enough credits {o offset the increase) residents can absorb the entire cost in 2011. Counoi|muornher 8ui|oy commented the General Fund is also the ncmidonta` money. Woodruff stated the budget can't operate aiudeficit. Woodruff noted bevoted for the new recycling program. Counci|noenube, Zerby stated that using the (3cno,u| Fund v/uu|d provide recycling services with money ooUeuiud from taxes. He explained he votod'fbr the new recycling program knowing full well there would he an iuoruuoe in uoai for services. lt`o his understanding that other cities that have implemented ullouyo|eBuuk type program have reduced solid waste tonnage. }{e expressed his confidence in the decision made. Director Burton explained there will hcapositive fund balance u1the end of2OO9. & transfer will not be needed right up/uy. ?hnm: is time for Council to determine ;vbu1 combination of transfers in and ru10 inorouamn it would like to have implemented. Director Burton stated enterprise funds should be treated as u huai000s and aiundu|ono over the long-term, however u one-time transfer from the General Fund to establish u progrmn is acceptable. )� Counoi|mncnube,Zerby requested the number ofhouseholds and percent participation be added \o the budget work sheet. )� Coonci/cnouobe, Woodruff withdrew his request to add the $30,000 transfer in from the General Fund. He reaffirmed there is need to have budget that will not have a negative bu}auuc a1 year end. Therefore, something has to be done during 2010 to ensure that doesn't happen. 8amthmhwrm Community Center Director Burton stated the City assurned responsibility for managing 1he3outhshoreCommunityCenter mid-year 2009. The budget projections are best estimates. A concerted effort is being made to market the CITY OF SHOREWOOD WORK SESSION MEE MlN}rES November 16, 200 Page 8 of 10 use of the Center in order to increase revenues. This effort will omudoue into 2010. Budget forecasts indicate 2OlO expenses will exceed revenues hvapproximately $28,808'$30,000, Council must decide whether subsidies mr internal loans are appropriate. The following clarifications, comments and suggestions were made with regard to the 8outbmbore Community Center (the hodro. Couuulmomber Turgcoo recommended Council determine hmvv much it wants to subsidize Center operations. She stated she did not want tusubsidize $3U each year. She requested Staff provide Council with more information on the operation. Mayor Liz6o explained that after /\ph| 6, 2009, this Council uamuouod responsibility for managing and operating the Center. When that decision was made Council did not make any requests for financial assistance of the other four owners of the Center (i.c. the other four cities). One ofthe four cities [the City ofDeephavcn] indicated it would howilling to consider adonation. As of yet she has not heard that any of those four cities have made u contribution. This uouoornm her. She gathered they were operating under the assumption that Shorewood p/oo|d be responsible for the costs. Mayor L.iz& recommended the City Administrators and City Manager ofthe five oiboe take oo the responsibility nf drafting uplan for the long-term care and maintenance ofthe facility along with on approach for funding the plan. Councilmember Turgeon stated she did not think any of the cities offered to do anything for 2009. She did not ozpoci the other four cities to contribute anything to Center operations in 2018, although she hopes that the cities vvi||. It would be ubouum if the cities do. [t`u her rcoo||eodou that the Counci|auennberm agreed that the City was not going to count on any contributions from the other cities. From her vantage point Council has wanted the Center to hoconnc as self-sustaining as possible. Counci|mnonoher Zcrby stated it was ugenenoum and noble gesture for the City to uauunnc operating responsibility for the Center. Be thought it was the right thing 1u do. He expressed he did not think the City should rely on the Center being self- sustaining. It would he the aoino as relying on facilities for public use to be self- sustaining. He thought the City has some obligation to subsidize the operation of the Center. He noted the City subsidizes its parks, and other areas are used for umuch lower fee then what i{ costs the City to operate them. Councilmember Turgeon stated something needs to be done to lower operating costs. For osamp|c the hours of operation could be reduced. She didn't think the City should continue to inake improvements to the Center until it has a clearer understanding of what revenue generating poiundx| there is. It was her recollection that (ho Friends of the Souihahoru Center (the y,iouda used to he responsible for managing and operating tho Center) had u budget nf$42,UU0 and it paid all of the bills. She did not think the Friends received any money from the five cities. The Friends made $3O,0O0fronn outside rentals, and it did u great deal uf fundraising to help cover the bills. CouuoUnnornber Woodruff stated that basically the Center ia ubuainoao. It's programmed to |oxc approximately $28,000 in 2010. The question is where thu $28 going is 10 come from to pay for the loss. He explained when the City assumed responsibility for the Center it established u fund which had u beginning cash balance of slightly more than $40 U`n projected the 3009 ending cash balance will be approximately $1,200. The center gcouro1cd $19,000 in revenues as of September 2009. He is not willing to set u target nho,c u $28,000 |oou is viewed as mn000aofo||y operating the Center. He recommended the $6,000 in capital outlay botaken out ofthe 2010 budget; the City has already invested about $19,000 in capital in the Center in 2009. He will not support spending unuLbcr dime on the facility from a capital standpoint until it can he CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 16, 200 Page 9ufl0 demonstrated there is a financial proposition that makes sense. He would like to have the 20I0 deficit reduced to zero, When be supported the City umsuroia0 responsibility Council understood the Center would toao nnwoey in 2009. Be understood that it was Cmnooil`m intent for the Center to break even in 2818. He wanted a Staff tm submit 4 different 2010 budget. He oonuzneotud he did not think there was any stretch in the revenue budget of approximately $44,9UU;1obinnit was u slam dunk. CouuuilnucmuberTurgeon stated she thought it may be beneficial to track rental revenues by the categories of classes, outside rentals and 1uog'teon rentals. Having that information on u monthly basis would bcvaluable. Mayor Liz6e suggested Council wait until 20 10 to ask for some of that detailed reporting because 2009 has been udifOcu|t year. Mo. Anderson was not hired until July 2009. 7.horc have been issues with the phone and computer uuocuu at the Center making it difficult to get work done. She stated it was difficult to know if projected revenue budget of$44,900 was good or not for 20lO; she did not think it was uslam dunk. She asked what the $6 in capital outlay was fbr. Director Burton questioned if it may be |oaa costly for u staff 000nnhor to oaounou responsibility for managing and operating the Center. Administrator Bouk stated during the November 9 work session be discussed the need to have a data and phone connection hoin'eon the Center and City Hall. lt`o his understanding there is now access to the iotcrne\Oronn the Center. There was no specific need attached 1uthe $0,000 in capital uodoy, but capital needs have been identified. He did not think it would be an issue to eliminate ii for 20|O. He explained Mx. Anderson and be had reviewed puoi expenses and revenues. It appears the Fdcudu generated approximately $25 in revenues. This included the long-term rental revenues from the Church and the Excelsior-Lake Minnetonka Historical Society. The revenues fronn the Church alone approximated $8,000. The Center only gets u percentage offees for classes held in the Center. The |orguai increase in expenses over the next five yearn is for the incentive pay for rentals per Ms. Anderson's contract. He noted 2010 will be the City's first full year o[ managing the operations. Cnuoci|nnonobor 7orgoon again questioned the need for three cleaning services. Counuilrnenubor Ze,by explained that two ofibuno were tonnporu,y; one for u one-time badly needed thorough cleaning ofthe kitchen and the other for u one-time thorough o/euuinQ of the rest of the Center. The third is the handyman Drew. Turg000 stated she did not think the City should have to pay for the cost to clean the kitchen when tile City io not renting the kitchen out. Councilmember Zerby again stated he thought the City should subsidize the operation of the Center to some degree. He explained he did not think $|O per household per year is too much. The City spends hundreds of thousands ofdollars on the City's parks to oon/e u certain population. He thought it was an obligation of the City to provide the needed subsidy. He commented the costs tu operate and purchase things are always increasing. Councilmember Turgeon stated from her vantage point in 2010 the City needs to decide if it's a business it really wants to be in and if it wants to get the other cities involved. )� Counci|noenobur Woodruff eiu1ud the Center operation is really not an enterprise. If the Ceo\u, operates at a loss the City will have to subsidize it out of the [}onorx| Fund. He again reiterated the target aboo|d be for the Center is to break ovoo in 2010, and falling short of that target means the objective was not met. Mayor [iz6o stated the Center in not a huoiuoam, and it's difficult for her to consider this an enterprise operation. If the Center breaks even financially in 2010 that is the best that can be expected. For 2011 she suggested the Ununuiu| uonup000ni ho|| under the Parks and Kccruo1ioo area because this is on amenity for the residents similar to park amenities; the Center will continue to be managed outside of Parks and Recreation area. She CITY OF SHOREWOOD WORK SESSION MEETING MINUTES November 16, 2009 Page &0nfl0 thought if the Center has to break even then the cost to maintain the City's fields inthe parks and coordinate sports and progcom activities should also have to break even, Director Burton stated a transfer in could be made fronn the Parks C[P. Mayor Liz6e supported that. Couo*ilraenobcr Tucgemn and Cnoocilnnennber Woodruff resisted that idea. Turgeon stated the money from developers can only be used for equipment. Woodruff recommended the deficit in this area be dealt with in 2010. He stated be did not think it appropriate to take funds out ofthe Parks CT9 for the Center. Counoilnuemuber l3uUey stated for 2010 be did not vvau1 to reach into the Parka ClP budget for funding. If Council wants to consider that ua part ofthe Parks and Recreation budget it could he discussed for future years. Be suggested the General Fund should be used to offset any deficit in 2010. In 2011 if there boon`i been any progress made at muuuuAin8 expense control or increasing revenues the City may want to consider turning the responsibilities for managing and operating the Center buck over to the five cities when the City's 3-year agreement is up, and to let the other cites know of this possibility sooner versus |a1o/. He stated that ultimately there will have to he capital contributions to the long-term care and nuuiniouunce of the facility. He supported removing the $6,000 capital outlay out of the 2010 budget. He agreed Staff should try and refine this budget. Administrator E}uuk oiutcd be intends to work more closely with Ma. Anderson on operations ofthe Center. They will develop the appropriate reports. He will entertain suggestions on the reports. He anticipates having a 2009 year-end summary report of the operation in early 2010. That Could possibly bu provided {o the other cities. In 2010 Staff will have u much better understanding of the czponxcm and rovnnueo. Staff plans to develop a quarterly report oil the operations for Council and the other cities. He indicated there will be a meeting of the Center Oversight Committee before tile end of the year to discuss the year-end wrap-up. Counoi\mncnnber 2erhy noted Council chose the |cau costly approach to providing mnaougenucnt aorviuuo for the Center. It hired u contractor to provide those mnrvioux for total of 17 hours per week. Mo. Anderson is already spending more time then that oil the Center. It will be difficult to do the reporting on top of what she is already doing. He stated if there is anything Staff can io help Anderson it would be most appreciated. 3. ADJOURN Woodruff moved, Turgeon seconded, Adjourning the City Council Work Session Meeting of November 16,2009, at 7:22 P.M. Motion passed 510. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder ATTEST: G4 Christine Liz6e, Mayor t 7