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06-28-10 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, .TUNE 28, 2010 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. Mayor Liz6e called the meeting to order at 6:00 P.M. A. Roll Call Present. Mayor Liz6e; Councilmembers Bailey, Turgeon, Woodruff and Zerby; Administrator Heck; Planning Director Nielsen; Director of Public Works Brown; and Engineer Landim Absent: None B. Review Agenda Zerby moved, Turgeon seconded, approving the agenda as presented. Motion passed 5/0. 2. WATER Mayor Liz6e introduced Alan Wallner, with W Creative, who was present to solicit Council's input on the design of a brochure about the City's municipal water system. She stated the meeting packet for this evening contained a document listing a number of questions Mr. Wallner and staff would like Council to answer. Mr. Wallner stated this evening he would like to validate with Council the objectives for the brochure as well as whom the target audience is for receiving the brochure. He would also like input on the questions identified in the document provided to Council. He indicated he will collect information from staff about specifics of the system. Mr. Wallner stated he thought the objective is to provide the residents of Shorewood a high quality, easy to understand education brochure about the City's municipal water program. Mayor Liz6e suggested the objective is also to encourage those residents who have access to the system to connect to it. This would be accomplished by explaining the benefits of being connected to city water. Councilmember Woodruff stated the brochure should also clearly convey to residents what the benefits and tradeoffs are of installing water main under the abutting street to their property. He noted the City assesses for the installation of the actual water main even if a property owner chooses not to hook up at that time. Mr. Wallner clarified what he thought he heard. The brochure should educate the residents on the options and what their decision making process should be regarding hooking up to city water and supporting the installation of water main. Councilmember Turgeon stated from her vantage point Council and staff can tell Mr. Wallner what they think the benefits are, but unless the City solicits resident input about what they perceive the pros and cons of city water to be, the brochure will not have as much value. She then stated Council has at times chosen not to extend water main as part of a roadway reconstruction projects because property owners have not wanted that. Council has discussed having a water policy that would require the extension of water main CITY OR SHOREWOOD WORK SESSION MEETING MINUTES June 28, 2010 Page 2 of 6 (when it doesn't exist) as part of any reconstruction project. If Council is going to allow affected property owners to decide if they want water main extended, then the property owners should be asked questions such as why they would be interested, what the benefits to them would be, and why they would not want that to occur. Mr. Wallner asked if the brochure should also tell property owners the City would like to hear their opinion and provide the name of a website address where they could take a survey. Councilmember Turgeon stated she thought it should. She commented that property owners have told her that having access to city water will not save them money or add value to their property. She indicated she wanted to hear from the property owners why extending water main or hooking up to city water is something they would like. If property owners think it's cost prohibitive she would like to know that. Councilmember Zerby stated he did not think Council would hear anything different than what it has heard in the past. He then stated the brochure is intended to encourage property owners to hook up to city water or support the installation of water main. Mayor Liz& stated Council has heard property owners concerns expressed in public hearings about road reconstruction projects. The property owners tend to share their negative thoughts about extending water main or hooking up to city water. She then stated the purpose of this evening's discussion is to talk about the brochure, a brochure that stresses the benefits, safety, and reliability of city water. Councilmember Turgeon stated there could be value in asking property owners who have hooked up to city water explain why they did so. Councilmember Bailey concurred that there could be value in soliciting feedback from property owners who have hooked up to city water, those who can hook up but haven't, and those who have opposed the extension of water main. He questioned if W Creative wants to take on that task for the small amount of money they are being paid to create the brochure. He didn't expect a large survey to be taken. Councilmember Zerby stated Council has already made the decision to hire a consultant to create a brochure that explains the benefits of hooking up to city water. Mr. Wallner stated based on this discussion he understands the target audience to be property owners that either have or could have access to city water but currently use private wells. He indicated there could be some value in including positive testimonials about having city water in the brochure because that wouldn't be coming from the city. He then stated W Creative's original proposal does not include creating a survey or interactive component on the City's website, but Council may want to consider adding that. He asked if he understood the target audience correctly. Mr. Wallner asked Council how it thought the success of the brochure could be measured. After discussion it was agreed the actual number of hookups and potential number of hookups could be considered when determining if the brochure had any positive impact. Mr. Wallner asked Council and staff what they thought the percentage of property owners is who understand the City's water policy, including the costs for water main installation and connection charge. Mayor Liz& stated she thought there was a lot of confusion about that. The City does not have a clear policy about extending water main as part of roadway reconstruction projects. That has been debated over the last two to three decades. Also, property owners are concerned the City will force them to hook up to city water CITY OF SHOREWOOD WORK SESSION MEETING MINUTES June 28, 2010 Page 3 of 6 if water main is extended, noting that is not the case. Councilmember Turgeon stated there is also confusion about the assessment cost and connection charge. Councilmember Woodruff explained the City's current ordinance and water policy specifies a connection charge of $10,000 to connect to city water. At the time a property owner connects to city water, they will pay the difference between any amount assessed for extending water main and $10,000. They will not pay more than $10,000 in total. The cost to run the line from the water main to the house is an additional cost paid by the property owner. Mr. Wallner stated the brochure will explain the water policy in a way the general public can understand. He will try to clarify any misconceptions property owners may have. Councilmember Woodruff stated he thought property owners who have the option to hook up to city water but have not should get a copy of a brochure, and those residents that may be impacted by the extension of water main should also get a copy of the brochure. Hopefully, after reading the brochure, the property owners will understand what their options are, and if they don't, they still have enough understanding to help them ask questions that will clarify things for them. Mr. Wallner stated it's his understanding that Council wants the brochure to be very informative, clear and easy to understand. Mayor Lizee stated she would like the brochure to be very clear and include the appropriate visuals because most people are visual learners. She thought the brochure should stress the safety and reliability of city water. She noted that the City does test its water to ensure it complies with government standards. She stated staff can provide Mr. Wallner with statistical information and water standard information. She hoped the brochure would encourage property owners to at least consider connecting to city water. Councilmember Turgeon commented there have been more and more articles about arsenic in private well water. Councilmember Woodruff stated staff had started to try and contrast the cost of connecting to city water (which is $10,000 plus the cost to go from the water main to the house) and installing a new or replacement well. Councilmember Zerby stated the brochure should also discuss the protection part of extending water main. Fire hydrants are installed when water main is extended. Also, if a property owner experiences a power outage their well stops working. City water wouldn't do that. He noted the city is required to test city water and to treat it so it is within specifications. Councilmember Woodruff stated a lot of well water is very full of iron and that would not be the case with city water. Mayor Lizee stated there is a fair amount of iron in the city water on the west end of the City. Mayor Lizee stated there are a lot of issues being discussed at the state and federal levels regarding ground water contamination and supply. Ground water safety and supply has to be considered for the future. Mr. Wallner asked if being connected to city water increases the value of a property. Councilmember Woodruff indicated there is a lot of controversy about that. Mayor Lizee stated it would be worthwhile to get opinions from realtors on that. Mayor Lizee stated new or potential new residents don't always understand how wells work or what it costs to repair or replace them. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES June 28, 2010 Page 4 of 6 Councihnember Turgeon stated she did not think anyone has been able to prove that being connected to city water improves the value of a house /property or that having fire hydrants near the property decreases the cost of home owners insurance. Mr. Wallner stated the discussion this evening gave him a good perspective. Mayor Lizee thanked Mr. Wallner for his efforts. 3. 2011 BUDGET Administrator Heck noted the budget information included in the meeting packet about the Parks CIP is based on the original CIP the Parks Commission discussed. The Commission has recently been discussing shifting some items in the CIP around and that is not reflected. The Commission will be asked to spread their proposed projects out over a few more years. Heck reviewed changes he included in this draft of the high level budget. He reduced the contribution for the 3 -Bay chemical treatment of Eurasian Watermilfoil and Curlyleaf Pond Weed to $4,000 from the $6,000 that has previously been contributed. This was done based on the assumption that the cost of the treatment will go down. The amount budgeted for the contribution for the Fourth of July fireworks is $2,500; this is the same as the 2009 contribution and what was asked for in 2010. The budget includes an increase of $220 in the City's portion of the Lake Minnetonka Conservation District's levy. The cost for Hennepin County assessor services was increased to $96,000 from $94,000 based on information received from the County. The budget for civil defense fees was increased $7,000 based on current utilization. The budget includes 2% wage and benefit increases for union employees ($7,000), and a salary increase pool for non -union personnel equal to 2% of the gross non -union wages (approximately $20,000). The budget includes anticipated increases of $14,000 in the City's contribution for fire services and $56,000 for police services. The largest increase in the Excelsior Fire District (EFD) contribution is for part of the required contribution to the Excelsior Firefighters Relief Association fund for pension purposes; this is going to be a larger ongoing increase for the next eight years. The budget does not reflect any increase in the levy; it remains at $4,776,292. The budget reflects an anticipated loss in other revenue of approximately $300,000 (or 5.8 %) with most of the loss being in interest earned. The proposed budget reflects a decrease in General Fund expenditures of approximately 0.3% (or $13,695). Heck explained staffing allocations for Public Works departments have been adjusted based on the time sheets from the first six months of 2010. He extrapolated the six months out over the rest of 2010. Some of the reduction in the General Fund area was reallocated to the utility areas. He also adjusted staffing allocations for Parks, General Government, Planning and Inspections. Heck stated based on this proposed budget $296,000 has to be found in transfers, revenue sources or expense reductions in order to balance the budget. The Implicit Price Deflator (IPD) was 1.124% last week. The IPD can be applied to the 2010 actual base levy ($4,776,292) or it can be applied to the 2010 allowable base levy amount. If the 2011 levy increase is based on the allowable 2010 levy the 2011 levy will increase approximately 3.5% — 4% over 2010. Using the allowable levy amount will still require finding approximately another $150,000 in transfers, revenues or expense cuts to balance the 2011 budget. He anticipates the City will use $200,000 to $250,000 from the General Fund balance by the end of 2010. The 2010 budget includes using $160,000 of that. He anticipates using an additional $50,000 or more to cover the loss in revenue. Councilmember T urgeon stated she preferred to allocate $2,200 for the contribution for the Fourth of July fireworks. She expressed her appreciation for having charts included in the budget packet. It's her recollection that parks and roadways are the main concerns for funding. She stated that from her vantage point the funding for parks should be reduced slightly. Funding for parks may need to go back to the level of CITY OF SHOREWOOD WORK SESSION MEETING MINUTES June 28, 2010 Page 5 of 6 what it takes to maintain the parks and keep the parks usable and safe. It's her recollection that Council had discussed using Liquor Fund funds for things that benefit the community as a whole and that could include funding roadways and parks and keeping the levy to a reasonable level. She stated she did not think the levy could be kept to 0% any longer. Councilmember Zerby stated the cost for Fourth of July fireworks go up each year and the insurance costs go up. He expressed he was sorry he was not able to attend the June 14 " Council meeting when there was an agenda item to increase the agreed upon contribution for 2010 to $2,500 from $2,200. The motion did not pass on a 2/2 vote. Had he been in attendance he would have voted to contribute $2,500; the same amount contributed in 2009. With regard to the use of the Liquor Fund, he stated it's his understanding that Council agreed to solicit input from the City's residents on how the fund should be used when Council decided to sell the City's liquor operations. He asked why the budget for Snow /Ice increased 54.3% and the budget for Public Works Services decreased 24.5 %. Administrator Heck explained that was because of the redistribution of Public Works staff resources based on the time sheet information. Councilmember Bailey stated he was impressed with Administrator Heck having put numbers to things that are hard to conceptualize. He thought it was a step forward in making the budget picture clearer. IIe then stated he did not expect interest income earnings to improve much in the near future nor did he expect housing permits to increase in the near future. Councilmember Woodruff stated the 2011 budget reflects income from licenses and permits to be $75,725. He asked how that compared to 2010 year -to -date. He noted the 2010 budget for this item was reduced approximately $21,500 from 2009 actual. The 2011 proposed budget is approximately $30,500 less than the 2010 budget. Administrator Heck explained building permit revenues have been approximately $40,000 for the first 5.5 months of 2010. He projects 2010 year -end revenues from building permits to be $65,000. The 2009 budget for building permits revenues was $90,000. He has reduced that to $60,000 for 2011. Woodruff suggested the $30,000 decrease be reassessed in the next six weeks or so. Woodruff then stated the 2011 revenue budget doesn't include anything for transfers. That is the big discrepancy between 2010 and 2011. He thought the City can take $160,000 out of General Fund reserves, as it has the past few years, and still be within the City's reserve policy guidelines. He also thought the City can take somewhere around $40,000 from the Liquor Fund. Adding this additional $190,000 - $200,000 to the revenues transfer line would basically balance the budget. He proposed using the $160,000 in General Fund reserves for the transfers into Parks Capital Fund and into the Road Fund for capital for roadway projects; therefore, it's not being used for general operations. Woodruff asked why the budget for elections in 2011 is roughly four tunes greater than the 2009 actual, noting there are no elections in either year. He suggested reallocating the labor to where it belongs. Administrator Heck stated that will increase General Government. He noted reallocating some Public Works staff time to the enterprise budgets will increase those budgets. He suggested the staff budget for Snow /Ice be based on actual time for the last six months of 2009 and the first six months of 2010 to more accurately reflect needs. He thought staff spent more time on that in the first part of the year. Woodruff asked if there is a budget for the Southshore Community Center (SSCC). Administrator Heck stated there is one but it has not been included in the budget yet. Heck anticipates the City will have to minimally subsidize that operation in 2011. Woodruff asked that a line item be added to the revenue and the expense side for the SSCC, noting he assumed that the SSCC budget is not part of the Parks budget. Woodruff stated the budget for Municipal Buildings reflects an inclusion of $30,000 for signage. He asked what that is for. Administrator Heck explained is for purchasing signage for the entry points into the City; signage will be located approximately where the LRT Trail crosses County Road 19, at the intersection of Highway 7 and Country Road 41, and by the border with Excelsior. The signage will be similar to the CITY OF SHOREWOOD WORK SESSIOIN MEETING MINUTES June 28, 2010 Page 6 of 6 signage for the City's parks. Woodruff suggested a transfer from the Municipal Building Fund be made to cover that cost. Woodruff then stated the budget notes indicate the Traffic Control and Engineering budgets include funds for an inventory of the City's street signs and sign management software. He asked what the cost for these two items is. Director Brown explained the software will cost $8,000; the software will be used to maintain the inventory. The consultant cost is $2,800. Brown noted there are also funds in the budget for purchasing additional replacement signage. Brown explained that the Traffic Control budget will increase over time because the City has to replace its signage to meet visibility requirements. Engineer Landmi explained by 2013 the City has to have developed a maintenance plan methodology, by 2015 the City has to start replacing its signage and by 2018 all signage that doesn't meet visibility requirements have to be replaced by 2018. Landini noted the cost for the software is included in the Engineering budget and the consultant is in the Traffic Control budget. After looking at his budget detail, Administrator Heck clarified the cost for the software is approximately $6,700 and the cost for the consultant is approximately $6,400. Mayor Lizde suggested Council email Administrator Fleck any additional questions they have about this draft of the budget. Administrator Beek explained in order to balance the budget Council has to come up with $300,000 from transfers and/or revenue sources and /or expense reductions. He noted Couneilmember Woodruff offered ideas about transfers. Council needs to decide what size of levy it's comfortable with. He also noted Council needs to have more in -depth discussions about increasing the transfer into the Road Fund in order to have a more aggressive roadway improvement program and possibly increasing the transfer into the Park Capital Fund. Heck stated he will schedule a budget work session for July 12 prior to the regular Council meeting. If another budget work session is required that can be scheduled. 1�, 13141490 Woodruff moved, Bailey seconded, Adjourning the City Council Work Session of June 28, 2010, at 7:07 P.M. Motion passed 510. RESPECTFULLY SUBMITTED Christine Freeman, Recorder Christine Lizee, Mayor