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09-13-10 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, SEPTEMBER 13, 2010 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. Mayor Lizee called the meeting to order at 6:01 P.M. A. Roll Call Present. Mayor Lizee; Councilmembers Bailey (arrived at 6:02 P.M.), Woodruff and Zerby; Administrator Heck; Finance Director DeJong; Planning Director Nielsen; Director of Public Works Brown; and Engineer Landim Absent: Councilmember Turgeon B. Review Agenda Zerby moved, Woodruff seconded, approving the agenda as presented. Motion passed 310. Councilmember Bailey arrived at 6:02 P.M. 2. CAPITAL IMPROVEMENT PROGRAM Administrator Heck stated the meeting packet contains information on the Equipment Replacement Fund, the Public Facilities Fund, the Park Capital Improvement Fund, the Street Reconstruction Fund, the Technology Fund and the Community Infrastructure Fund. The Community Infrastructure Fund was created in 2009 with a $1 million transfer from the Sewer Fund. He explained the packet contains copies of reports showing the schedule of capital improvement projects for 2011 — 2020 and spreadsheets reflecting the actual or budgeted use of each of the six funds for 2007 — 2011. Heck explained the Public Facilities Fund is used to maintain and improve the City's public facilities. Council had requested funds be earmarked for potential unplanned capital maintenance or improvements for the Southshore Community Center (SSCC). Staff programmed $15,000 for that purpose. If there is a need for funds for some other facility the $15,000 could be used for that purpose. No transfer is planned into this Fund from the General Fund, but in future years, Council may want to consider a transfer to maintain a reasonable balance. Heck explained the Park Commission revised the Parks CIP a number of times. The most recent revision includes projects with a total estimated cost of $74,200. The proposed projects include: signage for the City -owned parks ($30,000); continuing the replacement of the picnic tables ($7,000); playground equipment for Freeman Park ($15,000); replacing the roofing on the shelter in Freeman Park ($2,200); rehabilitating the warming house in Badger Park ($5,000); and, connecting to the LRT ($15,000). Funds were allocated for the trail connection in anticipation of applying for a grant and one of the grants requires a 20 percent match of grant funds. If the City is not awarded a grant the $15,000 will not be used for that purpose. He noted costly improvements to the tennis court located in Manor Park are scheduled for 2015. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES September 13, 2010 Page 2 of 6 Councilmember Woodruff suggested removing the $15,000 in grant revenue from the Park Capital Improvement Fund because the grant is not guaranteed. He expressed he thought the programs in the Parks CIP had been scaled back too far because the Park Capital Improvement Fund has a balance of over $200,000 year after year. He thought a balance between $50,000 - $100,000 is reasonable. He clarified he did not advocate making any additional changes other than the removal of the $15,000 in grant revenue to the Park Capital Improvement Fund at this time. Councilmember Zerby asked if there is a rule -of -thumb guideline for determining how much money should be budgeted for park purposes each year. He expressed concern about the $100,000 Manor Park tennis court project scheduled for 2015 and he recommended that project be kept on the radar screen going forward. He stated he was not sure how many people are using the City's tennis courts when compared to participation in other programs. Administrator Heck explained the City hasn't used any type of algorithm to determine how much money to allocate for park capital improvements. The City transferred $15,000 from the General Fund to the Park Capital Improvement Fund in 2007 and 2008. The transfer amount increased to $45,000 in 2009 reduced to $42,000 in 2010 He thought funds budgeted for maintenance of the parks has always been low; therefore, it was increased in 2011. He explained the Park Commission considers the condition of the parks and the facilities in the parks when preparing the Parks CIP. The tennis court in Manor Park project includes rebuilding it and expanding it to include a half -court basketball. Rebuilding a tennis court is quite costly. The tennis court in Badger Park is heavily used. He noted he has encouraged the Park Commission to consider projects that will benefit the largest number of people. He stated the hockey association is not going to schedule games at Cathcart Park; therefore, there is no need to replace the rink boards in that Park when the rink will only be used for recreational purposes. Director DeJong stated he is not aware of there being a standard for how much a city should allocate for park expenditures. That's a decision each city makes for itself. Councilmember Zerby asked if the goal is to maintain status quo with the City's parks or to improve the parks. Administrator Heck stated he thought the Parks CIP basically maintains status quo. Zerby stated the shelter in Silverwood Park and the boundless playground in Manor Park, both done in 2010, are improvements. Heck agreed, but noted that going forward the Park Commission is looking at maintaining status quo as best as possible. Heck stated the Commission thought some of the projects identified in the study done by TKDA were cost prohibitive so many are not included in the Parks CIP. They remain on a list for consideration. Councilmember Woodruff stated he advocates adding projects on the list for consideration to the Parks CIP thereby reducing the balance in the Park Capital Improvement Fund to $50,000 - $100,000. That can be done at a later date. He conveyed that from a strategy perspective it makes sense to him to use the money already taken from the residents in the way it was intended and that is for park projects. Councilmember Zerby stated it's still the taxpayers' money independent of which fund the money is in. He indicated he didn't think the funds in the Park Capital Improvement Fund had to be spent on park projects only. For example, a transfer could be made from that Fund to another fund. Mayor Liz& suggested Council and the Park Commission discuss the appropriateness of adding additional park projects to the Park CIP in 2011. Councilmember Woodruff agreed with the suggestion. Administrator Heck stated the Equipment Replacement Fund has a healthy balance. He explained the proposed 2011 transfer into this Fund was reduced to $50,000 from the 2010 budgeted amount of CITY OF SHOREWOOD WORK SESSION MEETING MINUTES September 13, 2010 Page 3 of 6 $100,000 and the 2007 — 2009 actual amounts of $175,000. This Fund is used to replace major equipment. The 2011 CIP includes replacing a dump truck/snow plow vehicle ($141,426), replacing a Ford baekhoe ($75,000), and installing a vehicle lift in the Public Works facility ($50,000). Based on the current Equipment Replacement CIP the Fund will enter into a deficit state in 2015. Councilmember Woodruff stated he had had no problems with the 2011 and 2012 Equipment Replacement CIP. He expressed concern about the peaks and valleys in spending levels in the 10 -year CIP. He recommended increasing the transfer -in amount to the Equipment Replacement Fund sometime after 2011. He suggested Staff consider moving the replacement of one of the two dump trucks proposed for 2013 to 2014. Councilmember Zerby stated two more dump trucks are scheduled to be replaced in 2015 and he suggested that be spread out over a two -year period. Director Brown stated he will revise the CIP to level out the spending. Administrator Heck explained the 2011 Local Street Reconstruction CIP includes the rehabilitation of Star Circle and Star Lane ($593,989) as well as the mill and overlay of the City's portion of Vine Hill Road ($176,741). The Street Reconstruction Fund will run a deficit in 2013 based on the 10 -year CIP. He noted Council has had numerous discussions about funding of roadway improvements. There has also been some discussion that the 20 -Year Pavement Management Plan (PMP) may be too aggressive. The need to reconstruct versus reclaim versus mill and overlay has also been discussed. Those discussions need to continue. He noted the 2011 CIP includes a $700,000 transfer from the General Fund; the same as in 2009 and 2010. Councilmember Bailey stated if the proposed expenditure rate was averaged over the 2011 — 2020 period the spend rate is approximately $1.2 million. Yet, the annual transfer is only $700,000 for the same period. If the numbers are accurate, he would be inclined to raise the levy to cover additional funding of $400,000 per year for roadway improvements. If the roadway funding needs are substantially more than that amount, then another funding solution has to be identified. He asked if the CIP projections were realistic, conservative, or aggressive. He asked if the PMP includes roadways that will deteriorate to a level requiring repairs during the 10 -year period. Director Brown explained that the project cost estimates Engineer Landini and he provided are on the high side. He noted there will likely be some anomaly during the 10 -year CIP period that will result in higher costs, yet he thought the estimates were good for financing purposes. He explained the Pavement Surface Evaluation and Rating System (PASER) factors for deterioration. He stated Landini and he intend to refine how to estimate the rate of deterioration. Councilmember Bailey stated Council and Staff have discussed the benefits of reclaiming versus reconstructing roadways, in particular less traveled roadways. He asked if that is factored into the 20- Year PMP and the 10 -year CIP. Director Brown explained the condition of the underlying pavement structure and sub -soils have the most impact on deterioration. Roadways identified for reconstruction and reclamation are classified accurately in the PMP. Councilmember Zerby stated he continues to believe the PMP is too aggressive. He suggested shifting the reconstruction of Garden Road to 2016 from 2015 in the CIP and shift subsequent projects to later years. Director Brown noted the City has just received a petition from some of the property owners along Star Circle and Star Lane asking that the roadways not be reconstructed. Council will discuss the petition during its September 27, 2010, meeting. He explained it's likely that projects will be removed from the CITY OF SHOREWOOD WORK SESSION MEETING MINUTES September 13, 2010 Page 4 of 6 10 -year CIP and others potentially added. He stated there may be value in explaining to residents that the City heard the concerns about the quality of the roadways and has a plan to address the concerns, and that there is willingness to adjust the rate of improvements downward because of funding or resident feedback. In response to a comment from Councilmember Zerby, Director Brown stated Staff would prefer to be more aggressive when identifying roadway improvement projects in the CIP. Councilmember Woodruff requested Staff provide Council with a solid cost - benefit analysis for the reconstruction of Star Circle and Star Lane including what other things won't get addressed if the project is not done. He clarified he was not saying he was advocating doing the reconstruction of these two roads that have a limited number of properties abutting them. He stated the 2012 CIP includes the reconstruction of Valleywood Circle and Valleywood Lane, both of which have few properties abutting them and are not collector roads. He commented the cost to reconstruct them is about eight times more than the cost to mill and overlay the City's portion of Vine Hill Road. He stated the 2017 CIP includes improvements to Riviera Lane, another short roadway, for a cost of over $1 million. He suggested reclamation be discussed because it would cost much less and it's not a heavily traveled roadway. He then stated that if the projects were spread out as Councilmember Zerby suggested a lot of the deficit in the Street Reconstruction Fund would be eliminated. Mayor Lizde stated if Staff can lay out the cost/benefits of reconstruction versus reclamation versus mill and overlay that would help in explaining things to the residents. The impact of poor underlying structure and sub -soils on roadways also need to be explained. She then stated residents must also be told if roadway improvement projects are removed from the list because residents expressed opposition to them the roadway will not be scheduled for repair for a very long time; they will be placed far down on the list. Councilmember Bailey stated it would be valuable for Staff to explain the cost versus useful life ratio for the various improvement options. For example, if a mill and overlay of a roadway cost one -tenth the cost of reconstruction and lasts one -half as long, then it would make sense to do a mill and overly. If it would last less than one -tenth the time, it would make financial sense to reconstruct. If, for example, a mill and overlay were to be done of Star Circle and Star Lane and it would only last one year then he may not take the residents wishes as seriously. But, if it would last ten years then it would make sense to do it. Director Brown stated Staff will attempt to provide that information for at least Star Circle and Star Lane by the next meeting, while noting each roadway has its own unique characteristics. Administrator Heck reviewed what he heard Council asked for. Staff will validate the projects, project schedule and project costs. Staff will also provide cost/benefit and useful life information for each roadway rehabilitation alternative. Councilmember Bailey stated Star Circle, Star Lane, Valleywood Circle and Valleywood Lane may be candidates for some type of rehabilitation other than reconstruction. If that ended up being the case it would significantly reduce roadway improvements expenditures in 2012 and 2013 thereby leaving those funds for other scheduled roadway projects. He then stated if those roadways need to be reconstructed then he suggested Council consider increasing the transfer into the Local Street Reconstruction Fund. Director DeJong stated he thought more engineering information is needed to answer Councilmember Bailey's questions. He then stated there will still be some subjectivity included when making decisions on which rehabilitation alternative to use. Councilmember Woodruff stated part of the assessment impact has to include what other issues, such as stormwater management mitigation, will or won't be addressed. That would impact other funds such as the Stormwater Management Utility Fund. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES September 13, 2010 Page 5 of 6 Administrator Heck stated he was not sure there is a need for a Technology Fund because the City no longer hosts its own network server. Individual computers are not considered capital items in either length of time or cost. The only major technology item the City has is the copier. He did not recommend a change for 2011 and said that major technology purchases could be funded out of the Public Facilities Fund. He explained the one purchase included in the Technology CIP is for computers for council members ($5,000). He related that Councilmember Turgeon had expressed two concerns with electronic meeting packets. One was with materials that are in landscape format in the PDF. The other is the requirement to download the packet to a council member's personal computer and then transfer it to a laptop. Turgeon thought it would be easier to just access it on the City's network server. Also, there is the issue of the quality of the laptop currently be used in the trial period. Councilmember Zerby suggested upgrading the video to high definition and adding a third camera be added to the CIP a few years out. He also thought a computer for the kiosk in the City Hall lobby should be added in the out years of the 10 -year CIP. Administrator Heck explained that when a desktop computer is replaced it usually is rotated into the kiosk because it's a better computer. Heck stated items such as these can be programmed into the Public Facilities Fund. Councilmember Woodruff stated he would support funding technology items out of the Public Facilities Fund. He then stated computers for Council had previously been scheduled for 2011 and that is now scheduled for 2012. He requested it be put back into 2011. He questioned the need for a five -year replacement schedule for staff computers. Councilmember Zerby stated productivity could suffer if computers are 6 — 8 years old. He thought the replacement timeframe varies by each employee's needs. He cautioned against having new employees be the first to get the newest computers from a morale perspective. 3. EXTERPRISE BUDGETS Administrator Heck explained there are four enterprise operations: the Water Fund, the Sewer Fund, the Stormwater Management Utility Fund and the Recycling Fund. The revenue /expense spreadsheets for these funds indicate the funds are running a deficit each year. He stated Director DeJong and he are trying to clean up the reports to make them clearer. Heck questioned if the City is charging the correct utility rates. New water rates were implemented in 2010 and recycling rates were changed when the City changed its recycling services provider. The recycling rate covers the provider collection services only. Councilmember Woodruff explained that he had discussed some inconsistencies in the enterprise reports with Administrator Heck and Director DeJong earlier in the day. The operating costs /revenues and capital costs are not accurately integrated. He expressed concern that the Stormwater CIP indicates the Stormwater Management Utility Fund will be out of money by the end of 2014 while noting that will be adjusted once operating revenue /costs are factored in. He thought operating costs for this enterprise operation had been exceeding budget for the past few years. Based on the information provided, he thought it prudent for Council to discuss increasing the stormwater utility rate unless there is a reduction in the number /scope of stormwater mitigation projects due to a change in roadway improvement approaches. Councilmember Bailey commented the City had a utility rate study conducted in 2009 and Council made a decision not to increase the stormwater utility rate. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES September 13, 2010 Page 6 of 6 Director Brown explained in 2009 the Stormwater Management CIP included the costly Lake Mary outlet project. When that project was deleted, it was decided there was no need to increase the stormwater utility rate. Administrator Heck stated some of the enterprise projects identified for 2010 may not get done because of the difficulty the City is having with getting easements. Also, the residents' issue with the quality of Silver Lake is not included the Stormwater Management CIP. A project to improve the drainage area may be presented to Council in the near future. Mayor Lizee stated she hoped there will be an opportunity to work with the Minnehaha Creek Watershed District on this from a water quality perspective. Mayor Liz6e stated there is a lot of technology in the Council Chamber yet there seems to be a problem displaying graphics on the screen for residents to see when they watch the video recordings of council meetings. She asked Staff to look into making that possible. Couucilmember Zerby stated that should be relatively easy because the meeting packet is already in a PDF format. 4. ADJOURN Woodruff moved, 7erby seconded, Adjourning the City Council Work Session of September 13, 2010, at 7 :00 P.M. Motion passed 4/0. RESPECTFULLY SUBMITTED Christine Freeman, Recorder e Chri 4 stine 'k Liz6e, Mayor A TTIr QT-