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10-27-14 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, OC'T'OBER 27, 2014 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. Mayor Zerby called the meeting to order at 6:00 P.M. A. Roll Call Present. Mayor Zerby; Councilmembers Hotvet and Woodruff; Administrator Joynes; City Clerk Panchyshyn; finance Director DeJong; Planning Director Nielsen; Director of Public Works Brown; and City Engineer Hornby Absent: Councilmembers Siakel and Sundberg B. Review Agenda Hotvet moved, Woodruff seconded, approving the agenda as presented. Motion passed 310. 2. CAPITAL IMPROVEMENT PROGRAM DISCUSSION Administrator Joynes explained that during the 2013 and 2014 . Council and staff retreats the health of all of the City's Capital Improvement Program (CIP) funds, the Enterprise funds and the General Fund were reviewed. Over the last few years a number of steps were taken to stabilize several of the funds. There is still work that needs to be done. The first priority for discussion was how to stabilize the General Fund reserve. There was discussion about the General Fund Balance Policy and a tax increase. The City had not increased its tax levy for a number of years. The City had Ehlers conduct rate studies for the sewer and stormwater utilities because the balances in the Sewer Fund and Stormwater Management Fund were declining. The rate increases recommended by Ehlers were implemented and the two Funds have been stabilized from their starting point in 2013. The transfer from the General Fund to the Equipment Replacement Fund and Street Reconstruction Fund was increased by about $80,000; that still does not fund everything that needs to be done. Staff provided a financing plan for the revised construction cost estimates for the County Road 1.9 trail and Smithtown Road west sidewalk. The financing plan included using Minnesota State Aid (MSA) funds, borrowing from other funds and switching of money around. The updated construction cost estimates for the proposed Galpin Lake Road trail segment and the Smithtown Road east sidewalk extension are significantly less than what the current bidding environment indicates. The bids for the Galpin Lake Road segment came in substantially higher than the estimates. The funding for the proposed trail segment and sidewalk extension has been put in jeopardy given the City's current assets. There are some major issues that need to be decided in 2015. One of them is the ownership of and fiscal responsibility for the Southshore Community Center (SSCC). There needs to be a decision about what to do with it and what the City's obligations are. A letter from the Shorewood Council was mailed to the City Councils for the other four cities that co -own. the SSCC with Shorewood regarding the future of the CITY OF SHOREWOOD WORK SESSION MINUTES October 27, 20114 Page 2 of 9 partnership of the five cities. A representative for the City of Excelsior sent him and Mayor Zerby an email stating Excelsior was financially unable to continue with any type of partnership at this time; at least under the current conditions. The Excelsior Council has not addressed the letter from the Shorewood Council. Financing for the proposed Smithtown Road east sidewalk extension, the Galpin Lake Road trail segment, the Excelsior Boulevard trail segment and the Strawberry Lane trail. segment is something Council has to discuss and decide. Staff will present later on during this meeting revised cost estimates for the projects based on the current bidding environment. Possible finding options will also be presented. The layout and financing for Badger Park needs to be decided. There are elements of those improvements that need to be included in the Park Improvements CIP. The Minnetonka Country Club (MCC) is in the process of being sold. The potential for various types of development that could be done there will have an influence have an influence on things (e.g., the impact on traffic, park usage, and public facilities). There will likely be real estate decisions for Council to make as the MCC redevelopment moves forward. He noted that because there are two members of Council missing this evening staff will not ask for direction this evening on the priority, timing and financing of trails. In December staff will bring to Council decisions on the immediate 2015 General Fund and 2015 CIP elements. In early 2015 Council and staff will have a third retreat during which the SSCC will be discussed (assuming a decision about it has been made), major projects going forward will be discussed, and there will be another review of the health of the City's existing funds. Director DeJong walked through the 2015 — 2019 CIP Projects by Funding Source document included in the meeting packet by fund. Park Improvement Fund Director .DeJong explained the 2014 Park Improvements CIP had included some improvements for Badger Park. Because things are in flux for the future of the SSCC and because of the significant increase to the estimated cost for the improvements to more than $1. million none of the improvements scheduled for 2014 have been done. He moved the 2014 . improvements to the 2015 CIP. Although that may not be realistic he does not have much better to go on. If Council wants him to put in the full $1,000,050 worth of improvements costs in the CIP he will do that. There is not enough funding in this Fund to pay for all of the improvements. There needs to be other funding sources. He does not think any decisions about Badger Park will be made early enough in 2015 to actually get a project constructed in 2015. Therefore, the first set of improvements could be moved out to 2016. The Gideon Glen signage and parking lot improvements have been shifted from 2014 to 201.5. The cost for resurfacing of the Badger Park tennis courts has been left in 2015. Equipment Replacement Fund Director DeJong explained the only significant new item in the 2015 CIP is the trackless trail machine with flail mower for a cost of $150,000. Because of that a tractor, flail mower and rear mower were taken out of the CIP. There is some trade in value for that equipment. As a result of those changes the cost of the 2015 CIP has increased. Director Brown has indicated he would like to order that new piece of equipment in 2014 knowing it will not arrive until 2015. Street Reconstruction Fund CITY OF SHOREWO0I3WORK SESSION MINUTES October 27, 2014 Page 3 of 9 Director DeJong explained. that Star Circle and Star Lane are in the 2015 Road Reconstruction CIP for reconstruction /reclamation. When they were being considered for reconstruction in 2010 many of the property owners along those roadways were in opposition to that. Their reconstruction was moved out one cycle after the City sealcoated the roadways. Because it would be easy to connect to the City's water system Council will have to decide if it wants to extend watermain as part of that project. Amlee Road and Manitou Lane are scheduled for reconstruction in 2016. The bases have deteriorated significantly so they should probably be fully reconstructed at some point but that is not to say that reclamation could not last for a while. But, the CIP reflects reconstruction. Strawberry Lane and West 62`1 have been added to the 2019 CIP for a cost of $1,140,000. The plan had originally been to reconstruct Eureka Road with MSA funds. Unfortunately, the MSA funds cannot be used for Strawberry Lane because it does not connect to a MSA classified roadway. If all of the projects in the CIP were done at the cost estimated the Street Reconstruction Fund would end up in a deficit state. MSA funds could be used for the Christmas Lake Road signal refurbish project. The City's share of that project is estimated to be $8,000. Trail Fund Director DeJong explained the estimates in the 2015 Trail CIP for the Galpin Lake Road trail segment, the Smithtown Road cast sidewalk extension, and the Excelsior Boulevard trail segment have been revised to reflect the current bidding environment. For the Excelsior Boulevard trail segment the estimate is worst case at $300,000. That estimate was provided by the engineering staff at Metropolitan Council Environmental Services (MCES). The CIP estimate had originally been $180,000. The $800,000 estimate for the Strawberry Lane/ West 62" d trail segment does not include right -of -way (ROW) costs. Constructing the additional curb and gutter and the sidewalk would require obtaining easements from property owners along that roadway. The cost for that could be considerable. Mayor Zerby stated in the various CIPs things are in flux because of the MCC property potentially being redeveloped. If 100 houses were built on the site, that would result in approximately $500,000 in revenue from park dedication fees. There has been some casual discussion about there potentially being a park on the site. He clarified that he is thinking out loud right now. He stated if the existing SSCC stays where it is located (he assumes it will because the building cannot be moved very easily) and if the building will continue to be used for community events then parking is still an issue that needs to be addressed. With regard to facilities and fields, there is a need for additional discussion. He does not know where the MCC property would have an impact on what is planned for that in the 2015 CIP. Director DeJong noted there is sorne money in the 2015 Park CIP for roadway and parking improvements. But, it is probably inadequate depending on the option chosen for Badger Park. Any option involves expanding the parking area. He stated staff can provide a better estimate for what it would cost to expand the parking area and bring that back for the next discussion of the CIPs. Councilmember Woodruff explained he spoke with Administrator Joynes earlier in the day and lie told him if Council took action on the CIPs he would vote no on the whole plan. Council has not been provided any information about fund balances or balances over time. There are no funding options being discussed. Yet, Council is being asked to make commitments about spending money next year. He thought this is going at things backwards. He also thinks there are things in the CIPs that the City should not be doing and from his perspective it appears no one else wants to talk about those. Therefore, his only recourse is to say no. Mayor Zerby stated Council is present to talk about it; it is a work session. Zerby asked Woodruff what he would like to talk about. Woodruff noted that he was done. Zerby stated he is not sure what to make of that. CITE' OF S.HOREWOOD WORK SESSION MINUTES October 27, 2014 Page 4 of 9 Councilmernber Hotvet stated she hopes that people do get creative about the area surrounding the Country Club about what the trail needs are and about reconfiguration. She expressed hope that the City will work cooperatively with the developer. Mayor Zerby asked Administrator Joynes if there is an opportunity to come back with fund balances and to address some of Councilmember Woodruff's concerns. Administrator Jaynes noted he and Councihnember Woodruff have differing opinions about how this should be approached. He explained that staff is trying to get Council to make decisions about what it wants the City to do in 2015 and 2016, when it wants them done and to what extent. It is difficult for staff to provide balances or tell Council what the City can spend in 201.5 when so many decisions have not been made. Woodruff has stated he wants to know how much there is to spend and then that is all that will be spent. His position is Council needs to decide what it wants done and then staff can provide three or four options for funding those projects. Two or three of those options have significant tax impacts. Staff cannot determine the impacts until it knows what Council wants the City to do and when. He noted that staff's responsibility is to do what Council directs staff to do. He also noted that for months he has repeatedly heard that trails are significantly important to Council. He clarified he has no animosity towards Woodruff s point of view; he just has a different perspective on how to approach things. Mayor Zerby stated it is his recollection that Council had approved the construction of the Galpin Lake Road trail segment. It was put out for bids and the bids were rejected because of the exorbitant bid amounts. It was anticipated that construction would have already been started. Council had been told money was available to construct the Galpin Lake Road trail segment for the original cost estimate. Administrator Joynes noted that is correct. Zerby stated the Smithtown Road east sidewalk extension has been discussed and in the CIF for two years and Council had ordered a feasibility report be done for that. Council will consider accepting the report during its meeting immediately following this work session. Joynes clarified it had been in the CIP at the original cost estimate. Zerby then stated the Strawberry Lane trail segment has been discussed but Council has never taken any action on it. It is only a thought at this time. Even though there is no plan to build that segment in 2015 there needs to Council and staff discussion about it. There have been a number of discussions about trying to get grant funds through the safe routes to school (SRTS) program. That has not been factored into any documents in the meeting packet. Zerby noted that there is a desire to find a way to continue to move forward with the Galpin Lake Road trail segment and the Smithtown Road east sidewalk extension. He stated Council has been told there are opportunities to look at other funds as well as MSA funding to help fund those initiatives. He would like staff and Council to focus on how to get those done. He then stated the City is still waiting for a revised cost estimate from MCES for the Excelsior Boulevard trail segment because of the complications of the retaining wall. He hopes the City will continue to negotiate with MCES on what the City's share of that project will be. Zerby stated he thought that saying there is a $2 million dollar gap between available funds for the trail priorities and what the revised estimates are is a bit of a jump for hire. The Strawberry Lane trail segment is included in the numbers yet Council has never stated it wants to move forward with it. He is not sure the analysis is accurate at this point. Administrator Joynes clarified that the revised cost estimates in the CIP are worst case scenario. Staff thought that is the most Council would want to spend. He stated Council can pick what trails it wants done, it can delay the construction of their and it can pick the funding sources for them. Those are CITY OF SHOREWOOD WORT{ SESSION MINUTES October 27, 2014 Page 5 of 9 decisions Council has to make. He noted that everything Mayor Zerby just stated is accurate. But, he has not beard Council make any decisions yet. Joynes then stated the cost for the Excelsior Boulevard trail segment may end up costing $120,000 more than previously planned. Council has not decided if it wants to spend that much more on that segment. Mayor Zerby clarified. that Council cannot make any decision until it is provided with a revised cost estimate. Administrator Joynes explained staff has spoken with other municipalities and with engineering firms and Council and staff s idea of waiting until next spring to re -bid and bid the trail projects is the same thing others are intending to do. It is very possible the bid amounts will continue to be exceptionally high through at least the first half of 2015. There will be a huge influx of projects and there will be continued demand on resources because of projects like the new Vikings stadium. He noted the City cannot bid it right now because of the lack of available funds. Council needs to decide if it wants to find a way to increase financial resources for trail projects. There are ways to do that. For example, the City could bond for the projects in three different ways. Or it could borrow frorn the Water Fund and pay it back over time. Councilmember Woodruff stated that he found it interesting that this has turned into a trail discussion and all of the rest of the capital has been ignored. Yet, Director DeJong had gone through a number of things and identified some issues and where decisions need to be made. He then stated from his vantage point the Park Commission is quite frustrated because of Council's lack of decision making about improvements to Badger Park. He noted he supports the Commission's frustration. He stated the improvements have been talked about for a couple of years and the Commission has put a lot of work into identifying different concepts. He thought Council decided on a concept. Yet, the numbers in the Park CIP won't fund any of the concepts presented to Council. He asked if Council wants the improvements to Badger Park done or not. Staff needs to know that. He expressed his frustration that the numbers in the CIP have not been increased to reflect the high level cost estimates for any of the concepts presented to Council. He asked how Council can make a decision about what to do when it does not have the current cost estimates. Woodruff explained the 2015 . Equipment Replacement CIP reflects projects expenditures of $427,500. Yet, Council does not know how much money there is in the Equipment Replacement fund or what happens to the Fund if Council decides to spend all the money. The expenditure projections for 2016 — 2019 are: 2016 --- $194,500; 2017 — $197,500; 2018 — $68,500; and, 2019 -- $44,000. He recommended staff try and find a way to even that spending out somewhat. He stated maybe there is not enough information for 2018 and 2019 to make better projections. He then stated from his perspective the whole thing does not hang together. He does not know what he is looking at and that is why he would vote no. Woodruff stated the 2015 Park CIP shows there is $1.5,000 for the Gideon Glen signage and parking lot improvements. That seems insufficient to him and he thought there are numbers that reflect it would be significantly more than that. Council rejected the bid for the parking lot because staff thought it was too high. The City also received a bid for the signage. Woodruff then stated funding for trails is a separate discussion and noted that he agrees there are a number of funding sources that can be considered. He asked who is going to give the City part of the MCC property for free for a park. Getting any land will have a cost. He asked what an acre of that land is going to sell for and he asked how many acres the City would like. Mayor Zerby acknowledged he thought Councilmember Woodruff made some good points. CITY OF SHOREWOOD WORD SESSION MINUTES October 27, 2014 Page 6 of 9 Mayor Zerby stated he would like to move forward with Badger Park parking lot and road improvements in 2015 which will also affect the SSCC and then delay any other improvements until there is some understanding of what is going to happen to the MCC property. It may be possible to have park dedication fees contribute to a substantial portion of the cost for the Park improvements. He eventually wants to move forward with improvements to the Park and believes that in the not too distant future there will be funding available. Councilmember Woodruff stated a few months ago the Park Commission recommended Council move forward with Concept 1.5, the one Council selected, for Badger Park. The improvements could be split into two parts with sorne being done one year and the rest being done the following year. He noted the Commission felt strongly that if Council authorizes moving forward with any improvements it should commit to doing all the improvements over a two year period. He stated he thinks that the first half of the improvements, the parking lot and road improvements and the field renovation, can be funded out of the Park Improvements Fund in 2015. The issue is how to fund the second half of the improvements. He then stated from his perspective if Council and staff cannot come up with a way to fund all of the improvements both for Badger Park and other City parks then Council should tell the Commission to stop working on identifying future park needs and desires. Mayor Zerby clarified that lie is committed to doing all of the improvements to Badger Park. But, when it comes to funding lie wants to wait until there is more funding available and he thinks the redevelopment of the MCC property will provide that needed finiding. He noted he is not willing to give up a trail in order to do all of the Badger Park improvements next year. ConnCihTiember Hotvet asked how different the CIP numbers are from cost estimates for Badger Park improvements. Director DeJong stated the CIP includes about $550,000 in improvements and he thought the top estimate was more than $1 million. Hotvet then asked why the top estimate numbers are not in the CIP. DeJong stated there is lack of consensus of what to put in the CIP. He noted that he will put the estimate numbers in the CIP and he will bring back a financing pro forma for Council's next work session based on the parking lot improvements being done in 2015 and the remainder of the improvements being done in 2016. Administrator Joynes stated staff can put any numbers Council wants them to in. the CIP but there needs to be a financing decision behind them otherwise they will not mean anything. He explained that CIPs are planning documents. They are a snap shot of what the City wants to do and it is an estimate as the CIP goes out a few years. They also indicate how the CIP projects will be financed. The numbers in the CIPs are the numbers the City has financed. Staff does not know how Council is going to finance it going forward. If Council asks staff to put in costs for projects that the City cannot pay for then that is a disservice to Council because it would not mean anything. Mayor Zerby stated the fund balances and projections for the funds have not been provided; only the expenses have. Councilmember Woodruff stated if the City spends $546,500 out park improvements in 2015 he does not think the City would have the financial capacity to spend $1 15,000 in 2016. The City would have spent all there is in the Park Improvements Fund in 2015 and it only transfers in $42,000 annually. The rest comes from park dedication fees and user permits. Director DeJong stated it would be pretty close. Woodruff asked that staff show that information to Council. Director DeJong explained staff has provided that information on a regular basis; it is not trying to hide that information. It was talked about during the Council and staff retreat and it was talked about the end of this past July. He then stated staff is trying to get Council's commitment on which projects it wants the CITY OF SHOREWOOD WORK SESSION MINUTES October 27, 2014 Page 7 of 9 City to undertake and when. When he gets that information he will bring back the Financial Management Plans (FMPs) with estimates of what is being spent this year, what has been brought in and what can reasonably be expected as income going forward. Council can then make a decision off of all of the information. He noted that he would also like to see the expenditures leveled out. That would make it easier to manage. Mayor Zerby stated it has been his experience that each year there are always significant expenditures planned for in the first year of the Park Improvement CIP and toward the end of the five years there is almost nothing planned. He is quite sure that in 2019 the City will not spend only $19,000 on its parks. He would also like to have the expenditures leveled out. The same is true for the Equipment Replacement CI.P. Zerby reiterated that he would like the Badger Park parking lot and road improvements done; at least for the time being. Director Nielsen explained the Park Commission's recommendation was to do the parking lot and road improvements and the field renovation together. Mayor Zerby stated that recommendation was before the MCC property came into play. That redevelopment is why he is willing to move the field renovation out. Councilmember Woodruff asked when the discussion about the impact of the redevelopment of the MCC property on Badger Park took place and who was present. Mayor Zerby clarified it is discussions he has had with staff and it has only been within the last week that information has come forward about the sale of the MCC property. Councilmember Hotvet noted she had been the liaison to the Park Commission for the first six months of the year. She stated she agrees the Commission has put a lot of work into coming up with concepts for the Badger Park renovation. She thought that moving forward with the parking lot and road improvements would be a good place to start. She then stated she thought the field renovation needs to be considered carefully because of the time it takes to make the improvements and get the turf ready to be played on. Director Nielsen stated if the field renovation is done after the parking lot improvements the heavy equipment that will be needed for the field could damage the parking lot. That was the rationale for doing those two components together. The buildings and other improvements follow that. He thought the money was there to do the parking lot and field components. Councilmember Hotvet stated it is her recollection that Council gave direction to do those two components. Mayor Zerby concurred. Councilmember Woodruff asked staff if there are financing options for completing the improvements to Badger Park. Administrator Joynes explained there are some major money sources. The Council could decide to bond for any kind of public improvements and there are different ways to do that; one is for the Shorewood Economic Development Authority to bond. The City could borrow from its Water Fund, which has the most significant balance, to do public improvements. The loan could be paid back over time with interest. There will be some form of development on the MCC property. The City has the ability to charge a per lot park dedication fee. The current zoning of that property could possibly allow 90 — 100 lots. Depending on how a developer wants to develop the property there could be a lot of negotiation. For sure there will have to be some traffic changes. CITY OF SHOREWOOD WORK SESSION MINUTES October 27, 2014 Page 8 of 9 Councilmember Woodruff stated there is also the possibility of Tax Increment financing (TIF). He reiterated that he thought there is enough money in the Park Improvements Fund to fund the Badger Park parking lot and road improvements as well as the field renovation within a few dollars. The second phase of the improvements could possibly be funded with a loan from the Water Fund. That same type of discussion needs to take place for trails. Woodruff then stated the Street Reconstruction CIP includes Amlec Road and Manitou Lane but not Glen Road. Glen Road is in similar condition to the other two roadways and it is the feeder street to the other two roadways and those two roadways in total only have about 20 residents living along side of them. That makes no sense to him. Woodruff went on to state that the Park Improvements CIP includes $10,000 for a Badger Park Creek Crossing. He thought that is a misplaced priority and it could be pushed out if need be. Councilmember Hotvet stated the Minnehaha Creek Watershed District (MCWD) is discussing its 10- year CIP. She asked if staff is keeping the MCWD in the loop on what the City's plans are for Badger Park. Councilmember Woodruff stated there is nothing in the Stormwater Management CIP for stormwater improvements at Freeman Park. Yet, there is an agenda item related to that Council's regular meeting agenda later this evening. Councilmember Hotvct asked who is responsible for keeping the MCWD informed about what the City's plans are. Administrator 1oyn.es stated staff monitors what the MCWD is doing the best it can. He noted that staff will follow -up with the MCWD. Engineer Hornby stated there is an item on Council's regular meeting agenda this evening that is not in the 2015 or 2016 Stormwater Management CIP for a Freeman Park wetland restoration project. That project was discussed a number of years ago. The hope is to alleviate some drainage problems in that area; problems that were very apparent this spring. He then stated he thought there is an opportunity to pursue grant funds from the MCWD for a couple of projects. There is a similar opportunity with Hennepin County especially if there were some County projects that contributed to drainage problems (e.g., the Glen Road area). Councilmember Hotvet stated it is prudent for the City to keep the MCWD aware of what the City has for upcoming CIP projects where there could be collaboration with the .MCWD as the MCWD is building its 10 -year CIP. Engineer Hornby stated staff has been proactive in telling the MCWD what pertinent projects the City has on the horizon. An example of that is the Gideon Glen parking lot project including the erosion issue that the two parties are trying to find a solution for. He then stated staff gets together with the MCWD at least once a year to discuss the City's and the MCWD's upcoming projects. That meeting was about one month ago. Director Nielsen noted that he and Mayor Zerby are meeting with representatives from the MCWD tomorrow October 28 to talk about Badger Park improvements and how the MCWD could be involved with that. Councilmember Hotvet suggested the Freeman Park wetland restoration effort also be brought up. CITY OF SHOREWOOD WORK SESSION MINUTES October 27, 2014 Page 9 of 9 Director DeJong noted that there is nothing in the CIP for funding any alternative energy initiative. Mayor Zerby asked staff to schedule another work session to discuss the CI.Ps and enterprise operations. He noted that for that meeting he would like staff to also provide fund balances information and funding options. 3. TRAIL FUNDING OPTIONS This was briefly discussed as part of Item 2. 4. ADJOURN Woodruff moved, Hotvet seconded, Adjourning the City Council Work Session of October 27, 2014, at 6:58 P.M. Motion passed 310. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Sco erby, M or ATTEST: Jc d n Panchyshyn, Cit3PCierk