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02-08-16 CC Retreat Minutes CITY OF SHOREWOOD 24150 SMITHTOWN RD CITY COUNCIL/STAFF RETREAT SOUTH LAKE PUBLIC SAFETY MONDAY, FEBRUARY 8, 2016 FACILITY TRAINING ROOM 9:00 A.M. MINUTES Convene City Council/Staff Retreat Mayor Zerby called the meeting to order at 9:01 AM. Present: Mayor Zerby; Councilmembers Labadie, Siakel, Sundberg and Woodruff; City Attorney Keane (departed the meeting at 12:45 P.M.); City Administrator Joynes, City Clerk Panchyshyn, Finance Director DeJong, Planning Director Nielsen, Director of Public Works Brown, and City Engineer Hornby Absent: None Siakel moved, Woodruff seconded, approving the agenda as presented. 1. Goals and Objectives Update Administrator Joynes highlighted the status of various items on the 2015 Work Plan/Action Items. The format is the same as used in past years. The items are above and beyond staff’s regular work. (The PowerPoint presentation and the meeting packet contained a copy of that work plan.) 2. Southshore Center Attorney Keane explained the City brought the partition action seeking the dissolution of the partnership and the allocation of the ownership of the Southshore Center to Shorewood with the determination of compensation to be decided by a third party referee. The other four cities that co-own the Center with Shorewood brought a motion for summary judgment arguing that Paragraph 6.A Termination: Shorewood Option in the Cooperative Agreement required Shorewood to repay those cities the full price if Shorewood exercised the purchase option to buy back the Center. Over the last 20 days those issues were fully briefed by the four cities. Shorewood responded. The four cities submitted their reply brief. On February 5, 2016, oral arguments were presented before Judge James Moore (the judge assigned to the matter). Judge Moore has 90 days to decide. Judge Moore had been the Chief Deputy of the Civil Division for the City of Minneapolis City Attorney’s Office. Judge Moore is quite in tune with serving the public, local issues, the importance of efficiency in matters of public representation and he is very conscientious. He noted that when the oral arguments were presented during the hearing with Judge Moore Deephaven Mayor Skrede, Greenwood Mayor Kind, Excelsior City Manager Luger, a local Beat reporter, and a woman he did not recognize were present. He stated Judge Moore asked good questions and it was clear he had read all of the materials before the hearing. About one minute into Attorney George Hoff’s (the attorney for the other four cities) presentation Judge Moore interrupted him and asked if the Cooperative Agreement required all five cities to agree to the exercise of the option to purchase. Keane then stated if Judge Moore denies the motion for summary judgment hopefully it will facilitate another round of swift settlement discussions. He did not think the cities were that far apart when the mediation ended. He thought there would be another round of mediation to try and resolve this as efficiently as possible. It could be another six months before the referees were appointed and the cities City Council/Staff Retreat Minutes February 8, 2016 Page 2 of 27 complete their appraisals and submit arguments about the value to the panel of referees. Or, it could be resolved this spring. Councilmember Sundberg asked who participated in the last round of mediation. Attorney Keane stated Council appointed Mayor Zerby and Councilmember Siakel. Administrator Joynes noted on the others cities side there were 16 people. Councilmember Siakel stated if another member of Council wanted to participate she asked if that would be a problem. Keane responded it would not. Joynes commented that it was an interesting back and forth process. He clarified the Shorewood participants were never in the same room as the other cities’ representatives. Sundberg noted she would be interested in participating in future mediation if it works out. In response to a question from Director DeJong, Attorney Keane stated if three or more members of Council participate the mediation would have to be noticed. Mayor Zerby asked if the public is invited to attend. Attorney Keane stated that would be an exception. Councilmember Labadie stated she would be interested in participating in a future mediation. Administrator Joynes explained he had asked Park and Recreation Coordinator Grout and Communications Coordinator Moore to identify interior updates that they would recommend doing to the Southshore Center in 2016. A copy of that list was included in the meeting packet along with the long- term capital maintenance plan for the Center prepared by Building Official Pazandak. The three interior items recommended for 2016 are: 1) interior painting and trim for the hallway (estimated cost $5,500), dining room and reception area; 2) purchasing 200 chairs for the dining room (estimated costs $10,000); and, 3) replacing the fluorescent lights in the dining room with recessed lights (estimated cost $4,000). Councilmember Siakel asked why chairs were needed. Administrator Joynes responded because of wear and tear and noted there are opportunities to buy chairs from organizations that are getting rid of them. Mayor Zerby stated that if the situation with the Southshore Center is going to be resolved in 2016 he asked if it would be prudent to take a longer term view of how the Center would be operated and what the staffing and facility needs would be. He thought that should be done before doing those three items. He commented that a few years ago the chairs in the conference room were replaced. Attorney Keane stated the whole point of starting the partition action was so that Shorewood could take over control over the Southshore Center and manage its destiny. He then stated if Judge Moore ruled against Shorewood and Shorewood then decided to drop the partition action that would be the only outcome that would not leave Shorewood in control. Administrator Joynes noted that then capital improvements to the Center would have to be approved by all five cities. The other four cities would also have say about what is done to the Center. If the Judge rules in favor of Shorewood then Council ultimately has to decide how it wants the Center to be operated. Administrator Joynes stated in the past there has been some discussion about including the Southshore Center as part of the parks program. Planning for improvements to the Center would need to be in part done by the Park Commission. Mayor Zerby stated he thought the Southshore Center needs to be considered from a business perspective. He then stated, for discussion purposes, that there may no longer be a need for a full commercial kitchen because senior lunches are no longer being served there. Caterers could bring food and warming trays to the Center. Maybe fewer rooms are needed; walls could come down or be moved. He noted that it is his City Council/Staff Retreat Minutes February 8, 2016 Page 3 of 27 recollection that Council wanted to take the Center to the next level. Maybe a contractor could help create the vision for the Center. Councilmember Sundberg concurred and stated there are a variety of options. Councilmember Siakel stated she thought it would be best to leave the Southshore Center operations as status quo for at least the next six months. She thought it was appropriate to make limited cosmetic improvements. Councilmember Sundberg asked if the reason for purchasing new chairs is because there are not enough of them or are they becoming dilapidated. Administrator Joynes stated they are a detriment to the operation. Administrator Joynes stated, for example, that if a decision was made mid to late summer of this year it would be prudent to allocate money in the 2017 budget to do a study and to allocate funds in the Capital Improvement Program (CIP) to make improvements. Joynes then stated that Southshore Center operations loss less money in 2015 than in the past few years. Mayor Zerby noted that Council has not been provided with a financial report on that for quite some time. Councilmember Siakel reiterated her support for doing the three cosmetic improvements to the Southshore Center and she cautioned against doing anything that would increase the value of the Center at this time. She stated if the City takes control of the Center then she could possibly support doing a few improvements in the third or fourth quarter of 2016 provided there is the needed funding to do so. Administrator Joynes stated staff will bring back to Council the three top interior items for consideration. Mayor Zerby stated he does not want to put anything significant into the Southshore Center until there is a business plan. Councilmember Labadie stated she does not recollect ever seeing a Southshore Center operations financial report since she has been on Council. She then stated she would like the report to indicate how often there is a need for 150 chairs. She would also like to know the number of and types of events being held there. That information would be useful when deciding future things. Mayor Zerby stated a church and the Historical Society used to rent space in the Southshore Center. When the other cities quit participating in Center operations and funding those renters went away. 3. Review of City Finances A. Projects/Funding Sources Administrator Joynes distributed a copy of a Funding Worksheet which depicted possible funding sources and projects funding needs. He explained it is an update of a similar sheet provided to Council last year. The scope of time is about five years for sources and needs. It showed the total amount of funding sources ranged from $10,053,500 – $12,207,000. The $10,053,500 amount is what the City can control. The higher amount would require decisions by other organizations (e.g.; the Minnetonka School District for tax abatement funds). It showed the total project funding needs to be $9,081,000 – $9,525,000. The lower amount is what staff expects. The higher number, the worst case scenario, is if the settlement for the Southshore Center is higher than anticipated. The takeaway is there would be sufficient resources for both the best case and worst case situations. He highlighted various items on the Worksheet. City Council/Staff Retreat Minutes February 8, 2016 Page 4 of 27 The Minnetonka Country Club (MCC) development project will generate revenues based on the project design. The $2,000,000 in municipal state aid (MSA) reimbursement will be used to help fund the construction of nd the Smithtown Road east sidewalk extension, the Strawberry Lane and West 62 Street trail, and the Galpin Lake Road trail segment. The City was awarded a $200,000 Hennepin Youth Sports Program grant for the construction of an artificial turf ballfield, The Minnetonka Lacrosse Association has committed $175,000 and the Minnetonka Football Association has committed $25,000 to that also. Other items that could be included in other funding sources are: street assessments; General Fund tax increase of 1 percent (or $50,000); and, General Obligation (GO) bonds ($1 million worth of bonds would require a yearly payback amount of $155,000 for ten years). No decisions have been made on those three other funding sources and they are not included in the funding sources total. In 2023 the bonded debt for the two public safety facilities will be paid off. The City pays about $500,000 annually to pay down its share of the debt. After that is paid off, he assumes the fire and police joint powers organizations will require funding be set aside for major capital improvements to the facilities. The Worksheet reflects that $100,000 of the $500,000 will be needed for that leaving the other $400,000 for Shorewood specific needs. The trail needs are partially funded with MSA funding. There are enough excess General Fund reserves to fund the purchase of the Southshore Center. The MCC park dedication fees combined with the outside contributions to the artificial turf ballfield should cover the cost of improvements to Badger Park. The funding needs for street reconstruction for 2018 – 2022 for seven streets is estimated to be $4,812,000. They are not specifically funded; there should be close to enough resources available to do what needs to be done. A future funding source needs to be identified for street reconstruction. Assessing for street reconstruction would be a philosophical change for the City. Bonding for reconstruction would be different for the City as well. If the City wants to build up its tax distribution system to help fund reconstruction, that would be a change as well. There is currently a legislative effort underway relating to creating street reconstruction and street maintenance utility funds. The Legislature has not approved that yet. If implemented, it would allow a municipality to charge its residents a maintenance utility tax for streets each year. There is no guarantee that will come to fruition so Council needs to find another source to fund streets. The City cannot be put in a position to be without funding for streets five years out. Some cities have the philosophy that they do not reconstruct streets until residents demand it and then the residents have to pay the cost for doing it. nd Councilmember Sundberg expressed concern about the sharp turn from West 62 Street on to Cathcart nd Drive. She asked if that would be addressed when Strawberry Lane and West 62 Street is reconstructed. nd Engineer Hornby responded it would not and explained West 62 Street would only be reconstructed between Strawberry Lane and Church Road. Sundberg stated that area could be the scene of a terrible accident. It becomes more likely with bicyclists riding their fat tire bikes on the trail year round. She continues to observe bicyclists ignore the stop sign on the trails. She expressed concern about what could happen at that intersection. In response to a question from Councilmember Woodruff, Director Brown nd explained the City owns up to the center line on West 62 Street and the City of Chanhassen owns the other half. Woodruff stated the trail intersects with the roadway at a diagonal and asked if the trail is all in Shorewood there. Brown explained the portion on the north side is located in Shorewood and that on the south side is located in Chanhassen. Sundberg stated the street configuration is bad. Councilmember City Council/Staff Retreat Minutes February 8, 2016 Page 5 of 27 Labadie concurred and stated there are two issues with that intersection – one is the street configuration and the other is the intersection with the trail. Both are extremely dangerous. Councilmember Siakel noted Shorewood was quite rural a number of years ago. She encouraged Council to remember the City cannot fix everything; Council needs to prioritize things. She cautioned Council against reprioritizing needs too often. Councilmember Sundberg stated that she thought that dealing with that sharp turn is a high priority item. She cannot think of a more dangerous intersection in Shorewood. Administrator Joynes stated that because the City will be working in that area it would be appropriate to assess the situation. The availability of funding resources for that will depend on the City’s ability to convince the Minnetonka School District to participate in abatement. He thought the proposed trail along Strawberry Lane to the Minnewashta elementary School should be a solid reason for the District participating with at least $900,000 in abatement. Discussions with the District were postponed last fall because residents in the District were going to vote on a referendum. Joynes then stated abatement discussions have been started with Hennepin County related to an above grade crossing for the Lake Minnetonka Regional LRT Trail crossing at County Road 19. That would benefit the Three Rivers Park District (TRPD). That abatement would be because of the MCC project. The TRPD has submitted an application to the County for abatement and it will be the agency that will champion the abatement. The TRPD has indicated there will be another chance for federal funds to help fund the construction of the overpass. Councilmember Woodruff stated for projects that will start in 2016 the specific funding sources need to be identified. Administrator Joynes stated when staff presents a project it will identify the specific funding source. Woodruff asked if the Worksheet could be expanded to show specific sources. Mayor Zerby noted the City already has an approved budget for 2016. Woodruff stated that, for example, Badger Park improvements are funded out of the Park Capital Fund and there is no money budgeted in the General Fund to transfer into the Park Capital Fund for those improvements. Director DeJong highlighted the Financial Management Plan (FMP) Summary for the City’s various funds which reflected the estimated cash balance at the end of 2015 (based on the adopted 2015 budgets), the end of 2024 (absent any changes to the document) and the dollar change. He explained the Summary shows what is projected to happen to each of the funds over the course of the next 10 years. Deficits are projected for some of the capital funds. Towards the end of the 10 years there are some unfunded projects. There is funding for projects in the earlier years but funding decisions have to be made for the out years. The estimates for projects in the earlier years are realistic. Mayor Zerby asked when the City will receive the park dedication fees for the MCC development. Director DeJong stated he included $300,000 in 2016 and the remaining $486,500 in 2017 and noted the City may not receive it that fast. It is for a total of 121 units at $6,500 per lot. The fees are received at the point of final platting. Attorney Keane explained the City receives the fees when the City releases a plat to the developer for recording. Keane noted that the City has no control over when the plat is recorded, but it must be recorded within two years. He stated there is no assurance when the Phase 2 and Phase 3 final plats will be submitted for approval. Director Nielsen noted the earliest the City will consider approval of the final plat for Phase 1 of the project would be in March 2016. Nielsen clarified that in the past when the City gave a developer the final plat for recording it required payment of the fees and the developer to put up a substantial letter of credit. Councilmember Woodruff cautioned against planning to use the fees to fund projects before the fees are actually received. Councilmember Siakel stated she envisions phasing the improvement to Badger Park in. Administrator Joynes noted that the only City Council/Staff Retreat Minutes February 8, 2016 Page 6 of 27 improvement that may be done at Badger Park in 2016 would be the construction of the artificial turf playfield. Joynes also noted the City could sell abatement bonds in anticipation of the abatement funds coming in. He stated there will be more than one builder for the MCC development and it is likely they would want to get started. Administrator Joynes displayed graphics depicting the level of expenditures and fund balance of the various funds based on their 10-year FMPs and highlighted what to take from them. They were discussed in order of relative financial health with the least healthy / speculative funds being discussed last. The more noteworthy comments are as follows for each of the funds. Recycling Fund  The balance in the Recycling Fund is projected to increase substantially because of changes to the recycling contract that reduced the City’s cost.  The recycling fees could be reduced, money could be transferred out of the Recycling Fund to other funds or service could be expanded. Mayor Zerby asked if any money from this Fund is used to pay for the spring clean-up event. Director DeJong stated the event is paid for out of this Fund. Zerby stated there has been discussion about bringing curbside collection back. If that was done it could be funded out of this Fund. Councilmember Woodruff stated he has heard residents suggest that it would be helpful to have yard waste pickup in the fall or even during the growing season. He then stated the recycling rate could be reduced and the stormwater management rate could be increased proportionately. He went on to state the Fund could be used to pay for forester/arborist services. Administrator Joynes explained there are communities that provide spring brush pickup services. A benefit to the community of having curbside pickup is people will more likely prune their shrubbery and trees and that helps make the urban forest healthier. There are also problems with utility lines from fallen branches or trees. Councilmember Sundberg suggested encouraging residents to clear out invasive growth such as buckthorn. She stated if there are funding needs for alternative energy things may those needs could be satisfied with funds from this Fund. Administrator Joynes suggested consideration be given to renaming the Fund to Environmental Fund. Councilmember Sundberg concurred with that. Councilmember Siakel stated the chart reflects a modest increase in recycling costs. She then stated the chart reflects there will excess funds available in 2017/2018. She asked staff to get an estimate for city- wide brush pickup and brush drop off. Administrator Joynes stated there are a lot of examples that staff can research. Siakel stated paying for recycling services is the first priority for use of the funds. Council should prioritize other uses of it. Siakel then stated if the City had one trash hauler she asked if the City would bill for that or the hauler would bill the resident. Administrator Joynes explained there are a number of options for organized hauling. One is it would be the City’s hauler. Another is for the City to contract with one vendor and the City would probably bill for the service. Sometimes there is a consortium of haulers and they handle the administrative tasks. There is a bill at the legislature that would put a moratorium on organized hauling efforts because of residents’ emotional responses to it. He noted there was an editorial in the February 8, 2016, Star Tribune about the benefits of organized hauling. City Council/Staff Retreat Minutes February 8, 2016 Page 7 of 27 Councilmember Siakel stated she pays $75 a year for seasonal yard waste pickup. That is an option for residents. Administrator Joynes stated if the City provided city-wide, one-time brush pickup services the City would select the vendor, administer the contract and pay for it. Councilmember Labadie stated she would be interested in having staff solicit a quote for a one-day, curbside collection and noted that some of the other communities in the area provide that. Mayor Zerby noted the City used to do that but moved to drop off collection in the spring. He also noted residents liked the curbside collection. Councilmember Woodruff concurred. Councilmember Siakel stated she would prefer the brush pickup. She thought it would tie nicely into forester/arborist services Council has decided to contract for. Councilmember Sundberg suggested Council discuss, at a future date, the possibility of conducting another resident survey. Councilmember Siakel stated if that is done it should be done for just a couple of items. The last survey was very comprehensive. Mayor Zerby stated the survey questions have to be carefully worded. Councilmember Siakel summarized that Council would like staff to solicit quotes for brush removal and the costs for paper shredding and any other expenses for spring clean-up. Water Fund  This is the healthiest fund. The cash balance has about $2.5 million in excess of what the City needs to operate. The balance will continue to grow as more residents connect to municipal water.  This Fund could loan money to other funds.  Only about one-half of the Shorewood residents are connected to municipal water; they are the only contributors to the Water Fund. Mayor Zerby stated, for example, if he had a water company he would want to use the excess funds to build up the business. There are hundreds of residents who are not connected to municipal water but could connect. He asked what kind of incentive the City could offer residents to entice them to connect. Councilmember Siakel asked if the City could offer no interest financing over 10 years to residents to connect. Director DeJong noted a recent example where there were two properties fronting both Star Lane and Smithtown Road that were assessed $5,000 each when watermain was extended along Smithtown Road. The current connection charge is $10,000 minus any assessment. When Star Lane was recently reconstructed watermain was extended. If the owners of those two properties want to connect to water it would cost them $5,000 to bring water to the edge of the property and that could not be assessed. The assessment for properties along Star Lane was $9,500 and those property owners would pay a connection fee of $500 ($10,000 – $9,500). Engineer Hornby explained that when watermain was extended those property owners wanted to assess the connection to public right-of-way (ROW). It will also cost another $3,000 – $5,000 to extend the water from the ROW to the house. That cost cannot be assessed. Offering a way to finance that $3,000 – $5,000 cost could be a way to entice property owners to connect to water. He noted that last year there were six inquiries about extending watermain to the ROW and only one property owner moved forward with that. He stated there have been more inquiries in that one year than since he has provided engineering services to the City. City Council/Staff Retreat Minutes February 8, 2016 Page 8 of 27 Councilmember Siakel asked how many properties are not hooked up to municipal water that could hook up. She questioned how much of the excess funds in the Water Fund could be used to provide low cost financing for the cost to connect. Councilmember Woodruff suggested, for example, allocating $1 million of the excess funds to zero or low cost financing option to connect. The applications for financing would be considered on a first come first serve basis. Councilmember Siakel reiterated she would support providing no or low cost financing. Mayor Zerby, Councilmember Labadie and Councilmember Sundberg also indicated they would support that. Engineer Hornby noted that along Star Lane and Star Circle there were about six property owners who opted to connect to water. He thought there were a lot more property owners there who are interested in connecting. Councilmember Labadie stated with the exception of Star Lane and Star Circle she asked when the last time was when a large number of property owners opted to connect to municipal water. Director Brown stated it would have been for the Wedgwood Drive reconstruction project. Administrator Joynes stated current and past Councils have generally turned down watermain extension projects because residents did not want to be assessed for watermain extension. Out of the last nine proposed projects eight were turned down. He commented there is a difference between dictating water versus incenting people to want to connect to municipal water. He stated sometimes projects have been turned down that prevented the City from providing the opportunity for municipal water in other areas of the City. Joynes noted the MCC development will generate about 140 connections by the time the project is complete. Mayor Zerby stated cost has been a barrier for a long time for people who may have wanted municipal water to be made available for them to connect to. He has pushed to find a way to reduce that cost. He then stated when he tells property owners that the cost to get water to their property, not their house, would be $10,000 they decide they don’t want to do that when they having working wells. Engineer Hornby explained that in 2012 when the water plan was updated the recommendation was to increase the connection fee to about $17,400. That plan was not adopted by Council. Councilmember Siakel reiterated she likes the idea of using up to $1 million out of the Water Fund to provide no or low cost financing to residents to connect to municipal water. Councilmember Labadie stated she likes that a lot more than having the City contributing toward the payment of the connection. General Fund  There is excess balance in the General Fund based on the General Fund Balance Policy guidelines that could be used for other purposes. The excess ranges from $467,000 – $1,621,000 depending on the method used to calculate it. The greater number is based on how the Office of the State Auditor (OSA) recommends calculating reserves. Joynes cautioned against going to level recommended by the OSA because the City’s Policy is no less than 55 percent reserves based on the next year’s budgeted expenses. It helps with the City’s bond rating and the availability of funds. City Council/Staff Retreat Minutes February 8, 2016 Page 9 of 27 Equipment Replacement Fund  The Fund’s balance varies from year because equipment replacement needs vary. There is no need to worry about this Fund.  The graphic shows a deficit of about $50,000 in 2018 but that should not be a problem.  Transfers into this Fund have been increased the last few years. Sewer Fund  The cash balance has about $1 million in excess of what the City needs to operate.  This Fund could loan money to other funds. Director DeJong stated there has been discussion about moving money into the Stormwater Management Fund. The results of a rate study the City asked Ehlers to conduct recommended significant increases in the level of the Stormwater Management Fund for ongoing charges. The Stormwater FMP indicates that towards the end of the 10-year plan the incoming revenue should be a lot more than the annual expenditures. He does not recommend transferring $1 million from the Sewer Fund to the Stormwater Management Fund at this time. That can be done at a future date after assessing what the future stormwater operational and capital needs are. Director Brown stated The FMP does not include any increases for possible MCES (Metropolitan Council Environmental Services) surcharges imposed for exceeding inflow and infiltration (I&I) rates into the MCES’ sewer system. There may be increases to MCES rates in order to pay for the improvements it has made to its system. There should be funding available to deal with those surcharges or rate increases. Engineer Hornby explained every year the Public Works Department televises certain segments of the City’s sewer line and makes the needed repairs to reduce I&I flow. That televising and those repairs are funded out of the Sewer CIP. The sanitary sewer system was repaired as part of the Star Lane and Valleywood Lane roadway reconstruction projects. The funds that were budgeted for televising were used to make short-term I&I repairs. For the Sunnyvale Lane project the sanitary sewer was replaced because it was in a state of disrepair. Councilmember Woodruff stated the Stormwater Management FMP chart indicates there will be a small deficit in the cash balance in 2016 and a small positive cash balance in 2017 and 2018 and again a slight deficit in 2019. In 2023 the projection is there will finally be an adequate cash balance. He then stated if money is transferred from the Sewer Fund to the Stormwater Management Fund that will result in an adequate positive balance in the Stormwater Fund. He expressed concern about the need to keep track of what was going to be spent for stormwater projects and what might be spent. The money in the Sewer Fund could be spent on something else and a few years later find out the money was needed for stormwater related things. Therefore, he advocated for transferring about $500,000 from the Sewer Fund to the Stormwater Fund. He cautioned against coming up with a new project to spend on. Director DeJong explained from an accounting perspective if there is a negative balance in a fund at year end there can be an inter-fund loan made on December 31 and reversed on January 1. Southshore Community Center Fund  There are ongoing deficits in the Fund for a variety of reasons. That will continue due to the current structure for operating and maintaining the Southshore Center. Those deficits are offset by the approximate $70,000 subsidy Shorewood contributes annually. Councilmember Woodruff asked that the subsidy be foot noted on the FMP graph. City Council/Staff Retreat Minutes February 8, 2016 Page 10 of 27  Building capital needs are not included in the FMP. Stormwater Management Fund This was in part discussed as part of the Sewer Fund discussion. Park Improvement Fund  Badger Park is the major expenditure in 2016 and 2017. The Park Improvement FMP graph reflects a deficit at the end of 2017. In response to a question from Mayor Zerby, Director DeJong explained that the Park Improvement FMP includes $300,000 of park dedication in 2016 and the other $486,500 is included in 2017. It does not include the $200,000 Hennepin Youth Sports Program grant for the construction of an artificial turf ballfield, the $175,000 the Minnetonka Lacrosse Association has committed or the $25,000 the Minnetonka Football Association has committed. Because the artificial turf playfield was not included in the plans for the Badger Park improvements for a cost of $1.3 the $400,000 total may keep the Fund from going into a deficit state in 2017. Other improvements to the field were included. The City has committed $150,000 for that playfield. The balance going into 2016 was high because the proceeds from the sale of eh City-owned residential property were put in this Fund and not much was spent in 2015. Administrator Joynes stated the only improvement that will be made to Badger Park in 2016 will be the construction of the ballfield. Council and staff have to discuss what will happen after that. He noted that the cost to replace the tennis courts is $200,000 and that has not been included in the Park Improvement CIP. Councilmember Siakel stated she recollects the estimate for the artificial turf playfield was about $600,000. $400,000 will be funded from outside sources. Director Nielsen stated if there is a shortfall in funding the Lacrosse Association needs to determine how to find the additional funding. Councilmember Siakel stated it appears there is enough funding in this Fund in 2016 to pay for the planned projects and possibly enough to make other improvements (e.g., the tennis courts, the parking lot or the warming house). She suggested people start to refer to the area around Badger Park as the Badger Park Campus or something of that nature. That would include the Southshore Center. Mayor Zerby noted that Badger Park was named after the first mayor of Shorewood whose last name was Badger. Councilmember Woodruff suggested Council have a workshop with the Park Commission about 2016 projects. He stated that few members of the Park Commission have participated in Badger Park improvement discussions and come March 1 even fewer will have been. In response to a comment from Attorney Keane, Director Nielsen explained that staff has made it very clear to the Lacrosse Association that the new playfield is not the Association’s field. Director Brown noted the City’s policy on accepting donations is there are no strings attached. Mayor Zerby stated that had been made clear to the Baseball Association as well when it helped fund improvements. In response to a comment from Councilmember Labadie, Director Nielsen stated making sure the playfield is made out of healthy turf is the Lacrosse Association’s responsibility. City Council/Staff Retreat Minutes February 8, 2016 Page 11 of 27 Director Nielsen noted the only way to get a realistic idea of what it will cost to construct the playfield is to bid it out. For the grant application he used the highest guestimates. He thought the actual bid would be in line with the funds available. Mayor Zerby noted the Park Improvement CIP includes $105,000 for Freeman Park in 2017 and $75,000 in 2018. It includes $50,000 for Cathcart Park in 2018 and $60,000 for Silverwood Park in 2018. Councilmember Siakel stated Council needs to provide the Park Commission with direction on hockey. Badger Park is currently set up for a hockey rink. There is also a rink in Cathcart Park. She questioned if the City should invest in a portable hockey setup for Freeman Park. Director Nielsen noted that is what the Park Commission has recommended. Siakel stated there is also a rink in Manitou Park in the City of Tonka Bay. She questioned how many rinks there needs to be in a small area. Councilmember Woodruff stated that per the Park Commission there is a demand for space for ice skating, not necessarily for hockey. Nielsen stated the Commission asked the hockey organizers why they are not using the City’s rinks very much. The organizers claimed it was because of the City’s player fee of $10. Baseball and soccer organizers do not complain about that fee. The hockey organizers don’t care if the rinks are smaller portable ones because young players can skate on those rinks. Ice skaters can also. Woodruff stated he has heard that someone had questioned why the hockey rink would be taken out of Badger Park. Councilmember Labadie stated a member of the Park Commission is an employee in the warming house at Cathcart Park. It was the Park Commissioner’s opinion that warming house was no longer usable. That Commissioner has a good idea of the usage of the rink. Labadie assumes the Park Commission will ask to replace that some time. Director Nielsen noted that warming house is a trailer. Councilmember Woodruff stated the removal of the rink in Badger Park has been discussion by the Park Commission numerous times over two years and Council has discussed it also. No members of the hockey organization came to express their displeasure about that. Councilmember Siakel stated hockey is done at Badger Park and noted the soils under that area are very poor. Director Nielsen reiterated that is the Park Commission’s recommendation. Mayor Zerby recessed the meeting at 10:55 A.M. Mayor Zerby reconvened the meeting at 11:04 A.M. Trail Construction Fund  The anticipated capital expenditures in the next few years are for the Smithtown Road east nd sidewalk extension, the Galpin Lake Road trail segment and the Strawberry Lane and West 62 Street trail segment.  There is funding for the Smithtown Road and Galpin Lake Road trails segments.  The Strawberry Lane segment is funded pretty minus the abatement portion which has to be worked out. The abatement process will be a major effort this year. If the abatement situation works out that segment will be developed in the next few years.  There was some money in this fund at the beginning of 2016.  Municipal State Aid (MSA) funds will be used to help fund trails. In 2018 and after there are no funds left for trails. Yet, there are trails still to be constructed in the Trail Implementation Plan. Funding is an issue Council has to address. Director DeJong explained 25 percent of the MSA funds go towards maintenance; it goes into the General Fund. He stated there is $4.8 million in unfunded trail projects in the Trail Implementation Plan. Director City Council/Staff Retreat Minutes February 8, 2016 Page 12 of 27 Nielsen stated the Plan needs to be updated. The Strawberry Lane trail segment has been moved up in the construction plan. Councilmember Siakel explained when the Trail Committee developed the Trail Implementation Plan the Committee took multiple plans that had been developed over the years and combined them into one plan. Then they prioritized them. The trails were added to the CIP and the CIP became underfunded. She was not sure it would make any sense to build some of the trails included in the Plan. She suggested identifying one or two trail additional segments (in addition to those listed above) that it would make sense to construct and leave those in the CIP and take the rest out. After that, the Plan should be terminated. Councilmember Sundberg stated she thought Councilmember Siakel’s suggestion makes a great deal of sense. Director Nielsen stated some of the trails listed in the Plan would have been on-street trails. Street Maintenance Fund  The cost of major street reconstruction projects is projected to be about $4.8 million out beyond 2020.  Roadway maintenance is funded by transfers from the General Fund.  Starting in 2019/2020 the balance in the Street Maintenance Fund starts to be inadequate to fund the necessary roadway maintenance projects.  Council needs to start thinking about a philosophy for funding roadway reconstruction (e.g., bonding, assessments, higher taxes, etc.). That would be the prudent thing for this Council to do for future Councils and for residents. Councilmember Siakel stated she thought Administrator Joynes’s recommendation makes sense and noted that all property owners pay for roadways. Councilmember Woodruff stated the City does not transfer enough money into this Fund to fund the 20- Year Pavement Management Plan (PMP). He then stated if the concept of the street improvement district becomes a reality the City could, for example, be divided into five districts and levy a tax for roadway improvements for each district. Councilmember Siakel noted that City had been divided into five precincts once upon a time. Woodruff stated the City needs about $2 million to make this Fund healthy. Administrator Joynes stated Council could increase its tax levy by 1 percent (or about $50,000) each year and transfer that increase into this Fund to build the balance up. That would be much better than taxing for $2 million all at once. Councilmember Woodruff stated he would advocate doing that. Mayor Zerby stated he would prefer to have the benefiting property owners share in the cost of the reconstruction. He commented that Shorewood to some extent is a City of cul-de-sacs. He noted the Funding Worksheet indicates a 20 percent street assessment would generate about $962,000 in funding. Administrator Joynes explained that the courts have found 20 percent to be justifiable for benefiting properties for most cities. The other 80 percent is a city’s cost because it is a city-wide system. Councilmember Woodruff stated he thought the City of Mound assesses 40 percent to the benefiting properties. Woodruff then stated the City would still need to come up with $1.6 million. Director DeJong explained the transfers into the Equipment Replacement Fund and the Street Maintenance Fund have been increased by $15,000 annually for the last three or four years. He thought that after one or two more $15,000 increases the balance in the Equipment Replacement Fund should be City Council/Staff Retreat Minutes February 8, 2016 Page 13 of 27 sufficient to avoid deficits except when there is a major purchase such as a front end loader. He reiterated that in 2023 the bonded debt for the two public safety facilities will be paid off. The City pays about $500,000 annually to pay down its share of the debt. Councilmember Siakel stated there will still be a need for funding of capital expenditures for public safety. Administrator Joynes stated the Funding Worksheet indicates $100,000 was allocated for that and noted the need could be higher. Administrator Joynes summarized that the City has the resources needed to fund things for about the next five years. He noted that Council needs to make some decisions about where the funds come from. If Council wants to schedule a workshop to discuss that staff can put together more detailed information. Councilmember Woodruff suggested staff prepare a timetable for making decisions about funding. Councilmember Sundberg asked if Council needs to be a little more aggressive in its support for legislative initiatives such as the League of Minnesota Cities’ (LMC) initiative with the legislature to implement the concept of street improvement districts. Administrator Joynes stated there various groups that lobby for the cities. It does help if the City contacts its elected officials to ensure they understand the City’s position. The City has sent letters to its legislators over the last few years. Unfortunately, most of the City’s positions have not been shared by its legislators. Sundberg noted that she had contacted the two legislators on another issue; one was responsive and one was not responsive at all. Joynes stated he is aware of some cities getting together and having legislators come before them as a group; he thought that is effective. Sundberg suggested doing that and noted that she does not think the City is getting the representation it deserves. B. Tax Abatement This was referenced as part of Item 3.A. C. Minnesota State Aide Advance Funding Opportunities This was discussed as part of Item 3.A. 4. Staffing/Succession Planning Administrator Joynes reviewed a timeline for succession planning tasks. In June or July hire a company to conduct a compensation study for all positions. There are three  companies that do that for the public sector. There are a number of long tenured employees that will be retiring before or during first quarter of 2017. Those individuals are at or near the top of their pay grades. It is prudent to find out what the market rate is for the positions they hold. The search for a new city administrator will go on during July and August. The goal is to have a  new administrator on board by October 1. By September succession plans will be created for the following positions: the city clerk, the  planning director; the planner; the building inspector; and, the public works assistant. All have given some idea of what the range of time is that they will retire. Most of the individuals holding those positions have indicated they would be receptive to phasing out their departure (e.g.; working part time, coming back on a part-time basis or overlap with a new hire). Joynes will work with each of them to develop an exit strategy. Joynes noted there is money budgeted for those tasks. Mayor Zerby asked how much the compensation study will cost. Joynes responded about $20,000; about $1,500 per position. Zerby asked if the League of Minnesota Cities (LMC) has that data. Joynes explained he has tried to use the LMC’s data the last three City Council/Staff Retreat Minutes February 8, 2016 Page 14 of 27 years. He found the volume of data it has is much less; the LMC lost about one half of its data a year or two ago. Councilmember Woodruff stated when the City did a study about five years ago one of the challenges was finding comparable position descriptions. Zerby asked if the job descriptions are up to date. Joynes stated they were updated a few years ago. Zerby then asked if there a job description for the Public Works assistant position. Joynes responded no. He explained that there is also $4,000 – $5,000 budgeted for supervisory and public contact training for a Public Works person. Zerby asked if a Public Works staff member could be promoted for the Assistant position. Mayor Zerby asked what the difference is between a planner and planning assistant. Or, is it different titles for the same job responsibilities. Administrator Joynes stated in the LMC’s survey, her responsibilities were similar to those of the planner classification. 5. Minnetonka Country Club Development Director Nielsen stated someone had raised a question about the park dedication fees the City will receive from the Minnetonka Country Club (MCC) planned unit development (PUD). He displayed a chart comparing what the City of Minnetrista received and what Shorewood will receive from the MCC project. He reviewed the comparison chart of the two development projects.  Total project acres – Shorewood 199.6; Minnetrista 490  Total units – Shorewood 142; Minnetrista 1071 (214 are being built by Mattamy)  Public open space acres – Shorewood 42 (not including the common area); Minnetrista 73  Public open space percent of project: Shorewood 35 percent; Minnetrista 15 percent  Trails / sidewalks – Shorewood 2.1 miles (about what the City currently has constructed the last two years); Minnetrista 11 miles  Cash park dedication fees – Shorewood $6,500 x 121 units; Minnetrista $3,000 x 214 units (the $3,000 is what the Minnetrista finance person told Rick Packer with Mattamy Homes) Mayor Zerby asked if Minnetrista increased the land use as well. Director Nielsen responded he does not know. Director Nielsen stated the meeting packet contained a copy of a MCC Development Stage Recommendations Summary document. It also indicates where the items will get addressed – in the Final Plans, in the Development Agreement, in the Declaration of Covenants or all three. He noted the Planning Commission will hold a public hearing on the revised Development Stage plans during its February 16 meeting and Council will consider them on February 22. The revision to those plans is the developer is going to move the age-targeted units originally proposed for the northeast corner of the site to Niblick Alcove and replace those units with traditional single-family units. Mattamy representatives stated its marketing people stated buyers would want the age-targeted units to be either walk-outs or at least look- outs. The builder for those age-targeted units wants those style units. Depending on the developer it could submit the final plat for its first phase of the development as early March. Councilmember Woodruff asked why the chart indicates that the MCC project is 121 units. Director Nielsen explained that was Mattamy’s original proposal. The Planning Advisory Committee (PAC) asked Mattamy to also build a variety of housing types and prices. Administrator Joynes explained that was part of the negotiation process with regard to park dedication fees and number of units. Mattamy had wanted credit for the public open space. He noted that Mattamy will build the trails; the City will not be involved with that. He stated that Mattamy was not pleased that the City increased the park dedication fee in the middle of negotiations. Director Nielsen clarified that was done just prior to that. Joynes noted that City knew what was coming at that time. Attorney Keane stated that during his entire career he has not seen a City Council/Staff Retreat Minutes February 8, 2016 Page 15 of 27 municipality receive as much park benefits (e.g.; cash, land, trails) from a project as this without the developer getting credit for those benefits. Councilmember Siakel stated she thought the City is going to get a lot because of the MCC development. Ultimately, the MCC will be a nice community. She then stated the City created the PAC in order to solicit input from its residents. The PAC asked the developer to build the age-targeted units so there would be some price diversity that would allow residents to stay in Shorewood when they downsized their living space. It has morphed into a premium builder building those units and the price of the units has increased from $400,000 to $600,000 – $700,000. People originally thought those units would be more affordable; $700,000 is not considered affordable. She does not think the City can dictate the price of those units. She suggested the City find a way to get the Smithtown Crossing area developed including some age appropriate housing units for a price of $300,000 – $400,000. Mayor Zerby stated he does not think there is nothing the City can do about the changes. Director Nielsen stated the City has never dictated price point during his 30-year tenure with the City. Mayor Zerby stated Mattamy is asking for a lot from the City. He thought most people are happy with what the City and developer have negotiated. He noted that it is up to Council to decide if it wants to accept the negotiated terms or not. Administrator Joynes stated Council has a say about very technical things. He noted Council already approved the Concept Stage plans and the developer has spent a tremendous amount of money on Development Stage efforts. Director Nielsen stated if Council is interested in having lower price point housing units developed in the Smithtown Crossing area Council needs to allow higher density. That is how the price point is lowered. He cited the example of the Shorewood Ponds development. At the start the units were going to cost $170,000 and by the time they were built the price increased to $200,000 – $220,000. Mayor Zerby stated he wanted to talk about the PUD process – not the pricing or any other details. When a Concept Stage plan is approved it basically means that the Council is interested in the project and that it will be explored further. The final decision is made when the final plat is approved by Council. Council is empowered to have some say in the process; it is not just about rubber stamping what is presented to Council. Director Nielsen stated he thought Zerby downplayed what the Concept Stage approval means. Nielsen explained that when Council approves the concept plans a developer spends a tremendous amount of money to make the concept work. If Council did not like the mix of units proposed (independent of the price point) then that would have been the time to say that. Zerby noted the Concept Stage was approved on a 3/2 vote without a wetland being filled in on the northwest corner of the site. Nielsen clarified it was filled in because the City wanted a second access on to Smithtown Road. Councilmember Sundberg expressed her hesitancy about messing around with the project at this stage because that would send a negative signal to other potential developers in the area. She suggested redevelopment of the Smithtown Crossing area be revisited. Director Nielsen stated there is a redevelopment opportunity for the area encompassed by the MCC development. That would be more of a mid-density area. There would be an opportunity for a more moderately price unit there. Councilmember Siakel encouraged the City to be more proactive and go after a builder that would build units with a $300,000 – $400,000 price point. She clarified that she is not asking anyone to revisit things for the MCC project. She stated the price point for the age-targeted units on the east side results in there being mid- and high-price point units. The MCC development is not going to provide owners of City Council/Staff Retreat Minutes February 8, 2016 Page 16 of 27 moderately priced properties to downsize and still stay in Shorewood. She expressed concern that if the City is not proactive another developer will again not offer moderately priced housing units. She stated she thought there should be an opportunity for a diverse group of people to have access to moderate price point units. Mayor Zerby stated he thought part of the PAC’s recommendation was to have affordable housing. Administrator Joynes cautioned people not to confuse affordable with price point. Director Nielsen stated none of the proposed housing units are going to be affordable; it was not affordable when it was going to be $400,000. Director Nielsen stated the PAC wanted variety of housing styles as well as a variety of price points. The developer is offering three products. Mayor Zerby stated he thought part of the reason for going with the narrower lots was to lower the price and keep the density. Director Nielsen stated the age-targeted units built by the other builder will cost less than the traditional units and definitely less than the $1 million plus units. Zerby stated the age-targeted lots will be smaller in size than most in Shorewood and they will be more expensive than the average property in Shorewood (about $450,000 on about one-half acre lots). The age-targeted lots will be about one-fourth acre in size and cost $600,000 – $700,000. Director Nielsen stated staff has heard that Charles Cudd Company is going to build the age-targeted units on the east side and that developer does not build anything for less than a $500,000 starting point. Mayor Zerby stated Mr. Packer had indicated they were going to be closer to $600,000 and probably a little higher. Director Nielsen noted that Mattamy currently intends to build the age-targeted units on the northwest corner. Director Brown stated there are financial and legal reasons to approve or deny a concept plan. Administrator Joynes stated if Council wants to City to be more proactive it needs to get the Shorewood Economic Development Authority (EDA) involved. Unfortunately, it has no money. He then stated any time a municipality wants to buy down the cost of housing it needs to have “skin in the game” (e.g.; own the land). If Council wants the EDA to be active in that there needs to be financial resources to do so. Councilmember Sundberg asked what it would take to get in the game. Joynes stated initially money to do studies and market analysis. During the last budget process there was discussion about having a 1 percent levy increase for the EDA to start accruing funds. Sundberg stated that appeals to her. Director Nielsen stated the City bought the residential property near the Smithtown Crossing area and it has an option on the liquor store property. Those are steps in the right direction. Councilmember Siakel asked if the Lucky’s Station and area around it would be viable for redevelopment. She stated there are no senior cooperatives out in this area. Maybe that area would be better than the northwest corner of the Smithtown Cross Redevelopment Area. Administrator Joynes stated everything is viable and that there is money to fund a study. Mayor Zerby stated there has been discussion about a potential transportation hub and working with transit authorities. Zerby then stated he was pleased to hear that the City will not be involved with the construction of trails on the MCC property. City Council/Staff Retreat Minutes February 8, 2016 Page 17 of 27 6. Badger Park Improvements There was Council consensus to schedule a joint meeting with the Park Commission to talk about Badger Park prior to a Council meeting. 7. Policy on Providing Services to Other Cities Administrator Joynes noted that the meeting packet contains a copy of a memorandum from Director Brown that identifies the services Shorewood staff provides to the other South Lake cites and to the public safety joint powers organizations and the estimated costs for doing so. Director Brown explained the Excelsior Fire District (EFD) and the South Lake Minnetonka Police Department (SLMPD) do not have a building engineer. He somewhat serves in that capacity for the public safety facility located in Shorewood next to the Public Works facility. He started doing that shortly after the facility was built when the then chief of police called him for help at 6:00 P.M. because there was flooding in the detention area. That facility is a technical building. Public Works personnel maintain the building and grounds which are owned by the EFD and SLMPD member cities. Mayor Zerby stated he thought Public Works has also provided services for public safety vehicles. Director Brown clarified that has been very minor; there have been about six instances when the SLMPD asked for help with a dead battery, flat tire or something similar to that. Zerby commented there is a lift in the Public Works facility. Brown stated he had been asked to give the SLMPD a proposal on providing maintenance services on vehicles. The lift was sized for Public Works large equipment as well as fire trucks. Nothing ever happened with that proposal. Zerby asked how the City should go about recouping the costs for those services. He thought it was time to stop providing the services for free. He asked staff to get a quote for snow plowing. Administrator Joynes suggested bringing that up during the 2017 budget discussions for the two organizations. He noted that the Deephaven Public Works Department provides free snow plow services for the EFD station located in Deephaven. Mayor Zerby stated that Department probably provides some maintenance services for that building as well. Councilmember Woodruff stated he thought there are two options. One is for Shorewood to be compensated for providing the services. The other is to rotate providing the services among the member cities. Mayor Zerby stated that rotating would be up to the EFD Board and SLMPD Coordinating Committee to decide. Mayor Zerby questioned waiting until 2017 to start charging for the services. Maybe that could begin on July 1, 2016. Councilmember Siakel suggested the EFD Board and SLMPD Coordinating Committee discuss charging for services. Mayor Zerby stated he thought Shorewood should initiate that discussion. It could send a memo to the two organizations. Councilmember Siakel noted that she does not want Fire Chief Gerber or Chief of Police Meehan to be put in the middle of this discussion. She thought the issue could be raised during Operating Committee meetings or during EFD Board and Coordinating Committee meetings. Councilmember Labadie stated her preference is for Shorewood to continue to provide the services and get paid for doing so. Labadie commented there have been times when she has driven on a roadway where the Shorewood portion is plowed and the part in another city is not. City Council/Staff Retreat Minutes February 8, 2016 Page 18 of 27 Councilmember Woodruff stated he also supports Shorewood continuing to provide the services and getting paid for doing so. Director Brown stated from a logistics stand point having more than one group responsible for providing building maintenance services would be a disaster. There is a lot of equipment in that public safety facility. Councilmember Siakel suggested Shorewood charge a flat annual fee. Director Brown noted that he thought that would be a good approach to take because it provides the Chiefs with predictability when budgeting for the services. Councilmember Sundberg stated she thought it would be appropriate to recoup all of the City’s costs. Councilmember Woodruff stated he does not think Director Brown’s list is all inclusive. Administrator Joynes stated he would bring this up to the member City Administrators/Managers. Joynes then stated by having the Shorewood EDA do the bond refunding Shorewood’s bond rating was used. The refunding and the bond rating saved the member cities money. Councilmember Woodruff stated if an organization were to come to Shorewood and ask Shorewood to put its name on a bond issue so it would be tax exempt Shorewood would get 2 – 2.5 percent of the bonding fee. Director DeJong clarified it would be 0.5 – 1.0 percent. Woodruff stated that would be tens of thousands of dollars. Shorewood provided that service for free for the refunding. Councilmember Sundberg stated the City does not get anything from the other member cities. Those cities have at times been reluctant to work with Shorewood on resolving issues. Director Brown stated that Public Works personnel and police and fire personnel work very well together. That was not the case when he first came to work for Shorewood. He complimented all three organizations for building those relationships. He then stated if Public Works personnel need some help from the public safety organizations they respond quickly. He noted that Police Chief Meehan called him recently and thanked the Public Works personnel for their efforts during / after the recent snow storm. Councilmember Siakel reiterated that she does not want the Fire and Police Chiefs or their employees to be caught in the middle of this. 8. Traffic Committee Engineer Hornby noted the Traffic Committee has one meeting remaining. The Committee had 13 members at the beginning and by the end of the process there are six to eight participating. From the way the Committee started he is amazed at how far it got in the process. The Committee discussed a lot of alternatives and rated them. The ratings were put into a matrix format and a copy of that matrix was included in the meeting packet. The focus was on the area near the Minnetonka Country Club property. The Committee will create a formal report. Chuck Rickart, a Professional Traffic Operations Engineer (PTOE) with WSB & Associates and the main consultant for this effort, will assist with that. It is anticipated that the draft report will be complete in March and then be distributed back to the members of the Committee. They will provide feedback back to Mr. Rickart and he will refine the report. The report will be presented to Council during a work session. City Council/Staff Retreat Minutes February 8, 2016 Page 19 of 27 Councilmember Sundberg asked why the active participation dropped down. Engineer Hornby stated it may have been in part because the Committee started to meet every two weeks. One dropped out because of a change in her work schedule. Sundberg then asked if the schedule for presenting the report to Council will work with the MCC development schedule. Hornby clarified the MCC site was hands off for the Committee. Engineer Hornby asked Council what, if anything, is next for the Committee. Mayor Zerby stated he thought that maybe those processes that were useful and effective for the Committee could be used on a larger scale for traffic in other areas of the City. He hopes that WSB can provide the City with guidance on what path to follow. Engineer Hornby stated from his perspective a Committee of 5 – 7 people is big enough; a committee of 13 people was too large. Councilmember Sundberg stated she thought it is important not to create the perception that Council is managing the committee process. Hornby then stated the Committee did a relatively good job of sorting out what the issues are and narrowing down the Committee’s focus. Administrator Joynes asked if Council wants staff to make a recommendation after being presented with the report during a work session about whether or not to have a traffic committee assess traffic issues City-wide. Mayor Zerby stated acting on all of the recommendations would cost the City a great deal of money. Engineer Hornby stated that during the Committee’s last meeting there was realization that the common element between all of the alternatives was enforcement. That will be highly emphasized. Councilmember Siakel stated the City of Tonka Bay has been very aggressive in using the speed buggy along Pleasant Avenue on recent mornings. Councilmember Woodruff stated there have been police patrol cars out on the Islands recently; there were two out there the previous day. There had been an officer running radar one day. 9. MS4 (Municipal Separate Stormwater Sewer System) and Forestry/Arborist Staffing / Scope of Services Administrator Joynes stated the meeting packet contains a document listing four different arborist / forester service options for the contractor [S&S Tree and Horticultural Specialists] Council selected to provide those services. The fee for those services is $65 per hour plus mileage. The 2016 budget includes $40,000 to pay for those services. Staff is asking Council which services it wants provided. Engineer Hornby reviewed the four service options. 1. Assist with Tree Preservation and Reforestation Management Program development and implementation. Staff has done a tree inventory for some of the City’s parks and right-of-ways (ROW). There remains work to be done on it. He thought the contractor could take that over. Before doing that staff would ask the contractor to submit a proposal of what the actual cost to complete it would be. 2. Inspect trees on City of Shorewood property and recommend corrective actions as needed. City Council/Staff Retreat Minutes February 8, 2016 Page 20 of 27 3. Inspect trees for disease and damage on private properties, particularly after storms and as part of the tree management program. 4. Assist with public education programs related to urban forest management. Information could be posted on the City’s website and published in its newsletter. Common issues that residents could address on their own could also be placed there. Hornby noted that S&S is part of a larger corporation that is based out of the State of Ohio. They have a lot of staff that can assist with tasks. Councilmember Siakel stated the $40,000 would pay for a little more than 600 hours of services. She asked if the services would be requested seasonally; for example, from April to September. Engineer Hornby suggested asking for a recommendation from S&S. He explained that certain varieties of trees have to be pruned in late January or early February. S&S could also explain how it would improve sight lines at problematic intersections. Councilmember Siakel stated she thought the four service options would all provide benefit. She then stated she would like the City to offer the residents services for a fee (e.g.; $50). Mayor Zerby concurred. Engineer Hornby stated if the S&S contractor gave advice to the resident and then decided to offer follow-up services then that could be a conflict of interest. He then stated he recently received a new contract from S&S and it includes a conflict of interest statement. Councilmember Siakel suggested that the contractor could give something to the residents saying they would not be required to use their services. Administrator Joynes cautioned against getting into a situation where the contractor identifies a tree as diseased and then they take down the tree. The City should not be put in a situation where the contractor classifies a tree as diseased and it is taken down only later to find out it was not diseased. Administrator Joynes stated he thought it would be a good idea for the City to charge a fee for providing services to inspect trees for disease and damage. He thought those kinds of services would be very popular. Councilmember Siakel asked how providing those inspection services would be managed. Engineer Hornby suggested they be required to submit a statement of what they did, where and when it was done and for how long. Councilmember Woodruff stated he thought the order for service should come through the front desk and the fee for service should be collected upfront. The City would direct the contractor about what to do and the contractor can set up the appointment. Administrator Joynes stated if Council wants to do that then staff will set up the program. The SeeClickFix Customer Relationship Management Software could be used to track that. He suggested trying it for one year. Woodruff suggested charging at least the $65 hourly fee and ignoring charging the cost for mileage. Director Brown stated what is proposed would mean the homeowner hires the City who then has the contractor do the work and the City ends up with the liability. Attorney Keane stated the City would make the service available to residents and the residents engage the service. Councilmember Woodruff stated the City has to pay the vendor so that the City can set the fee. Attorney Keane stated the City pays the contractor for what the City asks them to do. Director Brown stated that can be set by the agreement / contract. Director Brown stated staff will work out the details on how this would work. City Council/Staff Retreat Minutes February 8, 2016 Page 21 of 27 Councilmember Labadie asked if the City has a buckthorn removal policy for City-owned property such as along the trails. Director Brown stated when the City had buckthorn removed in Freeman Park a resident came before Council and vehemently asked that the City quit using the chemical that was used during that process. The City does remove buckthorn along the edges of roadways and it has been scolded by many residents for doing so. It does not have the resources to remove it from parks. Councilmember Woodruff stated that in order to mitigate buckthorn it has to be done on an annual basis. Mayor Zerby recessed the meeting at 12:32 P.M. Mayor Zerby reconvened the meeting at 12:42 P.M. 10. Other Issues A. Residency Requirements Administrator Joynes stated he had been asked to research Deborah Zorn’s residency because Council had appointed her as the City’s representative on the Lake Minnetonka Conservation District (LMCD) Board. Based on what staff found there are no residency requirements for being the City’s representative on commissions and boards. He noted that Councilmember Woodruff asked that Council discuss requirements. He stated there have been times when the City had difficulty finding people to serve on boards and commissions. He thought it makes sense to have residency requirements for the Parks and Planning Commissions but maybe not for some other boards and commissions. Director Nielsen clarified that about five years ago a residency requirement was put in place for serving on the Planning Commission. There had already been a requirement for serving on the Park Commission. Councilmember Woodruff stated a resident who lives out in the area where he lives told him Ms. Zorn does not live in her house near him year round. She and her family live someplace else part of the year. He questioned if it was appropriate to have someone represent the City who does not live full time in the City. He thought that was a requirement. He clarified that he was not questioning her ability to serve on the LMCD Board. Mayor Zerby stated in the past he had spoken with representatives for the Minnehaha Creek Watershed District (MCWD) about possibly appointing someone on Shorewood staff to attend meetings. Councilmember Woodruff stated that situation was different; they went to audit meetings and were not a member of the board. In the case of Ms. Zorn she is a voting member on the LMCD Board and has the ability on behalf of Shorewood to help make law. Attorney Keane departed the meeting at 12:45 P.M. Councilmember Siakel stated she does not think having Ms. Zorn represent the City on the Board is an issue. Ms. Zorn pays taxes on her property that fronts Lake Minnetonka and lives there during the summer. She has an appreciation for issues that impact the Lake. She noted that people serve at Council’s discretion. Councilmember Woodruff asked if that means a person needs to own property and pay taxes to serve. Siakel stated there have been times when people did not want to serve on a commission or board. Councilmember Labadie asked if the City has a representative to the Lake Minnetonka Communications Commission (LMCC). Mayor Zerby stated he has been serving in that capacity and Councilmember Siakel is the alternate. He explained that in 2015 one person applied and Council did not think that individual was a strong applicant. City Council/Staff Retreat Minutes February 8, 2016 Page 22 of 27 Councilmember Woodruff stated if Council is saying an applicant does not have to be a resident then the opening should be advertised as such. He then stated there has been a situation where someone moved out of the City and they had to resign. Woodruff then stated he had no problems leaving things the way they are with Ms. Zorn. He noted that he was particularly concerned about the Park and Planning Commissions. B. JPA Funding Formula Mayor Zerby stated that he continues to think the funding formula for the South Lake Minnetonka Police Department (SLMPD) joint powers organization is not fair for Shorewood. He thought the SLMPD member cities (the City of Excelsior in particular) create a demand for services by decisions the cities make. That is unfair for the other cities because they do not get to vote on those decisions. The number of liquor licenses Excelsior has approved (29) has ultimately increased the demand for policing services. He explained the SLMPD funding formula is based on three equal factors: population, tax capacity and initial complaint reports (ICRs). It does not include crime statistics. The SLMPD now has a system that makes it much easier to report on crime statistics. The SLMPD has compiled those statistics for the last five years and Excelsior had the highest combined Part I and Part II crimes four the last four years of the four member cities. He would like the funding formula to be based on four factors equally: population, tax capacity, ICRs and crime statistics. He thought it prudent for there to be repercussions for decisions the cities make. Councilmember Sundberg noted that she wholeheartedly agrees. She asked how to go about changing the funding formula. Mayor Zerby stated he brought the topic up during a SLMPD Coordinating Committee meeting. The other Committee members indicated they would listen to what he has to say during a future meeting. He asked for Attorney Keane, who had left the meeting, and / or other staff to give Council options on how to move that forward and to tell Council what leverage the City has. Councilmember Woodruff agreed with what Mayor Zerby would like to have happen. He stated West Hennepin Public Safety serves a number of cities and he thought it operated under a joint power agreement (JPA). Administrator Joynes explained he thought there were four or five police public safety joint powers organizations. All of them have some underlying philosophy for distributing funds whether under a JPA or contract for services agreement. There are funding models that could be researched. There are five to seven factors. One formula is supported by the International Association of Chiefs of Police (IACP). The League of Minnesota Cities (LMC) has a few funding models. Ultimately, it will come down to negotiations between the member cities about what factors to include and how to rate the factors. Joynes stated one of the issues with the JPA is with governance. In particular, the proportion of funding a city contributes and how it relates to the power of a city’s vote. He explained that over time Shorewood has come to contributing close to one-half of the funding for the SLMPD but its vote is worth the least when compared to its share of the funding. There is the possibility that the two cities that contribute the smallest amount of funding could lock things up. He then stated it is very likely that Shorewood would not get one other member city to vote in support of bringing up the idea of a funding formula change. If that ends up being the case then the only option would be to file for dissolution of the JPA noting that would cause all kinds of community issues. That would be a year and a half long process. But, it would encourage discussion. City Council/Staff Retreat Minutes February 8, 2016 Page 23 of 27 Mayor Zerby noted that the Mayor of Excelsior has already told him that Excelsior was not going to pay one dollar more. Administrator Joynes stated Shorewood may want there to be discussion about whether or not the proportionality in terms of governance is equitable. He noted that he was involved in the mediation about the SLMPD JPA funding formula during 2005 and 2006. Former Shorewood Mayor Wood Love brought that proportionality issue up at that time. At that time the JPA did not include a dissolution process. That was mediated into the JPA. Mayor Zerby noted that in 2011 the Greenwood Council discussed possibly contracting with the Hennepin County Sherriff’s Office for policing services. Administrator Joynes noted that during the mediation Excelsior looked into contracting with Hennepin County for policing services. He stated a number of communities studied what the most efficient ways to provide policing services were. The then Shorewood City Administrator Dawson conducted a study also. The results of the studies indicated that the joint powers approach was the most efficient way. Contracting with Hennepin County would cost more money and provide less service. Excelsior had also approached the City of Deephaven about that and Deephaven declined to talk about that because Excelsior is a high demand area. Joynes noted that he has not been able to get the member City Administrators/Manager to talk about the funding formula. Councilmember Woodruff commented that the other member cities have no motivation to discuss a change to the funding formula; they know it could potentially increase what they contribute. He stated all four member cities are obligated to pay off the bonded debt for the public safety facility in Shorewood. Councilmember Sundberg suggested waiting until the Southshore Center issue is resolved. She noted that she 100 percent supports trying to resolve the funding formula inequity. She is tired of all of the inequities between Shorewood and the other South Lake cities that the other cities do not want to help resolve. Councilmember Siakel stated all four cities would be responsible for paying off the bonded debt no matter what. But, if a city left the remaining cities would have to pay all operational and capital costs. She then stated the Excelsior Fire District (EFD) JPA funding formula is strictly based on tax capacity. Once the Minnetonka Country Club (MCC) is fully built out Shorewood’s share of the funding will increase quite a bit. Administrator Joynes mentioned how things could play out where Shorewood would have more control. Councilmember Woodruff stated he concurred that the big inequity with the SLMPD JPA is Shorewood pays about 50 percent of the funding for the SLMPD yet it only gets 25 percent of the vote. A member city that is paying a small percentage of the funding can drive the organization. Mayor Zerby stated the 2017-2021 reallocation formula for the SLMPD Operating Fund prepared by Greenwood Mayor Kind indicates Excelsior would pay almost 27 percent, Greenwood would pay approximately 7.7 percent, Shorewood would pay approximately 49.5 percent and Tonka Bay would pay approximately 15.9 percent of the funding for those five years. He asked staff to verify the calculations. Zerby then stated his intent is to have as much conversation as he can with the Coordinating Committee and when he hits a dead end he will come back to Council and ask for advice. Councilmember Siakel suggested he tell the Committee that the Shorewood Council discussed the funding formula during a City Council/Staff Retreat Minutes February 8, 2016 Page 24 of 27 Council and staff retreat and Council stated it wanted the Committee to have a meaningful discussion about the formula. In response to a comment from Director Nielsen, Mayor Zerby stated Excelsior representatives constantly say Shorewood residents are part of the reason for the high crime statistics but based on data very few Shorewood residents are getting tickets in Excelsior. More people are coming to Excelsior from outside of the surrounding communities. He has countered the comments from Excelsior by saying residents from communities around Excelsior are being invited to come and enjoy Excelsior establishments. He commented that if a wall was built around Excelsior it would economically collapse; it cannot support the number of eating and drinking establishments it has with a population of 2,600. Councilmember Woodruff stated he thought it would be appropriate for Mayor Zerby to have that discussion with the Coordinating Committee. He then stated he thought the results from the 2005/2006 mediation about the funding formula for the SLMPD were unsatisfactory. Councilmember Siakel stated there have been discussions for a long time about the four member cities merging. She does not think there would ever be enough cooperation to make that a reality. Councilmember Sundberg stated when she ran for Council she did not think that; she thought it was logical to merge. She knows better now. Mayor Zerby stated the Mayor of Excelsior recognizes that it will become an issue for Excelsior in the future. It will not have the money to pay for necessary services. It would be to Excelsior’s benefit to merge with Shorewood. In order to do that, people have to overcome their egos and pride. He noted that Shorewood will be 60 years old this coming August and for 100 years before that it was part of the Excelsior township. C. Conflict of Interest – Role of Liaisons Councilmember Siakel stated that she has been told that a person does not have to abstain from voting on approving meeting minutes if they were not present as a meeting. Mayor Zerby stated that is correct. Siakel then stated if a vote is to be taken that would benefit the neighborhood a member of Council lives in or directly benefit a member of Council, particularly when the City is paying for it, she thought the member of Council should acknowledge it. She stated she had not been aware that a beaver lodge was located near Councilmember Woodruff’s property when Council authorized hiring a person to harvest beavers. Mayor Zerby questioned how that would be defined and noted that he lives somewhat close to the Minnetonka Country Club property and to Badger Park. Councilmember Woodruff stated he comes from the perspective of if it could affect a Council member’s personal property then they should probably abstain from a vote and maybe even the discussion. He then stated when a vote was to be taken about the City helping fund the chemical treatment for aquatic invasive species (AIS) in Phelps Bay he abstained from that vote. His property fronts that Bay. He was chastised by his neighbors for doing so. If there were to be a vote on roadway improvements out on Enchanted Island he would not abstain from the vote on because his property is only one of 90 properties along that roadway. Councilmember Sundberg stated she thought it would be good policy to note that a member of Council lives nearby and then they can vote on the item. City Council/Staff Retreat Minutes February 8, 2016 Page 25 of 27 Councilmember Labadie cited the example of Mayor Zerby abstaining from a vote about power boats for the Shorewood yacht Club because he docked his boat there in 2015. Councilmember Sundberg suggested adding an item to the document titled Expectations and Roles of City Council Liaisons to Advisory Commissions and Commission Liaisons to City Council about noting if a vote is on something that would impact an area near where they live. That does not mean the person cannot vote on the item. D. Water / Sewer Charges from Other Cities Director DeJong stated when municipal water is extended from other municipalities into Shorewood the City’s residents pay an upcharge over what the municipalities’ residents are charged. That applies to agreements currently in place as well. The municipalities include the Cities of Chanhassen, Excelsior and Tonka Bay. Director Brown explained there may be areas that are easily served by another municipality’s water system when Shorewood does not have water facilities in that area. It is not uncommon for a municipality to charge a “wholesale rate” to nonresidents. There are areas that are served by another municipality’s / agency’s sanitary sewer system because that is the path that is most convenient for waste water to flow. Director DeJong stated he just wanted to ensure Shorewood residents are being treated fairly by other cities. Councilmember Siakel stated if Shorewood is supplying water to other cities she asked if the residents in those cities are paying an upcharge. Director Brown explained Shorewood supplies water to about 40 houses in the City of Deephaven and those agreements have been in place for more than 20 years. They are not charged an upcharge. Administrator Joynes stated that Oppidan Investment Company is proposing to build senior housing near the intersection of Chaska Road and Highway 7 and it approached Excelsior about extending water from its municipal system to that area. At first Excelsior agreed to that and then changed its position. The public rational was Excelsior was too busy at this time. Mayor Zerby stated he thought that water is an essential service. He asked if that would give the City any leverage and require Excelsior to provide it. Joynes noted that Oppidan will extend service from Shorewood instead and that is to Shorewood’s advantage. He also noted there is a problem trying to get Excelsior to allow the extension of its watermain to MCES’ new underground lift station near Highway 7 and Christmas Lake in Shorewood. Director Nielsen noted that for Summit Woods in Shorewood, Chanhassen would not extend is municipal water system to that area because Shorewood would not loop the watermain down to Chanhassen’s system. He stated that historically if a municipality had the capacity to provide the service it would. Director Brown explained that for the MCES lift station as part of Shorewood granting the conditional use permit for that Shorewood was going to require MCES to extend the Excelsior watermain west of the property up to the intersection of Christmas Lake Road and Third Avenue. Engineer Hornby noted that lift station would only have a bathroom and cleanup station; it would not be a big consumer of water. Councilmember Siakel stated her strong preference is not to have Shorewood suit the other South Lake cities over some of the issues on the table. But, at some point they need to decide to be good neighbors. City Council/Staff Retreat Minutes February 8, 2016 Page 26 of 27 Other Administrator Joynes PowerPoint presentation contained a list of outstanding items for discussion in future work session. Accepting credit card payment for permits and licenses. Director DeJong stated the City accepts  credit card payments for utility bills. Administrator Joynes suggested having a work session to discuss if the City should accept credit card payments for permits and licenses and if so should it charge a fee for what the City has to pay to credit card companies. DeJong the City pays about 2.65 percent. A boulevard spraying policy.  The Boulder Bridge Pond issue.  MCES Lift Stations L-18 Update – that was discussed as part of Item 10.D above.  MCES Interceptor 7017-2 (Galpin Lake Road and Truck Highway 7) improvements – Engineer  Hornby noted that project has been postponed for at least one year. Roadway pavement rating system – Engineer Hornby stated there are other ways to rate the  roadways than the current method the City uses. Currently the City uses more of a visual method. It is cost effective. Councilmember Woodruff stated Council and staff have discussed a couple of times the posting of less than 30 miles per hour (mph) speed limits on roadways in Shorewood. He thought staff had been asked to identify which have the necessary documentation authorizing those postings. He suggested staff come back with a list of those postings and Council can adopt a resolution approving all of those postings. Director Brown explained for Howard’s Point Road the legal speed limit is 30 mph. More than 20 years ago the then Council chose to post the speed at 20 mph but did not know it was not an enforceable limit. It would be difficult for Council to adopt a resolution authorizing the 20 mph posting because there is no engineering constraints that would support that. Councilmember Woodruff suggested there be another discussion about this item. Mayor Zerby explained that he and Director Brown had a discussion about no parking signs and in particular about construction project areas. Brown had told him that two things have to be in place for them to be enforced. One is Council has to adopt a resolution saying the roadway would be posted no parking. The second is it has to be signed as such. That is a problem residents have about the Davis property during construction there. Councilmember Siakel stated she thought the contractor has done a good job managing the volume of construction vehicles there. Zerby stated his concern is primarily about the corner where children wait for the school bus. There is supposed to be no parking back to a certain sight line. Engineer Hornby noted an Xcel Energy utility will be extended from Grant Lorenz Road to Edgewood Road in the City right-of-way (ROW). That would be done in the spring. The proposal is to directional drill the entire line on the east side. That may require acquiring additional easements from property owners. That ROW is becoming crowded. City Council /Staff Retreat Minutes February 8, 2016 Page 27 of 27 11. Adjourn Councilmember Labadie moved, Councilmember Woodruff seconded, Adjourning the February 8, 2016, Council and Staff Retreat. Motion passed 510. RESPECTFULLY SUBMITTED, Christine Freeman ATTEST: VaIA P Jean Panchyshyn, Cfty Cle •k SF, 9 ayo �..- --