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08-08-2016 CC WS MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, AUGUSGT 8, 2016 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. Mayor Zerby called the meeting to order at 6:04 P.M. A. Roll Call Present. Mayor Zerby; Councilmembers Labadie, Siakel, Sundberg (arrived at 6:06 P.M.), and Woodruff; City Clerk Panchyshyn; Finance Director DeJong; Planning Director Nielsen; Director of Public Works Brown; and, Engineer Hornby Absent: Administrator Joynes. B. Review Agenda Woodruff moved, Labadie seconded, approving the agenda as presented. Motion passed 4/0. 2. 2016 -2025 CAPITAL IMPROVEMENT PROGRAM AND 2017 GENERAL FUND BUDGET Director DeJong explained that during its July 25, 2016, work session Council directed staff to refine up the Street Reconstruction Capital Improvement Program (CIP). Staff determined that all of the streets are included in the CIP and have some type of maintenance activity planned for them over the 10 -year period. The Equipment Replacement, Water, Sewer and Stormwater Management Funds are all stable over the course of the CIP timeframe. The Park Improvements Fund will enter into a deficit state if more than about $200,000 in improvements is made to parks after 2016. The Trail Fund will go into a deficit state in 2018. If improvements to the roadways on Enchanted Island and Shady Island are moved to 2017 the Street Reconstruction Fund will enter into a deficit state in 2017. Councilmember Sundberg arrived at 6:06 P.M. Director DeJong explained roadways are scheduled to be maintained and replaced based on the PASER (Pavement Surface Evaluation and Rating) System rating to a great extent. The roadways are rated on a scale of 10 to 1 with 10 being a perfect newly constructed roadway and 1 being a step above a gravel roadway. The current practice has been to recommend reconstruction or reclamation when the rating falls below 4. The Street Reconstruction CIP has the following roadways scheduled for reconstruction between 2017 and 2020: 2017 — Riviera Lane; 2018 — Mann Lane; 2020 — Seamans Drive. Their current ratings are: Riviera — 6; Mann — 6; and, Seamans — 7. Each of the three roadways was rated a 4 sometime in the not too distant past. Some level of maintenance had been done to them which resulted in their ratings being increased. The underlying conditions of those roadways will likely cause the ratings to fall back to 4 CITY OF SHOREWOOD WORK SESSION MEETING MINUTES August 8, 2016 Page 2 of 6 relatively quickly. There are some stormwater management issues that need to be addressed where those roadways are located. When those drainage improvements are made it would make sense to reconstruct the roadways at the same time. The reconstruction of Amlee Road, Manitou Lane and Glen Road are scheduled for 2021. There is a lot of stormwater management work that must be done in conjunction with the reconstruction of those three roadways. They had been pushed out in the schedule because they will be very expensive to do. The revised 2017 CIP reflects that the improvements for roadways on Enchanted Island and Shady Island have been advanced to 2017 provided the City of Minnetrista makes improvements to the section of Enchanted Lane located in Minnetrista in 2017. They had previously been scheduled for improvements in 2023/2024. The improvements would mainly be mill and overlay but one roadway would be reconstructed. All but one of those roadways are rated 4 or 3; one is rated 5. He stated if the reconstruction versus reclamation decision matrix does not produce the results people want to see from a policy perspective then revisions need to be made to the decision matrix. That would be better than determining what type of maintenance needs to be done one roadway at a time. The PASER rating combined with the decision matrix allows the City a way to consistently explain to residents when and why improvements will be made to roadways. He explained when he started with the City in 2010 the City had recommended the reconstruction of Star Lane and Star Circle. At that time the residents did not think those roadways were in poor enough shape and they did not want watermain extended. Based on that resident feedback the reconstruction was pushed out a few years. A few years later most of the residents favored reconstruction and the extension of watermain. He stated staff believes it is prudent for the City to have a policy for making decisions on improvements to roadways. DeJong noted that at some point in the not too distant future Council will need to determine how to fund roadway improvements for the long -term. To date the City has not assessed for roadway improvements but that may have to change. He stated during the July 25 work session there was a little discussion about transferring about $500,000 from the General Fund to the Street Reconstruction Fund to address some short-term issues. Mayor Zerby noted the most expensive roadway project scheduled for 2017 is for reconstruction of Strawberry Lane and West 62 °d Street. He asked how that that schedule fits with the City's roadway improvement policy. Director DeJong stated it does not and explained it was moved up because of the proposed Strawberry Lane trail per Council's direction. Per the decision matrix the roadway would not be up for construction in 2017. Councilmember Siakel stated it was her recollection that Strawberry Lane was originally scheduled for improvements in 2019. DeJong confirmed that and noted it would probably not have been a full reconstruction; it would probably have been a mill and overlay. Zerby clarified that Council has discussed a trail along Strawberry Lane but it has not taken any formal action on that. DeJong stated action was to some extent taken when the CIP was adopted last year. The CIP reflected the reconstruction of Strawberry Lane in 2017 along with drainage improvements and the construction of a trail alongside of the roadway. Director DeJong stated maybe a decision point should be added to the matrix of whether or not there is a trail associated with a roadway improvement. That could change how the matrix works. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES August 8, 2016 Page 3 of 6 Mayor Zerby asked if Shorewood Lane, which is scheduled for costly improvements in 2017, follows the policy. Is its rating below 4? Director Brown stated it is in bad shape. Councilmember Siakel stated the City has a 20 -Year Pavement Improvement Plan (PMP) and it uses the PASER system to rate the condition of the roadways to determine what type of improvements need to be made. Because of developments going on in the community there has been discussion about pushing some projects forward. She asked if any other roadway improvements other than Strawberry Lane were advanced in the CIP. Director Brown noted that the 2016 pavement rating of Shorewood Lane is 3. Mayor Zerby asked if all of the other roadways proposed for significant improvements in 2017 are rated a 3 or less. Director DeJong clarified that the decision matrix is only for reconstruction versus reclamation. It is not used for mill and overlay. If the PASER rating for a roadway is 4 or higher than it might be considered for a mill and overlay. Director Brown noted that mill and overlay is considered a maintenance item as is sealcoating. Director Brown explained there are other factors that come into play when considering what improvements should be made to a roadway and when they should be made. One factor is drainage. He reiterated the decision matrix is only for reconstruction versus reclamation Mayor Zerby asked if staff has any suggestions about how to modify the policy. Director Brown suggested adding more decision points to the decision matrix: one for associated trail construction; one for stormwater management issues; one for watermain extension; and, possibly one for traffic volume. He explained that a roadway could come up for reconstruction because of there being a need to make significant stormwater management improvements. Zerby noted the Street Reconstruction CIP reflects about $3 million in improvements in 2017. The 2016 CIP reflects about $490,000 and the 2018 reflects about $790,000 in improvements. That is a significant spike for 2017. He asked why. Director DeJong stated the spike is because of the reconstruction of Strawberry Lane being moved to 2017. Zerby clarified that cost is about $1 million. Councilmember Siakel asked if it would be prudent to use the funding for the Galpin Lake Road trail segment scheduled for 2018 for roadways instead. Director DeJong clarified roadway improvements do not have to be made as soon as a roadway's PASER rating goes under 4. But, it should be included in the system for a reconstruct or a reclaim once that happens. He stated Council needs to have a policy discussion about how to fund roadway reconstruction and reclamation. Mayor Zerby stated Google maps shows there are seven houses along Shorewood Lane. The CIP reflects a cost of $455,000 to improve that roadway. He noted Councilmember Woodruff has brought up the traffic volume on roadways before. He asked what has to be done to that roadway. Director Brown asked Mayor Zerby if he was saying that the traffic volume does not warrant reconstruction. Zerby stated maybe it could be reclaimed and commented that amount of money is for more than sealcoating. Director Brown explained when a roadway is reconstructed it is usually because the underlying soils are not stable. The soils tend to shift during the winter and spring and break up the pavement. Reconstruction involves digging out the soils about two to three feet deep and replacing them. Reclamation does not deal CITY OF SHOREWOOD WORK SESSION MEETING MINUTES August 8, 2016 Page 4 of 6 with the underlying soils. The pavement and rock is ground up and put back down on top of the existing soils and then a pavement top coat is put down over it. Reclamation when there are poor soils may not be the best use of the City's money because of the life of a reclaimed roadway. Brown noted that there is some staff subjectivity in rating roadways. Councilmember Siakel stated she assumes that Shorewood Lane has not been advanced in the PMP or CIP. Director Brown confirmed that. Director Brown stated Council and staff made a decision to try and keep the City's roadways at a rating of 4 or higher. Maybe that needs to be reduced but he does not think so. Councilmember Siakel stated she would like the City stick with the 20 -Year PMP and CIP as much as possible. She thought it important to balance the sense of urgency with roadway projects against being responsible with the budget. Director DeJong asked if Council is okay with the Street Reconstruction CIP as presented. He reiterated that the roadways on the Islands had been scheduled for improvements in 2023/2024 and the current CIP shows that being advanced to 2017 provided Minnetrista makes improvements to its portion of Enchanted Lane in 2017. The cost for the improvements is about $500,000. Councilmember Siakel stated that from her vantage point that is a lot of expense to push forward five years. Councilmember Sundberg asked if transferring $500,000 from the General Fund to the Street Reconstruction Fund would be sufficient to fund the Street Reconstruction CIP as presented. Director DeJong responded yes and explained that without transferring money into the fund would result in an approximate $500,000 deficit until 2020. Sundberg noted she would like to stick to the original plan. Councilmember Labadie asked how much money the City would save by making its repairs to Enchanted Lane at the same time Minnetrista does rather than doing the project when originally planned in 2023/2024. Mayor Zerby noted that doing a cooperative project on Enchanted Lane with Minnetrista does not necessitate all the roadways on the Islands being worked on. Engineer Hornby stated if it were to be a cooperative project he estimated the savings to be 5 — 10 percent. Director Brown asked if Minnetrista was going to do floodplain mitigation as part of its project. Hornby stated yes and noted the Minnehaha Creek Watershed District (MCWD) is working on that. Brown stated he thought the City would save about 10 percent because the City would want to dovetail with Minnetrista on the floodplain management portion. Director Brown explained that when a roadway is raised flood storage volume is lost. Therefore, FEMA (Federal Emergency Management Agency) and the MCWD require that the volume be made up somewhere. That basically means a hole has to be dug somewhere to store that volume of water for floods. The approval process for that is costly. Brown clarified there would be a 5 percent savings on construction hard costs and there would be savings on the design costs and permitting costs. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES August 8, 2016 Page 5 of 6 Councilmember Labadie expressed her preference to make a concerted effort to stay with the original timeline but there are times when decisions have to be made on a case by case basis. She stated Council needs to know what the realistic savings would be by doing a cooperative project. Councilmember Siakel asked when people will know if Minnetrista is going to move forward with its Enchanted Lane project in 2017. Engineer Hornby noted that the Minnetrista Council is going to have a public information meeting in before it moves to consider the feasibility study phase. Engineer Hornby noted if the City wants to move forward with floodplain mitigation he would have to calculate that. The MCWD is preparing plans now. Director Brown stated in addition to adding more decision points to the decision matrix (associated trail construction; stormwater management issues; watermain extension; and, possibly traffic volume) he also recommended adding a financial feasibility decision point. Director DeJong stated staff will hold off with budgeting for the transfer of funds from the General Fund to the Street Reconstruction Fund at this time. Councilmember Siakel asked if there is a way to extend watermain without having to tear up a roadway. She has had residents ask her about that. Director Brown explained a pipe can be bored down a roadway. The issue would be in bringing out services from each property; it would create a bump in the roadway at each property. People would have to put up with the bumps for a year and then the following year a mill and overlay could be done to the roadway. Director Brown explained that on the agenda for the meeting following this there are two items for a Mission Communication system. One is for the water system and one is for the sanitary sewer system. The one for the water system is included in the Water CIP for 2016. The Sanitary Sewer System CIP does not include it. Mayor Zerby explained that during its July 25, 2016, meeting Council discussed a petition from residents living in the Shorewood Ponds development requesting the parking lot in Freeman Park adjacent to the development be paved. He asked if the $50,000 in 2017 for the line item titled Freeman Parking lot w/MCWD in the Park Improvements CIP is for that. Director Nielsen stated there is no number for that yet. Director DeJong stated he thought that is a placeholder. Zerby noted the items in the CIP are all placeholders. Director DeJong reviewed the major elements in the draft 2017 General Fund Budget. ➢ The preliminary General Fund levy increase is 2 percent. That is the base level needed to maintain services. ➢ It includes a salary reserve of 2.5 percent for office staff and Public Works union personnel. The union contract has to be renegotiated for 2017. ➢ It includes $40,000 for contract forestry activities; the same as in 2016. ➢ The $50,000 included for a compensation study and transition planning in 2016 has been removed for 2017. That work will be completed in 2016. ➢ The $85,000 included in the first draft budget for consultant services to update the Shorewood Comprehensive (Comp) Plan has been removed. ➢ Those changes will put the 2017 anticipated deficit at $73,000. That compares to $180,148 in 2016. ➢ The permit revenue was increased by $30,000 when compared to the first draft. ➢ The plan check fees were increased by $10,000 when compared to the first draft. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES August 8, 2016 Page 6 of 6 He then reviewed minor changes in the draft 2017 Budget. ➢ Professional services — Prosecution was increased by $4,000. ➢ Municipal Building — Communications in was increased by $4,000 to increase the speed of the internet service. ➢ Inspections — Contractual Services was increased by $2,500 because of the Minnetonka Country Club development. ➢ Public Works — Motor Fuels was reduced by $3,000. Director DeJong stated past practice has been that revenues should be budgeted such that there is a 50 percent chance the actual amounts would be higher. For expenses there should be a 50 percent chance they would be less than budget. Public Safety Budgets Those will be discussed during the regular Council meeting following this work session. Recommended CIP and Levy for 2017 3. ADJOURN Siakel moved, Sundberg seconded, Adjourning the City Council Work Session of August 8, 2016, at 6:50 P.M. Motion passed 510. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder ATTEST: ScotUerby, ayot W -A Lo±:C- .�- - An Panchyshyn, CiVy Cl rk