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08-27-18 CC WS MinutesCITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL WORK SESSION COUNCIL CHAMBERS MONDAY, AUGUST 27, 2018 5:30 P.M. MINUTES 1. CONVENE CITY COUNCIL WORK SESSION MEETING Mayor Zerby called the meeting to order at 5:30 P.M. A. Roll Call Present. Mayor Zerby; Councilmembers Siakel, and Sundberg; City Administrator Lerud; Finance Director Rigdon; Planning Director Darling; Director of Public Works Brown; and, City Engineer Fauske Absent: None. B. Review Agenda Siakel moved, Sundberg seconded, approving the agenda as presented. Motion passed 310. 2. CIP — CONTINUE DISCUSSION City Engineer Fauske noted that staff had taken the discussion items from the last few sessions and regrouped the updated pavement conditions and the PASER ratings to come up with some high -level cost estimates for the Council to consider. Councilmember Labadie arrived at 5:33. City Engineer Fauske stated that staff worked to make what they are recommending for 2019 more clear to the Council for projects using existing budget funds or with general obligation bonds. Councilmember Siakel noted that she felt the report was well prepared. She asked about MSA streets and MSA street funds and asked if the City had maximized those projects. She asked how the MSA funding worked. Director Brown stated that for MSA funding, the City receives two apportionments. The construction and maintenance allotment deposits actual money into the bank of about $180,000.00 per year. The second apportionment is held in an account at the State level and the City applies for reimbursement once the City has spent State aid dollars and that is around $220,000.00 per year. Councilmember Johnson arrived at 5:37. City Engineer Fauske stated that for State aid projects she recommends keeping the funding in one project rather than spreading it out over several projects, because of the amount of bookkeeping involved in State aid projects. City Administrator Lerud stated that he believes there is a negative balance currently because the Smithtown Trail was done with a commitment for future MSA dollars and he believes that at the end of 2017 there was a negative balance of in excess of $700,000. Finance Director Rigdon stated that it was a negative balance of $750,000. Mayor Zerby stated that Enchanted Point is on the list as part of the recommended projects for 2019. He noted that the Council had discussed in the past raising the question of who should fund the road for paving an unpaved road. He stated that they had discussed the option of the general tax payers or just the residents of the road. He stated that paving the road will bring value to their homes and perhaps the residents should bear some of the costs. He understands that it is a short road and it makes sense to do it at the same time as the others in the area. Public Works Director Brown stated that the City has three gravel streets; Wiltsey Lane, Enchanted Point and Maple Avenue. He noted that the City has considered vacating Maple Avenue and shifting the one driveway that takes access off it over to Church Road. He stated the cost would be quite steep for residents on some of these gravel roads where there are no houses on the other side of the road. Councilmember Siakel asked if the gravel roads needed to be paved or if they could remain gravel. Public Works Director Brown stated there are three options: gravel, autoseal, or paving. He noted that the City had done the autoseal process in the past and it worked well, and the residents seemed pleased with it also. He stated that this option is significantly cheaper than paving. Councilmember Johnson asked how long the autoseal would last. Public Works Director Brown stated that there is about an eight -year life span before it starts to look ragged. Councilmember Siakel asked if any residents had requested the paving. Public Works Director Brown stated that some residents had requested it. Mayor Zerby would be interested to know the different in the pricing between the autoseal method and the paving and perhaps have a neighborhood discussion and see if the neighborhoods are interested in absorbing some of the costs for the upgrade. Councilmember Labadie stated that she would be interested in taking the costs out, for example twenty years, because having to redo a road in eight years should be factored into the overall cost. She stated that she would like the cost comparison to be apples to apples and asked about the life the pavement. Mayor Zerby stated that it seems like Eureka Road will need to be done sooner than 2024. He suggested flipping that road with the planned 2020 Road, Excelsior Boulevard. Public Works Director Brown stated that when staff looks at the roadways they also wrestle with how to rework the watermain links. He stated that he agreed that Eureka Road and Grant Lorenz are in very difficult shape. He stated that staff had chosen to work the watermain from the other end of the City. He suggested moving Edgewood Road to 2024 and keeping Excelsior Boulevard in 2020 plans. Councilmember Siakel stated that all of these roads are important and it appears as though the life cycles of the roads have all converged at one time. She stated that to bring up something Mayor Zerby has brought up in the past that the City should ask the residents about water hook ups. She stated that if two - thirds of the neighbors do not want water, perhaps the City should not have the added expense of installing the infrastructure. She asked about the possibility of bonding for more than $2.5 million to get more of these big projects done since interest rates are currently low. City Administrator Lerud stated that there will be a bond this year and then probably another subsequent two or three bond issues for upcoming years for future projects. He explained that the goal with these recommendations is to get these individual areas done and give time to look at the logical place to move forward and structure the debt. He stated that as far as the idea of doing a larger project in 2019, he understands Councilmember Siakel's point, however, it is getting kind of late to do a much bigger project. CounciImember Siakel asked if the City could bond for a larger amount of money now, but not complete all the work in 2019. City Administrator Lerud noted that he believes the projects could be put off to 2020 and still use the original bonding funds. He distributed a flow chart for looking at water hook ups. Councilmember Labadie asked if the City was looking at a percentage of households in a neighborhood that are interested in water hook ups. City Administrator Lerud suggested setting the percentage at something that is greater than the majority, perhaps sixty or sixty -five percentage and if that is the CounciI's policy, then those residents get water. Public Works Director Brown stated that the ordinance currently states sixty -six percent. Councilmember Labadie stated that she thinks back to when the Council was originally discussing the country club project and the phrase was used that these were "generational decisions ". She stated that she thinks this is how the Council needs to look at water, as a generational decision. Mayor Zerby stated that the watermain availability was put in on Smithtown in 1994 or 1995 and people are still not hooking up. He stated that if he approached this as a business owner it would take a long time to see a return on his investment. He stated that perhaps there can be a "pre- sale" of connections included in the survey. Councilmember Siakel suggested some sort of incentive and noted that the City had charged $10,000 in the past and suggested offering an incentive of $7,500 if you sign up ahead of time, $10,000 at the time, and if you decided to hook up afterwards it would be the market rate, which she thinks is around $15,000. Councilmember Labadie stated that four years ago when she put her hat in and decided to run for Council, the number one question she was asked by residents was about her position on water hook ups. She stated that she believes the decision needs to be backed up by the ordinances because of what happened with just the thought of collective waste hauling. She stated that people are very passionate about choice and government involvement. Councilmember Siakel stated that she thinks the Council is considering more choice than they currently have if the City offers an incentive program. She asked staff what would happen if the City had bonded for money and then came through the neighborhood and the residents did not want to have water hook ups. She gave an example of Glen Road, which would have $450,000 for that purchase and asked what would happen with that bonded money if the residents did not want water. City Administrator Lerud explained that the bond money would be just for street work only. Councilmember Johnson noted that all three Enchanted streets are given a PASER rating of seven. City Engineer Fauske noted that these roads were seal coated two years ago which automatically brings the rating up to a seven and explained the roads will start deteriorating based on the number it started at before the sealcoat. Councilmember Johnson stated that he understands that, but that type of information it is not visible to the constituents. Councilmember Labadie reiterated her desire to know the price difference between doing another sealcoat and paving. City Administrator Lerud noted that is something the staff can take a look at after the road cores come in to see if a sealcoat would be a better idea and then consider bonding for a slighter larger amount and including Edgewood Road or Noble Road. He stated that staff can look at gathering more information and bring it back to the Council for a decision, but noted that it will need to be decided on relatively quickly in order to be done in 2019. Councilmember Siakel asked when the City Hall bonds would be coming off the books. Finance Director Rigdon stated that the City Hall bonds will come off in 2028. City Engineer Fauske stated that if there was a way to authorize some of the work such as preparation of feasibility study and the pavement corings rather quickly, that would help with the timing. She noted that the islands could be added to the feasibility study after the pavement coring results are received. Mayor Zerby noted that it looks like the time for the 2019 projects is running out and stated that he could support staff recommendations for the 2019 street projects. Councilmember Siakel stated that she was in favor bonding and biting off something big so the City can get some of these projects done. Public Works Director Brown stated that staff will get information back to the Council as soon as they can. 3. WATER CONNECTIONS City Administrator Lerud stated that there are about 290 parcels that have water available but are not connected to the system. He explained that staff has looked at all the assessment projects done since 1985 and found about 68 parcels that have been assessed but not connected. Staff would like to do a few things: let residents know that it is available; offer testing through a contracted company; offer the option of paying the assessment at $1,000 a year with no interest until paid in full. He suggested keeping this option open until the end of 2019, and after January 1, 2020, if residents choose to connect, it will be at a higher rate. He stated that staff has heard from residents who would like to have City water. He stated that residents may not know that they can keep their well for irrigation purposes. Councilmember Sundberg asked if there would be some sort of educational component along with the options. City Administrator Lerud stated that there would be but he was not sure how it will look yet. Councilmember Sundberg asked if there have been many contaminants found in well water. City Administrator Lerud noted that arsenic has been found in some private wells in the city. Councilmember Labadie noted that there was a good job done a few years ago educating the public on radon and getting the detection devices installed in homes. Public Works Director Brown noted that there is flyer that was created about hooking up to City water. He noted that it is still used but needs to be updated. Councilmember Labadie asked how many people hooked up to water on Star Lane and Star Circle. City Engineer Fauske stated that about 40 percent of people in that project area have not hooked up to City water. City Administrator Lerud noted that paying $10,000 to hook up to City water is actually cheaper than a new well, which is around $15,000- $17,000. Councilmember Sundberg suggested that kind of information be highlighted for people because many of the wells in the City should be getting pretty old. City Administrator Lerud will bring back a draft of the educational plan and the mailings for residents to a future meeting. Councilmember Labadie suggested holding an Open House question and answer session with an engineer present. She stated that she would like to see this provided to all residents, not just certain streets. Mayor Zerby suggested having something like that in conjunction with another City event rather than having something scheduled separately. 4. 2019 OPERATING BUDGET Finance Director Rigdon reviewed the expenditures and noted that the budget is preliminarily set at $6,319,948. He noted that there is one additional part-time employee included in the budget that will be half in Planning and half in Administration. He noted that the employee cost of living adjustment is included at three percent for 2019. Councilmember Johnson asked about the personnel related assumptions whether the time period of the overlap where the new building inspector and the current building inspector would both be employed at the same time had been accounted for. Finance Director Rigdon stated that his assumption is that overlap would be done by December. City Administrator Lerud stated that he believes the Building Inspector Pazandak will be done by the end of 2018. Finance Director Rigdon noted that the health insurance premiums are estimated to increase at ten percent and the employer contribution toward the premiums will increase $50 to $1,130 per month. He noted that a time study was done for the Public Works Department and the budgeting was adjusted to reflect the reality of their work hours. He noted that revenues are currently budgeted for $6,273,532. Councilmember Sundberg asked about the budget breakdown by department and whether this was typical for other cities he has worked with. Finance Director Rigdon noted that for most cities he has worked with it would typically break down to: 1. Public Safety, 2. Streets, and 3. General Government. He stated that they are currently proposing a use of reserves to balance the budget in an amount of $46,416, which is significantly less than last year when there was $174,097 budget for this purpose. He stated that the City could look at ways to eliminate this altogether and noted that he would personally like to see that so there is a structurally balanced budget. He reviewed the transfer for the Southshore Community Center and the Enterprise Funds. He stated that the preliminary property tax levy is at $5,530,322 and noted that the tax capacity rate has gone up while the tax rate has declined slightly, which means the property values have been increasing a little bit faster than what the City has been levying. He reviewed the tables that showed the impact for the property owners. Councilmember Siakel asked what were contractual services under Other Services and Charges. Finance Director Rigdon explained that it is for the police department service. Councilmember Siakel noted that she liked how he broke out under Other Financing Uses the Park improvement. She asked if the budgeted $42,000 was sufficient for what the Parks Commission needs to do. Finance Director Rigdon stated that this amount will be fine for a few years, but going out farther, that amount will not be enough. Councilmember Siakel asked if the Council could use some of the reserve funds to allocate money to park projects. Finance Director Rigdon stated that the Council could decide to use excess fund balance for that purpose. Mayor Zerby suggested looking at what the has actually been spent in the parks over the last few years and come up with an average and see about giving them money. Finance Director Rigdon stated that if the Council would look at the CIP for the Park Commission, $42,000 is not nearly enough on an annual basis to go toward the park improvements that have been identified. City Administrator Lerud stated that staff will present a preliminary budget for the September 10, 2018 meeting. 5. ADJOURN Siakel moved, Johnson seconded, Adjourning the City Council Work Session Meeting of August 27, 2018, at 6:45 P.M. Motion passed 510. ATTEST: Sandie Thone, City Clerk ebbie Siakel, ayor Pro Tem