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11-13-23 WS MinutesCITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL WORK SESSION MEETING COUNCIL CHAMBERS MONDAY, NOVEMBER 13, 2023 5:15 P.M. MINUTES 1. CONVENE CITY COUNCIL WORK SESSION MEETING Mayor Labadie called the meeting to order at 5:15 P.M. A. Roll Call Present. Mayor Labadie; Councilmembers Labadie, Callies, Maddy, Sanschagrin, and Zerby; City Attorney Shepherd; City Administrator Nevinski; Parks and Recreation Director Crossfield; City Clerk/HR Director Thone; Finance Director Rigdon; Planning Director Darling; Director of Public Works Morreim; and, City Engineer Budde Absent: None B. Review Agenda Zerby moved, Maddy seconded, approving the agenda as presented. Motion passed 5/0. 2. ENTERPRISE FUNDS DISCUSSION Finance Director Rigdon gave a general overview of the projected future balances in the City's utility funds, including: water, sewer, and storm sewer, and explained that these funds were designed to pay for themselves via user charges. Councilmember Sanschagrin asked if there were any ideas or observations about why Chanhassen's rates were so low. Finance Director Rigdon stated that he does not know and was something that staff could check into. Councilmember Sanschagrin stated that the way he calculated this information it appears as though it was roughly about $600 per household. Councilmember Callies stated that there are 1,500 accounts that use City water and also 1,500 not using City water. She asked how that compared to overall households and if those numbers basically meant that there were 3,000 households in the City. City Engineer Budde stated that was about right. Councilmember Callies asked about the difference between the operating revenues and the operating cash. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 2 of 7 Finance Director Rigdon explained that there is operating income and under that there is a statement of position which rolls in everything including large capital items and long term debt. He noted that, in his opinion, the cash number is what the Council should be reviewing in full. Councilmember Sanschagrin asked how much the analysis had taken into account the new connections on Strawberry Lane. Finance Director Rigdon explained that there were ten connections budgeted, per year, in this scenario, throughout its duration. He noted that in the five years he has been with the City they have averaged between ten to fifteen connections per year. Councilmember Callies stated that she thought the report had indicated that the City had over estimated the number of connections. Finance Diregor Rigdon confirmed that they had initially over -estimated the connections when they first provided this information, at thirty to forty connections per year. City Engineer Budde noted that this was largely from when the Minnetonka Country Club was coming on line when they were getting around thirty, but now that it is mostly built out they are back to the lower number. Councilmember Sanschagrin stated that part of the challenge with the water fund is that there are lots of costs and infrastructure but do not have as many people hooking up, which means it becomes an economic issue and the City will have to find a way to compensate through something like user fees. Councilmember Callies noted that she feels there are some inconsistencies within the City code in terms of the costs of water and how it is being paid for. She stated that there is not a lot of incentive for people to hook up, and suggested that this may be a good topic for a larger discussion at the Council Retreat. Councilmember Zerby stated that this topic has come up in past conversations and noted that they talked about things like having a half -priced sale to encourage people to hook up, but that raised concerns about whether it would be fair to the others who paid full price. Mayor Labadie noted that they had touched briefly on this issue at last year's Retreat and anticipates that it will be a topic for the upcoming Retreat as well. Councilmember Callies referenced various sections of the Code related to hook ups such as 903.04, Subd. 3D. She noted that she believes the City needs to have a consistent policy so some people are not paying the cost of construction and others are only paying for the hook up fee. Mayor Labadie asked if Planning Director Darling had noticed inconsistencies in the City's ordinances. Planning Director Darling explained that she did not work very often with the water code, but agrees that the issue was pretty apparent when you look at a situation where someone is interested in extending the watermain, even if it is just a short distance. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 3 of 7 City Engineer Budde stated that he deals with this the most and confirmed that Councilmember Callies was correct that when it is neighborhood or resident driven, for example, come to the City with a petition, the Code says that they will basically pay for the project, which will most likely be $50,000 per property. He noted that if the project has been in the City's CIP, such as Strawberry Lane, then the City has not assessed or pushed the total cost onto the adjacent property owners and have just charged the hook up. Councilmember Callies stated that if the City wants to have a policy about this, she thinks it should be clarified for consistency. She stated that it would not necessarily need to be in the Code but could just be in a City policy of some kind. Councilmember Sanschagrin explained that he had done some quick calculations on possible rate increases that would get the City to be able to break even and cover cash flows that came out to about thirty percent for the next three years. Councilmember Callies stated that she has some articles that she will bring for the Retreat and noted that there is a significant cost in not spending money for infrastructure in terms of quality of life and sustainability of the City. She stated that always looking to cut costs is not necessarily in the best interests of the residents. She noted that she thinks they need to look at the actual dollar amounts and not percentages, because they give a more realistic idea of what these increases will mean for people. Mayor Labadie noted that there was a lot of information to digest but felt that Finance Director Rigdon did a good job laying it out for the Council. She stated that she liked that there was also information comparing the City with other nearby cities. Councilmember Zerby asked that future information show if the other cities had a treatment plan or not so they are making sure to compare apples to apples. Councilmember Sanschagrin stated that for the sewer fund it appears as though the vast majority of the costs are the Met Council fees. Finance Director Rigdon stated that was correct. Councilmember Sanschagrin asked if the Met Council's growth, over time, matched up with the nine percent that the City is using. Finance Director Rigdon explained that the City has been a bit behind in that because their fees have been going up fairly high. Councilmember Sanschagrin asked how they calculated their charges. Finance Director Rigdon stated that was determined by the flowage. Councilmember Maddy asked City Engineer Budde about the water access charges. He noted that sidewalks and sewers seem to be a lot cheaper when the City is doing a road reconstruction project. He stated that they ran the numbers to connect their two water supply systems and it was around $50,000 per household and asked what the added cost as for Birch Bluff or Strawberry Lane per household. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 4 of 7 City Engineer Budde stated that he did not have that information tonight, but can provide it for a future discussion. Public Works Director Morreim stated that he can say that it was more than $10,000. Councilmember Maddy stated that he feels the City is not charging enough for access. Councilmember Callies stated that years ago, when she was on the Council, there was a similar discussion about the charges. She explained that she had found some minutes from that time that discuss the water access charge which was $10,000 at that time and the City Attorney made a comment that the charge had been the same for many years and was woefully inadequate even back then. She stated that she feels that fee needs to be re-evaluated, but also has to be some amount that provides for an incentive for people to hook up as well, or perhaps they should think about not doing it. Councilmember Maddy stated that if it is spread out far enough where it does not make economic sense to provide City water, that is something that can be accepted, however, there may be a water quality issue on top of this. He stated that he does not know how many PFAS chemicals are in the higher aquifer that individual residents are pulling versus the deeper aquifers that the City pulls from. Mayor Labadie stated that she did not think the City had that information because private wells are not tested unless it is through a private testing company. She noted that she assumes that the deeper you go, the better the water will be. Public Works Director Morreim stated that there are variables on one City street and gave the example of one side of the street having bad water and having a desire to connect to City water and the other side of the street having no issues and are not interested. Councilmember Callies asked how they move forward. City Administrator Nevinski stated that this information is really a snapshot of where the City is currently located and noted that it was intended as a bit of a preparatory discussion for the Retreat. He stated that there are a lot of questions that need to be considered and thinks that staff will bring some different scenarios to the Retreat that they can model for the Council. He noted that if there are specific things the Council would like to see modeled that would be helpful information for staff to have ahead of time. He stated that not all of the City being served by water is also a possibility. He suggested that perhaps the Council can put together some sort of strategy that promotes water connection where it is most efficient and is needed the most. He stated that this should be part of the conversation and then the City can focus its energy and resources on things like connecting the east and west systems. He noted that this issue will not be resolved tonight or mostly likely at the Retreat, but gives them moving in a direction and begin to develop a strategy. Councilmember Zerby stated that he feels one of the components is also looking at the economics of the service. He stated that he is not an engineer, but questions whether the City needed six wells and asked if there may be some efficiencies that they can put into place. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 5 of 7 Public Work Director Morreim suggested that they add this topic as a discussion point for the Retreat. He stated that having two separate systems is probably not the most efficient way to run water system and agreed that there may be some efficiencies that can be gained in certain areas. Councilmember Sanschagrin stated that he feels it would also be helpful for the Council to have more data on water quality, even on the private wells, if people were willing to share any of the testing data they have. Public Works Director Morreim stated that they had been in discussions with some residents about testing data for their households, for example Christmas Lake Point. Councilmember Callies stated that she feels it is very unrealistic that the Christmas Lake Point area will be getting City water any time soon, at an economical price. City Engineer Budde stated that he expects the pricing will be somewhere in the $50,000+ range. Councilmember Callies stated that she did not think there were many places left in the City where it would be efficient to hook up to City water. Councilmember Zerbv shared the mixed feelings of residents on his street to City water and noted that he expects this dichotomy is true throughout the City. Mayor Labadie asked if the Council had any more points that they would like staff to talk about at the Retreat relating to water, sewer, and storm water. Councilmember Sanschagrin stated that he would like to understand more about how the Met Council prices their services. He stated that he would also like to see an analysis of average cost per user and how it compares to the other cities. He suggested that the comparison also include other communities such as Orono or Victoria. Councilmember Maddy noted that if there is a city doing this more efficiently than Shorewood, he would like to be able to understand what they are doing. City Administrator Nevinski noted that staff will take a look at this idea and noted that it may not even need to be a neighboring city, but just a city that is like Shorewood. Public Works Director Morreim noted that he would be giving a report to the Council in December on the new technology for the roads and how it relates to the CIP. Councilmember Callies asked if a neighborhood would move up on the list if there was strong interest from them in having improvements put in. Public Works Director Morreim stated that hopefully if the conditions are bad enough, they are looking at programming that in the near future. Councilmember Zerby stated that he is very skeptical of these numbers seeing the cost that the City has bore over the last few years and noted that it almost feels like they should double them. He noted that from what he has seen in his service to the City is that the squeaky wheel is what gets attention. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 6 of 7 Mayor Labadie stated that she thinks everyone on the Council has heard this type of squeaky wheel noise from residents and suggested that they alert staff with what they have heard. The Council listed off Radisson Road, Minnetonka Boulevard, Brackets Road, Boulder Bridge, Country Club and Yellowstone Pass through, as `squeaky wheel' roads. Councilmember Sanschagrin stated that when they talk about this again he would like to understand what this will do to the City's budget and debt levels. 3. WINTER MAINTENANCE PRACTICES/PLANS Public Works Director Morreim gave an overview of plans for winter operations and plans for improvements in 2023 and 2024. He noted that the goal was to find a way to be more efficient, more effective, and practice environmentally responsible operations. He reviewed snow and ice management priorities, training, Mayor Labadie noted that there are many changes from the City's old policies and encouraged the Council to clearly understand them and be able to explain them to residents and if not, to point them in Public Works Director Morreim's direction. She stated that she thinks everything presented were good steps that will move the City in a positive direction. Councilmember Zerby stated that he was thrilled with these plans and believes they will be great for the City and the environment. He encouraged staff to put an article in the Shore Report to explain that changes will be coming. Councilmember Maddy noted that he had gone through the Smart Salting training and thanked Public Works Director Morreim for making this a priority. He noted that he believes the City can use less salt and have better outcomes if it is done correctly. Councilmember Sanschagrin asked if there was an opportunity to recycle the sand. Public Works Director Morreim explained that the cost to recycle the sand because of the necessary treatment, makes it pretty cumbersome and cost prohibitive. He noted that he believes the only agency that ever really did anything like that was MnDot but noted that they own the necessary equipment. Councilmember Sanschagrin asked if the City could collect the sand and reuse it the following year. Public Works Director Morreim stated that could not be done and explained that typically it would need to be used in a base and covered because it would typically be classified as hazardous waste. Councilmember Sanschagrin asked if there was another cost effective way to service the island. Public Works Director Morreim stated that he has not had a relationship with their neighboring community, but that is on his radar. CITY OF SHOREWOOD WORK SESSION COUNCIL MEETING MINUTES NOVEMBER 13, 2023 Page 7 of 7 Councilmember Zerby noted that the City had asked in the past and the answer they received was that they did not have the resources to do it. Councilmember Sanschagrin asked about the possibility of contracting it out to a third party. Public Works Director Morreim stated that they can consider it, but would most likely have to go out there anyway. Mayor Labadie noted that the City of Maple Plain had contracted their snow removal last year which was essentially a disaster, so much so that the mayor ended up formally apologizing to the City and it was featured on the news because threats had been received. She stated that she would highly discourage independent contractors for the City streets. Public Works Director Morreim noted that the information he presented tonight was in its draft form and explained that he would be bringing a final version back to the Council sometime in December. Councilmember Sanschagrin asked how the City handled private roads, for example, if they were treated as driveways. Public Works Director Morreim stated that he believes the City plows them essentially like a driveway and the expectation would be that a contractor would then come in and open it up when they plow it. Councilmember Callies stated that the new Maple Shores development has a private street that that was not listed in this information. Public Works Director Morreim agreed that needed to be added and noted that this was something he is planning to bring to the Council on an annual basis and things like that will be added and updated because this is a living document. 4. ADJOURN Maddy moved, Sanschagrin seconded, Adjourning the City Council Work Session Meeting of November 13, 2023, at 6:37 P.M. Motion passed 5/0.