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072808 CC Reg AgP
CITY OF SHOREWOOD CITY COUNCIL REGULAR MEETING MONDAY, JULY 28, 2008 AGENDA 1. CONVENE CITY COUNCIL MEETING A. Roll Call 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 P.M. Mayor Lizee Woodruff Turgeon Bailey Wellens 2. 3. 4. 5. 6. 7. B. Review Agenda APPROVAL OF MINUTES A. City Council Work Session Minutes, July 14, 2008 (Att. -Minutes) B. City Council Regular Meeting Minutes, July 14, 2008 (Att.- Minutes) CONSENT AGENDA -Motion to approve items on Consent Agenda & Adopt Resolutions Therein: NOTE: Give the public an opportunity to request an item be removed from the Consent Agenda. Comments can be taken or questions asked following removal from Consent Agenda. A. Approval of the Verified Claims List (Att.- Claims List) B. Staffing -Appointing the 2008 Primary and General Election Judges (Att. -Deputy Clerk's memorandum, Resolution) MATTERS FROM THE FLOOR (No Council action will be taken.) RECESS TO ECONOMIC DEVELOPMENT AUTHORITY MEETING RECONVENE REGULAR CITY COUNCIL MEETING REPORTS AND PRESENTATIONS A. Approval of Lease Documents between the Shorewood Economic Development Authority and the City of Shorewood (Att. -Assistant Treasurer's memorandum; Ground Lease dated August 1, 2008; Lease Purchase Agreement dated August 1, 2008) B. Award the Sale of Public Project Lease Revenue Bonds, Series 2008A (Att. -Assistant Treasurer's memorandum; Resolution) CITY COUNCIL REGULAR MEETING AGENDA -JULY 28, 2®08 PAGE 2 OF 2 8. PUBLIC HEARING 9. PARKS 10. PLANNING -Report by Representative 11. GENERAL/NEW BUSINESS A. Approval of the SLMPD 2009 Budget (Att. -Acting Administrator's memorandum) 12. ENGINEERING/PUBLIC WORKS A. Approving Change Order No. 1 for the 2008 Sealcoat Project (Att. -Engineer's memorandum, Resolution) 13. STAFF AND COUNCIL REPORTS A. Administrator & Staff B. Mayor & City Council 14. ADJOURN CITY OF ~~REWOOD 5755 COUNTRY CLUB ROAD • SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us Executive Summary Shorewood City Council Regular Meeting Monday, 28 July, 2008 A 6:00 p.m. Work Session is scheduled this evening. The Regular City Council meeting will be recessed and reconvene after the EDA meeting. Agenda Item #3A: Enclosed is the Verified Claims List for Council approval. Agenda Item #3B: This resolution appoints Election Judges for the 2008 Primary and General Elections. Agenda Item #5: The City Council will recess to the Economic Development Authority (EDA) meeting. Agenda Item #6: Following the EDA meeting, the Regular City Council meeting will reconvene. Agenda Item #7A & 7B: Mr. Paul Donna, Northland Securities, will be present during the Council Meeting to present information to the City Council regarding the leasing documents and the sale of bonds for the Shorewood City Hall Project. Agenda Item # 11 A: Police Chief Bryan Litsey will be presenting the 2009 SLMPD budget. Agenda Item # 12A: Boulder Bridge Homeowners Association requested a deferment of up to one year on seal coating the area streets to finalize the mill and overlay proposal. Removing the streets from the project requires a change order. A draft resolution to remove the streets from the project is attached for consideration. ®' ~®r9 PRINTED ON RECYCLED PAPER CITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, JULY 14, 2008 MINUTES 1. CONVENE CITY COUNCIL WORK SESSION 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:30 P.M. Mayor Lizee called the meeting to order at 6:30 P.M. A. Roll Call Present: Mayor Lizee; Councilmembers Bailey (arrived 6:33 P.M.), Turgeon; Wellens and Woodruff; Acting Administrator/Director of Public Works Brown; Finance Director Burton; Planning Director Nielsen; and Engineer Landini Absent: None B. Review Agenda Wellens moved, Woodruff seconded, Approving the'Agenda as presented. Motion passed 4/0. 2. STORMWATER MANAGEMENT PLAN Engineer Landini stated Steve Gurney, with WSB ~ nssociates, was present this evening to discuss changes made to the City's Comprehensive Surface Water Management Plan (the Plan). Mr. Gurney had. prepared the Plan. Mr. Gurney explained the City had submitted its Plan to the Metropolitan CoLmcil (Met CoLmcil), the Minnehaha Creek Watershed District (MCWD) and the Riley-Purgatory-Bluff Creed Watershed District (RPBWCD) for their review and comment. "I'he organizations had 60 days to provide with City with their comments. The City received written comments from the Met Council and the MCWD within that 60-day period. After the 60-day deadline period the City received verbal comment from the IZPBCWD, but to date it has not received anything in writing. The Met Council had a few minor comments regarding how to proceed with some of the plans the City was proposing to implement, and the MCWD had provided a number of comments. Mr. Gurney stated Council had been provided with a copy of his draft letter responding to the comments received; items that were completed were not addressed in the letter. A copy of the letter can be found on file. He had also provided Council with the proposed changes to the Plan. Mr. Gurney highlighted those items in his letter he thought may require further explanation. Those items included: funding ability to implement the plan (the possibility of securing grant funds for certain projects was added and it was noted the General Fund would not have to fund the projects in the Plan); the MCWD's requirement for the City to reduce its phosphorous loading into Lake Minnetonka by fifty pounds annually (the MCWD appears to agree with the City's proposal to conduct additional street sweeping each fall, and the City is requesting partial credit for some initiatives it has already implemented); there was a suggestion to integrate low impact development (LID) techniques into the City's land use regulations to help with infiltration/volume control (rather than force the use the City will encourage the developers to use the techniques where possible); there was a suggestion to construct #Za CITY OF SHOREWOOD WORK SESSION MEETING MINUTES July 14, 2008 Page 2 of 2 stormwater ponds within City-owned outlots (the City is unwilling to place further restrictions on private properly at this time); and the MCWD requested language be included regarding the enforcement of buffer regulations (the revised Plan will state the MCWD as the LGU is responsible for enforcing those regulations). Mr. Gurney stated he intended to meet with the MCWD, along with Engineer Landini, in the next week to get clarification on some items and to ensure that the MCWD's concerns were adequately addressed. He explained once the revised Plan is submitted for final approval all three of the previously listed organizations have another 60 days to review and comment on the Plan. Ideally, the Plan would be approved by September 15, 2008; the deadline established by the Met Council, but he did not think that would occur. The Met Council is aware that the MCWD is in the process of revising its own plan which makes it difficult for the City to satisfy the changing MCWD's requirements. In response to a question from Councilmember Bailey, Acting Administrator Brown explained there are elements of the City's Comprehensive Plan that are intertwined with this Plan, the Plan does satisfy a number of statutory legal requirements, and a lot of the analysis that was done for the Plan is used for other purposes. Councilmember Woodruff suggested the action items in the Plan be incorporated into work plans to ensure they get completed. In response to a comment from Councilmember Bailey, Acting administrator Brown stated the nuisance drainage issues identified in the Plan are being addressed through the CIP. 3. ADJOURN Wellens moved, Turgeon seconded, Adjourning the City Council Work Session Meeting of July 14, 2008, at 6:55 P.M. Motion passed 510. RESPECTFULLY SUBMITTCD, Christine Freeman, Recorder ATTEST: Christine Lizee, Mayor Lawrence A. Brown, Acting City Administrator/Clerk CITY OF SHOREWOOD 5'755 COUNTRY CLUB ROAD CITY COUNCIL REGULAR MEETING COUNCIL CHAMBERS MONDAY, JULY 14, 2008 7:00 P.M. MINUTES 1. CONVENE CITY COUNCIL REGULAR MEETING Mayor Lizee called the meeting to order at 7:00 P.M. A. Roll Call Present: Mayor Lizee; Councilmembers Bailey, Turgeon, Wellens, and Woodruff; Attorney Keane; Acting Administrator/Director of Public Works Brown; Finance Director Burton; Planning Director Nielsen; and Engineer Landini Absent: None B. Review Agenda Councilmember Woodruff requested Item 11.A.2, Ameshury Wcll Update, be added to the agenda and Council be provided a copy of the revised City Administrator's performance review form. Wellens moved, Woodruff seconded, approving the Agenda as amended. Motion passed 5/0. 2. 2. APPROVAL OF MINUTES A. City Council Work Session Minutes, June 23, 2008 Turgeon moved, Woodruff"seconded, Approving the City Council Work Session Minutes of June 23, 2008, as presented. Motion passed 5/0. B. City Council Regular Meeting Minutes, June 23, 2008 Woodruff moved, Turgeon seconded, Approving the City Council Regular Meeting Minutes of June 23, 2008, as presented. Motion passed 5/0. 3. CONSENT AGENDA Mayor Lizee reviewed the items on the Consent Agenda. Wellens moved, Woodruff seconded, Approving the Motions Contained on the Consent Agenda and Adopting the Resolutions Therein. A. Approval of the Verified Claims List In response to a question from. Councilmember Turgeon, Director Burton explained check # 46839 for the League of Minnesota Cities was for the City's deductible portion of the charge for final resolution of the sump pump situation with Mr. Johnson. #ZB sxoREwooD C1T~ CoUNC1L REGULAR MEETING MINUTES July 14, 2008 Page 2 of 13 B. 2008 Election Judge Salary (This was moved to Item 9.H under General/New Business.) C. Approving ORDINANCE NO. 451 "An Ordinance Amending Chapter 903 of the Shorewood City Code Relating to Water Conservation Measures" and ORDINANCE NO. 452 "An Ordinance Titled `License, Permit, Service Charges and Miscellaneous Fees"', and Adopting RESOLUTION NO. 08-054, "A Resolution Approving Publication of Ordinance NO'S 451 and 452 by Title and Summary". Motion passed 5/0. 4. MATTERS FROM THE FLOOR There were no matters from the floor presented this evening. 5. REPORTS AND PRESENTATIONS None. 6. PUBLIC HEARING None. 7. PARKS A. Report on Park Commission Mcetnig Held July 8, 2008 Chair Davis stated on May 31, 2008, she, Councilmember Wellens, Commissioner Norman and Park Foundation Chair Dahlberg .attended the Mutt Strut grand opening of the off-leash dog park at Lake Minnewashta Regional Park: The City was awarded a plaque of appreciation for its contribution to the dog park. The Park Commission raised' donations totaling $5,000 and the Foundation matched that contribution. The dog park is unique because it has potable water for humans and dogs as well as water to rinse dogs off with. Davis reported on matters considered and actions taken at the July 8, 2008, Park Commission meeting (as detailed in the minutes of that meeting). She stated she and three other Park Commissioners had been documenting the condition of all parks and the improvements needed. The other Park Commissioners will have an opportunity to provide their input. She requested a joint meeting be scheduled with the Council where the Commission would give a presentation on the State of the Parks 2008. Because funding for the improvements will be an issue it is appropriate to start the dialogue with Council early on in budget discussions. There was agreement to schedule a joint meeting for 6: 15 P.M. August 12, 2008. B. Acceptance of Proposal for Badger Park Rink Lighting Engineer Landini explained that one of the wood light poles at the Badger Park rink had fallen down and all four lights at the rink are in need of repair or replacement. Council had been provided a quote from Musco Lighting to remove the existing poles and to install two 40-foot light-structures with extended bases. Six fixtures will illuminate the rink and two additional fixtures will illuminate the free skating SHOREWOOD CI'T'Y C®UNCII. REGULAR MEETING MINUTES July 14, 2008 Page 3 of 13 area. The proposed lighting system is the same as the one installed at the football field. The cost for this effort will be $38,492 (not including electrical). Councilmember Woodruff questioned if this was the best way to solve the problem; if Badger Park is to be reconfigured, installation of lighting may have to be redone. Mayor Lizee stated she and Park Chair Davis had discussed the possibility of reconfiguring Badger Park this past winter. If that was done she questioned if the City would be able to salvage the lighting, noting the new poles will have fixed bases. Engineer Landini stated the soil borings and the Light fixtures could be salvaged. New bases will have to be installed. Acting Administrator Brown stated if the Park is reconfigured approximately 50% - 65% of lighting system could be reused. Park Chair Davis stated because there is so little land at Badger Park there is little that can be done to reconfigure it, unless the City tears down the City-owned house and keeps the land. The current wooden light poles are a safety hazard because of their condition. Councilmember Turgeon suggested a decision on this item be deferred until after the joint Council and Park Commission meeting is held on August 12"'. After that meeting the Council and Commission should have a better understanding of the priorities for the parks. `~, Engineer Landini explained there was a lead ~ifr-e of sip weeks for the light fixtures. He anticipated footings could be installed in about six weeks and they would: have to cure for about two weeks before the poles could be installed. Acting Administrator Brown stated the rink and football field at Badger Park are highly used. If there is any reconfiguration done it would,be highlyunlikely the football field or rink would be relocated. Engineer Landini stated if this contract were awarded the three standing light poles eouid be taken down as soon as possible to ensure they did not fall down during a storm. Chair Davis stated the Park Commieion would like to replace the lights at the rink at Cathcart Park, but has delayed any request to do that because it is considering installing a warming house which would result in some reconfiguration at that park. She noted that one of the light poles at Manor Park is partially out of the ground and that needs to be fixed for safety reasons. Woodruff moved, Bailey seconded, accepting the proposal provided by Musco Lighting for the Badger Park rink lighting for an amount not to exceed $38,492. Motion passed 5/0. C. Acceptance of Proposal for Professional Geotechnical Services for Rink Lighting Engineer Landini explained a geotechnical analysis is required for light pole foundation design for future lights at Cathcart Park and Manor Park. Staff requested a quote from American Engineering and Testing, Inc. to do three geotechnical borings (two at Cathcart Park and one at Manor Park), to document ground water conditions and to provide calculations and recommendations on an acceptable foundation for each park. The quote received was for an amount of $4,400. SHOREWOOD CITY C®UNCIL REGULAR MEETING MINUTES July 14, 2008 Page 4 of 13 In response to a question from Councilmember Woodruff, Park Chair Davis stated there were economies of scale to do the analysis for both parks at the same time as a great deal of the cost was for bringing the truck on site. She related Engineer Landini had stated the information about the ground at Cathcart Park would be of value when determining what to do with other structures. In response to a comment from Councilmember Turgeon, Engineer Landini explained the borings at Cathcart Park would be a representative sample of the ground condition if the lights were to be placed in a different location than currently proposed. Councilmember Turgeon questioned if the City of Chanhassen is willing to pay for some of the repairs and improvements at Cathcart Park being the park is located in Chanhassen. Engineer Landini stated there is a partnership agreement with Chanhassen which was enacted in 1983; the agreement specifies Chanhassen is responsible for the upkeep of anything that grows and Shorewood is responsible for capital improvements. Councilmember Woodruff stated he thought it would be worthwhile for the Park Commission and Staff to go before the City of Chanhassen to discuss how future maintenance, repairs and improvements to the Park should be funded. After ensuring discussion there was consensus to defer this itcin until the long-range plans for Cathcart Park were known, including Chanhassen's perspective on funding improvements. Chair Davis stated the light pole at Manor Park is partially outof the ground and that needed to be fixed for safety reasons. 8. PLANNING Commissioner Geng reported on matters considered and actions taken at the July 1, 2008, Planning Commission meeting (as detailed in the minutes of that meeting). A. Minnewashta School. Traffic Management Plan Director Nielsen explained the June 9, 2008, City Council meeting packet contained a memorandum regarding Staff's initial comments .about a proposed parking lot management plan for the Minnewashta Elementary Plan. The plan was a condition of the most recent Minnewashta Elementary School conditional use permit. (C.U.P.). On the same day prior to the meeting the City was informed that the School District was able to acquire two properties adjacent to the west side of the Minnewashta Elementary School property which significantly increases the amount of available parking at the School. At that time the District submitted a new site plan including the two new parcels. There was consensus to continue this item to the July 14, 2008, City Council meeting to allow Staff to study the new site plan. Nielsen stated Staff met with representatives of the Minnetonka School District today to discuss the plan. Staff informed the District it needed to address revisions to the drainage plan for the site as well as screening and landscaping where the expanded parking lot can be seen from adjoining residential properties. He noted the School District closed on the two properties on June 13, 2008, and it will take possession. of the properties on September 1, 2008. He stated the District has an aggressive goal to have the expanded parking lot completed in the fall of 2008. If the parking lot were not complete the parking management plan will have to be in effect on an interim basis. Nielsen explained the proposed parking lot expansion will require a revision to the District's C.U.P. If the application is received by August 5`~', a public hearing can be scheduled for the September 15"' SH®REW®®I2 C1T~' C®UNCII,I2EGLII.,AR MEETING MINUTIIS July 14, 2008 Page 5 of 13 Planning Commission meeting and it can be placed on a September 22"d City Council regular meeting agenda. 9. GENERAL/NEW BUSINESS Mayor Lizee requested Item 9.E on the agenda be discussed after Item 9.B because Excelsior Fire District Chief Gerber was present. A. Accept Bids and Award Contract for City Hall Building Renovation Project Acting Administrator Brown stated on July 9, 2008, the bids were opened for the City Hall Renovation Project. Thirteen bids were received for the project, and the bid amounts ranged from $930,000 to $1,165,000. The low bid was submitted by Lund Martin Construction, Inc. Staff checked references for the contractor for several projects and received excellent responses; each respondent stated they would use the contractor again. Staff is impressed with the experience of this contractor and the types of projects it has performed. Brown explained the contract documents included two bid alternates for the project. The first bid alternate is an "add alternate" for skylights in the central office area. The low bidder has an add amount of $18,600 for this item. The second bid alternate is a "deduct" for an amount of $32,000; it is possible fire suppression pumps specified in the technical design ~~-ill nc7t be needed to properly supply the interior fire suppression system. The lack of need for the pumps will be confirmed once the suppression system design has been completed and construction is well under ~wav. Brown stated Staff recommends the contract be awarded to Lund Martin Construction pending final review of the contract documents by Staff and the City Attorney. He requested Council specify if it wants add alternate one to be included in the .contract In response to a question fi-omCouncilmember Woodruff, Brian Lubben stated the bid includes a generator. Turgeon moved, Woodruff seconded, Adopting RESOLUTION NO. 08-055, "A Resolution Accepting Bids and Awarding Contract for City Hall Building Renovation Project, City Project No. 08-06" as amended to include bid alternate one for skylights in the central office area. Councilmember Wellens stated after the Southshore Center was built there were issues with water leakage and faulty wiring. He questioned if there was a warranty on the construction work to be done for this project. Attorney Keane stated the contract documents provide for a customary two-year warranty. Keane explained he has been reviewing the form of agreement that is to be used and he is in the process of strengthening some of the framework of the contract to better protect the City with regard to the contractor's performance. Motion passed 5.0. B. Approving Change Order #1 for City Hall Building Survey Services Acting Administrator Brown clarified this was not a change order. He explained during the final design phase for the City Hall Renovation Project it was determined survey field work was required to finalize the design. That survey work was outside of the original project scope. Staff obtained quotes for the SHOREWOOI) CITY COUNCIL REGULAR MEETING MINUTES July 14, 2008 Page 6 of 13 survey work from two firms. The low quote was from Bonestroo Engineering for an amount of $2,000. To keep the project on schedule Staff had the survey field work done. Woodruff moved, Turgeon seconded, authorizing the expenditure of funds in the amount of $2,000 from funds for the City Hall Renovation Project for survey field work provided by Bonestroo Engineering for the Project. Motion passed 5/0. Discussion moved to Item 9.E on the agenda. C. Accept Proposal for City Survey Services This was discussed after Item 9.E on the agenda. Acting Administrator Brown stated per the direction of Council, Staff sought out proposals from qualified firms for services to perform aCity-wide survey. Prior to soliciting proposals Staff asked other municipalities and the League of Minnesota Cities what firms were qualified to perform such services, and which of those firms provided great results and insight into the services provided by those cities. Without question or hesitation the answer always came back to Decision Resources, LTD. Staff also asked the question on the League's Administrator/Clerk's list serve and again every single response without exception returned with Decision Resources. Staff did seek bzit other firms to perform such services, but there weren't any firms that could provide clear answers about their approach to cost in a timely manner. Brown explained Decision Resources would consult with the Council, perform a 50-question survey and provide analysis for a fee of $12,000. Each additional question beyond 50 would cost an additional $1.35. He asked Council if a 50-question survey w~~uld be adequate. He noted the costs for these services were not budgeted for in the 2008 operatinb budget. Councilmember Bailey stated he reviewed he .City's of Hopkins 2007 Quality of Life Survey which Decision Resources had performed. He~questioned what he would do with the results of that survey. Mayor Lizee stated it would be: Council_'s responsibility to guide Decision Resources on the types of questions it wanted to ask and the types of information it was seeking. Bailey recommended the survey be placed on hold until the new City Administrator was on site and ]lad time to be involved with this effort. There was ensuing discussion regarding what the Council wanted from the survey, the length of the survey, the method for conducting the survey, the timing of the survey, etc. There was consensus to delay further discussion on the City-wide survey until after the new City Administrator was on site. D. Discussion regarding City Owned House at 5795 Country Club Road Acting Administrator Brown stated the tenant at the City-owned house located at 5795 Country Club Road had provided the property manager with a 60-day notice to vacate which is dated June 30, 2008. He explained the City purchased that property to provide options for consideration for the expansion or rebuilding of City Hall; as the design for the City Hall renovation has been approved, it may be an appropriate time to consider what to do with that property. sx®1~Ew®oD ciTx CouNCI~, >zE~uLA~ N1EET1NC ~11tvuTEs July 14, 2008 Page 7 of 13 Director Nielsen suggested the City use the house from September 2008 through February 2009 for office space during the renovation, noting the City would have to obtain a conditional use permit to use it for that purpose. He stated Staff had researched the use of trailers for temporary office space, and trailers cost approximately $5,000 each. He thought the house would be more ADA compliant than trailers, and there would be less security issues. He commented it was possible the renovation effort could be completed faster if all of employees were not working in the facility. Acting Administrator Brown stated staff has concerns about how it will operate during the renovation. The Southshore Center is available for Election Day use, but adequate space is not available for staff use during the construction period. He cautioned that the impact on the property should be minimized if it were to be used for office space. He recommended staff research the practicality of using the house for office space during the renovation; and staff talk with the renovation contractor and determine if there could be any savings realized if employees were not located in City Hall during the renovation. There was consensus to delay any decision on the future of the City-owned house and property until after the renovation was complete. Discussion moved to Item 9.F on the agenda. E. Accept Excelsior Fire District 2009 Budget This was discussed after Item 9.B on the agenda. Acting Administrator Brown explained at its June 26; 2008, special meeting the Excelsior Fire District (EFD) Governing Board unanimously recommended the' proposed 2009 Operating Budget and the proposed 2009 - 2029 Capital Improvement Program (C1P) be forwarded to the member cities' councils for their review and approval. The proposed total budl;et for 2009 is $1,481,832 and it reflects a $9,961 (or 0.68%) increase over the adopted total budget for 2008. The proposed 2009 budget less the debt service payment is $922,832 aijd it reflects an increase of $43,434 over the adopted 2009 budget minus the debt service payment of $879,398. 'Thc City's total contribution for 2009 would be $575,445 and it reflects a $22,232 decrease over its 2008 contribution. He stated the EFD 2009 budget process was extremely thorough. Councilmember Wellens, the City's representative on the EFD Board, stated he endorsed the recommended budget. Councilmember Turgeon stated the EFD Joint Powers Agreement (JPA) requires four of the five member cites approve the CIP and three of the five cites approve the operating budget. Councilmember Woodruff thanked Councilmember Wellens for calculating the percent increase (which Wellens calculated to be 4.7%) of the proposed 2009 budget minus the debt service payment over the adopted 2008 budget minus the debt service payment. He stated Staff ]lad been directed to prepare a 2009 operating budget with no increase over the adopted 2008 operating budget and to identify the critical items which could not be funded. He then stated he had a problem with the 4.7% increase which is 0.8% higher than the levy limit of 3.9%. Councilmember Turgeon stated the proposed 2009 operating budget reflects a 6% increase over the adopted 2008 operating budget, and the 2009 CIP amount was the same as the 2008 CIP amount. She noted the Board had moved some items (for an amount of $17,500) from the 2009 CIP to the 2009 SHOREWOOD CITY COITNCIL REGULAR MEE'T'ING iV1INUTES July 14, 2008 Page 8 of 13 operating budget. She stated she had issue with the size of the operating budget increase. She then stated she would support an operating budget increase of 3.9%. Councilmember Bailey stated part of the reason there was no increase in the proposed 2009 CIP was because of transfers from the CIP to the operating budget. EFD Chief Gerber stated during the 2008 budget process the EFD Board and various member cities' councils (including the Shorewood Council) requested the operating budget and CIP be considered at the same time. The EFD accommodated that request during the 2009 budget process, noting the process started in December 2007. There was a joint meeting of the member cities' councils on June 11, 2008, to allow the member cities' councils the opportunity to express their concerns; from his vantage point those concerns were addressed in the budget forwarded to the councils. He stated the proposed 2009 operating budget reflects a 6% increase over 2008 and there is no increase in the 2009 CIP over the 2008 CIP. The 0% increase in the CIP was because the Board recommended transfers (totaling $17,500) from the CIP to the operating budget and items were cut from the CIP. In the past, the Midget had always included the debt service payment; now there is a request to separate that from the budget. The budget reflects a reduction in the debt service payment in 2009 over 2008 of $33,473 as a result of the bond refinancing for the public safety facilities. The budget proposed is for «~hat it will take to operate the District. The proposed 2009 budget (which includes the debt service payment) is $1,481,832 and it reflects a $9,961 (or 0.68%) increase over the adopted 2008 budget. i~, Councilmember Turgeon stated if the preference is to consider the budget as a whole (the operating budget, the CIP and the debt service payment), she recommei~ded:~the budget be approved as one budget either requiring three out of five or four out of five cities to approve it (which would require an amendment to the JPA). Director Burton stated the document provided showing the summary of percentage increase by City for the 2009 proposed budget indicates Shorewood's contribution will decrease by $22,232 (or 3.72%) over its 2008 contribution. She asked Chief Gerber. to clarify how this information was calculated. Chief Gerber explained he prepared the document .and the contribution percentages were determined based on the 2009 funding formula specifiied in the JPA. Gerber noted that starting in 2010 member cities' percent contributions will be entirely "ad valorem" (or tax capacity) based. Councilmember Woodruff stated he did not view the use of the bond refinancing savings as a means to fund the EFD. He assumed the City could use its share of the savings for additional City projects. He was not willing to support spending those savings on the EFD. Councilmember Bailey stated the reduction in the debt service payment should not be considered as part of the budget increase. He noted Council had to vote on the CIP this evening. He stated the 4.7% increase in the operating budget and CIP (not including the debt service payment) and an increase in the South Lake Minnetonka Police Department budget in excess of the tax levy limit of 3.9% means there will have to be reductions in other areas in the City's budget in order to achieve the levy limit. He explained if the City's portion of the reduction in the debt service payment were not included in the City's $22,232 decrease in contribution in 2009, the City would still have a decrease in its contribution in 2009. In response to a question from Councilmember Woodruff, Chief Gerber stated he recommended the City vote on the budget this evening. SHOREWOOI9 CITY COUNCIL REGULAR MEETING MINUTES July 14, 2008 Page 9 of 13 Mayor Lizee stated it is prudent for Council to respect the recommendations of the EFD Board. She thought the recommended budget addressed the concerns expressed by the member cities' councils at the joint meeting of the councils. Councilmember Wellens stated a number of items were cut from the proposed 2009 budget (including the voluntary contribution to the Excelsior Firefighters Relief Association pension fund). He thought additional reductions to the budget would create problems for the EFD. Councilmember Bailey explained the City's portion of the total member cities' contribution is approximately 38.8%. The City's 2009 contribution reflects a $22,232 decrease over 2008. The total debt service payment in 2009 reflects a $33,473 decrease over the 2008 payment. For purposes of discussion, if 38.8% was used to determine the City's portion of the savings the City's portion would be $12,988. If that savings of $12,988 were backed out of the $22,232 reduction in contribution the City would still have a contribution reduction of approximately $9,244 in 2009. He questioned if the some Councilmembers were opposed to the proposed budget based on principal. Councilmember Woodruff questioned what action other member cities' councils had taken with regard to the budget. Chief Gerber stated if that question was relevant to the Council, it was his understanding the Deephaven and Tonka Bay councils had unanimously approved both the operating budget and CIP, the Excelsior council will consider them at its meeting next week, and the Greenwood council will consider them at its August meeting. - , Wellens moved, Turgeon seconded, approving the recommended 2009 - 2029 Excelsior Fire District Capital Improvement Program dated Jrrne 27, 2008. Motion passed 5/0. Wellens moved, Bailey seconded, approving the recommended 2009 Excelsior Fire District Fire District Budget dated June 27, 2008. Motion passed 3/2, with Turgeon and Woodruff dissenting. Mayor Lizee thanked Chief Gerber for attending the meeting. Discussion returned to Item 9.C ou the agenda. F. Accept Proposal fu r Owners Representative for City Hall Building This was discussed after Item 9.D on the agenda. Acting Administrator Brown stated on July 9, 2008, the City received proposals in response to a request for proposals published for firms interested in serving as an Owner's Representative for the City Hall Renovation Project. Of the six firms contacted, three submitted proposals. The firms and their proposed fees are as follows: CPMI ($52,550); Constructive Ideas ($59,550) and Yanik Companies ($70,000). All three firms appear to be qualified to perform the work requested, and staff has checked the references provided by each firm. He explained when compared to the current bid amount of $930,000 for the renovation CPMI's proposed fee equates to 5.65% of the total construction cost. Brown then stated Staff recommends CMPI be awarded the contract to serve as the Owner's Representative for the City Hall Renovation Project. Brown explained the proposal from Constructive Ideas contained a lump sum billing option (a fixed bid) with a guaranteed not to exceed amount of $47,500 plus expenses (which are estimated to be less than SHOREWOOD CI'T1' CO><JNtCIL i2EGULAR 1VIE11TING IVII1vU`TES July 14, 2008 Page 10 of 13 $5,000). There would be an initial billing of $7,500 to pay for the cost of additional insurance to provide insurance limits in the amounts required. The remaining amount would be billed monthly at a rate of $4,705.88. Its hourly billing option with anot-to-exceed fee is $59,550 plus expenses. The proposal states the costs are based on project time averaging 12 hours per week, and the hourly billing rates are $150 for the project principal and $75 per hour for the administrative support person. Brown then explained the CPMI proposal indicates there would be five different personnel resources involved with the project. The hourly rates are $110 for the principal in charge, $90 for the senior owner's representative, $65 for the assistant owner's representative, $110 for the chief cost manager and $50 for clerical/accounting support staff. The majority of the time spent on the project will be spent by the assistant owner's representative (600 hours are budgeted for this position). The City would get a significantly more involvement from CPMI personnel (a minimum of 20 hours per week for key personnel) than it would from Constructive Ideas personnel. Brown stated that although both CPMI and Constructive Ideas had strong references, he recommended CMPI be awarded the contract based on its experiences and the involvement of its personnel. Mayor Lizee stated she was impressed with the CPMI proposal. She stated the $5,000 reimbursable expenses for Constructive Ideas would increase its fixed cost to app~~oximately that of CMPI. Councilmember Woodruff stated the City had received proposals from three good firms. He explained he had called the President of Constructive Ideas to get claritication on the pricing in that firms proposal. He stated the RFP specified insurance requirements that were not customary for this type of effort. The fixed bid of $47,500 includes the cost for additional insurance in'an amount of $7,500. If the company's insurance is adequate (which he thinks it is), the fixed costfor the project will be reduced to $40,000. He was also told the expenses would likely be around ~2,~}00. He stated it was prudent for Council to weigh a fixed cost of $40,000 plus expenses against CPMI's did of $52,500 (including expenses) which is not fixed. Mayor Lizee expressed concer^ with Councilmember Woodruff calling Constructive Ideas about the bid received and having the company President explain they could do the job for less. She stated Council was considering the bids submitted; it was not considering after the fact discussions about price. She stated this item could be deferred to a future meeting. Councilmember Woodruff requested staff ask CPMI for anot-to-exceed cost and clarify what the City's actual insurance requirements are (i.e., were the requirements specified in the bid necessary). He stated the two firms should be asked to clarify their bids based on those two questions. Councilmember Wellens stated in order for Constructive Ideas to make money on their fixed bid they will not want to spend any more time on the project than absolutely necessary. Councilmember Woodruff stated he checked three of Constructive Ideas references and he received extremely good references. In response to a question from Councilmember Bailey, Acting Administrator Brown explained the fixed fee implies there are a fixed number of hours that will be devoted to the project. CPMI's proposal indicates there will be substantially more resources devoted to the project than Constructive Ideas based on an hours-to-hours comparison. If Constructive Ideas uses up the hours allocated to the project before SHOREWOOD CITE' C®UNCIL REGULAR 1VIEE'TING 1V1INU'I'ES July 14, 2008 Page 11 of 13 it's done, the company would very likely come back to the City and tell the City the scope changed. Each firm's proposal states the proposals are based on the project scope they bid on. Councilmember Woodruff stated if the project takes longer than specified all three firms would request more money from the City. He then stated from his vantage point the City did not have all the necessary facts from the firms. He believed there was a question about whether Constructive Ideas budgeted enough hours for the job. Acting Administrator Brown stated he did not think an average of twelve hours per week (including administrative support services) was sufficient to get the job done. CPMI would have substantially more personnel and hours allocated to the project. He explained the original RFP did contain language about insurance requirements for a construction manager versus an owner's representative, but an official addendum was issued to the RFP clarifying that, and Constructive Ideas did not respond to that addendum. CPMI did not have an issue with the insurance requirements. Councilmember Wellens clarified all three firms would have to be given a second opportunity to respond to the RFP. G. Investment Policy Director Burton stated at its June 23, 2008, regular meeting'Council suggested certain comments and changes be made to the City's revised investment policy. The revision distributed in the meeting packet included those items. She reviewed the changes that were .made. The highlights are as follows: commercial paper was added to the list of authorized and suitable investments; the list of authorized and suitable investments was modified and clarified; the rePercnce to long-term investments was revised regarding length of maturity; and investment reporting requirements were changed to quarterly. She explained Council had been provided. another revision this evening depicting two additional changes recommended. The changes were: in item 4 under authorized and suitable investments, the words "or local government" were deleted; and' under diversification, the words "with rating of AIP1 or better" were deleted. Councilmember Bailey stated he had spoken with Director Burton and recommended she work with staff to prepare an expenditure forecast for the various funds in five year increments to help in managing long- term investments. He stated he would support approving the revised investment policy this evening. Woodruff moved, Turgeon seconded, adopting the City of Shorewood's revised investment policy. Motion passed 5/0. H. 2008 Election Judge Salary This item was removed from the consent agenda at Councilmember Woodruff's request. Councilmember Woodruff questioned if the proposed wage of $5.50 for the student judge satisfied minimum wage requirements. Acting Administrator Brown stated Staff was researching that. Woodruff moved, Wellens seconded Adopting RESOLUTION NO. 08-053, "A Resolution Approving Election Judge Compensation Rates" subject to confirmation that the student judge $5.50 hourly rate satisfies minimum wage requirements. Motion passed 5/0. SH®REW®®D CITI' C®IJNCII., REGITI,AIt 1l~IEETING MINUTES July 14, 2008 Page 12 of 13 10. ENGINEERING/PUBLIC WORKS None. 11. STAFF AND COUNCIL REPORTS A. Administrator & Staff 1. July 10, 2008 Storm Update Acting Administrator Brown explained there were 42 areas in the City which Public Works responded to that had trees and/or power lines down because of the July 10`x' storm. Public Works then had to stabilize utilities affected by the storm and that took well into the afternoon of July 12"'. There were no long-term effects to the City as a result of the storm. Councilmember Woodruff asked Staff to contract Xcel Energy to determine what its policy was with regard to trimming trees over power lines. Acting Administrator Brown stated he had been in contact with Xcel Energy and they would get back to him. Woodruff stated his house was without power for approximately 24 hours and then again for another three hours during the time period from July 10`x' to July 11`x'. Tree limbs over power lines caused problems on Cnchanted anc~zShady Islands. Council complimented City staff for its efforts during and alter the storm. In response to a question from Councilmember Wellens, Acting Administrator Brown stated the new generator at City Hall will not be portable. It will be single phased electricity. 2. AmesburyWell Update Acting Administrator Browne~plainedon .I~ne 23`a one of the three legs of power from Xcel Energy to Amesbury Well was lost and at that time there was thought it likely caused damage to the well. Staff asked a contract to check the well motor and it is fine. He noted after the Xcel Energy electrical engineer went to the well with the contractor. to check the well, Xcel Energy decided it would fund changing the power source and transformer outside of the well to 480 volts from 240 volts which will result in a savings to the City. That proposed change will require a change order to the design for the well controls. B. Mayor & City Council Councilmember Wellens stated at its July 1, 2008, meeting the Planning Commission discussed the need for senior housing which could require a change to the City's zoning regulations. He recommended Council discuss whether that is appropriate before the Planning Commission discusses it any further. Councilmember Bailey stated he thought it was appropriate for the Planning Commission to discuss the topic or other topics it thought prudent even though it had not been given specific direction by Council. Park Chair Davis recommended Council create a vision for the City; that vision should not be the responsibility of the Planning Commission. She commented the firm she works for helps cities create their vision. SHOREWOOD CITY COUNCIL REGULAR MEETING MINUTES July 14, 2008 Page 13 of 13 Councilmember Turgeon stated the maximum density the Code allows is ten units per acre, and it does not allow for any residential development in a commercial zone. She thought the Planning Commission was trying to be proactive in discussing this topic. Councilmember Woodruff stated part of the Planning Commission's charter is to recommend updates to the Comprehensive Plan. He thought the Park Commission could provide input regarding the future needs for the City's parks. Councilmember Wellens stated he thought any zoning change being considered should be discussed by the Council prior to it being considered by the Planning Commission. Director Nielsen stated the Council has to approve any change to the City Code. Mayor Lizee stated the annual Excelsior Firefighters Relief Association funding raising dance is scheduled for Friday, July 18`i' from 5:00 P.M. - 12: 00 P.M. 12. ADJOURN Wellens moved, Woodruff seconded, Adjourning the .City Council Regular Meeting of July 14, 2008, at 9:08 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Christine Lizee, Mayor ATTEST: Lawrence A. Brown, Acting City Administrator/Clerk PAYABLES APPROVALS For 07/28/2008 Council Meeting ,~ ,~ Prepared by: ~f - , ,- Date: ,~ Michelle T. Nguyen, Sr. Accounting Clerk ,, < Reviewed by: _~ ~,~~., ~ Date: ~'~ , < `~ Bonnie Burton, Finance Director 1 ~ ~Y ~ __. Approved by: Date: ~ ,,~~ ~ ~` .~ ; ~' airy Brown, Acting City Administrator PAYROLL APPROVALS For 07/28/2008 Council Meeting ,~ ~I g.... °.,.~.,,._-. ~,.,..-- , Prepared by: `' ° Date. ~ fi Michelle T. Nguyen, Sr. Accounting Clerk Reviewed by: ~ ~ Date: ~~~~ ~ ~~ ._ Bonnie Burton, Fin nce Director ~ .;. Approved by "" ~~ Date: ~~", ,- ~`~ ~~ry Brown, Acting City Administrator SHOREWOOD 5755 COUNTRY CLUB ROAD •SHOREWOOD, MINNESOTA 55331-8927 • (952} 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us MEMORANDUM DATE: July 24, 2008 TO: Mayor and City Council ;~ , ;` , FROM: Jean Panchyshyn, Deputy Clerk CC: Lawrence A. Brown, Acting City Administrator/Clerk RE: Resolution Appointing 2008 Primary and General Election Judges Several individuals have expressed their desire to serve as an Election Judge for the 2008 Elections. Occasionally, Elections Judges are not able to work due to unforeseen circumstances. When this occurs, replacement judges are sought out and asked to fill in. Typically, there are approximately 7-10 Election judges working in the polling place, with the exception of Precinct 1 located at 4445 Enchanted Point, which has four Election Judges. Some of the judges work all day and many work half days. The attached resolution approves the list of Election Judges to officiate at the Primary Election on September 9, 2008 and the General Election on November 4, 2008, and provides the Deputy City Clerk the authority to assign other individuals to serve as an Election Judge, if needed. COUNCIL ACTION Approval of a Resolution Appointing the 2008 Primary and General Election Judges. ~~: a®«® PRINTED ON RECYCLED PAPER CITY OF SHOREWOOD RESOLUTION NO.08- A RESOLUTION APPOINTING 2008 PRIMARY AND GENERAL ELECTION JUDGES WHEREAS, the Deputy City Clerk has submitted for approval a list of election judges to officiate at the Primary Election on September 9, 2008, and the General Election on November 4, 2008; and WHEREAS, said list includes those individuals who have agreed to serve as an Election Judge; and WHEREAS, the Deputy City Clerk has the authority to add additional Election Judges if needed to conduct the 2008 Primary and General Election; NOW, THEREFORE BE IT RESOLVED that the Shorewood City Council hereby approves the list of election judges, attached hereto and made a part hereof as Exhibit A, to officiate at the 2008 Primary and General Elections. ADOPTED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD this 28th day of July, 2008. ATTEST: Christine Lizee, Mayor Lawrence A. Brown, Acting City Administrator/Clerk Resolution No. 08- Exhibit A City of Shorewood 2008 Primary and General Election Judges First Name Last Name Address City Betty J. Andersen 27400 Pine Bend Shorewood Michael Barga 26305 Oak Leaf Trail Shorewood Michael Begun 5955 Boulder Bridge Lane Shorewood Lois Berg 5481 Grant Lorenz Rd Shorewood Karen Boynton 6155 Riviera Lane Shorewood Tena Brandhorst 27225 Smithtown Rd Shorewood Jerry Brecke 27450 Pine Bend Road Shorewood Marlys Bucher 5490 Manitou Lane Shorewood Mary Ann Chinander 23955 Clover Lane Shorewood Beverly Conklin 4970 Devonshire Circle Shorewood Susannah Dodson 19265 Shady Hills Rd Shorewood Mary Donahue 6065 Pond View Drive Shorewood Rebecca Fish 5200 St. Albans Bay Rd Shorewood Marilyn Gagne 24850 Amlee Road Shorewood Bob Gagne 24850 Amlee Road Shorewood Nancy Geng 4530 Enchanted Drive Mound Gene German 5925 Eureka Rd Shorewood Darlene Gertz 28125 Boulder Circle Shorewood Nikki Hedtke 5490 Manitou Lane Shorewood Michael Herzig 5330 Vine Hill Road Shorewood Jeanette June 25930 Wild Rose Ln Shorewood Joe Kapolka 4680 Fatima Place Shorewood Raj Katti 19490 Muirfield Circle Shorewood James Kendrick 22830 Murray St. Shorewood Carla LaBore 4445 Enchanted Point Mound Audrey Larson 4385 Enchanted Point Mound Shirley Leebens 23825 Smithtown Road Shorewood Doug Legault 6065 Cathcart Drive Shorewood Gordon Levack 5610 Harding Lane Shorewood Sandra Louis 19860 Waterford Court Shorewood Elaine Love 5390 Barrington Way Shorewood Floyd Lovelette 5460 Howard's Point Road Shorewood Anita Lynn 5435 Wedgewood Dr. Shorewood Rod Macpherson 19925 Waterford Ct. Shorewood Jill Majestic 5840 Eureka Road Shorewood Pam McDavitt 21125 Christmas Lane Shorewood Pamela McDonald 4695 Lagoon Drive Mound Chuck Niles 5277 St. Albans Bay Circle Shorewood Jerry Noack 19965 Waterford Court Shorewood Resolution No. 08® Exhibit A City of Shorewood 2008 Primary and General Election Judges First Name Last Name Address City Kathleen Noren 5760 Christmas Lake Rd Shorewood Miechelle Norman 23690 Gillette Curve Shorewood Kerry Noyes 4680 Fatima Place Shorewood Eleanor Ogin 5440 Gideon's Lane Shorewood Terry Paetzel 19625 Excelsior Blvd. Shorewood Carol Paulsen 27585 Woodside Rd Shorewood Norma Peterson 4755 Regents Walk Shorewood Teddy (Jack) Raby 4695 Fatima Place Shorewood Jean Raby 4695 Fatima Place Shorewood Frank Reese 6200 Chaska Road Shorewood Joshua Rockers 5975 Boulder Bridge Lane Shorewood Jack Rockers 5975 Boulder Bridge Lane Shorewood James Savoie 5455 Gideon's Lane Shorewood Mary Savoie 5455 Gideon's Lane Shorewood Virgil Smeltzer 19600 Waterford Court Shorewood Barbara Spannaus 5885 Minnetonka Dr. Shorewood Jane Stein 5995 Glencoe Road Shorewood Millie Trebnick 25550 Park Lane Shorewood SHOREWOOD 5755 COUNTRY CLUB ROAD ®SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us MEMORANDUM Date: July 23, 2008 To: Honorable Mayor and City Council Members Lawrence A. Brown, Acting City Administrator From: Bonnie Burton, Finance Director/Treasurer Re: Authorizing the Sale of Bonds to Finance the 2008 City Hall Project The City Council, at their June 23, 2008 meeting, adopted Resolutions to Pre-Authorize the Sale of Bonds to finance the renovation and construction of the City Hall. The resolution provided for Lease Revenue Bonds to be issued in anot-to-exceed maximum amount of $1.4 million. Staff and consultants have been preparing for the bond issue with many behind-the scene tasks, including preparation and review of all bond documents; a conference call with Moody's Investor Services to obtain a bond rating for the issue; and obtaining estimates for telecommunications and furnishings from vendors. Staff s recommendation is that the bond issue be sized at $1.25 million plus issuance costs, for a grand total of $1,310,000. The bond issue was sized based on the. following known cost considerations and estimates: Construction (bid received) $950,000 Telecommunications (estimate) 50,000 Furnishings (estimate) 75,000 Owners Representative (estimate) 60,000 Contingency (10%) 115,000 Costs of Issuance (estimate) 60,000 Total: 1 310 000 The attached finance documents are representative of what the Council can expect to see at Monday's meeting, after the issue has been priced and finalized. The financing plan calls fora 20-year debt service schedule, with annual debt service (principal and interest) payments of approximately $100,000. (The debt service payments, or lease payments, are paid to the EDA from the City's General Fund, either as a special levy, or possibly from an annual dedicated transfer to the General Fund from the Liquor Fund.) The Lease Agreement documents are also attached for Council review and will be finalized for the closing. vs r®p® PRINTED ON RECYCLED PAPER . ` ~.. Authorizing the Sale of Bonds to Finance the 2008 City Hall Project Page 2 In terms of process and procedure, the City Council will be asked to approve the documents, including the Lease Purchase Agreement, and a Grotmd Lease Agreement, and a Resolution Awarding the Sale of Bonds, after the EDA transacts its business and the EDA meeting is adjourned. Mr. Paul Donna will be present at the July 28, 2008 meeting to present the final terms of the bonds, answer questions, and guide the City Council through this process. Prelimin~'gary/ (~ (~ j~ j~g'~ ~i~~..?1t7'17~11~(71l catty oCSl~cre~~%ooci, ~V11t>nesota Public Project Lease Revenue Bonds, Series 2008 Pricing Resize Sources & Uses Dated 08/01/2008 i Delivered 08/21/2008 Sources Of Funds Par Amount of Bonds $1,310,000.00 Accrued Interest from 08/01/2008 to 08/21/2008 3,130.00 Total Sources $1,313,130.00 Uses Of Funds Total Costs of Issuance including Underwriter's Discount 59,845.00 Deposit to Debt Service Fund 3,130.00 Deposit to Project Construction Fund 1,250,000.00_ Rounding Amount 155.00 Total Uses $1,313,130.00 Lease Revenue Bonds Serie ~ SINGLE PURPOSE ~ 7/24/2008 ~ t 1:18 AM Northland Securities Inc. Public Finance Page 1 "~ Preliminary s" ~ ' 3 City of S~IOre~~ocd, Minnesota Public Project Lease Revenue Bonds, Series 2008 Pricing Resize Debt Ser vice Schedule Part 1 of 2 Date Principal Coupan Interest Total P+I Fiscal To#al 08/21/2008 - - - - - 06/01/2009 - - 46,950.00 46,950.00 - 12/01 /2009 25,000.00 2.850% 28,170.00 53,170.00 100,120.00 06/01/2010 - - 27,813.75 27,813.75 - 12/01/2010 45,000.00 3.150% 27,813.75 72,813.75 100,627.50 06/01/2011 - - 27,105.00 27,105.00 - 12/01/2011 50,000.00 3.500% 27,105.00 77,105.00 104,210.00 06/01/2012 - - 26,230.00 26,230.00 - 12/01/2012 50,000.00 3.500% 26,230.00 76,230.00 102,460.00 06/01/2013 - - 25,355.00 25,355.00 - 12/01/2013 50,000.00 3.750% 25,355.00 75,355.00 100,710.00 06/01/2014 - - 24,417.50 24,417.50 - 12/01/2014 55,000.00 3.750% 24,417.50 79,417.50 103,835.00 06/01/2015 - - 23,386.25 23,386.25 - 12/01/2015 55,000.00 4.000% 23,386.25 78,386.25 101,772.50 06/01/2016 - - 22,286.25 22,286.25 - 12/01/2016 60,000.00 4.000% 22,286.25 82,286.25 104,572.50 06/01 /2017 - - 21,086.25 21,086.25 - 12/01/2017 60,000.00 4.200% 21,086.25 81,086.25 102,172.50 06/01/2018 - - 19,826.25 19,826.25 - 12/01/2018 60,000.00 4.200% 19,826.25 79,826.25 99,652.50 06/01/2019 - - 18,566.25 18,566.25 - 12/01/2019 65,000.00 4.350% 18,566.25 83,566.25 102,132.50 06/01 /2020 - - 17,152.50 17,152.50 - 12/01/2020 _ 70,000.00 4.350% 17,152.50 87,152.50 104,305.00 06/01/2021 - - 15,630.00 15,630.00 - 12/01/2021 70,000.00 4.500% 15,630.00 85,630.00 101,260.00 06/01/2022 - - 14,055.00 14,055.00 - 12/01/2022 75,000.00 4.500% 14,055.00 89,055.00 103,110.00 06/01/2023 - - 12,367.50 12,367.50 - 12/01/2023 75,000.00 _ 4.650% 12,367.50 87,367.50 99,735.00 06/01/2024 - - 10,623.75 10,623.75 - 12/01/2024 80,000.00 4.650% 10,623.75 90,623.75 101,247.50 06/01/2025 - - 8,763.75 8,763.75 - 12/01/2025 85,000.00 4.750% 8,763.75 93,763.75 102,527.50 06/01/2026 - - 6,745.00 6,745.00 - 12/01/2026 90,000.00 4.750% 6,745.00 96,745.00 103,490.00 06/01/2027 - - 4,607.50 4,607.50 - 12/01l2027 95,000.00 4.850% 4,607.50 99,607.50 104,215.00 06/01/2028 - - 2,303.75 2,303.75 - 12/01/2028 95,000.00 4.850% 2,303.75 97,303.75 99,607.50 Total $1,310,000.00 - $731,762.50 $2,041,762.50 - Lease Revenue Bonds Serie ~ SINGLE PURPOSE ~ 7/24/2008 ~ 17:78 AM Northland Securities Inc. Public Finance Page 2 ` ~ P~r`eliyyminary ('~ (p, City of Shorewood, Minnesota Public Project Lease Revenue Bonds, Series 2008 Pricing Resize Debt Service Schedule Part 2 of 2 Date And Term Structure Dated 8/01 /2008 Delivery Date 8/21/2008 First Coupon Date 6/01/2009 First available call date 12/01/2016 Call Price 100.0000000% Accrued Interest from 08/01/2008 to 08/21/2008 3,130.00 Yield Statistics Bond Year Dollars $16,103.89 _ Average Life 12.293 Years Average Coupon 4.5440111 Netlnterest Cost(NIC) 4.7880515% True Interest Cost (TIC) 4.8275079% All Inclusive Cost (AIC) 5.0110909% IRS Form 8038 Net Interest Cost 4.5245748% _ Weighted Average Maturity 12.293 Years Bond Yield for Arbitrage Purposes 4.4879648% Lease Revenue Bonds Serie I SINGLE PURPOSE ~ 7/24/2008 ~ 11:18 AM ~ ;a. Northland Securities Inc. ~~`~=~ Public Finance Page 3 THE LEASE ~CUREEIIE~TS Fc~llo~;tit:; is ~i stntitttc3t~_- cif eert~itt proviiom ~f the <Trotmd Luse cud Lease-Purchase ~ae~tt~ent beh~-een the Authoritc and the City: The CFrotnxl Lease: The Gx~und Leaseterminates upon the occturenue of anti otie of the f~llc+i~~int et>ents: + Payment b~- the C'iri' of all Lease P~vntents • Etercise by the City of its option to prepay the Lease anti all other sums due • The reimntation of the Lease Tc'rln by the Citi~ for uonappropriatiou • The termination of the Lease Tenn upon the oecaurence of an Event of Defauk by the {_'it}~ The Lease-Purchase Agreement: The .~ttthurih is ~~~ilhn~ to aecluire a leasehold interest in the site, pttrsuaut to a (~rotutd Lease.. from the C'irv- to the Authotih~ and to acquire title to the Facilities ancito lease and sell the site and facilities is the City, pursuant to a Least Purchase Agreement. The City has deter~uued tliat it is necessary for it to acquire, pursuant to the Lease- the Authority's interest in real property urith buildings.. stntchues and itnlxoventents constructed thereon and equipment fo be contained tlrereitt. Payments raider the Lease A~reenrent The City ~r~ill make Lease Payments under the Lease-Purchase agreement senuannually in amount: sufficient to pay the principal of and interest on the Bonds ~~rhen due. The City is also obligated to nnike other payments sufficient to pay: • all fees. chat ~~es and expenses of the Bond Register and Pad ing Agent • all c_i~sts in connection t~~ith the call, redemption and ga}-went of Botrds + expenses reasrnrably uicrnred 1iy the Authorit<~ ut connection ~iith the performance of the Authority's oblisatious under the Lease oi- Bind Res~hrtirnr • all e~peus~s incurred in couiiecticin ~t~ith the enforcement of auv rights render The Lease by the Authorit<° or the O~s,~ners of the Bonds • all payments required by rebate cotenants • all tither paytttents tchiclt the C'iit~ has a~reeil to pay or assume • all costs; cli<~ueet. expenses and other amounts and obligations due under the tJroturd Least Lease Payments shall be paid in same-day' fiends chrectly to the Bend Revistrar. It is .~cl:rroU=lodged that the Lease Pa~~ment to be made on each fay 15 or hTOeember 15, respectiyel}~=, shall be applied to p.ayrnent of the principal of and interest on the Bonds to be paid on each Jtme 1 and December i, respectiE-ely. Operation, :1laintenance and ~~iottiticatiott of Site and Facilities The Cite shall. at its otivn expert e, mauztain, presei-t,~e and keep the Site anii the Facilities in good repair, working rnxter ,and condition and shall lrom time to time make all repairs, replacetuents and imlaroyements necessary to keep the Site and the Facilities in such condition. The City sha11 have the right to remodel the Facilities, or make alterations, mod>fications,and impioeements thereto. Dm~ina the tens of the Lease, the City shall pay as the same become due, all utilities, tales and gen=emmental charges of any kuxi ~ihatsoet-er. Insurance The City shall procure and ntaurtain cuntinttousIv insurance relaturg to the nrauitenance. use or operation of the Cih~. tine Facilities or anv part thereof; in amounts not less than the City's tort liability linuts tinder ATinnesota Stahttes. Assi~~ruueut: Subleasin Tlae lights and obligations of the Authority_ under this Lease.. including the right to receive Sand enforce payment of the Lease Payruerrts and the Additional Lease Patiinentti to be made Li- the Cite, mat root be assi~vriecl, piecl~~eil or mottRa~ecl car tl~ansfeared ua whole or nr part. 'The rights and obligatioiLS of the Authority may be hrrn:ferred and assiQuacl to arrz° legal successor to the functions of the Audrinif`~. The iaght~s and oblisa[ions of the City may notbe asaiared by the City wiffioart the a=ritten consent of the Anflrarit<°. Events of Default and P.emedies Followins,~ are E«ent of Default under the Lease-Pau'chase A~~eemerit: 1. Failure by the Cih~~ to pay any Least Payment ar other pa}-meat recltureci to lre paid hereunder 2. Failure by the City to observe rmd perform any covenant condition ur agreement under the Lease for a period of (iU day: after written notice specri}~ia{g such failure and requestiir~~ that, it be cenredied has been given to the City by the Authority, unless the Authority shall agree in iaaiting to an eYtensiou of,ucla tiure prior to its eypir~iton. 3. The City shall appl}' fbr or consent to the appointureut of, or taking of possession by. a receiver. custodian, tnastee_ liquidator or the like of the Cite or of all or a substantial part of its property, or commence a ti~bh~ntaav case under- the Federal Bankruptcy Code; ur flle a petition seekin~~ to take advantage of any other law relaturg tc~ bankaraptcy, insolvency, reorganiz_ataon, winding-up or composition or adjustment of debts. d- A parcr:eding or case shall be aruunenccd without the application ar consent of the Git}° seekurg (ir) liquidation, reorganization, dissolution, wiirding-up or c-omposition or adittshnent of debts of the CiR~ or (bl the appointrnent of a trnstez, rzceiyer, custodian, liquidator oi~ the like of the City or (c) similar relief in aspect of the City auader an<< law° relating to barihiaptcy, insolyenc~. reorgauizataon, ~--hindin;-up or composition or adiushueut of debts, and such proceedin~* has rant been clisrnissed with Bitty (CU) cLiys of the llliu~ thereof. Pm~ehase of Facilities by the City; TerYninatio^ of Lease At any time a~°hen the P~uchase Price, together as=ith nnv unpaid or delinquent interest; hr~s been fully paid or provided for shall be deemed to have been completed. The ~~uthoritl° shall thereupon deliver to the City snob instruments of convey{agree or release as, in the opinion of the City. array be necessary to release the interest of the AuthoriiZ fir the Site and the Facilities. Extract of Minutes of Meeting of the Shorewood Economic Development Authority, Hemlepin County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the Shorewood Economic Development Authority was duly held in the City Hall in the City of Shorewood, Mimiesota on Monday, July 28, 2008, commencing at 7:00 P.M. The following members were present: and the following were absent: *~~ :~~* *~* The President announced that the next order of business was consideration of a proposal for the purchase of the Authority's $ Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation). The Acting Executive Director presented the proposal. After due consideration of the proposal, Commissioner following resolution, and moved its adoption: then introduced the 33303~v2 A.IP SI f230-41 RESOLUTION NO. 2008- A RESOLUTION AWARDING THE SALE OF $ PUBLIC PROJECT LEASE REVENUE BONDS, SERIES 2008A (CITY OF SHOREWOOD, MINNESOTA LEASE OBLIGATION); FIXING THEIR FORM AND SPECIFICATIONS; DIRECTING THEIR EXECUTION AND DELIVERY; AND PROVIDING FOR THEIR PAYMENT BE IT RESOLVED By the Board of Commissioners of the Shorewood Economic Development Authority (the "Authority") as follows: Section 1. Sale of Bonds. 1.01. Background. The City of Shorewood, Minnesota (the. "City") is authorized by Minnesota Statutes, Section 465.71, as amended to acquire such items of real and personal property as are needed to carry out its governmental and proprietary functions, and to acquire such real and personal property by entering into lease-purchase agreements. The City has determined that it is necessary for it to acquire pursuant to aLease-Purchase Agreement, dated as of August 1, 2008 (the "Lease"), between the City and the Authority, the Authority's interest in certain real property described in the Lease (the "Site"), together with certain buildings, stntctures and improvements to be constructed thereon, and certain equipment to be contained therein (the "Facilities"). 1.02. Constriction of Facilities. The development of the Site and the Facilities is consistent with and furthers the economic development functions of the Authority, and the Authority is willing to acquire a leasehold interest in the Site pursuant to a Ground Lease, dated as of August 1, 2008 (the "Ground Lease"), between the City and the Authority, and to acquire title to the Facilities and to lease and sell the Site and the Facilities to the City, pursuant to the Lease. To provide funds for the construction of the Facilities, the Authority will issue its $ Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation) (the "Bonds"). 1.03. Award to the Purchaser and Interest Rates. The proposal of Northland Securities, Inc. (the "Purchaser") to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $ plus accnted interest to date of delivery, for Bonds bearing interest as follows: 33~034v2 A.IP SFIZ30-41 2 Year of Maturity 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tnie interest cost: Year of Maturity 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Interest Rate 1.04. Purchase Contract. The President and the Acting Executive Director are directed to execute a contract with the Purchaser on behalf of the Authority. 1.05. Terms and Principal Amounts of the Bonds. The Authority will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Sections 469.091 to 469.1081, as amended (the "Act") in the total principal amount of $ , originally dated August 1, 2008, in the denomination of $5,000 each or any integral multiple thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on December 1 in the years and amounts as follows: Year of Maturity 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Interest Rate Amount Year of Maturity 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Amrnmt 1.06. Optional Redemption. Bonds due on or after December 1, 2016 are subject to optional redemption and prepayment on December 1, 2015 and on any date thereafter. Redemption may be in whole or in part and if in part, at the option of the City, so long as the Lease is in effect, and in such manner as the City will determine. If less than all Bonds of a maturity are called for redemption, the Authority will notify DTC (as defined in Section 7 33~034v2 A.IP SFI230-41 3 hereof) of the particular amount of such maturity to be prepaid. DTC will determine by lot the amount of each participant's interest in such maturity to be redeemed and each participant will then select by lot the beneficial ownership interests in such maturity to be redeemed. Prepayments will be at a price of par plus accreted interest. [1.07. Mandatory Redemption. To be inserted if Term Bonds are requested by the Purchaser.] Section 2. Registration and Payment. 2.01. Registered Form. The Bonds will be issued only in frilly registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 2.02. Dates; Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on June 1 and December 1 of each year, commencing June 1, 2009, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 2.03. Registration. The Authority will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal corporate trust office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instniment of transfer, in fornl satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like 33~034v2 AJY SH230-41 4 aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar znay refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instnmzent of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes and payments so made to the registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes, Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds, sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated Lost Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the Authority and the Registrar mzzst be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the Authority. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the redemption notice by first class mail (postage prepaid) to the 33~034v2 AJP SFI230-41 5 registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. Bonds so called for redemption will cease to bear interest after the specified redemption date, provided that the funds for the redemption are on deposit with the place of payment at that time. 2.04. Appointment of Initial Registrar. The Authority appoints Northland Tnist Services, Inc, Minneapolis, Minnesota, as the initial Registrar. The President and the Acting Executive Director are authorized to execute and deliver, on behalf of the Authority, a contract with the Registrar. Upon merger or consolidation of the Registrar with another corporation, if the resulting corporation is a bank or mist company authorized by law to conduct such business, the resulting corporation is authorized to act as successor Registrar. The Authority agrees to pay, from Additional Lease Payments paid by the City under the Lease, the reasonable and customary charges of the Registrar for the services performed. The Authority reserves the right to remove the Registrar upon 30 days' notice and upon the appointment of a successor Registrar, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. 2.05. Execution, Authentication and Delivery. The Bonds will be prepared under the direction of the Acting Executive Director and executed on behalf of the Authority by the signatures of the President and the Acting Executive Director, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual signature of an authorized representative of the Registrar. Certificates of authentication on different Bonds need not be signed by the same representative. The executed certificate of authentication on a Bond is conclusive evidence that it has been authenticated and delivered under this Resolution. When the Bonds have been so prepared, executed and authenticated, the Authority will deliver the same to the Purchaser upon payment of the purchase price in accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 2.06. Temporary Bonds. The Authority may elect to deliver in lieu of printed definitive Bonds one or more typewritten temporary Bonds in substantially the form set forth in Section 3 with such changes as may be necessary to reflect more than one maturity in a single temporary bond. Upon the execution and delivery of definitive Bonds the temporary Bonds will be exchanged therefor and cancelled. 33i03av2 AJP SH230-41 6 Section 3. Form of Bond. 3.01. The Bonds will be printed or typewritten in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF SHOREWOOD SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY No. R- Interest Rate Public Project Lease Revenue Bond, Series 2008A Maturity Date of Original Issue CUSIP December 1, Registered Owner: CEDE & CO. Principal Amount: August 1, 2008 The Shorewood Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnesota (the "Authority"), for value received, hereby promises to pay, but solely from the sources hereinafter described, to the Registered Owner specified above or registered assigns, the principal amount set forth above on the Maturity date specified above, upon the presentation and surrender hereof, and to pay to the Registered Owner hereof interest on such principal amount from such sources at the interest rate specified above from the Date of Original Issue set forth above, or the most recent interest payment date to which interest has been paid or duly provided for as specified below, on June 1 and December 1 of each year, commencing June 1, 2009, until said principal amount is paid. Principal and interest are payable in lawful money of the United States of America at the office of Northland Tntst Services, Inc., Minneapolis, Minnesota, or of its successor, as Bond Registrar. Interest shall be paid on each interest payment date by check or draft mailed to the person in whose name this Bond is registered at the close of business on the fifteenth (15th) day of the month immediately preceding such interest payment date (whether or not a business day) at the Owner's address set forth on the registration records maintained by the Bond Registrar. Upon written request to the Bond Registrar, delivered at least fifteen (15) days prior to an interest payment date by a registered Owner of $500,000 or more in aggregate original principal amount of the Bonds, payment of interest may be made by wire transfer to such registered Owner. Any such interest not punctually paid or provided for will cease to be payable on such regular record dates and such defaulted interest may be paid to the person in whose name this Bond is registered at the 33~034v2 A.IP SN230-41 7 close of business on a special record date for the payment of such defaulted interest established by the Bond Registrar. It is hereby certified and recited and the Authority has found: that all acts, conditions and things required to be done precedent to and in the issuance of this Bond and the series of which it is a part have been properly done, have happened and have been perfornled in regular and due time, fornl and manner as required by law; and that this Bond and the series of which it is a part does not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation. This Bond is issued pursuant to Minnesota Statutes, Sections 469.091 to 469.1081, as amended (the "Act"), and in conformity with the provisions, restrictions and limitations thereof. This Bond does not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City of Shorewood, Minnesota (the "City") and does not grant to the Owner of this Bond any right to have the Authority or the City levy any taxes or appropriate any fiords for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. This Bond does not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. This Bond and interest hereon are payable solely from Lease Payments to be paid by the City pursuant to a Lease-Purchase Agreement, dated as of August 1, 2008 (the "Lease"), between the Authority and the City, or other moneys held by the Bond Registrar in a fiend or account appropriated to the payment of the Bands of this series under the Bond Resolution adopted by the Authority on July 28, 2008 (the "Resolution"). The Authority's Board of Commissioners has designated the issue of Bonds of which this Bond forms a part as "qualified tax exempt obligations" within the meaning of Section 265(b)(3) of the Intenlal Revenue Code of 1986, as amended (the "Code") relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE IS SUBJECT TO ANNUAL APPROPRIATION BY THE CITY COUNCIL OF THE CITY. IN THE EVENT THE CITY COUNCIL DETERMINES NOT TO APPROPRIATE MONEYS FOR THE PAYMENT OF LEASE PAYMENTS DUE IN A FISCAL YEAR, THE LEASE WILL TERMINATE AT THE END OF THE THEN-CURRENT FISCAL YEAR, AND THE CITY WILL HAVE NO FURTHER OBLIGATION TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE. This Bond is one of a duly authorized series of special, limited obligation Bonds in an aggregate principal amount of $ , in denominations of $5,000 or integral multiples thereof not exceeding the principal amount maturing in any year, and numbered from R-1 upwards, and of like tenor and effect except as to serial number, denomination, interest rate, maturity and right of prior redemption, all of which have been authorized by law to be issued and have been issued or are to be issued by the Authority pursuant to the Resolution, to provide 33~034v2 A.(P SH23U-41 8 financing for the acquisition and constriction of the Site and the Facilities described in the Lease. The Bonds are equally and ratably secured by the Resolution and the Lease. Pursuant to a Ground Lease, dated as of August 1, 2008 (the "Ground Lease") between the City and the Authority, the City has leased the Site described in the Lease to the Authority. Reference is hereby made to the Ground Lease, the Lease, the Resolution, and any amendments or supplements thereto for a description and limitation of the property, revenues and fields pledged and appropriated to the payment of the Bonds, the nature and extent of the security thereby created, the rights of the Owners of the Bonds, the rights, duties and immunities of the Bond Registrar, and the rights, immtmities and obligations of the Authority and the City thereunder. Certified copies of the Resolution and executed counterparts of the Ground Lease and the Lease are on file at the office of the Authority. Bonds due on or after December 1, 2016 are subject to optional redemption, at the election of the City, so long as the Lease is in effect, in whole or in part, and if in part in such manner as the City shall determine, on December 1, 2015 and any date thereafter, at a redemption price of par plus accrued interest. Notice of any such redemption shall be given to the registered Owner of each Bond to be redeemed by first class mail, addressed to the Owner's registered address, not later than thirty (30} days prior to the date fixed for redemption. Prior to the date fixed for redemption, funds shall be deposited with the Bond Registrar sufficient to pay the Bonds called and accrued interest thereon. Upon the happening of the above conditions, Bonds thus called shall not bear interest on or after the call date and, except for the purpose of payment from the funds so deposited, shall no longer be protected by the Resolution. This Bond is transferable, as provided in the Resolution, only upon the registration records maintained by the Bond Registrar by the Registered Owner hereof in person or by the Owner's duly authorized attorney, upon surrender of this Bond for transfer at the office of the Bond Registrar, duly endorsed by, or accompanied by a written instniment of transfer in form satisfactory to the Bond Registrar duly executed by, the Registered Owner hereof or the Owner's duly authorized attorney, and, upon payment of any tax, fee or other governmental charge required to be paid with respect to such transfer, one or more Bonds of the same maturity, aggregate principal amount and interest rate will be issued to the designated transferee or transferees. The Bonds are issuable only as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof not exceeding the principal amount maturing in any year. As provided in the Resolution and subject to certain limitations set forth therein, the Bonds are exchangeable for a like aggregate principal amount of Bonds of the same maturity and interest rate, of different authorized denominations, as requested by the Registered Owner or the Owner's duly authorized attorney upon surrender thereof to the Bond Registrar. In case an Event of Default as defined in the Resolution or the Lease occurs, or in the event ofnon-appropriation under the Lease by the City Council of the City, the principal of this Bond and all other Bonds outstanding may be declared or may become due and payable prior to 335034v2 AJP SFI230-41 C~ the stated maturity hereof in the manner and with the effect and subject to the conditions provided in the Resolution, but no Owner of any Bond shall have any right to enforce the provisions of the Resolution, the Lease or the Ground Lease except as provided in the Resolution. With the consent of the Authority and the Bond Registrar, and to the extent permitted by and as provided in the Resolution, the terms and provisions of the Resolution, the Lease and the Ground Lease, or of any instrument supplemental thereto, may be modified or altered by the assent or authority of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding thereunder. This Bond shall not be valid or become obligatory for any purpose until it shall have been authenticated by the execution of the certificate hereon endorsed by the Bond Registrar under the Resolution. (The remainder of this page is intentionally left blank.) 335034v2 AJP SI-1?30-41 1 IN WITNESS WHEREOF, the Shorewood Economic Development Authority has caused this Bond to be executed in its name by the facsimile signatures of its duly authorized officers, all as of the Date of Original Issue specified above. Date: SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY (Facsimile President (Facsimile) Acting Executive Director (Form of Bond Registrar's Certif cate) This is one of the Bonds described in the within mentioned Resolution. Date: NORTHLAND TRiJST SERVICES, INC. Bond Registrar By Authorized Signature 33~034v2 AJP Sf-1230-41 11 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name aiid Address of Transferee} the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with frill power of substitution in the premises. Dated: Please Insert Social Security Number or Other Identifying Number of Assignee Notice: The signature to this assignment must correspond with the name as it appears on the face of this Bond in every particular, without alteration or any change whatever. PR®VISI®NS AS TO REGISTRATI®N The ownership of the principal of and interest on the within Bond has been registered on the books of the Bond Registrar in the name of the person last noted below. Signature of Date of Registration Registered Owner Bond Registrar August _, 2008 Cede & Co. Federal ID #13-2555119 3.02. Au~,rovin~ Leal Opinion.. The Acting EXcciitlve Director iS autiloriZed and directed to obtain a copy of the proposed approving legal opinion of Kennedy & Graven, Chartered, Minneapolis, Minnesota, which will be complete except as to dating thereof and to cause the opinion to be printed on or accompany each Bond. 33~034v2 AJP SH230-41 l 2 Section 4. PaYment• Security Pledges and Covenants. 4.01. Debt Service Fund.. (a) The Bonds are payable from the Debt Service Ftmd hereby created, and the Lease Payments payable by the City under the Lease are hereby pledged to the Debt Service Fund. There is also appropriated to the Debt Service Fund the accnied interest paid by the Purchaser upon closing and delivery of the Bonds. So long as there is no Event of Default under the Lease and the City has not terminated the Lease due to nonappropriation, the Debt Service Fund shall be held and administered by the City. (b) Protect Fund. The proceeds of the Bonds, less the appropriations made in paragraph (a), will be deposited with the City in a separate project field to be used solely to defray expenses of the constniction of the Facilities. When the Facilities are completed and the cost-thereof paid, the project filnd_is to_be closed,. and_any balance thereon credited to the Debt_ _ _ __ Service Fund. 4.02. Lease Payments. The Authority covenants to apply all Lease Payments received by the Authority from the City pursuant to the Lease to the payment of the principal of and interest on the Bonds. The Bonds shall not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority or the City and shall not grant to the Owners of the Bonds any right to have the Authority or the City levy any taxes or appropriate any fiords for the payment of the principal thereof or interest thereon. The Bonds are not a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. The Bonds shall not constitute an indebtedness of the Authority or the City within the meaning of any state constitutional provision or statutory limitation. The Bonds and interest thereon are payable solely from Lease Payments to be paid by the City pursuant to the Lease, or other moneys held by the Bond Registrar in a fiend or account appropriated to the payment of the Bonds. The obligation of the City to make Lease Payments pursuant to the Lease is subject to annual appropriation by the City Council of the City. In the event the City Council determines not to appropriate moneys for the payment of Lease Payments due in a fiscal year, the Lease will terminate at the end of the then-current fiscal year, and the City will have no further obligation to make Lease Payments pursuant to the Lease. In case an Event of Default as defined in the Lease occurs, or in the event of non- appropriation by the City Council of the City, the Authority may declare the principal of all Bonds outstanding to be due and payable prior to the stated maturity thereof, and upon such declaration, the principal of all Bonds outstanding shall become due and payable. After such declaration, all moneys received by the Authority and applicable to the Bonds pursuant to the Lease shall be applied to the equal and proportional payment of all Bonds outstanding and claims for interest thereon, without priority of any Band over another Bond, or of principal over interest or interest over principal. 33~034v2 A.IP SFI230-41 13 Section 5. Authentication of Transcript. 5.01. Bond Transcript. The officers of the Authority are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the Authority relating to the Bonds and to the financial condition and affairs of the Authority, and such other certificates, affidavits and transcripts as maybe required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, may be deemed representations of the Authority as to the facts stated therein. 5.02. Official Statement. The President and Acting Executive Director are authorized and directed to certify that they have examined the Official Statement prepared and circulated in connection with the issuance and sale of the Bonds and that to the best of their knowledge and belief the Official Statement is a complete and accurate representation of the facts and representations made therein as of the date of the Official Statement. 5.03. Approval of Documents. The Ground Lease and the Lease are hereby approved. The President and the Acting Executive Director are authorized and directed to execute and deliver the Ground Lease and the Lease on behalf of the Authority, substantially in the forms on file, but with all such changes therein as shall be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall be delivered, filed and recorded as provided therein. The President, the Acting Executive Director and other officers of the Authority are also authorized and directed to execute such other instniments as may be required to give effect to the transactions herein contemplated. 5.04. Payment of Costs of Issuance. The Authority authorizes the Purchaser to forward the amount of Bond proceeds allocable to the payment of issuance expenses (other than amounts payable to Kennedy & Graven, Chartered as Bond Counsel) to the Registrar on the closing date for further distribution as directed by the Authority's financial adviser, Northland Securities, Inc. Section 6. Tax Covenants. 6.01. Tax-Exempt Obligations. The Authority covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that maybe necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 33i034v2 nJP SFI230-41 1l~ 6.02. No Rebate Required. (a) The Authority will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income of the interest on the Bonds under Section 103 of the Code, including without limitation requirements relating to temporary periods for investments, limitations on amounts invested at a yield greater than the yield on the Bonds, and the rebate of excess investment earnings to the United States, if the Bonds (together with other obligations reasonably expected to be issued in calendar year 2008) exceed the small-issuer rebate exception amount of $5,000,000. (b) For proposes of qualifying for the small issuer exception to the federal arbitrage rebate requirements, the Authority finds, determines and declares that the aggregate face amount of all tax-exempt bonds (other than private activity bonds) issued by the Authority (and all subordinate entities of the Authority) during the calendar year in which the Bonds are issued and outstanding at one time is not reasonably expected to exceed $5,000,000, all within the meaning of Section 148(f)(4)(D} of the Code. 6.03. Not Private Activity Bonds. The Authority further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 6.04. Qualified Tax-Exempt Obligations. In order to qualify the Bonds as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b} the Authority designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2008 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2008 have been designated for purposes of Section 265(b)(3) of the Code. 6.04. Procedural Requirements. The Authority will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this section. 335034v2 A.tP SH230-41 15 Section 7. Book-Entry System• Limited Obligation of Authority. 7.01. DTC. The Bonds will be initially issued in the form of a separate single typewritten or printed frilly registered Bond for each of the maturities set forth in Section 1.03 hereof. Upon initial issuance, the ownership of each Bond will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York, and its successors and assigns {"DTC"). Except as provided in this Section, all of the outstanding Bonds will be registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC. 7.02. Participants. With respect to Bonds registered in the registration books kept by the Registrar in the name of Cede & Co., as nominee of DTC, the Authority, the Registrar and the Paying Agent will have no responsibility or obligation to any broker dealers, banks and other financial institutions from time to time for which DTC holds Bonds as securities depository (the "Participants") or to any other person on behalf of which a Participant holds an interest in the Bonds, including but not limited to any responsibility or obligation with respect to (i) the accuracy of the records of DTC, Cede & Co. or any Participant with respect to any ownership interest in the Bonds, (ii) the delivery to any Participant or any other person (other than a registered owner of Bonds, as shown by the registration books kept by the Registrar) of any notice with respect to the Bonds, including any notice of redemption, or (iii) the payment to any Participant or any other person, other than a registered owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the Bonds. The Authority, the Registrar and the Paying Agent may treat and consider the person in whose naive each Bond is registered in the registration books kept by the Registrar as the holder and absolute owner of such Bond for the purpose of payment of principal and interest with respect to such Bond, for the purpose of registering transfers with respect to such Bonds, and for all other purposes. The Paying Agent will pay all principal of and interest on the Bonds only to or on the order of the respective registered owners, as shown in the registration books kept by the Registrar, and all such payments will be valid and effectual to fully satisfy and discharge the Authority's obligations with respect to payment of principal of or interest on the Bonds to the extent of the sum or sums so paid. No person other than a registered owner of Bonds, as shown in the registration books kept by the Registrar, will receive a certificated Bond evidencing the obligation of this Resolution. Upon delivery by DTC to the Authority of a written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new nominee of DTC; and upon receipt of such a notice, the Authority will promptly deliver a copy of the same to the Registrar and the Paying Agent. 7.03. Representation Letter. The Authority has heretofore executed and delivered to DTC a Blanket Issuer Letter of Representations (the "Representation Letter") which will govern payTnent of principal of and interest on the Bonds and notices with respect to the Bonds. Any Paying Agent or Registrar subsequently appointed by the Authority with respect to the Bonds will agree to take all action necessary for all representations of the Authority in the Representation Letter with respect to the Registrar and Paying Agent, respectively, to be complied with at all times. 335034v2 AJP SH230-41 1 7.04. Transfers Outside Book-Entry S, stein. In the event the Authority, by resolution, determines that it is in the best interests of the persons having beneficial interests in the Bonds that they be able to obtain Bond certificates, the Authority will notify DTC, whereupon DTC will notify the Participants, of the availability through DTC of Bond certificates. In such event the Authority will issue, transfer and exchange Bond certificates as requested by DTC and any other registered owners in accordance with the provisions of this Resolution. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the Authority and discharging its responsibilities with respect thereto under applicable law. In such event, if no successor securities depository is appointed, the Authority will issue and the Registrar will authenticate Bond certificates in accordance with this Resolution and the provisions hereof will apply to the transfer, exchange and method of payment thereof. 7.05. Payments to Cede & Co. Notwithstanding any other provision of this Resolution to the contrary, so long as a Bond is registered in the name of Cede & Co., as nominee of DTC, payments with respect to principal of and interest on the Bonds and notices with respect to the Bonds will be made and given, respectively, in the manner provided in DTC's Operational Arrangements, as set forth in the Representation Letter. Section 8. Continuing Disclosure. 8.01. Contim>ina Disclosure Certificate. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate is not to be considered an event of default with respect to the Bonds; however, any Bondholder may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Section. 8.02. Execution of Continuing Disclosure Certificate. "Continuing Disclosure Certificate" means that certain Continuing Disclosure Certificate, executed by the Mayor and the Acting City Administrator of the City and dated the date of issuance and delivery of the Bonds, as originally executed and as it maybe amended from time to time in accordance with the terms thereof. Section 9. Defeasance. When all Bonds and all interest thereon have been discharged as provided in this Section, all pledges, covenants and other rights granted by this Resolution to the holders of the Bonds will cease. The City may discharge all Bonds which are due on any date by depositing with the Registrar on or before that date a sum sufficient for the payment thereof in frill. If any .Bond should not be paid when due, it may nevertheless be discharged by depositing with the Registrar a sum sufficient for the payment thereof in full with interest accrued to the date of such deposit. 335034v2 A.(P SH230-41 17 Adopted this 28th day of Juiy, 2008 by the Board of Commissioners of the Shorewood Economic Development Authority. SHOREWOOD ECONOMIC DEVELOPMENT AUTHORITY By Its President By Its Acting Executive Director 33~034v2 AJP St-[230-41 18 The motion for the adoption of the foregoing resolution was duly seconded by Commissioner ,and upon vote being taken thereon, the following voted in favor thereof: and the following voted against the same: whereupon said resohrtion was declared duly passed and adopted. 33~034v2 AJP SH230-41 19 STATE OF MINNESOTA ) COUNTY OF HENNEPIN ) SS. CITY OF SHOREWOOD ) I, the undersigned, being the duly qualified and Acting Executive Director of the Shorewood Economic Development Authority, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the Authority held on July 28, 2008 with the original minutes on file in my office and the extract is a full, taste and correct copy of the minutes insofar as they relate to the issuance and sale of $ Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation) of the Authority. WITNESS My hand officially as such Acting Executive Director and the corporate seal of the Authority this day of , 2008: Acting Executive Director (SEAL) 335034v2 AJP Sf I230-41 I SHOREWOOD 5755 COUNTRY CLUB ROAD •SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us Celebrating 50 Years • 1956 - 2006 MEMORANDUM TO: City Council FROM: Larry Brown, Acting City Administrator & Director of Public Works DATE: July 24, 2008 RE: Consideration of the 2009 Budget for the South Lake Minnetonka Police Department On May 14th, 2008, the South Lake Minnetonka Police Department (SLMPD) Coordinating Committee hosted a joint meeting of the member Cities that operate under the Joint Powers Agreement (JPA) for the SLMPD. Attachment 1 is the draft minutes of that meeting. Included within the Council Packet is the 2009 Operating Budget Proposal. Chief Litsey will be present at the City Council Meeting, on Monday, to present the budget that was discussed at the Joint City Council Meeting. Chief Litsey and done an outstanding job at outlining the budget proposal in the front end of the budget. Thus, this will not be repeated here. Having stated that, the following are key discussion points from the Joint Meeting. Staffin There was considerable discussion at this meeting regarding the proposed staffing levels that are proposed to address current shortfalls within the normal shift schedules and to increase availability of officers to perform other demands during DUI enforcement or community policing. Currently, there are shifts are often performed by a single officer. This scenario gets more complicated when officers are sick, on vacation, or in training. Considerable discussion was also conducted by the Operating Committee on concerns that have been raised with regard to officer safety, during periods or shifts where only one officer is on duty. Labor Costs Labor, health insurance and pensions represent a key portion of the budget. It is noted that officers are part of a bargaining unit and wage negations for the following years have yet to be negotiated. :®~® PRINTED ON RECYCLED PAPER y~ 6 Fuel and Ammunition Certainly, a focus in all departments is fuel costs and the impacts that the recent fuel pricing has had on all departments. Similarly, Chief Litsey has indicated that ammunition costs have increased dramatically, due to the war in Iraq. While conservation measure can be used for both of these items, these tend to be fixed costs. Appendix B provides a 5 year breakdown of the member cities. In an effort not to duplicate that which has already been published in great detail, this will not be repeated here. Long Term Building Maintenance Costs There has been considerable discussion, both on the police and fire side of operating budgets as to how to calculate the long term impact of owning and operating the public safety facility. To date, an accepted method of calculating such costs has not been agreed upon. Certainly, this will take time to compile and reach agreement with all the member cities. The good news is that this item is not an item that has to be addressed immediately. Wile it would be convenient to have this information at hand, the Cities actually have a four year history with the facility. This provides a good history to draw upon for the current operations. Will this operating number change over time? However, being that the building is only four years old, it is very probable that the operating costs will remain as they have been, for the next few years. This provides an opportunity and adequate time to develop a long term depreciation plan for the building. Under any scenario, if there were items of catastrophic or unexpected expenses, the Police and or Fire Chief would be requesting additional funding from the member cities. Thus, there appears to be adequate time to address this question in the near future. Update on Member City Actions The other member cities under the JPA have considered the proposal and taken action. They are as follows: • City of Greenwood July 1, 2008 Approved 4 to 0 (one member absent) • City of Excelsior July 21, 2008 Approved 5 to 0 • City of Tonka Bay July 22, 2008 Approved 3 to 1 Again, Chief Litsey will be present on Monday to present this in greater detail. South Lake Minnetonka Police Department Coordinating Committee 24150 Smithtown Road Joint Meeting of SLMPD Member Cities' Councils Shorewood, Minnesota Wednesday, May 14, 2008 7:00 P.M DRAFT -SUMMARY MINUTES 1. CONVENE JOINT MEETING OF SLMPD MEMBER CITIES' COUNCILS Chair Lizee called the meeting to order at 7:02 P.M. A. Roll Call Present: South Lake Minnetonka Police D~artment (SLMPD) Coordinating Committee Members: Chair Lizee; Committee Members Newman and Ruehl; SLMPD Chief Litsey; SLMPD Deputy Chief Nieling; and SLMPD Office Administrator Swanson Also present: Excelsior City Manager Luger and City Clerk Johnson; Greenwood Administrator Whipple; Shorewood Acting Administrator Brown; and Tonka Bay Administrator Loftus; Excelsior Councilmembers Caron and Miller; Greenwood Councilmembers Sagal and Scharf; Shorewood Councilmembers Bailey, Turgeon, Wellens, and Woodruff; and, Tonka Bay Councilmembers De La Vega, Marceau, and Tessness Absent: Committee Member LaBelle Chair Lizee welcomed attendees to this joint meeting of the South Lake Minnetonka Police Department (SLMPD) member cities councils. She introduced Kristi Luger, the new City Manager for Excelsior; Luger started in her position on April 21, 2008. Chair Lizee reviewed the agenda for the meeting. First, Chief Litsey would provide an overview of the SLMPD strategic planning initiative. After a short break, there would be an opportunity for questions and filrther discussion. She requested people wait until after the break to ask their questions. 2. SLMPD STRATEGIC PLANNING OVERVIEW Chief Litsey walked the participants through a PowerPoint presentation he had prepared regarding the SLMPD Strategic Planning initiative and the Strategic Action Plan (the Plan) as detailed in the PowerPoint presentation dated May 14, 2008, which is on file. Chief Litsey provided a brief overview of the SLMPD organization. The highlights are as follows. - The SLMPD's vision statement is "To provide quality policing for the cities of Excelsior, Greenwood, Shorewood and Tonka Bay through visionary leadership, a commitment to excellence and the effective use of resources." - The SLMPD's mission statement is "To deliver unparalleled police service by sustaining an organizational philosophy that fosters pride, integrity, dedication and excellence among the department personnel. This, in turn, nurtures innovative problem solving, community partnerships and proactive crime suppression that enhances the quality of life in the cities of Excelsior, Greenwood, Shorewood, and Tonka Bay." SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 2 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 2 of 13 - The SLMPD is one of the few police departments in the State that operates as a joint powers organization. In essence the SLMPD is a separate unit of government, but it does not have taxing authority. It relies on contributions from the member cities as its primary source of funding. Once the contributions are approved they come under the SLMPD umbrella and oversight is provided by the SLMPD Coordinating Committee. - The Coordinating Committee (comprised of the mayors of the member cities) is the governing board for the SLMPD. The Operating Committee (comprised of the member cities' administrators/managers) serves in an advisory capacity; the Operating Committee was created by policy in 2004. The Chief of Police reports to the Coordinating Committee; the Chief is the chief law enforcement officer and has administrative responsibilities similar to that of a city administrator. Duties of the Deputy Police Chief include overseeing the day-to-day operations. There are two patrol sergeants, eight patrol officers, two investigators, one office administrator, two part-time office specialists, one community service supervisor and three part-time community service officers. There are currently nine reserve officers along with seasonal employees in the summer. - The Community Services Officer program was expanded in 2007. - The SLMPD works in partnership with the Southwest Metro Drug Task Force and the Minnesota Financial Crimes Task Force (MNFCTF). It also partners with Hennepin County. The SLMPD and the Mound Police Department (MPD) both have tactical teams and formed an alliance as a joint Emergency Response Unit (ERU). Chief Litsey provided an overview of the Strategic Planning process. The highlights are as follows. - Strategic planning creates a common vision for the future, promotes a shared understanding of expectations and objectives, and helps manage the future rather than reacting to events as they unfold. It's a never ending process. - A strategic plan identifies the status today, the vision for the future, and how to achieve that vision. - Common planning obstacles are lack of time and resources, lack of support by stakeholders, lack of a clearly defined strategy, and lack of funds to implement an action plan. Members of the Strategic Planning Group (the Group) were very committed to the process. They were thoughtful, respectful, and were open to ideas. There were many opportunities for the members to provide input into the various iterations of the Plan. To date, there has been support from the stakeholders. During March 2008 and April 2008 the Group helped create the Plan. Funding to implement the Plan was discussed at great length. - This initiative is the latest in a series of efforts over the past 10 years to build upon the SLMPD's successes. The most high profile of them was construction of the state-of-the- art public safety facility. There was a great deal of foresight and vision that went into the facility so it would meet the long-term needs of the SLMPD and the Excelsior Fire District (EFD). SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 3 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 3 of I3 - There was a pause in long-range planning while the SLMPD member cities came to terms over the formula used for finding annual operations. This coincided with an amendment to the Joint Powers Agreement that bolstered the long-term stability of the SLMPD. - The Strategic Planning process was kicked off at the January 17, 2007, Coordinating Committee meeting. Phase I, Information Gathering, was completed at the January 30, 2008, Strategic Planning work session. Phase 2, Define Key Issues, was completed at the February 26, 2008, work session. Phase 3, Develop the Plan, was completed on April 30, 2008. - The Group is comprised of Coordinating Committee Members (the mayor of each member city), Coordinating Committee Alternates (a designated councihnember from each city), Operating Committee Members (the administrator/manager or staff designee from each city) and SLMPD Police Chief and Deputy Chief. - The Group met five times from January 27, 2008, through April 22, 2008, for a total of 8.5 hours. Staff spent a tremendous amount of time gathering and analyzing data and preparing presentations for the work sessions. - The Group extensively reviewed the following types of information and data -staffing; demographics; crime statistics; city specific issues; law enforcement trends on the federal, state and local level; an internal analysis of the SLMPD organization and what personnel think the future needs are; service levels; activity; recruitment of personnel; career development; equipment; facilities; and technology. Chief Litsey presented the Strategic Action Plan. - The Group favored four strategic goals after a considerable amount of discussion and review of materials provided. These priorities were identified as critically important to the future of the SLMPD. The goals are as follows. ^ Establish a timetable for phasing in additional police officers earmarked for the patrol division. ^ Increase the overtime budget so that manpower issues due to training, illness, injured on duty, time off request, etc., can be more readily accommodated in the work schedule. ^ Maintain pace with changing technology. Ensure there is a sufficient fund balance available to update, replace, and add new technologies. ^ Establish a capital fund for the long-term care and maintenance for the public safety facility. - The first three goals would be funded out of the operating budget; the last goal would not. - The Group spent a considerable amount of time discussing staffing issues. The patrol division was identified as the having the most critical need for additional personnel and there was Group support for adding officers there. This occurred after substantiating that the redeployment of existing personnel was not a viable option; that there was clear and convincing data to support adding more police officers; and that officer safety was being compromised at present staffing levels. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 4 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 4 of 13 - One member of the Group smmned it up best, "We need to protect those who protect us." - There is no "one-size-fits-all" approach for determining staffing levels; a multitude of factors were taken into account. The factors include safety of police officers and the public, policing philosophy and priorities, demand for service, population size and density, demographics, and municipal resources. - The Group was provided with several benchmarks to make comparisons. One was an "apples-to-apples" comparison to the Centennial Lakes Police Department (also a Joint Powers organization), which is strikingly similar in makeup to the SLMPD. The CLPD is amore costly operation primarily because it employs three more police officers, which allows the CLPD to have at least two patrol officers on-duty at all times. - Other comparisons were provided which were based solely on per capita or demand data. The SLMPD is extremely lean when using a per capita ratio (number of officers per thousand residents) as the benchmark for comparing police officer staffing levels. The SLMPD would need to hire five more police officers just to be in the average range among police departments in the Lake Minnetonka area. To meet the statewide average the SLMPD would need to hire six more police officers. The demand driven and per capita indicators are both usefiil if they are used as part of a broader analysis which include factors like those previously identified. - The results are similar when using the International Association of Chiefs of Police (IACP) demand formula for determining patrol division staffing. Working through this formula using conservative SLMPD data numbers reveals that a baseline of between twelve and thirteen police officers are needed to handle the workload in the patrol division. The SLMPD only has enough personnel to assign ten police officers to handle the workload in the patrol division. - One of the more eye opening presentations for the Group was explaining just how difficult it can be to provide adequate patrol coverage with staffing being so lean. Even more problematic is trying to fill gaps in the schedule because of job vacancies, vacations, sick leave, work related injuries, training, special assignments, etc. Samplings of four different months in 2007 (one each quarter) were provided. December was the most extreme case, with staffing shortfalls occurring 29 out of 31 days. An example was cited where very recently two officers were out due to illness, a third was out due to a torn hamstring, and a fourth was out due to stress fracture in his lower leg. - Atypical twenty-four hour period is presently divided into five patrol shifts with overlapping coverage during peak times. Deployment generally varies between one and three patrol officers at any given time. The Group endorsed phasing in a sixth shift so that at ]east two patrol officers would normally be on-duty at any given time; fully staffing this sixth patrol shift would require hiring two additional police officers. A sixth shift would also provide additional personnel resources to cover some gaps in the patrol schedule. Just because two officers were scheduled for duty it did not guarantee there would be two officers on duty. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 5 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 5 of 13 - Although the Group respected the fact that hiring additional police officers is a significant financial investment for all the member cities, it recognized it would be remiss not to start addressing the critical staffing need. The Group recommended hiring one additional entry-level police officer in 2009; this hiring would be delayed until June 1, 2009, to spread out the additional cost over atwo-year period. The Group further recommended the hiring of a second police officer June 1, 2011.. This approach would complete the objective of phasing in two additional police officers to enhance both coverage and officer safety. It also affords officers more opportunities to take time off. With this staffing increase, there is a gradual increase in the amount budgeted for overtime in order to follow the more prudent practice of backfilling staffing shortfalls. Personnel costs are predicated on the new hires being entry level positions and using salary and benefit estimates that reflect what increases will likely be. - A five-year operating budget forecast was prepared to project the overall cost of implementing these staffing goals. The methodology applied to the budget forecast is consistent with how the SLMPD and cities in general present their annual operating budgets. This forecast is a year-by-year comparison and has been averaged over afive- year period. This method of presentation was favored by the majority of the group. - The Group supported the SLMPD's efforts to maintain pace with changing technology. This includes adopting and funding a replacement schedule for the current inventory of 800 MHz radios and mobile data computers in the patrol vehicles. The in-house record management system will need to be replaced in the next few years. Although costly, it will provide significant advancements in technology with increased efficiencies, better data collection and reporting capabilities, enhanced interoperability with other systems and improved officer safety features in the field. There are ongoing upgrades to the internal network of voice/data systems and the related components which are required. A preliminary estimate of what additional capital will be needed to support these technology goals is reflected in the accompanying five-year operating budget forecast. These figures are predicated on several variables to help preserve capital in the Technology Fund. These include Hemiepin County extending its lease program for 800 MHz radio equipment, continuing the internal practice of transferring favorable revenues into the Technology Fund and being able to tap into forfeiture proceeds when feasible. - The Group acknowledged the need for a capital maintenance plan for the public safety facility. There is currently no arrangement in place to provide for the preservation of this vital community asset. The capital maintenance plan would be earmarked for the long- term care and maintenance of the building grounds, the exterior of the building, the interior of the building, and the mechanical and electrical components of the building. This is a shared liability between the SLMPD and the EFD and it is dependent on the financial backing of their respective member cities. This would be in addition to what is already being contributed to annual operations and other capital needs. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 6 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 6 of 13 - The Group discussed the option of using the savings derived from refinancing of the original. construction debt related to the public safety facility as a funding source. These savings on the police side will first be realized starting in 2009, and total an estimated $326,000 over the life of the refinanced bonds. The Group clearly understands savings belong to the cities. Presumably, the contributions to this fund from the member cities would be based on the same funding formula adopted for repayment of the original construction debt. The SLMPD would collect contributions and hold them in trust until payments are required, similar to the debt service payments on the facility. Any interest earned by the trust stays in the trust. - Although preparing along-term care and maintenance schedule for the facility will take time and will require some technical expertise, the Group thought it was important to have a baseline to plan around. It was generally agreed this could be established by applying "rule of thumb" standards applicable to buildings with similar characteristics. It was suggested the respective auditors for the SLMPD and the EFD recommend a baseline figure that would be further refined as the process progresses. Achieving this initial objective has been put on the "fast track" so that member cities can begin to plan for this eventuality. It was also the Group's sentiment that gaining the support of al] the member cities to create this capital find should be the first priority; adopting a contribution schedule along with each member city identifying what funding source to use to support their share was secondary to that. Chief Litsey stated explained per the direction of the Group, he prepared five budget forecast scenarios for the 2009 - 2013 operating budgets. The baseline budget forecast was based on what he thought was needed, and forecast was prepared using the year-by-year comparison method (the comparison is made against the previous year). He noted approximately 84% of the SLMPD operating budget is personnel related, there is little control over utilities for the facility, and there is no control over fuel costs. He explained the starting baseline for the budget forecast is the 2008 adopted operating budget amount. Scenario 1 reflects the services currently provided plus a 5.5% - 5.8% increase over the previous year's baseline budget. Scenario 2 reflects all associated costs for hiring an additional patrol officer on June 1, 2009. Scenario 3 reflects all associated costs for hiring a second patrol officer on June 1, 2011. Scenario 4 reflects adding the two patrol officers as previously stated and increasing the overtime budget in the patrol division starting in 201.0. Scenario 5 reflects adding the two patrol officers, increasing the overtime budget, and increasing finding for the technology starting in 2009. He sated a forecast has not been prepared for the long-term care and maintenance of the public safety facility. Chief Litsey stated he had been requested to prepare the forecast on a comparative basis; the comparison was the increase between the adopted 2008 operating budget and the projected 2009 operating budget including all the additions described above. The projected dollar increase remains the same using either method; the percentage increase is calculated differently. Chair Lizee recessed the meeting at 7:55 P.M. Chair Lizee reconvened the meeting at 8:09 P.M. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 7 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 7 of 13 3. QUESTIONS AND DISCUSSION In response to a question from Greenwood Councilmember Scharf, Chief Litsey explained ideally the SLMPD would like to hire four additional officers; two for the sixth shift and two for power shifts. Adding a sixth shift within atwenty-four hour period would allow for the scheduling of at least two patrol officers around the clock; however, there would still be instances when there would be only one officer on duty during non-peak times. It would also provide greater flexibility to cover staffing shortages during peak times. A power shift is a flexible shift; it could be used to help fill gaps in the schedule and for specialized details (e.g. traffic enforcement), and it would be well suited for a canine program. Adding two officers would go a long way towards achieving the objectives identified. He did hope power shits could be considered at some time. Deputy Chief Nieling stated adding a sixth shift of two officers to the schedule; it did not account for filling gaps in the schedule because of job vacancies, vacations, sick leave, work related injuries, training, special assignments, etc. Litsey stated there was reservation in presenting staffing shortage specific information in a public forum because of concern that people could use that information to determine when the SLMPD was vulnerable. He explained the SLMPD receives a lot of requests to enforce traffic. Sometimes the SLMPD can accommodate a specific request, but if there is another call during that time the officer must respond. If a city wants to ensure the officer is dedicated to the enforcement, it may have to pay the overtime costs incurred to do so. Shorewood Councilmember Weilens made the following comments and criticisms. - He questioned what had changed in the community to require additional patrol officers. - The Plan states the priorities had already gone through intense scrutiny. He thought that was the job of the member cities' councils. - The Plan states the SLMPD currently has a lean workforce and that is a good thing. Adding staff will make the Department less lean. - The Plan stated there was clear and convincing data to support more officers. It was up to the councils to decide if the data was convincing. - The Plan states officer safety was being compromised at present staffing levels. That statement suggests prior councils compromised the safety of the officers by short staffing the department. He did not think prior councils were irresponsible in jeopardizing the lives of the officers. - He wanted to look at the demand for service data taken into account when determining staffing needs. He wanted to get an understanding of the types of service. He had not noticed an increase in crime level. - He stated he want to know what other cities were considered for comparison to so he could determine if the Centennial Lakes Police Department was an appropriate comparison. - He questioned what had changed to cause all the gaps in the schedule; were there more job vacancies, vacations, sick leave, work related injuries, training, special assignments, etc. Or, was it a continuation of status quo. He stated the Chief and Deputy Chief have some control over training and special assignments. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 8 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 8 of 13 - The Plan states during December 2007 the SLMPD experienced extreme staffing shortfalls. That happens to every business in the Country, yet they cope with it. Crime should be down in the winter. - The member cities had to be concerned about values dropping resulting in a lower tax base for funding. Chair Lizee thanked Shorewood Councilmember Wellens for his comments and criticisms. Lizee suggested Wellens review the PowerPoint presentations and meeting minutes as she thought they could address the points he made. Chief Litsey made the following noteworthy clarifications. - The SLMPD is in a critical staffing situation; it is not even considering trends at this time. - He receives feedback from people who state having only one officer on duty is "fundamentally wrong". - The Plan identifies strategic goals, and achieving them is tactical. - It is his responsibility to identify issues and needs. - Demand data can be manipulated. The SLMPD could double its number of calls by tracking inconsequential incident calls. The SLMPD tracks data that is of use to it, the member cities and the public. The SLMPD wants its officers to get their reports done as quickly as possible so they can be "out on the street".Anew records management system that interfaces with the Hennepin County Dispatch System should make it easier to capture and report additional data. - Residents call police to resolve more things than they used to. They used to try and work out issues with their neighbors themselves. - The SLMPD and the EFD are first responders for medical calls. A minor change was made to EFD auto starts for medical calls. The SLMPD may respond to more medical calls alone, but that will depend on the SLMPD on duty staffing level at the time of a call. - During the summer months, the SLMPD can receive more calls then the City of Plymouth. Committee Member Ruehl stated the questions and comments he was hearing were good. He did think the majority had been answered in other meetings. What changed for him was getting a clear understanding of how serious the staffing issue was. The issue of one officer on duty was highlighted a number of times, and it became very apparent that there were too many instances of there not being a backup officer available. The frequency of staffing shortfalls was clearly presented. Alternative staffing formulas were reviewed and discussed in depth. The Group agreed there is a need to "protect those who protect us". After clearly understanding the reasons for needing additional patrol officers, the Group worked on how to make it somewhat affordable to implement and to keep increases to single digits. The compromise as to have enough officers to provide backup most of the time, and they would be phased in mid-way through the year in which they were added. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 9 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 9 of 13 Committee Member Newman stated during the strategic planning work sessions he learned a great deal from the information provided, the thoughtful discussions which occurred and the probing questions asked. He heard about the attitudes of officers and what things were important in retaining officers. When he tried to imagine himself being an officer on a dangerous call during the middle of the night without backup, he came to the conclusion that the staffing shortage was a critical issue that had to be resolved. Councils fulfill one their basic requirements when they take action to ensure there are sufficient fire and police personnel to provide public safety services. Councils must ensure there is an appropriate level of support to help improve the safety factor for public safety personnel and ultimately the residents; they must "protect those who protect us" as well as the residents. He doesn't want an officer to choose between quickly responding to a dangerous call or hesitate while he assesses the potential impact on his safety because there is no backup. What changed for him and the Group was the awareness level of the critical staffing shortage. The shortage does increase officer turnover because they are concerned about their safety. The Group decided it was time to take the appropriate next steps to reach the objective of improving the situation; it agreed to a reasonable approach to increasing patrol officer staffing. Excelsior Alternate Committee Member Miller stated he did not think previous Councils consciously made the decision to put officers at risk. When the Group looked at the staffing issue in depth, it determined the cost to reduce officer risk would cost about 2 percent per year if it added two patrol officers on the schedule proposed. Shorewood Councilmember Bailey stated if a comparison was made between the 2008 adopted operating budget and the 2012 projected operating budget (including the additional two officers, increased overtime and technology funding), the increase would be approximately 44 percent without including the cost for the long-term care and maintenance of the facility. The annualized increase was approximately 8 percent per year, yet Shorewood's revenues were growing at 3 percent per year; that is a concern. Public safety services accounted for a significant portion of the Shorewood budget. He questioned if the councils would be presented with priorities to consider; or, was the plan an all or nothing proposal. Chief Litsey explained the projected budget increase for current services provide is approximately 28 percent; the majority of the increase is personnel related. Litsey stated he was not trying to minimize the cost to add officers, increase overtime and increase funding for technology. Adding one patrol officer June 1, 2009, is the first step in executing the Plan; his intent is to include that first step in the 2009 operating budget. Although he strongly recommends executing the next steps of the plan, those decisions can be made as part of budget discussions in subsequent years. Plans are subject to change as circumstances change. Shorewood Councilmember Bailey questioned if the Coordinating Committee or the Group took a position on the use of the debt service savings from the crossover bond refunding. Chair Lizee explained the Group discussed the savings and the option of using some portion of the savings to help create a fund for the long-term care and maintenance of the facility. The Group and Coordinating clearly understood the savings belonged to the member cities. Bailey stated he thought the use of the savings and the funding for the long-term care and maintenance were two separate issues. Shorewood Councilmember Woodruff stated he respected that there were staffing coverage issues. He questioned what the SLMPD would do better, faster, or different after adding additional patrol officers. He assumed his constituents will ask him that question. He stated he did not see information about that in SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 10 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 10 of 13 the data, but he did see a lot of qualitative statements. He commented additional patrol officers would not increase traffic enforcement. Chief Litsey clarified adding officers will give the patrol officers some discretionary time to do things such as traffic enforcement. Chief Litsey stated when there was one officer on duty, that officer does not want to get tied up doing certain things; the officer needs to be able to respond to calls. The mode of operation is reactive rather than proactive; the officer responds to one call after another. Adding staffing proportionally will begin to give officers more discretionary time. If power shifts were to be added the SLMPD would be able to commit officers to traffic enforcement on a regular basis. Adding the first two officers will allow for two officers to more frequently respond to calls. It can take an officer 3 - 4 hours to process a DWI arrest; it's mandated a person arrested for DWI be booked. He stated a department should staff to meet the majority of its needs. Mutual aid should be viewed as an insurance policy. It is not fair to another community to rely on mutaal aid. Mutual aid response is unpredictable, and the responder's level of training is unknown. The level of accountability is not the same, Shorewood Councilmember Woodruff questioned why some of the technology upgrades proposed are necessary. He did not think that had been adequately explained. He agrees there needs to be a fiord established for the long-term maintenance of the facility. That cost must be considered along with the operating budget costs. He questioned what organization or city was responsible for the facility. Chief Litsey explained the SLMPD and EFD are jointly responsible for the facility; the daily operation of the facility is also a joint responsibility. He stated that the SLMPD and EFD have been in discussions about the long-term maintenance of the facility. The facility is more than four years old and it was prudent to consider what the long-term needs of the facility will be and to prepare to fund them. The Group discussed the possibility of establishing a smaller group to address what the long-term needs of the facility, and he thought that would be an excellent idea. Chief Litsey stated the questions asked this evening were all pertinent. The majority, if not all, of them had been answered during the planning work sessions. He stated the information included in the PowerPoint presentations and documented in the work session minutes may be able to provide additional insight into what was discussed, questioned and clarified. That information is available to anyone interested. He encouraged individuals to review it. As an administrator, he is responsible to present his perspective on what is needed based on his more than thirty years of experience in public safety. Committee Member Newman stated the Group discussed the use of the savings from the crossover bond refunding. Concern was expressed about using all of the savings for the long-term needs of the facility. The Group agreed the need to establish a fund to address the facility needs was a different issue then the issue to determine how that fiord would be established. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 11 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 11 of 13 Greenwood Councilmember Sagal made the following comments. - The member cities' councils must be fiscally responsible. - With regard to what has changed, the CUB store is a new addition (relatively speaking) to the community; people from neighboring communities go there. Traffic on Highway 7 has increased because of the growth to the west. There has been some small growth in the communities. - Scheduling for at least two officers on duty at any time was a responsible thing to do for reasons such as officer safety and providing backup when there is a medical call. - One way for the SLMPD to maintain a strong understanding of what's occurring in the community is to have a strong presence in it. That presence helps deter things such as gang shootings. - The tour boat business draws approximately 500,000 people to the community during the summer, and with that influx of people there is bound to be an increase in incidences. In response to a question from Greenwood Councilmember Sagal, Chief Litsey explained the State makes a strong distinction between a patrol officer and a reserve officer. A reserve officer cannot carry a firearm, they cannot make an arrest and they should not be put in harms way because they do not have "the tools of the trade" to rely on. Reserve officers are used for things such as special events, transporting evidence, directing traffic, etc. They will periodically ride with a patrol officer. A patrol officer has extensive training including verbal training on how to solve a situation verbally. Although a tazer is a wonderfitl tool, an officer does not use a tazer if there is no backup because if it didn't work the officer's life would be at risk. Committee Member Ruehl noted the SLMPD entered into a voluntary agreement with Maynard's Restaurant and BayView Event Center/Bayside Grille (both in Excelsior) to provide a dedicated presence at the establishments on weekend nights during the summer; the establishments paid for the costs for that service. The presence of officers does help mitigate the number of calls to the SLMPD. He stated the types of crimes are changing. During the planning work sessions his awareness of the staffing shortage issue and the officer safety issue increased dramatically. An increase in the overtime budget will help, but not eliminate, the issue of gaps in the schedule because of job vacancies, vacations, sick leave, work related injuries, training, special assignments, etc. Tonka Bay Councilmember De La Vega stated one of the primary responsibilities of local government was to provide safety to its residents and it was difficult to put a price tag on that. He explained the projected baseline yearly budget increases over the next five years for services currently provided ranged from approximately $102,000 to $121,000. He questioned what efforts had been made to minimize that baseline growth by implementing cost saving measures. Chief Litsey explained the SLMPD had switched to Chevy Impalas for squad cars and they use less fuel; the cars also had a fuel management system (i.e., it cut out cylinders when the vehicle was not being driven aggressively). The Department gets a discount on gas for fleet vehicles. The costs of ammunition had increased substantially, so the Department went to a quarterly POST (Peace Officer Standards and Training) approval process to limit the number of large rounds an officer has to shoot. He related Coordinating Committee Member LaBelle had stated the SLMPD was a very lean and efficient organization. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 12 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 12 of 13 Chief Litsey stated the SLMPD maximizes the use of its personnel and there is only so much work that can be done when the patrol division is critically understaffed. He explained approximately 84% of the SLMPD operating budget is personnel related; there is little control over utilities for the facility; there is no control over fuel costs; and there is no control over ammunition costs. There is little that can be done to minimize year-to-year baseline budget increases. He noted he makes a concerted effort to provide the member with sufficient information for them to understand this Plan and the SLMPD operating budgets. Chief Litsey requested participants submit any unanswered questions they to him so he could respond to them. 4. CLOSING REMARKS Chair Lizee asked if there were any closing comments. Committee Member Newman stated strategic planning was an ongoing process. The Group was presented with information which it discussed and at times challenged. He thought the conclusions reached were appropriate. The goal was to develop a Strategic Action Plan which could be used in preparing the 2009 operating budget; the goal was achieved. I-1e views safety similar to the way he views insurance - if you are lucky you don't need it and you are unlucky it's too late. The Plan reflects a compromise in addressing the staffing shortage; it doesn't address all the needs presented, but it is a step in doing so. Committee Member Ruehl suggested the councilmembers who were not part of the Group solicit answers to any outstanding questions they have over they next two weeks. There is a tremendous amount of work session materials available for review. People can email Chief Litsey with specific questions they have, or they can meet with him. Also, members of the Group are available to answer questions or explain things. Chief Litsey thanked everyone for attending this meeting. He also thanked the Strategic Planning Group for their commitment, participation and desire to learn during the process. Chair Lizee thanked everyone for coming, and the Group for its efforts. She commented strategic planning is done by all successful organizations. She noted there had been an open Coordinating Committee special meeting held before this meeting during which Chief Litsey's written performance evaluation was accepted; Litsey's performance had been exemplary, as had his commitment and dedication to the SLMPD and its member cities. At that meeting the Committee approved an adjustment to Litsey's compensation. SLMPD JOINT COUNCIL MEETING MINUTES May 14, 2008 Page 13 of 13 Joint Meeting of SLMPD Member Cities' Councils Meeting Minutes Wednesday, May 14, 2008 Page 13 of 13 5. ADJOURNMENT Newman moved, Ruehl seconded, Adjourning the Joint Meeting of the SLMPD Member Cities' Councils of May 14, 2008, at 9:25 P.M. Motion passed 3/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder REVIEWED AND EDITED BY, Bryan Litsey, Chief of Police This document is intended to be a summary of the meeting held on May 14, 2008. ~00~'~flAq~.~ll~~ ~®~~I~~~~ ~®Sl~I®]Cl ~~~$~]t`~l~l~$ South Lake Minnetonka police Department The Coordinating Committee for the South Lake Minnetonka Police Department initiated a strategic planning initiative to identify current and future needs of the organization. In that light, a Strategic Planning Group (SPG) was formed comprised of the Mayors and one additional representative from each City Council. This means that 40% of the total Council membership was involved in the process. The SPG met several times for some 81/2 hours before producing a Strategic Action Plan for consideration by the Councils. To that point, SPG members were deeply involved in the process and there were no objections to the final product by the SPG. The approach attitude was one of listening to input from the Chief, with a pervasively conservative fiscal overtone and skepticism regarding need. While we acknowledged the Chief as a solid professional who knows much more about law enforcement than we do, we were, nevertheless, unwilling to simply "rubber-stamp" his recommendations. Multiple thorough presentations from the Chief drew numerous probing questions, first about need, then about potential cost as we sought justification for such a change. What follows is an accumulation of facts, information and conclusions that came to light as a result. Providing adequate public safety is the #1 responsibility of government. Statistically, the SLMPD is far and away the leanest police department in a very wide surrounding area. Lean is not necessarily a bad thing in and of itself unless it presents inherently related problems that undermine the department's ability to provide that crucial responsibility of public safety. The current staff level results in widespread single-officer patrol coverage (one officer on duty with no back-up) for the entire SLMPD area. Current staff levels undermine opportunities for time off, relief for needs such as health, injury, stress and more. Current staff levels add stress in these ways as well as increased danger on the job. Our officers have taken up a career which brings risk to their lives at any time. Single coverage increases that risk. It also changes the way officers respond to certain types of calls. If an officer has no back-up, should he wait on a domestic call until another agency becomes available to assist or not actively pursue DUI violators knowing he will be tied up for two to three hours with no one on patrol? This factors in to why officers have left the SLMPD for larger departments. Turnover is expensive in any organization. Recruiting the highest quality personnel is more difficult for an understaffed department. Staffing with minimal numbers is very difficult. It is like having no financial reserves-there's no "well" to go to when you need it. The SLMPD is a very efficient operation. Yet questions arise: Is it optimally efficient? It can't be when officers are regularly forced into a reactive rather than a proactive mode. Does the current staffing level undermine officers' ability to be all they can be in pursuit of the public's best interest? Yes, for the same reason. Would the addition of personnel make the department optimally efficient? Maybe, maybe not, but it will significantly mitigate the damage. Mayors and other SPG members acknowledged a new level of awareness when presented with the graph indicating how often there is only one officer on duty and when informed of the effect on officer psychology. Understaffing endangers not only the public but the officers as well. Their safety is every bit as important as our own. Mayor LaBelle summarized our conclusion with "We need to protect those who protect us". With all the funds spent on the facility, equipment, and staff; we cannot be optimally efficient if officers cannot freely respond to all calls. The SLMPD is doing a great job making the most of the staff level they have to work with, but this still doesn't meet the public's real need in this area, especially considering its size, slow roads, and indirect routes. Also, consider the growth in the surrounding areas whose populations often enter our area for its natural attractions. More calls are requiring multi-officer response such as medicals needing use of a defibrillator. The fact that the SLMPD is understaffed is not a new issue. It simply has been put on the back burner for the last 6-7 years, in favor of the new facility and funding formula issues. Chief Litsey has continually informed the cities of this critical issue, but he has been told to make due until those issues are resolved. Well, now they have been and the issue of adequate staffing is before us. No one can deny the statistics: compared to all other area departments, the SLMPD is the lowest staffed per 1,000 residents. A supervisor for a neighboring police agency recently commented that whenever they dropped to single officer coverage, "it has always come back to bite us". It would take four additional officers to get our department to the "average" level and that is what the Chief recognizes is most appropriate. The SPG has told him this is too large of a leap, but it has also acknowledged the status-quo is unacceptable. The public's perception of their safety exceeds reality. Feedback from the public indicates they would be surprised to know how often our area is covered by only one on-duty patrol officer. They would likely favor more even if it costs more. In analyzing the issue for value: cost vs. need, we have to acknowledge that not all issues are quantifiable. We tried to use quantitative data and still step back and see the big picture, use introspection and intuitive, qualitative reasoning to make appropriate decisions. Budgeting and funding must always follow a "needs analysis." Police protection is like insurance-nobody likes to pay for it until they need it. The question is value. How much do we need? Can we afford two additional officers? More importantly, can we afford to remain under-protected? We as the Coordinating Committee take our duty to provide for the public safety needs very seriously, and therefore, recommend to our Councils the implementation of the strategic plan by supporting the requested funding in the 2009 budget. The following Coordinating Committee members support this Position Statement as amended at the Coordinating Committee meeting on June 25, 2008. t~ g ~. Mayor Bob Newrpa~n City of Greenwood ,' 1Vlayor Bill LaBelle City of Tonka Bay 2 -~ ~__ _ . ~, _ ~ _~ . - y. >~ Pr~p~~ed by ~ P~~~~e Chief ~~yan Li~s~ ,~- a~ -_ R'` July 2008 ®I'E TING BUDGET C®SIDE TIONS fOP FISCAL. YEAR 2009 Prepared by Bryan Litsey, Chief of Police PRELUDE This preliminary budget proposal represents a prudent, responsible and straightforward approach for meeting the operational requirements of the South Lake Minnetonka Police Department (SLMPD). It continues to maximize the advantages of being a joint powers organization, which provides an economical way to increase the availability and depth of police services over what each city could independently support on its own. This arrangement has stood the test of time ever since the cities of Excelsior, Greenwood, Shorewood and Tonka Bay first formed this partnership back in 1973. The structure of the SLMPD is illustrated on the attached organizational chart. See Appendix A. This budget proposal maintains current operations while incorporating the key goals identified for 2009 as part of the strategic planning process. Highlighted in this summary are some of the significant factors that were taken into account when preparing this budget proposal. This is not a substitute, however, for reviewing the attached budget documents. FINANCIAL CONSIDERATIONS The financial considerations of the SLMPD consist of the long-term debt service obligation for the public safety facility and the annual operating budget. These are dealt with respectively in the Third and Fourth Amendments to the current Joint Powers Agreement (JPA). The Third Amendment to the JPA addresses each member city's long-term debt obligation for the police portion of the public safety facility. It is proportioned among the cities using a formula based upon ad valorem (tax capacity) and is subject to annual adjustments due to changing property values. A separate budget document will be prepared showing each member city's debt service obligation in 2009 using current data on property values. Operating Budget Considerations Fiscal Fear 2009 Page 2 of 5 The Fourth Amendment to the JPA addresses among other things the funding of SLMPD operations. An arbitration process incorporated into this amendment established each city's percentage contribution to annual operations starting in 2007. They are as follows: Excelsior - 27%: Greenwood - 8%; Shorewood - 50%; and Tonka Bay - 15%. Another key provision in the Fourth Amendment to the JPA redefines what occurs if the member cities are unable to agree on funding for the next fiscal year by the September 1st deadline of the current year. In the past, any one city was able to veto increased funding above the previous year's level. The current agreement mandates increased funding to maintain personnel and to finance other operational expenses for the coming year if such a scenario occurs. STRATEGIdC GOALS The 2009 budget process comes on the heels of what has been a comprehensive strategic planning process to help position the SLMPD for the future. This Coordinating Committee initiative commenced in 2007 and evolved into the formation of a Strategic Planning Group at the beginning of 2008. Each member city was afforded up to three representatives to be part of this group, two of which were elected officials (forty percent of each city council) and the other being an administrative staff member. The SLMPD was represented by its command staff. The group adopted an aggressive schedule so their recommendations could be considered and incorporated into the 2009 budget cycle. These recommendations were bundled in the form of a Strategic Action Plan, which was accepted by the Coordinating Committee at its meeting on April 30, 2008. See Appendix B. This culminated the initial phase of what was an exhaustive process over a relatively short period of time. The strategic plan was first presented to the member City Councils at a joint meeting on May 14, 2008. It has since been the topic of discussion at individual council meetings and reported on in the local media. Guest editorials were submitted to the local media explaining the process that was followed and the recommendations. See Appendix C. The strategic plan establishes benchmarks for each of the next several years in order to accomplish the stated goals. Achieving these objectives each year is dependent on additional funding being approved by the member City Councils as part of the annual budgetary process. The strategic plan for 2009 calls for the hiring of an additional police officer during the year and increasing the amount dedicated to technology. The additional police officer would be earmarked for the patrol division with a start date of June 1, 2009. Operating udget Considerations Fiscal Year 2009 Page 3 of 5 Phasing in this new position spreads out the financial impact over atwo-year period. The additional capital for technology would help maintain current systems as well as provide for future needs. 1VIAINTAINING ®PERATI®NS The budget proposal that has been provided contains not only budget figures, but a corresponding narrative for each expense and revenue category. This helps lay the foundation for what goes into the budget and the driving forces behind the increases. Aside from the strategic goals that have already been mentioned, there are still a number of factors behind the increases for 2009 that extend beyond economic and/or inflationary considerations. Among these are pensions, health insurance, ammunition and gasoline. The following is a brief explanation of each: Pensions -The pension bill passed by the 2005 Minnesota Legislature mandated greater contributions from both the employer and the employee. This was a necessary measure to sustain adequate funding levels for both the Coordinated and Police & Fire Pension Plans. To mitigate the impact, these increases are being phased in between 2006 and 2010 for the Coordinated Plan and between 2006 and 2009 for the Police & Fire Plan. Over the aforementioned phase in periods, the employer rate for personnel covered under the Coordinated Plan goes up nearly 27 percent. The impact is even more dramatic for personnel covered under the Police and Fire Plan with an increase of nearly 52 percent. The majority of SLMPD personnel are covered under the latter plan which for 2009 goes up by 9.3 percent. This has a financial impact on two fronts. First, even if the percentages were to remain the same this liability continues to climb each year due to an increasing payroll. Second, this factor is exacerbated by the increasing employer contribution rates. Health Insurance -The SLMPD is part of a consortium of local governmental agencies that collectively negotiate with providers to obtain the best possible contract. This alliance is called the LOGIS Health Care Group. The contract went out for bids last year, which resulted in a switch from Medica to HealthPartners. The current three year contract with HealthPartners (2008-2010) caps the increase for 2009 at sixteen (16) percent. This comes after what was only a modest increase during the first year of the contract. Although the exact amount of the increase will not be known until after this budget needs to be approved, past experience supports calculating the anticipated employer share based on the maximum allowable increase for 2009. ~3perating Budget Considerations Fiscal Year 2009 Page 4 of 5 Ammunition -Prices have soared in recent years due to the war in Iraq, which has pushed up overall demand, and growing industrial powers such as China, which bid up the cost of needed raw materials. Along with this price increase, the much needed addition of a tactical team has increased the amount of ammunition needed for training purposes. Gasoline -Gasoline prices have risen by historic proportions with no downturn in sight. To put it in perspective, every 10 cent increase in the price of gasoline sustained over the course of a year costs the SLMPD an additional $1,250 (assumes an annual fleet consumption rate of 12,500 gallons). Needless to say, it is difficult to estimate what the true cost will be for the coming year in such a volatile market. The SLMPD has implemented a number of proactive strategies in recent years to mitigate the volatility in gasoline prices, but streets still need to be patrolled and calls still need to be answered regardless of the cost. ESSENTIAL EXPENSES The SLMPD is not unlike most service oriented agencies in that personnel related expenses comprise the majority of operational expenses. Such is the case for 2009, with nearly 83 percent of operational expenses attributed to salaries, payroll taxes, pensions, health insurance benefits, uniforms and training. Another consideration is that the majority of SLMPD personnel are designated by Minnesota Statute 179A.03 as essential public employees. Such a designation entitles them to binding arbitration to settle contract impasses in place of the right to strike. This means at a minimum the operating budget needs to support what an arbitration award would likely be if contract negotiations were to breakdown. Such an award is normally based on the statistical norm among other comparable law enforcement agencies. Beyond personnel related expenses, the budget is required to support numerous other required operational expenses. Some of these include keeping the public safety facility operational; replacing, maintaining and fueling a fleet of vehicles; insurance for liability, property and employee injuries; professional services; and managing, supporting and upgrading a variety of technologies. All of this translates into a budget proposal that supports the essentials for effectively and efficiently running a police department. It also takes into account the additional financial obligations associated with being a joint powers organization. These costs would normally be the individual responsibility of each member city if not for the fact that the SLMPD is a joint powers organization. ®perating Budget Considerations Fiscal Fear 2409 Page 5 of 5 PR®Pt.~SED BUDGET This is once again a lean, yet responsible budget proposal that supports current operations while addressing some specific needs identified through an inclusive, probing and thoughtful strategic planning process. The preliminary draft of the 2009 operating budget proposal reflects an overall increase of 9.5 percent. This includes the already mentioned strategic goals identified for 2009. This increase is close to the 2009 budget forecast of 9.25 percent, which was prepared for illustration purposes as part of the strategic planning process. BUDGET P~20CESS The budget process essentially started early this year through the strategic planning process. It has since advanced through the next phase, which is preparing, reviewing and refining a preliminary budget proposal at the staff level. The Operating Committee also weighed in on the proposal at a meeting held on June 24, 2008. Representing each member city at this meeting were Excelsior City Manager Kristi Luger, Greenwood City Administrator Roberta Whipple, Acting Shorewood City Administrator Larry Brown and Tonka Bay City Administrator Jessica Loftus. This provided helpful feedback and insight moving forward in the budget process. The Coordinating Committee reviewed, discussed and endorsed this budget proposal at their meeting on June 25, 2008. It was forwarded to their respective City Councils with a recommendation for approval. Also adopted at this meeting was a Position Statement. See Appendix D. It concludes by saying: "We as the Coordinating Committee take our duty to provide for the public safety needs very seriously, and therefore, recommend to our Councils the implementation of the strategic plan by supporting the requested funding in the 2009 budget. " CI..®SING REMARKS This is an exciting time for the SLMPD now that the JPA partnership is back on solid ground and strategic planning has resumed. Through it a11, the SLMPD has maintained a reputation of being a lean and efficient operation with highly capable and dedicated personnel. The integrity and professionalism of the organization has never come into question. These inherent qualities provide the nucleus for moving forward as an organization through a well defined and financially sustainable strategic plan. This budget proposal provides such an opportunity. OPEKATII~C~ BUDGET COI~ISIDEKATIOI~IS for FISCAL YEAK 2009 Appendi~c A IJJ ~' O W W V ~ J L S Z V O ~ W ~® Z ~ Z N •- Q J '® V / Q m o >- v ~ ~ O ~ > °' a o 0 ~ y a ~ ~ ~ Z y m m ~ ~ O ~ v a Z _ c C7 ° z ~ Q ~~ ~ ~ z ~a w ~ ¢ ~~ ~ ~ O ~ U ~ W .N o o pp 'a ,~ O ~ v ~ ~ a cn w C~ ~ ~ V ~. 0 ~~ ~ y d ~ ~ ~ ~ g~ ~ a? ~ ~ V ~ w N ® t0 i V ~~.. w ~ _ ~ = s o. w Q. ii v o ~ ~ v ° •~- ~ o ~ - c a~+» . , ~~ vC ~ o c O o ~ ~U c U ~ " ~ Q ~ ~ ~ ~ a ~ n 'Q .~c N Q `~ ~ ~ c ~ ~ ~ ~ ~0. U ~ ~ ~ ~ ~ ~ '~ ~- N ~ ~ Q `` k ~ U W W U a ~ w U} ~ .w ~' ~ _ `~ ' _ ~ v a ~ Q ~ v v O ~ i L +N-' U ~ ~ O ~ ~ d C ~ i ~ ~ ~ ~ N ~ ~ J 0 ~~ a ~ N ~ C r ~ Q C d N = ~ W OPEKATII~IC~ BUDCzET COI~ISIDEKATIOI~IS for FISCAL ~.'EA 2009 Appendiac B S~`FtATEGIC AG"i'YON PLAN Pre are }~y Chief an Litsey h if a trace ~ in r i t i of i +~il EXCelsaor, Greenwood, Shorewood arsd Toxrka Bay May 14, 2008 OVERVIEW Strategic planning has increasingly become part of the organizational fiber of the South Lake Minnetonka Police Department (SLMPD). Over the past ten years its significance as part of the annual budgetary process has expanded considerably. It was the impetus behind the vision of a new public safety facility becoming a reality toward the latter part of 2003. Because of this foresight, the long-term facility needs of the SLMPD have been met for decades to come. There was a pause in long-range planning while the SLMPD member cities came to terms over the formula used for funding annual operations. This point of contention persisted for several years and was ultimately settled through an arbitration process in 2006. This coincided with an amendment to the Joint Powers Agreement that bolstered the long-term stability of the SLMPD. This allowed the focus to shift back toward strategic planning. At its meeting on January 17, 2007, the Coordinating Committee "kicked off" what has become an ongoing strategic planning process committed to the future interests of the SLMPD. The initiative intensified this year through the formation of a Strategic Planning Group with broad-based representation from the member cities. Input from other sources has also been incorporated into the process to provide additional perspectives. STRATEGIC PLANNING GROUP The Strategic Planning Group is comprised of Coordinating Committee Members (mayor from each city), Coordinating Committee Alternates (designated council member from each city), Operating Committee Members (administrator/manager or staff designee from each city) and SLMPD Command Staff (police chief and deputy chief). A list of group participants is attached to this document. The Strategic Planning Group has met regularly since the beginning of 2008 and has adhered to the following sequential process: Phase 1 -January 2008 Phase 2 -February 2008 Phase 3 -March/April 2008 Information Gathering Define Key Issues Develop Plan During each of these phases there have been corresponding PowerPoint presentations specific to the topics being discussed. These PowerPoint presentations, which contain a wealth of information, are available in either paper or CD formats. After each meeting, summary minutes were prepared and are available in either paper or CD formats. The PowerPoint presentations have laid the foundation for the Strategic Planning Group to identify and endorse several key strategic goals. The corresponding timetable has -1- served to move things along in a relatively short period of time so the findings may be incorporated into the budgetary process for 2009. ACTION PLAN The Strategic Planning Group favored four strategic goals after a considerable amount of discussion and review of the materials provided. Although not all-inclusive, these priorities for the organization have been identified as critically important to the future of the SLMPD. They have already gone through intense scrutiny, which reinforces even more the importance of achieving these goals. They are as follows: Establish a timetable for phasing in additional police officers earmarked for the patrol division. Increase the overtime budget so that manpower issues due to training, illness, injured on duty, time off requests, etc. can be more readily accommodated in the work schedule. Maintain pace with changing technology. Have a sufficient fund balance available to upgrade, replace and add new technologies. Establish a capital fund for the long-term care and maintenance of the public safety facility. STAFFING CONSIDERATIONS The Strategic Planning Group spent a considerable amount of time discussing staffing issues. It was recognized that the SLMPD continues to be significantly understaffed with its current complement of police officers. The patrol division was identified as having the most critical need for additional personnel and there was group support for hiring more police officers to address this deficiency. This occurred after substantiating that the redeployment of existing personnel was not a viable option; that there was clear and convincing data to support adding more police officers; and that officer safety was being compromised at present staffing levels. One member of the group summed it up best, "We need to protect those who protect us." Since there is no "one-size-fits-all" approach for determining staffing levels, a multitude of factors were taken into account by the Strategic Planning Group. These include: • Safety of police officers and the public • Population size and density • Policing philosophy and priorities • Demographics • Demand for service • Municipal resources The Strategic Planning Group was also provided with several benchmarks to make staffing comparisons. One was an "apples-to-apples" comparison to the Centennial Lakes Police Department, which is strikingly similar in makeup to the SLMPD. The -2- Centennial Lakes Police Department is a more costly operation primarily because it employs three more police officers. This allows the Centennial Lakes Police Department to have at least two patrol officers on-duty at all times, something the SLMPD is unable to achieve with current staffing levels. Other comparisons were based solely on per capita or demand data. The SLMPD is extremely lean when using a per capita ratio (number of officers per thousand residents) as the benchmark for comparing police officer staffing levels. The SLMPD would need to hire five (5) more police officers just to be in the average range among police departments in the Lake Minnetonka area. To meet the statewide average the SLMPD would need to hire six (6) more police officers. The results are similar when using the International Association of Chiefs of Police (IACP) demand formula for determining patrol division staffing. Working through this formula using conservative SLMPD data numbers reveals that a baseline of between twelve (12) and thirteen (13) police officers are needed to handle the workload in the patrol division. The SLMPD only has enough personnel to assign ten (10) police officers to handle the workload in the patrol division. One of the more eye opening presentations for the Strategic Planning Group was explaining just how difficult it can be to provide adequate patrol coverage with staffing being so lean. Even more problematic is trying to fill gaps in the schedule because of job vacancies, vacations, sick leave, work related injuries, training, special assignments, etc. To illustrate this point, samplings of several months in 2007 were featured. December was the most extreme case, with staffing shortfalls occurring 29 of the 31 days of the month. STAFFING GOALS A typical twenty-four hour period is presently divided into five patrol shifts with overlapping coverage during peak times. Deployment generally varies between one and three patrol officers at any given time. The Strategic Planning Group endorsed phasing in a sixth shift so that at least two patrol officers would normally be on-duty at any given time. It would also provide additional personnel resources to cover gaps in the patrol schedule. Fully staffing this sixth patrol shift would require hiring two additional police officers. The Strategic Planning Group respected the fact that hiring additional police officers is a significant financial investment for all the member cities, yet recognized it would be remiss not to start addressing what has been identified through this process as a critical staffing need. To this end, the group recommended hiring one additional police officer in 2009 to provide some more immediate relief. This hiring, however, would be delayed until June 1, 2009 to spread out the additional cost over atwo-year period. The group further recommended the hiring of a second police officer in 2011. Once again, this would be delayed until June 1, 2011 to spread out the additional cost over atwo- year period. This approach would complete the objective of phasing in two additional -3- police officers to enhance both coverage and officer safety. It also affords officers more opportunities to take time off, which is important in terms of employee retention and maintaining good mental health to balance what is otherwise a very demanding and stressful job. In conjunction with this staffing increase, there is a gradual increase in the amount budgeted for overtime in order to follow the more prudent practice of backfilling staffing shortfalls. The projected overall cost of implementing these staffing goals is itemized on the accompanying five-year operating budget forecast. Personnel costs are predicated on the new hires being entry level positions and using salary and benefit estimates that reflect what the increases will likely be in relation to the current labor agreement. The methodology applied to the budget forecast is consistent with how the SLMPD and cities in general present their annual operating budgets. This is a year-by-year comparison, which for purposes of this illustration, has been averaged over afive-year period. This method of presentation was favored by the majority of the group. It should be noted that once payroll costs are finalized for each of the next five years, the financial implications to the member cities may fluctuate depending on future labor agreements and personnel changes. TECHNOLOGY CONSIDERATIONS The Strategic Planning Group supported the efforts of the SLMPD to maintain pace with changing technology and develop along-range capital plan for consideration as part of the 2009 budget process. This builds upon past efforts to absorb the capital costs associated with a number of technology upgrades, such as the conversion to an 800 MHz radio system and implementation of mobile data terminals in patrol vehicles. These were funded through the Designated Technology Fund, which traditionally has been supported by annual appropriations from the operating budget and transfers from surplus revenues. Additionally, the SLMPD has successfully secured a number of grants in the past to assist with technology upgrades. TECHNOLOGY GOALS The Strategic Planning Group encouraged further development of the long-range capital plan currently in the works that will need to support a number of required enhancements. This includes adopting and funding a replacement schedule for the current inventory of 800 MHz radios and mobile data computers in the patrol vehicles. Additionally, the in-house record management system is nearing the end of its useful lifespan and will need to be replaced. Although costly, it will provide significant advancements in technology with increased efficiencies, better data collection and reporting capabilities, enhanced interoperability with other systems and improved officer safety features in the field. The last significant piece of the technology pie is the ongoing upgrades to the internal network of voice/data systems and the related components. -4- A preliminary estimate of what additional capital will be needed to support these technology goals is reflected in the accompanying five-year operating budget forecast. These figures are predicated on several variables to help preserve capital in the Technology Fund. These include Hennepin County extending its lease program fox 800 MHz radio equipment, continuing the internal practice of transferring favorable revenues into the Technology Fund and being able to tap into forfeiture proceeds when feasible. FACILITY CONSIDERATIOl~TS The Strategic Planning Group acknowledged the need for a capital maintenance plan specific to the public safety facility. There is currently no arrangement in place to provide for the preservation of this vital community asset. Such a plan is not intended to provide for routine maintenance, ongoing operations or scheduled service of existing equipment. These expenses are funded each year through the operating budget. The capital maintenance plan would be earmarked for the long-term care and maintenance of the facility. Included under this would be: • Building Grounds • Building Exterior • Building Interior • Mechanical • Electrical This shared liability between the SLMPD and the Excelsior Fire District (EFD) is dependent on the financial backing of their respective member cities. This would be in addition to what is already being contributed to annual operations and other capital needs. FACILITY GOALS The Strategic Planning Group recognized the importance of establishing a capital maintenance fund in partnership with the EFD. Interest was expressed in using as a funding source the savings derived from refinancing of the original construction debt related to the public safety facility. These savings on the police side, which will first be realized starting in 2009, total an estimated $326,615 over the remaining life of the refinanced bonds. This amount, coupled with a matching share from the EFD, would accumulate a sizable balance over time. Presumably, the contributions to this fund from the member cities would be based on the same funding formula adopted for repayment of the original construction debt. The SLMPD would then hold these contributions in trust similar to the debt service payments on the facility. The Strategic Planning Group supported the work being done by the SLMPD and the EFD to identify what will need to be replaced, timing and related costs. This will then be incorporated into a replacement schedule that can serve as both a checklist and estimator of what needs to be collected to sustain the fund balance. Completing this task will require some technical expertise that will likely have to be outsourced. -5- Although recognizing the aforementioned process will take time, the Strategic Planning Group felt it was important to have a baseline figure in which to plan around as soon as possible. It was generally agreed this could be established by applying "rule of thumb" standards applicable to buildings with similar characteristics. As a starting point, it was recommended having the respective auditors for the SLMPD and the EFD meet collectively to come up with a baseline figure that would be further refined as the process progresses. Achieving this initial objective has been put on the "fast track" so that member cities can begin to plan for this eventuality. It would be premature at this time, however, to do a projection prior to this baseline figure being determined. It was also the sentiment of the Strategic Planning Group that gaining the support of all the member cities to create this capital fund should be the first priority. Secondary to this would be adopting a contribution schedule along with each member city identifying what funding source to use to support their share. The SLMPD member cities use a different method than the EFD for funding the debt service payments on the building. This same funding method would presumably be followed in establishing a capital maintenance fund for the building. This fund would be treated independent of the SLMPD operating budget with contributions being collected and held in trust by the SLMPD until payments are required. Any accumulated interest would stay with the trust and not comingled with the operating budget. CONCLUSION The Strategic Planning Group has not only devoted many hours to this process, but has adhered to an aggressive schedule in order to reach reasonable conclusions and suggested actions to incorporate in the 2009 budget process. The key strategies identified as part of this sequential process evolved from an extensive review of information and data coupled with group discussions focused on reaching a common vision for the future of the SLMPD. Throughout this process the group interaction has been probing, thoughtful, insightful and respectful. This is probably the most important reason why the group has been able to reach fundamental decisions and agree on some recommended actions to move the organization forward. These suggested actions are now in the hands of the Coordinating Committee and the SLMPD Command Staff to present to the member cities for consideration. Strategic planning is anever-ending process that learns from the past, evaluates the present and provides direction for the future. The Strategic Planning Group has laid the groundwork for what is a very exciting time for the SLMPD as efforts are made to better position the organization for present and future challenges. * See Next Page for Strategic Planning Group Representatives -6- I REPRESENTATIVES City of Excelsior Mayor: Nick Ruehl Council Member: Greg Miller City Clerk: Cheri Johnson City of Greenwood Mayor: Bob Newman Council Member: Bob Quam City Administrator: Did not participate City of Shorewood Mayor: Chris Lizee Council Member: Laura Turgeon Acting City Administrator: Larry Brown City of Tonka Bay Mayor: Bill LaBelle Council Member: Ken Folley City Administrator: Jessica Loftus SLMPD Command Staff Chief of Police: Bryan Litsey Deputy Chief: John Nieling Group Support Staff Administrative Assistant: Nancy Swanson Official Recorder: Chris Freeman -7- a !`r I y~ ~~~ Z W ~~~// li U J 0 a H Z Cz G Q J '"' to V L O ~i~+ m +~+ L ~. O ti.. 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Part 1 focuses on the process itself along with the strategic goals that have been identified for consideration. Part 2 will focus on the dialogue that led to these strategic goals surfacing to the top in terms of need and priority. The South Lake Minnetonka Police Department (SLMPD) has been engaged in a strategic planning process for well over a year. This comes on the heels of what were several years of political uncertainty over the future of the organization as the consortium of four cities served by the SLMPD grappled over the formula used for funding annual operations. These four cities are Excelsior, Greenwood, Shorewood and Tonka Bay. Settling this concern through arbitration and a revised joint powers agreement paved the way for the SLMPD to look toward the future with a renewed sense of stability. The strategic planning process was initiated by the mayors of the aforementioned cities. This was essential to the process, given their leadership role at the council level and being their city's representative on the governing board (Coordinating Committee) that oversees the SLMPD. The process kicked into "high gear" at the beginning of this year with the formation of a Strategic Planning Group. Each city was afforded up to three representatives to be part of this group consisting of two elected officials (mayor and designated council member) and the city administrator/manager. This allowed for an inclusive process with each city council having forty percent representation in the group. The SLMPD was represented by its command staff consisting of the Chief of Police and Deputy Chief. The Strategic Planning Group met in a public forum five times between January and Apri12008 to complete its initial mission. This does not include the countless hours of prep time spent on research, data collection and preparing informative presentations. The process was divided into three phases: information gathering; defining the key issues; and developing a plan. This resulted in the following four strategic goals being identified: Guest Column Continued -Page 2 * Establish a timetable for phasing in additional police officers earmarked for the patrol division. * Increase the overtime budget so that manpower issues due to training, illness, injured on duty, time off requests, etc. can be more readily accommodated in the work schedule. * Maintain pace with changing technology. Have a sufficient fund balance available to upgrade, replace and add new technologies. * Establish a capital fund for the long-term care and maintenance of the public safety facility. The group maintained an aggressive schedule so that these goals could be considered as part of the 2009 budget cycle. These goals along with the anticipated financial impact were bundled into a Strategic Action Plan, which was accepted by the Coordinating Committee at its meeting on April 30, 2008. This culminated the initial phase of what was an exhaustive process over a relatively short period of time. The strategic plan was presented at a Joint Meeting of City Councils held on May 14, 2008. It has since been the topic of discussion at individual council meetings. The Strategic Action Plan establishes benchmarks each of the next several years in order to accomplish the stated goals. Achieving these objectives each year is dependent on additional funding being approved by the member City Councils as part of the annual budgetary process. The strategic plan for 2009 calls for the hiring of an additional police officer about midway through the year and increasing the amount dedicated to technology. The additional police officer would be earmarked for the patrol division with a start date of June 1, 2009. Phasing in this new position spreads out the financial impact over atwo-year period. The additional capital for technology would help maintain current systems as well as provide for future needs. In recent weeks the local media has reported on the Strategic Action Plan as it becomes part of budget discussions for 2009. The plan is available for the asking and will soon be posted on the SLMPD web site at www.southlakepd.com. Moving forward with this plan will continue to provide an economical way to increase the availability and depth of police services over what each city could realistically support on its own. This arrangement has stood the test of time ever since the cities of Excelsior, Greenwood, Shorewood and Tonka Bay first formed this partnership back in 1973. GUEST COLUMN -PART 2 Submitted -June 27, 2008 Chief Bryan Litsey South Lake Minnetonka Police Department 24150 Smithtown Road Shorewood, Minnesota 55331 Strategic Planning Initiative Note: This is the second in a two part series in which Chief Bryan Litsey summarizes the strategic planning process that has been followed to address some organizational needs. Part 1 focused on the process itself along with the strategic goals that had been identified for consideration. Part 2 focuses on the dialogue that led to these strategic goals surfacing to the top with an emphasis on staffing. The South Lake Minnetonka Police Department (SLMPD) was formed as a joint powers organization in 1973 to serve the policing needs of Excelsior, Greenwood, Shorewood and Tonka Bay. It has proved to be an economical way to increase the availability of police services over what each city could realistically support on its own. The SLMPD is governed by the Coordinating Committee, consisting of the mayor from each member city. The Coordinating Committee embarked on a strategic planning initiative more than a year ago to address current and future organizational needs. The process accelerated with the formation of a Strategic Planning Group in January 2008. The charge of the group was to identify key organizational goals, needed resources to achieve these goals and recommended actions to meet these goals. This inclusive process in a public setting included broad based representation from each member city council along with members of the SLMPD. The group held five meetings in a relatively short period of time so their findings could be considered as part of the 2009 budget cycle. The group initially focused on community characteristics and some of the unique aspects of policing the area. These include being a regional hub with a downtown district; popular nightlife in which crowds swell during the summer months; recreational activities associated with lakes, parks and trails; major arterial highways; and growing population in the southwest metro. Aiso examined by the group was SLMPD operations and its capital investment in a shared facility with the Excelsior Fire District (EFD). Input from SLMPD personnel was considered along with other stakeholders. Key issues began to take shape concerning inadequate staffing levels and needed funding for technology and the long-term care of the facility. Guest Column Continued -Page 2 Given its critical importance to the mission of the SLMPD, the balance of this column focuses on staffing needs. An extensive analysis of this topic led to a heightened awareness among group members that the SLMPD is understaffed with its current complement of police officers. The patrol division was identified as having the most urgent need for additional personnel. This group consensus was reached after substantiating that the redeployment of existing personnel was not a viable option; that there was clear and convincing data to support adding more police officers; and that officer safety was being compromised at present staffing levels. One member of the group summed it up best, "We need to protect those who protect us. " It was an "eye-opener" for members of the group to learn just how lean SLMPD patrol coverage can be at times. It was difficult as police chief to talk about this in a public setting, not wanting to expose such vulnerabilities, yet needing to emphasize this point to help the group better understand the gravity of the current manpower situation. Learning how often coverage for all four cities drops to just one patrol officer was concerning enough, but realizing there is no coverage when this officer becomes tied up on a call or an arrest was even more unsettling to members of the group. Relying too much on other police departments (mutual aid) to provide primary coverage during these times is a risky practice. It was also very telling for the group when different types of data from multiple sources all pointed to the fact that the SLMPD is understaffed when it comes to police officers. Using a per capita standard (number of police officers per thousand residents) the SLMPD would have to hire five more police officers just to be in the average range among police departments in the Lake Minnetonka area. Six more police officers would have to be hired to meet the statewide average. The results are similar when using the International Association of Chiefs of Police (IACP) demand formula. Using this standard, at least 2 to 3 more police officers are needed just to handle the workload in the patrol division. Distance and topography also factor into the mix when considering response time. This is particularly problematic when down to one patrol officer having to negotiate around numerous bodies of water for a considerable distance to cover all four cities. Two or more patrol officers allows for coverage to be split into districts thereby reducing both distances and the effects of geographical barriers. Paramount to this discussion was officer and public safety. Tactically and psychologically having a multiple officer response to a variety of incidents minimizes the potential risks to all parties involved. Volatile situations are less likely to escalate to violence. There is also a greater probability that non-lethal methods can be tried before having to resort to deadly force when dealing with a violent subject. Although police work is inherently dangerous, proper staffing lessens the potential for injury or death. It is also helps with employee retention and maintaining good mental health to balance what is otherwise a very demanding and stressful job. Guest Column Continued -Page 3 I want to thank the members of the Strategic Planning Group for their invaluable service to the community and the SLMPD. The Strategic Action Plan developed through this process made two specific recommendations for 2009 that have been incorporated into the SLMPD budget proposal recently endorsed by the Coordinating Committee. These include the hiring of an additional police officer during 2009 and providing additional funding for technology. It is now dependent on the member cities to follow through with funding to achieve these strategic objectives. Strategic planning is anever-ending process that learns from the past, evaluates the present and provides direction for the future. The Strategic Planning Group has laid the groundwork for what is a very exciting time for the SLMPD as efforts are made to better position the organization for present and future challenges. (APE II~ICz T E I for FISCAL YEAK 2009 Appendix D youth bake Minnetonka Y~olice department The Coordinating Committee for the South Lake Minnetonka Police Department initiated a strategic planning initiative to identify current and future needs of the organization. In that light, a Strategic Planning Group (SPG) was formed comprised of the Mayors and one additional representative from each City Council. This means that 40% of the total Council membership was involved in the process. The SPG met several times for some 81/2 hours before producing a Strategic Action Plan for consideration by the Councils. To that point, SPG members were deeply involved in the process and there were no objections to the final product by the SPG. The approach attitude was one of listening to input from the Chief, with a pervasively conservative fiscal overtone and skepticism regarding need. While we acknowledged the Chief as a solid professional who knows much more about law enforcement than we do, we were, nevertheless, unwilling to simply "rubber-stamp" his recommendations. Multiple thorough presentations from the Chief drew numerous probing questions, first about need, then about potential cost as we sought justification for such a change. What follows is an accumulation of facts, information and conclusions that came to light as a result. Providing adequate public safety is the #1 responsibility of government. Statistically, the SLMPD is far and away the leanest police department in a very wide surrounding area. Lean is not necessarily a bad thing in and of itself unless it presents inherently related problems that undermine the department's ability to provide that crucial responsibility of public safety. The current staff level results in widespread single-officer patrol coverage (one officer on duty with no back-up) for the entire SLMPD area. Current staff levels undermine opportunities for time off, relief for needs such as health, injury, stress and more. Current staff levels add stress in these ways as well as increased danger on the j ob. Our officers have taken up a career which brings risk to their lives at any time. Single coverage increases that risk. It also changes the way officers respond to certain types of calls. If an officer has no back-up, should he wait on a domestic call until another agency becomes available to assist or not actively pursue DUI violators knowing he will be tied up for two to three hours with no one on patrol? This factors in to why officers have left the SLMPD for larger departments. Turnover is expensive in any organization. Recruiting the highest quality personnel is more difficult for an understaffed department. Staffing with minimal numbers is very difficult. It is like having no financial reserves-there's no "well" to go to when you need it. The SLMPD is a very efficient operation. Yet questions arise: Is it optimally efficient? It can't be when officers are regularly forced into a reactive rather than a proactive mode. Does the current staffing level undermine officers' ability to be all they can be in pursuit of the public's best interest? Yes, for the same reason. Would the addition of personnel make the department optimally efficient? Maybe, maybe not, but it will significantly mitigate the damage. Mayors and other SPG members acknowledged a new level of awareness when presented with the graph indicating how often there is only one officer on duty and when informed of the effect on officer psychology. Understaffing endangers not only the public but the officers as well. Their safety is every bit as important as our own. Mayor LaBelle summarized our conclusion with "We need to protect those who protect us". With all the funds spent on the facility, equipment, and staff; we cannot be optimally efficient if officers cannot freely respond to all calls. The SLMPD is doing a great job making the most of the staff level they have to work with, but this still doesn't meet the public's real need in this area, especially considering its size, slow roads, and indirect routes. Also, consider the growth in the surrounding areas whose populations often enter our area for its natural attractions. More calls are requiring multi-officer response such as medicals needing use of a defibrillator. The fact that the SLMPD is understaffed is not a new issue. It simply has been put on the back burner for the last 6-7 years, in favor of the new facility and funding formula issues. Chief Litsey has continually informed the cities of this critical issue, but he has been told to make due until those issues are resolved. Well, now they have been and the issue of adequate staffing is before us. No one can deny the statistics: compared to all other area departments, the SLMPD is the lowest staffed per 1,000 residents. A supervisor for a neighboring police agency recently commented that whenever they dropped to single officer coverage, "it has always come back to bite us". It would take four additional officers to get our department to the "average" level and that is what the Chief recognizes is most appropriate. The SPG has told him this is too large of a leap, but it has also acknowledged the status-quo is unacceptable. The public's perception of their safety exceeds reality. Feedback from the public indicates they would be surprised to know how often our area is covered by only one on-duty patrol officer. They would likely favor more even if it costs more. In analyzing the issue for value: cost vs. need, we have to acknowledge that not all issues are quantifiable. We tried to use quantitative data and still step back and see the big picture, use introspection and intuitive, qualitative reasoning to make appropriate decisions. Budgeting and funding must always follow a "needs analysis." Police protection is like insurance-nobody likes to pay for it until they need it. The question is value. How much do we need? Can we afford two additional officers? More importantly, can we afford to remain under-protected? We as the Coordinating Committee take our duty to provide for the public safety needs very seriously, and therefore, recommend to our Councils the implementation of the strategic plan by supporting the requested funding in the 2009 budget. The following Coordinating Committee members support this Position Statement as amended at the Coordinating Committee meeting on June 25, 2008. H ,_ Mayor Bob Newman City of Greenwood ~~if~` ~~~ ~Y 1~Iayor Bill LaBelle City of Tonka Bay 2 . _ a P~~p~red by - P®l~ce ~h~~f Bryan L~ts~y ~~, ~Y ~ ,. _ r,. _ _ ~~~~ ~,. :., -, s ti,, : - ` .. ;~ ~ ~~~ ~r~ .r ~ c,. z ,h4 ~~' ~' St .. -~.~ L' ~~ ~Y_ - -. ~ - m ~ - . . ' ~ - a June 25, Zoos E 1'INC l9 T L raj t x ns r trtcice~es 2009 Strate is ~aPs ITEM CATEGORY AMOUNT 50100 Salaries -Full-Time $1,208,000 50200 Salaries -Overtime $66,000 50300 Salaries -Part-Time $94,500 50500 Social Security & Medicare $27,400 50600 PERA Pensions $177,000 50700 Insurance Benefits $197,000 51000 Contracted Services $12,800 52100 Equipment Leases $40,400 52200 Repairs & Maintenance $43,500 52300 Utilities $72,500 52400 Janitorial & Cleaning $12,400 52500 Printing & Publishing $4,600 52800 Care of Persons $100 53000 Supplies $73,500 54000 Uniforms & Gear $15,600 54500 Training & Conferences $10,600 56000 Insurance $55,000 56100 Subscriptions & Memberships $2,900 57000 Special Projects $12,200 58000 Capital Outlay $50,000 TOTAL PROJECTED EXPENSES $2,176,000 I r®jc vn ~Y r Does Not include Contributions from Member Cities ITEM CATEGORY AMOUNT 40110 Court Overtime $5,000 40120 Excelsior Park and Dock Patrol Services $22,000 42100 State Peace Officer Aid $137,000 42200 State Training Reimbursement $7,000 43100 Minnetonka School District $7,000 43200 Administrative Requests $1,000 43400 Security Details $25,000 44000 Investment Income $20,000 46400 Forfeitures $1,000 46500 Miscellaneous State Reimbursement $8,500 46600 Other Reimbursement $1,500 TOTAL PROJECTED REVENUES $235,000 Expenses in Excess of,Revencoes $1,941,000 ~ ~ PROJECTED COST TO MEMBER CITIES ~ $1,941,000 ~ liYtcBu es 2009 Strategic ais ni ti n fr e r iti - e r MEMBER CITE TOTAL ,~M®UI~T °lo SI~AI~E $ SHARE $ INCREASE OVER 2008 Excelsior $1,941.,000 27.0% $524,070 $45,657 Greenwood $1,941,000 8.0% $155,280 $13,528 Shorewood $1,941,000 50.0% $970,500 $84,550 Tonka Bay $1,941,000 15.0% $291,150 $25,365 2009 Total Contributions from Member Cities $1,941,000 2008 Total Contributions from Member Cities $1,771,900 The Fourth Amendment to the Joint Powers Agreement (JPA), which was ratified by the member cities in 2006, contains a provision whereby each city's annual contribution toward the operating budget was determined by arbitration. The percentages in the chart above reflect the ruling of the arbitration panel, which were first implemented in 2007. Dollar Increase Over 2008 $169,100 Percentage Increase Over 200$ 9.5% ®ntriuticans fr®r>n Berner ~itie~ -Year 200 MEME3ER CITY TOTAL AMOUNT % SHARE $ ShiARE $ INCREASE OVER 2007 Excelsior $1,771,900 27.0% $478,413 $37,901 Greenwood $1,771,900 8.0% $141,752 $11,230 Shorewood $1,771,900 50.0% $885,950 $70,188 Tonka Bay $1,771,900 15.0% $265,785 $21,056 Totals $1,771,900 $140,375 out a inneton olice e a nt r Deed erein ut l~cludes 2009 Strategec Goals Tonk 1~ $291 ntri uti r~~ fro r itie~ -- Y r Excelsior 27% $524,070 Greenwood 8% $9 70 ,5 00 ^Excelsior ^Greenwood ^Shorewood ~Tonka Bay PROJECTED EXPENSES 50100 -SALARIES -FULL-TIME This line item includes full-time salaries for union and non-union personnel. Included under this category is the salary of an additional police officer earmarked for the patrol division. The hiring of this officer will be delayed until June 1, 2009 to spread out the additional cost over atwo-year period. This is one of the goals identified as part of the Strategic Action Plan included with this budget document. The current labor agreement with union personnel expires at the end of 2008 and has not been negotiated for 2009. Salary reviews for non- unionpersonnel are also pending for 2009. The total amount for this category reflects what these increases will likely be based on a market analysis of data currently available. Other considerations taken into account include step increases tied to length of service along with educational and fitness incentives. Employee retirements have mitigated some of the payroll increases, but these savings are short-lived as new officers advance through the salary schedule. This category no longer includes the reimbursable salary for an investigator on assignment with the Minnesota Financial Crimes Task Force (MNFCTF). The affiliation ended in early 2008 with the retirement of the SLMPD investigator assigned to this detail. 50200 -SALARIES -OVERTIME This line item includes overtime paid to personnel working on holidays and in excess of their regularly scheduled time. The latter of these can be impacted by a number of variables such as staffing and activity levels. Overtime paid for court appearances, school programs and major special events is reimbursed and reflected under revenues. Amore recent addition to this category is the reimbursable overtime associated with officers working during the summer at two popular lakefront restaurants in Excelsior. Referred to as the bar cop detail, this started out as a pilot program in 2007 and was reinstated for 2008 with some slight modifications. It is anticipated this partnership will continue in 2009. This category no longer includes the reimbursable overtime previously associated with having an SLMPD investigator on assignment with the Minnesota Financial Crimes Task Force (MNFCTF). Because of this deletion, there is a reduction to this category. There is also a corresponding reduction on the revenue side. 2009 OPERATING BUDGET PROPOSAL PROJECTED EXPENSES Page 2 of 8 50300 -SALARIES -PART-TIME This line item includes salaries for the part-time office specialist and community service officer positions. It also includes the seasonal positions associated with providing park and dock patrol services in Excelsior. Projected economic and market rate adjustments along with step increases for these part-time positions have been factored into the total for this category. It should be noted that providing seasonal park and dock patrol services in Excelsior needs to be formally approved each year by all the member cities pursuant to the most recent amendment to the Joint Powers Agreement (JPA). Reimbursement from the City of Excelsior for providing these services is reflected under revenues. 50500 -SOCIAL SECURITY & MEDICARE This line item includes the required employer contribution for those personnel covered under the federally mandated social security and medicare programs. There are no expected rate changes for 2009, but due to a larger payroll, more personnel covered under medicare and seasonal employees being included under this category the overall amount has increased proportionately. 50600 - PERA PENSIONS This line item includes the required employer contribution for those personnel covered under the state mandated Public Employees Retirement Association (PERA). A pension bill passed by the 2005 Minnesota Legislature mandated greater contributions from both the employer and the employee. This was a necessary measure to sustain adequate funding levels for both the Coordinated and Police & Fire Plan. To mitigate the impact, these increases are being phased in between 2006 and 2010 for the Coordinated Plan and between 2006 and 2009 for the Police & Fire Plan. Over the aforementioned phase in periods, the employer rate for those personnel covered under the Coordinated Plan goes up nearly 27 percent. The impact is even more dramatic for those personnel covered under the Police & Fire Plan with an increase of nearly 52 percent. The maj ority offull-time SLMPD personnel are covered under the latter plan which for 2009 alone goes up by 9.3 percent. This has a financial impact on two fronts. First, even if the percentages were to remain the same, this liability continues to climb each year due to an increasing payroll. Second, this factor has been exacerbated by significant rate increases. Included in this category is the increased pension cost associated with the hiring of an additional patrol officer during the year. These mandated pension obligations are one of the driving forces behind the budget increase. 2009 OPERATING BUDGET PROPOSAL PROJECTED EXPENSES Page 3 of 8 50700 -INSURANCE BENEFITS This line item includes the employer contribution toward health, life and supplemental insurance for eligible personnel. It also includes the added premium for the patrol officer to be hired during the year. The majority of expense under this category is for health insurance. To help mitigate the ever increasing cost of providing this benefit for employees, the SLMPD is part of a consortium of local governmental agencies that collectively negotiate with providers to obtain the best possible contract. This alliance is called the LOGIS Health Care Group. The contract went out for bids last year, which resulted in a switch from Medica to HealthPartners. The current three year contract with HealthPartners (2008-2010) caps the increase for 2009 at sixteen (16) percent. This comes on the heels of what was only a modest increase during the first year of the contract. Although the exact amount of the increase will not be known until after this budget needs to be approved, past experience supports calculating the anticipated employer share based on the maximum allowable increase for 2009. 51000 -CONTRACTED SERVICES This line item includes a number of professional services for such things as the annual audit and other financial services; legal counsel for departmental affairs; recorder for governing board meetings; availability of interpreters to communicate with non-English speaking suspects, victims and witnesses; fees associate with providing direct deposit for employees; annual retainer fee for the long-term boarding of animals at the Mound Police Department; and pre-employment medical and psychological examinations for the additional patrol officer to be hired during the year. Trying to accurately predict what legal resources might be needed in any given year can be difficult. This is mitigated by the fact that most significant legal expenses will arise out of actions covered by the League of Minnesota Cities Insurance Trust (LMCIT). Additions to this category include fees associated with direct deposit, recorder for meetings and retainer fee for long-term boarding of animals. The latter of these should be offset under revenue from the fees collected for the short-term boarding of animals at the SLMPD. The fees associated with providing direct deposit for employees was previously under the category of Printing and Publishing. If not for the aforementioned additions, there would only be a modest increase to this category. 52100 -EQUIPMENT LEASES This line item includes lease and maintenance agreements for such things as connecting to 2009 GPEIZATING BUDGET PRP®SAL PROJECTED EXPENSES Page 4 of 8 the state criminal justice information system (CJIS), postage meter and multifunctional copier with networking capabilities for copying, faxing, scanning and printing. The most significant expense under this category is the annual transfer made to the Technology Fund. Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of this special fund. Nearly the entire increase to this category can be attributed to the additional $10,000 that will be transferred to the Technology Fund. This was one of the goals identified for 2009 as part of the Strategic Action Plan included with this budget document. 52200 -REPAIRS & MAINTENANCE This line item covers such things as the repair of office equipment and furniture, preventative building maintenance, vehicle repairs, support for technology and calibrating specialized equipment. A number of maintenance agreements have been secured for critical building components such as the heating/cooling systems and controls, boiler inspections, communications, emergency generator, elevator, security gate, etc. Many ofthese are shared with the Excelsior Fire District (EFD) as joint tenants of the building. These maintenance agreements are necessary not only to prevent the disruption of emergency services, but also to extend the useful life of equipment. The same is true when it comes to vehicle maintenance, which is the most significant expense under this category. It is important that our fleet of vehicles be maintained in top-notch condition given the reliance placed on them for emergency response. Maintaining a reliable computer network with interoperability capabilities requires specialized technical support along with having a number of user/maintenance agreements in place. As dependence on technology increases so does the expense of keeping it operational. Other items in this category include the cost of calibrating specialized equipment such as speed measuring devices and truck scales. There is also a nominal contribution to the Firearms Range Fund. Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of this special fund. Much of the increase to this category can be attributed to the additional maintenance agreements for the building along with the rising cost of technical support and fleet maintenance. 52300 -UTILITIES The majority of expenses under this line item are associated with the public safety facility that serves as headquarters for the SLMPD and the Excelsior Fire District (EFD). Shared costs include regular phone service, high speed voice and data connections, electricity, 2009 OPERATING BUDGET PROPOSAL PROJECTED EXPENSES Page 5 of 8 natural gas, water, sewer, waste removal and alarm monitoring. The most costly and volatile items under this category are electricity and natural gas. Fine-tuning system controls and energy saving practices have helped mitigate this increase from year-to-year. The cost of waste removal has surged in recent years and this trend is expected to continue. Cellular phone and air card service, which is not a shared cost, is an essential part of the communication grid for the SLMPD. It allows greater efficiencies and access to data so that officers can do more work in the field. It also provides a way to contact key personnel 24/7. Cellular phone costs are expected to remain relatively flat for 2009. Air cards permit wireless connections to the mobile data computers in the patrol vehicles and laptop computers used in the field. The number of air cards and some of the subscriber fees have increased for 2009. 52400 -JANITORIAL & CLEANING This line item includes janitorial and carpet cleaning services. These expenses increased significantly when the SLMPD moved into its current facility with considerably more area to maintain. Now that these expenses have stabilized, there is only a modest increase factored into this category for 2009. 52500 -PRINTING & PUBLISHING This line item includes printing and stationery costs for letterhead, envelopes, business cards, forms, citations and warning notices. Publishing costs are generally limited to advertising personnel vacancies and posting official notices in the newspaper. Other expenses include purchasing publications to help personnel do their work. This cost has diminished with the ability to access information through Internet sites. No longer included under this category are the fees associated with providing direct deposit for employees. These have been moved to Contracted Services. Because of this reclassification, there is a decrease in this category for 2009. 52800 -CARE OF PERSONS This line item includes caring for detainees while in custody at the SLMPD. This is a nominal expense since most detainees are either booked and released from the SLMPD detention facility or transported to the Hennepin County Jail. This category is also used to track booking fees, which are offset through reimbursement from the member cities. 2009 OPERATING PUI~GE'I` PROPOSAL, PROJECTED EXPENSES Page 6 of S 53000 -SUPPLIES This comprehensive line item includes gasoline for vehicles in the fleet, diesel fuel for the emergency generator at the public safety facility, vehicle supplies, educational materials, ammunition, first aid supplies, batteries, recording supplies, film, drug testing kits, hardware, office supplies, meeting expenses and other miscellaneous items required for department operations. There is an offset under revenues for the educational materials used by SLMPD police officers instructing the CounterAct Program at the local elementary schools. The sharp increase to this category is directly related to the unprecedented rise in gasoline and ammunition prices. Also factored into the equation is the anticipated increase in road miles associated with the hiring of an additional patrol officer during the year. Gasoline prices have risen by historic proportions with no downturn in sight. To put it in perspective, every 10 cent increase in the price of gasoline sustained over the course of a year costs the SLMPD an additional $1,250 (assumes an annual fleet consumption rate of 12,500 gallons). Needless to say, it is difficult to estimate what the true cost will be for the coming year in such a volatile market. The SLMPD has implemented a number of proactive strategies in recent years to mitigate the volatility in gasoline prices, but streets still need to be patrolled and calls still need to be answered regardless of the cost. The other escalating expense under this category is for ammunition. Prices have soared in recent years due to the war in Iraq, which has pushed up overall demand, and growing industrial powers such as China, which bid up the cost of needed raw materials. Along with this price increase, the much needed addition of a tactical team has increased the amount of ammunition needed for training purposes. The difficulty in predicting fuel and ammunition costs has resulted in these expenses being underestimated the last several budgets. 54000 -UNIFORMS & GEAR This line item includes uniforms and gear for department personnel along with applicable clothing and equipment allowances. The addition of several part-time community service officer positions has increased this expense. This category also absorbs the considerable expense of outfitting new personnel. Such will be the casein 2009 with the hiring of a patrol officer during the year. State and federal reimbursement is available when purchasing body armor for licensed police officers. The City of Excelsior reimburses the SLMPD for those uniform expenses associated with providing park and dock patrol services during the summer months. Rising vendor prices and the anticipated increase in contractual allowances have been factored into this category. Outfitting the newly hired patrol officer accounts for the majority of the increase to this category. 2009 OPERATING BUDGET PROPOSAL PROJECTED EXPENSES Page 7 of 8 54500 -TRAINING & CONFERENCES This line item includes sending personnel to mandated and elective training as well as conferences. The hiring of new personnel adds to this cost, since they generally require more training during the first years of employment. A case in point is the necessary training for new police recruits. Costs can easily run in the thousands of dollars for training and certification in such areas as emergency medical technician, pursuit driving, interviewing and interrogation, Intoxilyzer operator, Livescan operator and CJIS operator. Once achieved, ongoing refresher training is required of all officers to maintain their certifications. Officers must regularly train and demonstrate proficiency in the use of firearms (pistol, shotgun and rifle), Taser, ASP baton, chemical spray, use of force techniques, high risk traffic stops, etc. Additionally, all personnel must receive ongoing OSHA training dealing with hazardous materials, blood borne pathogens, etc. This does not even include the discretionary training needed to enhance the skill level and professionalism of personnel and to prepare them for specialized assignments in such areas as tactical operations, investigations, supervision and administration. The state also continues to require more and more mandated training without reimbursement in response to directives from the legislature. Nevertheless, the importance of providing training cannot be underestimated in order to provide quality service and minimize injuries. Training costs are significant, but this pales in comparison to the implications associated with failing to adequately train personnel. There is a partial offset under revenues from the money allocated by the state toward police training. Most of the increase to this category is attributed to the hiring of an additional patrol officer during the year. 56000 -INSURANCE The amount allocated to this line item is transferred to the Insurance Fund. Premiums are paid out of this fund for liability, property and workers' compensation coverage through the League of Minnesota Cities Insurance Trust (LMCIT). Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of this special fund. The increase to this category will help manage anticipated rate hikes and premium adjustments for the newly hired patrol officer. 56100 -SUBSCRIPTIONS & MEMBERSHIPS This line item includes subscriptions to periodicals as well as memberships in civic and professional organizations. Also included under this category is the contractual expense of 2009 OPERATIllTG PUDGET PROPOSAL PROJECTED EXPENSES Page 8 of 8 activating and renewing peace officer licenses through the state for all SLMPD police officers. Licenses are valid for three years and renewals are staggered according to the last name of the officer. Officers must earn a minimum of 48 hours of continuing education credits during each license renewal period. There is only a modest increase to this category for 2009. 57000 -SPECIAL PROJECTS This line item has traditionally included membership in the Southwest Metro Drug Task Force and subscribing to the professional services provided by CornerHouse. New to this category for 2009 is a contribution to the Reserve Officer Fund. In past years, each member city contributed the same amount directly to this fund. Each contributed $500 in 2008 making a total of $2,000. The Coordinating Committee decided to change this practice starting in 2009 so that the contribution to this fund is made through the SLMPD operating budget. This means each member city's contribution is proportionate to its percentage contribution to the operating budget. The Coordinating Committee also adopted a schedule whereby the 2008 cumulative contribution of $2,000 will increase by $200 in each of the next six years. This means the transfer amount for 2009 will be $2,200. Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of the Reserve Officer Fund. Having a contingent of volunteer reserve officers is a community and organizational asset. The Southwest Metro Drug Task Force is funded through contributions from member law enforcement agencies supplemented by grant money and proceeds seized through forfeitures. Once again, there is no anticipated increase to members for 2009. CornerHouse is a highly respected sexual abuse evaluation center for child victims. A nominal increase in the subscriber fee is anticipated for 2009. The SLMPD communities have benefitted greatly from these longstanding partnerships focused on drug trafficking and helping children get through the trauma of being sexually abused while obtaining the necessary forensic evidence to hold perpetrators accountable. 58000 -CAPITAL OUTLAY The amount appropriated to this line item is earmarked for two capital funds. These are the Vehicle Fund and the Equipment Fund. Nearly the entire amount will be transferred into the Vehicle Fund leaving a nominal amount to be transferred into the Equipment Fund. Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of these two capital funds. The increase to this expense category is intended to help restore and maintain an adequate balance in the Vehicle Fund. PROJECTED REVENUES (Excluding Required Contributions from Membe~° Cities) 40110 -COURT OVERTIME Member cities are individually responsible for the overtime costs associated with SLMPD personnel making court appearances for incidents that occur in their respective cities. This varies from year-to-year and the amount for this category is an estimate based upon past experience. 40120 -EXCELSIOR PARK & DOCK PATROL SERVICES It is anticipated that the City of Excelsior will once again request the SLMPD to provide park and dock patrol services in 2009. The SLMPD is reimbursed by the City of Excelsior for providing these supplemental services and the anticipated amount is reflected under this category. The protocol for requesting the SLMPD to provide these services changed in 2006 as a result of the most recent amendment to the Joint Powers Agreement (JPA). It requires the approval of all parties to the JPA before the SLMPD can provide supplemental services to a member city. This process was first followed in 2006 and repeated for 2007 and 2008. The SLMPD prepares a proposal for providing park and dock patrol services in Excelsior for the summer months. The City of Excelsior is engaged early on in the process so there is a common understanding of the services desired and corresponding costs. Once the proposal is completed, it goes to the Excelsior City Council for approval and the SLMPD Coordinating Committee for an endorsement. The proposal is then forwarded to the City Councils in Greenwood, Shorewood and Tonka Bay for consideration. If approved by all, the services are implemented in accordance with the proposal. This will be the same protocol followed for 2009. 42100 -STATE PEACE OFFICER AID This reimbursement through the Minnesota Department of Revenue is based on a formula that takes into account what the employer contributed the previous year to the police pension fund administered through the Public Employees Retirement Association (PERA). For purposes ofthis calculation, only full-time licensedpolice officers employed for the required 2009 OPERATING BUDGET PROPOSAL PROJECTED REVENUES Page 2 of 4 period of time are included in this reimbursement. 42200 -STATE TRAINING REIMBURSEMENT The Minnesota Board of Peace Officer Standards and Training provides a limited amount of reimbursement toward the continuing education of full-time licensed police officers. This reimbursement is based on the total amount appropriated by the legislature divided by the number of eligible officers. The SLMPD fills out and submits an application each year to receive this reimbursement. No significant increase is anticipated for 2009. 43100 - MINNETONKA SCHOOL DISTRICT The Minnetonka School District provides funding for police liaison activities and educational programs in the schools. Because of this funding the SLMPD is able to offer the CounterAct Program each year to the elementary schools. The curriculum is designed to involve police officers, schools and families in preventing children from using alcohol and drugs. It also helps children to avoid using violence as a means of solving problems. The CounterAct Program was developed by the Hazelden Foundation with financial support from numerous corporate sponsors. SLMPD officers also provide other educational programs in the schools such as talking to high school students about the legal consequences associated with drinking and driving. 43200 -ADMINISTRATIVE REQUESTS This is the anticipated revenue from public data requests for copies of documents as well as audio, video and digital recordings. This category also includes revenue from fingerprint requests for employment purposes and other non-criminal matters. 43400 -SECURITY DETAILS This category includes additional policing requests over and above the services normally provided by the SLMPD. These extra policing requests are billed at a set amount with the personnel working these details being paid in accordance with their SLMPD overtime rates. The number of requests vary from year-to-year, but have been on the increase. The estimated amount in this category is subject to fluctuation, but there is no adverse effect on the budget since costs are reimbursed by the business, organization, etc. contracting for the service. Art on the Lake and the Fourth of July Celebration are two of the more high profile events in 2009 OPE TING BUDGET PROPOSAL PROJECTED REVENUES Page 3 of 4 which sponsors pay for an additional police presence. Amore recent addition to this category is the seasonal policing detail at two popular lakefront restaurants in Excelsior. Both establishments share the cost of having a dedicated police presence on weekend nights throughout the summer. Referred to as the bar cop detail, this started out as a pilot program in 2007 and was reinstated for 2008 with some slight modifications. It is anticipated this partnership will continue in 2009. 44000 -INVESTMENT INCOME The anticipated revenue under this category is an estimate based upon historical trends and anticipated future earnings. Interest rates have been on the decline, which generates less revenue from investment income. This accounts for the decrease shown in this category. The SLMPD maintains a portfolio of low risk investments through locally based Beacon Bank and the 4M Fund managed by the League of Minnesota Cities (LMC). 46400 -FORFEITURES This includes unanticipated revenue from forfeitures, which is subject to extreme fluctuations from year-to-year. It should be noted that proceeds from the sale of vehicles forfeited under the impaired driving laws are not reflected in this category. This money goes directly into the DWI Forfeiture Fund maintained by the SLMPD and is administered in accordance with state guidelines. Please refer to the "Funds Supporting Operations" section of this proposal for a more detailed explanation of this special fund. Additionally, most forfeitures associated with drug arrests are not reflected in this category. The Southwest Metro Drug Task Force, of which the SLMPD is a member, supplements its operations with these forfeitures. This allows membership dues to remain extremely reasonable. 46500 -MISCELLANEOUS STATE REIMBURSEMENT The past several budgets have included reimbursement received through a state grant for having an SLMPD investigator on assignment with the Minnesota Financial Crimes Task Force (MNFCTF). This affiliation ended in early 2008 with the retirement of the SLMPD investigator assigned to this detail. Because of this change, there is a significant reduction in this category. There is also a corresponding reduction on the expense side. Included under this category is the partial reimbursement received from the state for providing health insurance coverage for a former SLMPD police officer disabled in the line-of--duty. Providing this coverage is mandated by the Public Safety Officer's Disability Benefit 2009 OPE TING BUDGET PROPOSAL PROJECTED REVENUES Page 4 of 4 (Minnesota Statute 299A.465). This financial assistance from the state has been approximately two-thirds of the actual cost requiring the SLMPD to absorb the balance. Another lesser revenue item under this category is the grant reimbursement received from the state for conducting alcohol compliance checks. 46600 -OTHER REIMBURSEMENT This category no longer includes potential funding from the Midwest Economic Crime Foundation, which is a nonprofit organization that provides monetary assistance to help law enforcement agencies combat financial crimes. This assistance was available to help defray some of the secondary expenses associated with having an SLMPD investigator assigned to the Minnesota Financial Crimes Task Force (MNFCTF). Since the SLMPD no longer has an investigator assigned to the 1VINFCTF, this is no longer a potential revenue source. New to this category are the short-term boarding fees collected for kenneling stray and/or dangerous dogs at the SLMPD facility. This helps offset the retainer fee charged by the Mound Police Department for the use of their kennel as overflow and longer term confinement. ~ _ ~ _ :. __ _. .~; - ~ _ :. e .z._ ~ i .,_ ~1 Prepared by h s l t7 1 1 ,: ,.-.~ .. -~., .~ -~ ua - Police Chief B 1 + 'r3 l i? ~ a'- _~ ryas Litsey I ~ `T t ri enin 2 er~t6n u et end Approve 2 p~r~t~n c~d~ ®f~ER,~TlNG BU©GET E.~{~ ENSES Item Category 2009 2008 Inc(Dec) Change 50100 Salaries Full-time $1,208,000 $1,167,000 $41,000 3.5% 50200 Salaries Overtime $66,000 $72,500 ($6,500) -9.0% 50300 Salaries Part-time $94,500 $89,900 $4,600 5.1 50500 Social Security & Medicare $27,400 $23,900 $3,500 14.6% 50600 PERA Pension $177,000 $157,400 $19,600 12.5% 50700 Insurance Benefits $197,000 $175,000 $22,000 12.6% 51000 Contracted Services $12,800 $10,500 $2,300 21.9% 52100 Equipment Leases $40,400 $30,000 $10,400 34.7% 52200 Repairs & Maintenance $43,500 $40,500 $3,000 7.4% 52300 Utilities $72,500 $68,500 $4,000 5.8% 52400 Janitorial & Cleaning $12,400 $12,000 $400 3.3% 52500 Printing & Publishing $4,600 $5,100 ($500) -9.8% 52800 Care of Persons $100 $100 $0 0.0% 53000 Supplies $73,500 $53,500 $20,000 37.4% 54000 Uniforms & Gear $15,600 $13,000 $2,600 20.0% 54500 Training & Conferences $10,600 $9,800 $800 8.2% 56000 Insurance $55,000 $53,000 $2,000 3.8% 56100 Subscriptions & Memberships $2,900 $2,800 $100 3.6% 57000 Special Projects $12,200 $9,900 $2,300 23.2% 58000 Capital Outlay $50,000 $47,500 $2,500 5.3% TOTAL PROJECTED EXPENSES $2,178,000 $2,041,900 $134,100 6.6% OPERATING BUDGET REVENUES (Does i~dot Include Contributions from Member Cities) Item Category 2009 2008 Inc(Dec) Change 40110 Court Overtime $5,000 $5,000 $0 0.0% 40120 Excelsior Park and Dock Patrol Services $22,000 $23,000 ($1,000) -4.3% 42100 State Peace Officer Aid $137,000 $117,000 $20,000 17.1 42200 State Training Reimbursement $7,000 $7,000 $0 0.0% 43100 Minnetonka School District $7,000 $7,000 $0 0.0% 43200 Administrative Requests $1,000 $1,000 $0 0.0% 43400 Security Details $25,000 $25,000 $0 0.0% 44000 Investment Income $20,000 $23,000 ($3,000) -13.0% 46400 Forfeitures $1,000 $1,000 $0 0.0% 46500 Misc. State Reimbursement $8,500 $56,000 ($47,500) -84.8% 46600 Other Reimbursement $1,500 $5,000 ($3,500) -70.0% TOTAL PR©JECTED REVENUES $235,000 $270,000 ($35,000) -13.0% Expenses in Excess of Revenues $1,941,000 x1,771,900 $169,100 9.5% PRC}JECTED COST TO I~JlEMBER CITIES 51,941,000 $1,771,900 $169,100 9.5% Yellow shading ind}aates that one of the strategic goals contributed to the increase for this particular category. These goals include the hiring of an additional patrol officer during the year and additional funding for. technology. ~" r~/ IL ^Q 1.L. W J 0 g~ S Z Z _Z L~ F '®~/~ v/ N NN 6ei. W ~_ W M_ W W ~_ Q W ~~,^ V! W 0. 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O ~ o o ~ - O ~ L o ~ ` N ~ 'D N p ' O Q ~ ~ ~ ~ '`' ~ ~ U U ~ a~ -~-~ a ~, a~ N c m - m c co a .~.~ m O O ~- ~. ° ' '~ U O ~ ~ c °- c O c t ~ ~ O • o m m ~ ~ Q • c n _ O ~ ~ o ~ m o ~ ~ - o.o ~~ o~•~ ~ O ~ U ~ d ~ N~ O N~ Q Q C O ~ ~ C N ,~ N E B O ~ U ~ i1 H ~ ° ~ :c ~ -,a ~ .. __ .~ _ a !., _ _ _ .. ,~ s> . t`.: ,.,r ~4 _ a . ~ u s ":~ b L I 1" ! T° ( s ®f ecernber 3~, 2007) Designated Funds Balances Insurance Fund $25,903 Vehicle Fund $44,645 Equipment Fund $7,975 Technology Fund $93,722 Building Fund $28,089 Reserve Officer Fund $1,148 DWI Forfeiture Fund $25,142 Firearms Range Fund $1,814 Other Funds Balances Accrued Liabilities $228,393 Undesignated-Reserve Fund - (See Notation Below). $136,372.:. Notation: There was a net increase in the Undesignated-Reserve Fund as a result of favorable operations during 2007. This is reflected in the audit report completed by CPA Stuart Bonniwell for 2007. A memorandum and related spreadsheet was prepared by Chief Bryan Litsey with recommendations for transferring surplus revenues to meet specific capital needs. This proposed redistribution of funds was approved by the Coordinating Committee at their meeting on April 30, 2008. .: 'r~EG~ta ~ Supie en# I® 2009 per~Iig dget rip®sai :~~~ :. Prepares' by Chief Bryan Litsey INTRODUCTION The South Lake Minnetonka Police Department (SLMPD) is responsible for managing its own fiscal affairs as a j oint powers organization. This means it is necessary for the SLMPD to maintain a number of capital and specialized funds in support of the operating budget, which is financed primarily through member city contributions. Many of these funds are used to help with cash flow and to maintain consistency in the operating budget from year-to- year. All fund balances are subject to variances depending on when transfers and expenditures are made throughout the year. The following narrative provides an overview of each fund within the context of the overall fiscal management of the organization. The corresponding spreadsheet is a snapshot of the audited fund balances as of December 31, 2007. DESIGNATED FUNDS insurance p'untl -This fund is used to manage insurance costs. Premiums are paid out of this fund for liability, property and workers' compensation insurance provided through the League of Minnesota Cities Insurance Trust (LMCIT). Maintaining this fund helps protect against the volatility in the insurance industry as well as providing a means ofself-insuring against smaller claims. There is an annual appropriation to this fund from the operating budget which until recently remained unchanged for years. The balance in the fund has decreased due to increased workers' compensation premiums; insuring the new public safety facility; and increasing liability coverage to protect against federal actions which are not subject to the same tort limitations as state actions. Nevertheless, the balance is still sufficient enough so that the annual contribution from the operating budget can be held to a modest increase in 2009. What helps make this possible is the Joint Powers Liability Clarification Bill passed into law by the 2006 Minnesota Legislature. Enactment of this law was in response to a federal court ruling that sanctioned the "stacking of claims" against members of a joint powers organization. The law effectively nullifies this federal court ruling and treats a joint powers organization as a single entity for purposes of state tort caps. If not for this law, joint powers organizations such as the SLMPD would have incurred higher premiums in order to protect against the ramifications of the federal court ruling. South Lake inneton~a Police I)epartar~ent u ary of Funds Supporting Operations Page 2 of 5 Tlehiele p'azd -This fund is utilized to purchase, equip and set-up vehicles. It allows for a uniform replacement schedule for vehicles in the SLMPD fleet. Proceeds from the sale of vehicles go directly into this fund to help offset replacement costs. Vehicles in the patrol fleet are replaced more frequently than the vehicles used for other functions. This is for obvious reasons, given the high and rigorous number of miles put on patrol vehicles and their need to be in good condition for safety and reliability. The annual contribution to this fund from the operating budget was drastically reduced in 2004 to help with a projected revenue shortfall that year. The fund balance was sufficient enough at the time to temporarily absorb a reduced contribution from the operating budget. It was recognized, however, this could not be sustained over the long-term and if allowed to continue would have severe financial implications on future operating budgets. Since that time, progress has been made toward restoring this fund to a sustainable level through incremental increases in transfers from the operating budget along with transfers of excess revenues. Additionally, an increased contribution to this fund was established for the eventual replacement of the vehicle put into service as part of the expanded community service officer coverage implemented in 2008. Although these have been positive steps to bolster the health of the fund, the annual contribution from the operating budget will need to be increased for several more years to restore the fund to an adequate level. Equipment Fund -This fund was established for the purchase and replacement of furnishings and equipment. Some of the fund uses have been shifted in recent years to the Technology Fund. Additionally, most of the furnishings were new when the SLMPD moved into its new facility thus lessening the dependency on this fund. Nevertheless, this fund is still being relied upon for a number of acquisitions. Contributions to this fund from the operating budget have been minimal in recent years due to budgetary constraints. This would have been more consequential if not for the resourcefulness of the SLMPD in securing other funding sources through grants and donations. One of the most consistent and prominent contributors has been the South Lake Minnetonka Crime Prevention and Criminal Apprehension Fund. This locally based nonprofit organization has contributed thousands of dollars toward equipment purchases. Their most recent donation enabled the SLMPD to purchase tactical gear for the members of its newly formed Emergency Response Unit. Once again, there will only be a modest transfer to this fund from the operating budget in 2009. Technology F'~€nd -This fund was initially established in anticipation of the conversion by Hennepin County to a new 800 MHz radio system. It was realized that the SLMPD would have to absorb a considerable expense for the equipment needed to remain part of the county- wide system. This conversion took place in the fall of 2002. Since that time, the fund has South bake innetonka Police cpartanent u a~°y oi° Funds Supporting C}pe~°ations Page 3 of 5 taken on an expanded role to support other technologies such as the more recent installation of mobile data computers in the patrol vehicles as well as the internal expansion and replacement of computer hardware and software. Additionally, some of the aforementioned radio equipment and mobile data computers are nearing the end of their useful life-span and will need to be replaced. A couple "big ticket" items on the horizon include replacement of the current in-house record management system as well as the network server. A schedule was previously adopted whereby the annual contribution from the operating budget increased proportionally through 2008. Not only does this need to be extended, but the amount of the annual transfer needs to be increased substantially to support and replace those technologies already in use along with future technologies that have yet to be developed. Addressing this need was one of the strategic goals recommended for implementation beginning in 2009. Some of the financial impact to this fund has been mitigated in the past by leasing radio equipment through the county in order to preserve capital. Additionally, the SLMPD has taken advantage of grant opportunities for radio equipment and mobile data computers in the patrol vehicles. There is no assurance, however, these opportunities will be available in the future and thus the SLMPD needs to plan accordingly in order to support these critical systems. Surplus revenues have been transferred into this fund over the years to supplement the annual appropriation it receives from the operating budget. I3uilrldng F'uncl -This fund was initially created to assist with capital costs associated with maintaining the former police station and to provide the financial means for exploring the option of a new shared facility with the Excelsior Fire District (EFD). It was later used to offset some of the costs associated with the SLMPD moving into its new shared facility with the EFD. In more recent years, this fund has served primarily as a capital account for maintaining and improving the functionality of the facility. This use is different from what is factored into the operating budget each year for the routine maintenance and upkeep of the building. Even though the facility is relatively new, this fund has already been used for some costly system malfunctions not covered under warranty. The fund currently receives no annual appropriation from the operating budget and has been supported over the years through transfers of surplus revenues. This unreliable funding source falls well short of what will be needed as the facility ages and the cost of maintaining the infrastructure of the building mounts. Much of this is a shared liability with the EFD, which also headquarters out of the facility. This joint responsibility needs to be addressed by both public safety organizations as well as their member cities as part of a coordinated effort. The SLMPD has already taken positive steps to do so as part of its current strategic planning initiative. One helpful factor is that the member cities should be in a better position to contribute toward this capital need when the savings realized by the refinancing of the original lease revenue bonds South bake inuetonka Polace epartruent Su ary of Funds Supporting pcrations Page 4 of 5 for the facility start to materialize in 2009. e~eawe f~eeN Fuaad -This fund was initially established to finance the appreciation banquet held each year for volunteer reserve officers. The use of this fund has been expanded in recent years to help cover the expense of equipping and training reserve officers. One of the funding sources has changed for 2009 at the direction of the Coordinating Committee. Member cities will no longer make a direct contribution to this fund each year. Instead, funding will now become an annual transfer from the operating budget under the expense category of Special Projects. The fund will continue to receive the revenue generated from SLMPD auctions. It is important to note that reserve officers are volunteers in the true sense of the word and receive no financial incentives for being part of the organization. Having this fund is a nice way to show the members of the Reserve Unit that they are appreciated and supported by the South Lake Minnetonka communities. DTI Forfeiture Fund -The proceeds realized from the sale of vehicles seized by the SLMPD pursuant to the DWI forfeiture law must be distributed in accordance with state statute. The percentage that goes to the SLMPD is maintained in a dedicated account for ease of tracking as required by state guidelines. Expenditures from this fund are also regulated by state statute and must be related in some way to law enforcement training and enforcement efforts. This includes purchasing equipment that can aid in the detection and apprehension of people who are driving while impaired. This fund is intended to enhance, not replace, normal budgetary items. It also cannot be relied upon as a steady revenue stream given its volatility from year-to-year. Firearms Range Fund -This fund was created to help manage and track expenses relating to the operation and maintenance of the SLMPD indoor firearms range. Some of the more costly items are maintaining the automated target system, cleaning the bullet trap and replacing the special filters that are part of the air exchange unit. This fund receives a nominal contribution each year from the operating budget along with the revenues generated from other law enforcement agencies renting the firearms range for training purposes. OTHER FUly1I~S Accrued Liabilities Fund -The amount in this fund needs to be proportionate to the liability at the end of each year for accrued compensated absences for employees. This liability includes earned but unused vacation and compensatory time as well as severance pay. Employees who resign or retire are also entitled to the same consideration and are paid from South bake innetonka Police apartment Su ary of Funds Supporting parations Page 5 of 5 this fund. The SLMPD has a longstanding practice of making sure this financial obligation is met on behalf of the member cities. Zlraclesicctecl- ese~ve F'unr~ -The budget process is not a perfect science and many costs are influenced by external factors that are not easily controlled. Additionally, when providing essential services to the public it is critical to have money in reserves for unknown contingencies. This fund provides the SLMPD with a cushion against unanticipated expenses ranging from skyrocketing energy prices to investigating a major crime involving hundreds of hours of overtime. One important distinction, however, is that the SLMPD does not rely on money in reserves as extensively as a municipality to maintain its cash flow throughout the year. This is because unlike a municipality, which needs to maintain its cash flow between tax collections, the SLMPD receives the majority of its revenue through monthly payments from member cities. This provides a constant and dependable revenue stream throughout the year. It is fiscally responsible for the SLMPD to normally maintain in reserves the equivalent of approximately five percent of operating expenses. Anything beyond this range is considered more discretionary in terms of its use. The practice has been to shift any surplus toward capital needs rather than offsetting operating expenses. It is normally not advisable to offset operating expenses with reserves, being the temporary relief it provides will have to be made up in future budget years in addition to any other budgetary increases. This compounding effect can be difficult to overcome and can lead to future budget deficits. Transferring excess reserves to designated funds allows the SLMPD to better meet specific needs. In recent years such transfers from excess reserves have been made into the technology, building and vehicle funds. MEMORANDUM CITY OF ~~~ ~T~~:WO(~ 5755 COUNTRY CLUB ROAD • SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us TO: Mayor and City Council Larry Brown, Director of Public Works, Acting City Administrator FROM: James Landini, City Engineer `"' DATE: July 24, 2008 RE: Shorewood 2008 Bituminous Seal Coating of Streets Project -Change Order 1 City Project No. 08-02 On May 27, 2008 the City of Shorewood accepted bids and awarded the 2008 Bituminous Seal Coating of Streets Project to Allied Blacktop. On July 24, 2008, The City received a verbal request from Boulder Bridge Home Owners Association to defer seal coating the Boulder Bridge area streets for no more than one year to finalize the potential mill and overlay proposal. A representative from the Association will be present for questions. The streets requested to be deferred are Boulder Bridge Drive, Boulder Bridge Lane and Boulder Circle. The deferral will reduce the 2008 contract by $14,696.75. The original Shorewood's portion of the bid was $126,230.25 and will be reduced to $111,533.50. This removal would reduce the street maintenance over-budget situation of $28,506.95 to an over-budget situation of $13,810.20. The change would result in a total cost for street projects this summer to be $313,810.20. The 2008 budget is $300,000 for street maintenance. To grant the association the time deferral a change order removing the Boulder Bridge area roads from the project is necessary. A resolution is attached for your consideration. Recommendation Staff has considered the request and it does bring the City closer to the 2008 operating budget. Staff awaits direction from Council on the request. A draft resolution is attached for your consideration. ®. r®a® PRINTED ON RECYCLED PAPER CITY OF SHOREWOOD RESOLUTION NO. 08- A RESOLUTION APPROVING A CHANGE ORDER 1 FOR THE 2008 BITUMINOUS SEAL COATING OF STREETS PROJECT, CITY PROJECT NO. 08-02 WHEREAS, on May 27, 2008, the City of Shorewood entered into a contract for Bituminous Seal Coating of Streets with Allied Blacktop for the 2008 Bituminous Seal Coating of Streets Project, City Project No. 08-02; and WHEREAS, City of Shorewood has prepared Change Order 1 that removes Boulder Bridge Drive, Boulder Bridge Lane and Boulder Circle from the project; and NOW, THEREFORE BE IT RESOLVED by the City of Shorewood to approve Change Order Number 1 with Allied Blacktop, that removes Boulder Bridge Drive, Boulder Bridge Lane and Boulder Circle from the 2008 Bituminous Seal Coating of Streets Project. 2008. ADOPTED by the City Council of the City of Shorewood this 28th day of July, ATTEST: Christine Lizee, Mayor Larry Brown, Acting City Administrator/Clerk yr r~~ a aewaad City ae~nail a ors With due respect to your in-depth knowledge of city finances and budget process, we cannot help but wonder why there would be any questions or daubts aboufi the veracity of the South ~.ake Minnetonka Police Chief's need far a slight increase in budget for Ot}. Nor do we understand haw, in light of year many years as citizens in Shorewood, you might wish to jeopardize the safety and security of your fellow citizens by voting down Chief Litsey's reasonable budget request for (one} additional officer. Public safety should be a top priority of city management. The small increase that would be passed on to Shorewood residents seems well worth it, when ane reads in our lacal newspapers recent reports of increased burglaries (garage entries) and thefts (while people are at work or on vacation). In a challenged economy such as we are experiencing, crime generally gees up, not down. Please vote `(ES on this budget and show the Shorewood electorate that you, too, value public safety and security! Shorewood can afford its share of this budget; we cannot afford to have a council that pinches every penny at the expense of public safety. $1,310,000 Shorewood Economic Development Authority Public Project Lease Revenue Bonds, Series 2008A Bond Sale Summary Jt~Iy 28, 2005 PURPOSE: To finance. renovations to the City of Shoi•ewood's .City Hall. FINANCE PLAN: Issue fixed rate bank qualified bonds payable from Lease Payments from the City of Shorewood that are equal to the debt service payment on the Bonds. Payments will commence on June 1, 2009. The final maturity of the Bonds is December 1, 2028. The Bonds are callable on December 1, 2016 at par RESULTS: - Moody's upgraded the lease revenue debt, iilcludiizg the Bonds, to a Aa3 rating and upgraded the City's GO ratnlg to a Aa2. - Average Izlterest rate of 4.51% - A111z1clusive Cost of 4.97% - Average aruzual payments of $101,854. ~ ~ Y~ ~P ~ P® 'I '' - g 6 ~ R a Spww 6 ~ ~ /°° $ y 1 ~. ``~~`~ 1 ,_.~ ~ _~, ...,~-, m ~'