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City Council Minutes 09-22-2014 SpecialMINUTES SPECIAL MEETING — MONTICELLO CITY COUNCIL Monday, September 22, 2014 — 5:00 p.m. Bridge Room, Monticello Community Center Present: Clint Herbst, Lloyd Hilgart, Tom Perrault, Glen Posusta, Brian Stumpf Absent: None Others: Wayne Oberg, Jeff O'Neill, City Department Heads 1. Call to Order Mayor Clint Herbst called the special meeting to order at 5 p.m 2. Purpose of Workshop: Present potential items for inclusion in 2015 levy Jeff O'Neill introduced the objectives of the budget workshop: to provide some general and department presentations and allow time for Council to discuss potential items to be included with the 2015 tax levy. 3. Budget Presentations: Wayne Oberg — Introduction/Priorit Item. � s Wayne Oberg stated that Council will be asked at the regular meeting to approve a preliminary 2015 levy. Wayne recapped items from previous budget workshops including: levy summary, finance director's recommendation for base levy, levy impact for 2015, impacts to market value from the Xcel power plant, tax capacity and rates over past years, levy target comparison, impact of levy on residential and commercial taxes, and debt service levy changes in coming years. Wayne Oberg talked about setting Capital Improvement Project (CIP) priorities and some of the points to consider. "Imperative" would be the top priority which are items that must be done; "Essential" would be a priority item that should be done; and "Important" are those items that could be done. Some other considerations when determining priorities include: revenue generated in excess of costs, essential services, increasing productivity or efficiency, decrease in related costs, preventative maintenance, and replacement of needed existing capital assets. When selecting items to place in the CIP, it's advisable to look at sustainability and incrementalism. Wayne Oberg reviewed the additional law enforcement hours that he incorporated into his base levy. Glen Posusta asked why the city would raise the number of hours if only the Level 2 crime has increased. Brian Stumpf felt that the I -94 construction might make a difference in the statistics this year. Wayne Oberg pointed out that deputies wrote more tickets even with less hours. He commented that it would be good to look at how much cost is going into law enforcement compared to the number of hours. Lloyd Hilgart noted that there will be a large City Council Special Meeting Minutes — September 22, 2014 Page 1 apartment complex built in the next year that may increase the number of calls for service. Clint Herbst feels that it would be better to take a longer look at the statistics before increasing the number of hours again. He suggested that the County would be willing to increase the number of hours before the contract is up for renewal again, if the need is warranted. Tom Moores — Public Works /Streets Tom Moores presented some slides on activities and requests for the Streets department. Their activities include maintenance of 68 miles of streets and boulevards along with parking lots, street light systems, street signs, sidewalks, outlots, storm water system, and buildings and grounds maintenance. Tom Moores noted that his proposed budget would be an increase of 2.96% with increases in motor fuel, small tools, and repair and maintenance related to street pavements. Other items to consider are an additional full -time employee ($70,000), addition to the salt shed (could delay for several years), replace seasonal banners ($16,000), and painting the stoplight poles ($42,000). Tom Moores noted the capital equipment items being proposed in the 2015 CIP: 3/ ton pickup truck (replace), blacktop roller (add), plow tractor for flail mowing (replace), and forklift (add). These items would be included in a capital equipment bond issue. Tom Moores also reviewed some items to be placed in the 2016 CIP. Next, Tom Moores talked about the Snow & Ice Department. He proposes an increase of 9.14% in the event that we have another snowy winter season. Tom Moores pointed out that he is under budget yet for 2014, but it is very close and still has to go through November and December. Increases are expected in chemical products, sand and salt, and equipment repair parts and supplies. There was a short discussion of the applications that are made to the roads prior to snowstorms. The Shop & Garage Department handles maintenance of all city vehicles and equipment, and Tom Moores proposed an increase of 3.31 %. Major increases are for safety supplies, welding supplies, equipment repair parts, small tools, electric costs, and licenses. Street Lighting Maintenance includes maintenance of lights owned by the city, Wright- Hennepin, and Xcel Energy. A 3.15% increase is proposed to cover maintenance agreements for the lighting systems throughout the city. Storm Water Maintenance has a large increase but this is due to moving a $40,000 budget line into this department to cover ongoing maintenance repairs related to storm water facilities. Parking Lots are estimated at a 1.07% increase, mainly for electricity. City Council Special Meeting Minutes — September 22, 2014 Page 2 Lloyd Hilgart asked if the budgets in Public Works generally go over or use up all their budget. Tom Moores explained that the budget is a tool to use as a guide for annual spending. It doesn't mean that everything gets spent but it's there if needed. Jeff O'Neill commented on the future planning for a new Public Works Facility and noted that would be a future year item. • Shibani Bisson — Public Works Projects Shibani Bisson talked about the city's Street Reconstruction Program which was put into place in 2003. A pavement management system has been developed which rates the streets and calculates the overall condition of the streets. This helps define when streets are due for preventative maintenance, mill and overlay, or reconstruction. This planning follows industry standards. Shibani Bisson explained that the average road condition is rated at 79.26, with 46% of roads in the excellent category down to 6% in the poor category. Shibani Bisson reviewed the approximate costs for pavement management and how that ties into the budget proposal of $175,000 for sealcoating and $625,000 for reconstruction or mill and overlay. For 2015, it is proposed to overlay School Boulevard, a segment of 85d' Street east of Hwy 25, and at the corner of Edmonson & 85b Street. Clint Herbst noted that he and Jeff O'Neill recently talked to members ofthe Timber Ridge Townhome Association. They would like to be incorporated into the city's street improvements, which would be assessed back to them for their portion of a benefitting project. Glen Posusta asked about how the decision is made to select roads that are up for improvements in a given year. Shibani Bisson explained that staff looks at the road conditions and lays out the projects in the 5 -year CIP. Glen Posusta asked about the streets in the downtown area east of Hwy 25 between Broadway and 7a' Street. Shibani Bisson noted that that area is proposed to be reconstructed in 2016. Shibani Bisson talked about the plans for Hwy 25/7t' Street signal improvements, which may include a protected left turn. This will need discussion with MnDOT to get their approval for those signal changes. Glen Posusta asked about the timing of making changes along 71 Street by the cemetery. Shibani Bisson indicated that those improvements would be part of the street reconstruction slated for 2016. Glen Posusta asked if it would be possible to consider addition of a right turn lane from Hwy 25 North onto 7t' Street East. Shibani Bisson also discussed other potential items that could be included in the CIP: pedestrian crossing safety measures along Hwy 25 and interchange planning for a future I -94 intersection to the west. Shibani Bisson pointed out some of the 2015 ongoing efforts that will be continued: Fallon Avenue overpass, regional transportation planning, SWPPP management, Waste Water Treatment Facility City Council Special Meeting Minutes — September 22, 2014 Page 3 management, and GIS management. Shibani Bisson reviewed the projects that are proposed for the 2015 budget: TH 25 expansion at 85b Street, rural road improvements for 85th Street and Fallon Avenue, School Boulevard overlay, Oakwood sidewalk, Chelsea Road West street lighting, TH 25 /CSAH 75 Intersection, and 7h Street/TH 25 signals. Glen Posusta asked when the Hwy 25 project was anticipated to begin. Shibani Bisson stated that MnDOT will bid that out this fall and would probably start in March. • Tom Pawelk — Public Works /Parks Tom Pawelk provided a slide show about the Parks Department and what is being proposed for 2015. Tom Pawelk explained his intent to move one of his current employees into the Parks Foreman position, which was vacated when Derek Wipper moved to Special Projects Coordinator. Tom Pawelk showed some service trends which showed an increase in the amount of parks and trails that are maintained and a decrease in the number of skating days. Tom Pawelk indicated that the skating hours have decreased because of the budget cuts in prior years that reduced the hours that the skating rinks and warming houses are staffed. Tom Pawelk noted that the major budget increases are in chemical products, park supplies, professional services, and training. He would also suggest consideration for adding a full -time employee. T om Pawelk showed a graph of the various tasks that are performed by parks department employees within the various departmental divisions. Ten years ago, they employed ten seasonal workers which has been reduced to four workers, including some that worked both summer and winter on a seasonal basis. These seasonal workers perform many of the tasks identified in the presentation. Tom Pawelk explained that they can no longer have seasonal employees work more than 67 continuous days in a year, which is creating a difficult situation in getting the tasks done. Clint Herbst suggested that perhaps some of the work may have to be contracted out. Clint Herbst expressed concern about hiring a full -time person if the need is mostly in the summer season. Brian Stumpf noted that this was discussed at a Parks Commission meeting and a full -time employee would be cross trained to work in other departments in addition to Parks. There was some discussion about the pros and cons of using seasonal workers versus hiring another employee. Tom Pawelk talked about the priorities established by the Park Commission for 2015: 1 st — full -time Park Maintenance Worker, 2nd — Hunters Crossing Park, 3rd — Hunters Crossing/Fallon Avenue pathway connection, 4th - Spirit Hills trail connection, 5th — Meadow Oak dog park. Tom Pawelk reviewed the projects associated with these priorities. Tom Pawelk talked about some of the proposed costs associated with Bertram Chain of Lakes Park maintenance. They are hoping that these costs could be split with Wright County. Some of the proposed capital equipment items proposed for 2015 and 2016 are an MT Trackless, utility mule vehicle, Cushman, JD tractor, seeder, mower, truck, skid loader, and an infield pro. City Council Special Meeting Minutes — September 22, 2014 Page 4 Tom Pawelk noted some proposed costs for budgets for Cemetery (blacktop exit driveway) and Shade Tree (boulevard tree planting; chain saw). Angela Schumann — Community Development Angela Schumann presented some highly- requested amenities for Bridge Park. They are hoping to drive more use of the downtown parks with improvements that include a splash park and addition to the shelter in West Bridge Park. Glen Posusta asked about costs and Angela Schumann indicated that could vary greatly depending on the size of the amenities and how they are constructed. Kitty Baltos — Community Center Kitty Baltos talked about a potential budget item for improvements to the play structure in the community center pool. During the annual pool cleaning, they performed some maintenance but the play structure needs some major work or replacement. The play structure is 15 years old and the goal would be to replace it with a new structure sometime in the near future. This would also create renewed interest in using the pool. Kitty Baltos noted that the MCC is working on some ways to create more excitement in use of the community center and feels that the play structure would be a big gain. If this were approved for the 2015 budget, they would plan to replace the structure about the same time as the annual pool maintenance takes place. • Wayne Oberg — Summary /Spreadsheet Wayne Oberg handed out a spreadsheet listing a number of potential capital items that could be incorporated into the 2015 tax levy. Jeff O'Neill noted several items that were added to the spreadsheet: industrial land acquisition, a new fire hall or renovations to the existing, and security cameras for parks and trails. The potential budget costs are indicated and Council could decide items to include and remove. 4. Summary discussion of budget recommendations Lloyd Hilgart asked about Hunter's Crossing Park and wondered if the cost for the park could be funded by another source. Glen Posusta questioned the value of creating neighborhood parks versus putting the money into larger parks such as Bertram Chain of Lakes or Pioneer Park. Glen Posusta asked Wayne Oberg about the FiberNet bond settlement debt: Wayne Oberg explained that the first year payment would be $180,000 and increase to $480,000 for a number of years after that; however, the city's debt service drops significantly over the next five years leaving substantial room for this payment. City Council Special Meeting Minutes — September 22, 2014 Page 5 Wayne Oberg went on to explain that Council is being asked to approve a preliminary levy tonight, not a preliminary budget, so Council does not necessarily need to select specific budget items. Wayne Oberg explained what will happen with debt service over the coming years and indicated that proposed projects can be accommodated over time with bonding. For example, a total levy of $9,400,000 would create a levy increase of $1.25 million or 15.3% for 2015. This would generate a tax rate of about 39.500, which would still be less than last year's tax rate of 44.709. Wayne Oberg pointed out that this should easily accommodate the debt service needs over the term. Glen Posusta asked if the levy would factor in the FiberNet bonds over the life of that bond. Wayne Oberg explained that the bond would be issued this year and he hopes to incorporate some other capital projects /equipment with that bond. Glen Posusta asked how they will be able to sustain the levy at the higher rate. Clint Herbst explained that the levy amount can be lowered the following year; the amount that is approved for 2015 does not have to remain at that level. Clint Herbst noted that even with an increase of $1.25 million for this year, taxes would still decrease. 5. Adjournment TOM PERRAULT MOVED TO ADJOURN THE SPECIAL MEETING AT 6:59 P.M. LLOYD HILGART SECONDED THE MOTION. MOTION CARRIED 5 -0. Recorder: Catherine M. Shuman 0*4.1 Approved: October 13, 2014 Attest: �i C Cwt inistrator City Council Special Meeting Minutes — September 22, 2014 Page 6