City Council Agenda Packet 12-17-1990AGENDA FOR THE SPECIAL MEETING OF THE CITY COUNCIL
Monday, December 17, 1990 - 3:00 p.m.
Mayor: Ken Maus
Council Members: Fran Fair, Warren Smith, Shirley Anderson, Dan
Blonigen
1. Call to order.
2. Consideration of awarding the Monticello Heartland Express
Dial -a -Ride bus system service contract for 1991 and 1992.
3. Consideration of establishing an assessment formula for
Sandberg East Project 90-4 .
4. Ratification of the salary adjustments for 1991.
5. Adjournment.
k
11
0
Special Council Agenda - 12/17/90
2. Consideration of awarding the Monticello Heartland Express
Dial -a -Ride bus system service contract for 1991 and 1992..
(J.O.)
A. REFERENCE AND BACKGROUND:
On December 3, 1990, at 10:00 a.m. the City received two bids
from companies interested in providing dial -a -ride
transportation service in the city of Monticello. Bids were
received from Hoglund Coach Lines from Monticello and Medavan
out of Duluth, Minnesota. The bid specification included two
alternatives for bidding for the right to operate the
transportation service.
Alternative 1: The operator of the system would own
the bus.
Alternative 2: The operator of the system would
utilize a city bus in providing
transportation service.
Hoglund Coach Lines elected to respond to alternative #1 which
called for private ownership of the bus, whereas Medavan
elected to respond to alternative #2 that requires City
ownership of the bus. The service price per hour indicated by
Hoglund under alternative B1 is $20.10/hour; under
alternative A2, Medavan indicated that it would operate the
system at a cost of $17.54/hour. In terms of the cost of
service beyond the minimum 2,500 hours, Hoglund indicated that
the cost would be $20.10/hour, and Medavan indicated a cost of
$12.50/hour.
After reviewing the bids received, the Monticello
Transportation Advisory Committee has recommended that the
City select Hoglund Coach Lines. Below is a review of the
budget impact of each bid and criteria used in decision
making. Essentially, Hoglund Coach Lines was selected based
on the fact that cost considerations are equal and Hoglund is
more likely to be able to provide a level of sorvico we are
accustomed to.
BID ANALYSIS AND BUDGET IMPACT
The following compares the Hoglund and Modavan options in
terms of short and long term budget impacts. In summary, it
appears that operating under the Modavan proposal is more
expensive in the short run; but after four years of operation,
the gap closes and the total cost after four yoars is about
the same. For more detailed information on cost comparisons
and projections, please refer to the attached budget shoot.
Special Council Agenda - 12/17/90
The hourly rate proposed in 1991 by Hoglund Coach Lines is
$20.10. This is about 9 percent higher than the present rate
of $18.36. Gordy Hoglund indicated that the major reason for
the increase beyond the expected 4 percent increase is due to
higher than expected telephone charges. Unfortunately, the
State of Minnesota has locked the increase in 1991 to
4 percent; therefore, the 1991 budget reflects only a
4 percent Increase in the purchase of service line item, which
ultimately results in a budget deficit for 1991. In addition,
the original budget was established prior to the increase in
gas prices which has contributed to an expected budget
shortfall in 1991. The bottom line is that in 1991, there
will be a projected shortfall of about $4,500 if the Hoglund
alternative 1s selected.
Under the Medavan proposal, the City would be required to
spend a minimum of $8,000 on a new bus, which is the City's
portion of the State match, which would result in the City
acquiring a bus with a value of approximately $36,000. After
adding in the cost of this bus to the projected cost to
operate the system under the Medavan proposal, the actual 1991
cost will end up being around $79,000, which is $7,000 over
budget. Of course, this one-time capital expense which has
resulted in the 1991 budget over -run can be spread to
subsequent years that the bus will be operating, thereby
reducing this 1991 budget gap.
As noted under the Hoglund alternative, a budget gap of $4,500
exists. It is proposed that this funding gap be closed
utilizing a reduction In the amount charged for administrative
services and by increasing fare revenues to $.75 per ride. At
present, the budget calls for an expenditure of $12,955 for
personal services associated with City staff time. This
Includes 10% of the Assistant Administrator's salary, 104 of
the Senior Citizen Director's salary, and 10% of a clerical
person's salary, including fringe benefits. It is suggested
that under the Hoglund alternative, the City staff time is
going to be closer to 8% than 10% because very little staff
time is needed for actual administration of the operation of
the bus system. Under the Medavan option, it has boon
estimated that the City staff time involved in system
administration should be maintained at 101 because under this
altornative, City staff would be responsible for purchasing
and maintaining the city bus. The difference of 2% between
the two moth ode of acquiring and operating the bus results in
an annual savings of $2,591 under the Hoglund method. Over
four years, this results in a savings of $10,364. It is
proposed that the current budget which calls for a $12,955
expenditure under the personal sorvicos lino item be amended
to $10,364. After this adjustment is made to the budget under
r�> Special Council Agenda - 12/17/90
i the Hoglund option, a funding gap still exists which amounts
to $1,634. It is proposed that this funding gap be closed by
increasing fare revenue or by allocating contributions made by
local organizations to specifically help with the funding of
this financing gap.
MEDAVAN
Under the Medavan proposal, the actual operations cost would
amount to $71,103, which is slightly less than the total
operating budget of $72,737. However, under this option the
City would be required to purchase a vehicle in the amount of
$8,000. This expense would be in addition to the $71,103
operations expense. As noted earlier, after four years the
actual cost to operate the Medavan based system versus the
Hoglund system would be about the same because there is added
expense associated with owning the bus such as administrative
cost in the amount of $2,591 annually and additional insurance
expenses, which amount to $3,500 per year.
PERFORMANCE
The following section outlines some of the performance
criteria and other factors associated with operation of the
bus system.
BACKUP BUS/ADDITIONAL BUSES
on occasion there is a need to have a spare bus on hand to be
used when the primary bus goes down or to be used during peak
demand and during special events. It is my understanding that
both Modavan and Hoglund Coach Lines will be in a position to
provide a backup bus In the event the primary bus goes down
and both will be able to provide additional buses in the event
that there is a special event. Under the Hoglund framework,
the extra bus and backup bus cost is included in the hourly
rate. Under the Medavan option, the added or extra buses must
be rented individually, and that cost then must bo passed on
to the City In addition to the hourly rate. Thero are no
funds in the budget at this time to pay for the additional
buses that might be necessary in the event that the primary
bus goes down or in the evont the City wants to put more buses
on line at one time as was done during tho Tram 250 event.
Under this category, Hoglund Coach Lines is bottor equipped
to servo our needs.
In addition, Hoglund Coach Lines has placed a van in service
during periods when the bus was extremely busy. Hoglund
Transportation has not charged us at all for that van service.
we should not expect, however, that they will continuo to not
charge us for the times when the van Is needed. However, it
doos give you an idea of the type of cooperation that we have
rocoivod from Hoglund Coach Linea.
Special Council Agenda - 12/17/90
EXTRA AND BACKUP DRIVER AVAILABILITY
On occasion, the driver of the bus will be absent or need a
vacation, etc. Hoglund Coach Lines has numerous bus drivers
that are well trained and capable of filling in at any time.
Medavan has indicated to me that they plan on hiring a person
to be on standby and be available if the primary driver is
unable to drive. It is not known how well this type of
arrangement will work out. Even though Medavan appears to be
able to meet the minimum requirement, it is more likely that
Hoglund will consistently be able to provide sufficiently
trained drivers.
TELEPHONE SYSTEM BACKUP/RADIO DISPATCH
The existing method of dispatching the bus requires a reliable
telephone system. Experience has shown us that on occasion
the telephone system will go down; and when this occurs, there
is no communication between riders and the bus driver unless
there is a backup system whereby riders can call a central
number to a radio dispatcher. On numerous occasions in 1991,
the telephone system was replaced momentarily by a radio
dispatch system of communication which required that a staff
person on the Hoglund team be used to answer the phone and
call the bus for service, etc. Although this system was not
ideal, it provided sufficient backup to the telephone system.
It is unclear at this time how well Modavan's plan for
handling communications interruption will work. Modavan
proposes to use voice mail as a substitute for direct
communication. This approach is destined for failure and
would not work because of the volume of rides and ride
juggling that is often done. It appears that Hoglund is
superior in this important category.
DRIVER TRAINING AND PUBLIC RELATIONS
The drivers now working for Gordy Hoglund on a regular basis
are doing a fine job. I have received numerous positive
comments regarding their abilities, and I am confident that
they are presenting the proper level of service and image for
the Monticello Heartland Express. I am somewhat concerned
that there could be an impact on ridership in the short term
if the present drivers are replaced. It is unknown at this
time what typo of lovel of training and public relation skills
the drivers for Medavan might possess.
Special Council Agenda - 12/17/90
TRACK RECORD
As coordinator of the Monticello Heartland Express, I have
only positive remarks to make about the manner in which the
system has been operated by Gordy Hoglund. Although there
have been a few glitches along the way, none of them have been
substantial, and all of them have been worked through to my
satisfaction. The entire organization supporting the bus at
the operational level should be commended for their fine job.
In terms of Medavan's track record, obviously there is no
local track record; however, I have been informed by MN/DOT
that Medavan is doing a good job in Cloquet, and every
indication is that they would operate the system well in
Monticello. There is nothing, however, that indicates that
Medavan would do a better job than Hoglund Coach Lines is
doing. Therefore, based on the first hand experience we have
with Hoglund Coach Lines, I must conclude that Hoglund Coach
Lines is superior in this category.
All in all, it appears that Medavan is capable of providing a
sufficient level of service, with Hoglund Coach Lines
providing a superior level of service based on the items noted
above.
B. ALTERNATIVES ACTIONS:
1. Motion to award 1991 and 1992 Monticello Heartland
Express contract to Hoglund Coach Lines.
Under this alternative, the City would recognize that the
cost to operate the system appears to be relatively equal
if the system operates 2,500 yours annually. If it
appears that service hours will be greater than 2,500
hours, then the Medavan option is less expensive. The
selection must be based on the ability to provide service
itself. In review of the various criteria for evaluating
service, It appears that Hoglund Coach Lines is superior;
therefore, it makes nonso to aeloct Hoglund Coach Lines
as the service provider. Under this alternative, the
budget should be adjusted to reflect 8% of City staff
time going toward administration of the system, and a
strategy for increasing faro revenue needs to be
developed.
This alternative locks the City into private ownership of
the bus for the next 2-3 years. The City will not likely
have the opportunity to purchase a bus using State
matching funds until 1993 or 1994.
? Special Council Agenda - 12/17/90
2. Motion to award 1991 and 1992 Monticello Heartland
Express contract to Medavan,
Under this alternative, the City would select Medavan for
operation of the bus system. This would require that the
City go out for bids for a new bus, and it would also
require that the City operate a used bus during the early
months of 1991 while the new bus is on order. This
alternative should be selected if members of the
committee feel that Hoglund Coach Lines has not
demonstrated their ability to provide good service. In
addition, this alternative would provide the City with
the ability to run the bus at $12.50 per hour for each
hour after 2,500 hours.
Four hours of Sunday bus service under this alternative
would cost $50. Under the Hoglund alternative, the same
four hours of service would cost $$0.40. At this time,
to select Medavan based on the need to add bus hours
would be speculative at best as it has not been clearly
demonstrated that there is a need to run the bus more
than 2,500 hours annually (10 hours/day).
C. STAFF RECOMMENDATION:
Staff and MTRAC recommend alternative Ni for the following
reasons: 1) It appears that the cost to operate the two
systems, given the bids submitted, over a one to four year
time period appear to be approximately equal; 2) Hoglund
Coach Lines has demonstrated a fine ability to operate the
system in a safe and efficient manner; 3) Hoglund Coach Lines
has the resources to provide the necessary backup drivers and
buses; 4 ) Radio dispatch is available under the Hoglund option
when the phone goes down; 5) There is a greater likelihood
that the level of service will be maintained under the Hoglund
alternative; 6) MN/DOT Project Manager, Tom Gottfried, agrees
with the staff recommendation.
D. SUPPORTING DATA:
Spread sheet Showing cost projections under Modavan and
Hoglund Coach Lines alternatives; Lotter from Tom Gottfried
indicating support of the City staff recommendation; Copy of
bid forms. Letter from Medavan outlining operation approach.
(As of Friday afternoon, we have not yet received Mr. Gottfried's
latter. You will receive it on Monday if It arrives after this agenda
has boon doliverod. )
6 r
2. /,�-//vp
c
0
COSI C08P4AISON -HOLLAND VERSUS
MEDEVAN G ib
p(%Njt %Sk
It 3 /7(JQ/0
G} t/, G 7(5
1
1991
1 1991
1991 1
1992
1992 1
1993
1993 1
199A
1996 11TOTAL
TOTAL An n *` J
OPERATING DPENSES 1EUDGET
1HOGLUNO MEDEVAN IHOGLUND
MEDEVAN
1HOGLUND MEDEVAN 1HOGLUND
MEDEVAN IIHOGLA40
MEDEVAN
I-1
I
1
I e.oai 1o:ootl
I
---------------I
------------
I
I
I
-11
II
-
I
PERSONNEL SERVICES/WI
I
I
I
I
I
I
I
II
II
'ADMIN, MANAGEMENT 1
$7,639
1 $6,111
17,639 1
15,111
$7,639 1
$6,111
$7,639 1
$6.111
57,539 11
'OPERATOR'S WAGES FTI
t0
I f0
10
I 10
$0
1 SO
$0
I f0
$0 11
'MAINTENANCE/REPAIR I
t0
1 SO
10 1
SO
$0
t0
$o I
$0
$0 II
'GENERAL OFFICE SUPP1
$3,727
1 $2.982
$3,777
1 12,982
$3,727
1 $2,982
$3,127
1 $2,982
$3,727 11
'OPERATIONS SUPPORT I
$0
I $0
$0 1
$0
SO
1 10
10 1
$0
$0 11
'FRINGE BENEFITS FT 1
$1,589
1 $1,271
51.589
1 11,271
$1,589
i $1,271
$1,563
1 11,27i
$1,589 II
-----------------I--------I----------------I----------------I----------------I----------------II
TOTAL 1112.955
1110,366
112,955
1110,364
$12,955
1110.366
112,955
1110,366
112,955 11
1
ADMINISTRATIVE CHARGI
1
I
1
I
1
I
1
I
II
II
'MANAGEMENT FEES I
$0
1 $0
$0
I f0
f0
1 $0
10
1 $0
$D 11
'TARIFFS 6 TRAFFIC 1
11,247
1 11,241
11,247
1 11,247
11,247
1 $1,247
$1,267
1 $1,267
$1.261 11
'ADVERTISING/PROMO 1
$2,000
1 12,000
32.000
1 12,000
$2,000
1 $2.000
$2.000
1 $2.000
12,000 II
'LEGAL/AUDITING FEESI
10
1 10
t0
I $O
10
I $0
10
I $0
10 II
'SECURITY COSTS I
$0
1 $0
$0
I $0
10
I t0
10
1 t0
$0 11
'OFFICE SUPPLIES 1
$52
1 $52
152
1 $52
$52
1 152
$52
1 $52
$52 II
'LEASES & RENTALS I
f0
1 $0
10
I SO
$0
I $0
$0
I SO
t0 II
'UTILITIES I
$0
$0
$0
I $0
10
I $0
$0
I $0
$0 II
'OTHER AOMIN CHARGESI
$0
1 10
SO
I 10
$0
I to
f0
1 $0
t0 II
13, 299
1 $3,299
I
13.299
1 13.299
I
13.299
1 13.299
I
13,299
-- ---
1 13,299
I
-- ---
13,299 11
II
I
VEHICLE CHARGES 1
1
I
I
I
II
'FUEL AND LUBRICANTSI
10
1 $6,500
16,500
1 16.500
16.500
1 $6,500
$5.500
1 $6.500
16,500 II
'MAINT/REPAIR MATERII
$o
I t0
to
1 $o
t0
t0
t0
1 $0
$0 11
'CONTRACT SERVICE LBI
t0
I SO
f0
1 10
t0
I t0
$0
I t0
$0 11
'TIRES 1
t0
$0
$0
1 $0
$0
1 SO
$300
1 $0
10 11
'OTHER CHARGES I
So
1 $0
$0
1 $0
t0
1 $0
SO
1 $0
10 11
-- -•••------------I_•------I----------------I..----------•---I--_....._.__....1----------------II_...----•---------
TOTAL 1
10
1 16,500
16.500
1 15.500
I
15.500
1 $6,500
I
56,800
1 16,S00
I
16,500 11
II
I
OPERATIONS CHARGES I
I
I
I
11
'PURCHASE OF SERVICE1147,735
I
1150.250
143,050
I
1152,250
146,500
I
1152,250
146,500
I
1152,250
II
166,500 11
'DEPRECIATION I
SO
SO
SO
I SO
10
1 t0
10
1 10
10 II
'MILEAGE REIMBURSEMEI
18,749
1 $6,000
$0
1 14,500
t0
115,000
10
1 15,500
$0 11
'REPAIR/MAINT OTHER I
$0
1 10
11,000
1 t0
11.250
1 SO
It, 500
1 SO
$2.000 11
'LEASES AND RENTALS I
so
1 10
10
I t0
f0
I 10
t0
1 10
t0 II
'OTHER ODEA CHARGES I
10
1 $0
t0
I 10
$0
I t0
10
1 10
----••-•--_____I1..................
t0 II
-
i0T41 1156,484
L__..._.I
................I•-•------.......I
1154.250
I
144.850
156,750
I
141,750
................
157,250
I
$48,000
157,150
I•
I
168,500 1
II
I
INSURANCE CHARGES I
I
I
I
I
II
'PUB LIAB/PROP DAMAGI
t0
I 10
13,500
1 t0
13,615
1 t0
$3,859
1 t0
14.052 11
'PUB LIAB/PROP DAMAGI
$0
I 10
t0
1 10
I
to
I 10
$0
I f0
t0 11
--------------
TOTAL I
I ........
t0
I ................
I f0
13,500
................
1 10
13,675
I ................
t0
13,059
I-•--....-•-•--;•I�
$0
..................
$6,05.
0
13. 1.2-11,lF0
cCOST COMPARISON - HDGLAND VERSUS MEOWN
1 1991 1 1991
1991 1 1992
1992 11993
1993 1 1994
1991 1 ITOTAL TOTAL
OPERATING EXPENSES (BUDGET XOGLUND
MEDEVAN IHOGLUND
----------------
MEDEVAN IHOGLUND
MEDEVAN IHOGLUND MEDEVAN 11KOGLAND MEDEVAN
---------------- 11-__---___-__ ------
TAXES AND FEES I
I
1
I
1
1
11
11
-VEHICLE REG/PERMIT I $o I so
so I so
so I so
so 1 $0
10 11
-FED FUEL/LUBRICANT 1 10 1 so
so so
so I so
so I so
$0 11
*STATE FUELAUBRICANJ so 1 ;0
so 1 $0
so I so
so I so
$0 11
-OTHER TAXES/FEES I so I so
so I to
10 1 so
so 1 $0
to 11
TOTAL 1 so I so so I $0 so I so so 1 $0 $0 11
1426 TOTAL OPERATINGIV2,737 1374,41 2 $71,103 1$76.912 174,178 1$77,412 171,912 1177,912 $15,305 11
FUNDING GAP
1.534
CAPITAL EXPENSES
-VEHICLE I
so so 18.000 I
to
to I
so
so I
so
so II
'LIFT,RAAP ETC
to 1 so so I
to
so I
so
so I
to
so 11
-RADIO EQUIPMENT
to 1 $0 so 1
so
so I
so
to 1
so
to 11
FARE20X
so I so so I
so
so I
so
so I
so
so 11
OTHER CAPITAL EXPENJ
so I so so I
to
so I
so
so 1
$0
to 11
1585 TOTAL CAPITAL
so I so 18,000 1
I I
so
so I
I
so
so I
1
to
10 11
11
$8,000 interest earnings I $640 1
1691
I
$M
1
1806
11
OPERATIONS/CAPITAL
TOTAL - minus
172,717 1173,772 179, 103 1116,221
174.170 1176,666
174.912
1177,106 175,305(�111303
756 �$303,499
interest earnings
I I
I
I
(I
�J n BID FORM
I Iiea�JO ✓I MONTICELLO IIEARTLAND EXPRESS 1991-1992
Bidder must fill in unit prices in numbers.
bl
1. ALTERNATE: Calls for bid based on service Provider ownership of bus.
I
ITEM NO. DESCRIPTION
PUANTITIES
1991 AID AMTS
1992 WD AHTS
p
1 Provide dial -a -ride service
2500 hrs
Cost per
Cost per
r
Including vehicles, full
hour
hour
n
maint., 6 vehicle storage
farlllties
2 Provide dial -a -ride service,
Any hours
Cost per
Cost per
Q,
Including v(jhJctes, full-
contracted
hour
hour
malnt., b vehicle storage
in excess
facilities
of Item 1
r..
3 Mileage expense for
N/A
Cost per
Cost per
estimated 25,000 miles
collo
mile
-
(Doea not Include fuel
lubrication)
II. ALTERNATE: Alternate calls for bid
based un City
ovnerolsip of bus.
C
T
City pays actual pninCing, maintenance, and fuel
/Iubrl ca tion costa, said expensen to bo paid
'
directly to the operator.
C
ITEM NO. DESCRIPTION
QUANTITIES
1991 AID AHTS
1992 RID AMTS
1 Provldu dial-a-rldo service
2500 hrs
Coat per
Cost per
Including vehicle atorago
hour
hou r
r
tACIIid as
$17.54
$18.60
r
r
2 Provldu dial -a -ride service
Any hours
Cost per
Cost per
r
Including vohJclo storage
cuntracted
hour
hour
faciIItion
In UKcnsn
$12_.50
$13._24
of Item 1
3 Ilourly rate Routine Run
As needed
$12.50
$13.24
Ma 1 ntonalIC0
4 Ilourly rate repairs
As nouded
$39.00
$39.90
,
D',r'PI:CSt 11/26/90
�
Vag �6
,
BID
FORM
MONTICELLO HEARTLAND EXPRESS 1991-1997.
0
Bidder must fill in unit prices in numbers.
1. ALTERNATE: Calls for bid based on service provider ownership of bus.
ITEM NO. DESCRIPTION
QUANTITIES
1991 BID AMTS
1992 BEDAMIS
1 Provide dial -a -ride service
2500 hrs
Cost: per
Cost per
including vehicles , full
hour �0
hour
maint., 6 vehicle storage
X010
a0-
fac111ties
2 Provide dial -a -ride service
Any houvs
Cost per
Cost per
Including vehicles , ful l
contracted
hour
1-t
hour
mai.nt., 6 vehicle storage
in excess
_20
-70�
facilities
of Item 1
3 Mileage expense for
N/A
Coat. per
Cost par
estimated 25,000 m Iles
mile
mile
(Does not Include fuel 6
lubrication)
n�`/J�,9'•
I1. ALTERNATE: Alternate cal Is for bid
bas d on City(
o`wnwnorahip of I4Gs. p
/ j•%a�,Q�,.J
City pays actual painting, malntonanco, and
fuel/lubrication costa, said expanses
to 130 paid
directly to the Operator.
ITEM NO. DESCRIPTION
QUANTITIES
1991 BID AMTS
1992 BID NCS
1 Provide dial -a -ride service
2500 hr.s
Cost per
Cost per
Including vehicle sLorago
hour
hour
faclllties
2 Provldo dial-a-rldo service
Any hours
Cost per
Cost par
Including vehicle storage
contracted
hour
hour
facilities
in excess
of lLem 1
3 liourly rate - Iloutlno Bus
As needed
Maintenance
4 11ourly rate - repairs
As needed
1)
Pm-.Dh6
It 31,ECSi 1 1/26/90
12/12/90 10:14 1218731910
1-4
114171,'-NUI l EL
MORN -DANIEL ENTERPRISES, INC.
DULUTH MED -A -VAN
313 EAST SUPERIOR ST.
DULUTH. MINNESOTA 55802
12igj 723.1212
Pa ;E 01
December 11, 1990 Post -it
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City of Monticello"`L•a'•il e t� If
Jeff O'Neill
Assistant Administrator-,._tm. S-, h;t3-1G•'7$
Dear Mr. O'Neill
I am sure that you MAY have some concerns as to how we plan to
operate your Dial -A -Ride and what our operating approach is.
1. During the period we are providing a bust If a breakdown should
occur it .would be our expense to provide a replacemput vehicle.
If 1t were your bus the coat would be yours.
2. We will be hiring local drivers for this service. This would
include primary and back-up drivers.
3. If Sunday hours are aseded on an occaseional basis our rate
would be the quoted 410.90. if it were to be permanent our rate
would be 415.00.
If the direct communication with the bus wore to be interrupted
for a period of time wa'wouid use the following procedure'.
1. The call would be forwarded to an answering service.
2. Tho driver would chock with this service every 10 to
15 minutgo. '19tio would cause Little or nu delay to the
Dial•A-Aida customer.
we use thin oyatem at our Cloquet Dial -A -Ride with good success.
If you have any questions, plass let me know.
Sincbrely,
William Luak
u
Special Council Agenda - 12/17/90
3. Consideration of establishing an assessment formula for
Sandberq East Project 90-4. (R. W.
A. REFERENCE AND BACKGROUND:
The 90-4 improvement project servicing the Sandberg East
Development is now nearing completion with primarily
restoration work left to do in the spring. The staff has been
accumulating the cost involved in this project and have
compiled the total project cost including change orders and
all indirect cost. From our calculations, total project cost
for construction only will total $172,230.31. To this figure
we must add all indirect cost, such as engineering, legal
fees, bonding cost etc. to arrive at our total project cost.
Indirect costs are going to be higher than we had originally
estimated and will be 29.78 or $51,216.96 making the total
project cost at $223,400.14. Project costs were originally
estimated at $213,000.00 so there has been a slight increase
due to additional cost Incurred. Some of the additional costs
Include engineering fees to redesign the project along Gillard
because of Mr. John Sandberg's inability to work out a
suitable arrangement with adjacent property owner, Rod Norell .
This resulted in some design changes and the installation of
an additional manhole. Additional costs were incurred in
obtaining easements from Joanne Halliger for replacement of
her fence within the easement area and also compensation for
trees removed from the Jeff Nelson property. Some costs were
Incurred in relocating utilities within our easement area and
additional soil borings were necessary.
With the entire project cost known, the first step the staff
took was to separate the cost for service stubs for sewer and
water that have affected each property owner and allocate them
to the property based on actual services received. Over -
sizing costs for the sower and watormains totaling $10,015.62
was also removed from the total to be picked up by the City
with the remaining balance spread equally on a front footage
basis for benefit received. Under this method, Mr. Rod
Noroll , owner of. Outlet A in Sandberg East would receive an
assessment for only the lots and parcels fronting directly on
Gillard Avenue. This breakdown shown in Exhibit A. As you
can see from this cost allocation, the cost allocated for each
property ownor exceeds our original estimate by more than 10%
from what we originally anticipated at the start of the
projoct. In some cases, the assessment under this method may
seem excessive and is primarily duo to the fact that this
project Is unique in that only one side of the irnprovement can
,-7 be assessed for the benefit. Normally improvement projects of
'J this nature typically will have benefiting property owners on
both sides of the Improvement which helps to keep the costs
Special Council Agenda - 12/17/90
14
reasonable on a per foot basis. Because this is an unusual
improvement project in that the City did annex Sandberg East
which was previously platted and indirectly was required to
provide City services, and the fact that the sewer and water
extensions can only service one side at this point In time, it
is my recommendation that the City Council should look at
reducing the sewer and water lateral cost by 25% with the
possibility of recapturing some of these dollars in the future
through area assessments as additional properties develop in
the future. There does appear to be rationale to assume 251
of the cost when these unique situations arise where only one
side benefits from an improvement through an existing area.
With the Sandberg East development being at the edge of the
City limits, there is potential for the City recapturing some
of this cost in the future should services be provided to the
Tyler East area some day.
Exhibit A allocates the sewer and water lateral cost with the
258 reduction being attributable to the City and the balance
of the cost for sewer and water service stubs being charged on
actual services received. Using this method, the proposed
assessments for each parcel are extremely close to our
original estimate on a per parcel basis of August 9, 1990.
The amount of the project that the City would be picking up
certainly has increased, but the City always has the option
recapturing some of this cost in the future through an area
assessment as future property develops, including the
Kraucbauer property and the Norell property through an area or
access charge.
This has been a difficult project to come up with an
acceptable formula for assessing in a fair manner. Initially
we had looked at attributing some of the cost for the sower
and water laterals as an area charge based on percentage of
area served. While the allocation under Exhibit B comes close
to meeting the original estimates, the rationale used is a
little different in that the Council would be indicating that
this case is unusual in that the sewer and water lines only
benefit one side of the street and there is rationale for the
city picking up a portion of this cost. The original finance
plan using a portion of the cost as an area assessment
deducted the area assessment cost from tho lateral cost and
redistributed the area assessment as an access charge.
Normally the intent of the an area charge is to assess an
additional amount above the normal cost of a lateral benefit
to pay for such things as oversizing, lift stations, trunk
charges that holpod servo the area. An area charge was not
intended to be a direct deduction from the lateral coat as we
had originally proposed.
Special Council Agenda - 12/17/90
In this case, if the Council determines that there is logic
for taking a portion of the cost and holding this in reserve
and possibly assessing some or all of the cost as an area
assessment when properties develop, we are able to arrive at
a cost allocation that coincides fairly well with our original
estimate when the project started.
While this meeting should not be considered the assessment
hearing for this project, if a formula is agreed to by the
Council today, Mr. Sandberg could be Informed of the Council
consensus so that he may continue with his proposed replat and
development. It is anticipated that the actual public hearing
will not be held until sometime in January, 1991.
B. ALTERNATIVE ACTIONS:
1. Indicate that it is logical to absorb 25% of the lateral
cost because of the unique situation whereby only one
side of the improvement can be assessed and propose to
allocate the assessment according to Exhibit B with the
understanding that a portion or all of the amount
absorbed by the City may be re -captured in the future
through area assessments when additional properties are
developed or annexed.
2. Establish a formula whereby all of the costs associated
with this improvement are allo ted on a per foot basis
with (§nl� the City pickinq u �8' feet of side frontage
and oversizing coat: Under th s method, it appears that
each property owner's projected assessment would exceed
our original estimate by more than 10%.
3. Direct staff to prepare an additional allocation
developing an area assessment charge that would apply to
each property owner in the future before calculating
actual front footage cost. This alternative has not been
prepared but would likely result in a similar cost
allocation as Exhibit B. The only difference in my
opinion is that you would be establishing today what you
expect to charge each future property owner on a per acre
basis for an area assessment rather than leaving this
dollar amount open for future consideration.
C. STAFF RECOMMENDATION:
While ideally the entire project cost should be allocated to
all benefiting property owners, I believe this option A may
result In each proposed assessment being excessive. This is
based on the fact that the assessments would be over 109
higher than originally estimated at the time the project
started. I believe there is logic for utilizing the method
Special Council Agenda - 12/17/90
proposed under Exhibit B in that this improvement is certainly
unique for a number of reasons including the City being
somewhat forced into providing sewer and water to an area we
annexed. The fact that the property is adjacent to the City•
limits and limited property is available to assess somewhat
indicates that the City may have to pick up a portion of the
cost for the time being. We would always have the option of
utilizing our present assessment ordinance and re -capturing
some of this cost through an area assessment in the future or
if additional lands are annexed and require services.
D. SUPPORTING DATA:
Two cost allocation formulas.
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EXHIBIT A
PROJECT 90-4
Entire project costs assessed to benefitting property owners except for City
assuming 285 feet of side frontage along Gillard and oversizing costs.
Lateral Water Lateral Sewer
Property Water Services Sewer Service
Owner25.5 951LF $400.29/LF $35.79 LF $250.49/LF Total
John Sandberg
1160.14 LF $30,105.63 $5,203.77 $41,521.41 $3,256.37 $80,087.18
13 lots
Jeff Nelson
160 LF
1 101
Rod Norell
302.77 LF
2 lots
2 stubs
Joanne Halliger
895 LF
11 Iota
Peforson
100 LF
water only
Kraulbauer
530 LF
water only
2 stubs
City of Monticello
285 LF
oversizing
$4,152.00 $400.29 55,726.40 $250.49 $10,529.18
$7,856.88 $800.58 $10,836.14 $500.98
$2,779.66 $790.35 $23.564.59
523,225.25 $4,403.19 $32.032.05 $2,755.39 $62,415.88
$2.595.00 $400.29
$13.753.50
$2,412.45
$7,395.75 $10.200.15
$8,445.75 $1.569.88
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$2,995.29
$16.165.95
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M6111,53
$223.369.60
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EXHIBIT B
PROJECT 90-4
City assumes 25% of lateral sewer and water costs with remaining amount assessed to benefitting
property owners on a front foot basis, plus service connections.
Property
Owner
John Sandberg
1160.14 LF
13 lots
Jeff Nelson
160 LF
1 lot
Rod Norell
302.77 LF
2 lots
2 stubs
Joanne Halliger
895 LF
11 lots
Peterson
100 LF
water only
Krautbauor
530 LF
water only
2 stubs
City of Monticello
25% of sewer &
water lateral costs
Lateral
Water
Lateral
Sewer
Water
Services
Sewer
Service
23.$24/LF
$400.291LF35
0.35 LF
$250.49/LF
Total
$26.961.65
$5,203.77
$35.210.25
$3,256.37
$70,632.04
$3,718.40
$400.29
$4,856.00
$250.49
$9,225.18
$7,036.37
$800.58
$9,189.07
$500.98
$2,779.66
$790.35
$21,097.01
$20,799.80
$4,403.19
$27,163.25
$2,755.39
$55,121.63
$2,324.00 $400.29
$12,317.20
$2,412.95
$24,385.59 $25,471.60
$2,724.29
$14,730.15
$49.857.19
$223.387.49
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Special Council Agenda - 12/17/90
4. Ratification of salary adjustments for 1991. (R.W.)
A. REFERENCE AND BACKGROUND:
Based on the Council's action last Monday to establish a
salary adjustment pool of $26,000 to be used by myself for
adjustments to non-union employees, enclosed you will find a
proposed salary adjustment list for all employees. In terms
of percentages, the adjustments were mainly in the five
percent area but did vary slightly depending on the employee's
position and current salary. As previously noted, it is
anticipated that after our job evaluations are completed
during 1991, additional position adjustments may be necessary
to comply with the new comparable worth legislation. Using
the funds available, no attempt was made on my part to adjust
salaries to what may be appropriate levels for each position
but was merely an allocation attempt in the cost of living
area and some merit adjustments where I believe they were
warranted.
B. ALTERNATIVE ACTIONS:
1. Ratify the proposed salary adjustments as presented.
2. Do not ratify the adjustments and direct the
Administrator to prepare a new allocation.
C. SUPPORTING DATA:
List of proposed salary adjustmonts for each individual.
X
C PROPOSED SALARY ADJUSTMENTS FOR 1991
(Annual % 1991
un Increase Salary
John Simola Public Works Director 5 6.5 543,344
Jeff O'Neill Assistant Administrator 0 5.5 $41 ,321
011ie Koropchak Econ. Develop. Director51,85p 6.4 $30,557
Roger Mack Street/Park Supt. $1,72 5.4 $33.940
Gary Anderson Building Inspector $1,625 ,5�.1 633,530
Matt Thiesen Water/Sewer Supt. $1,500 $30,985
Joe Hartman Liquor Store Manager $1,500 4.9 532,110
Karen Hanson Senior Citizen Director $1,150 5.3 $22,819
Tom Bose Utility Inspector 51.300 5.0 $27,300
Cathy Shuman Utility Billing Coord. $1,275 5.9 $22,803
Wanda Kramer Utility Billing/Recept. $1,075 5.5 520.523
Marlene Hellman Bookkeeper/Secretary $1,200 5.2 $24,184
Karen Doty Executive Secretary $1,250 5.5 $23.756
Diane Jacobson Deputy Registrar Clerk $1,225 5.2 $24,667
Pat Kovich Deputy Registrar Clerk $1,050 5.4 $20.498
Cindi Erickson Liquor Store Clerk S88,225 5.0 S17,382 r
Q., $23,300
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