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HomeMy WebLinkAboutItem 06.c CITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES April 27, 2015 Mayor Little called the meeting to order at 6 p.m. in the Marion Conference Room at City Hall. Members Present: Mayor Little, Council Members Swecker, LaBeau, Anderson and Davis Staff present: Allyn Kuennen, Assistant City Administrator; David Olson, Community and Economic Development Director; Jerilyn Erickson, Finance Director; Julie Werner, Interim Finance Director; Daryl Morey, Planning Director; Brett Altergott, Parks and Recreation Director; Chris Petree, Public Works Director; Monica Heil, Operations and Maintenance Engineer; Zach Johnson, City Engineer; Judi Hawkins, Deputy City Clerk 2. Citizen Comments: None 3. Discussion Items: a. Mendell TIF Application David Olson stated that Mendell, Inc. is a medical device manufacturing company located at 21463 Grenada Avenue in Airlake Industrial Park with approximately 94 employees. Mendell is continuing to grow and is planning construction of an 18,200 square foot expansion of their building which would allow them to add 12-25 new jobs over the next two years. The addition would also provide additional parking and satisfy storm water requirements. Mendell has applied for Tax Increment Financing and is also submitting an application to the State’s MN Job Creation Fund which would provide additional funding assistance. Mr. Olson introduced Bryan Bartz, President/CEO of Mendell, Inc. and Jack Matasosky of APPRO Development. Bryan Bartz provided a brief history of the company, stating that the company moved from Bloomington to Lakeville in 2003. Mendell specializes in medical machining of orthopedic medical devices, cardiovascular and endovascular devices, and several technical areas of medical device production including implants and plates for spines and joints. Growth of the industry has created a need for enhancing technology and expanding their facility. Approximately 56% of their employees are residents of Dakota County. Council Member Anderson asked if there would be some changes to the storm water ponding or cul-de-sac area. Jack Matasosky stated that the project intends to maximize the storm water on the site and minimize utility relocation. Council Member LaBeau stated that the project will provide additional parking for both Mendell and neighboring businesses. Council Member Swecker supports the proposed pay-as-you-go TIF method. City Council Work Session April 27, 2015 Page -2 - Olson stated that the project will be presented to the EDC on August 28 for a recommendation to Council. According to an established formula, the amount of TIF available is estimated at $114,000 over the nine-year period in which tax increments can be captured. Council members directed staff to schedule an HRA Board meeting for May 4, 2015 in order to set a public hearing to consider the creation of a new TIF District for Mendell, Inc. and to retain Springsted to prepare the required TIF Plans and notifications. b. Dakota County CDA Broadband Study Lisa Alfson, Dakota County CDA Director of Community and Economic Development, provided an overview of the broadband collaboration by the Dakota County Mayors/Managers group. The CDA contracted with Design Nine and consultant Craig Ebeling to perform a broadband study to better understand what improvements would be necessary to link designated public facilities in the County with broadband capabilities. Many of these facilities were already served by fiber optic cable owned by the County and its cities, but it was thought that some gaps may exist. The envisioned “I-Net”(Institutional Network) would be a system that links and serves these public sites with a system that utilizes existing publicly owned communication facilities, including fiber, and the necessary additions to that system to allow service to work. In addition to increasing the efficiencies of local government services, the broadband objectives adopted through the HiPP process include the enhancement of economic development opportunities, growing businesses, and maintaining increases in residential home values. The study was funded one-third by the CDA, one-third by the County, and one-third was shared by the cities. A result of the Design Nine study was a recommendation to investigate the creation of a joint powers agreement with Dakota County and its cities. Mr. Ebeling stated that through a JPA process Dakota County and its cities are considering efforts to combine existing publicly owned telecommunications assets into a core network group. A combined group would enhance and strengthen the institutional networks within each jurisdiction that serves governmental operations including the following benefits: • Increased economic development competiveness with other counties with similar broadband networks. • I-Net connections between publicly owned facilities have allowed the usage of “enterprise services”, that is the same licensed software serving multiple sites delivered from centralized locations. Many of these solutions are “hosted” meaning that the software is not resident on local servers but is “in the cloud”. • Drastic reductions in internal and external communications costs have been realized through the elimination of multiple copper service lines (“T-1” lines) by consolidating voice (VOIP City Council Work Session April 27, 2015 Page -3 - technology), video and data network services over fiber. Dakota County alone eliminated more than forty T-1 lines resulting in huge cost savings; • Fiber connectivity among partner organizations like the DCC, LOGIS, the State of MN, the MVTA, Dakota County and its cities has become more possible; • Enabling the implementation of the “Next Generation” NG911 System and internet protocol (IP) Station Alerting for fire stations; • Enabling the creation of shared (combined) data centers, more widely hosted applications, data storage capacity, and disaster recovery sites with other entities; • Shared internal Voice over IP (VOIP) telephone connections between all I-Net connected facilities again have saved dollars on expensive internal communications systems; • A “backhaul” system for the 800 MHz public safety system in the County to reinforce the existing micro-wave radio backhaul system on which the system presently relies. This redundancy would not only protect Dakota County but also make our connections to Scott County and other 800 MHz public safety systems more reliable. In addition, with a focus on economic development and the desire to make governmental operations as secure and efficient as possible, a future “C-Net” for commercial use could also be provided through the I-Net system. This could be a valuable resource for private ISPs to use in expanding their broadband fiber services to current or prospective residential, commercial, industrial and office customers and conversely provide more ISP options for customers. Anderson asked if a map exists showing all available fiber. Ebeling stated that the government owned fiber locations are known but the fiber that is owned by private business is not mapped. Anderson stated that it doesn’t seem like an efficient use of resources to double up on the amount of fiber in the ground and asked if there could be an incentive for private businesses to work with the government entity. Ebeling stated that private companies generally wish to provide their own fiber so they have total cost, economic, and quality control and that ISPs and telecommunications companies will not typically disclose the location of their fiber network or provide a map of their system due to proprietary or competitive reasons. The study recommends about 20 more miles of fiber to be installed to close the service gaps. Ebeling wants to ensure that each city is doing what is most beneficial for them by being involved in the process. Part of the JPA is to determine how the total cost of $3.4M would be shared among the cities and county. Swecker stated that as an employee of Century Link she is aware there are several providers in Dakota County. Would any fiber be leased or purchased from any existing providers to build the system, or would it be newly installed as roads are built. Ebeling stated that the first priority is to connect what is already available and that an additional co- location facility in Dakota County has not yet been designed into the plan. Swecker asked if the group has investigated use of the Cloud in addition to fiber. Ebeling stated that redundant services for storage are critical and fiber will always be a necessary component. Swecker stated City Council Work Session April 27, 2015 Page -4 - that people might be opposed to government being involved in or competing with what private companies are doing and doesn’t believe it should necessarily be a revenue generator. Ebeling stated that the group does not intend to be in the ISP business. If a C-Net was developed it would be available for lease by all ISPs. However, lease payments for use of the infrastructure could be justified to cover maintenance and expansion costs. Council members directed staff to continue to work with the Dakota County Mayors/Managers group to develop a JPA and to provide updates as they are available. c. Patios/Hours of Operation Daryl Morey provided an overview of previous City Council discussions regarding outdoor patio hours of operation, particularly in the downtown C-CBD zoning district. The original City Code required outdoor patios in all zoning districts to be closed after 10 p.m. every night. In 2014 at the request of Carbone’s Restaurant Council approved extension of the patio operating hours for businesses in C-1, C-2 and C-3 districts to 11 p.m. on Sunday through Thursday nights, and midnight on Friday and Saturday nights. As a result of public input from downtown residents at that time the hours of operation in the C-CBD district remained at 10 p.m. With Heavy Metal Grill’s application for a patio license in the C-CBD, Council wished to revisit the discussion. Staff provided three possible options for discussion and consideration: 1) Maintain the current patio hours ordinance and change the wording from “residential district” to “residential use” in order to take the senior housing into consideration; 2) Extend the outdoor patio hours in the C-CBD District to match those in the C-1, C-2, and C-3 Districts; or 3) Keep the C-CBD outdoor patio hours as is for Sunday through Thursday (closing at 10 p.m.) and change the weekend hours to either 11 p.m. or midnight. • LaBeau prefers Option #1 due to the senior living building across the street; however, she is willing to discuss Option #3 to extend weekend hours. • Anderson supports Option #1 in order to clarify the intent of the ordinance adopted last fall. He would like to work with and support the downtown to create a welcoming environment for new businesses that strengthen the downtown. The challenge is working with the businesses to enhance the activity, while respecting the existing residents who have chosen a quiet location in which to live. Possible solutions could include design of patios, sound buffering, or ensuring that traffic doesn’t move into residential neighborhoods. He believes that extending the hours could be detrimental to everyone. • Swecker suggested that these questions might be answered with a downtown study. Olson stated that a discussion several years ago regarding expansion of the downtown commercial area was not well received by the public. City Council Work Session April 27, 2015 Page -5 - • Davis supports Option #3 allowing 10 p.m. Sunday through Thursday and 11 p.m. or midnight on the weekends. He believes that all businesses should be treated equally. • Little sympathizes with the owners who have faced changes after they have opened a business. This decision will impact surrounding businesses, including the former VFW site, which is also close to a residential area. Allowing businesses to use their patios for the short summer season will help the entire downtown. • Swecker stated that due to the unique downtown she would support allowing the later hours on Friday and Saturday nights as long as the operating hours are consistent for all businesses in the C-CBD. • Little stated that he also supports Option #3 and would like to explore some of Council Member Anderson’s suggestions. • Anderson stated that he would like to delay moving forward until there is an opportunity to analyze the downtown design and give the residents an opportunity to express any concerns. • LaBeau stated that the previous strong opposition of the downtown homeowners needs to be considered, and there is no comparison between Carbone’s and Babe’s because of the distance to the residences. • Davis believes having consistent hours would avoid “patio-hopping”. • Council members supported changing the wording in the ordinance to “residential use” and generally supported a midnight closing time. Anderson suggested discussing council’s questions with the DLBA and possibly looking at revised patio designs before deciding on whether to support an ordinance amendment. Council members directed staff to place the item on the agenda and to notify nearby residents and other interested parties of the potential change to the ordinance. d. Lakeville Area Active Adults Update Brett Altergott stated that after the senior citizens organization helped to retire the Heritage Center debt there was a $22,300 balance in their account. These funds were collected over the years from senior center fundraisers and the account is now overseen by the Lakeville Area Active Adults (LAAA) advisory group. Staff is proposing a Memorandum of Understanding (MOU) which would transfer the funds into a City escrow account and dissolve the non-profit status of the senior organization. Existing funds would be used for future needs of the senior organization at the Heritage Center and future fundraisers will be for a specific purpose or goal. Staff is also proposing that the LAAA advisory board become a subcommittee and be guided by the Parks, Recreation and Natural Resources Committee. LaBeau suggested staggered terms as there are for other advisory committees, allowing adequate time for new PRNRC members to City Council Work Session April 27, 2015 Page -6 - take their seat on that committee before making appointments. Council members also stated this would be a good way to assist staff. Council members directed staff to prepare a resolution for Council consideration which would establish a LAAA seven-member subcommittee of the PRNRC. e. First Quarter Financial Report Council welcomed new Finance Director Jerilyn Erickson on her first day. Interim Finance Director Julie Werner provided highlights of the First Quarter Financial Report. The importance of maintaining a 40% fund balance becomes most apparent as the City needs to cover obligations while it awaits its next tax payment. This is anticipated to be about $17.8M for the General Fund. Building permit revenues continue to be strong, exceeding 2014 by 18.5%. Strong activity in the Planning Dept. has increased revenues from charges for services. Savings have been realized in utilities and plowing with a milder winter, and in Finance Dept. personnel. Council members expressed their appreciation for the quarterly report and its value in gaging the status of the City’s finances. They also thanked Julie Werner for filling in as Interim Finance Director. Anderson asked if a cash flow report could be created showing how the 40% fund balance is trending, possibly with the use of a chart or graph. Council members also requested a budget forecast or preparation of a visual aid for tracking unencumbered funds. Swecker particularly appreciated the Summary Statement. LaBeau would like to receive periodic reports on the unencumbered fund balance as it becomes available. f. 185th Street Trail The 185th Street trail extension from Ipava Avenue to Jamaica Path was scheduled to be coordinated with the CR 50/60 RAB and was anticipated to cost the City $319,000, which was allocated in the Parks CIP. Due to unanticipated wetland impacts, soils, and acquisition costs, the project cost increased significantly to $546,000. Altergott proposed three possible options: 1) Use current park dedication funds and reprioritize other major park projects scheduled for the next few years. 2) Use unencumbered funds which have been earmarked for park maintenance. 3) Delay the project until such time that Co. Rd. 60 (185th Street) is upgraded. Swecker stated that bikers and walkers have a great need for a trail on 185th Street; however, she believes the funds would be best used by waiting until 185th Street is improved before the trail is built. Little also believes that projects have already been identified for allocation of current park dedication funds and supports delaying construction of this trail until it can be done in conjunction with CR 60 roadway improvements. LaBeau asked if this was on the Safe Routes to School list or if it impacts students who walk to the Century Middle School. Kuennen stated that City Council Work Session April 27, 2015 Page -7 - the trail is not on the Safe Routes list. Davis also believes that at this time the funds would be better spent on designated priorities. Staff agrees, since there are so many park projects that have already been identified. Council members directed staff to delay this project in the CIP. g. County Road 50 Economic Development Study Update Chris Petree provided a brief update on the progress of the Co. Rd. 50 Economic Development Study and preliminary engineering study. Staff has met with all business and property owners and has begun several appraisals on commercial properties that would need to be acquired for the backage road option for the project, which was the preference of the property owners. The City has begun the process for purchasing several properties rather than waiting for the County to acquire them at the time of the project. RFPs were sent out and staff has met with a company which specializes in negotiating acquisitions and relocations. More information and appraisals could possibly be available for Council at the May 11th Work Session. LaBeau asked if the cost of the appraisals would be included in the project costs; Petree stated that it would. LaBeau also asked if property owners might want to secure their own appraisals for comparison purposes. Olson stated that property owners have that option. Zach Johnson stated that Council will be requested to consider a JPA with the County to complete the Dodd Blvd. construction. Davis asked if there are any grant funds that can be used for “opportunity acquisitions”. Olson stated that limitations on the funds prevent them from being used for road projects. Petree stated that staff is hopeful that the final conceptual plans will be completed in the next few weeks which will allow staff to continue to move forward with the projects. h. School Road Safety Task Force Report Staff indicated they had met with Lisa Snyder and Michael Baumann on March 2nd to review SRSTF Report and discuss public roadway issues vs. school district on-site issues. A follow-up meeting was held with Michael Bauman on March 12th to review the City’s current activities regarding roadway and pedestrian safety improvements/studies and to review a prioritized list of City related issues for further investigation or inclusion into the City’s CIP. The list of on-site school district related issues was also reviewed by Mr. Baumann which he was going to discuss further with his staff. Staff also provided ISD 194 with the 2016 SRTS application, examples of successful SRTS application from Parkview Elementary (ISD 196) and recommendations on engineering firms familiar with SRTS application process. Staff indicated the next steps in the process include meeting with ISD 192 and 196 staff to review their sites, coordinate with ISD 194 as they prepare their prioritized list of projects, work with school districts regarding on-site projects that may affect the public right-of-way, and provide input/direction to the school districts as requested to encourage them to apply for the 2016 SRTS City Council Work Session April 27, 2015 Page -8 - grants. City staff will also use the SRSTF Report while developing the City’s 2016-2020 CIP to recommend safety improvement projects that fall within the City’s public right-of-way. School Board member Michelle Volk was in attendance and stated she will discuss the status with Dr. Snyder. Staff will provide further updates and information to Council as it becomes available. i. 2016-2020 Street Reconstruction Chris Petree reviewed possible options for moving forward with future street reconstruction projects as outlined at the February Council work session. Bids were opened on April 24 for the Hamburg Ave. and Kensington Ave. projects, which will provide more accurate future cost estimates. Monica Heil stated that future street reconstruction project areas include failing pavement conditions, poor or corrosive soils, and utility needs. In 2009-10 the City developed a pavement management program with a goal of extending the useful life of roadways, predict future roadway performance, and establish funding and lifecycle costs for future budgeting. In 2013 Council approved an accelerated Street Reconstruction Program. The City’s philosophy has been that pavement conditions determine reconstruction project areas but utility needs also need to be addressed. It is most cost effective to replace utilities as part of the street reconstruction projects. Streets are currently being reconstructed with a 40-50 year design lifecycle. Street and utility conditions are looked at on a case by case basis, and more utility needs are being encountered each year. Staff has developed a map showing the 2015-2019 CIP with approximately $8M per year budgeted for street improvements, working toward a goal of increasing the City’s OCI each year. As a result of corrosive soils, utilities will need to be replaced in each of the 2015-2019 CIP years, which significantly increases the estimated costs. A projected cost for 2016-2019 CIP (four years) based on average bids received in 2015 is a total of $96M. Funding would come from City CIP funds ($41M), City Utility funds ($27M), and special assessments ($28M) to completely reconstruct the streets and replace the watermains. Staff provided three potential options and requested Council direction: Option 1: Maintain current CIP budgets and continue to focus on pavement conditions and street needs to determine reconstruction project areas, including spot utility repairs as needed. The result would be smaller project areas and a decrease the overall OCI. Cost is $47M over four years ($40M for streets and $7M for utilities). Option #2: Maintain current CIP project areas with more focus on extensive utility needs. Soils are corrosive and there will be future maintenance issues. Replacing utilities will extend the life of the roadway and utilities to 40-50 years. Cost is $96M over four project years. Several break history areas and corrosive soils have been addressed with this year’s projects. City Council Work Session April 27, 2015 Page -9 - Option #3: Combine pavement reconstruction with efforts to extend the useful life of existing utilities including the addition of cathotic protection in some areas without replacing the entire watermain. Smaller utility replacement areas would be targeted which would provide an opportunity to maintain and increase the OCI for city-wide pavement and mitigate utility issues based on soil conditions. This is also a chance to review utility rates and possibly build the funds necessary to replace the utilities over an extended period of time. Cost of this option is $38M. This option allows continued programmed maintenance. Petree stated that Option 3 extends the watermain life but is not all-inclusive or permanent. Mayor Little stated that the City will incur significant future utility replacement costs and funds need to be set aside so that in coming years councils do not face huge debt as the result of major utility projects. Swecker is also concerned that if the cathotic protection does not alleviate the problems a full replacement will need to be done later, which will add to the overall costs. Davis asked if Option #3 could be repeated in 25 years when the roads and utilities are expected to reach their life expectancy. Heil stated that Option #3 would extend their useful life but if they are failing in 25 years a complete replacement would be needed. LaBeau asked if the City’s specs for new construction had changed due to the corrosive soils and if the costs for new construction similar to these projects. Ms. Heil stated that if developers submit information showing similar soil conditions the new streets would be constructed according to Options #1 and #2. Petree added that the figures in the report include removal of old streets and soils so the costs would not be comparable to new construction. Anderson asked if Option #3 would indicate no curb and gutter for the North Lake Marion neighborhood. Heil stated that staff would like to discuss that option with those residents and partial curb and gutter installation might be an alternative. With Option #3 the streets would be reconstructed in their present location. Anderson stated that in speaking with his neighbors he believes their priority is to have good streets to use, and that curb and gutter is not necessary. LaBeau believes that damage to the streets from heavy construction traffic should be eliminated when neighborhoods are totally built. Heil stated that the project areas would be looked at on a case by case basis before making a repair or replacement recommendation. Little is concerned about the uncertainty of Option #3. Heil stated that cathotic protection has not been tested in Lakeville but other test studies indicate significant reduction in break history and maintenance costs; however, there are no guarantees. Little is concerned that utility funds might not be there when needed; Council needs to plan ahead financially for the long term and budget accordingly. City Council Work Session April 27, 2015 Page -10 - Petree stated that there is no way to know the life of the infrastructure but believes watermain breaks are inevitable in the corrosive soils. Some additional maintenance and added equipment at a nominal cost could considerably extend the years. Failing streets can be addressed and continue to be reconstructed at the scheduled accelerated pace. Swecker stated she is hesitant to spend money on a temporary solution. Anderson appreciates the opportunity to discuss various options and believes Option #3 allows continued investment in the City’s infrastructure while taking the current debt capacity into consideration. Davis believes Option #3 is a prudent choice especially if projects are reviewed on a case by case basis and the cost per mile will be reduced. Council can allocate future utility funds for these projects. Ms. Erickson provided her perspective on funding considerations: future councils will have the ability to reallocate funds; additional funds will be needed for future mill and overlays; what funding sources are being used, etc. Little stated that legislation is currently being considered which might add another funding tool. Council Members were most supportive of Option #3. Staff is recommending Option #3 in addition to a Utility Rate Study. Staff previously met with property owners affected by 2016 improvement project but would like to present Option #3 to them for their feedback in order to produce a feasibility report for this project. Anderson would like to study the utility rates while continuing to discuss additional funding sources. Little stated that it has been difficult to create funds to manage debt. Davis suggested a policy discussion might be valuable. Petree stated that it is staff’s intent to determine actual utility costs and include the Utility Rate Study on a future work session agenda. 4. Adjourn The meeting adjourned at 9:22 p.m. Respectfully submitted, __________________________________ Judi Hawkins, Deputy City Clerk __________________________________ Matt Little, Mayor