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HomeMy WebLinkAbout08-24-15 WSCITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES August 24, 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: Justin Miller, City Administrator; Allyn Kuennen, Assistant City Administrator; Jerilyn Erickson, Finance Director; Daryl Morey, Planning Director; Chris Petree, Public Works Director; Brett Altergott, Parks and Recreation Director; Judi Hawkins, Deputy City Clerk 2. Citizen Comments: None 3. Discussion Items: a. Sale of City -owned property to Bethlehem Baptist Church Daryl Morey provided background information on a request from Bethlehem Baptist Church to purchase a 15 X 600 -foot strip of property which is currently owned by the City of Lakeville. The land is located along the south side of a 12 -acre parcel owned by the church east of Kenrick Avenue, north of the Holiday Inn/Rudy's Redeye Grill, and would accommodate the desired site design for their proposed new church. Rudy's Redeye Grill was contacted by City staff and stated that they are not interested in purchasing the property. The deed was acquired from the State through tax forfeiture in 1994 at no cost and restricts the use of the property to storm sewer right of way. This restriction would need to be cleared from the title in order for the property to be sold to the church. Mr. Kuennen stated that by law the process includes re -conveying the property to the State, determining fair market value, and reacquiring the property from the state with no use restriction. Dakota County would act on behalf of the state in the re -conveyance. Council Member Anderson asked why the property couldn't be conveyed with the restriction since it would likely continue to be used for stormwater drainage and utility easement. Morey stated that if the property is designated for green space and no driveway or hard surface is installed, it might meet the restrictions; more information on the site plan would be needed. Council Member Davis noted that the site plan indicates that a portion of the property would be used for the driveway. City Council Work Session August 24, 2015 Page -2 - Council members directed staff to proceed with the process for clearing the restrictions from the title and conveying the property to Bethlehem Baptist Church. b. Professional Services RFP schedule City Administrator Miller stated that several contractors and consultants provide specialized services to the City. At Council's request, staff has outlined a list of the consultants with the most interaction and is recommending a schedule for obtaining regular proposals for the various services. Staff believes that a bid or RFP process for regular consulting services will result in the best services and the best price. RFPs in 2016 will include City attorneys, auditors, and criminal prosecution and civil forfeiture; 2017 will include banking, bond counsel and financial advisors; RFPs for 2018 will include property/casualty/workers comp. insurance, health insurance brokers, and a planning consultant. LaBeau suggested a regular three to five-year schedule for requesting RFPs for the various categories. Council members supported the proposal and directed staff to proceed. c. 183rd Street RFP response review Assistant City Administrator Kuennen provided background information on the City -owned property located on the west side of Dodd Boulevard north of 183`d Street which could be available for development. There are 19 developable acres remaining of a 60 -acre purchase by the City of Lakeville as part of the King Park acquisition process. In 2005, 25.24 acres of the original purchase were sold to Lifetime Fitness and in 2007 7.5 acres were used for a new Police Station. At the direction of Council staff prepared and advertised for RFPs to obtain proposals for the sale of the remaining 19 developable acres. An additional 8.59 acres of greenway/ wetland will remain. The RFP guidelines specified a residential development compatible and complementary to surrounding neighborhoods; creative development design and housing styles; and increased residential opportunities and choices of housing products. Four proposals were received: • DR Horton Homes: Purchase price: $1,250,000 ($65,789 per acre) Proposal: 22 Single Family homes/ 23 detached townhomes (some rezoning required) Alternate: Land swap for a portion of the Mullen/Streefand property which DR Horton owns adjacent to the future extension of 185th Street. Swecker asked what the southern piece of the DR Horton property is zoned and if it is in the Parks Master Plan. Altergott stated that it is zoned for single family but the land contains a quality stand of hardwood that has been identified in the last two Park Plans. Swecker noted this is also a headwaters area for a natural stream. Kuennen stated that this wooded parkland would be designated passive recreation and preservation. LaBeau pointed out that in the land swap scenario City Council Work Session August 24, 2015 Page -3 - there is no immediate revenue. Kuennen stated that park dedication would be required at the time of development. KRB Development: Purchase price: $1,550,000 ($81,578 per acre) Proposal: 39 Single Family homes (Rezoning to RS -3 would be required) The proposal includes a culvert for crossing of the greenway which would likely require City participation. Council might wish to consider this feature for all of the proposals. • Pulte Homes: Purchase price: $1,300,000 ($68,421 per acre) Proposal: 22 Single Family homes/31 detached townhomes (some rezoning required as well as a variance for cul-de-sac length) Ryland Homes: Purchase price: $840,000 ($44,210 per acre) Proposal: 40 Single Family homes; $21,000 per lot allowed Staff asked Council if they wish to narrow the list down to one or two proposals for further review of pros, cons, and cost analyses or would they prefer to choose one and work with that developer. LaBeau asked if revenue from the 19 -acre sale was allocated and if funds were allocated for any certain park or project. Miller stated that it is his understanding that approximately $1.5M is needed for the City's share of the Mattamy Homes Park in addition to park dedication. The Park Dedication Fund has approximately $550,000 set aside for 2017 funding. Council had discussed possibly using the revenues for this purpose but has not taken any formal action; expenditure would be at Council discretion. Anderson asked if the proposals were consistent with current market values. LaBeau stated that in her sales experience, the bids seem reasonable. She also stated that the detached townhome product is in high demand but there are not many being built in Lakeville. Swecker stated that good access to parks and trails in the area is a valuable asset for the property. Davis stated that he has also been approached about the need for detached townhomes. Swecker believes the mixed housing proposals by DR Horton or Pulte would offer the best options but would need more details on the land swap. Miller stated that it is staffs opinion that the best option for preserving the stand of trees would be to negotiate land in lieu of cash for park dedication at the time that site develops, but it would likely result in acquisition of only a portion of woods. Anderson agrees with waiting for development to acquire some of the wooded property and believes it is Council's responsibility to capture as many dollars as possible from the sale of the property. He favors the KRB proposal because of the variety of housing products that would result from use of multiple builders. He supports allocating the funds to a specific use. City Council Work Session August 24, 2015 Page -4 - Little asked if the proposed housing product offers were negotiable. Kuennen stated that the RFP provides that option. Staff does not have a specific recommendation but has also been made aware of the desire for more housing types, specifically detached townhomes. Davis agreed that the KRB proposal maximizes the value of the land; however, Pulte's proposal would be more attractive if their design could be revised to eliminate the need for a variance. Anderson suggested going back to the three highest bidders to determine if they would be able to provide revised proposals based on Council's desired housing products and concepts. Council's long term vision and maximizing tax dollars should be most important. Council members directed staff to meet with the three highest bidders to determine if their proposals could be revised to best fit the City's long term vision. d. Land of Amazement update Parks and Recreation Director Brett Altergott provided an overview of the condition of the 23 - year old Land of Amazement (LOA) wood structure at Steve Michaud Park. Due to its age and the wear and tear it has sustained replacement is a priority. Altergott introduced Harlan Lehman from Minnesota/Wisconsin Playground who has been working with staff to create a concept design with a look similar to the existing LOA but with many updated elements and features, low maintenance steel and composite lumber materials, and higher safety standards. Mr. Lehman provided an overview of the proposed playground and the several amenities and elements that would be unique about the completed structure. Many of the pieces are designed for physically challenged or very small children. Lehman commented on the Tri - Angel Park which was recently completed in River Falls and stated that a destination park such as that and the Land of Amazement could have up to six million visitors annually. The concept can be further customized by substituting elements. Efforts will be made to save existing trees. The cost of the proposed replacement, in 2015 dollars, is $393,158 based on installation by volunteers. Funding is proposed to come from a variety of sources including $85,000 of unencumbered funds and $50,000 that has been pledged by the Rotary. Remaining funds will be from donations, fund raiser events, grants, corporate gifts and general funds. Staff is asking for Council approval to proceed with fundraising for the LOA replacement. Altergott's fundraising plan includes exploring grants, soliciting corporate and civic group donations, and other funding sources. Swecker asked if funds could be available to begin the project prior to fundraising. Council decided to first approve a specific playground concept and then raise funds prior to beginning the project. Davis suggested fundraising from September 11 through March 31St and expects additional public dollars will need to be City Council Work Session August 24, 2015 Page -5 - committed. Council members asked to see some optional elements so the design concept can be solidified prior to determining fundraising goals. Altergott stated that the proposed design is the recommendation of Minnesota/Wisconsin Playground, the Parks, Recreation and Natural Resources Committee, and staff. LaBeau is disappointed about the continually rising cost and believes that fundraising should begin as soon as possible. Revenue from the sale of the 183rd Street property is uncommitted and could be considered for funding. Council members supported launching a community fundraising plan for the remaining $235,000 so the playground can be replaced in the summer of 2016. e. 2016 Budget Mr. Miller provided a budget timeline: Council is required to adopt the preliminary levy by September 30th. A work session is tentatively scheduled for September 14th if needed and at their September 21s' regular meeting Council will consider adoption of the preliminary levy and set a date for the Truth in Taxation hearing. Staff is proposing a 5.5% increase in the 2016 levy, of which 2.2% is from new growth. The 5.5% tax levy increase on a median valued home would result in a $32 increase in the City's portion of the property tax. Dakota County has increased the valuation of homes in Lakeville by 2.41% for 2016. The budget anticipates building permits for 300 new housing units, the same as 2015, but lower commercial/industrial building permit revenues. One of the principal budget expenditures is personnel. Funding for two positions will increase since they were mid -2015 hires, and two new positions are also being requested. An increase in Worker's Comp Insurance and COLA also contribute to the increase. Other expenditures include cost of judges for the 2016 election and a CR 70 corridor study. Reductions are reflected in car allowances vs. mileage reimbursements and liability insurance transfers. Anderson asked for clarification on the $206,000 increase in commodities. Petree stated that the majority is to replenish inventories of de-icing chemicals, salt, etc. Swecker asked about the car allowance adjustment and if employees would have City cars available. Miller stated that accommodations might be needed for a few employees. Requests for new positions include a Street Maintenance II as of April 1, 2016 and a technology position to be dedicated mainly to the Police Department. A forester position is also being proposed to be funded through a quarterly fee of $.75 on utility bills and not as part of the general fund. Staff would like to change the name of the Surface Water Fund to Environmental Fund. Mr. Petree stated that the dedicated forester would be a three-quarter time position and would be a resource for both the City and residents. This offsets the cost of contract forestry services on street reconstruction and other projects, which is an annual expense of $15-20,000. City Council Work Session August 24, 2015 Page -6 - A Utility Maintenance II position is also being requested due to the increased miles of utilities. Other positions proposed by departments but not included in the budget: Parks Maintenance II position, part-time Recreation Program Assistant, and an additional police officer. The proposed budget lowers the fund balance from approximately 44.3% to 43%, which remains within an acceptable range. $1.1M is dedicated to the pavement management program. The facilities portion of the 2016 budget shows a $157,000 deficit which includes repayment of $290,000 from this fund to the Liquor Fund for the Heritage Center remodel. Staff recommends recognizing the debt but with no transfer of funds, which will result in a Building Fund balance of $133,000. The budget proposes to increase the levy for the Building Fund from $51,000 in 2015 to $300,000 in 2016 with further increases in subsequent years. Repair of the foundation on the west end of City Hall in 2016, along with associated costs, is estimated at $200,000. Anderson would like to further discuss upcoming projects at City Hall. The major expense at the Arts Center in 2016 is waterproofing of the lower level at $175,000. Staff has proposed a baseline equipment replacement schedule; however, replacements are not automatic. Decreases in the Liquor Fund and Communications Fund contributions are also shown. Shown in 2017-2019 is a new "bond proceeds" line item for issuance of equipment certificates, or bonding, which is a shift in policy and will be discussed at a later meeting. If the Streets Maintenance II position is filled, an additional plow truck will be needed. Of the 22 existing trucks three are due for replacement as well as two street sweepers. A velocity patch truck is proposed for purchase; this work has previously been contracted but staff believes it can be done more efficiently in-house. Funds related to repayment of a TIF loan for Southfork will probably be received in 2016 and may have some geographical restrictions on use. Possible options are listed in the budget. Little feels it is important to establish consistent budget terminology. He stated that last year Council was provided with a chart comparing tax levy impacts on various market values and asked for a similar chart showing what portion of the total tax bill is related to the City levy. Erickson clarified debt service funds and how they could assist in reducing the levy. LaBeau asked if the Southfork TIF revenues could be used for the unanticipated RAB overage. Miller stated that the bond issue was adjusted to accommodate $800,000 of the $1.1M, but TIF funds could potentially be used for the remaining cost. The CR50/I-35 interchange is another potential use. LaBeau asked if there was a forecast for building permits for 2015. Erickson stated that the current estimate is 325 housing units, which would potentially add $392,000 to the fund balance. A fund balance of 40-50% allows the Council flexibility. City Council Work Session August 24, 2015 Page -7 - Council is being asked if they are in agreement with the proposed budget or whether the figures need to go up or down. Little supports the street maintenance and police technician positions. Anderson believes it is Council's responsibility to consider what options might be available to reduce the tax levy and what could potentially be done to lower it, although 5.5% is not an impossible number for him. Little listed several items that he would like to discuss further: Southfork TIF bond payment, funding for Land of Amazement, etc. Davis believes there could be some opportunities to lower the levy but doesn't think 5.5% is out of the question with a net of 3.3%. He thanked staff for their work on the budget. LaBeau appreciates the new budget format and believes it will be easier for the public to understand. Council members agreed that an extra budget meeting on September 14`'' would be helpful and asked staff to prioritize any items that might help to lower the levy. Several Council members Swecker, Anderson, and Davis have previous commitments and will be out of town on September 281: Mr. Miller will also not be available. A budget discussion could also be scheduled prior to the September 2151 regular meeting. Council members directed staff to look at agenda items other than budget to determine if all items can be addressed on September 14I''. 4. Adjourn The meeting adjourned at 8:25 p.m. Respectfully submitted, J&4i ". VO d- Hawkins, Deputy Cit3Zerk Matt Litt%, Mayor