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HomeMy WebLinkAbout09-27-10 WSMinutes Lakeville City Council Work Session September 27, 2010 In attendance: Mayor Holly Dahl Council Member Laurie Rieb Council Member Kerrin Swecker Council Member Kevin Miller Absent: Council Member Mark Bellows Staff present: Steve Mielke, City Administrator Dennis Feller, Finance Director Keith Nelson, City Engineer Chris Petree, Operations and Maintenance Director Steve Michaud, Parks and Recreation Director Tom Vonhof, Police Chief Judi Hawkins, Deputy City Clerk The meeting was called to order at 6:00 pm by Mayor Dahl. ITEM #1 — 2011 Street Improvement Projects Operations and Maintenance Director Chris Petree outlined information which has previously been provided to Council regarding the pavement management program and directions which staff has received regarding 2011 street improvement projects. The Pavement Management Program began in 2009 with rating all roadway surfaces in the city. At the February 22, 2010 work session, a study was presented which indicated that based on the overall roadway conditions and repairs which will be needed funding is inadequate to maintain the current roadway network at an acceptable level of repair. At the April 26, 2010 work session Council was presented with a comprehensive Pavement Management Program and Fiscal Impact Report which detailed several financing options in order to avoid a backlog of maintenance and deterioration of the roadway system. The options would be 1) a pay -as- you -go plan; using debt on a three -year or ten -year plan; 2) use structured debt for the proposed rehabilitation and reconstruction projects; or 3) lower the amount of projects that are done, or complete them over a longer period of time. Staff recommended and Council Members agreed that using structured debt in order to equalize payments over a set number of years was the best option. At that meeting Council directed staff to prepare a proposed 5 -year CIP and budget for recommended areas of rehabilitation and reconstruction. The streets that are being proposed for reconditioning in 2011 are near the downtown area and are original streets. Most are in poor or failing condition and are beyond cost effective repair. Staff is proposing installation of concrete curb and gutter where there is currently City Council Work Session Minutes September 27, 2010 Page -2- none. The adopted Street Reconstruction Policy establishes a 60% City cost/ 40% property owner cost for general reconstruction costs. Storm sewer upgrades are also 60/40 %. Concrete curb and gutter in locations where there is no concrete curb and gutter is 100% assessed to the property owner. The estimated total cost of all projects in 2011 is $2,675,000, of which the City's cost will be $1,503,717. Based on the assessment policy, the remaining $1,171,283 will be assessed to benefitted property owners. The city's cost will represent a 2012 levy increase of 1.2 %. The project timeline begins in October 2010 with surveys, soil borings, etc., and continues with ordering a feasibility study, scheduling a neighborhood open house and public hearing in January, followed by a bid opening, etc. Construction would be scheduled for)une through October 2011. This timeline will allow residents to attend meetings and offer input. If residents are overwhelmingly opposed to the projects, Council will have the option of not ordering a specific project; however by policy no future major maintenance would be done on these streets, since it would not be cost effective. Council Member Swecker asked if the construction would have an effect on Pan- O -Prog activities in the downtown next summer. Mr. Petree is confident that working with the contractor on the construction schedule would eliminate any potential conflicts. Council directed staff to move forward by advertising the project and scheduling public hearings and neighborhood meetings in order to keep affected property owners well informed. ITEM #2 — Holyoke / 21o Street Intersection City Engineer Keith Nelson stated that the City had been approached by ISD 194 regarding McGuire Junior High School traffic congestion and safety concerns, both on -site at the school and at the intersection of 210 Street and Holyoke Avenue. The City and the school district shared the cost of a traffic study which was conducted by SRF. The study recommended improvements to the parking and traffic patterns at the school. Improvements that can be made by the City include reconstruction of Holyoke Avenue south of 210 Street and addition of a dedicated left turn lane. This would eliminate the on- street parking on the east side of Holyoke which is utilized by Cross of Christ Church. The cost of the left turn lane is estimated at $30,000, plus engineering and possible right -of -way acquisition costs. Prescriptive rights may apply along the west side of Holyoke since the public has been using the adjoining property, without objection, for a long time. Long term, when Holyoke Ave is reconstructed, there will be some access modifications. This item is not in the CIP but is in the budget projections for 2011. Council directed staff to continue with planning for construction of the turn lane and pursue discussions with property owners along Holyoke Avenue. City Council Work Session Minutes September 27, 2010 ITEM #3 — Pioneer Plaza Induction Guidelines Page -3- Parks and Recreation Director Steve Michaud stated that the original intent of Pioneer Plaza was to have a place to recognize members of the community who have made a difference and improved the quality of people's lives. To date there have been three inductees into the Pioneer Plaza: Bud White, Nich Mahowald, and Jerry Erickson. In each case, the families of the inductees have paid for the plaques. There are many people still living who are deserving of such recognition, and for that reason there is a need for a policy or guidelines as to who will receive this award. Council members received a copy of recommended selection criteria and process for nominations. The Parks, Recreation and Natural Resources Committee has reviewed the draft policy and recommends adoption of these guidelines. Council directed staff to move forward by bringing the proposed policy to City Council at a future regular meeting. ITEM #4 — Budget Questions and Concerns Mr. Mielke stated that the purpose of this agenda item is to provide responses to questions that were raised at and subsequent to the September 7 Council meeting. The preliminary budget was adopted with the maximum tax levy being set. Following staff's responses to the questions, Council is invited to submit any further questions or request additional information. Finance Director Dennis Feller provided a memorandum with detailed explanations to the following questions: 1. Describe the impact of foreclosures on City operations and budget. City expenses are incurred due to additional staff time being required for inspections and monitoring. In addition, foreclosures result in diminished property tax revenues. 2. Delete $250 from the Police Department Chaplaincy budget. This adjustment will be made and will be reflected in the revised final budget. 3. Provide an overview of the Mayor and Council budget. The Mayor and Council Members have not raised their salaries for over ten years and there are no changes proposed. An increase was perceived due to one of the Council positions being vacant for a short time in 2009. This Mayor and Council budget also includes membership in several organizations which benefit the city in many ways including access to the League of Minnesota Cities' (LMC) liability insurance trust. The LMC Insurance Trust has a superior claims administration, safety programs, education programs, and cost containment. The Municipal Legislative Commission is largely a lobbying organization whose positions are in alignment with the City Council. The primary purpose of membership in the Association of Metropolitan Municipalities (Metro Cities) is to monitor areas affected by the Met Council such as transportation and infrastructure, and housing mandates. 1 -35W Solutions Alliance has been influential in lobbying to increase capacity and safety on 35W through Lakeville. There is also a $5,000 appropriation for a Council goal setting session in 2011. City Council Work Session Minutes September 27, 2010 Page -4- 4. Provide data regarding resident and business opinions relating to services and taxes. The proposed 2011 budget is consistent with community survey responses by residents and businesses to refrain from tax increases in 2011. 97% of taxpayers will experience a reduction in taxes. The survey also showed that by a margin of 2:1 residents would oppose cuts in city services even to reduce City property taxes. Budget reductions are being made in low priority non - essential services only. S. Describe trends on property values and taxes. Mr. Feller commented on the home valuation decrease/market - correction. Many property owners mistakenly believe that if the home value decreases, the taxes should also decrease. The reason that is not necessarily true is because taxes are allocated to individual properties based on their pro -rated share of the total tax base, not on a percentage of the property value. Residential properties receive a homestead credit which is not available to businesses and a lower classification rate than businesses. 6. Provide an overview of the issuance of debt for equipment acquisitions. Equipment acquisitions are financed from various revenue sources including cash reserves, taxes, liquor fund, sales of assets, other revenues sources and issuance of short- term debt. The debt is used to finance assets which have a useful life of 10 -15 years. The debt will be retired in less than 3 years. Debt is one of the financial tools the City uses to level out the peaks and valleys of the long term capital improvement plan without causing an undue financial burden on taxpayers. The use of short-term debt will enable the city to have no tax increase in 2011 and very minimal increases in 2012 and future years. Current interest rates are very favorable. As such, the issuance of short-term debt in 2011 will result in net interest costs of approximately $8,000 per year for 2012, 2013 and 2014. Mr. Feller stated that the proposed 2011 budget is based on 2010 pricing as a means of controlling costs. Cost increases however are inevitable such as those associated with diesel engines in order to comply with EPA standards. As such the Equipment Fund budget includes a $108,861 contingency. Council members commended Mr. Feller for consistently using prudent techniques for keeping the tax levy low and providing a financial plan for the future. Council Member Swecker stated that Council is very open to considering any budget suggestions from the Council or the public. 7. Capital Improvement Budget and Policy. Capital improvement budget policies provide guidelines for the budget process. The proposed 2011 budget provides full disclosure of capital outlay acquisitions and a level of accountability and transparency that exceeds policy. As such the budget detail provides a framework for cost control which is one of the components which enables the city to have low taxes and low per capita spending. City Council Work Session Minutes September 27, 2010 Page -5- 8. Provide a comparison of the actions taken by the school board and county regarding wages. Non -union workers at Dakota County are projected to receive a 1 % increase. At ISD 194 all employees who are members of a collective bargaining group will receive a compensation increase in 2010 -11; non -union employees will receive compensation increases in 2011 -12. 9. Provide an explanation of proposed changes to the Forestry position and program. The City Forester will no longer respond to questions or provide advice to homeowners, but will begin only working to take care of trees on City properties. The remainder of the Forester's time will be assigned to park maintenance duties. 10. Provide justification for the addition of a Streets Maintenance position in 2012. This position is scheduled to be filled in October 2012 and it will be the first addition to the department since 2007. Since then, 3.6 miles of streets (7.3 lane miles) have been added for snowplow responsibilities. Several plats currently in the system will add several more lane miles, with more anticipated in 2011. An aging street system also requires additional maintenance hours. 11. Provide justification for the addition of a Police Officer and Police Department Records Technician in 2012. The number of sworn officers on the force is the same today as in 2008 but the population will have increased by 1,500 residents in 2012. Lakeville's ratio of officers to population is among the lowest of the 20 largest metro area cities. Staff needed for processing of police records information has not been increased since 2004. 12. What are the proposed 2011 surface water management fees for commercial and industrial properties? A surface water management fee is allocated to all residential parcels. Commercial and industrial charges are based on a "Residential Equivalent Rate" according to parcel size and impervious areas; a $.50 per quarter increase is being proposed. Mr. Feller showed examples of two commercial properties and the effect this would have on their fees. 13. What are the projections for future water rates? Water rates will increase in 2011 in order to pay for debt service obligations. Future water rate adjustments will depend on the cost trends of such items as electricity to operate the wells and water treatment facility, chemicals to treat the water, and weather patterns. The debt on the Water Treatment Facility will be retired in 2016. Commercial and industrial properties pay Tier 2 rates based on consumption, and only pay Tier 3 if they irrigate. Tier 1 rates are amongst the lowest in the Metro area. 14. Impacts of additional liquor sales competition. The budget takes into consideration a reduction of 5.4% of sales at the Kenrick Store only. Increased competition in Burnsville will impact sales to the Kenrick Liquor Store. Costco, Byerly's and Cub Foods will be opening off -sale liquor stores. Costco had expressed an interest in developing in the City but only on the condition that they would be able to sell beer and wine. In order to obtain such a license, State Statutes would require the City of Lakeville to get out of the liquor business. Lakeville Liquor generates City Council Work Session Minutes September 27, 2010 Page -6- about $1.2 million of profits which is designated for city projects. In the absence of a Liquor Fund, City taxes would be approximately 5% higher. If the City got out of the liquor business and the Costco project would have proceeded, Costco would only have provided approximately $50- 60,000 for the city property taxes and $60- 80,000 in school district taxes. In other words, it would have taken 8 -12 Costco projects to equal the loss of revenues from liquor operations. More importantly, the city benefits by maintaining control of alcohol sales. 15. Budget — Overall. The 2011 budget is $58 million; an increase of $8 million compared to 2009. Mr. Feller provided an overview of individual funds which make up the increase, including Capital Improvement Projects, Utility maintenance projects, and increases in General Fund public safety. Mr. Feller stated that an explanation of each of the funds budget and significant project cost is contained within the budget document. The majority of the increase is due to infrastructure improvements such as roads and utilities. 16. Microsoft upgrades. The standard computer replacement schedule was previously on a four -year plan, and has now been moved to a five -year plan. Consequences of not upgrading computers include incompatibility with some of the other programs and applications. In previous budget discussions it was recommended to wait for the next application rather than upgrade to MS Office 2010. After researching and reviewing alternatives it was decided to delay the upgrade from 2010 to 2011. Mr. Feller added that technology is one of the areas that help the City maintain a high level of efficiency and low taxes. Mr. Feller provided graphs showing that Lakeville has the lowest in per capita spending of the 50 largest metro area cities and is 43r in per household taxes Mr. Feller stated that in his opinion per capita spending is the most accurate measurement of comparing the efficiencies of operating costs and per household taxes is one of the most accurate measurement for financing operations. Lakeville has the third lowest taxes in the county in spite of the fact that it receives no state aid for property tax relief. Council was asked for any questions or comments, and if there are other budget topics they would like to discuss at a future work session. Council Members commented that over the years Lakeville has been a well run, fiscally conservative community and commended staff for their continued diligence. Mr. Mielke reminded Council that if they wish to alter the level of City services this document can be revised. If that is the case, direction is needed for staff. Council Members felt that the budget was reflective of the message citizens had sent via the community survey. Council Member Rieb commented that the Council has worked for many years to make this a great City that people want to move to; and they are not willing to throw it away. Council members did not feel that further discussions would be necessary; however citizens are encouraged to submit any suggestions. City Council Work Session Minutes September 27, 2010 ITEM #5 — Page -7- Other: Lakeville sustainability practices Allyn Kuennen's informational memo outlines the City's sustainability policies including energy efficiency, green initiatives, low impact development, etc. Further discussions might be needed at the strategic planning areas. No action is needed at this time. Interagency Committee and Board Reports • ALF / DCC Discussions have been held about the dispatching practices with Allina and DCC. Some changes are anticipated with the new technology coming from the LOGIS systems. • Lakeville Arenas Everything is running smoothly with the new leadership. • 1 -35 Solutions Alliance Working on policy statements towards Met Council's Transportation Policy Plan. • MLC The Policy Committee will be meeting to develop an outline for legislative action. • Cedar Corridor Improvement Group This group has not been meeting, as the project is in the implementation stage. • CVB No update. • DLBA Council Member Rieb recently provided an update on the budget to the DLBA. • HiPP Is getting the plan underway for a collaboration study with SCALE. ITEM #6 — Adjourn The meeting adjourned at 8:00 pm. Respectfully submitted,