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HomeMy WebLinkAboutWK - September 22, 2015• C I T Y O E MOVER 1685 CROSSTOWN BOULLVARU N.W. • ANUUVLR, MINNLbUTA 553U4 • (763) 755 -5100 FAX (763) 755 -8923 • WWW.AN DOVE RM N.GOV City Council Workshop Tuesday, September 22, 2015 Conference Rooms A & B 1. Call to Order— 5:30 p.m. 2. City Council Community Bus Tour - Engineering 1 2016 Budget Development Discussion — Administration 4. Distribution & Discussion - 2016 Special Revenue, Debt Service, Capital Projects, Enterprise & Internal Service Funds Budgets — Administration 5. Other Business . 6. Adjournment ct'ry oc MOVER, ANDOVER CITY COUNCIL WORKSHOP MEETING —SEPTEMBER 22, 2015 MINUTES The Workshop Meeting of the Andover City Council was called to order by Mayor Julie Trade, September 22, 2015, 5:30 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers present: Mike Knight, Sheri Bukkila, Valerie Holthus, and James Goodrich Councilmember absent: None Also present: City Administrator, Jim Dickinson Public Works Director /City Engineer, David Berkowitz Others CITY COUNCIL COMMUNITY BUS TOUR —ENGINEERING • Prairie Meadow /Sylvester Addition Proposed 2016 Street Reconstruction Mr. Berkowitz described the deteriorating condition of the roadway, pointing out potholes that have been patched. He stated the survey information has been collected and staff will start the feasibility report. For this street project, including concrete curb and gutter, 25% of total project cost will be assessed. Mr. Berkowitz noted a section of gravel road that it would be timely to pave with this project. He explained that staff sent abutting residents a letter explaining the petition and assessment process and asking if they want to have the gravel section paved with the City paying 50 %, 3 of the 5 of the abutting residents said they did not want the road paved. The Council discussed the average daily traffic counts and need to maintain a consistent assessment policy. Due to the lack of resident support, the Council agreed to not pursue paving the section of gravel road. 173" Lane (Langseth- Thrane 1" & 2 0a Addition Developments) State Aid Street Reconstruction Mr. Berkowitz explained this road has lasted for close to 30 years but is probably six years over due for reconstruction. Because the curb is in good shape, only sections of curb will be replaced. . The pavement will be reclaimed and the street repaved. He estimated a per lot improvement of $8,000 yielding an assessment of $2,000 per property. Mr. Berkowitz stated this neighborhood is active and has already circulated a petition against the • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 2 project so he expects a good turnout at the neighborhood meeting. Mr. Berkowitz explained the City has only six miles of gravel road remaining in the city and is budgeting for two calcium chloride sprays in 2016 to lower resident dust complaints. Timber Trails Park 2016 Proposed Park Renovation Mr. Berkowitz explained Timber Trails Park is scheduled for renovation in the 2016 Capital Improvement Plan (CIP). He noted the baseball field will be regraded and a well, estimated to cost $130,000, will be installed to irrigate the turf. In addition, the older sections of fence will be replaced, as needed, and repurposed elsewhere. The outfield will be updated for soccer play. Mayor Trade noted this park location is a distance away and questioned the $200,000 that will be spent to serve just two teams playing ball. • Timber Rivers Development Road Conditions and Timber River Park 2015 Renovation Mr. Berkowitz stated the roadway is just 19 years old and in rough shape, possibly because of • clay in the roadbed and while under construction it was not inspected in a timely manner. He described the sealcoat failure experienced is metro -wide, nofing MN/DOT undertook a study to determme the cause. Councihnember Holthus asked whether it was caused by the asphalt not containing enough oil. Mr. Berkowitz stated asphalt density requirements were met so that likely was not the cause. One theory is that the problem was caused when moisture within the asphalt became trapped by the sealcoat layer, then froze and expanded during winter weather conditions, causing the sealcoat layer to `pop' off. Mr. Berkowitz stated sealcoating reduces oxidation and prolongs asphalt life but the City is not sealcoating new roadways at this time due to the recent failures. Mr. Berkowitz noted this neighborhood contains both smaller sized and larger sized lots so the assessment will be high for some. The Council viewed the new playground equipment. With regard to complaints received on the woodchips used in the playground area, Mr. Berkowitz explained that pea rock can no longer be used, rubber shreds are quite expensive, and woodchips cushions falls. The Council also viewed the tree planted in memoriam and accompanying plaque and Rum River launch that had been upgraded to concrete. The Council asked staff to explore the opportunity for the Council and staff to pontoon the Rum • River, a designated Wild and Scenic River, to view bank and outfall conditions. It was noted the Lower Rum River Water Management Organization recently did the same. • Country Oaks North 2 vd Addition Proposed Development • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 3 The Council viewed the Country Oaks North Addition development. Mr. Berkowitz pointed out the location where the 2"d Addition will be constructed and the property that will be re- graded to accommodate that next phase of the development. The Council toured a model home. • Prairie Knoll Park, Parking Issues The Council viewed both the gravel and paved parking lots at Prairie Knoll Park, noting that even though there were open spaces, vehicles were still parked on both sides of Prairie Road as it was in closer proximity to the playing fields. ° Catcher's Creek, Proposed Catcher's Creek 2 °d Addition, Hickory Meadows 2 °d Addition Developments Mr. Berkowitz explained the need to extend the watermain from the other side of the creek to create a loop system and serve Catcher's Creek 2 "d Addition. However, the developer objects to paying for the side yard watermain cost. Councihnember Holthus asked whether this dispute would hold up the development. Mr. • Berkowitz stated that consideration is with the Council. Mayor Trade pointed out it is the City's policy to have the developer pay for this type of watermain extension. Mr. Berkowitz confirmed that was the case as well as the City's past practice. In Hickory Meadows 2"d Addition, Mr. Berkowitz explained the sewer and watermain are installed as well as the fast lift of blacktop. He pointed out two locations of grade separation, one involving a driveway that the developer will be required to restore. • Safe Routes to Schools Update Mr. Berkowitz explained that of the 18 projects approved by the program, 10 had plans, 4 had plans in progress, and 4 had great political pressure. Andover's Crosstown Boulevard plan will be in progress after October so he recommended making application in the spring for funding that would then be available in 2018 -2019. One project could be the $1 million underpass as part of the City Campus Master Plan or trails that are close to the schools or impact students. The Council agreed with the recommendation of Mr. Berkowitz to make application for Safe Routes to Schools funds in the spring of 2016. RECESS AND RECONVENE • • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 4 Following the bus tour, Mayor Trude recessed the Workshop at 7:15 p.m. The Workshop was reconvened at 7:20 p.m. 1016 BUDGET DEVELOPMENT DISCUSSION — ADMINISTRATION Mr. Dickinson presented staffs memo, noting the Preliminary Levy was adopted at the Council's first meeting in September. The preliminary 2016 budget proposes a total property tax levy of $11,593,935 resulting in a 4.04% increase in gross levy. The Council can reduce the levy between now and the end of the year but cannot increase it. He noted the 2016 budget reflects the Council's commitment to a City Tax Capacity Rate to meet the needs of the City and position it for long -tenn competitiveness. Mr. Dickinson stated the General Fund balance cash flow of 50% is a bit higher than the guideline but the City has still not completely filled the gap between General Fund revenues and expenditures so it is prudent to retain that balance and then migrate down to 45% once that gap is closed. Emergency Fund balances are established to stabilize an emergency situation. • Mr. Dickinson stated the 2016 Debt Service Levy is currently at 18.12% of the gross tax levy and since 25% provides a reasonable margin, the City is in good shape even if debt (an Equipment Note or hnprovement Bond) is issued next year. Mr. Dickinson stated representatives of Standard and Pours toured Andover today and categorized the City as a low debt community. They were informed that Andover's practice is one of sustainable revenues. Mayor Trude asked whether Standard and Pours will be submitting a letter. Mr. Dickinson stated probably not but there may be some follow up to assure Andover is maintaining since it was last rated in 2014. He stated there may be an outside chance Andover will get a rating upgrade based on the last report but he felt Standard and Poors will not do it until the City pays for another rating review on a new bond issuance. Mr. Dickinson reviewed capital equipment, long -term financial models that identify anticipated community growth, and financial resources. The financial models addressed the debt fall off in 2017 and 2019 and how to deal with that. Mr. Dickinson noted there has been discussion of the City Hall Campus Master Plan and how to integrate debt into that plan. The Council's Community Vision and Organizational Goals and Values document, approved July 7, 2015, reflects community vision and organization goals. Standard and Pours was provided a copy of this document today. . Mr. Dickinson stated administration reviewed staffing requests but is not recommending the addition of any new positions for the 2016 budget. Pay steps have been factored into the 2016 budget. Mr. Dickinson stated the budget also includes a cost of living adjustment for bargaining units and non - bargaining employees. Mayor Trude asked whether the City will consider • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 5 matching with the contract. Mr. Dickinson stated that is usually considered. He noted the Public Works contract is under negotiation and will be voted on by the membership on Monday. Mr. Dickinson stated a midyear review of the health plan was conducted and following his challenge about being considered as a large group (by including part-time employees), Preferred One and Health Partners are now recognizing Andover as a large group. Mr. Dickinson stated he is looking to see if Medics comes into play and if so, it opens flexibility for staff to go to any clinic they want to. He explained that while he is not excited about switching carriers, the majority of employees would like flexibility. Mr. Dickinson stated the budget includes a 25% premium increase as a placeholder but if Andover is considered a large group, that increase can drop by about 10 %, or a $37,500 reduction in the health insurance budget. Mayor Trude asked whether the City offers coverage to part -time employees if they are counted in qualifying for a large group. Mr. Dickinson stated they do not and even some full -time employees are excluded. He noted it may be cheaper for them to go to the exchange than purchase the City's coverage. Mr. Dickinson stated he will be meeting with the insurance • marketing people next week. Councilmember Bukkila asked whether an employee can opt out and go on the exchange. Dickinson answered in the affirmative but noted it would work against the City in being considered a large group. He doubted they would go to the exchange because a single has zero premium obligation. Mr. Dickinson explained that an employee can opt out if they can prove insurance coverage from somewhere else. He stated that Andover's premium is still reasonable when compared to what other government entities pay. Mr. Dickinson reviewed contractual departments and a list of memberships included in the 2016 budget. He advised that Stepping Stone has asked for a contribution, which could be from the Charitable Gambling Fund. Mayor Trade stated Family of Promise was added last year and she had received a thank you letter from them asking if the City would consider a presentation and 2016 funding. She noted that the Council had also added Hope for Youth. Councilmember Bukkila stated Hope for Youth was a one -time match donation. Mr. Dickinson asked if there was Council support to contribute to Stepping Stone. Councilmembers Bukkila and Goodrich did not support that contribution. Mayor Trade stated she would support contributing to Stepping Stone if from the Charitable Gambling Fund. • Councilmember Holthus asked about the contribution to the high school senior parties. Mr. Dickinson stated the City donates $2 per Andover resident, if requested, regardless of high school. Councilmember Knight asked what about Charter schools. Mayor Trude stated Charter • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 6 schools generally do not host a senior party Mr. Dickinson presented capital projects and described the dwindling levels of LGA contributions that had been used to help fund the Road and Bridge Fund. He explained that making up those funds results in a 9.3% increase for the Road and Bridge Fund. Mr. Dickinson next addressed the 2016 Park Improvement Levy that was reduced from $61,500 in 2015 to $15,000 for 2016 with the funds being reassigned to the General Fund to focus on park maintenance/replacement items. A list has been made of parks repair and replacement items that will be prioritized and scheduled and then compared with the work of the Park & Recreation Commission. Councilmember Goodrich asked whether funding is switching from growth to maintenance. Mr. Dickinson stated that is correct, maintaining current parks rather than adding new. Mayor Trade noted that park dedication fees are still being received. Mr. Dickinson stated those funds will be for new parks and if the City receives fees for 50 new lots, it would total about $144,000 a year, currently the City is out pacing the 50 new lots. . Councilmember Bukkila asked about the gap between what was to be funded in the CIP that will now not be funded. Mr. Dickinson reviewed the 2016 projects, noting they will all be funded. In addition, some of the items don't reflect actuals so there may be funds that carry forward. He estimated the park dedication numbers will exceed expectations as they are conservatively projected at 25 homes in future years. Councilmember Bukkila asked about Pine Hills North phases for completion. Mr. Dickinson stated $100,000 was budgeted for the shelter building, which is to be funded through an association donation. Curb and parking are not scheduled until 2020. Mr. Berkowitz explained the Park & Recreation Commission pushed that out so they could do other projects. Mayor Trade noted there is $15,000 for annual miscellaneous projects not allocated for other projects. Councilmember Bukkila stated with the 2016 budget, the Council should have additional oversight on what the funds are used for. She asked how you decide the role of the organization. Mr. Dickinson stated those fine details are being worked out and at the next Park & Recreation Commission meeting, a significant list of projects will be considered. Mr. Dickinson stated he will attend that meeting to explain the new direction of the funding, what maintenance will do, what the Park and Recreation Commission is to do, and where Commission and maintenance will work together. Councilmember Bukkila pointed out that the more information offered and exchanged, the better the process will be. Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 7 The Council discussed the impact of community growth and funding needed to meet the scheduled CIP projects. Mr. Dickinson reviewed the scheduled projects, noting some funds will carry forward. He stated it is a process in transition and he thinks the Park & Recreation Commission will be comfortable with the process once it is understood. Councilmember Holthus stated the Park & Recreation Commission's concern is not having enough money to do the scheduled projects. Mr. Dickinson stated the Park Dedication Study addressed the entire City. On the eastern side there are 800 to 1,000 acres yet to develop and in the middle area there are 1,000 acres yet to develop. When developed, those properties will generate a lot of fees. He stated the park system is expected to be complete when the City is completely built out but "I want it now. I need it now." is not a reality with the nexus requirement for the Park Dedication Study. Mayor Trude described the informational memorandum from Finance to the Park & Recreation Commission after the Council's budget discussion. The Council reviewed the past consideration of the Park & Recreation Commission and discussed the need to provide an explanation so there is a higher level of comfort. Mr. Dickinson stated he will provide that explanation at their next meeting. Mr. Dickinson stated the Finance Department analyzed debt service but sees no opportunities to refinance at this time. He explained that since the Federal Reserve decided to keep the interest rate constant for at least six months, there may be a dip in the bond market. Should the market fall enough, the Finance Department may recommend issuing a refunding bond to save money. Mr. Dickinson discussed the Debt Service Levy with the City Council. Mr. Dickinson reviewed the City's bonds and stated interest rates will probably rise after the next election. He believed the rates will remain constant until then and they will not go into any investments that are more than 18 months out because they will capture those better interest rates that will likely take place after the next presidential election. Councilmember Holthus asked if the bond issuances will be combined. Mr. Dickinson stated they will never be combined because they need to stay separate according to the requirements of issuance. He stated they have to be dealt with individually. Each bond has a separate statutory authority as to what they were issued for so they have to follow the same statute but as long as they can see present value reduction in interest savings of at least three percent they can refund them. Mr. Dickinson reviewed the levy with the City Council and stated they will specifically identify the parks replacement levy and use that as the base rate for 2016. He stated the tax rate for 2016 is looking like 37.28, which is a .08 percent increase, the rate is basically unchanged. Fund balance analysis is unchanged and he predicted at the end of the year they will use some fund balance at this point in time but could change now that they have Arbor Oaks Estates pulling the trigger on building and he thought the number might drop from $324,000 to $250,000. There Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 8 could potentially be more dollars available for the next budget cycle but based on all of their estimates today and keeping in place all of their emergency fund balances and funding the deficit for next year, which could change, there is $377,460 that is in his opinion excess fund balance. Mr. Dickinson went over the trails Capital Improvement Projects with the City Council. He stated the trail projects they have projected do not have enough money to be completed so some projects will need to be pushed out further. Councilmember Goodrich asked if these are new projects. Mr. Dickinson noted these are new projects. Mayor Trude did not think any new trails have been constructed recently. Mr. Berkowitz stated Nightingale Street was the last trail they built and that was funded through State Aid. Mr. Dickinson stated the last major trail done with trail dedicated funds was in 2007. He stated the trail was Crosstown Boulevard from Hanson Boulevard to Nightingale Street along with two Hanson Boulevard trails and a small trail by Woodland Crossings. Councilmember Goodrich asked if trail maintenance was a whole other item. Mr. Dickinson indicated it was. He stated there is some community support based on the last survey in spending money for trails. He noted 71% support spending money on trails. This was identified . as a council priority and is on the council goal list. He thought the $370,000 in excess fund balance could be put into the trail fund. Councilmember Knight stated that fits the demographics of the community. Mayor Trade stated they needed to plan trails in transportation because it is multi -modal and are considered part of complete streets. Mr. Berkowitz stated they do not promote shoulders as bike ways because they have to provide a barrier separation which can cost a fortune. Mr. Dickinson stated the trail fee needs to have a nexus connection so they need to justify what they are doing and this is for their regional trail system. He stated the trail fee can go to making connections between parks. If they transfer funds from the General Levy they do not have those restrictions. Councilmember Bukkila asked what sets the trail fee and is the trail fee high enough. Mr. Dickinson did not think the trail fee was set high enough. Councilmember Bukkila stated if the trail fee is not high enough then they need to set it higher. Mr. Dickinson stated then they would need to go back to development, which is what pays for all of this, and if they get the trail fee too high, park dedication fee too high, they will start choking development out. Councilmember Bukkila thought this was something worth looking at in -house to see what the comparables are. Mr. Dickinson stated they could take a look at it. Mayor Trude stated if new development pays for the trails then there is a problem with their nexus. Councilmember Knight asked if they set criteria for the trails before they are done so they know exactly how much they will cost. Mr. Dickinson stated they use estimates for these. Mr. Berkowitz stated it is always more difficult and expensive to build trails next to an existing road, it is cheaper to build a trail with a street reconstruction. There was discussion regarding the trail system and the proposed upcoming projects. Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 9 Mayor Trade stated if they are going to collect $450,000 in 2016 they should put $100,000 into the trail fund and start working on some of them. Councilmember Bukkila stated she did not have a problem putting a portion of the excess fund balance into the trail fund, but would like to hold some money back as a cushion. She thought they needed to figure out how they can fund them in their own right. Mr. Dickinson stated at the next meeting they will start to identify trails and how they can fund them. Mayor Trude asked if they could move some allocated funds specifically to trails. Mr. Dickinson stated they could if they want to shore up at least the 2016 budget for trails. Councilmember Bukkila indicated she would be willing to add half the excess money for trails. Councilmember Holthus stated she would like to have a trail along Verdin Street from 161" Avenue to Rum River Elementary up to the next city street. Councilmember Bukkila indicated they could add that to the list in 2020 because there are other projects that have been on the list for a long time that should get completed first. Mayor Trude thought the trail project along Bunker Lake Boulevard by Lucky's could be removed completely from the CIP because the $190,000 to build a trail for that short distance is too expensive and when all she wanted was a trail through the Hidden Creek North Park. Consensus of the Council was to remove the $190,000 project from the CIP. Mr. Dickinson stated he would propose a transfer of $200,000 from the $375,000 excess fund balance to the trail fund. DISTRIBUTION & DISCUSSION — 2016 SPECIAL REVENUE, DEBT SERVICE, CAPITAL PROJECTS, ENTERPRISE & INTERNAL SERVICE FUNDS BUDGETS Mr. Dickinson reviewed the Special Revenue Funds with the City Council. Mr. Dickinson stated in 2014 for the Charitable Gambling Fund they received $33,000 by the end of the year, which they were not anticipating. He stated so far they are estimating $22,000 coming in by the end of 2015 but it could change as they get closer to the end of the year. He stated they will have $40,000 to $50,000 through the end of 2016 to assist in funding future contributions. He noted if the Council would like to contribute to Stepping Stones, this is the Fund the money would come out of Mayor Trade did not think Stepping Stones wanted much money but they were looking for support from the City. Mr. Dickinson stated the Water Trunk fund is starting to even out and rates are reasonable when compared to neighboring communities. He stated the Sewer Trunk Fund remains healthy. Capital project funds related to storm sewer has to do with the Winslow Hills Area. He stated the Road and Bridge Fund is covered specifically through the Capital Improvement Plan and they always need to maintain a fairly healthy fund balance to move projects forward. They like to see the number closer to four million so they can do all of the projects. He stated they are fully funded for the projects in 2016. • Andover City Council Workshop Meeting Minutes — September 22, 2015 Page 10 Mr. Dickinson continued reviewing the Special Revenue Funds with the City Council. Mr. Dickinson stated he will cover the Enterprise and Internal Service Funds at the next workshop meeting. OTHER BUS /NESS There was none. ADJOURNMENT Motion by Bukkila, Seconded by Knight, to adjourn. Motion carried unanimously. The meeting adjourned at 8:50 p.m. Respectfully submitted, Sue Osbeck, Recording Secretary 0