Loading...
HomeMy WebLinkAbout02.09.15 Work Session Minutes Council Work Session Minutes February 9,2015 Mayor Larson called the work session to order at 6:30 p.m. Present: Larson, Bartholomay, Bonar, Donnelly, Pitcher Also Present: David McKnight, City Administrator; Robin Hanson, Finance Director; Kevin Schorzman, City Engineer; Cynthia Muller, Executive Assistant MOTION by Bartholomay, second by Pitcher to approve the agenda. APIF,MOTION CARRIED. Draft Financial Plan Information The debt levy for 2015 is $3,059,728. Road projects on the CIP for 2015 include 195th Street and the Henderson Addition. The next road project is Second Street and Honeysuckle Lane in 2019. Starting in 2020 city vehicles will also be included in the CIP. Municipal Services Director Reiten has played a big role in centralizing vehicle purchases in the CIP rather than purchasing being department versus department. City Administrator McKnight presented the CIP summary through 2029 which included road projects and vehicle purchases according to year. City Administrator McKnight reviewed future debt tax levy projects from 2015 to 2034. The road and bridge fund will be paid off in 2027. The non-road and bridge fund which includes projects such as fire station two, city hall,police station, etc. will be paid off in 2027. New debt includes 195th Street which will start this year. This project will be paid off over 15 years. There are eight more projects which will incur new debt between 2019 and 2029. Payment for some street projects and city equipment will be with cash starting in 2020. Paying off debt and paying cash for projects leaves the city council with some decisions between 2020 and 2035 to either add new projects, reduce the levy, or a combination. Most of the equipment CIP is paid for through the tax levy as we go. There is $1 million in bonds included in the plan to pay for larger streets vehicles and fire department vehicles. City Administrator McKnight presented the debt levy projection starting in 2015 through 2034, which he estimated would increase by 3%for the first two years and 5%the third year for operations. The projected 2016 tax levy would be just over$10 million with a 9.16%increase or $839,806. This is to pay for the CIP,the deficit in fiscal disparities, etc. These numbers are very large and unrealistic. There are other sources through MSA and internal funding to pay for these items. Items not included are the second sheet of ice,pool conversion,park facility project at Jim Bell Park, ladder truck,buildings CIP and trail maintenance increases in 2021. This also does not consider the road and bridge fund transfers to the CIP (assessments from Vermillion River Crossings scheduled to come into the CIP in 2023-2027)and refunding opportunities. Growth is not included. This is the base line. Growth is in more residents and new homes. Councilmember Bonar was concerned with putting together a budget that does not reflect Council Work Session Minutes February 9,2015 Page 2 growth. We have to continually look for efficiencies. We are asking for more money, but not adding individuals or corporations. Everyone should have a stake in community development. Staff can look at how to forecast growth by obtaining history from the county. Councilmember Donnelly noted growth comes with a cost. We are doing what we can to get new businesses. We need shovel ready lots. Councilmember Bonar noted last year we were under 100 in new residential properties. He was concerned with raising taxes in that circumstance. We have a great plan,but we lack the means to fund it right now. Councilmember Pitcher noted in talking with residents the 9.16%will not go over with residents. We will have to manage things through efficiencies and providing good, quality services. Residents are frustrated that taxes are high. They do like the charm and hometown feel. Somehow we need to identify efficiencies, increase the tax base and get people to shop here maybe through more social media. Commercial growth would help. Residents want to support Farmington. The school board is also considering a ballot question. City Administrator McKnight noted this is the last year for the pool. Next year the plan was to convert the pool to a splash pad in 2016. After the city survey and input from various groups we would have a potential ballot question in 2016 regarding Jim Bell Park. He will bring proposed survey questions back to the city council to determine if we are hitting all areas the city council wants. He had a concern with spending time on the list of items not included in the CIP when there are concerns with funding the CIP. The survey will help determine what residents want. Mayor Larson felt the pool needs to close. It is falling apart and costing too much money. He was not in favor of installing a splash pad in that area either. He would be more in favor of putting in a splash pad in Jim Bell Park knowing we will not have a pool out there for quite some time. We could turn the pool area into fields and relieve some of the field congestion. If we do have a pool in Jim Bell Park he saw no reason to have a splash pad competing with it in another area. 195th Street Proiect Update The cost for the city is estimated at$5.8 million. Items which increased the cost include intersection control at Flagstaff Avenue and Akin Road with roundabouts,pedestrian underpass at Meadowview Elementary and expansion of Pilot Knob Road from two lanes to four lanes from 190th Street to 195th Street. Bids will be out mid-March. There could be a substantial reduction between the estimate and the bid amounts. There are two components in a project; paying the contractor and paying back the bonds. Pilot Knob and 195th Street are both eligible for MSA funds. MSA funds were not in the original CIP. We have over$1 million in the MSA account. Staff proposed to apply for MSA funding and use that as the down payment on the project and bond for the remaining cost. In the CIP, staff anticipated$4.38 million to pay back the bonds. If we have a$4.38 million bond issue that would leave$1.7 million more than anticipated. Staff proposed to use MSA funds to make up the difference to not destroy the integrity of the CIP. Council Work Session Minutes February 9,2015 Page 3 Mayor Larson asked about the Safe Route to Schools grant and if that could be used for the underpass. City Engineer Schorzman explained the funds to be used this year were issued a year ago and that is a very competitive program. The city council was in support of this funding approach. 195th Street Financing and Debt Management Opportunities There are two refmancing opportunities in 2016. The first is 1995A bonds where the city will owe$58,000. This bond was for wastewater treatment. Staff would like to fully repay the bond in February 2016. The 2005C bonds can also be redeemed in February 2016 and were used to finance fire station two. There is $1.385 million outstanding. Staff recommends using our own funds to pay them off and repay the city's advance from debt levy going forward. There are four more issues in February 2017; 2008A, 2008B,2010C, 2010D that we can redeem at that time. The 2007A bonds were used to finance city hall and the First Street garage. They will be redeemable in February 2017. Staff has been working with financial advisers on using our own money to pay off the portion of the bond related to the expansion space at city hall in hopes that it would remove the restriction on who we can rent to. The advisers are working with the IRS on this situation. Staff asked for feedback from the city council on how important that is in case the IRS says we have to fmd enough money to pay back the entire bond. Mayor Larson felt it was not our job to compete with other empty buildings in the city. Councilmember Bartholomay felt it could be a growth space for a current business. Staff asked if the city council would want$1 million of the bonds refinanced, or if that is not possible the entire $6 million. The city council consensus was to redeem $1 million if possible,not the entire bond. Councilmember Donnelly was also not in favor of competing with private businesses. There are some security issues that we would need to deal with. Councilmember Bonar would like to see rental numbers. Councilmember Bartholomay left at 7:50 p.m. Finance Director Hanson proposed the 195th Street project and the refunding of 2007A bonds be done together. There is also an advantage to staying under$10 million in bonds as it expands the amount of potential buyers and the bonds are considered"bank qualified." In combining these two we would be$500,000 over the target size, so staff recommended internally financing the $500,000. Mayor Larson asked about tracking all the internal funding. Staff would lay out all the internal financing on a spreadsheet and there would also be agreements. Finance Director Hanson reviewed the advantages and disadvantages of financing a portion of bond redemptions with internal financing. The 2015A bond issue will be brought to the city council at a public hearing on May 4, 2015. The bond closing would be July 15, 2015. Council Work Session Minutes February 9,2015 Page 4 2016 Highway 3 Project Update In 2016 MnDOT is planning a rehabilitation project on Highway 3 from Ash Street to 170th Street. City Engineer Schorzman would like to add to the project turn lanes on Highway 3 at 225th Street,turn lanes on Highway 3 at Centennial Drive and trail construction on the west side of Highway 3 from 194th Street to 190th Street by the roundabout. The city collected$37,500 from the developer of Executive Estates to pay for turn lanes at 225th Street and$37,500 from the Twin Ponds developer for turn lanes at Centennial Drive. The trail would complete an S- mile trail loop. Staff asked for Council's thoughts on these additions. A cost estimate is not yet available. Empire has indicated willingness to participate in the trail cost. MnDOT would pay 50% - 60% of the cost of the trail. Mayor Larson asked about the opportunity to recoup the cost of the trail as development occurs. City Engineer Schorzman explained the opportunity to work with the developer is to obtain right-of-way for the trail. Council reached a consensus for MnDOT to look at the project with all three additions. Cost estimates will be provided after further research. Flagstaff Avenue—179th Street Intersection Traffic Control Study Lakeville did a traffic control study at this intersection which is just north of Farmington. The recommendation was to place the dynamic speed signs on both the north and south sides of the intersection. The south side location would be in Farmington. Lakeville has asked if we would be willing to participate in the cost of the sign on the south side and increased enforcement. There would not be stop signs, only the speed signs. There are stop signs on 179th Street. The cost for the dynamic speed sign is $5,000. The city council reached a consensus to install the speed sign. Parking Restriction Request—Spruce Street Staff received a request to limit one to three of the parking spaces along the south side of 431 Third Street to two-hour parking. Staff is not in favor of this as enforcement is too difficult. The city council reached a consensus to have no restrictions. Calendar of Events 360 Communities Annual Luncheon will be held on February 13, 2015. Strategic planning will be held on Friday, March 6,2015, at 12:30 p.m. at city hall. MOTION by Bonar, second by Pitcher to adjourn at 8:30 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant