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HomeMy WebLinkAbout10.12.20 Work Session Minutes CITY OF FARMINGTON CITY COUNCIL MINUTES WORK SESSION OCTOBER 12,2020 Call to Order Mayo Larson called the work session to order at 6:00 p.m. Roll Call Present-Larson, Bernhjelm, Craig, Donnelly, and Hoy Also Present-Administrator McKnight, Finance Director Malecha, Parks and Recreation Director Malecha and Public Works Director Gehler Agenda Motion by Bernhjelm,second by Craig,to approve the agenda as presented.APIF, motion carried. 2021-2025 Capital Improvement Plan Public Works Director Gehler presented the draft 2021-2025 Capital Improvement Plan for city council review. The Capital Improvement Plan (CIP) is a long-range financial planning document intended to provide policy makers and the community with a strategic(documented) approach to capital purchases and replacements.The CIP informs decisions regarding the City's financial resources in relation to operating needs, existing debt and future capital needs.There are several revenue sources utilized to finance the CIP including tax levy, utility enterprise funds,trunk funds, Municipal State Aid (MSA), Liquor Operation proceeds and in some cases debt. The 5-year CIP is a planning document that is annually reviewed and updated based on current needs and other financial considerations. Projects and purchases identified in the CIP are incorporated into the current budget cycle. Many of the projects and purchases require further review and approval during project development. Capital projects and purchases are generally those$5,000 in value or greater that replace or significantly improve existing assets.The CIP is comprised of the following components: 1. Street Reconstruction 2. Pavement Management 3. Utilities(Water,Sanitary Sewer, Stormwater, Solid Waste) 4. Vehicles& Equipment 5. Trail and Sidewalk Maintenance 6. Park Improvements 7. Building Maintenance The draft plan has been reviewed by department staff in conjunction with the City Administrator.The plan will be discussed at the October 12, 2020 work session.While all of the plan is five years in length, the most important year of the plan is year one as these are the expenses and revenues included in the proposed budget for the next year. Each component of the plan outlines the capital expenses that are supported through a variety of funds. Each portion of the plan is generally described below with the changes noted from the 2020-2024 CIP.A summary of the funds supporting the plans is included in the budget section. Impacts to the enterprise funds is included in this report and will be reviewed at the work session. Street Reconstruction The Street Reconstruction plan is used to prioritize the major street reconstruction projects in the next five years. Reconstruction often includes replacement of the underlying infrastructure including water, sanitary sewer and storm sewer. Over the last year there have been opportunities that have presented themselves that have been incorporated into the CIP. 1. One of those opportunities is the potential redevelopment of an area east of TH3 between Willow Street and 209th Street. A study was completed in late 2019 that looked at how this area could be redeveloped and identified infrastructure to support this redevelopment when it occurs.With the recent Holiday Station Store development,there is an opportunity to move the plan forward in constructing a backage road (9th Street)from the store property south to Willow Street.This project has been incorporated into the CIP in 2022.Additional work will be needed to explore redevelopment opportunities and acquire ROW to allow this project to proceed. 2.The state and Dakota County have programed the construction of a roundabout at the intersection of TH3 and CR66 in 2022.The city will have cost contribution for the roundabout work through the County's cost share participation policy. In addition the extension of the sidewalk on the west side of TH3 will be completed with this project and will be financed through funds the city was awarded by the state through the Local Partnership Program (LPP). The last component of this project will entail extension of trail on the east side of TH3 from CR66 to 209th Street.This portion of the work will be fully funded by the city through a combination of funds from the Street Fund and the Stormwater Fund. 3.The 2020-2024 CIP had street projects programmed for 2022-2024, 2028 and 2029.The 2028 and 2029 projects have been moved forward to 2025 and 2026 with place holder street projects identified each year beyond.The projects are generally funded through bonding for the street portion of the work and directly from the utility funds for the water,sewer, and storm work. Pavement Management The Pavement Management plan accounts mid-life cycle maintenance of street pavements. The goal of the program is to complete the right pavement management strategy at the optimal time of surface degradation. Current techniques include mill and overlay, seal coating and crack sealing that are performed on the 85+ miles of streets each year. Over the last couple of years we have scaled back the seal coating work as pavements have been exhibiting a larger degree of the thin scaling. More emphasis has been put on milling and overlaying these pavements. $450,000 has been allocated to the mill and overlay program in 2021. Selection of roads will occur in the spring after the spring thaw. Equipment Replacement The Equipment Replacement Plan encompasses vehicles and large equipment required by our departments to perform their work.As previously discussed with the council during 2021 budget development, all 2021 General Fund fleet purchases have been postponed except Police vehicles. In addition the waste hauler scheduled for replacement in 2021 from the solid waste fund has also been postponed.The 2021 Plow truck in production scheduled to be funded from the general capital fleet fund has been shifted to the water fund.The sanitary sewer vactor truck scheduled in the Sanitary Sewer Fund remains in the fleet plan for replacement in 2021. Trail and Sidewalk Maintenance/Replacement A number of years ago the city established a trail pavement maintenance budget to help address the needs of our 40+ miles of trail in the city.This fund originally focused on pavement management strategies including crack sealing and fog sealing of bituminous trails. Many of these trails are near the end of their life cycle and replacement needs should be considered within this fund. In addition,there are a number of trail/sidewalk issues where replacement needs exist such as the downtown sidewalks and Prairie Waterway trails. The 2021 budget and five year CIP include minimal dollars for replacement work.The city will need to find additional funding for this work in a relatively short time frame to address these issues.Staff will discuss future funding options with the council at the work session. Utilities The utility portion of the CIP considers large capital projects and more significant maintenance projects of the water, sanitary sewer and stormwater systems. Utility piping replacements that are part of street projects are mirrored in each of the utility plans. Updates to these plans incorporate the shifts in the Street Reconstruction Plan along with general expense/revenue updates. In addition,the plans shown incorporate potential adjustments in the employee HR transfers to better represent the work performed.These adjustments are shown as a line item on each of the enterprise financial models.As you will note in the later years,we will have to consider funding options to support the street program. Park Improvements The Park Improvement Fund is dedicated to developing and redeveloping our park system.The funding for this fund comes from park dedication fees, park land lease payments and an annual transfer from liquor store profits. The Parks and Recreation Advisory Commission spends time each year developing a five-year plan along with city staff.The proposed 2021-2025 plan includes limited work in 2021 with work in moderate replacements in 2022-2025. Building Maintenance In 2017 the city completed a study to address the current and future maintenance needs of our many city facilities. During 2017, 2018 and 2019, city staff and contractors have completed a number of projects based on the study recommendations. The draft 2021 budget does not include funding for any facilities maintenance projects. It is important to note that there are large projects on the horizon that the city needs to determine a funding source. Roof replacements, HVAC equipment and more need to be maintained and replaced in our facilities that date back as far as the early 1970's. At the work session staff will review the documents and facilitate a discussion that will include the following: ❑ Employee HR Transfer percentages ❑Transfer of funds for downtown sidewalks ❑ Use of Municipal State Aid (MSA) ❑Annual street reconstruction projects Councilmember Bernhjelm asked if the streets CIP included city parking lots. Staff will ensure that parking lots are included. Councilmember Donnelly asked about the proposed 911 Street project and why the landowners would not pay for it. Gehler stated that since this is a redevelopment area, if the city wants to see it,we will need to pay for it. Councilmember Craig expressed concern about the cost of the 9th Street project. Gehler stated that we have approximately$250,000 in excess MSA funds. We have placed $150,000 in the street fund. Gehler shared how we are trying new products to help eliminate willow issues around trails. Gehler reviewed all of the utility funds and proposed financial models. Gehler discussed a potential change in human resources allocations that are currently weighted more on the General Fund as opposed to the utility funds. Staff and the city council discussed a number of proposed purchases and projects over the next five years. Considerable time was spent discussing the willow issue and their impact on trails and homes. Gehler discussed using potential human resources to add an additional position to concentrate on the willow issue. Discussion occurred about realistic options in dealing with the willow issue. Gehler reviewed the solid waste fund and how tonnage and cardboard is up this year. A proposed increase for 2021 was discussed. Administrator McKnight shared that Commissioner Slavik would be attending the November work session to discuss potential assistance in this area. The consensus of the city council was to move the proposed 91h Street project to 2022 and to have additional conversations in 2021 on this project. 2021 Draft Fee Schedule Finance Director Malecha presented the draft 2021 fee schedule for city council review. Each year the city places fees on a large variety of work items that are performed.The draft 2021 fee schedule is attached for your review. DISCUSSION The management team was asked to review the 2020 fee schedule to see if there were any fees that they wanted to recommend for adjustment in 2021.The attached draft fee schedule reflects the changes that are proposed for 2021.The changes are highlighted and in red font on the attached fee schedule. Below is a summary of the areas recommended for change in the city's 2021 fee schedule. • Fire o A fee of$150 per response for nuisance or unintentional alarms allows us to charge for someone working on an alarm or sprinkler system and fails to put the system in test mode and initiates a fire response. If the person puts the system in test mode it does not initiate a fire response.This fee to assist in eliminating false alarms that can be avoided. o The addition of the aerial ladder truck charge is recommended to be added at$525 per hour for non-contracted services.The rate is comparable to other area cities. o The addition of a temporary tent permit of$40 is recommended. It is currently charged, but not listed on the fee schedule. o The verbiage has been updated from Fire Sprinkler System to Fire Suppression System.The charges have not changed. o Addition of the Complaint, Requested,or Routine Fire Life Safety Inspection - Initial and Follow-up is recommended at no charge. On any fire inspection after the initial inspection the responsible party will receive a written corrections letter with any code violations and time frame for corrections.The letter contains a re-inspection date and time for a follow-up inspection.Any inspections after this requires a re- inspection and fee that is listed separately in the fee schedule. • Parks and Recreation (Rambling River Center Rental Rates) c An increase in annual membership from $37 to$38 for an individual is recommended. • Parks and Recreation (Schmitz-Maki Arena Rates) o Staff is recommending increasing the advertising rates$10 per year at the arena. There is a discounted rate if a business chooses to do a three-year advertisement. But, it must be paid in full up front. o An increase of$5 per hour in ice rental rates is recommended to help cover operational and maintenance costs. o An increase to the cost of skate sharpening to$4 per pair or$35 per 10 pairs is proposed by staff. • Permits- Building(General) o An addition of a $10 fee for cancelled permits is recommended. Currently,when an epermit is pulled the city incurs credit card fees.When the permit is cancelled and refunded the city has lost administrative time and the money charged for the credit card fees. • Utility Service Connection Permits o The city WAC fee is proposed to increase based on an estimated 2 percent construction cost index increase. • Platting Fees, Escrows, &Sureties (Area charges to support development) o The Sanitary Sewer Trunk Area Charge, Sealcoating Fee, Surface Water Management Fee,Surface Water Quality Management,Water Trunk Area Charge, and Park Development Fee are proposed to increase based on an estimated 2 percent construction cost index increase. • Water Tower Communication Devices (Base Lease Rate and Additional Antenna and Space Rental Lease) o These fees are proposed to increase 5 percent annually to align with the 5 percent annual increase included in our existing leases. o A request has been made to discuss this issue by a local, small scale provider that city staff is starting to discuss. You may see more on this request in the near future. • Utility Charges and Fees -The CIP for the utility enterprise funds will be reviewed this evening.These funds support the ongoing operations as well as capital replacement projects of the three major utilities. o Water-There is no increase proposed for this fund. o Sanitary Sewer-An increase of 4 percent to the base fee and volume charges are being proposed this evening.There was no increase in 2020. o Storm Water-There is no increase proposed for this fund. • Other o Removal of Solid Waste Collection (See Schedule Q. Schedule C was consolidated with the main fee schedule in 2020. • Solid Waste Charges and Fees o The proposed rate increase for 2020 is 5 percent. o An increase of$5 for the per trip charge to empty a temporary 300 gallon container is proposed. With the increase the charge would be consistent with a return collection trip charge. o An increase in the time limit for residential rolloffs from 1 week to 2 weeks is proposed. o Recommended changes to the commercial rolloffs include increasing 5 percent per load to$150.15 and decreasing the disposal per ton cost to$128. All of the proposed parks and recreation fees were reviewed and recommended for approval by both the Rambling River Center Advisory Board and the Park and Recreation Commission. The proposed water fees were reviewed and recommended for approval by the Water Board. Councilmember Craig asked about the proposed nuisance fire alarm fee and how often these occur. Administrator McKnight shared that it was enough to cause the fire chief to propose this few. Councilmember Bernhjelm asked how we advertise the advertisement opportunities at the arena. Parks and Recreation Director Distad shared that we do reach out to businesses. Bernhjelm stated this could be a potential EDA opportunity as well. The city council was comfortable brining this issue back at a public hearing on November 16, 2020. CARES Act Grant Funding and Reimbursement Finance Director Malecha updated the city council on the CARES Act grant funding and reimbursements. The city received an allocation of$1,723,785 from the CARES Act.The allocation provides for expense reimbursement, but not revenue replacement for lost revenues.The CARES Act funding can only be used to cover costs that: • are necessary expenditures incurred due to the public health emergency with respect to COVID- 19. • were not accounted for in the budget most recently approved as of March 27,2020. • were incurred during the covered period of March 1, 2020 through November 15, 2020.Those dates are for cities only. The guidance provided by the United States Treasury is broad and staff continues to utilize the information as it is updated.The expenses that are eligible include: • Medical • Public Heath • Payroll • Public Health Measures • Economic Support At the August 3rd and October 5th city council meetings the council approved $1,642,190.69 in expenditures for cleaning supplies, PPE,equipment, building materials, IT equipment,wages, and grants to local businesses. The city invests funds in various CD's and bonds. At the end of the month each fund with a cash balance receives a portion of the interest income based upon the balance of the fund.The fund for the CARES Act money received a portion of the interest income. Per the Treasury guidelines, any interest earned can only be used to cover expenditures incurred due to COVID-19.The fund has earned$3,900.62 in interest income for July and August. It will continue to earn interest until the funds are depleted. With the current interest income included,the city has$85,494.93 in CARES Act funding remaining. The city still has additional wages that the CARES Act funding can be used to reimburse.The Families First Coronavirus Response Act(FFCRA) requires employers to provide employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.The city has$23,987.17 in expenses related to the FFCRA that can be reimbursed using CARES Act funding.The unemployment expenses for first,second and third quarter were$23,700.03 that can also be reimbursed.The most recent Treasury guidance allows for reimbursement of public safety wages.The city currently has over $1 million in public safety wages for the covered period. Funding requests have been received from numerous organizations as listed below.They would be required to follow the same Treasury guidance for expense reimbursement and also sign subrecipient grant agreements. Organization Amount Requested ISD#192 $64,550 Fairview Ridges 55,963 360 Communities 15,000 It is necessary to determine the allocation of the remaining funds as the October 19th city council meeting will be the last meeting before the end of the covered period. If the city still has funds at the end of the covered period they must be returned to Dakota County. Malecha stated that recent guidance from the Department of Treasury on the use of the CARES dollars on public health and public safety wages. These wages are now eligible to reimbursement using CARES dollars. The city council and staff were comfortable submitting the full $1.7 million in public safety wages and the proposed projects already approved by the city council. This will help ensure that our full allotment of CARES dollars are spent. The city council asked staff to reach out to 360 Communities to see if they have the eligible expenses for the $15,000 they requested. City Administrator Update Administrator McKnight updated the city council on the following items- ✓ Pilot Knob Liquor Store has returned to regular hours. ✓ City staff is reviewing a drainage project from 2016 that has failed. More information will be brought back in November for the city council to review. ✓ Verified the November 12, 2020 city council meeting to canvass the results of the election. ✓ Reviewed a potential drainage issue on Akin Road. More information will be brought back to the city council on this issue. Adjourn Motion by Hoyt, second by Craig,to adjourn the meeting at 7:36 p.m.APIF, motion carried.