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HomeMy WebLinkAbout01.11.10 Work Session Minutes Council Workshop Minutes January 11,2010 Mayor Larson called the workshop to order at 6:30 p.m. Present: Absent: Larson, Donnelly, May, Wilson Fogarty Also present: Peter Herlofsky, City Administrator; Kevin Schorzman, City Engineer; Cynthia Muller, Executive Assistant MOTION by Wilson, second by May to approve the agenda. Councilmember Wilson requested allowing any residents that arrive to speak at 7:30 p.m. MOTION CARRIED. General Ene:ineerine: Discussion There are currently three employees in the Engineering Department - a City Engineer, a Civil Engineer, and an Engineering Technician, A discussion followed regarding the education and testing required for these positions and the duties they perform. Also covered was how resident issues are handled, agency reporting, and utility permits, Councilmember May asked if any of the items requiring consultant services could be done by City staff with more time and experience, City Engineer Schorzman stated when we hire a consultant, that is what they do everyday, Staff would not get to the same level as a consultant because of the variety of duties that have to be done. That level of expertise is not needed on a daily basis. The biggest benefit with Bonestroo is the knowledge, experience and history with the City, Councilmember May felt it was good practice to go through the RFP process at regular intervals. It is good practice and it creates a level of transparency. Staff cautioned you may find a cheaper rate, but without the history you may have to pay more for the project work. The next discussion covered project cost breakdown. The design of a project is approximately 6% of a proj ect. Too much time is spent on the 6% instead of focusing on the larger area. We need to focus on the larger area to save money as there are more pieces that affect the cost of the project. Mayor Larson agreed, but stated we do not always need the top of the line, We can save money by not over-designing projects, Staff noted as a way to save money for the Walnut Street project they are proposing to make the contractor responsible for maintaining the seed bed in a moist condition for 45 days rather than using sod. Putting seed in the ground and not watering it, is not completing the project. Consultine: Ene:ineerine: Services City Engineer Schorzman felt it was important to distinguish between commodities and professional services. Treating them the same, you end up losing in the long run. Professional services should be long term because it takes time to build the knowledge and relationships when you change. Mayor Larson felt everyone knew we would need to use a consulting firm. Council Workshop Minutes January 11,2010 Page 2 Councilmember May asked what someone does that is on a retainer. If there is not a big project, they work on daily items just as any other employee. We have someone on a retainer for the additional help and to keep from hiring a fulltime person. Councilmember Wilson asked if it takes four fulltime people to get things done. Staff confirmed we do need at least four people. When someone works on a retainer, they cover general engineering duties and the cost comes out of the general fund. If that person works on a specific project, it is charged to that fund. Any consultant that we have working here, we want them to stay in business. If they lose money here, no engineering firm will stay here. With going out for RFP, there is the potential they will low ball the cost to get in the door. Councilmember Wilson was concerned about the amount of contractors in the field working on a project. City Engineer Schorzman replied it is possible there have been four people at a project at the same time. Last year he had more City employees out in the field to gain knowledge from the consultant. He firmly believes in having eyes on a project. City Administrator Herlofsky stated if we change engineering firms, we would need another fulltime employee. With having a City Engineer as a City employee we have changed how consultants are managed. There was a period of time where Bonestroo knew more about the City than City staff. That is beginning to change, He recommended staying with Bonestroo. City Engineer Schorzman stated he cannot be here for three years and know everything someone who has been here for 15 years knows. The knowledge is intangible. Mayor Larson wanted to continue to send projects out for bid. City Engineer Schorzman felt other engineering firms could come in and do a reconstruction project following our comprehensive plan. The other side is, do you wipe the slate clean and have som~one new come in and do everything or do you keep the people with the knowledge for the things you need the knowledge for and shop around to get the best deals on things that make sense to do that. If we don't have well thought out, long term plans, making a 1 % mistake in the 94% of the project has the exact impact as taking 1 % out of it. Not all cities have a consultant on retainer, but they have more City staff. Those cities still use consultants on big projects. Councilmember May agreed for now we do need someone on a retainer, but to eventually work away from that. City Engineer Schorzman stated long term there will be a point in the City where if we can maintain staff here and learn about what we have and they stay, we may be able to migrate away from a retainer. Council was under the impression that the cost of the retainer was the only cost to the City, but there is also the amount charged to specific projects. Councilmember Donnelly asked if it was cheaper to put someone on staff. City Engineer Schorzman stated it comes down to the knowledge. The only way to learn about our infrastructure is to be here and see it. Councilmember May felt we should still go out for RFP for a consultant periodically. City Engineer Schorzman stated if we do that, it would be wise to enter into a 5-10 year contract so you can get the knowledge transferred and use it. We do not have the time to train engineers annually. Mayor Larson asked what we can do differently to save money. City Engineer Schorzman stated the City could go out for RFP on bigger projects. It is in the City's best interest when comparingnrates and knowledge, to keep the retainer for at least two more years and continue to use Bonestroo for long term planning. Once you have gone down a path, you need to maintain that Council Workshop Minutes January 11,2010 Page 3 path. Mayor Larson agreed we have seen a savings by going out for bid on projects. He also felt it was important to not over-design proj ects and wanted staff to make sure that does not happen. Councilmember May felt eventually it would be nice to not have an engineer on retainer. She agreed with keeping the current situation for two years and then go out for RFP or hire someone, She asked if there is a Bonestroo contract in place that needs to be reviewed and are we still on the same numbers as 2008 because they did not increase in 2009. City Engineer Schorzman stated Bonestroo has requested an increase to the dollar amount of the retainer. In 2008 we assumed 10 hours of work would be done per week for the retainer. That has turned out to be 12 hours per week that they have not been getting compensated for. Councilmember Wilson was comfortable with the two years and then look at an RFP. Councilmember May asked about the amount of the increase, It is $7,000/year based on a history of actual activity. Councilmember May noted all the employees who did not receive an increase and the public is going to hear increase; so why do that? Staff stated we can tell them the retainer stays at $30,000 and it is then up to them. Councilmember May felt there was sensitivity to the increase. Staff suggested doing a two year contract with Bonestroo and then re- evaluate everything. Development Fees City Engineer Schorzman stated to calculate development fees, you start with a cost. The cost is based on the comp plan and regulations in place at the time. The remaining storm sewer at complete build out will cost the City $47 million in today's dollars, If the regulations change, the cost will change. There are many regulations that need to be addressed that are regulated by different agencies. The $47 million is based on staffs assessment of where we are now and what it would cost to build it out today. A discussion followed on how to calculate the fee and what it included, Councilmember Wilson was concerned about the lack of competitiveness in development with fee increases. Staff stated they are working under the assumption that to develop in this community to full build out you have this cost. How you chose to make it palatable for developers is a policy decision. Up until now Council direction has been development pays for itself. Councilmember May asked why the fees were so out of line and why the need for the big increase? City Engineer Schorzman stated the biggest difference between ten years and now is the increase in regulations and the change to our system that was required. Weare in a unique situation; the Vermillion River drives everything here. Councilmember Wilson suggested reaching out for grant money and explore partnerships and at the same time increase fees and revisit the issue in mid-20 10. Staff stated we have received money from various organizations for projects such as the North Creek re-meandering. Councilmember Donnelly stated when a developer develops property; they put in their own streets, water, sewer, etc. He asked what the $47 million pays for. City Engineer Schorzman stated the City acts like a banle When development comes in that cannot build what they need because of limitations to size, etc., staff collects these fees. Then when development happens where the infrastructure needs to go, the developer builds it for their development, but it also needs to take care of these people who did not take care of themselves before. For doing that, we take the money the first developer gave us and credit it toward the second development. City Council Workshop Minutes January]],20]0 Page 4 Administrator Herlofsky felt having developers pay for their own development is the right policy. Councilmember Donnelly asked if this was a large enough increase that even though they may own the land, they cannot afford to pay the fees and will not develop it. A discussion followed about land in surrounding areas. Councilmember Wilson asked if some areas of the City are more expensive than others. Staff stated the area east of TH3 would be more expensive because of its proximity to the river. Councilmember May asked if it was wrong to think the other way; that we all pay a piece of development because it would bring more growth and more tax base. Isn't it a benefit to have more taxpayers and then get more business? With these increases we are saying we will not grow in the immediate future. Councilmember Wilson stated that would mean adding to the utility bill. Councilmember May stated if we get more people, then we get more business. Staff stated that is an option presented on the spreadsheet; to add to the storm water utility fee. Councilmember May felt we need to do what we can to be competitive. Councilmember Donnelly would like to see other fees and how competitive we are. City Engineer Schorzman stated last year he compared our development fees plus our utility rates with other cities. The way Lakeville is set up, you would never break even; it will always be cheaper in Lakeville. With Rosemount we had higher development fees, but the utility rates were lower and some of the turnaround was between 20-30 years before it would be cheaper to be in Farmington because of our utility rates. He suggested Council not just focus on development fees. It may be more of a sales issue than a policy issue. City Engineer Schorzman will discuss development fees with developers who do not plan on building here so they do not have a vested interest in the outcome. MOTION by Wilson, second by May to adjourn at 9:51 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~_~tLJ-r?~ // ~Ynthia Muller Executive Assistant