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HomeMy WebLinkAboutCCWS 05-15-2006 ~ . ~~ILLS Approved: 6/12/2006 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION MONDAY, MAY 15, 2006, 5:15 P.M. CITY HALL COUNCIL CHAMBERS, 1245 WEST HIGHWAY 96 Call To Order Mayor Aplikowski called the meeting to order at 5:15 PM. Present: Mayor Aplikowski, Councilmembers: Gregg Larson, David Grant, Brenda Holden, and Vince Pellegrin Absent: None Staff present: City Administrator, Michelle Wolfe; Chief Finance Officer, Murtuza Siddiqui; Assistant City Administrator, Schawn Jolmson; Civil Engineer, Kris Giga; Community Development Director, Karen Barton; City Planner, James Lehnhoff; Building Official, Dave Scherbel; and Building Inspector, Jolm Mennenga; . 2005 Audit Report Chief Financial Officer Murtuza Siddiqui introduced Steve McDonald with the auditing firm of Abdo, Eick, & Meyers to the City Council. Mr. McDonald noted that his firm recently complcted its audit of the City's 2005 financial records. Mr. McDonald noted that his firm does not test 100% of the City's financial items. They concentrate on analyzing the City's journal entries and financial risk assessment. Due to the City's recent fraud case, Abdo, Eick, & Meyers have implemented more detailed financial testing for the City of Arden Hills and their other clients. Councilmember Larson asked why a declaration statement was not included in past audit reports. Mr. Steve McDonald said that the auditor recently noticed that the declaration statement was not located on the City's checks this past year. The problem was reported to the City's finance department and has already been changed. Councilmember Larson asked what other financial related activities the City should change in order to avoid future fraud cases. Steve McDonald said that the separation of duties is very important in a small organization like Arden Hills. The City has done a good job recently of separating out the mail opening, data entry, and check processing procedures. . Mayor Aplikowski asked what is the general purpose of an audit. May 15, 2006 2 . Mr. McDonald said that local governments are required by state statute to have an audit completed on a yearly basis. Also, the City's bonding rating can be affected by an audit. It is also good to have an outside source review your processes and procedures for handling financial transactions. Mayor Aplikowski said that the separation of duties is very important in an organization like Arden Hills. Coul1cilmember Larson asked about the increased number of journal entries at the end of this past year. Chief Financial Officer Murtuza Siddiqui stated that the majority of the entries are standard year end entries. A few adjustments were made in relation to the reclassification of the of the object codes. Councilmember Larson recommended that the City Council adopt a policy that ensures that the City has a reserve of 40% of its general fund balance on a yearly basis. The City could designate any reserves to the PIR fund. Chief Financial Officer Siddiqui noted that the City should consider developing a fund balance . policy covering all of the City funds. Mr. Steve McDonald completed an overview of the City's different fund balances for the City Council. Members of the City Council agreed to have the financial audit report placed on the consent agenda at a future City Council meeting. Account Code Restructure Chief Financial Officer Murtuza Siddiqui reported that the City's current financial system has been in placc for over ten years. The current system consists of five major fund categories and multiple departments. Within each department there are numerous categories and object codes. A majority of these codes were created for specific purposes to track the expenses of a particular vendor or object code. Due to the City's recent fraud case, Chief Financial Officer Siddiqui recommended to the City Council that the City explore the possibility of reducing the number of account codes for the City. This may help the City in identifying potential fraud in the future and also assist in the management of reviewing monthly reports. City Administrator Wolfe said that the City of Arden Hills current budget code system is very cumbersome. It is difficult for staff members to track their expenditures using this system. It is a critical part of a department heads job to track expenditures. The transition to the proposed . changes in the City's accounting system may be a challenge at first, but it should be worth it in the end. May 15, 2006 3 , Chief Financial Officer Siddiqui said that the first year of the proposed change will be challenging for the City Council and City staff. Councilmember Holdcn asked how City staff would monitor utility costs. Mr. Siddiqui said that the City could continue to monitor expenses by using the activity codes and the specific fund it is being charged to. Charges are broken down into three funds, i.e. water, sewer, and surface water. Mr. Siddiqui is also researching the possibility of combining different departments into one account fund. For example, police and fire could possibly be combined to create a public safety fund. Councilmember Grant agreed with the proposed changes. He requested that important financial detail will not get lost in this change. Councilmember Pellegrin asked why City staff brought this information forward to the City Council. In his opinion, this type of item should be handled by City staff and monitored by the City Administrator. e City Administrator Wolfe stated that this information is for members of the City Council to gain a greater understanding of the proposed changes and not to surprise members of the City Council when City staff begins to prepare the budget for next year. Members of the City Council were agreeable to the proposed accounting code changes and recommended that these changes be brought forth to the City Council in the proposed 2007 budget. Code Enforcement Issues Community Development Director Karen Barton provided the City Council with an overview of the City's current code enforcement policies and philosophy. At this time, the City's code enforcement program is complaint driven. The primary complaints staff responds to are junk vehicles, outdoor storage, junk, debris, weeds, tall grass, snow removal, and barking dogs. Typically the process for code enforcement issues involves receiving a complaint, investigating the complaint, writing a compliance order, and continuing to follow-up until the issue is resolved. Typically this process can take from two weeks to several months to complete. There are a number of ways in which a code enforcement program can be operated. The following are a few options for the City Council to consider: . Complaint Based; . Proactive Program; , . Hybrid of the Complaint Based and Proactive Programs. May 15, 2006 4 , City staff s concerns with adopting a proactive or hybrid system is that code enforcement will entail additional staffto handle the effective enforcement of housing maintenance violations. Community Development Director Barton said that the City currently utilizes section 600 of the City Code, and portions of several other sections. In order to be more proactive and effective in our enforcement program, City staff recommends that the City adopt a housing maintenance code or property maintenance program. Building Official Dave Scherbel noted that the Cities of Roseville and Blaine have recently adopted the International Property Maintenance Code. Councilmember Grant said that his concern with the reactive form of code enforcement is that residents don't complain about the neighborhood problems and the property values in Arden Hills begin to decrease. The City's goal should be to maintain our current housing stock. Councilmember Grant proposed that the City Council should allow City staff to concentrate on a few major clean-up issues each year. Building Official Dave Scherbel said that the City of Roseville recently passed the International Housing Maintenance Code to prioritize housing issues for the City and to protect the City's housing stock from deteriorating. e Councilmember Grant asked if the adoption of a housing maintenance code would increase the building department's work load. Mr. Scherbel said that the proposed change would result in more work for staff, but it would also give the City another tool to enforce maintenance code violations. Councilmember Larson said that a housing maintenance code will be necessary for the City to resolve on-going housing maintenance code issues in the City. A housing maintenance code would be a tool for to allow staff to do their job more efficiently and effectively. Councilmember Pellegrin said that he was in favor of a hybrid plan. He would like to see a more proactive system to deal with code enforcement issues. It should be staff s professional discretion whether or not a violation is dealt with quickly even though it has not been reported to City hall. Members of the City Council were in agreement that City staff should take a more proactive stance in regards to code enforcement violations. It is important for the City to begin protecting the market value of the City's housing stock. A sub-committee including Mayor Aplikowksi, Councilmember Grant, members of the Planning Commission, and residents was recommended to review the possibility of implementing a property maintenance code and perhaps a "Point of Sale" housing program for the City. , Councilmember Pellegrin was excused from the meeting at 6:45 PM. May 15,2006 5 e CIP Discussion Civil Engineer Kris Giga provided the City Council with of an overview of the GoodPointe Technologies report. Ms. Giga also provided the City Council with an overview of the following street maintenance practices and procedures: Seal Coat-A seal coat is one of many types of surface treatment used in street maintenance. A seal coat is an application of asphalt emulsion followed immediately with an aggregate cover. Seal coat can waterproof the surface, provide low severity crack sealing, and restore surface friction. Seal coating can be performed at any time during the life of pavement and lasts an average of three to six years. The primary purpose of seal coating a street is to protect the street from deterioration caused by sun and water. A seal coat provides a waterproof membrane that keeps the pavement from becoming brittle and cracking. Mill and Overlay-There are several maintenance practices that involve milling. An edge mill typically consists of grinding the old bituminous surface along the outer eight feet of the strect. This helps establish a uniform cross-section, especially in instances where the crown in the street is relatively flat. A full width mill or resurfacing is necessary when the upper surface layer of a pavement has deteriorated considerably. e A full depth mill can be used on a street that has already been reconstructed with a good base section, but the pavement has deteriorated to a point where seal coating or a standard mill and overlay is not effective. A pavement section with significant cracking will end up reflecting through the new pavement. The full depth of the pavement is ground up and removed. This process may also involve some sub grade soil corrections and some removal of aggregate base, if it has been contaminated or is sub-standard. The street is paved with the same thickness of new asphalt. Reconstruction- When a street is fully reconstructed, the existing asphalt and base are completely removed and replaced. Reconstruction may also involve sub-grade soil corrections. For streets that do not meet current design standards for width, curb and gutter, and drainage, an upgrade may be necessary. Based upon the City's prevIOus five year capital improvement program, GoodPointe Technologies provided the City with four financial analyses using the following scenarios: Scenario I-The City would spend $1 million dollars per year on street improvements over the next twenty years. The existing five year CIP has been incorporated into the first five years of the model. Over the next twenty years, the average PCI would increase from 64 to 77. Scenario 2- The City would try to maintain a PCI rating of 64 and project the level of funding over the next twenty years to maintain this rating. The streets are selected by the program for , maintenance on an as needed basis. The results of this scenario indicate that approximately $14.5 million will need to be budgeted for pavement management over the next 20 years. ------.--- May 15, 2006 6 , Scenario 3- A PCI value of 75 is an average benchmark for a number of cities in the metro area. In order to the City to maintain a PCI rating of 75, the City would invest approximately $16 million over the next twenty years for street improvements. Scenario 4- If the City adopted the existing CIP, the average PCI rate for the City would be 65 after the five year period. The projected results would be very similar to scenario number 2. Councilmember Grant asked what are the different types of seal coat that are available. Roseville Public Works Director Duane Schwartz stated that most communities use pea gravel and aggregate rock. Most cities use the aggregate rock because it wears better and is more economical. Councilmember Holden asked how long the top coat of a typical street lasts. Mr. Schwartz said that the top coat of a street will usually last three to six years. It is important for the City to develop a maintenance strategy to address street improvements, storm water drainage, curbs, gutters, utilities, and other maintenance issues. Typically pothole patching is a stop gap measure and not a permanent solution for repairing the roadways. Councilmember Holden asked why the software program did not recommend more streets for e mill and overlay. Mr. Duane Schwartz noted that streets that have curb and gutter may not be considered a candidate for an edge mill and overlay. Councilmember Holden said that it would be more advantageous for the City to mill and overly streets if it is possible. City Adminsitrator Wolfe said that the proposed CIP will change based upon the PCI ratings. It may be wise for the City to invest more money up-front to obtain a standard PCI rating for all of the City's streets. Councilmember Grant asked what Roseville's PCI goal is? Mr. Duane Schwartz said that Roseville's PCI goal is 75. The City began with a PCI rating of 55 at the beginning of its street maintenance program. On a yearly basis, the City would reconstruct four to five miles of street a year in order to bring the City's PCI rating up to 75. In the beginning for the City of Roseville to get their street maintenance program off the ground, the City bonded for street improvements in 1988. Recently the City of Roseville has not bonded for improvement projects and has been able to utilize the interest earned from the bonds to pay for future road improvements. , Councilmember Larson noted that the PCI infonuation presented tonight was very helpful. He would be in favor of supporting option #3. May 15, 2006 7 e Mayor Aplikowski agreed with Councilmember Larson that a number of streets are at their critical life point and need to have maintenance work. She would be in favor of researching the bonding proposal as supplement funding to the City's PMP budget. Councilmember Grant said that he is supportive of option #3, but not the idea of bonding for road improvement projects. Councilmember Holden said that she is supportive of option #3. She believes that the City should adopt a road maintenance policy before proceeding with a funding discussion. City Administrator Wolfe said that City staff will continue to research street improvements, MSA projects, and the capital equipment replacement schedule for the proposed five year CIP. Councilmember Holden asked if the City would continue to proceed with the neighborhood approach to PMP projects. City Administrator Wolfe said that the City will attempt to continue utilizing the neighborhood PMP approach. The City may not be able to utilize the neighborhood approach for all of the street improvement projects. Councilmember Holden said that the City needs to concentrate on maintaining the marginal streets that can be repaired using seal coats or mill and overlay. e Counci1member Larson agrees with Councilmember Holden's street improvement philosophy. The City needs to find the necessary revenue needed to make these improvement projects a reality. Councilmember Holden requested that City staff prepare a road maintenance program for the City. City Adminsitrator Wolfe said that City staff will attempt to complete a draft program within the next six months. A draft CIP will be presented to the City Council at the work session meeting in July. ProDosed Chanees to the City's Website Members of the City Council reviewed the proposed changes to the City's web site and requested that this item be placed on the agenda at the next City Council meeting for further discussion. City Council Retreat Follow-uD City Administrator Michelle Wolfe provided the City Council with a follow-up to the City Council's retreat in March. The following is the proposed list of goals for the City Council for 2006-2009: I. TCAAP e 2. CIP Priorities 3. Road Changes-Benchmarks/description of what Arden Hills wants May 15, 2006 8 e 4. Strong Regional relationships with other cities 5. Parks/Trail visions and budget/action plan; response to committee's work 6. Vision and/or philosophy and/or policy on: . Strong neighborhoods . Strong businesses . Fiscal responsibility . Police . Fire . Co'mmunication with residents 7. Committees/Commission structure philosophy and role definitions 8. Leadershiplbuilding staff capacity/Retaining good staff 9. Infrastructure revenue needs. (How are we are going to pay for all this?) 10. Library 11. Philosophy of development and redevelopment cost and investment vs. status quo. Councilmember Holden requested that item number three of the City Council's goals be reworded. City Administrator Wolfe suggested that item three be changed to "CIP Priorities- PMP Philosophy." Members of the City Council were in agreement with the proposed change to item number three e of the City's goals and objectives and that the "Tone of Debate/Civil Disclosure" section of the City Council retreat be included in future meeting packets. Celebratinl! Arden Hills City Administrator Wolfe provided the City Council with an update on the financial contributions the City has received from local resident, organizations, and businesses for this year's event. City staff will also e-mail a formal letter to the councilmembers for distribution when they are seeking donations for this year's event. Plantinl! Dav Recreation Supervisor Michelle Olson is organizing this year's planting day. The event will he held on May 20th at Royal Oak Hills Park and City Hall. A local Girl Scout troop has volunteered to assist with this year's plantings. Fraud Case The sentencing hearing for Sandy Berres is scheduled for May 19th at approximately 9:00 AM. The sentencing will take place at the Ramsey County Government Center in St. Paul. e The meeting adjourned at 8:15 PM May 15,2006 9 e Respectfully submitted by Schawn P. Johnson rv1~JtJQW ~~ ft~ Beverly lik wski, MAYOR Michelle A. Wolfe, CITY ADMINISTRATOR . e