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HomeMy WebLinkAbout09-09-24-WS -SR E HILLS Approved: October 14, 2024 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION SEPTEMBER 9, 2024 5:30 P.M. -ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor David Grant called to order the City Council Work Session at 5:30p.m. Present: Mayor David Grant, Councilmembers Tom Fabel, Brenda Holden, Tena Monson and Emily Rousseau Absent: None Also present: Interim City Administrator Jessica Jagoe; Finance Director Joua Yang; Public Works Director/City Engineer David Swearingen; Assistant Public Works Director, Lucas Miller and Assistant to the City Administrator/City Clerk Julie Hanson 1. PUBLIC INQUIRIES/INFORMATIONAL None. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. 2025 Park Improvements Design Discussion Assistant Public Works Director Miller stated that the PTRC met on August 20. They reviewed the survey results from the open house and the online survey. They recommended following the majority recommendation of the park users' surveys for both the play structure types and colors. They also recommended a shade structure be added to the Arden Hills Park. Assistant Public Works Director Miller introduced Bryce Shearen from Bolton and Menk to go over the structure and color survey results. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 2 Bryce Shearen pointed to the survey results included in the agenda packet. He stated that the open house was well attended. They wanted to capture as many opinions as possible so the survey was provided online for residents who couldn't attend the open house. Bryce Shearen discussed the survey results for Arden Oaks Park. He said Option 1 had the greatest number of votes. It is the larger structure. The color palette was Option 5. Bryce Shearen said the survey respondents selected Option 4 for Freeway Park had Option 4 had the greatest number of votes. Option 5 was the chosen color palette, for this park, as well. Bryce Shearen noted there was some discussion regarding the parks looking a little different. Selecting the second color choice for one of the play structures may be an option. Bryce Shearen discussed the cost. He said these play structures can be purchased using competitive purchasing agreements to receive a discounted price. He showed the difference between the retail cost and the cost with competitive purchasing agreement. MWP also offers grants. He showed the prices of each park, after discounts and if the City applied for the grant and were awarded the maximum grant amount. There is no guarantee that a grant will be awarded, but with Council direction, they will get started on the application process. He said the grant amount is capped and they are awarded on a first come, first served basis. Mayor Grant asked when the grant application opens. Bryce Shearen said the grant opened at the beginning of August and will close in the middle of October or when funds run out. Councilmember Holden recalled the City received a grant from a playground vendor. She thinks typically they quote you expensive cost and then give you 30% off. Bryce Shearen confirmed. He said if the grant is not approved or we don't receive enough funds, we would deny the grant and buy the equipment through the purchasing contract. He said there are still a lot of moving pieces with both of these projects. Narrowing down these details will help the projects to continue moving forward. Future discussions will include ADA access, adding trails and a possible fence or barrier. Councilmember Monson noted the budget is $150,000 for the playground structure. She looked at Freeway Park. She noted that if we went with Option 4, through St. Croix Rec, we'd be there. She asked for confirmation that there's no grant option for that one. Bryce Shearen confirmed. The purchase would be made through the state purchasing contract. Councilmember Monson asked if MWP offered Option 4. Bryce Shearen said no. That is a different manufacturer. Councilmember Monson asked about Arden Oaks Park. If Option 1 was selected, that would be MWP. She said if we don't the grant it would be $67,000 over budget. With the grant we would be $25,000 over budget. Bryce Shearen confirmed. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 3 Public Works Director and City Engineer Swearingen wanted to add that the budget for the hard-court rehabs is probably over-budgeted. Any overage in that budget could be allocated towards the structures. Councilmember Monson clarified that additional budget funds for Freeway Park, could be allocated to Arden Hills Park. Public Works Director and City Engineer Swearingen confirmed. Councilmember Holden thought that Option 1 was quoted from St. Croix and that MWP would probably have something very similar. Bryce Shearen stated they may have something similar, but not in the budget that was specified. The vendors were given the budget, and these were the options we received. Mayor Grant asked if there were any concerns if we chose a different vendor for the two parks. Bryce Shearen said he doesn't have any concern about using two vendors but would defer to staff about what they were comfortable with. Public Works Director and City Engineer Swearingen said Public Works is comfortable with it. Councilmember Holden said typically if a slide or other equipment breaks, there's one on hand because the same equipment was used throughout the parks. She asked if that will be an issue. Public Works Director and City Engineer Swearingen is not worried about that. He said having two different contacts to deal with is not a concern. Councilmember Monson remembered discussion at the open house that one of the parks be a traditional playground and the other be a nature-based playground. She is curious if that is an option. Bryce Shearen said he talked to the vendors after that meeting and they both said that is an option. They can design whatever we want. That would mean taking a step back and letting residents vote on that type of equipment. He has not requested proposals from the vendors, but he can do that, if Council wishes. Councilmember Monson wondered if he had a price range for what a nature-based playground would cost, or what $150,000 could buy. Bryce Shearen said those are custom playgrounds. He would anticipate there would be fewer features in that type of play structure. Councilmember Monson wondered what Council appetite would be for moving forward with Freeway Park this year because that falls into the budget. Then hold off on Arden Oaks to see what a nature-based playground could look like. Then the projects would be staggered. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 4 Councilmember Fabel asked how much of the expenditure for this project is built into the 2025 budget numbers that will be discussed later in tonight's meeting. Finance Director Yang said the entire $475,000 is in there. Councilmember Fabel said his concern is one of the issues to be discussed later is the expansion of the Public Works Department, to include a full time Parks position. He believes that position is a higher priority than some of this equipment. He wondered if money could be transferred from the Capital Improvement Fund into the General Fund to cover that. Finance Director Yang confirmed. Councilmember Fabel said he is concerned about the Public Works position. He thinks that's important. Mayor Grant asked Councilmember Monson to provide a better understanding about what a nature-based playground is. Councilmember Monson said they are not a traditional playground structure. The ones she has seen are well built with a lot of investment. They can have streams and sand pits and rocks to climb and trees to build forts. She doesn't envision the City would have one that extensive. She is willing to explore the options because she just doesn't know what could be included on the City's budget. Mayor Grant asked what the useful life of a play structure is. Bryce Shearen said they should be programmed at 20 years. Councilmember Holden asked what parks are next in line to be improved. Public Works Director and City Engineer Swearingen replied Ingerson and Sampson in 2027 and Royal Hills in 2029. Councilmember Holden doesn't think Arden Oaks is the right location to have a nature-based playground. It has a lot of sun exposure. She thinks a location with more shade trees would be a better option. She said Sampson is a smaller park on two major pathways. She thought that might be a good location to consider. Councilmember Rousseau was hoping there would be a variation that included a ninja course. She didn't know if that might become outdated in a short time. She agrees that Arden Oaks is not the location to explore a nature-based playground. She thinks the residents selected Option 1 at Arden Oaks and that's probably a good choice for that location. She thinks Freeway Park is more of a destination park and it would be better to look at that location for a nature-based park, if one or the other of the current parks are to be considered. She thinks the two structures should be different colors because that's how kids will differentiate them. They will ask to go to the green park or the blue park. Councilmember Monson said she is comfortable with looking at Freeway Park as the option for a nature park. She has heard from residents that those two parks are so close in proximity, and they would prefer some variation. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 5 Mayor Grant agrees that Arden Oaks is flat and he thinks the proposed Option 1 would be a great sizable improvement for that location. It looks nice. He is open to delaying Freeway Park to explore other possibilities. He asked if it's possible to ask the vendors to submit bids on a nature- based playground at Freeway. Bryce Shearen said he can request the playground designers come up with a nature-based option at Freeway Park. He said the budget is what it is. The designers will submit bids to include what can be done for the budgeted cost. Mayor Grant thinks it makes sense to move forward with Arden Oaks. Councilmember Holden said she attended Nite to Unite at Freeway Park and those residents are looking forward to the playground they voted for, to be built. She noted it's been postponed twice. She said residents want the fence up, they want the playground to be safe for their kids and they are looking forward to it. She asked if getting bids would push the installation out another year. Bryce Shearen didn't think it would delay it for another year. He said MWP could probably get a design together this year, but it might leak into November, so that would be past the grant deadline so potential savings would be lost. Councilmember Holden wondered if there would be another open house to discuss playground vs. nature-based equipment. She thinks residents already looked at this location and they are anxiously awaiting a new park. Mayor Grant asked if a nature park would have a longer lifespan than a traditional playground. Bryce Shearen noted there are different styles. Some options use real wood which would lessen the life cycle and it would be more work to maintain. Some styles use faux wood. It is molded material that are made to look like wood. Those have about a 20-year life cycle. He said the idea behind nature play is some of the real wood element allows the playground to change. Kids will experience nature by seeing some of that decay. He said that type of structure is usually found at a nature preserve settings with an educational component. He believes that for a neighborhood setting it would be better to go with the faux wood. Mayor Grant thinks there would have to be neighborhood engagement before completely changing the plan. He thinks installing Arden Oaks gets something for both neighborhoods. He wonders about resurfacing Freeway Park. Can that project move forward, so residents can play basketball and pickleball while the discussion surrounding the play structure continues? Bryce Shearen didn't see any issues with phasing the construction. There would be a savings if both parks are resurfaced at the same time. He thought that phasing could be scheduled in May or June of 2025. Assistant Public Works Director Miller confirmed that it would be more cost effective to keep the two resurfacing projects together. Those projects could move forward without impacting the footprint of the play structure. Mayor Grant said that would allow progress at each location, so residents are getting something sooner. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 6 Councilmember Holden asked if the fence could be installed at the same time. Assistant Public Works Director Miller thought that was a possibility. Councilmember Holden asked how the drainage is at that location. Assistant Public Works Director Miller said there are a couple of low spots. There has been a little bit of improvement,but not a lot. Councilmember Monson summarized what she heard. Council will green-light Arden Oaks, as defined in the survey, with a possible color change. The City will move forward with the hard court rehab. The play structure at Freeway will be put on hold until the residents can weigh in on if they even want a nature-based structure and then seeing their thoughts after they see what the proposals include for that amount of money. Mayor Grant said there needs to be neighborhood engagement. They have been given the options and they made their selection. The City can't just move forward with installing something completely different. He wondered if the vendors can share some concept designs of other locations where they've done these. Then the public could see examples before having a complete redesign of current proposals. Bryce Shearen said he could ask for examples. A lot of times the vendors want to go through the process of designing something specific to the space. We wouldn't want residents seeing another park concept, using similar features but it cost $300,000. He will reach out to ask the vendors for examples. Mayor Grant said the eventual play structure install will need to be completed without damage to the hard-court surface. Councilmember Monson would be open to Council exploring examples. Then they can determine if it's even worth it to request public opinion if Council determines a suitable nature- based option can't be built for the $150,000. Councilmember Rousseau agreed and would like to have some examples brought to the next work session for Council to discuss. Mayor Grant agreed Council should see examples. His concern is the residents selected a design for Freeway Park that is multi-age and well thought out. He thinks the natural parks cater more to younger children. Councilmember Monson thought that was a good point. She thought the concept experiment they are conducting at the Council level may help determine if another location might be a better fit. Mayor Grant thought maybe the answer is Sampson Park. Councilmember Monson agreed Sampson Park would be a great location for a nature park. She is discussing this because the residents specifically requested something completely different between the two locations. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 7 Councilmember Holden noted her discussions at Nite to Unite were with a lot of residents who have small kids. She doesn't think there are a lot of families running from park to park. She thought maybe the older kids do, but crossing County Road E is difficult. She didn't hear the request for different concept designs out of her discussions. Mayor Grant asked if Councilmember Holden is in favor of the modular designed park. Councilmember Holden said she is willing to see a nature-based concept plan by November. She wants Freeway Park to have something next year. Mayor Grant said the hard-court improvement will make sure that park gets something. Councilmember Holden stated a three-year-old isn't going to be interested in a hard-court. Mayor Grant summarized that Arden Oaks will move forward, as well as Freeway Park fencing and hard-court. A work session discussion is forthcoming regarding what features could be included in a composite nature park. He wondered if there is a list of residents who attended the open house. Staff confirmed there was a sign in sheet. Councilmember Holden said there is a neighborhood email. Bryce Shearen said he would need a couple weeks to pull some examples together and he will send it to staff as soon as possible. Public Works Director and City Engineer Swearingen requested specific direction. He asked if the nature options should be brought to Council in a work session or should the information be sent in an email prior to public engagement. Mayor Grant wants Council to have a chance to look at what the options are. Councilmember Holden asked what the budget amount is, that we are requesting options for. Public Works Director and City Engineer Swearingen said they will request that they stay within the original $150,000 budget. B. Comp and Class Study Update Tessia Melvin began the discussion by stating that nothing has changed from the previous discussions. She said Council has selected the pay philosophy and pay grid. Three steps will be cut from the bottom of the grid and three will be added to the top. Next steps are implementation. She anticipates that with the change in City Administrator, there will likely be some savings as the previous Administrator was maxed out and a new one would most likely be hired around the third step range. Councilmember Holden disagreed. She stated it's hard to find a good City Administrator and usually the offer must be high. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 8 Tessia Melvin said that is a discussion Council can have when the time is right. She thought typically you aren't going to start someone at the top step. She said savings also come depending on when the position is hired. There will be some savings because that salary will only be paid out when the position is filled. It won't be for the entire year. Tessia Melvin outlined the recommendation for implementation be the 3% cost of living adjustment(COLA), cut the bottom three and add three to the top then move employees into the closest step that benefits the employee. If the adjustment is made to the scale and employees stay at the same step, which would be a bigger cost up front. The first option would give employees a bump of 4-6%, the second option would give a higher percentage. Mayor Grant asked staff if either option could be implemented. Finance Director Yang confirmed it could be implemented either way. Councilmember Holden asked if the cost of$155,000 included social security and Medicare. Finance Director Yang confirmed. Councilmember Holden said she thought earlier the amount for FICA and PERA was $26,000 and $6,000 for the insurance. Finance Director Yang explained that a portion of it allocated to the General Fund and another portion to the Enterprise Fund. Councilmember Holden asked for confirmation this only includes non-union staff. Finance Director Yang confirmed. Councilmember Holden asked for confirmation that the current union contract will expire in January. Public Works Director and City Engineer Swearingen confirmed. He said negotiations have begun. Councilmember Monson noted the City hasn't done an analysis like this in several years. She believes the impact on the levy may be too big. She would like to understand what the levy impact would be if we come to market and move to above market over the next three years. She recognizes we are digging ourselves out of a hole and trying to be above average for a pay philosophy. She thinks the cost is too high to take on at one time. She would like to see what the cost of being at market and the costs of exceeding the market at 5%vs. 8% as outlined in the current option. She wants to understand what the scale of a change like that would be. Would it mean $20,000 or$100,000 difference? Tessia Melvin said she doesn't want to guess what that number might be. She said the most important question that should be answered tonight is the implementation of this. Will employees be placed at the closest step,by dollar amount, to what they are currently making or will they remain at the same step and receive that increase. She anticipates going from 8% to market, the cost will go down by a couple percent. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 9 Tessia Melvin said Council is saying they want to fix the grid immediately for hiring and retention. The implementation can be slowed down. She noted there are other ways to slow it down. Council could choose to do the COLA and everyone stays where they are. The rest could be implemented in July. She said she can keep giving different options but that is going to cause confusion. Her recommendation is to stay the course with the grid because people have seen it. If the grid starts changing, then people stop trusting the process. There are different ways to implement the changes to get to a more comfortable cost. If Council is saying that$124,000 is okay but $155,000 is too much, the implementation can be pushed to April or July or October. She can work with Finance Director Yang to come up with a scenario that keeps the budget impact at a certain dollar amount or percentage of levy impact. She has seen instances where initial discussions said one thing and Council lowered it. Employee morale goes down in those situations. The trust in the process can be lost. Councilmember Monson asked if changing from 8% above market to being at market, would change how the grid moves. Tessia Melvin confirmed. She said the grid is calibrated for 8%. Councilmember Holden said they did this three years ago and she said we are very close with only four positions below market. Tessia Melvin said the pay equity is done every three years. This is market analysis. Councilmember Holden understands but stated that is how we have adjusted the grid and COLA in the past. Sometimes it was 5% sometimes it was 3%. She thinks this option is too much money. She thinks if implementation is delayed until July, all we're doing is moving a bunch of money into next year's increase. Either way, the cost is perpetual into future years. She said all discussions have been as of January 1. She thinks people have the expectation that they are going to get what the grid says at the first of the year. No matter what changes,people will be disappointed. Mayor Grant does not think factoring in a staff vacancy as a means of cost savings is appropriate. That should not be a part of the planning process. He said moving employees to the closest step to their current wage is how he would like to see it implemented. He would not characterize this as climbing out of a hole. He said they try to true this up every three years. He wondered how far behind you can really get in three years. He stated it is up to Council if they want to implement later than January 1. Interim City Administrator Jagoe pointed to the bench handout that councilmembers received at the beginning of the meeting. She had Finance Director Yang use Option 1 and the $155,000 based on her understanding of the council direction to look at employees doing the market analysis. That analysis showed which positions should be reclassified and then having those employees retain their tenure and moving them into the scale. She wanted to be clear; that was what Council is seeing with the $155,000. Councilmember Rousseau would like to see the difference if implementation was moved to July. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 10 Tessia Melvin said the way this was costed out was that on January 1, everyone receives the COLA and then moves into the grid. Depending on how Council decides to implement it, everyone either moves to the step that is closest to their current pay or receives the new rate at their current step. Then, everyone would step up on anniversary dates. She admitted we are kicking the can down the road either way. With the labor market as it is, it will be favorable to have a pay grid that is competitive. The implementation can move. Councilmember Monson gave a hypothetical example and stated the employee wouldn't lose money but would appear that they lost tenure. Interim City Administrator Jagoe confirmed. She said Option 1 was calculated by taking an equal percentage for every employee for an increase. If someone was at Step 5 they might be Step 2 on the new scale. There were employees who went up steps because the way it was calculated, every employee to average 6%. For some employees the closest step to their current wage wasn't 6% so those employees stepped higher. If positions were reclassified to meet market, their step went down. There are variables in play that gets everyone to the average. Tessia Melvin stated direction from the former City Administrator was that everyone should get something. She states that Option 2 is equitable because it leaves everyone at their step. The employees that will get more than the 6%will be the positions that are reclassified. They will keep their step and they're getting a new grade. Those employees are moving horizontally and vertically on the grid. Councilmember Monson thinks the example that uses $125,000 could create a tenure issue if an employee is bumped lower. She wants to understand, in the second option that uses $155,000, how an employee stays at the same step. Interim City Administrator Jagoe clarified that, in the $155,000 option, an employee who is at Step 5 would move to Step 2. You retain that tenure step but it's still a drop of three. Councilmember Holden said no one is losing any money. The only thing happening is shifting the grid to allow three more steps. Mayor Grant clarified that employees will not receive a step increase on January 1 but rather on their anniversary. Tessia Melvin confirmed. The step increase will happen at the employee's anniversary. Councilmember Holden thought from the initial discussions, one of the reasons January 1 was selected was because it made it much easier to implement. Now you will have people on two different grids throughout the year. That was the reason Council chose January 1 to change the grid system. Mayor Grant said Council needs to land somewhere. Tessia Melvin summarized that she isn't hearing a decision has been made. She hears that the cost needs to come down from $155,000. She can come back with some options. She asked for direction on what should be changed so she can come back with more options. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 11 Mayor Grant would like to maintain Option 1 at $124,000. Councilmember Rousseau would be interested to see what it would look like if there were two grids and employees would move to the new grid at their anniversary. Discussion ensued regarding what is included in the calculations. The $124,000 just included the wages. Including benefits, it would be a higher amount. Councilmember Monson asked what the levy impact is, as a percentage,based on what dollar amount. Finance Director Yang replied that approximately every$27,000 equals 0.5% impact on the levy. Councilmember Holden stated the union employees haven't negotiated their contract. She said they aren't going to agree to less than what the non-union employees are getting. She asked what the increase will be if union employees are given the same increase. Finance Director Yang said the amount in the budget right now is 3%. She could calculate what a larger increase will mean and bring the numbers back. Councilmember Fabel asked if the COLA is calculated into the wage on January 1. Tessia Melvin said on December 31 St the COLA is calculated and then the step movement would follow that. Discussion ensued regarding how many employees were maxed out on the current grid and what step movement would look like with Option 1 at the $155,000 cost vs. $124,000. Councilmember Monson said she would like to have the budget discussion so she can understand what the levy impact of comp and class decision will be. Councilmember Fabel asked if the increases equal at least 6% in Option 2. Interim City Administrator Jagoe confirmed. Option 2 increases range from 6-10%. Councilmember Fabel asked if a person has been maxed out for more than a year, do they get seniority credit for any years they haven't had a step increase. Interim City Administrator Jagoe said the benefit to those employees is now they will have three additional steps where they were maxed out before. Councilmember Holden reminded that whatever happens here, will happen with the union. Tessia Melvin said there was no reclassification of any of the union positions. The wages were within market. Some language was added to job descriptions, but the classification of those positions did not change. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 12 Discussion ensued regarding how the decision was made to reclassify some positions and why some positions didn't warrant a change. Councilmember Monson said she is comfortable if the cost lands between $124,000 and $155,000. The numbers changing won't move the levy as much as she hoped unless something more dramatic was done. Mayor Grant summarized that it appeared that Option 1 was going to be the choice and now Option 2 seems to still be an option. Interim City Administrator Jagoe stated that Staff understood Council direction to be $155,000. She thinks there may be a discrepancy between how it was calculated and how it was conveyed. Staff didn't create a different strategy for implementation, the $155,000 amount is the direction, as she heard it, that Council gave. Councilmember Holden agreed, that is clearly the direction Council gave to staff. Interim City Administrator Jagoe summarized what she heard. This will be part of the bigger budget discussion. Staff will leave the amount that is there as a place holder for the budget discussion. Councilmember Fabel said it is a question of equity for him. He is inclined to believe it is more equitable for everyone going up about the same amount now with the reclassified employees having a more aggressive schedule. Tessia Melvin said she has enough direction for now and Finance Director Yang will let her know what amount is agreed upon and she will find options to make that work. The Council recessed the work session at 6:51pm. The Council reconvened the work session at 9:06 pm. Councilmember Fabel was not present for the continuation of the work session. C. Preliminary 2025 General Fund Budget Discussion Mayor Grant introduced the discussion. He said Council has agreed that they will give Finance Director Yang a range for the preliminary levy. The Preliminary Levy needs to be agreed upon by the end of the month. Finance Director Yang continued the discussion on the preliminary general fund budget for 2025. The City is required to adopt a maximum tax levy by the end of September. This will have to be done at the September 23 Council meeting. She is seeking direction for what scenarios Council would like Staff to bring forward. Finance Director Yang provided 5 scenarios based off the August 19th Special Work Session and guidance provided by council. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—SEPTEMBER 9, 2024 13 Scenario 1 includes a 3% COLA, 10%health and 4% dental increases and Option 1 for $155,000, from the previous Work Comp Study. It also includes Ramsey County Police, Lake Johanna Fire Department and Ramsey County Election Services contractual increases. The CIP increase of $160,000 is also included. There is a$100,000 of EDA levy transfer to the General Fund. Scenario 2 includes everything in Scenario 1 with the addition of$151,000 for Public Works staffing updates. Scenario 3 includes Scenario 2 with the addition of the Lake Johanna Fire Station. Scenario 4 includes Scenario 3 with the addition of Old Highway 10 Trail. Scenario 5 includes Scenario 4 with the addition of Lake Johanna Boulevard Trail. Councilmember Rousseau would like to discuss the Franchise Fee. If Council decides not to move forward with the franchise fee, that could change how this looks. Councilmember Monson agreed. She wondered what the timing was on the franchise fee. Finance Director Yang said it would be 90-days prior to implementation. Councilmember Monson asked when the first bond payment will be made. Finance Director Yang said the first bond payment would be in February 2026. Discussion ensued regarding the need for a public hearing to keep residents informed. Mayor Grant said the fire station is going to happen. He said the Public Works staff updates are likely but is not as certain as the fire station. Councilmember Monson said either option is unpalatable. Mayor Grant said that point is well taken. He would like to separate needs and wants, for lack of a better way to phrase it. He noted the fire station is an absolute need. Finance Director Yang clarified that Scenario 3 would be if the City levies for the new fire station, rather than using franchise fees. Mayor Grant would prefer to see the fire station become Scenario 2 and would like Scenario 3 to include Scenario 1, plus the fire station, plus Public Works. Councilmember Rousseau likes the scenarios laid out as they are. She noted four councilmembers support franchise fees going to the fire department. Mayor Grant agreed with that reasoning. Councilmember Holden thought Scenario 4 should be higher on the list because the City has received two grants. She asked if the county has raised the amount they will give. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 14 Public Works Director and City Engineer Swearingen said they will. They haven't provided the exact amount yet. Councilmember Monson would like to look at the baseline numbers. She understands the permit software conversion is included. She wondered if that can be pushed. She would like Staff's opinion on what else could be pushed. She would like to get the baseline amount lowered and then discuss what else could be swapped around, within these scenarios. Public Works Director and City Engineer Swearingen said the street maintenance program could be flexible. Those projects could be scaled back because they already have the initial chip seal layer down so it wouldn't affect the life of the road. The proposed project is a sealant over that initial chip seal. He could reduce the amount by $75,000 and feel comfortable. Councilmember Holden asked if everyone has reviewed the Master Park Plan. She wondered what could be postponed. Councilmember Monson had considered bringing in the proposed Parks Manager position later in the year. Interim City Administrator Jagoe said the current permit system is functioning. The customer support for that program is nonexistent. The concern is, if something happens to the system, there is no support department to help work through that. Mayor Grant asked if the software we have is an old version that is no longer supported. Interim City Administrator Jagoe this would be change to an entirely new vendor because the program we use doesn't have an option to upgrade. We must switch. She noted the program we have functions. Councilmember Holden said she thinks permitting/licensing is one of the basic services provided to residents. She would not want to give that up. Councilmember Monson asked what the impact would be if the loader for Public Works was pushed. Finance Director Yang said the levy could be reduced by $110,000 for 2025 but it would have to be revisited in future years. Councilmember Holden thought Staff was going to look at purchasing something else. Public Works Director and City Engineer Swearingen hasn't had time to do that research yet. Councilmember Monson calculated the items discussed would be a 4%reduction. She wondered if that could be applied across the scenarios. Finance Director Yang confirmed. Councilmember Holden asked if the street maintenance amount could be lowered to $25,000. Public Works Director and City Engineer Swearingen thought that is possible and he can look at a scenario where that won't need an increase at all, this year. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 15 Councilmember Monson would prefer to use funds to help support the personnel costs of the market adjustment. She wants that to stay under$155,000. She doesn't like the initial calculation of 20% levy increase. She understands it can be lowered after the preliminary levy approval, but she would like to lower the preliminary number now, if possible. Councilmember Holden asked what mandates are unfunded. She reminded there are other discussions that have not happened. Discussion ensued regarding what impact it would have if certain items were delayed or removed. Finance Director Yang summarized that she heard direction to update to reduce the Equipment and Replacement Fund by $110,000 and $30,000 for the street maintenance program. Public Works Director and City Engineer Swearingen said he is nearly certain he can reduce the entire street maintenance program amount to $0. He will just need to make some calculations based on a bigger project next year. He received the street maintenance condition results. The City is in really good shape. The Karth Lake neighborhood will be taken care of in 2026 and the rest of the city is in a maintenance period. Councilmember Holden would like staffs input on the Comp and Class Study. She is concerned that Council discussion was one thing and that it seems the direction has changed. She noted some employees are at the top of their range and other cities are looking for good employees. She asked if there are any dangers in changing course now. Public Works Director and City Engineer Swearingen stated that the first option doesn't feel like there is any immediate benefit. In the past two to three years, the COLA increase has not met inflation costs. Staff is hopeful that the market study will, at minimum, address the inflationary piece. With Option 1, Staff will have to wait at least three years before seeing the full benefit. Option 2 makes the market adjustment. Assistant to the City Administrator/City Clerk Hanson said she has heard from other cities that have recently been through this process and some of them feel they are already behind after two years. The question is if this change will be outdated in two years. Finance Director Yang said when staff originally saw the proposal there was some excitement over the possibility of room to grow. She agreed changing to the other option now will not be as much as they originally expected. The $155,000 amount is adding/dropping three steps and reclassification based on the market analysis. Using the $124,000 amount defeats the whole purpose of having a market adjustment because you're being reclassified but then you're being bumped down steps. Councilmember Holden was not originally in favor of the $155,000 option but she thinks it's wrong to pull that back now. Mayor Grant asked Councilmember Holden if she is in favor of the $155,000. Councilmember Holden replied no, she isn't. However, that is what was proposed at the last work session. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 16 Mayor Grant asked if the levy has been reduced by 4%. Councilmember Monson summarized the changes discussed. Removing the street maintenance program saves 2%. Removing the permit software would lower the levy by 1%. The change to the Equipment budget would be another 2%. She said total cuts are 5% and if Council chooses to move forward with implementing the Public Works staff mid-year, instead of at the first of the year, there would be additional savings there. Councilmember Holden asked if the Public Works staff savings was worth it. She said staff already doesn't have the capacity. A member of the public was currently overseeing the Great River Greening contract. She doesn't think that's appropriate. She didn't vote to approve the $2 for a lead position but she wants to discuss that tonight. That person could oversee this contract. It should not be a member of the public. She would propose the Lead Parks position be approved now. Councilmember Monson asked if that was the Utility Lead or a Public Works Lead. She clarified Councilmember Holden is not talking about the Parks Manager position. Councilmember Holden confirmed. Councilmember Monson would be comfortable with that. Then wait on the Parks Manager position until the middle of the year. She pointed out that they just cut 5%. She is open to discussing other options. Mayor Grant is not comfortable with the levy increases. He shared the proposed levy increases for surrounding cities. Councilmember Holden would like to know how the Council feels about the $155,000 for the Comp and Class study. Councilmember Monson said as they walked through it earlier, the $155,000 remained in there. Mayor Grant thinks that is what staff thought Council was offering. Councilmember Monson said when this was discussed originally, she thought it was the $124,000, not$155,000. She said that was new information. Discussion ensued regarding underfunded revenues from 2024 to 2025. Councilmember Rousseau asked how the City has been trending with the underfunding. She asked if that is typical for past Councils. Mayor Grant said it's not uncommon for councils to do that. You either increase the revenue or you can't spend all of your budget. Historically we have come in pretty close. Councilmember Holden said we're pulling the permit software conversion. She asked if the Master Park Plan needed to be done next year, if we aren't hiring the Parks Manager until July. That person will come in and not know the parks. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 17 Mayor Grant said it's important to prioritize the five trails. We want to do all of those. Finance Director Yang said the Master Parks Plan is in the PIR fund. It impacts the fund balance, not necessarily the levy. Councilmember Holden said we still have to put money into the PIR so it doesn't matter. Councilmember Monson said she would like to not underfund this year. She remembers last year Council landed on the decision to underfund, though it wasn't her choice. We were trying to find some level of compromise and we didn't quite get there. She doesn't think underfunding is a good practice. She feels we're just kicking the can down the road. Councilmember Holden said she doesn't think we ever kicked the can down the road. She remembers it being a lot of wants vs. needs. We don't approve every piece of equipment that is brought for replacement just because it's rusty. We have replaced some lemons after just a couple years. There has to be a practice for that. Councilmember Monson clarified that the phrase "kicking the can down the road"was used by Councilmembers in 2022. Councilmember Holden said it was used by Councilmember Holmes. Mayor Grant said Council should account for some underfunded amount. He thought $190,000 is not a good number but maybe $150,000 is okay. The levy is $5.6 million. He doesn't think every single dime of that will be spent. Last year the actual amount came in within $9,000. Some years you will be above and some years you'll be below. You can't fund it to the max, every time. Mayor Grant asked Finance Director Yang to recalculate the numbers, making the cuts discussed and include it in the Admin Update. Councilmember Rousseau asked to see what the numbers would look like if the Parks Manager position started after quarter 1 vs. waiting until June or July. Finance Director Yang asked what the decision is on the timing for the Public Hearing for franchise fees. Councilmember Holden said that wouldn't be until January. Councilmember Monson asked for clarification that we would want to have a decision prior to the debt in May. She thinks the fire department will want a clear indicator of how the bonding for the fire department will be done. She thinks it's important to commit to how the bond will be paid, as this is a partnership with three other cities. It should be clear, if we issue a bond in 2025, this Council will use franchise fees to pay that back. Councilmember Holden said it's our bond. She doesn't think the fire department will care how we pay it back. Councilmember Monson said it shows commitment that we are going to pay it back. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 9, 2024 18 Interim City Administrator Jagoe said she will coordinate the Public Hearing for the franchise fees before the end of the year. Finance Director Yang said the last piece to consider is the franchise fee debt service schedules. The biggest thing will be determining the term that will establish the overall rate. She will follow up with Council at the next work session. Councilmember Rousseau announced she was leaving at 9:52 pm. Mayor Grant said he thinks we need to talk to Xcel in terms of franchise fees and their terms. Councilmember Monson thinks it is relatively easy. She thinks Council just tells them and they will do it. Finance Director Yang confirmed, it's straight forward. D. Parks Lead Discussion This item was not discussed. E. Rice Creek Commons/TCAAP Discussion This item was not discussed. F. Agenda Planning This item was not discussed. 4. COUNCIL COMMENTS AND STAFF UPDATES ADJOURN Mayor Grant adjourned the City Council Work Session at 9:53 p.m. ifpcm./A4fi Je r Estling David Grant Deputy Clerk Mayor