HomeMy WebLinkAboutCCWS 11-20-2006 4
• �fi` REN HILLS
Approved: 12/11/2006
CITY OF ARDEN HILLS, MINNESOTA
WORK SESSION MEETING
NOVEMBER 20, 2006; 5:00 P.M.
ARDEN HILLS CITY COUNCIL CHAMBERS
CALL TO ORDER/ROLL CALL
Pursuant to due call and notice thereof, Mayor Beverly Aplikowski called to order the
work session meeting at 5:05 p.m.
Present: Mayor Beverly Aplikowski, Councilmembers Gregg Larson, and Brenda
Holden
Absent: Councilmembers David Grant (Excused), and Vincent Pellegrin (Excused)
Also present were City Administrator, Michelle Wolfe; Community Development
• Director, Karen Barton; Assistant City Administrator, Schawn Johnson; Parks and
Recreation Manager, Michelle Olson; Public Works Director, Greg Hoag; and
Accounting Analyst; Michelle Bruley,
Others present were Mark Ruff, Ehlers & Associates and Elizabeth Diaz, Ehlers &
Associates
Proposed 2007 Budget-
City Administrator Michelle Wolfe provided the City Council with an update regarding the
financial management plan that Ehlers and Associates has been putting together for the City. The
financial management plan will be a good tool for the City Council and City staff to utilize in
assessing the City's current financial status and provide a foundation for future budget related
decisions. The financial management plan is projected to be completed by January 2007. Mark
Ruff, Ehlers and Associates, was in attendance to provide the City Council with an update
regarding the City's current financial status in regards to the general funds, capital funds, and
public safety funds. At this time, Ehlers and Associates have been working on creating a
financial model for the City. As with any financial model, assumptions have been made by City
staff and Ehlers &Associates regarding fund balances and future improvement projects.
However, as we progress with work on this plan, the City can modify the different assumptions
that were made and analyze the impact of these decisions.
The final plan will include an analysis of the utility funds. In terms of the 2007 budget, staff is
recommending that the City implement the rates that were included in the 2005 Utility Rate
ARDEN HILLS CITY COUNCIL—November 20, 2006
• Study. The study recommended rates for the period 2005-2009. However, the analysis Ehlers is
performing will effectively update that rate study and assist us in determining whether additional
changes to the utility rates will be needed in 2008.
Mark Ruff, Ehlers & Associates, provided the City Council with an overview of the financial
management plan. He noted that in reviewing the financial bonding rating of a city, Standards &
Poor will look at a city's overall debt, economy, current financial status, and long term
management/future financial planning. In completing a financial management plan, the City is
exhibiting good financial stewardship to the public. Typically cities that experience poor bond
ratings are caused by the mismanagement of public funds during a large public project.
Mr. Ruff noted that the draft financial management plan reviewed the City of Arden Hills
proposed revenues and expenditures over a ten year time frame. The proposed expenditures and
revenues also include the City's capital improvement plan, but does not include any infrastructure
costs related to the TCAAP project. The long term question that the City Council should address
is what fund balances are the City Council comfortable with. Overall, the City appears to be in
good financial shape based upon the draft financial management plan. A second option for the
City Council to consider is the possibility of splitting the capital equipment and capital
improvement projects into two separate funds.
Councilmember Larson noted that the proposed financial management plan does not take into
consideration potential expenditures for the TCAAP project. By not including the projected
411 expenditures, this may leave future City Councils at a financial disadvantage.
City Adminsitrator Michelle Wolfe said that one of the reasons why City staff recommended that
a financial management plan be created was due to the potential costs associated with the TCAAP
project. The financial management plan will be a good base for future discussions regarding the
TCAAP project.
Councilmember Larson asked why the utility funds are not included in the financial management
plan for the years 2012 to 2015.
City Administrator Wolfe noted that the future utility costs are only estimates and have not been
broken down by individual funds (water, sewer, and storm) at this time.
Mr. Mark Ruff reviewed the City's proposed public safety and capital portion of the financial
management plan with the City Council. The public safety capital plan includes proposed
equipment purchases and the replacement of Fire Station #1. Fire Station #1 is proposed to be
replaced or reconstructed in 2012.
City Administrator Michelle Wolfe said that the City is budgeting for a needs assessment study at
Fire Station #1 in 2007. This will allow the City to evaluate the need for a new fire station or if
the current fire station can be remodeled/repaired to meet the future needs of the Lake Johanna
Fire Department.
•
2
ARDEN HILLS CITY COUNCIL—November 20, 2006
Mr. Ruff noted that the financial management plan was based upon the financial information
•
provided by the City for the fiscal years 2005, 2006, and 2007. Also, the projected model does
not take into consideration the effect TCAAP or increased building permit revenue may have on
the City's tax base if the land purchase is completed.
Councilmember Holden asked where the revenue from the fraud case will be allocated.
City Adminsitrator Wolfe said that it is at the Council's discretion where the money is allocated.
The City Auditor booked the claim payment as 2005 revenue.
Mayor Aplikowski noted that the City's goal and purchasing attitude will also impact the City's
financial philosophy in the future.
Mayor Aplikowski thanked Ehlers & Associates for providing the City Council with an update on
the draft financial management plan.
City Administrator Michelle Wolfe provided the City Council with an overview of the proposed
2007 budget. At the September 11, 2006 meeting, the City Council approved a preliminary tax
levy amount of$2,675,161, which represents a 6% increase from the 2006 levy. At the
December l lth City Council meeting, Council will be asked to approve a final 2007 tax levy as
well as a 2007 Budget. The tax levy cannot be increased from the preliminary levy amount; it
can be decreased.
• Based upon previous discussion with the City Council, the 2007 budget was prepared with the
following assumptions:
1. Salaries are based on the existing compensation plan and a 2.75% annual adjustment on
January 1, 2007. (The existing union contract includes a 2.75% increase for the union
employees.)
2. The City's contribution towards employee benefits is based upon the increase in
premiums. Historically the City has increased the contribution by 50% of the increase in
premium. Council has indicated that(1) we may need to review the formula for
calculating the employer contribution; and(2) the City needs to continue to explore other
options and consider a more consumer-driven health care options. Health insurance rates
will increase 7% and dental insurance rates 8% in 2007. In addition, City staff is
implementing an optional health care plan that adds deductibles and higher out-of-pocket
maximums for a lower premium. Staff is recommending that the City's contribution
increase from $586 to $615/month. This represents less than 50% of the increase in
premiums for family coverage if an employee stays with the current plan; however,we
are providing a less expensive plan(with higher employee out-of-pocket expenses).
Administration's goal is to provide incentive for employees to move to the optional plan,
which we believe will have an overall positive impact on future claims.
3. Other employee benefit rates have been included and there were no increases/changes in
those rates.
•
3
ARDEN HILLS CITY COUNCIL—November 20, 2006
4. As mentioned the budget includes the 2007 CIP projects and equipment as previously
•
discussed by Council and shown in the attached budget document.
5. Utility rate changes as outlined in the Utility Rate Study have been included in the
proposed budget. We have also adjusted for the new Water Contract with the City of
Roseville.
6. No new full time staff positions are proposed in this budget. There is $15,600 included
for a part-time Recreation Programmer. This may be an intern position or a part-time
employee. The recommendation for this position is based on the need for assistance in
the recreation area, as a result of upgrading the Parks and Recreation Manager position.
As a result of TCAAP, we may recommend the addition of staff and/or consultants;
however, that would not be recommended without an identified revenue source.
ADDITIONAL BUDGET CONSIDERATIONS
1. The City received payment from the League of Minnesota Cities Insurance Trust
for the fraud claim. The amount was $237,541. In 2005 the auditors booked the
expected claim payment as revenue in the general fund. Council could consider a
partial transfer to other funds that were affected by the fraud.
2. It is also anticipated that the City will receive revenue from the sale of the Old
City Hall/Public Works property. Staff will look to Council for direction as to
where the funds should be placed. At this time, staff anticipates a need for this
revenue in the Public Safety Capital Fund, but other considerations would be the
• 3. general Capital Fund(PIR) or General Fund Balance.
Staff is recommending a change in regards to the TCAAP fund. For the past
several years the City has been budgeting a percentage of staff time to the TCAAP
fund (City Administrator 15%, Community Development Director 30%, and
Office Support Specialist 10%). However, this is not a common practice for
cities, and the City currently has no revenue in the TCAAP fund. Furthermore, if
TCAAP did not exist, the City would likely still have those three positions on
staff and paid from the General Fund. The standard for development projects is
that a portion of the salaries related to development (administration,planners,
building inspections, etc) are in the general fund, and that revenue generated by a
project(plan review fees, permit fees, increased tax base) are returned to the
general fund to cover those costs. City staff is recommending that this change be
implemented in 2007 and future years. However, to the extent that the City may
add staff or services specifically related to TCAAP,both the expenditure and the
revenue will be budgeted in the TCAAP fund.
POTENTIAL BUDGET CHANGES FOR FURTHER DISCUSSION
1. Staff has suggested that the City consider conducting a resident survey in 2007.
City staff has obtained a quote for such a survey and it will cost approximately
$10,500. Staff is recommending that the Council direct staff to include funding
for a survey within the 2007 budget.
411
4
ARDEN HILLS CITY COUNCIL—November 20, 2006
2. In the Public Safety Capital budget, staff is recommending a need assessment for•
Fire Station#1 in 2007. The Lake Johanna Fire Board has also recommended that
we conduct an assessment. As Council has previously been informed, the Fire
Department is planning for potential reconstruction of Fire Station#1 (currently
contemplated in the Fire Capital Plan for 2012.) Staff recommends adding a
$5000 budget amount in the Public Safety Capital fund for this purpose.
3. The proposed budget still incorporates funding for Celebrating Arden Hills.
4. The EDC has presented a Strategic Plan that recommends a number of items for
2007 implementation. The only item that has been incorporated into the budget at
this time is $5,000 in the EDA fund for Business Retention Program activities.
GENERAL FUND AND TAX LEVY DISCUSSION
The current proposed budget is based on a 6% increase in the tax levy from $2,523,737 to
$2,675,161. A percent in the increase of the tax levy is $25,237. The City has hired
Ehlers and Associates to prepare a Financial Plan for the City, to assist the City with
assessing its current financial status and with making decisions regarding the 2007 budget
and tax levy. City staff's primary concern is that operating costs can be covered with a
4% increase in the tax levy, but our fund balances in the capital funds area are decreasing
(due to significant capital improvement projects) and the City needs to ensure the
viability of those funds for future projects. Our primary sources of revenue for those
funds are assessments and property taxes.
. At this time the projected budget includes $159,316 in transfers to the PIR/Capital Fund
($39,829) and the Public Safety Capital Fund($119,487). It is at the discretion of the
City Council to elect to lower the transfer amounts in the following areas:
• Establishing a Council Contingency for unanticipated purchases or projects during
2007 or decreased revenues (unspent contingency at the end of the year would add
to the General Fund Balance)
• Initial funding for a Capital Equipment Replacement Fund
• Covering the cost of a City survey($10,500)
• Contribution to General Fund Balance
• Funding for possible implementation of all or portions of the EDC Strategic Plan
Implementing any of the above options reduces the amount of the transfer to the two
capital funds.
There are several options if the Council is interested in lowering the tax levy:
• Decrease the transfer to the PIR/Capital Fund
• Decrease the transfer to the Public Safety Capital Fund
• Recommend cuts in the proposed budget or capital plan
•
ARDEN HILLS CITY COUNCIL—November 20, 2006
•
UTILITY FUND DISCUSSION
•
The three utility funds are being studied as part of the Financial Plan that will be
completed early 2007.
Water Fund: The proposed budget anticipates $1,343,900 in revenue and $1,394,604 in
expenditures. The fund balance would be used to cover the difference between
expenditures and revenue. This budget is based on the most recent CIP reviewed by
Council. Staff is confident that the capital expenditures for the water improvements in
2007 will be reduced so that this budget will balance, but City staff will not have a final
figure until the feasibility report for the 2007 PMP is completed.
Sanitary Sewer Fund: The proposed budget anticipates $1,167,250 in revenue and
$1,312,082 in expenditures. The fund balance will be drawn upon to cover the balance in
expenditures above revenue. The primary factor in the increased expenditures is I&I
investigation and repairs.
Storm Water Fund: The proposed budget anticipates $401,500 in revenues and $242,927
in expenditures. Because the 2007 PMP does not include a significant storm water
project, the additional revenues will help replenish the fund balance. The fund balance
has declined significantly over the past few years due to the improvement projects that
have been constructed.
Councilmember Holden asked if City staff members are allowed to carry health insurance
coverage through the City and their spouse.
Assistant City Administrator Schawn Johnson said that it is his understanding that employees can
be covered under the City's health insurance plan and their spouses, but he will confirm with the
City's health insurance broker.
City Administrator Wolfe noted that the City will begin looking into implementing a cafeteria
benefit plan for employees in 2007.
Councilmember Larson asked if the City has reviewed the financial impact of allowing Arden
Hills seniors discounted utility rates.
City Administrator Wolfe said that she will ask City staff or Ehlers and Associates to review the
financial impact on the City by offering the senior utility rate program.
Mayor Aplikowski asked for the City Councils input regarding the status of Celebrating Arden
Hills.
Councilmember Holden recommended that the event be cancelled this year and reevaluated for
2008.
i
6
ARDEN HILLS CITY COUNCIL—November 20, 2006
Councilmember Larson said that he is comfortable with canceling the event in 2007.
•
Parks and Recreation Manager Michelle Olson suggested that she could take lead on creating a
citizen group to explore different options for future Celebrating Arden Hills events.
Members of the City Council were in agreement that Celebrating Arden Hills should be cancelled
in 2007 and revaluated in 2008.
Councilmember Holden inquired about replacing the radio-read batteries for the water meters
over a three year time frame.
Public Works Director Greg Hoag said that City staff is comfortable with implementing a three
year battery replacement program.
Councilmember Holden asked if the battery replacement program will be staff intensive.
Public Works Director Hoag noted that it will take approximately one-half hour per replacement
and two staff members at each site.
Councilmember Holden asked if the City is exploring the possibility of allowing recreation
program registration and payments on-line.
• Parks and Recreation Manager Olson said that City staff is exploring different options for the
City to consider regarding on-line registration and credit card payments.
Councilmember Holden asked what is the estimated cost to cover the proposed registration and
payment software programs.
Parks and Recreation Manager Olson said that City staff is estimating the cost for the necessary
software at $5,000. A small increase would be passed onto the customer for utilizing this
service. The on-line registration and acceptance of credit card payments would improve the
City's customer service for recreation programs.
Councilmember Holden inquired about the building inspection software that was budgeted for in
2007.
Community Development Director Karen Barton noted that staff does not currently have a
software package to track code enforcement complaints. City staff is currently tracking this
information by hand. The cost would include the software and server. City staff is currently
exploring different software and server options with the City of Roseville IT Department.
Mayor Aplikowski asked how much time the Building Inspector spends on writing reports.
Community Development Director Karen Barton said that she estimates that two hours a day are
• spent writing reports.
7
ARDEN HILLS CITY COUNCIL—November 20, 2006
• Councilmember Holden recommended that the City also budget for a lap top computer for the
Building Inspector. He could complete the reports at the job site.
Councilmember Holden asked why the general supply budget doubled from last year.
Accounting Analyst Michelle Bruley said that City staff combined the different departmental
supply budgets into one line item located in the administration budget. General office supplies
are no longer budged in multiple departments, so there are off-setting decreases.
Councilmember Holden recommended that the City's contribution to Northwest Youth and
Family Services be reduced by$1,000.
Councilmember Larson said that he is comfortable with this recommendation as long as the
City's overall annual contribution amount does not decrease.
Councilmember Holden requested that the I-35W Corridor Coalition membership fees be
removed from the 2007 budget.
Councilmember Larson said that he is comfortable with the City remaining a member of the I-
35W Corridor Coalition.
IIIICouncilmember Holden said that she is concerned that the levy will remain at 6% for 2007.
Councilmember Larson said that he is comfortable with a 6% levy for 2007.
Mayor Aplikowski stated that she also supports a 6% levy.
Mayor Aplikowski recommended that additional funding be budgeted for residential improving
communications with the residents.
Councilmember Larson recommended that additional funding be used for public safety, PLR, and
park improvements.
City Administrator Wolfe provided the City Council with an overview of the proposed changes
to the 2007 budget:
• Northwest Youth& Family Services contribution reduced by$1,000, resulting in a$4,000
contribution.
• $5,000 budgeted for a Needs Assessment for Arden Hills Fire Station#1.
• $10,500 included for a City wide survey.
• Celebrating Arden Hills (expenditure and revenue) was removed from the 2007 Proposed
Budget.
•
8
ARDEN HILLS CITY COUNCIL—November 20, 2006
• TCAAP-
Community Development Director Karen Barton provided the City Council with an update
regarding the status of the TCAAP Master Development Plan. Mr. Steve Bubul, Kennedy &
Graven, was in attendance to provide the City Council with an update regarding negotiations of
the Preliminary Development Agreement. At this time, the City and CRR have been discussing
the following areas of the proposed Master Development Plan:
• Areas of negotiations in the Preliminary Development Agreement and the proposed time
lines;
• If necessary, right to terminate language for both parties;
• City's reimbursable costs and financial caps(e.g. consultant fees, legal costs, and staff
time);
• Rights of land transfer-language that would protect the City from having the developer
transfer the land or a portion of the land to a third party without the City's approval.
Councilmember Holden asked if the City is initiating all of the negotiations or is CRR being a
willing partner.
City Administrator Wolfe said that City staff and CRR have had back and forth communications
regarding the Preliminary Development Agreement negotiations.
Mayor Aplikowski asked if the delayed Congressional approval will impact the preliminary
• development agreement with CRR.
Community Development Director Karen Barton said that she does not believe that the delayed
congressional approval will affect the preliminary development agreement.
TCAAP-Development Tour-
Community Development Director Karen Barton announced that the TCAAP development tour
of metro area developments has been scheduled for December 2nd. The tour bus will be leaving
City Hall at 10:00 AM. City staff is requesting City Council's input regarding their thoughts on
the different types of developments (residential, commercial, office showroom) sites that will be
seen on the tour.
Councilmember Larson asked who will be representing CRR on the bus tour. It is very important
for a representative of CRR to participate in this tour.
City Administrator Wolfe said that representatives from CRR will be part of the tour. Also, if
the City Council has a particular development project that they would like to visit, please let City
staff know.
Councilmember Holden requested that a public meeting be held for the residents of Arden Hills
to discuss the current status of the TCAAP project. It would be difficult for the City to provided
in-depth information to the residents of Arden Hills at a town hall meeting.
•
ARDEN HILLS CITY COUNCIL—November 20, 2006
•
• City Administrator Wolfe said that the City staff would be more than willing to host a
neighborhood meeting to discuss the TCAAP project.
Councilmember Holden asked if the newsletters regarding the TCAAP project will be distributed
by the developer in the near future.
City Administrator Wolfe said that City staff will discuss this issue with the developer.
Community Development Director Barton said that a TCAAP consultant meeting for the City
Council is recommended as an opportunity for members of the City Council to meet with
consultants and have an opportunity to understand their roles and responsibilities in the TCAAP
project. Each of the different consultants could provide a brief overview of their roles and
responsibilities in this project.
Mayor Aplikowski noted that it was more important for the new City Council and Planning
Commission members to meet with the TCAAP consultants.
City Administrator Wolfe said that City staff will work on organizing a TCAAP meeting to bring
the new members of the City Council up-to-speed regarding the TCAAP project prior to January
2007.
TCAAP Master Development Advisory Group-
. Community Development Director Karen Barton noted that staff is recommending the formation
of a TCAAP Master Development Advisory Group to be appointed by the City Council. The
mission of the group would be to meet with Hoisington Koegler Group, Inc (HKGi), the City's
master development consultant for TCAAP, to provide input and feedback on proposed plans for
the TCAAP project. At this time, City staff is proposing the following structure for the advisory
group:
• One or two members from the City Council;
• One or two members from the Planning Commission;
• One or two members from the Economic Development Commission;
• One or two members from the Parks, Trails, and Recreation Committee; and
• One or two members from the community at large.
Mayor Aplikowski recommended that twelve members be appointed to the advisory group.
Councilmember Holden suggested that more citizens be appointed to the advisory group.
Councilmember Larson recommended that a mission or charge for the group be created prior to
appointing members. It would be a good idea to appoint professional planners or architects that
live in Arden Hills on the advisory panel.
• City Administrator Wolfe said that the charge of the group would be to review proposed concepts
related to the TCAAP project and provide input to the Council.
10
ARDEN HILLS CITY COUNCIL—November 20, 2006
• Mayor Aplikowski requested that all four precincts be represented on the TCAAP Master
Development Advisory Group.
Councilmember Larson asked if this group would advise the City Council or work with the
developer on reviewing proposed plans.
Community Development Director Karen Barton said that the advisory group would review the
consultant's proposals and provide feedback to the City Council.
Based on recommendations from the City Council, City Administrator Wolfe proposed the
following structure for the TCAAP advisory group:
• 1 Planning Commission Member;
• 1-Ecconomic Development Commission Member;
• 1-Parks, Trails, and Recreation Committee Member;
• 9-At-large Arden Hills residents.
Members of the City Council supported the proposed structure for the TCAAP advisory group.
Council Comments and Requests-
Mayor Aplikowski adjourned the Work Session meeting at 8:30 p.m.
•
Beverl Apli owski Michelle A. Wolfe
Mayor City Administrator
•
11