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HomeMy WebLinkAbout11-02-2015 Work SessionMeeting of: Date of Meeting: Time of Meeting: Location of Meeting: Purpose of Meeting: CALL TO ORDER /ROLL CALL The meeting was called to order at 7:00 PM COLUMBIA HEIGHTS CITY COUNCIL November 2, 2015 6:30 PM Conference Room #1 WORKSESSION Present: Mayor Peterson, Councilmembers Murzyn Jr, Williams, Nawrocki and Schmitt Also Present: City Manager Walt Fehst, Finance Director Joe Kloiber, Human Resources Director /Assistant to the City Manager Kelli Bourgeois, Library Director Renee Dougherty, Public Works Director Kevin Hansen, Facilities Maintenance Supervisor Eric Hanson, Community Development Director Joe Hogeboom, Assistant Finance Director Jackie Zillmer and City Clerk /Council Secretary Katie Bruno. Report on Solar Engineering Study Director of Public Works Kevin Hansen gave an overview of the feasibility of adding solar panels to the following four city buildings; Public Works, Public Safety, the New Library and Top Valu, Store #1. Two programs are being considered; Made in Minnesota and Rooftop Solar. The City would enter into a Power Purchase Agreement (PPA) with an investor. The City is looking at the Made in Minnesota program for Top Valu 1. Over a 25 year time period the City would save approximately $156,000; it was noted there are not any capital costs to the City. For the other three buildings, the City is considering Rooftop Solar, again a PPA would be required. A graph was displayed detailing the cost savings over 15, 20 and 25 years. Overall the City has the potential to save approximately $1,000,000 in electrical costs for the four buildings. Hansen noted the council will need to consider a PPA agreement before the end of the year. Councilmember Nawrocki asked if the panels could damage the roofs. Hansen explained the panels are ballasted on, and will not sit directly on the roof. Councilmember Schmitt asked if Murzyn Hall has been considered. Director Hansen stated he will look into that in 2016. Councilmember Nawrocki suggested doing one building, commenting the council is not sure of the future of the liquor store. Finance Director Joe Kloiber explained this is a long term investment for the City, and he panels can be removed if a building is sold. Staff recommendation is to enter into a 10 year PPA for Top Valu and a 15 year PPA for the other three buildings. Utility Rate Study 2016 -2020 Director of Public Works Kevin Hansen reported two previous studies were completed in 2003 and 2007. The rate study was last updated in 2010, and extended until 2014. The 2015 rates are unchanged from 2014. TKDA was hired to review various rate scenarios for our water, sanitary sewer, storm sewer and refuse enterprise departments. The following are factors that are influencing the current operations of each Enterprise Fund: • The water, sanitary and refuse budgets are all impacted by service contracts . As an example, MCES fees have increased 4.5% and 5.5% in the last two years and our tipping fees have increased 68% since 2009. • The Sanitary Sewer Fund does not currently generate sufficient revenue to cover operating expenses. The 2015 CAFR shows a net shortfall of $200,000. • The Sanitary Sewer department has also experienced additional demands: internal aggressive sewer cleaning, 1/1 disconnect program, backflow prevention program; and externally the MCES 1/1 surcharge program -that may add $125,000 per year until satisfactory 1/1 reductions are made. • The Water department budget has been impacted primarily in capital improvements with the addition of a cleaning and lining program under the City of Minneapolis annual program, and water main replacements. • The Storm Sewer Fund does not currently generate sufficient revenue to cover operating and debt service expenses. The 5 -year permit (NPDES) was recently revised in June of 2014 increasing the demands of the department. • Our Capital Improvement Plan (CIP): The city's infrastructure is aging; while we are investing to address those needs with repairs, rehabilitation and replacement, it is Public Works opinion that the current levels are not adequate to meet the long- term need of our utility infrastructure needs. The Final Utility Rate Study report will be presented to the Council at a future meeting. The average resident will see an increase of 3% in 2016, 6% in 2017 (this year tax - payers will receive the fiscal disparities subsidy) and 3.5% in 2018 and 2019. TKDA recommended removing the senior discount. Currently fewer than 200 residents qualify for the discount. Councilmember Schmitt suggested implemented a program to assist seniors in ensuring their utilities are working efficiently. Director Kloiber noted the proposed rates yield a shortfall in the utility funds. Discussion regarding 2016 Budget Administration City Clerk Katie Bruno reported the Mayor Council budget has an overall decrease of $173. The Sunshine Fund has an increase of $500 to cover inflation, most decreases are in personnel services. The City Clerk Budget has an overall increase of $51,777 due to the 2016 Presidential Election. Human Resource Director /Assistant to the City Manager Kelli Bourgeois reported the City Manager Budget has an increase of $18,500, largely due to personnel costs, as well as the $3,000 inclusion for IS services. The Legal Services budget decreased by $9,900, due to labor negations being done in- house. Ms. Bourgeois reported the Cable Budget will see an increase of $35,175, noting we will see $35,000 in revenue from the PEG programming. We will be required to upgrade equipment to our cable equipment. Additional increases include $7,700 for Neogov, this will allow on -line employment applications. Councilmember Nawrocki stated we should consider a decrease the amount residents are paying for cable because of the PEG fee revenue. Bourgeois reported that the franchise fees for Comcast are already settled; additionally the revenue is expected to cover the cost of necessary upgrades. The council discussed whether to change to HD (high definition) or stay with SD (standard definition). Councilmember Schmitt asked if it is necessary to upgrade to HD. Bourgeois noted it is not required, and is an additional cost of $15,000. The council discussed ways to increase the use of our cable channel, and it was noted that HD may be preferred going forward. Mayor Peterson indicated he would support the acquisition of high definition equipment, Council member Schmitt stated she would support standard definition. Bourgeois will look into what the industry standard is, as well as look at best options for our usage level. Liquor Finance Director Joe Kloiber reported the three liquor stores have an approximate 2% decrease overall combined. This is due to projected energy savings, as well as some personnel restructuring. The council had staff to look at privatization scenarios and a 5 year pro forma if sales decrease. In 2017 the debt for the stores can be refinanced, resulting in a cost savings. The County assessed the three buildings at $2,103,400, which Kloiber though was low, noting the county valuation lags about 30% below the market. The existing debt is greater than the amount the properties could be sold for, indicating selling is not advisable. The option to sell as a going for concern was explained. Mayor Peterson stated he sees no reason to get out of the business, noting the stores are making money. Community Development Director of Community Development Joe Hogeboom explained Community Development has three functional areas; Planning & Zoning, Economic Development and Building Inspections. The overall increase is 2 %. Contributors to the decrease include an overall planned increase in salaries, decreases in supply costs, outside professional services and training expenses. Director Hogeboom reported the building permit revenue is higher than expected due to the increase in construction activity. Hogeboom explained the decision was made not to fill the Assistant Community Development Director position, and to bring back the position of Planner. A part -time Community Development Secretary will be hired as well. The re- organization of the department are cost neutral. Councilmember Nawrocki questioned why staff is not being reduced due to the recent sale of Park View Villa. Director Hogeboom explained that many of those duties were done by non -city personnel. Finance Director Kloiber clarified that the department is increasing the number of staff, not the amount of resources. Councilmember Schmitt stated she sees the addition of the part -time secretary as advantageous. Public Works Director of Public Works Kevin Hansen reported wage increased were 2.25% to 2.5 %, no personnel budget changes are anticipated. Infrastructure is a growing concern for Public Works. Expected "RFPs" for 2016 include a Refuse contract, a HVAC maintenance for all public buildings, and automation controls for buildings. The street department has an increase of 1.3 %, due to wages, chemicals and salt. Street Lighting has a decrease of 2 %, due to a decrease in electrical costs. Traffic Signs & Signals covers contracts for non -trunk highways and lane striping and painting. A 2.7% increase is anticipated. Parks has a 1.1% increase, due to personnel increases. Huset Field 5 is having lighting issues, which will need to be addressed. Urban Forestry has a 5.5% increase, this is to cover EAB inspection and removal. All departments result in a 2.6% increase. Councilmember Schmitt asked about the park dedication fee expected from Dominium, and suggested considering a multi -age park. Director Hansen will relay the request to the Park & Recreation Commission. State Aid Maintenance Major Maintenance is proposed for 2016. Projects include crack sealing, closing the median on Central at the new library, two retaining walls, milling of streets, and maintenance on three intersections along Central Ave. Infrastructure Fund Seal coat in Zone 7 and the construction area in Zones 2 and 3. Water Fund A 1% increase is proposed, due to the price in purchased water from Minneapolis Waterworks. Debt Service This includes debt service for water tower maintenance. Sanitary Sewer A 1.6% increase is proposed. Director Kloiber reported the League of Minnesota Cities recently changed the way the insurance premiums are calculated. Refuse This is contract driven; there has been a steady increase of 3% in 2015, 2016 and 2017. Building Maintenance Personnel costs are expected to increase due Step increases and the anticipated additional workload at the new library. Capital Equipment requested include replacing the smaller asphalt roller, and a slope mower for parks. The sewer department is requesting a backhoe and breaker. Councilmember Murzyn, Jr. suggested replacing two pieces of equipment and get a better vehicle. Director Hansen will look at options, and report back to the council. Capital Improvements include two RTUs at City Hall, sheetrock in the Community Development area, and carpet in the Administration area. A LED sign is proposed for the new library, although it was noted it may be funded from the library fund. Park Improvements include playground equipment at Circle Terrace Park, a small restroom /changing area and an additional shade structure for the Huset Park splash pad. Councilmember Schmitt asked if there are any improvements planned for Lomianki Park. Director Hansen indicated the Park & Recreation Commission did not include it in their recent master plan discussion. Utility Fund The water tower is scheduled to be repainted in 2016. Water mains and sanitary sewers are scheduled to be cleaned and lined. Pond reconstruction is planned for the Silver Lake boat landing. Meeting Adjourned at 10:37 PM Respectively Submitted, Katie Bruno, City Clerk /Council Secretary