Working Session

Mayor and City Council Work Session
October 27, 2004 – 5:00 p.m.
A101

Council Members Present: Gerald Hamerlik, Dorette Kerian, Doug Christensen, Curt Kreun.
Council Members Absent: Hal Gershman, Bob Brooks, Eliot Glassheim, Mayor Brown.
Others Present: Rick Duquette, Saroj Jerath, Greg Hoover, John Packett, Don Shields, Colleen Morstad, Maureen Storstad, Daryl Hovland, Al Grasser, Mark Walker, Roxanne Fiala, Pete O’Neill.

Chair Hamerlik called the meeting to order at 5:05 p.m. and stated that the planned adjournment for today’s meeting will be 6:00 p.m.

1) Greenway.

Mark Walker, Assistant City Engineer, distributed to the group a packet of information detailing budgetary needs for the maintenance of the flood protection project and the greenway. Walker directed the group review the far right column on the cover page which breaks down the overall total projected costs and is broken down with the Flood Protection Project section being on the top half of the page and the greenway costs broken down on the bottom half of the page. He stated that the overall cost for the Flood Protection Project Maintenance is projected to be $588,200.00 and for the Greenway is $375,185.00. He explained that the group will also notice a column labeled “Absorbed into Existing City Budget” which will be $164,930 for the Flood Project and $2,000 for the Greenway, this column represents the amount that could be covered by various departments in the city with existing personnel and equipment. This leaves a net to be added to the City Budget of $423,270 for the Flood Project and $373,185 to be added for the Greenway. He stated that the remaining pages of the handout detail how the information on the cover sheet were derived.

Walker proceeded to highlight a few areas on the handout for the group.

1) In the Flood Protection Administration, Walker stated that they feel that the full $48,000 cost for a half-time Project Engineer could be fully absorbed in the existing engineering department budget.
2) For Mowing the Flood Control Project, he stated that the estimates are based on some staff judgments, for instance that in residential areas the mowing would take place 18 times over the course of the season, while in nonresidential areas mowing would only be done 9 times. He stated that this was for mowing on the levee itself and that mowing in the greenway was represented separately in subsequent pages. He stated that for the basis of these costs, the greenway is considered to be the area between the levy and the river.

He stated that another area where staff judgment has been used is in the area of herbiciding. This report was based on doing one application of herbicide per year, but there is a staff concern that the community may expect more, particularly in residential areas and were looking for feedback on these judgment areas. Kreun stated that he would agree that there may need to be at least two applications – 1 early in the season, then one mid-way to catch late developing plants. Christensen concurred that the report should probably include at least two so meet the expectation that the general community has for maintenance.
3) Walker pointed out that on page 2 there is a section talking about restaining of the flood wall. He explained that this is a regular maintenance item that will be required approximately every 20 years, but what they have done is budget an amount in each year’s budget so that at the end of 20 years there are funds available to cover the cost of this maintenance item.
4) On page 3, Walker explained that Todd Hanson, Mosquito Control, feels that the full cost of mosquito control in the English Coulee diversion area can be absorbed in their current budget. Grasser added that he believes that they are already covering much of this area at the present time. Grasser pointed out that there is one herbicide application listed, as that is consistent with what the County/Township do in this area, however they have included mowing all areas twice per year, which is more than the County currently does in that area.
5) On page 4/5, Walker stated that in the pump station area they assume needing to rebuild each of these about every twenty years, which would break down to an annual budget accumulation of $8,000. He drew particular attention to item I. The SCADA upgrade. This is the software system that is located in the pump stations and reports their status continually to the Water Treatment Plant as well as triggering an alarm when something fails or is in need of maintenance. These usually require upgrading every 10 years, so an annual amount of $8,350 has been included in the budget so that when the upgrades are needed, funding is available.

In turning to the Greenway:

1) Walker stated that there are approximately 230 acres to mow and approximately 250 acres that are closer to the riverbank that will be left in a natural state.

Christensen inquired as to if there are any staff thoughts on funding sources for the costs to be added to budget. Walker stated that they are looking for guidance from the City Council on funding options.

Christensen stated that they had at one time talked about a change in policy to fund these type of expenses on a citywide basis and wondered what the status of this research was. Kreun said that they has talked about wanting to disburse the expense to the greatest number of people, thereby lessening the actual amount that people had to individually pay and he recalled that one option discussed was to look at the stormsewer fund and a utility bill line item as one of the best options.

Kerian expressed that some still view this as a tax even though for commercial it can be passed down to the consumer. She inquired if including this was in any a part of the current model for stormsewer rates. Walker stated that the only part that could be considered to be included would be the items that were able to be absorbed into the current budget, all additional costs would need to be added to the current model.

Grasser added that stormsewer is calculated on a square footage with a multiplier for impervious surface, with four categories for how the charge is computed. Kreun stated that one benefit to using this method would be that Council would have control of the formula used and could thereby work with it to develop a formula that would be equivalent for all users.

Kerian inquired whether there is anyone who is exempt from the stormsewer charge on the utility bills. Grasser stated that the only customers that used to be exempt were those that used to drain directly to the river or the English Coulee, and that the largest of these would be Altru Hospital and the University. He continued that now that we have added controls to the English Coulee and for what flows into the river, we now have established control over even these, so there should be no exemptions for the stormsewer charge. Kerian stated that she has heard concern expressed from community members over the continued increase of not only their tax bill, but also their fixed costs and that makes her cautious since some view this as a regressive charge that hits the lowest income people hardest.

Christensen stated that he feels the use of stormsewer fund for direct maintenance of the flood project and also the greenway, which is a result of the flood project, is appropriate and that the addition of this cost as a part of the utility bill is a good fit. He also asked for other possible sources of funding for these costs.

Kreun suggested that perhaps if we decide to fund this through the utility that a separate line item on the bill such as “greenway maintenance or flood protection maintenance” would be more acceptable than lumping it in with the regular stormsewer charge. He felt that gives the customer better knowledge of what they are being charged for. Hamerlik expressed that he is more in favor of the wording of “flood protection maintenance” or something similar than greenway.

Christensen stated that the group needs to become aware of what effect allocating these costs on a utility basis would have on a utility bill, including what effect adding in the charge to those entities that have previously not paid the stormsewer charge will have and that a decision can not really be made until this information can be reviewed. He added that another possible funding source that had been discussed was city-wide special assessment and that he is not as in favor of that as people are very against their taxes increasing any more than they already are. The group discussed that the use of special assessments would also be a change in that this will be ongoing maintenance that will be funded and typically special assessment is not a good fit for this and has never been used for this. Duquette agreed that in this case considering special assessments does not seem to be the best option.

Christensen stated that he believes the average homeowner will not see the biggest impact on their regular utility bill from an added charge for these maintenance items, but the larger commercial property owners and those that have previously not been charged will be the most vocal against the charge and that is why he would like information on the formula as to how this allocation would be done so the can review the overall impact.

Duquette stated that they will be working on an equation and a policy to accompany it to bring back to this group. He brought up that there was also some discussion in the past on out-of-town users of amenities, such as the greenway, and a thought of trying to find a way to allocate some of the cost to them. Kerian stated that you could say the same for parks, roads and water and any other City service that people expect to find when they come into our community. Christensen also brought up those that pay for school on tax bill, but have no students in their household. Duquette inquired whether there was still a desire to consider sales tax in the mix for covering some of the maintenance costs and if we don’t how we justify to property owners that they are covering full costs when there is substantial usage from those outside the community. Christensen stated that he is not in favor of looking at an increase in the sales tax to fund this cost at this time.

Hamerlik suggested that maybe we need to look at a combination of a utility charge and sales tax to ease the heartburn that some have toward the greenway. Hoover suggested that maybe the key is to view the entire project as the flood protection project, since the greenway in incidental to the flood project. He felt that it would be easier to explain the benefit that all are receiving from the charge in this way. Hamerlik stated that is another good reason to list any utility charge as a “flood protection maintenance”.

Jerath suggested that perhaps instead of an increase in the sales tax, a change in the allocation could be made, so that increase in the collections are channeled to cover a portion of the maintenance costs, thereby lessening the amount that would need to be covered by the utility fund.

Hamerlik reiterated that people seem to tolerate new charges, whether a fee or a tax, easier if they hear it is related to flood costs. He felt that the main difference between these two options is that one we would be able to control at the council level, whereas the other will require a vote of the people to approve. Kreun agreed that the only easy way to target users from outside the city would be to look at something based in the sales tax.

Christensen reiterated that he sees no difference between regular infrastructure we as a city are expected to provide and the greenway/flood project. He added that the group had received a listing from Mr. Schmisek that already incorporates use of the increases in sales tax collections for funding other upcoming needs including infrastructure. Kreun agreed and added that one idea that the group is trying to work toward is being able to use these funds to pay for main trunkline projects instead of special assessing them so that we have more control of the project.

Kerian reiterated that some fixed income people may be at their limit for what they can pay in fixed costs each month and she would like to explore maybe a combination of a couple of funding sources to ease the burden on these individuals.

Walker stated that as the areas that are currently in the future assessment areas come into the City the cost per household will also decrease. Grasser added that Schmisek has reviewed this in the past and has concluded that any affect will probably not be of a substantial amount.

Grasser stated that they have looked at some tentative estimates for cost that could be offset to the larger entities that are currently not covered by the storm sewer charge and it appears that it will be in the neighborhood of $75,000.

Christensen stated that he still feel this goes with our policy on infrastructure and that other revenue sources to fund that have limited availability and that we have been paying some things out of highway users that we have discussed also need to find another funding source and we need to look at the items that are before us and what is best way to fund them. Kerian pointed out that the choices that we make and the policies that we set up will have an affect on others in the future, as if we choose certain funding sources they become unavailable for others to use or change the use of later. Christensen stated that the main concern is looking at the needs of the City and making sure that we are able to maintain adequate funding for those needs.

Duquette stated for the next meeting he would like to bring back some models for the group to review. They would be : 1) showing stormsewer charge, including the entities that do not currently get charged; and 2) a model showing a reallocation of the sales tax dollars as a funding source. Kreun stated that the models should include the effect of new areas that are projected to come into the City. Christensen stated that he would also like included a list of all other potential uses for the infrastructure allocation.

Grasser stated that one item that this has been used for is a match to federal dollars for regional and federal projects. He added that currently there is a struggle to find local match for some of the dollars that are available and that is why some projects the local match has been special assessed, as it is the only funding source available.

Christensen inquired whether any opinion on the local match for the 42nd Street Underpass project is available. Grasser informed the group that in talking with the City Attorney he does not believe that a city-wide special assessment will be a good choice for that project. Christensen inquired how much a local match usually is. Grasser stated that the agreement usually states 80/20 split, but in actuality becomes more like 60/40 due to some items that are needed, but not covered under the matchable part of the project, so in case of 42nd Street Project may be close to $6 million. Christensen stated that then when we sell a bond usually at least another $1 million for interest and other costs, and if we take all of the money out of the infrastructure allocation for other projects or the maintenance costs then the dollars will not be available to work with on large projects such as the 42nd Street Project. Kreun agreed that how we begin to handle these will become policy that others will begin to use.

Jerath brought up that at one time there was talk of using the proceeds of the use tax for funding the greenway and flood project maintenance. The group discussed this, but given that the use tax is lumped in with the sales tax figures, it has already been included for potential use in other areas and if separate it out for greenway then not available for the other use.

Duquette stated that on the previous handouts prepared by Schmisek it listed that we would need to have $4.5 million available in 2007 for the underpass. Duqette stated that he and staff will work on preparing the models as discussed and will bring them back to the next meeting, as that will be able to be calculated by then. He proposed then for two meetings out returning to the general discussion on the CIP needs and potential funding sources, as that topic is a little more involved. Kreun requested that a copy of the formula to be used should we elect to go with a stormsewer charge on the utility bill so that the group could play with it if needed.

Pete O’Neill inquired whether anyone has explored the recreational use side of the project and a way to bill for use of trails or snowmobile access. Duquette stated that early on there was some discussion of this, but in research it was determined that it was not cost effective to work up an access charge, and often times small amount of revenue generated was not worth the cost or the community heartburn that was caused.

Meeting adjourned at 5:55 p.m.


Respectfully submitted,


Sherie Lundmark
Admin Spec Sr