Loading...
HomeMy WebLinkAboutMinutes i� ��tJV� �ri°t � y � ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... ���� �ri e ar�d PC�� t MINUTES COTTAGE GROVE CITY COUNCIL January 18, 2017 COUNCIL CHAMBER 12800 RAVINE PARKWAY SOUTH REGULAR MEETING - 7:00 P.M. 1. CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota, held a regular meeting on January 18, 2017, at Cottage Grove City Hall, 12800 Ravine Parkway. Mayor Bailey called the meeting to order at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE The audience, staff, Mayor, and City Council Members recited the Pledge of Allegiance. 3. ROLL CALL The following were present: Mayor Myron Bailey, Council Member Steve Dennis, Council Member Wayne Johnson, Council Member La Rae Mills, and Council Member Dave Thiede. Also present were: Charlene Stevens, City Administrator; Korine Land, City Attorney- LeVander, Gillen & Miller, PA; Ryan Burfeind, Asst. City Engineer; Zac Dockter, Parks and Recreation Director; Joe Fischbach, HR Manager/City Clerk; Jennifer Levitt, Community Development Director/City Engineer; Sharon Madsen, Communications Coordinator; Molly Pietruszewski, Parks and Recreation; Robin Roland, Finance Director; Craig Woolery, Director of Public Safety; Gary Orloff, Working Foreman. 4. OPEN FORUM Mayor Bailey asked if anyone in the audience wished to address the Council on any item that was not on the agenda. As no one wished to address the Council, Mayor Bailey closed the open forum. 5. ADOPTION OF AGENDA Mayor Bailey stated they'd be pulling Item 11A off of the Consent Agenda this evening because they will be having a workshop prior to taking any further action. Motion by Council Member Thiede, second by Council Member Dennis, to adopt the agenda without Item 11A. Motion carried: 5-0. CITY OF COTTAGE GROVE • 12800 Ravine Parkway • Cottage Grove, Minnesota 55016 www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer City Council Meeting Minutes January 18, 2017 Page 2 6. PRESENTATIONS A. Receive Inclusive Playground Donations Totaling $56,000 Accept Inclusive Playground donations of.� 1. Western Refining and SuperAmerica - $25,000. 2. Stantec Consulting Services - $6,000. 3. Cottage Grove Lions Club - $10,000. 4. St. Paul Park Newport Lions Club - $15,000. Mayor Bailey asked the City Council Members and Molly Pietruszewski and Zac Dockter, Director of Parks and Recreation, to join him to receive the donations for the Inclusive Playground. Matthew Sieh from Western Refining and SuperAmerica was asked to step forward; he introduced Carolyn Hieb of SuperAmerica and the Lions Club, who was with him. He stated one of SuperAmerica's core values is to give back to the communities in which they live and work. Matthew stated they had been approached about the Inclusive Playground and they knew they wanted to participate. Carolyn was instrumental in helping with securing the donation for this project, as she's also a member of the Cottage Grove Lions Club; she was able to make sure that Western Refining and SuperAmerica understood the value of a $25,000 donation and what that would mean to the community. Mayor Bailey thanked Matthew and Carolyn for their work in securing the donation and also for the other donations they make to the community. Tom Bader and Lee Mann of Stantec Consulting Services stated they're the engineers for the City of Cottage Grove and have worked with the City for a long time. Stantec's slogan is "We design with community in mind," so that's the base and fiber of what they do as a company. They said they look forward to seeing the playground completed and presented a donation of$6,000 to Mayor Bailey; Mayor Bailey thanked them for Stantec's donation. Randy Lewis of the Cottage Grove Lions Club stated their vision was community service, family, and fun, and the Inclusive Playground really exemplified every aspect of that. One of their members, Patrick Forsythe, is on the Inclusive Playground committee, and he shared his passion for it with others in the club. It's been an easy project for them to get on board with and to see it happen within the community; he presented a donation of$10,000 to Mayor Bailey. Randy was thanked by Mayor Bailey, who stated the Cottage Grove Lions have been an integral part of the community and how they give back to make Cottage Grove great. Secretary Greg Langbehn of the St. Paul Park Newport Lions Club presented a donation of$15,000 to the Inclusive Playground; he stated they believe in giving back to the community, and while Cottage Grove is a neighboring community, they're proud to do this. He stated they've applied for a $100,000 grant from Lions Club International Foundation; if they receive that grant, the total amount will be donated to this project. City Council Meeting Minutes January 18, 2017 Page 3 Mayor Bailey stated the St. Paul Park Newport Lions Club has stepped up with many Cottage Grove projects, and it was nice to see the Lions Clubs working together to make things happen in the community. Mayor Bailey again thanked all of those who had donated to the Inclusive Playground; he can't wait for it to become a reality later this year. B. Afton Apple Donation to the Public Safety Board Presentation of check from Afton Apple's fall fundraising in the amount of $5,321 to the Cottage Grove Public Safety Board for Fire Department education. Karin McCarthy, of the Cottage Grove Public Safety Board, stated they're a nonprofit organization that works to provide support for the Cottage Grove Public Safety Department, which includes Police, Fire, and EMS. They've previously had fundraisers to purchase various items: The first K9, Blitz, and his expenses; a portable speed trailer; and a chip reader for animals that get lost in the City, which helps the Police Department and prevents animals from being placed in the Humane Society. This year they're helping the Fire Department. Sarah and Mike Parkos and the Femling family, of Afton Apple Orchard, were present. Sarah stated their family has owned and operated Afton Apple for 28 years; they're a small family business striving to provide a memorable apple orchard experience with the ability to pick your own apples, raspberries, strawberries, and pumpkins. They added a corn maze to their orchard 16 years ago, and each year they have the opportunity to create a unique design, which have mostly been farm related; when trying to come up with this year's design, they wanted to get the community involved and wanted to show their gratitude and support for people dedicating their lives to being the real heroes. So, they carved the theme, "Thank Your Local Heroes" in their 15-acre cornfield and they felt the least they could do was hold a fundraiser and give back to the community. They coordinated with the Washington County Sheriffs Office, Hastings Fire & Police, Woodbury Fire, and Cottage Grove Fire & Police to host fundraisers for their Public Safety Departments. The fundraising included donations from a portion of an adult corn maze admission and the "Fill the Firefighter's Boot" contest. Public Safety personnel were present at the corn maze on weekends for meet and greets, to show safety equipment, and answer public safety questions. The "Fill the Firefighter's Boot" contest was on three weekends, represented by Hastings, Cottage Grove, and Woodbury Public Safety. Each City was challenged to collect the most on-site donations into a firefighter's boot from corn maze customers, and they matched the donation of the winning City. They're also donating $3 from each paid adult corn maze admission each day of the weekend to the featured Department. The fundraiser of corn maze admission sales and "Fill the Firefighter's Boot" contest was very successful. The support for the "Thank Your Local Heroes" theme was mind blowing, and they are completely thrilled to be giving back over $21,000 to the community. Cottage Grove Public Safety did a remarkable job representing first responders by bringing out several City Council Meeting Minutes January 18, 2017 Page 4 Fire Rescue vehicles and Police equipment on the weekend of October 22 and 23. Cottage Grove was the City with the most donations for the "Fill the Firefighter's Boot" contest, so they matched the total of$142 and donated $284. Sarah stated on behalf of Afton Apple, including their families, employees, and customers, they were privileged to donate a grand total of$5,321 to Cottage Grove Public Safety for Public Safety education. She thanked Cottage Grove Public Safety for their outstanding service. Karin McCarthy, on behalf of the Cottage Grove Public Safety Board and the Public Safety Departments in Cottage Grove, thanked them for the very generous donation and stated it would be put to wonderful use for the City. Mayor Bailey stated Afton Apple also got involved with the Cottage Grove Strawberry Festival and made sure the City had enough fresh strawberries at the concession stands, etc. He stated once again it was nice to see surrounding communities and businesses helping Cottage Grove with fundraising and supporting our City. 7. CONSENT AGENDA A. Approve the January 4, 2017 City Council Regular Meeting Minutes. B. Receive and place on file the approved minutes for the Arts Commission Meeting on December 6, 2016. C. Schedule Local Open Book Meeting and Acknowledge Regional Meetings. D. Adopt Resolution 2017-003 accepting donations received in the Fourth Quarter of 2016. E. Accept donation from Conway and Katherine Olson in the amount of $11,000 towards the purchase of cross country ski and snowshoe trail grooming equipment. F. Adopt Resolution 2017-004 extending the closing date for the Land Exchange Agreement with Presbyterian Homes an additional 90 days. G. Reappoint Myron Bailey to the Economic Development Authority. Council Member Dennis wished to pull Item D and Mayor Bailey wished to pull Item E for further comment and/or discussion. Council Member Dennis stated he wanted to recognize donations made to the Inclusive Playground in the Fourth Quarter of 2016: Alene Colvin Fundraiser; Becky Uecker; Rosemount Lions; C. Carlin-31 Gift Vendor; Krista Bolad; L. Jameson-Keep Collective; Advanced Sportswear; Cottage Grove Middle School Special Ed & Reaching All Humans-Craft Fundraiser; Tennis Sanitation; Jamberry Nails-Mallory Martin-Vendor Fundraiser; Whenever Fitness; Ryan Sundell; Bolton & Menk; Stantec; Vadnais Heights Lions Club; Thrivent Financial; Dorie Hanson; Cottage Grove Lions; Western Refining & SuperAmerica; St. Paul East Parks Lions Club; Andersen Corporate Foundation. Additionally, there was an unrelated donation for the Bike Park from Rumpca Excavating in the amount of$4,918.50, for services and materials that were given. City Council Meeting Minutes January 18, 2017 Page 5 Council Member Dennis stated making a difference in the community can come in many different ways, and it doesn't have to be volunteering on a commission, etc. but can be simply by donating money to the City for a designated project; no amount is too small, and it's always appreciated. He thanked all of the above people and/or businesses for their generous donations. Mayor Bailey stated that he pulled Item E, which was to accept a donation from Conway and Katie Olson in the amount of$11,000 toward the purchase of cross country ski and snowshoe trail grooming equipment. Early last year, Mayor Bailey was speaking with Conway Olson, who stated he liked some of the changes being made at River Oaks Golf Course. He had suggested the golf course might be a great place to actually put in some trails; Mayor Bailey agreed but stated the City didn't really have the right equipment to groom trails. Mr. Olson asked if he could make a donation, Mayor Bailey got Director pockter involved, and they came up with what would be needed to groom trails; in fact, the equipment might also be utilized in other ways throughout the City. Conway and Katie Olson are very passionate about cross-country skiing and wanted to give back to the City of Cottage Grove. Mayor Bailey thanked them for their generous donation toward the equipment, which has been ordered, and will help expand trail options in Cottage Grove. Motion by Council Member Thiede to approve the Consent Agenda, second by Council Member Mills. Motion carried: 5-0. 8. APPROVE DISBURSEMENTS A. Approve payment of check numbers 199495 to 199610 in the amount of $447,252.71 and EFT Payment of$861,307.19. Motion to approve disbursements by Council Member Mills, second by Council Member Johnson. Motion carried: 5-0. 9. PUBLIC HEARINGS — None 10. BID AWARDS — None. 11. REGULAR AGENDA A. Classification and Compensation Study Staff Recommendation: Approve the proposal to conduct a Classification and Compensation Study with Springsted in the amount of$38,500. This item was pulled by Mayor Bailey for a future meeting. 12. COUNCIL COMMENTS AND REQUESTS City Council Meeting Minutes January 18, 2017 Page 6 Council Member Mills stated there's a Stone Soup Thrift Shop fundraiser coming up on Saturday, January 28, which will be a luau; tickets are available, $10 for adults and teens and $5 for children. The tickets can be purchased at Park Place, the Stone Soup Thrift Shop, and also online. Council Member Johnson stated after the last snowfall, he realized people need to be reminded of how important it is to shovel out the fire hydrant in your area. It could help you or your neighbor someday to make sure the Firefighters can access the fire hydrants, as seconds and minutes matter. Council Member Johnson stated due to social media, there are more ways than ever to really stay informed on what is going on in the City with new developments, new stores, current School Board information, information on community groups, etc. He encouraged everyone to be part of the community and stay informed. Council Member Johnson stated he had a chance to tour the Cottage Grove Public Works Department. He stated it's a great department, they really care about the community, and they're very prompt in responding to citizens' requests. He was very impressed with everyone there, and the City should be proud of them. 13. WORKSHOPS — OPEN TO PUBLIC A. 2017-2021 Capital Improvements Plan Staff Recommendation: Workshop discussion of 2017-2021 Capital Improvements Plan, including Central Fire Station presented by Wold Architects. Mayor Bailey asked Community Development Director/City Engineer Jennifer Levitt to begin the workshop on the Capital Improvements Plan (CIP). Director Levitt informed the new Council Members that's a five-year plan for roads, utilities, park projects, and buildings; she advised they'd be discussing all of those tonight except parks, which will be dealt with at the next Council Meeting. Tonight they'd focus on anything being planned in the next two years. This evening they'd start with buildings, one of which is the Central Fire Station; the plans and specifications for that will be voted on at the next Council Meeting and the bid date will also be established. Director Levitt advised regarding budget, she would not be speaking on that, but Finance Director Robin Roland would do so later on. The other building is the Hero Center; that project is currently under preliminary design. The Council will be meeting with the City of Woodbury's City Council on February 9, so there will be more information gleaned at that time. The Hero Center will hopefully be constructed in 2018. Regarding the Ice Arena, they're looking at the north and south refrigeration system replacement and roof replacement in 2020. Director Levitt asked John McNamara of Wold Architects to speak about the Central Fire Station. Mr. McNamara wanted to give everyone an update on the design process City Council Meeting Minutes January 18, 2017 Page 7 and the direction they were going, as they'd be going out for bids soon. The site on 80th Street will be completely reconstructed; there will be two main parking lots, one for the public, and one for the apparatus. There will be an additional parking area in the back of the station for staff. He reviewed the building layout; they're looking at expanding the garage from five drive-through bays to six. The proposed colors for the exterior brick as well as the colors chosen for the interior were shown. He gave specifics of the interior design on all three levels. Mr. McNamara reviewed the schedule: February 1 they'll be looking for Council approval of the plans and specifications, to go out for bid. In February and early March, they'd obtain bids; the project will be awarded in early April, with construction starting in the spring. Regarding the budget, they're at $7,900,000 for the general building construction, which includes some schematic design costs and costs for the demolition of Fire Station 2. Right now, they believe the total project cost will be approximately $9,000,000, which is a bit higher than it had been; the sixth bay and in-floor heat and heated apron are some amenities that they might choose to do without. He reviewed some changes they might want to make to the plans, specifically, installing in-floor heat to the apparatus bay instead of overhead heat, but that would be an added cost. They would also need to upsize the boilers and other control work if those changes were made, which would be added costs. The monument sign is being provided; however, the electronic reader board is a fairly expensive item, approximately $60,000. On bid day, they can discuss the relative importance of each item. Mr. McNamara asked if there were any questions from Council. Mayor Bailey stated he thought the heated apron is a priority, based on what had happened with the sidewalk at City Hall; he personally felt the electronic reader board should be way down the list. Council Member Thiede asked if the in-floor heat was actually more cost effective, energy wise; Mr. McNamara stated there are some savings but it would not affect the rebates. Council Member Thiede asked about the solar panels on the previous City Hall and if those had been factored in; Mr. McNamara stated there's about a $16,000 premium on that, but they felt those should be included so they're already part of the cost. Council Member Johnson asked several questions, including if the design had been copied from another city's existing fire station, it had been built this way, and it worked great; if there was going to a rough type of tile installed in the public portion of the building to prevent slippage and, if so, how easy that would be to keep clean with muddy shoes, etc. Mr. McNamara stated they'd toured many fire stations and got input on what worked best. A rough tile would be used in the public portion, and there would be a walk-off mat in the main entry vestibule and the hallway, as you enter the building; the tile used would be easy to clean. City Council Meeting Minutes January 18, 2017 Page 8 Council Member Johnson asked with all the glass used to help heat the building in the winter if that would create problems in the summer with excessive heat. Mr. McNamara stated it's very energy-efficient glass and felt there'd be more of a benefit in the wintertime. Council Member Johnson asked if that specific glass was readily available should it break; Mr. McNamara stated that yes, it was pretty common in the building trades. Council Member Johnson asked about maintenance on the building; Director Levitt stated the maintenance people take a close look at the plans and specifications; they look at lighting, the HVAC, the boiler systems, and identify anything that might be more challenging for maintenance and they try to minimize those. They also work closely with them to develop a maintenance plan for the facility. Council Member Johnson asked what ensured that the price quoted will remain and won't become excessively more expensive; Mr. McNamara stated right now it's a budget number, it's going out for bid, and the bids are going to tell them if they were on track. Based on the information they had, Wold felt relatively confident that their numbers were accurate. Council Member Johnson clarified that he's not worried about that; it's when the project is done and there have been many changes made, what the final cost will be. Mr. McNamara stated they break the project up into work scopes and make sure it's as clear as possible; he stated they try to alleviate contractors pointing the finger at each other. He stated he won't say there aren't going to be any issues because that's not reality; however, theirjob is to reduce that as much as possible, and they have a pretty good track record of doing so. Council Member Johnson asked if there's a chance that this cost could be 10% higher, if they're getting change orders. Mr. McNamara stated there's a contingency earmarked going into it, to help offset any of those costs that arise. Director Levitt stated that with the Kraus-Anderson contract there's a maximum price guarantee, so there's a lot of emphasis that Kraus-Anderson is putting in when reviewing these plans and specifications because they also have to absorb risk. Council Member Thiede asked with the design and the landscaping, etc. if the maintenance budget would need to be increased or if they'd be able to do the work with the existing staff. Director Levitt stated the Parks Department actually did the detailed landscaping design on the project and gave a lot of insight on how to efficiently maintain the exterior. Public Works also gave insight on plowing and the most efficient way to do it so as not to damage curbs, etc. Every Department has touched this project and next week they'll have one more chance to vet any concerns and issues. Engineer Levitt stated there were a couple key road projects that are moving ahead: • Hadley Avenue and 95th Street is one of those, near the new Summers Landing subdivision. The project began in 2016 and will continue this year. • 65th Street, which will come before the Council as they get ready to actually bid the project. The project was ordered on December 7; negotiations with the adjacent landowners are being finalized for the necessary right of way, and she expects that will be completed within the next month. Ten-E Packaging in Newport has requested to have water extended to their facility so they're working City Council Meeting Minutes January 18, 2017 Page 9 with them on the expenditure for the extension of water. The overall project cost is approximately $4,200,000; $2,600,000 will be paid by the School District for those improvements. • A project with Washington County at Keats Avenue and East Point Douglas Road and the ramps that connect to Highway 61. They'll reconstruct the road and the new entrance into Ravine Park. That entire area will be able to be developed with all utilities, water, sanitary sewer, storm sewer, and a road network to support that development. Mayor Bailey asked Engineer Levitt if all of the agreements were in place; she stated they're very close to having everything finalized. Council Member Thiede asked about the new entrance to Ravine Park and if that would go across; Engineer Levitt stated that it would. Council Member Johnson asked if there had ever been a six-legged roundabout; Engineer Levitt stated Cottage Grove was the first to build a six-legged roundabout, located at Jamaica Avenue. She stated the new roundabout will be concrete, similar to Jamaica. Engineer Levitt reminded everyone that Ravine Park would be closing shortly, as they begin work on the mitigation storm projects. There will no longer be flooding, there will be bridges, trails, fishing piers, and it will be an exciting enhancement to the area. • Washington County will be very busy in Cottage Grove this year with construction; they will be reconstructing 70th Street from Highway 61 all the way to Hinton Avenue. The roundabout will not be constructed at Hinton and 70th Street until 2019 because it has not yet been formally approved by the State; Engineer Levitt felt that Washington County would want a roundabout, as opposed to a stoplight. 70th Street to Meadow Grass will close first, from May to July; once that reopens, 70th Street will then close from Meadow Grass to the area near Hinton Avenue, as that's in conjunction with the 65th Street project. • Engineer Levitt stated another road project is at 80th Street and East Point Douglas Road. Hy-Vee is a large traffic generator and with the redevelopment of the Home Depot site, there will be more traffic at the stoplight; therefore, they'll be installing an additional right-turn lane. There will be significant traffic signal work forthcoming. They're anticipating Hy-Vee will possibly open in early summer so they want the right-turn lane roadwork done in time for Hy-Vee's opening. • Ravine Parkway is the linchpin to enable the City to move forward with development in that quadrant of the City; without it, they will not be able to access residential parcels that are already being developed. This project will build the City's tax base, and there's much interest in that area. The total project is $5,200,000, and this is a Chapter 429 project. • In 2018, there were aspirations to get rid of the thumping sound on 80th Street, but that's one project that might have to be pushed off. • Engineer Levitt stated they're also proposing to improve 100th Street from Ideal Avenue to Hemingway. They're anticipating if a developer comes in, they have to be prepared to extend sanitary sewer, various utilities, and extend the roadway and turn lanes that facilitate that. They're optimistic with changes in the marketplace and want to be in a position and financially ready to be able to move City Council Meeting Minutes January 18, 2017 Page 10 forward with that project. This is not being currently designed, but it's on the edge of moving forward as development comes forth in the business park. That has about a $2,300,000 price tag. • The bridge on Grey Cloud needs touch-up paint; they call it their"fractured critical bridge." They need to plan for some paint preservation projects on it, which is planned for 2018. • In 2019, there will be a roundabout at Hinton Avenue and 70th Street; the total cost is approximately $2,600,000. They anticipate the Cottage Grove share will be just over $600,000. Washington County owns three legs of the intersection and Cottage Grove only owns Hinton; therefore, Cottage Grove will only pay 25% of the cost. • In 2019, there's a pavement management area to the west of Jamaica Avenue, north of 90th Street, which has a cost of about $1,000,000; this might be another project that might have to be moved further into the future. • Engineer Levitt described the new Ravine Parkway and the new Ravine Park entrance and explained how the connection would be made northward to the other side of the road. Council Member Thiede asked about the placement of East Point Douglas Road; Engineer Levitt stated there were multiple options on how that road could be placed, depending on what future developers wanted and/or needed. Mayor Bailey stated some developers have commented that the piece of property is too big to take all at once, and so breaking it up would be beneficial; the landowners are okay with that, also. Council Member Johnson asked if that area would be zoned commercial; Engineer Levitt stated yes, but there would be some mixed use zoning as it moves toward 90th Street. • They're looking at redoing 80th Street from Ideal Avenue to Highway 61; that's a $5,000,000 project. They've also added Harkness Avenue reconstruction; this is the Harkness Avenue that is actually from Hardwood Avenue to Hardwood Avenue, near Oakwood Park and Las Margaritas. There's a road that kind of winds through there and there's some great potential for development there; it could stage for development so they're proposing funding for that. • Regarding the new six-legged roundabout, the new bridge over Highway 61 that connects to 3M and across the property, that's put in the fifth year; anytime that they're trying to seek third-party funding, we're always more competitively positioned in year five. Council Member Thiede stated that part of that project involves a County road; Engineer Levitt agreed and stated they could look for some federal dollars. • Washington County has plans for 70th Street, from County Road 19 all the way to trunk Highway 95, so they're expecting in the future they'll have cost participation with that. • Engineer Levitt explained that various utility funds support the maintenance projects in the CIP and explained details about that. Growth in Cottage Grove makes the City have to start anticipating a new well, so they're expecting that in 2019, which will be offset by the Water Fund. There will also be a business water tower park slated in there, only if there's a high water user in the business park; however, they're budgeting and analyzing and anticipating that so they can City Council Meeting Minutes January 18, 2017 Page 11 be positioned for that. There's the sanitary sewer utility fund for larger maintenance activities. • The Belden Lift Station (located near the Youth Service Bureau) will be coming before you for approval, $700,000. There's currently only one lift station in the City of Cottage Grove; everything else flows by gravity. However, the lift station has some limited capacity and not a very big factor of safety. As Dominium is added onto it and other commercial redevelopments, the volume of sewage is increasing, so the capacity has to be built to provide good customer service. There will be some additional sanitary sewer lining projects that need to take place to support the sanitary sewer system. Council Member Johnson asked if they're looking five years ahead if they're using today's dollars; Engineer Levitt replied they put some inflationary dollars in there to try to offset that. They estimate about 3.5% per year. Engineer Levitt stated it's also important to look at our utility rate structure for various utilities so we can budget for the larger capital projects. The final enterprise utility fund is the enterprise streetlights. They budget about $100,000 annually for streetlight enhancements; those are typically done in conjunction with pavement management and other areas where they've had problems with reliability. The streetlight fund also pays for traffic signals. They anticipate with the growth in the business park with high morning and evening peak hours, they might start seeing traffic congestion, so they're programming for that in 2019. Mayor Bailey asked if they're going to keep the stop signs up at 95th Street; Engineer Levitt stated with the project on Hadley Avenue, between 95th Street and 100th Street, there's a reason to have those and it buys us more time to continue to evaluate. Therefore, they're in no hurry to take down those stop signs. Finance Director Robin Roland commented that Engineer Ryan Burfeind deserved a lot of credit for the work he did on tonight's presentation, as he helped her out a great deal. Director Roland explained that when the City issues debt, we are statutorily required to identify how much the City will contribute in the levy each year toward the debt service for those bonds. For 2017, $190,000 of the $985,000 goes toward the Ice Arena in the levy each year; the balance of the amount of debt service for those bonds comes from fees that the City charges the Hockey Association and the School District. Those revenues plus the City's contribution fund that debt service. The rest of the $985,000 is currently pavement management debt; that includes bonds from 2009, 2012, 2014, 2016, and 2017, which were just issued in December. They moved the pavement project ahead so it could be prefunded and we didn't have to start making debt service payments on that until 2017, in the second part of the year. For 2017, Director Roland stated we're moving toward building a Central Fire Station. We're looking at about $9,000,000 of debt service on that; we anticipate issuing that City Council Meeting Minutes January 18, 2017 Page 12 debt on a CIP timeframe. That means we have the option of financing certain facilities in the City, essential buildings (which include police Stations, fire stations, and city hall) but not park buildings or community centers. CIP bonds are what we're anticipating using for the construction of the Central Fire Station. There are statutory requirements; we have to produce a CIP, which we then have a public hearing about so the public can comment on that CIP, which includes the $9,000,000 Central Fire Station. Once the City holds that public hearing, there's a 30-day period where there's a reverse referendum situation; that means if there are people in the community who do not want the facility, do not believe it is an essential facility, and want to have a general referendum on it, they are allowed to bring a petition, and if it meets certain criteria, the City Council has to hold a referendum. They don't feel there's a high probability of that occurring because it is an essential building, the City's been very open in communicating to the public about the Central Fire Station, and what it's going to take and the plan to reduce from four fire stations to two fire stations. On February 15, the City Council will be asked to call for a public hearing; that public hearing will be held on March 15, and they'll talk about what the debt levy will do to the City's levy. After the public hearing, the 30-day period elapses, and without a petition, then we are approved to go forward and issue debt. The debt would be issued at the Council Meeting on April 19. They will take bids on the fire station project significantly enough in advance of issuing the debt so that if there is an issue, the estimates are wrong and it will cost more, the Council will have the option to accept the bids or not accept the bids, prior to the City actually issuing debt. That puts the City in a safer position and we're able to identify how much money we really need. We may not need the full $9,000,000, which would be great. If it's needed, we want to be in a position to do that. With the bond market the way it is right now, they anticipate that the debt service on the $9,000,000 bonds will be somewhere in the $600,000-$690,000 a year debt levy. That is 4.87% of our current levy, so with one bond issue, if all things remain the same, we would increase the levy by that 4.87%. Staff knows that one bond issue with that much of an increase in the levy is going to be very difficult because they're also looking at maybe increasing the general levy by 3% each year. During the course of the budget, they discussed several things as a proposal to moderate the impact of the debt. The City currently has $500,000 each year which is assigned to an Interfund Loan that paid for City Hall. There are four different funds that funded this building; the Water Fund, the Sewer Fund, the Closed Debt Fund, and the Closed Construction Fund. Each of them has anywhere from $1,500,000 to almost $3,000,000 in outstanding loans among the funds; we levy $500,000 every year to pay those loans back. Council has always said that the Water and Sewer funds absolutely have to be paid back because those are fees that we collected for future use in the projects that Engineer Levitt has already highlighted. However, the Closed Debt Fund and the Closed Construction Fund both had significant cash balances that we drew upon to help build City Hall because we didn't bond for City Hall. So, staff is going to propose that we have Council forgive the loan to the Closed Debt Fund and the Closed Construction Fund; in doing so, adjust the financing structure for the next 15 years so City Council Meeting Minutes January 18, 2017 Page 13 that the required annual debt levy is only $250,000 per year. The $250,000 that we are not levying for that Interfund Loan would then go to offset the debt service that we're issuing for the Fire Station. So, we're essentially refinancing our debt and wrapping it together. Because it has been over seven years, there's also the opportunity to call the 2009 Pavement Management Bonds; if they were called on February 1, 2018, it's approximately $1,300,000 in cash that we have in the Closed Debt Fund in addition to the money that's been earmarked for this building. If we were to call those bonds, in addition to reducing the debt levy, we would have another $175,000 available to us that we would not have to levy for the 2009 bonds that would offset that debt service. So combined the $175,000 and the $250,000 would significantly knock down the debt service. Director Roland stated she's also not sure what the bond market is going to do in the future. Discussion ensued amongst the Mayor, Council Members, and Director Roland regarding tax base increases for the future, retiring TIF Districts, etc. and ways to decrease the future projected levy of 7.07% by lowering expenses or modify the debt levy if funds are available to offset that, which is what has happened for the last couple of years. There are a couple very healthy Pavement Management Debt Funds because there were a lot of special assessments. Director Roland stated that the $690,000 is a large cushion, but she again indicated that she didn't know what the bond market was going to do between now and April. Pavement Management Debt for all of the upcoming projects Engineer Levitt spoke about will be another $200,000 in Pavement Management Debt in the future. So, if any of those projects were postponed, you could postpone the additional $200,000 debt. Regarding the Hero Center, the $290,000 is based on a $4,000,000 bonding requirement that the City would have to go through; the State would pay $8,000,000, Woodbury would pay $4,000,000, and we've got our fingers crossed that it will show up on the State's bonding forecast but that's possibly not until 2020. City Administrator Charlene Stevens stated that there's credit that Cottage Grove would receive for the value of the land, but she didn't know how that credit would be determined. Without the State funding, the Hero Center project will not go forward; they've got that listed for 2018 but that's not certain. The debt service jumps to $1.157 in 2018 because we issued debt in December, and that will be the first payment for the 2016-2017 Pavement Management Bonds. In 2018, the $985,000 plus our new debt for 2016-2017, but without the $175,000 where we would refinance the 2009 Pavement Management debt. Council Member Johnson asked if the $690,000 is when the fire station's done in 2018, so that's when the debt service begins; Director Roland stated they were required to actually levy so they have the cash on hand for the following year. The debt service City Council Meeting Minutes January 18, 2017 Page 14 gets paid on February 1 of each year, so they actually have to collect the cash in the year and then pay it in 2019. Council Member Johnson asked if the $690,000 was just interest; Director Roland stated that's principal and interest. Mayor Bailey stated the $690,000 moved up to the $1,800,000, which is with the Hero Center and the Pavement Management for 2019. The following year all of that would increase except for pavement management because there are debt levies. Director Roland stated 1% is $147,000, so the $690,000 is about 4.8%, so there'd be 3% that you'd need to effectively reduce it, which would be the amount that the General Fund levy would increase. Council Member Johnson asked what happened in 2015 that taxes took such a jump; Director Roland stated in 2015 there was a 5% increase in the property tax levy. Council Member Johnson asked if it was because of extra debt or if it was just budgetary or operational. Director Roland stated it was a combination of the two. Mayor Bailey stated there were capital projects and they had to do catch up, and a lot of equipment was purchased that year. Council Member Johnson stated there seemed to be a lot of debt and asked if they couldn't do projections going forward. Director Roland stated they had done projections, but they also had a flat tax levy for about five years; there was no increase in the dollar levy so the City's effectively playing catch up for that period of time. Council Member Johnson asked if the ongoing debt would ever improve; Administrator Stevens stated that type of debt service typically doesn't go away, especially with new buildings, which tend to be the spikes that occur. Council Member Johnson assumed the Hero Center was originally set up that other cities were going to come in and use it, and you're also going to save money from having to go to other places to do training. Administrator Stevens stated that's still the intent. Mayor Bailey stated that if we're going to use Federal or State money to fund the project, we have to allow the public to utilize it during certain times. There's a public benefit to having it in Cottage Grove, as well as efficiency for the officers to have it close. Council Member Johnson asked if it would ever get to the point where it would help repay the debt; he was advised that was not expected. Director Woolery stated they're still working on other components with other agencies or Washington County. Council Member Thiede asked if that would happen in 2018; Administrator Stevens stated whether that will actually happen depends on the State Legislature and their ability to do a bonding bill, which they haven't been particularly good at in previous years, or if this would rise to a higher priority. They're proceeding along that timeframe that they would be on the governor's bonding tour for 2018. Council Member Thiede asked if that would get pushed out, if it would affect the 5.49%. Director Roland stated to get down to 0 from the 7%, you would not be able to issue debt for the fire station, and you would not be able to increase the General Fund levy by 3%. Director Roland stated the 2018 budget numbers were not balanced and they were already at a 5% increase to the levy. Director Roland stated these were their choices: Obviously, everything can change, and the Central Fire Station might come in under $9,000,000, and we wouldn't need to issue City Council Meeting Minutes January 18, 2017 Page 15 all $9,000,000, and the debt service isn't the $690,000, maybe it's $600,000 or $550,000. The solution that they can present to reduce some of the impact is to call the bonds for February 1, 2018; that reduces the debt service by $175,000, and then they'll present a plan to refinance the Public Safety/City Hall debt service for 2018 and beyond. You'll probably see that around the same time that you'll see the bonds being sold in April, as a recommendation. Director Roland stated the choices are stark to a certain extent, but other things can impact this; none of these take into consideration what is known as a levy limit. We haven't had those for a few years and maybe we won't have them next year, but that always lurks in the back of people's minds, particularly when we have a surplus in the General Fund at the state and perhaps they want to do some tax relief and they don't want local governments to necessarily take advantage of that, so they would set levy limits, but that's not in this scenario and she's not thinking about that at this point. Council Member Thiede stated there are certain things in the CIP that are committed to, such as projects with Washington County and maintenance money. He felt they need to start taking a look at maintenance down the road and potentially pushing those out. Administrator Stevens said there's potential to look at some of the pavement management projects to see if those could be pushed out further, if some of these other projects are higher priority. As they go forward with the joint meeting with Woodbury for the Hero Center, the question is if that project is important in 2018 or could it be a 2020 bonding project? Director Roland stated the bond rate that we're estimating at this point is higher than we've estimated in the past; the debt that was issued in December is at less than 2%. She stated that you could think about recent political changes and what the market has done and what the Federal government has done, which have all had an impact on where bond rates are going. Council Member Johnson asked how that affects bond rates; Director Roland stated it affects the interest rate, the interest that we pay, but what we try to do in all of these scenarios is look at a flat debt levy. It isn't principal and interest that goes up and down; we would have a flat number. Director Roland stated at this point they're not anticipating the rate will go down. Director Roland stated she started at $500,000 for 2017. As you can see, the total levy is just shy of$15,000,000. If everything is equal and we issue all of the debt that's included here, by 2021 your total levy would be well in excess of$17,000,000. Council Member Johnson asked if there was a cap; he was advised there was not. Council Member Thiede stated we just had to figure out how many homes needed to be built and how many businesses needed to be put in without necessarily TIF to support that. Director Roland stated in all fairness, the Hy-Vee and the Home Depot are both in a TIF District, so growth in that basically adds to the TIF District but not to the City's tax base until 2028. Council Member Johnson asked what surrounding cities' debt is; Director Roland stated they looked at debt per capita when they did the budget in December. Cottage Grove's City Council Meeting Minutes January 18, 2017 Page 16 debt per capita is similar to Woodbury's, so the amount of debt per person for Cottage Grove is approximately $414. Woodbury's is approximately $420 per person. Mayor Bailey stated they had to also discuss parks and park improvements; Administrator Stevens stated that will take place on February 1, which is why the parks were not discussed this evening. This information will be presented to the Planning Commission, and it will be back before the Council for adoption on February 15. Director Roland advised it goes to the Planning Commission because it's part of the City's Comprehensive Plan. Administrator Stevens stated the figures for 2018-2019 are pretty clear; as you get further out, those projections are just that, more of a projection than actual costs. Mayor Bailey stated he felt the only decrease that could be made in the coming years was pavement management because we're pretty much locked in with Washington County on the other projects and/or roads and the Central Fire Station. Hopefully, we'll come in at or below the projected cost for the Central Fire Station. Before the next Council meeting, he'd like to hear if some of the pavement management projects were pushed off so we'd know what effect that would have. Council Member Johnson stated pavement management also involves assessments to the homeowners, so that's always a touchy subject. So, if it gets pushed off, that might make a homeowner feel better because they wouldn't have to pay an assessment. Administrator Stevens stated the challenge is with any maintenance that you push off, you might be buying some time and saving some dollars, but you don't want to push it off so far that something that would have been less than a reconstruction becomes a reconstruction. Mayor Bailey stated that that's what happened in his neighborhood. Council Member Johnson asked if that's basically the only place where there was wiggle room; Mayor Bailey stated in the early years, yes, unless we went to Washington County and told them we didn't want to do the Hinton roundabout in 2019. Then you're going to have citizens driving on a very nice-looking road, who come upon an intersection that's already been an issue, and the City and County are going to have to try to piecemeal it together for a few years. We're going to be dealing with those issues. Some of the projects in queue right now, like the County Road 19 project is a queue to grow the Cottage Grove site, the Ravine Parkway is absolutely in queue to expand the housing options to the north or to the Woodbury border. Administrator Stevens stated 65th Street was a function of growth and had not been in the City's projections in the CIP; that was driven in part by the new school, but that also drives growth and potential for housing in that area. Council Member Thiede stated having a 12.5% increase to residents' taxes in the next two years probably isn't even thinkable, so we're going to have to really look at options. Director Roland stated perhaps you want a 7% increase in your tax base for 2018. Council Member Thiede stated we want the tax base to grow quicker than our expenses; a tax increase of 12.5% over the next two years won't go over well with the City Council Meeting Minutes January 18, 2017 Page 17 residents of Cottage Grove. Council Member Thiede stated we need to look at what could be adjusted. Mayor Bailey stated hopefully they'll get back to stability. 14. WORKSHOPS — CLOSED TO PUBLIC — None. 15. ADJOURNMENT Motion by Council Member Thiede, second by Council Member Dennis, to adjourn the meeting at 9:14 p.m. Motion carried: 5-0. Minutes prepared by Judy Graf and reviewed by Joe Fischbach, HR Manager/City Clerk.