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HomeMy WebLinkAboutBudget Advisory Commission - 04/22/2008 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING TUESDAY,APRIL 22, 2008 7:00 PM, CITY CENTER 8080 Mitchell Road, Eden Prairie, MN Heritage Room COMMISSION MEMBERS: Don Uram(Chair), Katherine Kardell (Vice Chair), Mark Kantor, Richard (Rick) King, Jon Muilenburg, Richard (Dick) Proops, Gwen Schultz CITY STAFF: Sue Kotchevar(Finance Manager), Tammy Wilson (Finance Supervisor), Gene Dietz (Public Works Director), Cliff Cracauer(Public Works Superintendent), George Esbensen (Fire Chief), Rob Reynolds (Police Chief), Angie Perschnick (Recording Secretary) I. ROLL CALL/CALL THE MEETING TO ORDER Chair Uram called the meeting to order at approximately 7:00 PM. Kardell moved and Muilenburg seconded the motion to begin the meeting. All Commissioners were present. II. MINUTES A. BAC MEETING HELD THURSDAY APRIL 3, 2008 Commissioner King noted that the term "Commission" should be used in place of "task force" in the three places it was used in the minutes from the previous meeting. MOTION: Kantor moved, seconded by King, to approve the minutes from the April 3, 2008 meeting. Motion carried 7-0. III. CHAIR AND STAFF LIAISON UPDATE A. SCHEDULE UPDATE/OTHER Kotchevar updated the BAC on a few administrative items. First, the equipment replacement discussion was moved to tonight. Second, the website is not secure, so there should be no issues with sharing passwords; all the information on it is public information. Then scorecards and question sheets were passed out for use during the meeting. Uram stated that the status of the 2008 Capital Improvement Projects would be posted soon. Kotchevar will prepare this information. Uram also noted that the Eden Prairie Budget Advisory Commission April 22, 2008 Page 2 format for the meeting would include presentations from the vehicle, police, and fire representatives. The BAC will see if they have their questions answered during the presentations and there will be time to ask further questions. Information will be posted on the web site. The BAC is not trying to finalize comments for items tonight. IV. STAFF PRESENTATION AND BAC QUESTIONS A. EQUIPMENT REPLACEMENT PLAN Public Works Director Gene Dietz said the information to be presented tonight is similar to what was presented at last year's budget meetings. Public Works Superintendent Cliff Cracauer walked through the presentation and highlighted the new items, which include a replacement schedule by department and a scoring model. The replacement scorecard will be implemented for 2009, and it provides a way for Cracauer to show customers why it might make sense to replace a vehicle later vs. sooner. The goal for equipment replacement is to find a point where it makes sense to replace vehicles (not too early where there is a lot of useable vehicle life left and not too late where there would be a lot of maintenance costs). Proops requested the presentation be geared more towards dollars and things the BAC is able to question. King noted that lengthening the fleet service for two years in a row sounds like a good cost savings for the City of Eden Prairie. King noted that he appreciates the fact that the questions the BAC raised previously (last summer) are being addressed with the replacement scorecard. King asked if there was a way to quantify the value of lengthening the life of vehicles. Dietz said equipment replacement is a philosophical issue and the Public Works department mediates between customer wants/needs (customer service) and what is most economical for the City. Dietz said that, with the internal service fund, each department has pieces of equipment in their budget; they can then determine tradeoffs they may want to make when deciding what to buy. Proops noted that the 100,000 mile criteria used for replacing some vehicles is impressive. Dietz said they use good quality materials for maintenance and repair so they can get the most for their money. Also, many Chryslers are receiving free break replacements when they wear out and the vehicle is still under warranty. Dietz noted that most of the vehicle repair work is done at the 15050 Technology Drive facility. Last year they eliminated a position there as well. Proops asked about the size of the repair operations. Dietz said there are 3 mechanics, 1 service worker, and 1 lead. The lead handles ordering replacement parts, snow plowing, and seasonal activities. Dietz stated that the Parks department has 15 regular employees and 22 additional seasonal workers. The police department decreased the number of vehicles purchased by the lengthening vehicle lifespan plan, and they only set up 5 police cars this year instead of the 9 that were set up last year. Eden Prairie Budget Advisory Commission April 22, 2008 Page 3 There will be 2 big trucks replaced in 2009 that are used all year around for the streets. They don't make the schedule since they receive an excessive amount of use and wear out faster than average vehicles. Some equipment costs a lot of money to replace, such as tree loaders (around $300,000), so the costs from year to year in projected budgets does fluctuate considerably. Uram asked who decides what trucks the City buys. Cracauer administers the program. Jay Lotthammer from the Parks division is involved in the process as well, and he looks at the utilization of vehicles. Vehicle additions also go through the budgeting process, so there is involvement from other sources, starting with the head of the department requesting the vehicle. Uram asked how accurate projections have been in the past in determining whether or not it makes sense to sell a vehicle or maintain it. Cracauer said he looks at the market, and if there is a very low resale value, the City will keep the vehicle and use it for as long as possible. If a vehicle is not as useful as other vehicles, they often choose to get rid of it. They may encourage the liquor operation to take a well used van instead of buying a new one. Public Works is currently negotiating to see if they can use a bigger sweeper for bike paths and sidewalks. Proops asked if there are any limitations on what Cracauer needs to do his job better. Cracauer responded that he has had good cooperation from all departments. Schultz asked if the City is in a cooperative buying arrangement for vehicles. Cracauer responded that we are in two vehicle purchasing co-ops, including the Hennepin County Co-op and the Minnesota State Co-op. The co-ops allow the City to save money on purchases and to save time and money from writing contracts. The Minnesota state co-op may reduce the participation fee from $500 to a lower amount. Almost all major equipment can be purchased through the programs; however, the City sometimes has to replace vehicles on an emergency basis. They still get the contract price in these situations. The City gets very good rates on vehicles, often about a 50% return on the purchase price. Kantor asked if the replacement score was available for specific vehicles. It is not currently available on the handouts provided. Kantor asked if the BAC could see more detail on each of the vehicles (currently listed as "Chevrolet," for example). It was noted that the replacement criteria is intended to be used as a planning tool. Kantor asked if it was possible to compare old versus new replacement schedules. Then we might be able to get to the cost savings by looking at the change in dollars. Uram walked through some of the critical questions from the handouts. He asked about the equipment fund value balance, and it is $900,000. There appears to be a wildly fluctuating operations maintenance budget because a piece of equipment is scheduled to be replaced. By scheduling replacement with the new system, there Eden Prairie Budget Advisory Commission April 22, 2008 Page 4 is typically a somewhat flatter, steadier budget with fewer fluctuations. The BAC recommendations for equipment replacement include additional efforts to quantify savings. Dietz agreed that there is discretion on the utility enterprise fleet, and it is still a cost. The funding is part of an internal service fund, but the money is in a separate account. Muilenburg asked what Dietz and Cracauer are expecting to see from implementing their replacement plans. (1) The assessors receive older vehicles, and they think they are overcharged in their budget for the vehicles they receive. In the future, the City may have the assessors use their own vehicles and just reimburse them for mileage. (2) 20-40-15: The City does not want to make bad environmental decisions (choosing to purchase fuel-efficient vehicles when possible, but they want to make sure they receive a good ROI also). The City currently has 1 hybrid vehicle and 1 other one on order that is currently sold out. The City's diesel cost is about the same as their costs for regular gasoline. The City does not pay the gas tax and they receive a good rate on gas for all vehicles. They look at their costs on an annual basis. The City recently purchased a Chevy Malibu for an investigations vehicle, and the officers are not used to this, but using smaller, more fuel-efficient vehicles may be a good way to save costs going forward. The City is also encouraging officers to turn off their vehicles sometimes during duty when that is possible. B. FIRE Fire Chief George Esbensen presented information about the SCBA (Self Contained Breathing Apparatus) equipment the fire department will be replacing soon. SCBA equipment is very important to firefighters because it allows them to enter hostile environments without fear of having their breathing compromised. The equipment provides oxygen to the firefighters and is required and regulated by federal and state safety laws. The Eden Prairie Fire Department (EPFD) last replaced SCBA units in 2000, and 70 new units are needed in 2010 at a cost of approximately $7,000 per unit. The total cost of replacement SCBA units in 2010 is expected to be $490,000. The EPFD is involved in a joint ops group with surrounding suburbs to the North, East, and West. They are looking at a different way to buy this equipment. They are planning to find one manufacturer to lease the equipment instead of buying it. This would move the costs out of the CIP and into the operating budget. An RFP is going out in May, and they will be receiving proposals from bidding companies in June. Several companies are expected to bid. Schultz asked if they had any idea of what the leasing cost would be versus the purchase price. Esbensen clarified that the EPFD is not just looking at the lease option in order to save money. The City currently takes on a significant potential liability by maintaining its own records and SCBA equipment, including tracking cleaning and repair of the equipment. The requirements for the tracking keep Eden Prairie Budget Advisory Commission April 22, 2008 Page 5 increasing. Part of the lease agreement would involve putting the recordkeeping on the company that wins the bid. Another benefit to leasing is that all the units used would be the same in Eden Prairie and the surrounding suburbs. They want all units to be the same because this allows the fire operations to work as one group without worrying about violating equipment warranty or safety regulations by mismatching equipment from different models or manufacturers. Also, it smoothes the costs to lease equipment and put it in the operating budget. Proops asked if everyone needs to have their own SCBA unit. Esbensen clarified that, while everyone is required (by OSHA and NIOSH regulatory agencies) to have their own face masks, there are 70 air packs for the 9 full-time plus 95 volunteer firefighters. The BAC asked if Esbensen might have the costs for the lease option figured out by July 29, and Esbensen replied that this will be a very complex decision process since it goes into uncharted waters and includes multiple cities. The BAC would find an update on July 29 helpful. In response to a question, Esbensen stated that the City of Eden Prairie takes on liability for the volunteer firefighters. Although the EPFD has not had its records audited by regulatory agencies, Esbensen has heard that audits are somewhat like IRS audits in that some errors are almost always found in the process. Muilenburg asked if there was a way to spread out equipment replacement. Esbensen replied that it is important to have equipment manufactured in the same year as much as possible since there are compatibility issues with different makes of the products. Proops asked about the number of volunteers. Esbensen responded that the total number of volunteers went from 75 to 95 after Fire Station#4 was opened. Kardell said she thinks the cooperative purchasing idea is a good one. Uram commented that they could ask for an option to purchase equipment after the lease is up when negotiating the deal. Esbensen noted that the SCBA equipment world changes quickly, and even the 10 year replacement goal they currently have is probably too long. Uram asked how long the tank works when firefighters are in a hot zone. Esbensen said that the bottle is only half full after 15 minutes of hard work, and people can get into trouble if they stay in the hot zone working after the half full point. They are told to leave the hot zone when the bottle is half full. Minnetonka and Bloomington have air trucks, so they can refill bottles on the scene and shuttle bottles back and forth as needed for lengthy fires. Proops asked how many times in the past few months have firefighters needed SCBA equipment. Esbensen replied that they are needed about every other week, for all car fires, gas leaks, structural fires, and other possibly hazardous events that may occur. C. POLICE Police Chief Rob Reynolds described the Police Department remodel project that was added to the CIP in 2005 for 2010. The most critical needs are record and Eden Prairie Budget Advisory Commission April 22, 2008 Page 6 evidence storage, and they have been able to meet these needs in other ways up to this point. Personal storage and work station needs were other issues that caused the remodel project to be planned. In 1994, the EPPD moved into their current space. Since that time, they have added 20 more officers, 8 other additional FTE, and 32 more volunteers. The evidence room is too full, so they were able to upgrade to movable shelving and make modifications so that the current storage holds about twice as much as what they had previously. They created off-site work stations at the Eden Prairie Center also. The size of individual cubicles has decreased significantly from 1994, and many offices are shared by officers on different shifts. Some cubicles have been added in obscure places such as under the stairs and in a janitorial closet, and there are currently no other spaces that could be converted into cubicles if additional workspace is needed in the future. The equipment they use now takes up a lot more space than what was planned for in 1994. The EPPD remodel project was placed in 2010 to bring balance to the CIP. At the time of the request in 2005, the project was rated at about a C level in terms of priority. It is still at about that level today according to Chief Reynolds. The timing is still flexible, but the interim fixes they are using are approaching the point where large scale remodeling options should be reviewed. The evidence holding space cost about $36,000, and they can move the new shelves into future workspaces to use them there too. The EPPD has worked with the Facilities Manager and an architect to look at use of the gross space. Proops asked how we can get them the space they need since it seems there is not an overall shortage of space in the City Center complex. Reynolds said they are currently looking at a project to make an adequately-sized personal care room. The cost would be about $60,000, and that money would not be recovered if the overall EPPD remodel project was done later and they ended up moving to another space. Based on current projections for Eden Prairie growth, the EPPD is expecting to top out at about 75 officers. They currently have a part-time crime analyst who will be full-time soon, and they expect that 10-15 years from now, they will have 3 crime analysts. They may use more volunteers for analyst assistance in the future too. There may be more part-time positions in the future in the area of background investigations and forfeiture too. Other Police Departments have discovered that some officers like to volunteer to do forfeiture work after retiring, and the EPPD plans to tap into this type of opportunity in the future as well. Overland Park, Kansas is a community very similar to Eden Prairie, and they are 5-7 years ahead of Eden Prairie in terms of their analyst function. They use a lot of volunteers in it currently. The goal for the EPPD remodel efforts is to utilize the current footprint and expand their space only if necessary. They want to create as much open space as possible so the building design and layout can be adjusted to future needs. They plan to employ a model similar to ADC by using open spaces effectively and create cubicles that are more private and sound-proof. They want to be able to put work groups together so they can work more closely on related activities. The Eden Prairie Budget Advisory Commission April 22, 2008 Page 7 Hennepin County Southwest Task Force (which includes Eden Prairie, Minnetonka, Edina, and Hennepin County) is currently housed in the former video production room. It would be beneficial to have this group working near the drug and burglary groups so they could share more information that would be useful to the other group. It is expected that the current holding cells will be enough in the future as well since people are moved to the county quickly and not held overnight. Proops asked what the $700,000 cost was for from the 2005 plan (what that covered in terms of expansion). Reynolds said he brought the number to the Facilities person, and he was told it should be enough to do the deluxe version of what they may want to do for expansion. It would include building and tearing down block and drywall walls. They are currently using square footage in the low 20,000 range plus 9,000 in cold storage (not finished), and the deluxe plan calls for 29,000 in finished square footage. The building currently has many inefficient uses of space. Proops asked if the EPPD is artificially limiting doing the job by keeping the same footprint for the remodel project. Reynolds said their goal is to use the current footprint, and the City is probably not ready to spend the money to add to their space significantly. Uram stated that he has not heard strong justification for the project happening in 2010, so he wondered how much time and effort the BAC wants to spend on it. He said maybe they should wait until there is a preliminary design and cost figures to accompany the current project plans. Proops said that a lot of thought has gone into this, and he thinks it would be nice to have this project on track with a more accurate estimate of a reasonable cost (an amount significantly less than the $700,000 it would cost to complete the deluxe remodeling plan). It was noted that, if the project is not reviewed for the 2010 budget, it would not be looked at again until 2010 for the 2011 — 2012 budgets. Reynolds wondered if the BAC wants to look at this. He is not sure exactly when it needs to be done, but the project should be looked at in the next couple of years. King asked if Reynolds would recommend moving this project to 2012. Reynolds said that he does not want to be behind the curve on completing this project, and he does not want to go through the justification and presentation process again in a couple of years. Kantor said maybe they could look at the project again in a few years with more specific costs attached to it. Kantor asked if part of the project could be done in one year and part in another year. Reynolds stated that it would make the most sense to do it all at once. Uram asked if there is a consensus that a project is needed in the EPPD. Proops noted that the City of Eden Prairie spends $200,000 - $400,000 without blinking. Muilenburg said that if it is a $400,000 project, it may make sense to do it sooner rather than later. Uram said they would need floor plans and time to set up a bidding process, and he said the project may be a question of timing. Eden Prairie Budget Advisory Commission April 22, 2008 Page 8 Muilenburg asked if they would gain efficiency within the EPPD if the project were done sooner rather than later. Reynolds responded that they would. King asked what it would take to get a preliminary design and cost estimates. Then the BAC could see what other projects are planned, do a little investigation, and then prioritize this project relative to other ones. Uram clarified that the recommendations from the BAC for the City Council would be to obtain a preliminary layout and gather some cost estimates. Kotchevar noted that the City could consider issuing bond debt to pay for the project if it was combined with other projects and the total amount needed was around $1,000,000. V. BAC ANSWERS CRITICAL QUESTIONS AND FORMULATES COMMENTS A. CRITICAL QUESTIONS 1. Were the projects adequately described? Was the need for the projects justified? 2. Where appropriate, is there a systematic method for identifying projects and costs? Was the condition of current assets including the projected need for repair or replacement and the likely demand for the improvement considered? 3. What is the funding outlook for these projects? 4. Does the BAC have recommendations in this area including budgetary and operational changes? What are the recommendations and why? B. COMMENTS 1. Include in Summary of Comments that is presented to the City Council Uram asked for comments regarding the format that was used for this BAC meeting. Kardell stated (and the group seemed to agree) that the structure worked fairly well. Kardell noted that there could be a problem in the future if some departments had multiple projects to discuss (it could take up too much time to review several department's requests in one meeting). VI. ADJOURNMENT The meeting ended at approximately 9:00 PM. Schultz moved and Kardell seconded the motion to adjourn the meeting. The next meeting will be held on Tuesday, May 27 at 7:00 PM in the Heritage Room.