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HomeMy WebLinkAboutBudget Advisory Commission - 05/27/2008 APPROVED MINUTES BUDGET ADVISORY COMMISSION MEETING TUESDAY, MAY 27, 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), Lisa Wu (IT Manager), Jay Lotthammer (Parks and Recreation Director), Stu Fox (Parks and Natural Resources Manager), Angie Perschnick(Recording Secretary) I. ROLL CALL/CALL THE MEETING TO ORDER Chair Uram called the meeting to order at 7:01 PM. All Commissioners were present with the exception of Vice-Chair Kardell. II. MINUTES A. BAC MEETING HELD TUESDAY,APRIL 22, 2008 The minutes from the April 22, 2008 meeting were approved as written. III. BAC COMMENTS A. REVIEW AND FINALIZE SUMMARY OF COMMENTS FROM APRIL 22, 2008 MEETING Kantor noted one of the suggestions from the BAC was included in the minutes but not in the comments for the City Council from the April 22, 2008 meeting. The suggestion was that the cost savings be quantified for the equipment scheduled to be replaced. The BAC learned that the information was in the spreadsheet, but it was not included in the part shown the BAC during the Public Works presentation. Kotchevar will add a note to the comments to reflect that the BAC would like to see this data in the future. King recommended a note be added to the comments to reflect the information the BAC received on vehicle life was received in response to a request the BAC made to see this data at a meeting last summer. Kotchevar noted Mike Barone will be at the next meeting for feedback on timing of BAC terms and the start date for new commissioners. Budget Advisory Commission Minutes May 27, 2008 Page 2 MOTION: Proops moved, seconded by Kantor, to approve the BAC recommendations from the April 22, 2008 meeting. Motion carried 6-0. IV. STAFF PRESENTATION AND BAC QUESTIONS A. INFORMATION TECHNOLOGY Lisa Wu discussed the changes happening in the IT department with CIP and budgetary impacts. The focus was on the LOGIS transition. A study was done last year on LOGIS applications, and the study was completed in October 2007. They looked at 8 vendors who could deliver several of the modules the City needs, and they are considering an integrated system for HR, Payroll, Finance, and some department-specific applications. Based on the study, the IT department is projecting they could save over $400,000 over a period of 5 years. LOGIS is the only provider available for the Assessing department, but other vendors could be chosen for other applications. A subscription fee is paid on a per-module-used basis, so it does not add costs for different vendor to be used for different applications. Proops asked if Krause, the consulting firm that completed the study, calculated the amount of money that could be saved with different vendors. Wu said the report shows averages for estimated savings. Proops also asked about the process for choosing Krause, and Wu said they were chosen through a bidding process. Proops asked about the $1 million fiber cable project that was discussed during the budget process last summer. Wu said they decided not to do that project this year. Instead, they are using connections from a remote site from Edina. If they pull more applications from LOGIS, bandwidth can be reduced. Uram asked if additional equipment will need to be purchased and if those numbers are included in the packet. Kotchevar responded the hardware is not included in the CIP numbers, but the estimated $400,000 net savings over 5 years does include hardwire costs. Uram asked who decided to evaluate other providers, and Wu said it was decided by the IT staff because another provider could make things more efficient and LOGIS isn't fully meeting their needs. LOGIS is a consortium of local companies that banded together in the 1970s to reduce costs. Uram noted Plymouth has moved away from relying on LOGIS. He also stated that because LOGIS serves a number of smaller communities along with larger ones like Eden Prairie, all the cities have to wait until the smaller ones can afford to join in before they make system upgrades or other improvements. Kantor asked if there are options they could install and if there are state contracts. Wu said they purchase and install MS office with a state contract, but this option is not available for business applications. Kantor asked if on-demand solutions were available as a subscription. Wu said the applications are live on LOGIS and cities join as a member instead of subscribing. Budget Advisory Commission Minutes May 27, 2008 Page 3 King asked if the BAC could receive a copy of the consulting report. Wu said they could, but it is very lengthy. Schultz said a three to four page summary would be helpful, but that is not currently available. Proops asked about the cost of the study, and Wu said it was $18-$20,000. Muilenburg asked how they could quantify the projected savings (of over $400,000 over 5 years) if they don't know which way they are going (if they are switching vendors or making any other changes). Wu said they currently have one vendor providing the solution, so this was a high level study that looked at savings for switching vendors for specific applications (this year police and fire applications are the focus). Wu noted that a six month notification is needed if the City decides to leave LOGIS. Uram asked where the money is allocated; it is in the IT operating budget. Uram asked how staff would be able to manage the additional workload with only adding 1/2 a person to the IT staff to handle the change. They would be working with a vendor, so at this point, 1/2 a person is all that is expected to be needed. King asked if it was more cost efficient to run HR and Payroll through the City than through a third party. It was noted that with frequent tax changes and other regulations, it is often more efficient to have payroll handled by a third party administrator. Wu said they are considering service providers like ADP for payroll. King asked about the number of FTE for the City. There are 350 regular employees and 300 seasonals. Muilenburg would like to see more information on each of the projects. He would like to see a summary of the report and a description of the activities and reasons for the projects. King noted that it is difficult to see which costs go with which possible projects. Wu said that they will be increasing licensing, and they may hire an intern to help implement that. King asked what justification is for what. The internal network is listed as one project, but he's not sure if there is a justification given for document imaging. Wu stated that the storage needs are increasing for imaging and scanners are needed to complete this project. In response to a question from Kantor, Wu said that the imaging costs include only the scanner and licensing. Wu noted that net application storage is needed regardless of which vendor is picked (LOGIS or another). Schultz asked if staff time would be saved eventually and if the document imaging information would be available to the public. The storage project will touch every department, and eventually time may be freed up. Uram said that after the IT study document is reviewed, the BAC can spend time discussing it at the next meeting before finalizing their recommendations for City Council. B. PARKS AND RECREATION Jay Lotthammer and Stu Fox discussed the new projects and renovations planned for Cedar Hills Park, Miller Park, and the Trails project. For Cedar Hills Park, Budget Advisory Commission Minutes May 27, 2008 Page 4 which is in the CIP currently, a fee will be paid to MAC for lifelong City accessibility (a permanent use agreement). Purchase of the land has been held up due to the lawsuit between MAC and NWA. The City plans to purchase the 30 acres from MAC in 2008 or 2009 for $900,000. New homeowners have seen the plans for this park near their homes, and there is also land to be developed in the future that is near the park. In 2011 and 2012, the park is scheduled to be developed, including ball fields for non-league use. This is currently the last neighborhood park planned for development. Proops asked why the City is spending $2 million on another park. Lotthammer said the neighborhoods near the park are not yet fully developed, and there will be a sizable population near the park to use it. Most neighborhood parks are 8-15 acres with a small parking lot and small ball field, so this one is somewhat larger but still more of a neighborhood park than a community park. The land provides an opportunity to get another soccer field too since it will be one of the larger neighborhood parks. Two soccer fields will be lit in Miller Park this year. It was noted people usually access neighborhood parks by walking, so most people are not likely to drive to it. The fields are not for league play but for practice only. Proops asked if this is a good use of $2 million, and Fox said this cost is fairly typical for a neighborhood park. Uram asked when there will be a larger population in this area to use the park. Fox noted that this project did get pushed back from 2005, and if the housing market stays bad, it could get pushed back again. They can keep moving the project out except that the $900,000 purchase does need to happen soon. It will be a one-time payment. Uram asked about the Flying Cloud field expansions. The estimated cost for these expansions is $1.4 million. Lotthammer said they intend to develop the fields at Flying Cloud further based on user demand and increased field needs. Uram asked if the new soccer field planned at Cedar Hills Park would fill some of this need. Lotthammer clarified that the soccer field at Cedar Hills is really considered more of a green space where non-league practice and games can take place. The Cedar Hills Park land is not developable and would not be able to go onto the tax rolls if not made into a park; fields are an acceptable use for the land. Kantor asked if MAC could take the land back. Currently a year to year "lease"is paid for the land under the user agreement. Fox said that, although MAC could take it back, they are not likely to for political reasons. Lotthammer noted that the City Parks & Rec department is close to sitting down with MAC again to finalize the lease of the land. The second project discussed is the 2008 Miller Park project. Since Miller Park is a larger community park, a large play structure is needed. There are a couple of phases of the Miller Park project, and they stand independently. One can be done sooner and the other later, depending on if more fundraising is needed. Phase I of the Miller Park project is for the replacement of the play structure, and that is needed because the materials on the current structure did not hold up well and cannot be replaced. There is also a man who wants to make the park more Budget Advisory Commission Minutes May 27, 2008 Page 5 accessible and is raising funds for that effort. It would cost $350,000 to complete Phase II. They are currently looking at all play structures and replacing them on an as- needed basis. This is a multi-phase project that will be re-evaluated based on usage and need. On Memorial Day, there were 50 people on the play structure. The play structures at Miller Park are typically heavily used. One part of the planned projects involves $350,000 to replace the soil and improve drainage at the athletic fields at Miller Park. Last year they took out the clay soil and brought in sand-based soil for green fields (so they drain faster). They typically take out one at a time and make improvements (they need all others available for use and cannot really do more than one at a time). There is $200,000 in contributions that will primarily go to benefit the baseball association for the Miller park baseball stadium. The project isn't ready to go now and may not be next year either. In addition, the Miller Park shelter lacks a picnic area, and they would like to add this in 2013. Muilenburg asked why a shelter costs $600,000. The costs are for the foundation, restrooms, running water, and other elements typically found in a shelter. Muilenburg asked where it would be located, and Lotthammer responded that the shelter would be east of the play area. Lotthammer noted that there are currently waiting lists for shelters, and they could book shelter rentals every weekend for events and family gatherings. Muilenburg asked about the ROI on the shelters. Based on the cost of $100-150 per event to rent it out, the ROI is probably about 90 years. He suggested the price could be raised to generate more revenue and decrease the payback period. Proops asked about the impact of the projects on the operating budget. He noted that, since 2005, the Parks Maintenance budget is up 40%. He wondered how many more thousands of dollars we are building into the operating budget with the improvements. Fox noted there are three segments of conservation trail areas from the master plan in 2005. The three trail areas include Lower Purgatory Creek, Riley Creek Woods, and Edenbrook. Some land was given by developers, and it was planned to be used for nature trails with money included for improvements. The plans were made in 2006, and there are several phases for trail improvements. Phase II is planned for 2008 (and approved for the 2008 CIP), and Phase III is planned for 2013. Most of the trails are planned for the purpose of connecting different neighborhoods together. For Lower Purgatory Creek, Phase I was completed in 2006, and Phase II is planned for 2009 with Phase III planned for 2012. Land acquisition is needed before these trails can be completed. Phase II for Riley Creek goes through some MAC property near the planned Cedar Hills Park. King asked if some of the projects would involve referendum money as a funding source. The answer was given that all of the trail project Budget Advisory Commission Minutes May 27, 2008 Page 6 money would come from the CIP and park maintenance fees. Some trails currently stop in downtown areas, and they plan to connect more of those trails. Muilenburg asked how heavily used the nature trails are, and Fox replied that they are very heavily used. There have been public hearings and a petition requesting the completion of Phase IL Neighborhood petitions and studies drive the trail building decisions and are used to prioritize the projects. Muilenburg asked if the trails will be unpaved, and they will be; that means no snow removal services will need to be hired for them. Uram asked what the criteria are for determining where funding comes from. Lotthammer said the trails are paid for by either referendums or the CIP. Overlays, maintenance, and repairs come out of the CIP. New trails may be paid for by referendums. Cash park fees are used for new park equipment, and replacing large play structures usually relies on the CIP too. In response to a question from Proops, we learned that trails in the right of way are in the public works budget. The park maintenance budget is used for other trails. Proops noted that he is impressed with the Parks & Rec department's planning, but he is concerned about all the money recently spent and planned for spending in the future on trails. Several million dollars has been either spent or approved in recent years for trail improvements. Lotthammer clarified that the master plan for the trails was approved by the City Council and the Council awards bids and authorizes spending. He noted the priority of when and where to spend money for various projects changes over time. Proops asked about the $1 million for Cedar Hills Park, and Lotthammer clarified that this money has not been approved yet for spending. Fox said that they try to balance needs when they plan for spending money. Muilenburg asked when we will stop acquiring property and developing it for new trails and parks. Fox said they are not planning to buy more land at this time. They are planning to renovate existing parks instead (some are 25-30 years old currently). They are also protecting natural resources in the process as they make improvements. Improvements and maintenance are needed for Miller Park since around 270 games are played on each field in that park annually. Lotthammer said that as redevelopment occurs, at times they may decide to decrease the density and put land into the public domain. They may look at acquiring little pieces of land to make the park system whole. An example of this type of project would be acquiring land in the future that makes Riley Lake more accessible (currently this land is privately owned). Also, the Pioneer Trail expansion may impact land availability for trails. Funding sources are different from park fees, and cash park fees won't always come in. They could charge user fees too. Uram asked if they evaluate whether or not a section of trail is needed. Lotthammer said there are currently 100 miles of trail and 80 of sidewalk, and they are not planning to pull out trails to decrease maintenance costs. Fox added that there is a hierarchy for prioritizing trail needs. First, transportation trails are considered most important to keep bikes off of the highways. Second, connective Budget Advisory Commission Minutes May 27, 2008 Page 7 trails are important to provide paths to shopping areas and schools. Third, nature trails are developed to connect other neighborhoods, etc. Based on the quality of life survey, trails and parks are near the top of citizens' priorities. The City wants to keep the trails in good condition and stretch pavement management over a longer time (so replacement isn't needed most of the time). Proops asked how much is in the park development fees, and Kotchevar said $2 million. Proops asked what is out there that is assured. Proops noted that $5 million is planned in the short term. Lotthammer said park fees brought in $998,000 last year. Lotthammer said they are not factoring in possible increases in fees (they are presenting conservative project estimates for the BAC's review). Proops asked if memberships were ahead of projections for the Community Center. There are close to 1,000 members, but Lotthammer noted that the money from the memberships is a very small piece of the financial pie. Proops said there is no money for capital costs for the Community Center included, and it was clarified that there is a small amount of money included for facilities. RJM Construction Management is managing the total Community Center project with a "not to exceed" figure. On June 17, Parks & Rec will give an update to the City Council at a workshop for the Community Center project and Birch Island Woods. Architectural fees were included at the time the contract was approved for the Community Center. Muilenburg would like to see the final Community Center report. There was a $14 million referendum that included the Community Center project, a third patch of ice, and ball fields. Proops noted that, for the Community Center project, some capital costs are included as start up costs that should probably be expense items. Kantor asked about the tennis courts at Round Lake Park, and it was clarified that the costs are shared 50150 with the school district. Fox said they are putting in sub-drainage, and the projections are pretty accurate. He noted that Parks & Rec shares playgrounds with schools and do 50150 renovations at times. The tennis courts are only one example of this. There is a new skate park planned for Homeward Hills, and the demand for this is driven by kids and their parents. There is currently only one skate park (at Round Lake), and it is highly used. The new skate park is projected for 2011. Muilenburg asked if there is a significant liability to the City for having a skate park. Fox said they are covered by a risk management group called League of Minnesota Cities. He also noted that, if equipment is under a certain height, it doesn't need to be monitored and helmets are not required. Also, Lotthammer noted that injuries are not as prevalent or severe as we might expect for skate parks. They are not like the motor cross areas that were popular in the 1980s that were later ripped out due to liability problems. Budget Advisory Commission Minutes May 27, 2008 Page 8 In response to the first critical question, Proops thanked the presenters for not using a PowerPoint presentation, and he complimented them on their knowledge. Schultz agreed that the presentations were great, and the presenters were well- prepared. Uram noted that the playground equipment is ranked, and that may be of interest to others to see. In response to the second critical question, Muilenburg said the Parks & Rec department could be more complete in their justification for the projects. Most of the wording in that part really just describes the projects. Uram thought it would be helpful for them to quantify the projects more. For the third question, the fundraising outlook looks bleak to Uram based on the current housing market. Uram wanted to know the total cost of maintaining the current trail system. He also wondered how maintenance will be funded for new trails going forward. Fox asked what costs they are wanting more information on (overlaying, plowing, other costs). Proops asked what the ongoing impact is of the projects in terms of costs. Fox said the park and street maintenance staff help plow, but changing ordinance means that street maintenance people will not have as much to maintain going forward. Fox said the operating costs include lots of things, and he wasn't sure what data the BAC would want to see. Proops said they would want to know all the costs that would be involved if a private citizen owned the trail. King agreed that some estimates of annual maintenance are needed. Fox said the facilities group takes care of all park maintenance buildings. Trails and playgrounds and parking lots are components in a lump sum in the budget. These were included in the packet given to the BAC previously. Proops noted that if Cedar Hills is operational right away, the costs could increase sooner than the CIP information indicates. It was clarified that mowing expenses hit the operational budget, and Cedar Hills would add to the seasonal employee cost minimally (Fox clarified that it would not be a substantial increase in cost to maintain that park). Kantor said they can't always project all costs in the future, and it may not be too useful to try to plan for costs that are 15-20 years down the road (like replacing a new roof on a shelter that is not yet built). Muilenburg said that annual maintenance costs that will add to the operations budget are useful, and Kantor agrees with that statement. Proops thinks capital expenditures should be slowed down in this market, and he would like to see them take about $2 million out of the planned expenses. Muilenburg asked about fund-raising efforts given the amount of pressure on the ball fields. It may make sense to consider increasing user fees so the City can recover more of its costs. Kantor said they may need to reduce the CIP number, but more importantly, they could prioritize the projects in case some need to be delayed due to the costs. Lotthammer noted that the information provided in the packet is categorical currently, and the priority information is not generally shown. They have prioritized projects, however, and about 25% of them have been moved to a later year (none have been moved to a sooner year than originally planned). Budget Advisory Commission Minutes May 27, 2008 Page 9 Lotthammer stated that spending has been slowed already because so many projects have been planned into later years. If they took last year's amounts, almost $6 million are in 3 big projects. Delays are saving money in the short-term. Fox added that the reason the operating budget increased for Parks & Rec is because the risk management costs were put onto each park (they switched budgets from a central one to the Parks & Rec budget). Kantor clarified that this means the comparison of the 2005 budget to the current budget is not an apples to apples comparison. 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 VI. ADJOURNMENT King congratulated Uram on his new role as City Administrator for Victoria. He starts the job on June 9. The meeting ended at 9:08 PM. King moved to adjourn the meeting. The next meeting will be held on Tuesday, June 24 at 7:00 PM.