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City Council - 03/21/2000 - Workshop APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL WORKSHOP/FORUM TUESDAY,MARCH 21,2000 5:00- 6:55 PM, CITY CENTER HERITAGE ROOM II CITY COUNCIL: Mayor Jean Harris, Councibnembers Sherry Butcher,Ronald Case,Ross Thorfinnson, Jr., and Nancy Tyra-Lukens CITY COUNCIL STAFF: City Manager Chris Enger, Parks & Recreation Services Director Bob Lambert, Public Safety Director Jim Clark, Public Works Services Director Eugene Dietz, Asst. City Engineer Rod Rue, Community Development and Financial Services Director Don Uram, Management Services Director Natalie Swaggert, City Attorney Ric Rosow and Council Recorder Peggy Rasmussen I. CALL MEETING TO ORDER—MAYOR JEAN HARRIS Mayor Harris called the meeting to order at 5:30 p.m. II. APPROVAL OF AGENDA III. CAPITAL IMPROVEMENT PLAN(CIP) Enger said the prioritization process was reviewed at a previous City Council Workshop, classifying projects as "A", `B", and"C"in priority. Council directed Staff to come back with recommendations on how to fund the "A"projects. The purpose of this meeting is for the Council to discuss policies and strategies for funding the CIP. All "A" projects are fundable. Discussion as to "how"these projects are funded is needed. The various types of Capital Improvements were reviewed for maintenance, support and expansion. Capital needs for 2000-2005 total $21,433,500, and beyond 2005 are $4,591,000. Total anticipated capital needs are $26,024,500. Prioritizing the needs for 2000-2005 breaks down to"A"projects, $14,480,000, `B"projects, $6,128,500, and"C" projects total$825,000. The needs beyond 2005 are identified. The biggest expenditure is $2 million for the new fire station and replacement of fire department vehicles, which were all purchased in the same year. "C"projects will need to be done at a future time. "A'projects include $6,493,000 for Public Works (primarily the Pavement Management System), $3,250,000 for Public Safety, $855,000 for Parks and Recreation, $600,000 for Information Technology, $1,467,000 for Facilities Maintenance and Improvements, $2,425,000 for Park Development and$390,000 for Park Acquisition. COUNCIL WORKSHOP MINUTES March 21,2000 Page 2 Staff presented a number of alternative funding strategies including: • The CIP Revolving Fund. This fluid was established specifically to pay for the City's capital improvements. There are approximately $2 million in the fund currently and staff projects an additional $2 million added this year. Revenues for this fund come from transfers from the general fund, the enterprise funds, and one- time revenues. • The General Fund Tax Levy. The City currently transfers excess building permit and development fee revenue above the level budgeted to the unreserved fund balance. The purpose of this is to fund future operating expenses if necessary. Any remaining revenue above the level budgeted is transferred to the CIP fund. Last year $1.2 million was tranferred. • The Liquor Enterprise Fund. The City budgets annually for a transfer from the liquor fund to the general fund. In 1999, $450,000 was budgeted to be transferred. Since revenues exceed expenditures in the general fund, this transfer is not necessary and staff recommends transferring it to the CIP fund. • One-Time Revenue. The City expects to close on the sale of the former public safety building in May. The proceeds from the sale will be used to fund one-time expenditures (the relocation of the 911 tower) and the remainder will be transferred to the CIP. • Cash Park Fees. These could be used for second phase park-facility replacement. Lambert said Cash Park Fees are being used for some smaller projects, but we may run out of Cash Park Fees for doing this work. The $1 million improvement for the ballpark cannot be done with Cash Park Fees. • Utility Enterprise Fund. Currently $60,000 a year is budgeted to be transferred to the general fund. The possibility exists to transfer either a larger amount to the general fund or make a transfer to the CIP fund. An analysis of the utility enterprise debt service funds must be done prior to any additional transfers. A combination of these funding sources will allow the City to fund all"A"projects,with the potential to fund `B" and "C" projects. With the exception of using cash park fees- for second phase park-facility replacement, Council was comfortable with the alternatives presented. Potential funding strategies include the following: • Bonding. As the City's debt level is reduced, the possibility to issue additional debt exists. Staff recommends that the City issue debt to fund large capital (vehicles) expenditures through the use of equipment certificates. • City Center Debt Service Fund. Based on staff projections, the City Center debt service fund currently has a surplus. Because of that,revenue from this fund could be used for building maintenance and repair. Staff will review the balance in the fund annually to ensure that debt service payments are made. • Street Lighting Utility. The City could implement a street lighting utility which would allow for an additional$600,000 annually for use in the CIP. • Street Utility. The legislature is currently discussing the potential of allowing municipalities the ability to implement a street utility. The purpose of this would be to Rind street maintenance and repair. Staff will continue to monitor this legislation. COUNCIL WORKSHOP MINUTES March 21,2000 Page 3 Enger said the City can fund all of the "A" projects. If some of the funding sources perform better,the City should be able to fund all the `B"and some"C"projects. Dietz said the City is spreading the funding of the Pavement Management System over 10 years instead of five years. In five years staff will determine the validity of the Pavement Management System model and recommend adjustments to funding levels and sources if necessary. At that time, staff will address the possibility of implementing a street lighting utility and also revisit the special assessment policy. Mayor Harris said the recommendations would be a continuation of things that are already being done plus bonding and the use of the City Center debt service fund. Thorfinnson congratulated Staff on their outstanding work in preparing the CIP and the planned funding sources. Enger said a final report would be presented to the Council in May. They will see how the funding strategies would work for the "A"projects. Case said he would like to look at the list of"A", `B", and "C" projects again to see if all three levels need to be done. Enger also said that staff would bring back for presentation to the Council an overall debt service schedule. This could be used to identify opportunities for issuing additional debt. Enger thanked all those who worked on the CIP and expressed appreciation for the support and direction received from the Council. H. OTHER BUSINESS VIH. COUNCIL FORUM IX. ADJOURNMENT MOTION: Case moved to adjourn the meeting. Mayor Harris adjourned the meeting at 6:45 p.m.