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City Council - 07/11/2017 - Workshop APPROVED MINUTES CITY COUNCIL WORKSHOP & OPEN PODIUM TUESDAY,JULY 11, 2017 CITY CENTER 5:00—6:25 PM, HERITAGE ROOMS 6:30—7:00 PM, COUNCIL CHAMBER CITY COUNCIL: Mayor Nancy Tyra-Lukens, Council Members Brad Aho, Sherry Butcher Wickstrom, Ron Case, and Kathy Nelson CITY STAFF: City Manager Rick Getschow, Police Chief Jim DeMann, Fire Chief George Esbensen, Public Works Director Robert Ellis, Community Development Director Janet Jeremiah, Parks and Recreation Director Jay Lotthammer, Finance Director Sue Kotchevar, City Attorney Ric Rosow, and Recorder Jan Curielli Workshop - Heritage Room H I. 2018/2019 BUDGET Getschow said he will be presenting an overview of the proposed 2018/2019 budget process and Public Works Director Ellis will give a presentation about franchise fees. Getschow reviewed the budget process, starting with the development of the 2017-2018 City- wide work plans by staff followed by a review of the Quality of Life survey results in March, the Council's goal-setting session in April, and the Council workshop to review the 2016 financial results in May. There will be community engagement with the budget process and the City's portion of the total property tax levy through City Connect and other media before the Council adopts a preliminary tax levy and budget on September 3. Further discussion and review of the budget, including enterprise and utility funds, will take place in October and November. On December 12, the Council will hold a public meeting before adopting the final budget and tax levy. Getschow said staff reviewed the Quality of Life survey results and have included in the proposed budget consideration of such concerns as traffic and the increased engagement of our residents in social media. He reviewed the City-wide goals: community well-being and safety; high quality efficient services; preserved and beautiful environment; sense of community; innovative and sustainable practices; and economic vitality. Aho commented we probably would never get up to 90% on the survey question regarding a sense of community. Getschow said that was probably true;however, the percentage for that question increased from 62% to 70% on the 2016 survey. Butcher Wickstrom said she would like to target what people are looking for in a sense of community. Getschow said we have had discussions about digging further into that category. Aho noted Eden Prairie cannot make an historic downtown area at this point. Butcher Wickstrom said we would need to factor that into the numbers if that is what people are looking for. Aho thought we need to strive for improvement, but we won't get that number City Council Workshop Minutes July 11, 2017 Page 2 way up. Nelson said there is not one specific place that is identified with a downtown area,but we need to do what we can to build a sense of community at a reasonable cost. Tyra-Lukens said the sense of community score will never get as high as other items on the survey. She thought a sense of community is probably related to where an individual is in their life. Case noted if we are trending correctly, we are picking up on what we should be doing. We need to know what the current demographic feels is important to building a sense of community. Getschow said we are looking at promoting connectedness in development proposals and have included a sense of community as one of the six goals to work on. Getschow reviewed the General Fund revenue and budget. He noted every other year we raise and adjust our permit and development fees as needed after we see what other cities are doing and determine our cost of doing business. There has been an increase in Community Center revenue and expenditures, and we are coming closer to 100% cost recovery at that facility. Aho asked how much membership at the Community Center has increased. Lotthammer replied volume is up about 5%, and continues to increase. Case asked if we ever expected the facility to reach 100% cost recovery. Lotthammer said we talked about that early on, but when we went forward with the expansion we showed cost recovery to be above 90%. Case thought we did expect to subsidize some of the activities there. Nelson commented our programs are getting to be known throughout the greater metropolitan area, yet we don't charge any more for non-residents than we do residents. Lotthammer replied we do charge more for non-residents and businesses for facility rental and memberships. There is not a high percentage of non-residents in programs, in part because residents can register for programs earlier than non-residents. Getschow reviewed the General Fund expenditure budget, noting both expenditures and revenues are up. The biggest item for expenditures is employee wages and benefits. There is a 3% wage increase included in the budget because we need to be competitive with our wages and benefits. There will be a General Election in 2018. He noted the School District plans to move to even-year elections, so they will be included in the City-wide election once they have moved to even years. He said there are increased pension contributions and duty crew wages included for the Fire Department. Aho asked about the pay rate for the fire fighters. Getschow replied the rate has gone from $8.50 to $13.00 per hour, which is more than 3%. Aho asked why the Police Department percentages are higher than the Fire Department's. Getschow said it is primarily the IT service charges that make the difference. We have also been receiving a lot of requests for data so we are looking at data practices software. Aho asked if we have included body cameras for police. Getschow replied that would be a capital improvement item. Aho commented body cameras would add a lot of administrative costs and City Council Workshop Minutes July 11, 2017 Page 3 the work flow would change. Chief DeMann said the real expense is the management of the data and the storage requirements. Nelson asked if the Police Department has a system whereby an officer can input information and have it be downloaded onto the required forms. Chief DeMann said we have made some efficiencies such as that. Getschow reviewed items proposed for expenditure such as emerald ash borer expenses, LED streetlight requirements, historic interpretive sign replacement, ASPIRE Eden Prairie, and redesign of Life in the Prairie, the City website and the intranet publication, Prairie Pages. Getschow then reviewed the proposed levy and budget. He said there is a 3.7% increase in the General Fund levy, which matches well with what other communities are doing. He said there is a need to add a little more to the capital improvement levy, and the proposal is to go from $200,000 to $300,000 in 2018 and to $400,000 in 2019. He noted with that increase the levy goes to 3.9%,but the debt levy is flat. Aho asked if the decreased liquor revenue has affected that. Kotchevar said we want to have enough to cover all the capital projects, so we need to keep building that fund. Butcher Wickstrom asked about the decrease in liquor revenues. Kotchevar replied revenue is $635,000 this year,but it should go back up. Aho asked if there is an early read on Sunday liquor sales. Kotchevar said the first Sunday sales were $38,000, but last Sunday sales were $16,000. She thought that will be a"wait and see" situation. Getschow said there is an imbalance between the revenue and expenditures of about$283,000. Staff will continue to work on the budget. He noted the Council has not always approved a balanced budget, and we have never needed to transfer funds in because we generally have higher revenue and lower expenditures at the end of the year. Aho asked what the goal is for the amount in the capital improvement fund. Kotchevar said they would like to see a balance of$4,000,000 which would cover about two years of expenditures. Getschow reviewed the tax impact of the proposed budget. He noted Eden Prairie is the fourth lowest out of 14 comparable cities. He said early estimates show that, even with the 3.9% increase in tax levy, our City tax rate will go down. A lot of the estimates depend on the impact of items not yet known such as fiscal disparities and TIF. Tyra-Lukens commented we have a nice situation in the City with low debt and low taxes. Our economy is doing well. She asked if there is some place in the budget to add $100,000 to kickstart some sustainability projects. She suggested using some of the funds to make grants available to residents to make homes more energy efficient. She would like to see what impact that addition would have on the budget. Getschow replied we have talked about possibly issuing debt for some of the larger projects, and that could be on the Capital Improvement Plan. Nelson commented she would like to include things that pay back over several years. City Council Workshop Minutes July 11, 2017 Page 4 II. PAVEMENT MANAGEMENT AND FRANCHISE FEES Ellis gave a PowerPoint presentation about pavement management and franchise fees. He said Eden Prairie has 228 centerline miles of streets whose average age is 30 years. We expect to get 60 years of life from our streets if we do preventive maintenance and timely repair. The goal is to keep the Pavement Management Index (PMI)between an "excellent" or"very good" rating. He said costs of street maintenance range from 50 cents per square foot for preservation and up to $8 per square feet if the roads fail. Ellis reviewed the franchise fees that have been used for pavement management since the fees were first adopted in 2011. The fee has been $2.50 per month,per utility. If the franchise fee stays the same, the PCI will drop down to "good"between 2022 and 2025. In order to maintain the goal of"very good" to "excellent," the franchise fees would need to be increased gradually up to $4.00 per month,per utility. Getschow noted we would expect to put the increases in place over a period of ten years. Getschow asked if Council Members had any other concerns. Aho said the increases are a little above his comfort level. He asked if we plan to keep the current staffing. Getschow said there is nothing in the budget to increase the number of full time employees. Aho said he would feel more comfortable if the tax levy were closer to a 3% increase as it feels we have been creeping up a percentage or two every year. Case commented the budget ought to drive the tax levy. Tyra-Lukens noted 70% of the budget is wages. Nelson said we can't necessarily replace our good quality employees if we lose them. Getschow said several adjustments were made to the budget prior to tonight's meeting. If there were to be a different budget, we would be looking at the use of reserves. Aho noted we have gotten a lot more efficient in our services and asked if there is anything we can do to lower the increases in the near term. Getschow replied we are looking at a lower budget and a lower levy in 2019, when the increase will be closer to 3%. II. OPEN PODIUM A. DENNIS GALLAHER—PICKLEBALL COURT DEVELOPMENT Dennis Gallaher, President of the Southwest Metro Pickleball Club, said their club has 442 members, 85 of whom are Eden Prairie residents. He noted the sport is exploding and has great health benefits for players. He reviewed the existing courts and proposed development of additional courts here and in surrounding communities. He said the need is for larger 10-12 court facilities where players can congregate in one location to play and socialize. Tyra-Lukens said there will be a report from Parks & Recreation Director Lotthammer about pickleball at tonight's City Council meeting. Mr. Gallaher said his group has been trying to raise funds to help develop additional courts and would be willing to provide $10,000 in funding. City Council Workshop Minutes July 11, 2017 Page 5 Aho asked Mr. Gallaher how many courts they would need. Mr. Gallaher said a 12-court complex would be ideal. B. KIM BATEMAN,ASAD ALIWEYD AND JOAN HOWE-PULLIS—EP COMMUNITY HOUSING COALITION Kim Bateman, representing the Eden Prairie Community Housing Coalition, introduced other members of the coalition and said they are dedicated to working with the City and developers to increase the affordable housing options in the City. Asad Aliweyd, Community Housing Coalition member, said their first goal is to help residents with their affordable housing needs. David Saltzman, Community Housing Coalition member, said the Jewish Community Action group is also interested in promoting affordable housing in Eden Prairie. He noted Eden Prairie has a long and well-documented policy of inclusion, but an improving economy has impacted rental rates which has caused hardship for low income residents. Joan Howe-Pullis, Community Housing Coalition member, said the group supports development of a housing project with 100% affordable housing, such as the Aeon project that proved impossible to build. She asked the City to look for other sites with similar potential. C. CLAIRE BLESER Claire Bleser, an Eden Prairie resident near Duck Lake, commended the Parks, Police and Fire Departments for the great safety camp at Riley Lake. She was concerned about the situation involved in crossing Eden Prairie Road and 72nd Street, near the Eden Prairie Community Center where children must cross the street to get to the Community Center. She was also concerned about traffic in the Community Center parking lot where many people are busy on cell phones as they walk and drive. She suggested making that parking lot a cell phone-free zone. III. ADJOURNMENT