2017-08-22 CC Meeting MinutesMOUND CITY COUNCIL MINUTES
August 22, 2017
The City Council of the City of Mound, Hennepin County, Minnesota, met in regular session on
Tuesday, August 22, 2017, at 7:00 p.m. in the Council Chambers of the Centennial Building.
Members present: Mayor Mark Wegscheid, Council Members Ray Salazar, Kelli Gillispie, Jeff
Bergquist, and Jennifer Peterson
Members absent: none
Others present: City Manager and Director of Public Works Eric Hoversten, Community
Development Director Sarah Smith, Administrative Assistant Mary Mackres, Director of Finance
and Administrative Services Catherine Pausche, Field Officer Stewart Simon, Public Works
Superintendant Ray Hanson, Public Works Street Lead Brent Kress, Public Works Utilities Lead
Ryan Prich, City Attorney Elizabeth Brodeen-Kuo, Joseph Schwebel, Jayne Quinnell, Michelle
Olson, Hayley & Jeremy Nelson, Mark Hanson, Kari McReavy, Paul & Lori Snyder, Traci
Mallonee, Scott Steele, Allan Moran, Brian Blake, Barb Fritsch, Mike & Cindy Palm, Joleen
Stadsklev, John Range, Tom McDonnell, Susan Hoversten, Johann Chemin, Linda Cordie, and
Kevin Boyle
Consent agenda: All items listed under the Consent Agenda are considered to be routine in
nature by the Council. There will be no separate discussion on these items unless a Council
Member or citizen so requests, in which event it will be removed from the Consent Agenda and
considered in normal sequence.
1. Open meeting
Mayor Wegscheid called the meeting to order at 7:02 p.m.
2. Pledge of Alleaiance
3. Approve agenda
MOTION by Salazar, seconded by Bergquist, to approve the agenda. All voted in favor.
Motion carried.
4. Consent agenda
MOTION by Salazar, seconded by Peterson, to approve the consent agenda. Upon roll call
vote, all voted in favor. Motion carried.
A. Approve payment of claims in the amount of $283,161.35
B. Approve Minutes: 8/08/17 Regular Meeting
C. RESOLUTION NO. 17-115: RESOLUTION AUTHORIZING 2017 CENTRAL
BUSINESS DISTRICT (CBD) PARKING MAINTENANCE ROLL TO BE CERTIFIED TO
THE COUNTY AUDITOR AT 5% INTEREST, LEVY #19677
D. RESOLUTION NO. 17-116: RESOLUTION AMENDING AND RESTATING
RESOLUTION NO. 17-104 RESOLUTION APPROVING STATE OF MINNESOTA
JOINT POWERS AGREEMENTS WITH THE CITY OF MOUND ON BEHALF OF ITS
PROSECUTING ATTORNEY
Mound City Council Minutes —August 22, 2017
E. RESOLUTION NO. 17-117: RESOLUTION OF SUPPORT FROM THE CITY OF
MOUND FOR THE MINNEHAHA CREEK WATERSHED DISTRICT WATERSHED
MANAGEMENT PLAN
F. RESOLUTION NO. 17-118: RESOLUTION APPROVING VARIANCE FOR 2025
LAKESIDE LANE
G. RESOLUTION NO. 17-119: RESOLUTION AMENDING AND RESTATING
RESOLUTION NO. 16-124 APPROVING VARIANCES FOR 4804-4820 NORTHERN
ROAD
H. RESOLUTION NO. 17-120: RESOLUTION APPROVING A VARIANCE FOR 2039
ARBOR LANE
I. RESOLUTION NO. 17-121: RESOLUTION APPROVING A VARIANCE FOR 3231
GLADSTONE LANE
J. RESOLUTION NO. 17-122: RESOLUTION APPROVING VARIANCE AND
EXPANSION PERMIT FOR 2060 WATERSIDE LANE
K. RESOLUTION NO. 17-123: RESOLUTION ACCEPTING BID FOR THE 2017
RETAINING WALL IMPROVEMENT PROJECT - PW -17-04
5. Comments and suggestions from citizens present on any item not on the agenda.
Mark Hanson, 5555 Three Points, said there is an easement driveway owned by the City
that leads into Harrison Shores townhomes and a City -owned well -house. Hanson said
several years ago in the spring, the City's water department truck drove up that driveway
while road restrictions were in effect and caused damage to the driveway which is now in
need of repair. Hanson says this driveway is subject to getting ruined again if the City keeps
using this road. Mayor Wegscheid asked if Hanson has had discussions with Staff and
Hanson indicated he had spoken with Hoversten.
Hanson shared pictures of the damaged road, which is east of Commerce, before Lafayette,
which is an easement driveway that leads to a City well -house at the top. Hanson noted the
damage is up and down the hill and that there are huge divots from trucks.
Mayor Wegscheid informed Hanson that this item will be referred back to Staff to recap the
conversations, make recommendations, and include on an upcoming Council agenda.
Lori Snyder, 4789 Dorchester, said she is here because of Mound's water bills. Snyder says
the group does not have a spokesperson but they know that the water bills are very high in
Mound compared to other cities. Mayor Wegscheid said this is something that is part of the
agenda tonight and will be discussed.
6. Catherine Pausche, Director of Finance and Administrative Services, with an overview
of the 2018 Preliminary Budget and Lew and requesting action on related
resolutions.
Catherine Pausche presented the 2018 preliminary proposed budget and stated that in
August of each year, the City typically focuses on the General Fund revenue levy and the
total levy, which is what the county uses to produce the estimated tax statements that are
Mound City Council Minutes — August 22, 2017
mailed oui in November. Pausche noted the total levy cannot go any higher than the
amount set tonight.
Pausche reviewed the General Fund highlights, noting Staff is recommending a 2.5%
increase in the General Fund revenue levy and a 2% increase in the overall levy. Staff is
recommending utilization of $189,000 of General Fund reserves which will produce an
unassigned fund balance of 20% of expenses and $1.5M for inter -fund loans or transfers.
The City's projected tax rate is about the same as this year at 47.4%.
Pausche says that Staff is always keeping an eye on where Mound's rates are averaging
and that Mound's tax rate hit its peak at 57% in 2014, which was a result of the recession
and the declining tax capacity, but General Fund levy and expenditures were basically flat
on average from 2009 — 2018.
Pausche said General Fund expenditures are proposed to increase 2.2% which funds the
essential city services of streets, parks, public safety, etc. Pausche said that when the City
contracted for police services, savings of $200,000 per year where projected, but the
contract is subject to inflationary increases tied to CPI.
Pausche said Staff allocations were modified to better reflect how the positions spend their
time, which meant more expense was moved to the General Fund for the Field Officer and a
Public Works maintenance worker. Pausche said capital expenditure requests are up
$130K from prior year, including two new trucks for Streets and the replacement of the
remaining roof sections at the Centennial Building.
Pausche proposed to create additional capital project related funds to help smooth the
fluctuations from year to year and to plan for the future. Pausche said Staff is working on a
10 -year financial plan which would include both inventories and replacement schedules so
the City Council could focus on priorities. Pausche said the plan will be a main topic at the
October 17th workshop.
Pausche reviewed the Mound property taxes, noting Mound's tax base is mostly residential
and only 5% commercial, with off -lake properties making up 75% of parcels paying 47% of
taxes, and on -lake making up 20% of parcels and paying about 43% of the taxes.
Pausche shared a summary by fund of the 2018 proposed budget, noting General Fund
capital expenditures of $341 K and use of reserves of $189K. Pausche noted the Area Fire
Fund has also proposed to use some of their reserves for equipment this year.
Pausche discussed what drives increases to tax and utility rates, saying the primary reason
are investments in infrastructure, in addition to covering operating and capital expenditures.
Pausche said Mound's rates are compared to other cities annually, but it is important to also
compare the size and age of infrastructure, as well as the amount of investment that has
been made.
Pausche showed a breakdown of investments in infrastructure through 2016. Investments
have included $32.3M in street and retaining wall reconstructions. $19M was invested in
water system improvements associated directly with those street repairs, a new water tower
and pump houses, and improvements to the distribution network to improve service volume
and capacity. $9.8M in sanitary sewer system improvements included replacement of 19 of
the 30 City lift stations, and lining of sewer pipes to reduce groundwater infiltration. $5.9M in
bonds have been issued for storm water improvements most generally linked to the street
Mound City Council Minutes — August 22, 2017
reconstruction efforts. An additional $8.8M in bonds have been issued for redevelopment
related activities in the Lost Lake/Harbor Districts. Pausche said Mound's aging
infrastructure required a response and topography/lakes caused unique challenges,
including 30 lift stations and the need for watermain looping to improve water quality.
Pausche shared the ratio comparison showing Mound as compared to cities with
populations of 2,500 - 10,000 that is part of the annual management letter from the City's
auditors. Pausche said the $75M investment shows that Mound is highly leveraged, with
the debt to assets and debt per capita higher than the peer group average, but also noted
Mound's operating expenses are less than the peer group average, which reflects a direct
effort to be as lean and efficient as possible.
Pausche showed comparisons of infrastructure with neighboring cities of St. Boni and
Delano. For Mound, its infrastructure is 30-50 years old, which means that it was at the end
of its useful life. Mound also has 60 miles of sewer line, compared to 10 miles in St. Boni
and 30 miles in Delano.
Pausche shared a chart with city comparisons showing three other cities and what they pay
to the Met Council and how many miles of sewer and the number of lift stations they have.
While Pausche acknowledged that Mound has high base utility rates, neighboring cities
such as Delano get to a higher quarterly rate with a higher usage fee.
Pausche highlighted the need for balance within the utility rate structure between base
charges and variable meter charges in order to generate revenues sufficient to cover
current operating expenses and repay the debt, noting more than half of the City's annual
costs for utility services is linked to the repayment of debt/MCES charges. Pausche said
when the tiered rates were implemented, the idea of a "per household" base fee made
sense because of the level of fixed costs related to the debt. Pausche said every household
pays a minimum $206 quarterly water bill, or approximately $70 a month, with a variable
component based on usage that is meant to encourage people to conserve water.
Pausche said there is some debate on whether the City should put these costs on the
property taxes, which would be deductible. Pausche said Mound is considered a fully
developed community and the population is not expected to fluctuate much in the coming
decades, so the City can't rely on growth to fund infrastructure investments, like other cities
may. Pausche said taxes based on property values do not necessarily bear any direct
relationship to the benefit of government goods and services received, and therefore, cities
typically charge utility rates in order to treat these services like commodities similar to
electric, gas, garbage and communication services instead of taxing. Shifting utility
operating and capital costs to the tax levy would shift more of the burden for utility services
and system capital improvement to higher value properties instead of sharing the burden
equally among all benefitting system users.
Pausche said it is the Council's challenge to determine what constitutes a fair system of
allocating the tax burden and that the City must balance how costs are distributed.
Mayor Wegscheid noted that the City continued the investments even with the tax capacity
fluctuations caused by the recession, so having fee-based utility bills insured a steady cash
flow, which is just another piece to consider.
Joleen Stadsklev, 4731 Manchester, questioned if the utility bill for 15K gallons is lower than
Delano's but there is a higher minimum, then there is no incentive to conserve. Stadsklev
Mound City Council Minutes — August 22, 2017
said people who are using a lot of water get an advantage because they get a lower variable
rate.
Pausche addressed the question stating that there are seasonal people who leave town in
the winter who are still charged the minimum rate. Pausche said there are not that many
pools or sprinkler systems in Mound and smaller lot sizes, meaning the majority of
households use similar amounts of water, and therefore if the base fee was lowered the
variable rates would need to increase dramatically. Pausche said the City is ahead of the
curve regarding infrastructure improvements and she would expect the trends to look more
like Mound in the long term.
Mayor Wegscheid said that no plan is perfect and there is bound to be a downside for
someone.
Johann Chemin, 6039 Beachwood. Chemin noted that there are different rates for amount
of usage and he thinks there should be more tiers to encourage people to save water.
Mayor Wegscheid said that the Council will have a discussion at the upcoming workshop
and revisit the usage rates.
Council member Bergquist asked that with all the investments since the early 2000's, will
things get cheaper or lower. Pausche stated that investments will diminish after the last
street project in 2018, but that the City will need to consider other deferred needs that
haven't been addressed while the City concentrated on infrastructure and street
improvements. Pausche said October's workshop will focus on a comprehensive look at the
City's buildings, infrastructure, capital equipment, parks, etc., but that the rate of increase in
utility rates should definitely slow down.
Mayor Wegscheid noted this is kind of an exciting time as the City can look 10 years out
where previously the City had committed to all of these infrastructure projects and related
debt. The City now has the opportunity to look forward, plan better, and consider options on
how the City can pay for future improvements.
Council member Gillispie said that in her time on the Council, she has noticed that there
were never any 5-10 year plans, more year-to-year planning, but that the Council asked
Staff to plan ahead and she gave credit for them doing so.
Joleen Stadsklev asked about the upcoming workshop when further discussion will take
place. Mayor Wegscheid said the workshop is on Oct. 16, 2017 at 6:30 with the final budget
and levy approval on Dec. 12.
A. Action on Resolution Approving Changes to Debt Service Levy Schedules and to
appropriate funds in the debt service fund for Bond Series 2015B & 2016A
MOTION by Salazar, seconded by Bergquist, to approve resolution. All voted in favor.
Motion carried.
RESOLUTON NO. 17-124: RESOLUTION AUTHORIZING CHANGES TO DEBT
SERVICE LEVY SCHEDULES AND TO APPROPRIATE FUNDS IN THE DEBT SERVICE
FUND FOR BOND SERIES 2015B & 2016A
Mound City Council Minutes — August 22, 2017
B. Action on Resolution Approving a Levy not to Exceed $218,404 for the Purpose of
Defraying the Cost of Operation, Pursuant to the Provisions of MSA 469, of the
Housing and Redevelopment Authority of and for the City of Mound for the Year
2018
MOTION by Salazar, seconded by Peterson, to approve resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 17-125: RESOLUTION APPROVING A LEVY NOT TO EXCEED
$218,404 FOR THE PURPOSE OF DEFRAYING THE COST OF OPERATION,
PURSUANT TO THE PROVISIONS OF MSA 469, OF THE HOUSING AND
REDEVELOPMENT AUTHORITY OF AND FOR THE CITY OF MOUND FOR THE YEAR
2018
C. Action on Resolution Approving the 2018 Preliminary General Fund Budget in the
amount of $5,614,463; Setting the Preliminary Levy at $5,704,456; and Approving
the Preliminary Overall Budget for 2018
MOTION by Salazar, seconded by Gillispie, to approve resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 17-126: RESOLUTION APPROVING THE 2018 PRELIMINARY
GENERAL FUND BUDGET IN THE AMOUNT OF $5,614,463; SETTING THE
PRELIMINARY LEVY AT $5,704,456; AND APPROVING THE PRELIMINARY OVERALL
BUDGET FOR 2018
D. Mayor Wegscheid announcing: The 2018 Final Budget and Levy discussions and
decisions will take place at the Dec. 12, 2017 Regular Meeting, at 7:00 pm, in the
Council Chambers. Public comments will be taken at this meeting. Comments or
questions on the 2018 Budget and Levy can be Directed to the Finance Director at
952-472-0633.
7. City Manager and Director of Public Works Eric Hoversten presenting discussion and
recommendations of the Public Works Committee regarding removal of proposed
pathway/trail elements from 2018 Street and Utility Improvement Project.
City Manager Hoversten said that at the July 25 Council meeting, a public hearing was held
regarding the financing and construction of a project along the Westedge corridor that
included a recommendation to build a pedestrian and bicyclist pathway and trail into the
right-of-way. Hoversten said following the significant amount of public comments received,
a meeting of the Public Works Committee was convened that included Mayor Wegscheid,
Council Member Salazar, City Manager Eric Hoversten, and City Engineer Brian Simmons,
who discussed the trail in more detail and decided to recommend removal of the pathway
from the project based on the incompleteness of the bikeway element. Hoversten said Staff
would accept instructions from the Council to remove those elements from the plans and
edits would be made to the feasibility study which would then be brought back to the Council
as a consent item.
Mound City Council Minutes — August 22, 2017
Motion by Saiazar, seconded by Gillispie, to direct Staff to make edits to feasibility study to
remove pathway elements and to review trail components of the comprehensive plan for
2040. All voted in favor. Motion carried.
Johann Chemin, 6039 Beachwood came forward to ask how the Wilshire Blvd. reconstruction
was being assessed, saying he thinks it is unfair that people who live there have to pay as there
are trucks that use the road and ruin it. Chemin added the project benefits the whole city and
not just the people who live on it.
8. Conduct a closed session pursuant to the Minnesota Statutes, section 13D.05, subdivision
3(b) to engage in an attorney-client privileged discussion with the City's attorney regarding
the 4837 Bedford Road hazardous building matter currently being litigated.
Motion by Wegscheid, seconded by Salazar, to go into closed session to engage in an attorney-
client discussion with the City's attorney regarding the 4837 Bedford Road hazardous building
matter currently being litigated. All voted in favor. Motion carried.
Closed session begins at 7:51 p.m.
Motion by Wegscheid, seconded by Salazar, to reopen the meeting. All voted in favor. Motion
carried.
Meeting reopens at 8:09 p.m.
9. Information/Miscellaneous
A. Comments/reports from Council Members
Hoversten reminded all of the following: State Fair - starts Aug. 24, Labor Day - Sept. 4 -
City offices closed, School starts - Sept. 5, Running of the Bays - Sept. 9
Last day to purchase trees for Tree Trust program is Sept. 1. Residents can purchase up to
two trees. Interested residents can order on the City's website. Pick-up for the trees is on
Sept. 16 at the Public Works lot, upper storage lot. Trees are 10 -gallon trees of about 1.5".
Residents' cost is $30 per tree.
B. Reports: Fire Department - July 2017
Liquor Store - July 2017
Finance Department - July 2017
C. Minutes: Planning Comm Minutes - July 18, 2017
D. Correspondence: CenterPoint Energy Rate Change Filing - August 8, 2017
10. Adjourn
MOTION by Gillispie, seconded by Bergquist, to adjourn at 8:10 p.m. All voted in favor.
Motion carried.
N\VL)
Mayor Mark Wegscheid
Attest: Catherine Pausche, Clerk