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2020-08-25 CC Meeting MinutesMOUND CITY COUNCIL MINUTES August 25, 2020 The City Council of the City of Mound, Hennepin County, Minnesota, met in regular session on Tuesday, August 25, 2020 at 7:00 p.m. in the Westonka Schools Performing Arts Center in Minnetrista. Members present: Mayor Ray Salazar; Council members Phil Velsor, Jeff Bergquist, Paula Larson, and Sherrie Pugh Members absent: None Others present: City Manager Eric Hoversten, Fin Dir/Clerk/Treasurer Catherine Pausche, City Engineer Brian Simmons, Justin Rock, Gretchen Piper 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 Councilmember or citizen so requests, in which event it will be removed from the Consent Agenda and considered in normal sequence. 1. Open meeting Mayor Salazar called the meeting to order at 7:00 p.m. 2. Pledge of Allegiance 3. Approve agenda MOTION by Bergquist, seconded by Velsor, to approve the agenda. All voted in favor. Motion carried. 4. Consent agenda MOTION by Velsor, seconded by Pugh, to approve the consent agenda as amended. Upon roll call vote, all voted in favor. Motion carried. A. Approve payment of claims in the amount of $371,702.19. B. Approve minutes: 08-12-20 rescheduled regular meeting. C. RESOLUTION NO. 20-75: RESOLUTION TO AUTHORIZE MAYOR AND CITY MANAGER TO ENTER INTO A CONTRACT AGREEMENT FOR PROFESSIONAL ENGINEERING SERVICES D. RESOLUTION NO. 20-76: RESOLUTION APPROVING UN -FORECAST CAPITAL IMPROVEMENT CONTRACT EXCEEDING $5,000 FOR CONVERSION OF FLORESCENT LIGHTING TO LED LIGHTING E. RESOLUTION NO 20-77: RESOLUTION TO APPROVE A PUBLIC LANDS PERMIT FOR 4730 GALWAY ROAD FOR INSTALLATION OF UNDERGROUND ELECTRIC TO ABUTTING CITY ASSIGNED DOCK AND TO ALLOW LOW VOLTAGE ACCENT LIGHTS Mound City Council Minutes — August 25, 2020 5. Comments and suggestions from citizens present on any item not on the agenda. Gretchen Piper, 4653 Highcroft Road, said she is running for Minnesota Senate District 33 and is introducing herself all around the district to cities, school boards, police and fire. Piper gave her personal background and said her family has been here for generations. Piper said she is running to ensure the values of the community are represented at the capital. Piper said she is a small business owner in Wayzata and gave a list of experience with various organizations, including currently with Goodwill Easter Seals. Piper said her priorities are healthcare and climate, noting she is looking to put all voters in front of partisan gridlock. Piper said she can take questions now or can be reached at gretchenpiper. com. Piper said she is hosting multiple listening sessions each week. Mayor Salazar thanked Piper and upon receiving no further questions from the Council, wished her luck. 6. Orono Police Sergeant Tim Sonnek presenting the Mound activity report for JuIV 2020 Officer Tim Sonnek summarized the number of calls/activity for the month of July, 2020 as shown in the report for the packet. Larson once again noted that the number of calls differs from other information she has been given. Sonnek said not all calls appear on this report, just the ones that create a case number. For instance, traffic stops that did not result in a ticket. 7 City Engineer Brian Simmons requesting action to approve a Resolution acceptingbid for 2020 Manhole Rehabilitation Proiect City Project PW -20-04 and awarding contract in the amount of $86,980.00 to Thule Specialty Contractin Simmons summarized the project to fight inflow and infiltration in Mound that was on the 2020 capital plan, noting it focuses on leaking in sanitary sewer manholes. Simmons said this contractor did the 2019 project. Larson asked for Simmons to explain what manhole covers are. Simmons said some need to be replaced, but the work focuses more on where the clear water enters the sanitary sewer system on the municipally owned portion vs private property. Simmons clarified there is a complete structure underneath the manhole cover. Bergquist asked if the work includes any other pipes and Simmons said it is limited to leaking manholes that were analyzed and determined to be problematic. Bergquist asked about a sunken cover near his home and Simmons said that relates to the potable water system. Simmons said sometimes the installation is a problem because of the compaction around it and just to let the City Manager know where that particular cover is. MOTION by Bergquist, seconded by Larson, to adopt the following resolution. All voted in favor. Motion carried. RESOLUTION NO. 20-78: RESOLUTION ACCEPTING BID FOR 2020 MANHOLE REHABILITATION PROJECT CITY PROJECT NO. PW -20-04 Mound City Council Minutes — August 25, 2020 8. Director of Finance and Administration Catherine Pausche requesting discussion and direction on the updated Capital Improvement Plan and Long Term Financial Plan Pausche said in 2018 there was an extensive analysis of the city's infrastructure with Bolton and Menk using the knowledge and inventory from the last 15 years of projects to come up with a timeline for maintenance and replacement which created the project priorities in the Capital Improvement Plan (CIP). Pausche noted the Long Term Financial Plan (LTFP) shows how we are going to pay for the CIP. Pausche said the Council will not make any formal decisions tonight and this is just an opportunity to review the project priorities and timing that impact the property tax and utility rates. Pausche said in 2018 the motivation for creating this plan was to reduce and hopefully eliminate the need for special assessments to the abutting property owners and finance future street projects with the levy, reserves, and debt as needed. Pausche said in 2000 when the street projects got started, there were no reserves and between 2003 and 2016, the City issued over $75M in bonds to finance the projects. Pausche summarized those projects by category, including streets, utilities, and redevelopment, noting that $48.5M is still outstanding as of 12-31-19. Pausche said the street project special assessments varied by project based on the density of the area and cost of the project. Pausche detailed the five capital reserve funds that were created in 2018, including Infrastructure Replacement Reserve Fund, Capital Reserve Funds for Vehicles & Equipment and City Buildings, Community Investment Reserve fund for parks and open spaces, and the Road Maintenance Fund. Pausche said the city issued an average of $5.11 M in bonds per year from 2003 — 2016, $2.8M funded by utilities, $1.4M funded by levies, and $909K funded by special assessments. Pausche said the city can assess up to 2/3 rd of the assessable street costs which funded a large portion of the street projects. Pausche showed that % of city expenditures are for operating and % are for debt and capital investments. Pausche said Staff tries to maintain the same format for the CIP and LTFP so people can become more familiar with it and can more easily identify the patterns. Pausche said it is a very fluid document as more needs are identified and estimates change and noted that since October of 2019, the project costs increased $4.2M for 2021 — 2029. Pausche noted that the idea is to commit to some level of funding and make it more predictable and stable. Pausche highlighted the assumptions for the CIP which shows the frequency of repairs and replacement. Pausche noted that only about 1/2 of the sewer piping infrastructure is municipally owned and some cities are looking at how to assist private property owners in addressing their inflow and infiltration issues. Pausche said the LTFP shows the two scenarios which have not changed since October 2019, a 5% and 3.5% levy increase for the next 10 years with a 3% increase to sewer rates only. Pausche said she always tries to give at least two scenarios so the Council can better understand the trade-offs. Pausche said she could have also given a 10% levy increase scenario, noting that the average levy increase in the 2000's was 11 % per year whereas in the 2010's it was less than 2% when the City tax base went down 40% and many operating cost cutting measures were made. Pausche said it is now time to decide what the 2020's will look like and what kind of burden we will leave for the future. Pausche said the scenario summary shows that with a 5% levy increase through 2030, with the current assumptions in the CIP, $9.6M in bonds will be needed and with a 3.5% levy increase through 2030, $13.8M in bonds will be needed. Pausche also noted the difference in the levy has a minimal impact on the tax rate but results in significantly higher reserve funding. Pausche noted the utility funds are significantly in the red and are subsidized by positive cash balances in the governmental funds. Mound City Council Minutes — August 25, 2020 Bergquist asked about the ongoing street maintenance assumptions and asked that if at the end of the mill and overlay do we basically have a new street. Simmons said the mill and overlay is to seal and up and extend the life because we know when we rebuilt it, good class 5 was put underneath it. Bergquist asked if that is the norm. Simmons said it is based on what he sees and hears from neighboring communities and his peers. Bergquist said he just doesn't see his street lasting 30 years and that a lot is being asked of the first part of the street life. Simmons said that is to be expected as the pavement is new and should have the longest wear. Simmons said there is a rating scale of 0 to 100 to evaluate the condition of pavement that each of these activities adds a certain amount of points. Bergquist wondered if it is realistic. Simmons said part of the goal is to respond to changing conditions including increased use of the road. Bergquist asked if arterial streets had 2 more inches of base and Simmons said the pavement on truck routes is 2 inches thicker and there is 1.5 to 4 additional inches of gravel base. Simmons said Tuxedo Blvd has 4 more inches of base. Pugh noted the prior streets were much older when this round of projects started. Hoversten said when BMI took over in 2003, they took a more holistic approach, which addressed the infrastructure under the streets and much of it was the first time the underlying water and sewer infrastructure had been assessed and repaired/replaced so the streets wouldn't have to be torn up again, noting the underlying utilities should last much longer than the streets. Hoversten noted the plan is the engineering piece but when and how to do it is the legislative piece. Hoversten said it is risk management on how much to delay and/or push costs into the future. Pugh said she thinks Mound has done a great job with infrastructure and has the best streets in the lake area. Pugh agrees that setting aside reserves is the right thing to do. Bergquist asked Pausche to clarify the two scenarios and whether or not special assessments can be avoided. Pausche pointed to the two scenarios in the LTFP, and the amount allocated to the capital project funds. Pausche said with a 5% levy increase per year, there will be $3.419M available for the Infrastructure Replacement Reserve fund and only $2.2M with a 3.5% annual increase by 2030. Pausche also noted the higher deficit/bonding needs of an additional $4.3M if we only levy 3.5%. Salazar asked about the private sewer lines. Hoversten explained the 51 % of sewer pipes are on private property. Hoversten said they changed focus to manhole repair after exhausting the best opportunities for pipe lining (CIPP) on the municipal side along with replacing all of the lift stations. Hoversten said the available funds have been used on the municipal side first and then the decisions will have to be made on how to approach the private side issues since it all impacts our fees to the Met Council for wastewater treatment. Salazar asked Simmons to address domestic water quality and what causes brown water. Simmons said the same topography that requires lift stations does not facilitate looping and some residents are in locations that are basically dead ends, which is why there is a semi- annual flushing program, noting the iron and manganese that causes brown water is safe. Simmons said 2 loops have been added to the island. Hoversten said on the management side, mixers have been added to the water towers because iron increases with the exposure to air and time and mixing keeps water moving. Hoversten said cleaning of storage tanks to cut down on build up has also been stepped up. Hoversten said BMI has created a model based flushing plan using valves to flush segments rather than just moving the water down the system. Hoversten noted there are places that still have challenges were supply zones overlap or areas Mound City Council Minutes — August 25, 2020 with an imbalance of use. Hoversten said an example is on Lynwood at about Grandview which is the intersection of water from Evergreen tower and Chateau tower and depending which side is using more water, there is a lot of water changing directions and scrubbing in the pipe. Hoversten said he recommends delaying water treatment plants that will $4M at each location as well as create significant new operating expenses, noting that is why they are not even in the CIP at this time. Hoversten said the focus on better management practices is in order to keep costs and rates down. Hoversten encouraged people to continue to report problems so they can be studied. Salazar asked if there were additives that could be added but Hoversten said nothing that he would ever recommend as they are short term solutions that create other problems down the road. Bergquist noted the 5% and 3.5% levy scenarios will be discussed at the next meeting so this is the time to ask questions. Hoversten said the preliminary levy will set the cap for the final levy and this is just an attempt to break down the information in sizable chunks, noting the budget and levy will be discussed at the September 8, 2020 meeting. Salazar said just like personal finance management for households, an ounce of prevention is worth a pound of cure and this is a way to think about our citizens and avoid the need for special assessments, which have been a topic of concern for many in the past. Salazar noted his street had craters prior to being improved, noting this current round of projects was an investment in the future, similar to the new fire station in 2003. Salazar said it is the Council's responsibility to be good stewards and make the tough decisions. Salazar encouraged the Council to reach out with questions and to spend the time with the information over the next two weeks as he has. Salazar asked what are the additional annual taxes due for a $400K house with a 5% compared to a 3.5% and Pausche said approximately $23 per year. 9. Information/Miscellaneous Hoversten said meetings will be held at the PAC through November 10, 2020. Hoversten said it is estimated that the Narrows Bridge will reopen after Labor Day, noting the 15/19 intersection is wrapping up quickly and Hwy 7 eastbound closures will begin Sept 6. Hoversten said there are some issues with the lift station near the Brighton bridge so warranty work will begin that may cause some closures. Hoversten said they will work with the Met Council on a communication strategy. Simmons said Hennepin County may build a temporary bridge next to the Tanager bridge but no timeframe has been set. Hoversten noted links to the county information are available on the City website's construction project tab. A. Comments/reports from Council members/City Manager: B. Reports: Fire — July 2020 C. Minutes: D. Correspondence: 9. Adiourn MOTION by Bergquist, seconded by Pugh, to adjourn at 8:30 p.m. All voted in favor. Motion carried. Mayor Raymond J. Salazar Attest: Catherine Pausche, Clerk