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HomeMy WebLinkAbout2022 07-18 FCM MINUTES OF THE PROCEEDINGS OF THE CITY COUNCIL/FINANCIAL COMMISSION OF THE CITY OF BROOKLYN CENTER IN THE COUNTY OF HENNEPIN AND STATE OF MINNESOTA JOINT WORK SESSION JULY 18, 2022 VIA ZOOM 1. CALL TO ORDER The Brooklyn Center City Council/Financial Commission Joint Work Session was called to order by Mayor Elliott at 6:33 p.m. 2. APPROVAL OF AGENDA There was a motion by Mayor Elliott and seconded by Councilmember Butler to approve the agenda. Motion passed unanimously. 3. OVERVIEW/INTRODUCTIONS Mayor Mike Elliott and Councilmembers Marquita Butler,April Graves,Kris Lawrence-Anderson and Dan Ryan were present. Also present was Financial Commission Chair Teneshia Kragness and Commissioner David Dwapu Not present were Financial Commissioners Taofeek Ishola, Emmanuel Kpaleh, Abate Terefe, and Dean Van Der Werf. Also present were City Manager Reggie Edwards, City Clerk/Interim Assistant City Manager Barb Suciu, Communications and Community Engagement Manager/Interim Assistant City Manager Angel Smith, Director of Finance and Fiscal Services Angela Holm, City Engineer Mike Albers, and Director of Public Works Elizabeth Heyman. 4. CAPITAL IMPROVEMENT PLAN 2023-2037 4a. CAPITAL IMPROVEMENT PLANS City Manager Reggie Edwards explained Andy Splinter served as the Interim Finance Director. There were two stand-out candidates throughout the hiring process, and two people were brought on. Angela Holm now serves as Director of Finance and Fiscal Services. Dr. Edwards pointed out capital improvements are the most expensive initiative of an entity. Therefore, it is important to address the topic early on. He summarized the item and invited Director of Public Works 7/18/2022 Page 1 Elizabeth Heyman to continue the Staff presentation. Director of Public Works Elizabeth Heyman stated a Capital Improvement Plan (CIP) is future intent of City capital projects over the next 15 years. It is developed by prioritizing a list of capital projects based on anticipated needs in the coming years. The initial focus is on the first three or four years. 2023 projects will be incorporated in the requested 2023 budget. Ms. Heyman stated the CIP includes public utilities, street improvements, park and trail improvements, and Capital Maintenance Building Program (CMBP). There are various funding sources such as utility fees, special assessments,franchise fees,Municipal Street Construction Aid, a portion of local government aid, liquor operations, and more. Ms. Heyman pointed out the high-level themes of CIP driving the decision making includes setting a plan for future park and CMBP improvements, continuing the ongoing investments in street and utility infrastructure, and coordinating CIP projects with the Opportunity Site. Ms. Heyman showed a slide highlighting some new projects. The Park Capital Planning Study is a new line item for 2023 with a total project cost of$300,000. The CMBP Evaluation Study is planned for 2023 with a total project cost of $150,000. Hazardous tree management and reforestation will be a ten-year plan starting in 2023 and would cost approximately $150,000 per year. Councilmember Lawrence-Anderson asked what the City is going to do to help homeowners with tree maintenance. Ms. Heyman stated it costs about $1,200 to remove a tree and grind the stump. Therefore, the line item may need to be increased to assist homeowners. Councilmember Lawrence-Anderson asked how many trees included in the hazardous tree management and reforestation are in the yards of residents. She noted the cost would likely be closer to $3000 to $5000. Ms. Heyman stated she can get another estimate for tree removal and look into how many trees are in the yards of residents. Dr. Edwards stated they need to start putting away some funds while they do planning and inventory to prepare to address the issues. Councilmember Lawrence-Anderson pointed out an assessment could be beneficial and provide options to the homeowner. Councilmember Ryan noted as the special assessments go on, it would be beneficial to establish a sort of tree trust where they set aside a modest amount of money that could be access by homeowners to pay for tree management. Commissioner Kragness stated as a homeowner, she got estimates for tree removals, and her estimates were around $2,000. Councilmember Lawrence-Anderson noted the City has more bargaining power than individuals. Mayor Elliott asked if the City does a bidding process to determine tree removal. Ms. Heyman stated it depends on how the contract is set up. 7/18/2022 Page 2 Commissioner Dwapu asked when a project becomes a capital project. Ms. Heyman stated it is usually something that is a capital generator and/or when the project costs more than$50,000. Dr. Edwards pointed out the tree management isn't necessarily something that generates capital, but it is a known upcoming cost for the City. Ms. Heyman added there are a number of projected street improvements such as 50th Avenue, 51st Avenue, Knox Avenue, James Avenue, 54th Avenue, and Orchard Lane East. The first three years of the CIP includes Knox,James, and 54th Avenue area improvements in 2023, Orchard Lane East improvements in 202, 65th Avenue trunk storm sewer rehabilitation in 2024, Orchard Lane West area improvements in 2025,Humboldt Avenue reconstruction in 2025, 69th Avenue reconstruction in 2026, and the TH 252/66th Interchange and 70th Pedestrian Overpass in 2026. She noted there is about six percent considered for inflation. Mayor Elliott stated inflation is about three percent on average. City Engineer Mike Albers stated they have looked at the typical construction costs in the area monthly. They use the most recent assessments for estimates. The construction cost index has varied a lot over the past few years. They use the index to adjust the costs. It has been as low as 0 and as high as 5. The construction cost index doesn't completely follow inflation numbers, but there are similar trends. He noted metal costs have increased significantly. Councilmember Ryan pointed out inflation varies greatly over time and it doesn't make sense to look at average inflation over a long period of time. The best prediction is looking at the trends for the last year or so. Supply chain considerations would also point to a six percent consideration for inflation. Director of Finance and Fiscal Services Angela Holm noted the presentation is entirely projections and is based on the best information currently available. The estimates will be updated as time goes on. Ms. Holm explained the capital improvements fund policy includes a general fund transfer of audited year-end unassigned fund balance above 52 percent of next year's general fund operating budget, liquor operations transfer of audited year-end liquor fund unrestricted cash balance then exceeds two months of next year's operating budget and one year of budgeted capital improvement needs, local government aid received in the amount o $650,000 or half of the amount received by the City, whichever is greater, and other outside sources of revenues such as grant funds. Ms. Holm showed a bar graph of cash flow analysis for the capital improvements fund and the cash flow analysis of the MSA fund. Dr. Edwards noted 2022 has a healthy balance, and they will look to replenish their emergency fund. Commissioner Kragness asked if they were able to recognize the 52 percent transfer. Ms. Holm confirmed they recognized the 52 percent transfer, but she would have to look back at the documents from the audit for more information. 7/18/2022 Page 3 Councilmember Ryan asked if they should consider a point increase to the capital fund if the funds are available. Ms. Holm stated it would be prudent, but they are very early on in the process. Councilmember Ryan stated the negative cash fund balance is alarming. Ms. Holm agreed with him, but it is quite a ways out to project. Ms. Holm showed a table and a graph with information about the street reconstruction fund and the cash flow analysis. She then showed a graph of the special assessments fund cash flow analysis. Over time,the expenditures will increase over the cash balance, but there is time to plan for it. Dr. Edwards noted they will have upcoming conversations on franchise fees. Ms. Holm showed a table of the 2023 utility projects broken down by storm water, sanitary sewer, water, and streetlights. As for the CIP impact on utility funds, cash flows show the impact of the CIP plan on utility funds. Details will be further covered in the review of utility funds budgets and rates. Ms. Holm showed a graph of the cash flow analysis of the water fund over the next several years including the capital outlay, ending cash balance, and the minimum targeted balance. The minimum targeted balance is three months of operations, following year debt services and 10-year average internal funded capital. There is a bit of a dip in the ending cash balance in 2023, and that will be considered in the budget process. Ms. Holm showed a cash flow analysis graph of the sanitary sewer fund. The proposed expenditures are very low over time, but it is hard to predict what will happen with the sewer system. Councilmember Ryan asked if the City has been given a projection of upcoming fees for sewers. Ms. Holm stated she hasn't come across the information. However, she will look for the information to share with the Council. Ms.Holm showed a graph of the cash flow analysis of the storm drainage fund. There is a currently high cash balance, and it starts to level out around 2028. Councilmember Lawrence-Anderson asked if the dips are based on today's pricing or if inflation is included. Ms. Holm stated the projections are based on today's price per gallon. Ms. Holm showed a table comparing the City's utility rates to some surrounding cities. Brooklyn Center is very inexpensive for both 2022 and 2023 in comparison to cities with a similar size. The other city's data is based on 2020 costs. Dr. Edwards pointed out the comparison cities were established by the Council well over ten years ago. The cities have been consistently used for comparisons over the years. The cities include White Bear Lake, Fridley, Roseville, Maplewood, Shoreview, Richfield, Golden Valley, Crystal, and New Hope. Councilmember Ryan noted the cities were selected based on the age of housing stock, population, and proximity to Minneapolis. 7/18/2022 Page 4 Commissioner Dwapu asked if it would be prudent to look at other cities. Dr. Edwards stated it would be beneficial to keep the same cities for a consistent comparison over time. The criteria in comparison to Brooklyn Center has also stayed very similar. Brooklyn Park,however has a similar population, but it is not similar in size or housing stock. Councilmember Ryan noted Brooklyn Park has several newer projects impacting their costs. Also, cities such as Golden Valley and Richfield have decided to buy water from Minneapolis. It has proven Brooklyn Center made a more cost-effective choice by using a different water source. Ms. Heyman agreed the age of the housing stock is very important in comparisons because the cities have to use similar amounts of money to keep up their buildings and residences. Mayor Elliott stated Commissioner Dwapu is asking if it would be worth reassessing the comparison cities. It may be worth considering. Councilmember Ryan stated the comparisons need to stay consistent for the comparisons to remain valid over time. Councilmember Lawrence-Anderson stated newer cities will have newer infrastructure such as newer pipes which would impact the costs. They could compare Brooklyn Center to newer cities for fun, but not for consistent rate comparisons. Commissioner Dwapu stated the water quality should also be considered because some apartments have poor water quality. Councilmember Graves pointed out they built a new water treatment facility a few years ago. Therefore, it is cleaner and healthier than in the past. There may be issues of buildup in pipes in certain buildings. Councilmember Ryan stated the Minnesota Department of Health tests the City's water quarterly, and any serious concerns with the water would arise during those tests. Dr. Edwards stated he would get information about the poor water quality mentioned by Commissioner Dwapu and have a Staff go there. Mr. Albers noted the City owns the central pipes under the roadways, but individual homeowners are responsible for the pipes under one's yard and house. A plumber can come in and clear out the private pipes if needed. Ms. Holm showed a slide depicting the street light fund's cash flow analysis. There aren't any long-term capital outlay projects, so the ending cash balance increases significantly over time. Ms. Holm explained anticipated bond issues based on capital investment needs include levy and assessments for street reconstruction and user fees would cover water, sanitary sewer, and storm sewer. She showed a slide with a table providing information about anticipated debt issues. Ms. Holm added, in summary, there would be $4.56 million in debt issuances over the next two years. The Neighborhood Construction Program is a driving factor. There is not currently a project in need of bonding in 2023. The slide also listed the projected property tax levy and the quarterly utility bills. 7/18/2022 Page 5 Commissioner Dwapu asked about the irrigation costs and the $220,000 item listed. Ms. Heyman stated the presentation is focused on new line items. Part of the infrastructure with the irrigation is no longer being supported by the vendor they use. They will have to upgrade some components to be able to speak to controllers in the field. The $220,000 is more of a continuation of the carpet and painting project in City Hall. They want to make sure they are continuing the investment across the rest of the City buildings. Councilmember Lawrence-Anderson stated she believes they don't have enough street lights. She asked what type of lights they are using. Solar probably isn't an option due to the cold weather. She asked what the policy is on lighting. Mr. Albers stated the policy includes lighting up intersections and mi-blocks when longer than 700 feet. They are in the process of converting lights to LED. Some lights are owned by Xcel Energy. Councilmember Lawrence-Anderson asked if the current policy is the best policy for the City. It may be something to consider in the future. Mayor Elliott asked if there is a map streetlights in the City. Mr. Albers stated they can create a map showing which ones they own and the ones Xcel Energy owns. They would need an updated map from Xcel. They could also put information about if the light is LED. Councilmember Lawrence-Anderson asked if Woodbine is the last major street reconstruction and if they are starting over. Mr. Albers stated some roads still need to be reconstructed, but they are mostly County roads. Councilmember Ryan stated the cash balance increases in the streetlight fund, and it might be helpful to use some of the funds for additional streetlights in the Opportunity Site. Ms. Holm agreed Staff is looking at the various CIP and seeing where projects can overlap. Commissioner Kragness asked how they are going to rebuild the emergency fund. Dr. Edwards stated rebuilding the emergency fund is separate from the capital projects. They will replenish it from excess in the budget. Mayor Elliott asked why some of the fund costs are lower. Mr. Albers stated as they have new projects, some costs are lower because they already did improvements there. For example, they don't need new insulation because they already installed a certain kind the first time around. Councilmember Ryan asked if the capital emergency fund balance was able to be drawn from. Dr. Edwards confirmed the capital emergency fund balance was able to be drawn from. 5. INDIVIDUAL CAPITAL PROJECTS FUND 5a. INDIVIDUAL FUNDS 7/18/2022 Page 6 • Capital Improvement Fund • Municipal State Aid Fund • Street Reconstruction Fund • Special Assessment Fund • Overview of Utility Funds 6. ADJOURN There was a motion by Councilmember Graves and seconded by Councilmember Butler to adjourn the meeting. Motion passed unanimously. The Brooklyn Center City Council/Financial Commission adjourned at 7:59 p.m. STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss. Certification of Minutes CITY OF BROOKLYN CENTER) The undersigned, being the duly qualified and appointed City Clerk of the City of Brooklyn Center, Minnesota, certifies: 1. Attached hereto is a full, true, and complete transcript of the minutes of a Joint City Council/Financial Commission of the City of Brooklyn Center held on July 18, 2022. 2. That said meeting was held according to due call and notice thereof and was duly held at Brooklyn Center City Hall. 3. That the City Council adopted said minutes at its August 8, 2022, Regular Session. City Clerk Mayor 7/18/2022 Page 7