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HomeMy WebLinkAboutCity Council Minutes 03-13-1995 SpecialMINUTES SPECIAL COUNCIL MEETING MARCH 13, 1995 A study session of the Plymouth City Council was called to order by Mayor Tierney at 7:00 p.m. in the Training Room of the Public Safety Building, 3400 Plymouth Blvd., on March 13, 1995. PRESENT: Mayor Tierney; Councilmembers Edson, Helliwell, Lymangood, and Wold. Councilmember Granath arrived at 7:15 p.m. ABSENT: Councilmember Anderson STAFF PRESENT: City Manager Johnson, Assistant Manager Lueckert, Public Safety Director Gerdes, Community Development Director Hurlburt, Finance Director Hahn, Park Director Blank, Public Works Director Moore, and City Clerk Ahrens. David MacGillvray and Dan O`Neil, Springsted, Inc. Manager Johnson announced that the purpose of this meeting is to discuss long-term financial planning for capital improvements. Assistant Manager Lueckert presented the status of Capital Improvement Program (CIP) projects. She noted there are no proposed changes to the CIP for roads, water, and sewer, and described the proposed changes to the parks section. The purchase of open space ($250,000) is postponed from 1994 to 1995 and would be used to purchase the "big woods" portion of the Ninth Playfield site. The playground replacement project 200,000) would be postponed from 1994 to 1995. The cost for the Ninth Playfield Acquisition reflects the actual price of the land, and assumes that $250,000 from the Community Improvement Fund (CIF) would be applied toward the purchase price. The costs listed for 1995 and 1996 ($1,500,000) for the Ninth Playfield Development coincide with the development plan for the site. The original estimated cost of developing the Ninth Playfield was $750,000. She stated that funds for the acquisition of the Tenth Playfield site ($480,000) are identified in 1997 and 1998. The cost was originally spread over three years beginning in 1996. A new project for development of a neighborhood park has been slated for 1998. With the exception of 1996, trail construction is continued each year in the CIP. Funding sources are the park dedication fund ($200,000 annually) and MSA ($100,000 annually.) Assistant Manager Lueckert said that other than the $250,000 for Open Space land acquisition in 1995, no funding is proposed from the Community Improvement Fund. She also presented revised revenue projections for the Park Dedication Funds to reflect the recent 22 percent increase in park dedication fees. She said that the revenue projections will be closely monitored as development occurs. Special Council Meeting March 13, 1995 Page 2 Manager Johnson stated that if the City's growth slows or the Metropolitan Urban Service Area (MUSA) is not expanded, the proposed revenues and proposed projects would be scaled back. He also noted that the cost for the Ninth Playfield significantly increased in the CIP. The new cost estimate includes full installation of utilities, irrigation, seeding, lit softball and soccer fields. Councilmember Lymangood questioned if acquisition of the Tenth Playfield site should be delayed for one year, as proposed by staff. He suggested that it may be advisable to explore a long-term option on the property. Councilmember Granath arrived at 7:15 p.m. Park Director Blank stated the property for the proposed Tenth Playfield has recently been sold. He does not believe there would be a benefit to enter into a long-term option agreement with the new owner. Staff will monitor the status of the property and advise the City Council if action should be considered. Manager Johnson explained that the proposed changes to the park element of the CIP will be finalized by staff and then considered through the public hearing process. The result will be presented to the City Council for consideration of amendments to the CIP. Manager Johnson stated that at the January 3, 1995, study session, Councilmembers requested that staff explore future capital needs in relation to present and future available capital funds. The immediate issue relates to alternative concepts for improving the City Council Chambers. However, interest in accelerating trail development was expressed, and the work of the Open Space Committee also requires a long-range view of capital financing. He reviewed the assumptions under which the long-range financial planning is proposed, the available sources of funds, and possible future projects and undesignated balances. He stated that some bonding might be needed now or later if the City decides that most of the projects will be needed at some point. Councilmember Edson asked about the estimated cost for open space acquisition. Manager Johnson responded that $3 million was originally estimated for land acquisition, as recommended by the Open Space Committee. However, it may be possible to acquire those properties for about $2 million. In response to Council questions, he noted that 1.9 million of the Project Administration fund is tentatively earmarked for the Fourth Fire Station; the $1 million balance is undesignated. He stated that under the options presented, a $5 million reserve would be maintained in the Community Improvement Fund, and that all cost estimates are very tentative. Special Council Meeting March 13, 1995 Page 3 The Council reviewed the list of possible future projects, as well as the estimated cost for completing each of the trails proposed within the MUSA. Councilmember Edson asked if the list of trails would complete the plan to have trails along all existing collectors and arterial roadways. Park Director Blank said trails would be completed on most major collectors within the MUSA. He noted, for example, that the adopted trail plan for 25th Avenue indicates an on -road trail. He presented a map with the proposed trail projects, and stated that the design would be done in 1995, with construction in 1996. Manager Johnson noted that it is difficult to retrofit sidewalks into existing neighborhoods. He stated that the list of proposed trail projects will not complete the trail system, but the construction would be advanced by about five years. Councilmember Lymangood suggested that Councilmembers and citizens should provide staff with their input if they believe the trail list should be amended. He asked about the status of the East Medicine Lake trail. Park Director Blank said the Hennepin County Park District has asked the City to approve the trail project and the use of condemnation. This will be on an April Council agenda for consideration. Councilmember Edson asked the status of the pedestrian traffic control on Northwest Blvd. near the Bass Lake Playfield. Public Works Director Moore reported that the County has indicated they will not approve a full traffic signal at this location. They would consider pedestrian flasher lights. He said the signal will be considered along with the trail construction project on the west side of Northwest Blvd. Mayor Tierney asked about the amount in the Community Improvement Fund. Finance Director Hahn said that the Community Improvement Fund had a balance of over 8 million at the end of 1994. By the year 2000, the fund would increase to about $12 million. Manager Johnson presented various scenarios for financing the acquisition of open space areas and the acceleration of trail construction. He said that each scenario assumes an overall need of $3 million to accomplish the desired objectives and that any bond issue would extend for 15 years at an interest rate of 5.35 percent. Special Council Meeting March 13, 1995 Page 4 Councilmember Lymangood stated he supports the option to combine issuance of $2 million in General Obligation bonds with spending $1 million from the Community Improvement Fund. Manager Johnson stated that this scenario would result in an annual principal and interest payment of $211,800, percentage increase in City taxes of 2.31 percent, and percentage of total taxes of 0.31 percent. The tax increase for a $150,000 home would be $10.02 per year, with a net increase after repayment of the old park bonds of $1.71 per year. An election would be required on the bonds. He stated this option would result in a minimal net new burden to the taxpayer or the park dedication fund, and little burden on the Community Improvement Fund. The City would buy open spaces in a timely manner and accelerate the trail construction program by about five years without raising taxes, without impacting existing park development, and with little impact on the City's ability to fund other possible community projects from the Community Improvement Fund. Councilmember Edson stated that the City has discussed maintaining a $5 million reserve in the Community Improvement Fund, a $1 million reserve in Project Administration, and a $4 million reserve in the General Fund. He asked if this would be sufficient in the event of a natural disaster and if there are other emergency revenue sources. Manager Johnson said there are options to consider in the event of a disaster. For example, utility fund reserves could be used to repair damaged utilities or water tower. There also could be state and/or federal disaster funds available, in addition to City reserves. Councilmember Wold asked when the existing park bonds will be repaid and whether a new bond issue could affect the City's Aaa bond rating. Finance Director Hahn stated there is no guarantee that the City's bond rating can be retained; however, this would be a very small bond issue for the City. The City has reduced its outstanding debt substantially since obtaining the Aaa rating. The existing park bonds will be repaid after 1996. Mayor Tierney questioned if bonds should be issued now when there is existing money available to do these projects. Councilmember Lymangood stated that he believes these projects (acquisition of open space and acceleration of trail projects) are philosophically a new direction for the City. He would support asking the voters if they favor a bond issue for open space acquisition because it is a new endeavor for the City. He said that based on the result of a referendum, he be more apt to approve or disapprove similar projects without additional referendums. Special Council Meeting March 13, 1995 Page 5 Councilmember Granath stated that he believes the acquisition of open space is a worthwhile objective, but agreed that the decision should be left to the voters. Councilmember Edson stated that he supports the concept of open space acquisition, but feels that the voters have the right to directly vote on major issues. Councilmember Helliwell stated that the referendum question should be asked in November because there will be a greater voter turnout than in a May special election. She also questioned whether a referendum should be held since the City currently has the money and the City Council has been elected to make decisions on behalf of the citizens. She would oppose a May special election. Councilmember Wold asked if the election could be delayed until November in order to be held along with the City election. Manager Johnson stated that the City has been negotiating nine month purchase options on the parcels. That will only be through the end of 1995. Park Director Blank stated he has met with all of the affected property owners and believes that within a brief time, proposed option agreements will be available for consideration by the Council. He believes that $2 million will be adequate to accomplish the needed open space acquisition. Councilmember Lymangood noted that the cost of longer purchase options could exceed the cost of conducting a special election. These parcels need to be optioned now or may no longer be available for open space. Mayor Tierney asked the Springsted representatives to comment on the possibility of a bond issue. David MacGillvray, Springsted Inc., stated the issue of whether to bond is related to what reserve levels the Council wants to maintain in the various funds. He encouraged the Council to establish a policy on the desired cash positions to be maintained. He noted that the City has a fairly low debt level and it is unlikely that the proposed bond issue would impact the City's bond rating. He also explained the bonding process. If the referendum is successful, bonds would be sold through competitive bids, and the City would have the funds in 60-90 days. Mayor Tierney expressed concern that this may not be the appropriate time for a referendum question based on the recent school district referendums and resulting large tax increases. She stated that the purchase of land is very important. She asked if the amount of the bond issue could be coordinated with the existing park bonds, so that there would be no tax increase. Special Council Meeting March 13, 1995 Page 6 Mr. MacGillvray stated that the question on the ballot must indicate there would be a tax rate increase if approved. However, the literature supplied by the City could indicate that this bond issue would 'replace' the previous park bonds. Manager Johnson stated the City would have the option of adjusting the Community Improvement Fund contribution so that the new bond issue would "replace" the previous issue. Councilmember Wold favored putting the bond issue question to the voters. If timing of obtaining purchase options on the open space is a concern, then he will support a special election in May. Councilmember Edson stated he favors a $2 million bond issue. He would favor a November election; however, time is critical with respect to the open space negotiations and acquisitions. Councilmembers Granath and Lymangood agreed. They indicated their support for this option and the time frame for a special election. Mayor Tierney asked about the available options if the referendum question fails. Would the Council simply not purchase any open space? Councilmember Lymangood stated the Council could still consider purchase of individual sites, but it is probable that not all recommended open space sites would be acquired. One option may be that the City would purchase only one site and the trail construction would not be accelerated. Councilmember Granath agreed that the Council could still consider the recommendations and priorities of the Open Space Committee if the referendum question failed. He stated that purchase of open space is a new direction for the City and the voters should have a voice on the issue. Manager Johnson stated that a proposed special election will be placed on the next regular agenda for Council consideration. The meeting was adjourned at 8:50 p.m. r Laurie F. Ahrens City Clerk