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Home My WebLink About07-19-16 City Council Meeting packet 2 of 2 MAYOR & COUNCIL COMMUNICATION -- page 1 -- DATE: July 19, 2016 REGULAR ITEM # 17 AGENDA ITEM: CSAH 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements – Resolution for Municipal Support SUBMITTED BY: Jack Griffin, City Engineer THROUGH: Kristina Handt, City Administrator REVIEWED BY: Stephen Wensman, Planning Director Rob Wellen, Public Works Cathy Bendel, Finance Director Chad Isakson, Assistant City Engineer SUGGESTED ORDER OF BUSINESS: - Introduction of Item ...................................................................... City Engineer - Report/Presentation .......................................Washington County Public Works - Questions from Council to Staff ............................................. Mayor Facilitates - Call for Motion ............................................................... Mayor & City Council - Discussion ....................................................................... Mayor & City Council - Action on Motion .................................................................... Mayor Facilitates POLICY RECOMMENDER: Engineering. FISCAL IMPACT: Washington County intends to require cost participation from the Cities of Lake Elmo and Oakdale in accordance with the County Cost Participation Policy for County Improvement Projects. In addition, the improvements include the extension of sanitary sewer service to Lake Elmo and Oakdale properties at the request of both cities with the full cost of the utility extension to be paid by each city for their respective share. The current estimate for the local share of the local improvements to be generally split equally between Lake Elmo and Oakdale is $1,185,142. The cities of Lake Elmo and Oakdale, and Washington County will be working on a Joint Powers Agreement which will more specifically allocate those costs between the cities. The funding for the Lake Elmo local improvement costs may be specially assessed to the benefitting properties. SUMMARY AND ACTION REQUESTED: The City Council is respectfully requested to consider approving a Resolution providing Municipal Support for the County State Aid Highway 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements, “Locally Preferred Alternative” (LPA). City Council Meeting [Consent Agenda Item X] July 19, 2016 -- page 2 -- PROJECT BACKGROUND: Washington County has completed the public participation process related to the County State Aid Highway (CSAH) 13 (Ideal Avenue/Olson Lake Trail) project from CSAH 14 (Old TH 5) to CSAH 35 (50th Street North). During that process a number of design alternatives were explored to address the issues and concerns of the abutting property owners, while simultaneously preserving the minor arterial function of the roadway. The County is now requesting that the cities of Oakdale and Lake Elmo support the selected alternative which includes: 11’ thru lanes, an 8’ parking lane on the east side, a 4’ west shoulder, a 6’ boulevard, an 8’ trail on the west side, and curb and gutter on both sides of the roadway (see map exhibit). The County is looking to phase the corridor improvements as development of the 3M property may impact the improvements adjacent to their property. The initial phase will include a mill/overlay from CSAH 14 to 44th Street, and the complete improvements from 44th Street to 50th Street. In the future the County will initiate a future project for the complete improvements from CSAH 14 to 44th Street. In addition to the roadway improvements, the cities of Oakdale and Lake Elmo have been working jointly since 2012 to provide public sanitary sewer service to the abutting properties along Olson Lake Trail from 44th Street to 50th Street. These improvements should be included with the street improvements since the sanitary sewer main needs to be located under the pavement section. The limits of the sewer service area for Lake Elmo properties should be defined as part of the Olson Lake Trail Phase 2 Feasibility Report to be completed in preparation of the County improvements. The proposed improvements will:  Improve sight lines and address roadway safety concerns,  Correct pavement deficiencies and shoulder widths,  Address erosion concerns and storm water management,  Accommodate the extension of sanitary sewer service to additional Lake Elmo properties, and  Provide for pedestrian/bike accommodations along the corridor. Municipal Support for a “Locally Preferred Alternative” (LPA) expresses the City’s support for the project and more specifically for the preliminary design layout as presented. Municipal Support allows the County to proceed with the final project design and property acquisition with the intention to begin construction in 2017. Upon completion of the final design the County will request the City to enter into a Cooperative Agreement for the Project further outlining the City’s cost obligations and other provisions as may be deemed appropriate. RECOMMENDATION: Staff is recommending that the City Council approve a Resolution providing Municipal Support for the County State Aid Highway 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements. The recommended motion for the action is as follows: “Move to approve Resolution No. 2016-63 providing Municipal Support for the County State Aid Highway 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements.” ATTACHMENT(S): 1. Resolution Providing Municipal Support for the County State Aid Highway 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements. 2. Exhibit – County State Aid Highway 13 (Ideal Avenue/Olson Lake Trail) Phase 1 Improvements. Resolution No. 2016-63 1 CITY OF LAKE ELMO WASHINGTON COUNTY STATE OF MINNESOTA RESOLUTION NO. 2016-63 A RESOLUTION PROVIDING MUNICIPAL SUPPORT OF THE COUNTY ROAD 13 PAVEMENT MANAGEMENT AND SAFETY IMPROVEMENT PROJECT (S.A.P. 082-613-033) WHEREAS, a County recommended County State Aid Highway 13 (CSAH 13) (Ideal Avenue North/Olson Lake Trail North) Project layout dated April 21, 2016, showing proposed roadway, trail, and drainage improvements for CSAH 13, within the limits of the City of Lake Elmo, as a County State Aid Project has been prepared and presented to the City; and WHEREAS, the City, in coordination with Washington County and the City of Oakdale, has engaged in a preliminary design process that started in August of 2015; and WHEREAS, the City and County have engaged in a significant community engagement process as part of the preliminary design effort intended to gather and consider public feedback for the proposed County State Aid Highway 13 Reconstruction Project. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Lake Elmo supports the County continuing with the development of the final plans and right-of-way acquisition necessary for the construction of the project. ADOPTED BY THE LAKE ELMO CITY COUNCIL ON THE NINETEENTH DAY OF JULY, 2016. CITY OF LAKE ELMO By: __________________________ Mike Pearson Mayor (Seal) ATTEST: ________________________________ Julie Johnson City Clerk 7/11/2016 1 Preferred Alternative Oakdale Lake Elmo STAFF REPORT DATE: July 19, 2016 REGULAR ITEM #: 22 TO: Mayor and City Council FROM: Kristina Handt, City Administrator AGENDA ITEM: Northland Pro Forma BACKGROUND: On January 19, 2016, the City Council approved an agreement with Northland Securities for pro forma services after many months of discussion (i.e. 10/20/15, 11/4/15, 12/15/15, 1/12/16 meetings) following the previous presentation of a pro forma to the Council on September 15, 2015. The previous Interim Administrator had noted there were linkage errors in the spreadsheet presented 9/15/15 among other issues and recommended the Council approve an agreement with Northland Securities for pro forma services. Staff initially met with Tammy Omdal from Northland Securities in February 2016. Bernie Bullert from TKDA was also involved in the meetings as the Council approved an agreement with TKDA for a cost of service study for water and sewer utilities. Follow up meetings occurred on April 25, May 10 and May 26. Staff had been working to meet the initially proposed target date of the June finance committee meeting and the June 21st Council meeting for presentation of the pro forma as described in my email to Council on April 25, 2016. On May 31, 2016 after receiving an email from Council member Fliflet, I sent out an updated schedule for the pro forma. I informed the Council “the draft pro forma had been completed however, at the request of Council Member Fliflet, Chair of the Finance Committee, it will not be presented to the Finance Committee until after we have an approved CIP. The earliest the pro forma is anticipated to be presented would be the September Finance Committee meeting and then a council workshop to follow.” The Finance Committee has had the 2017-2021 CIP on their agenda three times, however, they have not completed their recommendation on the CIP. Under Sec. 31.04 of the City Code, Mayor Pearson and Council member Bloyer have requested this item be placed on the agenda for the July 19th meeting. ISSUE BEFORE COUNCIL: Council is asked to receive the pro forma report from Northland Securities. PROPOSAL DETAILS/ANALYSIS: A copy of the pro forma prepared by Northland Securities dated June 1, 2016 is included in your packet. Tammy Omdal will be at the meeting to present the pro forma information and answer any of your questions. The financial plans (pro formas) for the water, sewer and storm water funds begin on page 25 with the key assumptions. Key assumptions include: Operating expenditures will increase 2% annually along with adjustments recommended by TKDA; no change in the existing tier structure for fees; depreciation is estimated over a 40 year period; capital improvement plan implementation will result in increase of future debt service; utility fees increase by 1% for water and sewer beginning in 2018 and $10 per year for storm water beginning in 2017; connection and availability charges would remain the same through 2025; and the proposed fees are adequate to maintain cash balances in the funds to cover: 6 months operating expenses, following year’s capital improvements, and following year’s debt service. Although Northland was not tasked to review the 9/15/15 pro forma, since previous discussion that led to the Northland pro forma included questions about the 9/15/15 pro forma I would offer the following analysis, which looks at the period of 2016-2025 in order to compare the same time frame in each model. Water Fund: 9/15/15 6/1/16 #of WACs: 1,561 1,965 Revenues: $32,529,681 $20,615,121 Operating Expenses: $7,462,688 $5,858,686 Capital Improvement Plan Projects: $9,716,517 $13,921,517 Debt Service (P&I) $11,467,355 $11,116,043 Combined Cash Flows/Ending Cash Balance: $13,599,638 $4,061,372 Summary: Although there were fewer WACs proposed in the 9/15/15 model, there was more revenue proposed than in the 6/1/16 model. Previous statements made at the 11/4/15 meeting acknowledged there was a linking error in 2022 where the model showed non-usage revenue of $2,208,000 despite there being no buildouts proposed for that year. Operating expenses decreased by $1,604,022 due to the recommendations from TKDA. Capital Improvement Plan projects increased by $4,205,000 due to adding in new projects in 2017, 2018, 2019, and 2020 and a longer term look to 2025 which was beyond the scope of the previous five year CIP. Some of the CIP projects were proposed to be paid from fund cash if they were $500,000 or below. Projects above that amount would be financed through borrowing (debt service). After factoring these changes in assumptions, the fund balance of the water fund differs by $7,395,288 from 9/15/15 to 6/1/16. Another significant difference in the two pro formas is the fact that the water fund is shown to cash flow positively throughout the years in the 9/15/15 model, however the 6/1/16 model shows the has a negative cash flow beginning in 2022. The Finance Director was asked to provide further analysis of the two pro formas but she declined to offer input. There may be other explanations for the different conclusions in the two models but I am not aware of any at this time. Sewer Fund: 9/15/15 6/1/16 # of SACs: 2,016 2,306 Revenues: $23,442,684 $15,722,716 Operating Expenses: $2,127,344 $4,521,539 Capital Improvement Plan Projects $3,266,837 $6,242,837 Debt Service (P&I) $4,238,389 $4,237,300 Combined Cash Flows/Ending Cash Balance: $17,076,948 $5,732,918 Summary: Although there were fewer SACs proposed in the 9/15/15 model, there was more revenue proposed than in the 6/1/16 model. Operating expenses increased by $2,394,195 due to the recommendations from TKDA. Capital Improvement Plan projects increased by $2,976,000 due to adding two new projects in 2017 and 2018 and a longer term look to 2025 which was beyond the scope of the previous five year CIP. Some of the CIP projects were proposed to be paid from fund cash if they were $500,000 or below. Projects above that amount would be financed through borrowing (debt service). After factoring these changes in assumptions, the fund balance of the sewer fund differs by $5,974,724 from 9/15/15 to 6/1/16. Another significant difference in the two pro formas is the fact that the sewer fund is shown to cash flow positively throughout the years in the 9/15/15 model, however the 6/1/16 model shows the fund has a negative cash flow beginning in 2022. The Finance Director was asked to provide further analysis of the two pro formas but she declined to offer input. There may be other explanations for the different conclusions in the two models but I am not aware of any at this time. RECOMMENDATION: Receive Report. No other actions necessary. As per the contract with Northland, the pro forma will be updated quarterly and any future changes in policy can then be incorporated. City ofLake Elmo,MN FinancialManagementPlan for Water, Sanitary Sewer,and StormWaterFunds 2016REPORT FINALDRAFTFOR DISTRIBUTION ASOF JUNE 1, 2016 Northland Securities, Inc. 45 South 7th Street, Suite 2000 Minneapolis, MN 55402 (800) 851-2920 Member NASD and SIPC i Letter ofTransmittal Executive Summary 1 Organization of the Report....................................................................................................................1 Study Approach..........................................................................................................................................1 Conclusions and Recommendations..................................................................................................2 Table A - Growth in Residential Equivalent Units.....................................................................3 Table B - Establishment of Utility Rates.......................................................................................4 Table C - Management of Cash Balances and Assets..............................................................4 Chart 1 -Year-end Cash Balances and Change in Cash Balances.......................................5 Background 6 Water..............................................................................................................................................................6 Sanitary Sewer............................................................................................................................................6 Storm Sewer.................................................................................................................................................6 Capital Improvement Plan 7 Capital Projects...........................................................................................................................................7 Source of Funding for Capital Projects...............................................................................................7 Debt Service.................................................................................................................................................7 Table D-1 - Capital Improvement PlanWater...................................................................................9 Table D-2 - Capital Improvement Plan Sanitary Sewer..............................................................10 Table D-3 - Capital Improvement Plan StormWater...................................................................11 Table E-1 - Debt (Bonds) Outstanding as ofYear End.................................................................12 Table E-2 - Annual Debt Service - Principal and Interest Payment on Bonds.....................13 Chart 2 - Estimated Debt Outstanding atYear End.....................................................................14 Chart 3 - Estimated Annual Debt Service........................................................................................15 Utility Rates 16 Key Factors.................................................................................................................................................16 Annual Operating Expenditures.........................................................................................................16 Metropolitan Council Environmental Services..............................................................................16 Annual Capital Expenditures...............................................................................................................17 Debt Service...............................................................................................................................................17 Growth in Customers..............................................................................................................................17 Table F - Growth Projections................................................................................................................18 Chart 4 - Sanitary Sewer REU Platted and Connected byYear................................................19 Chart 5 -Water REU Planned and Connected byYear................................................................19 Available Other Revenue Sources......................................................................................................20 Historical Utility Rates............................................................................................................................20 Future Utility Rates..................................................................................................................................20 ProjectedVolumes ofWater Sold and Sanitary Sewer Billed...................................................20 Table G -Water Fund - Fees and Charges and Customer Data................................................21 Contents ii Table H - Sanitary Sewer Fund - Fees and Charges and Customer Data..............................22 Table I - StormWater Fund - Fees and Charges and Customer Data.....................................23 Chart 6 - Estimated Annual Gallons ofWater Billed....................................................................24 Financial Plans 25 Key Assumptions......................................................................................................................................25 Water Fund.................................................................................................................................................26 Table J-1 - Pro Forma......................................................................................................................27 Table J-2 - Cash Balance................................................................................................................28 Table J-3 - Operating and Other Expenses.............................................................................29 Chart 7 -Year End Cash Balances...............................................................................................30 Chart 8 - Source and Use of Funds............................................................................................30 Sanitary Sewer Fund..............................................................................................................................31 Table K-1 - Pro Forma.....................................................................................................................32 Table K-2 - Cash Balance...............................................................................................................33 Table K-3 - Operating and Other Expenses............................................................................34 Chart 9 -Year End Cash Balances...............................................................................................35 Chart 10 - Source and Use of Funds..........................................................................................35 StormWater Fund....................................................................................................................................36 Table L-1 - Pro Forma......................................................................................................................37 Table L-2 - Cash Balance................................................................................................................38 Table L-3 - Operating and Other Expenses............................................................................39 Chart 11 -Year End Cash Balances............................................................................................40 Chart 12 - Source and Use of Funds..........................................................................................40 Appendix 41 Appendix A -Water Fund - Calculation of Net Capital Assets..................................................41 Appendix B - Sanitary Sewer Fund - Calculation of Net Capital Assets................................42 Appendix C - StormWater Fund - Calculation of Net Capital Assets.....................................43 Appendix D - Quarterly Residential and Commercial Utility Bills byYear...........................44 Appendix E - Chart 13 -Year End Cash Estimates by Fund........................................................45 Appendix F - Chart 14 -Year End Cash Compared to Outstanding Debt............................46 iii 1 Executive Summary EXECUTIVE SUMMARY This report was prepared by Northland Securities for the QVSQPTFPGSFWJFX JOHUI FöOBODJBMQFSGPSN BODFPGUI F City of Lake Elmo’s enterprise funds, including the Water Fund, the Sanitary Sewer Fund, and the StormWaterFund (collectively,the“utilityfunds”)todeterminetheappropri- ate fees and charges and other revenue needed to fund operations through 2025. The process involved the projection of revenues and ex- penditures for the utility funds and included incorporat- ing the City’s plans for capital improvements, and plans GPSöOBODJOH JOUPUI FöOBODJBMQSPKFDUJPOTBMPOHX JUI QSP jected growth in customers. Recommendations included in the report are based on information provided to Northland Securities from City TUBòBOEPUIFS$JUZDPOTVMUBOUTBOEDFSUBJOBTTVNQUJPOT as prepared by Northland Securities and detailed in the report. To the extent the assumptions in the report change in the months and years ahead, which they will, the City will OFFE UPBE KVTUJUTPOHPJOHöOBODJBMQMBOTBDDPSE JOHMZ #FGPSFPòFSJOHUIFDPODMVTJPOTBOESFDPNNFOEBUJPOT from the study, an explanation of the organization of the SFQPSUBOEUIFTUVEZBQQSPBDIJTPòFSFE Organization of Report This report is organized into six sections: 1. Executive Summary provides information on the or- ganization of the report, study approach, and conclu- sions and recommendations. 2. Backgrounddiscussesthehistoricalcontext,including growth and development of the community, and per- formance of the utilities. 3. Capital Improvement Plan provides information on the City’s plans for infrastructure improvements for the utilities. This includes estimates on project costs andsourcesoffundsto pay forthe improvements. In- formation on debt service is also included. 4. Utility Rates provides current, and future projected utility rates that will be necessary to maintain a posi- UJWFöOBODJBMDPOE JUJPOGPSUI FVUJMJUZGVOE T*OGPSN B tionisprovidedintheAppendixofthisreportonwhat proposedrateincreaseswillmeantocustomers ofthe utility systems. 5. Financial Plans are provided for the Water Fund, Sani- UBSZ4FX FS'VOE BOE 4UPSN 8 BUFS'VOE 5I FöOBODJBM plans provide both historical, current, and future pro- jected sources and uses of funds and balance sheet information. Financial plans take into account capital improvement plans, debt service, and proposed rates. 6. Appendix provides information on calculation of net assets and depreciation for the utility funds, and change in cash balances. Study Approach The following steps were taken as part of the study: • City provided information on the following: -historical spending and revenues, and future capi- tal improvement plans; -projected growth in customer units from future residential and commercial development; and QSFMJN JOBSZöOBODJBMSFTVMUT UI F$JUZT$PN 2 Executive Summary prehensive Annual Financial Reports as of Decem- ber 31, 2015 was not yet available for the study. • Information provided by the City was organized, ana- MZ[FE BOE VTFE UPTVQQPSUUI FE FWFMPQN FOUPGöOBO DJBMQMBOT0 ODFUI FQSFMJN JOBSZöOBODJBMQMBOTX FSF EFWFMPQFEUIFOEJòFSFOUTDFOBSJPTXFSFDPOTJEFSFE BOEBOBMZ[FEXJUI$JUZTUBòBOEPUIFS$JUZDPOTVMUBOUT to determine impact on utility rates. •$JUZTUBòPòFSFEJOQVUBOEGFFECBDLPOUIFBTTVNQ tions and desired outcomes. •"öOBME SBGUPGUI FSFQPSUX BTQSFQBSFE GPSQSFTFOUB tion to the City Council. *UJTJN QPSUBOUUPOPUFBTQFDUTPGöOBODJBMQFSGPSN BODF not reviewed as part of this study: •5I FWBMJE JUZPGUI FBTTVN QUJPOTBOE öHVSFTQSPWJE FE by the City on future growth was not reviewed. • Analysis of the basis for the City’s determination of current utility fees and charges was not reviewed. •5I FöOBODJBMJN QBDUUPUI F$JUZPGQPUFOUJBMDI BOHFT to theexisting customer tier structure for charging for water and sanitary sewer services was not reviewed. • NorthlanddidnotreviewanyCitypreparedproforma as part of the study and we are not aware of how this report may compare to any prior or current City pro forma. • The scope of the study did not include a review and comparison of the City’s utility fees and charges to other cities. • The City was not able to provide volume data by tier. Because historical volume data was not available for review, the report makes certain assumptions for fu- ture volume of water sold by tier. Conclusions and Recommendations The following conclusions and recommendations are of- fered as a result of the study: 1. Growth in Customers (Residential Equivalent Units) To meet service demands from growth in customers, the City is planning for capital improvement projects. It needs to be emphasized that the scope, timing, and cost of the capital improvement projects included in this report are preliminary estimates. The City Engi- neer provided a projection of improvement projects with gross estimates for project costs to provide a reasonable basis for the pro forma analysis included in this report.The City will need to continue to review and revise the capital improvement plan on an on- going basis. Timing for future projects will be driven by future de- velopment. The planned improvements that are cur- rently included in the capital improvement plan are anticipated to be paid for through a combination of issuance of debt, special assessments (pre-paid), and cash. Inadditiontotheimpactoffuturegrowthonthecapi- tal improvement plan, the actual timing for the build out of already approved housing development and DPN N FSDJBMBSFBTX JMMI BWFBTJHOJöDBOUJN QBDUPOUI F estimatesforfuturerevenuesto theutilityfunds,from both the collection of development fees and usage fees. Table A provides the estimated growth projections for residential equivalent units (platted and connected). 5IFHSPXUIFTUJNBUFTXFSFQSFQBSFECZ$JUZTUBò Table F on page 20 provides detailed information on 3 Executive Summary the growth projections summarized in TableA. The as- sumptions for growth in customers have an impact on the establishment of future utility rates and the resulting revenue and year-end cash projections for the utility funds.The City should continue to carefully monitor its assumptions for future growth in custom- ers against actual development. /PUFUP5BCMF"5IFSFJTBEJòFSFODFCFUXFFO4FXFSBOE8BUFSVOJUT shown in Table A because some customers will connect to either mu- nicipal water or sanitary sewer, but not both. 2. Establishmentof UtilityRates The report assumes a 1.0% annual increase in water and sewer rates, beginning in year 2018. The annual rateincreaseisassumedonthequarterlybasefeeand usage fees only. The annual fee for storm water is as- sumed to increase by $10.00 per year, beginning in year2017.TheincreasesareneededtoensuretheCity JTBCMFUPNBJOUBJOTVóDJFOUDBTIJOUIFVUJMJUZGVOET overthelong-term.Thereisnoassumedchangetothe developmentfees(connectionandavailablycharges). TheCityshouldestablishannualuserratesconcurrent with the development of the following year’s budget BOE CBTFE POUI F$JUZTöOBODJBMQMBOT*UJTJN QPSUBOU to maintain a long term, forward looking view for the ongoingmanagementoftheutilityfundstoavoidpo- tential adjustments to utility rates based on prior year öOBODJBMQFSGPSN BODFBMPOFX JUI PVUUBLJOHJOUPBD DPVOUGVUVSFöOBODJBMQSPKFDUJPOTBOE QPUFOUJBMDI BM MFOHFT'VUVSFöOBODJBMDI BMMFOHFTN BZDPN FGSPN UIFEJòFSFODFCFUXFFOQSPKFDUFEBOEBDUVBMHSPXUI incustomers,unanticipatedcapitalfundingpressures, and other unanticipated expense or revenue short- falls. There are no changes recommended at this time to the City’s rate structure (i.e., volume tiers). As the City gains more experience operating the expanded utili- UJFTBOE N PSFöOBODJBMI JTUPSZCFDPN FTBWBJMBCMF UI F City should evaluate whether the current rate struc- ture is continuing to meet the City’s objectives. An increase in revenue from growth in customers is projected; revenue collection will come from platted and connected units and customer usage of the sys- tems. TableB provides a summary of utility rates as assumed JOUI FSFQPSUGPSUI FOFYUöWFZFBST"DUVBMGVUVSFö nancial results and growth in customer units will im- pact the future utility rates that will be needed. 4 Executive Summary It is important to note that beginning in year 2022, boththeWater FundandSanitarySewer Fundwillbe- gin to draw on projected cash balances to cover ex- penses. Current projections suggest that the City may need to consider rate increases beyond what is pres- FOUMZJODMVE FE JOUI JTSFQPSU"DUVBMöOBODJBMSFTVMUT will need to be monitored to determine what may be necessary in the future years. TableC provides a summary of the projected year-end cash balances, combined net assets, and combined cash as a percentage of combined net assets.Chart1, on page 5,provides a summary of the total estimated year end cash balances and annual change in cash balances. Note toTable B: Table B does not include all of the tier rates. See Table G, Table H, andTable I for more information. 3. Managementof Cash BalancesandAssets The assumed level of utility rates included in this re- port, combined with the projected volume of water sold and sanitary sewer billed, plus the projected rev- enue to be collected from development charges, will provide cash needed to operate the utilities, maintain capital assets, and to pay debt service. The Financial Plan Section of this report provides a break-down of cash balances for each of the utility funds based on the following: 1) cash available to cover at least six months of anticipated operating expenses; 2) cash availabletocoverthefollowingyear’scapitalimprove- mentsthatareplannedtobefundedwithcash;and3) cashavailabletocoverthefollowingyeardebtservice. 5 Executive Summary Chart 1 shows that cash bal- ances in the utility funds are projected to increase over the next several years as a result of revenue collection from development (availability and connection charges).The cash balances will begin to decline as cash collected over the next several years is then used to pay debt service in the future years. Chart 14, on page 48 provides a comparison of projected year-end cash balances to pro- jected year-end outstanding debt obligations. 6 Background BACKGROUND The City of Lake Elmo is located on the eastern edge of the Twin Cities metropolitan area. The City’s 2030 Com- prehensive Plan forecasts and provides for approximately eighttimesthegrowthinhouseholdsandpopulationdur- ing the 2000-2030 planning period than was experienced during the 1980-2000 period. The City reports an estimated 2010 population of 8,069 and 2,774 households (2010 Census). Population is esti- mated to increase to 10,500 by 2020 and households to 3,800 (source: Metropolitan Council’s System Statement Dated September 17, 2015). The land area for the City en- compasses approximately 15,250 acres. The City’s 2030 Comprehensive Plan provides guidance on the City’s plans for managing future demand for utility infrastructure. The City is preparing to update to its Com- prehensivePlan, theupdatedPlan willlikely haveimplica- tions for the assumptions included in this report. Water Utility Lake Elmo owns, operates and maintains a municipal wa- ter supply and distribution system. The City has a goal to serve existing population desiring public water supply while preparing the system to allow people to connect as development occurs or existing areas request service. This policy guides the City’s capital improvement plan- OJOHBOE UI FOFFE UPN BJOUBJOBøFYJCMFBOE SFTQPOTJWF water system. Capital planning includes projects to cor- SFDUFYJTUJOHE FöDJFODJFTBOE UPFYQBOE UI FTZTUFN The City uses an enterprise fund to account for its wa- ter operations. The net assets in the Water Fund totaled $9,360,075 and cash balance was $617,655 as of Decem- CFS UI FN PTUSFDFOUBVE JUFE öOBODJBMTUBUFN FOUT for the City). SanitarySewer Utility PropertyownersintheCityareservedbyindividualsewer systems or in limited areas by municipal sewer. Capital planswillprovideforanincreaseinthenumberofproper- ties to be served by municipal sewer and connection to the RegionalSewerSystem. The Metropolitan Council En- vironmentalServices (MCES)has extended regionalsewer service to serve a greater area of the City. The City uses an enterprise fund to account for its sew- er operations. The net assets in the Sewer Fund totaled $3,611,364 and cash balance was $60,592 as of December UI FN PTUSFDFOUBVE JUFE öOBODJBMTUBUFN FOUGPS the City). StormWater Utility TheCityoperatesastormwaterutility. Thesystemofcon- veyancesisownedandoperatedbytheCityanddesigned for collecting or conveying storm water. The City collects anannualfeefrompropertyownersthat isusedtopayfor the cost of constructing and maintaining the system. The City uses an enterprise fund to account for its storm water operations. The net assets in the Storm Water Fund totaled $1,095,528 and cash balance was $312,746 as of %FDFN CFS UI FN PTUSFDFOUBVE JUFE öOBODJBM statement for the City). 7 Capital Improvement Plan andDebtService CAPITALIMPROVEMENTPLANAND DEBT SERVICE Thisreportincludesacapitalimprovementplan(the“CIP”) thatincludescapitalprojectsfundedfromutilityrevenues and accounted for the in the utility funds.Table D, which canbefoundbeginningonpage9,providesdetailsonthe annual capital spending that is projected and included in this report for each of the utility funds. It is important to emphasize that the CIP included in this report should be considered a working draft. The City Engineer prepared the CIP included in this report. The TQFDJöDDPTUFTUJN BUFTJODMVE FE GPSFBDI PGUI FQSPKFDUT provides a reasonable basis for the pro forma analysis in- cluded in this report. But it is important to recognize that UI FTQFDJöDQSPKFDUTUI BUN BZBDUVBMMZCFBVUI PSJ[FE JOUI F future, and the actual costs, may vary greatly from what is included in this report. Capital Projects The projects included in the CIP include projects to ex- QBOE UI FDBQBDJUZBOE DPSSFDUE FöDJFODJFTPGUI FX BUFS and sanitary sewer systems.The City is a developing com- munity with utility expansion needs. Planned projects in- clude expansion of the City’s water supply capacity and distribution system. Sanitary sewer services have been expandedthroughtheconstructionofconnections to the Regional Sewer System. As a developing community, the City’s capital improve- ment plans focus on expansion and does not presently include capital spending for maintenance of existing sys- tems.ThiswillneedfutureconsiderationbytheCityasthe communitydevelopsandinfrastructureagesandrequires major maintenance and/or replacement. StormWaterProjects ItshouldbenotedthatforthestormwaterCIP,theCityEn- gineerhasincludedprojectsforPhases2and3forregion- al drainage improvements. The City Engineer has identi- öFE UI FGPMMPX JOHJTTVFTGPSUI FTUPSN X BUFSVUJMJUZUI BUBSF BOUJDJQBUFE UPCFBE E SFTTFE JOUI FOFYUöWFUPUFOZFBST • Phase 2 Downtown Regional Drainage project consisting of land acquisition (Shiltgen property west of Lake Elmo Avenue and north of CSAH 14), a storm water pond, and storm water diversion QJQJOHUP4VOöTI -BLF • Phase 3 Downtown Regional Drainage project consisting of storm sewer piping south of CSAH 14nearHagbergs.Thepondingmaybedeveloper paid, but for the purposes of this report it is as- sumed to be paid from utility revenue. • KraemerLakeFloodplainstudywillbeneededbe- foredevelopmentcanoccurinI-94corridor,Phase 3 area (between Keats-Lake Elmo Avenue). Source of Funding for Capital Projects The source of funding for the planned capital projects includes one of the following sources or a combination thereof: fund balance (cash); bond proceeds; and special assessments. Debt Service Planned funding for utility infrastructure projects antici- patestheissuanceofdebttoundertakeplannedimprove- ments and to manage annual fee increases. TheprojectionsassumethattheCitywillissuegeneralob- ligation bonds secured by revenues from the utility funds 8 Capital Improvement Plan andDebtServiceto pay principal and interest. This approach provides the lowestcostofdebt.Thesebondswillnotcountagainstthe City’s debt limit.Debt management is an important factor in the City’s ongoing capital improvements planning. The estimates for debt service are based on bonds to be paid over 15 years and level annual debt service.The esti- mated interest rates used to calculate annual debt service are generally based on today’s current rate environment. 5I FBDUVBMJOUFSFTUSBUFTX JMME FQFOE POöOBMTUSVDUVSFBOE market conditions at time of issuance. TablesE1andE2,beginningonpage12,providesinformationon the City’s existing and projected future debt obligations supported by the utility funds. • Table E-1 includes information on projected debt (bonds) outstanding as of year-end for each of the utility funds. • Table E-2 includes information on projected annual debt service (principal and interest) payments for each of the utility funds. 9 Capital Improvement Plan andDebtService 10 Capital Improvement Plan andDebtService 11 Capital Improvement Plan andDebtService 12 Capital Improvement Plan andDebtService 13 Capital Improvement Plan andDebtService 14 Capital Improvement Plan andDebtService The annual debt outstand- ing as of year-end shown in Chart 2 includes G.O. revenue bonds secured by water, sani- tary sewer, and storm water revenues. The chart includes both exist- ing debt and estimated debt anticipated to be issued in the future and paid from util- ity revenues. Future bond is- suance estimates are based on the City’s capital improve- ment plan. Chart 2 includes debt sup- portedbyutilityrevenueonly and does not include existing or future estimated debt that is paidfromproperty tax levy. 15 Capital Improvement Plan andDebtService Theannualdebtservice(prin- cipal and interest) shown in Chart 3 includes G.O. revenue bonds secured by water, sani- tary sewer, and storm water revenues. The annual amounts include bothexistingdebtservice(on outstanding bonds) and esti- mated debt service on bonds anticipated to be issued in the future and paid from util- ity revenues. Future bond is- suance estimates are based on the City’s capital improve- ment plan (seeTable D). Chart 3 includes debt sup- portedbyutilityrevenueonly and does not include existing or future estimated debt that is paidfromproperty tax levy. 16 UtilityRates UTILITYRATES Key Factors 1SPKFDUJOHUI FVUJMJUZSBUFTOFDFTTBSZUPN BJOUBJOUI Fö nancialstabilityoftheCity’sutilityoperationsrequiresde- velopment and analysis of the following key factors: • Estimates for future annual operating expenditures, including personnel, materials and supplies, cost of electricity, and other operating expenses. The City contracted with TKDA Engineering Firm to perform a reviewoftheCity’soperations.TheresultsoftheTKDA revieware includedinthe futureannualoperatingex- penditures included in this report. • Metropolitan Council Environmental Service (MCES) sewer fee charged to the City by the Metropolitan Councilforregionalcollectionandtreatmentofwaste water. This is an operating expense that the City does not have control over. • Annual capital expenditure to maintain and improve the utility systems. • Annual debt servicePOCPOE TJTTVFE UPöOBODFDBQJ tal improvements. • Growth in customers using and paying for the sys- tems. This growth will provide additional revenue to the systems at time of platting, connection, and on- going usage, but will also create additional demand for services. • Available other revenue sources other than fees and charges to users of the water and sanitary sewer ser- vices. Annual Operating Expenditures Costs incurred in operating the utility systems, which are used up in the period in which acquired, are recorded as operating expenditures. Annual growth in operating expenditures, not including the MCES charge, has been modest.Itisanticipatedthatgrowthinfutureyearswillbe 2.0% annually. The operating expense projections included in this report were prepared by Bernie Bullert, fromTKDA.The City con- tracted with TKDA to perform a review of the City’s op- erations for the utility systems and to provide input into future estimated capital improvement projects. TKDA will provide the City with a report that explains the assump- tions and other factors behind the operating expenses that are included in the pro forma for each of the utility funds. Depreciation is reported as an operating expenditures and is the process of allocating the costs of an asset over its useful life in a systematic and rational manner. Depre- ciation is projected to change with capital spending and depreciation of both existing and future acquired assets. The appendix to this report includes information on the calculation of depreciation for this report. MetropolitanCouncil Environmental Services TheMCESchargetocitiesforregionalcollectionandtreat- ment has been volatile in recent years. MCES experienced SFWFOVFMPTTFTGSPN UI FTJHOJöDBOUE SPQJOSFHJPOBME FWFM opment during the recession which has caused a corre- sponding decline in revenue collected by the Council for Sewer Availability Charges (a one time fee for new con- nections).Forprojectionpurposes,thestudyassumesthat future charges paid to MCES for collection and treatment 17 UtilityRates will increase by 5.0% annually. This is part of the annual operating expense to the City’s Sewer Fund. The City accounts for the collection and payment of the MCES “Sewer Availability Charge” (SAC) through an ac- counts payable account. Therefore the pro forma for the sanitary sewer fund (see Table K-3, on page 34) does not in- clude a separate revenue and expense line item for the MCES SAC. Annual Capital Expenditures TheCIP anticipates paying for futurecapitalimprovement project costs with a combination of revenue sources. The City anticipates future development will provide the neededrevenuetotheCityforpayingforutilityexpansion through the collection of development fees (an availabil- ity and a connection charge). Paying for annual planned capital improvement projects with cash may be a sound strategy depending on the de- tails of the project. It avoids incurring annual interest ex- pense. However, this strategy requires advance planning and implementation of utility fees and charges that pro- WJE FBE FRVBUFDBTI øPX For large (non-routine) capital expenditures or unantici- pated capital expenditures, the use of bonding to fund capital minimizes annual rate increases that otherwise wouldbenecessary.ItalsoallowstheCitytochargefuture customers the cost of infrastructure with a longer useful life, versus putting the entire burden on today’s custom- ers. The CIP anticipates bonding for certain project costs. The resulting annual debt service on the bonds is includ- FE JOUI FöOBODJBMQMBOTGPSUI F6 UJMJUZ'VOE T Debt Service Debt service in the Utility Funds is paid from revenue col- lected from utility fees, availability and connection charg- es, and special assessments. The CIP anticipates debt is- suance to be supported by the revenues within the utility funds. "MMDVSSFOUBOE GVUVSFE FCUJTBDDPVOUFE GPSJOUI FöOBODJBM plans that are included in this report. The estimated debt serviceisbasedon15yearsbondspayableatcurrentmar- ketinterestrates.Futureestimatedutilityfeesandcharges SFøFDUUI FDPTUPGUI FFTUJN BUFE JODSFBTFGPSE FCUTFSWJDF Growth in Customers Growth in customers fromfuture landdevelopment is the most important factor in determining the projections for future utility rates. Build out of approved developments will bring an increase in revenue to the City’s utility funds through the collection of availability and connection charges and fees collected for service and usage of the systems. Availability charges and connection charges are one time charges collected at the time of development and connection to the system. Estimating the increase in future customers from growth in residential and commer- cial development is the most volatile factor in developing öOBODJBMQSPKFDUJPOTGPSUI FVUJMJUZGVOE TTableFandChart4 andChart5,beginningonpage18,include information on the assumed growth in residential equivalent units (“REU”) fromfuturedevelopment.Theprojectedannualgrowthin 3&6TXBTFTUBCMJTIFECZ$JUZTUBòBOEQSPWJEFEUP/PSUI land for this report. The pace of future development will increase or decrease projected revenues shown in this report and impact fu- ture utility rates. For this reason it is critical that the City 18 UtilityRates 19 UtilityRates The estimates for future growth from development, shown in residential equiva- lentunitsinChart4andChart XBTQSFQBSFECZ$JUZTUBò The data was provided to Northland Securities as an input for the study and this report. The assumption on growth, and annual units platted and connected, is an important input for projecting future revenue for the utility funds. Revenue from increased residential equivalent units comes from a one time pay- ment of the City’s availabil- ity charge and connection charge and then from on- going payment for use of the systems. The availabil- ity charge is paid at time of platting and the connection charge at time of connection. 20 UtilityRates VQE BUFJUTöOBODJBMQMBOTCBTFE POBDUVBMHSPX UI Available Other Revenues There is limited other revenues that provide a source of funding for utility services.The majority of the cost to op- erateandmaintainthesystemispaidfromfeesandcharg- es collected from those using the system. Other revenue includes interest income on cash balances, special assess- ments, grants, and rents. Historical Utility Rates Informationonhistoricalratesisprovidedin TableG,TableH, andTableI,beginningonpage21, for each of the utility funds. Ratesshownarebilledquarterly,withtheexceptionofthe stormwaterfeewhichisbilledto customersreceivingthis chargeonanannualbasis.TheCitychargesabasicservice fee for water only. Future Utility Rates Informationonfutureprojectedutilityratesforyears2017 to2025isalsoincludedin TableG,TableH,andTableI,foreach PGUI FVUJMJUZGVOE T5I FQSPKFDUFE GVUVSFSBUFTSFøFDUUI F rates necessary to maintain adequate cash balance in the utility funds. These rates applied against projected cus- tomers and usage is used to calculate the annual estimat- FE DI BSHFTGPSTFSWJDFTGFFTTI PX OJOUI FöOBODJBMQMBOT (pro forma) for each utility fund. The report assumes a 1.0% annual increase in water and sewer rates, beginning in year 2018. The annual rate in- crease is assumed on the quarterly base fee and usage fees only. The annual fee for storm water is assumed to increase by $10.00 per year, beginning in year 2017. As stated, the increases are needed to ensure the City is able UPNBJOUBJOTVóDJFOUDBTIJOUIFVUJMJUZGVOETPWFSUIF long-term. There is no assumed change to the develop- ment fees (connection and availably charges). The validity of the tier structure the City uses for charging customers for water, based on volume of water sold, was not reviewed as part of this study. The current adopted tier structure appears to be reasonable. ProjectedVolumes ofWaterSoldand Sanitary Sewer Billed Annual estimated volume of water sold by tier and esti- mated sanitary sewer billed by year is included in Table G and Table H. The estimated gallons of water billed is sum- marized in Chart6,onpage24. The City was not able to provide information on histori- calvolumesoldpertiersoassumptionsweremadeonthe volumes sold per tier in order to prepare this report and toprojectfuturerevenuesfrombillingofwaterusage.The assumptions should be updated in the future as better is available from the City’s billing system. The report assumes average annual volume of 96,000 gal- lonsperresidentialcustomer(or8,000gallonspermonth). This volume is pro-rated across the City’s tier structure us- ing estimated historical data (actual data was not avail- able). For commercial customers, annual volume is cal- culated based on prior year estimated volumes adjusted by the percentage increase in commercial (and school) customers.The report assumes annual sewer volume bill- er per customer, for both residential and commercial, of 72,000 gallons (or 6,000 per month). The assumptions for residential and commercial custom- ersvolumeusageforbothwaterandsanitarysewerneeds to be revisited and reviewed as better information be- comes available fromtheCity’s utility billingsysteminthe future and historical billing data becomes available. 21 UtilityRates 22 UtilityRates 23 UtilityRates 24 UtilityRates The estimated annual gallons of water billed is projected to increase as more customers connect to the water system. This report assumes that the average annual usage per customer, for residential and commercial, remains con- stant. 25 FinancialPlans FINANCIAL PLANS #BTFE POI JTUPSJDBMöOBODJBMQFSGPSN BODF QSPKFDUFE VUJM ity rates andstructure, andanticipatedfuturecapitalproj- FDUT öOBODJBMQMBOT QSPGPSN B I BWFCFFOQSFQBSFE GPS each the utility funds. KeyAssumptions 5I FöOBODJBMQMBOTGPSFBDI PGUI FVUJMJUZGVOE TX BTE FWFM oped based on several key assumptions which are as fol- lows: • Operating expenditures, including personnel costs and materials supplies and all other operating ex- pense will increase by 2.0% annually along with other adjustments as prepared by TKDA Engineering Firm. The City contracted withTKDA to perform a review of theCity’soperationsfortheutilitysystemsandtopro- vide input into future estimated capital improvement projects. TKDA is to present the City with a report that will provide information on the assumptions and other factors behind the operating expenses that are included in the pro forma for each of the utility funds. • Nochangeinexistingtierstructureforfeesandcharg- es. • Depreciation is estimated based on projected capital improvements with new assets assumed to be depre- ciated over a 40 year term. Information on calculation of net capital assets, including depreciation is includ- ed in the Appendix. • Current capital improvement plan will be implement- ed at estimated project costs and projected sources of funding as included in this report. This includes an increase in future debt service for payment on bonds to be issued. • Utility fees for use of the system are assumed to in- crease by 1.0% annually for water and sanitary sewer services, beginning in year 2018. The annual rate in- creaseisassumedonthequarterlybasefeeandusage fees only. The annual fee for storm water is assumed toincreaseby$10.00peryear,beginninginyear2017. • Connection and availability charges are assumed to remain constant for years 2016-2025. Revenue from these charges is used to pay for the system, including the planned capital projects and related debt service. • Theproposedfutureutilityfeesandchargesareshown to be at a level that is adequate to maintain cash bal- BODFTJOUIFGVOETTVóDJFOUUPDPWFSUIFGPMMPXJOH 1) six months of operating expenses; 2) the following year’s capital improvements that are planned to be fundedwithcash;and3)thefollowingyear’sdebtser- vice. 26 FinancialPlans WATER FUND Fund Description The Water Fund is used to account for the operating and capital improvement costs of the water utility system. Background 5I F8 BUFS'VOE JTJOTPVOE öOBODJBMDPOE JUJPO'VUVSFö nancialperformance willbe impacted by the timing of fu- ture development of land in the City and the timing of re- ceipt of development fees (trunk line availability charges and connection charges) that will support infrastructure costs and receipt of charges for service for usage of the system. Source of Funds There are two major source of funds for the Water Fund: thecollectionofchargesforservicefees(basefeeandvol- ume usage fees) and development fees collected at time of platting and time of connection to the system. Future revenue from charges for service fees will increase as the number of customers increases over time and the volume of water sold increases. 5I FöOBODJBMQMBOGPSUI F8 BUFS'VOE BTTVN FTOPDI BOHF in the City’s existing rate structure and assumes rates in- crease of 1.0% annually beginning in year 2018. TheCitycollectsrevenuefromarentalfeeforaccesstothe City’s water tower by communication companies. InterestincomeisearnedonthecashbalanceintheWater Fundthatisrecordedasrevenue.Theinvestmentearnings rate is projected to be 0.5% for future years. Special assessments levied for water infrastructure im- provements is recorded as revenue in theWater Fund. Use of Funds The use of funds is to pay for the operation of the water system, debt service expense, depreciation, and autho- rized transfers to other funds that may occur from time to time. Operating expense line item details can be found in Table J-3. Debt service expense, which includes interest expense on bonds, can be found in Table E-2. (Principal payments on bonds supported by the Water Fund result in a reduction of liability for the Fund.) Depreciation expense details, including calculation of projected net capital assets, can be found in AppendixA,. Transfers 5I FöOBODJBMQMBOE PFTOPUBOUJDJQBUFBOZGVUVSFUSBOT fers in or out of funds from the Water Fund to other city funds. Presently the City does not charge the utility funds for General Fund overhead but does charge the fund for BENJOJTUSBUJWFTUBòUJNF Balance SheetItems 5I FöOBODJBMQMBOJODMVE FTQSPKFDUFE BTTFUTBOE MJBCJMJUJFT for the Water Fund, this includes projected annual year- end cash balance.Table J-2 provides a detailed summary on projected change in cash year by year.TheWater Fund cash balance includes funds collected and recorded as deferred revenue and funds held in escrow related to the refunding of bonds. WATERFUND 27 FinancialPlans WATERFUND 28 FinancialPlans WATERFUND 29 FinancialPlans WATERFUND 30 FinancialPlans Estimated year end cash bal- ances are projected to in- DSFBTFPWFSUI FOFYUöWFZFBST and then will be spent down as projects are implemented and cash balances are drawn down. The source and use of funds includes depreciation and capital contributions. The dif- ference between the annual source and use of funds is the change in net assets of the fund. WATERFUND 31 FinancialPlans SANITARY SEWER FUND Fund Description TheSanitarySewerFundisusedtoaccountfortheoperat- ing and capital improvement costs of the sanitary sewer utility system. Background 5I F4BOJUBSZ4FX FS'VOE JTJOTPVOE öOBODJBMDPOE JUJPO 'VUVSFöOBODJBMQFSGPSN BODFX JMMCFJN QBDUFE CZUI FUJN ing of future development of land in the City and the tim- ing of receipt of development fees (trunk line availability charges and connection charges) that will support infra- structurecostsandreceiptofchargesforserviceforusage of the system. Source of Funds TherearetwomajorsourceoffundsfortheSanitarySewer Fund: the collection of charges for service fees (base fee and volume usage fees) and development fees collected at time of platting and time of connection to the system. Future revenue from charges for service fees will increase as the number of customers increases over time and the volume of water sold increases. Future development of landthroughplattingwillresultinincreasedrevenuefrom water availability and connection charges. 5I FöOBODJBMQMBOGPSUI F4BOJUBSZ4FX FS'VOE BTTVN FTOP change in the City’s existing rate structure and assumes a rate increase of 1.0% annually beginning in year 2018. InterestincomeisearnedonthecashbalanceintheWater Fundthatisrecordedasrevenue.Theinvestmentearnings rate is projected to be 0.5% for future years. Special assessments levied for sanitary sewer infrastruc- SANITARYSEWER FUNDture improvements is recorded as revenue in the Sanitary Sewer Fund. Use of Funds The use of funds is to pay for the operation of the sanitary sewersystem,debtserviceexpense,depreciation,andau- thorizedtransferstootherfundsthatmayoccurfromtime to time. Operating expense line item details can be found in Table K-3. Debt service expense, which includes interest expense on bonds, can be found in Table E-2. (Principal payments on bonds supported by the Sanitary Sewer Fund result in a reduction of liability for the Fund.) Depreciation expense details, including calculation of projected net capital assets, can be found in AppendixB. Transfers 5I FöOBODJBMQMBOE PFTOPUBOUJDJQBUFBOZGVUVSFUSBOTGFST in or out of funds from the Sanitary Sewer Fund to other city funds. Presently the City does not charge the util- ity funds for General Fund overhead but does charge the GVOEGPSBENJOJTUSBUJWFTUBòUJNF Balance SheetItems 5I FöOBODJBMQMBOJODMVE FTQSPKFDUFE BTTFUTBOE MJBCJMJUJFT for the Sanitary Sewer Fund, this includes projected an- nual year-end cash balance.Table K-2 provides a detailed summary on projected change in cash year by year. 32 FinancialPlans SANITARYSEWER FUND 33 FinancialPlans SANITARYSEWER FUND 34 FinancialPlans SANITARYSEWER FUND 35 FinancialPlans Estimated year end cash bal- ances are projected to in- crease annually between years 2016 and 2025. This is due the projected annual revenue collection exceeding the use. The actual year-end cash bal- ances will be impacted by changes in planned capital spending. As projects are implemented, beyond what is included in the draft CIP, cash balances may be lower than what is projected in this report. The source and use of funds includes depreciation and capital contributions. The dif- ference between the annual source and use of funds is the change in net assets of the GVOE5IFEJòFSFODFJTESJWFO by the projected collection of trunk line availability charges in advance of further build- out of the system. SANITARYSEWER FUND 36 FinancialPlans STORMWATERFUND Fund Description TheStormWaterFundisusedtoaccountfortheoperating and capital improvement costs of the storm water utility system. Background 5I F4UPSN 8 BUFS'VOE JTJOTPVOE öOBODJBMDPOE JUJPO'V UVSFöOBODJBMQFSGPSN BODFX JMMCFJN QBDUFE CZUI FUJN JOH of future development oflandintheCity. Future develop- ment will increasethe demands onthestormwaterutility infrastructure and provide opportunity for increased rev- enue to support the infrastructure and operation of the system. Source of Funds There is one major source of funds for the Storm Water 'VOE UI FDPMMFDUJPOPGBöYFE BOOVBMDI BSHFGPSTFSWJDF fee. The City does not charge an availability fee for the storm water utility system. Build out of the system has been paid as part of the developer’s project costs. Theannualfee,presentlyat$50.00,isassumedtoincrease by $10.00 per year, beginning in 2017. This increase is needed in order to maintain cash balance. Beginning in 2017,theCitywillbeginpayingdebtserviceonthebonds JTTVFE JOUPöOBODFTUPSN X BUFSJN QSPWFN FOUT Some cities choose to manage storm water utility fees UI SPVHI öOBODJOHDFSUBJODBQJUBMJN QSPWFN FOUTX JUI UBY levy, the City will have the ability in the future to consid- er what costs, if any, of the storm water utility should be spread over the cities entire tax base. InterestincomeisearnedonthecashbalanceintheWater Fundthatisrecordedasrevenue.Theinvestmentearnings STORMWATERFUNDrate is projected to be 0.5% for future years. Special assessments levied and recorded as revenue to the StormWater Fund relate to unpaid utility bills and are not related to project costs. Use of Funds The use of funds is to pay for the operation of the storm water system, debt service expense, and depreciation, ex- pense. Operating expense line item details can be found in Table L-3. Debt service expense, which includes interest expense on bonds, can be found in Table E-2. (Principal payments on bonds supported by the Storm Water Fund result in a re- duction of liability for the Fund.) Depreciation expense details, including calculation of projected net capital assets, can be found in AppendixC. Transfers 5I FöOBODJBMQMBOE PFTOPUBOUJDJQBUFBOZGVUVSFUSBOTGFST in or out of funds from the StormWater Fund to other city funds. Presently the City does not charge the utility funds for General Fund overhead but does charge the fund for BENJOJTUSBUJWFTUBòUJNF Balance SheetItems 5I FöOBODJBMQMBOJODMVE FTQSPKFDUFE BTTFUTBOE MJBCJMJUJFT for the Storm Water Fund, this includes projected annual year-end cash balance.Table L-2 provides a detailed sum- mary on projected change in cash year by year. 37 FinancialPlans STORMWATERFUND 38 FinancialPlans STORMWATERFUND 39 FinancialPlans STORMWATERFUND 40 FinancialPlans Estimated year end cash bal- ances are projected to de- cline due to the increase in debt service expense related UPUI FöOBODJOHPGDBQJUBMJN provement projects.Year-end cashbalancesareexpectedto recover due to the projected increase in the annual storm water fee (assumed to be $5 per year increase). The actual year-end cash bal- ances will be impacted by changes in planned capital spending. As projects are implemented, beyond what is included in the draft CIP, cash balances may be lower than what is projected in this report. The source and use of funds includes depreciation. The EJòFSFODFCFUXFFOUIFBO nual source and use of funds is the change in net assets of the fund. STORMWATERFUND 41 Appendix 42 Appendix 43 Appendix 44 Appendix 45 Appendix The increase in estimated year-end cash is due to the collectionofchargesfromde- velopment to pay for future capital improvement proj- ects, including debt service JTTVFE UPöOBODFUI FQSPKFDUT The estimated spend down of cash is projected to occur as projected development units are realized and the col- lection of development fees begins to decline and debt service payments are met. For year by year explanation of projected change in year- end cash balances, see Table J-2 on page 29 for the Water Fund), Table K-2 on page 34 for the Sanitary Sewer Fund, and Table L-2 on page 39 for the StormWater Fund. 46 Appendix AsnotedforChart13onpage 46, the increase in estimated year-end cash is due to the collectionofchargesfromde- velopment to pay for future capital improvement proj- ects, including debt service JTTVFE UPöOBODFUI FQSPKFDUT The CIP anticipates the issu- ance of debt in the future to payforcapitalimprovements. The projected future year- end cash as percent of year- end debt outstanding will increase as cash increases from the collection of devel- opment charges. The cash collected will be used to pay future debt service. Northland Securities, Inc. 45 South 7th Street, Suite 2000 Minneapolis, MN 55402 (800) 851-2920 Member NASD and SIPC MAYOR AND COUNCIL COMMUNICATION DATE: 7/19/2016 CONSENT ITEM #: 20 AGENDA ITEM: Hunting Ordinance SUBMITTED BY: Stephen Wensman, Planning Director THROUGH: Kristina Handt, City Administrator REVIEWED BY: Sarah Sonsalla, City Attorney Washington County Sheriff’s Department BACKGROUND: In fall of 2015, City staff received numerous complaint calls about illegal or perceived illegal hunting. In response, Planning Staff drafted an amendment to the Weapons Ordinance, Section 130.15 and held a public hearing at the January 11, 2016 Planning Commission meeting. No member of the public spoke at that public hearing, but the Planning Commission raised a number of issues including wanting to know how the changes related to the MN conceal and carry legislation. Because of the complexities of this Statute, Planning Staff had the City Attorney draft the Ordinance Amendment attached to this report. The City Attorney has informed Planning Staff that the public hearing was not necessary because the Ordinance is not part of the City’s zoning code. ISSUE BEFORE COUNCIL: The Council should consider approval of the new hunting ordinance and map. PROPOSAL DETAILS/ANALYSIS: Ordinance Hunting is presently addressed by the Weapons Ordinance, Section 130.15. Section 130.15 prohibits hunting as follows: (B) Unlawful acts. Except as otherwise provided in this section, it shall be unlawful for any person: (1) To fire, discharge, release, throw, or in any other manner propel a weapon within 500 feet of a residence, whether or not inhabited, or any other structure or building or within 500 feet of any platted area in the city and , except on an approved target range; City Council Meeting July 19, 2016 Consent Agenda Item #_20__ Page 2 The average resident is not likely to know the differences between platted and unplatted property, making self-enforcement difficult. The new Hunting Ordinance is an amendment of the Weapons Ordinance, Section 130.15. The ordinance allows hunting in areas designated on a hunting map established by Council Resolution each year. This allows the City to adjust allowed hunting areas as the City grows and develops. The ordinance references a hunting map which will be updated by City staff from time to time as needed. The hunting map will be posted on the City’s website and at City Hall and will enable residents a greater ability to determine where hunting is allowed and prohibited. In addition to hunting, the amendment also amends Section 130.15B to align with conceal and carry law, MN Statute 624.714. Since the enactment of this statute, the City Attorney believes it is unlawful for the City of Lake Elmo to require a person carrying a loaded weapon to obtain written permission from a property owner in order to carry the weapon on the property. The Statute does allow the city to require written permission from a property owner for another to hunting on the property. Approved Hunting Areas Map The proposed ordinance was modeled after Minnetrista’s Hunting Ordinance, which designates both areas in which hunting with a bow and arrow or handgun is allowed and areas in which hunting with a bow and arrow only are allowed. The proposed hunting ordinance for Lake Elmo states that a map will be provided to designate these two areas as well. Currently, the proposed Approved Hunting Areas Map shows areas that have been found to be at least 500 feet away from a structure (as viewed from the Washington County Property Viewer website aerial view) and not located in a Public Facilities zoning district. This reflects the specific language in the ordinance that prohibits the discharge of any weapon within 500 feet of a platted area or structure. The map does not designate areas in which hunting with a bow and arrow only are allowed. If the Council wishes to establish areas in which hunting with a bow and arrow only are allowed, it needs to determine what criteria needs to be met in order to allow this so that the map can be properly amended to reflect this criteria. As previously mentioned, the proposed Approved Hunting Areas Map shows areas that were found to be appropriately zoned and not shown to be located within at least 500 feet of a structure. Minnetrista’s Hunting Zones Map, attached, does not designate specific areas that are at least 500 feet away from structures, but instead restricts hunting in more dense areas (Residential, R-1, R-2, etc.), allows hunting with a bow and arrow in areas with bigger lots and more open space, and allows hunting with a shotgun or bow and arrow in areas that are agriculturally zoned with parcels upwards of 40 acres in area. The Council should decide if it chooses to adopt a map that specifically shows areas that are appropriately zoned and not within 500 feet of a structure or a map that simply designates areas in which hunting would be appropriate with the stipulation that hunting with a shotgun within 500 feet of a structure inhabited by a human or livestock is prohibited unless authorized by written permission of the property owner as state statute dictates. If the Council feels that the proposed Approved Hunting Areas Map is appropriate, it should adopt it by resolution by approving the attached Resolution 2016-142. If this is so determined, the Council should also consider adopting the attached Alternative Ordinance 08-142 (the redlined version of the ordinance) so that the ordinance does not lead one to believe that there are areas in the city in which one cannot hunt with a shotgun but can hunt with a bow and arrow only. City Council Meeting July 19, 2016 Consent Agenda Item #_20__ Page 3 FISCAL IMPACT: The proposed hunting ordinance will likely lessen the number of complaints taken by City Staff pertaining to illegal hunting and may eliminate costs associated to enforcement. OPTIONS: The City Council may approve or deny approval to the hunting ordinance. RECOMMENDATION: Staff respectfully requests, as part of tonight’s consent agenda, that the Council approve Ordinance 08-142 as it pertains to hunting in the City of Lake Elmo, Section 300.15; Resolution 2016-55, approving summary publishing of the ordinance; and Resolution 2016-___, adopting the Approved Hunting Areas Map. If removed from the Consent Agenda, the recommended action can be completed through the following motions: 1. “Move to approve Ordinance 08-142 as it pertains to hunting in the City of Lake Elmo, Section 300.15.” 2. “Move to approve Resolution 2016-55 approving the summary publishing of Ordinance 08- 142.” 3. “Move to approve Resolution 2016-__ adopting the Approved Hunting Areas Map.” ATTACHMENTS: 1) Ordinance 08-142. 2) Alternative Ordinance 08-142 (redlined version). 3) Draft Approved Hunting Areas Map. 4) Resolution 2016-55 approving the summary publishing of ordinance 08-142. 5) Resolution 2016-___ adopting the Approved Hunting Areas Map. 6) Minnetrista Hunting Ordinance and Map 479514v2 AMB LA515-1 CITY OF LAKE ELMO COUNTY OF WASHINGTON STATE OF MINNESOTA ORDINANCE NO. ________ AN ORDINANCE AMENDING THE LAKE ELMO CITY CODE OF ORDINANCES BY AMENDING SECTION 130 OF THE CITY CODE WHICH REGULATES WEAPONS SECTION 1. The City Council of the City of Lake Elmo hereby amends Section 130.15, paragraph (B) of the City Code by adding the double underlined language and deleting the stricken language as follows: § 130.15 POSSESION, DISCHARGE, OR SALE OF WEAPONS (B) Unlawful acts. Except as otherwise provided in this section, it shall be unlawful for any person: (1) To fire, discharge, release, throw, or in any other manner propel a weapon within 500 feet of any residence, whether or not inhabited, or any other structure or building or within 500 feet of any platted area in the city, except on an approved target range; (2) To wear or carry a loaded weapon for hunting or other purposes hunt on land not owned by the person wearing or carrying the weapon, hunting in the city, without specific written and dated permission of the owner of the land. The writing containing the permission shall also describe with reasonable accuracy the boundaries of the land owned by the owner giving the permission except on an approved target range. SECTION 2. The City Council of the City of Lake Elmo hereby amends the City Code by inserting the following new sections in Section 130 of the Code as follows: § 130.16 RESTRICTIONS ON THE DISCHARGE OF FIREARMS; HUNTING. No person may discharge any firearm or bow and arrow, or engage in hunting of any game birds or other animals by any means within the corporate limits of the city: (A) Except as otherwise provided in this section; (B) Unless discharged in lawful defense of person or property; or (C) Unless the person is a duly authorized law enforcement officer engaged in the performance of his or her official duties. § 130.17 HUNTING REGULATIONS. (A) Hunting with a shotgun or with a bow and arrow as authorized by the Minnesota Department of Natural Resources, state laws pertaining to trespass, and by landowner permission, is allowed but only in the areas established by the city council. No other firearms, including long 142 479514v2 AMB LA515-1 guns or hand guns, or any other weapon, except a bow and arrow, are permitted to be used for hunting within the city. (B) The city council shall, by resolution, establish by map or other means the areas in which the discharge of shotguns and the use of a bow and arrow are allowed for hunting and the areas in which only the use of a bow and arrow is allowed for hunting. No hunting shall be allowed in other areas of the city. § 130.18 HUNTING TO MANAGE WILDLIFE Notwithstanding anything herein to the contrary, the city’s law enforcement agency shall be entitled to issue permits to hunt in any area of the city to manage wildlife populations upon evidence that all required state permits have been secured and a determination by law enforcement that such hunting will not pose an undue risk to public health and safety. SECTION 2. Effective Date. This ordinance shall become effective immediately upon adoption and publication in the official newspaper of the City of Lake Elmo. SECTION 5. Adoption Date. This Ordinance No. ____ was adopted on this _____ day of _____________, 2016, by a vote of __ Ayes and __ Nays. LAKE ELMO CITY COUNCIL ___________________________________ Mike Pearson, Mayor ATTEST: _________________________________ Julie Johnson, City Clerk This Ordinance ________ was published on the _____ day of _________________, 2016. 142 08-142 479514v2 AMB LA515-1 CITY OF LAKE ELMO COUNTY OF WASHINGTON STATE OF MINNESOTA ORDINANCE NO. 08-142 AN ORDINANCE AMENDING THE LAKE ELMO CITY CODE OF ORDINANCES BY AMENDING SECTION 130 OF THE CITY CODE WHICH REGULATES WEAPONS SECTION 1. The City Council of the City of Lake Elmo hereby amends Section 130.15, paragraph (B) of the City Code by adding the double underlined language and deleting the stricken language as follows: § 130.15 POSSESION, DISCHARGE, OR SALE OF WEAPONS (B) Unlawful acts. Except as otherwise provided in this section, it shall be unlawful for any person: (1) To fire, discharge, release, throw, or in any other manner propel a weapon within 500 feet of any residence, whether or not inhabited, or any other structure or building or within 500 feet of any platted area in the city, except on an approved target range; (2) To wear or carry a loaded weapon for hunting or other purposes hunt on land not owned by the person wearing or carrying the weapon, hunting in the city, without specific written and dated permission of the owner of the land. The writing containing the permission shall also describe with reasonable accuracy the boundaries of the land owned by the owner giving the permission except on an approved target range. SECTION 2. The City Council of the City of Lake Elmo hereby amends the City Code by inserting the following new sections in Section 130 of the Code as follows: § 130.16 RESTRICTIONS ON THE DISCHARGE OF FIREARMS; HUNTING. No person may discharge any firearm or bow and arrow, or engage in hunting of any game birds or other animals by any means within the corporate limits of the city: (A) Except as otherwise provided in this section; (B) Unless discharged in lawful defense of person or property; or (C) Unless the person is a duly authorized law enforcement officer engaged in the performance of his or her official duties. § 130.17 HUNTING REGULATIONS. (A) Hunting with a shotgun or with a bow and arrow as authorized by the Minnesota Department of Natural Resources, state laws pertaining to trespass, and by landowner permission, is allowed but only in the areas established by the city council. No other firearms, including long 479514v2 AMB LA515-1 guns or hand guns, or any other weapon, except a bow and arrow, weapons except for a bow and arrow or shotgun are permitted to be used for hunting within the city. (B) The city council shall, by resolution, establish by map or other means the areas in which the discharge of shotguns and the use of a bow and arrow are allowed for hunting and the areas in which only the use of a bow and arrow is allowed for hunting. No hunting shall be allowed in other areas of the city. § 130.18 HUNTING TO MANAGE WILDLIFE Notwithstanding anything herein to the contrary, the city’s law enforcement agency shall be entitled to issue permits to hunt in any area of the city to manage wildlife populations upon evidence that all required state permits have been secured and a determination by law enforcement that such hunting will not pose an undue risk to public health and safety. SECTION 2. Effective Date. This ordinance shall become effective immediately upon adoption and publication in the official newspaper of the City of Lake Elmo. SECTION 5. Adoption Date. This Ordinance No. ____ was adopted on this _____ day of _____________, 2016, by a vote of __ Ayes and __ Nays. LAKE ELMO CITY COUNCIL ___________________________________ Mike Pearson, Mayor ATTEST: _________________________________ Julie Johnson, City Clerk This Ordinance 08-142 was published on the _____ day of _________________, 2016. Lo n g La k e Sun n y b r o o k Lo n g La k e Cl e a r L a k e LakeJane Sunfish Lake LakeElmo E a g l e P o i n t L a k e Do w n s La k e Horse s h o e Lake A r m s t r o n g L a k e Goose Lake Ro s e La k e Mark s g r a f Lak e il W s LakeOlson L a k e D e M o n t r e v i l l e Source: Esri, DigitalGlobe, GeoEye, Earthstar Geographics, CNES/Airbus DS, USDA, USGS, AEX,Getmapping, Aerogrid, IGN, IGP, swisstopo, and the GIS User Community Legend Approved Hunting Areas* Approved Hunting Areas The following map outlines where hunting with a bow and arrow or shotgun is allowed in the City (all other weapons prohibited for hunting). Hunting is not allowed within 500' of any residence, structure or platted area in the city unless in an approved target range.Hunting ordinance, DNR regulations, and trespassing laws apply. *Map is updated from time to time but may not reflect structures recently erected.Hunting with a shotgun is prohibited within 500 ft of a structure occupied by a human or livestock without property owner or occupant permission regardless if this map shows the area to be an approved hunting area. 0 21 Miles Updated: 7/6/2016 CITY OF LAKE ELMO COUNTY OF WASHINGTON STATE OF MINNESOTA RESOLUTION NO. 2016-__ RESOLUTION AUTHORIZING PUBLICATION OF ORDINANCE 08-___ BY TITLE AND SUMMARY WHEREAS, the City Council of the City of Lake Elmo has adopted Ordinance No. 08-___, an ordinance to amend Section 130 of the Lake Elmo City Code which regulates weapons; and WHEREAS, the ordinance is lengthy; and WHEREAS, Minnesota Statutes, section 412.191, subd. 4, allows publication by title and summary in the case of lengthy ordinances or those containing charts or maps; and WHEREAS, the City Council believes that the following summary would clearly inform the public of the intent and effect of the ordinance. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Elmo, that the City Clerk shall cause the following summary of Ordinance No. 08-___ to be published in the official newspaper in lieu of the entire ordinance: Public Notice The City Council of the City of Lake Elmo has adopted Ordinance No. 08-___, which amends the Chapter 130: General Offenses: • By amending Section 15: Possession, discharge, or sale of weapons, to replacing language that makes it unlawful to wear or carry a loaded weapon with language that makes it unlawful to hunt on land not owned by the person or without specific written and dated permission of the owner. • By inserting Section 16: Restrictions on the discharge of firearms; that restricts hunting of any game birds or other animals. • By inserting Section 17: Hunting regulations, that establishes restrictions on hunting by establishing a map that designates areas in which the discharge of shotguns and the use of a bow and arrow are allowed for hunting. • By inserting Section 18: Hunting to manage wildlife, that entitles law enforcement to issue permits to hunt in any area of the city to manage wildlife populations. The full text of Ordinance No. 08-___ is available for inspection at Lake Elmo city hall during regular business hours. BE IT FURTHER RESOLVED by the City Council of the City of Lake Elmo that the City Administrator keep a copy of the ordinance at City Hall for public inspection and that a full copy of the ordinance be placed in a public location within the City. Dated: July 19, 2016 ___________________________________ Mayor Mike Pearson ATTEST: ____________________________________ Julie Johnson, City Clerk (SEAL) The motion for the adoption of the foregoing resolution was duly seconded by member _________________________ and upon vote being taken thereon, the following voted in favor thereof:____________________________________and the following voted against same:________________________________________ Whereupon said resolution was declared duly passed and adopted. CITY OF LAKE ELMO COUNTY OF WASHINGTON STATE OF MINNESOTA RESOLUTION NO. 2016-__ RESOLUTION ESTABLISHING A MAP DESIGNATING APPROVED HUNTING AREAS WITHIN THE CITY WHEREAS, the City Council of the City of Lake Elmo has adopted Ordinance No. 08-142, an ordinance to amend Section 130 of the Lake Elmo City Code which regulates weapons; and WHEREAS, Ordinance No. 08-142 states that the City Council shall, by resolution, establish by map or other means the areas in which the discharge of shotguns and the use of a bow and arrow are allowed for hunting; and WHEREAS, § 130.15: Possession, Discharge, or Sale of Weapons of the Lake Elmo City Code which regulates weapons states that it is unlawful for any person to fire, discharge, release, throw, or in any other manner propel a weapon within 500 feet of any residence, whether or not inhabited, or any other structure or building or within 500 feet of any platted area in the city, except on an approved target range; and WHEREAS, the City Council, at its meeting on the 19th day of July 2016, considered the areas in which the discharge of shotguns and the use of a bow and arrow are allowed for hunting and found the established map to delineate these areas; and NOW, THEREFORE, BE IT RESOLVED by the City C ouncil of the City of Lake Elmo that the map entitled Approved Hunting Areas, updated on the 6th day of July 2016, which designates areas in which hunting with a shotgun and bow and arrow, is hereby adopted. BE IT FURTHER RESOLVED by the City Council of the City of Lake Elmo that the City Administrator keep a copy of the established map at City Hall for public inspection and be placed on the City’s website to be made available for public viewing access. Dated: July 19, 2016 ___________________________________ Mayor Mike Pearson ATTEST: ____________________________________ Julie Johnson, City Clerk (SEAL) The motion for the adoption of the foregoing resolution was duly seconded by member _________________________ and upon vote being taken thereon, the following voted in favor thereof:____________________________________and the following voted against same:________________________________________ Whereupon said resolution was declared duly passed and adopted. Pe r m i t t e d - S h o t g u n a n d B o w Pe r m i t t e d - B o w O n l y Re s t r i c t e d - N o H u n t i n g A l l o w e d Pe r S e c t i o n 1 1 2 5 . 1 1 Mi n n e t r i s t a C i t y C o d e Hu n t i n g Z o n e s Da t e : 8 / 2 6 / 2 0 1 4 /05,000 Fe e t Minnetrista City Code Chapter 11 - Public Safety Page 62 of 67 Section 1125 – Weapons 1125.01. Definitions. Terms used in this section, unless expressly defined in this subsection, will have the meaning prescribed by Minnesota Statutes, chapter 609 for the same terms. The following terms will have the following meaning: Club means any group of persons having a regular membership and improved or permanent facilities for target or trap and skeet shooting. Concealed manner means having the object on the person in such a manner so that it is not completely visible to any other person. Having a knife in a sheath will be considered as having the knife concealed, irrespective of the position of the sheath on the person. Firearms mean any device from which is propelled any projectile or bullet by means of explosions or gas. Military type weapon means any firearm or other weapon such as bazookas, machine guns, mortars or grenades. Nunchucks mean any device constructed of two solid cylindrical objects joined together on one end by a chain, rope, thong or other such material. Person means any natural individual, firm, partnership, trust, estate, club, association or corporation. Public place means any building or establishment, place, or public street or highway, where the business, social or governmental activity ordinarily conducted is generally held open to the public; specifically including, but not limited to, such locations as governmental buildings, meeting halls, centers for art and culture, places of amusement, liquor or beer establishments, and restaurants. It must also include any private residence, which is the site of unlawful activity. Public place will not include: (a) A dwelling place or residence when a person is present with the permission of its lawful possessor, or one's own place of business; (b) Business premises at which the buying, selling, repair, or trade in weapons or firearms is regularly conducted; (c) Places at which an event or activity is conducted involving the exhibition, display, or carrying of a weapon, done in a manner not intended or calculated to result in or lead to the unlawful use of the weapon, including, but not limited to, educational or training programs, weapons or collectors' Minnetrista City Code Chapter 11 - Public Safety Page 63 of 67 shows or exhibitions, or religious, artistic, educational, or cultural events; or (d) Parades or other public events when the use or display of weapons is specifically authorized by the city for such events; (e) Places at which the weapon is used in a lawful manner for hunting, fishing, recreation, or agricultural purposes. Secured container means a closed and fastened case, box or securely tied package having no mechanical features designed for immediate weapons removal or use and containing no other nonrelated objects. A sheath or scabbard alone will not constitute a secured container. Unlawful use means, with respect to a weapon or a firearm, to brandish, assault with, threaten with, or otherwise employ in a manner calculated and likely to cause death, great bodily harm, or substantial bodily harm, or the reasonable and immediate fear thereof. Weapon means any firearm, whether loaded or unloaded, or device designed as a weapon and capable of producing death, great bodily harm, or substantial bodily harm, or any other device or instrumentality which, in the manner it is used or intended to be used, is calculated or likely to produce death, great bodily harm, or substantial bodily harm, or the reasonable and immediate fear thereof. Weapon includes but is not limited to any bow and arrow, bayonet, blackjack, chain club, Chinese stars, dagger, dirk, firearm, folding knife with a blade in excess of four inches, fixed blade knife carried in a concealed manner or within reach of any person in a motor vehicle, gravity knife, machete, nunchucks, pipe club, push-button knife, sand club, slingshot, stiletto, or switchblade. [Revised 5-18-15, Ordinance 429] 1125.03. Carrying weapons. Except as otherwise provided for herein or by state law, it is unlawful for any person within the limits of the city to carry on that person in a public place or transport in any vehicle in a public place any weapon, except that: (a) Any weapon may be transported by a person not in a vehicle directly to or from any place or activity referred to in subsection 1125.01 under the definition of public place or to or from person’s vehicle and the places, gatherings or activities set forth therein, in a secured container; or (b) Any weapon may be transported in a motor vehicle in a secured container or in the locked trunk of such vehicle. The provisions of this subsection will not be applicable to the transport of weapons Minnetrista City Code Chapter 11 - Public Safety Page 64 of 67 by persons who are regularly engaged in the lawful manufacture, distribution, or sale at retail or wholesale of weapons, or the agents of any of them while engaged in such business; to the carrying or transport of weapons by licensed police officers, law enforcement officers or military personnel while in the course of their duties; to any officer of a state adult correctional facility when on guard duty or otherwise engaged in an assigned duty; to an owner or agent while owner or agent is present at a business place operated by owner or agent, except a business which is the site of unlawful activity; or to persons holding a permit to carry a weapon while acting within the scope of such permit. [Revised 5-18-15, Ordinance 429] 1125.05. Target shooting. Annual permits authorizing the use of firearms may be granted for target shooting or trap and skeet shooting to clubs if the city determines that such use is not contrary to the public safety or welfare and if the use of the firearms would not constitute a hazard to persons or property or would not create a nuisance. The applicant must be responsible for meeting all conditions imposed by the city and provide a detailed application that demonstrates that issuance of a permit would not be contrary to the provisions in this section. [Revised 5-18-15, Ordinance 429] 1125.07. Training dogs. Annual permits authorizing the use of firearms may be granted to clubs or individuals for the training of dogs. Such permit will allow this activity on land described in the permit by other persons with the consent of the owner or lessee thereof. Applicants for the training of dogs from April 16th to July 14th must also comply with Minnesota Statutes, section 97B.005. A person carrying a firearm, while training dogs, may only have in possession and discharge blank cartridges and shells. [Revised 5-18-15, Ordinance 429] 1125.09. Hunting restricted. Subd. 1. Restrictions. No person may discharge any firearm or bow and arrow, or engage in hunting of any game birds or animal by any means within the city: (a) Except as otherwise provided in this section; (b) Unless discharged in lawful defense of person or property; or (c) Unless the person is a duly authorized law enforcement officer engaged in the performance of his or her official duty. Minnetrista City Code Chapter 11 - Public Safety Page 65 of 67 Subd. 2. Regulations. (a) Hunting with shotgun or with bow and arrow as authorized by the Minnesota department of natural resources, state laws pertaining to trespass and by landowner permission is allowed only in the areas established by the city council. No other firearms, including long guns, or hand guns, or other weapons, except bow and arrow, are permitted to be used for hunting within the city. (b) The city council shall, by resolution, establish by map or by other means the areas in which the discharge of shotguns and the use of bow and arrow are allowed for hunting, and the areas in which only the use of bow and arrow is allowed for hunting. No hunting shall be allowed in other areas of the city. Subd. 3. Property. Property owners in areas in which no hunting is allowed may apply for a waiver to hunt by bow and arrow. Property owners in the areas in which only bow and arrow may be used may apply for a waiver to use shotguns to hunt. City staff may administratively grant or deny a waiver on the basis of the following criteria: (a) The property must be a minimum of 10 acres in size and able to accommodate hunting safely; (b) Hunting may only be conducted from a fixed location identified by the property owner and which must be 500 feet or more from any residence located on another property; (c) Hunting locations for deer or turkeys and any discharge of a shotgun slug must be from an elevated platform and shots must be downward in direction; (d) The property owner must provide prior written notice to the owners of all abutting properties regarding the owner’s intent to apply for a waiver; and (e) The city’s public safety department shall conduct a site visit and investigation to verify the application, identify any additional safety concerns and take input from the owners of adjacent properties. The proximity of structures other than residences within 500 feet of the proposed shooting area and other relevant factors may be considered as additional safety concerns. Application for a waiver must be received at least 30 days prior to the applicable hunting season. Any waiver granted shall only be valid through the end of that hunting season. The city may impose such limitations or restrictions as it deems necessary to ensure the public safety and welfare. Subd. 4. Bow and Arrow Target Practice Waiver Minnetrista City Code Chapter 11 - Public Safety Page 66 of 67 Property owners may apply for a waiver to allow target practice with a bow and arrow and city staff may administratively grant or deny a waiver on the basis of the following criteria: (a) The property must be a minimum of 2 acres and able to accommodate target practice safely. (b) Target practice may only be conducted from a fixed location identified by the property owner at a single target. (c) Target practice must be from an elevated platform and arrows must be discharged in a downward direction. (d) The city’s public safety department shall conduct a site visit and investigation to verify the application and identify any additional safety concerns. The proximity of structures and other relevant factors may be considered as additional safety concerns, Subd. 5. Appeals. Applications made under subds. 3 or 4 above and denied by staff may be appealed to the city council. The city council shall conduct such hearing as it deems appropriate to review the application, the staff findings, the reasons for denial, input by the applicant, and input by the owners of adjacent properties and shall uphold, reverse or modify the staff’s decision regarding the waiver. Subd. 6. Hunting to Manage Wildlife Notwithstanding anything herein to the contrary, the city’s public safety department shall be entitled to issue permits to hunt in any area of the city to manage wildlife populations upon evidence that all required state permits have been secured and a determination that such hunting will not pose an undue risk to public health and safety. [Revised 5-18-15, Ordinance 429] 1125.11. Exemption. Nothing in this section will be construed to restrict firing of any gun, pistol or other species of firearms when done in the lawful defense of persons or property or the necessary enforcement of the law. [Revised 5-18-15, Ordinance 429] 1125.13. Possession of knives in schools. It is unlawful for any person to be in possession of, carry, transport, or control any STAFF REPORT DATE: July 19, 2016 REGULAR ITEM #: 21 MOTION TO: Mayor and City Council FROM: Kristina Handt, City Administrator REVIEWED BY: Rob Weldon, Public Works Director Cathy Bendel, Finance Director AGENDA ITEM: Rain Garden Maintenance BACKGROUND: Since the City began a Rain Garden Program in 2008, there have been a total of 34 rain gardens to be maintained privately and 6 rain gardens to be maintained by the City as follows: • Tablyn Park. • Demontreville Park. • Demontreville Trail DNR Boat Launch area. • Jane Rd. • Legion Avenue. • Reid Park (30th Street). The 6 city maintained rain gardens are shown in red on the attached map ISSUE BEFORE COUNCIL: Should the seasonal parks workers be retained to maintain the city owned rain gardens? PROPOSAL DETAILS/ANALYSIS: The water work group of the Environmental Committee discussed rain gardens at their July 8, 2016 meeting. The work group discussed the concern of a resident expressed at recent Council meetings regarding the upkeep of the rain gardens. The discussion included the possibility of organizing a group of volunteers to weed the gardens, hiring the work out or expanding the use of the City’s seasonal parks staff to complete this work. The work group reported back to the committee that they would recommend the Council have the task completed by seasonal employees. Furthermore, a member of the work group, Wendy Griffin, volunteered to provide a brief training to staff on what to pull from the gardens. FISCAL IMPACT: Our seasonal employees make $10-11/hour. It is estimated to take about a week to make it through all of the city rain gardens. This would be an additional cost of $473.66. The budget for PT employees in Parks was $32,500 for 2016. Staff is projecting the actual to be $46,135.50 given the fact that the City was successful in filling the rink attendant position in 2016 as well as successfully recruiting and hiring summer help earlier in 2016 which did not occur in previous years. OPTIONS: 1) Approve keeping seasonal parks staff on to complete rain garden maintenance 2) Approve hiring out maintenance of rain gardens 3) Approve establishing a volunteer group to maintain rain gardens 4) Do not take any action with regarding to maintaining rain gardens. RECOMMENDATION: Environmental Committee recommendation: Motion to approve keeping seasonal parks staff on to complete rain garden maintenance. 483044v1 SJS LA515-1 Kennedy Sarah J. Sonsalla 470 U.S. Bank Plaza 200 South Sixth Street Minneapolis MN 55402 & Graven (612) 337-9284 telephone (612) 337-9310 fax ssonsalla@kennedy-graven.com http://www.kennedy-graven.com C H A R T E R E D MEMORANDUM TO: Kristina Handt, City Administrator FROM: Sarah J. Sonsalla, City Attorney DATE: July 15, 2016 RE: Censure of Council Member Bloyer At the meeting on July 5, 2016, the City Council adopted Resolution No. 2016-60, which censured Council Member Bloyer. The Resolution imposed restrictions on Council Member Bloyer, including that he may not interact with any member of City staff without another council member present, he must direct all questions during City Council meetings to the chair and that he be required to participate in training on handling of confidential information. I was unaware of and therefore did not have the opportunity to review the resolution prior to it being adopted by the Council. Council Member Bloyer has asked whether the City can legally impose these restrictions on him. I have consulted with the League of Minnesota Cities and independently researched the issue and the answer to this question is that the City should not impose these restrictions on Council Member Bloyer because they go beyond the scope of a censure and cannot be enforced. The dictionary definition of a censure is “limited to expressing severe disapproval of (someone or something), typically in a formal statement, but not to discipline or punish.” In this case, the resolution censuring Council Member Bloyer not only expresses the Council’s disapproval of his behavior but also imposes restrictions that are in the form of a penalty or deprivation for his behavior. That goes further than the Council expressing its disapproval of Council Member Bloyer’s behavior. The restrictions that are being imposed on Council Member Bloyer limit his rights to hold and enjoy his office as a city council member. The rule is well established that an elected official is entitled to hold that office without any restrictions. State v. Magie, 183 Minn. 60, 63- 64 (Minn. 1931). Furthermore, under the First Amendment, a council member’s speech (which is considered highly protected political speech) also may not be restricted. Goward v. City of Minneapolis, 456 N.W.2d 460, 464 (Minn. Ct. App. 1990). 483044v1 SJS LA515-1 2 Based on the above, if Council Member Bloyer violates the restrictions that have been imposed on him, the City will not have a legal basis to be able to enforce them. Because there is no legal basis for the City to be able to enforce the restrictions against Council Member Bloyer, it is my recommendation that they be removed. Please contact me if you have any questions regarding this information.