2016.06.27 CC Minutes - Street CIP

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i i Hugo City Council Agenda Street CIP Workshop Monday,June 27, 2016 7:00 p.m. Mayor Weidt called the meeting to order at 7 p.m. Present: Haas,Klein,Petryk,Miron,Weidt Absent: None Also Present: City Administrator Bryan Bear, City Engineer Jay Kennedy, Finance Director Ron Otkin,Public Works Director Scott Anderson, and City Clerk Michele Lindau. City Administrator Bryan Bear stated that the purpose of the meeting was to identify Council priorities with respect to additional levy capacity that will available at the end of 2019 when most of the city's bonds will be retired. This additional capacity can be used to either fully fund the street CIP or be used to fund improvements to Lions Park as was discussed at a joint workshop with the Parks Commission. He stated that although the city could issue bonds for the park improvements,the Council would need to levy approximately$464,000 per year for 15 years to repay them. However,it is the Finance Director's goal to eliminate borrowing. Thus, ' the Council needs to provide direction on what projects should be funded with this additional levy capacity. City Engineer Jay Kennedy provided a report that categorized city streets by their condition,and presented the Council with eight prioritized projects for their consideration. The costs for these eight projects totaled $15 million with primary funding coming from state-aid 34%),property taxes(46%) and special assessments(20%). Haas talked about the miscalculation of the population projection by the Met Council which impacts how state transportation dollars are distributed. Bear explained the City did appeal the population estimate and that the Met Council it has revised our population upward. Finance Director Ron Otkin discussed the current roadway CIP levy of$539,657,which is not sufficient to complete all eight prioritized road projects. But the CIP would be fully funded if all of the additional levy capacity,beginning in 2020,were dedicated to road improvements. He also explained that if the city issued bonds for improvements to Lions Park,the annual levy of $464,000 would result in a tax increase of$133 on a median valued homestead. Otkin also explained that the City's equipment replacement program is fully funded through 2020,including the replacement of the 1992 pumper/tanker truck for$500,000;however,there will not be sufficient funds to purchase an aerial fire truck without the issuance of equipment certificates.