HomeMy WebLinkAbout2016.06.27 CC Minutes - Street CIP i
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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.
City Council Minutes for June 27,2016 CIP Workshop
Page 2 of 2
Mayor Weidt asked if the long-standing policy of maintaining a flat tax rate is becoming
obsolete. Otkin explained that it is most likely that our tax rate would need to increase if
property values were to collapse like they did during the great recession. The Council talked
about how the City is unique in maintaining the tax rate,and how the budget would be affected
with another recession. They discuss whether a slight increase in tax rate would be appropriate
and if the flat tax rate was important in attracting new businesses.
Following additional discussion,it was the Council's consensus to place the highest prioritized
road project for consideration at a future regular meeting. The streets affected by this project
include portions of Homestead Avenue,Homestead Drive, 126`h Street and l 32"d Street.
The meeting adjourned at approximately 8:30 p.m.
Respectfiilly Submitted,
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Michele Lindau
City Clerk