2016-09-06 Council Workshop Packet CITY OF MENDOTA HEIGHTS
CITY COUNCIL WORKSHOP AGENDA
September 6, 2016 – 5:00 pm
Mendota Heights City Hall
1. Call to Order
2. Roll Call
3. Discussion Items
a. City Engineering/Public Works
b. City Department Reorganization
c. Ehlers Financial Plan Issues
d. Follow-up from previous budget workshops
i. Mendakota Fireworks
ii. Improvements at the Village of Mendota/Mendota Heights Town Center
4. FY 17 Budget Direction
5. Adjourn
Memorandum
Date: August 23, 2016
To: Mayor and City Council
From: Craig L. Ebeling – Local Government Consultant
Subject: Public Works and Engineering Division Organizational Model
Introduction and Background
Earlier in 2016 the City Council authorized Craig L. Ebeling, Local Government Consultant to review the
existing organizational structure of the Engineering Division. That effort was prompted by the departure
of the Project Engineer. That report recommended several follow up actions many of which the Council
has already accomplished. There were several other secondary recommendations that were left
unaddressed for the time being. The Council now finds itself at another crossroads with the recent
resignation of the City Engineer / Public Works Director. This provides yet another opportunity in which
the overall structure of the Division could be reviewed. Staff seeks direction as to how to proceed.
Existing Organizational Structure
The City has been operating with an authorized staffing level of 4.5 FTE’s. The City Engineer / Director of
Public Works (CE-DPW) has one direct-report from this work group in addition to direct-reports from
Public Works Operations, Protective Inspections (Building Inspections) and an administrative assistant
(See Attachment A). The CE-DPW reports to the City Administrator.
The authorized positions in the Division are as follows:
City Engineer / Director of Public Works 1.0 FTE
Assistant City Engineer 1.0 FTE
Project Engineer 1.0 FTE
Senior Engineering Technician 1.0 FTE
Administrative Support 0.5 FTE
The February report noted that while the City does not have the breadth of public works involvement
that some larger and non-suburban cities have (for example water treatment, wastewater treatment,
airports, landfills etc.) the Engineering Division oversees a work scope that is very similar to suburban
communities in the Twin Cities and throughout the United States. The exception to this is that drinking
water supply, distribution and storage is handled by agreement with the City of St. Paul. The report
included an exhibit that listed the major tasks for which the Division is responsible (Attachment B).
When most people think about “the City Engineer” they often focus on the tasks that are listed under
the capital project implementation portion of the document. Indeed this is a major focus for the
Division. But the list demonstrates that there are many more tasks that must be completed in the City
that are not nearly as visible but are nevertheless critical to the ongoing operations of public works
systems and the preservation and stewardship of the City’s public works assets.
page 2
Existing Funding Model
The City uses a funding scheme that has commonalities with many departments in the area and
throughout the country. It is the “enterprise” concept in which the costs to run the Division are actually
to a large degree collected from other non-levy sources within the City. The Engineering “enterprise” is
thought of as “paying its own way”. In Mendota Heights the fund is referred to as the Engineering
Internal Service Fund but the concept is the same. Historically there have been mixed results with
respect to the Fund paying its own way. In the years leading up to 2010 there had been several years in
succession where revenues had not covered expenses. To address this concern the Council determined
to provide additional funding for the CE-DPW from “retainers “ included in other activity budgets –
Planning, Admin, Code Enforcement, Roads and Bridges and Parks from the General Fund as well as
“retainers” from the Sanitary Sewer Fund and the Storm Sewer Utility Fund. These retainers presently
provide for $49,500 of the total Engineering Division budget of $641,742. Other fees relating to work for
the various other city departments performed by Division personnel account for more cost offsets for
the Division.
Discussion
Options for Funding Models
In the discussions leading up to and during the preparation of the report it was clear that the Council
was becoming more and more uncomfortable with the existing funding model for the Division. There
was a sense that project implementation decisions were being influenced by the need to fully fund the
Engineering Division. Stated another way, there was a fear that projects were being implemented so
that funding for the Division would be available from bonding and or other capital projects funding
mechanisms regardless of the merit of the project or the Council’s agreement that the City could afford
the project.
In the interim period since the receipt of the report the DPW/CE has suggested an alternate approach to
address this concern. The Council would transition from the existing “project financed” mode for the
Division to an approach in which the Division would be funded entirely from the general or “ad valorem”
levy. Because of the effect that this would have on the overall levy it has been suggested that the City
spread this change over two to three years or more. Following this concept there would be more
transparency as to what costs are being expended to run the Division. (Under the existing plan since the
bulk of the Division needs come from bond or other non-levy funds, the cost to run the Division is not
prominently a part of the overall levy discussions.) Another effect of this plan would be that general ad
valorem levy dollars would be used to partially fund capital projects. That is, the 15% +/- engineering
share of total capital project costs would be paid from levy funds thus reducing the amount necessary to
be raised from other traditional capital projects funds. Thus the need for Municipal State Aid funds,
bonded funds or other capital project funding sources would be lessened. Of course the other significant
effect is that the levy would need to increase significantly - based on existing budgets by an estimated
page 3
$510,000. Inasmuch as the Council is considering a phased-in approach, Utility Fund and General Fund
reserves could be accessed to lessen the blow. Presumably assessment policy would NOT change at least
for now. So the affect would be on the non-assessed capital project funding sources.
Options for Division Organizational Structure
In the February report there was also discussion as to how the Department should be structured. Are
there enough or too many staff people? Are the positions configured correctly? The report generally
stated that IF there were a predictable stream of capital improvements of a level in the $1.5 to $2.0
million range that the Division would design over the next years, that the overall headcount of the
Division was reasonable. The report did however suggest that the positions should be configured
differently, most notably reducing the number of registered engineers.
The report went on to discuss the concept of utilizing contracted vendors – or consultants - to perform
some or even all of the Division’s work tasks. The primary focus of that discussion was on the capital
projects implementation work. In general the report suggested that if there was uncertainty as to the
level of on-going capital projects implementation or a sense that there would NOT be $1.5 to $2.0
million in staff-designed projects over future years that the City may be well served by reconfiguring the
Division and utilizing contracted engineers for capital project implementation. The report noted that
when comparing the work done by the Division as presently configured to options in which consultants
mobilized capital improvement projects it is important to remember that the consultant would ONLY
implement the capital projects. Their fees would relate only to the projects and they would NOT handle
all of the other non-capital-project work costs discussed in Attachment B. It would be possible to even
utilize consultants for these non-capital-project tasks, but that concept is NOT recommended. Based on
Council input so far it appears that there are two general directions that the City could go:
Option A – The City could move to fill the vacancies left by the departure of the Project Engineer and the
Director of Public Works / City Engineer and move forward with the Capital Improvements Plans the
Council approves. Presumably this would continue the suggested planned phase-out of project-based
Division funding, transitioning to a completely levy based approach. This would have the effects noted
above. The Council could move forward establishing the Capital Improvements Plan utilizing the
recommendations of the Focus Engineering report. Among other things this would provide for an
expanded CIP document with more individual project information, departmental master capital projects
planning and earlier Council consideration of the overall Plan. We have come to refer to this as the in-
house-design approach.
Option B – The City could reconfigure the Division relying primarily on consultant implementation of
capital improvements projects. In this mode staffing for the Division would be reduced. Our first analysis
indicates that perhaps the head count could be reduced by 2.0 FTE’s not counting the 0.5 FTE that is
presently the administrative support for the Division. The remaining 2.0 FTE’s would be redefined
positions that for now we will refer to as the Director of Engineering and Infrastructure and the Senior
Engineering Technician. The Director of Engineering and Infrastructure position would meet the City’s
page 4
requirement for having a registered engineer in responsible charge of the city’s Municipal State Aid
Street System (MSAS). We have been referring to this as the consultant-design approach.
The Director of Engineering and Infrastructure focus would be in the following areas:
• Supervision of the consultants implementing the capital improvements projects
• Preparation of the Departmental Master Capital Projects Planning Effort and the overall Capital
Improvements Plan
• Implementation of Annual Contracted Maintenance Work – Seal Coating, Striping, Sanitary
Sewer Cleaning and Televising, Sanitary and Storm Sewer Lining etc.
• MSAS Administration – Planning and Reporting – Needs Assessment and Reporting, Annual
Status Map and Route Designation, Agency Agreements processing, etc.
• Supervision of Public Works Operations
• Oversight of the compilation of as-built for new and existing construction
• Processing required state and federal agency clearances – MS4 Reports and Updates, wetland
work permits,
• Coordination with the Lower Minnesota River Watershed District (LMRWD)
• Administration of the Met Council required Infiltration and Inflow reduction work plans
including the implementation of the sump pump inspection program (this presumes that the
actual inspections will be contracted with an outside vendor)
• Coordination with Parks regarding their Capital Projects and Contracted Maintenance
Implementation
• Development Review for Planning
• Coordination with St. Paul Water Utility – Monitoring and Amending the JPA, acquisition of
necessary easements
• Implementation of Capital Improvements relating to Facilities
• Utility Rate Computations
• Interagency Coordination – MnDOT, Dakota County, Metropolitan Council, Metropolitan Council
Environmental Services
• Liaison to Airports Relations Committee (ARC)
• Overall Supervision of the Asset Management System
• Promulgate City Standards – Public Works Standards, Standard Specifications and Standard
Plates, AutoCAD Civil 3D Standards etc.
• Oversight of City Mapping –
• Oversight of Cataloguing of As-Built Records including the conversion of paper records to digital
records
• Departmental Budgeting and Other Admin including Performance Reviews
• Public Information Response – Responding to Daily Inquiries and “Pipeline” and other public
outreach efforts
page 5
The focus of the new Senior Engineering Technician position would change from being more project
implementation focused to an infrastructure management task:
• Maintaining the GIS records of the City
• Performing and supervising all GIS applications of the City
• Maintaining and up-dating all as-built records of the City – clearing the existing back-log of
digital submittals and oversee conversion of old paper records to digital records
• Linking As-Built Data as GIS Attribute
• Building the Asset Management Database
• Generating required maintenance reports from the Asset Management System
• Generating data necessary for the formulation of the Departmental Master Project Capital Plans
and the Capital Improvements Plan
• Performing all Field Work necessary for Capital Improvement Plan preparation
• Performing Gopher State Locates
• Completing Erosion Control Inspections
• Cataloguing Lot Surveys / Certifications, Easements, Grading Plans
Depending on what is experienced in the first years of operation it may be necessary to contract out for
certain services including for example utility rate computations and Gopher State locates. If the work
load for the revised Division is too heavy the City may want to consider asking Public Works Operations
to take greater control of the Fleet Management function and even possibly assigning the supervision of
the Public Works Superintendent to Administration or some other department.
This alternative approach also envisions that some functions would be assigned to other City work
groups. Facilities Operations would go to Administration and building permits administration would go
to Planning (See Attachment D).
The Engineering Division personnel have completed a more detailed list of how the various upcoming
tasks would be handled under this model. That list is essentially a very current and detailed version of
Attachment B. The City Administrator and I have reviewed the list with the Division personnel.
Again, in this mode the City Engineering Division would NOT implement major capital improvement
projects.
There would need to be some human relations department work accomplished as a part of this
changeover – specifically the new Engineering Division positions would need to be evaluated and rated
utilizing the Hay methodology or other accepted process. Other positions that were assigned additional
tasks would also need to be evaluated and rated.
The Option B organizational structure model does not provide an opportunity for Division charges to
capital projects. If the Option B organizational model were implemented with the alternative Division
funding concept presumably levy dollars would be used to offset project engineering costs (costs which
would be paid to consultants) as opposed to paying for these costs from capital project funding sources.
This may not be the desired effect. If the Council determines to utilize the alternate Option B
page 6
organizational structure it is more likely that it would be mobilized with the existing funding approach.
The Council’s original angst was not in paying for engineering costs for capital projects but was instead
relating to how those engineering funding decisions were interplaying with project go-no-go decisions.
As noted above the existing retainer approach already generates $49,500 of funding for the Division.
Other fees account for an additional $120,500. While a final budget for the alternate concept has not
been formulated or approved it is envisioned that the total expenses budget would be approximately
$389,000. If the existing funding methodology were applied to consultant costs (funding those
consultant costs with capital dollars) the need for additional levy would be approximately $219,000 (See
Attachment C). And again as noted above that increase could be phased in with increments over the
next several years. The City has not operated in this mode for some time. Experience may show that the
costs can be further reduced. That experience could be reflected then in making the future change-over
increments. If this approach were adopted the City would still have separated the project go-no-go
decisions from Division Funding decisions at a much lower cost to the levy than if a levy were to be
made for the entire Division cost under the present structure as discussed above.
Attachment E is a matrix that better summarizes the various parameters that come into play with the
various alternatives and combinations.
Depending on the Council’s decision there will be immediate follow up steps. Given the present time in
the Capital Improvements Plan annual cycle and the time needed for recruitment it is apparent that the
2017 Capital Projects will need to be accomplished by the usage of consultants no matter which options
the Council selects.
If it is determined to maintain the existing organizational structure – the in-house-design concept - the
Council will want to:
• Move quickly to fill the DPW/CE and the Project Engineer Positions
• Implement the Focus Engineering recommendations on the Capital Improvements Process and
get that process underway
• Select the consultants for implementation of the 2017 projects
• Discuss and define the need for a temporary fill-in for the DPW/CE during the recruitment and
placement periods
If is determined to implement the consultant-design concept the Council will want to:
• Order the preparation of new job descriptions for the new positions and the rating of those
positions
• Implement the Focus Engineering recommendations on the Capital Improvements Process and
get that process underway
• Select the consultants for implementation of the 2017 projects
• Begin transitions for reassigned duties
• Discuss and define the need for a temporary fill-in for the DPW/CE during the transition period –
this need presumably would be much less than if the in-house-design concept is selected
page 7
Attachments
Attachment A Organizational Chart - Existing
Attachment B City Engineering Division Work Tasks
Attachment C Preliminary Engineering Fund Revenue and Expenditures Summary – Alternate
Organizational Structure and Existing Funding Plan
Attachment D Optional Engineering and Associated Divisions Chart
Attachment E Engineering Division Organizational Structure – Financing Approach Decision
Matrix
page 8
Attachment A
Organizational
Chart
page 9
Public Works Director/City Engineer
Public Works Superintendent
Streets Leadperson
Maintenance (Streets)
Maintenance (Streets)
Maintenance (Streets)
Maintenance (Streets-Seasonal)
Utilities Leadperson
Maintenance (Utilities-Seasonal)
Parks Leadperson
Maintenance (Parks)
Maintenance (Parks)
Maintenance (Parks-Seasonal)
Maintenance (Parks-Seasonal)
Mechanic
Assistant City Engineer
Project Engineer Senior Engineering Technician
Facilities Manager*
Senior SecretaryBuilding Official (contracted)
Public Works Department
* Facilities Manager Position recently transferred to Administration
page 10
Attachment B
City
Engineering
Division Work
Tasks
page 11
City of Mendota Heights
City Engineering Division Work Tasks
1. Capital Project Implementation
a. Feasibility Studies
b. Public Engagement
c. Preliminary and Construction Surveying Services Procurement
d. Permanent and Temporary Right-of-Way Acquisition
e. Preliminary and Final Design
f. Bid Procurement
g. Field Inspection
h. Contract Administration
i. As-Built Record Preparation
2. Public Works Operations Supervision
a. Fleet Management
b. Streets, Storm Drainage and Sanitary Sewer Operations Planning
c. Streets, Storm Drainage and Sanitary Sewer Operational Budgeting
d. Contracted Construction-Related Maintenance Procurement
e. Field Locations – “Gopher State One Call” Response
f. Acquisition of Regulatory Agency Permits
3. City Hall and Other Public Building Facilities Management
4. Protective Inspection – Supervision of Building Official and Permitting Processes
5. Coordination with Planning
a. Development Review
b. Comprehensive Planning
c. Development Project Inspection
6. Coordination with Parks
a. Trail Construction and Contracted Maintenance Implementation
b. Park Building Construction and Contracted Maintenance Implementation
7. Coordination with Other Infrastructure Agencies including MnDOT, Dakota County, Met Council
Environmental Services, the City of St. Paul, etc.
8. Administration of the Municipal State Aid Street System Program
9. Infrastructure Asset Management
10. Capital Improvements Planning
11. Mapping – Geographic Information Systems
12. Asset Inventory and As-Built Records Maintenance
13. Policy Development
a. Special Assessment Policies
b. Infrastructure Design Standards
14. Right-of-Way Management and Permitting
15. Public Works Codes Enforcement
16. Sanitary Sewer, Water and Storm Water Rate Studies / User Charge Systems
17. Administration of the Airport Relations Commission
18. Interaction with Other City Departments, Administration and the City Council
page 12
Attachment C
Engineering
Fund Revenue
and
Expenditures
Summary
page 13
ENGINEERING
FUND 5 DEPARTMENT 15
2013 2014 2015 2016 Opt 2017
ACTUAL ACTUAL BUDGET BUDGET BUDGET
ENGINEERING
4110 SALARIES-REGULAR $341,175 $354,553 $368,888 $380,469 210,767$
4115 SALARIES-OVERTIME $12,599 $13,025 $10,000 $10,000 10,000$
4130 SALARIES-TEMPORARY $9,810 $6,192 $10,000 $10,000
4131 INSURANCE $68,062 $68,562 $80,325 $80,325 50,964$
4133 WORKERS COMPENSATION $1,956 $2,737 $2,950 $3,688 4,057$
4134 PERA $25,320 $25,670 $29,364 $29,285 16,557$
4135 FICA $27,247 $26,955 $29,750 $30,636 13,688$
4139 OPEB $5,712 $5,835 $0 $0 -$
TOTAL HUMAN RESOURCES $491,882 $503,531 $531,277 $544,403 $306,033
4200 RENTALS AND LEASES $665 $850 $800 $800 500$
4209 CITY HALL OCCUPANCY $46,980 $46,980 $46,980 $49,329 49,329$
4210 TELEPHONE $3,920 $3,976 $4,000 $4,000 3,000$
4220 PROFESSIONAL SERVICES
CITY AUDIT $3,025 $3,050 $3,050 $3,050 3,050$
ASBUILT SCANNING $0 $0 $1,000 $1,000 -$
OTHER PROFESSIONAL SERVICES $591 $777 $2,000 $2,000 2,000$
4250 LIABILITY AND AUTO INSURANCE $8,663 $8,737 $11,160 $11,160 9,000$
TOTAL CONTRACTUAL SERVICES $63,845 $64,370 $68,990 $71,339 $66,879
4300 OFFICE SUPPLIES $1,728 $1,927 $2,500 $2,500 2,000$
4301 COMPUTER SOFTWARE $3,047 $3,241 $3,000 $3,000 3,000$
4305 OPERATING SUPPLIES $513 $735 $700 $700 500$
4318 POSTAGE $33 $21 $300 $300 300$
4320 GAS AND OIL $1,642 $1,394 $1,650 $1,650 1,200$
4330 EQUIPMENT REPAIR $297 $321 $1,500 $1,500 1,000$
4331 MISCELLANEOUS OFFICE/COMPUTER EQUIPMENT
COMPUTER REPLACEMENT $2,947 $2,104 $3,000 $3,000 2,000$
MISCELLANEOUS EQUIPMENT $1,179 $0 $1,250 $1,250 1,000$
TOTAL COMMODITIES $11,384 $9,744 $13,900 $13,900 $11,000
4400 CONFERENCES AND SCHOOLS $3,371 $3,824 $5,000 $5,000 3,500$
4402 BOOKS AND SUBSCRIPTIONS $139 $18 $250 $250 250$
4404 MEMBERSHIP DUES $344 $909 $800 $900 500$
4410 CLOTHING AND EQUIPMENT $233 $0 $250 $250 250$
4415 MILEAGE AND AUTO ALLOWANCE $803 $937 $800 $900 500$
4490 SUNDRY EXPENSE $165 $172 $250 $250 250$
4491 DEPRECIATION $4,559 $6,552 $4,550 $4,550 -$
TOTAL OTHER CHARGES $9,614 $12,412 $11,900 $12,100 $5,250
4620 CAPITAL OUTLAY $0 $0 $40,000 $0 (1)$
TOTAL CAPITAL OUTLAY $0 $0 $40,000 $0 (1)$
TOTAL EXPENDITURES $576,725 $590,056 $666,067 $641,742 $389,161
CAPITAL OUTLAY ITEMS REQUESTED APPROVED
CAT OBJ DESCRIPTION
CITY OF MENDOTA HEIGHTS
2016 BUDGETPreliminary page 14
ENGINEERING FUND
REVENUE SUMMARY
ENGINEERING FUND FUND 05
REVENUES Optional
Preliminary
REVENUE SOURCE 2013 ACTUAL 2014 ACTUAL 2014 BUDGET 2015 BUDGET 2016 BUDGET 2017 BUDGET
CHARGES FOR SERVICES
PUBLIC IMPROVEMENT PROJECTS $430,657 $363,708 $520,000 $480,000 $510,000 -$
MISCELLANEOUS SERVICES $541 $243 $6,000 $6,000 $6,000 500$
RIGHT OF WAY PERMITS $0 $0 $0 $0 $0 -$
TOTAL LICENSES AND PERMITS $431,198 $363,951 $526,000 $486,000 $516,000 $500
INTERFUND TRANSFERS
GENERAL FUND RETAINER
ADMINISTRATION $13,500 $13,500 $13,500 $13,500 $13,500 13,500$
CODE ENFORCEMENT $7,500 $7,500 $7,500 $7,500 $7,500 7,500$
ROAD AND BRIDGE $5,000 $5,000 $5,000 $5,000 $5,000 5,000$
PARKS $4,000 $4,000 $4,000 $4,000 $4,000 4,000$
PLANNING $16,000 $16,000 $16,000 $16,000 $16,000 16,000$
GENERAL FUND FEES
CODE ENF/FOOTING INSP/GIS $38,340 $29,636 $30,000 $35,000 $35,000 35,000$
PLANNING FEES $3,833 $17,260 $8,500 $8,500 $8,500 8,500$
OTHER FEES $26,177 $36,755 $14,000 $14,000 $14,000 22,500$
IT FEES $0 $0 $2,000 $2,000 $2,000 1,000$
UTILITY FUND FEES
RETAINER $2,500 $2,500 $2,500 $2,500 $2,500 2,500$
SSES $31,335 $53,080 $11,000 $11,000 $11,000 11,000$
MISCELLANEOUS $0 $0 $0 $0 $0 -$
STORM UTILITY RETAINER $1,000 $1,000 $1,000 $1,000 $1,000 1,000$
STORM UTILITY FEES $28,045 $20,069 $30,000 $31,500 $35,000 35,000$
CITY HALL FUND FEES $0 $0 $5,000 $5,000 $5,000 5,000$
WMO FEES $0 $0 $0 $0 $0 -$
SPECIAL PARK FUND MISC.$0 $0 $2,000 $2,000 $2,000 2,000$
INTEREST INCOME $10,000 $10,000 $10,000 $10,000 $10,000 -$
UNAPPROPRIATED FUND TRANSFER -$8,200 -$8,200 -$8,200 -$8,200 -$8,200 -$
TOTAL INTERFUND $179,030 $208,100 $153,800 $160,300 $163,800 $169,500
TOTAL ENGINEERING FUND REV.$610,228 $572,050 $679,800 $646,300 $679,800 $170,000
8/22/2016 Engineering Fund Summary-2013-2014-2015 2017w-opt-8-22-16.xlsxPreliminarypage 15
Attachment D
Optional
Engineering
and Associated
Divisions Chart
page 16
Optional Engineering and Associated Divisions Chart
Director of
Engineering and
Infrastructure
Public Works
Superintendent
Sr. Engineering
Technician
Senior
Secretary
Streets
Leadperson
Utilities
Leadperson
Parks
Leadperson
Fleet - Mechanic
City Planner
Building Official
Contracted
City
Administrator
Facilities
Manager
page 17
Attachment E
Engineering Division
Organizational
Structure – Financing
Approach Decision
Matrix
page 18
Engineering Division Organizational Structure – Financing Approach Decision Matrix
Alternative Division
Budget
Charges to
Other
Departments
Division
Charges to
Capital Projects
Other Levy
Needed to
Support the
Division
Effective Levy
Contribution to
Capital Projects
Existing Division
Structure – Existing
Finance Method
$680,000 $170,000 $510,000 $0 $0
Existing Division
Structure –
Alternative Finance
Method
$680,000 $170,000 $0 $510,000 $510,000
Alternative Division
Structure – Existing
Finance Method
$389,000 $170,000 $0 $219,000 0
Alternative Division
Structure –
Alternative Finance
Method
$389,000 $170,000 $0 $219,000 $510,000
page 19
DATE: September 6, 2019
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: City Department Reorganization
COMMENT:
At the September 6th budget workshop, the Council will be asked to discuss a reorganization of
City departments. I will distribute information regarding that at the meeting.
Note that as part of the proposed redesigned Assistant to the City Administrator/HR Coordinator
position, I will want Council to consider the hire of a 15 hour per week contract employee to
handle the City’s communications duties. A memo with more information on that is attached.
_____________________
Mark McNeill
City Administrator
page 20
DATE: September 6, 2016
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: Communications Provider
COMMENT:
INTRODUCTION
The purpose of this memo is to provide background for a part-time communications position for
the FY 17 budget.
BACKGROUND
At the September 6th budget workshop, I will talk about a proposed restructuring of several job
descriptions, including that of what had been the Assistant to the City Administrator/Human
Resources Coordinator.
One of the job responsibilities of that position as it is currently provided is to oversee the
communications responsibilities of the City. This has meant coordinating the City’s Friday
electronic newsletters; monitoring and updating the City’s Facebook and Twitter accounts, and
keeping the City’s website updated. The City Clerk has been the primary coordinator of the
quarterly print edition of the Heights Highlights
Due to the press of other business, the communications portion of the job has not had a lot of
attention; a case in point is coordinating the update of the city’s website. While money has been
available in the budget to work with the current vendor to provide a badly-needed facelift, the
amount of time to do that has not made the work possible.
This position could also take over much of the work of the Police Department in the preparation
of the Friday Facts, which would allow better productivity in that department.
BUDGET IMPACT
For budgeting purposes, I am estimating 15 hours per week, at $25 per hour, or $18,750.
page 21
RECOMMENDATION
Include this in the FY 17 budget.
_______________________
Mark McNeill
City Administrator
page 22
page 23
DATE: September 6th, 2016
TO: Mayor and City Council
FROM: Mark McNeill, City Administrator
SUBJECT: Ehlers Financial Plan/Budget
COMMENT:
INTRODUCTION
The City should tie the results of the Ehlers Financial Plan to the FY17 budget. We will discuss
this at the September 6th budget workshop.
BACKGROUND
The Ehlers study was reviewed with the City Council in May, 2016. Key decision components
were outlined in the study, and discussed here:
1. General Fund Balance Reserve Percentage—In order to keep the City’s AAA Bond
rating, it was recommended to keep the General Fund Balance above 75% (which is the
ratio of Fund Balance to annual expenditures). Because of previous budgeting decisions,
especially relating to how large capital expenditures were funded, the percentage had
dipped into the high 70’s percent as recently as 2015.
Due to more favorable than expected revenues and reduced expenditures in FY 2015, as
of the end of that year the General Fund balance had climbed to 93.5%. Since then, the
City did choose to fund a mid-year additions of Community Service Officer/Student
Intern, a Police Captain position, and the temporary Administrative Supervisor in the
Police Department from the fund balance, so that percentage has been reduced.
2. Utility Fee/Surcharge—For many years, the City has collected a 10% surcharge to fund
the maintenance of the water tower. However, it will no longer be able to collect that
amount once the water assets are transferred to SPRWS—that should take place later this
month.
page 24
Ehlers had recommended in the report to either continue collecting that surcharge to pay
for funding equipment and facilities needs, or discontinue collecting the amount, and pay
for future capital funding through the levy. However, the City Attorney has since advised
that state law prohibits the future collection of the water surcharge for anything other than
funding water improvements.
Therefore, a smaller amount should continue to be collected to take care of ancillary
expenses of water that are the responsibility of the City. 2% is recommended, which will
generate approximately $40,000 annually.
3. Water Tower and Water Revenue Fund Balance—The City Attorney also advised that
the existing balance in the Water Tower fund (approximately $1.5 million) could be used
to fund other purposes, as long as those are tied to infrastructure. The 7.8% levy
increase in the preliminary budget assumes that the Water Tower Fund would provide for
$100,000 of seal coat rock. Note that that should be levied, but if it is not, the Water
Tower fund is preferable to the current practice of bonding for this maintenance expense.
The proposed budget also assumes that the $110,000 generated by the cell tower revenue
would help to transition 50% of the $219,000 estimated cost of the new non-project based
Engineering Department. The cell tower revenue can be used for anything, but has been
going into the Water Tower Fund. There are six full years remaining of that.
Parks Improvements—While not mentioned by Ehlers, Council has expressed interest in
providing for improvements and repairs to the Parks system. This is timely, as many of
the improvements made to the parks were funded by a referendum more than 25 years
ago, and wear and tear is showing.
The Council could levy for that, perhaps by an amount equal to the difference between
the 10% and recommended 2% water surcharge, which would generate around $170,000
annually.
Also see the discussion in #5 below.
4. Fire Station—The Ehlers study suggested using the Water Tower Fund to potentially
“buy down” the cost of a new fire station, and also proposed to push the timing of the
new station out two years to 2018 because of the impending tax increases. At the August
23rd meeting, there was direction by Council to bring forward “must haves” for the
building’s safety needs, which would be needed to stay in the station over the next two
years. If available, those will be shared at the September 6th workshop.
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5. Fund Balances—Ehlers recommended using part of the Water Tower Fund to “seed”
both a Capital Equipment Fund ($315,000) and a Capital Improvements Fund ($330,000),
so that future large purchases won’t have such significant impacts on annual budgets.
Buy Back of System--There has been discussion of retaining the Water Tower Fund
balance for the possible buyback of the system, should that decision be made in the next
few years. Funding the two funds above, plus $100,000 of the seal coat rock, would
reduce the unencumbered available balance to $755,000. The amount that the City
would have to pay to buy back the system will be limited to whatever improvements
SPRWS has made since the transfer. The City could choose to limit those improvements,
should it so desire.
Capital Equipment Fund--Regarding the Capital Equipment fund, the City should also
begin to budget a depreciation amount for all new vehicular equipment purchases, based
on the life expectancy of the equipment. For example, the proposed FY 17 budget
current will acquire a skid steer loader for $44,000, and a mower with a net value of
$39,000. Assuming life expectancies of 8 years and 10 years respectively for each, a line
item of $9400 should be provided (the total of $5500 and $3900) that would go into the
Capital Equipment Fund annually (and adjusted each year for inflation). Doing so would
mean that when those two pieces of equipment need to be replaced, no additional large
“one time” levies will be needed. That will take discipline, but the practice is necessary
for optimal budgeting.
Capital Improvements (Facilities) Fund--When budgeting permits, a similar annual
depreciation amount should be provided for the Capital Improvements Fund (to be
termed “Facilities Fund” to eliminate confusion) to similarly eliminate large one time
increases for building maintenance, such as new roofs or HVAC replacements.
An alternative to a levy for any of the items above, would be to implement a franchise fee
on gas and electrical usage. That would be applicable to all properties in the city,
6. Street Reconstruction Bonding Term—Ehlers recommended shortening the term of bonds
which are sold for street reconstruction from the current 19 years, to 15 years. That will
reduce the amount of interest being paid, but would also increase the amount of annual
payments for those being assessed. Staff’s recommendation is to keep the existing 19
years for the remaining three street reconstruction projects, so as to keep continuity. Staff
also recommends keeping the term of bonding for the lesser street rehabilitation programs
at ten years.
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7. Funding Actual Costs of Road Reconstruction/Rehabilitation—Whether by staff
recommendation or Council directive, the recent amount of the levy for street
improvements projects has been limited to either .6%, or 1%.
Rather than assign a ceiling, we recommend the Council meet each year prior to the
budget being established, and prioritize street capital improvements programs and
expenditures on a more strategic basis.
RECOMMENDATION
The Council should review and give direction on the above, relative to the FY17 City Budget.
__________________________
Mark McNeill
City Administrator
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______23______
Package Number
City of Mendota Heights
Budget Improvement Package
Date: August 2016 Prepared By: Mark McNeill
Department: Parks
Description Provide for a greater level of City funding for the publically-used outlots at
Market Square Park (MSqP), which is Outlot F at the Village of Mendota. It is a City park.
Outlot A, which provides for the drainage pond along TH 110, is also requested for
participation.
Rationale. MSqP has been used as a central focus of the community since it opened about a
dozen years ago. Several of the improvements which were installed by the developer--some of
which were in partnership with the City--are in need of replacement or refurbishing. Examples
are landscaping, the fountain, an electrical vault near the stage area, and hardscape such as
benches, concrete, and brick pavers.
Outlot A, which contains a drainage pond located along TH 110, is also requested for re-grading
and landscaping as part of the TH 110 underpass project. Landscaping could be done with
pollinator-friendly plantings.
Costs It is likely that this work will need to be done in phases, as funding permits.
Budget Impact: The total amount of resources available to the developer for MSqP, and
other outlots funded either in whole or in part by the residential and commercial associations,
is $9000 annually. The FY16 City budget provided $2000, which is a reduced level from what
had in previous years been up to $5000 annually.
Any City funding would be provided through the General Fund, via property taxes.
Impact of Funding/Not Funding This proposal: The policy question for the Council is
whether participating in funding these improvements is consistent with treatment for other
private developments in the City. Several years ago, the City chose to do improvements at
MSqP at the same level as other City parks. However, it is evident that the amenities, and
public use of the Park are different than at other private developments. The development
agreement is not clear as to the City’s financial obligations to fund improvements, over and
above the maintenance that is paid for by the Associations.
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Staff Recommendation: $9,000 is proposed for FY 2017 to match the Associations’
investments. Future year commitments will be dependent on the scope of work to be
proposed.
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