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Minutes - 2020 - City Council - 05/21/2020 - Special ORIGINAL EAGLE CITY COUNCIL SPECIAL MEETING MINUTES sCp1y�lED May 21,2020 I. CALL TO ORDER: Meeting called to order at 1:00 p.m. 2. ROLL CALL: Present: BAUN,GOLD,PIKE,PITTMAN. A quorum is present. 3. PLEDGE OF ALLEGIANCE: 4. *ADDITIONS,DELETIONS OR MODIFICATIONS TO THE AGENDA: A. City Staff requests. B. Mayor or City Council requests. Sr Deputy Clerk Osborn and Economic Development Director Collins request the amended agenda be accepted to add 6(e) Executive Session,to consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations; and the possible action item regarding the same. The reason for the amendment is that the need for action came to light after the agenda had been posted and distributed. Gold moves to accept the amended agenda to add the executive session and the possible action item regarding the same. Seconded by Pittman. ALL AYE...MOTION CARRIES. 5. FY 2021- FY 2025 CAPITAL MAINTENANCE PLAN WORKSHOP: Workshop on the FY 2021-2025 Capital Maintenance Planning process, discussion of the capital projects & capital ,0"14, maintenance request list. Mayor Pierce introduces the item. Planner III Nicole Baird Spencer reviews the draft capital maintenance plan. General discussion. 6. EXECUTIVE SESSION: 74-206. Executive session — When authorized. [effective until July I, 2020] (1) An executive session at which members of the public are excluded may be held, but only for the purposes and only in the manner set forth in this section. The motion to go into executive session shall identify the specific subsections of this section that authorize the executive session. There shall be a roll call vote on the motion and the vote shall be recorded in the minutes. An executive session shall be authorized by a two-thirds(2/3)vote of the governing body. An executive session may be held: (f) To communicate with legal counsel for the public agency to discuss the legal ramifications of and legal options for pending litigation, or controversies not yet being litigated but imminently likely to be litigated. The mere presence of legal counsel at an executive session does not satisfy this requirement; *(e) To consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations; Pittman moves pursuant to I.C. 74-206(1 )(f) To communicate with legal counsel for the public agency to discuss the legal ramifications of and legal options for pending litigation, or controversies not yet being litigated but imminently likely to be litigated and possible action regarding Palmetto Extension; Seconded by Pike. Pittman amends to add I.C. 74-206(1)(e) to consider preliminary negotiations involving matters of trade or commerce in which the governing body is in competition with governing bodies in other states or nations; possible incentives and support from project hooch. Second concurs. PIKE AYE; GOLD AYE; PITTMAN AYE; BAUN AYE. ALL AYE... MOTION CARRIES. Page 1 K;\COUNCIL\MINUTES\2020\CC-05.21.20spmi n.d oc Council enters into executive session. Council discusses pending and threatened litigation and preliminary negotiations involving matters of trade or commerce. Council leaves executive session. 7. ACTION ITEM: Possible action regarding the Palmetto Extension Project. Mayor Pierce introduces the item. No discussion or motion. 8. *ACTION ITEM: Possible action to approve incentives and support for Project Hootch. Mayor Pierce introduces the item. Pittman moves to have the Mayor sign a support letter to the state and waive building fees for Project Hootch. Seconded by Pike. Discussion. PIKE AYE, PITTMAN, AYE, GOLD AYE; BAUN AYE.ALL AYE...MOTION CARRIES. Economic Development Director Robin Collins notes that the total fees proposed to be waived will not exceed $139,031.66 for Project Hootch. 9. ADJOURNMENT: Baun moves to adjourn. Seconded by Pike. ALL AYE..MOTION CARRIES. Hearing no further business,the Coutttncii�meeting adjourned. Respectfully submitted: �`o`ti� OF EA"%,,�� /`OPR �• z. !• •_ I • TRACY S ORN,C1V y L„' $ SR DEP CLERK/TRE\ n':•' O ••? %do. OF%V�'\,`% 000000 APPROV !. ON PIERCE • OR AN AUDIO RECORDING OF THIS MEETING IS AVAILABLE FOR DOWNLOAD AT W W W.CITYOFEAGLE.ORG. Page 2 K:\COUNCIL\MINUTES\Temporary Minutes Work Area\CC-05-21-20spmin.doc 5/21/2020 97-Z — 4. —_______,c. Si. s _dia,„, 456 isr-AOP • • Oa 4,e, Ih„. '411. grgA3241111 OTILE CITYOF ow Iii ' 2 7 alh Capital � I Planning 4 O Part 11 PRS 468 2 May 21, 2020 bristly The Goal: To provide the City - citizens, elected official, and staff- a road map for major investments and maintenance within the City that is collaborative and fiscally constrained. st Lii .-. 2 1 5/21/2020 New Definitions • Capital Project: Capital Maintenance Project: Operational Maintenance: New project,facility,or The replacement,upgrade,or The ordinary maintenance of a City investment that costs more than renovation of an existing capital facility and or investment to ensure $20,000 and has a life span of 5 project,facility,or investment that continued day-to-day/annual use for years or more. Customarily these has a cost of$10,000 or more and its intended purpose and projects are associated with has a lifespan of 5-years or function. These funds should be part maintaining minimal levels of more. This does not include of the appropriate departments' service associated with growth or ordinary maintenance necessary to budget request. the annexation of new ensure continued day-to-day/annual lands. These projects often have use of the facility. a dedicated funding sources(i.e. development impact fees)or are NOTE:This fund is not specific to a NOTE: These requests should be eligible for outside funding project but is established a saving for part of the annual department budget and/or moneys(i.e.state and future capital maintenance projects request. There will be no change to federal transportation grants, that would be in a future year or that this request process. etc.) are unexpected expenditures. 3 Examples Example Capital Projects: Example Capital Maintenance: Example Operational Maintenance: 'New parks, 'Computer replacements •Painting of buildings 'New trails, 'Replacement of existing fleet 'Screen protectors vehicles 'Expansion of existing facilities `Renovation/replacement of specific 'Sprinkler heads park elements-i.e.Play equipment 'Extending water main lines `Replacement of flood damaged Printer toner/Ink trails 'Upgrade booster pumps in wells •Water sampling *Replacement of lid on reservoir 'Repair of chlorine equipment "Replacement of onsite customer meter equipment 4 2 5/21/2020 Current Budget Process o Zero Based budget with limited Carry City Budgeting Model ration forward o General Fund is a clearinghouse for City revenue _ cwedmoi.an o Library is unique-off the top of property tax _ ;• � ►s 1 o Some revenue has a dedicated account a,,,,,,,cd,,,s o Water Enterprise fund ,, :. . o Impact Fees �, Contracts i o Remaining revenues are mixed to support . { the various budget funds No dedicated Capital Maintenance set-aside 5 Capital Projects vs. Capital Maintenance Capital Projects Capital Maintenance o New Infrastructure o Existing infrastructure o Impact Fee Eligible o No impact fees—general fund dependent o More outside funding sources o 1st items to go into deferred maintenance o Once constructed become maintenance o For every$Spent on Capital Projects$0.03 must be set aside annually_for maintenance Example: Example: o New Park,Trail or facility o Splash Pad Replacement,resurfacing Tennis Courts o Estimated at:$2.5M annually with some funding o Estimate at$1.04M annually with no funding offset 6 3 5/21/2020 Phase 2: Capital Maintenance 0 42 Maintenance set-aside sheets were submitted—39 unique facilities o Estimated Total Capital Value of 31,214,470 2020 2021 _ 2022 2023 2024 2025 Total Capital Value: $ 31,214,470 $ 521,900 $ 1,512,824 $ 633,236 $ 422,700 $ 3,616,700 $ 124,500 Annual Average Maintenance Cost of$1,040,085 o Maintenance costs of Capital averages 3.33% of the infrastructure value o Does not cover peaks in the program in 2021 &2024 7 FY2020-21 Capital Maintenance Set Aside Cl=121!RIM ten Ea le Publk Libra .ISO N Stlerman Wa Ea: CnIZEMML IMEIMEffnnell 5 1,900010.00 aEranel5=TrnIMMM2MEMTECIMMIIIMMMMMIM Whet en the sub components of thl.1ac110y that need to be conNd, Scheduled TRM Date Loa Replaced Cost •.ended Prbrtty 11.2.3) repl.cement Detalt, Annual savings L•ll•.`Jrt�iliY:'a1L•Jla'allbll� I000003 a©' CalEM=11. $ a00000U M111•11111WIEEMMEITIIIETI 1 $ 100000.03© . ml 00LLLJ<LYW�gini II000.00 rnitIMECITMEMEIMEE1 IZETNUMMEir S 75.00000 a® S AIL! ®� 10000.00 as S I50.000.00© t. nn� �5 10000000© , WlG.1l:.,,I1lL.111iall 5 3500000© 1. 0,ea5,00m Remodel Menln Roam Sink, Pl.nned 2020 ®®®® y. MEREMS 1m.re.ementa: --5 35.000 -$ 1000003-111MINE Description: Parilng lot BreaSammNemod<I Peptxem0m a 8 4 5/21/2020 Capital Maintenance in the Budget %of Annual Maintenance by Department o Historically part of an individualIt &;, departments budget request o No structured funding/savings Impacted by the Recession- o Increased differed maintenance o Still Catching Up! o Limited number of Departments Under current City Structure PW is a clearinghouse for most Capital Infrastructure-Buildings,fleet,trails &Parks ,� 9 The Problem o City has no list of upcoming large maintenance projects or contingency fund emergencies. *City has large projects ($1 M+) coming forward in FY21 & FY 24 with no funds set-aside to pay for them. o City needs to established a focused funding policy for Capital Maintenance o What others are doing: o ACHD— 1:1 Maintenance to Capital (33% Impact fees) o Boise City—1:0.83 Maintenance to Capital (8.8% Impact fees) 10 5 • 5/21/2020 Why Change? o Pay as you go—Annual Appropriations o Limited safety net o Can create a delay in needed improvements o Places Capital Expansion (projects) ahead of maintaining current City • investment o Limits our ability to pivot due to unforeseen circumstances o Disconnect with Capital Projects o Not good money management—increased project costs CJiNTG I I EBBUDG o Capital Maintenance request equals 5% of the City's , , current budget = to the City Hall Bond t . ',_ o Capital Projects + Maintenance = 19.5% �-• IfOU NEVER MAKE BUDGET-t 11 What Does the Next 5-Years Include? Direct Expenditure-"Pay as you go" 2021 2022 2023 2024 2025 P.ublicWo : $ 20,000 $ 256,000 $ 86,000 $ 3,450,000 $ 60,000 Library $ 18,000 $ 17,000 $ 13,000 $ 50,000 $ 27,300 $ 1,423,724 $ 278,036 $ 244,000 $ - $ - 51100 82200 79700 116700 37200 Planned Maintenance=Set-Aside $ 1,512,824 $ 633,236 $ 422,700 $ 3,616,700 $ 124,500 Annual Average Maintenance Cost of$1,040,085 3 of the next 5 years are over the average annual maintenance cost 12 6 5/21/2020 What Do The Requests Look Like? 2021-2025 Five Year Capital Planning Requests ent Mr- Current Capital Maintenance Request: $ 6.8M unding Ratio: 0.53: 1 Current Capital Project Request: $12.68M Total CIP Budget: $19.48M Annual Average: $ 3.89M Every$ spent on Capital Projects = $0.03 of Annual Maintenance Costs By 2025$12.6M of Capital Projects = $378,000 of Additional Annual Maintenance 13 Options Continue pay as you go: Direct Expenditure-"Pay as you go" 2021 2022 2023 2024 2025 ruhhc Wolk.s $ 20,000 $ 256,000 $ 86,00l 5 3,450,000 $ 60,000 Same process as today,no savings bra $ 18,000 $ 17,000 $ 13,000 $ 50,000 $ 27,300 $comes out of each fiscal year. Mails $ 1,423,724 $ 278,036 $ 244,000 $ - $ - Large variation in yr to yr budget 51100 82200 79700 116700 37200 Planned Maintenance=Set-Aside $ 1,512,824 $ 633,236 $ 422,700 $ 3,616,700 $ 124,500 14 7 5/21/2020 ' 5-Year Avera:e Set with Dedicated FEMA Reimbursement 2021 2022 2023 2024 2025 ,:. 520,000 5256,000 586,000 53,450,000 560,000 brary $18,000 $17,000 $13,000 $50,000 $27,300 f41li, $1,423,724 5278,036 5244,000 $0 $0 Assumes that In 2021 the City will increase � •' = �, .!t' - capital maintenance to$1.5M for lyear& -....��� -. : .... ...: ......-, 551,100 582,200 $79,700 5116,700 $37,200 Planned Maintenance 51,512,824 5633 236 5422.700 S3,616 700 5124500 the FEMA reimbursement replenishes the 5-Year Average Set-Aside($1,261,992) $1,261,992 $1,261,992 $1.261,992 $1,261,992 $1,261,992 account.One mechanism is to set a trigger FEMA Reimbursement $349,582 $1.067,793 $0 $0 $0 for 2021 construction on the$349K from Funding Balance(Syr Average♦FEMA-Planned FEMA and Limit projects in 2022 based on Maintenance) 598,750 $1,795,299 S2,634,591 5279,883 $1,417,375 $1.06M Reimbursement I I I I I I I I %of Ca•ital Investment 2021 2022 2023 2024 2025 : i;l ?'/7:.•. $20,000 $256,000 $86,000 S3,450,000 560,000 brary $18,000 $17,000 513,000 $50,000 527,300 rill: $1,423,724 $278,036 5244,000 SO SO Requiresannual an investment of 5%of the 551,100 582,200 $79,700 5116,700 537,200 current facility value set-aside for Planned Maintenance Request $1 512 824 5633 236 •22700 53 616 700 124500 3.33%of capital Investment $ 936,434 $ 936,434 $ 936,434 $ 936,434 $ 936,434 maintenance.Advantage It can be Increased as property investment increases. Annual Balance 576 390 $ 303,198 $ 816,932 1.863 334 $ 05 400, 4%of Capital Investment 5 1,248578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 5 1,248,578.80 Annual Balance 5 264 245.20 $ 351,097.60 $ 1,176,976.40 $ 1.191144.80 $ 67 066.00, 5%of Capital Investment $ 1,560,723.50 $ 1,560,723.50 $ 1,560,723.50 5 1,560,723.50 $ 1,560,723.50 Annual Balance $ 47,899.50 $ 975,387.00 $ 2,113,410.50 $ 57,434.00 $ 1,493,657.50 15 %of Ca•Ital Investment+Dedicated FEMA Reimbursement 2021 2022 2023 _ 2024 2025 $20,000 $256,000 $86,000 $3,450,000 $60000 Requires an annual investment of 4%of the current facility value set-aside for brary $18,000 $17,000 $33,000 $50,000 $27,300 maintenance.Advantage it can be increased ..•_. r. __ •_ _ ___ $1,423,724 $278,036 5244,000 co as property investment increases.Assumes Ef $51,100 $82,200 $79,700 $116,700 $37,200 that in 2021 the City will increase capital Planned Maintenance Re:nest 1 512 824 $633 236 •22700 3 616 700 124500 maintenance to$1.63M for Syear&the 3.33%of capital Investment $ 936,434 $ 936,434 $ 936,434 $ 936'434 $ 936,434 FEMA reimbursement replenishes the FEMA Reimbursement $349,582 $1,067,793 $0 $0 $0 account.One mechanism is to set a trigger Annual Balance 226 808 $ 1,144,183 $ 1,657,917 1,022 349 $ (210,415)for 2021 construction on the receipt of the 4%of Capital Investment $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $349N reimbursement from FEMA.Similarly FEMA Reimbursement $349,582 $1,067,793 50 50 $0 in 2022 based on$1.06M Reimbursement Annual Balance $ 85,336.80 $ 1,768,472.60 $ 2,594,351.40 $ 226,230.20 $ 1,350,309.00 16 8 5/21/2020 Recommendation o Fund Maintenance before capital. o Use a funding ratio of 1:1 Maintenance to Capital o Will reduce inclination to defer funding o Decreases rapid increase in capital maintenance by over investing in capital projects o Establish Triggers for project spending o Require reimbursement from FEMA and similar programs to the Capital Maintenance Fund Ail 17 What About New Facilities? We are growing don't we need more facilities? In 2019 the City collected: o $815,000 in Parks Impact Fees These are restricted funds to ensure o $189,000 in Pathway Impact Fees • we do not fall below our adopted LOS o Parks:Based on the adopted level of service(LOS)the city has cnou9lipark land to serve a future pppulation of 40.606 or an increase of 8,046 people,approximately 3,000 new homes,before needing to acquire new park land. o Trails:Based on the adopted level of service(LOS)the city has enouah trails to serve a future population of 44,50C.or an increase of nearly 12,000 people,approximately 4,500 new homes,before needing to acquire additional trails. The City's forecasted population for2025 as 37,910 Continue to use the development review process to leverage investment in parks and trails-consistent with our plans,while also reducing the long-term cost increases to both capital maintenance set-asides and annual operational maintenance in the Public Works Department. 18 9 5/21/2020 Role of the Council o Did we miss something? o Do we need to remove something? o What is the total capital investment the City should be planning for? 0 1:1 Capital Ratio o Maximum Annual Budget: $3.8M Annually o What other mechanisms should be considered? o Change the timing of projects o Establish sequencing of projects o Establish Triggers o Use minimum level of service standards to guide investment 19 .�+. Next Steps o Budget Time!!! o Need Numbers for the Capital Account for the upcoming budget 0 10-15%reduction in revenue o Focus on FY 2020-2021 o Public outreach—finish budget then take 5-yr plan out o Timeline for a 5-year Capital Plan &Annual Updates 20 10 %of Capital Investment+Dedicated FEMA Reimbursement 2021 2022 2023 2024 2025 Requires an annual investment of Vold li,Vk'oi I. $20,000 $256,000 $86,000 $3,450,000 $60,000 4%of the current facility value set- Library $18,000 $17,000 $13,000 $50,000 $27,300 aside for maintenance. Advantage Trails $1,423,724 $278,036 $244,000 $0 $0 it can be increased as property IT $51,100 $82,200 $79,700 $116,700 $37,200 investment increases.Assumes Planned Maintenance Request $1,512,824 $633,236 $422,700 $3,616,700 $124,500 that in 2021 the City will increase 3.33%of capital Investment $ 936,434 $ 936,434 $ 936,434 $ 936,434 $ 936,434 capital maintenance to $1.63M for FEMA Reimbursement $349,582 $1,067,793 $0 $0 $0 1 year &the FEMA reimbursement Annual Balance $ 1226,8081 $ 1,144,183 $ 1,657,917 $ (1,022.349) $ (210,415) replenishes the account. One 4%of Capital Investment $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 mechanism is to set a trigger for FEMA Reimbursement $349,582 $1,067,793 $0 $0 $0 2021 construction on the receipt of Annual Balance $ 85,336.80 $ 1,768,472.60 $ 2,594,351.40 $ 226,230.20 $ 1,350,309,00 the$349K reimbursement from FEMA. Similarly in 2022 based on $1.06M Reimbursement Additional options to reduce annual capital out lay include: • Establish a maximum budget limit (5%, 10%, 15%of total budget???) • Establish a capital projects to capital maintenance funding ratio • Using LOS to guide development • Removing Projects • Elongating replacement/maintenance and repair timeline • Establishing trigger for the project based on outside funding I ( ( The following funding option assume 100%funding and no changes in project timing as requested by the Departments. The Eagle Water Department has capital maintenance projects, see the department list, but it was not included here as the funds for capital maintenance come from the Water Department's enterprise fund. Direct Expenditure-"Pay as you go" 2021 2022 2023 2024 2025 Public Works $ 20,000 $ 256,000 $ 86,000 $ 3,450,000 $ 60,000 Library $ 18,000 $ 17,000 $ 13,000 $ 50,000 $ 27,300 `tfee ' r'# ar J $ 1,423,724 $ 278,036 $ 244,000 $ - $ - 51100 82200 79700 116700 37200 Planned Maintenance=Set-Aside $ 1,512,824 $ 633,236 $ 422,700 $ 3,616,700 $ 124,500 5-Year Average Set with Dedicated FEMA Reimbursement 2021 2022 2023 2024 2025 I"11l-'lit'Worts. $20,000 $256,000 Assumes that in 2021 the City will $86,000 $3,450,000 $60,000 increase capital maintenance to Library $18,000 $17,000 $13,000 $50,000 $27,300 $1.5M for 1 year &the FEMA Trails $1,423,724 $278,036 $244,000 IT $51,100 $82,200 $0 $0 reimbursement replenishes the $79,700 $116,700 $37,200 account. One mechanism is to set Planned Maintenance $1,512,824 $633,236 $422,700 $3,616,700 $124,500 a trigger for 2021 construction on 5-Year Average Set-Aside($1,261,992) $1,261,992 $1,261,992 $1,261,992 $1,261,992 $1,261,992 the$349K from FEMA and Limit FEMA Reimbursement $349,582 $1,067,793 $0 $0 $0 projects in 2022 based on$1.06M Funding Balance(5yr Average+FEMA-Planned Maintenance) $98,750 $1,795,299 $2,634,591 $279,883 $1,417,375 Reimbursement %of Capital Investment 2021 2022 2023 2024 2025 i'ul ii VA,11:!, $20,000 $256,000 $86,000 $3,450,000 $60,000 Library $18,000 $17,000 $13,000 $50,000 $27,300 Trails r=', "4 $1,423,724 $278,036 $244,000 $0 $0 Requires an annual investment of IT $51,100 $82,200 $79,700 $116,700 $37,200 5%of the current facility value set- Planned Maintenance Request $1,512,824 $633,236 $422,700 $3,616.700 $124,500 aside for maintenance. Advantage 3.33%of capital Investment $ 936,434 $ 936,434 $ 936,434 $ 936,434 $ 936,434 it can be increased as property Annual Balance $ (576,3901 $ 303,198 $ 816,932 $ (1,863,334) $ (1,051,4001 investment increases. 4%of Capital Investment $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 $ 1,248,578.80 Annual Balance s (264,245.20) $ 351,097.60 $ 1,176,976.40 $ (1,191,144.80) $ (67,066.00) ^ 5%of Capital Investment $ 1,560,723.50 $ 1,560,723.50 $ 1,560,723.50 $ 1,560,723.50 $ 1,560,723.50 ` 1 Annual Balance $ 47,899.50 $ 975,387.00 $ 2,113,410.50 $ 57,434.00 $ 1,493,657.50 1� -, 1 7_ f (.