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2. Key Financial StrategiesCITY O rFr MEMORANDUM CI1H11llHIJSE TO: Mayor & City Council 7700 Market Boulevard PO Box 147 FROM: Todd Gerhardt, City Manager Chanhassen, MN 55317 7901 Park Place Fax: 952.227.1190 DATE: January 7, 2012 Qe& Administration Council and Department Heads to establish our upcoming 2012 Key Financial Phone: 952.227.1100 Strategies. Staff will be reviewing our 2011 strategies and request City Council Fax: 952.227.1110 SUBJ: 2012 Key Financial Strategies Building Inspections Come prepared to share your ideas /goals for 2012! Phone: 952.227.1180 7901 Park Place Fax: 952.227.1190 Happy New Year!! I am very appreciative of the opportunity to work with City Fax: 952.227.1404 Council and Department Heads to establish our upcoming 2012 Key Financial Engineering Strategies. Staff will be reviewing our 2011 strategies and request City Council Phone: 952.227.1160 Fax: 952.227.1170 direction on whether the strategy has been completed, needs additional Phone: 952.227.1130 information, or should be moved to the "ongoing" list. Following that Finance discussion, staff will present the attached 2012 Draft Key Financial Strategies. Phone: 952.227.1140 g: \admin \tg \key financial strategies \2012 \cc memo 1- 7- 12.doc Fax: 952.227.1110 This is the City Council's opportunity to refine our strategies to meet your expectations. Upon completion of staff's presentation, the City Council will be Park & Recreation asked to provide additional strategies /goals for 2012 that will be added to the Phone: 952.227.1120 Fax: 952.227.1110 master list for prioritizing. Recreation Center Come prepared to share your ideas /goals for 2012! 2310 Coulter Boulevard 7901 Park Place Phone: 952.227.1400 Proposed 2012 Key Financial Strategies Fax: 952.227.1404 Please call me if you have questions regarding our session on Saturday, Schedule for 2012 Key Financial Strategies January 7 t " at 8:30 a.m. in the Fountain Conference Room. Planning & Natural Resources Phone: 952.227.1130 ATTACHMENTS Fax: 952.227.1110 Public works 1. 2011 Key Financial Strategies & Accomplishments 7901 Park Place 2. Proposed 2012 Key Financial Strategies Phone: 952.227.1300 3. Schedule for 2012 Key Financial Strategies Fax: 952.227.1310 Senior Center Phone: 952. 227.1125 Fax: 952.227.1110 g: \admin \tg \key financial strategies \2012 \cc memo 1- 7- 12.doc Web Site www.ci.chanhassen.mn.us Chanhassen is a Community for Life - Providing for Today and Planning for Tomorrow 2011 Key Financial Strategies/ Strategic Plan Competiveness Create an environment for innovation and change -- building on our strengths, creativity and skills. • Review Variances • Review Rental Licensing Program • Support Southwest Metro Chamber of Commerce, the Chanhassen Business Council, and the Buy Chanhassen program Strengthen the City's Financial Position Provide financial stability and resources necessary to achieve the city's vision by exercising financial stewardship, implementing best practices, and utilizing long -term financial planning tools. • Review Total Compensation (including PERA) package for employees • Review Paid Time Off (PTO) versus Sick/Vacation Benefits • Review Hook -up charges for Irrigation Accounts • Conduct Comparison of Costs of Development (building permit fees, development fees) • Develop a list of Budget- cutting Ideas, Policies, and Service Levels to examine Planning for the City's Infrastructure Create solutions for managing existing infrastructure and future growth in our community; while preserving a sustainable quality of life and protecting the environment. • Discuss long -term Tennis Court Maintenance plan • Revisit Fire Station #3 Justification Stud, including Staffing Plan • Consider Expansion of City Cemetery • Examine Impervious Surface Requirements/Review Standards Enhance Local Tax Base Evaluate the Comprehensive Plan with current goals and policies; assess the impact. • Discuss County Fiber Ring Project, Related City Initiatives, Potential for Business Opportunities, and understand the related costs/benefzts to Chanhassen taxpayers. • Identify Opportunities and Barriers to Development and Meet with Retailers/ Develop a Public- Private Partnership to Create Jobs and Enhance the Tax Base 2011 Key Financial Strategies Competitiveness REVIEW VARIANCES At the June 13`' work session, staff reviewed variances that were approved in Chanhassen from 1990 to 2010. This review was in response to the June 2010 Supreme Court ruling that redefined the role of local governments in granting variances. On June 27, 2011, the city council amended city code chapter 20 to include the following criteria: Must be in harmony with the general purpose and intent of the City's Comprehensive Plan "Practical difficulties" that the property owner proposes to use the property in a reasonable manner Due to circumstances unique to the property not created by the landowner The variance will not alter the essential character of the locality i l 9 1 - TI .:-►1', On May 23, 2011, the city council discussed why and how the rental licensing program was created, how it is working, and potential modifications to the current ordinance. Most of the discussion related to public benefit versus the city's cost to manage the program. Other comments included whether the city should get involved in property maintenance issues or could the nuisance ordinance be used for enforcement. I recommended that the city discontinue this program and ask staff to monitor complaints to determine if there is a need to re- implement the program in the future. Conclusion: The City Council repealed the rental dwelling licenses at their December 12, 2011 meeting. SUPPORT SOUTHWEST METRO CHAMBER OF COMMERCE THE CHANHASSEN BUSINESS COUNCIL AND THE BUY CHANHASSEN PROGRAM On March 14, 2011, the city council met with members of the Chanhassen Business Council, Buy Chanhassen membership, and the Executive Director of the SouthWest Metro Chamber of Commerce. Those present included Joe Scott, Bill Traxler, Vernelle Clayton, David Streeter, Jeff Anderson and Deb McMillan. Each group provided an update on their goals and activities. Business Council /Buy Chanhassen.: This group sponsors the Breakfast with the Mayor, an annual picnic, the SouthWest Chamber of Commerce holiday luncheon, and the Tree Lighting Ceremony. They also discussed their various marketing campaigns. For 2011, their goals include organizing community and networking events, promotions, marketing businesses, and taking a position on legislation and policies that may influence businesses. No action was taken on this item, but staff will continue to work with both groups in supporting and enhancing the businesses in Chanhassen. STRENGTHEN THE CITY'S FINANCIAL POSITION REVIEW TOTAL COMPENSATION PACKAGE FOR EMPLOYEES INCLUDING PERA At the July 11 th work session, staff presented the total employee benefits package offered to full -time city employees. The presentation included: Public Employees Retirement Association (PERA): PERA contributions are mandated by the state legislature. PERA is a defined benefit retirement plan. Employees contribute 6.25% of their pay and the city contributes 7.25% of the employee's pay. Employees are eligible for full retirement at age 65. The annual pension benefit would be 42.5% of the employee's highest five years of salary. Life Insurance: The city provides life insurance in an amount equal to their annual salary. The cost of this benefit is $4,600 annually for all employees. I..,ong 'Term. Disability Insurance: The city provides long -term disability coverage that replaces 60% of the employee's income in the event of a disability. The cost of this benefit is $9,300 annually for all employees. * Dental Insurance: The city does not provide or contribute to dental insurance. Health Insurance: The city offers one plan design —a high deductible plan with a health savings account. For single coverage, the city pays 100% of the premium and the $2,000 deductible. For families, the city pays 70% of the premium and $3,000 of the $4,000 deductible. The employee pays 30% of the premium and $1,000 of the deductible. The total city contribution for single coverage is $562.57 (KFS cities average $513.15) and $942.03 for family coverage (KFS cities average $913). REVIEW PAID TIME OFF (PTO) VERSUS SICK VACATION BENEFITS Staff presented the city's current policies for sick and vacation benefits offered to employees: Vacation can be accrued up to 3X the annual rate of accrual for a maximum of 81 days/ 648 hours. Vacation time is paid at 100% upon severance into the employee's Post Retirement Healthcare Savings Plan. Sick time is accrued at the rate of 8 hours per month. Accrual is capped at 600 hours. If balances exceed 600 hours, '/z of the excess balance is cashed out at the end of the calendar year into the employee's Post Retirement Healthcare Savings Plan. The city council discussed not changing the sick policy, but looked at potentially reducing the maximum vacation accrual from 3X to either 2X or 1.5X. Staff was asked to bring back options at the November 14`" work session for accomplishing each of the proposals. CONDUCT COST COMPARISON OF DEVELOPMENT FEES: BUILDING PERMIT AND DEVELOPMENT FEES Staff provided an update on the city's development fees on May 23, 2011. The analysis used two development scenarios based on a commercial building and a single family home. A survey was conducted comparing 13 cities to Chanhassen (see Attachment 1) using these development scenarios. The fees included building permit, plan check, sewer surcharge, water and sewer connections, and water meter. Findings: The commercial building permit scenario varied 58% with a range from $15,719 to $ 37,465. The average fee for the commercial scenario was $24,136. Chanhassen's fee is $26,734.54 Using only the building permit and plan review fees, the range varied 84% from $2,120 to $13,037.48 for commercial, and 75% from $1,330 to $5333.63 for residential. The fees for Shakopee are at the extreme low end of the spectrum, and if excluded, the fees vary only 20% for commercial and 22% for residential projects. The range in the residential permit scenario varied 62% with a range of $6,088 to $16,056. The average fees for the residential scenario were $10,066. Chanhassen's fee is $12,245. Conclusion: The city is near the average for commercial development and in the upper one - fourth for residential development. No further action was requested on this item. Sewer and water connection fees are determined by the capital needs to support the city's overall infrastructure. DEVELOP A LIST OF BUDGET - CUTTING IDEAS POLICIES AND SERVICE LEVELS TO EXAMINE On August 22, staff presented detailed budgets and also identified service level /levy reduction ideas (see Attachment #2). The city council also reviewed the city's Snow Plowing and Ice Control Policy in determining cost savings and environmental concerns. Other policies reviewed/ amended this year include the Investment Policy, Purchasing Policy, and the Boulevard Tree Program. Planning for the City's Infrastructure DEVELOP A LONG -TERM TENNIS COURT MAINTENANCE PLAN Staff presented a scoping study for the city's 17 tennis courts located throughout the community. The city's tennis courts were built between 1972 and 1995. To date, these courts have been patched, crack - sealed, and resurfaced; but no courts have been reconstructed. The scoping study completed by Kimley -Horn and Associates identified deficiencies and recommendations to provide an acceptable level of access to public tennis courts in Chanhassen. They include the following: Abandonment of tennis courts #1 and #2 at the Chanhassen Recreation Center/ Bluff Creek Elementary School to avoid an estimated full reconstruction cost of $129,100. Two tennis courts at North Lotus Lake Park are rehabilitated at an estimated cost of $35,000 in lieu of full reconstruction estimated to cost $80,300. Two tennis courts at Meadow Green Park are rehabilitated at an estimated cost of $25,000. Two tennis courts at Lake Susan Park are rehabilitated at an estimated cost of $ 21,600. Two tennis courts at South Lotus Lake Park are rehabilitated at an estimated cost of $21,200. Based on these recommendations, staff is proposing to spend $102,800 in 2012 and an additional $75,000 in 2014. It is my recommendation that these funds come from the city pavement management/ revolving assessment fund similar to road and trail improvements. REVISIT FIRE STATION #3 JUSTIFICATION STUDY INCLUDING STAFFING PLAN At the August budget work session, staff was asked to look at developing a comprehensive fire services plan in 2012. The study would review staffing and service levels, equipment needs, and the justification for Fire Station #3. This item will be included in the 2012 Key Financial Strategies/ Strategic Plan for city council prioritization. CONSIDER EXPANSION OF THE CITY CEMETERY Staff was able to achieve this goal internally without impacting the neighbors surrounding the cemetery. By removing several scrub trees and thick buckthorn growth surrounding existing graves, staff was able to make enough graves available to meet demand for the next few years. EXAMINE IMPERVIOUS SURFACE REOUIREMENTS/REVIEW STANDARDS This item is scheduled for city council review on November 28, 2011. Conclusion: Staff presented an impervious surface issue paper on November 28, 2011. The paper outlined the ramifications of allowing alternative hardcover materials and their effects on water quality, drainage, and flooding issues. On average, there are less than two (2) hard cover variances requested per year. The majority of these requests are from property owners within the shoreland district and were developed prior to the 1980's on smaller lots. The variance process provides alternatives and is working well. Staff is not recommending any changes to the current process at this time. 11111111 1 11111 1 DISCUSS COUNTY FIBER RING PROJECT RELATED CITY INITIATIVES POTENTIAL FOR BUSINESS OPPORTUNITIES, AND UNDERSTAND THE RELATED COSTSZBENEFITS TO CHANHASSEN TAXPAYERS At the June 13 meeting, Randy Lehs, Carver County Fiber Project Manager updated the council on the Open Fiber Project. The county has completed all of the environmental reviews required under federal guidelines. Installation of the fiber line should be completed by December 2012 and the fiber line would be fully functional by June 2013. Quarterly updates will be provided to all Carver County cities. IDENTIFY OPPORTUNITIES AND BARRIERS TO DEVELOPMENT AND MEET WITH RETAILERS/ DEVELOP A PUBLIC - PRIVATE PARTNERSHIP TO CREATE JOBS AND ENHANCE THE TAX BASE Listed below is a summary of staff initiatives to remove barriers and assist with expanding the city's tax base: Created a comprehensive list of businesses in our industrial parks. Enhanced the Available Land Inventory section of the city's web site. Met with property owners and retailers in and around the Chanhassen Transit Station. Assisted with the expansion of the following businesses: Exlar Corporation, Cub Foods, Haskell's, BP Gas Station, and redevelopment of the Teleplan building. Amended the city code to allow additional uses in the industrial district. PROPOSED 2012 KEY FINANCIAL STRATEGIES Comprehensive Fire Study/Fire Relief Benefits: Review the delivery of fire and emergency services, future cooperative efforts, staffing, compensation, facilities, equipment, etc. Review Kennel Permits: The city ended the animal license program in 2011, but we continue to require a kennel permit for residents with three or more dogs /cats. Staff proposes to evaluate the continued need for this program. Consider Offering NLC Service Line Warranty Program: The National League of Cities offers a Service Line Warranty Program, administered by Utility Service Partners that insures the portion of utility lines owned by the property owner (i.e. from the home to street.) Repairs to these lines can be costly and unexpected. NLC and USP are responsible for all sales and marketing, but the City Council must authorize participation in the program. Begin Franchise Renewal with Mediacom (Due in 2013): The current Franchise Agreement will expire in May 2013. Review the Community Commercial (CC) and Regional Commercial (RC) Zoning Districts: The CC district is the continuation of the downtown, and the uses and square footage requirements should be reviewed. Staff also would like to review the uses in the RC district, which is located in the Powers Boulevard /Lyman Boulevard /TH 212 area. Work on the 2005 AUAR (Alternative Urban Areawide Review) Update: The property owners are preparing for development and the uses in this district should be reviewed. Staff would like to outline the process for updating the AUAR. Redistrict Precincts: Redistricting is the process of redrawing the boundaries of election districts. All precincts in the state must be established or reestablished within 60 days of the adoption of the state redistricting plan, or by April 3, 2012, whichever comes first. Infiltration & Inflow (I & I) Update: This item will update the council on the current MCES I & I surcharge program, review what other cities are doing to decrease I & I in their communities, and discuss Chanhassen's current I & I program and strategies. Upgrades to Water Meter Radio Reads: This item will update council on the need to replace the current water radios for all water meter accounts. Most of the water meter reading radios were installed 10 years ago, when the city went from a physical meter collection system that required each meter to be read manually to a radio wireless read system that allows one person to read all the meters in the city in just a few hours. The batteries for the radios have a life expectancy of 10 years. These radios are starting to fail and the city will need to start replacing them in the very near future. This item will review options for replacing the radios. g: \admin \tg \key financial strategies\2012 \staff proposed 2012 key financial strategies.docx AIS (Aquatic Invasive Species) Policy Review: Identify policy priorities for the prevention/control of AIS in Chanhassen lakes and wetlands, including management, regulation, and budgetary needs. Comprehensive 5 -Year Road/Trail/Park Plan, Including Rice Marsh Trail Extension & Safety Crossing: Development of a comprehensive communication plan describing the status of projects currently funded in the CIP in addition to desirable projects not currently funded, but being pursued. Branding/Marketing for Sewer and Water Main Breaks: Develop an outreach marketing plan to inform residents of the city's policies concerning water main breaks and sewer backups. This would be an ongoing educational program to ensure customers are well informed by publishing articles in the quarterly newsletter, inserts in the city's billing statements, etc. Consider Cost Benefit of Ball Field Lighting at Bandimere Park: The demand for athletic field space continues to grow each season. Adding lighting to existing ball field facilities, in comparison to building more fields, is the most economical method of adding extra field capacity. Consider Cost Benefit of Artificial Turf on Soccer Fields, Lake Ann and Bandimere Parks: Changing out traditional turf athletic fields with artificial turf is another new technology that significantly increases the ability of a single athletic field to do more. Artificial turf does not require rest periods between activities and is nearly immune from the negative effects of weather. Installation of artificial turf more than triples the ability of a field to host games and practices — all while presenting a consistent and uniform playing surface. Re- evaluate Recreation Program Fee and Room Rental Schedule: Program fees and room rental rates need to be re- evaluated periodically to ensure that fees are consistent with the market — with the goal of maximizing registrants and revenue simultaneously. Discuss Cost Benefits of County -Wide Fiber: Review sharing services with Carver County and other participating agencies, e.g. online backups, disaster center, possibility of a county -wide cloud. Review Criteria for KFS Cities: The city worked with Ehlers & Associates to establish our list of ten comparable cities in 2002. Staff proposes to review the selection criteria and affirm or update the cities we use for comparison purposes. g: \admin \tg\key financial strategies\2012 \staff proposed 2012 key financial strategies.docx SCHEDULE FOR 2012 KEY FINANCIAL STRATEGIES Saturday, January 7, 2012 Monday, January 9, 2012 Monday, January 23, 2012 Tuesday, January 24, 2012 Monday, January 30, 2012 Monday, February 13, 2012 Staff presents suggested KFS to City Council. City Council brainstorms additional KFS suggestions. Discuss Key Financial Strategies at Work Session. City Council's Final Suggestions for KFS list. Staff distributes electronic spreadsheet for City Council rankings. KFS ranking due to Assistant City Manager. Staff presents compiled rankings. City Council finalizes 2012 KFS.