CAPITAL IMPROVEMENTS COMMITTEE

200 E. Wells Street City of Milwaukee Milwaukee, Wisconsin 53202 Meeting Minutes CAPITAL IMPROVEMENTS COMMITTEE ALD. ROBERT BAUMAN, CHAIR Ald. Nik Kovac, Ald. Michael Murphy, Ghassan Korban, Martin Matson, Mark Nicolini, and Mariano Schifalacqua Staff Assistant: Linda Elmer, 286-2231 Fax: 286-3456, lelmer@milwaukee.gov Fiscal Planning Specialist: Kathleen Brengosz, 286-3926, kbreng@milwaukee.gov Wednesday, June 3, 2015 9:00 AM City Hall, Room 301-B 1. Review and approval of the minutes of the May 21, 2015 meeting. Meeting convened: 9:07 A.M. Members present: Martin Matson, Mark Nicolin, Ald. Robert Bauman, Mr. Mariano Schifalacqua, Mr. Ghassan Korban , Mr. Gerard Froh and Ald. Nik Kovac Mr. Schifalacqua moved, seconded by Mr. Froh, for approval of the minutes. There were no objections. 2. Presentation of the Dept. of Public Works Recreation Facilities Condition Report. This matter was taken up second on the agenda, after item #5. Individual present: Matt Mortwedt - Dept. of Public Works Sarah Zarate - President Michael Murphy's Office Myra Elanise will be evaluating MKE Plays Mr. Matt Mortwedt discussed the condition of the City’s recreational facilities. He said the Department of Public Works operates 64 recreational facilities. The current replacement value is $20 million. He said on average sites are improved once every 18 years. Mr. Mortwedt said that in response to the MKE Plays initiative, the department would begin reassessing the condition of all rec facilities in 2015 and adjusting the capital plan accordingly. He said assessment criteria will include ADA compliance, park compatibility, ease of operation and other factors. Mr. Mortwedt discussed recent reconstruction projects. In 2014 three facilities were reconstructed. The site at 16th and Edgerton was capital funded, the site at Keefe and Palmer was grant funded, and the site at 90th and Bender used a combination of capital funding and grant. In 2015 two capital funded projects are planned; 26th and Medford and 31st and Lloyd. He said 26th and Medford should be substantially complete by the end of the week. The 2016 budget is expected to fund two sites; 30th and Cawker and 20th and Olive. He said that Paliafito Park will be leased long term to an outside organization. He said that some new features are planned for the east side of Hartung Park. He also said a grant funded project is planned for the fall of 2015 at Merrill Park. Ms. Zarate discussed the MKE Plays initiative. She said the program anticipates reconstructing 12 city playgrounds over the next three years. She said MKE Plays was introduced before the Council by Ald. Murphy in 2014. In March 2015, the Council unanimously passed a resolution officially making MKE Plays a City initiative. Since then Ald. Murphy has raised $750,000 from the private sector City of Milwaukee Page 1 CAPITAL IMPROVEMENTS Meeting Minutes June 3, 2015 COMMITTEE including $300,000 from the Zilber Foundation. She said other grants have included $25,000 pledges from the Fund for Lake Michigan and MMSD. She said the community engagement process has already begun for two parks. Ground breaking for at least one of the parks by the end of September. She said the goal is to make sure that the community engagement process for each park is extensive, authentic and effective Ms. Alaniz said the qualitative research will focus specifically on the perceptions of the neighborhood and their relationship with the park. Ms. Zarate said that a baseline evaluation will be done at the beginning of the project and then between 30 and 60 days after construction another survey will evaluate the impact of the new process. 3. Presentation of the Dept. of Public Works Buildings Condition Report. Mark Nicolin and Ghassan Korban excused from the rest of the meeting at 10:10 A.M. Individuals present - Sean Schutton and Tom Tarkowski - Dept. of Public Works Mr. Schutten discussed the condition of DPW maintained facilities. He said there are 90 facilities maintained by the Dept. of Public Works. The current replacement value is $340 million. The total area is 2 million square feet and the average age is 49 years. He said there is a wide range of facilities types including storage garages, office buildings and industrial facilities. He said that most of the full inspections have been conducted. There are 15 facilities remaining, 14 of which are vacant. He said the Safety Academy is the only occupied building which has not been evaluated yet. He said the full condition assessments include photo documentation. Mr. Schutten presented a heat map for DPW maintained buildings. Mr. Schifalacqua asked how often buildings are re-inspected. Me. Schutten said the department’s goal was to inspect 20% of the buildings each year. Mr. Schutten said the department has also done inspections for DPW Parking, the Police Department, the Health Department and some Fire Department facilities. Mr. Schifalacqua asked if DPW had inspected facilities for the Dept. of City Development. Mr. Schutten said no. 4. Presentation of the Forestry Condition Report. Individual present: David Sivyer - Forestry Mr. Sivyer discussed the condition of the street trees. He said the department maintains approximately 194,000 street trees. He said there are 295 distinct species and cultivars and that 89% of that population is in fair or better condition. Almost 16% of the population is ash. He said that the Norway maples that were planted to replace elm trees are beginning to decline. Mr. Sivyer said the department maintains 120 miles of landscaped boulevards with about 278 signature beds, 75 bio-swales, 265 acres of turf and 2,400 deep taps. He said additional bio-swales are being developed. Mr. Sivyer said that core services in street tree management are dead and hazard tree removal, pruning, stump removal, production and planting, protection and pest management. He said that all of these activities are performed by Urban Forestry Specialists who move from one operation to the next. He said typically activities are driven by season and by weather. Ald. Bauman asked if the department repairs trees that have been hurt by vehicles. Mr. Sivyer said yes. He added that repairs can be effective in the short term but that it is not unusual for structural decay to develop over time causing early removal of the tree. Mr. Sivyer discussed the department’s strategy for managing the emerald ash borer (EAB) infestation. The strategy includes mapping of ash trees, outreach to property owners with private ash trees, tracking of known infestations, and inoculation of street trees. Mr. Sivyer said that approximately half of the counties in the state are known City of Milwaukee Page 2 CAPITAL IMPROVEMENTS Meeting Minutes June 3, 2015 COMMITTEE to be infested. He said the city is at the very early stages of the EAB infestation and growth will continue to accelerate over the next several years. EAB was discovered in the City in 2012 in the 7900 block of W Mill Road. There are five confirmed infestations. The largest is near 49th and Hampton in the Wahl Park area. Other areas include Bay View, 10th & Layton, and 88th & Schlinger. Mr. Sivyer said Map Milwaukee includes a layer that shows parcels that have ash trees and infestation locations. He said 129 properties were cited for EAB last year. He said the pattern of the infestation is typically caused by movement of infested firewood or nursery stock. He said that the bugs can fly about ½ mile. Mr. Sivyer said that there are still only two proven strategies for managing EAB; chemical treatment and tree removal. He said that there are some unproven strategies such as biological controls but that the City is unlikely to see any benefit from them. He said that extreme cold can kill the larvae but that Milwaukee typically doesn’t see the temperatures required (approx. -30°F) for winter kill. Mr. Sivyer said that in 2009 the department proposed a transition plan that would replace 5% of the street ash trees each year. Because the cost of treating ash trees is so much less than removing and replacing trees, the department has focused on treatment and is removing ash trees as they naturally decline. The cost to treat is about $3.75 per diameter inch. Removal and replacement is between $8 and $10 per diameter inch. He said that the number of ash trees being treated has increased because trees that were less than 8” inches in diameter when the City began treating have grown into the treatment class. He said treatment is administered by college interns. Mr. Sivyer said that during the Dutch elm disease outbreak the City was removing 16,000 trees a year. He said typical annual removal is now about 4,500 trees. Mr. Sivyer presented pictures showing the City’s tree canopy pre and post Dutch Elm Disease. He said the street tree population has not fully recovered. He said there are more trees now, but they are smaller in diameter and have less canopy. Mr. Sivyer said that the department had received a federal grant to train arborists for private sector employment. He said the program was successful but that the grant dollars were gone. Ald. Kovac indicated he would like more information on the training program. Mr. Sivyer said the department is currently has a training crew that will fill regular Urban Forestry Specialist positions in the department. Mr. Sivyer discussed the department’s efforts to find a use for urban wood. He said the department harvests wood in the longest length possible. He said that since 2012 the City has shipped logs and wood waste to Kettle Moraine Hardwoods in Hartford. He said the arrangement saved between $60,000 and $70,000 a year in tipping costs. He said Bay View Lumber Company is planning to open a new mill to process urban wood. He said that the department is currently delivering on third of the wood supply to him. Delivering all of the wood to Bay View Lumber would save the City approximately $100,000 per year. He said that typically only about 30% of the City’s urban wood is millable. The rest is too deteriorated or has too much metal. Ald. Bauman asked if the lumber would be construction graded or decorative. Mr. Sivyer said that the intent is to produce dimensional lumber that can be used for furniture or stair treads. Ald. Bauman suggested connecting him with the deconstruction people to repurpose some of the wood removed from demolished houses. Mr. Sivyer said that the department is still carrying a tree pruning and stump grinding backlog. He said the stump backlog is beginning to influence the tree planting program. He said the backlogs are related to the number of Urban Forestry Specialist (UFS) positions. In 1999 there were 138 UFS positions. The number of positions declined to 109 in 2014. He said the number of trees and the acreage of boulevards haven’t changed from 1999. If anything, the trees are larger and require more time to prune. In 2015 7.5 additional positions were authorized. He said those new employees are just beginning their training and will have minimal productivity in 2015. Mr. Sivyer said that the department recently lost 8 employees to other jobs. He said that is unusual, that employees typically train with the City and stay for their City of Milwaukee Page 3 CAPITAL IMPROVEMENTS Meeting Minutes June 3, 2015 COMMITTEE career. Mr. Sivyer said the 6 year pruning cycle began in 2011 and the pruning backlog began in 2012. He said that each year the department is pruning fewer trees in cycle. He said that to maintain a 6 year pruning cycle, the department should be pruning approximately 32,000 trees each year. He said the department’s capacity is about 25,000 trees each year. Mr. Sivyer said all pruning is done by City employees. He said the department is trying to increase capacity by using 30 Compete Milwaukee workers for lower skill jobs and by contracting out about 25% of the boulevard maintenance. He said the Compete Milwaukee workers were productive, but that it was not a one for one offset for regular employees. He said that as the pruning cycle gets longer, the more trees need to be pruned out of cycle, which is less efficient. He said that scheduled and backlogged pruning for 2015 totals 56,000 trees which is more than twice the department’s current capacity. Mr. Sivyer said that the department’s goal is to maintain 98% of all tree sites with a tree and to replace trees within one year of removal. He said that currently 48% of trees are replaced within one year, 88% are replaced within a year and a half and 100% are replaced within two years. Mr. Sivyer estimated that it would cost $600,000 to reduce the stumping backlog to 1,000 per year. Mr. Schifalacqua asked about the condition of the City’s nursery. Mr. Sivyer said that there has been a lot of deferred maintenance. He said generators were installed to prevent plants from freezing. He said the lexan panels on the roof and sides need replacement. He also said that the installation of an iron curtain in the water system is planned to improve water quality and keep irrigation lines from getting plugged. He said improvements have been funded through DPW – Facilities. Mr. Schifalacqua suggested that the greenhouse should be included in the condition report. The committee rescheduled the June 24th meeting for Thursday June 25th. Mr. Froh will be unable to attend. 5. Discussion and recommendation for the Police and Fire ITMD requests and the SNIP program for the 2016 Capital Budget requests. This matter wasa taken up first by the Committee. Individuals present: Nancy Olson and Jackie Carter Ald. Russell Stamper. The committee discussed how to handle capital requests related to information technology systems. Mr. Nicolini said that because of the time it takes to review and evaluate new IT requests the committee could defer its recommendation to the Mayor and the Common Council. He suggested that the committee could modify its process so that its recommendations would be made in late August or early September. He said the committee’s comments would likely have more impact at that time. Mr. Schifalacqua said that evaluating IT projects is difficult because many are first time requests and departments don’t report to the committee on the status of their IT systems. Mr. Nicolini said the Budget Office works with Ms. Olson to evaluate IT projects. He said her involvement varies with the type of project. He said that she has advised that the Fire RMS is probably a needed item. He also said that the Police department has done extensive work in developing their new RMS system but that the final scoping is not expected until November. Mr. Matson suggested several alternatives. The first was to have the City Information Management Committee review the IT requests. The second was for the committee to make its funding recommendations during the capital budget hearings while the department was at the table to answer questions. He suggested that departments report on the status of their IT systems along with other infrastructure. Mr. Nicolini said that IT systems have more built in obsolescence than other types of infrastructure. He said a listing of all the applications that departments use and when they will become unsupported would be valuable. He said the same basic questions apply to IT systems as other infrastructure. Regarding the probability of asset failure, he said that the lack of vendor support and non-compliance are forms of failure that must be addressed. He City of Milwaukee Page 4 CAPITAL IMPROVEMENTS Meeting Minutes June 3, 2015 COMMITTEE said the Budget Office also looks at the consequences of asset failure and the available alternatives for correcting asset failure. Ms. Olson said the City spent at least $12 million on hardware and software maintenance and purchasing last year. She said the CIO and managers across the city must balance risk with investment. She said the 6 year capital plan should provide a listing of what the departments believe their needs will be. She said that the City has not completely consolidated IT services in ITMD and that several departments manage their own IT systems, staff and budget. These departments include the Police Department, the Fire Department, the Municipal Court, the City Assessor, the Comptroller and the enterprise funds. She said a thorough review of the IT requests requires most of the summer. Ald. Bauman suggested that the committee continue to get request information in its totality, make a recommendation if the committee has knowledge of the project or defer it to the Budget Office. He said the committee would sit tight with the recommendations it has already made. There were no objections. The committee discussed the Strong neighborhoods Plan. Mr. Nicolini said that looking at account balances at this point to determine next year’s recommendations are premature. He said many of the programs being funded are still developing, making it difficult to determine future funding needs. He said the Budget Office will see how the programs play out over the rest of the summer. He said the in rem Property Program in the Dept. of City Development has expanded to cover some programs that had been funded by the Neighborhood Stabilization Program and Community Development Block Grant funding. It now funds the Homebuyer Assistance program, the Rent to Own program, owner assisted repairs, the STRONG loans program, the Challenge Fund and other programs. He said the City was able to move 400 houses through the sales process with relatively modest subsidies. He said the STRONG loans program has been very popular and could position the city well for its goal of preventing foreclosures. He said the Code Compliance Loan program in the Department of Neighborhood Services also targets foreclosure prevention. He said the Code Compliance Loan program will likely use all of its capacity. The Housing Infrastructure Preservation fund is also expected to use all or most of its capacity. Ald. Bauman asked if funding the Strong Neighborhood Plan through an enterprise fund has been considered. He said for clarity, it would be easier to have all the revenues, expenses and staff in one place. He said any shortfall in the revenues could be paid from the levy. Mr. Nicolini agreed that it would provide greater clarity but said that combining multiple funding sources into an enterprise fund is very challenging. He said that typically enterprise funds are self-reliant. He also said that a line item budget has statutory controls over what a department can do. He said it would not be realistic or functionally sound to carve out pieces of each department and throw them in a different bin. Ald. Kovac suggested creating virtual enterprise fund that would preserve the legalities of the budget but which would provide greater transparency for evaluating programs and doing cost-benefit analyses. Mr. Nicolini said the Budget Office has had some success presenting a holistic budget and would continue to consider other approaches or presentations that would make it more understandable. Mr. Nicolini said the Strong Neighborhoods Plan was presented with four meaningful goals but that more detail could be provided. Mr. Matson said that he would not support creating another fund. Ald. Bauman commented on the interrelationship between DCD and the Redevelopment Authority (RACM). He said it is difficult to get accurate and complete information. Mr. Matson agreed. He said it is difficult to make informed decisions without being able to see the entire picture. Mr. Matson asked if the Zilber Foundation had been approached to provide additional support for the STRONG loans program. Ald. Bauman said that the Joint Committee on the Redevelopment of Abandoned and Foreclosed Homes had recently asked that question and been told no. Ald. Bauman said that he had introduced a file to transfer in $250,000 into the STRONG loans program. He said a funding source has not City of Milwaukee Page 5 CAPITAL IMPROVEMENTS Meeting Minutes June 3, 2015 COMMITTEE been identified. He suggested using contractors to process loans. Mr. Nicolini said that possibility is being evaluated. Ald. Stamper asked what the City’s bonding capacity is. Mr. Nicolini said that the property tax levy supported borrowing target, which would not include Water Works or Sewers, is about $85 million per year. Mr. Matson said generally the City should not increase borrowing by more than it is retiring. Mr. Nicolini said that the statutory limit is 5% of the state certified equalized value which is now just over $29 billion. He said most people recommend that the City should use no more than 70% to 75% of that. He added that the City retires debt very quickly. Generally 85% of debt is retired within 10 years. Ald. Stamper asked how the close out of tax increment districts factored into the equation. Mr. Nicolini said that it depends on if new TIFs are coming on board. He said that the debt is considered self-supporting, but that it’s usually general obligation debt and counts against the debt load. He said that incremental assessed value for districts is included in the state’s equalized total. Meeting adjourned: 10:40 A.M. This meeting can be viewed in its entirety through the City's Legislative Research Center at http://milwaukee.legistar.com/calendar. City of Milwaukee Page 6