City Council Worksession

South St. Paul WORKSESSION AGENDA SSP City Hall 125 3rd Avenue North Training room Monday, December 12, 2022 7:00 pm AGENDA: 1. ABM Preliminary Assessment Findings – City Facilities 2. Third Quarter Financial Report 3. PD Updates a. Recruitment/Retention b. Drug Task Force – K9 c. Workers Compensation Claims / PTSD d. Promotion of Police Commander (Salmey) 4. Council Comments & Questions A COUNCIL WORKSESSION REPORT DATE: DECEMBER 12, 2022 1 DEPARTMENT: ADMINISTRATION PREPARED BY: Ryan Garcia, City Administrator ADMINISTRATOR: RG Agenda item: ABM – Facilities Assessment Presentation Desired Meeting Outcomes: • ABM Building Solutions, LLC Presentation and generate discussion/questions • Discuss next steps in implementation of 2022 Council Goal, provide staff with direction For Discussion: On August 22, 2022, the City Council was introduced to ABM Building Solutions, LLC (ABM), and learned how ABM might leverage their expertise and deep resources to serve the City in our efforts to plan for and implement smart and efficient investments in our infrastructure and facilities. This effort was recognized as an opportunity to take some early steps towards the implementation of the Council’s 2022 Goal to complete a “Master Plan for City Buildings and Facilities”. Over the course of the past three months, ABM has worked to review pertinent information related (primarily) to resource consumption (electric, gas, water), operations and maintenance at City Facilities and identify potential areas for performance/efficiency improvement and ultimately cost savings. ABM will present their preliminary findings and recommendations at the Worksession. A Memorandum of Understanding (MOU) between ABM and the City from late August authorized ABM to complete a “preliminary assessment” of the City’s facilities at no cost to the City, with the stated goal of identifying opportunities for reducing the City’s overall cost of operations. As Staff discussed in August, we felt that this “risk-free” assessment would at worst help us gather some baseline information about City Facilities as we progress with the Master Planning process envisioned by the 2022 Goal Setting process (which we anticipate launching in very early 2023). Therefore, we look forward to ABM’s presentation and findings, and will seek to utilize any knowledge gained through this process as we take a closer look at City facilities in 2023. It is anticipated that ABM will seek to leverage these preliminary findings and engage the City in a contracted arrangement whereby ABM would procure and manage any projects identified through further, more detailed study. Staff’s opinion is that any commitment to moving specific projects forward at this time would be premature. It is important, in Staff’s opinion, to conduct the more comprehensive, holistic master planning process and draw our priorities from all of the information gathered prior to committing to those projects – however justified and valuable they may be - that might be revealed through ABM’s work. Nonetheless, we do look forward to learning more about our opportunities and engaging with Council on ABM’s findings at the worksession. 12.12.22 City of South St. Paul Financial Solutions for Critical Facility Needs Successful & Qualifying Preliminary Assessment 1 2 What Our Partners Say 3 Guaranteed Program Concept Savings $300,000 Savings Savings Used $600,000 Operating to Fund Costs Improvements $1,000,000 $300,000 Operating Operating Costs Costs $400,000 $400,000 Before During After 4 What is “Bundling?” FUNDING TURNKEY SOLUTION NO CHANGE ORDERS Pay for critical infrastructure Single point of accountability Firm, fixed pricing, guaranteed needs partially through for design, engineering, results – very low risk! Decide guaranteed energy and implementation and on your scope and GO, get operational savings. commissioning. Focus your your savings NOW. Strategic Vision. 5  Immediate Savings Through Bundling Savings Year 1 Savings Year 2 Savings Year 3 Lost Savings Savings Opportunity Year 4 Baseline Cost Savings Year 5 New Reduced Cost Benefits of Bundling 6 Preliminary Utility Data Analysis per Building $3,386,670 in preliminary utility savings – gas and electric ONLY 7 Preliminary Maintenance and Operations Savings 8  The Challenge: $111 Million Capital Improvement Plan • All identified needs cannot be addressed Avoided • Costs rise over time Capital Cost Savings • Reactive vs Proactive focus and resource allocation ABM Can Help Make Progress with Funding Challenges Beyond Energy 9 Avoided Capital Cost Savings All Figures Derived from SSP Capital Improvement Plan CIP Cat. Line Item Pg. 2023 2024 2025 2026 Notes Buildings Re-roof Library 6 $150,000 Originally planned for 2016 Buildings Library Boiler replacement 6 $35,000 Originally planned for 2016 Past useful lives, "difficult to find Woog Replace rooftop HVAC Units Office Suite 7 $80,000 parts," originally planned 2018 & 2019 Past useful lives, "difficult to find Woog Replace Rooftop HVAC Units 7 $65,000 parts," originally planned 2019 Woog Replace HVAC Rink1 Locker, etc 7 $45,000 Project previously delayed, causing Woog North Exit Doors 7 $20,000 price to double Woog Lobby Entry Doors 7 $10,000 Woog Mezzanine- Warm Viewing Flooring 7 $30,000 Originally planned 2020 "starting to require large amount of Woog Sprinkler Fire Supression 7 $25,000 maintenance and repairs" Woog Woog Arena Roof replacement 7 $800,000 "needs extensive updates in order to Library Rennovation of Library Building 8 $1,500,000 be functional for future use" Park & Rec Splash Pool Improvements 9 $200,000 "replace water features" Park & Rec Northview Pool Replacement 9 $5,500,000 "replace existing pool" Total Avoided Capital Capital potential (annual) $165,000.00 Library Lay-Up Savings potential (annual) $250,000.00 10 Funding the Solution – Qualifying Preliminary Project Opportunity Savings- Preliminary savings, Funded Project avoided capital, etc Opportunity numbers converted into financed project opportunity and qualified with project scope $6,208,330 *$553,922/yr This is the project you Assumes 15 yr could do TODAY Financing Term $7,659,439 *Assumes 20 yr Financing Term 11 Option 2: Savings-Funded Preliminary Project Opportunity Woog Arena, Airport, and Opportunity remains in Splash Pad facilities with strategic only certainty $4,342,027 20 yr Financing Term 12 Next Steps SOLUTION TIMELINE Procurement and Concept Data & Analyze Fiscal Investment Solution Scope Definition Meeting Documents Data & Potential Grade Development Process Collection Facilities Verification Audit Complete Complete Complete Today TBD TBD TBD 13 Thank You Adam Seidel 952-254-1327 Adam.Seidel@ABM.com 14 Funding the Solution – Qualifying Preliminary Project Opportunity Savings- Preliminary savings, Funded Project avoided capital, etc Opportunity numbers converted into financed project opportunity and qualified with project scope $6,208,330 *$553,922/yr This is the project you Assumes 15 yr could do TODAY Financing Term $7,659,439 *Assumes 20 yr Financing Term 15 A COUNCIL WORKSESSION REPORT DATE: DECEMBER 12, 2022 2 DEPARTMENT: FINANCE Prepared by: Clara Hilger ADMINISTRATOR: RG AGENDA ITEM: 2022 Third Quarter Financial Report and Status of 2021 Financial Audit Findings DESIRED MEETING OUTCOMES: Discussion on the 2022 Third Quarter Financial Report OVERVIEW: 2022 Third Quarter Financial Report The third quarter of 2022 is complete and financial results are available. The Finance Director prepared the attached third quarter financial report for Council review. The following items are important to note when reviewing the report: • The Benchmark is roughly 75% and is based on a fluid calendar year of operations. • Many of the variances result from seasonality and not all financial transactions occur evenly throughout the year. Some are one time or periodic activities that do not occur in each quarter. • Investment income is recorded and allocated to the funds on a semi-annual basis. • Large revenue sources (i.e., tax settlements and LGA) are received in July and December, which underscores the importance of a strong fund balance as a tool to avoid General Fund borrowing for operations. Finance has not noted any worrisome variances in the operating funds for the third quarter. The variances that have occurred are noted in the attached report. There are no proposed budget adjustments for the third quarter. Status of 2021 Financial Audit Findings 2021-001 Completeness of the Schedule of Expenditures of Federal Awards (SEFA) – New procedures are in place to ensure the completeness of the SEFA for the 2022 Financial Audit. We do not anticipate that this comment will repeat for 2022. 2021-002 Wait list at the Senior Housing buildings – City staff has been monitoring the retention and review of the wait list for the Senior Housing Buildings. Since the management of the buildings was taken over by the City in September, the wait list was added to the tenant software and is functioning properly. We do not anticipate that this comment will repeat for 2022. 2021-003 Group Insurance Request for Proposals – The City is required by Minnesota Statutes to issue a request for proposals for Group Insurance every five years. City staff will monitor the process in 2026 to ensure the process complies with Minnesota Statutes. We do not anticipate that this comment will repeat for 2022, or for 2026. 2021-004 Federal Deposit Insurance Coverage – The Finance Director discussed the issue with the bank that had pledged insufficient coverage. The calculation of coverage required was modified to ensure compliance with Minnesota Statutes. We do not anticipate that this comment will repeat for 2022. (The detail of the audit findings can be found on the City’s website under Departments & Services>Finance>Financial Reports. They start on page 236 of the 2021 Annual Comprehensive Financial Report document.) NEXT STEP: The third quarter financial report will be placed on consent for formal council action at the December 19, 2022 meeting. SOURCE OF FUNDS: N/A  Benchmark 2022 2022 Actual thru 75% Description Original Amended September Percent Budget Budget 2022 of Budget GENERAL OPERATING FUND GENERAL FUND - REVENUES Taxes 11,849,375.00 11,832,750.00 6,602,771.65 55.80% A Fees 1,781,720.00 1,781,720.00 1,546,027.96 86.77% B Intergovernmental 2,276,618.00 2,276,618.00 2,110,705.78 92.71% C Charges for Services 1,784,268.00 1,784,268.00 1,328,788.19 74.47% Other Revenues 57,140.00 57,140.00 56,984.58 99.73% D Transfers In/Fund Balance 190,000.00 190,000.00 142,515.00 75.01% Total Revenues 17,939,121.00 17,922,496.00 11,787,793.16 65.77% GENERAL FUND - EXPENDITURES General Government Mayor & Council 165,918.00 165,918.00 125,868.92 75.86% Administration 546,964.00 540,070.00 348,607.95 64.55% Human Resources 244,162.00 253,070.00 180,394.95 71.28% City Attorney 70,000.00 70,000.00 54,315.26 77.59% E City Attorney - Criminal 170,000.00 170,000.00 132,057.29 77.68% E City Clerk 201,694.00 242,898.00 161,265.91 66.39% F Information Technology 679,063.00 687,778.00 498,016.41 72.41% Recycling 25,588.00 25,588.00 8,824.53 34.49% G Finance 450,328.00 409,478.00 291,119.07 71.10% Total General Government 2,553,717.00 2,564,800.00 1,800,470.29 70.20% Public Safety Police 6,852,983.00 7,007,676.00 4,848,323.38 69.19% Fire 2,732,483.00 2,732,483.00 2,049,098.00 74.99% Total Public Safety 9,585,466.00 9,740,159.00 6,897,421.38 70.81% Public Works Engineering 547,885.00 553,584.00 476,478.91 86.07% H Streets, Alley's and Blvd's 1,919,766.00 1,944,375.00 1,440,552.69 74.09% Buildings 266,459.00 270,138.00 253,964.42 94.01% I Parks Facilities and Maintenance 1,148,620.00 1,179,521.00 795,988.03 67.48% Total Public Works 3,882,730.00 3,947,618.00 2,966,984.05 75.16% Community Development Development Services 593,530.00 613,812.00 404,804.96 65.95% Code Enforcement 246,802.00 167,111.00 139,372.74 83.40% J Total Community Development 840,332.00 780,923.00 544,177.70 69.68% Leisure Services Parks Administration 262,167.00 279,421.00 196,967.71 70.49% Splash Pool 69,695.00 70,776.00 77,130.11 108.98% K Northview Pool 92,095.00 93,176.00 81,485.56 87.45% K Recreation Programs 158,163.00 209,891.00 134,570.82 64.11% Community Affairs 122,280.00 124,901.00 91,238.99 73.05% Total Leisure Services 704,400.00 778,165.00 581,393.19 74.71% Nondepartmental Contingencies 372,476.00 110,831.00 0.00 0.00% Transfers out 0.00 0.00 597,255.00 100.00% L Total Nondepartmental 372,476.00 110,831.00 597,255.00 538.89% Total Expenditures 17,939,121.00 17,922,496.00 13,387,701.61 74.70% Revenues Over (Under) Expenditures 0.00 0.00 (1,599,908.45)  Benchmark 2022 2022 Actual thru 75% Description Original Amended September Percent Budget Budget 2022 of Budget OTHER OPERATING FUNDS LIBRARY FUND Revenues 843,892.00 860,517.00 422,476.96 49.10% A Expenditures 843,892.00 860,517.00 611,555.57 71.07% Revenues Over (Under) Expenditures 0.00 0.00 (189,078.61) DOUG WOOG ARENA Revenues 1,075,454.00 1,075,454.00 881,616.30 81.98% A Expenditures 927,621.00 974,917.00 854,095.38 87.61% Revenues Over (Under) Expenditures 147,833.00 100,537.00 27,520.92 AIRPORT OPERATING FUND Revenues 1,357,442.00 1,357,442.00 1,256,043.57 92.53% M Expenditures 1,227,396.00 1,236,125.00 1,090,278.78 88.20% Revenues Over (Under) Expenditures 130,046.00 121,317.00 165,764.79 STORM WATER UTILITY FUND Operating Revenues and Grants 673,010.00 673,010.00 378,766.12 56.28% N Expenditures - Operating 364,902.00 364,902.00 515,391.41 141.24% O Transfers - Capital 40,000.00 40,000.00 57,906.00 144.77% P Revenues Over (Under) Expenditures 268,108.00 268,108.00 (194,531.29) STREET LIGHT UTILITY FUND Revenues 330,100.00 330,100.00 186,118.61 56.38% N Expenditures 291,762.00 291,762.00 164,113.78 56.25% Revenues Over (Under) Expenditures 38,338.00 38,338.00 22,004.83 WATER AND SEWER UTILITY FUND Revenues Administration 40,000.00 40,000.00 11,429.22 28.57% Water Utility 2,766,725.00 2,766,725.00 1,657,285.33 59.90% N Sewer Utility 4,291,300.00 4,291,300.00 2,693,606.69 62.77% N Total Revenues 7,098,025.00 7,098,025.00 4,362,321.24 61.46% Expenditures Adminsitration 491,682.00 494,436.00 357,496.45 72.30% Water Utility 1,070,236.00 1,077,625.00 935,678.66 86.83% R Sewer Utility 3,635,084.00 3,640,659.00 3,625,722.72 99.59% Q Total Expenditures 5,197,002.00 5,212,720.00 4,918,897.83 94.36% Transfers Water Utility 1,256,125.00 1,256,125.00 94,303.00 7.51% S Sewer Utility 50,000.00 50,000.00 159,703.00 319.41% P Total Transfers 1,306,125.00 1,306,125.00 254,006.00 19.45% Net Income (Loss) 594,898.00 579,180.00 (810,582.59) CENTRAL GARAGE - INTERNAL SERVICE FUND Revenues 1,496,213.00 1,496,213.00 1,352,636.46 90.40% Expenditures 1,335,699.00 1,340,498.00 1,119,140.32 83.49% Net Income (Loss) 160,514.00 155,715.00 233,496.14  Benchmark 2022 2022 Actual thru 75% Description Original Amended September Percent Budget Budget 2022 of Budget OTHER OPERATING FUNDS ECONOMIC DEVELOPMENT AUTHORITY Revenues 340,084.00 340,084.00 185,765.45 54.62% A Expenditures 340,084.00 270,890.00 199,476.68 73.64% Revenues Over (Under) Expenditures 0.00 69,194.00 (13,711.23) EDA - HOUSING (HRA LEVY) Revenues 441,776.00 441,776.00 258,982.97 58.62% A Expenditures 441,257.00 424,194.00 226,073.00 53.29% Revenues Over (Under) Expenditures 519.00 17,582.00 32,909.97 HRA - PUBLIC HOUSING Revenues 2,038,000.00 2,038,000.00 1,374,898.23 67.46% T Operating Expenses 1,957,144.00 1,957,144.00 1,343,802.80 68.66% Capital Expenses 0.00 0.00 38,863.05 100.00% U Net Income (Loss) 80,856.00 80,856.00 (7,767.62) Tickmark Explanations for Budget VS Actual Variances A. Taxes will be received in June/July and December/January B. 3rd quarter Franchise fees come in October C. LGA is posted to General Fund first, then to Capital Programs Fund D. Interest earnings are posted semi-annually and other minor revenues are unpredictable E. Legal service invoices for eight months only F. Elections costs will be charged in August and November G. Compost site costs occur May through October H. One water grant applications higher than expected I. Contractual repairs in City buildings higher than expected J. Leave payout for retiree - will be transferred at year end K. Pools are only open June through August L. Transfer of 2021 fund balance to Capital Programs/Infrastructure Funds M. Certain revenues come in at the start of the year at the Airport (land leases) N. Utility revenues are based on service delivery, bills issued in Jan, Feb, Mar of 2022 are accrued back to the 2021 books as they are for services delivered in 2021. This is an annual occurrence. O. Seidl's Lake project costs P. Transfer for 2019A bond payment not budgeted Q. Sanitary Sewer has 10 months of MCES charges R. Design costs for water treatment plant S. Transfers for projects will be done at the end of the year T. Activity from the tenant software has not been updated for all of 2022 U. Capital expenses for Public Housing is not budgeted 20A COUNCIL WORKSESSION REPORT DATE: DECEMBER 12, 2022 3 DEPARTMENT: POLICE PREPARED BY: Brian Wicke ADMINISTRATOR: RG AGENDA ITEM: Police Department Update(s) DESIRED MEETING OUTCOMES: • Provide update(s) and solicit feedback on the following areas o Police Department Recruitment and Retention o Drug Task Force – K9 o Workers Compensation Claims / PTSD o Promotion of Police Commander DISCUSSION: Recruitment and Retention: During the 2022 Goal Setting process, recruitment of new employees and retention of existing employees was identified as a priority of both staff and the City Council. Earlier this year, with the guidance of the Civil Service Commission, police department staff changed the entry level testing process to move as quick as possible, but still provide thorough and effective evaluation of all applicants. As the competition for qualified police officer applicants remains strong, staff recommends next addressing existing barriers that may prevent an experienced officer from considering employment with the City of South St. Paul. The accrual of vacation time and longevity pay is embedded in the agreement between the City of South St. Paul and Law Enforcement Labor Services, Inc. and as such any changes to these terms and conditions must be negotiated. Staff have entered into discussion with LELS surrounding these potential barriers and have found mutual agreement in the following additions to the labor agreement: • 13.2 For lateral employees hired on or after January 1st, 2023, longevity awards under Article 13.1 may be calculated using total continuous years of licensed peace officer service. • 22.2.1 The Employer may start a Lateral hire on the vacation accrual schedule consistent with their years of full-time licensed peace officer experience or the equivalent there of Police Department staff believe these changes provide the appropriate balance of retaining basic management right but allowing for flexibility to recognize prior licensed peace officer experience in select cases. Drug Task Force K9: The Dakota County Drug Task Force (DCDTF), which we are a member of, has historically had in service two drug detection dogs to assist in fulfillment of their mission. Similar to a patrol dog, these drug detection dogs are assigned to a specific handler who possesses the requisite skills and training to perform drug detection dog handling responsibilities. The Dakota County Drug Task Force is in need of a new dog / handler team and South St. Paul Officer / Agent Peinovich has been selected to serve in this capacity. If approved, the Dakota County Drug Task Force will pay for the acquisition of the drug detection dog and it will remain property of the DCDTF, pursuant to a Joint Powers Agreement. The DCDTF will be responsible for food, veterinary service, equipment, supplies, certification, and other miscellaneous cost associated with the program. The City of South St. Paul would be responsible for providing an experienced, licensed peace officer (Peinovich) and for the compensation of this officer. The Cities of West St. Paul and Savage, along with Dakota County are current or recent signatories to similar agreements when their assigned staff was selected to be a drug detection dog handler. Workers Compensation Claims: Workers compensation claims, specifically those related to claims of Post Traumatic Stress Disorder, followed by disability retirement applications increased substantially in first responders across the state beginning in mid to late 2020. This trend continued into 2021 and as we close out 2022, we are beginning to see a decline across the state. Unfortunately, the Police Department was not immune to these same challenges. Between December 31st, 2018 and June 30th, 2022, four police department employees sought and obtained disability retirements through PERA, with each out of work for a substantial amount of time prior to their official retirement. Given the direction provided by Minnesota State Statute 299A.475 Post Traumatic Stress Syndrome Benefit, staff has limited response options if an employee provides documentation from a psychiatrist or licensed psychologist indicating the employee is unable to work. If the providing physician places restrictions on the employees work, staff does find meaningful work within the limitations but the nature of these claims leads to a complete prohibition from work, leaving no alternative. To place the scope of this into context, between 2019 and 2021, out of over 600 disability retirement applications submitted to PERA, only 14 were denied: Police Department staff has been and continues to invest in preventative wellness initiatives such as annual check ins with a licensed therapist, a peer support program, employee assistance program, and targeted post incident counseling through a licensed therapist or utilization of our crisis social work staff internally. Promotion of Police Commander: The Police Department has experienced significant change in 2022, beginning with the retirement of Chief Messerich and subsequent appointment of Chief Wicke and Commander Running. The retirement of Commander Oeffling in August left a leadership void in our Investigative Division that we have been able to temporarily fill through reassignment of duties but this is not sustainable given the volume of work that moves through that office, needs elsewhere in our department, and the anticipated expansion of our mental health and community outreach efforts via the federal COPS grant. In April of this year, the Civil Service Commission finalized the Police Commander testing process and certified the eligible register on April 4th, 2022. As we have a need and an eligible register, staff is recommending the appointment of a Police Commander SOURCE OF FUNDS: 2023 Police Protection Budget