Parks & Natural Resources Commission

Parks and Trails Replacement Plan Fund Joint Parks and Natural Resources Commission/Audit and Investment Commission Meeting The Parks and Natural Resources Commission Meeting will immediately follow the conclusion of the joint commission meeting Agenda September 1, 2020 | 7 p.m. Public Safety Education and Training Conference Rooms Public Safety, 2100 Radio Drive Please note: Due to COVID-19, the September 1, Parks and Trails Replacement Plan Fund Joint Commission meeting, followed by the Parks and Natural Resources Commission meeting are taking place virtually and at Public Safety in the Public Safety Training Center. Members of the public may attend the meeting but will be required to comply with social distancing parameters as determined by the City. Members of the public may also join the meeting using a PC, Mac, iPad, iPhone or Android device. Public comments will be accepted during the meeting by using the link to the virtual meeting to join the meeting and then submit your questions via the online Q&A feature within the meeting. Please note that all agenda times are estimates. 7:00* 1. Call to Order – Parks and Trails Replacement Plan Fund Joint Commission Meeting/Roll Call and Introductions 7:10 2. Approval of the Minutes of the Audit and Investment Committee Meeting – August 13, 2020 7:12 3. Parks and Trails Replacement Plan Fund 8:30 4. Adjourn --------------------------------------- 8:35 1. Call to Order – Park and Natural Resources Commission Meeting 8:36 2. Open Forum 8:38 3. Approval of Minutes – August 18, 2020 8:40 4. August Revenue Status – Memorandum No. 20 - 13 8:50 5. Council Report – Council Member Morris 8:55 6. Announcements/Miscellaneous 9:00 7. Adjournment If a Commission member cannot attend this meeting, please contact Belinda Reed at 651-714-3584 by Monday, August 31, 2020. Thank you. The City of Woodbury is subject to Title II of the Americans with Disabilities Act, which prohibits discrimination on the basis of disability by public entities. The City is committed to full implementation of the Act to our services, programs, and activities. Information regarding the provisions of the Americans with Disabilities Act is available from the City Administrator's office at 651-714-3500. Auxiliary aids for disabled persons are available upon request at least 72 hours in advance of an event. Please call the ADA Coordinator, at 651-714-3500 (TDD 651-714-3568) to make arrangements.  City of Woodbury Audit and Investment Commission Meeting Minutes August 13, 2020 Pursuant to due call and notice thereof, a meeting of the Audit and Investment Commission was held at Woodbury City Hall, 8301 Valley Creek Road, on the 13th day of August, 2020. ITEM 1: Call to Order Vice-chair Johnson called the meeting to order at 7:00 p.m. Roll Call Upon roll call, the following members of the Commission were present: Heidi Conrad, Ross Dahlin (via teleconference), Blake Darsow, Ken Johnson, Jeanine Kuwik, John Lehman, Aileen Lyle, Chair and Richard Osborn. Others present: Angela Gorall, Assistant City Administrator; Tim Johnson, Finance Director; Michelle Okada, Parks and Recreation Director and Belinda Reed, Recording Secretary. Item 2: Review of the New Parks and Trails Replacement Fund Ms. Okada noted that the Parks and Trails Replacement Plan (PTRP) presentation would be a broad brush overview of the new fund, followed by a presentation by Assistant City Administrator, Angela Gorall, who will present one of the funding options for the plan: franchise fees. Staff asked the Commission for their questions and comments so that staff can research and gather information to provide the joint Commissions. Ms. Okada noted that the City Council identified the PTRP as a Strategic Initiative to ensure our parks and trails meet the needs of a growing and changing community. Per the Council’s direction, the Parks and Natural Resources Commission (PNRC) is asked to provide recommendations, along with the Audit and Investment Commission’s (AIC) input, for potential funding options. (The Council Strategic Initiative statement will be included in the packet for the September 1, meeting, to help the Commissions understand the Council’s perspective on why they identified this as a Strategic Initiative.) Ms. Okada listed the main discussion points as to why the fund is important, fund framework, funding options, including franchise fees, and next steps. One of the critical success factors in both the Strategic Initiative and overall Council objectives is the quality of life for residents, business owners and guests of the community. Ms. Okada noted that while we have benefited from Woodbury’s continued new development and population growth, we are starting to see our older parks and trails needing replacement. The City of Woodbury has won a number of national awards in large part because of our park system. It was noted that there is insufficient ongoing funding to address the growing liability of an aging park system. Although, Woodbury is still a fairly new community in terms of years, with much of our park system having been built using park dedication and referendum bonding, etc., we are getting to the point where the aging system is of concern. A plan to replace the park system assets is needed. Audit and Investment Commission Meeting Minutes August 13, 2020 Page 2 As the city continues to grow, the Park Dedication Fund continues to fund the building of the new parks built in the new developments. The PTRP fund is what is going to help maintain that quality of life, equity and access to some of the older areas of the city as well, while maintaining the high quality that Woodbury has established as our park system. The park system is aging as our community is over 50 years old, but when talking about park system assets to maintain, it has been determined that a yearly expenditure of $2.9 million will be required. The $2.9 million does not include future inflation or new additions to the park system. The value of the assets in the PTRP is currently about $70 million. The framework of the fund includes supporting the replacement of park and trail amenities as outlined by the comprehensive asset and depreciation plan. The plan recommends replacement of specific park and trail amenities based on standard life expectancy, which is based on local, national professional standards. Ms. Okada noted the “assumptions” located at the bottom of the Parks and Trails Replacement Fund – Draft, were previously viewed and approved by the PNRC at their February 4, 2020 meeting. Generally speaking, new items come out of the Park Dedication Fund, which is a special fund that developers fund. When developers come in, they are required by State Statute to provide funding, based on the percentage of the acres they are developing, to the Park Dedication Fund. When a home is built, the developer pays a fee to the city. The Commission found the “Current Asset Value” a little confusing noting that the current asset value meaning reflects more the amount one could expect to get for selling something on the open market. It was noted that an asphalt trail is an asset; however, you would not go to sell a piece of asphalt on the open market. It was suggested “Current Asset Value” be renamed “Current Replacement” in the plan. Ms. Okada noted that the plan extends out 50 years, as the longest living asset in the PTRP is 50 years. It was noted that the PTRP fund already exists as a capital project fund. In fiscal year 2020, the city levied $500,000 for the first time, as seed money to start the fund. Ms. Okada noted that the assumptions previously discussed, actual expenses and prioritization of replacement, will be presented as part of the Capital Improvement Plan (CIP) process which is evaluated annually. To reiterate, items in the plan are not automatically replaced just because they come up for replacement in the theoretical plan; rather the plan assets will be evaluated yearly and the Finance Department will advise on the rates of inflation each year. The PTRP will be updated annually and new assets added, and it will be determined if the inflation rates need to change based on economics and updated replacement costs. Ms. Okada noted that the PTRP is a theoretical and living document that will change year-to-year as new assets and information are added. Ms. Okada clarified that any trail maintenance would fall under operations maintenance. However, if a trail is completely ripped out and requires total replacement, the full replacement cost would come out of the PTRP fund. Audit and Investment Commission Meeting Minutes August 13, 2020 Page 3 It was noted that the $2.9 million is just a depiction of the liability versus the funding. The PTRP fund currently consists of $500,000 seed money allocated by the City Council in 2019, from the levy, along with the reallocation of approximately $186,000 that was taken from a variety of budgets. It was noted that up until last year, complete playground replacements were placed in the operation’s fund. They will no longer be placed in the operation’s fund: those budget dollars will be reallocated into this fund. With the average yearly need determined to be the $2.9 million, and with the current available funding approximately $686,000, staff is looking for ways to fill the funding gap with a sustainable revenue source. With regard to next steps, additional funding options are being researched, including franchise fees, and the City Council is seeking the recommendation of potential funding options from the PNRC, in conjunction with the AIC. Those recommendations are scheduled to be presented to the Council at their January, 2021, workshop. The PNRC previously approved the PTRP as it is laid out based on the assumptions. Staff noted that the PTRP is a consistent approach that the city uses in other areas, with the asset life divided into expected replacement cost. It was noted that the fleet maintenance fund, HealthEast Sports Center, Eagle Valley Golf Course, EMS, etc., use the same theory. The difference is that the PTRP is bigger and more complex, with so many types of assets, compared to say a fleet of 300 vehicles. Commission commented that they were glad that the city is being proactive in thinking about this issue now. Staff noted that with the stated need of $2.9 million, if we were to add 10 percent contingency and 15 percent for enhancement, the need would no longer be $2.9 million; it would change to $3.4 million. In essence, we would be adding on top of an already aggressive number. History tells us that you rarely replace a park exactly the same way. There is always the desire by the community and/or staff to address that recreation changes over time. A park developed 30 years ago may have different uses today or going forward. Many of the new developments have private neighborhood parks supported by their HOA’s. Those parks do not qualify for park dedication: park dedication can only be used for full public access. The PTRP does not have anything to do with those private entities, nor would funds from the PTRP be used to replace private amenities The Commissions will be looking at what the money target is and that question will be one elements of the overall funding recommendation. Ms. Okada asked the Commission if they had any other questions on the assumptions or the replacement timeline. Hearing none, Ms. Okada asked the Commission to think about what other information they would need going forward. _______________ Ms. Okada introduce the Assistant City Administrator, Angela Gorall. Audit and Investment Commission Meeting Minutes August 13, 2020 Page 4 Ms. Gorall noted that the franchise fee presentation is intended to provide the Commission with an overview of a potential funding mechanism for the PTRP fund, with information to be layered on as the discussion moves forward. A franchise fee ordinance provides guidelines. For example, should a utility company need to tear up an area of roadway, the ordinance provides the guidelines as to how that street will be restored and who is responsible for paying for the reconstruction. In addition, should the utility decide to abandon a facility, or at some point install overhead utilities, or new technology comes along, there would be rules and guidelines as to what happens should that take place. Minnesota Statute allows the local authorities the right to have a gas and electric franchise fee. The term “franchise fee” is the terminology used in the State Statute. These franchises are negotiated in the form of a contract and then they are codified in an ordinance. The Commission inquired about cable TV companies. Staff noted that those fee dollars collected from users go directly to the South Washington County Cable Commission and the city shares that fee with four other communities. Restrictions apply to the cable fees and those fees must be used for cable related activities such as the broadcasting of community type channels. Fees may be applied in two ways: flat fee or fees can be based on a percentage of utility usage. Fees could vary by customer type: commercial, residential, industrial users, etc. There are a series of options that may be considered. Cities also have the right to decide whether to increase or decrease fees. It was noted that although the city establishes the fees, the utility generally passes 100 percent of the costs to their customers. Everybody that gets a utility bill will be paying the franchise fee. Woodbury would rely heavily on a model franchise ordinance provided by the League of Minnesota Cities, which has an attorney on staff that specializes in this area. A chart was provided showing some of the Minnesota cities with franchise fees. Woodbury was positioned at the bottom third of the tax rate, compared to other cities listed in the chart. More and more cities have franchise fees in place. It was noted that some cities are using revenue from their franchise fees for road maintenance and repairs, while others are using for parks and trails. A discussion took place with regard to the big picture as to what are the funding options to fill the $2.9 million. Examples include fund the PTRP fund entirely with franchise fees, or use a mix of franchise fees and property tax. If Woodbury moves towards a franchise fee to fund a specific fund, the city would have a very comprehensive community engagement and communications plan. A discussion took place with regard to debt issuance to fund the plan. The debt would have to match the asset life. Issuing debt for athletic fields and fencing doesn’t lend itself well to the debt market. What does this means in terms of future debt issuance is that it may not be a reliable revenue stream. Other sources mentioned included reserves, redirecting funds and taxing city utilities: water and sewer. Audit and Investment Commission Meeting Minutes August 13, 2020 Page 5 Ms. Okada noted that ultimately it will be up to the joint Commissions to make recommendations to the City Council as to whether or not a franchise fee should be collected to fund the PTRP fund, or whether a combination of property taxes and franchise fees or other options are recommended for funding the plan. Ms. Okada asked the Commission to be thinking about what additional information they would need to help them with their recommendations. Staff will keep layering the information on so that the Commissions will feel well prepared to make their recommendation. The Commission was encouraged to reach out to staff by email or telephone with any questions they may have in preparation for the September 1, joint Commission meeting. Staff will reach out to the Commissions when scheduling the September 1, joint meeting. Item 3: Other Business None Item 4: Adjournment Chair Lyle adjourned the meeting at 9 p.m.  City Of Woodbury, Minnesota Office of City Administrator September 1, 2020 To: City of Woodbury Audit and Investment Commission and Parks and Natural Resources Commission From: Clinton P. Gridley, City Administrator Subject: Parks and Trails Replacement Fund Summary As directed by Council, staff will continue to present information to the Parks and Natural Resources Commission and the Audit and Investment Commission seeking input on the financing approach and timing for the Parks and Trails Replacement Fund. Over the next few months, staff will present the plan and funding options seeking your review, feedback, and ultimate funding recommendation. At our last meeting, we reviewed the goal of recommending a sustainable funding source for the Parks and Trails Replacement Plan. We also reviewed the overall asset and depreciation plan, confirmed assumptions, and discussed a high-level financing option of franchise fees. At this coming meeting, we will provide the Commissions with more information related to franchise fees including comparisons to other cities. We will review a varied approach to this funding source and how we might approach funding the plan with franchise fees in total, blended with other sources or not including franchise fees in the funding solution. Recommendation This item is for the update, discussion, and feedback purposes only; there is no particular action required. Specific feedback is requested regarding questions the Commissions may have on the fund, plan, or potential funding mechanism. Fiscal Implications Within the 2020 Budget, $500,000 from property taxes was allocated to begin seeding the replacement fund. The proposed 2021 Budget currently includes $686,000 from Property Tax Levy, Property Tax reallocation from General Fund and Property Tax reallocation from Capital Improvement Fund. The total funding goal is approximately $2.9 million per year to sustain the fund. Policy 2019-2021 City Council Strategic Initiative, Parks and Trails Replacement Plan Critical Success Factor, Quality of Life Public Process Parks and Natural Resources and Audit and Investment Commission meetings August-November 2020. Additional public process will be conducted as appropriate. Audit and Investment Commission Parks and Natural Resources Commission September 1, 2020 Page 2 of 2 Background Woodbury’s parks and trails are essential assets that enhance the quality of life in our community. The City maintains 3,386 acres of park and recreation land, 76 sport courts, 152 miles of paved trails, 55 named parks, 19 irrigation systems, 123 athletic fields, 31 buildings/structures, and 46 play structures. Unfettered access to quality parks and trails support health and well-being, equity, economic development, and preservation and protection of the natural environment. The age of individual assets and continued growth of the system necessitates a robust plan for maintenance and eventual replacement. The plan that is being developed recommends the replacement of specific park and trail amenities based on professional and safety replacement standards and standard life expectancy. Staff will continue to evaluate each area of the system regularly and as items are due and requiring replacement, they will be moved from the asset plan to the Capital Improvement Plan, and eventually presented with the annual budget request. With increasing asset-liability, the time to respond is now, to avoid severe depletion of the overall system. A long-term funding plan is needed to support the Council Strategic Initiative and the Replacement Plan for the parks and trails system. The use of franchise fees will be a sustainable funding option that is reviewed. As required by the Minnesota Public Utilities Commission, franchise fees levied on a utility are passed on directly to the utility customers within Woodbury. A utility franchise fee appears as a charge listed on the monthly bill that customers receive from each utility. Written By: Michelle Okada, Parks and Recreation Director Angela Gorall, Assistant City Administrator Tim Johnson, Finance Director Approved Through: Clinton P. Gridley, City Administrator Attachment: 1. City Council Strategic Initiative 2. Estimated project timeline 3. Parks and Trails Replacement Plan, Fund and Franchise Fee 101 PowerPoint  2019-2021 Strategic Initiative 19-02 Parks and Trails Replacement Plan Ensure Our Parks and Trails Meet the Needs of a Growing and Changing Community I. Issue and Background The City is responsible for the management of 3,386 acres of park and recreation land, 76 sport courts, 152 miles of paved trails, 55 named parks, 19 irrigation systems, 123 athletic fields, 31 park buildings, 46 play structures, and 17,134 inventoried park trees. These built and natural assets are no different than our fleet of vehicles, roadway system or pipes in the ground. The quality of these assets is also directly linked to our continued high performance as a City, as a community of choice, and maintaining our high quality of life ratings (92% of 2019 community survey respondents rating excellent or good). Our success as a leading community in which to live, work and thrive means that these quality of life amenities be provided, preserved, maintained, upgraded and expanded when required. In June 2017, the City Council reviewed Critical Success Factors for the City and renewed support for Environmental Stewardship and Quality of Life as two of the six factors as critical to our success as a City and a community. Council supported the following guiding statements in support of Environmental Stewardship: Understanding that environmental health, economics and human well-being are interconnected and interdependent, Woodbury is committed to the responsible use and protection of all resources. To preserve our environment for future generations, the City will foster environmental stewardship through focused conservation, social responsibility and best management practices. Council supported the following guiding statements in support of Quality of Life: Woodbury maintains a high quality living environment characterized by attractive neighborhoods that offer a variety of housing options for people in all stages of life and that are linked through the City’s parks and trails system. The City provides open spaces that allow active and passive uses by the public. Residents have convenient access to essential private sector goods and services such as health care, as well as to high quality year-round leisure and recreational services. The City directly implements those aspects of the physical and service environment for which it is responsible and promotes the provision of desired services by private and other governmental agencies in areas outside its own responsibility. As anticipated for a community growing into maturity, the initial acquisition or development of many of these amenities was tied to our growth and development. To this time, modest operating funds have been needed to support the still maturing system that has developed. This system, however, is now reaching greater maturity, similar to the life cycle of any roadway, requiring increasing levels of additional preservation and resources before the spiral of decline whereby maintenance becomes futile and only replacement is cost effective. The City has also recently experienced fiscal challenges in funding planned park facility improvements requiring 2019-2021 Strategic Initiative 19-02 Parks and Trails Replacement Plan Page 2 projects to be scaled back from original goals. Staff is anticipating that these challenges are expected as well for upcoming projects. There is approximately $70 million in parks and recreation physical assets. Included are park buildings/structures, courts, fields, playgrounds, irrigation systems, parking lots, trails and miscellaneous items. This does not include the value of tree inventory nor current or future parks and trails development. Maintenance of and improvements to these assets are NOT included in this replacement plan or financial analysis. Funding needs for every department face a prioritization and competitive process with each annual budget cycle. Proceeding with this issue as a City Strategic Initiative will provide the necessary research, detail and focus on these assets to ensure the City Council can make informed, long-term and strategic decisions regarding preserving and enhancing our parks, forestry and recreation system through a financial plan to sustain them into the future. II. Issue Urgency As with any City Strategic Initiative, there should be a notable timing component as to why it reaches the priority of being a Strategic Initiative. The urgency of the issue to rise to being a priority City focus for the next two to three years include the following factors:  The City’s objective for any issue, fiscal or not, is ideally to be proactive rather than reactive. This topic is at a critical point of soon moving into a reactive position if no action is taken. Life cycles of current assets range from 15 to 50 years.  The City’s 2040 Comprehensive Plan parks and trails chapter was just updated as well as the parks focused comprehensive outdoor recreation plan; however neither document provides for a funding plan.  In addition to parks and trails asset replacements, the City needs to provide the financial resources to pay for public improvements that are parks and trail resource enhancements that are presently partially or fully unfunded.  Gaps have been identified in our asset management systems for parks. For example, not having as-built drawings of key infrastructure leading to management challenges of that asset and missed opportunities for good planning.  Currently the Roadway Rehabilitation program and MSA funding mechanisms have paid for trail improvements. These funding sources are increasingly under pressure and is not be able to continue funding trails.  Close to half (47%) of 2019 respondents to the Community Survey supported increasing property taxes to maintain City services at their current level and levels of support have been increasing since 2015. Woodbury residents have also supported previous park and open space referenda. In addition, if a referendum is a selected financial mechanism then significant advance planning is necessary.  The City has previously completed thorough reviews and funding analysis for streets and utilities infrastructure. Parks and trail resources should be the next priority. 2019-2021 Strategic Initiative 19-02 Parks and Trails Replacement Plan Page 3  Top tier and high performing local governments have strong, diverse, resilient park, trail and natural resource assets that support quality of life and sustain the community’s wellbeing and health long into the future and are critical to maintain our current high performance goals. III. Scope and Schedule March - April, 2019 Issue framing and internal initiative scoping by staff. April, 2019 Financial options internal review by staff (high-level). May - June, 2019 Issue framing and scoping review July – August, 2019 Staff finalization of park asset and depreciation plan (may continue through end of the year as needed). August, 2019 Consideration as a Strategic Initiative. November, 2019 Staff preliminary report to Council on full scope of project. Dec., 2019 – July, 2020 Development, review and analysis of plan and financial recommendation by staff under the guidance and input from the Parks and Natural Resources Commission and Audit and Investment Commission. August, 2020 Presentation of plan and recommendations to Council. September-Dec., 2020 Public engagement. December, 2020 Council consideration of funding action. January, 2021 Funding plan in place and plan implementation commencement. IV. Implementation Team To implement the current proposed scope of work in the schedule presented, a team of resources is required. The Parks and Natural Resources Commission will provide the necessary review, input and vetting process for the majority of this project in coordination with City staff. Per the City Council’s direction, the input of the Audit and Investment Commission will also be sought in regards to the financial structure and plan to support our parks and trails system. The City staff team will be led by Michelle Okada, Park and Recreation Director, with direct reporting to the City Administrator. The following additional City departments and divisions will also have a key role in this initiative: Administration, Finance, Community Development, Communications Division, Parks Division of Public Works and Engineering.  PARKS & TRAILS REPLACMENT FUND Estimated TIMELINE for review, analysis, funding recommendation, and implementation Updated 8/27/20 Nov. 2019 City Council workshop to review parks and trail replacement funding options and to provide direction on eligible sources and parameters Research Dec. 2019- Staff research and analysis, notification of process to Nov. 2020 utility companies and obtain rate schedules, draft documents financial analysis, etc. Mar. 2020 Parks & Natural Resources Commission reviewed plan and approved plan assumptions Aug. 2020 Audit & Investment Commission reviewed plan and agree with plan assumptions Consideration Sept. 2020 - Joint Commission Meetings to review funding options Nov. 2020 Nov. 2020 Joint Commissions formation of recommendation to City Council Jan. 2021 City Council workshop; presentation of joint commission recommendation Implement- ation Jan. 2021- Council Evaluation Aug. 2021 Potential public involvement process for franchise fees Potential initial Council Action Jan. 2022 Potential first collection of franchise fees Utilization Jan. 2023 Potential use of funds commences Parks and Trails Replacement Plan & Fund Main Discussion Points • Why this fund is important? • Framework of the fund • Funding options and franchise fees 101 • Next steps Importance of Parks and Trails Replacement Fund • Important contributor to the quality of life • Insufficient ongoing funding • Growing liability of aging parks system • Equity of quality assets • Average yearly replacement need is ~$2.9Million (plus future inflation, plus additions) • Competition for operating funds • Council strategic initiative  Framework • This fund will support the replacement of park and trail amenities as outlined by the comprehensive asset and depreciation plan. • The plan recommends replacement of specific park and trail amenities based on standard life expectancy • The fund covers only replacement, not new or maintenance items  Assumptions • Actual expenses and prioritization of replacement will be presented as part of annual CIP process • Where appropriate, funding for replacement items will be shifted from operating budgets (i.e. playground replacement)  Assumptions • Plan updated annually with new assets and replacements, and updated replacement costs • This plan does not change the CIP, budget and project process Replacement timeline Amenity Life Span Ballfields 30 Years Buildings 50 Years Courts 20 Years Irrigation Systems 20 Years Parking lots and trails 25 Years Play structures 15 Years Other: dugout covers, boardwalks, Various fishing piers, security, etc.  Liabilities vs. Funding $686,000 Current Available Funding $2.9 Million Current Average Yearly Need Next Steps • Additional plan development incorporating funding options with actuals/CIP development January 2020- • Franchise Fee research and analysis December 2020 • Seek recommendation from Parks and Natural Resources Commission and Audit and Investment Commission Council Workshop- Seek direction from Council January 2021 Financing Plan Discussion • Questions about: • Assumptions • Replacement timeline • What additional information do you need to help you make an informed decision? Franchise Fees 101 What is a Franchise? • Any public utility … occupying streets, highways, or other public property…may be required to obtain a license, permit, right or franchise… • Non-City services Franchise Ordinance • ROW management • Street restoration • Relocation for utilities • Performance bonds • Mapping information • Street vacation • Removal of abandoned facilities • Indemnification • Construction standards • Coordination requirements Franchise Statute • Cities have gas and electric franchise rights under State law (Minn Stat. §216B.36) • Franchises are negotiated taking the form of a contract in an ordinance Franchise Statute • Cities have the right to require franchises include certain terms, such as fees. • Fees to raise revenue • Fees to defray costs as a result of utility operations • Or Both Woodbury Utilities • Xcel Energy • Gas and electric • CenterPoint Energy • Gas only Franchise Ordinances • Existing Woodbury Code Chapter 9 - Franchises • Northern States Power Company-Electric & Gas franchise • Minnegasco Inc-Gas franchise • Both Expired • Both included section on Franchise Fees- not implemented Franchise Fees • Flat fee or a percentage fee • Fee amounts can vary between customer types • Several options to be evaluated Franchise Fees • Utility passes 100% of fee to its customers • Could be for just gas, just for electric, or both • City decides when to consider fee increases and how often Franchise Fees • Model franchise ordinances available from League of MN Cities • Attorney assistance specializing in franchises  Who has Franchise Fees? 2020 Final Certified Tax Rates for Metro Cities - Populations Over 40,000 (excludes Minneapolis & St. Paul) Brooklyn Park 48.862 Maplewood 44.646 St. Louis Park 43.398 Burnsville 43.148 Coon Rapids 40.199 Bloomington 39.557 Apple Valley 38.782 Community Minnetonka 36.574 Blaine 35.842 Eagan 35.262 Lakeville 34.615 Shakopee 33.965 Maple Grove 32.756 Woodbury 32.489 Eden Prairie 31.513 Edina 27.945 Plymouth 25.796 0 5 10 15 20 25 30 35 40 45 50 55 Rate Chanhassen, Inver Grove Heights, Shoreview, Cottage Grove, Oakdale Franchise Fee Pro’s • Sustainable source of revenue • Easy to administer • Local control • Transparency through fund accounting • Applicable to all customers, including non-profits, tax-exempt • Will diversify City’s revenue sources Franchise Fee Con’s • Raises utility costs to customers • Use of funds will not benefit all payers equally • Viewed as another fee/tax Options for Evaluation • Funding Options (examples) Property Tax 9% Property Tax 23% Franchise Fees 100% Franchise Franchise Fees Fees 77% 91% Options for Evaluation • Timing Options $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Year 1 Year 3 Year 5 Year 8 Options for Evaluation • If Franchise Fees, Structure Options Public Process • Recommendation from Parks and Natural Resource Commission • Recommendation from Audit and Investment Commission • Prescribed public process if collection and utilization of franchise fees move forward Discussion • Questions about Franchise Fees? • What additional information do you need to help you make an informed decision?  City of Woodbury Woodbury City Hall 8301 Valley Creek Road Woodbury, MN 55125 651-714-3583 Minutes of Parks and Natural Resources Commission Regular Meeting Tuesday, August 18, 2020 Commission Members Present: Greta Bjerkness (Chair), Timothy Brewington II, Karin Freymann, Bruce Montgomery, Jakob Neau Commission Member(s) Virtual: Arin Kurttila, Deborah Musser, Rachel Nelson Council Member Virtual: None Staff Present: Michelle Okada, Parks and Recreation Director Staff Virtual: Michael Adams, Parks Planner – In-person Belinda Reed, Administrative Assistant Robert James, Information & Communications Technology Director Call to Order Chair Bjerkness called the meeting to order at 7 p.m. Open Forum Chair Bjerkness explained that the Open Forum is a portion of the meeting where a maximum of three persons will be allowed to address the Commission on subjects, which are not a part of the meeting agenda. Due to the current pandemic situation, this meeting is being held virtually. Because of this, a couple of changes have been made to our meeting protocol. All Commission members and staff are asked to announce their title and name before making any motion or comment. Online attendees may use the Live Event Q&A chat feature in the right hand pane of the virtual meeting to ask questions of the Commission. You will need to enter your name and street address for the record for all questions or comments. Questions or comments can be entered at any time and will be read and answered during the appropriate section of the meeting. If in-person, please come forward and introduce yourself, provide your street address and issue you would like to address. Speakers are limited to two minutes. The Commission will listen attentively to comments but, in most instances, will not respond at the meeting. Typically, replies to the concerns expressed will be made via letter or phone call within a week. Action Items A. July 7, 2020, Parks and Natural Resources Commission Meeting Minutes Chair Bjerkness asked for the approval of the Minutes of the July 7, 2020, meeting of the Parks and Natural Resources Commission. Parks and Natural Resources Commission Minutes August 18, 2020 Page 2 MOTION: Moved by Commissioner Brewington, seconded by Commissioner Montgomery, to approve the July 7, 2020, Parks and Natural Resources Commission Minutes. VOTE: In favor All In-person and Virtual Against None Absent None B. Renaming of Bailey Lake Park - Memorandum No. 20 - 11 Mr. Adams noted that during a recent City Council park tour, staff received direction to change the name of Bailey Lake Park. The primarily reason was contextual in nature. With Council’s direction, staff reconvened the Park Lands and Recreational Facilities Naming Advisory Committee. During the committee’s brainstorming session on potential names, the group suggested the park be renamed to Red Pine Park, primary due to a large pine stand identified from aerial maps and located to the east of the parcel. It was also noted that the Minnesota state tree is the Red Pine. Following a Google search of the Cottage Grove and Stillwater areas, it was discovered that currently there exist parks named: Pine Tree Valley Park, Pine Tree Pond Park, Pine Coulee Park, and Pine Glen Park in Cottage Grove and Pine Point Regional Park in Stillwater Township. After a ground site investigation, staff discovered the tree stand is populated with Scotch Pine and not Red Pine. Mr. Adams noted that the intent for the pine plantation, which consists of planted, somewhat mature trees with 12”-15” diameters, would be to keep that stand rejuvenated with primarily the same pine species. As outlined in the memorandum, the Commission was asked to provide input as to whether to name the park: Scotch Pine Park, Pine Park or Fairhaven Park. The Commission referred to Council Directive number CD-PKREC-7.4 Procedure for Assigning Names to Park Lands and Recreational Facilities, concentrating on Priority 1, which states primary considerations per the comprehensive plan include: natural, geological or other prominent features of the property and/or being adjacent to a neighborhood or housing development. Mr. Adams noted that due to the park’s location and access point from the Fairhaven development, it would be common practice, as with many of the parks located in Woodbury, to be named after the development in which access to the park is gained. This would be a strong wayfinding component which would be a definite plus. During the Commission discussion, it was noted that Scotch Pine Park would differentiate the park from other city parks. Glacial Valley Park was described as an example of natural, geological or other prominent features since that park was once a glacial valley filled with glacial rock. Mr. Adams shared the park concept plan, noting the park is primarily a neighborhood park, which will offer active recreation for the area with nearby Summerlin Park described as being a lot size pocket park and Glacial Valley Park a more passive recreation opportunity. Bailey Lake Park was described as a neighborhood park which would provide a playground for 0-5 year olds and 5-12 year olds, a basketball court, pickleball/tennis court, as well as a shade space in the center for people to gather. Parks and Natural Resources Commission Minutes August 18, 2020 Page 3 Mr. Adams pointed out that the stormwater retention pond, which has historically been referred to as Bailey Lake, located south of Bailey Road, also continues south of Dale Road into the area near the Bailey Lake Park parcel. The Commission considered wayfinding and it was noted that Scotch Pine Park would not necessarily provide the community with an idea of location, while Fairhaven Park would be considerably better for wayfinding purposes. Mr. Adams noted that people are willing to drive and meet up to engage in parks with tennis or basketball courts. Bailey Lake Park has a very significant athletic field component that has programming opportunities in which the neighborhood could participate along with other people from throughout the community. It was noted that although technically this park is not part of the Summerlin or Fairhaven developments, it is nestled between the two on public property with access off of Glacial Valley Alcove, which is in the Fairhaven development. For community members visiting the park from other areas, accessing off of Woodbury Drive, there is also a Fairhaven Development monument sign for wayfinding. Ms. Okada noted that the parks and trails in the city are a park system with pocket parks, neighborhood parks and community parks. Considering the metric of residents having access to the park system within a quarter-mile of their homes, pocket and neighborhood parks are typically designed to serve those neighboring residents; however, all are welcome to recreate in any park in the system. In keeping with providing a mixed variety of park amenities, that people have fairly close access to, Bailey Lake Park is that little bit bigger but really is meant to serve the neighborhoods. A discussion took place with regard to any future expansion of the Fairhaven development in different phases, and what that would mean in terms of having the opportunity at some future date to use the name “Fairhaven” for a park. Mr. Adams noted that any development could chose to put in their own amenities, but within the metrics of one quarter-mile access in this area, with Summerlin Park and Glacial Valley Park, there is already outstanding trail connections and wonderful passive space and this new addition will provide more active space. The Commission’s unanimous consensus was to rename the park, currently known as Bailey Lake Park: Fairhaven Park. Chair Bjerkness asked for the Commission’s approval to move forward with the recommendation to rename the existing park known as Bailey Lake Park, to Fairhaven Park. MOTION: Moved by Commissioner Freymann, seconded by Commissioner Montgomery, to approve the recommendation to rename the existing park known as Bailey Lake Park, to Fairhaven Park. VOTE: In favor All In-person and Virtual Against None Absent None Discussion Items Parks and Natural Resources Commission Minutes August 18, 2020 Page 4 C. Review Parks and Trails Asset Management Plan and Fund Ms. Okada noted that that the Parks and Trails Replacement Plan (PTRP) was presented at the February 4, 2020, PNRC meeting, during which time the Commission approved the assumptions made in the plan and provided staff with their affirmation to move forward. At the March 4, 2020, PNRC meeting, the Assistant City Administrator presented a basic outline of franchise fees as a potential funding source for future consideration. Because we have had some time off since the plan and potential funding option was reviewed Ms. Okada noted that the PTRP and fund PowerPoint would be reviewed in preparation for next month’s joint meeting with the Audit and Investment Commission. Staff did meet with the Audit and Investment Commission last week and went through the same PowerPoint so that everyone is up to speed in preparation for the first joint meeting on September 1. Ms. Okada noted staff would like to make sure everyone is still comfortable with the information moving forward. The plan outlines specific park and trail amenities that will require replacement based on the standard life expectancy of each. The Commission went through and approved those assumptions of the life span and replacement. This fund covers only replacement and not new or maintenance items. Generally speaking new items come out of the Park Dedication Fund, which is a special fund that comes from developers. When developers com in it in State Statute that they have to provide funding, based on a percentage of the acres they are developing, to the Park Dedication Fund. As our community grows and we continue to have new developments, our Park Dedication Fund continues to fund the building of the new parks. The Parks and Trail Replacement Fund is what is going to help us maintain that quality of life, equity and access to some of our areas that are older as well, while maintaining the high quality that Woodbury has established as our park system. The park system is aging as our community is over 50 years old, but when talking about assets, they are starting to age and in order to maintain our park system, funding of $2.9 million will be required. The $2.9 million does not include future inflation or additions to the assets. The overall fund in assets is currently about $70 million. As we continue to grow, we continue to compete for operating funds. Staff has determined the importance of setting aside this replacement fund so that we can replace as needed. Additionally, the PTRP is a Council Strategic Initiative. The Council Strategic Initiative statement will be included in the packet for the September 1, meeting, to help the commissions understand the Council’s perspective on why they identified this as a strategic initiative. The framework of the fund is to support replacement of park and trail amenities, as outlined by the comprehensive asset and depreciation plan, which recommends replacement of specific park and trail amenities based on standard life expectancy. This fund covers only replacement, not new or maintenance items. New items generally come out of the Park Dedication Fund, which is a special dedicated fund that comes from developments. When developers come to Woodbury, it is in State Statute that they have to give a portion, based on the percentage of acreage they will be developing, to the Park Dedication Fund. And that is how we have been able to build the system to date. The maintenance items, such as cracks sealing, replacing certain items on a play structure, fixing things without total replacement, those maintenance items will continue to be placed in the operations budget of the Parks and Forestry Division maintenance budget. Parks and Natural Resources Commission Minutes August 18, 2020 Page 5 Again, the assumptions we have already talked about, actual expenses and prioritization of replacement, will be present as part of the Capital Improvement Plan (CIP) process which is evaluated annually. To reiterate, items in the plan are not automatically replaced just because they come up for replacement in the theoretical plan; rather the plan assets will be evaluated yearly. It was noted that up until last year, complete playground replacements were placed in the operations fund. They will no longer be placed in the operations fund: those budget dollars will go into the PTRP fund. The PTRP will be updated annually and new assets added, and it will be determined if our inflation rates need to change based on economics and updated replacement costs. After a few years, if we find we are spending “X” amount of dollars on a medium-sized playground, that amount will be updated in the plan. Ms. Okada clarified that any trail maintenance would fall under operations maintenance. However, if a trail is completely ripped out and requires total replacement, the full replacement cost would come out of the PTRP fund. Ms. Okada noted that nothing will be added into the plan until the item has been completed. The plan is to look at the PTRP at the beginning of each year, review the previous year and determine what projects were completed. The completed items would then be added into the plan and the replacement value will be updated. It was noted that the actual land value has not been included in the plan. This is just a depiction of the liability versus the funding. The PTRP fund currently consists of $500 thousand seed money allocated by the City Council in 2019, from the levy, along with the reallocation of approximately $186 thousand that was taken from a variety of budgets, to create the fund. Currently, the average yearly need is $2.9 million and the current available funding is approximately $686 thousand. Staff is looking for ways to fill the funding gap. With regard to next steps, additional funding options are being researched, including franchise fees, and the City Council is seeking the recommendation of the PNRC, in conjunction with the Audit and Investment Commission, of potential funding options for the PTRP fund. Those recommendations are scheduled to be presented to the Council in January, 2021. Ms. Okada asked the Commission to be thinking about what additional information they would need to help them with their recommendations. Staff will keep layering the information so that the Commission will feel well prepared to make their recommendation. Ms. Okada went through the PowerPoint’s Franchise Fee 101 section, that had been previously presented at the March 4, 2020, PNRC meeting, by Assistant City Administrator, Angela Gorall. Ms. Okada noted that staff is investigating franchise fees as an option for funding the PTRP fund. The information provided in the PowerPoint is basic information to help understand why the city is able to charge franchise fees. Both citizen groups will be determining whether staff will continue this research. It was noted that Woodbury would be looking for a sustainable, long-term revenue source for funding the PTRP fund. Fees may be applied in two ways: flat fee or fees can be based on a percentage of utility usage. Fee types could vary by customer: commercial, residential or industrial users. There are a series of options that may be considered. Cities also have the right to decide whether to increase or decrease fees. It was noted that although the city establishes the fees, the utility might pass on their costs to their utility customers. Parks and Natural Resources Commission Minutes August 18, 2020 Page 6 Woodbury would rely heavily on a model ordinance provided by the League of Minnesota Cities, which has an attorney that specializes on franchise fees. Included in the presentation was a chart showing which Minnesota cities have franchise fees. Most cities on the list have a population of 40,000 or greater. Woodbury was positioned at the bottom third of the tax rate, compared to other cities listed in the chart. More and more cities have franchise fees in place. It was noted that Woodbury would be looking for a sustainable, long-term revenue source for funding the Parks and Trails Replacement Fund. If Woodbury moves towards with a franchise fee to fund a specific fund, the city would have a very comprehensive community engagement and communications plan. Ultimately, it would be the City Council’s decision as to where the funds would be used. It was noted that quite a few cities are using revenue from their franchise fees for road maintenance and repairs, while others are using their funds for parks and trails. The Commission noted that utility franchise fees would draw on more sources including: homeowners, commercial businesses, renters, tax-exempt organizations, non-profits, etc. Ms. Okada noted that while we have benefited from Woodbury’s continued population growth, we are starting to see our older parks and trails needing replacement. The City of Woodbury has won a number of national awards in large part because of our park system. Ms. Okada noted that ultimately it will be up to the joint commissions to make recommendations to the City Council as to whether or not a franchise fee should be collected to fund the PTRP fund, or whether a combination of property taxes and franchise fees or other options are recommended for funding the plan. Ms. Okada asked the Commission to reach out to staff by email or telephone with any questions they may have in preparation for the September 1, joint commission meeting. D. Valley Creek Park Update Mr. Adams provided a quick update noting staff is in the design development stage right now with two main priorities: the first being Miller Barn. Staff and HCM Architects have been interviewing and doing site tours with several structural engineers. The structural engineer brought onboard will be providing recommendations on what will be required structurally to keep the Miller Barn as a fixture on the landscape. The second priority is having detailed survey work done. With this information, all the park amenities will be fine-tuned in the field. As modifications are made to the concept plan, staff will bring same back to the Commission for review. E. Monthly Update – Memorandum No. 20 – 12 Ms. Okada noted this is the second month of doing the update “COVID-19 style,” providing more of a recap of anything that has changed. This month a small project update section was also added with one of the main projects being the Tamarack Nature Preserve Boardwalk Project (TNPB). The project decking boards had been on backorder notably due to all the residential home projects and decks being built, but with the recent arrival of the boards, the project, which includes three new sections of boardwalk, was able to begin on Monday, Aug. 17. Parks and Natural Resources Commission Minutes August 18, 2020 Page 7 Ms. Okada noted that the Tamarack Nature Preserve has a very active volunteer group which has been involved in the preservation of areas around the boardwalk. Looking for the project completion sometime the end of September/early part of October, the volunteers will be working with city staff to plan an event to celebrate the reopening of the new boardwalk. For all park project updates, the public was encouraged to visit the city’s website: https://www.woodburymn.gov/departments/parks_and_trails/park_projects.php. Ms. Okada noted that Eagle Valley Golf Course numbers continue to be exceptional and while August tends to be tournament season, groups coming out really appreciate the staff’s work. With a few tournaments cancelling, staff was able to backfill with standard golf reservations. As noted last month, the longtime HSC manager retired after 25 years. Staff is taking this time to determine what the HSC needs are as things have changed substantially in 25 years. Programming continues to be going very well. Staff has been very patient in working through a variety of anomalies, in order to provide modified and safe programs that seem to be well received and appreciated by the community. Fall program offerings are also planned with outlined guidance compliance. Ms. Okada encouraged everyone to view recreation offerings on the city’s website: https://web2.vermontsystems.com/wbwsc/mnwoodburywt.wsc/splash.html. Council Report – Council Member None Announcements/Miscellaneous Mr. Adams noted that in working on the design development for the recommended Fairhaven Park, staff has been looking at the location of the parking lot to see if it could be moved further to the east, which would shortened the entrance road that connects to Glacial Valley Alcove. Not only would this reduce overall costs of the project, but there is a significant impact to the environment from all the impervious surface that is created by the entrance road. Also, taking into account the power lines overhead, putting the parking lot under the power lines is a pretty efficient use of that space, as typically we don’t place courts or playgrounds under power lines. Mr. Adams noted that small changes, such as moving a parking lot 100’, typically happens in the design development phase which is where we are currently. The Commission mentioned that moving parking spaces closer to the access road opens up more green space and if that reduces the amount of impervious surface, that would be great. The Commission consensus to make the parking lot adjustment if the plan continues to evolve with storm water needs. The Commission inquired about park rentals. Ms. Okada noted they are down due to terms of how many people we can accommodate. Indoor: 10 people or less and outdoor open air shelters 25 or less. Staff continues to adjust as guidelines change with the Stay Safe plan. A Commissioner commented that the new park monument signs being installed look great. Ms. Okada noted that the Parks and Trails Replacement Plan Fund joint meetings, with the PNRC and Audit and Investment Commission, will be held at the Public Safety Education and Parks and Natural Resources Commission Minutes August 18, 2020 Page 8 Training Center located in the Public Safety building, 2100 Radio Drive, with parking available in the main lot adjacent to the main entrance. Follow the sidewalk in front of the building parallel to Radio Drive to the training center entrance on the left. Staff will be present to help guide. Currently, staff is looking at the regulations regarding public meetings as to in-person and virtual attendance. The joint meeting will begin at 7 p.m. each date, to be immediately followed by the regular PNRC monthly meeting. More information will be shortcoming. September 1, 2020 – 7 p.m., Public Safety Education Room October 6, 2020 – 7 p.m., Public Safety Education Room November 4, 2020 – 7 p.m., Public Safety Education Room Adjournment The meeting adjourned at 8:45 p.m. Respectfully submitted, ______________________________ Belinda Reed Administrative Assistant Approved by the Parks and Natural Resources Commission on September 1, 2020.  City Of Woodbury Parks and Recreation Department Parks and Natural Resources Commission Memorandum 20 – 13 September 1, 2020 Parks and Natural Resources Commission Members: Departmental Revenues through July- Preliminary Below is a snapshot of each division on the revenues and expenditures through July 2020 in comparison to July 2019 and July 2018. 2020 2019 2018 Revenue Revenue Revenue Recreation $232,142 $669,776 $708,120 HealthEast Sports Center $648,165 $980,542 $936,848 Eagle Valley Golf Course $1,030,288 $1,010,034 $910,121 As you can see, the Covid-19 pandemic has had quite a negative effect on Recreation revenue as well as HealthEast Sports Center revenue for 2020. Eagle Valley Golf Course, though is slightly ahead of 2019 revenue at this time. Before the March shutdown due to COVID-19, the Recreation Division collected $327,000 in revenue; unfortunately, that was impacted by over $94,000 in refunds from program cancellations, and facility closures. The total revenue to date accounts for 22 percent of the total projected annual revenue. The HealthEast Sports Center has experienced fewer refunds. Still, the over two months of lost revenue for ice and field house rentals and no concession operations, have taken quite a toll on overall revenue at the facility. A few of the rentals initially scheduled for June, shifted to July and August. These adjustments will, in small part, help close the revenue gap. Good news comes by way of the Eagle Valley Golf Course, which is slightly above revenue year-to- date 2019. The combined eagerness to want to be outside, coupled with the excellent weather, has allowed the golf course to do very well during these unprecedented times. In 2019 thru July there were 22,049 rounds played in 121 days the course was open, while in 2020, there have been 22,601 rounds played through July within 105 days open equating to a 39.4 percent operating margin. Departmental Expenses through July - Preliminary On the expense side, below is a look at where each division is through July, compared to the same time range in 2019 and 2018. 2020 2019 2018 Expenses Expenses Expenses Recreation $783,397 $945,744 $995,563 HealthEast Sports Center $566,853 $669,542 $671,720 Eagle Valley Golf Course $624,142 $649,537 $648,740 Parks and Natural Resources Commission Memorandum 20 – 13 September 1, 2020 Page 2 of 2 A large percentage of the expenditures for each division accounts for full-time labor. Within each division, expenses have been reduced as much as possible. Some expenses are necessary due to COVID-19 for operations, such as purchasing of items for communications, operations and safety items. As each phase of the Stay Safe MN plan allows for additional gatherings, sports, and programming, we are swiftly, albeit safely, adjusting and adding to our program opportunities and facility availability. This is beneficial financially and for meeting the recreational needs of our community. Respectfully submitted, /s/ Michelle Okada Parks and Recreation Director