City Council

MINUTES WOODSTOCK CITY COUNCIL WORKSHOP City Council Chambers July 9, 2020 A special workshop meeting of the Woodstock City Council was called to order at 3:00 PM on Thursday, July 9, 2020, by Mayor Sager in the Council Chambers at Woodstock City Hall. Mayor Sager noted this is a special workshop session of the Woodstock City Council to discuss an enhanced street maintenance program. This meeting is being held under the Governor’s Emergency Declaration with Council members attending remotely and those attending at City Hall observing social distancing. Noting there are no members of the public attending the meeting in person, he explained the procedures to be used by the City Council, City Staff, and the Public to join today’s meeting. A roll call was taken. COUNCIL MEMBERS PRESENT: Mayor Brian Sager. COUNCIL MEMBERS ATTENDING REMOTELY: Darrin Flynn, Lisa Lohmeyer, Wendy Piersall, Jim Prindiville, Gordon Tebo, and Michael Turner. COUNCIL MEMBERS ABSENT: None STAFF PRESENT: City Manager Roscoe Stelford, Assistant City Manager/Finance Director Paul Christensen, Communications/Grant Manager Terry Willcockson, and City Clerk Cindy Smiley. STAFF ATTENDING REMOTELY: Public Works Director Jeff Van Landuyt, IT Director Dan McElmeel, and City Engineer Chris Tiedt. OTHERS PRESENT: None OTHERS ATTENDING REMOTELY: Ryan Livingston representing HLR. Mayor Sager noted the presence of a quorum under the revised rules of the Governor during this COVID-19 emergency. City Clerk Smiley confirmed the agenda before the Council is a true and correct copy of the published agenda. FLOOR DISCUSSION A. Public Comments There were no comments forthcoming from the Public. .  Woodstock City Council 07-09-20 Council Workshop B. Council Comments In response to a question from Councilwoman Piersall, Mayor Sager stated there were no minutes from the July 19, 2020 City Council meeting in the packet for approval, noting they will be on the agenda of the next regular meeting. Mayor Sager thanked all involved in the three exceptional events recently held in Woodstock. He thanked Staff from the Opera House, Public Works, and the Police Department for the exceptional job they did in organizing and setting up the two recent band concerts so the public may safely attend and enjoy these events. Mayor Sager noted the Fireworks were extremely successful, expressing pride in the community members and City Staff who put this event together. He acknowledged the Public Works Department, Police Department, Explorer Scouts, Cheryl Wormley, Mark Indyke, Jim Campion and all of the donors who made this possible. Mayor Sager especially acknowledged and thanked the Parks Division for their work on the event. There were no comments further forthcoming from the City Council. IV. CONSENT AGENDA There were no questions or comments from the Public or the City Council. Motion by M. Turner, second by D. Flynn, to approve the Consent Agenda as follows: B. Warrants #3911 #3912 A roll call vote was taken. Ayes: D. Flynn, L. Lohmeyer, W. Piersall, J. Prindiville, G. Tebo, M. Turner, and Mayor B. Sager. Nays: none. Abstentions: none. Absentees: none. Motion carried. V. DISCUSSION A. Enhanced Streets Program – 2021-2024 - Financing Mayor Sager stated Staff has worked diligently on this report. He noted the City Council has met and Staff has held many meetings to talk about how the City will pay off this essential program which will get the City ahead of this significant gulf with the challenges presented by the economy. Noting the work that is going on now, Mayor Sager stated the City now needs to look to the future of the program. He asked Mr. Stelford for a brief report. Mr. Stelford thanked Staff, specifically the Public Works team of Jeff Van Landuyt and Chris Tiedt and Assistant City Manager/Finance Director Paul Christensen, for their work to find the best approach for this project and extended kudos and thanks to Ryan Livingston, who also worked so hard on this. He stated Council has been provided with a lot of information to make this important decision. 2  Woodstock City Council 07-09-20 Council Workshop Mr. Stelford said when Council met to discuss this issue a few months ago, COVID-19 had not taken place, noting how some, but not all, of the effects of this are known. He stated there is no way to do this aggressive program without some form of tax increase. Mr. Stelford reminded those present that Council focused on a few scenarios at the last meeting, noting Staff has expanded Scenario E with some additional options. He stated information will be presented today on property tax and other revenue options. Stating Council is very much aware of the long history of this issue, Mayor Sager stated this brings the City to the point where it must decide how to move forward. He stated the City now knows the budget is being impacted by COVID-19, but does not know the entire impact and cannot predict that, opining Council must be cognizant of that. Mayor Sager stated Council knows the City is looking at a significant investment of another $40 to $50 million before it can get to the point where there are good quality streets and a plan for maintenance for the future. Noting Council requested further information on Options C, D, and E, Mayor Sager stated Staff has prepared that information to provide Council with a better understanding of those options. He stated within these are additional parameters to understand including initial cost, cost of future maintenance, timelines, and the impact in terms of water and sewer and other infrastructure. Mr. Stelford provided additional information on the options mentioned by Mayor Sager. He stated at some point in time roads drop to the next condition category, which makes it more expensive to repair them. He stated in Option C, the City would spend money in the last possible year before streets drop into the next category. He stated this would front-load the money, but reduces future liabilities. Mr. Stelford stated Option D focuses on a set dollar amount, $50 million, which would move the City forward very well. He stated there would be a certain set threshold of $10 million per year in bonds, noting Mr. Christensen researched this and found it will not save as much money as first thought. He stated the City would borrow $10 million per year for five years, providing a table depicting what this would look like. Mr. Stelford stated Option E focuses on a revenue-driven approach and the maximum revenue that could be generated for roads. He stated the idea is to give Council the idea of what progress can be made if the focus is on property taxes and how much money could be generated using this as the determination for the debt load. He noted debt would be issued over the 10-year period to enhance the spending program determined by using a percentage increase in the property taxes levied on City properties. He stated Staff also looked at how water rates would be impacted by these improvements, noting capital improvements to the water and sewer lines would have to be made when the roads are improved. He stated the number in the report is an estimate, noting it could fluctuate, explaining this further. Noting the report used a 1.7% property tax increase, Councilman Tebo asked what the average PTELL tax increase is. Mr. Stelford responded this varies, but on average it is a bit higher over a 10-year period, about 1.9 to 2%. Councilman Tebo noted the proposal is on the low end of the average PTELL each year. 3  Woodstock City Council 07-09-20 Council Workshop Councilman Turner noted under the scenario that calls for a 1.7% property tax increase, a future Council would have to decide if it would increase PTELL. In response to a question from Councilman Turner, Mr. Stelford stated Council would still have the option to take PTELL if property taxes were increased by 1.7%, noting this gives Council flexibility year to year. In response to other questions, Mayor Sager stated Council can design this revenue as a set property tax increase for a number of years. He talked about the various options of taxes and fees as well as property tax and PTELL. He noted this Council can say that is the direction it wishes to go, but future Councils will have to approve this moving forward. Mr. Christensen stated Council would be looking at extending the property tax for the term of the bond until reaching maturity of if it is abated, with Mr. Stelford explaining how and why this could be abated. Councilman Turner stated in real terms the property tax would go up by 1.7% of whatever the rate is. Mr. Stelford noted this is driven by the EAV. In response to a question from Councilman Turner, Mr. Christensen stated a property owner’s taxes would go up 1.7% of what was paid the previous year. Councilman Turner confirmed this would be a 1.7% increase only on the City’s portion of the tax bill. He stated as much as he hates property taxes, he pays the City of Woodstock very little in terms of his entire tax bill for all the services the City provides. He stated Council must recognize the needs of the streets and the way to pay for it. Councilwoman Piersall inquired about the impact this would have on the City’s credit rating, whether it would impact the City’s current debt. Mr. Stelford replied it would impact future debt only. In response to further questions from Councilwoman Piersall, Mr. Christensen stated Staff factored debt that is maturing in future years into their analysis. Mayor Sager opined this could result in a rating downgrade of one level at most, which could increase interest a bit, but will not put the City in a questionable situation because the City of Woodstock’s ratings are quite strong. Councilman Turner asked if there are any other projects where the City would need to be able to issue $5 to $10 million in debt over the next couple of years, such as downtown development, stating he would not want to be constrained. Mayor Sager stated the City’s debt capacity is quite good. Mr. Stelford agreed, referring Council to a table in the packet which addressed this. Brief discussion followed of the community’s debt load, including District 200, with Mayor Sager opining this is not of concern to him. Mr. Livingston walked everyone through the various scenarios. He stated Option C will spend enough money every year on those streets that will prevent a drop into a lower category. He noted this option has the largest capital outlay early on and tapers off at the end. He stated all options are comparable at the end of 10 years. He stated Option C has the most dramatic impact on future liability at the end of the program. He talked about the projected water/sewer improvements needed, stating the City should make sure it is improving those utilities so it will not be necessary to go back and dig up the streets to do them. He stated this is a snapshot at that point in time of what it would cost to replace the infrastructure. Mr. Livingston also talked about the impact a one- year deferment would have on this, opining it would not be much. Mr. Livingston stated with Option D the City would be spending a specific amount, noting it also has a high investment in the beginning and then has a consistent annual maintenance budget. He 4  Woodstock City Council 07-09-20 Council Workshop noted with this option there will still be some failing streets, so there will be a higher future liability. Mr. Livingston stated Option E is the opposite starting out at a lower annual budget and increasing over time. He stated by 2029 through 2031, this Option will catch up to the other scenarios, spending enough money for annual improvements and keeping streets from dropping. Mr. Livingston then talked about the differences between a 1.7% and a 2.0% property tax increase, how this would change the program, and what can be done with the various percentages of increases, including how total expenditures and future liabilities would be affected. In response to a question from Councilman Turner, Mr. Stelford confirmed with Option E how much that can be done is driven by the amount of revenue, while with the other scenarios Council determines what it wishes to be done and then must figure out how to raise enough revenue for that. Mayor Sager opined property taxes must be increased if Council wishes to pursue an enhanced streets program with the question being how that will be done and at what level. He stated Council must determine what is probable and whether that can be done and get the streets done right away. Mr. Livingston stated Option E would not improve anything drastically until 2028. Councilman Turner opined this is important if Council is talking about bonds. He stated he is willing to discuss Option E, but feels Option D should be on the table as well. Mr. Livingston talked about the PCI and future liabilities with all options. Mayor Sager stated people would like to get things done as quickly as possible. He stated money can be spent up front and people will see that, but then will see that the City will have to spend more money at the end of the program. He opined people will appreciate taking a more gradual approach that insures a more stable process within a ten-year period. Councilwoman Piersall stated she favors Option C as it would be less money spread out over a longer period of time and would ultimately be $20 million less in future liabilities at the end. Councilman Turner stated he is leaning toward Option E, but has not ruled out Options C & D, noting he would like to know how these would be paid for. Mr. Christensen noted Option C has a lot of up-front funding and that D is really a smoothed-out approach of Option C. Mayor Sager said he would like a comparison of Options C & D and would like to get a sense of Council’s preference between these two options. In response to Councilman Tebo’s questions concerning revenue needed for Option C and what property tax increase would be needed for that, Mr. Christensen went over revenues, presenting a table showing the various property tax increases that would be needed for each scenario and the resultant PCI ratings, noting these are estimates. He then showed the various water and sewer rate increases needed for each scenario and what the property tax dollar amounts would be for each scenario based on a $200,000 home. 5  Woodstock City Council 07-09-20 Council Workshop Councilwoman Piersall noted there is a 5% difference between these for the same money, so Option C would result in the same PCI for the same money. Councilman Turner noted this would also be for $20 million less. He stated the question is would a taxpayer pay $10 more per month to get the streets done sooner. He opined this is a sensitive issue especially with what is going on with the schools. Mr. Christensen discussed other methods of funding, including imposition of a Utility Tax, describing its effects on large and small businesses. Mayor Sager stated this has given Council more of a sense of potential financing as far as property taxes are concerned and of what the impact to this might be. He asked Staff if there is an evaluation between Options C & D from a finance perspective and a practical perspective. Mr. Stelford stated financially the more that can be done earlier the better, but the more the taxpayers will be asked to pay. He noted overall the community has weathered COVID-19 pretty well, so if the City can support Option C and if that is supported by the public, it would be the most cost effective and the quickest. He stated the downside is raising the revenue. Mr. Livingston stated Option C would have the greatest impact. He opined Option C is the best option, but if that is not possible he would say one of the variations of Option E would be better. Mr. Van Landuyt agreed with Mr. Livingston, noting some of the streets that are done upfront with Options C & D will need additional work in 20 years. He noted with all scenarios the City will be increasing revenue for streets. He noted people will see and feel the improvements with Options C & D, where this will take more time with Option E. Mayor Sager asked Council’s opinions if looking only at Options C & D. Councilman Turner expressed support of Option C stating he prefers an immediate impact, opining the overall property tax impact on a $200,000 house is not that large. He stated the City is coming out of COVID-19, noting prior to the pandemic, Council has been trying to grow the City and opining the streets are a big part of that. Councilman Flynn expressed support for Option C, stating people need to see results. He opined the overall cost is not that bad and is less expensive in the long run. Councilwoman Lohmeyer favored Option D, opining it still would have major influences on the street conditions the first few years, but would spread costs out a bit better. Councilman Prindiville favored Option D, opining the City does not need to be as aggressive as Option C. He expressed concern with Option C being very dependent upon engineering and construction and has a lot of unknowns. Councilwoman Piersall expressed support for Option C, opining there are more benefits with this, and it is a more fiscally-prudent decision, noting $20 million is a significant savings. 6  Woodstock City Council 07-09-20 Council Workshop Noting there will be a property tax increase, Councilman Tebo stated he would like to get things done with a noticeable improvement quicker and, therefore, prefers Option C. He opined this would be looked upon more favorably by the taxpayers as they would see results. Mayor Sager expressed support of Option C. He asked for comments when comparing Options C and E. Councilman Turner stated he recognizes the concern with property taxes, but echoed Councilman Tebo’s comments. He opined improving the streets sooner rather than later will attract and enhance business. He also expressed agreement with Councilwoman Piersall’s comments, noting Option C would save $20 million of the people’s money. In response to Mayor Sager’s expressed concern about the need for future spending, Councilman Turner asked if there are ways the schedule and expenditures can be adjusted to extend the life of the streets over the 20-year period. He opined this is worth considering rather than having streets in poor condition over the next decade. Councilwoman Piersall acknowledged the City would have to come up with $20 million in the future, but also will be spending less over the next ten years. Mr. Stelford noted the City is setting itself up with future revenue sources, because the bonds will expire, allowing the City to issue further debt if needed. He noted the City has learned a lot from the Pavement Management Study, expressing the hope the streets will last longer. Mr. Livingston noted funds for maintenance were included in his figures and were included in his projections. He opined in 20 years some of the streets will hold up and some will need repairs, but the City will still be saving money with a lesser amount required for streets and with making repairs in the next five years rather than letting them fail. Mayor Sager asked for Council’s opinion of Option C vs. Option E. Councilman Flynn favored Option C. Councilwoman Lohmeyer favored Option C, stating this was the #1 priority before COVID-19 and feels this is still the #1 priority. She opined Council must give the community a chance to see the improvements in the streets. Councilman Prindiville expressed support of Option E, opining the streets are a long-term investment and stating he likes the steadiness of the revenue sources in Option E. He opined it sets up a solid program, which will allow the community to develop in the future with new methods of transportation. Councilwoman Piersall and Councilman Tebo expressed support of Option C. Mayor Sager expressed concern about the unknowns of COVID-19 expenses and the capacity to meet these. He stated he is also concerned about the practicality of the capacity of imposing taxes. He stated he also does not take the imposition of taxes lightly, noting Council has tried to be responsive to the residents concerning taxes. He stated the City’s streets have been identified as a 7  Woodstock City Council 07-09-20 Council Workshop top priority of the Council, noting this must be upheld and addressed. Mayor Sager stated he appreciates the emphasis and benefits of getting this done quicker rather than later, noting he does not like the idea of prolonging things. He stated he is not fully convinced the City has the ability to do this quicker up front, but also supports Option C, noting this is the feeling of the majority of the Council. Mayor Sager stated he needs to get a better sense of how the City is going to pay for this, asking how Council feels about deferring this program for the first year. Councilman Tebo supported deferring the program for a year, noting people are still figuring out what the world will be like and opining much more will be known in a year. He stated he does not wish to add to the stress level. Councilwoman Piersall stated it costs less to defer a year, opining there are so many unknowns. She supported deferring the program a year. Councilman Prindiville supported deferring the program a year, opining this will give the City a chance to learn more, gather more information, and understand the financial impacts of COVID- 19. Councilwoman Lohmeyer did not support deferring the program noting many people are now working from home and not traveling so much. She opined the City could take advantage of less people on the roads. Councilman Flynn did not support deferring the program, opining it would mean spreading the increase over four years rather than five. He opined the community needs to see immediate results. Councilman Turner did not support deferring the program. He stated he understands the caution surrounding COVID-19, but stated he has more concern about other governmental entities. He expressed concern that one year will become two years, stating if the program is deferred, he would prefer a commitment to look at it in six months. Councilman Turner stated he likes the boldness of Option C. In response to a request from Mayor Sager regarding a one-year deferment, Mr. Livingston talked about the impact, noting there may be a slight increase in cost, but also a potential cost savings on construction. Mr. Christensen stated he is also concerned about the unknowns of COVID-19, opining more will be known six months from now. Mayor Sager stated it appears Council will not take action today. He requested Staff look at this again, with emphasis only on Option C and alternate financing packages that could be used for this. He stated Council will look at this and discuss at another workshop to be held in two months to get a better sense of how they might wish to look at a combination of revenue sources that will make this program possible before making a final decision. In response to a question from Councilwoman Lohmeyer as to what point in this year Council must make a decision if the program is going to move ahead in 2021, Mayor Sager stated by the end of the year. Mr. Stelford noted Council has authorized engineering costs for Option C. Mr. Van Landuyt stated bidding should be done by the end of the year. He stated the City is moving 8  Woodstock City Council 07-09-20 Council Workshop forward with an enhanced program for 2020, and Staff is assessing the streets and setting schedules for future years. Mr. Livingston stated final plans for the $50 million worth of work have been developed, noting priorities will need to be decided based upon Council’s decision. He opined the sooner they know about a deferment the better. Mr. Christensen stated the property tax levy, which is in December, drives the decision. Mayor Sager stated December is the deadline for a decision to move ahead in 2021 opining it should be done by the last meeting in November or the first meeting in December. He noted the decision most likely would be to choose Option C and whether to proceed in 2021 or defer for one year. He stated he wishes to make sure everyone understands the funding alternatives. Councilman Turner stated he would like to see a list of the roads to be done and would like Staff to refine with more detail as to the property tax costs to various houses and alternative ways to supplement this. He stated he would also like to see metrics every couple of months as to what is being affected by COVID-19 generally and specific to this discussion, so by the November meeting Council has a sense of what has been going on and any need to refine the plan. Councilman Tebo stated he would like to see a breakdown of what percentage is going to be spent on roads from what sources such as the local MFT, state MFT, etc. Mayor Sager expressed appreciation for everyone’s input. He asked Council to acknowledge the work of Mr. Stelford, Mr. Christensen, Mr. Van Landuyt, Mr. Tiedt, and Mr. Livingston, especially in the midst of everything else that is going on. VI. ADJOURN Motion by G. Tebo, second by L. Lohmeyer, to adjourn this special workshop meeting of the Woodstock City Council to the next regular meeting to be held at 7:00 PM on Tuesday, July 21, 2020. Ayes: D. Flynn, L. Lohmeyer, W. Piersall, J. Prindiville, G. Tebo, M. Turner, and Mayor B. Sager. Nays: none. Abstentions: none. Absentees: none. Motion carried. The meeting was adjourned at 5:00 PM. Respectfully submitted, Cindy Smiley City Clerk 9