Minutes - Council Work Session - 05/01/2012

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Councilmember Strommen asked if the staffing component at 54.85% reflects current staffing or incorporates cuts. Finance Officer Lund answered it incorporates staff cuts as detailed in staffs report, not replacing the Deputy City Administrator or Director of Public Works positions, and adds a Management Analyst. Councilmember Strommen stated she does not know what the cuts mean in cutting services and thinks it is wrong to not fill the economic development position. Other than the $1.5 million, she stated she does not know what has changed since the Council's conversation started because it still includes assessments and a future Council finding the final solution. City Administrator Ulrich explained a 25% assessment level has some merit because it protects the City's ability to bond for the project (which requires 20% assessments). It would provide that option and give individual property owners some "skin in the game" for the direct benefit of an improved roadway. He reviewed the scenario for a five -year phase out of assessment, noting $349,000 would equate to a $3 /month franchise fee. In addition, there would be land proceeds and future growth could bring in additional revenue. He noted if the Council is willing to look at a franchise fee, it could be phased in over time. Councilmember McGlone noted Statute requires the City to prove that a road improvement results in raising the property value by the amount assessed, which he did not think was the case, and is the problem with the assessment option. He pointed out there would be no need to bond or assess if road projects were part of the tax levy. Public Works Director Olson pointed out if the City did 3.5 miles of roads per year it would take 6 -7 years to get one year of construction done. However, if bonding, the City could get more than 3 5 miles of roads done in a year. Councilmember McGlone noted there would be need for more bonding in the beginning Public Works Director Olson clarified if the desire is to do only 3 5 miles per year, it could be accomplished but it would spread demand out further so roads would be 45 -50 years before reconstructed. Councilmember Strommen noted that could increase project costs. Councilmember Tossey stated he never supported a franchise fee but has always been okay with assessments; however, he would like to see it lowered from 50% so projects are not counter petitioned. He supported striving for 25% assessments so the City retains the option to bond, if needed in the future. Councilmember Tossey found roads to be a primary obligation of government, the same as fire and police protection, and preferred to see all City obligations done through the levy, not a franchise fee. City Council Work Session / May 1, 2012 Page 6 of 15