Board of Aldermen Workshop Session

Meeting Agenda

WORKSHOP SESSION AGENDA
January 21, 2012  8:00 a.m. – Noon
300 Park Drive, Donald “Red” Loehr Police & Court Center

 1) Call to order – Mayor Tim Pogue

 2) Life After Debt – City Administrator Bob Kuntz / Finance Officer Glenda Loehr
          a)  Reserve Fund Policy
          b)  Future Spending Priorities

 3) Government Center Issues – Assistant City Administrator Tom Aiken

 4) Pension Reform ? – City Administrator Bob Kuntz

          B r e a k

 5) Aging in Place

 6) Street Lighting

 7) Annexation

 8) Great Streets – Mayor Tim Pogue

 9) Other Issues / Concerns

10) Adjourn

NOTE:  Due to ongoing City business, all meeting agendas should be considered tentative.
Additional issues may be introduced during the course of the meeting.

Meeting Minutes

MINUTES - BALLWIN BOARD OF ALDERMEN
W O R K S H O P
300 PARK DRIVE
January 21, 2012
The Workshop Session was called to order at 8:05 a.m. by Mayor Tim Pogue.

             PRESENT                                ABSENT
MAYOR TIM POGUE 
ALDERMAN JIMMY TERBROCK 
ALDERMAN MICHAEL FINLEY 
ALDERMAN MARK HARDER 
ALDERMAN SHAMED DOGAN 
ALDERMAN FRANK FLEMING 
ALDERMAN JIM LEAHY 
ALDERMAN RICHARD BOERNER 
ALDERMAN KATHY KERLAGON 
CITY ADMINISTRATOR ROBERT KUNTZ 

Also in attendance were Assistant City Administrator Tom Aiken, Finance Officer Glenda Loehr, Chief of Police Steve Schicker, Director of Parks and Recreation Linda Bruer, and City Engineer Gary Kramer.

City Administrator Kuntz gave some opening remarks about the history of Aldermanic retreats, explaining that they have commonly and historically been used to set long-range planning priorities for the Board. 

“Life After Debt”:  The first item of discussion is what Mr. Kuntz referred to as “Life After Debt”.  With the early retirement of some of the city’s bond debt, some funds have been freed up from the annual expenditure commitment that can be used for other purposes.  The use of reserves to retire this debt early has proven to be a wise choice because the investment returns on these funds have been pretty much limited to 1% or less for several years.  By using these funds to retire the bond debt early, the much higher rate that was being paid for, the debt has been avoided.  City Administrator Kuntz recommended that a portion of the annual revenues that are now available for expenditures be used to re-establish the reserve from which funds were taken to pay off the bond debt early.  Mr. Kuntz noted that the City of Ballwin presently has a reserve of approximately $5.5 million.  Ballwin’s annual revenues are approximately $15 million.  Annual expenditures have generally been slightly below this level.  The year 2011 was an exception to this general trend, due to the substantial draw down to pay off debt.  This approach of not using reserves, except for extraordinary circumstances has been the backbone of Ballwin’s financial philosophy for many years. 

Alderman Harder asked why the expenditures in 2011 were so much in excess of annual revenues.  Finance Officer Loehr explained that this expenditure in excess of revenues reflects the Board’s decision to spend reserve funds to reduce future debt, purchase the Ferris Park property, and purchase the Finance software.  Alderman Fleming suggested that in the future, whenever such tables, charts, and graphs, that show a substantial expenditure in a given year above annual receipts, are constructed, it would be wise to add a footnote explaining that this change was the result of a specific determination made by the Board of Aldermen to make such an expenditure. 

Finance Officer Loehr presented the Cash Investments By Month table.  She explained that this table shows investments and reserves by month.  It clearly shows the special draw down of reserves in 2011 for the expenditures mentioned earlier.

Alderman Boerner noted that this chart clearly shows that overall cash balances of the City have increased since 2007.  Alderman Fleming asked what is the minimum cash balance Ballwin should have throughout the year.  Alderman Boerner noted that this is primarily driven by the note payments that Ballwin is obligated to make at different times of the year.  Once the debt is completely retired and these note payments are no longer an obligation, the minimum cash balance criteria will change. 

Finance Officer Loehr noted that it is important to remember that a fund balance is different from a liquid reserve.  The Board of Aldermen’s current policy is 25% of the annual operating budget will be retained in reserves.  Presently, Ballwin has approximately 30% of the annual operating budget in reserves as of the end of 2010. 

City Administrator Kuntz said that he has talked to many municipalities and financial institutions.  He can find no universally accepted or recommended standard for the size of a reserved held by a municipality.  Based on what other similar cities in our region have established, Ballwin’s 25% is probably a little bit higher than average.  He noted that 20% would probably be more in keeping with what most of the municipalities are currently using.  He noted that he’s making no recommendation to change the 25% standard that Ballwin currently uses.  He recommends, however, that as the reserve begins to build back up, excess reserves beyond the 25% be assigned to a capital improvements reserve fund.  These funds could be used to pay for grant matches, unbudgeted capital expenditures, or unanticipated opportunities.  Putting the money in this kind of a fund could help eliminate the many re-appropriations that are sometimes necessary.  It would give more structure to the city’s plans for the use of unreserved funds in the future.  This will eliminate any appearance of an unplanned, undesignated pot of money just sitting there.  Alderman Harder asked how much money would be in such a fund.  City Administrator Kuntz said that once the 25% reserve is met, all remaining excess funds would go into this fund.  The amount of this fund could be adjusted annually as part of the budget process.  Any reimbursements from this fund would eventually be paid back into the fund to maintain its designated level.

Alderman Boerner asked if these funds would be used for capital expenditures.  City Administrator Kuntz said he saw this more as a fund outside of the annual budget cycle and process.  He believes that most capital improvements will be funded as part of the annual cycle, but the money in this fund could be drawn upon for special needs or emergency situations.  Two years ago, the Board of Aldermen decided to spend an additional $1 million out of the reserve fund for additional street work.  Last year, the Board of Aldermen chose to spend approximately $400,000 for the new financial software.  These unanticipated kinds of expenditures are what he believes would be appropriately paid out of this fund.  The fund would not be used for annual capital expenditures, roadway improvements, etc. that are normally funded through the regular budget process.  Alderman Boerner noted that the important part of this is that this is a special fund above the 25% reserve.  Alderman Fleming agrees with the concept of setting the funds apart from the annual budget process.  He believes, however, that it might be advisable to set a specific amount rather than just let all funds in excess of the 25% be kept in this fund. 

Mayor Pogue noted that these funds are not intended to fund the annual Capital Improvement Plan.  This is to be viewed as an emergency fund.  City Administrator Kuntz said he recommends that the Board wait until the submission of the 2011 audit to see the actual dollars that are available for inclusion in the reserve funds.  After that time, the Board of Aldermen will need to adopt a policy establishing the amount of money to be kept in this fund, and that it is supplemental to the 25% reserve fund.  Alderman Boerner stated that since this isn’t viewed as an emergency fund, he agrees that a fixed dollar amount in this fund would be more appropriate than just allowing it to contain all funds in excess of the 25%. 

Government Center:  Assistant City Administrator Aiken made a brief presentation about some of the needs with the current configuration of the Government Center.  Alderman Fleming said that he does not think that building a new Boardroom at the Government Center will ever be viewed as an acceptable expenditure of city funds.  City Administrator Kuntz said he understands the Board’s reservation for that rather large expenditure, but he is asking for authorization to move forward with looking at resolving some of the interior space issues that were discussed in Mr. Aiken’s presentation. 

Alderman Dogan asked if the $4 million estimate was exclusively for the Board room addition.  City Administrator Kuntz said yes it was.  The interior work would be far less expensive.  Alderman Harder raised the question whether Ballwin should consider relocating the City Hall, and selling the property that it currently sits on.  City Administrator Kuntz said the Board has explored this in the past, but the property is less than ideal as a commercial property, and recent downturns in the commercial real estate market have made a situation whereby the property would not generate enough revenue in a sale to offset the cost of building a new government center at another location, even on property that Ballwin already owns.  It was the consensus of the Board that staff should proceed with finding a design professional to explore the changes discussed.

Parks & Recreation:  Director of Parks & Recreation Linda Bruer briefly discussed the long term capital improvement issues that she sees for her department.  She noted that it would be necessary to develop a new plan and bid construction for the Ferris Park expansion.  She noted also that the playgrounds in all of the parks are 20+ years old and need to be upgraded.  The oldest of these is the Holloway Road park playground.  The Vlasis Park playgrounds need new surfaces, which is a very expensive endeavor.  She also noted that acquiring land for new parks is always a good idea.  Land opportunities are very limited in the City of Ballwin.  She recommended that whenever something presents itself as a possibility, especially in the northern part of town, the Board of Aldermen may want to consider a land acquisition.

Mrs. Bruer noted that 1992 was the date of the last Parks’ Master Plan.  She believes it’s necessary to update the plan in order to move forward with any comprehensive improvements to any of the parks.  She noted also that The Pointe is getting old.  It’s going to be 20 years old very soon.  There are some needs for remodeling in the lobby area to allow better use of the open public portion of the building.  It’s very important that the building be kept fresh and new to keep it as a popular place to go.  Mrs. Bruer noted that the indoor pool will be needing major maintenance.  The HVAC system servicing that room, although it has been maintained over the years, will need to be replaced soon and that will be a fairly expensive investment. 

Mrs. Bruer noted that the Golf Course needs a new irrigation system.  It’s been identified to be a very expensive item to replace.  The Clubhouse needs a new parking lot.  She’s concerned that new MSD regulations may make the cost of replacing the parking lot substantially more than had been anticipated in the past. 

Alderman Terbrock asked if there are any standards for the amount of parklands a city the size of Ballwin should have.  Mrs. Bruer stated that yes, the National Parks & Recreation Association has standards on all types of facilities and parklands based upon population.  Alderman Dogan asked if it would be possible for the New Ballwin Park upgrades to occur sooner than 2016, where they are slotted in the Capital Improvements Plan.  He also asked if doing multiple playgrounds at one time might be less expensive than doing one at a time over a period of years.  Mrs. Bruer said, yes, there might be a possibility of some cost savings, but this is a funding staging issue.  It would probably cost more than $1 million to replace all of the playgrounds at the same time.  By doing them one at a time over years, it’s possible to apply for grant assistance for some of this work.  Putting all the playgrounds into a single project would not result in as much funding, and it’s not realistic to expect that Ballwin will be subject to a grant award every year.  Up to this point, it has occurred about every other year.

Police Department:  Police Chief Steve Schicker stated that the Police Department has no major capital needs identified for the near future.  He noted that it would be nice to have a carport for the marked cars.  It would preserve the cars, protect them from the elements, and make it easier to load and unload at shift change.  A facility of this nature would cost between $125,000 and $160,000.  The department is also in need of a 2-car garage to process vehicles for evidence and for storage.  Currently, the bicycle patrol vehicles are stored outdoors and are subject to weather deterioration.  City Administrator Kuntz noted that the Police Department has space available to expand staff within the current building.  The building was designed to serve a population of approximately 50,000 people.

Alderman Boerner asked where prisoners are brought into the building.  Police Chief Schicker stated that they are brought in through the sally port.  He noted that if the sally port has to be used for evidence processing of a vehicle, then security is compromised on the transfer of prisoners from vehicles to the building.  Alderman Kerlagon asked what is necessary to resolve the sally port utilization issue.  Chief Schicker said the construction of the 2-car garage would be the ideal way to get around this problem.  The sally port would never be tied up with vehicle processing if the secondary garage was available for this purpose. 

Public Works:  City Engineer Gary Kramer stated that the only capital project in the near future is the Kehrs Mill Road upgrade that is scheduled for the summer of 2012.  City Administrator Kuntz noted that most Public Works spending in recent years has been for street work.  Much of the street work is not included in capital projects, but is actually funded through the operating budget.  He noted that additional funds coming available with the end of debt payments could be used to supplement expenditures on roadway improvements.  He noted that $3 million is about all the work that can be accomplished in a typical summer season, not interfere with school busses, and be completed in the good weather. 

City Administrator Kuntz said that material costs are expected to be a major factor looking into the future.  He noted that in a given year, if Ballwin was fortunate to receive good bids on overlay or similar work, it might be advisable to draw on the proposed capital fund to do additional work.  City Engineer Kramer also noted that the dump truck fleet is getting old.  There are several trucks that date back to the middle 1990s and are beginning to show deterioration.  He explained that the problem is not so much a matter of mileage, as it is the deterioration caused by salt spreading in the winter.

Street Lighting:  Alderman Leahy stated he believes the Ameren lights are too expensive overall.  He believes the city should explore the possibility of buying the system over time.  Ameren would continue to maintain the lights and the electricity fees would be paid according to the actual energy consumption of the lights, but Ballwin would own the poles and be responsible for their maintenance.  He stressed that he’s not wanting to turn lights off.  He simply wants to find a way to make this service less expensive. 

Alderman Boerner noted that the problem is with the tariff setting process that goes on at the Public Service Commission.  He believes Ballwin needs to address the problem through that agency.  City Administrator Kuntz stated that the consortium of St. Louis area cities is already pursuing this avenue. 

Alderman Fleming noted that another option available to the City is trying to find a way to get higher efficiency lighting installed.  Ballwin might want to consider changing the subdivision regulations to require the installation of such higher efficiency illumination.  It may not be possible, in that case, to utilize Ameren lights.  If private lights were utilized, the question is would Ballwin be willing to take over their operation, or if that would fall onto the responsibility of the subdivision.  Alderman Terbrock noted that it would be very difficult to require new subdivisions to undertake the cost of providing lighting, when Ballwin already pays for the subdivisions throughout most of the rest of the City.  He also said that it would be very difficult to turn lighting payments back over to trustee associations.  There are several subdivisions, such as Ballwin Hills where he lives, that no longer have active trustee associations. 

Pension Reform:  City Administrator Kuntz described the history of the Police pension program and the LAGERS pension provided to the balance of the city employees.  He noted that the self-directed plan current utilized by the Police Department has not worked well in recent years.  He would like to find a way to fold the police pension plan and the LAGERS plan together to provide a defined benefit for all city employees.

Mayor Pogue asked if any programs other than that provided by LAGERS had been reviewed.  City Administrator Kuntz said they were unable to identify any other defined benefit program comparable to LAGERS that could be considered.  He indicated that he would be unwilling to move to another defined contribution program, given the unfortunate experiences that Ballwin has had in recent times with previous programs of that nature.  They are very much dependent on the ups and downs of the stock market, and in recent years, that has been more down than up.  City Administrator Kuntz also noted that if it were possible to combine the two programs under LAGERS, he would also like to consider moving to a higher level program that pays a higher benefit.  Currently, Ballwin is in the lowest program offered by the LAGERS system. 

Alderman Harder stated that from his perspective, there appear to be three choices:  1) Ballwin can stay with the current two programs and let the police fare as best they can;  2) Ballwin could combine the two programs under LAGERS in that defined benefit program;  3) Ballwin could move the police officers to a different contributory retirement plan, perhaps one that is offered by LAGERS. 

Finance Officer Glenda Loehr said that LAGERS had agreed to bring the police officers in as new employees without any waiting period, as is typically applied to new employees since they were already employees with the City.  They would be considered new employees, but could take their accumulated funds from the previous plan and use them to buy years of service.  This would enhance their retirement options, but most people have less money in their plan than they have years of service to purchase.  As a result, they would take a loss in this approach.

Alderman Harder suggested that this matter be taken to the Finance committee for review and consideration for the entire Board.  Police Chief Schicker commented that the issues with the current pension plan is becoming a major morale issue in the department.  He recommended that something needs to be done, or there may be a problem with continued morale deterioration and perhaps people moving on to other police departments. 

Mayor Pogue asked, do most of the existing officers just want a secure system that they can rely on to give them a specified retirement benefit.  Chief Schicker said yes.  He believes this is the primary issue for most of them.  Alderman Terbrock asked if the new program in LAGERS ended up being one that involved an employee contribution, will Ballwin then be looking to offer a salary adjustment to employees to keep them even?  Alderman Leahy said he certainly understood that morale is suffering from the current situation.  He believes that ultimately, the police force employees will have to make a decision on what they think is the most desirable retirement program.  Once that’s done, Ballwin can do a serious analysis of whether or not it can be afforded and how such a transition would work. 

Mayor Pogue noted that once Ballwin joins LAGERS, there’s no more switching allowed.  The City cannot quit that program. 

City Administrator Kuntz stated that it was always his understanding that bringing the Police Department employees into LAGERS would be a prohibitively expensive.  This possibility was not pursued for that reason because he believed the city would have to pay back costs, based upon their longevity with the city, to bring everybody current.  Alderman Harder suggested that Ballwin attempt to adopt a framework in which each employee can choose to direct their own funds.  Alderman Kerlagon suggested that the framework needs to offer limited options to the employees.  City Administrator Kuntz said that future options are set for everyone by the LAGERS program.  There’s only one option that can be available for all employees with the city.  The only option that employees would have coming into LAGERS would be how to deal with their existing funds in the purchase of additional years of service.  Alderman Finley asked if this issue only applies to uniformed officers.  Chief Schicker said yes, Dispatch is currently in the LAGERS program.

Mayor Pogue said the matter will be assigned to the Finance & Administration Committee for consideration and recommendation to the Board.

Plan of Intent:  City Administrator Kuntz explained that all cities in St. Louis County are obligated to submit an annexation map plan every five years under the State law that established the powers and authorities of the St. Louis County Boundary Commission.  The 2006 map plan was presented to the Board, and Assistant City Administrator Aiken explained the areas that were included, and why certain areas, even though they were not ideal annexation considerations, were included. 

Alderman Terbrock asked what the advantages would be to the City of Ballwin to consider additional annexations.  City Administrator Kuntz said there are issues of revenue, prestige to the City, and community of interest with the City of Ballwin.  He noted that The Pointe and the other recreational facilities that the city built, were designed for an eventual population of 50,000 people. 

It was the consensus of the Board that staff should prepare a Plan of Intent for submission to the St. Louis County Boundary commission for the upcoming map plan submission timeframe. 

Great Streets:  Mayor Pogue explained that representatives from the three cities that remain in the Great Streets endeavor have been meeting in an attempt to establish preliminary list of improvements that could be funded through the $5 million that MoDOT has agreed to provide out of its construction funds for the upcoming 2014 re-pavement of Manchester Road.  He noted that most of the preliminary work being considered by Ballwin, Ellisville, and Wildwood involves sidewalks, bus shelters, landscape islands, crosswalk enhancements, and a variety of way-finding signage improvements throughout the entire corridor. 

Mayor Pogue also noted that the three cities have been working on the development of an inter-governmental agreement that could stand as a plan for new State legislation to authorize the creation of a multi-city development district.  He explained that none of the current programs allowed by State statute are designed to accommodate multiple cities creating a common district within their boundaries. 

Alderman Boerner stated that he believes there needs to be established a continuity of direction in leadership for the Great Streets program.  He was concerned that waiting until 2014 for the first improvements is too long a time to wait.  He asked if anything could be done on a shorter timeframe.  Mayor Pogue explained that the inter-governmental agreement will set the stage to move forward with State legislation to allow the creation of a district.  Because the funds that are being spent are provided from MoDOT, it will be determined by MoDOT when they can be spent, and it is probably not likely that expenditure of those funds sooner than the 2014 schedule for the Manchester Road overlay will be possible. 

Assistant City Administrator Aiken explained that the $5 million from MoDOT is not a grant in the conventional sense.  The money has already been allocated to the Great Streets program along Manchester Road, and the total control of the expenditure of the funds lies with MoDOT.  There is no submission of an application, no competitive review by East-West Gateway, or anything that we typically face with this type of situation.  This pretty much puts MoDOT in the position of deciding whether or not it will agree to fund the recommendations that the three cities are making.  The one plus in all of this is that MoDOT said that the funds would only be spent in municipalities that adopted the plan.  This is why there are now only three cities being eligible for the funding, rather than the five that had originally begun the Great Streets effort. 

Alderman Terbrock noted that there are street lights recommended for the Great Streets plan.  City Administrator Kuntz said, yes, this is true, but it is not anticipated that these will be Ameren street light.  The recommendation will be to install street lights that are utilizing energy-efficient technology on poles that will be owned and operated by the district, if it is created.  These will be metered lights, and Ameren will not be involved.  Whoever pays for this will not be subject to Ameren’s pole charge and related issues.

Adjourn:  A motion was made by Alderman Leahy and seconded by Alderman Finley to adjourn.  The Board voted unanimously to adjourn and the meeting was adjourned at 12:35 p.m. 

Tim Pogue, Mayor

ATTEST:
Robert Kuntz, City Administrator 

TA:MC