6.4. SR 02-14-2005
Item 6.4.
MEMORANDUM
TO:
Mayor and City Council
FROM:
Pat Klaers, City Admin. ,i,s. tr~9r
.IM f,J1:Ui</-4'-
February 14, 2005
DATE:
SUBJECT:
Engineering Services
Councilmember Farber requested that this item be on the City Council worksession agenda. I
believe Larry wants to review the need and timing for establishing an in-housing Engineering
Department. Currently, Terry Maurer is under retainer from Howard R. Green and is at City Hall
full-time to provide the city with engineering services. In this regard, Terry is functioning as our staff
city engineer.
Background
The concept of the city having its own in-house Engineering Department has been a frequent topic
of discussion over the past ten years or so. Sometimes this issue has been discussed in depth and
other times it has been a briefer topic of discussion during budget meetings.
On July 22, 2002, the City Council had a lengthy discussion on city reorganization and personnel
issues as part of the budget worksession meeting. At this meeting, the city Engineering Department
and a public works director (along with a parks and recreation director) received the most attention.
No action was taken by the City Council at this meeting.
On August 25, 2003, again during the worksession meeting when personnel and budget issues were
discussed, the parks and recreation director position eventually made it to the top of the list. This
position ultimately got included in the 2004 budget in spite of the city experiencing LGA cuts.
In January 2004, the City Council directed me to begin work on revising the city organizational
structure. A City Council discussion on this topic took place on April 12, 2004 and for a variety of
reasons the community development director position was the focus of this meeting. Following this
meeting, there were three worksessions held with the City Council and all the department heads.
These worksessions were facilitated by Mr. Brimeyer and the City Council discussed issues and
challenges facing the city, goals, and priorities. During these meetings growth and development
issues were a major topic of discussion. One of the top two goals identified by the City Council at
these worksessions was the adoption and implementation of a revised organizational structure.
s: \ Council \Pat\200S \ W orksessions \Engineering Services. doc
The City Council next met to discuss its organizational structure on June 14 and at this meeting, the
public works director and city Engineer Department were a major topic of discussion. At the end of
the meeting, the City Council authorized entering into a retainer agreement with Howard R. Green
for the full-time services of Terry Maurer in Elk River.
The city has two reports on establishing an in-house Engineering Department dated March 29, 1994
and July 22, 1999, that have previously been distributed to the City Council. These reports were
most recently redistributed to the City Council with the June 14,2004 organizational structure
memo. An overview of these reports indicate that the city today likely has enough work to keep its
own in-house Engineering Department very busy. However, while we will be getting additional
services, the department will likely cost the city additional money out of the general fund.
The city has generally talked about engineering services in terms of a department of approximately
four or five; which includes engineering techs, clerical support, a public works director, and an
assistant city engineer. The engineering techs are the employees that pay for themselves most often
with the management staff being more administrative in nature and being more fmanced with
general fund monies (taxes). While we have enough basic engineering and public improvement work
to keep a staff Engineering Department very busy, especially now that we are into the pavement
rehabilitation program, it should be stated that we will always need consulting fIrm assistance for
large projects and special needs projects such as work at the Treatment Plant. Additionally, it should
be noted that it is more palatable for developers to be reimbursing a consulting engineering fIrm for
services versus reimbursing the city for staff engineering work.
Current Services
There is no doubt that the retainer agreement for services from Terry Maurer is working out very
well. The city is getting a much better deal from Howard R. Green under the retainer agreement
versus our previous arrangement of simply paying for Terry's services on an hourly basis. The
retainer agreement allows the city to get more hours at a lower cost. This retainer arrangement was
and is viewed as a transition or in-between step from our strictly consultant based relationship for
engineering services to establishing our own in-house city Engineering Department. This is
consistent with past Council discussion in terms of going slow and gradual towards establishment of
a department and not doing the entire department all at once.
Based on the success of our current retainer agreement relationship, it would be appropriate to start
an in-house Engineering Department from the bottom up. The city can save money on
improvement projects by spending money to hire in-house engineering techs. These techs would
provide a variety of inspection and plan development and mapping functions under the direction of
Terry Maurer. An example of how the in-house tech could save the city money is with the pavement
rehabilitation program. A lot of these inspections in the field and a lot of the preliminary planning
work could be done by these techs versus paying the consulting fIrm to provide these services.
Starting the Engineering Department from the bottom up will allow us to get established so that
when we hire an assistant city engineer or public works director, they will be able to come into a
situation where the department is somewhat established and they will not have to develop a
department as well as manage our consultants and do all the administrative work associated with the
Engineering Department.
s: \ Council\Pat\2005 \ W orksessions \Engineering Services. doc
Conclusion
Based on City Council direction in June 2004, the city has entered into a retainer agreement for the
full-time services of Terry Maurer. The city is getting a much better fmancial deal and much better
services out of this arrangement than our previous relationship with Howard R. Green. It makes
sense to continue this relationship and start establishing an Engineering Department "from the
bottom on up" utilizing Terry Maurer and his expertise and experience to manage these employees
and to start developing the department.
Please note that the establishment of an Engineering Department and the hiring of engineering
techs are not in the 2005 budget.
s: \Council\Pat\2005\ Worksessions \Engineering Services. doc
MEMORANDUM
TO: Pat Klaers, City Administrator
FROM: Terry Maurer, City Engineer ~
DATE: February 10, 2005
SUBJECT: February 14, 2005 Engineering Discussion
At Monday evening's worksession under the Engineering Discussion, I would hope to get a
chance to make a brief introductory presentation to the City Council. My thoughts on the
content of my presentation would be as follows:
1. A very brief update of my 27 -year association with the City of Elk River - As you are
aware, I began work for the City of Elk River in the fall of 1978. During my tenure here,
I have been associated with three different consulting firms.
2. A more detailed discussion about how the montWy retainer program has been working
since the Council authorized entering into this arrangement in June of 2004. As you are
aware, I moved up to the City Hall fulltime the last week of May 2004 and have been a
fulltime resident here since. In the last 7 - 8 months I have worked to extract myself
from as much developer review work as possible so that the City will get the biggest
"bang for their buck" on the monthly retainer. John Anderson from Howard R. Green
has been spending several days a week at City Hall also, and has taken over much of the
developer review, coordination, and construction administration. This has afforded me
more time to take over items that were previously done by personnel from Howard R.
Green, such as maintaining and updating the City's Municipal State Aid System, more in
depth involvement in City-initiated projects such as the King Avenue parking lot, and
the 2005 street reconstruction project, hands-on management of activities at the
Wastewater Treatment Plant, and being much more available for other staff and citizens
who have questions or need engineering involvement in issues of the day-to-day nature.
As you aware, I track the hours billed to the montWy retainer on a project-by-project
basis per month, so that the Accounting Department can assign these costs to the
appropriate projects. Each month since its inception, the number of hours charged to
the montWy retainer has increased to most recently-when it's been approximately 105-
120 hours a month.
Memo to Pat Klaers
February 10, 2005
Page 2
3. Discuss with the City Council my thoughts that I have previously discussed with you
relative to beginning to build an engineering department. My recommendation would be
to build an engineering department from the bottom up; that is, by starting to hire
technicians who are qualified to take over activities previously performed by Howard R.
Green staff. Examples of these activities would include construction inspection on City-
initiated projects such as the 2005 street reconstruction project, or the King Avenue
parking lot, NPDES inspections and administration, annual map updating, record
drawing preparation, construction of a computerized pavement management system,
storm sewer map construction, and other miscellaneous items that have previously been
completed by consultants. In fact, if more than one technician were to be added and
one of them was proficient at AutoCAD we could greatly reduce the cost of preparing
plans for City-initiated projects such as annual sealcoating, assessable overlay projects, or
the 2007 reconstruction project. It would be my recommendation not to have City-hired
staff work directly on developer projects, simply because all of the consultant costs on
these types of projects are typically billed back to the developer. It seems to me it would
defeat the purpose of starting to build an engineering staff if any or all of their time was
consumed by working on developer activities, since the City has historically not been
successful in charging back staff time but has passed through consultant's charges.
Beyond these three major points I would like to discuss with the City Council, I will certainly
be available to answer any questions or discuss any other engineering activities that you or
the Council would like to explore.
S:\Engineer\2005 Memos\02 1005 PK.doc
MEMO TO:
Pat Klaers, City Administrator, City of Elk River _ ;/
Steve Gatlin, P.E., Vice President, MSA ft/ ~
City Versus Consultant Engineering Services
~29,~
FROM:
SUBJECT:
DATE:
INTRODUCTION
Terry Maurer has asked that I provide you some information regarding my perspective on
whether or not it is appropriate for Elk River to consider hiring a city engineer or
establishing an engineering department of some sort. For background information, let me
introduce myself briefly. Until January 1994, I was a city engineer employed by two
suburban Twin Cities communities since 1978. Prior to that, I was an assistant city
engineer/city planner. I have had approximately 20 years municipal engineering experience.
I am very familiar with the process and economics of establishing a city engineering
department and analyzing whether or not the engineering services of a city staff are more
economical than a consultant. For your information, I have enclosed a brief biographical
sketch. Following review of my information, I would be happy to meet with you in person
or discuss the issue further by telephone. Please let me know if you need more assistance.
SUMMARY
Based on my experience and background, I would summarize the issue of city engineer
versus consulting engineering services for communities as follows:
· When a city reaches a population of 15,000 to 20,000, for proper municipal services
it is necessary for a city to have a full-time staff city engineer.
· Beyond the staff city engineer, the level of engineering services will depend on the
level of service required to be provided by the city in support of the city engineer.
230/000-3001.mar
· The engineering department function will never be financially self-sufficient and will
have to be significantly fInanced by the city general fund, at least at a 40-50% level.
· For cities above 20,000 population, a city engineering department consisting of at
least three to four employees is necessary to provide proper municipal services.
DISCUSSION
The decision whether or not to hire a full-time engineer and/or engineering staff would
depend largely on an evaluation done by the City to evaluate goals and objectives based on
desired functions for the engineering department to perform. I would suggest that you could
consider possibly three levels of service for the engineering department. I would categorize
these as follows:
Level 1
Level 2
Level 3
Technical support staff for City, including performin~ functions of advising
city council, commissions, department heads, administration, etc. This work
would generally be done by a licensed, degreed, city engineer type position.
Little of this person's time could be charged back to developers' projects
(estimated 10-20 % ).
Public services - this would include work performed by an experienced
engineering technician, including preparation and distribution of information,
maintenance of records, field services, drafting, and minor design. Some
portion of this person I s time could be charged back to developers and proj ects
(estimated 30-40 % ).
Engineering production services, including design, construction
administration, and staking. These services are provided by a team of design
and surveying technicians and office support staff. The size of the team
would depend on the level of construction activity required. Most of the time
for the engineering design/construction team could be charged back to
projects and developers (80-90%).
To have a better understanding of the time that each particular position might spend on a
variety of possible activities, I have attempted to summarize the role of the person or team
230/000-3001.mar
occupying each of the three levels as follows:
Level 1: City Engineer
FlInc:tions:
· Attend meetings - staff, developer, planning commission, city council (person would
act as a liaison and present staff reports or routine items but not major project
reports) - 10 % .
· Attend concept review meetings - 10%.
· Review plans for development projects - 20 %.
· Conduct field inspections - 5 %.
· Prepare mapping and graphic information - 5 % .
· Financial and project administration - 15 %.
· Long-range planning - 10%.
· Review of project plans - 10%.
· General departmental city administration/support - 15 %.
Level 2: Experienced engineering technician.
FlInc:tions:
· Attend concept review meetings - 20%.
· Review plans (public and private development projects) - 30%.
· Conduct field inspections - 20 % .
· Prepare mapping/graphics - 10%.
· Record administration/management - 15 %.
· Complete small field design/construction projects - 5 %.
Level 3: Experienced design technicians, field construction inspectors, and office support
staff.
FlInc:tions:
· Conduct preliminary surveys, field investigations - 20 %.
· Prepare project design plans and specifications - 40 %.
· Conduct field surveys, project inspections - 30%
· Records administration and management - 10%.
2301000-300J.mar
To analyze the cost issue, it must be understood that the cost saving issue is driven primarily
by the desired level of service for engineering. Typically, for level 1 services, a city would
spend $4.00 to $6.00 per capita. For level 2 services, the city would spend a similar
amount, $4.00 to $6.00 per capita. For level 3 services, the cost of one field crew consisting
of two full-time field personnel and one temporary aid would be approximately $100,000 per
year. One crew could handle approximately $1.5 million worth of construction work on an
annual basis. On an average, for a community the size of Elk River to provide level 1 and
level 2 services, including a full-time city engineer and a competent engineering technician,
the cost would be approximately $90,000 to $134,000 per year using the per capita figures.
For comparison purposes, using information generated by the City of Roseville for typical
operating costs, the Finance Department has suggested that to arrive at an actual cost for
department services, a salary factor should be used equal to the hourly rate paid to each
classification, plus a 22 % additive included for benefits. For overhead, a 59.5 % factor is
used, including the engineering department's share of equipment.... building expenses and
depreciation, and other operating expenditures. This would result in a total multiplier for
services of 1.95 times salary costs. For hiring purposes, I would suggest you consider the
cost ofa city engineer for Elk River in today's market would be approximately $50,000 per
year. For a reasonably experienced engineering technician, the cost would be $30,000 per
year.
In summary, the total costs to provide these two positions would be as follows:
rity Fneineer Te~hnici~n
Salary $50,000 $30,000
Benefits 11,000 6,600
Overhead ?9 J 7:')0 17, R'iO
Total $90,750 $54,450
Comparing this cost to the per capita cost would indicate that for a full-time city engineer
and engineering technician, the total cost would be approximately $140,000 to $150,000.
This would compare closely with the estimated cost to the City for a city engineer and
engineering technician using the per capita analysis.
230/000-300I.mar
The issue then must be analyzed from the perspective of who actually pays for these costs
and what benefit do the city and developer receive from having the full-time city staff. To
compare with a consultant, the issue must be analyzed as to what level of service is necessary
from the consultant and how the elements of timing, technical expertise, and fluctuating
workloads all are taken into consideration.
To further analyze the issue of cost, the time spent for each level of service on "chargeable"
functions must be analyzed. A summary table of the three levels of service and who would
benefit is estimated as follows, based on my experience:
Level 1 Service
City staff/city council
Developers
Public
Level 2 Service
City staff/city council
Developers
Public
Level 3 Service
City staff/city council
Developers
Public
60%
30%
10%
20%
50%
30%
10%
50%
40%
Looking at the level 1 service which could be provided by a city engineer, of the 40% time
that would benefit developers and the public, approximately only half of that could be
charged back. For the city engineer, the net cost to the City would be $90,000 less amounts
charged back of $18,000, or $72,000.
For level 2 services of the full-time technician, of the 80% which would benefit developers
and the public, only half or 40% could be charged back. Of the $55,000 cost, only $22,000
could be charged back. The net cost to the City would be $33,000.
In summary, the actual cost to Elk River of providing these two functions would be
approximately $105,000 annually. This must be compared with the current charge by MSA
to Elk River for general engineering services in the range of $40,000 to $50,000 annually.
This leads us to conclude that for similar engineering services, it would be twice as expensive
230/000-3001.mar
to have a full-time engineering department on staff than it currently is to utilize MSA.
Obviously, for the extra costs the City would receive the benefit of having full-time staff
available. However, for this service there would certainly be an increased cost to the City's
general fund to provide these engineering services.
With using consulting engineers, the City has control over the use of outside technical
professionals without having to hire a full-time staff. The issue relates to the City being able
to buy what it needs, when it needs it. This relates to items addressed earlier, including
fluctuations in seasonal workloads, timing for required services, and level of technical
expenence necessary.
In summary, I believe it is appropriate for the City of Elk River to consider a full-time city
engineer and possibly an engineering technician in the next 5-10 years when the population
of the community reaches the 15,000 to 20,000 range. Again, the city engineer and
technician could perform the functions as outlined. It should be cl~ly understood that the
cost for these positions would not be offset by charges against developers and public projects.
Significant costs would have to be absorbed by the City's general fund. I am convinced that
with full-time staff, costs now charged directly to developers for meetings with the engineer
would, in many cases, be "lost in the shuffle" and would become part of the normal
administrative services provided by City staff.
If you have questions regarding this information, please contact me. I would be happy to
meet with you to discuss any of these issues further.
SDG:tp
230/000-3001.mar
BIOGRAPHICAL INFORMATION
NAME:
Steve Gatlin, P.E.
EXPERIENCE:
Currently:
Vice President/General Manager
MSA, Consulting Engineers
1326 Energy Park Drive, St. Paul, Minnesota
MSA is an 85-person firm providing a wide range of municipal
engineering services to Minnesota cities, counties, and other
agencIes.
1988-1993
Public Works Director
City o{Roseville, Minnesota
Public works director and city engineer for suburban city of 34,000.
1978-1988
Public Works Director/City Engineer
City of White Bear Lake, Minnesota
Public works director and city engineer for suburban city of 25,000.
1974-1978
Planning Director! Assistant City Engineer
City of White Bear Lake, Minnesota
City planner and assistant city engineer for the City.
1973-1974
Construction/Design Engineer for two government agencies
EDUCATION:
Bachelor of Civil Engineering Degree
University of Minnesota, 1972
Graduate Courses - U of M in transportation, business, and management.
REGISTRATION: Registered Professional Engineer, Minnesota.
ASSOCIATIONS: American Public Works Association (APW A)
Past President, Minnesota Chapter - APW A
National Society of Professional Engineers
City Engineers' Association of Minnesota
OOl-2101.FEB
Howard R. Green Company
CONSULTING ENGINEERS
Date:
Pat Klaers, City Administrat()r, City of Elk River
Craig L. Ebeling, PE ~~
_.-_ . _' ..- -,. -- .----."-'-,.-~.,.:c::.::::::::..'_>.
(JuIY~~ _~_)
--..~-~.----""
City versus Consultant Engineering Services
To:
From:
Subject:
INTRODUCTION
Terry Maurer asked that I jot down a few thoughts on whether or not it would be wise for the City
to consider the establishment of a City Engineering staff. It is my understanding that you
considered this a few years back and are revisiting the issue to verify if your previous conclusion
is still valid. This is a consideration that is not at all foreign to me. I have worked both as a City
staff engineer and as a consultant, so I have looked at the issue from both sides. I have about
27 years of experience of which more than 15 have been as a City Engineer or Public Works
Director. I was in Burnsville for eight years as City Engineer then Director of Parks and Public
Works and finally as Deputy City Manager. I also served as City Engineer in Savage and
Worthington.
SUMMARY
The following is a summary of my thoughts:
. When a City reaches a certain population (perhaps 15,000 - 20,000), it can be
desirable and advantageous to have an in-house City Engineer. This is especially
true when the City is a "full service" city with water treatment, wastewater treatment,
airports, solid waste functions etc. and when it is "mature".
. There are several different in-house engineering approaches that can be used
depending on how heavily the City wants to get involved in staffing. All of these
approaches are being used by different communities with varying results. The
appropriateness of them can only be gauged by the community itself. That
assessment will hinge on what the expectations for the engineering group are.
. An engineering group can be nearly financially independent without funding by the
general fund under certain conditions.
The group must have a certain "mass".
It must be funded from non-general fund improvement funds at rates that are
at or above those charged by consultants.
The group must be of a size and experience level such that it can undertake
projects of meaningful size.
Projects of this magnitude must be in the City's CIP for the foreseeable
future.
O:\PROJ\900135csm\ 135-2203.july99.doc
1326 Energy Park Drive. St. Paul, MN 55108 . 651/644-4389 fax 651/644-9446 toll free 888/368-4389
Pat Klaers
July 22, 1999
Page Two
DISCUSSION
The decision on whether or not to run an in-house engineering group will hinge largely on what
the goals and objectives are. There are many, many different levels of in-house service that
could be implemented. I will suggest four. (I am sure there are many more but this will at least
serve as a starting point for your thoughts.) The attached chart attempts to layout some
generalized functions, staffing levels, and potential revenue to be generated by the scenarios.
If the goals are only financial one must carefully consider all of the costs. The simple chart
indicates that significant ad valorem contributions are necessary with smaller staffs. A decision
to get into a staff of some size will be required before the group approaches a break,.even point.
That staff will of course need to be equipped and housed. The assumptions on equipment follow
the chart. The costs of housing the group and other non-labor overhead costs are not
recognized in this simple analysis but of course they are there. One must also bear in mind that
this group will need to have the opportunity to handle meaningful projects each year from which
to generate revenue. Those projects will have to be within the technical purview of the group. It
would be unwise for the City to try to staff itself to handle all of the differing kinas of technical
work that it will encounter.
There are non-financial advantages to having an in-house engineering group. There can be
greater day-to-day accessibility in some cases (One should not overestimate that availability.
This decreases as more project work is taken on.) This is somewhat mitigated with our present
arrangement in Elk River. Conversely, however, there is the loss of some flexibility. Using a
consulting City Engineer allows the City to contract for the engineering services that are
required and nothing more. If a certain specialty is required, the City does not have to maintain
that expertise in-house idling away until the time for its need arrives. If there are upturns or
downturns in the economy the City never needs to be concerned with having too little or too
much staff. Fast track projects can be implemented very quickly and do not have to wait until an
in-house staff can get to them.
Nevertheless, I believe that there is a level at which an in-house engineering group is a
reasonable decision for a City. In order for that to be the case, the City must be at an age and a
population base where there is a predictable workload that warrants staffing up to handle it.
That is, the community must be a mature community with the majority of its infrastructure ready
for or approaching reconstruction. This allows for the in-house group to establish its base load
each year and to select projects that are within its size ability and technical capacity to handle.
Those projects that fall outside of that range should be given to consultants.
With the rapid growth experienced by the City in the last 8-10 years, Elk River may not yet have
met this criterion. Many cities that are still on the growth curve such as Apple Valley and
Cottage Grove have put off the establishment of an in-house engineering staff. Other smaller
mature cities such as Prior Lake, West St. Paul, and Mendota Heights have in-house staffs.
I would enjoy discussing this issue with you in greater detail if you think that would be helpful.
O:\PROJ\90013SCSm\13S-2203ojUIWWard R. Green Company
CONSULTING ENGINEERS
I Option Functions Required Staff Staff Required Equipment Equipment Revenue ( *)
Salary First Cost Generated
1 Coordinate City Engineer * $90,000 1 Computer w/Software $3,000 -
Consultants
Clerical Support $20,000 ArcView I ArcCad $1,500
Support PW
Total $110,000 Total $4,500
2 Coordinate City Engineer * $90,000 2 Computers w/Software $6,000 Development
Consultants Review
Asst City Engineer $70,000 ArcView I ArcCad ~1,500 $90,000
Support PW
Clerical Support $20,000 6 Plan Files $3,000
Development Review
Records I Mapping Total $180,000 Total $10,500
3 Coordinate City Engineer * $90,000 Computer w/Software $3,000 Development
Consultants Review
Asst City Engineer $70,000 2 CAD Computers $8,000 $90,000
Support PW
Engineering Tech IV $60,000 ArcView I ArcCad $1,500 Minor Project
Development Review Work
Clerical Support $30,000 2 AutoCAD $6,000 $100,000
Records I Mapping
2 SoftDesk $12,000 Total
Minor Project Work Total $250,000 $190,000
6 Plan Files $3,000
-
11x17 Laser Printer $2,000
Total $35,500
4 Coordinate City Engineer * $90,000 3 Computers w/Software $9,000 Development
Consultants Review
Asst City Engineer $70,000 3 CAD Computers $12,000 $90,000
Support PW
Engineering Tech IV $60,000 ArcView I ArcCad $1,500 Minor Project
Development Review Work
Engineer Tech II $50,000 3 AutoCAD $9,000 $100,000
Records I Mapping
Engineer Tech I $40,000 3 SoftDesk $18,000 Major Project
Minor Project Work Work
Clerical Support $40,000 6 Plan Files $3,000 $180,000
Major Project Work
11x17 Laser Printer $2,000 Total
Total $350,000 $370,000
E Size Plotter $7,000
Xerox $5,000
Survey Vehicle and $40,000
Equipment **
Total $106,500
*
If a Director of Public Works was selected who was a P.E., they could also serve as City Engineer. The Assistant City
Engineer's position could then be upgraded to a P.E. and another Staff Engineer added.
** Preliminary topography and Construction Staking could be contracted out.
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Assumption
. Office space and furniture is available.
. 30% fringe factor on salaries.
. Survey Equipment Prices:
4x4 with crew cab $25,000
Total Station $12,000
Level $ 1,000
Misc levels, prisms, tripods, etc $ 2,000
TOTAL $40,000
. HP IV, 11x17 Laser Printer - $2,000
. HP E-size Plotter - $7,000
. R 14 AutoCad - $3,000
. SoftDesk - $6,000
. Non Cad Computer - $3,000
. Cad Computer - $4,000
. ArcView / ArcCad - $1,500
. Development Review, assume 1500 hours at 60.00/hour = $90,000
. Minor Project Work, assume overlay project = $100,000
. Major Project Work, assume $1,000,000 project at 18% = 180,000
O:\proj\900135csm\135-0205.sept
\
City Council ~'finutes
July 22, 2002
Page 4
C. 2003 Personnel Services
City Administrator Pat Klaers discussed the 2003 staffing requests. He further discussed the
newly hired information technology employee plus the need for a building maintenance and
cleaning program, a Park and Recreation Director and department, an engineering
department and Public Services Director. The City Administrator discussed the current
organizational system of the city and the need for change due to the extent of growth that
has taken place. The City Administrator proposed establishing an engineering department in
2003, hiring Terry Maurer as the Engineer/Public Services Director and then staffing the
department in 2004. In 2005 an Assistant Engineer would be hired and then Terry Maurer
would just serve as the Public Services Director.
The Council questioned the issue of not opening up the position of Engineer/Public
Services Director to other applicants. The Council discussed the probability of the City
recognizing a savings by hiring Terry Maurer because of his knowledge of the City. Mayor
Klinzing indicated that she would need to see the position and needs justified and would like
to see the cost savings the city would realize because of Terry lv'!aurer's relation with HR
Green and the City of Elk River. Mayor Klinzing also indicated that she would like to see
exactly what the responsibilities of the position would be.
Councilmember Tveite indicated that he would like to see the net impact into 2004 prior
considering this issue. Councilmember Dietz and Councilmember Kuester iii_dicated that
they would rather see the department built up gradually. Councilmember Dietz stated that
he wanted to know how the department would be funded and questioned how these
positions would impact other staffing requests and needs. He further noted that he does not
like to see the Park and Recreation Director continually being put on hold although he
realizes the need for an engineer. Councilmember Tveite indicated that the position should
be justified on the position itself, not by considering a specific person for the position.
Councilmember Motin concurred. The City Administrator discussed the issue that the
position is not being designed for one specific person but that the Engineer position is best
suited to be the Public Services Director.
The Council made no decision on this issue at this time and requested further information
from staff.
5.4.D. 2003 General Update
Discussion was held regarding the police liaison program. Assistant Chief Beahen indicated
that the school district is seriously considering discontinuing the program and having
Sherburne County provide the service. It was indicated that the Police Staff would be
meeting with the school representatives to try to persuade the school to reconsider. The
"tvIayor stated that she would attend this meeting.
6. Other Business
The City Administrator informed the Council that the Initiative Foundation has requested
the City to contribute $5,000 per year for five years making a total commitment of $25,000.
The Council requested information as to what other cities are contributing. The City
Administrator indicated that he would provide more information on August 12.
City Council Minutes
Apri112,2004
Page 7
-----------------------------
TIle Council Wishes to establish regular meetings on the first, second, and third Mondays of each
. Monday. City Clerk Joan Schmidt e},.,l'lained that in order to do so, a change to the city code has
to be approved.
MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY
COUNCILMEMBER MOTIN TO ADOPT ORDINANCE 04-06 AMENDING
SECTION 2-52 OF THE CITY CODE OF ORDINANCES. MOTION CARRIED 5-0.
5.12A Consider a Resolution to Appoint a Contact Department and Assigning Duties in regards to
HIP AA and Consider a Resolution to Appoint a Privacy Official
Finance Director Lori Johnson informed the Council of the need to appoint a contact
department and assign duties in regards to regulations of the Health Insurance Portability and
Accountability Act of 1996 (HIPP A). This department would receive complaints about any
failure to comply with either the policies and procedures or the privacy rules in general regarding
HIPP A.
Ms. Johnson also explained that a Privacy Official needs to be appointed to coordinate the
employees' policies and procedures under HIPP A's privacy rules and to monitor and decide any
issues that occur under the rules.
MOVED BY COUNCILMEMBER TVEITE AND SECONDED BY
COUNCILMEMBER MOTIN TO APPROVE RESOLUTION 04-20 APPOINTING
THE FINANCE DEPARTMENT AS A CONTACT DEPARTMENT WITH
ASSIGNMENT OF DUTIES AND TO APPROVE RESOLUTION 04-21
APPOINTING THE FINANCE DIRECTOR AS THE PRIVACY OFFICIAL WITH
ASSIGNMENT OF DUTIES. MOTION CARRIED 5-0.
5.13
Discussio_n on City Organization Structure
City Administrator Pat Klaers explained that Council had directed him, widl staff assistance and
council input, to propose options for preferred organizational structure, staffIng levels, reporting
relationships, and a timetable for ultimate implementation over a two-three year period. TIle
first goal is to improve the services the city offers to dle public. TIle second goal is to reduce
the number of department heads dlat report direcdy to the City Administrator. Mr.K1aers
reviewed with Council his plan: the hiring of a Parks and Recreation Director; establishment of
a Public Works Director with establishment of a City Engineering Department; consolidate a
number of current departments within a Community Development Department; not to establish
and hire a Public Safety Director; and future changes to be discussed for the Administration and
Finance areas (General Government).
Councilmember Tveite asked if we establish a City Engineering Department, would we get away
from a consulting engineer. Mr. I<J.aers stated that he felt it would significandy reduce the need
for a consulting engineer but dlat he didn't feel the city could get away from dlis service one
hundred percent. Staff would be able to do dle routine projects, mapping, and GIS but we will
still need some consulting services for bigger projects and specialized projects.
Mayor Klinzing stated she was interested in seeing us adopt a specific structure that will be a
goal we will be working towards. She feels that we will be looking at serious areas to work on.
She's disappointed that dle Administration/Finance area is not completed. She stated that
setting up a structure now widl still nine department heads reporting to the City Administrator is
too many; the goal would be to have six.
City Council Minutes
April 12, 2004
Page 8
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Mr. Klaers stated thathe could ftnalize that piece of the puzzle but d1at he didn't see any
immediate urgency. He stated that from this General Government area, there would be no more
than two additional staff reporting to him, and maybe it's one.
Councilmember Tveite agrees d1at the next important consolidation area is the Community
Development area, and then d1e Administration/Finance area.
Councilmember Dietz stated d1at council has talked about city vision and reorganization, but the
main point of this exercise and the way d1at it started was the relationship between d1e city
administrator and d1e department heads, how they communicate and what needs to be done, and
he doesn't want the council to lose focus d1at that was the point of this whole mission. He
stated that he had heard from several staff members regarding d1e memo in d1e packet. His
response to people is d1at dus is just the administrator's opinion and, in his view, the council
wouldn't do anything until council has done the three sessions with the consultant Brimeyer.
He also stated that council would be receiving input from all d1e department heads.
Mr. Klaers stated d1at he compiled the information as he was asked to do and gave the council
his professional opinion, not d1e opinion from all 16-department heads. Mr. Klaers stated that
tlus was Ius assignment. Yes, it will cost money to go through organizational changes and to add
upper level positions. He feels in the hiring of a Community Development Director tl1at if tl1e
city promotes internally, you would have to replace that person. The Public Works Director and
the Engineering Department will be expensive and we will have to decide when it is tl1e right
time and whetl1erwe can afford it. Mr. Klaers stated that wid1 the assignment to eliminate tl1e
number of direct reports by half, it was going to impact people.
Councilmember Dietz stated that his idea wid1 tl1e exception of d1e Park & Recreation Director
position was d1at all candidates could be internal for these department head positions. Mr.
K.laers stated tl1at that is what he is suggesting with Community Development, and that some of
theotl1er positions could also come from within.
Councilmember Motion stated that we need the Assistant Administrator position in tl1e
organizational chart as well (for tl1e General Government area). He feels that dus position
should be considered even before d1e Public Works position.
Councilmember Dietz asked if the City Administrator, in regards to tl1e Community
Development position, is saying tl1at anyone in that area would be eligible to apply. Mr. Klaers
stated tl1at tlus is a council decision but that he could give Ius recommendation regarding whom
to promote if this is what tl1e council desires.
Councilmember Kuester feels that it should be open to internal and external candidates and to
follow the same process d1at we would follow for external candidates.
Mayor Klinzing stated d1at the council may be aware of issues from tl10se applying and the
council didn't want to put d1e Administrator in an awkward position.
Councilmember Tveite asked about d1e city prosecuting attorney and when he was hired it was
to have him with the police department, why is this not d1e situation.
Councilmember Motin stated tl1at could be a problem wid1 protocol; there should be separation
of duty. He stated tl1at he likes this overall proposal; that it is pretty close and that we just need
to complete tl1e Administration/Finance area.
City Council Minutes
April 12, 2004
Page 9
Councilmember Kuester stated a concern with Human Resources, which deals directly witll
council, since council should be hiring and fIring, and she wonders how many levels we should
have between the council and this position. Councilmember Kuester stated the person who is
assigned tllat responsibility needs to be a designated policy person at a management or
department head level.
Lori Johnson agreed and stated that by default tllat has fallen under tlle Finance Department.
She stated that tllis can be accomplished by moving the responsibility out of the Finance
Department and can be under this one person.
Councilmember Dietz asked if council was going to try to agree on a proposed organizational
structure tllat would be shown to staff as council has tlle upcoming meetings with Brimeyer.
Mr. Klaers stated that tlle meetings witll Brimeyer are to work on goal setting and tlle possibility
of a governance model, and that he wasn't hired to work with organizational planning.
Mayor Klinzing stated that it was her understanding tllat council is going to do tllis
organizational work. Once tlle council puts together a specifIc structure, this could create
opportunities.
Councilmember Kuester agrees witll Councilmember Dietz that even tllough this may not be
part of sessions witll Brimeyer, she would like to go through tllose sessions and see this
organizational structure come togetller after tllat.
Jeff Beahen stated his concerns about what the council thinks in regards to the city prosecutor
position and where it fIts in tllls structure, currently under the city administrator. But the
administrator is not the one that gets the calls from tlle county, sheriffs offIce, etc. He feels by
moving the city prosecutor furtller away from the Police Department it may break down
conimunication.
Councilmember Motin stated that we might need to discuss tlle role of the city prosecutor, tllat
tllls position should not be 95% working with police issues. Council felt that they need to know
tlle reality of tlle work of this position and how is the flow of communication witll the police.
Mr. Klaers asked what Council's timetable is and he will work on tlle "bubble"
(Finance/Administration or General Government) area.
Councilmember Motin stated that we are moving forward on the Park & Recreation portion and
doesn't like several montlls' delay between each new position.
It was the consensus of tlle council to have this as a June Council Work Session topic.
6. Other Business
No additional business.
7. Staff Updates
Catherine Mehelich informed the council tllat a notice was received from tlle Minnesota
Department of Employment and Economic Development tllat a portion of our grant
application for commercial rehab was awarded.
. ,
City Council Minutes
June 14,2004
Page 3
Mr. Maurer stated that when council continues discussion on the Comprehensive Plan and
comes up with scenarios in the target population range, then he could figure out the cost for
the trunk lines and come up with pricing. Otherwise, right now he doesn't know where to
consider the additional trunk lines. He stated that 1000 gallons per acre seems to be a good
number to use for sizing a large undeveloped area. He stated that after council deliberates
and decides, if the answer is that we want to plan for more than 3 million gallons per day,
then we would need to talk to Great River Energy. He stated that the land that we would
want to buy from Great River Energy is currently being used for outside storage.
Mayor Klinzing summarized the discussion by saying that this is the information that the
council has requested, unless there are more specific questions at the time of reviewing the
Comprehensive Plan, tllat this is now what's available for the council to review.
Ron Bratlie, School District #728 - stated that the District needed to build a school,
preferably in Elk River, and he needs to have a decision within 90 days if there is a
possibility to build a school here or he will need to look elsewhere to the south. He
currently has a plan and an architect and needs to know where he stands.
Ed Dulak - stated that property he controls is being donated and also he will be paying for
some of the infrastructure. He stated that tlle timing is such that they need to do something
at tlns time. It is hoped that the school would be opened by September 2006 and he stated
tllat we do have time now for the planning to have this happen.
Mayor Klinzing stated that council had made a decision to table the Comprehensive Plan
and this decision was tied to getting more information about the sewer study and the council
wished to be more comfortable before going forward. Most likely the Comprehensive Plan
discussion will be held on July 19. She is in favor of the area, including the 30 acres that are
being donated to the school, to be urban services and she felt a school in that location is
excellent. However, the capacity of the lift station is the issue. She feels that the capacity
for tlle sewer system is tllere and doable and that it's not the sewer plant, but the lift station
capacity that could be a problem.
A woman in the audience asked if there was anything more that can be done to expand the
urban area to their property. Mayor Klinzing replied that the citizens should discuss their
issues with the councilmembers.
Mayor K1inzing recessed the meeting at 7:55 p.m.
At 8:07 p.m. the meeting was reconvened.
5.2a Discussion of Structure of City Organization
City Administrator Pat I<:1aers reviewed his memo and discussed possible changes in the
city's organizational structure. Organizational chart options were reviewed along with his
recommendation to council of options A or B. He also recommended the following:
· Accept retainer contract for services from Howard R. Green regarding Terry
Maurer;
· Establish the director of administrative services position and place Lori Johnson in
that position;
· The city clerk position to remain under supervision of the city administrator;
City Council Minutes
June 14,2004
Page 4
.
Move forward with the establishment and filling of the community development
director position (option A) or the public services director position (option B) and;
incorporate funds into the 2005 budget for one of these positions.
Mayor I<linzing likes the structure of the City of Blaine but felt it is better for the
administrator to be removed from the actual hiring and firing of staff. She felt Safety
Service including Code Enforcement was interesting.
Councilmember Dietz asked if the city currently is paying more than $8,000 per month, over
and above developer driven projects, for Terry Maurer's services. Mr. Maurer answered that
last year he billed a little over 1000 hours to Elk River. It was felt that it would be more cost
effective if he were on staff because the city would get double the hours for a flat rate rather
than a dollar per hour rate. Howard Green gains by keeping the city as a major client. Mr.
Dietz felt that adding a whole engineering department would be expensive because it would
be adding more than one person.
Councilmember Dietz had concerns in hiring the additional positions of assistant city
administrator and community development director and if there would be sufficient work
for tllem. Mr. I<J.aers stated that we could have an internal person doing a dual function
such as an engineer and a public works director. These positions would better coordinate
the activities of the individual departments and their assignments. The community
development director may restructure tlle department and assume some of the
responsibilities that economic development or planning currently have. The community
development director is one of the positions that came up the strongest in the goal setting
sessions witll the council. More communication among boards, commissions, and staff is
needed and a community development director can help in tllis regard.
In tlle role of assistant city administrator, this person would be given some of the work that
tlle administrator currently does and that he can't delegate to others because tlleir work load
is also full. The assistant position would help in areas when there are vacancies and would
offer a great deal of flexibility as tlle city organization structure evolves. In the future,
perhaps this position would supervise human resources or the prosecuting attorney.
Councilmember Dietz asked why Mr. I<Jaers would want the city clerk and prosecuting
attorney under his supervision. Mr. I<Jaers stated tllat he wants the position tied to the
consulting attorney as we are trying to move some work away from Attorney Beck and also
to keep it independent from the otller department heads. The city clerk's position is tied
closely with tlle city administrator's roles, such as working closely with packets, agendas, etc.
and she supervises the support staff. He also would lose his clerical support help.
Council Tveite expressed the following:
· To have Terry Maurer on retainer; but not having an engineering department; afraid
would need to dissolve in 10 years;
· Community development director is a necessary position because of the communication
required among those departments and in servicing all customers; to be given a high
prlOrlty;
· Establish director of administrative services and we have a talented person on staff to
fill tllat role;
· Assistant city administrator--he felt this position was going to be a function of the
director of administrative services position; seems more like a luxury at tlus time and
may be needed in the future.
City Council Minutes
June 14,2004
Page 5
Mr. Klaers stated that the assistant city administrator needs to be more than just a title and
needs to be anotl1er person that he would be giving work to; right now the work is dispersed
in a piecemeal fashion.
Councilmember Kuester expressed the following:
· Difficult time seeing us move to Blaine's organizational structure; downsizing of
department heads would be enough transition;
. Assistant city administrator sounds like a trouble shooter and she would like 2/3 of the
job assigned witl1 specific job duties;
· In terms of administrative services and community development positions, didn't see as
outside applicants but internal. Need to take the time and develop a job description for
these positions.
· Uncomfortable committing to those two positions until see the comp worth studies.
Mr. Klaers stated that in the ultimate organizational chart, the clerk would report to assistant
city administrator or directly to the city administrator. The positions of community
development director, parks and recreation director, and administrative services would have
tl1eir own areas of responsibility.
Councilmember Kuester indicated that it is difficult for her to project to the ultimate but
can see tl1e next few steps that need to be taken.
Mr. I<:1aers stated he was asked to put the ultimate plan togetl1er so the Council could see
what it looked like; so tlus is what he has done. He stated that if we don't have some of
tl1ese key positions filled, tl1en we are just doing it all on paper and nothing has changed.
Councilmember Dietz questioned if directors will be higher paid because they have division
heads reporting to tl1em.
Mr. Klaers stated tl1at pay could be impacted but that wages may not change with current
division heads. If promoted, th~y may get an increase.
Councilmember Tveite stated that com..'TIunity development director and administrative
services director positions should do a job analysis and decide as to how we are going to fill
the position and at what wage level.
Councilmember Dietz stated that he feels the hardest positions will be in the community
development and public works areas.
Councilmember Motin expressed the following:
· It will take time to get down to this small number of reports to the city administrator;
· He is not in favor of a public services director but community development director and
public works director seem to make sense.
· An assistant city administrator doesn't seem necessary, as one person won't be able to
fill in with all positions (when they become vacant).
· Administrative services and public works director eventually will be necessary.
· City clerk could fall under administrative services with direct supervision form director
of administrative services.
· He stated tl1at he is leaning towards chart C.
Mr. Klaers stated the whole idea was to have fewer direct reports to him and this would
allow him to have more time for those who are reporting to him. There will still be the
City Council Minutes
June 14,2004
Page 6
same amount or more of work going on. If the city clerk reports to administrative services,
then the clerk will have two bosses.
Mayor Klinzing stated that from the discussion, two positions have been identified to
possibly move forward with, and those are the community development director and the
administrative services director. She stated that another position that may be needed is
human resources.
Finance Director Lori Johnson stated that the city does not currently have a human
resources position but that Payroll Clerk Lauren Wipper has been performing some of those
duties. Ms. ] ohnson stated that she would like to see tl1e city hire a payroll clerk so Ms.
\X1ipper can concentrate on human resource activities.
Mr. Klaers stated that he believes in order to implement the organizational structure, the
community development director should be considered for the 2005 budget. Mr. Klaers
noted that his biggest time commitment for departments he supervises is in the area of
community development.
Councihnember Kuester stated tl1at in deciding which positions to add, the Council needs to
review the internal services, such as tl1e number of reports to city administrator and
communication, as well as the external customer service that the city is providing.
It was the consensus of tl1e Council for staff to prepare job descriptions for a community
development director and a director of administrative services for Council review.
Mayor Klinzing stated that another task tl1at needs to be completed is for the Council to
adopt an organizational structure and the work program.
It was discussed tlnt the Council needs to review the following topics prior to the adoption
of tl1e organizational structure and tl1e work program: tl1e preferred governance model, set
individual and departmental goals, discuss acceptable behavior between Council and staff,
review relationships with boards and commissions, and continue work on the organizational
chart.
Mr. Klaers noted tl1at he has had meetings witl1 the 14 different individuals he supervises to
talk about departmental goals and individual goals and has tried to have these goals
implemented. He stated tl1at his plan is to have frequent meetings and to assist staff.
MOVED BY COUNCILMEMBER KUESTER AND SECONDED BY
COUNCILMEMBER TVEITE TO APPROVE ENTERING INTO AN
AGREEMENT WITH HOWARD R. GREEN TO RETAIN TERRY MAUER'S
SERVICES AS CITY ENGINEER AS PROPOSED. MOTION CARRIED 5-0.
5.2.b. Review Results of Council/Staff Governance \Xlorksession
Mr. Klaers stated tlut a Board and Commission Guidebook is in the process of being
prepared by the City Clerk and will be presented to the Council next month.
5.3. Schedule for Utilities Building Removal and Parking Lot Expansion
< City Administrator Pat Klaers indicated tl1at the overall plan for downtown is to remove the
utilities building, close King Avenue, and to work with First National Bank and tl1e school
~oward R. Green Company
May 10, 2004
File: 230000M-D325
Mr. Pat Klaers
City Administrator
City of Elk River
13065 Orono Parkway
Elk River, MN 55330
RE: FULL-TIME CITY ENGINEERING REPRESENTATION
Dear Mr. Klaers:
Howard R. Green Company (HRG) is pleased to provide you with this letter of understanding
relative to having Terry Maurer work out of the Elk River City Hall as a full-time consulting City
Engineer. We have reviewed the past three years of history relative to Terry's annual billings to
City of Elk River projects. We have also reviewed Terry's total time annually relative to the amount
of time spent on Elk River issues. On average, Terry has been approximately 50 percent billable
to Elk River projects over the last three years. Based on this history, we would propose an
arrangement whereby the City of Elk River would pay an $8,000 monthly retainer. In addition,
Terry would bill his time on a normal basis for work on development reviews that are passed
through directly to the developer. From HRG's perspective, this will provide approximately the
same income from Elk River for Terry's time as has been in the past three years. From the City's
perspective, for this payment they will receive 40 to 50 percent more of Terry's time.
Terry would be able to track retainer time either on HRG's accounting system or some way
acceptable to the City so that the monthly retainer amount could be accurately charged back to the
major projects Terry spends his time on. There would be no other proposed changes in the current
method HRG bills the City of Elk River for consulting engineering services.
We would suggest that both parties, the City of Elk River and HRG, agree to a gO-day notice if
either side would like to end the retainer relationship. This should allow either side time to make
provisions for continuing without this retainer service. HRG would request an annual adjustment of
three percent in the monthly retainer amount as this arrangement continues from calendar year to
calendar year.
We are prepared to begin this arrangement as early as June 1, 2004. Please review this letter of
understanding and let us know if you have any questions.
Sincerely,
Howard R. Green Company
~~~
Te~rer, P.E.
T JM:sw
Cc: Ralph Russell, President - HRG
Ltr -031704-Klaers.doc
2550 University Avenue West. Suite 400N . St. Paul, MN 55114 . 651/644-4389 fax 651/644-9446 toll free 888/368-4389
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MAYOR
&
CITY COUNCIL
BOARDS AND COMMISSIONS
f------
EDA
HPC
HRA
ICE ARENA
LIBRARY BOARD
PARK & RECREATION
PLANNING COMMISSION
CONSULTING CITY ATTORNEY
CITY
- ADMINISTRATOR
ASSISTANT
CITY ADMIN.
- -
PROSECUTING ATTORNEY
I I I I I I
PARKS & COMMUNITY PUBLIC POLICE FIRE ADMIN.
RECREATION DEVELOPMENT WORKS DEPT DEPT SERVICES
I I I I
RECREA nON BUILDING/ ENGINEERING & FINANCE
ENVIRONMENTAL MAPPING
\
PARK PLANNING/ WWTP LIQUOR
MAINTENANCE CODE ENFORCE STORE
ICE ECONOMIC STREETS/ HUMAN
ARENA DEVELOPMENT BLDG. MAINT.I RESOURCE
EQUIP. MAINT.
SENIOR INFORMA nON
CENTER TECHNOLOGY
CITY CLERK
(& CABLE)