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HomeMy WebLinkAbout06.06.11 Council Packet City of Farmington 430 Third Street Farmington, MN 55024 Mission Statement Through teamwork and cooperation, the City of Farmington provides quality services that preserve our proud past and foster a promisingfuture. FARMINGTON CITY COUNCIL Todd Larson, Mayor Jason Bartholomay Christy Fogarty Terry Donnelly Julie May AGENDA REGULAR CITY COUNCIL MEETING JUNE 6, 2011 7:00 P.M. CITY COUNCIL CHAMBERS 1. CALL TO ORDER 7:00 P.M. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVEAGENDA 5. ANNOUNCEMENTS/COMMENDATIONS 6. CITIZEN COMMENTS / RESPONSES TO COMMENTS (This time is reservedfor citizen comments regarding non-agenda items. No official Council action can be taken on these items. Speakers are limited to fIVe minutes to address the Council during "Citizen Comment" time.) 7. CONSENT AGENDA a) Approve Council Minutes (5/16/11 Regular)(5/11/11, 5/18/11 & 5/25/11 Workshop) b) Approve Rotary Club of Farmington's Request to Waive Showmobile Rental Fee for Rocktoberfest - Parks and Recreation c) Adopt Resolution - Accept Donations Rambling River Center Project- Parks and Recreation d) Adopt Resolution - Accept Memorial Bench Donation - Parks and Recreation e) Adopt Resolution - Accept Donations Arbor Day Celebration - Parks and Recreation f) Approve Development Contract Release 18818 Dylan Drive - Engineering g) Accept Resignation Water Board - Administration h) Adopt Resolution - Fairhill AUAR Update - Planning i) Approve ALF 2012 Budget - Human Resources j) Appointment Recommendation Parks & Recreation - Human Resources k) Appointment Recommendation Parks & Recreation - Human Resources Action Taken Approved Approved R28-11 R29-11 R30-11 Appro')Jl!d . Accepted R31-11 Approved Approved Approved 1) Appointment Recommendation Parks & Recreation - Human Resources m) Accept Fiber Repair Quote - Human Resources n) Approve Mowing Contract - Engineering 0) City Administrator Severance Agreement - City Attorney (Supplemental) p) Approve Bills REGULAR AGENDA (The Council takes a separate action on each item on the Regular Agenda. If you wish to address the Council regarding any or all of the items on the Regular Agenda, please address the item when the item is discussed Speakers will be given at least three minutes to speak per item. Additional time may be granted to speakers representing two or more persons.) 8. PUBLIC HEARINGS 9. AWARDOFCONTRACT 10. PETITIONS, REQUESTSAND COMMUNICATIONS a) April 2011 Financial Report - Finance b) Approve Lease Agreement Pilot Knob Liquor Store - Parks and Recreation 11. UNFINISHED BUSINESS a) Remediation of 431 Third Street - Economic Development b) Approve Updated License Center Application - Human Resources c) City Administrator Process Update - Human Resources (verbal) 12. NEW BUSINESS a) Boulevard Landscaping Maintenance - Engineering 13. COUNCILROUNDTABLE Approved Accepted Pulled Approved Approved 14. ADJOURN Persons with a disability may request a reasonable accommodation by contacting the City Administrator's office at 651-280-6803. Request should be made 24 hours in advance or as early as possible to allow time to arrange accommodation. Table of Contents Agenda. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Approve Council Minutes (5/16/11 Regular)(5/11/11, 5/18/11 & 5/25/11 Workshop) May 16 Minutes . . 5 May 11 Minutes. .14 May 18 Minutes. .17 May 25 Minutes . . 22 Approve Rotary Club's Request to Waive Showmobile Rental Fee memo . . . . . . . . . . . . . . . . . . . . . . . . . . 25 letter from rotary. . . . . . . . . . . . . . . . . . . . . 26 Adopt Resolution Accepting Donations to the Rambling River Center Renovation Project Memo . . . . . . . . . . . . . . . . . . . . . . . 27 resolution . . . . . . . . . . . . . . . . . . . . . 28 Adopt Resolution Accepting Memorial Bench Donation Memo . . . . . . . . . . . . . . . . . . . . . . . 29 Resolution. . . . . . . . . . . . . . . . . . . . . 30 Adopt Resolution Accepting Donation from Dakota Electric Association for the Arbor Day Celebration Memo . . . . . . . . . . . . . . . . . . . . . . . . . 31 Resolution. . . . . . . . . . . . . . . . . . . . . . .32 Approve Development Contract Release-18818 Dylan Drive Meadow Creek Development Contract Release 060611 . 33 Meadow Creek DC Release 053111 . 34 Accept Resignation Water Board Memo . . . . . . . . . . . . . . . . 36 Resignation Letter. . . . . . . . . . 37 Adopt Resolution - Fairhill AUAR Update Memo . . . . . . . . . . . 38 Resolution. . . . . . . . .39 A.L.F. Ambulance 2012 Budget 2012 ALF Budget. . . . .40 2012 ALF Budget1. . . . . 41 Appointment Recommendation - Parks and Recreation (Liquor Store) Council Memo - Baago pt Iiq clerk 2011. . . . . . . . . . . . . . 42 Appointment Recommendation - Parks and Recreation (Liquor Store) Council Memo - Roberts pt Iiq clerk 2011. . . . . . . . . . . . . 43 Appointment Recommendation - Parks and Recreation (Liquor Store) Council Memo - Wells pt liq clerk 2011 . Accept Fiber Repair Quote - Human Resources . . . . .44 1 2012 Fiber Repair Quote 2011 Mowing Contract 2011 Mowing Contract . City Administrator Severance Agreement Memo. . . Approve Bills List of Bills. April 2011 Financial Report April Financial Memo April Financial Report . Approve Liquor Store Lease Agreement Memo. . . . . . . . . . . . . . original lease agreement . . . . amendment one to original lease agreement . Charleswood Marketplace advertised lease rate . cobblestone lake retail. . . apple valley transit station. . . . . . . . . . . tamarack ridge. . . . . . . . . . . . . . . . . amendment two to original lease agreement . Remediation of 431 Third Street Memo. . . . . . . . . . . . . Approve Deputy Registrar Application Deputy Reg 6-2011 . . . . . . Boulevard Landscaping Maintenance Boulevard Landscaping Maintenance 060611 .45 .46 .47 .48 .84 .87 .93 .95 . 115 .116 .118 .119 .121 . 123 .125 . 127 . 128 2 k COUNCIL MINUTES REGULAR May 16,2011 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE Mayor Larson led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Mennbersi\bsent: Also Present: Audience: Larson, Bartholomay, Fogarty, May Donnelly Joel Jamnik, City Attorney; Peter Herlofsky, City Administrator; Teresa Walters, Finance Director; Brian Lindquist, Police Chief; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Brenda Wendlandt, Human Resources Director; Tony Wippler, Assistant City Planner; Cynthia Muller, Executive Assistant Beve Preece, David McMillen, Greg & Julayne Miller 4. APPROVE AGENDA MOTION by Fogarty, second by May to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) Swearing-in Officer Dane Tukua City Administrator Herlofsky swore-in Officer Dane Tukua. b) Heritage Preservation Awards David McMillen, Chair of the Heritage Preservation Commission presented the Heritage Preservation Award to Leander and Judy Geiffer for their efforts in maintaining their home at 300 7th Street. c) 2010 Comprehensive Annual Financial Report - Finance The auditor from KDV presented the 2010 fmancial report. Finance Director Walters received an award for the 2010 Comprehensive Annual Financial Report. The auditors look at seven areas of legal compliance. There was only one fmding for old outstanding checks and that has been handled. There was one material audit adjustment related to debt refunding. There is a lack of segregation of duties. The auditors have a concern going forward because the Finance Department has been reduced by one position, the Accountant. GASB 54 states this year the Council will need to approve a fund balance policy. The City needs to have a minimum fund balance and also look at the special revenue funds and make sure there is a funding source. The area they are most concerned about is 5 Council Minutes (Regular) May 16, 2011 Page 2 the Senior Center. Under the new GASB, you have to have a source of revenue and the source of revenue for the Senior Center is transfers from the general fund which cannot be a source of revenue. This is the same case with the Rambling River Center fund. They need to be in the general fund ifthere is no main source of revenue for those funds. The general fund is the main operating fund. Council approved a balanced budget with a decrease of only $2,500 for 2010. The 2010 City budget came in with a $60,000 surplus. The tax capacity rate was 49% for 2010. The City had to take a significant decrease in the market value. This is true all across the State. The City should have a minimum of 35% - 50% of general fund expenditures in the fund balance. In 2010 the City had 24% and has been below for the last five years. This is important when looking at cash in the general fund. The cash swings about $3 million depending on when property taxes are collected. Property taxes make up 80% of the revenue in the general fund. Taxes come in in June, July, and December. Without that cushion the general fund would be significantly in the hole. Councilmember May clarified that the City has to set a fund balance policy for a minimum fund balance even though it is set by the State. The auditor explained the City has a fund balance policy of35% - 50%. The City has consistently operated below that. The State Auditor also recommends somewhere between 35% - 50% as a minimum. Because of the new GASB, the City needs to set a minimum. If you are consistently around 24%, you need to set that as your minimum. The Council should set the fund balance where Council and the department heads are comfortable operating. This should be reviewed annually with the budget process. Councilmember Fogarty stated Council has talked about this in the past and she has brought up that we need to bring this within a realistic range. She has been told that we cannot go against the State's recommendation. The auditor stated the City can set their policy wherever they want. The State has a statement of position that recommends having an operating reserve of35%- 50%. IfFannington can say we are comfortable at 24% and have operated at this level for several years, then there is no reason it cannot be there. Councilmember Fogarty thought there were disadvantages to doing that. The auditor explained the disadvantage would be the cash balance. City Administrator Herlofsky stated it will affect the interest rate for bonds. The auditor recommended getting the policy in line with the City's practices. The general fund has had an operating surplus of$60,000 which is not huge. It has had an operating deficit for the past few years, so breaking even was good for the general fund this year. The general fund revenue's main source is property taxes, which is 80%. This means you are in control of your sources rather than depending on the State. Expenses have been consistent from 2009 to 2010. In 2010 you moved the street light utility out of the general fund which cut about $175,000 and the City found an alternative source ofrevenue for that expense. In 6 Council Minutes (Regular) May 16, 2011 Page 3 addition some expenses were put into capital projects. General fund expenses went up 5% and revenue went up 5%. Enterprise funds are meant to be self-sustaining. The liquor fund revenues have exceeded expenses in the last four years. There was an operating income of $17,000 in 2010. However, the City did transfer out $140,000 to the general fund and to the swimming pool. $75,000 of the liquor fund goes to the swimming pool operations. The liquor fund at the end of the year had $25,000 left in cash. Cash has been decreasing for the last three years. The State Auditor puts out an annual report on liquor stores across the State. An interesting statistic is operating expenses, salaries, supplies, and depreciation compared to sales. Last year Farmington was at 22%; in 2009 we were at 24%. The State average is 18%. So we have a higher percentage of expenses going to salaries and depreciation. The gross profit percentage is slightly lower than the State average for metro cities. If we do transfers from the liquor store fund, the cash will be in a deficit at the end of 20 11 if operations remain the same. The Water Fund remained stable and expenses were down slightly. This is a healthy fund. We are able to replace water mains and do repairs without having to borrow. Sewer rates were raised in 2010 and expenses were up slightly. There would be operating income if not for depreciation. The Sewer Fund does make transfers out and has to pay bond principal and interest payments of$250,000 and also transfers out for repairs. The Solid Waste Fund did very well. Operating income without depreciation is able to transfer for operating costs to the general fund. The cash was up in this fund. The Storm Water Fund had flat revenues. Operating income without depreciation is positive. Mayor Larson asked about the general fund percentage in other cities. The auditor explained Farmington's general fund percentage is low compared to other cities. Some have 100% or 70% because they want to make sure they have money for the next year. Councilmember May stated looking at the management analysis, we have $105 million in net assets and $19 million in unrestricted net assets. Then it talks about the $2 million unreserved fund balance. She asked about the difference between an unrestricted net asset and an unreserved fund balance. Finance Director Walters explained the unrestricted net asset is the capital net of the related debt. That is all tied up in capital. The unreserved is cash, receivables, anything that is available to be used. It is not part of the unrestricted net asset. The unrestricted net asset number includes capital. MOTION by Fogarty, second by Bartholomay to accept the 2010 Comprehensive Annual Financial Report. APIF, MOTION CARRIED. 6. CITIZEN COMMENTS Ms. Annette Kuyper, Warrior to Citizen network, explained Saturday will be Military Family Day at the Fairgrounds. All military families are invited. Leaders of the community received an invitation to the Enlistment Recognition Ceremony on May 25. 7 Council Minutes (Regular) May 16, 2011 Page 4 This is to recognize Farmington graduates who are entering the armed services. Within the next two weeks the Army National Guard will be deploying 2,400 service members throughout Minnesota. It is important to identify those families. Ms. Kuyper distributed Warrior to Citizen information cards to give out to military families. 7. CONSENT AGENDA MOTION by Fogarty, second by May to approve the Consent Agenda as follows: a) Approved Council Minutes (5/2/11 Regular)(4/27/11 Workshop) b) Approved HiPP Sub-Committee Appointments - Administration c) Approved Appointment Recommendation Engineering - Human Resources d) Authorized Request for Proposal Audit Services - Finance Councilmember Fogarty noted this is an unfunded mandate by the State. She would like cities to be able to take these things into their own hands. e) Adopted ORDINANCE 011-632 Allowing Churches in R-3 Medium Density Zoning District - Planning f) Approved Bills APIF, MOTION CARRIED. 8. PUBLIC HEARINGS a) Adopt Resolution - Approve Heritage Landmark Designations - Planning The Heritage Preservation Commission reviewed five reports for possible Herita~e Landmark designation. Two of the properties are The Jensen House, 7083r Street, and The Miller House, 621 3rd Street. The owner ofthe property at 719 3rd Street has declined the designation at this time. The designation stays with the home, not the owner. If any structural improvements are made to the home, the building permit would be forwarded to the HPC for a Certificate of Appropriateness. The HPC would review the plans to make sure they do not alter the historic value of the structure. The benefit designation does enhance the resale value of the property and has a large prestige. There has never been a property owner that has asked to be removed from the list. This is an effective way to do heritage conservation. Farmington's preservation standards and guidelines are very common sense. Property owners should not remove things that cannot be replaced and that are essential to designating it as a heritage landmark. Painting, etc. is not regulated. The general rule is that a property should be 50 years old. MOTION by Fogarty, second by May to close the public hearing. APIF, MOTION CARRIED. MOTION by Fogarty, second by May to adopt RESOLUTION R25-11 designating the Jensen House (708 3rd Street) and the Miller House (621 3rd Street) as Farmington Heritage Landmarks on the Official Zoning Map. APIF, MOTION CARRIED. b) Revise EDA Composition - City Attorney The EDA has recommended changing the composition of the EDA from five Councilmembers to five Councilmembers and two ex-officio residents. Terms of the ex-officio seats will end on 1/31/14 and 1/31/16. MOTION by Fogarty, second by May to close the Public Hearing. APIF, MOTION CARRIED. MOTION by Fogarty, second by May to adopt RESOLUTION R26-11 and 8 Council Minutes (Regular) May 16, 2011 Page 5 ORDINANCE 011-633 revising the composition of the ED to five Councilmembers and two residents. APIF, MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) Approve Federal Transportation Enhancement (TE) Grant Application for the Construction of a Section of the North Creek Greenway Trail- Parks and Recreation Staff has participated in Dakota County's master planning of the North Creek Greenway Trail Corridor. A portion ofthis trail is located in the City of Farmington. This trail will connect Lebanon Hills Regional Park to downtown Farmington. In 2011 it will be designated as a regional trail by the Metropolitan Council. The County approached the City about applying for a Federal Transportation Enhancement Grant to construct a section of the regional trail that will complete a connection from north of the Lake Julia Waterway to downtown Farmington. Hoisington Koegler is writing the grant for the project. Funding for the grant would not be released until 2015 or 2016. Applicants will be notified of approval at the end of 20 11. Dakota County will provide the 20% local match requirement if the City agrees to design and construct the trail. The application would be submitted by the City as the lead agency. The City would provide funding for the design, engineering of the trail and construction management. Design work would include pedestrian bridges over Middle Creek and Lake Julia Waterway along with alignment and construction of the trail. A portion of the trail is also within the orderly annexation area with Empire Township. The township had no concerns with the City being the applicant. Staff has contacted property owners in the orderly annexation area regarding construction ofthe trail. The actual easement or acquisition of right-of-way will be pursued once the application is approved. At that time County and City staff will meet with property owners to address easements or purchase of land. The application will address how the acquisition of land will occur. Mr. John Mertens, Dakota County, gave a presentation on greenways in Dakota County and this project. A representative from Hoisington Koegler presented the master plan of the greenway trail. The maximum for one grant is up to $1 million and they require a 20% match. The County will prepare the application and assure the 20% match. Councilmember Fogarty noted when the funding is granted there will be a different Council. This is because ofthe length of time it takes to design the project. Applications are taken every other year. Councilmember May asked about the amount of the soft costs for the City and are funds set aside once the grant is awarded. Mr. Mertens explained the City can set funds aside or pursue other funds such as a legacy grant for trails. The cost of design and engineering is 15% - 20%. Parks and Recreation Director Distad explained staff can do a lot of the design work in-house so that would be absorbed as part of the regular budget. 9 Council Minutes (Regular) May 16, 2011 Page 6 Some engineering work for the bridges would require consultant help. Most of the area is flat for designing. Councilmember May asked about maintenance costs. An agreement will be brought back to Council regarding maintenance of regional trails. Currently the City maintains trails along County roads until the road is redone, then the County reconstructs the trail with the road. Councilmember May asked if the County will be setting aside their portion. Mr. Mertens stated the County will budget for it and it will be in the County's CIP. Councilmember May asked about Empire's participation. Staffhas not discussed costs with Empire. Councilmember May asked how it affects the annexation agreement ifthe City is spending money on an area that is not annexed by the City. City Attorney Jamnik stated the City can expend funds outside the City for transportation and recreation activities. It should not have any impact on the Orderly Annexation Agreement. Mayor Larson felt this is a great opportunity for the City to receive this trail. Councilmember Fogarty agreed this is long vision planning and fantastic for the City. MOTION by Fogarty, second by Bartholomay to approve listing the City as the applicant for the North Creek Greenway TE Grant and that the City of Farmington supports the submittal of the TE Grant application. APIF, MOTION CARRIED. b) Adopt Resolution - Met Council LCDA Development Grant - Planning This resolution authorizes staff to apply for Met Council grants. Two are development grants for trail reconstruction and for infrastructure along Hwy 50 and north to Fairgreen Avenue in anticipation of future industrial development. The third grant is a pre-development grant to cover the costs of designing the infrastructure on the north side ofHwy 50. The development grants do not require a match. The pre-development grants do require a 25% match. Those matching funds would come from the appropriate utility funds. Councilmember Fogarty asked if staff time is included in the grant. Councilmember Bartholomay asked ifthere is technology available to speed up the application process to reduce staff time. Human Resources Director Wendlandt will research grant writing software. Councilmember Fogarty has not heard of any technology, but there are organizations that offer that expertise as it is more in wording the application. Councilmember May asked how staff decides what grants to apply for. City Engineer Schorzman stated as far as the trail reconstruction, this was an opportunity to get some outside funding to start the projects. The infrastructure along Hwy 50 has been discussed by the EDA as a potential area for expansion. Those two items fit well with Council objectives at that time. Council also wanted to maintain what we have and not create additional maintenance needs. MOTION by Bartholomay, second by Fogarty to adopt RESOLUTION R27-11 authorizing applications for Development and Pre-Development Grants through the Livable Communities Demonstration Program. APIF, MOTION CARRIED. c) Adopt Ordinance - Woodland and Tree Preservation - Planning This item is related to the Natural Resources Inventory. The presentation by Ms. Sherri Buss will explain that the ordinance will not have a negative impact on 10 Council Minutes (Regular) May 16, 2011 Page 7 development plans. The current ordinance does not distinguish between trees that are significant and those that are not. The new ordinance will make that distinction. The current ordinance does not set standards for replacement. The new ordinance only applies to new development and not to existing lots. A lot of communities regulate heritage trees even on private property. The new ordinance would require people do a tree inventory and map significant trees on their property. Someone could designate an area as a significant woodland and not have to count each tree. This would reduce the cost and ecologically more important to think about the woodland as a whole. The ordinance has defmite requirements for tree replacement. It also gives the developer an option to work with the City on replacing trees in other locations ofthe City if it does not make sense to replace the trees in the development area. Staffhas identified tree bank locations. The ordinance also allows for giving cash to the City to be used later to replace trees. The ordinance gives developers an incentive to protect woodland areas by giving them bonus units in a development. The ordinance allows removal of30% of significant trees in a development without any need for replacement. MOTION by Fogarty, second by May to adopt ORDINANCE 011-634 amending Section 10-6-11 of the City Code regarding Tree Preservation. APIF, MOTION CARRIED. 11. UNFINISHED BUSINESS a) Clarification of Urban Chicken Ordinance - Planning This was discussed at the April 18, 2011, Council meeting. Council had two specific comments regarding reducing the number of hen chickens and to require a yearly permit approval. An interim use permit would be required so a certain time frame is attached. If Council wants to renew the permit each year, that would be a $200 application fee. This was a concern to the Planning Commission especially with the amount of hen chickens reduced. This could eliminate individuals from applying for the permit. Staff suggested an initial permit of $200 to cover costs and after that a yearly administrative fee of$25. Councilmember Bartholomay agreed the fee is high and would like to see it closer to neighboring cities. He suggested splitting it to $100. The fee schedule can be revised for this specific permit. Councilmember May voted no to chickens. Councilmember Fogarty also said no to chickens. Regarding the permit fee, ifit costs us $200, then we charge $200. Staff felt the initial permit should be a public hearing. Once the requirements are met, a yearly renewal would be sufficient. Councilmember Fogarty was okay with the ordinance ifwe include consequences to complaints. As far as duplexes, the permit would have to come from the property owner. Councilmember Bartholomay suggested to save cost, rather than hold a public hearing we have the CSO get a written consent from the neighboring properties. Councilmember Fogarty stated it may not reduce expenses, but it would bring more awareness to the neighbors. Staff noted public hearing notices are mailed to adjacent properties. Mayor Larson also said no to chickens. 11 Council Minutes (Regular) May 16, 2011 Page 8 City Engineer Schorzman asked why we are moving forward if Council is saying no to chickens. Council agreed to not move forward with this ordinance. Councilmember Bartholomay was contacted by residents asking why we are discriminating against chickens. We all talk about having less mandates and not so much government involvement. This is a way to have smaller government and not put mandates on our residents. A dog barking can make a lot more noise. Councilmember May felt when people purchase a home that it does not include cohabitating with farm animals. If that is the lifestyle you desire, then there are a lot of options for residents to have that opportunity. We also have to consider those who have purchased homes thinking there are certain rules. Councilmember Bartholomay stated he was elected to represent all residents and has to make a decision that is in the best interest for everyone. Staffwill not move forward with the ordinance. b) Appoint Interim City Administrator - Human Resources Mayor Larson recommended appointing City Engineer Kevin Schorzman as Interim City Administrator. MOTION by Fogarty, second by May to approve the appointment of Kevin Schorzman as Interim City Administrator, effective June 1, 2011, or at the time the current City Administrator leaves. APIF, MOTION CARRIED. 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Councilmember Fogarty: This is City Administrator Herlofsky's last Council Meeting. Councilmember Fogarty was one of the Councilmembers who hired him. She thanked him as he came in very turbulent times with the City. He helped us find stability and worked very hard for the residents. She thanked him for his leadership and service. She learned a lot from him over the last five years and thanked him for that. It has been a pleasure and an honor to serve with him. He will be missed. May 7, Councilmember Fogarty attended the Mother I Grandmother luncheon for Warrior to Citizen. It was a fantastic event. This Saturday is prom and asked students to be safe. There will be a Farmington Red Carpet Fashions Event at the Grand Hall. This is a great opportunity to fmd out what clothing is available in Farmington. This is a fundraiser for Dew Days. Councilmember Bartholomay: At the March Council retreat, they discussed having a June retreat. He asked Councilmembers to check their calendars for a date. Councilmember May suggested waiting until the budget discussions are done, so it may not be until July. He asked Human Resources Director Wendlandt about the Policy Manual that was brought forward a couple months ago. He asked for a copy of the old manual. 12 Council Minutes (Regular) May 16, 2011 Page 9 Councilmember Bartholomay has spent a short amount of time with City Administrator Herlofsky and thanked him for everything he has done for the City. He wished him good luck in his future endeavors. Councilmember Bartholomay asked about placing City meetings on the community events calendar. Regarding the chicken ordinance, at the last meeting it was approved, and now we have unapproved it. Councilmember May: best in the future. Thanked City Administrator Herlofsky and wished him the City Administrator Herlofsky: This is his last Council meeting and it has been five years since the first meeting. He appreciated the Council approving his position here. He came on a 3-2 vote and it worked out okay with one of the three still being here. He thanked everyone for the opportunity and has enjoyed his time as City Administrator. He will remain in the community. Parks and Recreation Director Distad: The new playground equipment will be installed in Rambling River Park May 23 - 25. There will be a ribbon cutting on June 1, at 6:00 p.m. Mayor Larson: He has learned a lot from City Administrator Herlofsky. He wished him the best in the future. He has brought a lot of stability to the City. He asked people to remember Farmington Friendly and to introduce yourself to others. The community calendar is located at www.FarmingtonToday.com and has a lot of event information. The Farmington Business Association is holding the Minnesota Soybean Festival this Thursday - Saturday. We have hanging flower baskets downtown and flower pots along Elm Street. These are courtesy of the Farmington Business Association. He thanked the volunteers and Gerten's Greenhouse. There will also be pots placed at the north end oftown. Last week Mayor Larson met with the school district to fmd efficiencies and ways to work together. He encouraged residents to shop locally. Liquor store profits stay in the community. 14. EXECUTIVE SESSION MOTION by Fogarty, second by Bartholomay at 9:12 p.m. to go into closed session to discuss and receive a briefmg from the City Attorney on an appointment related claim. It is pre-litigation but it is threatened litigation. APIF, MOTION CARRIED. 15. ADJOURN Respectfully submitted, Cynthia Muller Executive Assistant 13 Council Workshop Minutes Municipal Services Department Budget May 11, 2011 Mayor Larson called the workshop to order at 3 :06 p.m. Present: Larson, Bartholomay, Donnelly, Fogarty (arrived 3:20 p.m.), May (arrived 3:30 p.m.) Also Present: Todd Reiten, Municipal Services Director; Kevin Schorzman, City Engineer; Lena Larson, Municipal Services Coordinator; Steve Arndt, Streets and Utilities Supervisor; Cynthia Muller, Executive Assistant MOTION by Bartholomay, second by Donnelly to approve the agenda. APIF, MOTION CARRIED. Sanitation - Rates are comparable with other cities. Staff explained what the City would lose if we allowed residents to use a private hauler. Currently there is $225,000 that sanitation puts into general fund items that the City would have to come up with. This includes certain salaries at City Hall that are spread out and we would need $155,000 for clean-up day. A portion of clean- up day is included in the rates. We would not have Christmas tree pickup, no cardboard cage drop offs, park and pond cleanup day, garbage collected downtown, need another plow operator, no help for park reconstruction projects, Dew Days would have to dispose of own garbage, sanitation now disposes of dead animals rather than 4 Paws. It also helps pay for IT services, electricity for the Maintenance Facility is $10,000, gas is $12,000, general fund receives $66,300 to help offset salaries at City Hall. Sanitation participates in $2,000 of the audit, pay for water, sewer and garbage for all City buildings at $3,000/year, softener salt, furnace filters, and building repairs. There is at least $225,000 the City would have to come up with ifwe did not have Solid Waste, plus the residents would have a bill to pay for their own garbage. If you want clean-up day there would be an additional $155,000 needed. Auditors would say sanitation cannot make money to give it to another area such as the liquor store. We have to have enough to cover the cost for doing business and equipment, but you cannot substitute an increase in fees for raising taxes. Staff would not recommend eliminating Solid Waste. Council agreed when looking at the big picture, the benefit to the community outweighs a couple complaints. Regarding having a drop-off location for clean-up day rather than curbside pickup, it is not as convenient for all residents and to have just one day for clean-up day, there is too much to pick up in one day. (Councilmember Fogarty arrived). There are five full time sanitation employees in addition to the $225,000. Snow - The City has used 1300 tons of salt/year which is approximately $90,000. There is $10,000 in the budget for cutting edges for plows. Fuel was over budget and repairs were over budget by $7,000. Salt was over by $2,000 for 2010. Currently we are at $61,000 for salt. (Councilmember May arrived). 14 Council Workshop Minutes May 11, 2011 Page 2 There is $15,000 budgeted for fuel and we have spent $22,000. $3500 is budgeted for sod damage and $500 for mailbox repair. The City allows $50 for a mailbox. Council asked that staff look at installing our own fuel pumps. Staff estimated it would cost $150,000 to install a fuel station. It is cheaper if the tank is under ground. Council also suggested doing the project with Empire Township. Council asked ifwe should convert to a cleaner energy source as we replace equipment. Staff explained Apple Valley switched their squad cars to natural gas and had nothing but trouble, spent a lot of money on it and switched them back. As far as infrastructure, staff suggested putting in charging stations in the future for electric vehicles. City Engineer Schorzman stated if we are considering a fuel station, it would be good to combine it with a salt storage facility. Staff purchases gas from Kwik Trip at the same price as everyone else. Council asked if it was possible to negotiate with the individual station owner or discuss buying diesel from Marshall Lines. Staff stated we need to depend on ourselves. If there is a gas shortage, other companies will not let us get gas from them. Neighboring cities have their own tanks. We would use the state bid process to purchase gas. The cost ofa fuel station is $150,000 and a salt storage facility would be $100,000. With the City having its own salt storage, we are able to use our own mix rather than use what the County has. Council asked if staff is looking at ways to reduce trips to the hardware store, etc. Staff explained every vehicle is equipped with the same supplies so there is no running back and forth. Staff takes a half hour break in the morning instead of 15 minutes in the morning and afternoon so they are not running back and forth. Council asked if they have to come back to the Maintenance Facility for break. Staff explained some do, some go home, some stay where they are. As far as the hardware store, employees are in that area a lot and it would be very expensive for us to keep that kind of inventory. Ifwe want fewer trips, we would have to start ordering supplies. Employees have been told to call the Director or the Supervisor when they need to go to the hardware store. If the parts were at the Maintenance Facility they would still be making a trip to get the part. Cost for a fuel station and salt storage facility would come from the general fund. Council asked staff to talk to Marshall Lines and the gas stations to determine any savings for the remainder of this year. Streets - There is $32,500 in the budget for street materials and we will be close to that. Staff received a call from Eureka regarding the maintenance of Farmington's portion of225th Street that will cost $2,000. We took $9,000 out of gravel hoping to make up for Flagstaff, but we should put that into blacktopping. The need for blacktopping materials will go up over the next several years. Staff suggested leaving the budget at the same amount and increasing it slightly each year. We need to increase the $32,500 because last year we had to stop blacktopping because we ran out of money. We should add $14,000 back in that was taken out last year. Fleet - Over the next five years we would need $200,000 - $300,000 every year to replace vehicles on the scheduled maintenance plan. One year we will need a new fIre department pumper for $600,000, so that year we will need $800,000. The vehicle is over 20 years old. Because we have not stayed with the schedule we are $1.3 million behind. Adding in the salt storage and fuel tanks we are at $1.6 million. Ifa vehicle now costs $30,000, in two years it will 15 Council Workshop Minutes May 11, 2011 Page 3 be $35,000. Council asked if all the regular vehicles need to be pick-up trucks. Staff agreed building inspections could get by with something smaller such as a Ford Ranger or a car. City Engineer Schorzman would prefer them having pick-ups because they do haul equipment. A smaller pick-up would work and use a hybrid or something more fuel efficient. Council asked if we could have a supply of vehicles and reduce the number of vehicles. Staff explained some people use their own car to go places. We may not need a truck for specific tasks, but do need it for other duties. We have been transferring and getting rid of the older vehicles. The type of vehicle needs to be able to be repaired by Fleet Maintenance. Staff recommended that next year when the $162,000 equipment certificate is paid for, it be put mto a vehicle fund or a project such as seal coating. All of these expenses are from the general fund, not enterprise funds. Council recalled we were trying to get away from using certificates for vehicles and pay for them. We may have to go back to using certificates. Staff noted the enterprise funds are running right. The general fund is not running right. Ifwe get rid of an old squad car, the money should go into a fleet fund and not the general fund. Regarding enterprise funds, ifthere are sewer and road problems, public works needs to work with engineering to fIX the sewer before the road. Ifwe have a CIP that Council will support, when there are issues, we can say it will be fIXed next year and it gets fIXed. We need to start setting up funds for the future. Staff asked Council to think about a funding level they would be comfortable with on an annual basis and make the CIP match it. Staffwill give options of projects for $750,000 and $500,000. Council asked if staff could be more creative of storing City Hall vehicles over the winter and suggested they be parked at the Maintenance Facility. Council received numerous calls from residents about City vehicles not being used over the winter. Regarding snow plowing, if the roads need to be plowed, they will be plowed. Staffwill use common sense. Council felt staff does a great job with plowing the roads. Council asked about reducing weekend overtime and send employees home early during the week. Staff could change the work schedule, but it depends on the snowfall. That does not always work because we have to react to the situation. If there is no snow, we still have to pay the employees. Councilmembers took a tour of the Maintenance Facility. MOTION by Bartholomay, second by Donnelly to adjourn at 5:25 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 16 Council Workshop Minutes Engineering Department Budget May 18, 2011 Mayor Larson called the workshop to order at 3 :05 p.m. Present: Absent: Also Present: Larson, Bartholomay, Fogarty, May (arrived 4:15 p.m.) Donnelly Kevin Schorzman, City Engineer; Todd Reiten, Municipal Services Director; Cynthia Muller, Executive Assistant MOTION by Fogarty, second by Bartholomay to approve the agenda. APIF, MOTION CARRIED. The big items for Planning, Engineering and Building Inspections are legal, IT, and professional services. Professional services have been reduced substantially due to the shift from using Bonestroo to City employees. Planning - Staff will be updating the comp plan this summer and continue plat and plan reviews. We are busy with plan reviews. Council asked ifwe resubmit the comp plan to the Met Council every two years and is there any cost. The plan will be resubmitted every 10 years, but updated every 2-3 years. The City Planner has taken a more active role in the economic development side. Planning works with several groups within the City and staffwill prioritize requests based on the overall scope of things. Both Planners attend Planning Commission meetings. The City Planner is on the EFP AC and Eureka group; the Assistant Planner is on the Castle Rock group and handling the Heritage Preservation Commission. They are still trying to review ordinances as time allows and dealing with complaints. This is what the Planning budget supports. Building Inspections - Council should not be concerned with information on the quarterly reports as things tend to even out. Last year we had fairly steady housing coming in. This year we are getting lower housing numbers to start the year, but they are picking up. We will have some big commercial items. Just because we are starting slower this year, is not an indication that things are changing. The revenue is coming in different ways. The Building Official does a very good job of estimating and he is very conservative. His estimates have been accurate and never over reaching with projecting next year's revenue. He has the opportunity daily to talk to builders about what is coming up. Fees charged for permits are to provide a service. If you carry it too far, then you are going outside the general principle behind the fees. We manage the fees in a way to support the work being done. In a couple years Council should be prepared for staff to ask for part time help. We focus so much on housing that other things get lost, such as decks, siding, roofing, etc. There are a lot of inspections not associated with new housing. The Inspectors are functioning as a part of public safety. The whole point of inspecting is to make sure things are built in a safe manner. The Building Official watches his budget very closely. If he says he needs help, he really does. Council noted the CDA housing will take a lot oftime. Inspections wants to try to get through it without additional help. In the last four years, Inspections is down two people; the division has been cut in half. 17 Council Workshop Minutes May 18, 2011 Page 2 Engineering - A new technician started Tuesday. He will be a good addition to the department and will compliment the skill package we already have. The Administrative Assistant also provides support for the Fire Department. Enough time is spent there that some of her time should be allocated to that department. CIP - Last year staff shifted from the normal 5-year CIP to a 10-year CIP. After the evaluation ofthe road and bridge fund and after looking at the debt service, the current CIP is not sustainable from a debt service standpoint. Staff provided a spreadsheet showing ifwe had $500,000 to dedicate to projects how they could be spread out to 2030. For the 195th Street and Pilot Knob Road intersection, staff applied for a federal grant, but was not successful. Staff will apply again for a second round of funding. The County is very interested in putting a roundabout in that intersection depending on the right-of-way. It may not happen until 2015 or 2016, but may be moved forward if the County fronts the money and we pay them over time. The project is in the CIP spread out over 2012 - 2014. The amount of money in the budget is the City's share of not only the intersections, but improvements from Flagstaff to Diamond Path. The federal funding would be only for the intersection. The CIP includes the rehabilitation work for Akin Park Estates in 2013, 2nd Street in 2015, and alternating bigger projects in the downtown area to 2024. The CIP shows a beginning balance, which is zero for 2012, total annual expenditure, total annual fIXed revenue, and an ending balance. It has been discussed to have each of these projects stand alone. Staff suggested we have a street rehabilitation fund to do the mill and overlay projects. Council suggested looking at franchise fees again and include a sunset for when we have the ability to do a street utility fee. Staff highly recommended this. The CIP shows the beginning balance as negative until 2020 with putting $500,000 in the budget for projects. The projects end at 2024. At the end of 2024 we will see new development again. The existing debt service is everything we have in debt, City Hall, ice arena, everything; not just road projects. In 2022 the debt service is higher than now. The second option is showing $700,000 dedicated to projects. The deficits are reduced to one year in 2014. This also builds up funds in the future. Ifa reconstruction project is needed, we would not have to bond for it. There is $400,000 in seal coating that is not part of this. By using this second option and maintaining the debt service, shifting the reconstruction projects out, there will be increased maintenance costs. Reconstruction projects will have assessments. The spreadsheets assume we bond for everything and there are no assessments. Staff is not suggesting doing this. The assessments would add to the balances. Eleven years from now we start dropping the debt significantly. We cannot continue not doing things. Councilmember Fogarty stated the problem is these are big numbers and no Council has wanted to take this on. We can ignore it or take the hit and be part of the solution. There also has to be an education piece that Council will be responsible for setting up. When new Councilmembers are elected, they need an orientation with each department head and understand the plans we have laid out. This is good fiscal policy. We have to raise taxes this year and next year. It will take some commitment and people who are willing to put their election on the line and do what is best for the City. Councilmember Bartholomay said we need to explain this to residents, go door to door, and hold open houses. Councilmember Fogarty stated we have two years we are not doing seal coating. In the long run that will cost us more than the $800,000 we saved not doing it for two years. We do not have the fmances unless we levy for it. It is too late in the year to get 18 Council Workshop Minutes May 18, 2011 Page 3 $400,000 in franchise fees. Staff stated that is not off the table because of a timing issue. We may operate in a slight deficit the first year, but it would correct itself and not come back. Starting sooner reduces the deficit sooner. It takes three months for franchise fees to turn around. We can still work with a levy or franchise fees. It will take developing a plan that all five Councilmembers are comfortable with. Then it will survive elections. Councilmember Fogarty felt new Councilmembers lack orientation. They need to meet with each department head for their priorities. Council noted we cannot raise the levy $2 million next year, but we have to do something. Rosemount is in a better position because their buildings are paid for. Council asked if other options instead of seal coating have been explored. Staff stated nothing gets the rate of return like seal coating. Another option is to start at $500,000 and do an inflationary factor each year. This can be reviewed further at the June Engineering workshop. Council asked if we get grants. Sometimes there are grants to get technical help. Staff was not opposed to this, but there are two issues. One is having the people that have the time to do that and the second is if we can get 100% grants that is great; if they are matching grants, where do you get the money. Council would be willing to entertain the idea of a part time grant writer for the City because we will get back their salary in grants. Instead of searching out grants, look for our projects such as failing infrastructure and focus on a specific project. This would be across the board, not just engineering. Staff stated grants require a lot of follow-up and would need a separate person. Lakeville is in a better position to receive grants because of the functional classification oftheir roads. We may get smaller grants such as for sewer work which delays the amount of time for raising fees. Council asked ifwe can use funds for water or sewer to pay that person. Councilmember Bartholomay stated ifwe get a professional grant writer, they can write grants for anything. Staff suggested having staff do preliminary work with consultants first and put people with the knowledge on a specific grant. Council also suggested sending staff to a grant writing class. Staff noted we do have an employee that is interested in writing grants. However, this employee has a lot of pressure from current duties. Council suggested maybe there are other duties that could be shifted. (Councilmember May arrived at 4: 15 p.m.) Staffwill research the time commitment for staff to write grants internally plus training costs and compare that to consultants. It may be a combination of the two where staffworks with a consultant on the first couple grants. Staff prepared the CIP spreadsheets to discuss the format and concept to fmalize them for the Engineering workshop. At the workshop staff and Council can work with different numbers to determine the outcome. As Council goes through the individual budget meetings many things have come up that we should do. Not everything can be done. The list should be prioritized to a level Council is comfortable with. Councilmember May felt the CIP is one of the primary functions of the City. She was surprised we are moving 2nd Street out to 2015. Staff did this for a constant funding level and to maintain bottom debt service payment at or below what it was this year. When talking about increased maintenance costs, on 2nd Street we have bad sanitary sewer, but that is not the only thing wrong. Ifwe repair the sanitary sewer and it lasts for 10-15 19 Council Workshop Minutes May 18, 2011 Page 4 years, but the water line only lasts 5 more years, then we have paid for something and we only get a third of the life out of it. That is the struggle with maintaining things past the point we should. You will be spending money you will never recover. Council will have to prioritize. If we want to do certain things and not raise taxes, then we need to stop doing something else. We cannot take a little out of each department. Councilmember May felt ifwe are looking at raising taxes then we have to make sure we are creating efficiencies and looking at both sides; decreasing spending and increasing revenue. She asked if the number is $700,000 will the money be dedicated to these projects. Staff could not say yes. The current Council cannot tie the future Councils' hands. Council can create a way that they have to publicly address the issue before they can change it. Councilmember Fogarty asked ifwe approved $500,000 a year would it sit in the general fund. She wants it to be easy for Council to view, so it should be set aside as a separate fund within the general fund. She also wants to know how it will affect the fund balance when calculating the percentage. Staffwill ask the Finance Director if the money can be reserved. Staff felt this would fall in the budget in the same place as the road and bridge fund; in the capital projects fund. Councilmember Fogarty recalled the way in which the funds are collected makes them untouchable. How Council wants to designate them they would be unreserved funds. If the City reaches a fund balance of35% - 50% that is good for our bond rating. She had been told in the past we should not deviate from that so would like more information on that. She wants the message to be clear to future Councils as to the intent. She wants them to have to answer to the public if they change it. Councilmember May would like to see a spreadsheet showing the projects done sooner. Staff explained the fIrst spreadsheet shows the impact of projects being done sooner. If Council is okay with the debt service going up, staff can shift the projects sooner. It will reduce maintenance costs and project costs, but it will create more debt service than we have now. Councilmember May asked if staff could estimate the savings in the project cost if they were done today versus 2013. Staff used an inflationary factor of2% per year between the fIrst spreadsheet and the other spreadsheets. For the June Engineering workshop, Councilmember May would like detail on how the consulting piece is working. Council was given a detail of costs a couple years ago. Based on the old model, she would like to know the savings. Staff stated the consulting costs have gone down substantially over the last three years. We still use the consultant for certain things. The City is not equipped to undertake reconstruction projects. We will need a consultant to design it, but the City can do the construction and inspection. Over the next few years staff would like to have money in the budget for testing supplies so we can do that ourselves. Staff is certified to do testing. In the future, staff would like to set up a lab at City Hall for doing aggregate testing. There are two benefits. The City Engineer trusts people that work for him more than others. The second benefIt is the turnaround. We could have results immediately. This would cost $10,000- $15,000. Council felt this would pay off in two years. Council noted when we are slower and things are cheaper, now is the time to plan ahead so we are ready when business does pick up. This type of thing should be done now while we have the time. Staff stated we are re- introducing institutional knowledge that resides within City Hall now. Doing what we are doing now is a fantastic way to move forward and not have to rely on someone else again. 20 Council Workshop Minutes May 18, 2011 Page 5 Before the budget workshop Council will meet on their own to review all this information and prioritize what is important to them. This will probably occur in July. Once staff receives what Council's priorities are, staffwill review them and come back with pro's and con's. Council will review the information and make a decision. The budget workshop would be with the Council and the department heads. MOTION by Fogarty, second by Bartholomay to adjourn at 5:18 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 21 Council Workshop Minutes Fire Department Budget May 25, 2011 Mayor Larson called the workshop to order at 3 :08 p.m. Present: Larson, Bartholomay, Donnelly, Fogarty, May Also Present: Tim Pietsch, Fire Chief; Kevin Schorzman, City Engineer; Cynthia Muller, Executive Assistant MOTION by Fogarty, second by Donnelly to approve the agenda. APIF, MOTION CARRIED. The Fire Department recently completed an ISO audit and the results will be available in four weeks. Fire Chief Tim Pietsch noted we do have some deficiencies. One is the pumper engine. We have two stations and two engines. Ifan engine goes down, the station is down. This hinders the flfefighting capabilities. It makes it difficult to do inside flfefighting or rescue operations. The other item is a ladder truck. There are nine buildings in the community that are three stories or more that present some issues. They called Lakeville for a structure fife this week. These are big ticket items. A pumper engine is $400,000 - $500,000 and a ladder truck is $750,000. Everyone's insurance is based on the ISO rating. The City is currently at a 5. Farmington is receiving the maximum credit for the City's water system and the Dakota Communications Center. There is not enough pumping capacity to contain a fire at City Hall because of the pumper engines. The engine at station 2 is scheduled to be replaced in one or two years. At that time it will be 20 years old. There is no funding set aside to do that. It would be nice ifthere was an equipment apparatus fund. The City collects money from the townships for fife services and that goes into the general fund. Approximately 20% of the fife budget is covered by the townships. Engine 2 at station 2 is a top priority. The City has recently entered into an agreement with Castle Rock for a set fee for fife services. A new pumper engine would be at station 2. They would combine the rescue truck and the pumper engine into one and keep the current engine as a backup. The City could purchase a used truck and save 25%. A new truck would have to be equipped as the backup truck would also have to be equipped. Staffhas tried to obtain grants, but some outstate cities have equipment 40 years old so they have a greater need. We have a very good ISO rating. The best is 1 and 9 is the worst. The average homeowner would save $20/year on their insurance if the City went from a 5 to a 4 rating. Ifwe could get $10 from every household, it could go towards a new engine or ladder truck. Staff has talked about becoming a Fire District. The Fire Department would be governed by a board and become their own taxing district. This would eliminate the Council having to worry about the Fire Department budget and pensions. Ifthe pension is not covered, since the Fire Department is a taxing district, the taxes would go up. West St. Paul and South St. Paul merged and became South Metro Fire and became a Fire District. The board is comprised of people from West St. Paul and South St. Paul. South Metro is a full time Fire Department. One chief retired and they eliminated that position. The Fire Chief stated it would be nice to have a county-wide department as we already have mutual aid with all departments in Dakota County. Council noted a Fire District is just a shift. Ifwe merged with Lakeville it would help the rating because they have a ladder truck. 22 Council Workshop Minutes May 25,2011 Page 2 The Fire Department is looking at going to a duty crew set-up. A duty crew is four members on in the prime time or daytime as those are the hours we struggle with for coverage. With four members you can get an initial fIre attack and cover medical needs. It would make the response time less. These would be 20 hourslweek paid positions. A duty crew of four members for five days would amount to $76,000/year. This would double the part time salaries. The Fire Chief felt we could get four members from the current staff. The Fire Department would like to add an additional Monday night training drill per month. Currently they train on the 2nd and 4th Monday and they would like to add a training session on the 3rd Monday. The required training could consume their schedule. This would cost an additional $12,000/year. When a truck was purchased in the past the City bonded for it. Council suggested setting aside a percent of the township money for vehicles. With townships and state aid the City received approximately $233,000 in 2010. The air packs will be coming up for replacement in a few years. There is a one year offset between them. Halfwould be replaced one year and half the next year. This would be approximately $100,000/year. There are 38 air packs. Council asked about having a rotating schedule to keep the cost down each year. Fire Chief Pietsch explained the bottles have to be tested and it is better to have them done all at once. Testing takes about two days. Council felt it would be easier budgeting to have the same amount in the budget each year. Staff explained we would have to start early to get on a fIve year schedule. The tanks last 10-15 years. Council asked about the cost of the Explorer program. Fire Chief Pietsch explained the explorers have to pay to join and the Relief Association has covered the startup expenses. Those running the program are volunteers. There is a Post Advisor and he needs two other advisors to assist him with the training. Eventually the Explorers will be self-sustaining. The Explorer program is a recruiting program for the department. The department will need to purchase five pagers over the next two years because ofthe narrow banding with the DCC. Staff was not sure about the cost of the pagers, but hand held radios are $1500 - $2500. Membership is at capacity at 50 members. The need for training will go down $5,000 next year. That will help with the cost of the 3rd Monday training. This extra training would start in 2012. The priorities are: - The training is doable. Mandated training is six courses over three years. There is grant money available for training. - The uniforms are in good shape. - The pumper engine is a big ticket item, but the highest priority. A committee looks at trucks and develops specs. The last pumper engine was purchased 10 years ago at $325,000. The new diesel added $30,000 - $40,000. One option is to purchase a Freightliner with a 4-door cab to save money. The other option is to get a manufacturer to build to a spec truck. They take it to shows for six months and work out any issues. Council asked if we consider an equipment certificate for next year, what does it do budget wise to make the payments because that does affect the insurance. They would like this information from the Finance Director. The last ISO audit was 10 years ago. Ifa significant change is made they can come back for an audit. Getting 23 Council Workshop Minutes May2S,2011 Page 3 an engine alone would not move us from a 5 to a 4 rating. But an engine and a ladder truck would change the rating. Mayor Larson noted every City does not need a ladder truck because we have mutual aid agreements. Fire Chief Pietsch noted ifwe have a fIre at Spruce Place and people are trapped on the second floor, we have to wait for Lakeville to come with a ladder truck to rescue someone. Council asked about a rrre district and then some of these issues would go away. Council would like more information on a Fire District and how to establish one. The engine and training are top priorities. A ladder truck could be both a ladder and a pumper and keep the old pumper for a spare. Currently the City receives no points for a ladder truck. The department had tarps that were too small, so purchased larger ones. By doing this we gained points on the ISO system. We received the maximum points for the equipment, water system, water tower and the DCC. We lost points because of the age of the truck, we don't have a spare, and we don't have a ladder. The department has two brush trucks; one is 1991 and one is 1993. They only have 5,000- 6,000 miles on them. Municipal Services would like to have these trucks for park and rec or use for plowing. The Fire Chief will be asking for more in equipment and supplies. The training budget was cut, so the additional training would show up in part-time salaries of$12,000. Councilmember May asked that the Fire Chief talk with the Finance Director regarding an equipment certificate for a pumper or a ladder truck. The Fire Department will research options for a ladder truck with pumping capabilities and used trucks. Councilmember May felt Council needs to look at setting aside some of the township money. Council liked that we were setting up dedicated funds for specific purposes and obtaining honest numbers. Fire Chief Pietsch suggested ifwe are on a 20-year replacement schedule, perhaps a seven or ten year schedule would be better so we get something for the truck. It would be good to set up a program for replacement. The Fire Chief stated if the Police replace any squad cars, he asked ifthe Fire Department could have a spare for the Assistant Fire Chief. The only cost would be to change the striping for $500. Council did not see a problem with this. MOTION by Fogarty, second by Bartholomay to adjourn at 4:40 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 24 76 City of Farmington 430 Third Street l;armington, Minnesota 651.280.6800. F<.IX 651.280.6899 ww.......ci. tarmingtll11.mn.L1.'l TO: Mayor, Councilmembers and Interim City Administrator FROM: Randy Distad, Parks and Recreation Director SUBJECT: Approve Request to Waive Fees for Rocktoberfest Celebration DATE: June 6, 2011 INTRODUCTION The Rotary Club of Farmington (the Rotary Club) has established an annual fundraiser called Rocktoberfest. This year's event will be held at the Dakota County Fairgrounds on Saturday, October 1 st. The Rotary Club has requested the Showmobile rental fee be waived during its use at Rocktoberfest. DISCUSSION The Rotary Club made a formal request to the Parks and Recreation Advisory Commission (the Commission) to waive the rental fee. Included with this memo is the letter sent from the Rotary Club to the Commission requesting the rental fee be waived. The Commission reviewed the request at its May 11,2011 meeting and unanimously recommended to the City Council to waive the Showmobile rental fee. The Rotary Club has provided a great fmancial boost to the Parks and Recreation Department over the years. Over the last six years, the Rotary Club has donated the following to the City: . purchased park benches worth thousands of dollars . sponsors the youth scholarship program and donated thousands of dollars so youths who have a fmancial need can participate in City programs . sponsors a senior of the month program for members and volunteers at the Rambling River Center . purchased room naming rights at the Rambling River Center at a cost of$3,000 in support ofthe improvement project BUDGET IMPACT $400 in revenue will not be received due to the rental fee being waived. In addition there will be approximately about four hours of staff time involved with setting up and tearing down the Showmobile for the Rotary Club's Rocktoberfest. ACTION REOUESTED Approve the Rotary Club's request to waive the Showmobile rental fee for use during Rocktoberfest. Respectfully submitted, Randy Distad Parks and Recreation Director 25 Farmington Rotary Foundation May 6,2011 Dear Farmington Parks and Recreation Advisory Commission, This letter Is to formally request a fee waiver for use of the Showmoblle. The Rotary Club of Farmington would like to use the Showmoblle on October 1, 2011 at the Dakota County Fairgrounds for our annual fundraiser, "Rocktoberfest". We plan to use It as a secondary stage for smaller local bands in between our regional bands on the main stage. . Rotary's principal motto Is "Service Above Self". "Rocktoberfest" Is our annual fundralser from which the majority of proceeds go directly back Into the community of Farmington. For example, The Rotary Club of Farmington supports the City of Farmington's Rambling River Center and has committed $3000 toward the new building over the course of five years. Since our club began over 8 years ago we have placed park benches In city parks and also provided thousands of dollars to Farmington's Park and Recreation to be used for scholarships for Farmington residents who otherwise could not afford to participate in programming. We also provide an annual holiday luncheon for Farmington Senior Citizens, In partnership with the Rambling River Center. In addition, we have contributed thousands of dollars in scholarships to Farmington High School students over the years. All of the money we raise, with the exception of our international project to provide financial support to an orphanage In Bolivia, goes directly back to the community of Farmington. As a club we are committed to continuing these projects and contributing to our community. The success of our fundralser Is directly tied to our ability to continue our financial support of these projects. We respectfully ask that you waive the regular rental fee of $400. The Farmington Rotary Foundation is a Non Profit 501(c)3 entity operated by the Rotary Club of Farmington. Thank you for your consideration. nspe~~.uIIYW . LU~~GL) Anlka Rychner Co-Chair, Rocktoberfest Committee P.O. Box 175 . Farmington, MN 55024. www.farmingtonrotarymn.com 26 /G City of Farmington 430 Third Street larmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.tanningtlll1.TIl1l.L1..l TO: Mayor, Councilmembers, and Interim City Administrator FROM: Missie Kohlbeck, Senior Center Coordinator SUBJECT: Adopt Resolution Accepting Donations to the Rambling River Center Renovation Project DATE: June 6, 2011 INTRODUCTION Donations continue to be made to the Rambling River Center's Renovation Project. DISCUSSION The following donations have been received for the Rambling River Center's Renovation Project: · $100 from Lee Farley Moe who held a Tastefully Simple event during the Kitchen Party Fundraiser event held at the Rambling River Center . $50 anonymous donation Staff will communicate the City's appreciation on behalf of the Council to these donors. ACTION REOUESTED Approve the attached resolution accepting the donations that have been made to the Rambling River Center's Renovation Project. Respectfully Submitted, Missie Kohlbeck Senior Center Coordinator 27 RESOLUTION NO. R28-11 ACCEPT DONATIONS TO THE RAMBLING RIVER CENTER RENOVATION PROJECT Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was held in the Council Chambers of said City on the 6th day of June, 2011 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member May seconded the following: WHEREAS, a donation of$100 was made by Lee Farley Moe from the Kitchen Party Fundraising event; and, WHEREAS, a donation of $50 was made from a person who wishes to remain anonymous; and, WHEREAS, it is required by State Statute that such donations be formally accepted; and, WHEREAS, it is in the best interest of the City to accept these donations. NOW, THEREFORE, BE IT RESOLVED that the City of Farmington hereby accepts with gratitude the generous donation of $100 from Lee Farley Moe and $50 donation that was made from a person who wishes to remain anonymous. This resolution adopted by recorded vote of the Farmington City Council in open session on the 6th day of June, 2011. -~~ Mayor ..;~ Attested to the L day of June 2011. ~~ator SEAL 7a' City of Farmington 430 Third Street larmington, Minnesota 651.280.6800. Fax 651.280.6899 WW\\'.ci. tanningtll11. TIlll.L1.'l TO: Mayor, Councilmembers and Interim City Administrator FROM: Randy Distad, Parks and Recreation Director SUBJECT: Adopt Resolution Accepting Memorial Park Bench Donation DATE: June 6, 2011 INTRODUCTION A recent donation was made for the purchase of a park bench. DISCUSSION A donation in the amount of $520 has been made for the purchase of a park bench. The donation was made by Anthony Schneider in memory of his wife. The park bench will be installed in Rambling River Park along the Vermillion River. Staff will communicate the City's appreciation on behalfofthe Council to Anthony Schneider for his generous donation. ACTION REOUESTED Adopt the attached resolution accepting the donation of$520 from Anthony Schneider for the purchase and installation of a new park bench. Respectfully Submitted, Randy Distad Parks and Recreation Director 29 RESOLUTION NO. R29-11 ACCEPT DONATION FOR THE PURCHASE OF A NEW PARK BENCH Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was held in the Council Chambers of said City on the 6th day of June, 2011 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member May seconded the following: WHEREAS, a donation of $520 was made by Anthony Schneider for the purchase of a new park bench in memory of his wife; and, WHEREAS, it is required by State Statute that such donations be formally accepted; and, WHEREAS, it is in the best interest of the City to accept such donations. NOW, THEREFORE, BE IT RESOLVED that the City of Farmington hereby accepts with gratitude the generous donation of $520 from Anthony Schneider for the purchase of a new park bench. This resolution adopted by recorded vote of the Farmington City Council in open session on the 6th day of June, 2011. z:~ ~or +h Attested to the C(f day of June 2011. g' Interim City Administrator SEAL 7C'.. City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.fanningtllll.mn.us TO: Mayor, Councilmembers, and Interim City Administrator FROM: Missie Kohlbeck Senior Center Coordinator SUBJECT: Adopt Resolution Accepting Donation from Dakota Electric Association for the Arbor Day Celebration DATE: June 6, 2011 INTRODUCTION A donation to the Arbor Day celebration was received from Dakota Electric Association. DISCUSSION Dakota Electric Association generously donated 100 seedlings and one bare root tree in support of the Arbor Day Celebration (Celebration) held on Friday, April 29, 2011. The bare root tree was planted in Lake Julia Park during the Celebration. The seedlings were given to fIfth grade students at Meadowview Elementary School who participated in the Celebration. Staff will communicate the City's appreciation on behalf of the Council to Dakota Electric Association for their support of the Arbor Day Celebration. ACTION REOUESTED Approve the attached resolution accepting the donation from Dakota Electric Association. Respectfully Submitted, Missie Kohlbeck Senior Center Coordinator 31 RESOLUTION No. R30-11 ACCEPT DONATION OF 100 SEEDLINGS AND ONE BARE ROOT TREE FROM DAKOTA ELECTRIC ASSOCIATION Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was held in the Council Chambers of said City on the 6th day of June, 2011 at 7:00 p.m. Members Present: Larson, Bartholomay, Donnelly, Fogarty, May Members Absent: None Member Fogarty introduced and Member May seconded the following: WHEREAS, Dakota Electric Association has generously donated 100 seedlings and one bare root tree in support of the Arbor Day celebration. WHEREAS, it is in the best interest of the City to accept such donations. NOW, THEREFORE, BE IT RESOLVED that the City of Farmington hereby accepts with gratitude the generous donations of 100 seedlings and one bare root tree from Dakota Electric Association. This resolution adopted by recorded vote ofthe Farmington City Council in open session on the 6th day of June, 2011. ~~ Mayor Attested to the "8-f'J, day of June 2011. $;fl--- 'Interim City Administrator SEAL I"~ ./t City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 ww'w.ci. vdnningtull.TIlll.L1.'l TO: Mayor and Councilmembers FROM: Kevin Schorzman, City Engineer SUBJECT: Approve Development Contract Release - Lot 7, Block 4, Meadow Creek 2nd Addition. DATE: June 6, 2011 INTRODUCTIONIDISCUSSION The owners of the property located at Dylan Drive (Lot 7, Block 4, Meadow Creek 2nd Addition), have re~uested that the property be released from the development contract for Meadow Creek 2n Addition. This will facilitate the sale of the property without the encumbrance of the development contract. There are a few minor items to be completed with respect to the public infrastructure in this phase of the development. However, none of the items relate to the above-mentioned property. Therefore, staff recommends that the property be released from the development contract. BUDGET IMPACT None. ACTION REOUESTED Approve the attached Development Contract Release. Respectfully Submitted, Kevin Schorzman City Engineer cc: file 33 RELEASE RELEASE of Development Contract granted this day of the CITY OF FARMINGTON, a Minnesota municipal corporation ("City"). , 2011, by WHEREAS, the City and the Developer, Progress Land Companl have entered into a Development Contract dated August 19,2002, for the plat of Meadow Creek 2n Addition, recorded with the Dakota County Recorder on November 13,2002, as Document No. 1958870. WHEREAS, the City has been requested to grant a release and discharge Lot 7, Block 4, Meadow Creek 2nd Addition from the Development Contract. WHEREAS, there is no present need to have the Development Contract recorded against Lot 7, Block 4, Meadow Creek 2nd Addition. NOW, THEREFORE, BE IT RESOLVED by the City of Farmington: 1. With the exception of levied and pending special assessments, if any, Lot 7, Block 4, Meadow Creek 2nd Addition is released and discharged from the Development Contract for Meadow Creek 2nd Addition dated August 19,2002, recorded November 13,2002, as Document No. 1958870. Dated this _ day of , 2011. CITY OF FARMINGTON By: Todd Larson, Mayor By: Kevin Schorzman, Interim City Administrator 81921 1 34 STATE OF MINNESOTA ). ) ss. COUNTY OF DAKOTA ) The foregoing instrument was acknowledged before me this _ day of , 2011, by Todd Larson and Kevin Schorzman, the Mayor and Interim City Administrator of the City of Farmington, a Minnesota municipal corporation pursuant to the authority granted by its City Council. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Campbell Knutson Professional Association Suite 317 1380 Corporate Center Curve Eagan, Minnesota 55121 JJJ/cjh 81921 2 35 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.tanningtul1.n111.U..l TO: Mayor, Councilmembers and Interim City Administrator FROM: Cynthia Muller Executive Assistant SUBJECT: Accept Resignation Water Board DATE: June 6, 2011 DISCUSSION Mr. Allan Maguire has submitted his resignation for his position on the Water Board. His term on the Board runs through January 31,2013. A copy of Mr. Maguire's resignation is attached. ACTION REOUESTED Accept the resignation of Allan Maguire from the Water Board and authorize staff to advertise this vacancy and accept applications through June 24, 2010. Respectfully submitted, Cynthia Muller Executive Assistant 36 / /5 Allan Maguire 20370 Eaves Way Farmington, MN 55024 Farmington City Council: I am sending you this letter to Inform you of my resignatIon from the Farmington Water Board. I am moving south of Farmington to an acreage that is outside the Farmington water system making me ineligible to be a member of this Board. I have enjoyed all the time I have served on this board, and will miss the opportunities to assist the City of Farmington with the oversight of the municipal water system. My wife and I are dosing on the house in Farmington on the third week in June so I will not technically be a resident for the June 27, 2011 water board meeting. Thank-you for giving me the opportunity to serve the City and its' residents. ~m.~ Allan Maguire 37 jl /0 City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.lanningtlll1.mn.u..l TO: Mayor, Council Members, Interim City Administrator FROM: Lee Smick, City Planner AlCP, CNU SUBJECT: Adopt Resolution - Fairhill AUAR Update DATE: June 6, 2011 INTRODUCTIONIDISCUSSION The City of Farmington has informed the Astra/Genstar Partnership that an update to the existing Alternative Urban Areawide Review (AUAR) needs to be performed on the Fairhill property. The original AUAR was approved on January 20,2004 with an update completed on August 21, 2006. Section 4410.3610 of the EQB Rules states that an AUAR remains valid for 5 years, therefore an update needs to be completed by August 21,2011. Astra Genstar Partnership has agreed to hire Bonestroo, Rosene, Anderlik & Associates to perform the AUAR Update. RECOMMENDED ACTION Adopt a resolution ordering an update to the existing AUAR. Respectfully Submitted, Lee Smick, AlCP City Planner 38 RESOLUTION NO. R31-11 ORDER FOR ENVIROMENT AL REVIEW UPDATE FOR FAIRHILL PROPERTY Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington, Minnesota, was held in the Council Chambers of said City on the 6th day of June, 2011 at 7:00 P.M. Members Present: Members Absent: Larson, Bartholomay, Donnelly, Fogarty, May None Member Fogarty introduced and Member May seconded the following: WHEREAS, recent changes in land use and transportation networks within the Fairhill Property have occurred, therefore, an update to the existing AUAR is required under the provisions of the AUAR process as described in Section 4410.3610 of the EQB Rules, and; WHEREAS, the Final Alternative Urban Areawide Review (AUAR) for the Fairhill Property was adopted on January 20, 2004, and; WHEREAS, an Update to that AUAR was adopted on August 21, 2006 and an additional Update is required to be completed on or before August 21, 2011. NOW, THEREFORE, BE IT RESOLVED that the Farmington City Council hereby orders the AUAR Update of the area known as Fairhill consistent with the intents and purposes of the Rules of the Minnesota Environmental Quality Board under the provisions for Alternative Urban Areawide Review. This resolution adopted by recorded vote of the Farmington City Council in open session on the 6th day of June, 2011. Attested to the 5'+h day of June, 2011 ~~~~ Mayor ;:t:~ . Interim City Administrator SEAL ];~ City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.tanningtl!ll.TIln.LL.l TO: Mayor, Councilmembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Approve the AL.F. Budget DATE: June 6, 2011 INTRODUCTION The purpose of this memorandum is to provide information and request approval for the AL.F. Budget. DISCUSSION The AL.F. Board, at its May 17, 2011 meeting, recommended the attached AL.F. 2012 Budget be forwarded to each City Council for approval. ACTION REOUESTED Approve the 2012 AL.F. Budget. Respectfully Submitted, Brenda Wendlandt, SPHR Human Resources Director cc: file 40 Statement of Cash Flows 2012 Budget Additions Collections of receivables $ 10,000 Townships 1,500 Interest on investments 1,000 Total additions 12,500 Deductions Expenses Collection services 5,000 Billing services 900 Insurance 938 Other 1,000 Total deductions 8,138 Net changes in cash position 4,362 Cash balance, January 1 85,480 Cash balance, December 31 $ 89,842 -- _,,--_,~---,'_._'-'--'-'--'-" ---.. ,.-----.,---..--..-------.. "._-.-,-. ----..-.- -.-----.- ---." .--- 41 City of Farmington 430 Third Street, Farmington, MN 55024 (651) 280-6800 Fax (651) 280-6899 www.ci.farmington.mn.us 7, IJ TO: Mayor, Councilmembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Appointment Recommendation - Parks & Recreation (Liquor) DATE: June 6, 2011 INTRODUCTION The recruitment and selection process for the appointment of a part-time liquor store clerk, to fill a vacancy in the Park & Recreation Department, has been completed. DISCUSSION After a thorough review by the Parks & Recreation Department and the Human Resources Office, a contingent offer of employment has been made to Emily Baago, subject to ratification by the City Council. Ms. Baago has retail and customer service experience and she meets the qualifications for the position. BUDGET IMPACT Funding for this position is authorized in the 2011 budget. ACTION REOUESTED Approve the appointment of Emily Baago as a part-time liquor store clerk in the Parks & Recreation Department effective on June 7, 2011. Respectfully submitted, Brenda Wendlandt, SPHR Human Resources Director cc: personnel file 42 7,v ./ I' ~ City of Farmington 430 Third Street. Farmington. MN 55024 (651) 280-6800 Fax (651) 280-6899 www.ci.farmington.mn.us TO: Mayor, Councilmembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Appointment Recommendation - Parks & Recreation (Liquor) DATE: June 6, 2011 INTRODUCTION The recruitment and selection process for the appointment of a part-time liquor store clerk, to fill a vacancy in the Park & Recreation Department, has been completed. DISCUSSION After a thorough review by the Parks & Recreation Department and the Human Resources Office, a contingent offer of employment has been made to Alex Roberts, subject to ratification by the City Council. Mr. Roberts has customer service and liquor sales experience and he meets the qualifications for the position. BUDGET IMPACT Funding for this position is authorized in the 2011 budget. ACTION REOUESTED Approve the appointment of Alex Roberts as a part-time liquor store clerk in the Parks & Recreation Department effective on June 7, 2011. Respectfully submitted, Brenda Wendlandt, SPHR Human Resources Director cc: personnel file 43 7L City of Farmington 430 Third Street, Farmington, MN 55024 (651) 280-6800 Fax (651) 280-6899 www.ci.faTmington.mn.us TO: Mayor, Councilmembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Appointment Recommendation - Parks & Recreation (Liquor) DATE: June 6, 2011 INTRODUCTION The recruitment and selection process for the appointment of a part-time liquor store clerk, to fill a vacancy in the Park & Recreation Department, has been completed. DISCUSSION After a thorough review by the Parks & Recreation Department and the Human Resources Office, a contingent offer of employment has been made to Donald Wells, subject to ratification by the City Council. Mr. Wells has customer service and liquor sales experience and he meets the qualifications for the position. BUDGET IMPACT Funding for this position is authorized in the 2011 budget. ACTION REOUESTED Approve the appointment of Donald Wells as a part-time liquor store clerk in the Parks & Recreation Department effective on June 7, 2011. Respectfully submitted, Brenda Wendlandt, SPHR Human Resources Director cc: personnel file 44 7h) City of Farmington 430 Third Street Farmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.fanningttll1.TIl1l.L1..l TO: Mayor, Councilmembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Accept Fiber Repair Quote DATE: June 6, 2011 INTRODUCTION The purpose of this memorandum is to provide information and request the Council accept the quote to repair the redundant fiber line. DISCUSSION In December, the City's redundant fiber line from the Police Department to Akin Road Elementary school was damaged. The City requested quotes from Parsons Technologies, Underground Piercing and MP Nextlevel. Parsons Technologies and Underground Piercing are the only two companies that submitted a quote for this project. The City has had positive experience working with both companies and both are familiar with the City's fiber network. The quotes are as follows: Parsons Technologies: Underground Piercing: $16,543.00 $10,864.88 Staff is recommending accepting the low quote and awarding the project to Underground Piercing. ACTION REOUESTED Accept the quote from Underground Piercing to repair the redundant fiber line. Respectfully Submitted, Brenda Wendlandt, SPHR Human Resources Director cc: file 45 7" City of Farmington 430 Third Street hrmington, Minnesota 651.280.6800. Fax 651.280.6899 www.ci.tlmninb>1:lln.TI111.LL.l TO: Mayor, Councilmembers, Interim City Administrator FROM: Jennifer Dullum, Natural Resource Specialist SUBJECT: 2011 Mowing Contract DATE: June 6, 2011 INTRODUCTIONI DISCUSSION Council may recall that the City has made two attempts to go out for a mowing contract for 2011. The past two attempts have not worked out; therefore we have gone out for bid for a two year mowing contract. Staff recommends that the project be awarded to Gilmer Excavating, Inc. $64.00 per lot for both developed and vacant lots. Developed w/2010 Vacant w/2010 TOTAL Contactor Lots lot amt. Lots lot amt. (2010 amt.) Gilmer Excavating, Inc. $64.00 $576.00 $64.00 $1,280.00 $1,856.00 Summit Custom Landscape, Inc. $65.00 $585.00 $65.00 $1,300.00 $1,885.00 Hedlund Irrigation & Landscaping, Inc. $48.75 $438.75 $84.55 $1,691.00 $2,129.75 BUDGET IMPACT The lowest bidder on the project was Gilmer Excavating, Inc. with a bid of $64.00 per lot for both developed and vacant lots. Charges are passed on to the property owners. ACTION REOUESTED Approve the attached contract accepting the bid of Gilmer Excavating, Inc. and award the project. Respectfully Submitted, Jennifer Dullum Natural Resource Specialist 46 70 City of Farmington 430 Third Street larmington, Minnesota 651.280.6800. Fax 651.280.6899 WW\\f.ci. tanningtll11.TIl1l.U.'l TO: Mayor and Councilmembers FROM: Joel Jamnik City Attorney SUBJECT: City Administrator Severance Agreement DATE: June 6, 2011 INTRODUCTION City Administrator Herlofsky's Employment Agreement specified the payment of severance pay equal to six months salary under certain circumstances, and there has been a difference of opinion as to whether the circumstances of his resignation satisfied those conditions or not. In order to avoid an ongoing dispute and possible need for litigation to resolve the matter, the parties have determined to settle the matter by the City paying Mr. Herlofsky three months of severance pay. DISCUSSION Discussion of this matter was the subject of a closed special council meeting on May 16,2011. Following that meeting, I have been in contact with Mr. Herlofsky's attorney, John Fabian, and we have negotiated the proposed compromise which would provide for three months of severance pay. The settlement documents also clarify the understanding ofthe parties regarding other employment matters such as payment of accrued leave, eligibility for unemployment and COBRA extension benefits but those are not substantive in nature, or are consistent with city policies applicable to any other employee resignation. 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Fax 651.280.6899 wW\\'oci.furmiT1gtI111.n11l.L1:; TO: Mayor, Councilmembers, and Interim City Administrator FROM: Teresa Walters, Finance Director SUBJECT: April Financial Report DATE: June 6, 2011 Enclosed is the fmancial report for the month of April 20 11. Below is an explanation for variations from the budget as well as differences from last year at this time. The Financial Report for 2010 is also enclosed for comparison. If you have any questions prior to the meeting, please e-mail meattwalters@ci.farmington.mn.us or call me at 651-280-6880. General Fund Overall General Fund Revenues are at 3.92% of the budget. Without taxes, revenues are at 19.73% ofthe budget. Tax revenue is not received until June/July. Expenditures are at 29.15% ofthe budget. General Fund compared to Last Year at this time: In 2010 the General fund revenues were at 5.65%. General Fund Expenditures were 28%. Although the variance is not large, it is due mainly to higher snow removal costs in 2011. REVENUES Licenses: License revenue is slightly higher than last year at this time. Fines: At 26.28% ofthe budget, fmes are higher than last year at this time. Permits remain lower than last year; however, as previously mentioned, we believe we will be in line with the budget by year-end due to several planned large projects. Charges for services are also higher than last year at this time. In 2010 actual revenues were $87,768 compared to $100,357 in 2011 Interest revenue is still low compared to last year. Interest rates have continued to drop. Most short-term CD's are currently paying less than 1 %. Last year's Miscellaneous revenue included the ALF payment, which we no longer receive. EXPENDITURES At 29.15%, overall General Fund expenditures are in line with the budget. 33.3% of the budget year has passed. 84 Snecial Revenue Funds: The Special Revenue funds are established to account for specific revenue sources (grants) or to fmance a specific activity. A plan to eliminate deficits will be discussed during the budget process. The following is a summary of each special revenue fund: EDA: April revenues exceeded expenditures by $434, bringing the fund balance from a negative $266,232 in March to a negative $265,798 in April. Rambling River Center Operations (Senior Center): As a result of transfers, April revenues exceeded expenditures by $272, bringing the fund balance from a negative $19,844 in March to a negative $19,572 in April. Without the transfer from the General Fund the Senior Center would experience a net loss of$II,453 this month. Since the main revenue source for the Senior Center is General Fund revenues, we are looking into moving the RRC Operations and RRC renovations out of special revenue funds and into the General fund in 2012. Rambling River Center Renovations: April revenues exceeded expenditures by $294, bringing the fund balance from a negative $159,585 in January to a negative $151,477 in April. Swimming Pool: The Swimming pool will be funded this year by a $20,000 transfer from the Liquor Stores. Efforts by staff to reduce costs have led to an increase in the Fund balance at the end of2010. The fund balance as ofthe end of December was $58,278. This fund balance will be drawn down throughout the year due to a reduction in the transfer. During April, in preparation for the opening of the pool, expenditures exceeded revenues by $2,798. Ice Arena: Ice Arena revenue is slightly (approximately 3%) higher than last year at this time. Ice Arena expenditures are slightly (approximately 2%) lower than last year. Overall ice arena revenues exceed expenditures by $290. The Ice arena continues to carry a deficit balance of $256,613 carried over from prior years. Enterprise funds: The Enterprise funds are self supporting and do not need fmancial assistance from the General fund. Liquor: April revenues exceeded expenditures by $29,151 this month. Overall revenues exceed . expenditures by $11,099 for the year (As of April). Storm Water and Solid Waste revenues and expenses are consistent with last year and within budget. Water revenues and expenditures are below last year at this time. When compared to last year, Water revenue includes a 64% reduction in the water availability charges (WAC) resulting from a decline in new connections, 69% reduction in interest (due to lower rates), and a 25% reduction in Enterprise sales due to less usage (from foreclosures and weather related issues). Sewer revenues are lower than this time last year due to a 17% reduction in enterprise sales and a 97% or $59,556 reduction in SAC charges. 85 Street Light Utility Revenues are higher than last year due to the increase in rates. At 39% of the budget, electric charges are also slightly higher than last year. GraDh: The graph shows that overall 2011 YTD fund balance slightly lower than the 2010 fund balance at this time. 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TO: Mayor, Council Members and Interim City Administrator FROM: Randy Distad, Parks and Recreation Director SUBJECT: Approve Pilot Knob Liquor Store Lease Agreement DATE: June 6,2011 INTRODUCTION For the past seven years, the City has leased the Pilot Knob liquor store space in the Farmington Gateway Shopping Center from Schwiness, LLC (the Landlord). The current lease agreement expires on December I, 2011. City staff members have negotiated a lease amendment that proposes extending the lease for five additional years with the Landlord which would allow the store to remain in the same location but would reduce the current space size of 6,820 square feet to 4,758 square feet (due to the elimination of space where the Wine Cellar is currently located). The proposed lease also reduces the annual per square foot price from the current rate of $19 to $16 for the term of the lease. Attached is the original lease agreement, amendment number one to the original lease agreement and the new amendment number two to the original lease agreement document that extends the lease for five more years. BACKGROUND The following is a comparison of the original 7-year lease that is expiring and the proposed new 5-year lease: Original7-year Lease: Term: 7-years Lease Area: 4,758 square feet (increased to 6,020 in 2006) Lease Rate: Year I and 2, $17.50 per square foot Year 3 and 4, $18.50 per square foot Years 5 thru 7, $19.00 per square foot Proposed 5-year Lease: Term: 5 years Lease Area: 4,758 square feet Lease Rate: All 5 years, $16.00 per square foot HISTORY: . 2004- Original 7-year lease executed . 2,062 square feet added to leased area for the creation of the Wine Cellar (no adjustment to lease rates) . September 2010- Staff begins negotiation with Landlord to extend lease and reduce space back to original 4,758 square feet. Negotiations stall later that month. . January 2011- Landlord sends e-mail reminding staff that the City could exercise the option to extend the lease ofthe entire 6,020 square feet for an additional three years at a rete of$19.75. . February 2011- Staffmet with Landlord to resume negotiations. Negotiations continue for two months. . May 2011- Staff researches other options for the location of the north (pilot Knob) liquor store. Staff determines there is one location available to lease but after analysis learns that when factoring in moving expenses, there is very little savings and in fact if there is a 1 % decline in revenue any savings realized would have been lost. Negotiations continue with Landlord. Through a series of discussions and compromises, the terms of the proposed 5-year lease are agreed upon. 93 DISCUSSION: Related to the negotiation of extending the lease for the Pilot Knob liquor store, the City Council provided the following direction: 1) Negotiate a lease with a shorter term than the current lease 2) Negotiate a lease that reduces the annual per square foot price 3) Negotiate a lease that decreases the number of square feet leased The proposed amended lease successfully achieves all three Council directives. It also provides for the stable operation of the Pilot Knob store while issues related to the downtown liquor store are addressed. Council requested that staff obtain an outside opinion of the terms of the proposed 5-year lease. The following opinions were provided by Bruce Rydeen from Cerron Commercial Properties: . The market range in the Pilot Knob Road location is between $15-$16 per square foot but that lease rates are determined by location, building layout and building condition . He recommends that clients negotiate the best deal they can possibly get . $16 per square foot was not an unreasonable deal . In the current market, the number of years to lease space is between 3-5 years . Ifhe is representing a tenant he recommends they lease space for a longer period of time because the market is showing some signs of improvement . If he is representing a landlord, he recommends they lease space for a shorter period of time because the market is showing some signs of improvement . Recommends a flat $16 for 5 years with no increases. Staff also searched, web sites to determine lease rates for other vacant properties that are similar. Attached are several properties and the lease rate that is advertised for City Council review. A June 13th workshop with the City Council has been scheduled. It is intended to provide a forum for discussion on a proposed five year plan that staff members are working on. The plan will be structured such that after five years, the City has addressed both liquor store locations in a manner consistent with the Council consensus on the direction liquor operations is headed in the future related to whether the City should own or lease space. ACTION REOUESTED Approve the attached amendment number two to the original lease agreement that extends the current lease for an additional five years with Schwiness, LLC at the current Pilot Knob Liquor Store site. Respectfully submitted, Rand Distad Parks and Recreation Director 94 . I . '. SHOPPING CENTER LEASE AGREEMENT I'. THIS LEASE AGREEMENT, is made and entered into on , 2004, by and between Schwiness, LLC (hereinafter referred to as "Landlord") a Minnesota limited liability company, and the City of Fannington ("Tenant''). 1. LEASED PREMISES: TENANT ALLOWANCE. (a) In consideration oithe rents, covenants and agreements herein contained, the Landlord hereby leases to Tenant, and Tenant. leases from Landlord the premises ("Leased Premises") described in Exhibit A, attached and hereby made a part hereo( consisting of approximately 4,758 square feet of the Fannington Gateway Shopping Center ("Shopping Center") situated on property legally described as "Lot I, Block I, DAKOTA COUNTY ESTATES 9TH ADDITION", in the City of Fannlngton, County of Dakota, State of Minnesota. Measurements of Tenant's space shall be from the outside of exterior walls to the center line of the demising wall. (b) The Landlord will, at its cost and expense, prepare the Leased Premises in accordance with plans and specifications prepared by Landlord and Landlord's architect, Incorporating In such construction only those Items of work described as Landlord's Work in Exhibit B. Any equipment or work, other than those items specifically set forth within Exhibit B, which the Landlord installs or constructs within the Leased Premises on behalf of the Tenant, at the Tenant's request and in accordance with the Tenant's plans, shall be paid for In advance by the Tenant upon receipt of a bill therefore at cost, plus a general contractor fee not exceeding 15% of such costs. Any roofmg penetrations must be made by Landlord's roofing contractor, at Tenant's cost. . (c) The Landlord will issue a check to the Tenant for $40,000 as a tenant allowance within five days of the Effective Date as defined in Section 2 . 2. mBM. Unless terminated earlier as provided herein, the term orthis Lease Agreement shall commence on the earlier of (a) the date the Tenant opens for business or (b) the date 45 days after the Leased Premises is substantially completed and possession Is turned over to Tenant (''Effective Date''). The term of the .Lease Agreement shl!,ll be for seven years from the Effective Date. The Tenant has the option to extend the Term by exercising the option ("Option") set forth iri Exhibit C. 3. BASE RENT: ADDITIONAL RENT. Starting on the Effective Date Tenant agrees to pay to Landlord, without demand, at its office at 708 North First S~et, #423, Minneapolis, MN 55401, or at such other place as Landlord may from time to time designate in writing, on the days and in the manner herein prescribed, base rent ("Baile Rent>>) and other rent for the Leased Premises as set forth In this Lease Agreement ("Additional Rent"). Base Rent and Additional Rent are collectively referred to as ''Rent''. . AIl Base Rents shall be payable on or before the first day of each calendar month during the Tenn. Partial months at the commencement and termination of this Lease Agreement to be prorated based on the number of days the Lease Agreement is in effect d~ng the month. (a) Monthlv Base Rent. Tenant shall pay monthly Base Rent as follows: Years I and 2: Years 3 and 4: Years 5 thru 7: $ 6,938.75 $ 7,335.25 $ 7,533.50 (b) Common Area. (i) Common Area. The term "Common Area" means the entire areas designated for common Ulle or benefit within the property limits of the Shopping Center, including but not j)y way of limitation, parking lots, areaways, roads, walks, curbs, corridors, together with public facilities such as washrooms, and loading docks. Said Common Area may be expanded or changed by Landlord from time to time as deemed desirable, provided such change does not decrease or Impede either the access or visibility of the Leased Premises. Subject to reasonable rules and regulations to be promulgated by Landlord, the public portions of the Common Area are hereby made available to Tenant and its employees, agents, customers and invitees for reasonable use in common with other tenants, their employees, agents, customers, invitees and Landlord. (Ii) Common Area OperatinfJ Expenses. Landlord's lInnual accounting of the costs and expenses ofmaintainlng and operating the Common Area ("Common Area Operating Expenses") shall be open to Inspection by the Tenant. For purposes of this Section, the operating year shall be each period of twelve (12) consecutive calendar months ending December 31 ". The Common Area Operating Expenses inciude those expenses incumd by the Landlord in maintaining and operating the Common Areas in a manner deemed by Landlord as reasonable, appropriate and for the best interests of the tenants of said Shopping Center, including, without limitation, all expenses of operations, repair, 1 .---- -- ....._.~- j maintenance, lighting, cleaning, painting, snow removal, ice removal, rubbish, garbage and other debris removar~ security, the cost of personnel to implement such services and police the common areas, property and commercial general liability insurance coverage premiums, worker's compensation insurance premiums, and premiums for other insurance as reasonably determined by Landlord to be appropriate, and all expenses associated with the repair or replacement of paving, curbs, pylon signs, common area signs, walkways, common area doors, roofing, HV AC systems (except HVAC systems for the Leased Premises that are the responsibility of the Tenant pursuant to Section 8), landscaping, drainage and lighting facilities, plus a fair market management fee, which fee shall be five percent (5%) of gross collected Rents. Common Area Operating Expenses also include all real estate taxes and llPOcial assessments due and payable during the Tenn. Notwithstanding the foregoing, Common Area Operating Expenses shall not include .pe following: (A) Depreciation, interest (except as set forth below with respect to amortization of capital improvements) and amortization on mortgages, and other debt costs or ground lease payments, if any; legal fees in connection with leasing, tenant disputes or enforcement of leases; real estate brokers' leasing commissions; improvements or alterations to tenant spaces; the cost of providing any service directly to and paid directly by any tenant; any costs expressly excluded from Common Area Operating Expenses elsewhere in this Lease Agreement; costs of any Items to the extent Landlord receives reimbursement from insurance proceeds or from a third party (such proceeds to be deducted from Common Area Operating Expenses In the year in which received); and (B) Capital expenditures except for: (a) the costs of any capital unprovements, equipment or devices installed or paid for by Landlord (1) required or desired for the health and safety of tenants and occupants, (2) to conform with any 0 change in public laws. ordinances or government regulations, whether federal, state, local, or municipal, rules, regulations or requirements of any governmental or quasi governmental authority having jurisdiction not applicable to the building as of the date of original construction or of the board of fire underwriters or similar insurance body, or (3) to effect a labor saving, energy saving or other economy, amortized over the useful life of such capital improvement, equipment or device; and (C) Repairs or other work occasioned by fire, windstonn or other casualty of an insurable nature or by the exercise of the right of eminent domaln; Landlord's costs of electricity imd other services sold to tenants and for which Landlord is entitled to be reimbursed by tenants as an additional charge or rental over and above the basic rent payable under the lease with such tenant; costs incurred due to violation by Landlord or any tenant of the terms and conditions of any lease; overhead and profit increment paid to subsidiaries or affiliates of Landlord for services on or to the real property, to the extent only that the costs of such services exceed competitive costs of such services were they not so rendered by a subsidiary or affiliate; Landlord's general limited liablllty company overhead; any compensation paid to clerks, attendants, or other persons in commercial concessions operated by Landlord; all items and services for which Tenant reimburses Landlord or pays third persons; advertising and promotional expenditures; and any costs, fines, interest or penalties incurred or imposed relating to any taxes or due to violations by Landlord of any govenunental rule or authority. (iIi) Tenant's Common Area Operatlne Charee. Tenant shall pay as Additional Rent Tenant's proportionate share of the Common Area Operating Expenses as herein provided (''Tenant's Common Area Operating Charge"). Tenant shall pay Tenant's Common Area Operating Charge In the manner set forth In Section 3(b)(iv) and 3(b)(v). Tenant's proportionate share shall be computed in the ratio to which the total rentable floor area of the teased Premises bears to the total floor area of all rentable space in the Shopping Center. No deduction or exclusion from the total floor area of the Leased Premises shall be made by reason of columns, stairs or other.interior construction requirements or equipment. In the event of any increase or decrease in total rentable space, Tenant's proportionate share ratio shall be recomputed as of the next January 1st fonowing such increase or decrease and the new ratio so computed shall detennine the Tenant's Common Area Operating Charge in said year and thereafter. (iv) Monthly Tenant's Common AreaiPperatlnll Char~e. On or before the first day of each calendar month during the Term, the Tenant shall pay 1/12 of the estimated Tenan~'s Common Area Operating Charge ("Monthly Tenant's Common Area OperatIng Charge"). On or before the Effective Date, Landlord shall notIfy the Tenant of the estimated Monthly Tenant's Common Area Operating Charge for the Tenant for the current operating year. Thereafter, sometime after the start of each subsequent operating year, as soon as Landlord is able to project the costs and expenses Landlord shall notify the Tenant of the estimated Common Area Operating Expenses for the operating year and commencing with the first day of the next calendar month of this Lease Agreement following the date Landlord provides Tenant with such estimate and on the first day of each month thereafter Tenant shall pay the new estimated Monthly Tenant's Common Area Operating Charge. (partial months at the commencement and tenninatlon of this Lease Agreement to be prorated based on the number of days the Lease Agreement is in effect during the month.) (v) Final Annual Accountine. Sometime after the end of the initial operating year and each succeeding 96 I . . i i , I I I I I: r r 2 . . Ii operating year, Landlord shall compute the Common Area Operating Expenses for the operating year allocable to all tenants. If the Tenant's Common Area Operating Charge exceeds the sum of the Monthly Tenant's Common Area Operating Charges for the same operating year already paid by the Tenant, Tenant shall pay such excess to Landlord within thirty (30) days of demand. If the Tenant's Common Area Operating Charge is less than the sum of the Monthly. Tenant's Common Area Operating Charges for the same operating year already paid by the Tenant, Landlord shall credit said amount to the next succeeding payment due from Tenant. If the Lease Agreement tenninated during the operating year, the Tenant's Common Area Operating Charge shall be prorated based the number of days the Lease Agreement is in effect during the operating year. 4. BUSINESS USE. The Leased Premises shall be used and occupied by Tenant for a liquor store and for no other purposes without the prior written consent of Landlord and such use and occupancy shall be in compliance with all applicable laws, ordinances and governmental regulations. S. NON-DISTURBANCE. It is understood that Tenant's occupancy of the Leased Premises shall not be disturbed, if Tenant is not in default under any t~rms and conditions of this Lease Agreement 6. SUBORDINATION. Tenant agrees that this Lease Agreement shall be subordinate to any mortgages that may hereafter be placed upon said Shopping Center and to all advances to be made thereunder, and to the interest thereon and all renewals, replacement and extensions thereof. Tenant shaU execute and deliver whatever instruments as may be required for the above purposes. 7. CARE OF THE PREMISES. Tenant shall, at its expense, keep the Leased Premises, including show windows, signs and loading platform used by it, in a clean, safe arid sanitary condition, in conformance with applicable laws and regulations;. keep the front entry way and loading areas adjacent to the Leased Premises free of debris, ice and snow; store in rat-proof receptacles and remove regularly all trash and garbage; replace broken glass in exterior and interior windows and doors with glass of same quality and, on Landlord's request, remove any encroachments maintained on any public place without Landlord's written consent Without such written consent, Tenant shall not mark., drill; deface, injure, waste, damage, or alter the Leased Premises; conduct business so as to constitute a nuisance to other tenants or occupants; overload any floor facility; make any structural alterations except as provided in this Lease Agreement, erect any antenna's on any building roofs, discharge or deposit any substance in plumbing facilities or use the same for any purpose other than that for which constructed. 8. REPAIRS. (a) Landlord's Repair Responsibilities. Landlord shall maintain in good repair, reasonable wear and tear and casualty excepted, all parts of the Common Area, the exterior of the Shopping Center building and all structural elements of the bJJilding, including footings, foundation walls and roof, making all necessary repairs and replacements, whether ordinary or extraordinary, structural or non-structural. Tenant shall immediately give Landlord written not1~ (the "Repair Notice") of any defect or need for such repairs, and after receipt of such written notice from Tenant, Landlord shall have a reasonable opportunity to repair the ~e or cure such defect. The tenns ''walls'', as used in this paragraph, shaIl not include windows, glass or plate glass, doors, special store fronts or office entries. If Landlord shall fail to make any repair to the Leased Premises or any area of the Shopping Center outside the Leased Premises, which is required to be made by Landlord under this Lease Agreement either within ten (10) days after receipt of written notice (the "Fail to Repair Notice") from Tenant of such fallure or, if such repair ClI11;Ilot reasonably by completed within such ten (10) day period after receipt of the Fail to Repair Notice and if the condition that is the subject of such proposed repair has a material adverse impact on the routine conduct of Tcnant's business in the Leased Premises, then Tenant shall have the right to make the repair and offset the reasonable, verifiable and direct cost thereof against the Base Rent next coming due under this Lease Agreement; provided that the foregoing right of offset shall be subjeCt to the following terms and conditions: (i) The foregoing offset right shall not be available with respect to any repairs required or desired in connection with any condemnation, casualty or other insured event; (ii) Landlord shall not be construed to have failed to proclled with due diligence to the extent that any such failure is due to reasons of force majeure or delays caused by Tenant; (Hi) The foregoing offset right shall not be applicable with respect to any "lost profits" or other consequential damages or losses that Tenant may incur or allege in connection with any such condition or failure to repair; . (iv) The Repair Notice and Fail to Repair Notice shall state with specificity the nature and extent to each item of repair that Tenant believes should be performed, Tenant's good faith estimate of the cost thereof, and the potential amount of offset; and 3 .__9L (v) " Any offset effected hereunder shall be exercised through the delivery of written notice to Landlor~ specifying the amount of the offset and including, as attachments, copies of all invoices or other source documents reasonably necessary to verify the costs underlying such offset, which notice shall be delivered on or before the date that the Base Rent offset Is otherwise due. '. (b) Tenant's Renalr resoonsibllities. Bxcept as otherwise provided in this Section, Tenant shall keep the Leased Premises, including the HV AC systems and other utilities providing services to the Leased Premises, at all times in good order, condition and repair at Tenant's own expense and in accordance with all laws, directions, rules and regulations of regulatory bodies or officials having jurisdiction in that regard, subject however, to the provisions of Section 10 hereof: Notwithstanding the foregoing, if HV AC system repairs will cost more than fifty percent (SOOIcl) of the replacement cost of the HV AC system, then Landlord shall replace the HV AC system and the replacement cost shall be considered a Common Area Operating Bxpense. If Tenant refuses or neglects to commence repairs within ten (10) days after written demand, or adequately to complete such repairs, Landlord may make such repairs without liability to Tenant for any loss or damage that may accrue to Tenant's stock or business by reason thereof, and If Landlord makes such repairs, Tenant shall pay Landlord, on demand, as Additional Rent, the costs thereof of said repairs. 9. SIGNS: DISPLAY WINDOWS. Tenant shall submit to Landlord for approval drawings showing all proposed sign work to be erected' in connection with Tenant's Leased Premises, including lettering and other advertising media upon the doors and show windows. Brection of any signs shall be prohibited unless approved in writing by Landlord. The size of the Tenant's sign will be limited as follows: (total Shopping Center sign area per Planned Unit Development Agreement) x (total floor area of the Leased Premises! total floor area of all rentable space in the Shopping Center). Loud Bpllakers, or other means of broadcasting in a manner to be heard outside the Leased Premises shall not be used. No sign or advertising medium shall be used so as to be a nuisance or menace to Landlord or other tenants. The cost of installing, maintaining, changing and removing all signs shall be borne by Tenant. Tenant's rights in respect of signs shall not be transferable, except as part of an assignment or sublease consented to by Landlord pursuant to Section 14 hereof. Additional terms reglirding the pylon sign along Pilot Knob Road are set forth in Bxhibit B. 10. ALTERATIONS. INSTALLATIONS. FIXTURBS. Bxcept as herein provided, Tenant shall not make any stJUctural alterations in or additions to the Leased Premises. Ifstructural alterations become necessary because of the application oflaws or ordinance, the direc;tions, rules and regulations of any regulatory body to the business carried on by Tenant, because of any act or default on the part of Tenant, or because Tenant has qverloaded any electrical or other facility, Tenant shall make such structural alterations at its own expense after first obtaining Landlord's written approval of its plans and furnishing such indemnification against liens, costs, damages and expenses as Landlord may reasonably require. 11. INSURANCB. Tenant agrees to purchase, in advance, and to carry in full force and effect the following insurance, and such insurance policies shall name Landlord as an additional insured: (a) "All Risk" property insurance covering the full replacement value of all of Tenant's leasehold improvements, trade fixtures, inventory and personal property within the Leased Premises. (b) Commercial general publio liability Insurance covering all acts of Ten ant, its employees, agents, representatives and guests on or about the Leased Premises, containing a contractual liability endorsement, In a combined single limit amount'ofnot less than $1,000,000 and written on an "occurrence" basis. The insurance shall be with an insurance company authorized to do business Ino Minnesota and reasonably satisfactol')' to the Landlord. Tenant will provide Landlord with certificates evldencing such insurance during the Term and upon Landlord's request. The policies must give Landlord a minimum of thirty (30) days written notice prior to cancellation, termination or change in such insurance. 12. DBLIVERIBS. PARKING. All loading and unloading and ail removal 'of garbage shall be made in accordance with regulations reasonably adopted by Landlord. Tenant and its employees and agents shall park cars only in areas designated from time to time by Landlord as Bmployee's Parking Areas. Trucks or delivery vehicles shall not be parked so as to inconvenience other tenants or impede access to the Shopping Center by customers or invltees. 13. WAIVBR. LIBNS AND INDBMNIFICA TION. a. Bxcept as caused by Landlord's gross negligence or wilfull misconduct, Landlord (Including its officers, partners, employees, agents and representatives) shall not be liable to Tenant, or those claiming by, through or under Tenant, for any itijury, death, or property damage occurring in, on or about ilie Leased Premises. Without limitation of the foregoing, Landlord shall not be liable to Tenant for any, and Tenant hereby releases Landlord from all damage, compensation or claims arising from: loss or damage to property, books, records, files, money, securities, negotiable instruments or other papers in or about the Leased Premises; the necessity of repairing any portion of the Leased Premises or the amenities within or without the 4 98 , . ,1 Leased Premises; the interruption in the use of the Leased Premises; accident or damage resulting from the use or operation by Landlord, Tenant, or any other person or persons whatsoever of heating, cooling, electrical or plumbing equipment or apparatus: any fire. robbery, theft, or any other casualty: and leakage or bursting of pipes or water vessels or any roof or wall leakage, in any part of the Leased Premises; water, rain, snow or underground water that may leak into, flow on, or flow from, any part of the Leased Premises; or acts or omissions of persons occupying or transacting business in the adjoining premises or any part of the Shopping Center. b. Tenant agrees to pay all sums of money in respect of an~ labor, services, materials, supplies or equipment furnished to Tenalit in or about the Leased Premises which may be secured by any Mechanic's, Materialmen's or other lien aQainst the Leased Premises or the Landlord's interest therein and will cause each such lien to be discharged at the time performance of any obligation secured thereby matures, provided that Tenant may contest such lien, but if such lien is reduced to fonnal Judgment and if such judgment or procesS thereon Is not stayed, or if stayed and said stay expires, than and in such event Tenant shall forthwith pay and discharge said judgment. Landlord shall have the right to post and maintain on the Leased Premises notice of non-responsibility under the laws of the State of Minnesota. c. Tenant shall defend with counsel approved by Landlord (which approval will not be unreasonably withheld), indemnifY and hold Landlord (including itsOofficers, partners, employees, agents and representatives) hannless from and against allliabiIities, obligations, damages, fines, penalties, claims, demands, costs, charges, judgment and expenses, including, but not limited to, t:easonable architectS' and attorneys' fees, which may be imposed on or Incurred or paid by or asserted against Landlord, the Leased Premises, Shopping Center, or any interest therein by reason of or In connection with any of the following: (i) Any alterations and anything done in, on or about the Leased Premises; (if) The use, nonuse, possession, occupation, condition, operation. maintenance or management of the Leased Premises; (iii) Any negligent or tortious act on behalf of Tenant or any of Tenant's agents, contractors, servants, employees, licensees, or invitees; (iv) Any accident, iqjury, death or damage to any person or property occuning in or on the Leased Premises; and (v) Any breach of this Lease Agreement by the Tenant 14. ASSIGNMENT OR SUBLETTINO. Tenant agrees not to sell, assign. mortgage, pledge, or in any manner transfer this Lease Agreement or any interest thereunder and not to sublet the Leased Premises or any part thereof and not to pennit any licensee or concessionaire therein without the previous written consent of Landlord in each instance; which consent shall not be unreasonably withheld. Consent by Landlord to one assignment of this Lease Agreement or to one subletting of the Leased Premises shall not be a waiver of Landlord's rights under this Section as to any subsequent assignment or subletting. 0 Landlord's rights to assign this Lease Agreement are and shall remain unqualified. Upon any sale of the Leased Premises and providing the purchaser assumes all obligations under this Lease Agreement. Landlord shall thereupon be entirely freed of all obligations of the Landlord arising therefrom and shall not be subject to any liability resulting from any act or omission or event occurring after such conveyance. IS. ACCESS TO PREMISES. Landlord reserves the right to enter upon the Leased Premises upon not less than 24 hours prior notice in order to inspect the same, or to make necessary repairs, additions or alterations to the Leased Premises. Landlord may exhibit the premises to prospective tenants, purchaserso or lenders only during the last six (6) months of the Term. Landlord may, however. enter at any hour in the event of an emergency. 16. UTILITY SERVICE. (a) Oas. Water and Electricity. Landlord agrees to cause mains, conduits, and other facilities to be provided and maintained to supply all necessary utility meters for gas, water, and electricity to the point whereo they enter the Leased Premises, and Tenant shall provide and maintain the same within the Leased Premises and pay when due all billings for gas. water and electricity used in the Leased Premises. (b) InterruDtion of Service. Landlord shali not be liable in damages or otherwise if the furnishing by Landlord or by any other supplier of any utility service or other service to the Leased Premises shall be Interrupted or impaired by fire, accident, riot, strike, act of God, the making of necessary repairs or improvements or by any causes beyond Landlord's control or if service may be curtailed or interrupted by energy regulations issued'by any lawful authority. 17. EMINENT DOMAIN. (a) Leased Premises. If the Leased Premises, or such portion thereof as to render the balance unsuitable for the purposes of Tenant, is taken by condemnation or the right of eminent domain or by private sale in lieu thereof, either party shall be entitled to terminate this Lease Agreement upon written notice to the other, provided that such notice is given within thirty (30) days after Tenant has been deprived of possession by such taking or sale. (b) Taking of ShoDDintt Center. If 50% or more of the Shopping Center is taken by condemnation or the right of eminent domain or by private sale in lieu thereof, Landlord may terminate this Lease Agreement upon giving written notice of terminatio~ to Tenant within one hundred twenty (120) days following the date of such occurrence. . 5 j I _.__ -----1 99 . I . .. . I . (c) Damalllls. All damages awarded for a taking under the power of eminent domain whether for whole or part of the Leased Premises belong to and are the property of Landlord whether such damages are awarded as compensation for diminution in value to the leasehold or to the fee of the premises. However, Landlord is not entitled to any separate award made directly to Tenant by the taking authorities for the fair value of leasehold improvem~nts made by Tenant. the cost of removal of stock and fixtures, moving expenses or loss of business. The term "eminent domain" includes the exercise of any similar governmental power and any purchase or other acquisition in lieu of condemnation. . 18. DAMAGB OR OBSTRUCTION. (a) In the event that the Leased Premises shall be damaged or destroyed by fire or other casualty, Landlord shall, unless it shall elect to cancel and tenninate this Lease Agreement, as hereinafter provided, repair such damage and restore 1I1e Leased Premises, with all reasonable diligence, to substantially their condition immediately prior to the happening of such event. The fixed minimum rent and additional rent provided to be paid by Tenant hereunder shall be abated or reduced proportionately during any period in which, by reason of such damage or destruction, there is substantial interference with the operation of the business of Tenant in the Leased Premises, considering the extent to which Tenant may be required to discontinue its business in the Leased Premises, and such abatement or reduction shall continue for the period commencing with such destruction or damage and ending with the completion by Landlord of such work or repair and/or constnlction and the issuance of an occupancy permit for the Leased Premises. (b) If fifty percent (50%) or more oftlie rentable area ofthe Shopping Center building in which the Leased Premises is located shall be rendered partially or wholly untenantable by fire or other casualty, notwithstanding that the Leased Premises may not have been rendered partially or wholly untenantable, Landlord may tenninate this Lease Agreement upon giving written notice of termination to Tenant within sixty (60) days following the date of such fire or other occurrence. 19. SURRENDBR. On the last day of the Term, Tenant shall peaceably surrender the Leased Premises in good order, condition and repair, broom clean, reasonable wear and tear only excepted. On or before the last day of the Term, unless otherwise directed by Landlord, Tenant at its expense must remove its trade fixtures, signs, and carpeting from the Leased Premises and any property not removed is deemed abandoned. Any damage caused by Tenant In the removal of such items shall be repaired by and at Tenant's expense. All alterations, additions, improvements and fixtures (other than Tenant's trade fixtures, signs and carpeting) which shall have been made or installed by either Landlord or Tenant upon the Leased Premises and all hard surface bonded or adhesively affixed flooring and all lighting fixtures, except any track or specialty lighting, shall remain upon and be surrendered with the Leased Premises as a part thereof, without disturbance or injury, and without charge, at the expiration or termination of this Lease Agreement. unless Landlord directs the removal of all or some of these items. Tenant shall promptly surrender all ke)'S for the Leased Premises to Landlord at the place then fixed for the payment of Rent and shall inform Landlord of the combination on any locks and safes on th~ Leased Premises. 20. SHORT FORM OR MBMORANDUM OF LHASB. Bither party, upon request, shall promptly execute duplicate originals of an instrument, in recordable fol111, which wlIl constitute a short fann of this Lease Agreement, setting forth a description of the Leased Premises or Shopping Center, the term of this Lease Agreement or any other provisions thereof, except for Rent, as Landlord may request. Notwithstanding the foregoing, Landlord agrees that any short fonn of this Lease Agreement will set forth the exclusive use clause found at Section 33 herein. 21. COMPLIANCB WITH LAW. Tenant .shall obtain and maintain in force and effect all pennits, licenses and similar authorizations to use the Leased Premises for its purpose required by any governmental authority, and comply with all applicable-laws. 0 22. ABANDONMENT. In the event the Tenant should at any time vacate or abandon the Leased Premises so as to cease doing business thereon for a period of more than thirty (30) days (except for a closing of the premises due to strikes or damages or destruction by fire or other cause covered by extended risk insurance coverage), the Landlord shall have a continuing option until Tenant shall reoccupy the. Leased Premises and open for business thereon of terminating this Lease Agreement irrespective of whether the Tenant may not otherwise be in default under the terms and provisions of this Lease Agreement. Landlord may exercise such option to terminate this Lease Agreement by sending written notice to the Tenant of its Intention, whereupon the Tenant will be permitted thirty (30) days from the date of such notice to remove its personal property, fixtures and equipment from the Leased Premises in the manner heretofore provided. At the expiration of said thirty (30) day period, this Lease Agreement will, at the option of Landlord, be deemed to have terminated and the Tenant shall surrender possession of the Leased Premises to the Landlord in the condition and in the manner herein provided and shall bring all Rents current to the date of Lease termination. 23. OFFSET STATEMENT. ATTORNMBNT. Within ten (10) days after request therefore by Landlord, Tenant agrees to deliver a certificate to Landlord or any mortgagees, Certifying (if such is tho case) that this. Lease Agreement is in full force and effect and that there are no defenses or offsets, or stating those claimed by Tenant 6 100 . . . , . .1 24. DBFAULT. (a) Tenant Default. If Tenant fails to pay any Rent or other amounts due hereunder within five (5) days after notice of default, or if Tenant breaches this Lease Agreement and does not cure the breach within thirty (30) days after written notice of such default, or if Tenant suffers this Lease Agreement to be taken under any writ of execution, then Landlord, besides other rights or remedies it may have, has all of the following rights: (1) Landlord may tenninate this Lease Agreement. . (2) Landlord has the immediate right of re-entry and may remove all persons and property from the Leased Premises and such property may be removed and stored in a public warehouse or elsewhere at the cost at; and for the !,ccount of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby. . (3) If Landlord elects to re-enter, or if it takes possession pursuant to legal proceedings or pursuant to any notice provided for by law, it may without lonninating this Lease Agreement, make such alterations and repairs as may be necessary in order to re-Iet the Leased Premises, and re-Iet said Leased Premises or any part thereof for such tenn (which may be for a lonn extending beyond the Tenn of this Lease Agreement) and at such rental and upon such other teons and conditions as Landlord in its sole discretion may deem advisable. (4) Upon such re-Ietting all rentals received by the Landlord shall be applied first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to the payment of any expenses of such re-Ietting, including brokerage fees, attorney's fees and of costs of such alterations and repairs; third, to the payment of Rent due and unpaid hereunder, and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If such rentals received from such re-Ietting during any month are less than that to be paid during that month by Tenant hereunder, Tenant shall. pay any such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry or taking possession of Leased Premises by Landlord is an election on its part to tenninate the Lease Agreement unless a written notice of such intention be given to Tenant or unless the tennination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such re-Ietting without tennination Landlord may at any time thereafter elect to tenninate this Le~e Agreement. (5) In addition to any other remedies it may have, Landlord may recover from Tenant all damages it may incul' by reason of such breach. including the cost of recovering the Leased Premises, and reasonable attorney's fees. (6) In case suit shall be brought for recovery of possession ofthe Leased Premises, for the recovery of Rent or any other amount due under the provisions of this Lease Agreement. or because of the breach of any other covenant therein contained on the part of a party to be kept or performed. and a breach shall be established, Tenant shall pay to Landlord all expenses incurred therefore. including reasonable attorney's fees. .(b) Landlord Default. If the Landlord breaches this Lease Agreement, the Tenant may terminate.the Lease Agreement by providing the Landlord with thirty (30) days written notice of the Landlord's breach and the Lease Agreement will terminate at the end of the thirty day (30) notice period unless the Landlord has cured the breach during the thirty day notice period. If the default is of a nature to require more than thirty (30) days to remedy, the Lease Agreement will not tenninate if Landlord has undertaken procedures to cure the default during the thirty (30) day notice period and diligently pursues such efforts to complete the cure. i I I I I l t f: I i 25. BANKRUPTCY. If the Tenant or any guarantor ofthis Lease Agreement makes an assignment for the benefit of Its creditors, or admits in writing its inability to pay its debts as they become due. or files a petition in voluntary bankruptcy or for an arrangement or rebrganization pursuant to the Federal Bankruptcy Code or any similar law, state or federal, now or hereafter existing ("Bankruptcy Proceeding"), or files an answer admitting insolvency or inability to payor falls to pay Its debts as they become due. or fails to obtain a vacation or stay of any involuntary Bankruptcy Proceeding within forty-five (45) days after the institution of the same. or is adjudicated a bankrupt or be declared insolvent in any Bankruptcy Proceeding, or has a custodian. trustee or receiver appointed for or have any court take jurisdiction of its property, or any part thereof, in any involuntary proceeding for the purpose of reorganization, arrangement. dissolution or liquidation. and such custodian. trustee or receiver shall not be discharged or such jurisdiction not be relinquished, vacated or stayed within forty-five (45) days. then in ~y such event the Landlord may; if it so elects, with or without notice of such election, tennlnate this Lease Agreement. 26. NOTICES. Any notice required or permitted under this Lease Agreement Is sufficiently given If sent by registered or certified mail to 'fenant at the address of the Leased Premises and to Landlord at the address then fixed for Rent payments. Bither party may be like written notice at any time designate a different address to which notices shall subsequently be sent. 27. HOLDING OVBR. If Tenant remains .in possession of the Leased Premises after the Tenn and without the execution of a new lease, it shall be deemed to be occupying said premises as a tenant from month to'montJt, subject to all tbe conditions. provisions and obligations of this Lease Agreement in so far as the same can be applicable to a month-to-month tenancy. 28. NON LIABILITY. Landlord is not responsible for its breach of this Lease Agreement for reasons beyond the Landlord's reasonable control. Landlord Is not responsible to Tenant for any consequential. special, Indirect or incidental damages. 7 101 . \ 1. 29. INV AUDITY OR UNENFORCBABILlTY OF CLAUSES. The invalidity or unenforceability of any provisions of this Lease Agreement shall have DO effect on the validity or unenforceability of any other provision of this Lease Agreement. . . . 30. RULES AND REGULATIONS. The Landlord may from time to time adopt reasonable rules and regulations pertaining to the operation of the Shopping Center and Tenan\ is to abide by such rules and regulations. 31. SURVIVAL OF PROVISIONS. Those provisions of this Lease Agreement including, but not limited to Section 13, that by their nature must survive the Term to protect the interests of the party to which they run, survive the Term. 32. GENERAL. This Lease Agreement does not create the relationship of principal and agent, partnership, or any association between Landlord and Tenant, the sole relationship between Landlord and Tenant is that of Landlord and Tenant. The terms, convents and conditions hereof shall. be binding upon and inure to the successors in interest and assigns of the parties hereto. No waiver of any default of Tenant hereunder shalI be implied from any omissions by Landlord to take any action on account of such default, and no express waiver shall affect any default other than the default expressly waived and that only for the time and to the extent therein stated. A waiver by Landlord'shall not be construed as a waiver of a subsequent breach of tbe same covenant, tenn or condition. Bach oprovision of this Lease Agreement performable by Tenant shall be construed to be both a covenant and a condition. No action required or pert)'litted to be taken by or on behalf of Landlord under the terms of this Lease Agreement shall be deemed to constitute an eviction or disturbance of Tenant's possession of the Leased Premises. The submission of this Lease Agreement does not constitute a reservation of or option for the Leased Premises and this Lease Agreement is effective only upon execution and delivery thereof by Landlord and by Tenant. The headings of the sections are for convenience only and do not define, limit or construe the contents of such sections. All preliminary negotiations are merged into and incorporated in this Lease Agreement. The laws of the State of Minnesota shalI govern the validity, performance and enforcement of this Lease Agreement. All Exhibits are incorporated herein and a part hereof. 33. EXCLUSIVE USE. The Landlord shall receive written agreement from the tenant prior to the leasing of any other space in the Shopping Center of which the Leased Premises is a part to any tenant who shall sell intoxicating liquors as part of their business. ACCBPTED AND AGRBBD TO: BY:~~ By: r City of Farmington Title: .J-r7~,,~ Da~~, . 4 ~ .:;}C!::x!:?s/ Date: 8 102 ~"~..r,,'o;:'oo. ~l;"''';;.f'' . w.~;~o. . ~~~. . ~f ell ~:.o ~;o' ~'h ~i. i' . ~:.. 1.' C' ~~~~ Ii. e. r ~: /to ,,- '0' , < .4. '0 ~~~'.. , 0 ..;,,. &0 !~:' II:.;~,. !-;, '0 . 0~,1 ~,' ;(:: .. ~;o:o ~~:. J~:' i~,: ill" ~- ., g;". . ~",o [~;:,.'o r({i'. fi\r.. \lV' ~fr m"".oo'J i. . , 'i ii II i g I I I~ (~ (N ~~ II I I (r;l) (fD (fD 1211'00' ....-..----.. .. -.. ---. (~) (>) '-' , \~ r... ~ ~I-" / "t)II' lr lill ~ 6 I 'il ! B II' .~E: 0 n .i II I~I nt ~ . .0 lij ;:0 u' n I, 11 . "lJ ~ D ~ II' In u ~ ~ ~ l a100 ' ' I!'r'l' , !i~ I f!] , . I dl 1lI~ I:j' , ~ B I I I ~ , I. iI . ~ I " ~ ~ I " , . u ~ , " 0 "'), ; " . -: ~ D o!ll; .0 ~oD,Vi! ' ~ ~. ' 00) 16'.0"' - 4.~ ~ ,0 16000' I I. II t:J=:---. - I I.. r.:c: (~o o..-p '1 Hl r-:r--o-o_-'-i-u.o01r-1 00 "__0 _ II JP\ ':" J. 0 0 z-r."~ '2'-8" 1.l2'01l" ' 0 fo8"l 5"4' ~Il"+-jo: :11'i.:7' ---..--I I~I ._~-r- .rr.:.r.:..:. . . I '.1. ~~ if I ;:..:; r._ ..... '. i !:to 0., i {i} '::~:'~., '0 l- - .J~o,1' ~~i;1I~ designery, ...... SCHWINESS RETAIL CEH'Il!R - 2D04 FLOOR PLAN GRANJ).PRQJECJ'S, me. ..~'~.".~'.. ~......,~., architecture :l83llO PD.ar lCIloa RoAD 'A 150JUt . .,~J..1o...f':' ,IIRH1HG1OIl, MIl S5O:I4 ~1/ff".1'O'" ""!'\'RPt~Nll- ~<<\!~.t:'.J ..~:' ; fAIl.', o..~ ==:=::... ~t.i~p.qs~ .tuu~ -- DCll..,ca,... : ....~...... ~~~~~'. f.~.:;:'l:.(:;_,!;.:..~~~\..~~...;-t. .:;';:~t;:'; A~; ....f,.~~~:';,~~t~~.:.!o.._~..4. ~~~;~:t...::~:.t':,:.. .' '. J :103,' " "'t~:.~t.;\.:'.~ }.T. . .f..~. .' . " ,. , -.. 00 3]'.3" ...- .-.....-.--. ~.- . .- . . ~ _ . . _ . 00 ..._ _,o_o.J?'oV .. o. . _ .__ ..... ..2!:-!...._ -' . .~-_.- -....-..:., I I , '," I " . , '. 1 ... . . EXHIBITOB Landlord's Work; Pylon Sign Landlord's Work. I. Building will be a one story structure with steel frame and masonry construction, and with an exterior of glass, stucco, and brick built in accordance with the plans as approved by the City of Fannington. 2. Roof construction will be built up roofing over steel joist and metal deck. 3. The ceiling height measured between the floor slab and ceiling when finished as provided will be approximately 10 feet. 4. Storefronts will be glass with a 16" sill along the blll!e of the front elevation, stucco In the sign band, and brick. S. Interior finishes and specifications: (a) Concrete floor. (b) Suspended ceiling tile or provide Tenant an allowance of equal value. (c) Oyps!J111 board demising wall taped and sanded. . (d) Ope toilet room per code, including plumbing fixtures, hot w,ter, ceramic floor with base, mirror, light exhaust fan, and one hub-type floor drain. (e) Heating and air conditioning system sized to Tenant's Leased Premises and according to code: two five ton HVAC units. (t) Separate gas meters for each tenant space at a location determined by Landlord. (g) Separate electrical service individually sized and metered for each Tenant space (maximum Landlord responsibility is 400 amp, 220 volt- 3 phase). (h) 2' x 4' recessed fluorescent light fixtures in the Leased Premises (one light per 64 square feet of ceiling area) or provide Tenant an allowance of equal value. . (i) 110 volt electrical receptacles on the perimeter sales and storage area walls of approximately one per 20 linear feet. (j) Electrical service to a junction box for Tenant .signs. Box will be located on inside surface of the exterior wall with extension to signs and any special controls furnished by Tenant. All wall signs, sign structure supports and sign lighting shall be furnished and installed by Tenant. Tenant must conform to all sign specifications as required by law. (k) Front entrance. One glass entry vestibule with two exterior doors and two interior doors with automatic motion activated openers on the two exit do'ors, per plan. Doors are aluminium and glass. 0) Two 3' X 7' steel back doors. Except as specifically set forth In this Bxhibit B, Tenant shall be responsible for aU other improvements to the teased Premises including, but not limited to, all trade fixtures, wall and floor covering, equipment, interior partition walls, any additional electrical and/or HV AC requirements beyond that SUpplied by Landlord as indicated herein. . Pvlon SieRS. Landlord will erect a pylon sign post for Installation of tho Tenant's sign. The size of the Tenant's sign will be limited as follows: (total pylon sign area) x (total floor area of the Leased Premises! total floor area of all rentable space in the Shopping Center). The Tenant's pylon sign is subject to the provisions of Section 9. 10 104 .. .... I J, .:. !. ; . . EXHIBIT C Option to Renew o 1. Option to Renew. If the Tenant is not in default in any of the terms and conditions of the Lease Agreement, Tenant shall have the right to extend the Term of this Lease Agreement for three (3) additional years (the "Renewal Term"), by giving Landlord notice of its exercise of this option at least one hundred eighty (180) da~ prior to the ex.piration of tho initial seven (7) year Term. The monthly Base Rent set forth in Section 3(a) shall be increased for the Renewal Term as follows: First Years 8, 9 and 10: Year 7 monthly Base Rent x ((CPI Year 7)/(CPI Year 4 )) Where, CPI Year 7 is tho most recently published Consumer Price Index 180 days prior to tho end of the initial 7 year Term; and CPI Year 4 is tho most recently published Consumer Price Index 180 days prior to the end of Year 4. Tho Consumor Prico Index refers to tho Consumor Price Index (all urban consumers) published by the United States Department of Labor. Except as specitically provided In tbis Bxhibit C, all other terms and conditions of tho Lease Agreement remain in effect during the Renewal Terms. The Term and Renewal Terms are collectively referred to as "Term". 11 0 105 AMENDMENT NUMBER ONE TO SHOPPING CENTER LEASE AGREEMENT THIS AMENDMENT NUMBER ONE TO SHOPPING CENTER LEASE AGREEMENT ("Amendment'') is made and entered into on March 31, 2005, by and between Schwiness, LLC (hereinafter referred to as "Landlord") a Minnesota limited liability company, and the City of Farmington ("Tenant''). This Amendment amends the Shopping Center Lease Agreement between the parties ("Lease Agreement"). Unless otherwise stated, all capitalized terms have the same meaning as in the Lease Agreement. 1. Exoansion of Leased Premises. On the date of this Lease Amendment, the Leased Premises will be expanded to include an additional 2,062 square feet ("Additional Leased Premises''). The original Leased Premises and the Additional Leased Premises are collectively referred to as the "Leased Premises". The sized of the Leased Premises is 6,820 square feet. The Additional Leased Premises is set forth in the plan attached to this Amendment .and incorporated herein. 2. Base Rent and Additional Rent. The Landlord will not charge Tenant any Base Rent or Additional Rent for the Additional Leased Premises until June 1, 2005. On June 1,2005, and thereafter during the Term the Base Rent for the Leased Premises will increase based on the additional square footage so that the monthly Base Rent will be as follows: Remainder of Year l(on and after June 1,2005) and Year 2: $ 9,945.83 Years 3 and 4: $ 10,514.16 Years 5 through 7: $ 10,798033 Starting on June 1, 2005, Additional Rent will be charged as set forth in the Lease Agreement based on the new size of the Leased Premiseso 3. Sil!l1ae.e. The Tenant will be allowed additional building signage and pylon signage commensurate with the additional square footage of the Leased Premises pursuantto Section 9 and Exhibit B of the Lease Agreement. 4. Exhibit B. Exhibit B is amended to include the following additional Landlord's Work for the Leased Premises: (a) One additional toilet room in the Additional Leased Premises per code, including plumbing fixtures, hot water, ceramic floor with base, mirror, light exhaust fan, and one hub-type floor drain. (b) Heating and air conditioning system in the Additional Leased Premises sized to Tenant's Additional Leased Premises and according to code: two five ton units. (c) . All other Landlord Work for the Additional Premises will be substantially the same as indicated for the Leased Premises. ACCEPTED AND AGREED TO: By: Title: C A""\\\ k\."-.)\'S~"t&L \ 115 19645 Pilot Knob Road, Farmington, MN, 55024 - Strip Center Property for Lease on Lo... Page 1 of 6 ~ LoopNet~ i#11n Commercial Real Estate Online Become a free member I Help I Log In 19645 Pilot Knob Road, Farmington, MN, 66024 - Available for Lease Retail For Lease View this active lease listing or start a search to find more properties for lease. For Sale For Lease Sale. Comps Property Records I Retail II Farmington. MN Advanced saarch Browse More Usllngsln Retail For Lease, Farmington, MN or Minnesota Retail Property For Lease .. '.. . Charleswood Marketplace 19646 Pilot Knob Road, Farmington, MN 66024 Chsrieswood Marketplace aka Farmington Marketplace Total Space AvaUable: . 6.640 SF Rental Rate: . $18.60 ISFlYear Min. Divisible: . 1,176 SF Maxo Contiguous: . 4.319 SF Property Type: o Retail Property Sub-type: . Strip Center Building SIze: . 6.540 SF Gross Leasable Area: o 5,540 SF TrafIlc Count: o 15.500 . Find Out Moreon Last Verified 3130/2011 UsUng ID 16982768 4 Spaces Avalleble DIsplay Rental Rate as Entered~ Space 102 Space Available: 1.221 SF Rental Rale: $18.60 ISFlYesr Space Type: Strip Center Lease Type: NNN Space 103 Space Available: 1,672 SF Rental Rate: $18.60 ISFlYear Space Type: http://www.1oopnet.com/Listing/16982755/19645- P11bf-Knob~ Road-Farmington- MN/ 5/31/2011 19645 Pilot Knob Road, Farmington, MN, 55024 - Strip Center Property for Lease on Lo... Page 2 of 6 Sbfp Center Min. Divisible: 1,672 SF Mex. ConUguous: 4,319 SF Space 104 space AValleble: 1.672 SF Rental Rate: $18.60 ISFlYesr Space Type: Sbfp Center Mlno DMslble: 1,672 SF Mex. ConUguous: 4,319 SF Lease Type: NNN Space 10S Space AvaIlable: 1.176 SF Rentel Rete: $18.60 ISFlYear Space Type: Sbfp Center Min. DMslble: 1,176 SF Mex. ConUguous: 4,319 SF Lease Type: NNN Descrlptton Great rateU location edJacent to CVS Pharmacy and a new medlcel buDding. ThIs buDding la located Just off of PDot Knob Road In Fannlngton, a rapidly-growing city located on the southern edge of the TwIn ClUes Metropolllan Area. The city boasts tremendous populaUon growth, a tredlUonal downtown area, new housing and commerclal devalopments. Graat rateD locaUon adJacent to CVS Pharmacy and a new medlcel buDdlngo Thla buDding Is located Just off of PDot Knob Road In Farmington, a rapidly-growing clIy located on the southem edge of the TwIn CUles Melropolltan Area. TtI$ city boasts tremendous populaUon growth, a tredlUonal downtown area, new housing and commerclel developmel\ts' of 19846 Pilot Knob Road, Farmington, MN 65024 (Dakota County) k l.'.... ..\\ .... ....... ..nll ,. ..., ! J !S}rr7l~j~!if~S.'2~,~.:t"~i18Tl110}' ;~~i-~ ~ . ""-1--" ..\\ " .. , .... ..1 ,J . ' ':tt~;~rr'f'~~\,;:i?~':{.~:~f"t,;~'?~'l.:\,; I':);.~~I ,'I...... '\' ..\.,\. ..11" I ...... Contact Listing Broker to find out mora details. http://www.1oopnet.com/Listing/16982755/19645- pJ~lKnob- Road- Fartnington- MN/ 5/31/2011 Pilot Knob Road - Cobblestone Lake - Proposed Retail- Property details on Showcase.com Page 1 of2 Showcase Your PropertIes Herel Search Results for Pilot Knob Road - Cobblestone Lake - Proposed Retail, Apple Valley, MN Welcome to SHOWCASE.COM, the Web's most comprehensive source of commercIal property data, where you car nationwide. To see more Commercial Real Estate listings, Office Space, Industrial Space, Retail Space, Commercia commercial property types, Just click the button to the right. Detail Map Forward to a Colleague Print Property Pilot Knob Road - Cobblestone lake - Proposed Retail Apple Valley, MN 55124 - Apple Vly/Lakevllle Ret Submarket Property Type: status: Building Size: Land Area: Retail Proposed 7,200 SF Sub Type: Year Built: Smallest Space: Largest Space: Total Space Avail: RenUSFNr: General Freestanding 2012 1,200 SF 7,200 SF 7,200 SF $23.00 - $25.00 Space Available: F"ioor --Jjf-j\vaiJ" __:=J_Ren.L___o~___rOccupancillease Termj]"pace Use 1st ~ III 1,200 SF-7,200 $23.00 - TBD 6 yrs Retail SF $26.00/SFlYr Available: 7,200 SF of Retail, will divide Largest Space: 7,200 SF RentlSFNr: RenUYr: Exec Suite: Occupancy: Type: Term: Space Notes: $23.00 - $26.00 / nnn $180,000 No TBD Direct 5yrs Estimated CAM & Real Estate Taxes: CAM: $2.75; Taxes: 4.00 (2008 estimates) Marketing Brochure/Flyer ~ For more Information: NAI Welsh Terese Reilin~ (952) 897-7738 [1] Amy Senn (952) 897-7833 [1] Marketing Flyer ~ Space Notes III HAIGIObar~ .l<<t.j,,,,4liI""l>IO"Il~....,,,,,. 't~;I'J..Jo, http://www.showcase.com/pl.opel.ty/Pilot-Knob-Road!Apple- Valley/Minnesota/5622646 118 6/112011 . Print Report ("'-j He 'r ,,' ('I ~R'~ ~ ~ f u t ~ ~) ~~!#"'lfffJ!i}i'~f:> Property Report (Apple Valley Transit Station) Property Details Site/Building Name Apple Valley Transit Station 15465 Cedar Ave Apple Valley Dakota County 55124 Retail 1,839 sqft 4,899 sqft Street Address City County Zipcode Type of space Min SubDivide Available Availability Lease Rate Lease Type Building Details Total Building Size Number of Stories Site Details Market Additional Information Broker Contact Contact Name Contact Orgnlzation Contact Phone Address Contact Email Page 1 of2 $22.00 Net, Net, Net 16470 1 Southeast The most convenient center In Apple Valley with an excellent mix of co-tenants. Rare opportunity to be located In a very successful trade areao Inllne and Endcap space available. Sara Martin Click here to view agent profile Data Provided by ~ MNCA~ NAI Welsh Commerclal- Corporate Office (952) 897-7723 4350 Baker Rd, Ste 400Mlnnetonka, MN 55343 smartin@welshco.com City Economic Development Contact Organization City of Apple Valley Name Bruce Nordquist Phone 952-953-2500 Fax 952-953--2515 bnordqulst@cl.apple- vaJ/eYomn.us wwwoci.apple-vaJ/ey.mn.us 7100 West 147th Street Apple Valley, MN 56124 Emall Web Page Address City, State Zip County Economic Development Contact http://metromsp.zoomprospector.comlmain/reportVie1J~s/printreport.aspx?id=e3fcb536-e2... 5/24/2011 Print Report Organization Name Phone Fax Emall Web Page Address Clty, State Zip Notes Page 2 of2 Dakota County CDA Dan Rogness 651-676-4464 661-675-4444 drogness@dakotacda.state.mn.us www.dakotacda.org 1228 Town Centre Drive Eagan, MN 56123 120 http://metromsp.zoomprospector.comlmain/reportViewers/prlntreport.aspx?id=e3fcb53 6-e2... 5/24/2011 Print Report "-Y' ~ k v f- ;" tiiJl g,% C"\i , ~ I G t f \J ~,&t~ ~~;.;:,~- Property Report (Tamarack Ridge Center) Property Details SitelBuilding Name Tamarack Ridge Center 20700 Chippendale Ave Farmington Dakota County 55024 Retail 1,283 sqft 5,058 sqft Street Address City County Zlpcode Type of space Mln SubDIvide Available Availability Lease Rate Lease Type Building Details Total Building Size Year Built Number of Stories Site Details Gross Land Area Market Parcel Additional Information Broker Contact Contact Name Contact Orgnizatlon Contact Phone Address Contact Email Page 1 of2 $13.00 Net, Net, Net 24777 2006 1 42253 Southeast 14 74903 020 01 Neighborhood strip center, new construction, ready to go New to strip center, Blondles Tavern other tenants are Dunn Bros, Sprint, H R Block, AnyTime Fitness. Lisa Christianson Click here to view agent profile Dl:!ta Provided by $) MNCAR Christianson Company Commerical RE Services, LLC (952) 393-1212 5528 Kellogg Ave SEdina, MN 55424 i Ilsa@chrlstlansonandco.com City Economic Development Contact Organization City of Farmington Name Tina Hansmeler Phone 651-280-6821 Fax 651-280-6899 Email thansmeler@cl.farmlngton.mn.us Web Page www.cl.farmlngton.mn.us Address 430 Third Street City, State Zip Farmington, MN 55024 http://metromsp.zoomprospector.comlmainlreportVie1Je1-s/printreport.aspx?id=9f3b4e6d-ae... 5/24/2011 Print Report Page 2 of2 County Economic Development Contact Organization Dakota County CDA Name Dan Rogness Phone 651-675-4464 Fax 651-675-4444 Emall drogness@dakotacda.state.mn.us Web Page www.dakotacda.org Address 1228 Town Centre Drive City, State Zip Eagan, MN 55123 Notes ~) http://metromsp.zoomprospector.comlmainlreportVietfe1s/printreport.aspx?id=9f3b4e6d-ae... 5/24/2011 AMENDMENT NUMBER TWO TO SHOPPING CENTER LEASE AGREEMENT TIllS AMENDMENT NUMBER TWO TO SHOPPING CENTER LEASE AGREEMENT ("Amendment Two") is made and entered into on June -,2011, by and between Schwiness, LLC (hereinafter referred to as "Landlord") a Minnesota limited liability company, and the City of Farmington ("Tenant"). This Amendment amends the Shopping Center Lease Agreement between the parties as previously amendment by Amendment Number One. Unless otherwise stated, all capitalized terms have the same meaning as in the Lease Agreement. 1. Extension of Lease Term. The Term of the Lease Agreement is extended until December I, 2016. 2. Base Rent. The Base Rent during the period from December I, 2011, until December I, 2016 is $ 6,344000 per month ($16/square foot per year). 3. Reduction of Leased Premises. As of December 1, 2011, the Additional Leased Premises consisting of 2,062 square feet that was added in Amendment Number One will no longer be part of the Leased Premises (the remaining Leased Premises will be 4758 square feet). On or before December 1,2011, Tenant will close the openings between the remaining Leased Premises and the Additional Leased Premises, remove the Tenant signage from the sign band in front of the Additional Leased Premises and surrendering the portion of the signage on the pylon sign that is attributable to the Additional Leased Premises. 40 Option. The Tenant has the option to extend the Term by exercising the option ("Option") set forth in Exhibit C. ACCEPTED AND AGREED TO: City of Farmington Schwiness LLC By: By: Jon Einess, Title: Title: Chief Manager 123 EXHIBIT C Option to Renew 1. Option to Renew. If the Tenant is not in default in any of the terms and conditions of the Lease Agreement, Tenant shall have the right to extend the Term of this Lease Agreement for three (3) additional years (the "Renewal Term"), by giving Landlord notice of its exercise of this option by March 1, 2016. The monthly Base Rent set forth in Section 3(a) shall be increased for the Renewal Term as follows: December 1, 2016, to December 1,2019: $6,344000 x ((CPI June 2015)/(CPI June 2010)) Where, CPI June 2015 is the Consumer Price Index for June 2015; and CPI June 2010 is the Consumer Price Index for June 2010. The Consumer Price Index refers to the Consumer Price Index (all urban consumers) published by the United States Department of Labor. Except as specifically provided in this Exhibit C, all other terms and conditions of the Lease Agreement remain in effect during the Renewal Term. The Term and Renewal Term are collectively referred to as "Term". 124 ) Ia... City of Farmington 430 Third Street h.rmington, Minnesota 651.280.6800<< Fax 651.280.6899 wwwoci.timningttlll.mll.u:; TO: Mayor, Councilmembers and Interim City Administrator FROM: Tina Hansmeier, Economic Development Specialist SUBJECT: Approve Remediation Work 431 Third Street DATE: June 6, 2011 INTRODUCTION / DISCUSSION Staffhas obtained estimates for cleaning and remediation work in the old Rambling River Center building from Peer Engineering, Pladson Environmental, and Steam Brothers Cleaning and Restoration. All professionals recommended the source of the problem should fIrst be corrected before any remediation work should be done. The estimates received are as follows: Peer Engineering Peer Engineering could perform air samples/testing and would subcontract remediation to a qualified contractor. Option 1 Option 2 Option 3 -$5,000 Remove damaged carpet areas (approx 2/3rds), hepa-vac beneath those areas, spray microbial disinfectant where carpeting was removed, and take remediation air samples after remediation work has been completed. -$8,000 Remove ALL carpeting, hepa-vac entire floor area (kitchen flooring included), apply anti-microbial disinfectant, wipe down horizontal surfaces, and perform air testing before and after remediation. Remove and dispose of water damaged ceiling tiles (-4 areas with stained tiles). -$10,000 Option 2 AND cleaning of ductwork/ventilation systems. Pladson Environmental, Inc. Pladson Environmental could perform the remediation work. A suggestion was provided to have air samples completed and ductwork/ventilation systems cleaned by qualified contractors. Option 1 -$3,400 Remove all carpeting and water damaged ceiling tiles, hepa-vac all horizontal surfaces, wet-wipe and/or mop affected areas with a fungal disinfectant and then lightly encapsulate the entire area with an anti- microbial encapsulant to help prevent any re-growth. 125 Option 2 -$8,000 Option 1 AND air tests and cleaning of ductwork/ventilation systems. Steam Brothers Cleaning & Restoration Steam Brothers could clean the carpet and perform the remediation work and would subcontract air testing and cleaning of ductwork/ventilation systems to qualified contractors. Option 1 Option 2 Option 3 -$1,925 Clean and deodorize all carpeting, hepa-vac and apply anti-microbial agent to the main room, and remove damaged ceiling tiles. HEP A machines will run for 2 days to help filter out airborne particles that may be present. -$2,815 Option 1 AND complete duct cleaning and interior germicide sanitation treatment inside ductwork. -$5000 Remove all carpeting and damaged ceiling tiles, spot hepa-vac above affected ceiling tiles, hepa-vac main floor prior to carpet removal and clean floor after remova~ apply anti-microbial agent, AND complete duct cleaning and interior germicide sanitation treatment inside ductwork. An additional option to consider would be not to choose any of the options presented above and to sell the property as-is. It appears that the City will not be able to recoup the expenses associated with the remediation options presented. Removing the affected areas will likely help with showing the property to potentially interested parties, but will not ensure a sale of the property will take place. ACTION REOUESTED Staff recommends selling the building as-is and to take no action on remediation at this time. Respectfully submitted, Tina Hansmeier Economic Development Specialist 126 //16 City of Farmington 430 Third Street, Farmington, MN 55024 (651) 280-6800 Fax (651) 280-6899 www.ci.farmington.mn.us TO: Mayor, CounciImembers, and Interim City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: Appoint Deputy Registrar and Approve Deputy Registrar Application DATE: June 6, 2011 INTRODUCTION The purpose of this memorandum is to appoint a new Deputy Registrar and Operations Manager for Office 177; and approve the Deputy Registrar application to be resubmitted to Driver and Vehicle Services. DISCUSSION Due to the resignation of the City Administrator, the City needs to appoint a new Deputy Registrar to handle the responsibilities pertaining to the License Center. Per the agreement with the State Department of Public Safety, that individual must be a City employee. The recommendation for Deputy Registrar is to appoint Human Resources Director, Brenda Wendlandt. Additionally, Council is being asked to appoint Randy Distad, Parks and Recreation Director as Operations Manager to manage the day-to day operations of the license center. These appointments are necessary to re-submit the Deputy Registrar application to Driver and Vehicle Services as it clearly shows the City understands and accepts the responsibility associated with operating a license center. ACTION REOUESTED The actions requested are: 1) Approve the appointment of Brenda Wendlandt as Deputy Registrar and Randy Distad as Operations Manager for Office 177. 2) Authorize staff to re-submit the application to the Department of Public Safety, Driver and Vehicle Services Division. Respectfully submitted, Brenda Wendlandt, SPHR. Human Resources Director 127 IJa- City of Farmington 430 Third Street Farmington, '[\'1inncsota 651.280.6800. Fax 651.280.6899 wW\\'.ci.tarmillgtlm.T11ll.LL'I TO: Mayor, Councilmembers, Interim City Administrator FROM: Jennifer Dullum, Natural Resource Specialist SUBJECT: Boulevard Landscaping Maintenance DATE: June 6, 2011 INTRODUCTION As the City has developed, Farmington has had several areas throughout the City where boulevard landscaping has been installed. Some of the areas include; median landscaping on 187th Street West at Pilot Knob Road, on Cascade Drive at County Road 66, the Spruce Street extension in the Vermillion River Crossing Development and boulevard planters on Elm Street and 3rd Street. DISCUSSION The areas above were created for their aesthetic value. However, due to budget and staff constraints the areas are not being maintained. BUDGET IMPACT Estimated costs: Plant Mulch Topsoil Weeding 2011 Total Future Annual Location Cost Cost Cost Cost Cost Cost (per yr.) 187th Street $1,530.00 $ 156.00 $1,686.00 $564.00 Cascade Drive $ 156.00 $156.00 $78.00 Spruce Street $8,863.00 $1,370.00 $ 625.00 $10,858.00 $3,975.00 Elm Street $1,100.00 $170.00 $34.00 $ 312.00 $1,616.00 $591.00 Total: $14,316.00 $5,208.00 Maintenance free options do exist such as placing concrete in the median or planter areas with tree grates around the existing trees. 128 ACTION REOUESTED Direct staff how to proceed with streetscape maintenance. Respectfully Submitted, Jennifer Dullum Natural Resource Specialist 129