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HomeMy WebLinkAbout05.16.11 Council Minutes "7 /CL. 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: Members Absent: 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 ofthe 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 of35% - 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%. If Farmington 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 of revenue 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 expe~es 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 of20l1 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 ofthe 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 Regu1ar)(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 t) 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, 708 3~ Street, and The Miller House, 621 3rd Street. The owner of the 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 ofthe 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 ofthe North Creek Greenway Trail Corridor. A portion of this 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 ofthe trail and construction management. Design work would include pedestrian bridges over Middle Creek and Lake Julia Waterway along with alignment and construction ofthe trail. A portion ofthe 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 of the 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 if the 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 if there 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 of the City if it does not make sense to replace the trees in the development area. Staff has 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 / 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