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HomeMy WebLinkAbout02.13.12 Work Session Minutes City Council Workshop Minutes February 13,2012 Mayor Larson called the workshop to order at 6:30 p.m. Present: Larson,Bartholomay, Fogarty, Donnelly(arrived 6:33 p.m.),May(arrived 6:43 p.m) Also Present: David McKnight, City Administrator;Teresa Walters, Finance Director;Kevin Schorzman, City Engineer;Tim Pietsch,Fire Chief;John Powers, Fire Marshal; Fire Truck Committee—Justin Elvestad, Matt Donnelly, Jim Schmitz,Adam Fischer,Luke Fischer; Cynthia Muller,Executive Assistant MOTION by Fogarty, second by Bartholomay to approve the agenda. APIF,MOTION CARRIED. The purpose of the workshop was to discuss two items;purchase of a fire truck,and the Fairhill property assessments. Fire Truck Discussion Fire Chief Pietsch introduced the Fire Truck Committee—Justin Elvestad,Jason Greiner,Matt Donnelly,Jim Schmitz,Adam Fischer, Luke Fischer,John Powers. Mr. Jim Schmitz presented the information for the fire truck committee. Chief staff vehicles respond to the scene and make decisions on what equipment is needed at the scene and when. The type of vehicle is important because of the equipment needed at the scene. (Councilmember Donnelly arrived). Currently we are short two chief vehicles. Chief 3 responds with his personal vehicle, and Chief Pietsch and Fire Marshal Powers share a vehicle. Chief staff vehicles include a 2002 Ford Expedition, 2005 Ford Crown Victoria, and a 2008 Chevrolet 2500 HD. Fire engines respond to all fire incidents and carry fire fighters to the scene. They hook up to fire hydrants and static water sources. The truck carries a huge amount of equipment. They are trying to have a 7-year replacement on engines and would like to acquire a third engine. Engine 1 is a 2001 Pierce and Engine 2 is a 1993 Luverne, so we are halfway through the life cycle of Engine 1. Heavy rescue trucks respond to medicals and fire scenes. They carry fire fighters to the scene. They do not carry water and do not have a pump. They carry a huge amount of equipment. The life cycle is 20 years. Rescue 1 is a 2005 and Rescue 2 is a 1986 and is the vehicle they are talking about tonight for replacement. They would like to replace it with a rescue engine which would serve a dual purpose. There are two tenders that shuttle water in rural areas. They will carry limited fire fighters and carry 1500—3500 gallons of water at one time. They also carry portable drop tanks to suck 11 Council Workshop Minutes February 13, 2012 Page 2 water from a pond or lake. Tender 1 is a 2004 and Tender 2 is a 1989. These have a 20-year life cycle. Brush trucks respond to small grass and brush fires. They can gain access to fields and woods and carry 200—300 gallons of water. They are four-wheel drive. The Police use these in the winter in bad weather. The brush trucks include a 1992 Ford F350, a 1997 Ford F350, and a 1991 Ford Super Duty, so they are all over 20 years old. A future need would be an aerial ladder. It responds to fire and rescue and carries fire fighters. It carries limited water. Ladder sizes are from 75 ft— 134 ft. They function similar to the heavy rescue vehicles. The committee anticipates replacing a rescue truck with a ladder truck in 2025. The tools the committee used to decide their needs include NIMS to help with deployment, and ISO which rates the ability as a fire department to do things. The recent ISO said we needed another 1900 gallons per truck. NFPA regulates how we do things as a fire department and the committee has also contacted several truck manufactures both inside and outside the state. The committee also used the NTSB which investigates accidents and makes recommendations on how to do things safely. (Councilmember May arrived). The committee's goal is to purchase a vehicle that is cost effective to operate and maintain through its useful life. They key items they are looking for is a custom chassis that is able to carry 5-6 fire fighters and adequate storage,2000 GPM pump, CAFS which reduces water needs and water damage,425 HP engine to run the pump, independent front suspension, light tower, onboard generator,extrication tools,hose,nozzles, ground ladders and tools. The committee suggested using consortium purchasing as surrounding cities have been very successful with this. The reason for a rescue/engine is it is a cost effective way to meet two needs for the Farmington area, it replaces a 25+year old Rescue 2 and adds an additional engine. It would be a multi- purpose vehicle used for fire and medical calls. It will reduce the number of vehicles needed at car accidents and we will have equipment to participate in auto-aid with other cities. If a new truck is purchased,there would be a warranty, built to the City's needs,the layout of the truck would be designed to fit the equipment needed, it would be the highest cost, but faster delivery versus a demo. A demo purchase may not fit the needs of the City,there could be delayed delivery,vehicle color, life expectancy is slightly less,higher maintenance cost,but possibly more affordable. A used purchase would be buying someone else's problems, highest maintenance cost, shortest operational life span, limited availability, least like to meet our needs, large cost in adapting vehicle to meet our needs, lowest initial cost. The committee was present to talk about replacing Rescue 2, a 1986 vehicle,with a Rescue/Engine. There is also a current need for Chief's vehicles, a Tender that is past its life cycle and two brush trucks are over 20 years old. In 2013 Engine 2, a 1993 vehicle, should be replaced. Councilmember May asked about the length of the warranty for a new vehicle and is there a warranty on demo or used vehicles. It depends on the manufacturer. Typically the structure of a new truck has a 10 year warranty, axles are 2 years. A demo would have a full warranty. Each 12 Council Workshop Minutes February 13,2012 Page 3 piece of the vehicle has a separate warranty. Councilmember May asked what is the typical mileage and at what point is mileage too high. She understood the number of calls has declined so is replacement based on mileage or age? It is based on the age since we are not a full time department. We don't get a lot of mileage on the trucks. Rescue 2 has over 100,000 miles and is 25 years old. Over 20 years, components wear out. The worst thing for a vehicle is they sit and do not get used enough. Councilmember May asked if you maintain the vehicle,wouldn't mileage be more of a factor than age? It depends on the piece of equipment. There is a mileage issue especially with a used vehicle,but a useful life expectancy is 20 years. Mayor Larson asked where the 20 years came from. It is based on the National Fire Protection Association (NFPA). They have national standards on age of fire vehicles. It is best practice that a fire engine should last 20 years. If there are more calls, it might last 15 years. Seven years ago we refurbished Engine 2 so that may stretch the life a little further. Councilmember May asked regarding a used purchase,what is a large cost;can we put a number on it? That would be hard to determine because it depends on what the vehicle would need. Councilmember May asked if it was worth the time and expense to deal with used? It is a matter of putting a safe vehicle on the road. The committee is looking more at new to get the latest features for safety. The average age of a used vehicle is 40 years old. They looked at a 2006 or 2007 and that was$300,000. Councilmember Bartholomay asked how many grants they have applied for in 2011. They applied for three grants. In the last 10 years they have received several hundred thousand dollars and have been very active in applying for grants. Now those grants are drying up and there are very limited grants for vehicles. We would be competing with very small communities that have no tax base to buy a vehicle. The entire department received new turnout gear from a grant and training reimbursement. Councilmember Bartholomay asked if anyone has checked with the Department of Homeland Security because of having the FAA center. The fire department has explored that option,but the FAA has such a high turnover,that it is difficult to form a relationship with them. Councilmember Bartholomay asked how Rosemount budgets for their trucks. That is a huge gap that we have;other Cities seem to strategically plan their purchases better than we do. Chief Pietsch knew Northfield's replacement schedule is much shorter and vehicles are replaced after seven years. They sell it for what they paid for and then the cost for a new vehicle is substantially less. Rosemount is on a 20-25 year schedule as we are. The department has tried to get a plan going so when the vehicles come due for replacement,the money is there, but there has been a frequent turnover of City management and Council so it has been hard to establish a plan. The Fire Department will stick to the plan that has been put together for this year's budget. We may not get what we are asking for, but that will be our guide for the next 30-40 years. Councilmember May asked for their thoughts on Northfield's plan. Chief Pietsch felt there is some value in looking at a different schedule for depreciation, maybe 10— 15 years. Northfield also has a fire district and fire service for the colleges. Councilmember Fogarty felt there is no doubt we need to replace Rescue 2. After this conversation,we have to talk with surrounding communities about forming a fire district. Long term, it is the best survivability for all communities and the best safety. Mayor Larson stated right now Lakeville does not have any interest in joining a district. Rosemount was on board to discuss it and also Empire Township. It got too political in Rosemount with the pensions and there was a lot of resistance so it was put on hold. Councilmember Fogarty felt we have to try again. We have all these communities purchasing equipment over and over and it is being under 13 Council Workshop Minutes February 13,2012 Page 4 utilized. If you have a bigger area to cover,the equipment would be used more frequently. Mayor Larson noted in the meetings other cities asked why we would want to partner with you with your old equipment. All equipment would have to be brought up to other's standards before a district would be considered. Mr. Schmitz agreed the biggest issue would be the pensions,but when he thinks of cutting costs,there is a baseline cost for fire coverage. Rosemount does not have a big overhead for administration. He did not understand how a fire district would benefit Farmington. You will still need similar equipment in Farmington and in Rosemount. We would still have a full time Fire Chief, so he did not understand where the cost savings would be. We would not want an engine coming from Rosemount to fight a fire in Farmington. Mutual aid is different. Councilmember Donnelly stated for insurance you have to have a certain pumping capacity. By combining into a district,you are not saving a lot. Chief Pietsch stated a lot has to do with placement of the vehicles, location of fire stations,where the fire fighters are in relation to the station and their response time from the fire hall to the scene. It also has to do with the fire load. Right now,we do not have the pumping capacity to fight a fire at City Hall. This is one of several buildings in the community. The department has been working with ISO and found they need another 1900 GPM for pumping capacity. If we can get to 2000,that is our goal. This will not result in a big savings in insurance costs for residents or businesses,but there may be some savings. Councilmember May asked if by increasing the GPM, does that increase the price of the vehicle substantially because we have mutual aid. For ISO pumping capacity,the capacity has to be in the first two trucks on the scene. We don't have the ability to do an auto aid agreement with our neighbors because we cannot provide them with pumping capacity. One truck the committee looked at had 1700 GPM which is the same pump as 2000 GPM,but has an additional outlet so there should not be much difference in cost. Councilmember May asked if we could save money with a demo. One manufacturer said it was not worth the time because it would take 1.5 years to get the vehicle. Another manufacturer was very interested in offering a demo and his discount was $7,500. If Council supports a demo,they will fmd the best they can, but there are things as far as the bid process the committee does not know. Councilmember Fogarty asked about the number of calls per year. In 2011,the rescue squad had 227 calls and fire had 200 calls. This new truck would run on both calls. City Administrator McKnight asked about the current status of Engine 1. It is back in service and the problem was taken care of. There are updates being installed. A valve was not working correctly, but is fine now. Preventive maintenance was done today. They are trying to determine a code in the transmission. The truck is operational except for the one valve that works intermittently. Councilmember Bartholomay stated this is the first time since he was on Council and they have been talking about a large purchase,where he has not received any resident comments. Mayor Larson did not want to look at a used truck;we should go with demo or new. Councilmember Fogarty asked if a demo takes six months or is that one year. It would actually 14 Council Workshop Minutes February 13,2012 Page 5 be 1.5 years before we receive it. A new truck would be ready in 6-9 months. None of the Councilmembers were interested in pursuing a used vehicle. Fire Marshal Powers suggested using a consortium to purchase a vehicle as there is a savings because several trucks are ordered at once. Surrounding cities are saving money with this. The bids are pre-done,they order the truck through the manufacturer that fits that bid. Councilmember May felt that makes more sense than ordering a demo. All Councilmembers were on board with ordering a Rescue/Engine truck for the dual purpose. Councilmember Fogarty urged the committee to get the best deal possible. She would like to have this process started by the end of the year. City Administrator McKnight stated the three options are new, demo,or consortium. Mayor Larson directed the committee to bring back the best two options with costs. The committee will provide two manufacturers with their specifications and ask for an estimate and also research the consortium. Fairhill Property Assessments The developer of the Fairhill property(the Seed family) has asked if the City will allow them to move the entire amount of the assessment on to the southern portion of the property which they still own. They are responsible for the assessments for both halves of the property, so it would be easier to place all the assessments on their half. The City had a blind appraisal done on the property and it came in at$5.7 million. The appraisal was done by Patchin,Messner,and Dodd. The outstanding liability is$4.7 million. If the City agrees to this,within 45 days of the agreement the developer will give the City$441,000 and the remainder of the assessment begins in 2014. This is the principal amount divided out as if it had been assessed. Staff is comfortable with this recommendation because we are comparing$4.7 million in liability to$5.7 million in security. This is 36%over and on typical developments we cap the overage at 25%. If the assessment is left on the north half,there would be more security,but we would be 100%over. Wells Fargo did an appraisal in the spring of 2011 and it came in at$10 million. Councilmember May asked if the decreased amount was a concern. City Engineer Schorzman was not concerned as they were looking at the mortgage value. Councilmember May completely disagreed. Staff noted the appraisal from Wells Fargo included the amount of pending assessments and everything associated with the 195m Street project. Councilmember May stated this decline in value is the reason banks are going out of businesses and it is due primarily to undeveloped land. She did not understand why we would want to remove collateral. What purpose does it serve the City? City Engineer Schorzman stated they are responsible for the higher assessment. Why have it assessed against property that is in someone else's name(the northern half). Councilmember May felt it made no sense as we are the bank,why would we want to release collateral? Councilmember Donnelly stated when the Seed's sold the northern half,they put that half of the assessment in the bank. If we release that half,they will give us $441,000. Then the Seed's have that money to use as they choose. If we don't agree to it, it may make them more serious about developing this property. Councilmember May stated we are in the position of a bank and we have to look out for our risks. There is absolutely no reason for us to do this. Councilmember Donnelly agreed. It is not like we are going back on anything the City has agreed to. The developer knew this when they entered into the agreement. The bottom line is the taxpayers in Farmington are responsible for making those bond payments whether the Seed family pays the City or not. Our recourse is the land. 15 Council Workshop Minutes February 13, 2012 Page 6 City Engineer Schorzman has noted in a lot of previous Council meetings, for example on storm water fees where Council has said we cannot raise fees because we want to encourage development. We want to make people come here to develop. He asked Council to consider that. As it sits now,their request still has the City collateralized more than we would require any other developer to be. There is a built in protection in this project that will eliminate the potential for having to tax residents to pay these bonds. Councilmember Donnelly stated if they want to develop this land,then we will all work together to get that done. If they don't then it doesn't matter. Once we accept this, if next year it appraises at$4.5 million,then we are under. There is no recourse. Councilmember Bartholomay asked if we left this as is,would the Finnegan's pay the assessments on the north half. Staff stated no,the Seed's pay the assessment. Councilmember Bartholomay asked the advantage to the Seed's is what. Staff stated they will have all the assessments they are responsible for on one property and there is this escrow to cover potential future assessments on the Finnegan(northern)property. If it's all assessed against the Seed property(southern half)then that money is freed up out of the escrow. Councilmember Fogarty stated the Seed's have been fantastic to work with. Every time we present them with a bill,they pay it. Things can change, but when you are working with someone in good faith, and you start to build up walls you have developers say the City is not easy to work with. She understood protecting the taxpayer,but this has not been a liability for us. We have better safety in this community because we have worked well with the Seed's. We have the first over the tracks crossing to allow emergency vehicles to get across,they were a major part of that and went above and beyond what they needed to do. She understood wanting to protect us,but this is someone who has never been any kind of a liability to us. This does not seem like a large thing they are asking for. There is something to be said with working well with developers and becoming known as a community that works well. Councilmember Donnelly stated we are not going back on anything we have said. Something happened with the Seed's that they sold the north half of the property. It is a big deal. We would be releasing$4 million worth of collateral. Councilmember Fogarty stated this is not going to make sure we get money in the bank. Councilmember Donnelly stated it helps ensure we get money in the bank. If they took this proposal to any bank,they would say no. It wouldn't even get to the appraisal phase. Councilmember Fogarty stated this is how we end up with the reputation we have. Councilmember May felt we are just making a good business decision. Mayor Larson asked if there was a way to get a guarantee from the Seed's through an annual appraisal that they stay at at least 125%. City Engineer Schorzman did not believe so because once you put the assessment out there it is a bill that is due every year. City Administrator McKnight stated you are going from three layers of security to two. Right now you have two different parcels of land and the money set aside from the original development. You are potentially removing one of those from your security. Councilmember Bartholomay stated Councilmember Fogarty does have a point about being friendly when it comes to development. He asked if one outweighs the other. City Administrator McKnight stated our relationship with them is very good. City Engineer Schorzman stated if we say no, he thinks the Seed's will be disappointed, but not angry. The Charleswood development was successful,they gave us the 16 Council Workshop Minutes February 13, 2012 Page 7 park land in Fair Hill,they have sent us checks for several hundred thousand dollars for the roundabout for the 195th Street project, and they gave us the Pilot Knob trail easement. Councilmember May stated there is a reason why there are procedures such as in this case where the money was put in escrow;there is a reason for that and that is to mitigate any risk. Mayor Larson came to the meeting thinking this would work,but after listening to Councilmember May who knows more about banking and Councilmember Donnelly who knows about land values,he does not want any bad blood with the Seed's,but we have to protect ourselves. City Engineer Schorzman stated if Council says no to this request,we would follow the PUD and assess against the entire property. Our appraisal was as ag land,where the Wells Fargo appraisal may have been as developable land. This could have caused the difference in value. Council discussed what if they give up half the escrow. Councilmember May said no. Mayor Larson said if they are willing to negotiate,he will look at it again. Councilmember Bartholomay agreed to negotiate, but was leaning towards no. Councilmember Donnelly would listen again,but for now its no. City Engineer Schorzman stated if we had to take possession of the property,we would need$9,000/acre to cover the assessment. If we get$441,000 it drops to $7,000/acre. Councilmember Donnelly noted the Seed's sold the north half for$7,900/acre. City Engineer Schorzman will contact the Seed's. If they do not want to negotiate further, Council will see a resolution this fall for the assessment. City Administrator Update The heat did go out at City Hall over the weekend and there was not an alarm for low temperature so staff will look into this. The March workshop will be to discuss the 2013 budget. City Administrator McKnight will not bring anything to the workshop;this is to obtain Council's ideas. The school wants the City to have summer ice. We had it for three weeks last year and we lost $3,200 and there was damage to the building from the humidity. Staff feels this is too big a risk. A counter offer was received for the old senior center building, but it did not meet Council's expectations. Council reached a consensus for staff to contact an architect to determine build out costs for the vacant space in City Hall. MOTION by Bartholomay, second by May to adjourn at 8:28 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 17