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HomeMy WebLinkAbout03.05.12 Council Minutes COUNCIL MINUTES REGULAR March 5, 2012 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: Larson, Bartholomay, Donnelly, Fogarty,May Members Absent: None Also Present: Joel Jamnik, City Attorney;David McKnight, City Administrator; Teresa Walters, Finance Director;Randy Distad,Parks and Recreation Director;Kevin Schorzman, City Engineer;Todd Reiten,Municipal Services Director; Cynthia Muller,Executive Assistant Audience: Russ Zellmer,Nicholas Pipho 4. APPROVE AGENDA Councilmember Donnelly pulled item 7d)Joint Powers Agreement with Dakota County for Fueling Services for discussion. MOTION by Fogarty, second by Bartholomay to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS 6. CITIZEN COMMENTS Mr.Dick Graelisch, Third Street,spoke regarding the tornadoes in the southern U.S. 7. CONSENT AGENDA MOTION by Fogarty, second by Bartholomay to approve the Consent Agenda as follows: a) Approved Council Minutes(2/21/12 Regular) b) Adopted RESOLUTION R10-12 Reestablish/Establish Existing Precinct Boundaries and New Polling Locations-Administration c) Approved Appointment of Mitchell Snobeck to the Water Board-Administration e) Accepted Resignation Municipal Services—Human Resources f) Approved Bills APIF,MOTION CARRIED. 4 Council Minutes(Regular) March 5,2012 Page 2 d) Adopt Resolution—Approve Joint Powers Agreement with Dakota County for Fueling Services—Municipal Services Councilmember Donnelly asked if there is a set price for the fuel as we missed the deadline to be included in the bid for 2012. Municipal Services Director Reiten explained at the end of the year you submit an amount equal to 80%of the fuel you will be purchasing for the year. This has already taken place for 2012, so this agreement will be in effect for 2013. For this year,we will get some fuel at the county's rate as long as we don't go over their 80%. If the county would have to refill their fuel tanks,they would charge us at the spot pricing. The City uses approximately 2,000 gallons/month of diesel fuel. Councilmember May asked why we have not used this program before. Staff explained when the Maintenance Facility was built,a slab was installed for a fueling station,but it has constantly been cut from the budget. Councilmember May asked if there is a minimum order or if staff is recommending 80%. Staff explained the county is recommending 80%. Lakeville does 60%. The county is trying to get as much benefit from this as possible, so that is why they do 80%. Whatever order staff puts in,that is what we have to take. After your percentage is used up, you go to spot pricing. Councilmember May noted there are other options for obtaining fuel after the locked in amount is used. She felt the amount should be less than what we plan on using. The average between levels for spot pricing could be approximately$.30/gallon. Councilmember May asked if we have looked at other options with stations in town. Staff has checked with Kwik Trip and it is more beneficial to stay with Voyager,the State purchasing vendor. She requested staff prepare a summary of the different options. City Administrator McKnight stated staff will summarize the options, but this is the direction Council gave;to save money with fuel. This is a potential$15,000 savings. Councilmember Donnelly noted the county has certainly done a lot of researching on obtaining a good price for fuel. If we can join them,that is good. Staff noted the county has saved over$1 million in fuel in the past few years. Lakeville has saved$60,000. Councilmember May asked why is Lakeville only doing 60%then? She was not disagreeing with the program, it is the percentage. Staff purchases 30,000 gallons of diesel fuel per year. So 80%of that is 24,000 gallons staff has to make sure they get. There has not been a year yet where we have not purchased 24,000 gallons. MOTION by Fogarty, second by Bartholomay to adopt RESOLUTION R11-12 approving a Joint Powers Agreement with Dakota County for fueling services. APIF,MOTION CARRIED. 8. PUBLIC HEARINGS a) 2011 National Pollutant Discharge Elimination System Phase II Annual Report—Natural Resources Natural Resources Specialist,Jen Dullum,presented the annual report. As Farmington has a population over 10,000,we are required to implement a Storm Water Pollution Prevention Program as part of the National Pollutant Discharge 5 Council Minutes(Regular) March 5,2012 Page 3 Elimination System Phase II requirements. The City has to obtain authorization to discharge storm water runoff to surface water. There are six minimum control measures which include 60 best management practices. MOTION by Fogarty, second by Bartholomay to close the public hearing. APIF,MOTION CARRIED. Councilmember Bartholomay noted in 2011 there were 40 calls to the City. He asked how often we review the BMP's and adjust as necessary. Staff explained the permit has been in effect since 2006 and the BMP's have been adjusted once. You are locked in for a five-year permit cycle. Councilmember May recalled a year ago a number of residents were concerned with the use of ponds for fishing and trampling the natural wildlife. She asked if that area is considered the storm water buffer. Staff explained those areas are storm water ponds. The brochure pertains to natural wetlands within the City. It is still up for debate whether storm water ponds should be used for recreation purposes and what is acceptable. Councilmember May recalled we did spend money from Natural Resources to plant natural flowers, etc. She felt we need to address this issue. If we allow that type of use, it will keep growing. If the ponds are for recreation use,then people should be directed to a specific area. City Engineer Schorzman agreed this has been discussed in the past,and we need a unified direction from Council. Councilmember May felt this was a valid point to continue to discuss for the residents that live around the ponds. Councilmember Fogarty noted there is one pond that is 40 feet deep. It was marketed as a lake and residents intended to be able to use it. She cautioned Council needs to be careful when regulating uses for all ponds. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) December 2011 Financial Report-Finance Finance Director Walters presented the draft December 2011 Financial Report. General fund revenues are at 98.18%of the budget and expenditures are at 99% of the budget. This reduces the fund balance by$71,663 in 2011. Our current fund balance is now 24%of total expenditures,which is below the limit set in our fund balance policy. Some of the shortfall in revenue includes investment income and taxes. The issue of investment income has been reduced for 2012. There were also higher delinquent taxes in 2011. Delinquencies in enterprise funds are being addressed in the 2012 budget. The liquor store ended the year with$40,000 in net income. Without transfers the liquor stores would have seen a profit of $130,000. Councilmember Bartholomay thanked Parks and Recreation Director Distad for being below on his budget. He noticed City Hall was$21,000 over budget,but staff has a plan to resolve that for next year. Finance Director Walters explained it was due to higher than expected electricity bills and repairs. 6 Council Minutes(Regular) March 5,2012 Page 4 Councilmember May noted the electricity could be reduced if we were all on one floor. She noted$200,000 was received in delinquent taxes and thought we factored in an amount for this each year. City Administrator McKnight noted that will be reviewed for next year. Councilmember May asked what the 2%is in dollars that was not received for delinquent taxes. Finance Director Walters stated we did not receive$350,000 in new delinquent taxes. Councilmember May asked for the amount of delinquent taxes in prior years. Staff stated there is a total of$600,000 in delinquent taxes. Councilmember May asked for a breakdown by year for delinquent taxes. She also asked if fmancial information can be separated for the two liquor stores. Councilmember Fogarty would like that to include overhead as well for 2012. Councilmember May asked about lowering the percent for the fund balance. Finance Director Walters stated we did lower it to 25%-50%in our policy. The State Auditor recommends 35%- 50%. It should be higher because we do go negative in the general fund throughout the year. Mayor Larson noted we had a loss of$14,823 in the arena which is getting closer to breaking even. He spoke with staff about the off months having so little revenue,but expenses are still$25,000- $28,000. We are so close to breaking even, so he would like staff to look at the operation to see if we need to make any changes and make sure salaries are going to the proper place. Staff explained expenses were high this year because of summer ice. In most summers we have expenses because we are doing maintenance work to prepare for the upcoming ice season. From 2006—2010 we were at$60,000-$80,000 loss. To bring it to $14,000 is good and staff is watching the budget. Mayor Larson also spoke with the City Administrator about the$70,000 transfer from the liquor store into the general fund to pay salaries, IT, etc. Staff will make sure that is for actual time spent at the liquor store. b) Lakeland Construction Finance Claim-Engineering In 2009 the City declared the developer of Parkview Ponds in default. Staff went to the company holding the Letter of Credit,that company was in receivership and the City could not collect. The City submitted a claim,and has since received a letter from Lakeland Financial requesting the City accept the claim being reduced by 50%which takes it from$144,000 to $72,000. That does not mean we will get that much,but that is what the claim would be reduced to. Staff anticipates getting 5%- 7%of that. Many cities are accepting their offer. If we do not,they can petition the court to deny the claim entirely. Much of the work in the claim has been completed as the development was built out. Councilmember Fogarty asked if we were to submit a claim today,what is the amount? Staff estimated$20,000- $30,000. She asked if a Letter of Credit doesn't have much value. This is a concern for other Letters of Credit we have. City Attorney Jamnik stated there have been more defaults on Letters of Credit. 7 Council Minutes(Regular) March 5,2012 Page 5 They are reviewed prior to posting them with us. Our policy is to take preferred local banks. Councilmember May noted the development is nearly built out so we are getting paid,we just have to wait. Development Contracts have timelines, so we should make sure developers are moving forward in a timely manner or draw on the Letter of Credit according to the timeline. MOTION by May, second by Donnelly to authorize acceptance of the proposal in the January 26, 2012 letter. APIF,MOTION CARRIED. 11. UNFINISHED BUSINESS 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Councilmember Bartholomay: He will not be at the next Council meeting and there will be a discussion on the ice arena. There is money left from the improvement project which was closed last fall, but we can open that before the audit. There are also discussions taking place with the hockey association. He would like to be included in the arena discussion, so he suggested opening the fund and tabling the discussion until the April 2, 2012,meeting. Councilmembers agreed. Several months ago,Council requested a spreadsheet of Park and Recreation and Rambling River Center programs showing revenues and expenses. Staff will work on this. Expenses are shared between programs or used year after year, so expenses could be difficult to separate. He congratulated Mr.Mitchell Snobeck on his appointment to the Water Board. He thanked the police and fire for their work at the apartment fire last week and thanked the police for their quick work on apprehending a suspect last week. City Administrator McKnight: On the Consent Agenda, Council approved new polling locations for this year. Four of the six polling locations are changing this year. The equipment used at the apartment fire did include Engine 1 which worked as expected. Parks and Recreation Director Distad: Gave an update on the MMBA liquor store analysis. Financial information and a self-analysis report were sent to the MMBA on February 17,2012. Mayor Larson and Councilmember May along with staff members completed the form. The MMBA would like to schedule a follow-up meeting to interview those who completed the report. Dates will be scheduled and there should be a report presentation on April 16,or May 7, 2012. Councilmember May asked about the deadline for the lease at the downtown store. Staff explained that deadline was for the 3-year extension and it has passed. City Administrator McKnight stated we said no to the 3-year extension,but 8 Council Minutes(Regular) March 5,2012 Page 6 we will call the owner this week. The lease does have a provision for a month-to-month rate. Mayor Larson: Reminded residents to shop local. Many local businesses support local youth groups so the money does stay in the community. 14. EXECUTIVE SESSION a) City Administrator Six-Month Performance Evaluation Council adjourned into closed session at 8:25 p.m. for City Administrator six- month review. A summary will be provided for the packet at the next meeting. 15. ADJOURN MOTION by Fogarty, second by Donnelly to adjourn at 9:13 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 9