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07.16.12 Council Packet
City of Farmington Mission Statement 430 Third Street Through teamwork and cooperation, Farmington,MN 55024 the City of Farmington provides quality services that preserve our proud past and foster a promising future. FARMINGTON CITY COUNCIL Todd Larson, Mayor Jason Bartholomay Christy Fogarty Terry Donnelly Julie May AGENDA REGULAR CITY COUNCIL MEETING July 16, 2012 7:00 P.M. CITY COUNCIL CHAMBERS Action Taken 1. CALL TO ORDER 7:00 P.M. 2. PLEDGE OF ALLEGIANCE 3. ROLL CALL 4. APPROVE AGENDA S. ANNOUNCEMENTS/COMMENDATIONS a) Recognition Dawn Johnson—Parks and Recreation Commission Recognized 6. CITIZEN COMMENTS/RESPONSES TO COMMENTS(This time is reserved for 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 (7/2/12 Regular) (7/9/12 Workshop) Approved b) Second Quarter 2012 New Construction and Population Estimate—Building Inspections Information Received c) Approve PERA Phased Retirement—Human Resources Approved d) Approve Bills Approved 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. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) Adopt Resolution—Approve Forwarding 2030 Comprehensive Plan 2011 Amendment to Met Council - Planning R29-12 b) June 2012 Financial Report-Administration Information Received 11. UNFINISHED BUSINESS a) Downtown Liquor Store Lease Amendment- Administration Approved 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE 14. EXECUTIVE SESSION a) Labor Negotiations 15. 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 2 Approve Council Minutes (7/2/12 Regular) (7/9/12 Workshop) Regular Minutes 4 Workshop Minutes 12 Second Quarter 2012 New Construction Report and Population estimate 2nd Quarter Construction Report 19 Approve PERA Phased Retirement Walton Phased Retirement 28 Approve Bills Bills 29 Adopt Resolution Approve Forwarding 2030 Comprehensive Plan 2011 Amendment to Met Council 2030 Comp Plan - 2011 Update 7-16-12 53 2030 Comp Plan 2011 Resolution 7-16-12 54 June 2012 Financial Report Memo 55 Downtown Liquor Store Lease Memo and Lease 65 Closed Session Labor Negotiations AFSCME Memo 84 1 7ez, COUNCIL MINUTES REGULAR July 2, 2012 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OFALLEGIANCE 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; Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer;Cynthia Muller, Executive Assistant Audience: Randy Turgeon,Annette Kuyper, David Hartnett,Kirk Zeaman, Kari Cistera,Zachary Stensland, Kyle Hemming, Todd Glass, Joy Lauterbach, Kyle Snesrude 4. APPROVE AGENDA MOTION by Fogarty, second by Donnelly to approve the Agenda. APIF,MOTION CARRIED. 5. ANNOUNCEMENTS 6. CITIZEN COMMENTS Ms.Joy Lauterbach, Trinity Senior Campus of Farmington, announced they have opened their memory care unit. On July 13 and 14, 2012,there will be an open house. Ms. Kari Cistera introduced herself as the new Director for the memory care unit. They are always looking for new residents and volunteers. Mr.Dave Hartnett, Dunn Bros. Coffee and member of the Farmington Business Association, stated a block party will be held July 19, 2012, at Tamarack Ridge Shopping Center and July 21, 2012,there will be a downtown block party. Ms.Annette Kuyper, Farmington Yellow Ribbon Network, read a statement from the network to address a problem in the community. Since 9/11 65,000 Minnesotans have been deployed overseas. There is a transition period when they return. There are physical and psychological wounds that need to heal. For service members loud fireworks can be a cause of reliving traumatic experiences. This continues to be a struggle for veterans for many years. Currently the Yellow Ribbon Network is supporting several veterans in the community who are having a difficult transition. She asked Farmington residents to take a stand for them. Ms. Kuyper listed the fireworks that are illegal. As the first Yellow Ribbon community in MN they have set a high standard. 4 Council Minutes(Regular) July 2,2012 Page 2 We all support our veterans in numerous ways. The network is asking Farmington residents to please obey the law this holiday season or call 911 if your neighbors need a friendly reminder. The veterans can stay away from large fireworks displays, but when it is happening in their own neighborhoods,they cannot get away. It has already become a problem for struggling veterans. She asked everyone to be respectful of our veteran neighbors throughout the City. We want to be the community that openly shows support for our veterans. By doing so we create a community in which we welcome them all the way home. 7. CONSENT AGENDA MOTION by Fogarty, second by May to approve the Consent Agenda as follows: a) Approved Council Minutes(6/18/12 Regular) b) Adopted RESOLUTION R25-12 Appointing 2012 Primary Election Judges- Administration c) Acknowledged Resignation Parks and Recreation Commission-Administration d) Approved Appointment Parks and Recreation Commission-Administration e) Adopted RESOLUTION R26-12 Approving Gambling Premise Permit Farmington Wrestling-Administration f) Received Information Water Restriction Enforcement Worker-Engineering g) Approved School and Conference—Parks and Recreation h) Adopted RESOLUTION R27-12 Amending Minnesota Task Force One Joint Powers Agreement—Fire Department i) Approved Bills APIF,MOTION CARRIED. 8. PUBLIC HEARINGS a) Approve Therapeutic Massage License Jackie Klanchnik-Administration Ms. Jackie Klanchnik has applied for a therapeutic massage license to practice at HealthPro Chiropractic, 19685 Pilot Knob Road. MOTION by Fogarty, second by May to close the public hearing. APIF,MOTION CARRIED. MOTION by Fogarty, second by May to approve a Therapeutic Massage License for Jackie Klanchnik at HealthPro Chiropractic, 19685 Pilot Knob Road. APIF,MOTION CARRIED. b) Adopt Enabling Resolution and Ordinance EDA Composition Revision (cont'd.)-Administration This public hearing was continued from the June 18, 2012, Council meeting. Currently the EDA is comprised of five Councilmembers and two residents holding ex-officio seats. The EDA has requested this be changed effective February 1, 2013,to two Councilmembers and three residents holding official, undesignated seats. The EDA would not have taxing authority, but would make budget recommendations to the City Council for Council approval. MOTION by Fogarty, second by May to close the public hearing. APIF,MOTION CARRIED. 5 Council Minutes(Regular) July 2,2012 Page 3 Councilmember Bartholomay suggested changing the name from an EDA to an EDC as we have stripped the authority away from the EDA. City Attorney Jamnik felt the change is not that significant. An EDA has a wide range of authority. The statute considers it an economic development authority regardless of the level of authority that you vest in it. He recommended staying with the statutory frame. Councilmember May asked if we need to be more specific as far as what authority we give the EDA? City Attorney Jamnik replied no,the enabling resolution contains the authority you grant or take away. Councilmembers agreed to leave the name as an EDA. Councilmember Fogarty attended the LMC Annual Convention and spent the majority of the time on economic development sessions. They said the City Council should not sit as the EDA and that the business owners in the community are the best source of economic development. Most cities have seven members versus five members. She felt we should continue to have a seven member board and work hard to get business owners involved in the EDA. Council needs to encourage them to apply when the time comes. Councilmember Bartholomay agreed with having seven members as two would be Councilmembers. Councilmember May wanted five members as it is a good place to start as we transition. Over the last year, as openings have come up,there has been a high caliber of candidates that apply. Councilmember Donnelly agreed with five members as the majority of the new EDA will not be Councilmembers. He agreed it is hard to get people to volunteer for boards and commissions. Mayor Larson asked if we do go to seven members and we cannot find qualified members,what do we do. Staff stated you will continue to have vacant seats until filled and we will continue to look for residents. We would have to go through this process again to change the number required. Mayor Larson had preferred to leave the EDA as is until he spoke with Councilmember Fogarty about the LMC conference. He agreed it should be seven members to get more opinions and ideas. Councilmember Fogarty wanted to be careful about dissuading business owners from applying who are not residents of the City. They have a vested interest in economic development despite the fact their homes may not reside in Farmington. It is one thing she would like to change in the enabling resolution is that you could be a resident or business owner and that should mean you do not need to own the building your business is in. Who would want economic development to succeed more than a business owner? City Attorney Jamnik stated when the statute was passed, the EDA did not specify the composition had to be City residents. The previous statute for HRA's did require members to be residents of the City. The statute also authorizes the EDA to be granted powers of an HRA so there is some ambiguity whether that restriction on membership carries over. He noted 80%of the cities have allowed non-residents, but 20% still say you should not do that. It depends on the primary focus of the group. If it is business,then allow business owners; if housing is the focus then why have a non-resident advising on housing issues. The statute is set up to give Council fmal flexibility. 6 Council Minutes(Regular) July 2,2012 Page 4 MOTION by May, second by Donnelly to approve a five-member EDA with two Councilmembers and three residents. Councilmember Donnelly noted we have talked about this at great length prior to this and this is what we agreed to have staff draw up. Voting for: Larson, Donnelly, May. Voting against: Bartholomay, Fogarty. MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) Approve Downtown Liquor Store Lease-Administration Current lease for the downtown liquor store expires on July 31, 2012. Options for the location of the downtown store include staying at City Center or moving to Tamarack Ridge. The Tamarack rent is$9.50/sq. ft. for the first year for 5,000 sq. ft. The City Center rate is $13.50/sq. ft for the first year for 6,000 sq. ft. At the June 11, 2012,workshop Council directed staff to work out a lease agreement with Tamarack Ridge. Both options include a savings in rent. The Tamarack lease included the possibility of new signage and an opt-out clause if we were to get out of the liquor business. Councilmember May has advocated we should not be in the liquor business, but the majority of Council does not agree. She was in favor of Tamarack and stated her reasons for that decision. She noted we are looking at options because we are not making money at the current downtown location. Mayor Larson preferred to stay at City Center. In the meeting with MMBA,they noted downsizing the store was not the best move. The nearby grocery store has changed, and is bringing more business to the area. The grocery store would be willing to cross-promote with the liquor store. He wanted to find something unique to do with the extra space. Councilmember Fogarty has struggled with this decision. There is an election this fall that could change the make-up of this Council. If that Council's decision is to get out of the liquor business, we have locked them into a seven-year lease at Tamarack to cover our moving costs. She is in favor of staying in the liquor business because we would have a large hole to fill in the budget with the loss of liquor revenue. She does not see a lot of other liquor stores wanting to come here. Residents want to do their shopping in Farmington. If this was her business, she would build her own building in town. Five-years is a good time period at City Center. Addressing Mr. Wartmann, owner of City Center, she noted how he dealt with the City on this was very disappointing. Until we were prepared to leave, he was unwilling to negotiate a better lease rate. Councilmember Bartholomay chose Tamarack. He asked why we would stay in a location where we continue to lose money. There are 300 more people living around Tamarack. We spent a year trying to work with Mr. Wartmann and a 7 Council Minutes(Regular) July 2,2012 Page 5 good indicator of future behavior is past behavior. He felt the customers at the downtown store would follow us to Tamarack. Councilmember Donnelly stated both locations have pluses and minuses. It has been at City Center for seven years. Tamarack access is difficult when going south. The surrounding businesses in each location would say they are happy where they are. The grocery store was not doing well, but they turned it around by changing the way they operate. The reason our liquor store is doing poorly is that it could be managed better. When times are tough you have to pay attention and run your business better. We should stop talking about this, get on with business and run it right. Give staff time to turn the business around and not distract them with having to move. He wanted some stability. Councilmember May stated we are talking about a retail business and the first thing with running that is visibility. You cannot compare us to the grocery store. You cannot miss that big building. We need visibility and we do not have that at City Center. A year ago when we knew the lease expiration was coming, she mentioned we should not be in the liquor business, so that was the time to make that decision. That discussion will take on a new meaning when you have a new location and a new lease. She cannot imagine a new Council would decide to get out of the business right after making a move and a new lease. It is over$100,000 cheaper over five years if we move to Tamarack rather than stay at City Center. Councilmember Donnelly stated if you take the extra square footage out,they are close. Before we consider moving, we should have done a marketing study. The MMBA has said don't move. Councilmember May stated if we were making money we would be taking a risk, but we are not making money. She noted people have changed their minds since the workshop, which everyone has a right to do. But if I had a change of mind, I would call the Mayor for another meeting to discuss it further. Until a few days ago, she thought Council had agreed to go to Tamarack. Mayor Larson noted after the workshop, it was a 3-2 consensus for Tamarack. Anyone has a right to change their mind. Councilmember May was concerned about the process and not calling another meeting. Councilmember Bartholomay asked if it was a bid, would we have to go with the lowest bidder. City Attorney Jamnik replied if it was a bid, if it was over $100,000, if it wasn't real property, etc. The competitive bid law doesn't apply to real property. Councilmember Bartholomay stated if we are staying at City Center, can we set up benchmarks to make sure we are hitting numbers rather than waiting two years and then look. Councilmember Fogarty felt that could be discussed during the budget process. Councilmember May stated we need an addendum to the lease that allows early termination and that is not in the City Center lease. Mayor Larson stated the MMBA has showed us the work we have to do and we have the ability to become extremely profitable if we do things smarter. We are in the process of doing that. 8 Council Minutes(Regular) July 2,2012 Page 6 MOTION by Fogarty, second by Donnelly to approve a five-year lease at City Center with an amendment to get out of the lease if we decide to get out of the liquor business. City Attorney Jamnik stated we will propose an addendum to the landlord. Voting for: Larson, Donnelly, Fogarty. Voting against: Bartholomay, May. MOTION CARRIED. b) May 2012 Financial Report-Administration We are at 42%of the year. In general fund revenues without taxes we have received 29.8%. Expenditures are at 36.81%of the budget. One budget that is over is emergency management and that is due to upgrading the outdoor warning sirens. Other general fund budgets are at or below budget. Revenues at the Rambling River center are at 44%of the budget and expenditures are at 38%. Pool expenditures are at$9200 and $5300 in revenues. The EDA had a significant expenditure in May associated with the new sidewalk by the dental clinic. The downtown liquor store had a loss of$10,000 in May and the Pilot Knob store had a profit of$24,000 before transfers. Councilmember May appreciated staff paying special attention to the revenue side. Seeing the comp time and overtime that was not included in the budget, she will rely on staff to watch that. She commended City Administrator McKnight for bringing that to Council's attention and wanted to know about any other expenses that are significant. Councilmember Fogarty asked about the pool revenues for June. Staff stated we have sold the most ever family passes this year only two weeks into the season. Councilmember Donnelly asked about the storm clean-up costs. Staff noted they will be included in budgets for streets,parks, and natural resources. 11. UNFINISHED BUSINESS a) Approve Second Amendment to Disbersing Agreement Vermilion River Crossings-Engineering This amendment states that the developer has completed the requirements in the Development Contract and in exchange the City receives the escrow money of $200,000,to complete the necessary improvements. Staff proposed obtaining quotes to complete a sidewalk between the CDA senior housing and McDonald's. There will be money left for intersection lighting and other sidewalks as needed. Mayor Larson stated right now,the developer is the financial group. The money sits in their non-interest account or we can take the money and use it for improvements we see fit for that area. Councilmember May stated the discussion is whether we want to release them of their development obligation. She did not like releasing them because she thought there were supposed to be many landscaping improvements. Are we doing it because there is a CDA building and a McDonald's and they want a sidewalk in between? Mayor Larson explained when we completed Dushane 9 Council Minutes(Regular) July 2,2012 Page 7 Avenue, Council discussed the design standards and decided they were too much and we did not want to spend the money to keep up the center island. Councilmember May stated she will vote in favor of this,because we cannot add more to the assessments. Down the road, Council will have to waive some assessments to get anything done out there. MOTION by Fogarty, second by Bartholomay to approve Amendment No. 2 to the Disbursing Agreement related to the Vermilion River Crossings development, and authorize staff to prepare plans and solicit quotes for the completion of the sidewalk on the east side of Dushane Parkway between the CDA project and McDonald's. APIF, MOTION CARRIED. 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Councilmember Donnelly: Commended staff for their work on the storm clean-up. Councilmember Fogarty: She spent two days at the LMC conference in Duluth. She encouraged Councilmembers to attend these events as you can learn a lot in a short period of time. She focused on economic development sessions. They also discussed what was passed and vetoed at the last legislative session. She also accepted the award for step two of the Green Step Program. Councilmember Bartholomay: Thanked the residents and business owners for coming to the meeting tonight and the Tamarack owners for working with the City on the liquor store issue. There were two ribbon cuttings last week; at Ameriprise Financial and Family Fresh Market. He thanked Parks and Recreation Director Distad and his staff for the recreation program report. Councilmember Bartholomay asked about performing an investigation on past payroll practices. Council directed staff to proceed with investigating this issue. Councilmember May: Thanked Councilmember Fogarty for the LMC notes. She was disappointed in the Council decision regarding the liquor store location. She feels Council did not make the best decision in the interest of the taxpayers. City Administrator McKnight: City offices will be closed on July 4, 2012,but the liquor stores will be open. City Engineer Schorzman: The hot weather stresses our water system. He reminded residents the City has year round odd-even watering restrictions based on their address. There is no watering from noon to 6:00 p.m. The Water Board has hired a person to patrol for violations. He has issued 14 violations so far. City Engineer Schorzman saw five more within 33 minutes tonight. Council Minutes(Regular) July 2,2012 Page 8 Mayor Larson: State Rep. Garofalo offered to come to a Council meeting to give an update on the session this year. Staff will schedule him for the next meeting. He encouraged residents to go to the new Family Fresh Market. It looks very nice and has a Farmington feeling with large historic pictures. Pizza Man has completed his addition with indoor seating and an outdoor patio. Tamarack is having a block party on July 19, 2012. He encouraged residents to shop local and support Farmington liquor stores. 14. ADJOURN MOTION by Fogarty, second by Bartholomay to adjourn at 8:43 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant Council Workshop Minutes July 9,2012 Mayor Larson called the meeting to order at 6:33 p.m. Present: Larson, Bartholomay, May(arrived 6:33),Fogarty(arrived 6:35), Donnelly arrived(6:37) Also Present: David McKnight, City Administrator;Brian Lindquist, Police Chief;Tim Pietsch, Fire Chief; John Powers, Fire Marshal;Lee Smick, City Planner;Cynthia Muller, Executive Assistant MOTION by Bartholomay, second by May to approve the agenda. APIF,MOTION CARRIED. 2011 Comprehensive Plan Amendment City Planner Smick explained this is an amendment, not an update. Changes include 2010 population and household numbers. The ag preserve map has also changed. Donnelly Farms has re-enrolled 11 of their properties for the next eight years,which means no development can occur during that time. (Fogarty arrived 6:35 p.m) Changes have been made to the transportation study including changes to 195th Street. A sustainability chapter has been added which includes the Green Steps Program. The economic development chapter includes the strategic plan. The comprehensive plan contains a lot of history. The economic development chapter includes changes made since 2007. There have also been changes to the fringe properties on the land use map. All property owners along 1st Street wanted to go back to low-medium density residential. (Donnelly arrived 6:37 p.m) This information will be on the July 16,2012, Council meeting for approval to forward the plan to the Met Council for a 60-day review. By October, staff will ask Council to adopt the changes which will make the property change effective. 2013/2014 Budget City Administrator McKnight presented the second draft of the budget and reviewed recent changes: Building permit revenue has been increased by$40,000,which is a$50,000 reduction from 2012. The$75,000 in delinquent tax coverage has been removed. 12 Council Workshop Minutes July 9,2012 Page 2 The$25,000 for the ice arena deficit has been removed. The sealcoating number has been adjusted to $350,000. The $15,000 in electrical inspection revenue has been removed as these are pass-through dollars. The Community Service Officer halftime position has been removed. A Police Administrative support position will be put on a phased retirement program. The position will be halftime for 2013 and there is an option to do this for four additional years. The Human Resources Representative will be retiring and this position will not be filled. The number for bond payments has been increased by$7,000. The Fire Department equipment/building maintenance has been reduced by$76,000. This item is still$135,000 over 2012. The Fire Relief Association is down to$154,255 for 2013 compared to $170,715 for 2012. Version one of the budget was at $10,341,694,tax levy at$9,533,480,tax levy change at $967,495 or 11.29%. In version two,the budget is at$10,093,772,tax levy at $9,156,385,tax levy change at $590,403 or 6.89% The Police and Fire budgets will be discussed tonight. Union contracts will be discussed in closed session on July 16, 2012, fiscal disparities is ongoing. The arena, pool, and Rambling River Center will be discussed at a future workshop and also the liquor store budget. The budget is in the shape it is today because of five reasons: Currently we have just over$79,000 in increases in expenditures,just under 1%. We have$237,901 in reduced revenues. Fiscal disparities are down$116,000 and we are using $1.9 million for 2012. Fund revenues are down$20,007. The debt has increased by$137,027 which is for the fire truck. This budget is$590,403 over from last year. Police Budget Police Chief Lindquist stated there is not a lot of change from 2012 to 2013. 2013 and 2014 numbers are based on what occurred in 2012. They are still investigating why there was a change in numbers in some areas. The data that was supplied to Finance, did not match the data they had tracked. Mayor Larson asked if the Police were due a contracted increase this year. City Administrator McKnight confirmed there is an increase for 2012 and 2013. Their current contract runs through the end of 2013. Part of the increase in administration and patrol has to do with the comp time issue. That is included for 2013. Police Chief Lindquist noted other than those increases he did not add a lot to this budget. There are necessities that we have to pick up such as CJIIN and Logis, gas, electric, fuel, squad car, all have stayed the same. When new cars are purchased,they will be a different model as the Crown Victoria is no longer made. Not all of the equipment from the old style will fit into the Ford Taurus. The items that carry great expense will fit. 13 Council Workshop Minutes July 9,2012 Page 3 The Community Service Officer left and those duties will be absorbed among the police department. There will also be an administration phased retirement at the end of this year. The school has gone from three SRO's to one. The Police Chief firmly believes two SRO's are needed at the schools. Councilmember Donnelly stated the school set their budget June 30, 2012 for 2013. So January 2013, it goes down one SRO. How can we work on it if their budget is set? It will not happen. Mayor Larson would like to revisit this with the school. He would like to see the SRO's in the schools. Councilmember Donnelly stated that discussion has to occur soon, before our September preliminary levy. City Administrator McKnight stated an SRO costs about$100,000. The school pays for 3/4 of the year and the City pays the rest. We are covered through the end of 2012, so when school starts in the fall,they will have two SRO's. January 1, 2013,they only want one SRO, so he took out all the revenue associated with it. The cost for that officer is still in the budget. We moved SRO 3 from investigations into patrol. Councilmember May felt it was a very minute chance the school will change their mind. There are still two SRO positions we fill on the force. So at a minimum we should reduce our force by one. There are other departments that have taken big hits and the police department cannot be immune to that. Police Chief Lindquist did not agree. When we approach spending,we treat it like it is our own wallets. The most important thing isn't always the bottom line, as much as the health of the product we are providing to the citizens. Being the cheapest, doesn't make it the best. Looking at the group,the changes in staff that have occurred as far as the CSO and the phased retirement, are a combined pot of money and we should apply that in the direction of where we need two SRO's, regardless of the school's position. There are other agencies that have a different contract with the schools,that provides less of an encumbrance to the school or the City. Councilmember May felt you cannot make decisions based on what someone else is doing. We have to look at the unique features of our City. She expects the Police Chief to try to get as much staffing as possible. When we had the discussion to add the SRO,we were told it would reduce overtime, etc. and she is not seeing that. The comparison is with communities that have a much larger commercial base. The reason we added the officer was for the SRO position and that is being cut from three to one. You cannot make that up. The Police Chief noted we are now doing three times the work with only 1.5 times the administration staff. We have to cover around the clock and we cannot anticipate when incidents will happen. The model he is presenting is the most efficient model. He was leery to talk about positions, because he wants them thinking about making traffic stops and staying safe,not about losing their job. Councilmember May stated the money has to come from somewhere and the police department cannot be untouchable. Police Chief Lindquist stated they have done as much stream lining as possible and still provide the best service. One in-the-line of duty death or injury could cost you more than you could possibly save in the next ten years if you eliminated half the department. Councilmember May noted the police department operated fine before we added the officer for the SRO position. Police Chief Lindquist stated we did not have the new high school at the time and had two SRO's. Councilmember May noted it is the school that is taking the SRO away and that is a choice they had to make. Councilmembers continued asking questions about all areas in the police department budget, including weapons, vests, supplies and fuel. It is included in the police contract that the City provides each officer with one handgun. They purchase a new gun every ten years and it comes 14 Council Workshop Minutes July 9,2012 Page 4 to four guns being purchased per year. Fuel has been charged to Police administration,but not budgeted there. Some of the fuel budget will be taken from patrol. Councilmember May would like to see the inventory list. Dues and subscriptions have increased by$5,000 because of an increase in CHIN fees. Councilmember Bartholomay asked about the increase for vehicles in 2013. The Police Chief explained this year there should have been three new vehicles and there were only two. We have to catch up. All will be over 100,000 miles. We have nine marked cars. Councilmember Bartholomay asked about uniforms. Officers are supplied a uniform when they start, and there is a uniform allowance in their contract. If the uniform is damaged in the line of duty,we cover it. Officers receive their allowance in January. Councilmember Donnelly asked about the workers comp line. City Administrator McKnight explained Finance started separating workers comp from employee benefits. By the end of the budget process it will all be separated. Mayor Larson noted investigations overtime is currently at 94.5%and the following year they are asking for an increase. Police Chief Lindquist explained 95%of overtime investigations is the drug task force. There is an annual reimbursement we receive from proceeds collected by the drug task force. Over the last two years we have received$21,000 that went into the general fund. Councilmember Donnelly asked what is supposed to be the outcome of this discussion? Is this the fmal discussion on the police budget? City Administrator McKnight wanted Council to get their questions asked and answered. The SRO issue is big. Councilmember Donnelly noted the Police budget is up $110,000 over last year. City Administrator McKnight noted part of that is including the comp time in the budget. The current budget includes all the officers we have today minus the CSO and minus one half-time administration employee. Adjustments citywide amount to $120,000 for comp time. The Police portion of comp time for 2013 includes administration$5,500, patrol$39,000, investigations$8,500, plus 20% for PERA and taxes. Councilmember Fogarty clarified that was never in the budget, but we paid it out. Overall, we cannot hold that against any department head. City Administrator McKnight stated the 2012 police budget goes from$3.87 million to $3.985 million in 2013,which is a$110,000 increase overall. A big chunk is an accounting correction. Councilmember Fogarty stated part of it is the contract and part of it we have not been budgeting for. Councilmember Donnelly stated the City is paying for%more of an officer than we used to. That officer was 25%City time, so that officer was not available 75%of the time to patrol. So we would be adding 3/4 time officer to patrol with having one SRO. We have to decide if that is what we want to do. For 2013 we are actually budgeting for another%officer for the City. Police Chief Lindquist noted minus the other two positions. Councilmember Donnelly noted they are totally different jobs and in different areas. The Police Chief stated nevertheless,they are bottom line department budget. Councilmember Donnelly stated if we accept this budget,we are paying for a%officer. Councilmember May stated you could add a part-time administration for a lot less than $100,000, so you cannot compare a patrol officer to administration. Councilmember Fogarty stated we have a department head saying he would rather keep a patrol officer and give up the CSO and administration support. Is that a decision we want to take away from him or let him 15 Council Workshop Minutes July 9,2012 Page 5 work with his department within his budget? Councilmember Donnelly stated we are looking at it two different ways. The CSO and the person going to halftime is a done deal. The other issue is do we want to pay for a3/4 officer. City Administrator McKnight asked if Council would be willing to look at an early retirement close to the top. Councilmember Donnelly did not believe the school district will keep two SRO's. Police Chief Lindquist explained if they get a call to go to the middle school, they have to go. This takes away from another area. They do not know when incidents will happen. Councilmember May stated she was against the SRO position when it came up. The decision at that time was based on the school covering the SRO;that is going away, not just for one, but for two. She feels they should reduce the force, as to what position that would be up to the Chief and we should look at just two vehicles. We are still faced with difficult economic times and the foreclosure rate is still high. Police Chief Lindquist heard a housing report that for every 13 that come on, ten are sold. There are not many empty homes left in the City. Councilmember Donnelly did not have an answer on the SRO position. Councilmember Fogarty stated the school needs to keep the SRO. Councilmember Bartholomay stated the school has told him no, they will not keep the SRO. He asked if we could have a joint School Board/Council retreat on this issue and the arena. Councilmember May understood safety is a concern, but the school made a decision based on their numbers to not increase taxes. We added a position because of the SRO. Police Chief Lindquist stated when they heard the school was going to do this,they approached the budget to save that position. This budget was put together three months ago and is a fluid product. Let staff look at a couple other things and come back to Council. Mayor Larson agreed they should explore the early retirement and other options and come back. Fire Budget Fire Chief Pietsch stated a comparison has been done with other departments of like size and service area and explained the comparisons. We are strictly a paid on-call department. We have about 600 fire and medical calls with the majority being medical. Two years ago we eliminated going to nuisance medical calls. The Fire Department does respond to the two most severe level calls or if the Police Department or ambulance is busy. Councilmember Bartholomay noted the townships pay for fire service. He felt that money should be put into capital improvement for the Fire Department. City Administrator McKnight noted if you take that money out of the general fund,you have to fill that hole. Councilmember Bartholomay suggested they need about$150,000-$160,000/year to get to a capital improvement plan. Fire Marshal Powers stated that would be to repair deferred maintenance items on station one and stay on top of station two maintenance. Those are the two biggest drivers with that number along with equipment needs, such as vehicles for the chief officers, brush trucks,the engine coming up in five years to replace engine 2, and the tender that is 22 years old. If we get up-to-date we would not need that much going forward the next seven years. City Administrator McKnight pushed some of the equipment from 2013 to 2014. There is $85,000 in 2013 and$175,000 in 2014. There is also some money for flooring, lighting, the front apron,and a washer and dryer. Even though money has been pushed forward,there is money in the budget for 2013 that hasn't been there for awhile. Councilmember Fogarty stated we have to start flat lining all across the budget. Fire Chief Pietsch stated the City Administrator 16 Council Workshop Minutes July 9,2012 Page 6 recommended we throw everything we need into the pile for the two-year budget cycle. They recently applied for a FEMA grant for the washer and dryer at station one for 2013. They asked for a generator for 2012,that didn't go through. City Administrator McKnight explained he is trying to get away from up and down budgets each year and keep them consistent from year to year. If some money is not needed and something comes up,there is money in the budget. Councilmember May noted they are looking at a$150,000 increase in Fire. She asked about IT services. City Administrator McKnight explained IT services have been reassigned to where the work is. Fire is getting an increase because there are more technology demands of IT staff. Councilmember Bartholomay would like to use the township money to slowly build a fund to cover maintenance items. Councilmember May felt it goes back to the CIP plan rather than setting aside the township money. Fire Chief Pietsch noted if the township wanted to take their services elsewhere,they could do that. Our call numbers would go down, but it would help our response time rating, as it takes time to reach the townships. We would lose that money that is coming in and still have the same needs. We are not in the business of trying to expand the service area. Councilmember Donnelly noted there is a$130,000 payment on the fire truck. In the budget it is $85,000 for 2013. Staff explained that is in addition to the $130,000. Fire Marshal Powers explained the$85,000 covers a brush truck where parts are no longer available for the pump. It keeps getting pulled out of the budget each year. It does still transport three firefighters to the scene and carries medical equipment. It doesn't serve its purpose and we would get rid of it. The$85,000 under vehicles would cover a brush truck and a chiefs vehicle. The$50,000 under machinery/equipment would cover the washer and dryer, replacing a brush truck skid unit, and air bags. With the new fire truck, equipment and vehicles it amounts to a$272,000 increase. Fire Marshal Powers explained we do auto aid and mutual aid with Northfield, Hastings, Rosemount to provide a higher level of service, not a savings. Some fire departments that combined are now splitting apart because it is cheaper to run them separately. Mayor Larson stated if we accept this we are increasing the levy by$272,000 of which$130,000 has already been committed. Councilmember May will not commit to the chiefs vehicle and the brush truck at this time. Fire Marshal Powers stated we do not have enough seats to transport people to the scene, so some have to take personal vehicles. If he is in charge of a single house fire, he would like to have 60 people there for backup. A brush truck holds six people and would be used for grass fires and small fires. City Administrator McKnight suggested working with fire personnel to get their numbers down. Councilmember Fogarty stated both departments tonight deal with public safety. She didn't want to say no this year and next year it could have saved a life. She asked them to keep working on the budget. Councilmember May noted there is an$8,000 increase in salaries. That is an estimate and staff will look at that again. Councilmember May noted fuel is $8,000 more. Staff stated diesel is split with the county and the gas is on the state card. She noted it sounds like we need the brush truck, but felt it was not Council's place to pick and choose. 17 Council Workshop Minutes July 9,2012 Page 7 City Administrator McKnight was hearing staff should prioritize through the entire budget. Mayor Larson stated for the past few years Council has micro-managed the budget. It is important Council look at it and suggest where to cut. He asked Councilmembers what if we pick a percentage increase and ask the City Administrator to bring us a budget that only increases by the number we pick. Tonight was important because we need to know where the money is going, but we do not have to get as deeply involved as we had to in the past. Councilmember Bartholomay thought we weren't going that deep this year. Councilmember Fogarty was open to that, but what if fiscal disparities comes in and wipes out 3%? Are we willing to use that money to flatten the levy? Mayor Larson stated we can say we want to use fiscal disparities to cover the 3%. City Administrator McKnight stated if that happens,that is not fiscal disparities creating a CIP;that is the tax levy. We don't get extra fiscal disparities. The fiscal disparities number will not be$1.9 million. It should be higher which is in our favor. Councilmember Fogarty stated if that happens, she is open to creating a road and bridge fund. City Administrator McKnight stated the money we use for that would come from the tax levy, not fiscal disparities. Councilmember May disagreed about giving a number. That is what we did and it became all about the number. The questions we are asking are not to sit behind staff all day;we are not at that level. It is a product of the difficult times we are in and the difficult spot we are in. It is more about what you cut. Councilmember Bartholomay asked if we just give a number would we not be having these discussions with the Fire and Police Chief about these items? Mayor Larson stated we would let the City Administrator work it out. City Administrator McKnight noted the SRO is a policy decision to be made by Council. Councilmember Donnelly stated the SRO and vehicles are policy decisions. Councilmember May would like to see the levy stay flat or a very low increase. Councilmember Donnelly felt residents will accept paying for a new fire truck. Mayor Larson noted the comp time issue is costing us$120,000, plus the revenue shortage. We will be close to 3%. Councilmember Fogarty stated her concern with the percentage is that ours is higher because we run a lower budget than other cities. City Administrator McKnight was not hearing a number and to keep working. There is a possibility we may not have to have a July EDA meeting, and asked if Council would like to have a budget workshop. Next would be the pool, arena and Rambling River Center. Council agreed with having a budget workshop instead of an EDA meeting. MOTION by Fogarty, second by Bartholomay to adjourn at 9:30 p.m. APIF, MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 18 City of Farmington 430 Third Street > Farmington,Minnesota t1 651.280.6800•Fax 651.280.6899 �D ."' 0+ www.cifarmington.mn.us TO: Mayor,Council Members,City Administrator FROM: Ken Lewis,Building Official SUBJECT: Second Quarter 2012 New Construction Report and Population Estimate DATE: July 16,2012 INTRODUCTION The following report summarizes the new construction permits issued during the second quarter of 2012,and the year- end population estimate. )ISCUSSION Second Quarter Building Permit Information: During the second quarter of the 2012 building construction season (April l'through June 30th), the City issued 17 new single-family detached housing permits and 0 new multi-family permits,for a total of 17 new second quarter housing permits. Construction valuation for single-family homes totaled $3,600,900.Also 1 public building permit(Park shelter at Lake Julia Park)was issued with a construction valuation of $35,000. The average building valuation of the single-family homes during the second quarter of 2012 was$211,818, up from $196,036 during the first quarter of 2012. (Note that the valuation averages do not represent the average sale price or average market value of the homes in question,since they do not include the value of the lot or any amenities added to the home that are not part of the building code formula). Year-End Population Estimate: At the beginning of 2003,City staff decided that each quarterly building permit report should also include an updated population estimate for the City of Farmington. After discussing several methods of calculating population,a decision was made to base our population estimates on Certificates of Occupancy rather than upon building permits. Building permit activity is not a "real time" reflection of actual population, given the "lag time" between the issuance of the permit and the actual occupancy of the dwelling unit(i.e.,the time required to construct,market and sell the home). Accordingly, staff started with the City population as of April 1,2000(as determined by the U.S.Census Bureau)and then determined the number of Certificates of Occupancy [C.O.s] issued by the City since that date. The number of C.O.s is multiplied by 2.95, which was (according to the 2010 Census) the average number of occupants per Farmington dwelling unit. The resulting calculations are as follows: 19 21,086 • 2010 Census population estimate + 472 =160 certificates of occupancies issued from the period 4/1/10 to 12/31/11 X 2.95 21,558 Estimated population as of December 31,2011 + 27 =9 certificates of occupancies issued from the period 1/1/12 to 3/31/12 X 2.95 21,585 Estimated population as of March 31,2012 + 130, =44 certificates of occupancies issued from the period 4/1/12 to 6/30/12 X 2.95 21,715 Estimated population as of June 30,2012 ACTION REQUIRED This item is informational in nature.No action is required Respectfully Submitted, 7441 'ZeiAii41 Ken Lewis Building Official 20 0 0 0 0 0 0 0 to Ji tot 1u IU N -� O !IA W -� �42t it s 2t if 11 A agi t 11 A git it� N a il}W -t ti W to aii p p a p z p A %N W C-A NN mmN mm8 NtW .JA W W W W oom 0 J ;1[O NV W w NN WOO 8 >v W m C a . . 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(D 11;;;;;;Milii6.11MINIMMI 0 Ell 0 0 cD .-r c \ \■ _0 cQ a=te CD 0 \\ \ ■.'\\.. 0 2 n N N N N N 0 0 0 0 0 -� O O c0 Oo 22 Accumulated Total Permits 0 0 0 0 0 0 0 0 I I I i i i m 1. 1. 1 CD - Q 11 • 1 I 1 • -•• > in • 1 • • I `C •• • ` {11 • ` '0 C_ •` ` CD = - I \ - D CD t1 0 5% \ c 3 r ea 3 c a` O w CD C _ -e m co co — \ 'r c � _ 3 ' <D• •• ` `► Cl) • • • • O ` 0 - • X • •.* • X • • it • Z 5 5 0 - • , I • • 1 a I CD 0 1 1 II 1 1 N N N N N 0 0 0 0 0 --• 0 0 N -• CD Co CO 23 Monthly Inspections cn o O O O O O o o o O O O o z a w AP 1 \\\\\\\\\\1\\1\1\1\\1\ 0 � K .a \\\\\\\\\\\\\\\\\\\\\\\\\\\\\ n o N c (n \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ CD -a 0 o O • NJ NJ NJ NJ NJ O 0 O O 4 N -7‘-, CD O 00 24 Total Inspections — N N W co ? 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O 0 N.) - 0 CO 00 27 2c, /41774,� City of Farmington jj 430 Third Street Farmington,Minnesota 651.280.6800•Fax 651.280.6899 wwwci.tarm ingt+m.mn.us TO: Mayor, Councilmembers and City Administrator FROM: Brenda Wendlandt, Human Resources Director SUBJECT: PERA Phased Retirement DATE: July 16, 2012 INTRODUCTION This memorandum is to provide information regarding the Public Employees Retirement Association of Minnesota (PERA) Phased Retirement option and request approval to offer it to Marilyn Walton, Police Administrative Supervisor. DISCUSSION Under the PERA Phased Retirement, the City may offer a phased retirement to members age 62 or older who are eligible to receive their retirement benefit. The phased retirement involves a reduction in the work schedule where the employee may not work more than 1044 hours per year. The initial agreement is one (1) year and may be renewed annually for a maximum of five (5)years. As reviewed during the Council Workshop on July 9, 2012, staff is recommending offering this phased retirement to Ms. Walton with the ability to renew the agreement each year for a maximum of three (3) years. The phased retirement option is beneficial as it provides a transition period for both the City and Ms. Walton. BUDGET IMPACT These transitional changes are being incorporated into the 2013 budget and the approximate savings to the City is$35,000.00. ACTION REOUESTED Approve offering the PERA Phased Retirement to Marilyn Walton effective January 1, 2013. Respectfully submitted, Brenda Wendlandt, SPHR Human Resources Director cc: Personnel file 28 7C/ 0 I� M r a ml 0) a s a a a 0 a O a o o a o o O m ° 0 a a a a a a a 0 0 0 0 0 0 0 0' 0 N U 1 (gyp{ (p ((pp p O O O a O O O a a O O a O O a. n g w w att atJ M N1 O 0 Ea to ga rt IXo °zz r4 w tt CO 0 CO 8 0 0 0 0 0 0 ] ' w w 0. 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Most of the changes deal with population,household,etc.,numbers that are associated with the 2010 Census. 2. The Agricultural Preserve Acres has been modified because property owners have determined that they want to re-enroll in the program. Of note,Donnelly Farms has re-enrolled eleven properties into the program for the next eight years. No development may occur on these properties until the owner takes them out of the Agricultural Preserve,not before eight years has passed. 3. The 2009 Transportation Study has been included in the Plan along with the construction discussion for 195th Street. 4. The Sustainability Chapter is now included in the Plan. 5. The Economic Development Chapter has been revised to include the Economic Development Strategy. 6. The"fringe properties"along 1s`and Elm Streets and 4th and Oak Streets have been revised from commercial to low medium density residential. Staff has recommended that the Council adopt a resolution to submit the amendment to the Metropolitan Council. ACTION REQUESTED Recommend adoption of a resolution to submit the 2030 Comprehensive Plan—2011 Amendment and to the Metropolitan Council. Respectfully submitted, Lee Smick,AICP City Planner 53 RESOLUTION NO.R29-12 REQUESTING SUBMITTAL OF THE 2030 COMPREHENSIVE PLAN—2011 AMENDMENT TO THE METROPOLITAN COUNCIL 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 16t day of July, 2012 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, Minn. Stat. § 462.355 and § 473.864 require the City to review its comprehensive plan and amend it, if necessary; and WHEREAS, the City of Farmington has prepared a 2030 Comprehensive Plan — 2011 Amendment in accordance with the Metropolitan Land Planning Act; and WHEREAS; a public hearing and workshop was held to provide for public input on development issues, goals and policies related to the 2030 Comprehensive Plan — 2011 Amendment process, and WHEREAS, the Planning Commission forwarded the proposed 2030 Comprehensive Plan — 2011 Amendment to the City Council; WHEREAS, the 2030 Comprehensive Plan — 2011 Amendment was submitted to adjacent governmental units, special affected districts lying in whole or in part within the City, and affected school districts for review and comment in accordance with Minn. Stat. §473.858. NOW, THEREFORE, BE IT RESOLVED that the City Council of Farmington hereby adopt the resolution to submit the 2030 Comprehensive Plan — 2011 Update to the Metropolitan Council. This resolution adopted by recorded vote of the Farmington City Council in open session on the 16th day of July,2012. Todd Larson, Mayor Attested to the /4b day of July,2012. Clet_f_42, strator David McKnight, ty SEAL god 40R#4, City of Farmington V ��►► c 430 Third Street ";. Farmington,Minnesota ..$ 651.280.6800•Fax 651.280.6899 •A PROD" www.cifarmington.mn.us DATE: July 16,2012 TO: Mayor and City Council FROM: David J.McKnight,City Administrator SUBJECT: June 2012 Financial Report INTRODUCTION Attached for your review is the June 2012 financial report. I have listed a number of points of interest for your review below. General Fund Revenues The general fund revenues are at 48.44%of the budget through June which represents 50%of the year. The first half property tax payment was received in June. All of the remaining revenues,with the exception of franchise fees,are below the 50%mark at this point. This includes the permits category which is at 43.85%of budget. Building permits individually are at 41.9%of budget. General Fund Expenditures The general fund expenditures are at 44.36%of the budget through June. We did incur one of our three payroll months in June which means we spent more in payroll than the first five months of the year. There are some budgets that are over the 50%mark at this point that I will continue to monitor. I discussed the Emergency Management budget having completed the upgrade of the outdoor warning sirens in last month's report. The Finance budget is over 50%due to the payment of the costs associated with our annual audit. While there are a few others just over 50%,nothing is out of the ordinary and staff will continue to monitor all budgets. Rambling River Center The Rambling River Center had$10,742 in expenditures in June compared to$3,479 in revenues. Revenues at the RRC are at 48.79%through June and expenditures are at 44.64%in that same time period. Swimming Pool 55 The pool had$29,391 in expenditures in June compared to$30,540 in revenues. I will remind you that we had to purchase an unplanned new hot water heater at just under$6,000. The pool is now fully open and benefiting from our stretch of warm weather. Special Revenue Funds The special revenue funds are established to account for specific revenue sources or to finance a specific activity. EDA-June expenditures totaled$141 while revenues were$191. The fund balance went from -$92,925 to-$74,125 due to the transfer that is taking place each month to help eliminate the negative fund balance. The City Council approved this transfer as a part of the 2012 budget. Ice Arena-June expenditures totaled$8,203 while revenues were$0. The expenditures associated with the arena in June were primarily staff related but also include utility costs and insurance. As a reminder,we did have a Dew Days event held at the arena in June. The fund balance for the arena went from-$251,868 in May to-$260,071 in June. Enterprise Funds t The enterprise funds are self-supporting and do not need financial assistance from the general fund. Downtown Liquor Store-June expenditures were$151,660 while revenues were$195,558 for a gross profit of$43,898 for the month. Pilot Knob Liquor Store-June expenditures were$194,451 while revenues were$243,550 for a gross profit of$49,099. Overall the fund balance for the liquor stores,after transfers,went from$315,264 in May to $402,427 in June. I remind you that most of the equity in the fund balance for the liquor stores is product and not cash. Sewer,Solid Waste,Storm Water and Street Lights-These funds are all in line with where they should be at this point in the year. The Street Light Fund continues to head in the right direction as we planned when the rate structure was set at the beginning of this year. DISCUSSION Review the financial report and discuss any issues you may have. BUDGET IMPACT None. 56 ACTION REQUESTED None,information only. Respectfully submitted, David J.McKnight City Administrator 57 o WI LAgosiggi at la-g:12gd c3gaamig€a44vggv4`aggo4 gig t W 1p �.�Nd gf EE d ad vdm ^vrim gg mc5 v vi ~Na�I NS�V V N� � N �r �D�1�N��r`-'.�(V Of of�i(O t9�m�00 r ` rN si 07 {7 r r W 0 N 0 00 W ��i4N��mg� •� N N vr33Nr��S� �rF3o�3ap8��6�3f .N- .� 'age 4 SKI 49 49 49 49 49 W 49 N a ~ r r V b W9J fA'9WWWW'9W9f9t9M4W4f9'f9N4'M.94 f9 4!4949 t9 w"' . .44 N 0000 W W CO W • g z is :i 49 w 49 .. Yi Sig 6 o • 49 49 W W • W 49 49 49 8O • r, r W CO W 49 r • W 49 49 49 gm g �icmc�•'�grrirmgk § M .� ',...i g1g, `Jgggalr;-1 .. S cm a 1 1 0 .-. W 49 CO 69 49 49 CO Rosa ngnr . § g .RxxmuRmonk w aiag® . 4 R Fa o 1 8S 'ag.org NrR v Q, .E a R➢6l� 0 .. 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'1n ii 64 //a__ City of Farmington 430 Third Street Farmington,Minnesota $4... 651.280.6800•Fax 651.280.6899 ''"" � wwwci.farmington.mn.us TO: Mayor and City Councilmembers FROM: David J. McKnight,City Administrator SUBJECT: Downtown Liquor Store Lease DATE: July 16,2012 INTRODUCTION At your July 2,2012 City Council meeting a lease extension for the downtown liquor store location at City Center was approved contingent upon an out clause being included to allow the city to get out of the lease if the decision is made at some point to get out of the liquor business. The attached second amendment to the shopping center lease agreement brings that direction to fruition. DISCUSSION Our current lease for the downtown liquor store expires on July 31,2012. The attached amendment extends that lease by five years and reduces the rent significantly. The option to terminate is also included in this amendment as directed by the City Council. In addition,two, five year optional extensions are included in the amendment. BUDGET IMPACT Rent costs are reduced from the current rental rates. ACTION REQUESTED If the City Council is comfortable with the proposed lease amendment,a motion should be made to approve the second amendment to shopping center lease for the downtown liquor store at City Center for the time period of August 1,2012 through July 31,2017. Respectfully submitted, David J.McKnight City Administrator 65 • SECOND AMENDMENT TO SHOPPING CENTER LEASE AGREEMENT This Second Amendment to Shopping Center Lease Agreement("Second Amendment"),is made and entered into on July /4 ,2012,by and between City Center Development LLC(hereinafter referred to as"Landlord"),a Minnesota limited liability company,and the City of Farmington("Tenant"). The terms and provisions contained in this Second Amendment are incorporated in and made a part of the printed portion of the Shopping Center Lease Agreement dated January 19,2005 between Landlord and Tenant and as amended by the by the First Amendment to Shopping Center Lease Agreement dated June 6,2005. In the event of any conflict between the terms and provisions of the Second Amendment hereof and the terms and provisions of the printed Shopping Center Lease Agreement,the provisions of this Second Amendment shall control. 1. LEASED PREMISES AND TERM. In consideration of the rents,covenants and agreements herein contained,the Landlord hereby leases to Tenant and Tenant leases from the Landlord,the premises consisting of 6,250 rentable square feet for an additional term of five(5) years commencing August 1,2012 through July 31,2017. 2. BASE RENT. (a.) Monthly Base Rent Tenant shall pay monthly base rent as follows: Year 1 $13.50 psf $7,031.25 Year 2 $14.00 psf $7,291.67 Year 3 $14.50 psf $7,552.00 Year 4 $15.00 psf $7,812.50 Year 5 $15.50 psf $8,072.92 3. OPTION TO TERMINATE. Tenant shall have the right to terminate this lease any time after August 1,2015 provided it gives Landlord at least ninety(90)days prior written notice. Tenant shall have the right to terminate this lease agreement pursuant to this provision only if Tenant no longer remains in the municipal liquor business. 4. OPTION TO RENEW. lithe 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 two five(5)year additional periods(the"Renewal Term"),by giving the Landlord notice of its exercise of each option at least one hundred eighty(180)days prior to the expiration of each five (5)year term. The Monthly Base Rent for the Renewal Term shall be negotiated between the parties based upon the than current market rates for similar size and character of shopping centers in the Metro area. All other terms and conditions of the Shopping Center Lease Agreement shall remain in effect. ACCEPTED AND AGREED TO: City of Farmington City Cent- `j ? / By: I: Thomas B.Wartman Title: /Lic yp►r' Title:Chief Manager Date: July /7 ,2012 Date:July` 7 ,2012 • SHOPPING CENTER LEAS E AGREEMENT THIS LEASE AGREEMENT,is made and entered into on, 19 ,2005,by and between City Center Development, LLC(hereinafter referred to as"Landlord")a Minnesota limited liability company,and the City of Farmington("Tenant"). - 1. LEASED PREMISES:TENANT ALLOWANCE. • (a) In consideration of the 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 hereof, consisting of approximately 5,000 rentable square feet and situated on property legally described as "Lot 2, Block 1, • Farmington City Center, Second Addition, in the City of Farmington, County of Dakota, State of Minnesota,hereinafter defined as the"Shopping Center"and depicted in Exhibit A-1. Measurements of the leased premises shall be from the outside of exterior walls to the center line of the demising wall. (b) Within thirty(30)days after full execution of this agreement,Tenant shall provide Landlord with its initial space plan and 1 other information as may be necessary for the completion of the landlord's work. 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(the Landlord's Work). 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 roofing penetrations must be made by Landlord's roofing contractor,at Tenant's cost. (c) The Landlord is providing a tenant allowance in the amount not to exceed$40,000 to be applied to the costs of tenant improvements to the Leased Premises. Tenant agrees to use Landlord or Landlord's contractor in construction of tenant's , improvements. Any costs in excess of$40,0.00 for the tenant's improvements will be paid by Tenant within ten(10)days after receipt of an invoice from the Landlord to Tenant. 2. TERM. Unless terminated earlier as provided herein,the term of this Lease Agreement shall commence on the earlier of(a)August 1,2005 or(b) ten(10)days after the Leased Premises are substantially completed as determined by the issuance of a certificate of occupancy from the applicable governmental authority and possession is turned over to Tenant("Effective Date"). The term of the Lease Agreement shall be for seven years from the Effective Date.In the event the Effective Date is other than the first day of a month,the Effective Date shall be deemed to be the first day of the month following the partial month. The Tenant has the option to extend the Term by exercising the option("Option")set forth in Exhibit C. 3. BASE RENT: ADDITIONAL RENT. Starting on the Effective Date Tenant agrees to pay to Landlord,without demand,at its office at City Center Development LLC,28120 Boulder Bridge Drive,Excelsior,MN 55331,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 ("Base 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". All Base Rents shall be payable on or before the first day of each calendar month during the Term. 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 during the month. (a) Monthly Base Rent. Tenant shall pay monthly Base Rent as follows: Years 1 and 2: $7,500.00 Years 3 and 4: $7,916.67 Years 5 and 6: $8,333.33 Year 7 $8,750.00 (b) Common Area. (i) Common Area. The term "Common Area" means the entire areas designated for common use or benefit within the property limits of the Shopping Center,including but not by 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 mall'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 Operating Expenses. Landlord's annual accounting of the costs and expenses of maintaining 1 67 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 3l'. The Common Area Operating Expenses include those expenses incurred 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, maintenance, lighting, cleaning, painting, snow removal, ice removal, rubbish, garbage and other debris removal, 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, HVAC 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 special assessments due and payable during the Term. Notwithstanding the foregoing,Common Area Operating Expenses shall not include the 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 improvements,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 change in public laws, ordinances or government regulations, whether federal, stale, 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,windstorm or other casualty of an insurable nature or by the exercise of the right of eminent domain;Landlord's costs of electricity and 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 liability 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 governmental rule or authority. (iii) Tenant's Common Area Operating Charge. 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 Leased Premises bears to the total floor area of the rentable space in the building of which the Leased Premises are a part. 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 following such increase or decrease and the - new ratio so computed shall determine the Tenant's Common Area Operating Charge in said year and thereafter. (iv) Monthly Tenant's Common Area Operating Charge. On or before the first day of each calendar month during the Term,the Tenant shall pay 1112th of the estimated Tenant'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 2 68 estimated Monthly Tenant's Common Area Operating Charge. (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 during the month.) (v) Final Annual Accounting. Sometime after the end of the initial operating year and each succeeding 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, lithe Lease Agreement terminated 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. 5. 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 terms 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 shall 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 marl,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 building,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 notice(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 same or cure such defect. The terms"walls",as used in this Paragraph,shall 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(15)days after receipt of written notice(the"Fail to Repair Notice") from Tenant of such failure or, if such repair cannot reasonably by completed within such ten(15) 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 Tenant'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 proceed with due diligence to the extent that any such failure is due to reasons of force majeure or delays caused by Tenant; (iii) 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; 3 69 (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 (v) Any offset effected hereunder shall be exercised through the delivery of written notice to Landlord 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 Repair resnonsibilities. Except as otherwise provided in this Section, Tenant shall keep the Leased Premises,including the HVAC 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 HVAC system repairs will cost more than fifty percent(50%)of the replacement cost of the HVAC system, then Landlord shall replace or repair the HVAC system and the cost shall be considered a Common Area Operating Expense. If Tenant refuses or neglects to commence repairs within ten(15)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. Erection 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 speakers,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 regarding the pylon sign along Pilot Knob Road are set forth in Exhibit B. 10. ALTERATIONS,INSTALLATIONS,FIXTURES. Except as herein provided,Tenant shall not make any structural alterations in or additions to the Leased Premises. If structural alterations become necessary because of the application of laws or ordinance,the directions,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 overloaded 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. INSURANCE. 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 public liability insurance covering all acts of Tenant,its employees,agents,representatives and guests on or about the Leased Premises, con slitting a contractual liability endorsement,in a combined single limit amount of not less than$1,000,000 and written on an"occurrence"basis. The insurance shall be with an insurance company authorized to do business in Minnesota and reasonably satisfactory to the Landlord. Tenant will provide Landlord with certificates evidencing 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. DELIVERIES.PARKING. All loading and unloading and all 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 Employee'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 invitees. 13. WAIVER.LIENS AND INDEMNIFICATION. a. Except 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 injury,death,or property damage occurring in,on or about the Leased Premises. Without limitation of the foregoing Landlord 4 70 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 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 any labor, services,materials,supplies or equipment furnished to Tenant in or about the Leased Premises which may be secured by any Mechanic's,Materialmen's or other lien against 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 formal 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 its officers,partners,employees,agents and representatives)harmless from and against all liabilities, obligations,damages,fines,penalties,claims,demands,costs,charges,judgment and expenses,including,but not limited to, reasonable 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; (ii)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, injury, death or damage to any person or property occurring in or on the Leased Premises;and(v)Any breach of this Lease Agreement by the Tenant. 14. ASSIGNMENT OR SUBLETTING. 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 permit 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. 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. 15. 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,purchasers 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) Gas. 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 where 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) Interruption of Service. Landlord ill 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 maybe curtailed or interrupted by energy regulations issued by any lawful authority. 17. EMINENT DOMAIN. (a) ):eased 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. 5 71 (b) Taking of Building. !f 50%or more of the building of which the Leased Premises is a part 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 termination to Tenant within one hundred twenty(120)days following the date of such occurrence. (c) Damages. 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 improvements 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. DAMAGE OR DESTRUCTION. (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 terminate this Lease Agreement,as hereinafter provided,repair such damage and restore the 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 construction and the issuance of an occupancy permit for the Leased Premises. (b) If fifty percent(50%)or more of the rentable area of the building in which the Leased Premises is located shall be rendered partially or wholly untenantable by fire or other casualty,notwithstanding that the Leased Pwutises may not have been rendered partially or wholly untenantable,Landlord may terminate 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. SURRENDER. 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 keys 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 the Leased Premises. 20. SHORT FORM OR MEMORANDUM OF LEASE. Either party, upon request, shall promptly execute duplicate originals of an instrument,in recordable form,which will constitute a short form 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 form of this Lease Agreement will set forth the exclusive use clause found at Section 33 herein. 21. COMPLIANCE WITH LAW. Tenant shall obtain and maintain in force and effect all permits,licenses and similar authorizations to use the Leased Premises for its purpose required by any governmental authority, and comply with all applicable laws. 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. 6 72 23. OFFSET STATEMENT.ATTORNMENT. Within ten(10)days after request therefore by Landlord,Tenant agrees to deliver a certificate to Landlord or any mortgagees,certifying(if such is the 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 24. DEFAULT. (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 terminate 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 of,and for the account 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 terminating this Lease Agreement,make such alterations and repairs as may be necessary in order to re-let the Leased Premises,and re-let said Leased Premises or any part thereof for such term(which may be for a term extending beyond the Tenn of this Lease Agreement)and at such rental and upon such other terms and conditions as Landlord in its sole discretion may deem advisable. (4) Upon such re-letting 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-letting, 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-letting 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 terminate the Lease Agreement unless a written notice of such intention be given to Tenant or unless the termination thereof be decreed by a court of competent jurisdiction. Notwithstanding any such re-letting without termination Landlord may at any time thereafter elect to terminate this Lease Agreement. (5) In addition to any other remedies it may have,Landlord may recover from Tenant all damages it may incur 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 of the 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) X andlord 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. lithe default is of a nature to require more than.thirty(30)days to remedy,the Lease Agreement will not terminate 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. 25. BANKRUPTCY. If the Tenant or any guarantor of this 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 reorganization 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 pay or fails 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 any such event the Landlord may,if it so elects,with or without notice of such election,terminate 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 Tenant at the address of the Leased Premises and to Landlord at the address then fixed for Rent payments. Either party maybe like written notice at any time designate a different address to which notices shall subsequently be sent 27. HOLDING OVER. If Tenant remains in possession of the Leased Premises after the Term and without the execution of a new lease,it shall be deemed to be occupying said premises as a tenant from month to month,subject to all the conditions, provisions and obligations of this Lease Agreement in so far as the same can be applicable to a month-to-month tenancy,at a 7 73 base rental rate equal to One Hundred and Ten Percent(110%)of the rent then in effect,in addition to additional rent. 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. 29. INVALIDITY OR UNENFORCEABILITY OF CLAUSES, The invalidity or unen£orceability of any provisions of this Lease Agreement shall have no 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 Tenant 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 shall 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 the same covenant, term or condition. Each provision of this Lease Agreement performable by Tenant shall be construed to be both a covenant and a condition. No action required or permitted 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 shall govern the validity,performance and enforcement of this Lease Agreement. All Exhibits are incorporated herein and a part hereof. 33. )3XCLUSIVE 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 1 their business. • ACCEPTED AND AGREED TO: City of Farmington City Center Develo.i.'ent,LLC y .,_ ..., By: /1 Title:Cl7 " ,r4DM1 tJ Ls7re�I T f Title: , Date: .jz,J A.0.1r J c lcr 5 Date: 4 2605— / • 8 74 Nu�gpIt.�� I i� " I ! a I ,f'� Jill %'� ` I r ,� BITUMINOUS • ill II1111111IIIlIT11 , , i , ' I I-s • _-- r _ _... _ _. I• - ,r , I j 80`x80` t1- ( / ,� j 2 STORY ; .. I OFFICE .s Ex 11r i ! _ Ace Hardware I 1 I i 80'x 8t►` >. I :n1- 9 STORY , i I• i Mil I 1 I-' LIQUOR STORE: $ r i11 m •J. � Jr I111II1J I LI . = �i_i > 1 17 SIGN PYLON . 0 v = Gco_o" 111/ SITE PLAN A 1 Blumentals//Arch Lecture 0i' I Farmington Center Retch/office 01/28/05 data 1/287% FARMINrON,MINNESOTA r Job Capt aTn A1.1 '1, fibh / *- 75 1 I OFFICE KELL/ I I I I I I I I 1 REINLJOPFlCC ril�I 1p -.. 104 LOBBY h 1ri –'rfrtn . Nlflll IOI Illk III"ifflipm r I 1 — il- 1 1 11_ I —I I I IIII- -_ • I , C I I IRPSH L REOCIZ .. _ A. nii�"_. I',1i Ili A MEN, i i! o��ICe — ——i 11! - \1 1 STOCK itc.IN I _— I I I I I Li=R I �: - --t to 1--- — 14- II MP* k !i I •N I 'UQUORSTORRI: I (! ...-_ g�ea—cn •� I loz i j I- --- I 1 I C–C ER.1� J— �! I M� I I RETAIL I Milk I SPACE I i i— 1 -1 — —I— — I_ -- I! !R I C ill 1 C Ord 0 MAIN LEVEL FLOOR PLAN I/16"= I'-O' ii JOB ennram PRA&AO: Blumentals/Architecture Inc ^S 603-4e antatonna.Orsereemm Farndngbn Center PAW]/Office SIMIIGiL° ISSUE MTe OMNI.r dSIBUD OS PARMThff Nl,AIR•WESOTA 1/28/05 z AXA FAX A /'1L 76 OArii/- EDIT B Landlord's Work;Pylon Sign Landlord's Work. 1. 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 Farmington. . 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 base of the front elevation,stucco in the sign band,and brick. 5. Interior finishes and specifications: (a) Concrete floor. (b) Interior exposed painted steel bar joist roof structure. (c) Gypsum board demising wall taped and sanded. (d) One toilet room per code,including plumbing fixtures,hot water,ceramic floor with base,minor,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 and one three ton unit.. (f) 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). (lh) Lighting provided by high intensity metal halide interior lights with acrylic lens covers(30-50 foot candles in retail space areas). (i) 110 volt electrical receptacles on the perimeter sales and storage area walls of approximately one per 20 linear feet. (0 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 doors,per plan. Doors are aluminium and glass. (1) Two 3'x 7'steel back doors. Except as specifically set forth in this Exhibit B,Tenant shall be responsible for all other improvements to the Leased Premises including, but not limited to, all trade fixtures, wall and floor covering, painting, equipment, interior partition walls, any additional electrical and/or HVAC requirements beyond that supplied by Landlord as indicated herein. • Pylon Signs. Landlord will erect a pylon sign post for installation of the 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 77 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 at least one hundred eighty(180)days prior to the expiration of the initial seven (7)year Term. The monthly Base Rent set forth in Section 3(a)shall be increased for the Renewal Term as follows: Years 8,9 and 10: Year 7 monthly Base Rent x((CPI Year 7)I(CPI Year 4)) Where,CPI Year 7 is the most recently published Consumer Price Index 180 days prior to the end of the initial 7 year Term; and CPI Year 4 is the most recently published Consumer Price Index 180 days prior to the end of Year 4. 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 Terms. The Term and Renewal Terms are collectively,referred to as"Term". • 11 78 • FIRST AMENDMENT TO SHOPPING CENTER LEASE AGREEMENT This First Amendment to Shopping Center Lease Agreement("First Amendment"), is made and entered into on Sul . (p ,2005,by and between City Center Development LLC (hereinafter referred to as "Landlord"), a Minnesota limited liability company, and the City of Farmington(``Tenant"). The terms and provisions contained in this First Amendment are incorporated in and made a part of the printed portion of the Shopping Center Lease Agreement dated January 19, 2005 between Landlord and Tenant to which it is attached. In the event of any conflict between the terms and provisions of the First Amendment hereof and the terms and provisions of the printed Shopping Center Lease Agreement,the provisions of this First Amendment shall control. LEASED PREMISES; TENANT ALLOWANCES. * (d) In consideration of the rents, covenants and agreements herein contained, the Landlord hereby leases to Tenant, and Tenant leases from the Landlord,the premises ("Additional Leased Premises") consisting of approximately 1,250 rentable square feet and described as "Retail/Office 106"of the Main Level Floor Plan of the shopping center as depicted in Exhibit [A2] attached hereto and hereby made a part hereof. Measurements of the Additional Leased Premises shall be from the outside of exterior walls to the center line of the demising wall. The Additional Leased Premises and the Leased Premises will comprise the Expanded Liquor Store as depicted in Exhibit[OPT 2]attached hereto and hereby made a part hereof 2. TERM. * * * • * Unless terminated earlier as provided herein,the term of this First Amendment shall commence on the earlier of(a)August 1,2005,_or(b)ten(10)days after the Additional Leased Premises are Substantially completed as determined by the issuance of a certificate of occupancy from the applicable governmental authority and possession is turned over to Tenant ("Effective Date"). The term of the First Amendment shall be for two (2)years from the Effective Date. In the event the Effective Date is other than the first day of the month,the Effective Date shall be deemed to be the first of the month following the partial month. Tenant is hereby given the right to extend the Term of the First Amendment for an additional period of five (5) years to commence immediately after completion of the two year term. Tenant shall exercise the right upon first having given the Landlord notice not less than 120 days before expiration of the two year term. Tenant shall notify Landlord according to the notice provisions contained in the Shopping Center Lease Agreement. 234800LeaseAddendum061305 79 • • In the event the Tenant does not exercise the right to extend the Term of the First Amendment, the Landlord shall,at its own expense,promptly convert and put back the Leased Premises to its original floor plan without the Additional Leased Premises as depicted in Exhibit [OPT 1] attached hereto and hereby made a part hereof Landlord may enter the premises during reasonable hours to convert the Leased Premises to its original floor plan and complete the work within forty-five(45)days. Upon completion of work, Landlord shall be able to lease the formerly Additional Leased Premises to new tenants. The Tenant has the right to .fw.ther extend the Term of the First Amendment by exercising the option("Option")set forth in Exhibit C to the Shopping Center Lease Agreement. 3. BASE RENT;ADDITIONAL RENT. * * * (c) Monthly Additional Base Rent. The term"Additional Base Rent"means the rent for the Additional Leased Premises as described in this First Amendment. Tenant shall pay monthly Additional Base Rent as follows: Years 1 and 2: $1,666.67 If exercised pursuant to the terms in paragraph 2 above, Tenant shall pay monthly Additional Base Rent as follows: Years 3 and 4: $1,979.17 Years 5 and 6: $2,083.33 and Year 7: $2,187.50 • All other terms and conditions of the Shopping Center Lease Agreement shall remain the same. ACCEPTED AND AGREED TO: City of Farmington City Center Development,LLC B . ._. . ? I ,t1..'_ By /id Title: ' /0 DOI l yvigt24914e Title: 2 Date: it/4k ,2005. Date: 2005. • r 2 234800LeaseAddendura06I305 80 I I I ! . 1 , I _ . { • • 1 Eliml-torride I .• i I KIM/Off= — ... ._. - 1 104 It wear um il .11IIYf1 1. 1 _ _RETAAU_/OtftCE i_. -ILSISift 1st • VIII; ff�tn g m 1, Mecd CC I i--""�� v[ALK IN I { STOCK —� I OM I 1 • _� 11 I ■. �I ■a / -UQUORSro e Iu G R. RETAIL I r I I SPACE I I j.. C 47f/.?"..."."------"7 O MAIN LEVEL FLOOR PLAN In6'x4 r-O• t 3013 CAMAIII Sa2 4# Bltimentals/Architecture Inc p.m,.00,,,t,sissrasztal FAIMINICA AMNESIA TOM Zila FAX ..k1.1 81 °iC ,V 4'-0° x 4'-O'SLIDING WINDOW with LOCK ON 25'-2° ,I OMCE 1 1151D>: 35'-6;I./_ 8'-7' 5' I G'-2° I COOLER DIMENSION ' �r. r+wmwrmwrirr�xwrrr. � ir�rrr} � OFFICE III ' OFFICE {. Z ro 'U E ,; _ro K ACH IN I 'fl C] COOLER • o 1 U 7 "O I Q I . ± I : DOORS co • Iji I 11 _ , 1 I. I. r • 1 ./ I* •• " r • j STORE ! J c/ / b 7 lI • /\ > > -2 .4 \ \ (/ / 1 • I L- s LIQUOR STORE PLAN ' 3/32" = !'-a' I hereby veer&that this wan,specification,or report bq-No Biumentais/Architecture 4' d a:nr awem ^ a d aM 04/26/05 or MN N sp Farmington Center Retail/Office date 6/23,101 FARMMNTON,MINNESOTA V 43854 AJS Andrew draw J. Swartz reg.n°. Job Captain cir2 82 II! - I 11 I III ' OPTION TO LEAVE EXISTING 4'-O' x 4'-O°SLIDING TOILET ROOM FWINDOW WITH LOCK ON OFFICE I 115ip> ^ � LOCATION I 9'-O° 5° 8'-5° 5° 5'-9° 40'1 1 1r OFFICE I III OFFICE -� f — 1 12 REACH IN COOLER i I . l ■ - 4'-° x 4F'-O°HM FRAME 1/P Pt" PP, IP.,PP" _ WINDOW.ALIGN HEAD _— WITH DOOR FRAME HEAD I LIQUOR STORE ° k /\ . / N L _ K/ > > \ \ (/ / . — — _ _ -- _ J 0---4. Walltalm 0 LIQUOK STORE 5000 5.F. OPTION 3/32" = 1'-0" • � Project Na. Blumenials/Architecture _ 6°�`'o ' Farmington Confer Retail/Office /0 dote 5/06/05 FARMINTON,MINNESOTA Job Captain OPT 1 83 /y ,tfokR.v City of Farmington „� 430 Third Street Farmington,Minnesota 1 651.280.6800•Fax 651.280.6899 4P.A Paa www.ci.farmington.mn.us TO: Mayor and Councilmembers FROM: David J.McKnight,City Administrator SUBJECT: Closed Session-Labor Negotiations AFSCME DATE: July 16,2012 INTRODUCTION Our current contract with our two AFSCME unions expire on December 31,2012. Our negotiations with the two unions will start soon and our negotiation strategy needs to be reviewed with the City Council. DISCUSSION Minnesota Statute 13D allows the City Council to go into closed session to discuss a very limited number of items. Of those items,labor negotiations are an allowed reason to go into closed session. )BUDGET IMPACT None. ACTION REQUESTED Make a motion to go into closed session to discuss labor negotiations for contracts starting January 1,2013. Respectfully submitted, David J.McKnight City Administrator 84