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HomeMy WebLinkAbout12.03.12 Council Minutes COUNCIL MINUTES REGULAR DECEMBER 3, 2012 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OFALLEGL4NCE Cub Scout Troop 117 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; Robin Hanson, Finance Director;Brian Lindquist,Police Chief; Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer;Todd Reiten, Municipal Services Director;Tim Pietsch, Fire Chief;Cynthia Muller,Executive Assistant Audience: Jennifer Chick, Kent&Micah Lillie,John Tonsager 4. APPROVE AGENDA Councilmember Donnelly pulled item 7d)Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes for comment, Councilmember May pulled item 7c) Sale of 431 Third Street for comment. MOTION by Fogarty, second by Donnelly to approve the Agenda. APIF,MOTION CARRIED. 5. ANNOUNCEMENTS a) Recognition of Service—Commissioner Joe Harris Commissioner Harris was elected in 1980 and served Dakota County for 32 years. He is the longest serving Dakota County Commissioner in history. Mr. Harris gave a history of the district and those he served with. Mayor Larson presented him with a certificate in recognition of his service. 6. CITIZEN COMMENTS 7. CONSENT AGENDA MOTION by Fogarty, second by Donnelly to approve the Consent Agenda as follows: a) Approved Council Minutes (11/19/12 Regular) b) Approved Various 2013 License Renewals-Administration c) Approved Sale of 431 Third Street-Administration d) Approved Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes—Parks and Recreation e) Adopted RESOLUTION R53-12 Accepting Donation to Skate with Santa Event —Parks and Recreation 5 Council Minutes(Regular) December 3,2012 Page 2 f) Adopted RESOLUTION R54-12 Accepting Donation to Rambling River Center —Parks and Recreation g) Approved School and Conference-Engineering h) Approved Fire Act Grant Program—Fire Department i) Adopted RESOLUTION R55-12 Approving Revised Master Subscriber Agreement and FAST Access Amendment—City Attorney j) Approved Bills APIF,MOTION CARRIED. d) Approve Advertisement to Lease Land in Jim Bell Park and Preserve for Farm Purposes—Parks and Recreation. Councilmember Donnelly asked where the money goes from the lease. Staff replied it goes to the park improvement fund. c) Approve Sale of 431 Third Street-Administration Councilmember May recommended the proceeds from the sale go into the EDA fund. City Administrator McKnight will bring this item back after the closing. 8. PUBLIC HEARINGS a) Approve Various 2013 License Renewals-Administration Applications were received from various businesses for On-Sale Liquor, On-Sale Sunday Liquor, Club, On-Sale Wine&On-Sale Intoxicating Malt Liquor, Therapeutic Massage licenses. The On-Sale Wine and Intoxicating Malt Liquor license for Farmington Billiards is pending receipt of the Certificate of Insurance. MOTION by Fogarty, second by May to close the public hearing. APIF, MOTION CARRIED. MOTION by Fogarty, second by Bartholomay to approve the above licenses. APIF,MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS 11. UNFINISHED BUSINESS a) Adopt Resolution—Approve 2013 Tax Levy and Budget-Administration City Administrator McKnight presented the 2013 budget and tax levy. The final budget and tax levy must be adopted by December 28,2012. The 2012 general fund budget was just over$10 million. The 2013 budget is proposed to be $10,691,639. This increase is due primarily to the way employees are assigned in the budget. The 2012 tax levy was$8.56 million. The preliminary levy approved in September was$8,808,865, which is a 2.84% increase over last year. The final tax levy proposed is$8,718,968 which is a 1.79% increase over 2012. Employees have been assigned to one home budget in the general fund rather than splitting some into five different budgets. This makes the budget more transparent. The impact transferred over$734,000 worth of expenses into the general fund from the sanitary, storm water and water funds. An equivalent amount of revenue was also transferred into the general fund to make this change tax levy neutral. The 6 Council Minutes(Regular) December 3,2012 Page 3 new approach impacts the Finance, Engineering, and Municipal Services budgets. The Administration and Human Resources budgets are reduced due to staff reductions. The Police Department budget is up because we have settled two union contracts for 2013. The Fire Department budget is up because it includes a Chief's vehicle and a generator for 2013. Parks and Rec is up for some minor reasons. The transfers budget is down because in 2012 there were two one-time expenditures to eliminate negative fund balances in the EDA and Park and Recreation fund. The Police Department makes up one third of the general fund budget and the rest are split between Fire,Engineering, Municipal Services, Parks and Rec, and Administration. There are smaller budgets in the transfer area in Human Resources and Finance. There were some significant challenges to the budget. Revenues were reduced to better reflect past years' receipts amounting to a reduction of$247,000. The first payment of the new fire truck of$120,000 is included. All anticipated personnel costs are included in the budget which was a$107,000 increase to the budget. These changes reflect $474,000 of impact to the general fund. Staff has been reduced by two full time positions;one in Human Resources and one in Community Development, and two part time positions;one in the Police Department and one in Municipal Services. These changes reflect a net impact of $232,000. Since then the tax levy has been reduced to $152,000. The preliminary tax levy approved in September was$8.8 million which represented$242,883 or 2.84% increase. The tax levy proposed now is$8,718,968 or a 1.79%increase. The truth in taxation statements residents received were based on the preliminary levy. All of the City numbers will now be lower than what is shown on the statements. City Administrator McKnight presented the use of the tax levy between 2012 and 2013. The general fund is up $56,000 due to decreased revenues and increased costs including the HR costs in the budget. The Fire relief levy is down$25,000 as finances are doing better and the 2012 number of$180,000 was incorrect and should have been$170,000. The general fund is looking for$30,000 more in tax levy dollars. The debt service levy is up $122,000 due to the new fire truck payment. All anticipated expenditures are included in the budget and revenues are conservative. This is a solid financial document. All interfund loans and liabilities are included in the budget. Separate accounts have been established or continued for seal coating and future building needs. City Administrator McKnight thanked Council and staff for their contributions and patience with the 2013 budget process. Mayor Larson thanked City Administrator McKnight and staff for their hard work. This is the City Administrator's first budget with the Council and he was impressed with the whole process and the ease of the budget document. 7 Council Minutes(Regular) December 3,2012 Page 4 Mr. John Tonsager, owner of Farmington Mini-Storage, stated based on the initial proposed taxes for a commercial business they are looking at a 10% increase. If the proposed taxes are decreased compared to the statements, he asked what they could expect in a reduction. Councilmember Fogarty noted the City Administrator could provide that number tomorrow. Despite there being a small increase,the businesses will take the brunt of it. It has to do with the state changing the market value homestead credit, so homeowners are seeing a reduction in taxes. Mr. Tonsager stated in the commercial industry the market value decreased and at some point we have to weigh in what is being levied against commercial industry if we are looking at long term growth as 10%is not sustainable. If we are looking at a 2%reduction in residential, it is a significant impact on commercial. He was interested in what percentage decrease they can expect. Councilmember Fogarty noted it is out of their control as to how the levy is applied. Mayor Larson stated the legislature has explained that because the commercial value did not drop as fast as the residential value, as the residential value starts gaining it will start to equal out. With the shift in market value homestead credit,they put the brunt on the commercial side. Councilmember May stated we should be honest;we are still proposing a tax increase. No matter who we want to blame,we are still proposing a tax increase. We don't all agree on that. It is unfortunate the commercial businesses are taking the brunt of it. Mr. Tonsager stated we should be looking at reductions as we all experience that in our personal lives. To expect that shift,we should be looking at counties and cities reducing their budgets, not increasing them. MOTION by Bartholomay, second by May to amend the 2013 budget and levy to reflect a 0%increase, keeping the levy the same as 2012. Councilmember May agreed with a lot of the comments,the process,the hard work,the due diligence, but felt there was more we could do with the unknowns in 2013. With the fiscal cliff talk,the continued reduction of home values,the shift to the commercial sector,we cannot be hypocrites and say we care and then have tax increases when we know hit that sector much harder and then say we want to increase commercial development. There is also talk about potentially reorganizing staff not necessarily elimination, but re-organization. We can't keep blaming the state for the shift. We still have to be responsible for any increase we propose. Voting for: Bartholomay, Donnelly, May. Voting against: Larson, Fogarty. MOTION CARRIED. Councilmember Fogarty stated we cannot pass a budget without the tax dollars to match. We have to go back into a budget workshop. Councilmember Bartholomay left it to City Administrator McKnight to determine how to make up the difference. Councilmember Donnelly stated last year we proposed an increase at the last second and didn't talk about it. This year we are proposing a decrease. He agreed with letting the City Administrator decide where the reductions should occur so the budget matches the levy. City Attorney Jamnik stated Council can direct staff to prepare a revised budget to bring back for approval, but ultimately the Council has to approve the budget. You can have a workshop to discuss it, 8 Council Minutes(Regular) December 3,2012 Page 5 otherwise you leave it to staff to come back with a recommendation that you can take or reject or modify. Councilmember Fogarty stated the decision has been made, but this does not prevent businesses from seeing an increase in their taxes. Taxes for businesses will increase despite what the Council does tonight. The vast majority of what we proposed came from this Council voting to get a new fire truck. Basically we have said we want a new fire truck, but we don't want to pay for it and we are going to make the City Administrator find other cuts to pay for it. Councilmember May felt Council was aware the commercial will still see an increase and the budget is not all about a fire truck. City Administrator McKnight stated the budget can be approved at the December 17, 2012,Council meeting. He confirmed Council wants him to find$152,000 in cuts to get the 2013 tax levy to match the 2012 which matched 2011. Staff will schedule a budget workshop for December 10, 2012. Councilmember Fogarty asked Council if they were fine with whatever decision the City Administrator makes because that could be employment decisions that are being given several weeks before the end of the year. If those decisions will be made, people need to be aware of it. Mayor Larson stated Councilmembers gave the City Administrator the responsibility so they will have to be okay with his decisions. 12. NEW BUSINESS a) 2013 Inflow and Infiltration Grant-Engineering Farmington has been awarded a grant for inflow and infiltration reduction. During the Walnut Street project, staff discovered a sewer line that crosses from the east side of hwy 3 to the west side at Oak Street. It is a clay line that is 2 ft below the ditch along hwy 3. The line will be changed so it goes down the east side of the frontage road and ties into Spruce Street. We have preliminarily been awarded$23,328 of the estimated $95,000 construction cost. The entire project cost was included in the budget for the sanitary sewer fund. So the budget impact would be a reduction in the $95,000 expenditure. Councilmember Fogarty felt that number was odd. City Engineer Schorzman explained the Met Council looks at the project in total and at the part of the project that will control the inflow and infiltration which is specifically what the grant is for. The location is under a street so some of the reconstruction costs were not qualifying expenses. MOTION by Fogarty, second by Bartholomay to authorize staff to continue preparation of plans and specifications for the project, and authorize staff to communicate the City's continued support of the project to the Met Council. APIF,MOTION CARRIED. 13. COUNCIL ROUNDTABLE Councilmember Bartholomay: Thanked staff for the Secret Holiday Shop;there was a huge turnout. He thanked the Farmington High School groups and volunteers for their help with this event. 9 Council Minutes(Regular) December 3,2012 Page 6 City Administrator McKnight: Residents should have received their City News and Recreation Guide in the mail this week. Registration for recreation programs opened today. He acknowledged the work by Danielle Cahlander and staff to put this together. Mayor Larson: Thanked those who worked the Secret Holiday Shop at the senior center. There were over 300 kids attend. He thanked the FBA and those who helped with Dazzle Day and the tree lighting. Stickers with the Shop Local logo have been distributed throughout town to be placed on business windows. He asked everyone to support retail and service businesses. It is important to keep the money in the community. Regarding the budget, we spent nine months working on the budget and it was a good, sound, solid document. He was very disappointed with how tonight went. We bought a fire truck and there are other things in the budget, but we did make cuts. The total increases for the year were$424,000 and we were asking for$150,000. For the remainder we did find ways to cut including personnel and other cost saving measures. By taking the action tonight,we took a sound budget and poked holes in it. 14. ADJOURN MOTION by Fogarty, second by Bartholomay to adjourn at 7:48 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 10