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HomeMy WebLinkAbout12.17.12 Council Minutes COUNCIL MINUTES REGULAR December 17, 2012 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE Mayor Larson led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Larson, Bartholomay,Donnelly, Fogarty, May Members Absent: None Also Present: Andrea Poehler, City Attorney;David McKnight, City Administrator;Robin Hanson, Finance Director;Randy Distad, Parks and Recreation Director;Kevin Schorzman, City Engineer; Brenda Wendlandt, Human Resources Director;Lee Smick, City Planner;Cynthia Muller, Executive Assistant Audience: Steve Fenlan 4. APPROVE AGENDA Councilmember May pulled item 7m)2012 Tree City USA Recertification. Mayor Larson pulled item 7g)Approve Annual Adjustment for Non-Represented Employees to abstain from voting. MOTION by Fogarty, second by Bartholomay to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) Recognition of Service—Councilmember Julie May Mayor Larson presented Councilmember May with a plaque in recognition of her four years of service on the City Council. 6. CITIZEN COMMENTS Mr.Dave Pritzlaft 20255 Akin Road,the way the meeting started saddened him as he felt there should have been a moment of silence for the families in Connecticut. He thanked Councilmember May for her four years of service on the Council. She tried to do a lot of things and sometimes they don't work out in your favor. He commended her for her efforts. Mr.Pritzlaff stated last week it did not show from a couple Councilmembers that her years of service were appreciated. When a vote went a certain way, Mayor Larson and Councilmember Fogarty demeaned the other three Councilmembers like they weren't on your team. He noted Councilmember Fogarty has stated that if a vote doesn't go your way, get on board and support it. That was not the case at the last meeting. When solutions are looked at,we throw our hands up and it looked childish on TV. That is not the way Council should work together as a team. He would like to see more professionalism as a team and work together and not single out 4 Council Minutes(Regular) December 17,2012 Page 2 one or two Councilmembers because of the way they voted. Regarding what took place at the workshop,there was more finger pointing. 7. CONSENT AGENDA MOTION by Fogarty, second by Bartholomay to approve the Consent Agenda as follows: a) Approved Council Minutes(12/3/12 Regular)(12/10/12 Workshop) b) Set January 14, 2013, Board and Commission Interviews-Administration c) Approved Temporary On-Sale Liquor License VFW-Administration d) Approved Temporary On-Sale Liquor License Knights of Columbus- Administration e) Adopted RESOLUTION R56-12 Approving Gambling Event Permit Knights of Columbus-Administration f) Adopted RESOLUTION R57-12 Tort Liability Limits-Administration h) Adopted RESOLUTION R59-12 Approving HPC Consultant Contract- Planning i) Adopted ORDINANCE 012-655 Amending Section 10-6-3(B)1(g)Increasing Size of Window Signs Allowed-Planning j) Approved EDA Loan Payoff-Finance k) Approved School and Conference-Engineering 1) Approved Electrical Inspection Service Agreement -Engineering m) Approved 2012 Tree City USA Recertification-Engineering n) Acknowledged Resignation Fire Department—Human Resources o) Acknowledged Resignation Fire Department—Human Resources p) Approved Bills APIF,MOTION CARRIED. g) Adopt Resolution—Approve Annual Adjustment for Non-Represented Employees-Administration MOTION by Fogarty, second by May to adopt RESOLUTION R58-12 adjusting the 2013 non-union wage scale by one percent in steps one through five and no adjustment in steps six through nine effective January 1, 2013. Voting for: Fogarty, May. Voting against: Bartholomay,Donnelly. Abstain: Larson. MOTION FAILED. Councilmember May noted this will affect the budget. Councilmember Donnelly stated the amount is not greater than the reserve. City Administrator McKnight stated the money related to this item is in the 2013 budget. If you change it, you will use some of the reserve in the budget. If no action is taken,the budget will not be adjusted. You are talking about$10,000 for those in steps six through nine. Councilmember Bartholomay stated he would like to talk about it, because there were some things he did not take into consideration. He suggested tabling it and discussing it early next year. City Administrator McKnight stated any change should be in place before a payroll is done in early January. MOTION by Donnelly, that everyone gets a 1%increase. Councilmember May was confused by this, because we had two workshops where this was discussed and it should 5 Council Minutes(Regular) December 17,2012 Page 3 have been brought up at the workshop last week. The motion was seconded by Bartholomay. Voting for: Bartholomay, Donnelly. Voting against: Fogarty, May. Abstain: Larson. MOTION FAILED. Councilmember Fogarty stated we have an option of doing a workshop this week to work it out before the end of the year, or wait until after the first of the year. Council discussed when to hold a workshop or continue this meeting. It was decided to continue the discussion as part of this meeting. Councilmember Donnelly agreed this was discussed, but he has heard from some individuals and it is a question of fairness. There was a system in place and it has been discontinued. The people that were in it received merit pay and it has been a bone of contention for awhile. After thinking about it,what we decided in the workshop is not fair. It is$10,000 to the City budget. It will be a morale problem, and a motivation problem if we implement what is on the agenda. Some get a raise and some don't;that will be an issue. He would rather not divide the staff for that much money. We are better off in the long run if we treat everyone fairly. Councilmember Bartholomay agreed. We need to treat our staff fairly. We have different philosophical views, but we do need to first and foremost treat our staff fairly and look at other options. Morale will be affected. Early next year we need to look at everything to see if we can fix the structure. Councilmember May learned from Councilmember Fogarty that when you try to use the word fair, it becomes difficult. She understood from the workshops that those in the upper steps were able to take advantage of the merit increases. Those are employees who have been around longer and there are fewer that are in the lower steps. Those people in the lower steps, since there are no longer merit increases, it is a way for them to catch up to those that have been here longer. She proposed that we either stick to the original plan, next year there is talk of re-organization, or just say no increase to any employee this year and next year you can come up with something that is fair to everyone. We just spent a couple weeks trying to reduce taxes, and now in the last hour here we are again. It isn't only$10,000; that is a lot of money. There were good, solid reasons why we made those decisions in that meeting. We have a great community and provide a good work environment,with decent jobs and decent wages and good benefit packages. We are providing a good package to our employees. If we don't think it is fair, we should hold off on any raise. Councilmember Fogarty agreed;there is no fairness. The employees that will never have the advantage of being in those higher steps, may look at it as being unfair they can never reach those levels. People continue to think these are easy decisions for us to make and they are not. She respected Councilmember Donnelly's and Bartholomay's opinions,but here we are at the last night and this changes the budget. We just changed the budget in the last two weeks. What some people took last week as being upset, it was more shock with changes that are coming with the most important vote of the year, changing on a dime without notice is head spinning. She agreed with Councilmember May;the last meeting was productive and this should have been discussed then. Councilmember Bartholomay would agreed to no increase and discuss it early next year. Councilmember Fogarty stated we could change the reserve budget to 6 Council Minutes(Regular) December 17,2012 Page 4 reflect that and still pass the budget. We could discuss it and do a mid-year adjustment. She asked Councilmembers to not have these discussions on the nights we are intending to pass the budget. It is the most important thing we do all year. MOTION by Fogarty, second by Bartholomay for no increase for non-bargaining employees and to revisit this after January 1,2013, and any budget dollars for this be put into the reserve to do a mid-year increase. Voting for: Bartholomay, Donnelly, Fogarty, May. Abstain: Larson. MOTION CARRIED. m) Approve 2012 Tree City USA Recertification-Engineering Councilmember May asked if we have formed a Tree Board. City Administrator McKnight stated this was discussed in February and staff decided to form a tree committee by project made up of area residents affected by the project. Parks and Recreation Director Distad stated the$2/capita is included in the budget and includes tree removal,trimming, staff time, equipment, etc. It is in more than one department budget. Staff has to document the work done for forestry. 8. PUBLIC HEARINGS a) Adopt Resolution—Approving a Project by St.Francis Health Services and a Joint Powers Agreement-Finance St. Francis Health System is doing a refmancing of taxable debt they obtained for improvements. They want to refinance this with tax-exempt debt. Mr. Steve Fenlon was present on behalf of the underwriting group. Mr. Fenlon stated this is a$10 million tax exempt fmancing. It is the third in a series of three. St. Francis has$55 million of long term debt outstanding, of which more than half could be refinanced. Of the$10 million, $732,000 was used for the Trinity campus. The City of Morris will issue the bond. The Joint Powers Agreement to be approved allows Farmington to direct the City of Morris to issue the bond that has an impact on property in Farmington. Councilmember May asked about the joint powers agreement, and if something goes wrong, would we be jointly liable for the full $10 million. Mr. Fenlon replied no,Farmington is not a party to the bond and does not have the authority to be obligated under the note. Ms. Shelly Eldridge,Ehlers&Associates, stated with respect to the conduit fmancing being proposed she explained the risks. The first risk is with arbitrage. She wanted to make sure in the documents the arbitrage for Farmington is contracted to make sure there is no arbitrage. The IRS has been coming back to the bank qualification authorities if there is an arbitrage problem. With$720,000 it would be minimal, however,that could be a risk. The second is your bank qualification. You are lending your bank qualification to your tax exempt portion. Next year if we were to have an advance refunding we could do no more than$9 million because the$720,000 counts towards the annual bank qualification. She 7 Council Minutes(Regular) December 17,2012 Page 5 did not see this happening,but if we got 0%interest we may not be able to refinance some of the debt. Third, she suggested having the bond counsel, Dorsey &Whitney review the documents and pass that expense on to St. Francis. It should be a minimal amount, but they should review all the documents on the City's behalf. Mr. Steve Fenlan stated in terms of arbitrage, St. Francis Health Services has obligated itself in the documents to have those calculations made every five years. If there is a rebate due,that falls on St. Francis. Regarding bank qualification,the City of Morris is making an allocation of$10 million. The City of Farmington is allocating zero of their bank qualification. Regarding the ability to issue in 2013, this fmancing will be issued in 2012. This will not affect Farmington in 2012 or 2013; it will affect the City of Morris who has not issued any paper in 2012. They are giving 100%of their bank qualification to this issue;Farmington is giving none. Regarding bond counsel reviewing the documents, St.Francis has had Briggs&Morgan on behalf of the City of Morris review the documents and the expense was born by St.Francis. Farmington is not the issue. You are playing a minor role which is conducting the public hearing and deciding whether you are comfortable with the City of Morris issuing a bond that in a small amount of $732,000 impacts your limits. Finance Director Hanson has had City Attorney Jamnik review the documents, so a review by bond counsel is not necessary. With the additional information,Ms. Eldridge suggested having the arbitrage documents sent to us for our files. MOTION by Fogarty, second by Bartholomay to close the public hearing. APIF,MOTION CARRIED. MOTION by Fogarty, second by Bartholomay to adopt RESOLUTION R60-12 approving a project by St. Francis Health Services of Morris, Inc. under Minnesota Statutes, Section 469.152 through 469.165 and approving a Joint Powers Agreement. APIF,MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) Adopt Resolution—Approve Sale of General Obligation Improvement Refunding Bonds Series 2013A-Finance Three bids were received on the 2013A bond sale. The bond sale was$5,365,000 and was for a cross over refunding for the 2005B bonds and a current refunding of the 2006A bonds. The low bid was for 1.3291%. They bid 2% interest rate on all the maturities and incorporated a premium of$228,000 resulting in the lowest overall price to the City. The future savings were$654,498. Staff anticipates a January 15, 2013 closing date. This moves the first principal date from February 2013 to February 2014. MOTION by Fogarty, second by Bartholomay to adopt RESOLUTION R61-12 awarding the sale of$5,365,000 General Obligation Improvement Refunding Bonds, Series 2013A which will refund the 2005B and 2006A bonds to the low bidder. APIF,MOTION CARRIED. 8 Council Minutes(Regular) December 17,2012 Page 6 b) Adopt Resolution—Approve 2013 CDBG Funds-Planning City Planner Smick met with the CDA regarding different allocations for the City's CDBG money. CDBG money comes from the Housing and Urban Development. The Dakota County CDA administers the funds and distributes the money to cities in Dakota County. City Planner Smick proposed to submit an application for 2013 CDBG funds to the CDA by December 31, 2012. Currently we have a 10%decrease from the 2012 funds, which means we have$35,820 we can utilize for 2013. The total funds as of today are$111,000. City Planner Smick spoke to the CDA regarding channeling the residential rehab money by taking away$27,000 and reallocate it to the commercial rehab. The residential rehab is home improvement for low income families. In 2011 and 2012 no one has been interested in utilizing this fund. City Planner Smick has three projects proposed for commercial rehab;Dakota County Lumber is required to install a sprinkler system with their proposed expansion,there is a proposal to create a banquet hall in the old senior center building which would require a sprinkler system, and there is a proposal for retail at the former Oasis Market building. The tanks need to be removed. Right now there is$22,000 in commercial rehab. Staff would add$5,000 to get to $55,000 in commercial rehab. Sprinkler systems cost approximately$24,000. The maximum request is$35,000. Another funding category is a business development grant. The CDA is reallocating$17,510 of this fund to the Dakota County Wells sealing program and to Coates for a weather siren. As the administrator,Dakota County is allowed to do this, and the board would approve this on January 8, 2013. Staff will try to get this money moved back to commercial rehab to use for the three projects. HUD is very adamant that funds be used. These funds have been available since 2007. Councilmember Fogarty asked about the lack of use of the residential rehab funds. Staff was informed that residents apply and when they get to the application stage,they change their minds. Councilmember Fogarty asked staff to determine if something has changed in the application process with the CDA. Councilmember May recalled at an EDA meeting it was discussed to meet with local banks. She suggested getting them up to speed with this program. City Planner Smick is working on information for that meeting which is planned for February when the new EDA composition starts. The public service senior center fund for$16,000 was allocated in 2011 to hire a part time staff person and also supply scholarship money to seniors who could not afford recreational programs. Staff is interested in bringing the scholarship program back to the EDA. This money could also be shifted to another area during this time. The business development grant for$30,000 can be used for the purchase of equipment for expanding businesses such as Installed Building Solutions. Staff is proposing to keep the microenterprise fund at$23,800. This is used to help with rent payments. MOTION by Fogarty, second by May to adopt RESOLUTION 9 Council Minutes(Regular) December 17,2012 Page 7 R62-12 approving allocation of$35,820 CDBG funds for FY2013 to the Commercial Rehabilitation and the Business Development Grant funding categories. APIF,MOTION CARRIED. 11. UNFINISHED BUSINESS a) Adopt Resolution—Approve 2013 Tax Levy and Budget-Administration At the December 3, 2012, Council meeting Council directed staff to reduce the budget by$152,986. A workshop was held December 10, 2012, and a list of items was selected to reduce the tax levy to $8,565,982,which is the same amount as 2012 and 2011. The items to reduce the levy include: -Remove the generator from the Fire Department budget$50,000 -Use the net sale revenue of the 431 Third Street building$30,000 -Remove the vehicle from the Fire Department budget$45,000 - Staff reorganization$24,000 -Reduce the reserve line item$3,986 Mr. Dave Pritzlafi 20255 Akin Road, stated in 2008 we lost the second half of the market value homestead credit and for the entire year for 2009, 2010, 2011. The state took it away so they could stay in fiscal order. No work has been done with this Council to move away from that. We have to make our budget stand without that. It is not an excuse, it is just gone. The state works with their funding and we need to work with our funding. From reading the paper, he was not in agreement with Council using the$30,000 of one time money from the sale of the old senior center. You will fmd yourself in the same place next year and possibly instead of$30,000 in the hole, it could be between$30,000-$60,000 because of using one time money and not fixing anything. He appreciated the Fire Department cutting one generator as there are other generators that can be used. He was not in favor of cutting the Fire Marshal's vehicle for$45,000. The current vehicle is unreliable and is a public safety issue. The Fire Marshal seems to be the first person on the scene. To cut$45,000 for a vehicle that is unreliable, may not start at times, floor boards are rusted out,and leave our Fire Marshal at the whim of a vehicle that may or may not run, and being the first person on the scene that could administer any type of first aid, or evacuate people, it is a public safety issue. Any time you take something from public safety, you are not looking out for the well being of the residents. Bringing one time money in is not a fix;there are no cuts. Next year you will be at the same place and could be twice as much because you are not fixing the problem. MOTION by Donnelly, second by May to adopt RESOLUTION R63-12 adopting the tax levy for the year 2013 collection. Voting for: Larson, Bartholomay, Donnelly, May. Voting against: Fogarty. MOTION CARRIED. MOTION by Fogarty, second by Donnelly to adopt RESOLUTION R64-12 approving the 2013 budget. Voting for: Larson, Bartholomay, Donnelly, Fogarty. Voting against: May. MOTION CARRIED. 12. NEW BUSINESS 10 Council Minutes(Regular) December 17,2012 Page 8 13. COUNCIL ROUNDTABLE Councilmember Donnelly: Thanked Councilmember May for her years of service and wished everyone Happy Holidays. Councilmember Fogarty: Asked City Administrator McKnight to look into the legislature moving us into the transit taxing district. If that occurs,Farmington would see no improvements, but would have a$200,000 -$225,000 tax bill. Mayor Larson recently heard the tax bill for Farmington would be$500,000 and get nothing for it. Councilmember Fogarty stated it is important we pass a resolution to work with the LMC and with coalitions as it will be a tough fight to keep us out and there will be no benefit. We struggled to get$152,000 reduced from the budget this year, if we have to come up with$500,000 that is significant for us. She was told Toys for Town went very well. She thanked Councilmember May for her service. Councilmember Bartholomay: The last couple meetings we started doing a better job compromising. At the last workshop we all had different ideas and we came together, did not agree on everything, but we all had some input. We compromised tonight as well with the non-bargaining increase. Toys for Town was outstanding and he thanked all the volunteers who helped. He thanked Councilmember May for her service and wished everyone Happy Holidays. Councilmember May: She spoke about some things that have gone really well. Overall there is a better accounting of revenue and a lot of that came to fruition this last year. Over the last four years we have done a better job as a Council and for the residents. We have more transparency and better accounting on the revenue side. There is progress on the elimination of negative fund balances and that is a step in the right direction. Employees are now assigned to one home budget to simplify the budget and the budget includes all employee costs and comp time. The labor costs are a big piece of the budget and you have to understand it all and feel confident with everything involved. She heard today about the transit tax and thanked previous Councils for their work in keeping this at bay. To have to spend that kind of money would present a huge challenge to Council next year. She thanked her fellow Councilmembers and encouraged them to have more debates. She thanked the staff and appreciated all they have done. She also thanked her family because this is a big commitment and a tough job. She encouraged others to consider serving. She was glad she served and learned a lot. Fresh perspectives will keep our City going. City Administrator McKnight: Residents should receive their 2013 calendar in the mail this week. He thanked staff for their hard work on this. Parks and Recreation Director Distad: Staff has started flooding the outdoor rinks today. Mayor Larson: Thanked Councilmember May for her service. Everything residents need to know is in the Community Calendar. He also encouraged residents to 11 Council Minutes(Regular) December 17,2012 Page 9 sign up for Facebook,Nixie and Twitter to obtain information. He thanked all those who volunteered for Toys for Town. He asked everyone to adopt a fire hydrant in their neighborhood. He encouraged residents to shop local. Regarding the budget, he thanked City Administrator McKnight. He suggested a different way of doing it and Council let him prepare the budget they way he saw fit and he did a great job. He found several holes in the budget and we plugged all the holes with a minimal increase including buying a fire truck. Staff was also a big help. Farmington has great employees that do a fantastic job and Mayor Larson thanked them for working within the budget. Farmington does have high taxes, it is not because we have too many people working for the City, it is because of the debt we have. This year's levy was$2.7 million in debt payments. Debt payments include the new fire station, new police station, new central maintenance facility, and new city hall. This is what all growing communities struggle with. As they grow they need more. He worried about cutting employees until we get to the point of diminishing return. He worried about not being efficient because we are stretched too thin. That is part of the balancing act for this Council. We have to look out for the taxpayer and look out for the fmancial well being of the City itself. Sometimes that includes raising the levy like we proposed; it was under 2%, not only because of the fire truck purchase which was$120,000 of that increase, gas, electricity, insurance have all gone up. To keep a healthy City we need to have little increases to stay with life. He worried about the financial health of the City as it takes money to run this City. The City is like one big property management company. We have not raised the levy in a few years and all the expenses keep going up and we keep cutting employees and cutting everywhere. A healthy community raises its levy minimally as its expenses go up. It is something we need to keep in perspective. We did a great job this year and City Administrator McKnight and his staff did a great job with the budget document. 14. ADJOURN MOTION by Fogarty, second by May to adjourn at 8:30 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 12