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HomeMy WebLinkAbout03.17.14 Council Minutes COUNCIL MINUTES REGULAR March 17, 2014 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, Bonar, Fogarty Members Absent: Donnelly Also Present: Joel Jamnik, City Attorney; David McKnight, City Administrator; Robin Hanson,Finance Director; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Cynthia Muller, Executive Assistant Audience: Steve Fenlon 4. APPROVE AGENDA MOTION by Fogarty, second by Bonar to approve the Agenda. APIF,MOTION CARRIED. 5. ANNOUNCEMENTS 6. CITIZEN COMMENTS 7. CONSENT AGENDA MOTION by Fogarty, second by Bonar to approve the Consent Agenda as follows: a) Approved Council Minutes (3/3/14 Regular)(3/3/14 and 3/10/14 Workshop) b) Adopted RESOLUTION R21-14 Approve a Joint Powers Agreement with Dakota County for Household Hazardous Waste Drop-off Day—Municipal Services c) Adopted RESOLUTION R22-14 Approve Gambling Event Permit St. Michael's Church-Administration d) Approved Temporary On-Sale Liquor License St. Michael's Church- Administration e) Accepted Resignation Planning Commission-Administration f) Approved Temporary On-Sale Liquor Licenses VFW- Administration g) Approved Bills APIF,MOTION CARRIED. 8 Council Minutes(Regular) March 17,2014 Page 2 b) Approve Joint Powers Agreement with Dakota County for a Household Hazardous Waste Drop-off Day—Municipal Services Councilmember Bonar noted this event is approaching its 30th year which is exceptional for two units of government to work collaboratively for that many years. This is a demonstration of how government does work together. 8. PUBLIC HEARINGS a) Adopt Resolution—Approve St. Francis Health Services of Morris Bond Refinancing-Finance St. Francis Health Services is refinancing several of its tax-exempt notes. They will issue up to$10 million in bonds through the City of Morris. A portion of this involves money used to refinance the acquisition of Trinity Campus. St. Francis is requesting the City of Farmington enter into a Cooperation Agreement with the City of Morris in order to accomplish this. The City of Farmington is not liable for anything. MOTION by Fogarty, second by Bonar to close the public hearing. APIF, MOTION CARRIED. MOTION by Fogarty, second by Bartholomay to adopt RESOLUTION R23-14 approving a project by St. Francis Health Services of Morris, Inc.; consenting to the issuance of obligations by the City of Morris, Minnesota; and approving a Cooperation Agreement. APIF,MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS,REQUESTS AND COMMUNICATIONS a) Draft 2013 Financial Statement Review -Finance The 2013 general fund revenues total $10.2 million or 108%of budget. The actual combined total of property taxes was 102% of budget. The city received 98.3% of current year property taxes and fiscal disparity dollars. This was offset by the collection of$208,000 in past year's delinquent taxes and$19,000 in related penalties and interest. The outstanding delinquent taxes receivable balance is $259,000 at the end of December 2013. This is down significantly from two years ago when it was $607,000. Permit revenue was $278,000 ahead of budget. Investment income was$72,000 more than budget. This was offset by the overall decline in market value of the city's general fund investments which resulted in a marked-to-market charge of$104,000 related to unrealized losses. This resulted in a net negative investment income of$32,000 for the year. General fund expenditures for 2013 were $10.4 million or 103% of budget. The fire engine was budgeted for in 2012, but received in 2013. Excluding the fire truck, actual expenditures were 94.5%of budget. 9 Council Minutes(Regular) March 17,2014 Page 3 Finance department expenditures were $14,000 less than budget,however,the property and liability insurance was $19,000 more than budget, so combined this line item was slightly over budget. The state fire aid received was $54,000 more than anticipated,which is a pass through to the Fire Relief Association. The auditor's review of the city's contribution to the Fire Relief Association indicated it needed to be$15,000 higher than budgeted. This contribution was made in 2013. The fire chiefs vehicle was purchased in 2013 from the Administration line item. It was a long, expensive winter for snow removal. Staff will be working on budgeting for this item for future years. Transfers in were $10,000 more than budget due to the transfer from the liquor stores and then donated to the Veteran's Memorial project. The city paid off the 2007 DCC bonds related to the communications center. The original $33,000 the city contributed to the bond sale was returned to the city when those bonds were paid off. Regarding transfers out,we did not need the $20,000 for the Rambling River Center's loan repayment because the loan had been paid off at the end of 2012. The decision was made to transfer$30,000 for trail maintenance to the new maintenance fund where we are accumulating dollars for trail maintenance, seal coating, building maintenance, etc. For 2013,the fund balance in the general fund increased$500,000 to $3.1 million or 28.3%of the 2014 budgeted general fund expenditures. The fund balance is still expected to drop below zero in June and not return to a positive fund balance until July when the first half 2014 property taxes are received. In other funds,the Rambling River Center revenues were $19,000 more than budgeted and 2013 expenditures were $2,000 more than budgeted due to higher activity levels. The net result was the city's contribution to the Rambling River Center was $95,000, which was $17,000 less than originally budgeted. Revenues at the pool were slightly more than budgeted. The expenditures were $9,000 less after taking into account the USAquatics feasibility study. The city's contribution to the pool was $65,000 which was $10,000 less than budgeted. EDA revenues and expenditures are significantly higher than budget due to the receipt and pass through of CDBG funds. The revenues are higher than expected because the CEEF loan was repaid in full. In early 2014 the Vinge loan was paid. In addition,we received unanticipated tax increment funds in 2013 and those were transferred into the EDA. The cash position for the EDA is much stronger than in the past. 10 Council Minutes(Regular) March 17,2014 Page 4 Ice arena revenues were $7,000 less than budget. Expenditures were $25,000 less than budget due to fewer full time salaries being charged to this area. The arena had revenues that exceeded expenditures for the second year in a row. The net income for the year was $22,000 and the cash balance only went below zero in the January/February 2013 timeframe. Both liquor stores met their individual gross profit bench marks of 25% and their combined bench mark of 6%for profit as a percentage of sale. Net income before transfers was $316,000 which was$35,000 more than the previous year. The minimum cash balance goal was$300,000. That may be moved up to $350,000. At the end of December 2013, they were at$395,000. All four enterprise funds had operating transfers out more than budgeted. A decision was made late in 2013 to transfer money into the 2010 bond fund to strengthen that so it met the 105%debt service funding requirement. Solid waste expenses were $667,000 less than budget due to the funds needed for the purchase of a new garbage truck being included in the budget. Actual depreciation was $286,000 less than budget. All of the assets in the solid waste fund have been fully depreciated. Actual salaries and benefits were less than budgeted due to not replacing a staff member who left city employment. Storm water expenses were less than budget by$131,000 due to pond sediment testing expenses being less than anticipated and the storm sewer design for the 195th Street project was not started in 2013. The water fund revenue exceeded budget. Special assessments were slightly less than budget due to the decline in the market value of investments. The water fund also recorded net negative investment income of$33,000 for the year. Enterprise sales for water were$135,000 less than budget due to decreased water usage. Data shows the city pumped 84 million less gallons in 2013 than 2012. Water fund expenses were less than budget by$394,000. The money for the water distribution system was not needed in 2013 amounting to$200,000. Depreciation was less than budget by$45,000 and professional services were less than budget by$35,000. Operating transfers were budgeted at$120,000 and were paid from the general fund to the water fund and were used to reduce the outstanding loan balance in the water fund and recorded as interest income. Councilmember Bonar summarized 2013 by indicating we added 5%to our fund balance, delinquent taxes are less than in the past and the 28.3%fund balance is better than in the past and we are still striving for 35%. It is good to note in contributions from the general fund we are transferring fewer dollars than in the past. This is the second year the arena revenues exceeded expenses. The liquor stores achieved their goals due to good management principles and the guidance of the Liquor Operations Committee. Finance Director Hanson added the city's 11 Council Minutes(Regular) March 17,2014 Page 5 contribution to the Rambling River Center and the pool were both less than budgeted. Councilmember Bartholomay stated the work done with the CIP and between staff and Council is going in the right direction. b) RETAP Assessment Report for City Facilities—Parks and Recreation Parks and Recreation Director Distad noted one of the goals in Council's strategic plan was to have staff review energy options in all city buildings through the Minnesota Pollution Control Agency's Retired Engineers Technical Assistance Program(RETAP). An assessment was done for the Rambling River Center, Schmitz-Maki Arena and Fire Station 1. The assessment took five months and was very thorough. RETAP provided some short term and long term recommendations having to do with consuming electricity and addressing human behavior. Some of the recommendations can be completed at little or no cost. Other city buildings are much newer so an abbreviated analysis will be done on the utility bills for the remaining facilities. The city is not legally bound to implement the recommendations. Staff will implement the recommendations that have little or no cost to the city. The report did not include estimated costs on other recommendations. Staff will include these costs in the 2015 budget process. Staff requested the following actions be taken: - Accept the energy and waste assessment reports for the Rambling River Center, Schmitz-Maki Arena and Fire Station 1. - Approve the implementation of the cost saving recommendations that don't have any costs associated. - Direct staff to prepare requests beginning with the 2015 budget for improvements that will have the highest savings at the lowest cost. - Continue to have staff work with RETAP on completing an abbreviated energy and waste analysis for City Hall, Police Station,Fire Station 2 and the Maintenance Facility. Councilmember Bonar suggested working with local utilities on any rebates that may be available. Staff has been working with Dakota Electric on a rebate for lighting improvements at Fire Station 1. Councilmember Fogarty asked about Xcel's Saver Switch program. Staff explained air conditioning is put on a program so during peak times they will turn the air on and off and you receive a reduction in your utility bill. This program is in place in other city buildings. Councilmember Fogarty was not in favor of this idea. City Administrator McKnight thanked Parks and Recreation Director Distad for leading this project. Parks and Recreation Director Distad thanked his staff for compiling the information for the assessment. MOTION by Bartholomay, second by Fogarty to approve the above actions. APIF, MOTION CARRIED. 12 Council Minutes(Regular) March 17,2014 Page 6 11. UNFINISHED BUSINESS 12. NEW BUSINESS 13. COUNCIL ROUNDTABLE Councilmember Fogarty: Congratulated the girls U12 hockey team for winning the state championship. Farmington athletes have done a great job this year. Finance Director Hanson: Electronic payments are being accepted for utility bills. Inserts on this new payment option will be included in upcoming utility bills. Mayor Larson: Encouraged residents to shop local. Money spent here stays here. 14. ADJOURN MOTION by Fogarty, second by Bonar to adjourn at 7:37 p.m. APIF,MOTION CARRIED. Respectfully submitted, Cynthia Muller Executive Assistant 13