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HomeMy WebLinkAbout09.05.06 Council Minutes COUNCIL MINUTES PRE-MEETING SEPTEMBER 5, 2006 1. CALL TO ORDER The meeting was called to order by Acting Mayor Fogarty at 6:30 p.m. Members Present: Members Absent: Also Present: Fogarty, McKnight, Pritzlaff, Wilson Soderberg Andrea Poehler, City Attorney; Peter Herlofsky, City Administrator; Brian Lindquist, Interim Police Chief; Lee Mann, Director of Public Works/City Engineer; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant 2. APPROVE AGENDA City Attorney recommended tabling the Orderly Annexation Agreement until the next Council Meeting. City Administrator Herlofsky added item lOa) Mill and Overlay Project. MOTION by Pritzlaff, second by McKnight to approve the Agenda. APIF, MOTION CARRIED. 3. CITIZEN COMMENTS 4. COUNCIL REVIEW OF AGENDA Councilmember McKnight asked that all bids received be included in the Council packet. He asked about an item on the bills paying the City of Lakeville for patrol services. Interim Police Chief Lindquist noted that was the night of Police Chief Siebenaler's retirement and through a mutual aid agreement, police from Lakeville covered the City so officers could attend the retirement event. Councilmember McKnight was concerned with removing the Castle Rock Orderly Annexation Agreement from the agenda as this has been a very long process. City Attorney Poehler explained there have been recent changes to the statutes pertaining to annexations and there are a couple steps added to the process. An informational meeting between the City and Castle Rock should be held before the agreement is approved. 5. STAFF COMMENTS City Administrator Herlofsky noted Great River Energy will be clearing a 70 ft. wide easement through Rambling River Park tomorrow. Council Minutes (Pre-Meeting) September 5,2006 Page 2 6. ADJOURN MOTION by McKnight, second by Pritzlaffto adjourn at 6:36 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~7 .7 /~ . /' ,.. /-:.,. }-7/7 ~ ./ Cynthia Muller Executive Assistant COUNCIL MINUTES REGULAR SEPTEMBER 5, 2006 1. CALL TO ORDER The meeting was called to order by Acting Mayor Fogarty at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE Acting Mayor Fogarty led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Members Absent: Also Present: Audience: Fogarty, McKnight, Pritzlaff, Wilson Soderberg Andrea Poehler, City Attorney; Peter Herlofsky, City Administrator; Brian Lindquist, Interim Police Chief; Lee Mann, Director of Public Works/City Engineer; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant Bryce Olson, Lacelle Cordes, Fred Alstrom, Dave Steinke, Peggy Backes, Lois Meyer, Scott & Lauren Graham, Nick Schultz, Gary Pipho, Bill Leysen, Richard & Mary Swanson, Jerry & Denise Ristow 4. APPROVE AGENDA City Attorney Poehler pulled item lla) Castle Rock Orderly Annexation Agreement to hold an informational meeting prior to approval. City Administrator Herlofsky added item lOa) Mill and Overlay Project. MOTION by McKnight, second by Pritzlaffto approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) Introduce Promoted Employee - Public Works City Engineer Mann introduced Todd Reiten who was promoted to Assistant Director Public Works. 6. CITIZEN COMMENTS Ms. Lacelle Cordes, 1405 Lower Heritage Way, attended a Council Workshop last week and the audience was told by Acting Mayor Fogarty that there would be no citizen comments taken and that it was Council policy. Ms. Cordes served on the Council for eight years and she found no policy where citizen participation is unwelcome at a Council workshop. There is a policy from 1998 for participation at Council Meetings and public hearings. She suggested something be in writing as to what the policy and procedure is. Council Minutes (Regular) September 5, 2006 Page 2 7. CONSENT AGENDA MOTION by Pritzlaff, second by McKnight to approve the Consent Agenda as follows: a) Approved Council Minutes (8/21/06 Regular) b) Approved Appointment Recommendation Finance - Human Resources c) Approved Appointment Recommendation Finance - Human Resources d) Approved Appointment Recommendation Finance - Human Resources e) Acknowledged Resignation Finance - Human Resources f) Received Information School and Conference - Parks and Recreation g) Received Information Capital Outlay - Parks and Recreation h) Received Information Capital Outlay - Parks and Recreation i) Adopted RESOLUTION R99-06 Accepting Donation Rambling River Center- Parks and Recreation Acting Mayor Fogarty thanked the Kuyper family for their donation. Adopted RESOLUTION R100-06 Accepting Donation Youth Scholarship Program - Parks and Recreation Acting Mayor Fogarty thanked FY AA for this donation acknowledging the work of Robin Hanson. Approved GIS Contract - Community Development Adopted RESOLUTION R101-06 Approving 20Sth Street W Parking Restrictions - Engineering Received Information Rescheduled 2006 Mill and Overlay Project Assessment Hearing - Engineering Adopted RESOLUTION R102-06 Approving Vermillion Trail 1 st Addition Development Contract - Engineering 0) Approved School and Conference - Community Development p) Approved Bills APIF, MOTION CARRIED. j) n) k) 1) m) 8. PUBLIC HEARINGS a) 2006 Seal Coat Project Assessment Hearing - Engineering The 2006 seal coat project is complete. The total project cost is $145,700. The proposed assessment amount is $52.94 per residential equivalent unit. The total amount to be assessed to benefiting properties is $72,850. The City's portion of the project cost is $72,850 and will be funded through the Street Construction and Maintenance fund. Mr. Dave Kennedy, 312 Maple Street, received a letter advising him that Maple Street in front of his house would be seal coated between 3rd Street and 4th Street. His street was not seal coated and he asked what the status is and will he be assessed. City Engineer Mann replied there are streets in the seal coat area that are reviewed each spring to determine if they need to be seal coated. Each year streets are removed where seal coating is no longer appropriate. This is likely what happened, but staffwill verify it. In this case, residents along that portion of the street would not be assessed. Council Minutes (Regular) September 5, 2006 Page 3 MOTION by Pritzlaff, second by Wilson to close the public hearing. APIF, MOTION CARRIED. Councilmember Wilson asked when a street is removed from the schedule it is because it falls into a category where it might be in line for a different project. City Engineer Mann replied it does not fall off the books. It is eligible for some other type ofproject such as mill and overlay or full reconstruct in the future. Councilmember Pritzlaff noted the amount is 50% to the residents and 50% to the City. City Engineer Mann replied that is the City policy. MOTION by McKnight, second by Wilson to adopt RESOLUTION R103-06 adopting the assessment roll for the 2006 Seal Coat project. APIF, MOTION CARRIED. 9. AWARD OF CONTRACT 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) Mill and Overlay Project - Engineering The purpose of doing the mill and overlay project in the Sunnyside and Chateau Manor areas was to improve the road and the drainage. During the process, it was found the condition of the road was not as good as expected. The roads need to have 4" of asphalt put on so they last another 10 years. The original bid was $373,000. Ifthe project were completed based on the original assumptions the cost would be $464,000. Additional work needs to be done and the City has to determine how to pay for it. Staff proposed to freeze the cost at the original amount and find an alternative so residents can be charged the original amount. If Council is willing to keep the original cost, staff will research options on how to pay the additional amount. The other issue is the appearance of the new curb. In 2-3 years this should go away and will not be an issue. The new curb will have the same coloring as the old curb. To replace all the curb would raise the amount of the project to $747,208. Staff does not consider this structural. It is aesthetic. Staff does not anticipate this happening on too many other streets. Councilmember McKnight asked how this impacts previous assessments or future assessments for similar projects. He asked if the City had any liability from the past or in the future. City Attorney Poehler replied no. The City can take each project individually, but it is best if a policy is set. Councilmember Wilson noted there were contingency dollars for this project and asked if those have been exhausted. City Engineer Mann replied yes. Councilmember Wilson asked ifthere would be some type ofliability when a contractor is bidding on a project that they are assuming the risks might be greater than or less than the final project costs and would the contractor absorb the price. Council Minutes (Regular) September 5, 2006 Page 4 Staff replied the items the contractor is bidding on are laid out and they bid on the quantity. If additional items need to be included, the contractor is not liable. Councilmember Pritzlaffnoted the original cost was $373,000. At that point there was 27% engineering, administration, and legal fees. He asked ifthe 27% is included in the $747,000 to finish the project. Staff replied the original estimated cost for construction was the $373,000. Adding on the engineering, legal, and administration staff would have to refer to the feasibility report. There may also have been a 10% contingency on top of that. The numbers being presented do not include the 27%. Councilmember Pritzlaff stated when the original cost was $373,000, the 27% amounted to $98,000. So will the cost be 27% more than the $747,000. Staff replied no. Councilmember Pritzlaffwanted the $747,000 to be the last figure he saw for this project. Staff noted the 27% is not an engineering fee. It is a number used to estimate the engineering, legal and administration costs on all projects. On a large project these fees may come close to 27%. On a mill and overlay project, staff did not anticipate coming close to the 27%. The 27% is not a fee that is charged, it is an estimating device. The numbers in the documents are construction only. At the Council Workshop, residents asked several questions. Councilmember Pritzlaff did not agree with the Centennial Circle answer. It was not part of the project to change the height ofthe road. He did not agree that 8" of asphalt is stronger than 3" of asphalt and 6" of base. He would like the driveways dug out where this was done. He would also like the driveways done consistently. They should be cut at the natural cut. Mr. Dave Steinke, 1412 Lower Heritage Way, stated he is hearing them talking about basically reconstructing Lower Heritage Way. A couple years ago he had a sewer backup due to the 8" main in the street being plugged. At their last resort they managed to get it cleared. If the street is rebuilt he asked what that will do to the schedule to rebuild the street and sewer and water system in 10 years. If it is done now, will the City not dig up the street in 10 years for the reconstruction? He has a lot of concerns about the sewer and water system. It has affected how he uses the basement on a daily basis. He has been told the City's maintenance program will take care of it. Mr. Steinke stated the maintenance program did not take care of it in the first place. Why should he believe it will take care of it in the future? He has not received any information that anything different is being done to prevent this from happening again. If the street is reconstructed now, will the sewer lines be repaired where there is a known issue now? He asked who is accountable for saying that 70-80% of the curb will be replaced rather than 50%. It smells of a runaway project and not very good management. Several people need to be held accountable. His sewer backup was in February 2004 and he was told it was a solid mass oftree roots blocking the pipe. He found it hard to believe an 8" pipe could become a solid mass of tree roots in 3 years time. He seriously doubted the previous inspection done 3 years earlier. City Engineer Mann stated if there are one or two spots in the sewer line that need attention that Council Minutes (Regular) September 5, 2006 Page 5 can be done. Staff anticipates another 10 years out of the sewer and water lines before a reconstruction is needed. Mr. Scott Graham, 509 Lower Heritage Way, stated he is hearing a full reconstruct is not needed now. Isn't that what this project was about in the first place? We did not need a full reconstruct and now we do. He would rather deal with the problem now. The manhole cover is sticking up in front of his driveway. He did not understand how they got to this point. He sees two other blocks in the same neighborhood where the streets are in the same condition and they are not being redone. Why not? Does it go back to the rating system? Mr. Jeff Thelen, 616 Lower Heritage Way, asked ifthere has been additional engineering tests done since last Thursday to determine what the conditions of the streets are. The reason we are in the mess that we are is because there was no prior test borings done and we had no idea what we were getting into. Now we are recommending a cure, but have there been any test borings done to say we can remove the blacktop and subsoil and be done, or will we find out once we remove the subsoil that there is just garbage under that. Has there been any additional testing done? Mr. Thelen asked who is doing the engineering on this project? Is this the City's own engineer or are we relying on Bonestroo, the consulting engineer. He thought the person doing the work was the Assistant City Engineer. In his business he is the guy at the top ofthe ladder, so when something goes bad, he does not point at everyone else down there and say I don't take responsibility for this. Ifwe are hiring Bonestroo to be the lead engineer, they better start taking some responsibility for this, because they have left the City owing many, many hundreds of thousands of dollars because somebody screwed up. He sees this as an engineering fault, not just a little quirk that somebody 35 years ago built the road with only 1.5" of blacktop. This is an engineering disaster. Mr. Jerry Ristow, 516 Lower Heritage Way, stated he did a lot of research on this project. He asked staff for the mill and overlay projects and assured Council the road did not need construction. Will the residents end up paying $985 for a road that met City standards that never had to be done to begin with according to City standards? He asked Council at the time ifthey were familiar with the Pavement Management Study and they were, yet they tore the road up. Now the residents are sitting with a lot of money to be paid. He thanked Councilmember Pritzlaff for taking the initiative to come out and actually see it and also Councilmember McKnight. This is a serious problem and also for the City, we are all taxpayers. His taxes went up 26.5% from the City. He does not even want to pay the $985 because he feels they do not have to. This was ajob where the roads met the City standards and now they are torn up and the residents could be paying more. Who will pay the additional cost? Maybe there should be some engineering insurance for tearing up a road that did not need it. Lower Heritage Way was supposedly the presenter to all the roads. You could overlay Lower Heritage Way right now. There is nothing wrong with it. The other roads have the big potholes. Council Minutes (Regular) September 5,2006 Page 6 Councilmember McKnight asked City Administrator Herlofsky if with his proposal the assessment level would be based off of the $373,000 or $446,000. City Administrator Herlofsky stated the $373,000 was construction so whatever the actual engineering is, probably less than $100,000 would be the base for the assessment to residents. The full depth mill with class 5 saving the good areas and all new curb would cost $747,208. City Administrator Herlofsky added or the $609,708 which does not include the curb. Councilmember McKnight stated using the larger number staff is looking at making up from City funds the $374,000 difference. The project has to be done now as we have a limited time line. It is horrible. He agreed with the residents and he is very disappointed. The accountability has to take place right now and he needs some help financially. This is his pocketbook too. He would like to do the curb because it looks horrible with 60% replaced, but it is an expensive price tag at $140,000 to replace the curb. Councilmember Pritzlaff stated out of the $374,000 what portion would come from the storm water fund. City Administrator Herlofsky stated that would have to be discussed. No one is pleased with where this project is. It has to be finished and we have to do the work to determine the costs. This is putting the Council in a very difficult position. It is really not a reconstruction. The Hill Dee project is a total reconstruction and is considerably more. This is a fix-up, not a major reconstruction. The televising of the utilities show there is still some life left in them. The City has an investment made and we need to determine what the best value is that we can get. Councilmember Pritzlaffwould like to go back to engineering and see some help from their insurance. What if we take up the rest ofthe asphalt and the base is terrible? Are we going to put down the bare minimum and get by? City Engineer Mann stated the section staff is proposing, except in the areas where the pavement is still good and could be overlayed, is more of a section that was put there originally. Many of the sections did not have any gravel underneath at all. Staff is proposing a minimum of 6" of gravel under all areas, except for the roadway that has been milled and the pavement is still structurally sound. Councilmember Pritzlaff stated out ofthis whole project it sounds like there is a road, maybe more than one, that we will just overlay. City Engineer Mann replied there are areas on the map shown last Thursday where the pavement is still solid and could be overlayed and would last for 10-15 years. Acting Mayor Fogarty asked about the cost to do borings. Staff replied that could be done and costs would have to be determined. Councilmember McKnight asked about the time frame if Council said tonight to complete the project. City Engineer Mann replied the earliest the milling machine could come in to finish the milling would be September 11, 2006, and staffhas been guaranteed by September 18, 2006. If Council wants all the curb replaced, that would change the schedule. Councilmember McKnight asked if changing the curb meant ripping up the new curb and staring over or replacing the curb that has not been replaced? City Engineering Mann replied it would be replacing the Council Minutes (Regular) September 5,2006 Page 7 sections that have not been replaced. Councilmember McKnight asked what that does for the health of the curb. Staff did not feel that was a major issue as the grade is already set. City Engineer Mann commented on the subsoils and doing borings, it was the pavement conditions that led to the project. Staffhas not seen major heaving issues that would lead staffto believe there are other issues, as long as they get the street section in. Councilmember Pritzlaff asked if the timeline includes the contractor replacing 50% ofthe curb due to chipping from the mill and overlay machine and strictly at his cost. Staff explained that time frame is when the milling machine would be able to come back. As far as how long it will take after that, staffwill have to review that. As far as what sort of curb and valley gutter replacement needs to occur, staff will need to determine that. Councilmember Pritzlaff asked if it was in writing from the contractor that the driveways were incidental. Staff noted it is in the specification contract signed by the contractor. It did not make sense to Councilmember Pritzlaff that a contractor would be doing this amount of concrete driveways and not have a way to recoup the costs, and now replacing the curb that has been damaged. He was leery this would come back for more money. Councilmember Wilson stated he took from the information from engineering that the road was in the condition that it needed to be repaired, and that it deteriorated from the 2003 pavement study. He would not like to explore any of these options and then have a future Council look at this same type of situation and have residents come back saying why didn't you reconstruct the road at that time. The telescoping has suggested the piping looks good. It would be nice to know in addition to the dollars if there are any pro's and con's to looking at these options. Councilmember Fogarty stated she voted for the project and doing back to back assessments because she thought they were going to save the residents money in the long run. Given the information she has now, she would not have voted for the project, but we have to fix this. She wanted to make sure we fix it right so it does last the 10-15 years the residents have been told. She was adamant the individual assessments not be more than the residents were originally told. She was also struggling with the aesthetics of the curb. Staff needs direction, but she was uncomfortable they did not know where they would come up with $250,000 - $375,000. She did not know how to vote when she does not have the answer to that question. Councilmember McKnight stated if we are going to do something we need to do it right. That is the only reason he would support doing the curb. He does not want to be back here. He suggested approving the $747,000 unless the residents do not want it. Mr. Jeff Thelen stated the roads are 35 years old. The residents did not want the project. They wanted basic maintenance and fix the potholes. These roads have lasted with the base that is there for 35 years and it has been a good road with Council Minutes (Regular) September 5, 2006 Page 8 basic maintenance and probably under-maintained. He asked what would happen if they rip out the blacktop that is there on all the roads and put blacktop over the existing base. If they have lasted 35 years, why can't we expect 10-15 years with a 2-3" lift of blacktop. City Engineer Mann replied the recommendation is to put in more of the standard street section in order to ensure that through this process we end up with a road that will last 10-15 years. At this point we would not suggest putting in a section that is sub-standard. As far as aesthetics, Mr. Thelen felt $140,000 extra for a whiter curb was not worth it. It was his thinking from the beginning that paying a $985 assessment for whiter curbs and blacker streets was insane and Council voted for the project anyway. At this point Mr. Thelen cannot see forcing this expense down the throats ofthe remainder of the taxpayers. If there is anyone to look at for additional funds, we should look at the engineering. Ifthose roads have lasted 35 years with the existing base, rip up the blacktop, put down as good a base as you can and we will see in 10-15 years. He suggested putting the preservative over all the curbing. Ifthe project needs to be done up to standards, then the consulting engineer should be liable. Councilmember Wilson would rather spend the $446,000 as opposed to another $163,000 to get the full depth mill and another $300,000 to replace all the curbing. Ifwe go from $373,000 to $446,000 and the road deteriorates in 5 years we will have a lot of problems. City Engineer Mann replied the $446,000 is not an option. That is a basis for comparison as to what the additional curb costs and the additional milling costs. The $609,000 and the $747,000 are the only two options. Councilmember Wilson suggested the $609,000. Councilmember Pritzlaff asked on the $609,000 how do we know how much class 5 we will put down to come up with the $609,000 and when it says saving good areas, is that good areas of the subsoil or good areas of the asphalt. He had a problem going through this whole project and leaving one road milled especially when that is the road that made this project come to a head. City Engineer Mann replied based on an individual who has done many mill and overlays throughout his career, he indicated on that road the pavement is solid, it was milled appropriately, and to overlay it would last 10-15 years. As far as how do we know how much class 5 we need, we estimated it based on 6" which is City standard. Councilmember Pritzlaff stated he cannot wait to make a decision, we need to get the road done. We will look at where the accountability stands, but in the meantime the project needs to move forward. Reluctantly he recommended the $609,000 option. Mr. Jerry Ristow stated if they do not tear out the existing old curb, staff should at least ask the contractor to spray the old curb along with the new curb. Staff stated that has been attempted in other cities and it does not work very well. The cure that is sprayed on sticks to the new concrete as it is setting up and it does not stick to the old concrete. The cost is 25 cents a foot. Council Minutes (Regular) September 5, 2006 Page 9 Ms. Lacelle Cordes stated we will pay for it in the end anyway. If it is not a direct assessment our taxes will increase along with everyone else's. The unfortunate thing is this project should have never been done. It should have waited the 10-15 years the City is hoping to get out of the new road. We should have waited 7 years and redone it all. Councilmember Fogarty agreed the aesthetics is not worth it to the overall taxpayer. Over time it will look even. She was still struggling with not knowing where this money is coming from. She would like to see some soil borings done to make sure this is all we are getting into. MOTION by Pritzlaffto move forward with the $609,000 option, the full depth mill with class 5 and saving good areas. Councilmember Pritzlaff stated ifhe had the information then that he has now, he would not have voted for this project. He gave the residents his word that they will be checking into the engineering. Mr. Scott Graham, stated he heard Council does not want the residents to be assessed more. He agreed we need to move forward but is Council saying the residents will not be assessed more. Councilmember Fogarty stated that direction has been given to staff. They are looking at road and bridge funds or possibly storm sewer. Regarding soil borings, a full depth boring is 20-30 ft. and if you have a lot they are $500 each. In this case they will not be that deep and there will not be that many. Staff would have to come up with a cost, but there is evidence those roads have stayed put over the years. He did not recommend doing borings every 10ft. Councilmember Pritzlaff stated his motion would be without soil borings. Councilmember Wilson stated the $609,708 is an estimated amount. They are voting on an estimated amount which could go up or down and we are uncertain as to which dollar amounts are coming from which fund. He wanted the project done, but there is uncertainty as to what to do with the money. He asked to amend the motion to not to exceed $609,708 and ifit goes beyond that, the liability is not borne by taxpayers. Councilmember Fogarty asked what time frame it would take to nail down the finances. City Administrator Herlofsky stated at the next meeting staff will have recommendations on financing. Councilmember Fogarty suggested not adjourning the meeting and continuing it to the near future to obtain better numbers. Councilmember McKnight felt Council's financial concerns are more the liability of the additions. We work with estimates all the time. He does not have time to wait to order the project. They need to order it tonight and continue to work on who is paying for it. MOTION by Pritzlaff, second by McKnight to approve the $609,000 option for the full depth mill with class 5 and save the good areas, without doing soil borings. APIF, MOTION CARRIED. Council Minutes (Regular) September 5, 2006 Page 10 11. UNFINISHED BUSINESS a) Adopt Resolution - Castle Rock Orderly Annextion Agreement - Community Development This item was tabled until the September 18, 2006 Council Meeting. 12. NEWBUSINESS a) Adopt Resolution - 2007 Preliminary Tax Levy and Budget - Finance City Administrator Herlofsky presented the highlights of the 2007 budget. The preliminary levy is $8,176,780. This is a 22% adjustment over 2006. The general fund is increasing by 21 %. The City's tax base reflects an increase of26% over 2006 due to a TIP district being decertified. The gross tax capacity value has increased by 13.2%, so the net tax capacity value is 23.3%. General fund revenues are estimated at $8.7 million with 73% from property taxes. There is no levy limit in 2007. Expenditures in the general fund are proposed to increase by 12.6% over 2006. This includes capital outlay. Capital Outlay was not included in the 2006 budget. The Dakota County Communications dispatch will cost $250,000. In the 2007 budget there is $317,000 in capital outlay expenses. There is only one additional staff position going from a half-time to full-time communications specialist. Other requests were not included in the proposal. Revenues in the general fund have 73% coming from taxes, permits and licensing has been reduced by $100,000. The total proposed revenues are at 12.6% and this matches expenses. Increases in expenses are due to capital outlay and to update computers. As far as the tax rate, there is no change from 2006 and it remains at 43.34%. The growth in the community and the reduction in TIP has resulted in being able to maintain the rate and still increase the levy. The City's portion of taxes payable will increase approximately $60 on a median value home. Councilmember McKnight noted the summary talks about the County's estimated increase on a tax base of 13%. He would like to have that broken down between new growth and value increases. He does not believe in his house being a higher value being considered as growth. Councilmember McKnight asked what kind of support is included for Rambling River Days. City Administrator Herlofsky replied the committee has not requested any dollar amount. There is $2500 left over from prior years in the Parks and Recreation budget. The biggest issue addressed by the committee is that the City provides staff assistance during Rambling River Days to alleviate some of the work done by volunteers. Staffwill determine which staff members would be most appropriate. Councilmember McKnight stated his personal request is also financial and to continue to work with that group. He noted the building permit revenue has been reduced from $825,000 in 2006 to $756,250 in 2007. He asked what the 2007 number is based on. City Administrator Herlofsky stated he would have to check on the actual number of permits. Councilmember McKnight wants it based on a realistic number. We cannot continue to miss that number. In the budget work session he said he could support a conservative levy increase. The first being replenishing the fund balance and starting a plan to do that. This budget does not do that which is a huge concern to him. The budget goes up which means the percentage Council Minutes (Regular) September 5, 2006 Page 11 of fund balance to budget goes down. He cannot support this type of levy increase without starting to deal with the fund balance. This is his first priority. City Administrator Herlofsky replied the first step is to have a balanced budget. Staff could spend 97% of our expenditures and if we have 100% of the revenues, we will pick up $250,000. That has been the issue the last couple years with building permits not matching up. You end up with fund balance surpluses at the end of the year by managing budget expenditures throughout the year. Councilmember McKnight agreed but in the last two years we have had an emergency and we have not had a realistic budget number in a couple places that have caused the end of the year balance to be negative. Councilmember Wilson noted in the 2005 auditor's report two goals the Council needs to work on is the fund balance and the investment policy. In 2005 there was an 18% reserve, in 2006 it was 16.6%, in 2007 proposed is 14.6%. We are going the wrong direction. We have significant projects we are moving forward on which were started with the previous Council, one being the Fire Station which was completed and City Hall which will be started next year. His concern as it relates to the fund balance is the City's bond rating and the adverse affects that happen in the marketplace with such a low fund balance. The 43.34% for the tax capacity rate does not address the competitiveness of Farmington relative to our neighbors. He was not comfortable with the initial proposal. Councilmember Pritzlaff stated the fund balance is a priority. He asked what the previous number was for building permits. Council stated it was 350 or 300. He was concerned that the City will not hit those projections. He felt the projection of $756,000 needed to be lowered. He asked if we are overstaffed and can we be more efficient and have more done with less people. We need to look at what more we can do to drop the amount of money we need. Councilmember McKnight does not want these numbers as a basis for the truth- in-taxation statements that the residents would receive. He cannot support this kind of increase. This has to be to the County by September 15,2006. He suggested continuing the meeting to allow staff a few more days to work on this number. Councilmember Fogarty stated she cannot approve this, as she was not comfortable with the numbers. She was very concerned about the fund balance. We have to have a plan and she did not feel like there was a plan included in the budget. She was concerned about building permits, as three years in a row they have come up short. She felt that number needed to be cut further. She suggested continuing this meeting to work on the numbers. Councilmember McKnight gave staff credit for the work done so far. MOTION by McKnight, second by Pritzlaffto continue this item to September 14,2006 at 5:30 p.m. APIF, MOTION CARRIED. Council Minutes (Regular) September 5, 2006 Page 12 13. COUNCIL ROUNDTABLE Interim Police Chief Lindquist: The City received a letter from a resident who is a parent of seven children and misplaced one ofthem. Officer Sundvall helped the mother search for the missing child. The parent was extremely happy the officer took his time to help her. 14. ADJOURN MOTION by McKnight, second by Pritzlaffto adjourn at 8:45 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~ >>7AL Cynthia Muller Executive Assistant