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HomeMy WebLinkAbout09.14.20 Work Session Packet CITY OF Meeting Location: FARMINGTONFarmington City Hall �■� 430 Third Street Farmington, MN 55024 CITY COUNCIL WORK SESSION MEETING AGENDA September 14, 2020 6:00 PM 1. CALL TO ORDER 2. APPROVE AGENDA 3. DISCUSSION ITEMS (a) 2021 Draft General Fund Budget(20 Minutes) (b) Assessment Hearing for the Reassessment of the County Road 50 Water and Sewer Utilities (20 Minutes) (c) Vermillion River Crossings Discussion (10 Minutes) (d) City Owned Property Discussion (5 Minutes) (e) Ice Update(10 Minutes) (f) DCC Funding Task Force Recommendation (10 Minutes) 4. CITY ADMINISTRATOR UPDATE 5. ADJOURN CITY OF 0 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 ®� O Farmington M N.gov TO: Mayor, Councilmembers and City Administrator FROM: Teah Malecha, Finance Director SUBJECT: 2021 Draft General Fund Budget(20 Minutes) DATE: September 14, 2020 INTRODUCTION This work session will provide an update on the General Fund budget discussed at the July 13th and August 10th work sessions. The preliminary General Fund budget and tax levy will be adopted at the September 21, 2020 city council meeting. Attached for your review are the summary pages of the 2021 draft General Fund and Debt Service Funds budgets after revisions. DISCUSSION Staff began working on the draft budgets in April. The first draft of the General Fund budget represented a 29.12 percent increase over 2020. An increase of that size is not feasible for the residents and businesses within Farmington. Department heads have reviewed and revised their respective department budgets multiple times. City Administrator McKnight and I have done the same with the department budgets and the operating transfers budget. The changes reduced the levy increase to 12.85 percent,then to 6 percent. Further reductions have been made to bring the levy increase down to the 4.9 percent. General Fund At the August 10, 2020 work session, staff presented city council with a 6 percent levy. It has since been decreased to 4.9 percent as shown below: 2020 Budget 2021 Proposed Increase Budget (Decrease) Revenues $3,411,161 $3,298,344 (3.31)% Expenditures 13,642,352 13,832,464 1.39% Fiscal Disparities 2,294,024 2,277,659 (0.71)% General Fund Levy 7,937,167 8,256,461 4.02% Debt Levy 2,805,387 3,012,093 7.37% Net Tax Levy $10,742,554 $11,268,554 4.90% Many changes have been made to reduce the levy increase for 2021. The city's Local Government Aid (LGA) and Fiscal Disparities funds have been reduced by$228,800 and $16,365, respectively, requiring further reductions. Below are numerous changes that have been made, but the list is not all-inclusive. Revenue increases: • A portion of the franchise fee revenue that is transferred to the General Fund has been increased $25,000 to$145,000 for 2021. • The building permit revenue has been increased $62,190. • Utility and Other permit revenue was increased $4,000. • I nvestment income for the General Fund was increased $5,000. • Fire revenue was increased $4,325. • A transfer of$25,000 from the liquor proceeds to the General Fund was added. Historically, the transfer was only from the liquor proceeds to the Park Improvement Fund. Expenditure Decreases: • EDA funding was decreased from $70,000 to$40,000. • Fleet replacement has been reduced from $380,000 to$143,989 for police vehicles only. No other vehicle replacements are accounted for. • Sealcoat was reduced $600,000 for the property tax levy. An additional$200,000 will come from liquor store proceeds resulting in a net reduction of$400,000. • The extension of 202nd Street into Farmington from Lakeville at the north end of Farmington High School was removed resulting in a $200,000 decrease to the property tax levy. • Downtown sidewalk replacement of$100,000 was removed. • The first year debt payment for the Highway 3 backage road has been moved to 2022. • Trail maintenance was decreased from $80,000 to$50,000. • The transfer to the Arena Capital Project fund has been removed for 2021. • The City Council budget was reduced $2,100 for legal expenses and mileage. • The Snow Removal budget has been reduced $10,000 in street materials,fuel, equipment supplies and parts, and sod damage repair. • The salary for Natural Resources has been reduced $10,000. • The Police budget has been reduced $10,000 in fuel, budgeted overtime, and training. • The Fire budget has been reduced $10,000 in fuel, training, utility costs for the fire stations, and uniforms. • The Engineering budget has been reduced by$1,500 for fuel, professional services, and legal expenses. • The Municipal Services budget has been reduced $5,500 for spray patch and fuel. • Administration has been reduced by$3,000 for training, city-wide office supplies, and equipment parts and supplies. • Elections equipment maintenance has been reduced $1,000. • Building maintenance has been reduced $85,172. • The transfer to property insurance has been reduced $14,024. Expenses are supported by the transfers into the fund from the tax levy. The fund can likely support itself with this reduction for one year. The RFP completed by Human Resources for staff health insurance was successful resulting in over$100,000 savings that impacts the General Fund. If the revenues and expenditures do not meet budget,the General Fund fund balance must be used to fund the difference. The General Fund fund balance at the end of 2019 was 42.2 percent. City policy requires a fund balance between 40 and 50 percent. Due to COVI D-19 it is difficult to predict the fund balance for the end of 2020. The General Fund budget summary and operating transfers are included for your review. Debt Service Funds Levy The Debt Service Fund budget provides funding for scheduled debt principle and interest repayment obligations, as well as ongoing trustee, assessments, arbitrage, and post-issuance compliance fees related to the city's debt. The 2021 debt levy is $206,706 higher than 2020. Ladder One accounts for $268,013 of the debt levy. The Ladder One costs are new expenditures for the 2021 budget. The city's debt shows a decline starting in 2022 in the Financial Plan attached. The preliminary General Fund budget and tax levy will be adopted at your September 21, 2020 city council meeting. Once the preliminary levy is adopted it can be decreased, but it cannot be increased. BUDGET IMPACT All information is related to the development of the 2021 city budget and tax levy. ACTION REQUESTED Discuss the preliminary tax levy and ask questions of the proposed budgets. Provide staff with direction on any needed revisions. ATTACHMENTS: Type Description D Backup Material 2021 General Fund Budget Summary D Backup Material 2021 General Fund Budget Revenues D Backup Material 2021 General Fund Budget Expenditures D Backup Material 2021 Operating Transfers D Backup Material 2021 Debt Service Funds City of Farmington Budget and Tax Levy 2020 Budget, 2021 Proposed and 2022 Proposed 2020 2021 Budget% 2022 Budget Company Budget Proposed Change Proposed Change% Non-Property Tax Revenues Licenses and Permits 473,115 517,076 9.29% 453,600 (12.28)% Intergovernmental Revenue 922,294 667,912' (27.58)%' 663,587 (0.65)%', Charge for Service 565,802 576,197 1.84% 589,285 2.27% Fines and Forfeitures 49,000 49,000 0.00% 49,000 0.00%i Investment Income 38,800' 29,100' (25.00)% 15,400 (47.08)% Miscellaneous 54,580 79,370 45.42% 53,170 (33.01)%! Transfers In 1,307,570' 1,379,689' 5.52% 1,408,874 2.12% Total Revenues 3,411,161 3,298,344 (3.31)%' 3,232,916 (1.98)%' Expenditures Administration 907,162' 889,300 (1.97)% 1,087,554 22.29% Human Resource 349,226 361,658 3.56% 391,509 8.25% Dakota Broadband - 24,489 37,500 53.13% 40,500 8.00%' Finance and Risk Mgmt 778,889 776,287 (0.33)% 827,688 6.62%' Police 4,677,813 4,853,870 3.76% 5,321,825 9.64% Fire - - 1,445,410 1,441,226 (0.29)% 1,573,4731 9.18%°' Community Development 1,014,867 1,007,849 (0.69)% 1,103,540 9.49%' Engineering 794,635 813,895 2.42% 889,172 9.25%' Municipal Services 1,439,078 1,511,187' 5.01%' 1,630,813 7.92%' Parks and Recreation 1,278,576 1,317,341 3.03% 1,454,246 10.39%' Transfers Out 932,207 822,351 (11.78)% 3,381,534 311.20% Total Expenditures 13,642,352 13,832,464: 1.39%' 17,701,854 27.97%' Revenues Over(Under)Expenditures (10,231,191)', (10,534,120) 2.96%' (14,468,938) 37.35%' Fiscal Disparities 2,294,024 2,277,659 (0.71)% 2,277,659 0.00%' General Fund Levy 7,937,167 8,256,461 4.02%' 12,191,279 47.66% Debt Levy Bonds 2,222,950 2,444,840 9.98% 2,099,788 (14.11)%', 2005C Loan Repay-Storm Water Tr Adv 166,000 275,000 65.66% 166,000 (39.64)% 2010A Loan Repay-Storm Water Tr Adv 400,000 292,253' (26.94)% 0 (100.00)% 201 OD Loan Repay-Storm Water Tr Adv 16,437 0 (100.00)% Total Debt Levy 2,805,387 3,012,093' 7.37% 2,265,788 (24.78)%' Use of Fund Balance to Lower Debt Levy 0 Net Debt Levy 2,805,387 3,012,093' 7.37% 2,265,788 (24.78)%' Farmington Net Tax Levy 10,742,554' 11,268,554'' 4.90%'' 14,457,067 28.30% General Fund Detailed Non-Property Tax Revenue Summary 2019 Budget, 2020 Budget, 2021 Proposed and 2022 Proposed Object 2019 2020 2021 2022 Account Budget Budget Proposed Proposed LIQUOR LICENSES 42,000 41,70040,000 37,000 BEER&WINE LICENSES 1,750 1,100 1,100 850' CLUB LICENSES 500 500 500 500 MASSAGE LICENSE 150 350 300 100 GAMBLING LICENSE/PERMIT 250' 450 250 250' OTHER LICENSE&PERMIT 1,700 1,900 1,700 1,500 ANIMAL LICENSES 4,000 4,080 2,500 3,000' Licenses 50,350' 50,080 46,350 43,200 BUILDING PERMITS 272,400 330,000 380,876 325,000' REINSPECTION FEES 1,000 1,000' 1,500 1,000 CODE ENFORCEMENT FEES 1,000 2,600 1,500 1,500 PLUMBING&HEATING PERMITS35,000 52,500 50,000 50,000 SEWER PERMITS _ 5,000 5,000 0 0_ ELECTRIC PERMITS 18,000' 16,000 16,000 16,000' ISTS PERMITS 250 - 300 300 300' UTILITY PERMITS 6,130 6,420 10,500 7,500 SIGN PERMITS 570 790 800 800 BURNING PERMITS 1,710 1,425 1,250 1,300 OTHER PERMITS _ 5,000 7,000 8,000 7,000 Permits 346,060' 423,035 470,726' 410,400 Licenses and Permits 396,410 473,115 517,076, 453,600; FEDERAL GRANT 0 5,000 5,000 5,000 FEDERAL AID LOCAL GOVERNMENT AID 314,725 328,374' 105,587 105,587' MSA MAINTENANCE 215,000 215,000 184,000 184,000'' POLICE AID 196,000 198,500 198,000' 198,0001 POST TRAINING 15,160 15,160 15,160 15,160 FIRE AID 137,910' 137,910 142,490 142,490 STATE GRANT 0 9,000 MARKET VALUE CREDIT 0 0 COUNTY MISCELLANEOUS 13,470 13,350 13,350 13,350 Intergovernmental 892,265 922,294 663,587 663,587` CUSTOMER SERVICE TAXABLE CUSTOMER SERVICES NONTAXABLE 250 200 210 210 ZONING&SUBDIVISION FEES 2,000' 3,050 2,600, 2,600 ADMINISTRATION FEES-PROJECTS 4,000 4,500 4,000 4,000 FIRE CHARGES 225,780 237,172: 239,227 260,940' POLICE SERVICE CHARGES 77,000 78,030 78,810 80,385 ENGINEERING FEES-PROJECTS _ EROSION &SEDIMENT CONTROL 9,900! 8,100 8,100 8,100 RECREATION FEES-GENERAL 90,000' 85,000 75,000 85,000' RECREATION FEES-SENIOR CTR 18,000' 19,000' 15,000' 18,000 MEMBERSHIP FEES-SENIOR CTR 9,000 8,000 6,000 7,500' MOBILE MEALS-SENIOR CTR ADVERTISING 750 950 750' 750' ADVERTISING 2,200 1,8001 1,500 1,800 FRANCHISE FEE 120,000 120,000 145,000 120,000 Charges For Services 558,880 565,802 576,197 589,285: COURT FINES 42,000 49,000 49,000 49,000' Paae 1 of General Fund Detailed Non-Property Tax Revenue Summary 2019 Budget, 2020 Budget, 2021 Proposed and 2022 Proposed Object 2019 2020 2021 2022 Account Budget Budget Proposed Proposed CODE VIOLATIONS&ADMIN FINES 6 0 Fines&Forfeitures 42,000 49,000 49,000 49,000 INTEREST ON INVESTMENTS 21,900 38,800 29,100 15,400' GAIN/LOSS INVEST MKT VALUE Investment Income 21,900' 38,800 29,100 15,400 MISCELLANEOUS REVENUE 5,000 1,500, 31,700 1,500 CASH OVER&SHORT RENTAL INCOME-RRC 22,000 20,880 18,000 20,000' RENTAL INCOME - 16,775 31,700 29,670 31,670' DONATIONS _ 0 500 DAKOTA BROADBAND HUMAN RESOURCE 0 Misc Revenue 43,775 54,580 79,370 53,170 OPERATING TRANSFERS 1,244,256 1,307,570 1,379,689 1,408,874' Transfers In 1,244,256 1,307,570 1,379,689 1,408,874 Total Revenues $3,199,486 $3,411,161 $3,294,019 $3,232,916 Paae 2 of General Fund Expenditure Detail Summary 2019 Budget, 2020 Budget 2021 Proposed and 2022 Proposed Company 2019 2020 2021 2022 Budget Budget Proposed Proposed Expenditures _ k Administration Legislative(1005) 96,447 87,772 87,392 89,642 Administration(1010) 295,214 302,068 308,097 454,221 Elections(1013) 35,867 44,124 9,351 47,454 Communications(1014) 99,650 108,537 114,900 124,057 City Hall(1015) 354,144 364,661 369,560 372,180 Administration 881,322 907,162 889,300 1,087,554 Human Resources 336,447 349,226 361,658 391,509 Human Resource(1011) 336,447 349,226 361,658 391,509'' Human Resources 336,447 349,226 361,658 391,509' Dakota Broadband 24,489 37,500 40,500 Dakota Broadband 24,489' 37,500 40,500' Dakota Broadbantl: , , 24;489 37,500 40;500; Finance and Risk Management Finance(1021) 569,926 609,079 603,097 651,8481 Risk Management(1022) 169,810 169,810 173,190 175,840' Finance and Risk Management 739,736 778,889 776,287 827,688 Police Police Administration(1050) 873,339 1,235,377 1,271,088 1,426,458 Patrol Services(1051) 2,738,524 2,538,727 2,639,752 2,880,295 Investigations(1052) 856,544 892,059 926,430 998,472' Emergency Management(1054) 11,650 11,650 16,600 16,600' Police 4,480,057 4,677,813 4,853,870 5,321,825' Fire Fire(1060) 1,267,885 1,445,410 1,441,226 1,573,473 Fire 1,267,885 1,445,410 1,441,226 1,573,473 Community Development 908,890 1,014,867 1,007,849' 1,103,540 Planning(1030) 521,062 591,133 567,681 629,388' Building Inspection(1031) 387,828 423,734 440,168 474,152 Community Development 908,890 1,014,867 1,007,849 1,103,540` Engineering _ Engineering(1070) 624,587 665,173' 694,134 749,555 Natural Resources(1076) 122,583 129,462 119,761 139,617. Engineering 747,170 794,635 813,895 889,172` Municipal Services Streets(1072) 1,146,492' 1,197,200 1,268,832' 1,367,910 Snow Removal(1073) 227,064 241,878 242,355 262,903' Municipal Services 1,373,556 1,439,078 1,511,187 9,630,813' Parks and Recreation Park Maintenance(1090) 671,357 700,111 733,607 780,897 Rambling River Center(1093) 182,287 190,822 185,054 218,149' Park&Rec Admin(1094) 271,145' 287,925 304,383 347,473 Recreation Programs(1095) 106,804 99,718 94,297 107,727 Parks and Recreation 1,231,593 1,278,576 11317,341 11454,246 Transfers Out 1,041,138.00 932,207.00 822,351.00 3,381,534.00 Transfers Out 1,041,138.00 932,207.00 822,351.00 . 3,381,534.00 Total Expenditures 13,007,794 13,642,352 13,832,464 17,701,854 B C D E F H M N O P Q R S T U 1 2021 OPERATING TRANSFERS 2 TRANSFERS IN (5205) General Capital General General General Equipment Capital Capital Storm Capital Fund Equip Fund Equip Fund General Water Arena Cap Equip Fund (Police (Police (Fire 3 Fund EDA Park Imp Trunk Pro'Fd Vehicles Vehicles) Equi Equip) Sealcoat Street Main Trail Mair 51 Fund 1000 2000 2300 4400 4503 5600 5600.5 5600.5 5600.6 5701 5711 5721 6 572,775 1000 Tax Levy _ - 75,000 91,545 331,208 20,00( 7 105,587 1000LGA 40,000 - 30,00( 8 _ 1000 Future Street CIP Debt _ 9 1000 Future Street CIP Cash _ 10 143,989 1000 Future Vehicle CIP Cash 143,989 11 _ 1000 Projects CIP Cash _ 12 _ 1000 Projects CIP Debt _ 13 - 2000 EDA 14 O _ 2500 Arena r 15 6,900 3094-2016A 6,900 16 F 292,253 3097-2010A 292,253 17 = - 3099-2011 A 18 O 275,000 3130-2005C 275,000 19 U _ 3136-20166 20 W _ 3137-2016C 21 Uj 3300-2010D LL 22 (n _ 3139-2020A 23 Z 340,410 6100 Admin(GF) 63,910 75,000 200,000 - 24 25,000 6100 25,000 25 89,411 6202 Admin(GF) 86,911 26 243,692 6202 HR 236,880 27 87,411 6302 Admin(GF) 86,911 28 61,848 6302 HR 61,848 29 86,911 6402 Admin(GF) 86,911 30 315,665 6402 HR 308,853 31 86,911 6502 Admin(GF) 86,911 32 357,126 6502 HR 335,554 33 3,090,889 1,379,689 40,000 75,000 574,153 - 143,989 75,000 91,545 531,208 - 50,00( 34 310,534 Cell:F6 Comment:Teah Malecha: Reduced$10k 7/13/2020 Cell:N6 Comment:Teah Malecha: Removed$1,024 8/31/2020 Cell:S6 Comment:Teah Malecha: Reduced$400k 6/30/2020,moved$200k to liquor proceeds 7/13/20 Cell:U6 Comment:Teah Malecha: Reduced$40k 6/30/2020,reduced$30k 8/4/2020 Cell:W6 Comment:Teah Malecha: Reduce$17,172 8/31/2020 Cell:Z6 Comment:Teah Malecha: Employer portion of T Daus's insurance premium Cell:AA6 Comment:Teah Malecha: Budgeted transfer for insurance deductible.Reduced by$10k 6/30/2020,Reduced$4,024 and moved to LGA. Cell:F7 Comment:Teah Malecha: Reduced$20k 7/13/2020 Cell:N7 Comment:Teah Malecha: Moved $3k moved to Township rd maint,$5,976 to prop ins 8/31/2020 Cell:S7 Comment:Teah Malecha: moved$156,208 to tax levy due to LGA cut Cell:W7 Comment:Teah Malecha: Reduced$60k to$82,958 6/30/2020.Moved$67,172 to tax levy due to LGA cut Cell:T8 Comment:Teah Malecha: debt payment for backage road-Moved$126k to 2022 Cell:T9 Comment:Teah Malecha: moved$350k to 2022,update to$300k per David 6/17/2020 202nd St.Move$100k to liquor store proceeds 6/30/2020,removed$200k per council 7/13 Cell:010 Comment:Teah Malecha: Reduced$100k 6/30/2020. Reduced to PD only per 4/20 CIP 8/4/2020 Represents annual debt service for 2010A which is used to repay Storm Water Trunk interfund loan. Actually doesn't flow through operating transfers,but is shown that way for budget purposes. Final pmt 2021 Cell:M18 Comment:Teah Malecha: Represents annual debt service for 2005C which is used to repay Storm Water Trunk interfund loan. Actually doesn't flow through operating transfers,but is shown that way for budget purposes. Cell:E23 Comment:Teah Malecha: Approx 4%increase rounded to be evenly divided by 12(i.e.monthly transfers) Cell:T23 Comment:Teah Malecha: $100k DT sidewalks moved from projects CIP cash&$100k from Future Street CIP cash FHS 6/30/2020,moved to sealcoat 7/13/20 Cell:AA23 Comment:Teah Malecha: Budgeted transfer for insurance deductible-Insurance Deductible Spreadsheet Cell:E25 Comment:Teah Malecha: Approx 4%increase rounded to be evenly divided by 12(i.e.monthly transfers) Cell:AA25 Comment:Teah Malecha: Budgeted transfer for insurance deductible-Insurance Deductible Spreadsheet Cell:E26 Comment:Teah Malecha: Amounts per worksheet in @H Drive-Budget 2021 Updated 2020 Salary Distribution Cell:Y26 Comment:Teah Malecha: Amounts per worksheet in @H Drive-Budget 2021 Updated 2020 Salary Distribution Cell:E27 Comment:Teah Malecha: Approx 4%increase rounded to be evenly divided by 12(i.e.monthly transfers) Cell:AA27 Comment:Teah Malecha: Budgeted transfer for insurance deductible-Insurance Deductible Spreadsheet Cell:E28 Comment:Teah Malecha: Amounts per worksheet in @H Drive-Budget 2021 Updated 2020 Salary Distribution Cell:E29 Comment:Teah Malecha: Approx 4%increase rounded to be evenly divided by 12(i.e.monthly transfers) Cell:E30 Comment:Teah Malecha: Amounts per worksheet in @H Drive-Budget 2021 Updated 2020 Salary Distribution Cell:Y30 Comment:Teah Malecha: 2021 Proposed Debt Service Object Refunding Ash St., Refunding of Elm City Hall&First St Account Fire Station 2 Police Station Spruce St.,&Hill 195th Street St.,195th St.,& Garage Westview Area Ladder One Dee Walnut St 4000-REVENUE AND EXPENDITU 4001 -REVENUES 4011 -CURRENT PROPERTY TA 275,000 292,253 443,000 293,500 574,327 635,000' 231,000 268,013 Property Taxes 275,000 292,253 443,000 293,500 574,327 635,000 231,000 268,013 4110-SPEC ASSESS CURRENT 58,926 286,149 Special Assessments 58,926 286,149 4955-INTEREST ON INVESTM 3,100 1,400 5,300' 300 500 Investment Income 3,100 1,400 5,300 300 500 Total Revenues $275,000 $292,253 $505,026 $294,900 $865,776 $635,300 $231,500 $268,013 6001 -EXPENDITURES 7110-DEBT PRINCIPAL 720,000 210,000 540,000 505,000' 180,000 7120-DEBT INTEREST 17,600' 55,450 31,900 116,275 34,500 80,113 7130-FISCAL AGENT FEES 2,950 2,950 5,915 2,950' 2,950 2,950 7140-LEGAL&FISCAL FEES 1,100' 1,100' Debt Service 741,650 268,400 578,915 624,225 217,450 83,063 Total Exp 741,650 268,400 578,915 624,225 217,450 83,063 7310-OPERATING TRANSFERS 275,000 292,253 6,900 Transfers Out 275,000 292,253' 6,900 Other Financing Sources (275,000) (292,253) (6,900) Net Change in Fund Balance $0 $0 ($236,624) $26,500 $279,961 $11,075 $14,050 $184,950 CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 OFarmington M N.gov TO: Mayor, Councilmembers and City Administrator FROM: Katy Gehler, Public Works Director/City Engineer SUBJECT: Assessment Hearing for the Reassessment of the County Road 50 Water and Sewer Utilities (20 Minutes) DATE: September 14, 2020 INTRODUCTION The city council tabled any discussion on the proposed reassessment on the Peterson property at the September 8,2020 city council meeting. Councilmember Hoyt wanted to discuss other options with the full city council before any decisions were made. I have attached an email exchange between the city attorney, public works director and myself on this issue to help give you a head start on any discussions. Below is the packet agenda item from the city council meeting. David McKnight I n the late 1980's the city completed two projects to extend water and sanitary sewer trunk infrastructure along CR 50 from Akin Road to Pilot Knob. These trunk utilities helped to facilitate the development of the industrial park and provide future service to the surrounding areas. The cost of the improvement was assessed to benefitting properties. Areas within the first phase of the l ndustrial Park and Northern Natural Gas were assessed as well as agricultural areas south of CR 50. Given the green acres status of the southern properties, the assessments were deferred until development occurred while continuing to accrue interest at a rate over 8%. There is one parcel from the original assessment rolls that is continuing to accrue interest on a deferred basis. This parcel is 80-acres located west of the Vermillion River Crossings development and was assessed a total of$192,000 for both projects. Given the time that has passed and the continued accrual of interest,the current amount of the assessment, principal and interest, is $698,577.31 that will be due upon sale or development of the parcel.This amount has raised concerns when put in context with other fees that are charged with development. For this 80-acre parcel, area charges for sewer and water that are paid at the time of platting would be on the order of$500,000. Combined with the current assessment,the fees are cost prohibitive. At a work session last summer staff discussed how the city has funded trunk utility projects in the past that included the use of an area-wide assessment whereas today the city incorporates the cost of these in availability charges (SAC and WAC fees) collected as part of the development contract. Options were discussed to address the large assessments on this parcel that included adjustment to the current assessment through the 429 assessment process, waiver of development fees or a combination thereof. General consensus was to reassess to waive the previous assessment and collect the standard development fees as development occurs. This option relieves the significant financial burden on the parcel at the time of development, allows the city to collect amounts needed to support the development of these parcels while managing challenges that can be associated with assessments and providing consistency in how the city completes development. DISCUSSION To complete the reassessment process,the city must follow Minnesota State Statute 429 which details the steps cities must follow when utilizing assessments. In this case,the city must call for an assessment hearing (public hearing on the assessment amount) by resolution, provide a 14-day notice,and hold the assessment hearing before acting on the proposed assessment. The City Council adopted Resolution 33-20 on August 3,2020 calling for the assessment hearing on September 8, 2020. Notice was provided to the property owner on August 12,2020 and it was published in the city's official paper on August 21,2020 meeting the public notice requirements. BUDGET IMPACT The city has not planned or programmed the use of the assessments due to the uncertainty of the timing of deferment. Any amounts due in debt payments from the original project have long been satisfied. The city will collect development fees as part of the future development of the property. ACTION REQUESTED The City Council is asked to hold the public hearing and consider adoption of the attached resolution reassessing the costs associated with the County Road 50 trunk water and sewer. ATTACHMENTS: Type Description D Resolution Assessment Resolution D Cover Memo City Staff Discussion RESOLUTION NO. A RESOLUTION ADOPTING THE REASSESSMENT OF THE COUNTY ROAD 50 WATER AND SEWER UTILITIES Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Farmington was held at City Hall of said City on the 8th day of September, 2020 at 7:00 PM. The following members were present: The following members were absent: Member Member introduced and seconded the following resolution: WHEREAS, pursuant to proper notice duly given as required by law, the council has met and heard and passed upon all objections to the proposed reassessment of the assessments previously levied on properties in conjunction with Improvements No.82-5 and 89-5,constructing trunk utilities under County Road 50 between Akin Road and Pilot Knob Road. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF FARMINGTON, MINNESOTA: 1. The proposed reassessment for the following parcel: Property ID: 14-03600-33-010 Owner: DONALD L PETERSON FAMILY LTD PTNSHP Owner Address: 14194 GARLAND AVE APPLE VALLEY MN 55124 Reassessment Amount: $0.00 is hereby accepted and shall constitute the special assessment against the land named therein, and each tract of land included is hereby found to be benefited by the proposed improvement in the amount of the assessment levied against it. 2. Such assessment shall be payable in equal annual installments extending over a period of one year,the first of the installments to be payable on or before the first Monday in January 2020,and shall bear interest at the rate of 0 percent per annum from the date of the adoption of this assessment resolution. To the first installment shall be added interest on the entire assessment from the date of this resolution until December 31, 2020. To each subsequent installment, when due, shall be added interest for one year on all unpaid installments. 3. The owner of any property so assessed may, at anytime prior to certification of the assessment to the county auditor, pay the whole of the assessment on such property, with interest accrued to the date of payment,to the city treasurer,except that no interest shall be charged if the entire assessment is paid within 30 days from the adoption of this resolution; and he/she may, at any time thereafter, pay to the city treasurer the entire amount of the assessment remaining unpaid,with interest accrued to December 31 of the year in which such payment is made.Such payment must be made before November 15 or interest will be charged through December 31 of the next succeeding year. 4. The clerk shall forthwith transmit a certified duplicate of this assessment to the county auditor to be extended on the property tax lists of the county. Such assessments shall be collected and paid over in the same manner as other municipal taxes. Adopted by the council this 8th day of September, 2020. Todd Larson, Mayor David McKnight, City Administrator David McKnight From: Joel Jamnik Sent: Thursday, September 3, 2020 3:23 PM To: Katy Gehler Cc: David McKnight Subject: Re:Assessment The main point of agreement I have with Katy is that while there are several ways to address this issue,the path currently being traveled and that was communicated to the owners seems pretty sound and worth following, rather than changing. Joel J.Jamnik Attorney CAMPBELL KNUTSON, P.A. Grand Oak Office Center 1 860 Blue Gentian Road,Suite 290 Eagan,MN 55121 Office:(651)234-6219 Cell: (651) 470-0756 jiamnik@ck-law.com •www.ck-law.com On Sep 3,2020,at 3:12 PM, Katy Gehler<KGehler@farmingtommn.gov>wrote: I will let Joel weigh in on these but a couple points that we had discussed at the work session to consider: 1. The new assessment will be subject to the benefit test. The property could file an objection to the assessment. It's hard to say whether the improvements could pass the benefit test given the age of the infrastructure. In any case,I think it is best to avoid or minimize that risk. 2. The notice to the property owner has been sent,so a new amount would be much different than what we previously communicated. Joel,your thoughts on the process to re-notice and continue the hearing? 3. Crediting the assessment is possible, but not as simple as is sounds. The assessment is assigned to the entire parcel and would have to be redistributed officially by the property owner. While it can be done, reassessing to zero and just charging the full SAC and WAC fees by the acre that is developed is the cleanest from a process perspective going forward and easiest for potential developers and the property owner to understand. I agree that we could proceed with the method Josh has inquired about. However,administratively it is more complex and has potential risks. Katy Gehler, PE Public Works Director/City Engineer <PhoneIcon,Citylpt_433fa8b9-8d95- Main: 651-280-6800 4a9b-bfb2-ccc295480c2b.png> I Direct: 651-280- 6841 430 Third St. <LocationIcon,Citylpt 226abbd5-5bec- Farmington, MN 4888-888d-c73f80199477.pn> 55024 <Logo-500x194 del 528c2-7348-4386-a5a0-ca9248fd61e3.pn > From:Joel Jamnik<jjamnik@ck-law.com> Sent:Thursday,September 3,2020 2:28 PM To: David McKnight<DMcKnight@farmingtommn.gov> Cc: Katy Gehler<KGehler@farmingtommn.gov> Subject: Re:Assessment I am fine with addressing the issue as proposed,or an alternative. Maintaining the status quo is not sustainable. Have to break the logjam somehow. Joel J. Jamnik CAMPBELL KNUTSON, P.A. Grand Oak Office Center 1 860 Blue Gentian Road Suite 290 Eagan,MN 55121 (651)234-6219• Fax: (651)234-6237 iiamnik@ck-law.com • www.ck-law.com On Sep 3,2020, at 1:56 PM, David McKnight<DMcKnight@farmingtommn.gov>wrote: Katy and Joel- Josh Hoyt contacted me on the Pederson assessment issue for Tuesday night. His thoughts included- ✓ Reassess the property down to the original assessment of$192,000. ✓ Stop any interest and penalties from accruing from this point forward. ✓ No payment is due now. ✓ Credit the$192K in assessment to what will be due from SAC and WAC fees when they develop. 2 A way to protect ourselves,work with the property owners and not have the appearance of the taxpayers having paid for something that someone else should have. I am fine with his approach, but wanted to see what I was missing with you two. Thoughts? David McKnight City Administrator <PhoneIcon,Citylpt_433fa8b9-8d95- Main: 651-280-6800 4a9b-bfb2-ccc295480c2b.png> I Direct:651-280- 6801 <LocationIcon,Citylpt 226abbd5-5bec- 430 Third St. 4888-888d-c73f80I99477.png> Farmington, MN 55024 <Logo-500x194 del 528c2-7348-4386-a5a0-ca9248fd61e3.png> 3 CITY 4F O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-280-6800 ® Farmington M N.gov TO: Mayor, Councilmembers and City Administrator FROM: David McKnight, City Administrator SUBJECT: Vermillion River Crossings Discussion (10 Minutes) DATE: September 14, 2020 INTRODUCTION A request was made by one of the city councilmembers to discuss the status of development at the Vermillion River Crossings. DISCUSSION As you are all aware, the Vermillion River Crossings development has long been identified as a commercial opportunity in Farmington. The status of development of Hy-Vee, Aldi and Taco Bell remains in the hands of the developers. The city council has approved four requests that have come forward from Hy-Vee including a preliminary plat, conditional use permit, site plan review and business assistance agreement. The city council has also approved a conditional use permit and site plan review for Aldi. BUDGET IMPACT NA ACTION REQUESTED Discuss the Vermillion River Crossings development as desired. ATTACHMENTS: Type Description ❑ Cover Memo VRC Map Cf'f `r Z j •1 i CITY 4F O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 Farmington MN.gov TO: Mayor, Councilmembers and City Administrator FROM: David McKnight, City Administrator SUBJECT: City Owned Property Discussion (5 Minutes) DATE: September 14, 2020 INTRODUCTION Recently I shared with the city council that a party has expressed interest in purchasing a city owned lot on Second Street. DISCUSSION The city owns a vacant lot located on Second Street just south of Spruce Street. A map is attached to show you the actual location of this lot. The city acquired the lot through tax forfeiture approximately 12 years ago. Our downtown redevelopment plan has identified this parcel as part of a downtown trail network. The county has an estimated value on the parcel of$25,900 for 2020. 1 am not sure the parcel amount assigned by the county is correct. BUDGET IMPACT TBD ACTION REQUESTED Discuss the issue of city owned property and any desire the city council may have to go through a public process to sell this parcel. ATTACHMENTS: Type Description D Cover Memo Second Street Parcel k I I I. T rx I Y rfl i m r t Jff) I (I� I �I r '"S- Ir ; I I i 7 ,r r mR L-4 e.• CITY OF O 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 OFarmington M N.gov TO: Mayor, Councilmembers and City Administrator FROM: David McKnight, City Administrator SUBJECT: Ice Update(10 Minutes) DATE: September 14, 2020 INTRODUCTION Recently representatives from the city, school district and Farmington Youth Hockey Association (FYHA) have met to discuss ice availability in Farmington. DISCUSSION Over the past few months two meetings have been held that included two city council representatives, city staff, school staff and leadership from FYHA. The issue of additional sheets of ice was the topic of the discussion. I shared in a recent update that I thought it was important that all city councilmembers hear an update on this issue so that is the reason this issue is on the work session agenda. BUDGET IMPACT NA ACTION REQUESTED Hear an update on recent ice discussions and ask any questions you may have. CITY 4F © 43o Third St., Farmington, MN 55024 FARMINGTON © 651-28o-6800 ®, purl Farmington MN.gov TO: Mayor, Councilmembers and City Administrator FROM: David McKnight, City Administrator SUBJECT: DCC Funding Task Force Recommendation (10 Minutes) DATE: September 14, 2020 INTRODUCTION Over the past few years members of the Dakota Communications Center (DCC) have been discussing governance and future financial options for the center. DISCUSSION As a part of the ongoing discussions, a DCC Funding Task Force was developed to look at various options when it comes to financing the center operations in the future. Fire Chief Elvestad was a member of this task force in his role as the representative from the Fire Operations Committee. The recommendation of the task force was to have Dakota County take on over time between 50 to 100% of the fixed costs of the DCC. The fixed costs total approximately$2,500,000 but are offset by E911 funds from the Department of Public Safety amongst others. The remaining of the budget(variable costs) would be paid for by members using the current allocation method. At the DCC Executive Committee meeting last week,the county manager reported that the County Board is willing to consider and/or keep discussing this issue. If it does proceed at the county level,they would like work their way to either 50 or 100%of these costs over three to five years. This would not go into effect, if approved by all parties, until the 2022 budget at the earliest. Councilmember Hoyt is the city representative to the DCC Board of Directors and can share any information he has as well. From a city perspective, this potential change has been a long time in the making and would be beneficial to us. City staff supports the proposal of the DCC Funding Task Force. BUDGET IMPACT TBD ACTION REQUESTED Ask any questions you may have on the DCC Funding Task Force recommendation and provide Councilmember Hoyt and Fire Chief Elvestad with any direction to be shared with their respective groups