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HomeMy WebLinkAbout09.21.20 Council Minutes CITY OF FARMINGTON CITY COUNCIL MINUTES REGULAR MEETING SEPTEMBER 21, 2020 1. Call to Order Mayor Larson called the meeting to order at 7:00 p.m. 2. Pledge of Allegiance Mayor Larson led those in attendance in the Pledge of Allegiance. 3. Roll Call Present-Larson, Bernhjelm, Donnelly and Hoyt Absent-Craig Staff Present-Administrator McKnight, Community Development Director Kienberger, Public Works Director Gehler, Finance Director Malecha, Police Chief Rutherford, Fire Chief Elvestad, Parks and Recreation Director Distad and Attorney Jamnik. 4. Agenda Motion by Hoyt, second by Bernhjelm, to approve the agenda as presented. APIF, motion carried. 5. Announcements/Commendations None 6. Citizen Comments a) William Pelach-315 Spruce Street asked the city to repair the sidewalks on Third and Elm Streets. In addition, he inquired about the status of the city getting a grocery store. 7. Consent Agenda Motion by Bernhjelm, second by Hoyt,to approve the consent agenda: a) Approve Minutes of the September 8, 2020 City Council Meeting-Administration b) Approve Minutes of the September 14, 2020 City Council Work Session-Administration c) Approve Contract with Lebrash Plumbing and Heating for the Installation of Touchless Faucets and Bottle Filling Stations-Parks September 14, 2020 Minutes -1- d) Adopt Resolution R38-2020 Approving a Gambling Permit for Farmington Youth Hockey Association-Community Development e) Approve Recommendation for Hire Liquor-Human Resources f) Approve Termination Finance-Human Resources g) Approve Bills-Finance APIF, motion carried. 8. Public Hearings None 9. Award of Contract None 10. Petitions, Requests and Communications None 11. Unfinished Business a) Reassessment of the County Road 50 Water and Sewer Utilities Public Works Director Gehler reviewed the proposed reassessment of the County Road 50 water and sewer utilities that the city council has discussed at three previous meetings. The details of the proposed assessment are included in the meeting packet. No city councilmembers had any additional comments to add on this issue. Motion by Bernhjelm, second by Donnelly, to adopt Resolution R38-2020 reassessing the costs associated with the County Road 50 trunk water and sewer utilities. Motion passed 3-1. Voting in favor: Larson, Bernhjelm and Donnelly. Voting against-Hoyt. 12. New Business a) Preliminary 2021 General Fund Budget and Tax Levy Finance Director Malecha presented the draft 2021 budget and tax levy for city council consideration. State statute requires that the proposed property tax levy for the upcoming year be certified to Dakota County on or before September 30th each year. The city council is being September 14, 2020 Minutes -2- asked to adopt the 2021 proposed property tax levy that will be included in the proposed property tax statements that are mailed to taxpayers in November. DISCUSSION The city council discussed the 2021 General Fund budget and tax levy at work sessions in May,July, August, and September. The proposed budget and tax levy are shown below. 2020 Budget 2021 Proposed Increase(Decrease) Budget 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% General Fund Revenues COVID-19 has created challenging times for many businesses but also for the city. Some areas that have seen a decrease in revenue due to COVID-19 are park and recreation, the Rambling River Center, and liquor licensing as part of the General Fund. The reduction is predicted to continue into 2021 resulting in lower revenue receipts rather than the typical annual increase shown in the budget.Through conservative budgeting, there is an anticipated decrease in revenue of$112,817. The General Fund has revenues outside of the tax levy.These revenues come from a variety of sources shown below. 2020 Budget 2021 Proposed Increase Budget (Decrease) Licenses and Permits $473,115 $517,076 9.29% Intergovernmental Revenue 922,294 667,912 (27.58)% Charge for Service 565,802 576,197 1.84% Fines and Forfeitures 49,000 49,000 0.00% Investment Income 38,800 29,100 (25.00)% Miscellaneous 54,580 79,370 45.42% Transfers In 1,307,570 1,379,689 5.52% Total Revenues 3,411,161 3,298,344 (3.31)% Revenue items of note in the draft 2021 budget: • Permit revenues are projected to increase by$47,691. They were initially anticipated to decline due to COVID-19, but have remained steady. • Local Government Aid received from the State of Minnesota will decrease by $228,800 from $334,387 in 2020 to $105,587 in 2021. • A reduction of$31,000 in MSA maintenance is anticipated for 2021. September 14, 2020 Minutes -3- • Investment income has been decreased based upon the city's portfolio. Using conservative budgeting, the city only accounts for investments that are non-callable in the next budget year. This amount is the General Fund's portion of the investment income and does not reflect all of the income received. • Miscellaneous revenue includes an increase to rental income and other items that may occur throughout the year and are unaccounted for in other areas. General Fund Expenditures There have been many reviews and revisions in an effort to lower the overall levy increase. The proposed 2021 expenditures are summarized below. 2020 Budget 2021 Proposed Budget Increase(Decrease) Administration $907,162 $889,300 (1.97)% Human Resource 349,226 361,658 3.56% Dakota Broadband 24,489 37,500 53.13% Finance&Risk Management 778,889 776,287 (0.33)% Police 4,677,813 41853,870 3.76% Fire 1,445,410 1,441,226 (0.29)% Community Development 1,014,867 1,007,849 (0.69)% Engineering 794,635 813,895 2.42% Municipal Services 1,439,078 1,511,187 5.01% Parks&Recreation 1,278,576 11317,341 3.03% Transfers Out 932,207 822,351 (11.78)% Total Expenditures $13,642,352 $13,832,464 1.39% Human Resource Costs All of the budgets include estimated human resource costs based on approved union contracts and estimates for employee benefits and worker's compensation premiums.The union contracts were approved for 2019 through 2021 and include a three percent wage increase each year. Human Resources completed an RFP process for staff health insurance and was successful resulting in over$100,000 in savings that affects the General Fund. Operating Transfers There are transfers in and out shown in the General Fund budget. The transfers into the General Fund are from the enterprise funds to reimburse the General Fund for human resource and administrative costs that benefit the enterprise funds. The transfers out are comprised of the LGA and tax levy. Those fund the public safety equipment, trail maintenance, EDA, and building maintenance among many other items. A detailed breakdown of the transfers has been included as a separate exhibit in your packet. September 14,2020 Minutes -4- Fiscal Disparities This is a metro wide program that is used to balance the development of commercial and industrial growth through the region.The city has received a preliminary estimate of the final number that includes a decrease of$16,365. Debt Levy The Debt Service Funds 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 levy includes both General Obligation bonds and Interfund loans.The 2021 debt levy is 7.37 percent higher than the 2020 debt levy.The increase in debt is due to the purchase of Ladder One that will be arriving in early 2021. Detail on the debt levy obligations are included with this memo. Additional Notes There are still a number of items that are unfunded or underfunded that the city council is aware of including: • Pavement Management • Trail Maintenance • Building Maintenance Projects • Fleet Replacements The estimated market value of the average residential home in Farmington increased 6.39 percent from $268,723 in 2019 to $285,906 in 2020. The increase is lower than the 6.42 percent increase from $253,204 in 2018 to $268,723 in 2019. Keep in mind the values are one year behind and these are payable 2021 values. Councilmember Hoyt stated that each year will get more difficult; we pulled a lot out of the budget to get to this point. Hoyt thanked city staff for their work. Councilmember Bernhjelm shared that she did not like the levy number but we are managing the best that we can. Debt is a big part of the increase. Councilmember Donnelly thanked city staff for their work in developing the budget. Mayor Larson thanked staff for their work and shared that it is not easy work. Motion by Bernhjelm, second by Hoyt, to adopt Resolution R39-2020 establishing the 2021 preliminary ax levy as proposed and set the public input meeting prior to the adoption of the September 14, 2020 Minutes -5 - 2021 final budget and tax levy for Monday, December 7, 2020 at 7:00 p.m. Motion passed 3-1. Voting for: Larson, Bernhjelm and Hoyt. Voting against-Donnelly. 13. City Council Roundtable Bernhjelm-In honor of the late Justice Ruth Bader Ginsburg she read her favorite quote. Hoyt-Congratulated American Legion Post 189 on receiving the Post of Excellence Award. McKnight-Reminded residents that absentee voting can be done at city hall through Monday, November 2, 2020 during normal business hours. Early voting will begin on October 27, 2020 during normal business hours as well. City hall will be open on Saturday, October 31, 2020 from 10:00 a.m. to 3:00 p.m. for early voting as well. McKnight also read a statement of Hy-Vee sharing that Farmington is still on their development list and there is nothing the city can be doing at this point to speed up the process. Distad-Shared that the Rambling River Center will start to reopen on October 1St and that the annual Halloween Walk has been cancelled for this year. Larson-Encouraged residents to shop local. 14. Adjourn Motion by Bernhjelm, second by Hoyt,to adjourn the meeting at 7:22 p.m. APIF, motion carried. Respectfully Submitted Davwe P. "aKo'*& David McKnight, City Administrator September 14, 2020 Minutes -6-