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HomeMy WebLinkAbout03.09.09 Work Session Minutes Council Workshop Minutes March 9,2009 Mayor Larson called the meeting to order at 6:30 p.m. Present: Also Present: Larson, Donnelly, Fogarty, May, Wilson Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Brian Lindquist, Police Chief; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Todd Reiten, Municipal Services Director; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant MOTION by Fogarty, second by Wilson to approve the agenda. APIF, MOTION CARRIED, 2009 Budget Options City Administrator Herlofsky provided Council with three options. A common goal is to have a well-managed community. The financial crisis we have is not a result of poor planning by City staff or Council. Weare in good shape compared to many communities. That is a result of the last two budget sessions as well as the budget adjustments in 2008, and what we have tried to do in 2009, We were promised revenues from the State and they were not received. We are trying to make adjustments as early as possible. Residents received property tax statements this week. Property taxes for the City did not go up from 2008, The three options include: A. Expenditure reductions amounting to $212,600 were approved at the March 2, 2009 Council meeting. Now we have to find a way to take care of the difference between $350,000 and $212,600. The State has not officially told us we are not receiving this money in 2009 and will not make a decision until June. B, Staff is suggesting Council approve the streetlight utility amount of$75,000 for 2009 and $150,000 for 2010 for additional revenue. This option also includes reallocating $20,000 in engineering time to specific projects, cutting $22,400 in police overtime. C. This is the least desirable and includes the above reductions plus closing the pool at a savings of $75,000. Currently we have a very limited, but competent workforce. We would like to continue to maintain the level of people we have right now. Over the last 2-3 years we have trimmed staff and at this point we are close to a point where if you want things to continue at the same service level, it will be necessary to keep those people, We have trained them and have a big investment in them. To let them go would not be a good decision. The citizens need to understand future implications. The third option does take care of us long range. We need to make sure Council is comfortable with staff. If Council does not believe something staff is saying, tell us so we can get more information. We need to be honest with each other about what is being discussed and what is not. Everyone's comments are needed to make sure this situation is taken care of to everyone's satisfaction, Results are established from accurate information. The suggestions are Council Workshop Minutes March 9, 2009 Page 2 fixed amounts. One is overtime in the Police Department. We will also be looking at everything else in the Police Department, not just overtime. All expenses are managed on a regular basis. City Administrator Herlofsky asked for comments from Council on the proposed options or if they would like more. Mayor Larson stated he reviewed the budget and had several questions. He asked for a dollar amount for the Prairie Restorations contract. Finance Director Roland stated in professional services there is $85,700. This is not just Prairie Restoration, but their amount is approximately $30,000 - $50,000. This is not in the general fund, Mayor Larson felt some of the things they are doing are over-kill such as controlled bums. We can establish the same thing by mowing the weeds down to 6" before they go to seed twice a year. All we need is a rough cut mower. Mayor Larson asked if the amount for cleaning services was $100,000. City Administrator Herlofsky stated the City Hall cost is $4800/month with three people, minimum of four hours,S days/week, square footage is 43,000. That is not a bad price. The Maintenance Facility is $10,000. They also do the Fire Stations and the Rambling River Center. Total is $84,000 for cleaning for all buildings. Mayor Larson asked if we could hire two part time people to take care of that. City Administrator Herlofsky noted it would be difficult to get two people to work four hours at that pay. This does not include benefits. What happens if they do not show up? Cleaning is a high turnover business. With a service we have cleaning five days/week with no interruption. We are looking at updating the contract next year. Based on the size ofthis building and other buildings we are getting a good value. Mayor Larson asked if some employees could help such as emptying their own garbage cans. He figured $48,750 could be paid for two people at $15/hour at 25 hours each per week to clean the building. Councilmember May asked if it could be done twice a week instead of five days/week and employees fill in the rest. City Administrator Herlofsky felt a building used five days/week should be cleaned five days/week. You make a substantial investment in the building with carpeting, floors, etc. If it is cleaned only a couple days/week, especially in the winter, the building takes a beating and you lose a lot of maintenance items. Mayor Larson suggested contacting the school to work out a partnership with their custodians. City Administrator Herlofsky stated what we are paying now would seem small compared to that situation. Mayor Larson would like to find out. Mayor Larson noted there is $4325 in elections for 2009. Finance Director Roland stated there is a requirement we have to pay the maintenance contract on the elections equipment over a two- year period. Mayor Larson stated there is police squad replacement at $54,000. That is for two cars. He asked if there was one proposed for next year. City Administrator Herlofsky stated vehicles are replaced based on their activity. Finance Director Roland stated next year there is one vehicle requested. There is a policy that if a vehicle has over 100,000 miles we have to replace it. Councilmember Fogarty asked if we could stretch it to 125,000 or 150,000 miles before vehicles are replaced. Municipal Services Director Reiten stated once they are over 100,000 miles parts are going out. Mayor Larson asked ifthere was more information on the ALF surplus. City Administrator Herlofsky explained because of the change to Allina, there is some money between Apple Valley, Lakeville and Farmington. There will be a meeting on this and it would be a one time transfer. Councilmember Wilson explained it is a one time sale of assets divided up between the cities. This would be at the end of 2009. Council Workshop Minutes March 9, 2009 Page 3 Councilmember Wilson noted the budget shows personnel services in categories 6110, 6112, and 6120, and confirmed that would that be a fair representation of the salaries only; not including benefits. He noted we have a change in those three categories from 2008 to 2009 of $272,627 representing a 6.3% increase. All the contracts approved included 2.75% - 3%. Comparing full time employees in 2008 there were 148, in 2009 there were 147. On an FTE basis, the cost per employee on salaries for full time, part time and overtime shows a difference of 7%. Finance Director Roland stated the overtime is significantly different because they used actuals in snow plowing, which increased one department's overtime by $20,000. That has nothing to do with the contracted amount of2.75% - 3%. The part time dollars also are not part of the 2.75% - 3%. Those have been increased in various departments based on the actual time asked for by Parks, Maintenance, or Municipal Services. If you want to look at the 3% increase you need to look at salaries for full time. Those include steps for individuals hired within the last three years. Councilmember Wilson felt this was way out of line with reality. This could be a way to keep everyone here and keep the 40-hour work week. The reality is this amounts to 5.68%. He understood overtime for storms. City Administrator Herlofsky stated the issue with steps is when employees in government start, there is a schedule associated with employment. This means there is an annual adjustment in the schedule and there are steps. The private sector does not have a schedule, but has one fixed amount. The advantage with different pay scales for public employees, under normal cases you have some turnover and the next person starts at 15%- 20% less. There is a very good chance we will have the same faces here as when the year started. Employees are aware ofthe change we will make which will take 3% off the top. Finance Director Roland stated we have focused on the union contracts with AFSCME with steps. In the LELS contract for police there is longevity. There are steps to get to the mid-point for police officers and then they get a percentage added to their salary for the number of years. This will also have an impact on the total increase amount. It is not just steps in the union contract or in non-bargaining. Councilmember Donnelly stated if we negotiate a 0% raise for everyone, the wage will go up by 3% because of steps. Councilmember Wilson stated there is a huge whole and it is 70% of the budget. He does not see how a tax increase equates to any amount of economic development. Farmington is not competitive. We have to work harder to continue to push that down. We need to figure out a way to encourage families to build homes and to build in Vermillion River Crossings. City Administrator Herlofsky provided information comparing tax rates with various cities. Councilmember Wilson noted more roof tops will bring more development. Mayor Larson asked about the last communication with Fairhill. It was a month ago and economic conditions will dictate when development occurs, City Administrator Herlofsky noted 195th Street will be completed late this fall and will have a lot to do with what happens. Finance Director Roland stated there are a lot of fully developed lots in Mystic Meadows and Parkview Ponds off 195th Street waiting for builders. Councilmember Wilson felt it would be a good idea to contact builders and see if we can synergize efforts to get people looking at development. City Administrator Herlofsky stated the problem is a lot of developers have had a great deal of financial difficulty. We are not dealing with them as much as we are with the banks. We need 195th Street to open up before development will pick up. 2009 may not be the year, but 2010 the road will be done and that exposure will do a lot. There are 700 platted lots in Farmington. Councilmember May felt we are in a long-term standby situation, She did not believe completing 195th Street will spark a lot of growth anytime soon. She did not think taxes or fees are the answer. It will have to involve some cuts starting at upper management and combine Council Workshop Minutes March 9, 2009 Page 4 positions to get solid savings. She suggested salary freezes, eliminate steps or staff. If you want to keep the same amount of people, we have to figure out how to shrink the cost of what we have. In the past she brought up the solid waste issue. Council was given a comparison of rates for City service and for private companies. She felt it would save money to contract out garbage service rather than have all the equipment and staff in the budget. City Administrator Herlofsky explained all the equipment and staff is paid for by the rates that cover that cost. It is an enterprise fund and generates revenues for the general fund as well as covers other municipal services costs. Finance Director Roland stated if we got rid of everything, we would not have a $60,000/year contribution to the general fund to help offset tax dollars, we would not have a $40,000/year contribution to the bond to pay for the Maintenance Facility, we would not have the availability of staff for snow plowing, we would not have lower rates for residents. Our rates are lower than surrounding cities with garbage haulers. Councilmember May confirmed we have all those costs and still have revenue. She stated we need to go back to salaries and staff. Salaries are competitive and above average and felt we could do some work there. Councilmember Fogarty wanted to compare tax rates for Rosemount and Hastings which are comparable to Farmington. As Councilmembers we have worked very hard to make it lean. Looking at Rosemount, Hastings, Apple Valley we are right there with them. Weare not out of line compared to them. The biggest difference residents are seeing is the school district portion. It is very difficult to cut and cut when it is not our portion ofthe tax bill that is pushing our taxes higher. It is difficult to ask staff to cut hundreds of thousands of dollars and layoff employees when we are doing our due diligence. She does not want to raise taxes, but does not see any way out that does not involve something. She is not interested in lay offs; if we did we would have to look at public safety and she is not interested in any kind of lay offs in public safety. She is somewhat comfortable in accepting some of staff's recommendations for fee increases, but is more interested in staff time reductions. She noted Council received information from employees suggesting cutting one hour/week. That is between management and staff. By them giving up this percentage of money that is almost what they were given in raises this year. City Administrator Herlofsky stated they will be meeting with the business agent and bargaining unit in April. Councilmember Fogarty would like to see this reduction come at 3%; right now we are at 2.5%. Essentially that is a pay freeze, just taking in a different way. Councilmember May noted that is a one time thing. Councilmember Fogarty agreed that we need long term solutions, but was not sure we could come up with them in time for the 2009 budget. We need to fix 2009 and spend the next nine months looking at 2010. That is when we go line by line through the budget to figure out what we can cut. Councilmember Wilson stated so we go for a tax increase and we are done. Councilmember Fogarty said she did not suggest that, she asked them to go for deeper cuts with wages. Every franchise fee that has been suggested, we can take back in 2010. Councilmember Wilson asked how many cities have taken away a tax. City Administrator Herlofsky noted we can do a sunset provision. Councilmember Wilson stated it is substantially cheaper to live in Lakeville if they both live in the Farmington school district. City Administrator Herlofsky noted you do not have to repeal a sunset provision, you can say it cannot be continued unless you take positive action. With Option B if the streetlight utility were put in place starting July 1,2009, through 2011 you can say that. Mayor Larson noted there is $340,548 in professional services and asked what that covers. Finance Director Roland explained that covers legal, engineering, parks and recreation for programs, and the animal control contract. Human Resources Director Wendlandt stated for HR/IT she does not spend all the money for professional services. If we have a positive drug test there are certain legal requirements, and costs for arbitration. Finance Director Roland stated it Council Workshop Minutes March 9, 2009 Page 5 also covers the annual audit and consultants for Planning and Community Development. She will provide Council with a detailed list. Mayor Larson stated data processing is $138,000. Finance Director Roland stated that is all financial and utility billing software. This was purchased with 25 other cities and it is paid for on a monthly basis. The same is done with the Police Department. All squads are equipped with computers that are hooked up to the DCC. Building permits are through the PIMS software through LOGIS, and also the financial reporting system to pay bills and pay employees through LOGIS. Mayor Larson asked about $7,000 for Farmington Independent advertising. Human Resources Director Wendlandt stated this will not be spent unless a critical position becomes vacant. Mayor Larson noted there is $138,500 in contracted services. Staff explained this is for the DCC. Mayor Larson stated there is $20,000 for professional services for Planning. Finance Director Roland stated the GIS budget was moved out of Engineering because it belongs in Planning. The people who use the GIS system through Dakota County are the Planners. We pay a $15,000 fee to Dakota County every year for GIS services for maps. Councilmember Donnelly asked about the franchise fee for cable. Finance Director Roland explained this was instituted in 1999 or 2000. It amounts to $75,000. This is part of the cable consortium with Apple Valley and Rosemount. Administrative Services Director Shadick stated it pays for Mark Moore's services, the crew, and the equipment for televising. Finance Director Roland stated we pay Apple Valley $45,000 a year for all the broadcast services, but that is in a separate fund. We collect $180,000/year in cable franchise fees. There is $75,000 in the general fund which helps pay for employees involved in communications and the equipment. The other $105,000 goes to the capital fund which pays for the equipment, depreciation, and Mark Moore's time. Mayor Larson asked if the $340,548 for professional services will all be spent. Finance Director Roland will provide a list of what is included and how much was spent in 2008. Councilmember Fogarty asked how we will reduce Police overtime. Police Chief Lindquist stated in 2009 there are changes in training. There are some things we must do such as having minimum coverage on the roads and court time. There are also requirements for licensing. Because of the 24-hour schedule we try to make it convenient for those who work nights and have training in the day which is overtime. Councilmember Fogarty asked if the County can do anything about scheduling court time during their work hours. The Chief explained the court has their own schedule, City Administrator Herlofsky noted we will be looking at the entire budget, not just overtime, Councilmember May asked where we were with selling any buildings, such as the parks garage, Mayor Larson replied no where. It will be discussed at the EDA meeting and also the old senior center building. Prior to that Councilmember May would like to talk with City Administrator Herlofsky and Finance Director Roland regarding the Business Subsidy Policy. Council Workshop Minutes March 9, 2009 Page 6 Councilmember Donnelly asked for an explanation on the MSA revenue. Finance Director Roland stated there are two amounts received from the State for highway maintenance and highway construction. Two years ago we received $140,000 for highway maintenance. We have pegged the revenue source for the general fund for 2008 and 2009 at $140,000. We have seen an increase in both 2008 and 2009 of $20,000. We are receiving over $160,000 in both years for MSA maintenance. Because we budgeted low that is a $20,000 increase in revenue we did not count on. Council accepted comments from the audience regarding the 36-hour work week and eliminating positions with the lowest seniority instead, leveraging other things such as the pool rather than cutting positions, can we use money from the water fund, have Council meet with the union to ask for concessions, etc. Farmington Fire Relief Association members were in attendance and expressed their disappointment in the $70,200 reduction in their pension for 2009, and the short notice received. They would like to have better communication from staff regarding the Fire Department. There is no other department that is not getting a dollar on their pension. The Association has been given extended money in the past, but that is part of the program. They did not see where the City should not have to contribute to the Relief pension. They were disappointed in the notification process and the fact they did not have any input. They were concerned the $70,000 budgeted for 2008 may not be enough to cover the pensions. Councilmember Wilson and staff noted the City has paid in $710,000 and was required to pay $199,000. This is a one time recommendation. Finance Director Roland stated when the audit is complete the City may be required to make a contribution. The Relief Association also receives all the fire aid the City receives which the City is required to do, but that can also count against the amount of money the City has to contribute. It might change and it might be more than we have seen required in the past, but statute allows for more than one way to make that payment to the Relief Association. Staff admired the fact the Relief Association would be willing to accept this one year cut. It would mean they could not increase their benefit level for the coming year, but their benefit level for the current year is at a level where it was close to the Stanton 6 average. The budget has to permit this. Members of the Relief Association felt the Council needed to look more long-range. This is a one-time reduction for 2009. What happens in 2010? The Relief Association is the only department that has taken a 100% cut in their budget. Councilmember May noted Option C includes closing the pool. What happened to the YMCA? City Administrator Herlofsky explained the Y is not going to save us $75,000 and we are still negotiating with them. If Council agrees to close the pool, there will be some concern. We have a swim bus that runs throughout the City and suggested we send the pool bus to Apple Valley. With the Y we are looking at operating the facility and it removes the need for payroll, hiring, and operating the pool. They would run the pool like a concession. The Y can do some things with pricing for supplies that we cannot, and after a couple years it may be a win-win for both of us. This creates an opportunity for the Y to come into the community. Mayor Larson was not in favor of closing the pool. Councilmember Donnelly stated we can look at this as a two-year painful deal at $350,000/year or as a long-range problem and get rid of people or close the pool. None of this is an easy decision. It is a matter of who you hurt and who you make mad. If you close the pool you make someone mad, if you put street lights in you make others mad. The approach is to spread the pain for two years and ride it out. Council Workshop Minutes March 9, 2009 Page 7 Fire Chief Pietsch understood we should have 30% of our total yearly budget in cash reserves. If that is where we are and we are not in crisis mode now, when do we call it a crisis? Should we look at that now or wait until 201 O? Finance Director Roland replied the current fund balance is between 20% - 25%. It should be 35% - 50% according to the auditor. We lost ground with the last LOA cut and putting us under levy limits. In the past we have used the fund balance to balance the budget. We did it three years in a row after losing LOA and it ate our fund balance down by over $1 million over three years. Weare trying to do this without reducing the fund balance because we have to have that money to operate. We will have to use $150,000 for 2008, City Administrator Herlofsky noted in 2002 the City lost LOA of $450,000. We have put in $750,000 for a couple years prior to last year. We were over $2 million, now we are just under $2 million. Ifwe eat another $350,000, it would cut us down to $1.5 million. Councilmember Wilson stated knowing staff will sit down with the union, his thought would be to first look at reductions in salary from 6% increase to 3% to allow us to keep the staff we have. If that cannot be done, then we need to have staff show us some staff that can be eliminated. Councilmember Fogarty was still collecting information, We have to consider more long-term options. Mayor Larson agreed. Councilmember May said no to any fees or taxes or any type of increase. It should be a combination of additional hours reduction, but long-term some staff consolidation. We have to reduce staff. Councilmember Donnelly asked if the State could hurt us more than the $350,000. City Administrator Herlofsky stated we think we are close to the limit they can cut. Councilmember Fogarty stated the State has cut 3% and has heard they will ask cities to write a check to equal 5%. City Administrator Herlofsky explained the fund balance allows us to cash flow the operations without borrowing any money. Cities should have balanced budgets and maintain a fund balance equal to 35%. Mayor Larson stated we will know more by the end of June. Finance Director Roland stated we are talking about a two-year budget that does not start for the State until July 1,2009. Everything we are talking about is a forecast budget. In two years it could be high or low. We have to plan for the worst and go about our business. Councilmember Donnelly would have a hard time supporting an increase in fees. He recommended we try it without increasing fees and tighten our belts. City Administrator Herlofsky stated Council has approved $212,600 already. We have about another $140,000 to come up with, We have $20,000 in MSA revenues, $20,000 with reallocating engineering time to projects, and $22,000 with cutting Police overtime. We have about $70,000 left to cut. Do we ride it out or come back with another $70,000. He suggested if staff has to come back, to give us until April 6, 2009, Mayor Larson directed staff to bring it back on April 6, 2009. Staff will bring the above items to the March 16,2009, Council meeting for Council approval. Councilmember Donnelly asked if staff could bring more information on the employee suggestions. City Administrator Herlofsky stated we will discuss it as that will be some detail work. He noted it was not signed by an individual and it does not represent the total group, as there are always more than two views, Council Workshop Minutes March 9, 2009 Page 8 Bonestroo Contract City Engineer Schorzman presented information showing a breakdown by year of Bonestroo expenses and which City funds they came from. Council asked who would manage the approved projects such as 4th and 5th Street and Denmark. The City will be managing the majority of the projects. Any additional amounts not covered by the retainer would include the bridge inspection program, or transportation related issues where a transportation expert is needed. Councilmember Wilson stated in December 2006 we reduced the amount of time we would have a full time employee here. In 2007 and 2008 we cut the retainer in half, but the additional expenses are quite a bit higher. This was due to having four people on the engineering staff and now we are down to three. Councilmember May would like to see staff do more and understood some items need advice, but would like to see the consultant time go down. There is currently one rerson here from Bonestroo. During the summer there could be four or five working on 195t Street. Without that there might be one more helping to finish the Spruce Street project, doing the 4th, 5th, and Denmark projects. We do a seal coat project in the summer, a sidewalk replacement project in the summer, monitor four wells every month and report information to the DNR, and sewer meters that are read. Mayor Larson stated if we have a project, instead of handing it to Bonestroo he would like to see it go out to bid to other engineering firms. He felt Bonestroo is part of the problem with not getting commercial development into the City because it was never a one stop process. Once the plans were brought in for approval, they were sent back for changes, bring the plans back, more changes are needed, etc. Even after the final plan was stamped and signed, Bonestroo would want to charge for other changes. It seems the process being followed for years and years was making work for Bonestroo and that is what needs to stop. When plans are brought in, all changes should be made in one visit. Councilmember Fogarty has heard this from many developers. There has to be a way to streamline it. We have a huge opportunity to streamline the process now so when the economy is going again, we are ready. Mayor Larson wanted projects sent out to three or four firms to get the best value for our dollar. City Administrator Herlofsky suggested we have Bonestroo finish up this year and do 195th Street. We can ask for bids for a new engineering firm at the end of the year and make a decision by the first of the year. Councilmember Fogarty asked if we have to do that. Ifwe have a project why can't we send it out for bids? Why do we have to have a consulting City Engineer? Councilmember Wilson stated this is part of the reason he did not support the three road projects. City Engineer Schorzman noted the majority of the inspection for those will be done in-house. City Administrator Herlofsky stated if we have a lot going on, we need a consultant. If we have limited projects we can do it ourselves which is the best for the general fund and our own department. Councilmember May confirmed it would be difficult to bid out the consulting piece. City Engineer Schorzman stated if you want to maximize savings for the City it would be in the public development area. There were over 17,000 hours in 2008 spent on public projects. When you go out for bid on projects that is where you will have the biggest savings. He suggested we keep Bonestroo on a retainer for extra work and use the RFP process for public projects. There is history and institutional knowledge possessed by Bonestroo that you will not get with other people. City Administrator Herlofsky noted Council had some sensitivity as to who handles developers. Councilmember Fogarty would like to have a game plan laid out to make this better. She has received complaints from several commercial and residential developers. She wants Farmington to be known as holding them to high standards, but it will be easy to get through. Council Workshop Minutes March 9,2009 Page 9 City Administrator Herlofsky stated staff will come back with the different functions and schedule of what will be done through this year to correct the issues Council brought up. Councilmember May asked staff to think about someone else for next year. She understood the continuity, but someone new can bring in fresh ideas. She would like to go out for bids for the retainer portion. Councilmember Wilson stated he sees the value in the Bonestroo retainer because of the knowledge, but is very uncomfortable whether we are getting a good deal with residential and commercial. Councilmember Donnelly stated there is benefit in their knowledge. He agreed with going out for bids as he has also heard complaints. Councilmember May asked if we can put it out for bid today? City Administrator Herlofsky stated this is a good time for a break and to make a switch for the retainer. Councilmember Fogarty was not sure all of Council agreed the retainer should go out for bid. Councilmember Wilson stated we have not approved engineering fees for this year. He did not see why we could not do an RFP and the Bonestroo bids could come in lower. Staff will put together a plan to request going out for RFP and bring to a Council meeting, Development Fee Schedule City Engineer Schorzman stated the sanitary sewer and water fees have changed from trunk fees per acre to a per unit fee. The philosophy is development pays for itself. In 1997 it was estimated it would take $28 million to completely construct the storm water trunk facilities in Farmington. In 2008 the new estimate is $47 million. Council noted rates are much lower in other cities and this makes economic development difficult. City Administrator Herlofsky stated we have developers pay for the improvements. Some communities have a fee that they get from the operating costs once the residents are there, The option is rather than have 100% buildup costs, we go with 75% and pick up the rest in rates. Councilmember Fogarty stated we charge more to develop and less in utilities. In other cities, a developer can build cheaper, but the resident pays in utility fees, Our choice is if we want to be competitive in developing, we can lower these fees, but we would need to raise utility fees which would affect people already living here. Council discussed fees for Target to build in Apple Valley. Councilmember Fogarty would like to know how much 20 acres would have cost them in Farmington. City Engineer Schorzman explained if we figure the fees as we have in the past it would be $706,000 in fees. Using the Farmington SAC fees it would be $518,000 in fees. Councilmember May asked if we could lower fees in down time. City Administrator Herlofsky stated we have to reach the bottom line, If not in developer fees, then residents have to pay. City Engineer Schorzman asked Council for their philosophy so he could prepare scenarios, Mayor Larson replied the philosophy is we want the developers to see fees closer to other cities. Councilmember Fogarty stated we cannot compete with Apple Valley and Lakeville and we are not that far off from Rosemount. Councilmember Donnelly felt the issue will be doing the increase all at once with trying to catch up in one year. He suggested doing a gradual increase each year. Staff will bring a phased in approach to Council. Councilmember Fogarty would like these fees reviewed every three years. MOTION by Fogarty, second by Wilson to adjourn at 9:49 p.m. APIF, MOTION CARRIED. Respectfully submitted, CZ., O/~~~ /?7~ / 'Cynthia Muller Executive Assistant