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HomeMy WebLinkAbout12.07.09 Council Minutes 7a- COUNCIL MINUTES REGULAR DECEMBER 7,2009 1. CALL TO ORDER The meeting was called to order by Mayor Larson at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE Mayor Larson led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Members Absent: Also Present: Audience: Larson, Donnelly, Fogarty, May, Wilson None Joel Jamnik, City Attorney; Peter Herlofsky, City Administrator; Randy Distad, Parks and Recreation Director; Kevin Schorzman, City Engineer; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant Bonnie Andrusick, Chuck Anderson, Jerry Anderson, Anika Rychner, Mark Dixon, Miles Kensler, Shannon Walsh, David Pritzlaff 4. APPROVE A GENDA Councilmember May pulled items 7h) Approve Development Contract Release - Vermillion River Crossing Outlot F, 7i) Approve Development Contract Release- Vermillion River Crossing - McDonalds Lot 1 Block 2, and 7k) Bills for discussion. MOTION by Fogarty, second by Wilson to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) NixIe Presentation City Administrator Herlofsky gave a brief demonstration on registering for Nixie on the City's website. 6. CITIZEN COMMENTS Mr. Mark Dixon, 608 Tamarack Trail, member of a homeowner's association, has contacted the City regarding the size of garbage cans. They all have the large cans and were told they cannot go to the small size because of billing issues. He asked Council how they can pursue using smaller cans for their residents. Mr. Colin Garvey, Castle Rock Development Company, received a letter in November asking him to mow his development, which he has mowed four or five times this year. In October it was very wet and he tried to mow, but could not finish. The City mowed the development and he received a bill from the City. He understood the process, but had a problem with the developments around him, including City property, that has been mowed once in five years. Now there are weeds throughout all the developments. Mr, Council Minutes (Regular) December 7, 2009 Page 2 Garvey stated the CDA development has never mowed their lots and currently they are not mowed. He had pictures of numerous City properties that are not mowed. He asked what the policy is. If the City has a policy to mow, they should follow their own policy. Mr. Garvey stated the Tollefson lot has never been mowed. He sold some lots to a developer a couple years ago and then he sold the lots. One of the homeowners landscaped their yard and put mulch around the transformer which is in the easement. There are thousands of houses, even City property, that have landscaping in their easements. The City would not release this person's money until he removed the mulch from around the transformer. Mr. Garvey felt this was unacceptable. The City cannot tell one person they cannot do this when there are thousands, even the City, that have landscaping in easements. Mayor Larson was aware that staff is working on the policy for landscaping in easements. a) Response to Mr. David Pritzlaff Mr. David Pritzlaff, 20255 Akin Road, at the last meeting he asked Mayor Larson to respond personally to three questions: - Why did you not take comment after a three hour budget workshop? - Tell people when you will and will not take comment at a public meeting. - Do you value the taxpayer's thoughts? Mr. Pritzlaffhas not received a direct response from Mayor Larson and asked if the City's response was his viewpoint. The response he received was that a Town Hall meeting on October 9, 2009, was to receive public comment. He asked if Council will let the public speak and not listen to them. He noted at the last meeting Council stated comments should be kept to five minutes. Mr. Pritzlaff wanted to make sure that was the same for everyone and not targeted to certain people or topics. Council was elected to represent the taxpayers, Making no staff reductions, adding taxes or fees to the taxpayers and not listening to the public is 100% against the way Mayor Larson campaigned. He asked Mayor Larson to answer the three questions now. City Attorney Jarnnik stated the purpose of Citizen Comments is not to have an exchange with the Council. It is to bring an issue forward to Council to consider. If Council wants to direct staff to respond or make it an agenda item at a future meeting, that would be the appropriate step, but not engage in a dialogue from the dias. Mr. Pritzlaff asked three weeks ago for a response. He asked again for another response from Mayor Larson on the way he ran a specific meeting, That would make five weeks for a response and felt that was not appropriate, City Attorney Jarnnik stated questions can be addressed under the standing procedure; questions can be addressed to the Council during the meeting; Council is free to call upon staff as necessary, but the protocol for response is that you respond at the next regularly scheduled Council meeting and it is placed on the agenda. If a Councilmember wants to add to it or review the staff response, that is up to the Councilmember, but you have no obligation to do so. Mayor Larson stated he did ask staff to send out a response. Mr. Pritzlaff asked if he was to consider the City's response as his viewpoint - that the October 9, 2009, Town Hall meeting Council Minutes (Regular) December 7, 2009 Page 3 was the only time Council would take comment on the budget. City Administrator Herlofsky noted public comment on the budget is scheduled for this meeting. Mr, Pritzlaff stated if a resident is unhappy with the response, they have a right to question the response. He was questioning the response. He stated Mayor Larson has not answered the question as to when he will and will not take public comment. He also has not answered the question whether Mayor Larson values taxpayer's thoughts. Mayor Larson stated he will send Mr. Pritzlaff a letter. Mr. Pritzlaffthen commented about a public hearing on franchise fees. He noted Councilmember Fogarty stated at the last meeting that the City is not implementing franchise fees and that Mr. Pritzlaffwas talking about a street light utility fee and a shift of money in the budget. Mr. Pritzlaff stated whether it is a utility fee, franchise fee or a tax, it is more money out of the taxpayer's pocket that we cannot afford. Mr. Pritzlaff stated with the Finance Director position open, maybe now would be a good time for consolidation of Finance/Administrative Service Director or Finance/Human Resource Director combined. He asked where is the $15,000- $20,000 extra budgeted for the Finance Director than what the paper states we would actually pay now for that position. Now is the time for seasoned Councilmembers to step up to propose cuts and not be so technical on how the public speaks on a topic. Council needs to live within their means and make some real cuts. 7. CONSENT AGENDA MOTION by Wilson, second by Fogarty to approve the Consent Agenda as follows: a) Approved Council Minutes (11/16/09 Regular) b) Approved Waiver of Excess Liability Insurance - Administration c) Adopted RESOLUTION R59-09 Approving Application for 2010 CDBG Funding - Economic Development d) Approved Minnesota Wetland Conference - Natural Resources e) Received Information Household Hazardous Waste Summary - Municipal Services f) Adopted RESOLUTION R60-09 Revised 22Sth Street Maintenance Agreement- Planning g) Approved Clear Wireless Lease Municipal Water Tower - Engineering j) Adopted RESOLUTION R61-09 Approving Heritage Preservation Commission Consultant Contract - Administration APIF, MOTION CARRIED. h) Approve Development Contract Release - Vermillion River Crossing Outlot F - Engineering Councilmember May stated this is releasing the property from the obligations under the Development Contract for Vermillion River Crossing, but this one is contingent on a separate Development Contract being written, She asked why we cannot wait. Even though there is a contingency, it would be better to have the separate Development Contract completed first. City Attorney Jamnik stated the Council Minutes (Regular) December 7,2009 Page 4 CDA is not ready to proceed with the development phase of their project at this time. They are ready to proceed on the closing to get things lined up. In order to facilitate the closing, they do not want to have the rest of the development's obligations hanging over their head following the closing. They are willing to have their obligations under the development agreement for their part of it left unclear. It is a risk to them because they have not locked down what responsibilities the City will impose on them regarding their development. Councilmember May asked what if they do not like the Development Contract. City Attorney J amnik replied then they will not be able to proceed. It is a matter of faith that the CDA and the City will be able to reach an agreement and not worry about other successors and interest such as McDonald's and other owners that could be involved. It is more of an article of faith that we are going through on the CDA property because of its status as a governmental entity. We would not recommend it for a private sector business without locking down more, such as the amounts. Councilmember May was not comfortable with this because there are too many unknowns. City Attorney Jamnik stated it is a risk they are willing to take. The uncertainty is on the CDA, not the City. Councilmember May would rather wait until Council knows what the separate Development Contract looks like. City Engineer Schorzman stated the CDA funds their projects through a variety of unique tax credits and they have it planned out into the future when they want to spend them. They want to spend the money they have set aside for this year to purchase the property, but they do not want to develop until 2011. Councilmember May felt there were a lot of exceptions being made in that development already, She was not willing to make that exception. City Attorney Jamnik stated the idea was that the City would be in a position to make sure of that after closing and after release of the individual parcels from the overall development agreement. We would only do that when we are sure we would get what we expect out of that project as far as the assessment amounts for the individual parcels. That is why the McDonald's site has a $43,000 figure on it; that is the high end of what we anticipate the cost would be to complete those improvements. Once that site is closed we do not have any other development approvals on that site because the structure has been built and developed on that lot. They do not have to come back to the City for any subsequent approvals where we can condition those approvals on payment for those improvements. It is a different situation with the CDA. They will have to get final development approval for their project so there is an additional step where we can hold building permits or other conditions of approval on payment for the improvements necessary for that site as determined by the Council's approved plans. There is an additional step with the CDA property that gives the City protection that we do not have with the other property, That is the justification for having money in hand for the McDonald's property where we don't have subsequent approvals, versus the CDA where the City will have subsequent approvals available. City Administrator Herlofsky stated after all the effort to have some development in Vermillion River Crossing, this is a bonafide developer with development Council Minutes (Regular) December 7, 2009 Page 5 scheduled for 2011. It is a needed facility in the community and will provide some definite benefits. It would also help with the rest ofthe development. If another community wanted to show more enthusiasm for 64 units of housing, staff would be concerned this could be perceived as negative, This is something Council should approve. City Engineer Schorzman stated in dealing with developments recently, having the ability to get the outlot under its own development contract is a better security for the City than putting a finite number on it at this time Councilmember Donnelly stated the CDA has money to spend and they want to close by the end of the year. They are buying a piece ofland without a Development Contract. If we cannot come to an agreement on a Development Contract, then they have land they cannot build on. They are more at risk than the City. This is something the City needs and he does not see a big risk to the City, City Administrator Herlofsky stated the CDA has plans they have been working on with the Planning Department. Councilmember Donnelly stated it has been said the City has been hard to work with and this is one way to overcome that. Councilmember May stated we do not know if there are others who may be interested in the site. She did not feel it was Council's job to market that development. There might be someone else who is ready, so we are enabling them to secure this piece of land and build when they are ready. City Administrator Herlofsky stated the City has been assisting with this development from the beginning because there were issues with the abatement. It was through our cooperation that there was an agreement between the seller and the buyer to make this work. Councilmember May stated she is not against the CDA, but did not think this transaction was ready. Councilmember Fogarty felt the CDA will do a great job. It cannot hurt to work as a catalyst to get some development out there. We keep hearing from retailers that it is rooftops that matter and these are rooftops. When it comes to economic development, she felt this was an important piece. Mr. Colin Garvey asked if the CDA project was taxed the same as a private individual. City Attorney Jamnik replied no. They do a payment in lieu of taxes. The fee is subject to negotiations. Mr. Garvey stated it is a 20 year tax payment on that project and now there will be less taxes out there. You have the CDA, which is the county, which comes from taxpayer's money. He asked where all this money was supposed to come from. Somewhere it has to stop. The CDA project may be good to get others out there, but in the long run, what will it do? Eventually we are all paying for the project. We are jumping into something no one has thought out. No one has answered any questions or has exact numbers. City Administrator Herlofsky stated the abatement on the property will preclude the City from getting any benefit for 17 years. This will do better than a private development based on the arrangement made with the property. Council Minutes (Regular) December 7,2009 Page 6 MOTION by Fogarty, second by Donnelly to approve the Release of Development Contract for Outlot F, Vermillion River Crossings. Voting for: Larson, Donnelly, Fogarty, Wilson. Voting against: May, MOTION CARRIED. i) Approve Development Contract Release - Vermillion River Crossing - McDonalds Lot 1 Block 2 - Engineering Councilmember May stated the dollar amount is in relation to specific items that are left and asked if there was a time line. City Engineer Schorzman stated staff began working on this with the Dushane Parkway project and the numbers were taken from the bids, The entire contract was not awarded. The dollar amounts are based on that bid and what was not awarded. The entire development has to be completed and then the security is returned. The timeline was until December 31,2009. Staffwill be bringing this development back to Council to discuss the remaining obligations. City Attorney Jarnnik stated the parties wanted to close by the end of the year. In order to do that, they were willing to sign the document the City drafted. Once the closing occurs, McDonald's will ask for an escrow agreement that will put some time limits on how long the money would be held by the City. The City is under no obligation to concede to their request. Staff is having discussions with them. The agreement in front of Council has no time limitations. City Administrator Herlofsky explained this development started on the basis that all the property would be rented, not owned by the person sitting on the property. Things have changed to where the owner is selling the parcels, Once people actually own the property we can start gaining some of the property taxes. City Engineer Schorzman stated the development contract is driven by the City in partnership with the developer. In both cases, the City did not ask them to do this; they came to the City wanting to do this. Councilmember May asked if the contract does not get renewed, what right does the City have to hold the money? Staff was asking for the money because when Dushane Parkway was discussed, the security that remains for that Development Contract is not sufficient to complete it, City Attorney Jarnnik stated the other agreement does not go away, it would just be in default. It remains in effect. We have the right under the agreement to hold the money. MOTION by Fogarty, second by Wilson to approve the Release of Development Contract for Lot I,Block 2 of Vermillion River Crossings, Voting for: Larson, Donnelly, Fogarty, Wilson. Voting against: May. MOTION CARRIED. k) Approve Bills Councilmember May stated one concern was the cleaning bills. She has requested looking into the feasibility of moving all staff to the first floor to reduce City Hall cleaning services, She was also interested in taking the cleaning services out for RFP for next year. Councilmember May noted the Bonestroo bill for the month totaled over $57,000. She had specific questions as to when we request Bonestroo' s assistance on Council Minutes (Regular) December 7,2009 Page 7 various projects. Council has also received an itemized listing for what we have paid out to Bonestroo for the year and it is $956,372. She realized it is for specific projects, but other times it is special requests when we need specific help or are busy. She asked whether we need more help in that department, are we trying to do too much at one time, or do we not have enough time, City Engineer Schorzman stated 88% of that number has to do with specific projects such as 195th Street, design work on Walnut Street, design work on the 2009 trunk utility project, etc. The remaining 12% is split between enterprise funds, water, sewer and storm and also private development. While it is a large number, at the end of last year we were at $1.9 million; the year before we were at $2.4 million; and the year before that we were at $2.6 million, We are doing what we can to minimize those costs. It would not be in the best interest of the City to upsize the Engineering staff because of the expertise we can call upon when we need it rather than having it here 365 days a year. That would be very expensive. City Administrator Herlofsky stated during the summer we will have 3-5 additional people here working on certain projects. The reason for the higher Bonestroo bills in previous years was because of inspections on new developments, Part of the reason for the reduction is because ofless activity. Mayor Larson wanted to make sure Bonestroo was earning the projects and we are not just giving the projects to them. He wanted to make sure the projects are going out for bid and we get qualified bidders. If they are the low bid, fine. City Administrator Herlofsky stated for us to have every project go out for RFP for a consulting engineer takes a lot of time and effort. Bonestroo has been here at least 10 years. There is a great deal of knowledge and history associated with the individuals. It allows them to provide us with the service at a lesser price. Mayor Larson stated when they have the knowledge of the City, they should be giving a decent price, We need to take advantage of that. Councilmember May stated there is an advantage to getting a bid from someone else and looking at a project with a different perspective. Councilmember Wilson requested the information earlier because of an upcoming item on the ice arena, which he found disturbing. He felt Council should discuss engineering issues in a workshop. The issue he had is not the value of a consulting engineer, but a year ago this Council moved away from a consulting engineer and they are still called to provide services in the City. It brings up the question of looking at an Assistant City Engineer at a lower cost. To state that $1 million is a good deal for 2009 may not be accurate if you look at the type of projects going on in previous years. Proportionately the cost may not be going down. 8. PUBLIC HEARINGS a) Approve 2010 License Renewal - Administration The American Legion has requested an On-Sale Liquor License and a Sunday Liquor License. The Eagle's Club has requested a Club License and a Sunday Liquor License. The information from the Eagle's Club is being reviewed by the Police Department due to receiving it late. MOTION by Fogarty, second by Wilson to close the public hearing. APIF, MOTION CARRIED. Councilmember Wilson suggested waiting until the next meeting to approve the Eagle's Club license until it has been reviewed. The Police Department does not anticipate any problems. Councilmember Fogarty was comfortable with Council Minutes (Regular) December 7,2009 Page 8 approving it contingent on the Police approval as the Police Department will not let it go through if there is something wrong. MOTION by Fogarty, second by Donnelly to approve contingent on final approval from the Police Department. Voting for: Larson, Donnelly, Fogarty. Voting against: May, Wilson. MOTION CARRIED. 9. AWARD OF CONTRACT a) Award Ice Arena Improvements Contract -Administration City Administrator Herlofsky stated they have a good price from an engineering firm, and there is a concern that we have ice for next fall. A meeting with the Hockey Association and the School District has been scheduled for this week to discuss this further. Long-range planning can continue while these improvements are being made. To ensure there is ice for next fall, we need to proceed. Mayor Larson asked about the discussions with the school district. City Administrator Herlofsky stated it would be good if the City and the school district looked at not just the ice arena, but the long range physical needs of the community whether they be soccer fields, Lacrosse fields, softball diamonds, community center, etc. We should do something to make sure the tax dollars are not duplicated. There was a referendum a couple years ago which said do not build two ice rinks. We are talking about fixing the one we have and if there is a long range plan and a need for a second sheet of ice in the future, he suggested we build one so when the current one is used up after 10-15 years close this one and add a second one, Another season becomes less reliable unless we do these improvements. Councilmember May felt it was a good meeting with the School Board and she was surprised this was brought to the meeting as we do not have a Task Force yet. She felt there needs to be a Task Force meeting. At the meeting with the School Board it seemed apparent they wanted to expedite it. The Chair wanted to see concrete proposals by mid-January which she felt was very aggressive to have three entities work together, Regarding the engineering work for $40,000, aren't we only talking about the ice? City Administrator Herlofsky stated and all the related mechanical equipment that makes it work. Councilmember May asked if the companies that do this know what to install, Mayor Larson stated the installers will need a recommendation from the engineers as to what equipment is needed. Councilmember May asked if all arenas have the same equipment. Mayor Larson stated no. City Administrator Herlofsky stated they met with one company that would design it and build it. They will hire the engineer, the contractor and turn it over to us. Two other options are to get a general contractor, or lay it out for a construction manager so we can see about the possibility of using volunteers. Councilmember May wanted to have a Task Force meeting first. City Administrator Herlofsky stated the issue with doing this now is to save time. Our Engineering Department cannot design the plans and do the work it would entail. Councilmember Wilson was also surprised to see this on the agenda. He asked where we would get the $40,000 from because the budget shows delaying $500,000 in capital outlay items from the general fund until 2011 or later. It also postpones improvements to the pool or arena for a minimum of two years. He felt Council Minutes (Regular) December 7, 2009 Page 9 we had a good discussion with the School Board. The fact we are talking with them before commencing work is good. He did not feel the economy would change between now and mid-January to affect how a contract would come out. He did not agree with approving this now. Councilmember Fogarty did not have a problem with waiting a little, but had two concerns. One is it is not entirely unfair to say the School Board does not know. They are aware this is on the agenda. At the meeting we discussed that engineering firms had been in and were preparing a bid for this. Her biggest concern is she did not think the Task Force could complete its mission on time. Weare going to study this until the ice rink falls apart and there are no options, She is very concerned this will happen and there are a lot of people saying they want this, but maybe this is not want they want. She wants people to be honest about what they want with the ice arena. If people will not support keeping an ice arena in Farmington, then she wants that out on the table. It is important and valuable to the community, just like the pool and the parks, She had no problem putting this before a Task Force, but felt it is a tall order to ask them within a month to have some concrete ideas. If this comes back to us in a month are we going to say we need to wait for the Task Force to complete their job which is going to be in May. City Administrator Herlofsky stated the most important question that keeps getting asked about this facility is how much will it cost. There is only one way to find out and that is to have the design work completed and sent out for bids. The $40,000 will have to come out of the ice arena fund which is in a deficit now. If the City completes it and we pay for it, it will be a debt. If ice is not available next fall, someone will blame Council for it and he wanted to give them the option to look at it now. Councilmember May stated that is the unfortunate thing, is that it is falling on our head. She has not received any constructive feedback from the school or the Hockey Association with the three bodies getting together and saying we will work as a team. We had one short meeting and now Council has to decide whether they are for or against ice. She was for the taxpayer, Unless she has more information, there is no way she can vote to spend $40,000. There has to be at least a couple meetings. She thought the Task Force was also going to involve other people in the community that are not associated with the City, the school, or the Hockey Association. Councilmember Donnelly stated the Task Force has to consider more than just the current ice problem. He has no problem with waiting for the Task Force to look at a proposal. As soon as the compressor dies and they are playing hockey somewhere else, then it is obvious who screwed up. He wanted to avoid that. We have to take some action in the near future. Councilmember Fogarty asked if we have a Task Force yet. Mayor Larson stated there is the school, the Hockey Association, and a few people from the community that did volunteer. City Administrator Herlofsky stated it has not all been worked out yet. He felt we should involve the various Farmington athletic associations for long range planning. Council Minutes (Regular) December 7,2009 Page 10 Mr. David Pritzlaff stated at earlier meetings Council discussed whether it is feasible to move forward with this building or do something different. He stated the Mayor was quoted as saying cut bait on this building and start over. Mayor Larson stated he said he did not know and we need to get an expert. Maybe it is time to cut bait, maybe not. He did not know. Mr. Pritzlaff stated maybe that question should be answered first before spending $40,000 or getting a Task Force. A Task Force meeting is scheduled this week that will include the Hockey Association, the School District and the City. Mayor Larson suggested tabling this until the second meeting in January. Councilmember Wilson would rather deny it. MOTION by Wilson, second by May to deny the request. Voting for: Wilson, May. Voting against: Larson, Donnelly, Fogarty. MOTION FAILED. MOTION by Larson, second by Fogarty to table it to the second meeting in January and bring back options, Councilmember Donnelly stated he was in favor of tabling it to keep it alive. It is a problem that will not go away. It has to be dealt with and keeping it on the agenda keeps our feet to the fire and everyone else involved, Councilmember Wilson stated until a good discussion on the facility occurs, it is hard to determine what a design report would do. He needed to know the viability of the building and a long range plan. Councilmember Fogarty stated she wanted to keep this alive and not die at the table. The ice is in jeopardy. Every indication we have been given is the building is a sound structure and with replacing the ice no one has told us this building would not continue to function for as long as the ice continued to operate. The ice would have a better chance of failing for a second time before the building would be unsound. The building is a sound structure, it is whether or not we want to invest the money to put new ice in the existing building or whether other options need to be pursued. Councilmember May wanted to hear from the Task Force first. Voting for: Larson, Donnelly, Fogarty. Voting against: May, Wilson. MOTION CARRIED. 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) 2010 Budget Public Comment - Administration Mayor Larson stated he will accept public comment but did not expect the Council to answer any questions. He asked City Administrator Herlofsky to respond to those with question within a week. Ms. Bonnie Andrusick, 19832 Goldfinch Drive, thanked Council for having this meeting. She received a tax statement showing 2009 and proposed 2010 property taxes and the breakdown of how much goes to each entity. From the 2008 valuation to 2010 her property value dropped 15.3%. Over that three year period her total property tax went down 5.6%. The County portion dropped 10.3%. The School District 192 voter approved levies dropped 17.8%. The City portion increased $5,69 from 2009 to 2010, not a lot, but certainly not in the same direction as the property valuation. She wanted to hear the City's justification for their tax budget. In this recession many of our residents have reduced incomes and she resented the fact the City wants an increased income. In her situation, her household income dropped 50% this year, She has to cut comers where she can Council Minutes (Regular) December 7, 2009 Page II so to see the City tax increase seems like a low blow. She asked Council to reconsider that. Councilmember Fogarty stated the tax statements that went out were based on the proposed budget. City Administrator Herlofsky stated the rate that was used by the County was the original rate that the City adopted in September which was 50,59%. With the reductions that have been made, we are at 49.24%. We decreased the tax rate by a little over 1 %. Councilmember Fogarty asked staff to send her what the new estimate will be so she knows what the budget decisions did to her property taxes. Staff will do some estimates. Ms. Shannon Walsh, 816 2nd Street, this year the value of her house went from $167,000 to $150,000; a drop of$17,000, While she understood the City has no role in controlling property values, there is an expectation that the City will recognize a long term economic downturn and adjust their tax rates accordingly, With the 10% drop in house value all their taxes went down except for the City taxes which went up 1.7%. Not only did the City taxes go up, they went up after the $155,000 street light expense was moved from the general levy to the enterprise fund thus creating a hole in the general fund to add an additional $155,000 of expenses which would have otherwise been eliminated or increased the overall levy. When Council says they are cutting $150,000 from the budget, in her opinion it seems more like a reduction of $150,000 gets us back to where we were before we took out the street light utility, The justification for the street light utility is to incorporate tax-exempt properties paying street lights. At the August budget meeting there was a comment from Council saying a large portion of the City is tax-exempt which made her think what properties are tax-exempt. She made up a list and found out the City is the largest tax-exempt property owner. She trusted the City was not planning to add $24 to the City Hall account and other properties owned by the City because those expenses are paid with our tax dollars, same as the schools. If we do not count the City as non-taxed or the schools, she counted nine churches that have their own tax-exempt building, the FAA, and the library. That is 11 properties times $24 comes to $264. It is possible she is missing other tax-exempt properties, but did not understand why we cannot just add the $24 to their utility bills, Her church is currently paying a City assessment so she knows you can levy expenses against tax-exempt properties and did not know why everyone had to be involved. She has been at all the budget meetings and when she was at the Town Hall meeting, she received confirmation from the City's Finance Director that expenses had grown by 13% over the past three years while revenue had only increased by 4%. Ms. Walsh stated at that point the Mayor cut her off and said the budget is a work in progress. She was asked to sit down instead of Council asking her what actions she would propose to curb the spending trend of spending three times more money than we are bringing in. That did not happen and her property taxes went up. We need to be clear there has not been a discussion about the City cutting taxes. Nothing in the budget or anything in the proposals will lower the taxes below last year's amount. Bond refinancing, ALF, all the trims in the budget or shifts, is lowering the amount of City tax, but if your City taxes have gone down, it is not anything the City has done, it is more your property values have decreased. The levy is up Council Minutes (Regular) December 7,2009 Page 12 $474,000 from last year, take the $150,000 in cuts, and we are still at an overall tax increase of$275 - $300. If you add the street light utility back in, we are back up to $474,000. As the budget stands right now, with the old numbers, we will be paying 7.3% more money to the City next year than we are paying this year for the same services. This does include the general tax levy, the street light utility, as well as increases in sewer and solid waste. Money paid to the government is tax money even if it is called a fee or service increase. She did not feel Council has done enough to improve the long term financial prospects for the City, There have been some unsubstantiated calls for budget cuts, but only Councilmember May has consistently looked for budget cuts both inside and outside the 2010 budget process. There is still time for Council to work together and make some real cuts to ensure the long term financial stability of Farmington instead of the nickel and dime solutions we have been offered thus far. Mr. David Pritzlaff, 20255 Akin Road, stated his property tax statement shows a $6,600 loss in value. The City's tax line shows a 10.5% increase for 2010, This does not factor in other increases Council is considering in the budget such as street light utility fee, an increase in solid waste and sewer. Taking into account these increases, his City's tax will go up 15.75%; hardly affordable in this economy. There are no cuts proposed in the budget, merely just shifts of money from here to there. He would like to get clarification on a few points: Street light utility fee - Starting from the beginning where Council was given a budget highlight report, expenditures for the City's street lights are proposed to be removed from the general fund and set up as an enterprise fund. The street light utility charge would be on all residential and commercial utility bills on January 1,2010. This shift of expenses reduces general fund expenditures by $155,000. By making this utility fund, all properties including tax-exempt properties within the City will pay for the lighting. According to the City's response he received on his budget questions, on page 103 of the budget, the reduction of$149,323 is shown, Why the difference in numbers? At the August 26,2009, meeting the Finance Director stated the electric rate class will be reduced for 2010 and beyond. On page 71 electric for Police Administration is going up $1,000. On page 55 electric for City Hall is going up from $15,000 to $30,000, A 100% increase for City Hall when three other departments stay the same, Why is this so much more? Since this will become an enterprise fund and we leave about $16,000 in the budget from the electricity he talked about and charge $24 for the 6,000 utility bill holders, which amounts to $144,000 which will increase as new homes are built which results in more revenue, How will the additional revenue be used or accounted for? Profits from the taxpayers are not a good thing. Now let's talk about who pays for street light utility, First, one reason we are doing a street light utility fee is to get all tax-exempt properties to pay. Councilmember Fogarty stated at the August meeting that a large portion of the City is tax- exempt. Explain that since we have 6,000 utility bill holders. He had an updated list of properties from the last meeting. Regarding the issue of apartments, 13 properties versus 461 households within those units. A potential 461 units times $24 equals $11,064 versus 13 utility bills times $24 equals $312; a difference of $10,572. Do they benefit as much as he does and get to pay a fraction of the cost? Council Minutes (Regular) December 7, 2009 Page 13 The Finance Director stated at the last meeting we do not want to discourage apartments. So you will charge them based on a multiplier that is used for storm water charges. Can someone explain how we charge for storm water? City Administrator Herlofsky stated that statement has been corrected. We have changed the issue and it will be established in an equal way. Each utility bill will receive the $6/quarter or $24/year, There will be no multiplier used; it will be equal. Mr, Pritzlaff stated when the Finance Director said it won't be at the high end or the low end, it will be in the middle, it will be at the low end? City Administrator Herlofsky stated his original estimate of$145,000 for revenues based on 6,100 utility bills will be the basis for the revenues the City will receive for street light utilities. Mr, Pritzlaff stated a property with .8 acre pays how much? This property has 32 units times $24 and should be $768. It might only have to pay about half as the Finance Director stated, $384, The City response he received is that one charge for all utility accounts will be $24, What is it exactly; $24/year or about half. Why not each household? Each person benefits as much as the other. It would be a tax cut for the landlords. He as 1/3 acre and he pays $9/qtr for storm water. A commercial property in the industrial park of about 5 acres pays a little more than $200/qtr for storm water. Kind of a tax break for landlords while sticking it to the residents and commercial property owners. Can Council tell him how many tax-exempt properties we gain by changing to street light utility fee versus leaving $155,000 in the budget? He has a list of tax- exempt properties which took less than a half hour looking at the City's Community Guide book. We gain ten schools, which he will pay for anyway. We gain nine churches which we all pay as we attend, Weare gaining nothing. He had a list of 42 properties that do not have water and sewer charges. Will they still be charged $24 due to a utility bill for solid waste? City Administrator Herlofsky stated there is water, sewer, and storm water. He has been told that storm water is charged to everyone throughout the City. That will be the basis for determining the $24/year. Mr. Pritzlaff stated no matter what, properties on the west and south side of the City that do not have water and sewer hook up, still pay a storm water charge and that will be classified as a utility bill and they will pay the $24/year? City Administrator Herlofsky replied yes. Mr. Pritzlaff stated solid waste is also an increase Council wants to put to the taxpayers, This is also an enterprise fund. On page 199 of the budget, it shows total revenue for 2009 of $1,871,800 and total expenditures of$I,715,561; a difference of$156,239. Ifwe subtract the transfers out which is the general fund and debt services of$112,559; a difference of$43,680 which would be profit we are getting for solid waste from taxpayers with no benefit for 2009. In 2010 we show $2,001,800 not including other revenue and expenditures of$I,874,388; a difference of $127,412, which after transfers out are subtracted of $115,662; $11,750 is used for what purpose? Not including other revenues of about $70,000 like in 2009, it was stated a 2% increase will take place on solid waste. On page 200 of the budget, there are three different increase rates proposed. The newspaper had quoted a 30 gallon container was going from $44 to $46. He received a response to his question from the last meeting stating staff is proposing a $2/qtr increase, not a 2% increase for sewer rates on each 1,000 gallons above 10,000 gallons and a $2/qtr increase in solid waste fees for residential levels of Council Minutes (Regular) December 7, 2009 Page 14 180 gallons. On page 200 it states a 2% rate increase will be proposed for 2010 to cover increased costs of disposal previously subsidized by the County funding. Where it states in 2009 a 30 gallon container costs $44, in 2010 it will go to $45; only $1; a 60 gallon going from $53 to $54.50 and a 90 gallon going from $62 to $63.50. Both indications are that we are talking 2%, not $2, He questioned it when the newspaper stated a 30 gallon container would go from $44 to $46, that equals a 4.54% increase, not 2% nor $2. Mr, Pritzlaff stated at the last budget workshop, Councilmember Fogarty asked staff if it was still feasible to recycle due to these increases, The answer was yes. The question should have been, is it still feasible for the City to be in the trash business if we only charge for our expenditures and would the expenditures be less if contracted out to a hauler? City Administrator Herlofsky provided Council some spreadsheets explaining the debt service bonds and information on the $201,000 in reductions as of November 9, 2009. Councilmember May requested another budget workshop next week so they can consider the questions raised. These are tough times and she wanted to do her part as a Councilmember to be as compassionate as she can. She has brought up cuts and that could mean services or someone's job. Mayor Larson and Councilmember Wilson agreed with having a workshop. No public comment will be taken. A workshop was scheduled for December 14,2009. b) Approve Room Naming Rights Agreement Rambling River Center - Parks and Recreation The Rotary Club of Farmington has agreed to pay $3,000 for naming rights for the Rotary Club of Farmington Computer Lab. A payment of $600 would be made upon approval of the agreement and $600 each year in 2011,2012,2013 and 2014. With this agreement $33,500 has been raised through the room naming rights program. MOTION by May, second by Wilson to approve the Agreement with the Rotary Club of Farmington to rename the computer lab to the Rotary Club of Farmington Computer Lab in the new Rambling River Center building. APIF, MOTION CARRIED, 11. UNFINISHED BUSINESS 12. NEW BUSINESS a) Approve Request for Proposals Community Survey - Parks and Recreation The City Council and Parks and Recreation Commission previously discussed completing a community survey prior to attempting a parks and recreation referendum. Staff was directed to bring to Council a Request for Proposals to submit to firms for a community survey. Staffhas discussed working with the school district on doing a long range recreational facility study. The survey would encompass all recreational facilities for the School District and the City. The survey would be sent to those within the school district boundaries. The cost for the survey would be paid from the park improvement fund. Councilmember Fogarty would like the RFP to include a 60-90 day shelf life, MOTION by Fogarty, second by May to approve allowing a Request for Proposal to be created and mailed to professional firms to complete a community survey. APIF, MOTION CARRIED. Council Minutes (Regular) December 7, 2009 Page 15 13. COUNCIL ROUNDTABLE a) Set Date Board and Commission Interviews - Administration Interviews will be held January 13,2010 at 5:30 p.m. Councilmember May: The Rotary Club will be hosting a senior lunch on Thursday at 11 :30 at the Rambling River Center. Councilmember Fogarty: A resident called her and stated we can pay utility bills electronically, but he wanted to know why residents cannot be billed electronically, Staff will research this. She reminded residents parking restrictions are in effect. Councilmember Wilson: Next year he suggested having a holiday light display contest. He stated when they do this, they also have a Toys for Town drive. Councilmember Donnelly: He had a procedural question. When Mr. Pritzlaffwas asking questions, he was directing a lot of them towards the Mayor. He asked if that was appropriate to request a response from an individual Councilmember rather than from the Council. He asked for an opinion on the appropriateness of that. City Attorney Jamnik replied it is at the discretion of the Council, but we have tried to steer away from that. The decisions of the Council are on meeting agenda topics. As an individual Councilmember prior to the vote you make your thoughts known regarding reasons for your votes. We generally do not have an exchange. This does not function like a Town Hall meeting where there is a free flow of exchange and ideas, Council meetings are structured to act on an agenda item. It is at the discretion of the Council how far you allow members of the community to go in asking personal questions or statements of political positions during a Council meeting. Historically we have not gone very far. At a certain point it would be appropriate to rule someone out of order for asking those types of questions that are not on an agenda item. That is why we have a structured, standard rules of procedure for Council meetings and for the citizen participation portion of the Council meeting. Councilmember Donnelly stated he would rather see those questions addressed to the Council as a whole. The personal part of it bothered him. Councilmember Fogarty agreed and historically it has not been addressed more formally because it has not been a huge issue. Councilmember Donnelly said it is the Mayor's authority to direct the meetings. City Administrator Herlo/sky: Regarding the budget item tonight, Farmington is one of 800 cities that are going through the same agony everyone else is going through. Prom a staff perspective, we have been working on this 2010 budget since April. We are very concerned how it goes and anxious to get it wrapped up so we can start on 2010. In three months we can start on 2011. The Dakota County Administrators had a meeting and the assessor spoke on the tax capacity. What you are looking at now is just a start, We have not seen any reductions in the values of non-homestead residential, commercial, or industrial. The last few years there has been little activity in that area. This means the reductions in non-homestead property have not started yet. To us over the next two to three years this means we will see reductions in our tax capacity continue despite what Council Minutes (Regular) December 7,2009 Page 16 the economy does. We asked departments to put a number in the budget they felt was appropriate for the next three years other than personnel. Council is not alone, but it will not get better. We tried to levy back the $350,000 the state took out of the budget last year. He hoped the information staff provided is helpful. Mayor Larson asked if the Governor was done. He has been hearing rumors that the $350,000 was not enough and he may want a check. City Administrator Herlofsky stated the budget problems were solved by one time events which makes it worse the next time around. Based on how we are managing the budget, we are looking to come out on the positive side this year, Mayor Larson: He urged residents to sign up for Nixie. He asked how many people have signed up. Human Resources Director Wendlandt stated staff is working with the school district to get them on board and then we will request numbers on how many have signed up. Congratulations to those who put together the Secret Holiday Shop last weekend. There were over 200 children that shopped for their family members. He thanked everyone who attended the Downtown Dazzle Days Christmas Tree Lighting. There were about 100 people in attendance. 14. ADJOURN MOTION by Fogarty, second by Wilson to adjourn at 9:22 p.m. APIF, MOTION CARRIED, Respectfully submitted, 57-~~~ Cynthia Muller Executive Assistant