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HomeMy WebLinkAbout07.07.25 Work Session Minutes City of Farmington City Council Work Session Minutes Monday, July 7, 2025 The City Council met in a work session on Monday, July 7, 2025, at Farmington City Hall, 430 Third Street, Farmington, Minnesota. 1. CALL TO ORDER Mayor Hoyt called the meeting to order at 5:30 pm. Members Present: Mayor Joshua Hoyt Councilmembers Holly Bernatz, Jake Cordes, Nick Lien, and Steve Wilson Members Absent: None Staff Present: David Chanski, Interim City Administrator/HR Director Deanna Kuennen, Community & Economic Development Director Joshua Lawrenz, Building Official Kim Sommerland, Finance Director Matt Price, Fire Chief Kellee Omlid, Parks & Recreation Director John Powell, Public Works Director Shirley Buecksler, City Clerk 2. APPROVE AGENDA Motion was made by Councilmember Bernatz and seconded by Councilmember Wilson to approve the agenda, as presented. Motion carried: 5 ayes / 0 nays 3. DISCUSSION ITEMS 3.1 Discuss and Seek Council Input on the Repeal of Chapter 1306 Subpart 3 (New Building), an Optional Chapter of the MN Building Code Building Official Lawrenz presented information on Chapter 1306 for the City Council. In the past, the City of Farmington has chosen to adopt optional chapters of the Building Code, aimed to enhance safety and provide for lifesaving and property preservation. Over time, the City has weighed the impacts of the optional provisions and opted to repeal when provisions proved to be too costly and overly burdensome to property owners. Work Session Minutes of July 7,2025 Page 1 of 4 The original intent of Chapter 1306, offered by the Minnesota Building Code, aimed to reduce fire propagation, save lives, and reduce risk to responding Fire personnel. Chapter 1306 was originally called the "Small Cities" option because the fire sprinkler systems were designed to suppress a fire until a small City's volunteer Fire Department could arrive on scene. Fast forward to 2025, the City of Farmington has several other systems and operational changes being implemented and underway that, collectively, enhance safety and provide for lifesaving and property preservation. These include: 1 . Substantial steps towards a full-time Fire Department. 2. Comprehensive and combined plan reviews by the Building Official, Building Inspector(s), Fire Chief, and Fire Marshall. 3. Implementation of a Certificate of Occupancy process for all tenant changes, regardless of whether a building permit is required/issued. 4. Annual commercial fire inspections. Following discussion, City Council directed Staff to move forward with the repeal of Chapter 1306 Subpart 3. 3.2 Discussion on an Ordinance Establishing Cannabis and Hemp Business Regulations and Amending the 2025 Fee Schedule for Retail Registration Interim Administrator Chanski presented the draft ordinance to establish cannabis and hemp business regulations, as well registration and other fees. Discussion ensued, and the City Council directed Staff to bring the ordinance forward for approval at their July 21, 2025 Regular City Council Meeting, as well as communication with area businesses and residents when an application is received by the City. 3.3 Discussion Franchise Fees Interim Administrator Chanski presented information on franchise fees for City Council discussion. Under Minnesota Statutes, Section 216B.36, Cities can impose a fee on utility companies that use the public rights- of-way to deliver service. Cities can determine the amount, structure, and use of franchise fees, which are generally structured as a flat rate per utility account or a percentage of consumption used by each utility account. In Minnesota, most franchise fees are flat rates. Work Session Minutes of July 7,2025 Page 2 of 4 Potential uses of franchise fees in Farmington include: • Implementation of full-time Fire Staff. • Fire Station 1 remodel and expansion. • Police Department remodel and expansion. The impact on residents: • The implementation of full-time Firefighters is estimated, conservatively, to cost around $1 million. • If placed entirely on the levy, the estimated property tax impact on a $354,000 residential homestead is approximately $100. o This number will vary, based on the value of the property (i.e., properties with a high valuation will pay more, and properties with a lower valuation will pay less). o Additionally, tax exempt properties that will benefit from the increased level of service will not contribute toward the increased level of service. • Franchise fees would "level the playing field" by ensuring that all residential properties pay an equal amount, while also ensuring tax exempt properties are also paying for the benefits of an increased level of service. Next steps include: • Engaging electric and gas providers. • Developing fee structures and revenue scenarios. • Compiling projects for funding and tax levy impacts. The City Council was comfortable with the franchise fees; Councilmember Lien suggested more transparency. City Council directed Staff to move forward with an ordinance amendment by January 1, 2026, if possible, and to get ahead of it with communication. 4. COUNCIL COMMITTEE UPDATE Mayor Hoyt provided an update from the City Administrator Hiring Committee. Councilmember Lien mentioned Dakota 911 member fees and that townships currently do not contribute. Information was forwarded to Chief Price. 5. CITY ADMINISTRATOR UPDATE Work Session Minutes of July 7,2025 Page 3 of 4 6. ADJOURNMENT Motion was made by Councilmember Bernatz and seconded by Councilmember Cordes to adjourn the meeting at 6:44 pm. Motion carried: 5 ayes / 0 nays Re pectfully submitted, ity ksler I y Cle Work Session Minutes of July 7,2025 Page 4 of 4 WORK SESSION - REPEAL OF OPTIONAL BUILDING CODE CHAPTER 1306. 0020 CITY OF FARMINGTON — a0000"-- I Fire Protection Systems TIMELINE In the past the City of Farmington has chosen to adopt optional chapters of the Building Code aimed to enhance safety and provide for lifesaving and property preservation. Overtime the City has weighed the impacts of the optional provisions and opted to repeal when provisions proved to be too costly and overly burdensome to property owners. The following is a brief timeline: • Prior to 1999, the Farmington City Code included Chapter 1306. The City Council at that time reviewed Chapter 1306 and chose to repeal the chapter, the main opposition was to the requirement of sprinkling existing buildings and the extra costs required by owners. • In 2003, revisions were made to Chapter 1306 which provided options for municipalities to determine what level of fire protection was appropriate and allowed an option to more narrowly apply the requirement for fire suppression systems. • In May 2003, with support of the Fire Marshall & Building Official recommendations were made to adopt Chapter 1306, selecting Subpart 3 which now more narrowly applied the fire sprinkler requirements. The new option adopted did not require existing buildings to comply with fire sprinkler requirements. Example A Proposed classroom/office addition Existing Church 12,000 sf 12,000 sf 1306.0020 Subp.2 (Existing and New) Both the proposed and existing building would be required to be sprinklered. 1306.0020 Subp. 3 (New Buildings Only) This option is currently adopted by the City of Farmington and would only require the proposed building to be sprinklered. Example B Suite A Suite B Suite C Suite D Suite E Existing Strip Mall Spaces "D and P are retail spaces (Mercantile Occupancy) which are remodeling into an A-3 Restaurant. (This is a change of occupancy from Mercantile to A3 Assembly) 1306.0020, Subp. 2 (Existing and New Buildings) would require the entire building to be fully sprinklered. 1306.0020, Subp. 3 (New Buildings) - Farmington's current adoption only requires the remodeled spaces (D and E) to be sprinklered. PROS VS CONS • Reduces property losses caused by fire. Increases construction costs for new and • Defers or delays the need for a full-time existing buildings — The building codes & fire department. standards division estimates the costs associated with sprinkler installation at • Reduces the potential for loss of life or $2.24 per square foot. injury to building occupants and Fire Department personnel. • Increased hardships for building owners attempting to lease space to new tenants • Reduces fire insurance premiums for with a different occupancy classification business owners. which would trigger 1306 and require the • Reduces the overall cost of fire protection. installation of a fire sprinkler system. • Limits growth potential and causes business stagnation and limits turn over to like-for- like business occupancies. WHAT CHANGES IN APPLYING THE CODE? MN BUILDING CODE VS CHAPTER 13o6 • Fire sprinkler provisions do not go away, Chapter 1306 simply lowers the threshold for when they are required. Typically the biggest change is the reduction from 12,000 square feet to 2,000 square feet as the triggering mechanism for when fire sprinklers are required. • Why was 2,000 square feet chosen? In 2002, The Building Codes & Standards Division provided a STATEMENT OF NEED AND REASONABLENESS (SONAR) providing the following explanation: • A 2,000 square foot buildings can be attacked by firefighters from outside the building. Larger buildings require interior fire lines and require fire fighters to enter buildings. Also noted in the SONAR was the acknowledgement that a 2000 square foot building has a reduced occupant load allowing exiting in a timely manner in the event of a fire emergency. WHEN WILL SPRINKLERS BE REQUIRED - IF REPEALED? Minnesota Building Code & The International Fire Code "Fire Protection & Life Safety Systems" The need for fire sprinklers will be based on occupancy classification (Occupant loads) and the height and area of the building because these are the factors that most affect fire-fighting capabilities and relative hazards of a specific building type. • IRC-3 Townhomes — Not required in two unit townhomes unless a "State licensed facility". Townhomes of three or more will be required to be equipped with fire sprinklers. • Assembly Group A — (1) Fire area of 12,000 sf (2) Occupant load of 300 or more (3) Fire area is located on a floor other than the level of exit discharge. • Business Group B — Not required • Hazard Group H — Required in high-hazard occupancies. • Residential Group R — Apartments over 4500 sf/fire area • Mercantile Group M — (1) Fire area of 12,000 sf (2) Fire area > 3 stories above grade plane (3) All combined fire areas exceed 24,000 sf. ORIGINAL INTENT - SMALL CITIES "OPTION" The original intent of Chapter 1306 offered by the Minnesota Building Code aimed to reduce fire propagation, save lives and reduce risk to responding fire personnel. Chapter 1306 was originally called the "small cities" option because the fire sprinkler systems were designed to suppress a fire until a small cities volunteer fire department could arrive on scene. Fast forward to 2025 , the City of Farmington has several other systems and operational changes being implemented and underway, that collectively enhance safety and provide for lifesaving and property preservation. These include: 1. Substantial steps towards a full-time Fire Department. 2. Comprehensive and combined plan reviews by the Building Official, Building Inspector(s), Fire Chief and Fire Marshall. 3. Implementation of a Certificate of Occupancy process for all tenant changes regardless if a Building permit is required/issued. 4. Annual Commercial Fire Inspections. 1300.0020 MUNICIPAL OPTION Subpart 1. Requirement. The sprinkler system requirements of this chapter, if adopted, must be adopted with the selection of either subpart 2 or 3 (Farmington Option Currently), without amendment. Subp. 2 — Existing and new buildings. Automatic sprinkler systems for new buildings, buildings increased in total floor area, or a change in occupancy classification. Subp. 3 — New buildings. Automatic sprinkler systems for new buildings, additions to existing buildings, or buildings in which the occupancy classification has changed must be installed and maintained in operational condition within the structure. The requirements of this subpart apply to structures that fall within the occupancy classifications established in part 1306.0030, items A to D. M91,NO Q� 13o6.0030 (TRIGGERING) REQUIREMENTS The following occupancy groups must comply with sprinkler requirements of this chapter, unless specified otherwise: • Group(s) A-1, A-2, A-3 and A-4 occupancies. Assembly occupancies where the building is used for the gathering of persons for purposes such as civic, social or religious functions (Bowling alleys, library, restaurants, and bars). • Group B (Business), F (Factory), M (Mercantile) and S (Storage) Occupancies with 2,000 or more gsf of floor area or with three or more stories in height. • Group E occupancies with 2,000 or more gsf of floor area or two or more stories in height. • Group E daycare occupancies with an occupant load of 30 or more. FARMINGTON FRANCHISE FEES DISCUSSION JULY 7 , 2025 CITY COUNCIL WORK SESSION CITY OF FARMINGTON FRANCHISE FEES IN SHORT • Under Minnesota Statute 21613.36, cities can impose a fee on utility companies that use the public rights-of-way to deliver service. • Cities can determine the amount, structure, and use of franchise fees. • Generally, they are structured as a flat rate per utility account, or a percentage of consumption used by each utility account. • In Minnesota, most franchise fees are flat rates. PROS & CONS OF FRANCHISE FEES • Pros • Cons • Fixed Fees • Perceived Transparency • Predictable Long-Term Revenue • Administration & Implementation • Captures Tax Exempt Properties • Immediate Revenue from New Properties USES OF FRANCHISE FEES • State Statute allows cities to determine how Potential uses of franchise fees in franchise fee revenue will be used, such as: Farmington include: • Lakeville established franchise fees to • Implementation of Full-Time Fire support public safety projects. • Fire Station 1 Remodel & Expansion • Burnsville established franchise fees to • Police Department Remodel & support facilities improvements. Expansion • Eagan established franchise fees to support climate and sustainability projects. • Apple Valley established franchise fees to support infrastructure projects. FRANCHISE FEES IN NEIGHBORING COMMUNITIES *Monthly combined Electric & Natural Gas franchise fees.* Commercial, Commercial, Large Commercial/ Community Residential Low Demand High Demand Industrial Apple Va lley 2% 2% 2% 2% Burnsville $ 8.00 $ 24.00 $ 80.00 $ 360.00 Eagan $ 3.70 $ 20.00 $ 20.00 $ 30.00 La kevi Ile $ 12.00 $ 32.00 $ 70.00 $ 240.00 ESTIMATED FRANCHISE FEE REVENUE • Current Water/Sewer accounts: While Electric and Natural Gas accounts may not perfectly • Residential = 71319 mirror Water/Sewer accounts (there are likely more electric and gas accounts), here are some fee and revenue • Commercial = 221 calculations assuming that they do: • Institutional = 40 Residential Commerical Institutional Industrial Total Est. Annual Revenue • Industrial = 17 $ 4.00 $ 20.00 $ 20.00 $ 50.00 $ 424,152.00 $ 6.00 $ 24.00 $ 24.00 $ 100.00 $ 622,536.00 $ 8.00 $ 30.00 $ 30.00 $ 150.00 $ 827,184.00 $ 10.00 $ 36.00 $ 36.00 $200.00 $ 1,031,832.00 $ 12.00 $ 40.00 $ 40.00 $250.00 $ 1,230,216.00 *Monthly combined Electric & Natural Gas franchise fees.* IMPACTS ON RESIDENTS • The implementation of full-time firefighters is, conservatively, estimated to cost around $1 million. • If placed entirely on the levy, the estimated property tax impact on a $354,000 residential homestead is approximately $100. • This number will very based on the value of the property (i.e. properties with a high valuation will pay more, and properties with a lower valuation will pay less.) • Additionally, tax exempt properties that will benefit from the increased level of service will not contribute toward the increased level of service. • Franchise fees would "level the playing field" be ensuring that all residential properties pay an equal amount while also ensuring tax exempt properties are also paying for the benefits of an increased level of service. DIRECTION FROM COUNCIL • Staff is requesting direction from the City Council whether to take the next steps in pursuing electric and gas franchise fees. • Next steps include: • Engaging electric and gas providers. • Developing fee structures and revenue scenarios. • Compiling projects for funding and tax levy impacts. • While franchise fees do not need to be put in place in 2025, a decision to pursue them will affect how the 2026 budget (and future years budgets) will be developed and set.