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HomeMy WebLinkAbout11-22-10 WSMinutes Lakeville City Council City Council Work Session November 22, 2010 6:00 p.m. In attendance: Mayor Holly Dahl Council Member Mark Bellows Council Member Laurie Rieb Council Member Kerrin Swecker Council Member Kevin Miller Staff: Steve Mielke, City Administrator Dennis Feller, Finance Director Keith Nelson, City Engineer Steve Michaud, Parks and Recreation Director Dave Olson, Community and Economic Development Director Daryl Morey, Planning Director Chris Petree, Operations & Maintenance Director Brenda Visnovec, Liquor Operations Director Tom Vonhof, Police Chief John Kornmann, Emergency Management Director Mike Meyer, Fire Chief Cindi Joosten, Human Resources Manager Penny Brevig, Recording Secretary The meeting was called to order at 6:00 p.m. by Mayor Dahl. ITEM #1 — 2011 Street Improvement Project Update Operations & Maintenance Director Chris Petree stated that at the September 27, 2010 work session, the City Council had authorized a neighborhood meeting to discuss the proposed 2011 Street Improvement Project. The meeting was held on October 28, 2010. He indicated that they also conducted some initial investigative work as part of the project, some soil borings, surveying, infrastructure evaluation, etc. Mr. Petree's PowerPoint presentation included updated information for the City Council regarding location of the projects, projected costs, estimated assessments, resident feedback and what the next steps will include. Included in the packets is a memo from WSB with responses to questions that were received via phone, comment card or at the public meeting. Council Member Swecker asked when these roads were constructed or reconstructed. City Engineer Keith Nelson indicated that they were originally constructed in the early 1960's and have never been reconstructed. City Council Work Session Minutes November 22, 2010 Page -2- Council Member Swecker clarified with Mr. Petree that the waste haulers are meeting the weight load limits for the roads. But, Mr. Petree also indicated that, to a certain extent, waste haulers are exempt from the load limits on the roads. Council Member Miller asked which kind of curb would be installed. Mr. Nelson indicated that it would be the same kind that is currently there. People have expressed that they like the lower driveway curb so their trailer hitches and bumpers don't hit the curb when they enter or exit their driveways. Mr. Petree commented that there will only be minor work done on the infrastructure of these neighborhoods. Everything is in very good shape with regard to the sanitary sewer lines, hyd rants, etc. Mr. Petree indicated that the neighborhood meeting was very positive. Residents asked specific questions, understanding that the construction will be happening and wanting to know how they will be affected during the project. Council Member Swecker confirmed with staff that the mailboxes will be updated, along with some street signs. Mr. Petree commented that this was discussed with the residents and they agreed that this would be the time to get all the mailboxes up to City code and make them uniform. This has been included with the estimated project cost. Council will authorize the preparation of a Feasibility Report or Study for the proposed project at the December 6, 2010 City Council meeting. ITEM #2 — 2010 -2011 Budget Topics City Administrator Steve Mielke stated that there are two agenda items related to the budget; one is a review of the budget with the status and options of how to close out the 2010 budget and the other is responses to the written questions that were received from the Chamber of Commerce Public Policy (formerly Government Affairs) Committee. Mr. Feller described the General Fund which accounts for all revenues and expenditures necessary to provide a full range of services, including general government administration, community and economic development, public safety, public works, and parks and recreation. Mr. Feller stated that over the last several months a number of events have transpired which will impact the proposed 2011 budget. The relevant issues include revision of the estimates in building permit revenues from residential construction. Relevant expenditure adjustments are primarily personnel issues. Council Member Swecker asked if the money in the Contingency Fund is carried over from the previous year and what would normally be included in the Contingency Fund. Mr. Feller explained that the Contingency is for unforeseen items which are almost always weather related. Any unexpended Contingency funds become a part of the subsequent years' fund balance. City Council Work Session Minutes November 22, 2010 Page -3- Mr. Feller discussed the options with respect to financing General Fund operations. Council Member Miller brought up the Kenrick Avenue project. He asked what would be involved with this project, and whether it has Council's support. Council Member Swecker indicated that residents are very anxious for this project to start. Council Member Bellows feels this is driven by speculation. He indicated that normally new roads would be driven by development and he feels that taxpayers may not want to pay for this project. Mr. Mielke indicated that the project can be left in the CIP and the decision does not have to be made at this time. There was a discussion amongst the Council Members regarding the City memberships, their cost and which ones which might be considered for discontinuance. Mr. Mielke explained the memberships and how they benefit the City. Mr. Mielke recommended that the Council wait and see what happens with our new Governor prior to dropping memberships. Council Member Bellows stated that he believes the Council should make a statement by immediately discontinuing the membership with the Association of Metropolitan Municipalities. Council Member Bellows asked whether the budget should include new employees in 2012. Mr. Mielke indicated the Council will consider the 2012 budget and any proposed new positions in the summer of 2011. Council Member Bellows questioned having to pay a facilitator at the Council Goal Setting Retreat. The other Council Members agreed to remove the $5000 for a facilitator from the 2011 General Fund Mayor and Council budget and tax levy. City Council consensus is to: a) Approve the 2010 budget adjustments as shown on Exhibit A (pages 28 -30 of the packet). b) Transfer $270,673 in 2010 from the General Fund contingency to Equipment Fund to reduce the debt issuance for the coming year. c) Approve the 2011 General Fund budget as amended subject to the adjustment of the Contingency of the revenues and expenses as shown in Exhibit A (pages 28 -30 of the packet). Mr. Feller continued with an overview of the Special Revenue Funds section. He indicated that there are no proposed changes to the preliminary 2011 Communications Fund, Compensation Liability, or Economic Development Fund budgets. He listed the options for the Environmental Resources Fund and the proposed $.50 per quarter increase in the Surface Water Management Fee. It was determined that there is a regulatory process and it's getting more expensive for these projects and programs listed under the Environmental Resources Fund, but they are mandatory programs. The City can be fined for not doing them. Council Member Bellows City Council Work Session Minutes November 22, 2010 Page -4- asked what the impact on commercial would be for these programs. Mr. Feller indicated it would be about a 6% increase, depending on the size of the lot and impervious surface. City Council consensus is to: a) Approve all Special Revenue Fund 2011 budgets as presented subject to the $1,300 adjustment in the Environmental Resources Fund. b) Approve the $0.50 increase in the surface water management fee to finance the projects and maintain the Environmental Resource Fund's financial integrity. Mr. Feller presented an overview of the Capital Projects Funds and the different options available, which include Debt for equipment acquisitions, use of Fund balance — rather than debt for equipment, reduced tax levy, equipment acquisitions, improvement Construction Fund — Street improvements, Improvement Construction Fund — Kenrick Avenue extension, or other improvement projects. Mr. Feller stated that there is one adjustment to the Improvement Construction Fund of $45,000 and two reductions in the Equipment Fund. City Council consensus is to proceed with the proposed 2011 Capital Projects Funds budget as presented subject to the following: a) Equipment Fund expenditures reduction in 2010 and 2011 of $117,810 and a corresponding decrease in debt issuance. The reduction is the result of equipment acquisition cost savings. b) Transfer $270,673 in 2010 from the General Fund to the Equipment Fund and decrease debt issuance accordingly. c) Finance the remaining $265,000 of equipment acquisitions with reduction in Fund Balance. d) Improvement Construction Fund increased expenditures in 2011 of $45,000 and a corresponding decrease in Fund Balance as shown in Exhibit B, which is attached to the packet. Mr. Feller presented an overview of the Debt Service Funds. He indicated that there is a net change in fund balance of $1,501,930. Overall, the debt is decreasing by approximately $2 million. City Council consensus is to proceed with the 2011 proposed Debt Service Fund budget as presented and finance the remaining $265,000 of equipment acquisitions with a reduction in fund balance. Mr. Feller presented an overview of the Liquor Fund and options. City Council concurred with the staff recommendation to proceed with the 2011 Liquor Fund budget as presented. Mr. Feller reviewed the Utility Fund — Water Operation. He explained the water tiered rate structure. Tier 1 is primarily water consumption for sustaining life and good health. Businesses are subject to Tier I and Tier II. Tier III, which has the most significant rate City Council Work Session Minutes November 22, 2010 Page -5- increase, is predominately for irrigation and is considered discretionary. City Council consensus is to proceed with the proposed 2011 Utility Fund — Water Operation budget and rate structure as presented. Mr. Feller reviewed the Utility Fund — Sanitary Sewer Operation. Mr. Feller indicated that the proposed sanitary sewer rate increase is important to maintain the fund's financial stability and provide financing for major maintenance projects. Council Member Swecker asked how much the SAC increases are for the coming year. Community and Economic Development Director David Olson stated that it's standard $100 - $130 per unit. City Council consensus is to proceed with the 2011 proposed Utility Fund — Sanitary Sewer Operation budget, sanitary sewer rate increases, and MCES sanitary sewer charge adjustment as presented. Mr. Feller stated that the electric utility companies have already implemented rate increases; hence, staff is recommending a utility fee increase for the coming year. City Council consensus is to proceed with the 2011 Utility Fund — Street Light Operation budget including a rate increase as proposed. Mr. Feller reviewed the Utility rate structures and proposed changes in rate structures and indicated that there would be approximately a $4.60 rate increase per quarter in 2011. Mr. Feller presented an overview of the Municipal Reserves Fund. These are basically self - insured funds. He stated that various City funds receive a charge from the Municipal Reserves Fund for their respective share of general liability insurance premiums, claims, and other related legal and administrative expenses. Mr. Feller indicated that the general liability and workers compensation insurance is provided through the League of Minnesota Cities Insurance Trust, a municipal insurance pool, in which the City retains exposure to losses for liability claims. City Council consensus is to proceed with the 2011 Municipal Reserves Fund budget as proposed. Mr. Feller presented an overview of the property taxes. He indicated that the 2011 proposed tax levy will result in a reduction for the overwhelming majority of residential and commercial /industrial properties. Prudent spending has resulted in no City tax increase which, when combined with a growing tax base, results in lower City tax impacts for both business and residents. Mr. Feller stated that the overwhelming majority of commercial and industrial property owners will see a decrease in their 2011 City property taxes but an increase in the total property tax bill because of Fiscal Disparities and the State General Property Taxes. The City share of taxes represents 14% of the total tax bill for businesses. Council Member Swecker indicated that she felt it was a huge advantage to Lakeville that Rep. Mary Liz Holberg is now Chairman of the Ways and Means Committee. Response to Citizen Inquiries: City Council Work Session Minutes November 22, 2010 Page -6- Mr. Feller stated that the Chamber of Commerce Public Policy (formerly Government Affairs) Committee submitted questions at the November 15, 2010 Council meeting and additional questions on November 18` Staff has tried to sort the questions into categories and address the questions as groups. The following categories, with the specific questions listed underneath, along with footnotes for specific line items, were handed out at tonight's meeting and were explained and answered by Mr. Feller: 1. Budget Expenditure 2. Debt 3. Interfund Transfers 4. Changes in Operations 5. Forestry Position 6. Personnel Mr. Feller pointed out that the response to the questions includes references to the page numbers of Budget Document as further substantiation of the answers. Mr. Mielke will provide the documented responses to the Chamber of Commerce. Council Member Swecker asked if these questions came from a business group or from the Chamber of Commerce. Mr. Mielke wasn't sure, but will ask for a clarification. Mr. Mielke, along with the Council and directors thanked Mr. Feller for all his work that went into these documents. ITEM #3 — Discuss date change or cancellation of December Council Work Session Mr. Mielke stated that typically the Council would have a work session on the fourth Monday of December; however he did not see a purpose for having that meeting and suggested changing it to the second Monday of December. Mr. Mielke indicated that there would probably only be one or two agenda items, including committee and commission appointments. This would give Council time to consider their options before making those decisions. Mr. Mielke indicated that he would not be available for a work session on December 13. ITEM #4 — Interagency Committee and Board Reports • ALF Senator Franken visited Apple Valley Fire Station #1 earlier today. His visit was intended to learn more about the financial impacts of federal policy on ambulance services. HiPP The second of three work sessions has taken place. A survey was sent out that gave all council members a chance to offer input. Lakeville was one of the top City Council Work Session Minutes November 22, 2010 Page -7- four responding agencies for that survey. Next step will be the creation of focus groups of citizens that will be asked a series of questions relating to collaboration. The process is on -going with the hope of producing a set of ideas for exploration. The group will attempt to expand beyond cities and counties, perhaps to schools, non - profits, and for - profits. ITEM #5. — Adjourn Adjourn to commence closed meeting at 8:30 p.m. in the Marion Conference Room of City Hall to consider strategy for labor negotiations. The meeting adjourned at 8:20 pm. Respectfully submitted, Penny Br ig Rec*ing Secretary :)Iy Dahl ayor