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HomeMy WebLinkAboutDraft 12/5/11 MinutesPRip U M 4646 Dakota Street SE ­ Prior Lake, MN 55372 REGULAR CITY COUNCIL MEETING MINUTES December 5, 2011 CALL TO ORDER The meeting was called to order at 7:00 p.m. Present were Mayor Myser, Council members Erickson, Hed- berg, Keeney and Soukup, City Manager Boyles, City Attorney Pace, Finance Director Erickson, City Engi- neer / Inspections Director Poppler, Community and Economic Development Director Rogness, Public Works /Natural Resources Director Gehler, Fire Chief Hartman, Assistant City Manager Kansier, Assistant City Manager Meyer and Administrative Assistant Green. PUBLIC FORUM The Public Forum is intended to afford the public an opportunity to address concerns to the City Council. The Public Forum will be no longer than 30 minutes in length and each presenter will have no more than ten (10) minutes to speak. Topics of discussion are restricted to City governmental topics rather than pri- vate or political agendas. Topics may be addressed at the Public Forum that are on the agenda except those topics that have been or are the subject of a scheduled public hearing or public information hearing before the City Council, the Economic Development Authority (EDA), Planning Commission, or any other City Advisory Committee. The City Council, may discuss but will not take formal action on Public Forum presentations. Matters that are the subject of pending litigation are not appropriate for the Forum. Comments: Dawn Schulberg, 4616 Colorado Street, addressed the Council with her concerns about the safety of the dance studio students when traffic is rerouted in conjunction with opening Arcadia Avenue at CR 21 to Col- orado Street. Spoke of the possibility of enhanced crosswalk markings, speed bump, increased parking. Commented that studies on the Arcadia intersection were conducted prior to the dance studio being built and she believes it does not address the current activities in the area. APPROVAL OF AGENDA City Manager Boyles requested that item 10A, Consider Approval of a Resolution Authorizing Execution of the City's Standardized Professional Services Contract for the Pavement Degradation Analysis, be re- moved from the agenda. MOTION BY ERICKSON, SECOND BY KEENEY TO APPROVE THE AGENDA AS MODIFIED. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. APPROVAL OF MEETING MINUTES MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE THE MINUTES OF THE NOVEMBER 21, 2011 MEETING AS PRESENTED. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. CONSENT AGENDA City Manager Boyles reviewed the items on the consent agenda. A. Consider Approval of Invoices to be Paid. B. Consider Approval of an Addendum to the Labor Agreement between City of Prior Lake and Law Enforce- ment Labor Services related to Insurance Rates for 2011. Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com C. Consider Approval of Resolution 11.141 Authorizing Submittal of an Election Assistance Grant Application to the Minnesota Secretary of State. MOTION BY HEDBERG, SECOND BY SOUKUP TO APPROVE THE CONSENT AGENDA AS PRE- SENTED. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. PRESENTATION Brad Brandt Retirement. Public Works Director Gehler introduced Brad Brandt and described what it was like to work for the City in 1975. She provided a biography of Brandt's 36 years of service. Thanked him for service. Mayor Myser presented an appreciation plaque. PUBLIC HEARING Public Hearing for Proposed 2012 City Budgets and Property Tax Levies. City Manager Boyles reviewed the accomplishments of 2011 including retention of the Aa2 bond rating and leading conservation efforts in the region, particularly in the area of water quality. Spoke of future ef- forts in collaborating and cost containment in IT services, health insurance and continued water quality ef- forts. Described the timeline for levying 2012 property taxes and the process used for developing the budget. Reviewed the proposed budget noting that water and sewer fees are proposed to be increased; and that additional overage in reserves is anticipated due to a workers compensation insurance rebate and more than expected building permit fees. Explained the proposed 2012 tax levy is lower than the 2010 levy as a result of proposed use of reserve funds. Also reviewed the tax impact on the average valued house- hold. Comments: Erickson: Commented that the desired General Fund reserve amount is 45% and asked for an explana- tion of the purpose of those funds. Boyles: Responded that the General Fund reserve is needed to provide: 1) cash flow since tax revenue is received only two times per year funds are needed for day to day expenses; 2) one -time opportunities or catastrophes; and 3) funding for expenses that need to be brought current such as facilities management, equipment replacement, etc. Keeney: Asked the amount of the fund balance reserve above the 45% goal. J. Erickson: Replied that the fund balance is projected to be $7.725 million at the end of 2011 which is approximately $2 million over the 45% goal before the proposed use of reserves. Hedberg: Clarified the anticipated level of reserve. J. Erickson: Replied that $7.2 million is anticipated at the end of 2012. Hedberg: Noted that $1.3 million would be 10% of the estimated $13 million budget for the year 2013. Soukup: Clarified the amount of the workers compensation insurance rebate and the additional building permit revenue. Asked for an explanation of the market value homestead credit program and what it might mean to the City now that it is going to be discontinued. J. Erickson: Described the market value homestead credit program enacted and funded by the State. Since 2008, the State has not funded that credit to Prior Lake. That program was eliminated and a new program called market value exclusion enacted in which the State is out of the payment program. Proper- ties valued at less than $414,000 would have the taxable value reduced. The tax rate was increased to keep the tax levy constant. MOTION BY HEDBERG, SECOND BY SOUKUP TO OPEN THE PUBLIC HEARING. DRAFT 12 0511 City Council meeting minutes VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried and the public hear- ing opened at 7:49 p.m. Comments: Darcy Running, 3217 Butternut Circle, spoke about the public safety budget and proposed consolidating supervisory positions with other cities in the County. Believes consolidation could occur and savings could be made. Stated he has seen Prior Lake work well with other cities and the County and believes the con- solidation of public safety departments could save money and retain same level of service. Wes Mader, 3470 Sycamore Trail, addressed the Council on behalf of the Citizens for Accountable Gov- ernment Steering Committee stating their organization reviews and analyzes the City budget. Given the current economic climate, they believe the proposed budget should not be adopted. Believes expenditures reflect a $2.3 million increase over last year's spending. Stated that $2.5 million has been accumulated in reserves since 2008 and the City should make a reduction in the tax rate in 2012. Stated transit generated an operating loss of a half million dollars and continues to project a loss. Stated that non -union employees received a 7.5% increase in wages since 2008. Believes the tax levy should be adjusted downward and the reserve returned to the taxpayers. Michael C. Gresser,14145 Shady Beach Trail, cited employee salaries of individuals in the room and compared them to private industry. Believes government has not experienced the economic difficulty that private industry has and that the people in government do not know what the hell they are doing. Kevin Lilland, 4560 Embassy Circle NE, commented that the charts in the presentation show almost no population growth since 2004. Believes government has made no efforts to cut back. Stated the reserve is well above the 45% goal and it would be prudent to give it back to taxpayers. Asked Council what they think should be done. Ronald Wolfram, 4612 Pleasant Street, commented on Mader's remark about raises for non -union em- ployees by saying he has been in the private sector for 35 years and doesn't recall getting large raises. Asked if Mader is correct about the rate of increase and whether the proposed 2% increase for 2012 is on top of that. Sandy Wright, 14300 Timothy Avenue, asked about the projected increased revenue on investments and questioned its validity. Believes that creating a hopeful revenue might encourage the City to justify in- creased expenditures. Asked if the projected increased budget for Economic Development is to cover ex- penses incurred relating to the study of CR 21 or for new projects and what they might be. Believes the City is always over in its reserve and that is over - taxation. Lloyd Erbaugh,17291 Marshfield Lane, stated he moved to Prior Lake in 2009 after looking for great housing, strong schools and a welcoming community; and described the City as having remarkable natural resources, astounding beauty, and being a cultural and natural gem. Believes we are custodians of the space. Referred to a 2009 Star Tribune article that discussed the strategic plan, partnerships and up- graded infrastructure in Prior Lake. Believes the budget debates are about how to keep Prior Lake a spe- cial place. Stated the City has delivered a budget surplus and it is a problem to be embraced. Encouraged residents to voice support for budget and a consensus to reduce budget surplus over a number of years. MOTION BY ERICKSON, SECOND BY HEDBERG TO CLOSE THE PUBLIC HEARING. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried and the public hear- ing closed at 8:28 p.m. Comments: Council and staff discussed questions brought forward in the public hearing. Consolidation and collaboration in public safety. Boyles: Stated that collaborative efforts in fire protection and police are underway and IT consolidation is being considered as well in the 2012 budget. 3 DRAFT 12 0511 City Council meeting minutes Myser: Added that SCALE works on collaboration, and public safety collaboration and consolidation is on its agenda. Council's proposal for the surplus. Hedberg: Noted that some of the reserve will be used to mitigate a tax increase. Population growth has not been flat. The number of households has grown about 1 % each year and increased growth is antic- ipated when the economy stabilizes. The City has more than $400 million in assets and infrastructure to maintain and Capital Improvement Programs are developed every year for infrastructure maintenance and improvements. Believes past capital obligations have been underfunded and surpluses should be used to meet long -term capital obligations such as the maintenance center and fire station roofs. Stated the infor- mation technology structure is way behind and some major financial software is decades old. There are important needs in the city that have not been approved and about which there is much discussion such as extending Arcadia and bringing sewer and water services in the Welcome Avenue area. Believes this is the appropriate budget to allow funds for some of the important investments that need to be made. Soukup: Concurred with Hedberg's comments. Stated there have been improvements to the City and we can be proud of the streets, landscaping and efforts to grow business parks, etc. Believes in trying to make the City less of a bedroom community and better able to be diversified. Wants to be able to offer new busi- nesses something to attract them here, and an improved technological infrastructure is being worked on. Noted that the surplus was accumulated over many years and it should be dealt with responsibly. Erickson: Thanked previous Mayor Mader for initiating the opt -out of the MTC transit program which re- sulted in the transit monies that are coming to the City. Those are dedicated non property tax funds and cannot be used for anything but transit. Believes the General Fund reserve should be reduced in incre- ments. Believes in building a sustainable, viable community for the future and the Council needs to con- sider the best way to do that. Keeney: Stated the City has adopted a financial management plan which states that if there is no specific budgeted purpose, we must reduce the reserve to the targeted 45 %. Believes the policy states it should be returned in tax cuts and to do it even over three years would take reductions of $800,000 or $900,000 per year. Favors a levy reduction in those amounts to hit a three year plan. Prefers the reduction over one or two years but believes a smoothing action of multiple years would be better than one year. Believes hold- ing the money to develop a plan would be unfair to the taxpayers. Myser: Believes it is taxpayer money and should be returned in reduced taxes. Believes half should be re- turned and the other half used for expenditures that are overdue such as financial software and facilities management. Believes it should be returned in a single year because this is when residents need it and if it held for other potential needs, a reason to spend it will be found. Noted that when items are bonded, it is future residents that are paying for needs that are met for future residents. Clarification of salary increases. Meyer: Related that in 2009, non union employees received a 2.5% increase; in 2010 no increase; and in 2011 a 2% increase for a cumulative 4.5% over three years. Explained a staffing reorganization occurred in 2011 which likely made it difficult for Mader and Gresser to review changes from one year to the next. Interest revenue increase. J. Erickson: Stated the City has been conservative on revenue projections over the past several years. Bonds have been called and turned over several times and interest earnings are exceeding what was bud- geted. The projected 2012 budget is aggressively showing interest revenue as well as building permit rev- enue to more accurately reflect what has happened and is anticipated. Economic development budget increase. 4 DRAFT 12 0511 City Council meeting minutes J. Erickson: Stated the CR 21 study expenses were paid out of the 2011 economic development and is not included in the projected 2012 budget. Cautioned that smaller budget items can appear to have large increases when only considering the percentage and the 2012 budget includes $50,000 in order to have funding available for professional services so the strategic plan can be implemented when approved. Hedberg: Noted that the Economic Development Authority (EDA) has not completed its strategic plan, but they have agreed upon four priorities: 1) to consider fiber to every parcel in the city; 2) technology business incubators; 3) a data center; and 4) economic development in downtown. The proposed budget is to have money available for professional services to move these four agendas forward. Budgeting process. J. Erickson: The process undertaken is to have a conservative budget. An average of $350,000 annually has been added each year for the past 20 years on the revenue side. Expenditures are more flexible as staff cannot know how many snow storms there will be, cost of fuel, etc. Council has adopted financial management policy to address how to manage reserves in the future. Hedberg: Stated that well -run cities run surpluses and the alternative is to run deficits. Believes the goal is to have modest surpluses. Noted that Prior Lake has been a fiscally conservative, well -run city with sur- pluses every year since 1990 and that is not a sign of a broken budget process. Myser: Believes there should be small surpluses and the City should plan for a slight reserve, but not have this great of a balance. Believes we are getting better at it. Erickson: Complimented staff on its stewardship of public monies and looking at alternatives to provide service rather that just spending the money. Comments: Keeney: Stated that when he reviews spending he considers if there is an increasing level of services or a larger population and if there are increases in the cost of living. Stated that it requires about a 3% increase to maintain what we have. Believes it inappropriate to consider new spending or new levels of service so, to the extent that the budget reflects increases in levels of service, he does not support that. Believes low- er priority items should be reduced and the City should look hard at what we have to do without. Finds it difficult to support adding two positions and should add with extreme caution as that increase will have to be carried for a long period. Stated he does not support spending the surplus down; expenditures and levy should be reduced. Erickson: Stated that staff was reduced over the past few years and compromises were made to do that. Supports adding the positions in public safety and accounting to become closer to being fully staffed. Rei- terated that the City is the lowest taxing entity compared to the School and County. Will support the pro- posed budget. Soukup: Disagreed with comments made to reduce services and that it is the wrong time to add positions. Supports the increase of two staff positions. Complimented staff on staying on or under budgets with crea- tive solutions, grant seeking, etc. Stated her conversations with residents leads her to believe that most people don't want the roller coaster ride of highs and lows in tax levies. Hedberg: Supports the budget as presented. It provides for a 2% reduction in levy which, with the 1 % growth in taxes, results in a 3% reduction in actual household taxes. Stated that recent statistics show in- flation at 3% and that should be used as a guideline in planning budgets. Projected inflation for the period from 2008 — 2012 is 10% and the tax per household remained flat during this period when the economy had an inflation rate of 10 %. Per household actual spending is down with this proposed budget. Regarding population projections, noted that the City is using adjusted projections based on actual census figures. Myser: Stated that adding two positions is a 5% increase and believes it is inappropriate to add them in this kind of environment. Does not propose cutting or reducing services but believes staff should continue to find opportunities meet service needs. Believes we should wait until growth increases and economy bet- ters to add staff. 5 DRAFT 12 0511 City Council meeting minutes MOTION BY HEDBERG, SECOND BY ERICKSON TO DIRECT STAFF TO PLACE THIS ITEM ON THE DECEMBER 19, 2011, CITY COUNCIL AGENDA FOR FINAL ACTION. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. OLD BUSINESS Consider Approval of a Resolution Providing for the Issuance and Sale of $5,780,000 General Obli- gation Bonds, Series 2011 B. Finance Director Erickson introduced Steve Mattson of Northland Securities. Mattson reiterated that the Council approved a trigger resolution to sell bonds at an advantageous time. Stated he started selling on November 21 and sold 60% of the bonds the first day. Interest rates were increased to sell the re- mainder. The overall savings on the refinance of the fire station is $215,000 for future debt service. Distri- buted the yield scales. Anticipates closing the bond issue on December 20 and refinancing the city hall /police station project in 2012. Comments: Soukup: Clarified the savings to taxpayers of $215,000. Mattson: Affirmed that over the length of the bond, it should save that much. Hedberg: Good job, well done. Will support. Keeney: Queried whether an expert reviews the documents on our behalf. Boyles: Replied that the City uses Briggs and Morgan as bond counsel and they have provided an opi- nion. Keeney: Stated it confirms the City is doing its due diligence. Erickson: Thanked Mattson for his work. Asked Mattson to explain what it means for the Council to do this planning in amounts that are bank qualified. Mattson: Stated that the Federal government wants to assure that small issuers can get good rates and has provided that community banks can receive the full tax exempt benefit if they buy from a city, school or county in an amount that stays under $10 million. Noted that being qualified rather than non - qualified re- sults in an approximate half percent difference in interest costs, which is around $500,000 - $600,000 in savings on $10 million. Part of the current planning is to do these smaller issues this year so we can leave the 2012 allocation for refinancing city hall/ police station. Myser: Asked about Bernanke's comments that QE4 might drive interest down at beginning of year. Mattson: Replied he does not know the particulars, but believes Bernanke and board will try to keep inter- est rates at the levels they would like for their reasons; but it is the bond traders across the country that ac- tually move interest rates. The rates will move because of perceptions. Interest rates can change based on local and international events. MOTION BY HEDBERG, SECOND BY SOUKUP TO APPROVE RESOLUTION 11.142 PROVIDING FOR THE ISSUANCE AND SALE OF $5,780,000 GENERAL OBLIGATION BONDS, SERIES 2011 B, PLEDG- ING FOR THE SECURITY THEREOF SPECIAL ASSESSMENTS AND LEVYING A TAX FOR THE PAY- MENT THEREOF. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. Consider Approval of a Report and Provide Direction Regarding Streetscaping Options for the Ar- cadia and County Road 21 Project, City Project #11.001. City Engineer / Inspections Director Poppler informed the Council that the final design is nearly com- plete and the intersection is targeted for landscaping options. Described the area and the planned traffic flow. Noted that amenities could be added to serve as a source of community pride and provide directional guidance to visitors. Don Sterna with WSB and Associates reviewed PowerPoint for proposed improve - 6 DRAFT 12 0511 City Council meeting minutes ments. Explained that any plan would require State approval as the project will use State Aid monies. Re- viewed amenities that could be considered including streetlights, benches, litter receptacles, planting urns, seat wall planters, decorative sidewalk and directional signs. Noted that the intersection is targeted for completion before Lakefront Days 2012. Poppler commented on the amenities that are sensible to be in- cluded now if they are desired in the final plan such as sidewalks and lighting; and others could be added later. Comments: Hedberg: Commented that streetlights could be installed to the corner of Duluth, but does not see the need to install them west of Arcadia at this time. Makes sense to do the benches, planters, etc. and begin to create the streetscape as the project progresses. Concurred with having decorative sidewalk. Asked the location of the proposed monuments. Stern: Replied it is planned for the SW corner for those heading eastbound into downtown. Hedberg: Believes some kind of direction for people heading westbound would be beneficial as well and suggested considering a sign on the NE comer of Arcadia. Believes kiosks could be done in the future. Questioned why the parcel shown for parking would not be a developable parcel for small business and does not favor a parking lot there. Soukup: Clarified the style of streetlights. Agreed with four lights on Arcadia and two on Dakota. Sup- ports signage on two corners to reach drivers from both directions. Not sure there should be benches on the main intersection. Would be interested in having additional parking, but would like to know if that lot is developable. Prior Lake may not be large enough to justify the kiosks. Erickson: Queried why the sign would not match the sailboat entry signs. Sterna: Responded they did not look at trying to keep the same shape as the entry signs, but could. Stated they tried to find a shape that would allow enough verbiage to direct people to downtown. Erickson: Likes the digital aspect to the monument sign and believes that would be cost effective over the life of the sign. Wondered if one sign could be double -sided and serve both sides of the road. Agreed westward bound drivers should have signage. Believes lighting west of Arcadia is not necessary at this time. Believes benches by the pond are not needed now, perhaps in the future. Does not support the kiosks due to upkeep and not in keeping with small town feeling. Wants to know if the proposed parking lot is developable, benefits of the parking area or if there could be a better place for parking. Keeney: Believes much of the streetscaping should wait until semaphores are installed. Lighting, signage and amenities should go with it. Lighting to the west should remain as is. Believes the proposed signage solution is deluxe. Noted that money has been put into streetscaping on Main, but he has not heard if it contributed to the success of businesses there and this seems like a lot to invest in a corner that will never have much development. Does not favor the "spot' parking solution as it is expensive and has potential to become dedicated to one business. Stated that does not reflect his vision of how to do parking downtown and he favors putting the lot on the market. Believes regular sidewalks will be fine. Myser: Would have liked the costs for the amenities to be included with the agenda package. Stated that the broad solution for downtown should consider whether this lot would be suitable for parking. Questioned whether the street lights will be for safety or aesthetics and how the lighting fits with the entire downtown. Stated he is open to a monument sign of some sort and would like to know the options from electronic to less expensive, the purpose, necessary size and what it should look like. Agreed that benches and lights to the west of Arcadia are not needed. Would like to see a holistic plan to consider all of the elements to- gether. Stern: Stated the input is greatly appreciated in putting together the next step to bring back to the Council. Myser: Queried the Council on whether the consensus is to have no lights west of Arcadia, no kiosk and no benches. Keeney: No parking lot. 7 DRAFT 12 0511 City Council meeting minutes Poppler: Clarified there is agreement to have a monument sign but more options should be explored in- cluding a sail shape, no decorative sidewalks and staff should come back with a lighting plan for downtown. Noted that currently there are wooden lights which will be removed to construct the project. It will be diffi- cult to put lighting in later and when replacing the street lights, it would be good to consider complementing downtown and the Wagon Bridge. Reviewed the map to discuss placement of lighting. Sterna: Currently there is lighting along the trail on the south side and from Arcadia east on the north side. Erickson: Asked if lighting could be omitted on the north side. Stern: Displayed the section that will be permanent noting they are suggesting that permanent lights be put in at this time. Boyles: Suggested bringing the topic back to a work session. Keeney: Asked if streetscaping is in the Capital Improvement Program. Poppler: Stated streetscaping was in the original budget, but construction and ROW costs have grown. Noted that the original project budget was $3.05 million and with the proposal brought to tonight's meeting as well as the semaphore, it is at $3.365 million. Consider Approval of a Resolution Making Appointment to the Communications / Technology Advi- sory Committee. Assistant City Manager Meyer stated that the interview team met with two applicants. One was not a res- ident and, therefore, not eligible for this Committee. The interview team recommends Fiddle for the Com- mittee and approaching the Economic Development Authority to recommend Dodaro for its Broadband Subcommittee. MOTION BY HEDBERG, SECOND BY KEENEY TO APPROVE RESOLUTION 11.143 APPOINTING THERESA FIDDLE TO SERVE ON THE COMUNICATIONS / TECHNOLOGY ADVISORY COMMITTEE. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. NEW BUSINESS Item 10A, Consider Approval of a Resolution Authorizing Execution of the City's Standardized Professional Services Contract for the Pavement Degradation Analysis, was removed from the agenda. OTHER BUSINESS Community Events Erickson: Stated that Lakefront Dazzle will be held at Lakefront Park Friday night. Boyles: Stated that the City has been nominated Outstanding Conservationist of the Year by the Scott County Soil and Water Conservation organization. Keeney: There will be a benefit for Joe and Carrie Wiita on January 28, and any donations for the silent auction can be handled by contacting Randy Hofstad. ADJOURNMENT With no further comments from Council members, a motion to adjourn was made by Hedberg and seconded by Soukup. With all in favor, the meeting adjourned at 10:29 p.m. Frank Boyles, City Manager Charlotte Green, Administrative Assistant D DRAFT 12 05 11 City Council meeting minutes