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09-06-1994 CC MIN - SPECIAL e SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL TUESDAY, SEPTEMBER 6,1994 Members Present: Mayor Duitsman, Council members Dietz, Scheel, Farber and Holmgren Members Absent: None Staff Present: Pat Klaers, City Administrator; Lori Johnson, Finance Director; Sandy Thackeray, City Clerk; Peter Beck, City Attorney; Terry Maurer, City Engineer 1. Call MeetinG To Order Pursuant to due call and notice thereof, the meeting of the Elk River City Council was called to order at 6:00 p.m. by Mayor Duitsman. 2. Consider Agenda e The following items were added to the agenda: 3.3. Set public hearing date for Western Area Phase II Assessment Hrg. 5.1. Consider lawful gambling exemption for St. Andrews 5.2. Update on Rre Chief Status COUNCILMEMBER FARBER MOVED TO APPROVE THE 9/6/94 CITY COUNCIL AGENDA AS AMENDED. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 3.1. Consider options for installinG and assessinG public improvements in the Sandpiper Estates Mayor Duitsman entered into the record a letter which was received from Ann Oster of 1921 Main Street regarding the proposed assessments for the extension of water, sanitary sewer and storm sewer to Sandpiper Estates. . The City Administrator stated that it would be in the best interest of the City to make a decision on the proposed assessments for the Sandpiper Estates before the bid is awarded for the Western Area II project. He stated that staff is recommending that the Council consider following Option 2 as outlined by Councilmember Dietz. He explained that option 2 consists of extending the trunk line through the Sandpiper Estates with no laterals and no assessments levied against the Sandpiper Estate properties. He indicated that this option allows the property owners to petition for the improvements in the future. The City Administrator also indicated that this option was the most cost effective for the City. City Council Minutes September 6, 1994 Page 2 e Terry Maurer, City Engineer also encouraged the Council to make a decision on the Sandpiper Development before awarding the bid for the project so that a change order could be authorized, if necessary. Mayor Duitsman opened the public hearing at this time. Steve Stewart - 18290 Ogden St NW- indicated that Option 2 takes away the property owners' ability to subdivide the property. He further indicated that if water and sewer were to come in 15 to 20 years, they may not be able to afford the assessment costs on a retirement income. Mr. Stewart stated that he preferred Option 1 if it included a 10% reduction in cost. He further stated that a corner lot should be assessed on the lesser side rather than on the greater side for streets. Becky Burley - 183rd Ave. - stated that she supports Option 2. She questioned the percentage of property owner's that could petition for city services. She suggested that #3 of Option 2 include the following: "The Council would likely not consider extending laterals into the Sandpiper area unless a petition were signed by at least 70% of the property owners requesting the extension, or unless it would be ecologically necessary". She further requested that #4 be deleted (referencing the $3,800 trunk fee). e Mayor Duitsman indicated that this council could not take any action that would tie the hands of a future council. Mrs. LaPointe, 18006 Queen St. - questioned why the property would have to be rezoned to a one acre minimum requirement. She questioned what would happen to the document that they signed when they purchased their property which indicated that the property could be subdivided. She indicated that with Option 2, city sewer and water would run in front of their home, however, they would not have the ability to hook up to the utilities or to subdivide their land. Mrs. LaPointe indicated her fear of being unable to split their land in the future. She indicated she is in favor of Option 1 as it is the least expensive in the long run. Troy Nemeth, 18185 Naples St. - stated that he is in favor of Option 2. Barb Guidarelli, 18137 Ogden St. - indicated that any assessment over $10,000 is too high. She indicated she is in favor of Option 1 with a reduction in cost. She suggested that the City put the trunk line but not the storm sewer. She also suggested that the City put the road back in its original condition (tar). She stated that this would cut costs for the City and the homeowners. Ms. Guidarelli also suggested zoning the area to allow one-half acre lots. Terry Maurer, City Engineer, encouraged the City to put in storm sewer due to the number of potential lots in the area, if the property is not rezoned to one acre lots. Pat Jensen, 18218 Naples - stated he was in favor of Option 2. e Two other Sandpiper residents indicated that they were in favor of Option 2. City Council Minutes September 6, 1994 Page 3 e Discussion was held regarding the criteria that would be used to determine the future need for sewer and water in the Sandpiper area. The Council indicated that this issue will be decided by a future council. Council member Dietz indicated that the City is not installing a trunk line to benefit the "business park." He stated that the City does not even own the land for the proposed business park. Mr. LaPointe, 18294 Naples St. - questioned whether the trunk line fee and lateral storm sewer assessment would be forgiven in ten years, or when the development is served in the future. Mayor Duitsman indicated that there was no guarantee that these fees would be forgiven in the future. Mr. LaPointe indicated that he is in favor of Option 1. -Becky Burley, 183rd Ave. - suggested that an environmental need or petition be the only reason that will bring utilities to the area. She further requested that the Council get the cost down to $10,000. Mayor Duitsman stated that he favored Option #2. He further stated that he did not feel the Council could lower the cost in Option 1. Council member Dietz concurred with Mayor Duitsman. He stated that the Council must be careful so as to not set a precedent that would be difficult for future Councils to follow. e Barb Guidarelli, 18137 Ogden st. - indicated that she and her husband are in favor of Option #2 due to the fact that the Council cannot lower the cost for Option # 1 . Council member Holmgren stated that due to the surplus of water and sewer lots, lot prices are decreasing. He indicated that he does not feel the lots would increase in value by the amount of the assessment and because of this it is not in the best interest of the residents of Sandpiper or the City of Elk River to extend utilities to the area at this time. He further indicated that by voting for Option 1, the Council would be setting a precedent that would be very difficult to follow. Council member Holmgren stated that he is in favor of Option 2. He thanked Council member Dietz for his work in this matter. COUNCILMEMBER DIETZ MOVED TO AUTHORIZE A MORATORIUM ON LOT SPLITS IN THE SANDPIPER SUBDIVISION OF LESS THAN ONE ACRE UNTIL A ZONE CHANGE TO Rl B IS ACCOMPLISHED AND TO EXTEND THE TRUNK LINE THROUGH THE SANDPIPER DEVELOPMENT ALONG 183RD AVENUE WITH NO ASSESSMENTS TO THE PROPERTY OWNERS OF SANDPIPER ESTATES. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. . Discussion was held regarding the Council suggesting to future Councils that Sandpiper not be forced to hook up to utilities in the future unless there is an environmental need or it is petitioned by at least 70% of the residents. City A ttorney Peter Beck suggested that a resolution be drafted to fully explain the motion as stated in Option 2 and that the suggestions regarding future hook-ups also be included in the resolution. It was the consensus that this resolution would City Council Minutes September 6, 1994 Page 4 e be drafted by the City Attorney and acted upon by the City Council at a future date. 3.2. Consider resolution awardina bids for the Western Area Phase II proiect City Engineer, Terry Maurer, indicated that the City received 11 bids for the Western Area Phase II project. He recommended that the Council award the bid to Barbarossa and Sons and to include a change order that eliminates the Sandpiper Estates from the project. This company was the lowest bidder at $1,958,884.47. COUNCILMEMBER HOLMGREN MOVED TO ADOPT RESOLUTION 94-90, A RESOLUTION ACCEPTING BID AND AUTHORIZING EXECUTION OF CONTRACT IN THE MATTER OF THE WESTERN AREA PHASE II IMPROVEMENT OF 1994 AND TO AUTHORIZE A CHANGE ORDER WHICH ELIMINATES SANDPIPER ESTATES FROM THE PROJECT. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 3.3. Set date of Western Area Phase II Assessment Hearina The Council discussed the possibility of permanently moving the EDA meetings to 6:00 p.m. It was noted that this may not be able to be accomplished without an amendment to the bylaws. e COUNCILMEMBERHOLMGREN MOVED TO CALL A SPECIAL MEETING OF THE CITY COUNCIL FOR OCTOBER 10, 1994, AT APPROXIMATELY 7:00 P.M. FOR THE WESTERN AREA II ASSESSMENT PUBLIC HEARING. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. THE MOTION CARRIED 5-0. 4. Check Reaister COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE CHECK REGISTER. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.1. Consider application for exemption from lawful aamblina license by st. Andrew's School COUNCILMEMBER DIETZ MOVED TO ALLOW AN EXEMPTION FROM LAWFUL GAMBLING LICENSE REQUESTED BY ST. ANDREW'S SCHOOL TO OPERATE BINGO ON OCTOBER 16, 1994. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.2. Update on Fire Chief Status . The City Administrator indicated that he met with Mr. Bruce West to discuss the terms of employment for the position of Fire Chief. The City Administrator recommended that the Council hire Mr. West according to the terms and conditions listed in the letter to Mr. West dated September 6, 1994. Discussion was held regarding the response time to a fire and the fact that Mr. West does not live in the City limits. Discussion was also held regarding the issue of when Mr. West will be required to move into the City. Councilmember Scheel indicated she had a problem with the beginning salary and the fact that Mr. West does not reside in the City. City Council Minutes September 6, 1994 Page 5 e Mayor Duitsman requested the City Attorney to draft more specific language in regard to response time or living in the fire district. COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE CONDITIONS STATED IN THE LETTER TO BRUCE WEST DATED SEPTEMBER 6, 1994, WITH THE EXCEPTION THAT THE CONDITIONS REGARDING RESPONSE TIME AND LIVING WITHIN THE FIRE DISTRICT BE DRAFTED BY THE CITY ATTORNEY SO AS TO BE MORE SPECIFIC. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5. Other Business Councilmember Farber stated that he saw a teacher wearing an orange jacket and directing traffic on School Street. He indicated that it is dangerous for unauthorized personnel. to direct traffic. Councilmember Farber indicated that traffic should be directed by police department. . Terry Maurer, City Engineer, updated the Council on the School Street and Jackson project. He also updated the Council on the progress of the Elk Hills Drive intersection. e The City Administrator updated the Council on the damage that took place to the fire station roof. He indicated that the Building Official would be receiving bids to determine the extent of damage. COUNCILMEMBER HOLMGREN MOVED TO RECESS TO THE TRAINING ROOM TO HOLD A BUDGET WORKSESSION. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. The Council recessed at 7:50 p.m. 6. Budqet Worksession The City Council discussed the projections for growth in the net tax capacity (NTC) and how it will affect the City tax rate. It was noted that more than half of the increase in the City tax levy is due to the proposed tax levy for surface water management (SWM). Councilmember Farber stated that the City should consider decreasing this proposed SWM levy and consider using some fees that could be generated through the utility billing process. The Mayor concurred that this is still an option that needs to be explored, but also indicated that an annual levy amount is necessary. Councilmember Dietz indicated that he thought three points was too high of a levy in 1995 for surface water management. The Council indicated that this amount can be reduced later in the year, but not increased after an amount is certified to the County on 9/15/94. . City Council Minutes September 6, 1994 Page 6 e The Council reviewed the revised 1995 personal services additions page. Administrative Secretarial duties, City Clerk duties, and the need for secretarial support for the administration staff were reviewed with the City Clerk. Councilmember Dietz outlined his goal of having only a $50,000 increase in 1995 for new personnel. Upon further discussion of the Accountant/ AA position, Council member Dietz stated that this information adjusts his goal to $64,000. The City Administrator noted that this revised personal services page includes more than the $80,000 goal as outlined by the City Council and that he further proposed to reduce this amount by $12,000 to a total of $68,000 for 1995. Personnel issues can be decided later in 1995 or in early 1996 by the City Council as to which positions should be added and when they should be added in order to achieve the $68,000 goal. The Council reviewed the total proposed tax increase, the 9/15/94 certification requirements, and the Truth in Taxation notices. The Council indicated that they thought the growth rate for the NTC would be at 11 percent or more and, therefore, the impact of the increase in the general fund tax levy and SWM tax levy would be much smaller than the amount identified in the Truth in Taxation notices. e The Mayor indicated two of his areas to cut or reduce include the Fire Department reserve request and the Ice Arena reserve request. The Council concurred with a $5,000 decrease in the Ice Arena reserve request and a $60,000 decrease in the Fire Department reserve request. It was noted that the Fire Department reserve can be partially established with reserve funds that have been generated by the sale of property to UP A. The City Administrator reviewed the budget balancing options for reducing the $339,000 deficit as outlined in his 9/1/94 budget memo. The first item reviewed was the designation of the $30,500 equipment transfer for specific capital outlay requests from various departments. The Council concurred with these designations at this time, but noted that some of these items may be cut and replaced with other capital outlay requests. The City Council concurred to reduce the deficit by $17,000 by purchasing the Building and Zoning inspector truck in 1994 by using undesignated equipment reserves. Additionally, the Council agreed to purchase $2,000 worth of proposed administration equipment out of the 1994 administration/finance budget. The Council agreed to purchase the pOlice copy machine out of the 1994 City Council Contingency budget. The Council agreed to reduce the Fire Department capital outlay reserve request by $60,000 and to supplement the remaining $10,000 in the budget with $30,000 from the reserve monies available from the UPA sale. The Council agreed to reduce the Building and Zoning capital outlay request of $6,000 for computer equipment by having this expenditure financed in 1994 from the data processing budget. It may be necessary to encumber these funds for this purchase. The Council agreed to solicit quotes for the truck, copy machine, and administration equipment. - The above budget adjustments reduce the budget gap by $95,000 and leaves a gap of $244,000. . City Council Minutes September 6, 1994 Page 7 e The Council agreed to reduce its City Council Contingency fund by $10,000. The Council directed staff to increase the revenue projections for items related to growth and development in the City by $30,000. The Council agreed to increase the Liquor Store transfer in to the General fund by $40.000, but indicated its desire that this not be an established amount for future budgets, and that this amount be reduced in the future. The Council disagreed and did not authorize the use of $20,000 from its cash flow fund in order to balance the budget. This may be necessary at a future point during the budget balancing discussion, but was not acceptable at this time. The above budget adjustments further reduce the budget gap by $80,000 and leave a budget gap of $164,000. The City Council agreed to request the EDA to absorb an additional $8,000 worth of expenses for personnel, videotaping, and Elk River pins: to reduce the City Council Contingency by $12,000 by delaying the hiring of new employees in 1995 (reducing the $80,000 goal to $68,000 - as previously discussed); cut $15,000 from expenditures by directing staff to make these departmental cuts: and cut $5,000 from the capital outlay request by directing staff to purchase the police vehicle VCR camera now through the use of undesignated equipment reserves. The above items equal an additional $40,000 in cuts and further reduce the budget gap to $124,000. e The City Council agreed to reduce the Ice Arena contribution by $5,000 and to reduce the Fire Department Retirement Fund contribution by $1,500 due to no contributions being necessary for the new Fire Chief. The Council did not authorize any further reduction in its Contingency fund as suggested by reducing wage increases for 1995. The $6,500 in reductions noted above further reduce the budget gap to $117,500. The Council reviewed the need for additional revenues and discussed an increase in the Utilities contribution to the City to cover general City expenses that are associated with meeting our growth and development challenges. The City Administrator reviewed the proposed $36,000 increase in this contribution. The City Council requested a joint meeting with the Utilities to discuss an increase in its contribution and other City/Utility issues. Until an agreement is reached for an increased contribution, the budget gap remains at $117,500. The City Administrator noted other options for reducing this gap which include additional reductions in expenditures, and additional increases in revenues. Action necessary by the City Council on 9112/94 in order to certify information to the County by 9/15/94 was reviewed by the Finance Director and City Administrator. The Council discussed certifying its maximum tax levy and budget and options to reduce this amount later in the year. e e e e City Council Minutes September 6, 1994 Page 8 7. Adjournment There being no further business, COUNCILMEMBER HOLMGREN MOVED TO ADJOURN THE MEETING. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. The meeting of the Elk River City Council was adjourned at 10:00 p.m. Respectfully submitted, A~a~ Sandra A. Thackeray City Clerk tft~lJ~ Patrick D. Klaers City Administrator