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11-13-2006 CC MIN . . . MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, NOVEMBER 13,2006 Members Present: Acting Mayor Farber, Councilmembers Dietz, Gumphrey, and Motin Members Absent: Mayor Klinzing Staff Present: City Administrator Lori Johnson; Street Superintendent Phil Hals; Assistant Street Superintendent Mark Thompson; Human Resources Representative Lauren Wipper; Recreational Director Bill Maertz; City Engineer Terry Maurer; Liquor Operations Manager Dave Potvin; and City Clerk Joan Schmidt 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 6:35 p.m. by Acting Mayor Farber. 2. Consider Council Agenda MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY COUNCILMEMBER DIETZ TO APPROVE THE AGENDA. MOTION CARRIED 4-0. 3. Consider Consent Agenda MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER GUMPHREY TO APPROVE THE FOLLOWING CONSENT AGENDA. 3.1. RESOLUTION ACHNOWLEDGING CONTRIBUTIONS TO THE CITY OF ELK RIVER RECREATION 3.2. RESOLUTION ACHNOWLEDGING CONTRIBUTIONS TO THE CITY OF ELK RIVER FIRE AND AMBULANCE SERVICE MOTION CARRIED 4-0. 4. Open Mike No one appeared for Open Mike. . 5. Worksession 5.1. Council Open Forum Councilmember Motin inquired as to whether the Energy City Commission had an opportunity to discuss the issue of E85. Ms. Johnson stated that she had discussed this with Rebecca Haug and will check into this to see if the commission has met since their discussion. City Council Minutes November 13, 2006 Page 2 Acting Mayor Farber wished to discuss an adjustment in pay for the Community Development Director. He stated that this would be effective January 1, 2007 with an increase again in July. City Administrator Lori J ohoson stated that Mr. Clark would receive a step increase on January 1, 2007 and a step increase on July 1, 2007. He would move to the top step on July 1, 2008. Acting Mayor Farber feels that this would be appropriate action. Councilmember Dietz stated that he agrees that Mr. Clark is doing an excellent job and that his pay should be adjusted. Councilmember Gumphrey agreed. Councilmember Motin inquired as to when this would place Mr. Clark at the top of the range, and he was satisfied that this would place him there one year early. . MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER GUMPHREY TO APPROVE THE REVISED PAY PLAN FOR SCOTT CLARK AS STATED BY THE CITY ADMINISTRATOR. MOTION CARRIED 4-0. Councilmember Dietz stated that with his leaving the Council, there will be the need to appoint a council member representative to the Utilities Commission. Normally this person is not on the EDA Commission. He stated that he hoped the Council will continue to appoint this position; that a strong City influence is necessary on that Commission; and stressed the importance to have a council member remain with this Commission. 5.2. Public Works Master Plan Update Jeff Oertel with Oertel Architects addressed the issues of location, existing facilities, site constraints, site expansion possibilities, future needs and recommendations for future expansion of the City's Public Works Facility. He stated that the existing building, including the second floor space, is approximately 20,000 square feet and the cold storage building is about 7,800 square feet in size. In order to accommodate the parking of all vehicles and equipment under heated cover, to provide an office, and an operation that is ADA compliant, efficient and serviceable, the projection for a current optimum building area would be 86,000 square feet. He stated that if projected out 20-30 years it was anticipated that the facility may need to increase to an overall size of 112,000 to 122,000 square feet. He stated that this was important for no other reason than to determine if the existing site can accommodate the long-term size and site space needs for the Public Works Department. . Councilmember Dietz felt that we should stay at the current site and inquired if we were to expand into the ball fields area, would the City be able to replace these ball fields. Recreational Director Maertz stated that the ball fields would need to be replaced because they are in constant use and that there were some potential sites, however, that there would be a loss of revenue to replace the fields. Councilmember Dietz felt that the Council should step up and build the new facility for the Public Works Department. Councilmember Farber agreed and asked how this would be phased in. Mr. Oertel explained that this would be a complicated issue since the Public Works Department does not stop operating. It would be eight months of pain during this project. He stated that they would need to expand to the south and west and the office would be at the front point with the crews remaining and working at the current area. The vehicle storage area would be the easiest to expand but would have the greatest need after the office area was completed. He stated that he could share this information at another council meeting explaining Phases I through IV. . . . . City Council Minutes ~overnber13,2006 Page 3 Councilmember Motin agrees that a facility is necessary and suggested gutting the whole building. He is not sold on the idea of 80,000 square feet of storage for equipment. He was concerned about bringing all the equipment indoors, that diesel vehicles should be in a heated area but that the pick-up trucks could remain outside. It was stated that a design of a long shed area to put the vehicles in may be helpful. Acting Mayor Farber stated that with the City of Fridley they have lawnmowers and other small vehicles in a long shed. Mr. Oertel stated that he feels a new vehicle maintenance area could be looked at in the long- term and that the City may wish to spend the money on the office with as much storage as possible. Councilmember Gumphrey inquired as to the thought of a second floor. Mr. Oertel stated that there would be a need for an elevator and that this option could be looked into. Councilmember Dietz inquired as to the financing, if we would use the government fund. Ms. Johnson stated that there is some funding in Government Building Reserve if this was a small project, those funds could be up front, a large project would be financed. Acting Mayor Farber asked what the overall effect would be in dollars. Ms. Johnson said that she did not have the fund balance information and will research the impact on an annual basis of financing theproject. Acting Mayor Farber would like staff to determine a budget and Councilmember Gmnphrey would like to see a plan of needs with what we wish to build and the dollar amount. Councilmember Motin would like to see what we felt needed to be housed inside. It was the consensus of the Council to stay at this location. City Engineer Maurer suggested breaking out this project into two parts: One, to work through the project and, two, to discuss the phasing. We need to look at this site and plan it for the long term. Mr. Oertel stated that it is not clear if the wedand area has to be touched, that the fueling island would have to be relocated, additional parking area for staff, and the need to look at temporary storage. He stated that it would be a long time before the need to have to touch or expand into the ball fields and wedand area, and this would give time to plan and fund this project. It was the consensus of the Council for staff to provide plans with the dollar amounts and a time line attached. 5.3. Storm Drainage Discussion A. 192nd Avenue and Lowell Street The City Street Department working with the City Engineer researched possible oudets for this land-locked pond in the vicinity of 192nd Avenue and Lowell Street. The most cost- effective option would be to connect a small diameter 8" pipe into Salk Middle School athletic field storm drainage system. This oudet would provide a positive oudet for this ponding area and yet be small enough to meter the water into the School District's system at a rate that will not overtax their system. The School District has given permission for this directional boring. Acting Mayor Farber inquired if this would be a permanent solution to the problem. Mr. Hals stated yes but that the City will need to maintain. Mr. Maurer reassured the Council that this will not overload the system. MOVED BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER DIETZ TO APPROVE THE STORM DRAIN IMPROVEMENT PROJECT FOR 192ND AVENUE AND LOWELL STREET AT City Council Minutes }Jovernber13,2006 Page 4 A COST NOT TO EXCEED $20,000 WITH FUNDING TO COME FROM THE STORM WATER MANAGEMENT FUND. MOTION CARRIED 4-0. . B. Royal Oaks Ridge The City Street Departrnent with the help of the City Engineer further reviewed the Deerfield III storm sewer, the pond and the pond outlet. Staff has come to the conclusion that the bog area between the inlet and outlet has become clogged with vegetative matter, which has raised the pond level about 30 inches. With the pond at the elevated level, the water fills the outlet of the Deerfield III storm pipe which could freeze up solid and stop the flow, or worst case scenario, break the storm sewer pipe. The solution is to clean the drainage ditch that runs from north to south along the east side of the pond and then install a culvert over the Northern Natural Gas line to control the water level. Staff has presented this proposal to the Technical Evaluation Panel (rEP) for their review and has received their approval. Councilmember Motin inquired if the homeowners had been contacted. Mr. HalS stated that two have been notified and that staff will visit with the remaining homeowners prior to any excavation. Mr. Maurer stated that the design of this project originally was with the pipe partially submerged and that it is now fully submerged with sediments, and that the pump is partially exposed and could freeze this winter. Mr. Hartrnan, a resident in the audience, stated that the original intent was to pipe the water in. He stated that he has spent quite a bit of money and landscaping around this area and is concerned about dropping the water level of this pond by 30". Mr. Maurer stated that it is a 36" pipe and that half of it is exposed. Mr. Hartman explained that he has been there for 12 years, that it is now aesthetically developed and paid for by the neighbors. The City Engineer stated that he has met with the TEP Committee and that this problem came to light after a rain storm. Staff has concerns of the culvert being exposed and freezing. . It was the consensus of the Council that staff members Phil Hals, Mark Thompson, and Terry Maurer meet with homeowners Mr. Hartrnan and Mr. Jackett to come up with a solution that maintains the pond and the integrity of the drainage system. 5.4. Health Insurance Update Barry Rosenberg and Rick Nelson of Minnesota Insurance Services di~cussed the renewal rates for health insurance for City employees. Based on the group's claims experience, it was determined that staying with BlueCross-BlueShield was the best option at this time. Lori Johnson stated that an Employee Assistance Plan will be added in 2007 through BlueCross- BlueShield at a cost of approximately $1,200. This will be funded through the tobacco settlement funds. The original renewal increase for health insurance was approximately 27%. By adjusting the plans slightly, the actual rate increases will be around 23% depending upon which plan the employee chooses. There are three plan options available from a $25 copay to a $500 deductible. The Council directed staff to research the city contribution so the Council could consider different options for the 2007 contribution. Lauren Wipper, Human Resources Representative, has surveyed other cities and found that there is no consistency in the contribution levels; the contribution in the cities surveyed varied from $500 to $850 per month. One item able to be summarized from the data was that the City's contribution to family coverage is slightly low. . . . . City Council Minutes ~overnber13,2006 Page 5 Council reviewed the information before them and gave direction to look at adding a fourth category of a $1,000 deductible class. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER GUMPHREY TO INCREASE THE CITY CONTRIBUTION FOR 2007 AT A MONTHLY COST OF $50,000 AND DIRECTED STAFF TO COME UP WITH A PROPOSAL AS TO HOW THIS ADDITIONAL MONEY SHOULD BE SPLIT AMONG THE GROUPS. MOTION CARRIED 4-0. 5.5. Park Dedication Fees Mr. Maertz explained that the State of :Minnesota statuteconceming park dedication fees requires that there be a "rational nexus" between park dedication and the long-range plan for park capital spending. In order to gauge this rational nexus, staff has reviewed Elk River's lO-year parks capital improvement plan in relation to park dedication revenue estimates. Projections using the current park dedication fees, with 5% increases each year, indicate that there will be a shortfall of approximately $580,000 over the next ten years. Staff recommends changing the park dedication fee for residential to $3,600 per dwelling unit and changing commercial and industrial fees by 5%. Mr. Maertz explained that staff had inquired as to what other local cities are doing with their fees. Staff looked at the cities of Big Lake, Albertville, St. Michael, and Otsego. Councilmember Motin stated that he does not feel that the residential fee should go up to $3,600 per dwelling unit, he felt that this amount was too high and that this would put the whole burden on future developers. Acting Mayor Farber agreed and feels that this amount was too much. Councilmember Dietz stated that lie was fine with this amount; that we have spent quite a bit for the Pinewood Golf Course with funding coming from this source; that we are not out of line with our neighboring cities; and that the developers will pass this cost on. Acting Mayor Farber inquired as to why we are not spreading out the amount equally between residential, commercial and industrial. Mr. Maertz explained that we are encouraging growth in the commercial and industrial areas. MOVED BY COUNCILMEMBER DIETZ AND SECONDED BY COUNCILMEMBER MOTIN TO CHANGE THE RESIDENTIAL PARK DEDICATION FEE FOR 2007 TO $3,300 PER DWELLING UNIT WITH AN INCREASE OF 5% FOR COMMERCIAL AND INDUSTRIAL AREAS. MOTION CARRIED 3-1 (Councilmember Gumphrey voted no). 5.6. Enterprise Fund Budgets Lori Johnson reviewed the operations for Westbound and Northbound Liquor Stores. Liquor Operations Manager Dave Potvin stated that Northbound sales have not decreased due to customer transfers to Westbound as much as originally projected, and that sales at both stores have been strong. Profits of $233,300 will be transferred in 2007 to pay for general fund activities and to fund debt service and city buildings. It was stated that one City Council Minutes }Jovernber 13, 2006 Page 6 expense in the 2007 budget will be to add a tasting demo area for Northbound, similar to what is currently at Westbound. . Ms. Johnson reviewed the Waste Water Treatment Plant request, stating that the City has consistently approved inflationary increases in sewer rates so that there are not major adjustments needed to the rate structure. The user fees cover the operations of the Treatment Plant. The sewer availability charge (SAC) funds the expansion of the plant. The city engineer is recommending that the SAC increase be from $3,500 to $3,700 for 2007. She explained that the Waste Water Treatment Plant budget is changes include purchasing a trash pump, additional chemicals of $70,000 to remove phosphorus and adding a full-time laborer position. Ms. Johnson reviewed the garbage collection budget. She stated that the tipping fees and contracts will not change for 2007; therefore, the customer rates will not change in 2007. The haulers have delayed a rate increase until 2008 and are requesting the contract be extended. Rebecca Haug will be coming back to the Council with revised language in the contract in 2007. It was the consensus of the Council to proceed with a SAC increase fee from $3,500 to $3,700 for 2007. 5.7. Discussion on General Fund Budget Mr. Johnson explained that the City's Truth In Taxation hearing is scheduled for December 4, at which time the proposed budget and tax levy will be discussed. The final tax levy and budget will be approved at the following meeting. The Council approved the proposed tax levy on September 11. At that time the Council also approved several changes to the General Fund Budget. The General Fund Budget has not been adjusted to reflect those changes. . There are other outstanding items that Council needs to consider so that the proposed budget can be drafted for the December 4 hearing. Ms. Johnson reviewed with the Council the approved adjustments as well as items to be determined and adjustments or corrections. The Council needs to consider the Elk River Area Arts Alliance contribution request of $20,000; currently $10,000 is in the budget. She stated that Mr. Maertz had requested a part- time recreation position go to full-time; which was misunderstood that a part-time position goes full-time; rather, he was asking for an additional full-time position with the additional cost to make the part-time position full-time. It was the consensus of the Council to have Mr. Maertz come back to explain. Discussion followed as to what other cities contribute to the Elk River Area Arts Alliance, and what the City contributes to other groups. MOVED BY COUNCILMEMBER DIETZ TO CONTRIBUTE $12,500 TO THE ELK RIVER AREA ARTS ALLIANCE. MOTION FAILED DUE TO LACK OF A SECOND. MOVED BY COUNCILMEMBER MOTION AND SECONDED BY COUNCILMEMBER GUMPHREY TO CONTRIBUTE $15,000 TO THE ELK RIVER AREA ARTS ALLIANCE. MOTION CARRIED 4-0. . . . . City Council Minutes November 13, 2006 Page 7 5.8. Consider 2007 City Council Meeting Schedule The Council reviewed the council meeting schedule before them and stated that they would like to meet on January 2 and approved the schedule. MOVED BY COUNCILMEMBER GUMPHREY AND SECONDED BY COUNCILMEMBER DIETZ TO APPROVE THE CITY COUNCIL MEETING SCHEDULE AS PRESENTED. MOTION CARRIED 4-0. 6. Other Business - None 7. Council Updates - None 8. Staff Updates ECONAR Donation Update MOVED BY COUNCILMEMBER MOT IN AND SECONDED BY COUNCILMEMBER GUMPHREY TO ACCEPT THE DONATION OF HEAT PUMPS FROM ECONAR FOR THE LIBRARY PROJECT AND FOR STAFF TO GO AHEAD WITH THE CHANGE ORDER TO THE LIBRARY CONTRACT. MOTION CARRIED 4-0. 9. Adjournment There being no further business, Acting Mayor Farber adjourned the meeting of the Elk River City Council at 9:20 p.m. Joan Schmidt City Clerk