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HomeMy WebLinkAboutMinutes i� ��tJV� �ri°t � y � ............................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... ���� �ri e ar�d PC�� t MINUTES COTTAGE GROVE CITY COUNCIL May 17, 2017 COUNCIL CHAMBER 12800 RAVINE PARKWAY SOUTH REGULAR MEETING - 7:00 P.M. 1. CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota, held a regular meeting on May 17, 2017, at Cottage Grove City Hall, 12800 Ravine Parkway. Mayor Bailey called the meeting to order at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE The audience, staff, Mayor, and City Council Members recited the Pledge of Allegiance. 3. ROLL CALL The following were present: Mayor Myron Bailey, Council Member Steve Dennis, Council Member Wayne Johnson, Council Member La Rae Mills, and Council Member Dave Thiede. Also present were: Charlene Stevens, City Administrator; Korine Land, City Attorney- LeVander, Gillen & Miller, PA; Ryan Burfeind, Assistant City Engineer; John Burbank, Senior Planner; Les Burshten, Public Works Director; Joe Fischbach/HR Manager/City Clerk; Jennifer Levitt, Community Development Director/City Engineer; Sharon Madsen, Communications Coordinator; Adam Moshier, Management Assistant; Rick Redenius, Fire Chief; Robin Roland, Finance Director; Craig Woolery, Director of Public Safety. 4. OPEN FORUM Mayor Bailey opened the open forum and asked if anyone in the audience wished to address the Council on any item that was not on the agenda. As no one wished to address the Council, Mayor Bailey closed the open forum. 5. ADOPTION OF AGENDA Motion by Council Member Mills, second by Council Member Dennis, to adopt the agenda. Motion carried: 5-0. 6. PRESENTATIONS CITY OF COTTAGE GROVE • 12800 Ravine Parkway • Cottage Grove, Minnesota 55016 www.cottage-grove.org • 651-458-2800 • Fax 651-458-2897 • Equal Opportunity Employer City Council Meeting Minutes May 17, 2017 Page 2 A. 2017 Historic Preservationist of the Year Staff Recommendation: Proclaim Brent Peterson as the 2017 Historic Preservationist of the Year for the City of Cottage Grove. As Mr. Peterson was not able to attend, this presentation will take place at the next City Council Meeting on Wednesday, June 7, 2017. B. Meritorious Service Awards - Firefighter/EMT Dahlquist and Firefighter/EMT Quebodeaux Staff Recommendation: 1. Present Meritorious Service Award to Firefighter/EMT Matt Dahlquist for his efforts over the past several years with regard to his knowledge and assistance in purchasing new ambulances and most recently his work efforts done to outfit our new ambulances with new stair chairs, new stretchers with steer-lock, and the Power Load cot loading system. 2. Present Meritorious Service Award to Firefighter/EMT Dave Quebodeaux for his efforts in regard to his assistance with the move of primary Fire/EMS operations to the BEC. He worked with Bob Schindeldecker and on his own to help make the move as seamless as possible. Mayor Bailey read the Meritorious Service Award given to part-time Firefighter/EMT Dave Quebodeaux for his efforts in moving primary Fire operations to the BEC and gave a summary of the work he had done to earn the award. Mayor Bailey read the Meritorious Service Award given to part-time Firefighter/EMT Matt Dahlquist for his assistance with the purchase of new ambulances, as well as equipment for the ambulances, for which he was given the award. Both recipients were thanked and congratulated by the Mayor and the City Council Members. Fire Chief Rick Redenius stated both of these gentlemen do whatever they can to improve Fire services, including work on construction projects, new ambulances, new equipment, or the image of the Fire Department. Chief Redenius said they're proud of both of them and very happy to work with them. Public Safety Director Craig Woolery stated these two gentlemen are exceptional people, both with their Fire/EMT skills and also with their other skills, which they use within the department. They were both thanked and encouraged to continue their great work. Council Member Dennis wanted to extend his appreciation to administration for recognizing these gentlemen. He felt the improvements made to the quality of service we bring to the citizens is incredible. Mayor Bailey stated both of these gentlemen had also helped with the interior design of the new Central Fire Station and again thanked them and congratulated them. 7. CONSENT AGENDA A. Approve the May 3, 2017 City Council Regular Meeting Minutes. City Council Meeting Minutes May 17, 2017 Page 3 B. Receive and place on file the approved minutes from the February 28, 2017 meeting of the Advisory Committee on Historic Preservation. C. Authorize issuance of a temporary liquor license to the Cottage Grove Lions in conjunction with Strawberry Fest events at Kingston Park on 6- 16-2017 (12:00 p.m.-1:00 a.m.) and 6-17-2017 (10:00 a.m.-1:00 a.m.), and Lamar Softball Complex on 6-17-2017 (7:00 a.m.-5:00 p.m.). D. Authorize issuance of a temporary liquor license to the St. Paul Park/Newport Lions in conjunction with Strawberry Fest events at Kingston Park on 6-16-2017 (9:00 a.m.-1:00 a.m.) and 6-17-2017 (10:00 a.m. to 1:00 a.m.). E. Authorize staff to execute an agreement with the Friends of the Mississippi River to develop a Natural Resources Management Plan for Settler's Island for a cost not to exceed $4,400. F. Adopt Resolution 2017-069 granting a variance to City Code Title 11-3- 3C, Accessory Structure Setbacks, and Title 11-3-3E, Miscellaneous Requirements, to allow a proposed 36-foot by 42-foot accessory structure to be approximately 68 feet closer to Lamar Avenue than the existing residential structure's front yard setback at 7910 Lamar Avenue South. G. Adopt Resolution 2017-072 approving the plans and specifications for the water meter and radio replacement project and establishing a June 15, 2017 bid date. H. Receive and place on file the approved minutes for the Arts Commission meeting on April 4, 2017. I. Receive 2017 Strategic Plan documents. Motion by Council Member Thiede to approve the Consent Agenda, second by Council Member Johnson. Motion carried: 5-0. 8. APPROVE DISBURSEMENTS A. Approve payments for the period of 5/03/17-5/10/17 in the amount of $702,054.93. Motion to approve disbursements by Council Member Johnson, second by Council Member Thiede. Motion carried: 5-0. 9. PUBLIC HEARINGS A. Host Approval Debt— City of St. Paul Park for PHS/Cottage Grove Inc Staff Recommendation:Adopt Resolution 2017-068 consenting to and approving the issuance by the City of St. Paul Park of revenue obligations and taking other actions with respect thereto. Finance Director Robin Roland stated this public hearing was to provide host approval. PHS/Cottage Grove Inc. in addition to Presbyterian Homes & Services, who'd built a City Council Meeting Minutes May 17, 2017 Page 4 facility, had proposed that the City of St. Paul Park issue revenue obligations in one or more series, taxable and tax exempt, in the aggregate maximum principal amount of $70,000,000. This money would be for purposes of refinancing the acquisition, construction, installation, and equipping the 144-unit senior housing facility located at 8200 Hadley Avenue, which is known collectively as Phase 1. It will also finance the acquisition, construction, and equipping of a 136-unit addition to Phase 1, consisting of 64 independent-living units, a 72 bed skilled-nursing wing, and 80,000 square feet of common space and underground parking. Even though the facility is located in Cottage Grove, the City of St. Paul Park is able to issue the debt under Minnesota State Statutes 471.59 and 471.656. The City is authorized to issue this debt as long as they are in a Joint Agreement with the City of Cottage Grove. Director Roland stated the City of St. Paul Park had approved this Agreement and they're ready to issue the debt; all that's required tonight is our Agreement. Presbyterian Homes can refinance their debt and acquire more debt to build their new facilities, which they anticipate being in the ground before this fall. Director Roland introduced Mark Meyer of Presbyterian Homes and Julie Eddington from Kennedy & Graven, who would take any questions. Council Member Thiede asked why we'd go through St. Paul Park to do this; Director Roland explained that St. Paul Park is issuing the conduit debt. They are a small borrower and have bank qualification because they have not yet issued debt. With any amount over $10,000,000, the interest rate increases. Neither the City of St. Paul Park nor the City of Cottage Grove has any responsibility for the repayment of any of this debt. Mayor Bailey opened the public hearing; as no one wished to speak on this issue, Mayor Bailey closed the public hearing. Motion by Council Member Dennis to Adopt Resolution 2017-068 consenting to and approving the issuance by the City of St. Paul Park of revenue obligations and taking other actions with respect thereto; second by Council Member Thiede. Motion carried: 5-0. B. TH 95/Manning Avenue Safety Improvement Project Staff Recommendation: 1) Hold the Public Hearing on the TH 95/Manning Avenue Safety Improvement Project. 2) Adopt Resolution 2017-071 approving the final layout of the TH 95 Safety Improvement Project from Bailey Road (CSAH 18) to 70th Street (CSAH 22). Mayor Bailey welcomed Adam Josephson of the MnDOT, who was going to explain this project. Mr. Josephson stated there are projects along Highway 95, one of which would be started this year; they expect it will begin in July and be completed in September. That project will add a northbound left-turn lane at Valley Creek Road. The public hearing tonight is for the 2018 project, which will add shoulders between 70th Street City Council Meeting Minutes May 17, 2017 Page 5 and 40th Street. That will be followed up with an identical project in 2019, from 70th Street to Highway 61. In 2017, at Valley Creek Road, in addition to the left-turn lane, they will be installing some shoulder mumble stripes, and also some drainage improvements. By adding the left-turn lane, they hope to reduce crashes, decrease localized congestion, and enhance safety and traffic flow. From a traffic impact standpoint, they'll detour southbound Highway 95 traffic to Woodbury Drive and then down to Bailey. Northbound traffic will be maintained through the construction area. MnDOT knows crashes are typical of rural highways; narrow shoulders contribute to that higher crash rate. The current ditches also aren't very good. The projects in 2018 and 2019 are geared to improve the safety of the corridor. The shoulders will be widened to approximately eight feet. They're installing shoulder mumble stripes and will be adding wet reflective pavement markings. They'll be constructing right-turn lanes at a number of the intersections. The existing pavement will be resurfaced; therefore, the drainage along the corridor will be improved. This project will start in the spring of 2018, with completion in the fall of 2018, at a cost just shy of$2.5 million. In 2018, they will close Highway 95 for the work. There are a number of local roads in Afton, Denmark Township, and Cottage Grove for local residents to get to the roadway. However, there will be no through traffic allowed on Highway 95; traffic will be detoured to Woodbury Drive. MnDOT will be coordinating with Washington County for traffic control on the detour route. They feel the eight-foot shoulders will benefit both bicyclists and pedestrians. They hope to decrease traffic accidents with these improvements. Mr. Josephson stated they've been meeting with City staff for all Cities involved, as well as the property owners along the corridor. There was a public open house held where they got some good feedback from residents. Afton and Woodbury City Councils both approved the project in April. He'll be meeting with the Denmark Township Board in the near future. The public hearing tonight is for the 2018 project; they don't anticipate any City costs associated with the project and no additional City maintenance responsibilities. Mr. Josephson noted there are a number of intersections that are dark, where the City might consider some additional overhead lighting, particularly at the intersection at 70th Street; however, he was informed by City staff that that's something that they'd work on with Xcel Energy should the City decide to pursue that. The 2019 project, which will cost approximately $5 million, will also add shoulders, mumble stripes, pavement markings, some turn lanes, intersection site improvements at 80th Street, 90th Street, and 110th Street, and resurfacing the pavement. He'll speak again with the Council before that project begins. Mr. Josephson asked if the Council had any questions. Council Member Mills commented that she was glad to see this work taking place; she used to travel that highway frequently, the work really needs to be done, and she thanked Mr. Josephson. City Council Meeting Minutes May 17, 2017 Page 6 Mayor Bailey commented that some of Highway 95 is like a rollercoaster; he asked if they were going to level off the road. Also, there are many large trees so he asked if those would be removed. Mr. Josephson stated in 2018 the only correction, as far as the rollercoaster effect, would be at 60th Street; he confirmed if the trees limited construction, they would be removed. Council Member Johnson wondered with the removal of the trees if that would cause more problems with blowing snow, as it's otherwise quite open there. Mr. Josephson stated there will be some changes, but he hoped with the new ditches that those would capture some of the blowing snow. Mayor Bailey opened the public hearing. As no one wished to speak on this item, Mayor Bailey closed the public hearing. Motion by Council Member Mills to Adopt Resolution 2017-071 approving the final layout of the TH 95 Safety Improvement Project from Bailey Road (CSAH 18) to 70th Street (CSAH 22); second by Council Member Thiede. Motion carried: 5-0. C. Easement Vacation and Discontinuance - Lots 2 & 3, Block 3, The Waters at Michaels Pointe Staff Recommendation: Adopt Resolution 2017-070 vacating and discontinuing the two existing platted five-foot wide drainage and utility easements that are located along the common property lines between Lots 2 and 3, Block 3, of The Waters at Michaels Pointe subdivision. Senior Planner John Burbank stated Andrew and Erin Ecker, who live at 8852-67th Street Bay South, in the Michaels Pointe subdivision, want to add an addition to their house. It's in the Michaels Pointe subdivision and they own both of the lots adjacent to them; however, the addition will cross the common property line. Typically, when the City approves plat subdivisions, they require platting of the drainage utilities. In order to do that, they need to vacate the easements in that area and require that they combine it as one taxing parcel; then, they'd have the ability to build the addition to their home. There are no public utilities located within that easement, and it doesn't impact any drainage. However, a public hearing is required whenever a road or an easement is going to be vacated; it needs to be published twice in the paper and a notice sent out to the adjacent residents. Planner Burbank requested the public hearing be held and the Council approve vacation of the easements, as depicted and described. Mayor Bailey opened the public hearing; as no one wished to speak on this item, Mayor Bailey closed the public hearing. Motion by Council Member Thiede to Adopt Resolution 2017-070 vacating and discontinuing the two existing platted five-foot wide drainage and utility easements that are located along the common property lines between Lots 2 and 3, Block 3, of The Waters at Michaels Pointe subdivision; second by Council Member Johnson. Motion carried: 5-0. City Council Meeting Minutes May 17, 2017 Page 7 10. BID AWARDS — None. 11. REGULAR AGENDA A. Modern Automotive Performance Special Event Permit Staff Recommendation: 1) Hold a hearing allowing residents to provide input on the application. 2) Authorize issuance of a special event permit to Modern Automotive Performance for their Boost for a Cure Fundraiser event on June 3, 2017 contingent upon conditions outlined by Deputy Director of Public Safety Greg Rinzel in his memo dated Apri126, 2017. City Clerk Joe Fischbach stated that Modern Automotive Performance had applied for a Special Event Permit for an event on June 3; as part of the Special Event Permit process, it was noticed that there would be a public hearing tonight. A notice was also sent to any residents within 500 feet of the affected property. All of the Departments were asked to look at the Special Event Permit, and the Public Safety Department had a number of conditions that they wanted as part of the approval process for the Special Event Permit; City Clerk Fischbach read those conditions aloud, and stated the Applicant was present to answer any questions. City Clerk Fischbach stated two people had submitted written comments. Mayor Bailey invited the Applicants to come forward; Heather and Chris Carey, 9461 Dunes Lane, Cottage Grove, did so. Mayor Bailey asked if they had any questions or concerns; they did not. Mayor Bailey stated he'd received a phone call, and the concern was not specific to the event but some other issues. Mayor Bailey asked if the Council had any questions. Council Member Thiede asked them to explain what the event is all about; Ms. Carey stated Boost for a Cure started in 2010 after she lost her mom to cancer. They basically raise funds to help families who are struggling to pay their bills, including mortgage, food costs, transportation, etc. As of 2015, they had raised $135,000 over the lifetime of the event, with $32,000 raised in 2015. Mayor Bailey confirmed the event was open to the public and asked what the event would include. Ms. Carey stated there would be a silent auction, donated car parts, lady's items donated from salons, dynoing of cars done in an auction format, barbecue, raffles, etc., and a car show. Mayor Bailey opened the public hearing. City Clerk Fischbach stated there were two anonymous residents who had called, but stated they lived on Heath Avenue, and their main concern was that people attending the event would park on the neighborhood streets and cut through the neighbors' lawns to get to Modern Automotive; they hoped they could cut down on people cutting through their lawns. There is offsite parking and people are being shuttled, so hopefully that will alleviate many of the residents' City Council Meeting Minutes May 17, 2017 Page 8 concerns. Mayor Bailey asked if it was an option at the time of the event to have some posted no parking; Ms. Carey stated they'd done that previously. Director Woolery stated that perhaps they could add that as part of the condition of the Special Event Permit. As no one else wished to speak on this item, Mayor Bailey closed the public hearing. Motion by Council Member Thiede to authorize issuance of a Special Event Permit to Modern Automotive Performance for their Boost for a Cure fundraiser event on June 3, 2017, contingent upon the conditions outlined by Deputy Director of Public Safety Greg Rinzel in his memo dated April 26, 2017, and the posted residential parking only; second by Council Member Dennis. Motion carried: 5-0. 12. COUNCIL COMMENTS AND REQUESTS Council Member Mills stated that Strawberry Fest will start on Thursday, June 15, which is also the date of the talent show; they're looking for people to register for that. Any ages are welcome; it will take place at Kingston Park. Council Member Mills stated there are a couple spots available for the Paint & Sip, which takes place next Wednesday at the River Oaks Golf Course; there's more information on the City's website, in the Arts Commission section. Council Member Mills stated the Arts Commission's Path to Poetry is an opportunity to submit poetry; the poetry selected will possibly be put on one of the paths in Cottage Grove. Council Member Dennis invited the community to Kingston Park tomorrow night for the Night to Unite Planning Picnic. It's an opportunity for those people who want to have a party at their home this year, to bring their neighborhood together; this picnic will be informational and will help to get people signed up. There will also be free pizza and soft drinks provided. Council Member Dennis stated with the inclement weather, if residents have hail damage, etc. to their homes, roofing contractors are required to be state licensed, and the contractors should pull the Building Permit through the City. They must also provide their State Contractor License Number on the Permit Application; City staff will verify that the license is valid. All Building Permits need to be on the site before any work takes place. Roof projects all need to be inspected to ensure quality and safety. Council Member Thiede stated that the Strawberry Fest is only four weeks away. The Strawberry Fields Marketplace has become a shopping destination, so crafters and businesses are encouraged to sign up and attend to promote their products. He encouraged all to go to the website and get signed up to be a part of the marketplace. City Council Meeting Minutes May 17, 2017 Page 9 Council Member Johnson stated on June 5 at City Hall there will be a blood drive. He encouraged all those who are able to donate blood do so, as it's always needed. Council Member Johnson stated on May 29, outside City Hall, there will be a Memorial Day ceremony. Council Member Johnson stated tomorrow evening at the Cottage Grove Armory will be a Beyond the Yellow Ribbon meeting; it's a great way to see what goes on there if you'd like to get involved. They'll be talking about the Memorial Day ceremony, as well as other volunteer opportunities. They will also have some ROTC students offering child care at the meeting. Mayor Bailey stated the Standing Strong 5K Run/Walk at Hamlet Park will be on May 20; that benefits anti-bullying efforts within the School District. He encouraged everyone to attend. Mayor Bailey stated on May 22, at City Hall, there will be an open house for the Comprehensive Plan, to discuss the future of Cottage Grove into 2040. Mayor Bailey stated the annual Kids Mud Run will take place on June 3, at Woodridge Park. If you would like further information on that, contact the Parks & Rec Department or read about it on the City's Facebook page. Mayor Bailey spoke with the Cottage Grove Lions last evening; they were notified that the Lions Club International has approved a $100,000 grant to the Lions Club of the City of Cottage Grove to complete the remainder of the funding for the Inclusive Playground at Woodridge Park. The Lions were very impressed by those working on this project and the fact that there were multiple Lions Clubs around the metro who were participating; with all of the other contributors, the outpouring of support for this project has been amazing. Mayor Bailey thanked the Lions Club International as well as all others involved in making this project a reality in Cottage Grove. 13. WORKSHOPS — OPEN TO PUBLIC — CONFERENCE ROOM A. 2018 Budget & Levy Direction Administrator Charlene Stevens stated as they begin the 2018 budget process, they first wanted to discuss some items in this Workshop. One issue was how to handle fixed assets and the equipment replacement policy. Director Roland will then review starting budget assumptions. Public Works Director Les Burshten, Public Works Management Assistant Adam Moshier, and Director Roland had compared Cottage Grove's fixed assets and equipment replacement policy to other cities and would discuss their findings. Management Assistant Moshier provided a spreadsheet to the Council Members, which City Council Meeting Minutes May 17, 2017 Page 10 showed responses from 15 different Cities and Counties; five Cities had specific guidelines regarding equipment replacement while others just had a general policy, no written policy, or a scorecard policy. Overall, the City is right in line with other Cities. One item, however, that stands out is the pickup trucks; Cottage Grove is at 12 years and other Cities have 3-to-8 years, 8 years, 10 years, and 10-to-12 years. Other Cities' methods were reviewed. Director Roland stated this information is very similar to information provided during the budget process. When equipment replacement requests are received, they also look at maintenance records. With PubWorks, the software purchased in 2016 for fleet services, Public Works is better able to keep track of all of the data and able to provide a better outline of the equipment during the budget process. Council Member Thiede stated if the costs are up, there's significant maintenance, and there's PubWorks justification, it's better to dispose of it and get something else. Council Member Thiede felt it's better to have that information before going into the budget meetings. Administrator Stevens stated they'll be bringing all of that information to a Budget Workshop so the Council can see it all and will be able to ask questions; however, it could be provided earlier than that if requested. Council Member Johnson asked if the City did all of its maintenance and repairs; Director Burshten said that was true for the most part, although some things occasionally got sent out. It was confirmed that PubWorks tracked all repairs, whether done here or elsewhere. A question was asked about transferring vehicles within Departments and how it was determined when to take them out of service; Director Roland explained the years and mileage policies for the different types of vehicles. Council Member Johnson wondered about replacement plans versus actual purchases. Council Member Thiede stated it really boils down to what's the best use of the City's money, maintenance costs versus a new purchase. Council Member Johnson said if there was a $100,000 budget, throughout the year you could save some money by extending the life, but you can't say in 2019 we hope to extend the life of these vehicles; we need to plan and budget $100,000 over our history. We can save money by practices, but you can't really count on that for budgetary purposes. Mayor Bailey stated they had what they thought was the average lifespan of a piece of equipment; staff is saying with PubWorks, we'll still have to budget or plan for that, but if there's equipment that's still running well, we might have money that's been put into the CIP or equipment replacement fund, and we might not buy that item that year. That money gets forwarded into the next year. At some point, we know we'll need to replace it. The guide is necessary to plan on when it might need to be replaced; if you don't do that and that $100,000 is available, more equipment than expected might need replacement compared to money that's available. Director Burshten stated he felt Public Works did an excellent job of maintaining all of the equipment. He stated that Cottage Grove is right where the other Cities surveyed are, so he knew they were in the ballpark. When they go through the budget process, City Council Meeting Minutes May 17, 2017 Page 11 the core group at Public Works goes over every piece of equipment, and they prioritize and re-prioritize things every year. There was a lot of thought and process put into it. PubWorks has helped them out a lot with the information they've gotten from it. Director Roland stated she'd now speak about the budget. She was presenting where the Council sees us going; the budget process is two years. When the 2017 budget was done, they also put together a base 2018 budget, as a best guess. The 2018 proposed levy is a 3% increase; it takes into consideration the refinancing of the Interfund Loan for the City Hall project, which reduces the amount of committed dollars. The refinancing is to eliminate the Interfund Loan that is due to two of the funds within the City but will repay the Water and Sewer Funds; it's basically just absorbing the cash that we've already borrowed. That will reduce the annual commitment from $500,000 to $250,000 and the loan to the Water and Sewer Funds will be paid off in the regular period of time. With that, and also paying off the 2008 Pavement Management Bonds, it will give us $400,000 that we can use and go towards the $600,000 debt service in 2018 for the Central Fire Station. The debt service for the Central Fire Station is pegged at about $640,000 per year for the next 20 years. If there are funds available that can offset some of that, we'll be able to reduce the amount of the levy that's required; there will be funds available that will help offset that. Instead of$640,000, they'll be putting in $600,000 of that levy. The 3% total levy ($13,325,000) translates to total General Fund revenues of $16,471,000. This keeps the Building Permit and Development revenues budgeted in 2017 at the same levels for 2018. The Building Permit levels had been increased because we saw significant additional development, and we believe that will continue but want to keep it static. Those revenues will go to offset $17,036,770 worth of expenses at this point. That was based on 2.5% wage increases, health insurance had a 12% increase, the fuel budget for 2017 and 2018 had no change, but they're seeing significant savings in 2017. All other expenses increased by 2%. We gave the direction to staff to increase them by 2% if they needed to increase them; if they didn't, they were not increased. Overall, there's a 2% increase of expenses. Transfers out are at $500,000 instead of$300,000, which is the amount for 2017. Given the levy of the 3% that Council has guided at this point, we'll start with a deficit of about $565,000 from these items before we're to even start adding position, projects, etc. This is where we're starting, but we want to confirm that we've heard Council correctly and this is where Council wants staff to go when we start talking about the budget. Staff will be doing the same budget process used last year, online data entry into the financial system. Department Heads, Finance, and the City Administrator meet during the week following all the data being input and updated. Budget Workshops with the City Council are on July 26 and August 2. They'll be taking public input in a different format than has been taken before; they'll be doing some Facebook Live or some other City Council Meeting Minutes May 17, 2017 Page 12 way of getting some input on the budget, as no one seems to ever show up for the Town Hall meetings. Council Member Thiede asked what effect the levy would have on taxes paid by the average homeowner; Director Roland stated Washington County has not yet sent out their valuation numbers so she couldn't give an answer. Administrator Stevens stated they were looking at the gross levy, so it's just projected. Council Member Thiede asked if we were in a better position than we were previously; Director Roland stated she believed they were. Director Roland stated being able to refinance the Interfund Loan was a significant choice that we're willing to make. It was discussed a lot when the Interfund Loan was first done; the money to build City Hall was borrowed from four funds in which the City had cash, Water and Sewer Funds and two closed funds, Closed Debt Fund and Closed Construction Fund. They're the accumulation of financial resources from special assessments, prior projects, and additional revenues received, which had built up over the years. There's about $4,000,000 that we will be essentially forgiving among the Funds, except the Water and Sewer, which are enterprise funds and need to be repaid. Council Member Thiede asked how the HERO Center factored into this; he asked if that was a 2019 budget item. He was advised that was a 2020 expense. Director Roland stated they'd not talked about it for 2018; Administrator Stevens said the earliest that debt would be involved would be in 2020. The earliest bonding process would be 2019, but those numbers have been programmed into the Capital Improvement Plan. Administrator Stevens asked if the Council was comfortable with this 3% change in the gross levy as they go forward with preparing the budget. Council Member Thiede stated he was concerned about the percentage of increase to the homeowners. Director Roland stated if the growth in the tax base is in excess of 3%, you won't see an increase. However, they can't control the valuation change from Washington County. Council Member Thiede stated if all of a sudden we have a 7% increase in homeowner taxes, for example, in his opinion, they'd have to do something about that. Mayor Bailey stated he couldn't even comment on that until they get the valuations back from Washington County. 14. WORKSHOPS — CLOSED TO PUBLIC — CONFERENCE ROOM A. Labor Negotiations Strategy Staff Recommendation: By majority vote, pursuant to Minnesota Statute 13D.03, vote to go into closed session to discuss labor negotiations strategy. Motion by Council Member Dennis by majority vote, pursuant to Minnesota Statute 13D.03, vote to go into closed session to discuss labor negotiations strategy; second by Council Member Thiede. Motion carried: 5-0. City Council Meeting Minutes May 17, 2017 Page 13 15. ADJOURNMENT Motion by Council Member Thiede, second by Council Member Dennis, to adjourn the meeting at 9:55 p.m. Motion carried: 5-0. Minutes prepared by Judy Graf and reviewed by Joe Fischbach, HR Manager/City Clerk.