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DATE
TIME STARTED
TIME ENDED
MEMBERS PRESENT
MEMBERS ABSENT
APPROVED
CITY OF LINO LAKES
MINUTES
: July 7, 2008
. 5:35 p.m.
. 9:25 p.m.
: Council Members O'Donnell,
Reinert, Stoltz and Mayor Bergeson
: Council Member Gallup
Staff members present: City Administrator, Gordon Heitke; Community Development
Director, Mike Grochala; Director of Public Safety, Dave Pecchia; Finance Director, Al
Rolek; Public Services Director, Rick DeGardner; Economic Development Coordinator,
Mary Alice Divine;
1. Centennial Utilities Gas Franchise Fees - V. Reinert - Mr. Vernon Reinert was
not able to attend the work session and will be invited to future meeting. Therefore this
item was not discussed.
2. Charter Amendment Public Information - Economic Development Coordinator
Divine requested direction in the area of a communication plan (city -sponsored public
information effort) regarding the charter amendment ballot issue (the council has an
established goal to update the City Charter to reflect and facilitate current and future needs
of the city). She reviewed past efforts in this area that included use of the city newsletter,
fact sheet mailings, the city Website, press releases, open houses and cable television.
Given the complexity of the current question, staff is recommending that the city employ
the services of a public relations consultant as well as receive consulting assistance in the
financing and legal areas. The Citizens' Task Force should also be involved and
contributors to the city's communication plan. Based on the required schedule for
consideration of a charter amendment, a communication plan should be prepared in
September for delivery in early to mid-October.
Ms. Divine requested council direction in whether or not communication consulting should
be engaged to develop and implement a communication plan. If directed by the council to
move forward in that direction, Ms. Divine will report back with a proposal at the council's
August work session. It was clarified that if a ballot question is put forward, the actual
wording would be drafted by legal counsel for consideration by the council.
The council discussed the possibility of having two differing ballot questions (one from the
council and one from the charter commission) and how a communication plan would fit
into such a scenario. An update on the charter commission's current position was
requested with an opportunity given to the commission to present that in person at a
meeting in August or, if they'd prefer, submittal of a written response.
Administrator Heitke noted that the information provided to the public ahead of time will
be key since the ballot language will be limited.
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CITY COUNCIL WORK SESSION -2- July 7, 2008
APPROVED
47 The council concurred that professional assistance may be required. There was concern
48 noted about putting only the facts on the table and working with the charter commission
49 because this is a complicated issue that could spin out of control; they don't want the real
50 message to get lost. The council would like to remain informed about the rules of
51 balloting and passage of amendments as those rules will relate to an amendment proposal
52 for the city.
53
54 3. Centennial Fire District funding formula — Administrator Heitke noted that the
55 council agreed to review the funding formula for the fire district and he is providing
56 additional information to allow for that review. The staff letter includes the joint powers
57 agreement that establishes the funding formula, the city's contribution for the past eleven
58 years, the 2008 funding formula, the cost per citizen since 1990 and a cost analysis relating
59 to valuation since 1990. The joint powers agreement provides that when any one member
60 (city) reaches a contribution percentage over 70%, they may request a reevaluation of the
61 formula; the City of Lino Lakes is currently contributing 69%. Administrator Heitke
62 reviewed the cost analyses information provided as well as data on runs as well as
63 constants and variables.
64
65 It was suggested that the question to the council is whether or not they want to look at this
66 before the ratio reaches the 70% threshold. There was concurrence that a review will be
67 automatic at 70% but, in the meantime, it is due diligence to review the numbers
68 occasionally and it was a good exercise at this point to ensure that the city has a fair deal.
69
70 4. Work Session Budget Guidance — Finance Director Rolek noted that staff is still
71 in the process of formulating and submitting to the Finance Department their budget
72 requests. The actual levy limit is not known at this point and is not required to be provided
73 until September 1. The council has scheduled a budget work session for August 18. Staff
74 has received direction from the council regarding maintenance of the tax rate and is open
75 to any further recommendations or directions from the council at this point. At the budget
76 work session, Director Rolek anticipates having some preliminary information and it is
77 important that the council receive a view of what next year's budget looks like at this
78 point.
79
80 5. Town Center Update - Economic Development Coordinator Divine updated the
81 council on the development end of the Town Center project and Finance Director Rolek
82 provided an update on the financial side of the project.
83
84 Ms. Divine reported that Marshall Investments has foreclosed on the remaining property
85 owned by Hartford Group in the Legacy at Woods Edge project. Marshall represents the
86 28 servicing banks involved and has hired a marketing agent, JBL Companies, with whom
87 staff has met and is currently working. The marketing plan currently involves putting
88 together a consortium of specialized developers for housing, senior housing, commercial
89 and office space on the site.
90
91 The council reaffirmed their commitment to maintaining the original nature of this planned
92 development and to not succumb to selling out to development that doesn't fit those plans.
CITY COUNCIL WORK SESSION -3- July 7, 2008
APPROVED
•93
94 Finance Director Rolek reported that what the city has with this development is a debt
95 obligation on the public improvements within the development area. The debt service is
96 about $530,000 per year — principal paid in February and interest paid in August. Some of
97 that has been paid in 2008 because there were funds associated with the hotel and housing
98 that was prepaid. The upcoming August payment is somewhat covered but the real
99 shortage will occur in February 2009 if there is no additional funds received. While
100 Marshall has indicated that they intend to make the assessment payment that has not
101 occurred (agreement is required among the 28 banks involved). Mr. Rolek, regarding the
102 debt obligation, recalled that he has previously presented to the council two options to pay
103 any debt service shortfalls — an interfund loan or a general tax levy. A third option was
104 brought to light by the city's financial consultant. As allowed under state law, some or all
105 of the outstanding bonds could be refunded and restructured to accommodate the current
106 and prospective cash flow, with additional expense however. He has also spoken with the
107 county officer who deals with property foreclosure and tax forfeiture and learned that
108 forfeiture for the properties would not take place until May of 2010 if not paid by that
109 time. He recommends that staff and the council examine all the alternatives in order to
110 make an informed decision.
111
112 Council Agenda Item #1B, Reject waiver of monetary limits on tort liability - Finance
113 Director Rolek noted that the council had some question about this matter and it was pulled
114 from the last council agenda. The memo included in the packet is very explanatory.
•115 Basically, the city has certain tort limits under state law and our insurance covers us to
116 those limits. The city has the opportunity to work within the limits or waive them to some
117 extent but by waiving those limits the city is open to higher insurance costs. The city has
118 traditionally rejected the waiver of monetary limits.
119
120 6. Proposals for Legal Services - Administrator Heitke explained that the idea of
121 soliciting proposals for civil and criminal legal services is something that the council
122 directed last year. During the interim, staff held off on the process due to some ongoing
123 legal situations as well as to give the current servicer the opportunity to go through some
124 changes and decide how their services would evolve. The RFPs have been sent out, using
125 the League of Minnesota Cities vendor list as a guide, to the firms that are interested and
126 working in the area. Eight proposals were received and key points have been summarized
127 and provided to the council. A department directors review of the key issues that affect
128 legal services as well as consideration of the depth of the services offered, culminated in
129 the recommendation of two firms — Campbell Knutson P.A. and Kennedy & Graven
130 Chartered. Only the proposals for civil legal services are being presented at this time; the
131 criminal service proposals will be presented at the next work session (Police Chief Pecchia
132 was out of the office for the review). Staff seeks direction on moving forward in a process
133 to select city attorney services.
134
135 The council requested that the top three firms and the Hawkins firm be invited to attend the
136 next council work session for a brief presentation of their services and to allow for a
•137 question and answer period.
138
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CITY COUNCIL WORK SESSION -4- July 7, 2008
APPROVED
139 7. Xcel Utility Franchise Agreement — Administrator Heitke recalled that the
140 council reviewed a draft franchise agreement with Xcel Energy at the last work session. In
141 response to concerns about limiting language in the proposed ordinance, the consulting
142 attorney has provided a memorandum that explains that there are legally no limitations but
143 the fees must be reasonable (not yet determined by courts). Additionally there is no law
144 that requires fees on any or all utilities. The proposed ordinance reflects the removal of
145 limitations and would leave the city ready to negotiate with Xcel Energy. In response to
146 discussion about how many cities are instituting the fees, Mr. Heitke suggested that the
147 trend is certainly to add the fees as cities are revisiting these generally old franchise
148 agreements. The providers prefer a flat meter fee with tiers for business/commercial use.
149
150 The council discussed the impact of fees on consumers as well as the option of putting
151 language into an agreement so there is an option of implementing in the future. The
152 council agreed to an agreement with a seven percent franchise fee cap on gross revenues
153 (matching Centennial Utilities) and to change the term of the agreement from twenty to ten
154 years. Further the council would like some legal advice on whether and how they could
155 include a freeze on implementation.
156
157 8. Goals and Objectives Quarterly Update — Administrator Heitke and the
158 department directors reviewed the report and update on goals.
159
160 9. Amending Park Dedication Fees — Public Services Director DeGardner reported that
161 staff has reviewed the current park dedication fee and, based on updated assumptions and
162 data presented in the staff report, is recommending that it be increased from $2,075
163 to$2,500 per unit. Staff may wait until January to make the necessary amendment to the
164 Fee Schedule but wanted to get a council direction. The city attorney recommended
165 against writing in an allowance for future inflationary increases; it's something that should
166 be considered when you can link the fees to actual values. The last increase occurred in
167 2004.
168
169 The council concurred with the proposed process to increase the fees.
170
171 10. Process for Cancellation of Regular Council meetings and Council Work
172 Sessions (requested by Bergeson and Reinert) - The Mayor recently took the authority
173 to cancel a pre -council work session and that authority was questioned by a council
174 member. The question of that authority was brought to the League of Minnesota Cities
175 who suggested that it is an internal question that the council itself should decide.
176
177 The council concurred that the question of cancelling a meeting should be posed to the
178 whole council and majority rules.
179 11. Regular Council Meeting Agenda of July 7 — There were no changes to the regular
180 agenda.
181
CITY COUNCIL WORK SESSION -5- July 7, 2008
APPROVED
182 The meeting was adjourned at 9:25 p.m.
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184 These minutes were considered, corrected and approved at the regular Council meeting
185 held on July 28, 2008.
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189 •
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191 Julianne B ell, City C k B eson, or
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