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HomeMy WebLinkAbout12/13/2007 CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Minutes of the regular meeting of the City Council of Apple Valley, Dakota County, Minnesota, held December 13, 2007, at 8:00 o’clock p.m., at Apple Valley Municipal Center. PRESENT: Mayor Hamann-Roland; Councilmembers Bergman, Goodwin, and Grendahl. ABSENT: Councilmember Erickson. City staff members present were: City Administrator Lawell, City Clerk Gackstetter, City Attorney Dougherty, City Engineer Manson, Finance Director Ballenger, Assistant Finance Director Broughten, Assistant City Administrator Grawe, Human Resources Representative Haas, Public Works Director Heuer, Parks and Recreation Director Johnson, Police Chief Johnson, Public Works Superintendent Blommel Johnson, City Planner Lovelace, Police Captain Marben, Community Development Director Nordquist, Police Captain Rechtzigel, Human Resources Manager Strauss, Liquor Operations Manager Swanson, and Fire Chief Wassmund. Mayor Hamann-Roland called the meeting to order at 8:00 p.m. Everyone took part in the Pledge of Allegiance to the flag. APPROVAL OF AGENDA MOTION: of Goodwin, seconded by Bergman, approving the agenda for tonight’s meeting as presented. Ayes - 4 - Nays - 0. AUDIENCE Mayor Hamann-Roland asked if anyone was present to address the Council, at this time, on any item not on this meeting’s agenda. No one requested to speak. CONSENT AGENDA Mayor Hamann-Roland asked if the Council or anyone in the audience wished to pull any item from the consent agenda. There were no requests. MOTION: of Bergman, seconded by Goodwin, approving all items on the consent agenda with no exceptions. Ayes - 4 - Nays - 0. CONSENT AGENDA ITEMS MOTION: of Bergman, seconded by Goodwin, approving the minutes of the regular meeting of November 20, 2007, as written. Ayes - 4 - Nays - 0. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 2 MOTION: of Bergman, seconded by Goodwin, approving the minutes of the special budget meeting of December 3, 2007, as written. Ayes - 3 - Nays - 0 - Abstain - 1 (Bergman). Resolution No. 2007-242 MOTION: of Bergman, seconded by Goodwin, adopting setting a public hearing, on January 10, 2008, at 8:00 p.m., on the application for On-Sale and Sunday Liquor Licenses by Applebee’s Restaurants North, LLC, d/b/a Applebee’s Neighborhood Grill & Bar, located at 14678 Cedar Avenue. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving renewal and issuance of 3.2 Percent Malt Liquor Licenses for 2008, as attached to the City Clerk’s memo dated December 10, 2007. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving issuance of a 2007 Precious Metal Dealer License, for more than 50 transactions per year, for Apple Valley Jewelers Acquisition, LLC, d/b/a Apple Valley Jewelers, 14810 Granada Avenue W. Ayes - 4 - Nays - 0. Resolution No. 2007-243 MOTION: of Bergman, seconded by Goodwin, adopting approving submitting the application for Fiscal Year 2008 Dakota County Community Development Block Grant (CDBG) funding of $138,800.00 for the Housing Rehabilitation Improvement Program, as attached to the City Planner’s memo dated December 10, 2007, and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the Second Amendment of Lease for property located at 7990 - 132nd Court W., with Gordon and Georgene Born, attached to the Public Work’s Director’s memo dated December 13, 2007; and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. Resolution No. 2007-244 MOTION: of Bergman, seconded by Goodwin, adopting approving the Final Alternative Urban Areawide Review (AUAR) and Mitigation Plan for Fischer Sand and Aggregate, LLP. Ayes - 4 - Nays - 0. Resolution No. 2007-245 MOTION: of Bergman, seconded by Goodwin, adopting approving the Planned Development Agreement for Lot 1, Block 2, The Legacy of Apple Valley (Regent Senior Building). Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving a 4-foot front yard height variance for a deck on Lot 1, Block 3, Greenleaf 11th Addition (5180 - 142nd Path W.), as recommended by the Planning Commission. Ayes - 4 - Nays - 0. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 3 MOTION: of Bergman, seconded by Goodwin, approving the reduction of financial guarantees for CVS Prairie Crossing NRMP from $21,000.00 to $4,750.00, CVS Prairie Crossing Commercial from $135,000.00 to $99,787.50, and Grandstay Hotel NRMP from $11,375.00 to $3,775.00; and release of financial guarantees for Haralson Apartments, East Valley Plaza 3rd, Wise Swim School, South Suburban EFC, and Dick’s Valley Service, as listed in the Community Development Department Assistant’s memo dated December 13, 2007. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving a Lease Agreement with TTM Operating Corporation, Inc., for an antenna on Palomino lattice tower, as attached to the Public Works Director memo dated December 13, 2007; and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving a 3-year Lease Agreement with Loffler Companies for multi-function digital copy machines and services, as attached to the IT Manager’s memo dated December 10, 2007; and authorizing the Mayor and City Clerk to sign the necessary documents. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving an Agreement with Ron Hunt d/b/a Palomino Pet Hospital and Clinic for animal impound boarding services, as attached to the Police Chief’s memo dated December 3, 2007; and authorizing the Mayor and City Clerk to sign the same. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving Change Order No. 2 to the contract with Enebak Construction, for Project 05-311R, Cobblestone Area Streets and Trunk Utilities, in the amount of $26,677.40. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving Change Order No. 1 to the agreement with Muska Electric Company, for Water Treatment Plant Variable Frequency Drive Installation, in the amount of an additional $2,469.22. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, accepting Water Treatment Plant Variable Frequency Drive Installation as final and authorizing final payment on the agreement with Muska Electric Company, in the amount of $4,474.22. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, accepting Holyoke Path Utility Relocation as final and authorizing final payment on the agreement with Minger Construction, Inc., in the amount of $35,515.35. Ayes - 4 - Nays - 0. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 4 MOTION: of Bergman, seconded by Goodwin, accepting Cedar Knolls Meter and Vault Installation as final and authorizing final payment on the agreement with Valley Rich, Inc., in the amount of $26,100.00. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving the 2008 Labor Agreement with AFSCME Council 5, Local No. 479, maintenance employees, as attached to the Human Resources Manager’s memo dated December 10, 2007; and authorizing execution of the necessary documents. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, approving hiring the full-time, part-time, and seasonal employees as listed in the Personnel Report and Addendum dated December 13, 2007. Ayes - 4 - Nays - 0. MOTION: of Bergman, seconded by Goodwin, setting the 2008 City Council meeting schedule, in accordance with adopted policy on the second and fourth Thursdays of each month unless the following Friday is a holiday, as listed in the City Clerk’s memo dated November 20, 2007. Ayes - 4 - Nays - 0. END OF CONSENT AGENDA SALE OF CITY REFUNDING BONDS Mr. Steve Mattson, of Northland Securities, the City’s fiscal consultant, was present and distributed an offer to purchase $2,425,000 General Obligation Taxable Refunding Bonds, Series 2008A, of the City in a negotiated sale. The original bonds were issued in 1998 to finance Fischer Market Place improvements. There are seven years remaining on the original bonds and refinancing would result in a total savings to the City of $101,942.28. Resolution No. 2007-246 MOTION: of Goodwin, seconded by Bergman, adopting providing for the issuance and sale of the City’s $2,425,000 General Obligation Taxable Refunding Bonds, Series 2008A, to Northland Securities, Inc., at an average interest rate of 4.4169588 percent and net effective interest rate of 4.6614149 percent, and authorizing execution of the necessary documents to complete the sale. Ayes - 4 - Nays - 0. CEDAR AVENUE IMPROVEMENTS Mr. Lawell said Cedar Avenue is an important arterial road for Apple Valley and the region. The City has been actively working with Dakota County and surrounding cities on future plans for Cedar Avenue for many years. The County started studying Cedar Avenue in 1994. It completed a feasibility study in 2001 and a transit alternatives analysis in 2004. Bus Rapid Transit (BRT) was selected as the preferred transit alternative and the Cedar Avenue corridor was the selected route. The implementation of BRT must be coordinated with roadway improvements in the corridor. Because of the importance of Cedar Avenue, there has been an extensive public input CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 5 process. Many options were considered. He summarized the public comments. Based on input from the public and various committees and groups, the options were narrowed to three. Mr. Lawell reviewed the three alternatives. Alternative 1 is a no build, Alternative 2 is a dual facility which includes two parts, one with improvements through 2015 and the other with improvements through 2030, and Alternative 3 is a dual facility with local lanes on top and express lanes below grade. The Dakota County Regional Rail Authority is the deciding agency and is expected to select a preferred alternative in January 2008. The County has asked affected cities to offer their comments on their preferred concept. Mr. Lawell reviewed the draft letter to the County which identifies Alternative 2 as the preferred option. The letter supports the first part of Alternative 2 but not the second part. The letter also identifies various concerns and conditions. He stated once the Regional Rail Authority selects its preferred alternative, it will undergo detailed design and extensive social, economic, and environmental review. The City is particularly concerned with businesses impacts related to jobs and tax base, stormwater management implications and possible noise impacts. He then reviewed the tentative timeline for the project. Mayor Hamann-Roland thanked Commissioner Branning and the County for listening and for the open process. Councilmember Grendahl noted Alternative 2 talks about BRT and transit stations. She questioned when it would be appropriate to discuss park and ride locations and transit stops. Mr. Lawell said it would be appropriate to add the Council’s thoughts on that subject to this letter or include them in a separate letter. Councilmember Grendahl requested the Council discuss park and ride locations and transit stops at the next informal meeting, so it may provide input to the County on the topic. Mr. Lawell suggested we hold an additional informal meeting in January immediately prior to the second meeting of the month to address this topic. MOTION: of Goodwin, seconded by Mayor Hamann-Roland, approving transmittal of the letter to Dakota County regarding future improvements to Cedar Avenue (County Road 23), as attached to the City Administrator’s memo dated December 10, 2007. Councilmember Goodwin said the public should not expect improvements immediately. Funding for this project is a long way off. Councilmember Bergman asked if there is a need for concern with the environmental assessment for Alternative 2. Commissioner Branning said the option which the City is recommending would have minimal impact on right of ways. Although additional review needs to be done, it does CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 6 not appear as though any businesses will need to be taken. At this time, there are no major concerns with the environmental assessment. Commissioner Branning then thanked the City for its cooperation and input into this project. Chamber of Commerce President Ed Kearney distributed a letter stating the Chamber Board’s position on the proposed alternatives for Cedar Avenue. They agree with the City that the best option is Alternative 2. They do not support the grade separations proposed under the 2030 portion of Alternative 2. Vote was taken on the motion. Ayes - 4 - Nays - 0. WENSMANN 13TH ADDITION VACATIONS Mr. Lovelace reviewed his memo regarding the vacation of drainage and utility easements on Outlot B, Wensmann 13th Addition, and the vacation of a portion of 145th Street right of way. The request is by Wensmann Realty, the developer of Midtown Village. The project includes townhouses and condominiums and is expected to be completed in two phases. The first part includes the vacation of drainage and utility easements on the north and west sides of Outlot B that were established as part of the Wensmann 13th Addition. Modifications to the development plans for the second phase of Midtown Village necessitate the need for the vacation. The necessary drainage and utility easements to serve the second phase will be established as part of the final plat approval for the Wensmann 14th Addition. The second part is for the vacation of a portion of 145th Street right of way. The City redesigned and realigned 145th Street W. and Flagstaff Avenue, so it utilizes existing right of way along the north side of 145th Street W., allowing the right of way on the south to be vacated. The City received comments from Frontier Communications and CenterPoint Energy stating they have no objection to the proposed vacation requests. Mayor Hamann-Roland called the public hearing to order, at 8:45 p.m., to consider vacating drainage and utility easements on Outlot B, Wensmann 13th Addition, and noted receipt of the affidavit of publication of the hearing notice. The Mayor asked for questions or comments from the Council and the public. There were none and the hearing was declared closed at 8:45 p.m. Mayor Hamann-Roland called the public hearing to order, at 8:46 p.m., to consider vacating a portion of 145th Street W., and noted receipt of the affidavit of publication of the hearing notice. The Mayor asked for questions or comments from the Council and the public. There were none and the hearing was declared closed at 8:46 p.m. ORDINANCE AMENDING FEES CONTAINED IN CITY CODE The City Clerk reviewed proposed amendments to the fee schedule contained in the City Code as described in her memo dated December 13, 2007. Fee adjustments are proposed for Lebanon Cemetery, consultant services, building inspections and permits, various licenses, civil penalties, cat and dog impound boarding services, ice rates, Valleywood Golf Course, subdivision and CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 7 development fees, and utility fees. The fees would be effective January 1, 2008. Staff recommends waiving the second reading. Councilmember Bergman requested the fee schedule be reviewed at an informal meeting along with the budget in the future. MOTION: of Goodwin, seconded by Bergman, waiving the procedure for a second reading Ordinance No. 827 and passing amending the Fee Schedule Appendix of Title III of the City Code by adjusting certain fees and charges effective January 1, 2008. Ayes - 4 - Nays - 0. PROPERTY TAX LEVY & 2008 CITY BUDGET Mr. Ballenger reviewed the budget process and meetings previously held regarding the 2008 City budget and property tax levy, including a public hearing on December 3, 2007. He presented statistics on population growth and Legislative impacts, and reviewed proposed revenues and expenditures. The City received approximately $3 million in State aid in 2001, nothing in 2005 and 2006, and $871,873 in 2007. Staff is projecting $850,000 in Market Value Homestead Credit (MVHC) in 2008. Mayor Hamann-Roland was at a Municipal Legislative Commission (MLC) meeting today where Rep. Ann Lenczewski, Chair of the Taxes Committee, said with the poor financial forecast that came out in November, and projections for February, the easiest pot of dollars the State can take from to help balance the budget is the Market Value Homestead Credit. Mayor Hamann-Roland added that the Senate, after looking at the deficit, may propose a property tax freeze. Councilmember Goodwin said it sounds very questionable as to whether the City will receive MVHC dollars in 2008. Mayor Hamann-Roland said Rep. Lenczewski referred to 2003 when the State had a $4.5 billion deficit and the cities lost their aid. The first money the State took was the Market Value Homestead Credit. Rep. Lenczewski said history will serve you well; this will happen again. Mr. Ballenger reviewed the budget assumptions. Councilmember Bergman asked for an explanation of Fire Relief commitments. Mr. Ballenger said the City contributes to a pension for its volunteer fire fighters. Contribution levels and municipal requirements for the pension fund are set by State Law. The Fire Relief commitment refers to the portion the City must fund. Mr. Ballenger said the projected total revenue in 2008 is $44,701,234. General Fund revenues are $24,337,161, which is a 6.52 percent increase over 2007. The General Fund and debt service is $25,833,257. He gave an overview of the proposed 2008 budget. The total 2008 City budget is CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 8 $45,296,171. He also presented tax calculations on a median valued home of $240,000 with a 0 and .58 percent property value increase. The Tax Capacity Rate is 35.529. Councilmember Bergman clarified that a median valued home of $240,000 only represents a median home in Apple Valley, not Dakota County. Councilmember Goodwin noted 85 percent of the properties in Apple Valley will have an increase in the City’s portion of their taxes of 1.72 to 2.42 percent. Mr. Ballenger reviewed a chart showing the proposed tax capacity increases for cities in Dakota County. Apple Valley has the lowest proposed increase. Councilmember Grendahl said the State Auditor recommends local governments maintain a fund balance between 35 and 50 percent at year end. Using the current fund balance, the City would have approximately $5.9 million in excess funds at the 35 percent level and $2.8 million in excess at the 50 percent level. Based on information gathered from neighboring cities’ websites, several communities maintain a 35 percent fund balance. As a side note, she asked that the City’s website be updated to include current budget information so it is easily accessible to the public. She questioned the need for $8.4 million in the Future Capital Project Fund. Councilmember Grendahl noted actual spending in 2006 was $1,134,118 less than what was budgeted, which was a savings of $585,078 more than projected. She inquired as to the accuracy of the estimated actual numbers for 2007. Mr. Ballenger said the $217,713 may actually be high. Councilmember Grendahl presented info from the City of Eagan’s website regarding 2008 Truth-in- Taxation estimates. The 18-city average is $923, Eagan’s is $731, and Apple Valley’s is $1,011. She then compared total expenditures for the two cities. According to the State Auditor’s website, Apple Valley’s average taxable tax capacity per capita is $943, which is 47th out of 218 cities, which means it is in the top 25 percent. Councilmember Grendahl noted several of the other budgets she looked at on the web had a more user-friendly format, and clearly displayed information including sales, gross profit, cost of goods, and net profits. MOTION: of Grendahl, seconded by Mayor Hamann-Roland, to reduce the General Levy by $871,873.00. Councilmember Goodwin pointed out Apple Valley spends more for parks; however, it is a result of the vote of the people. When comparing functions such as police and fire, Apple Valley is very comparable, or perhaps lower. If Apple Valley had the commercial and industrial tax base of Eagan or Burnsville, it would have very similar taxes. He cautioned against comparing funds and questioned the 35 percent fund balance recommended by the State Auditor. He asked if some funds still do not show up on the State Auditor’s report. Mr. Ballenger said that is still the case. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 9 Councilmember Goodwin said Apple Valley has a Capital Projects Fund with $7 million. White Bear Lake has a similar fund with $26 million. The Cities of Eagan and Burnsville have some type of fund with their money in it. Burnsville must have a fund because it is spending $22 million on a performing arts center, and that is without a vote of its citizens. Councilmember Goodwin further said the reason Apple Valley does not have the commercial and industrial base some of the surrounding communities have is because it does not have the railheads, freeways, and barge access other communities have. Railroads, freeways, and barges bring positives, but they also bring negatives. Some residents live in Apple Valley because it does not have those things. We want to increase our commercial and industrial tax base, but it is difficult to compete with communities that have these other modes of transportation. Mr. Ballenger explained that the reason Apple Valley’s tax capacity value is higher is because it has less value to spread per capita than some of the other cities. He added that the State Auditor’s report only includes General Funds and Special Revenue Funds. Capital Projects, Special Assessment, and Debt Service Funds are not included in any of their statistics. He added that the State Auditor’s position paper on fund balances recommends 35 to 50 percent, or 5 months operating expenses. However, cities do not get their tax settlements until June. Mr. Ballenger then explained the policy on determining the City’s fund balance and what is done with any excess amounts. Mayor Hamann-Roland added that the fund balance policy was implemented to ensure the City’s budget is more predictable and stable. Councilmember Grendahl said she addressed the commercial and industrial differences when comparing the general property tax budgets. In 2006, Eagan spent approximately $400 less per capita. Councilmember Goodwin said it is not an equal comparison. For example, Apple Valley pays for street overlays from its General Fund. Other cities assess it. If you compare employee salaries, they are similar. If you compare the number of police officers per thousand or the number of public works employees per miles of streets, they are close. The difference is what each city includes in its General Fund budget. Burnsville’s fire costs are four or five times higher than ours. Apple Valley is higher in some areas and lower in others. Vote was taken on the motion: Ayes - 1 - Nays - 3 (Bergman, Goodwin, Hamann- Roland). Mr. Lawell said the document Councilmember Grendahl presented from the State Auditor’s website has a revenue and an expenditure component. In total expenditures, Apple Valley is 184 out of 218 cities. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 10 Mayor Hamann-Roland called a recess at 9:43 p.m. Mayor Hamann-Roland resumed the meeting at 9:47 p.m. Councilmember Bergman said he agrees with Councilmember Grendahl on several points, including the need to improve the City’s website. He asked at what level Apple Valley is maintaining its fund balance. Mr. Ballenger responded it is in the mid 60’s. However, Apple Valley’s fund balance includes compensated absences. Councilmember Bergman asked if other cities do not have compensated absences. Mr. Ballenger said they have compensated absences, but they may not choose to recognize the liability and they may not account for them in their cash balances. All cities do it differently. Councilmember Bergman asked where gross profits for the liquor operations are listed. Mr. Ballenger explained where to find the breakdown by store and where the combined figures were located. Councilmember Bergman encouraged Mr. Ballenger to look at other cities websites to see how they list their data. Their formats are very simple for the average person to read and understand. He noted that when he was looking at other city budgets, the Cites of Eagan and Lakeville have several more funds than Apple Valley. He suggested the Council discuss where it wants to maintain its fund balances at a future meeting. Councilmember Bergman commented about medical, health, and wages. He asked how overtime is estimated. Mr. Ballenger explained that the departments determine their needs. The Finance Department reviews previous years’ actual expenses. Explanations are required for major changes. He stated the Police Department has had large increases in overtime the last several years but it is a result of the court system and is beyond their control. Councilmember Bergman recommended looking at uniforms, subscriptions, and the Chamber of Commerce dues. He questioned why the Chamber of Commerce dues are budgeted under Liquor. Mr. Ballenger said Chamber of Commerce dues are paid out of the Liquor Fund because State Law does not allow those expenditures to be paid out of the General Fund. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 11 Councilmember Bergman also commented about police car mileage and employee mileage reimbursement. He questioned the difference in requested mileage between the two ice arenas. He wondered if City vehicles were not available. Mr. Ballenger responded there are no City vehicles available. He said employees are reimbursed for mileage at the IRS prescribed amount when they use their personal vehicles to conduct City business. After reviewing the numbers, it was determined to be less costly to reimburse employees mileage than to purchase additional vehicles and pay for insurance, gas, and maintenance. Councilmember Bergman noted the liquor operations will make $7 million in 2007, of which $400,000 will be transferred to parks. Other communities transfer funds from their Liquor Fund into their General Fund as well as other funds and use it for a variety of purposes. He asked if the City can contribute to areas other than parks. Mr. Ballenger said the Council has some discretion in transferring funds. There are some restrictions. Councilmember Bergman said the ice arena loses money year after year and sits vacant five months out of the year. The City continues to contribute to the ice arena because it provides a service. This year the arena needs to replace its score board for $11,000 and the Zamboni for $85,000. Even though the arenas are an enterprise fund, additional money will be transferred to cover these costs. He believes additional emphasis should be placed on the arenas making money. He does not see the difference between the arenas and the golf course. Councilmember Bergman spoke of the recent bond referendum. It did not include improvements for Valleywood Golf Course. He recapped the history behind the acquisition of Valleywood and the existing clubhouse. He stated other park buildings and facilities are maintained. The only difference between Valleywood and other parks is the type of turf management. He encouraged the Council and citizens to support Valleywood, because it too is an important part of the park system. He added that Valleywood is not used to its full potential. Councilmember Bergman said the City also needs to address how it will fund water, sewer, and storm drainage improvements in the future. He then commended the cable staff for their efforts and producing a quality cable program. Councilmember Goodwin said the State Auditor’s report does not reflect expenses, but rather encumbrances. The City chooses to reflect its liability for compensated absences in its cash balances; other cities may not. Apple Valley includes its overlay program in its General Fund, other cities do not. It is an apples to oranges comparison when trying to analyze the State Auditor’s report. It would be nice if a standard was set and every city included the same items in the same funds. Then, you could compare the figures in the State Auditor’s report. Unfortunately, that is not going to happen. The State Auditor’s report shows some cities maintain a 25 percent fund balance. However, no city maintains a 25 percent fund balance CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 12 because State aids and property taxes only come twice a year, and at that level they would be running out of money. Councilmember Grendahl said with all due respect she sees no need to have additional conversation regarding the City’s reserves. Mayor Hamann-Roland said based on comments from Rep. Ann Lenczewski it sounds like the Market Value Homestead Credit will be taken away. She said residents want their taxes as low as possible, but they also want stability. Resolution No. 2007-247 MOTION: of Goodwin, seconded by Bergman, adopting approving setting the City tax levy collectible in 2008 at $20,998,045 and approving 2008 budgets with total revenue of $44,701,234 and expenditures of $45,296,173. Councilmember Bergman said the people he has spoken to about the budget encourage the City to watch costs, but are generally okay with the proposed increase. The City is in the service business and they like the services they are receiving. Councilmember Grendahl commented on her personal taxes, noting the County portion went up $3 and the City portion went up $30, while the other taxing agencies went down. Mr. Ballenger said there will be a reduction of $1 to $3 from the proposed amounts on property tax statements. Councilmember Bergman asked what the levy would be if the $850,000 Councilmember Grendahl was referring to was taken out of the budget. Mr. Ballenger said it would be about the same level it was last year. If the revenues are cut, the expenditures need to be cut by the same amount. Council would need to decide what services it would like to reduce or eliminate to balance the budget. Mayor Hamann-Roland stated if we reduced the budget by that amount, we could end up in the same place we were in 2002 when we actually did this and the State took away 40 percent of our Market Value Homestead Credit. Mr. Ballenger identified potential consequences associated with lowering the tax levy, if the Senate is considering freezing property taxes. Councilmember Grendahl responded that other taxing agencies do not seem concerned about taxes being frozen. She added that if taxes were frozen, the City would not cut services. It would simply use surplus funds. Councilmember Goodwin said the people he has spoken to are relatively happy with what is being proposed. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 13 Mayor Hamann-Roland said compared to neighboring cities Apple Valley’s taxes are going up the least. She thanked staff for proposing reasonable budgets and providing excellent service to the citizens of Apple Valley. Vote was taken on the motion: Ayes - 3 - Nays - 1 (Grendahl). WATER AND SEWER RATES Mr. Ballenger presented the proposed water and sanitary sewer rates for 2008. The Metropolitan Council Environmental Services (MCES) has increased its charges for wastewater treatment. The cost of energy for pumping water and sewer has also increased. The overall combined rates for water and sewer represent a 3.2 percent increase on the average home. Councilmember Bergman asked when the rates where last changed. Mr. Ballenger said last year. Councilmember Bergman asked if the rates are likely to increase in 2009. Mr. Ballenger said water will likely go up one to one and one-half percent. The City would need to increase its rates by eight percent to offset the MCES increased costs for sewer. Instead, it has opted to have less gross profit on sewer and increase the rates more slowly. Councilmember Bergman asked how Apple Valley’s rates rank compared to neighboring communities. Mr. Ballenger said Apple Valley’s water rates are in the bottom half and its sewer rates will now be in the middle. Councilmember Bergman said he would like to see the charts showing the rankings. Councilmember Goodwin said Apple Valley does not have its own waste water treatment plant. As a result, it must pay the fees set by the MCES for waste water treatment. Councilmember Grendahl asked if the General Fund Admin. Fee that is increasing from $220,000 to $300,000 is coming from the increased rates. Mr. Ballenger said it is funded from the operations. The proposed transfer from the Water and Sewer Fund for 2008 is less than the amount transferred in 1998. Councilmember Grendahl said she would like to see how the $300,000 is proportioned out. CITY OF APPLE VALLEY Dakota County, Minnesota December 13, 2007 Page 14 Resolution No. 2007-248 MOTION: of Bergman, seconded by Goodwin, adopting setting the sewer and water rates and related procedures, effective January 1, 2008. Ayes - 3 - Nays - 1 (Grendahl). COUNCIL COMMUNICATIONS Mayor Hamann-Roland congratulated Uponor on being named the Business of the Year by the Chamber of Commerce. Councilmember Bergman congratulated Parks and Recreation Advisory Committee Member Cindy Hart for being recognized Teacher of the Year by the Minnesota Association for Health, Physical Education, Recreation, and Dance. Councilmember Bergman summarized a response from the City’s Metropolitan Airports Commission representative regarding the City’s request to enact measures to lessen air traffic noise. CALENDAR OF UPCOMING EVENTS MOTION: of Grendahl, seconded by Goodwin, approving the revised calendar of upcoming events as included in the City Clerk’s memo dated December 10, 2007, and noting that each event listed is hereby deemed a Special Meeting of the City Council. Ayes - 4 - Nays - 0. CLAIMS AND BILLS MOTION: of Goodwin, seconded by Bergman, to pay the claims and bills, check registers dated November 28, 2007, in the amount of $10,769,112.46; December 5, 2007, in the amount of $6,816,555.69; and December 12, 2007, in the amount of $13,812,470.83. Ayes - 4 - Nays - 0. Mayor Hamann-Roland wished everyone a happy holiday. MOTION: of Goodwin, seconded by Grendahl, to adjourn. Ayes - 4 - Nays - 0. The meeting was adjourned at 10:48 o’clock p.m.