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08 17 20 Work Session MinutesCity Council Work Session August 17, 2020 Page 1 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 City Council Minutes Work Session Meeting August 17, 2020 Civic Center Conference Room CALL TO ORDER The New Hope City Council met in work session pursuant to due call and notice thereof; Mayor Hemken called the meeting to order at 6:30 p.m. ROLL CALL Council present: Kathi Hemken, Mayor John Elder, Council Member Cedrick Frazier, Council Member Andy Hoffe, Council Member Jonathan London, Council Member Staff present: Kirk McDonald, City Manager Dan Boyum, City Engineer Vicki Holthaus, AEM Valerie Leone, City Clerk Susan Rader, Director of Parks & Recreation Steve Sondrall, City Attorney Stacy Woods, Assistant City Attorney Also present: Sarah Larson, WMFRD Fire Chief WMFRD 2021 BUDGET Item 11.1 Mayor Hemken introduced for discussion item 11.1, Discuss West Metro Fire-Rescue 2021 Budget. Mr. Kirk McDonald, city manager, and Sarah Larson, West Metro Fire-Rescue District chief, reported on the 2021 budget. Mr. McDonald stated West Metro Fire-Rescue District’s proposed budget is $2,674,050, an increase of $99,800 over the prior year. New Hope’s percentage share of the budget increased slightly from 50.4104% in 2020 to 50.5736% for 2021. He stated the WMFRD’s board of directors approved the budget at its July 8 board meeting, and that the joint powers agreement requires both cities to approve West Metro’s budget by August 31. Mr. McDonald noted that the Crystal City Council will consider the budget at their August 18 Council Meeting. Council Member London inquired of the increase in financial services. Chief Larson reported the district utilizes AEM and MMKR for financial services and the budget has historically been underfunded in this area. Discussion ensued regarding the higher calls for service in New Hope. Chief Larson noted that New Hope has more commercial properties than Crystal and it also has three large nursing homes. She attributed these two items to the higher number of false alarm calls and medical calls. City Council Work Session August 17, 2020 Page 2 Ms. Larson explained the reasoning for the duty crew during the pandemic to reduce the risk of exposing the entire department to COVID-19. She noted the federal funding will cover the expense. Council thanked Chief Larson for the budget presentation. POOL/CIVIC CENTER PARK/CITY HALL LANDSCAPING UPDATE (IMPROVEMENT PROJECT NOS. 995/941/994) Item 11.2 Mayor Hemken introduced for discussion item 11.2, Update on Pool/Civic Center Park/City Hall Landscaping projects by Stantec Engineering (Improvement Project Nos. 995/941/994). Ms. Susan Rader, director of parks and recreation, and Mr. Dan Boyum, city engineer, provided an update to Council regarding the status of the pool and Civic Center Park projects. They reviewed the “extended general conditions” costs that were submitted by Donlar Construction. Mr. Boyum stated the original request was $267,509 and several negotiations took place. He reviewed the spreadsheet illustrating the items and revised amounts. He stated the updated request subsequent to the August meeting has been reduced from $49,207.89 to $22,744.05. Ms. Rader stated staff believes this is a reasonable compromise and staff has been pleased with the quality of workmanship on the aquatic complex. If Council supports the negotiated amount, the item will be presented as a change order at the August 24 Council Meeting. Council Member Elder inquired of the project deadlines and if the pandemic had an impact. Council was advised that June 5 was the deadline for the pool construction by Donlar Construction and August 29 is the substantial completion deadline for the landscaping by Sunram. It is not believed that the pandemic caused construction delays. Mr. Boyum reported the final lift cannot be installed on the parking lot until the concrete is replaced at the police entrance. Ms. Rader indicated that Sunram has been reminded of the deadline and that the contract contains liquidated damages language. Mr. McDonald requested the city attorney to send a formal letter to Sunram putting them on notice regarding the potential for liquidated damages. Council Member London noted the major concern is timing. He inquired of the project status in terms of total budget and asked to be provided full information in the August 24 agenda packet. Director Rader noted the costs were shared at the May work session (estimated shortfall of $261,000). Mr. McDonald commented that over $100,000 of the overage was due to poor soil conditions. Ms. Rader indicated she would include the financials in the August 24 report. She also noted she will continue to update Council in the Friday updates. She stated the punchlist is being addressed and the pool will be drained and winterized soon. Mr. McDonald commended Director Rader for coordinating the required paperwork regarding external funding for the pool. Council directed staff to present the change order at the August 24 Council Meeting. City Council Work Session August 17, 2020 Page 3 COMMISIONER APPRECIATION EVENT 2020 Item 11.3 Mayor Hemken introduced for discussion item 11.3, Discuss Commissioner Appreciation Event for 2020. Mr. Kirk McDonald, city manager, noted the city usually hosts a city-wide bus tour of completed projects for commissioners and elected officials. He stated due to the pandemic it is recommended that instead of an in-person gathering, a virtual bus tour or self-driving tour be prepared and provided to persons typically invited to the annual appreciation event along with a letter from Council expressing appreciation for their service. Council supported staff’s recommendation for a virtual or self-driving tour. ELECTRIC AND GAS FRANCHISE FEE ORDINANCE Item 11.4 Mayor Hemken introduced for discussion item 11.4, Review electric and gas franchise fee ordinance. Mr. Kirk McDonald, city manager, stated city code requires the electric and gas franchise fee ordinances to be reviewed every two years. He stated the fees were last increased in 2017. Council Member London stated the city collects nearly $1 million through this revenue stream which is essentially another tax. He stated he is pleased to see there is a plan for the use of the funds ($440,000 is directed to the street infrastructure fund to help support the pavement management plan). Mr. Steve Sondrall, city attorney, was recognized. He stated it is not necessary for the Council to take any action unless it desires to modify the fees. He stated franchise fees are authorized by state statute. Council reviewed the ordinances and directed staff to make no changes. THREE-YEAR CONTRACT RENEWAL WITH AEM Item 11.5 Mayor Hemken introduced for discussion item 11.5, Discuss Three-Year Contract Renewal with AEM for Professional Financial Management Services for Years 2021- 2023. Mr. Kirk McDonald, city manager, stated the city has utilized the financial management services of AEM since December 2008 and has been pleased with their broad range of services. He stated AEM has prepared a three-year contract renewal for Council’s consideration. He stated the average annual increase is slightly over 3%. He indicated the CAFR preparation responsibility has been transferred to MMKR so the 2021 contract price of $129,150 is slightly lower than 2020’s contract. Mr. McDonald noted that West Metro Fire-Rescue District and the city of Crystal also contract with AEM for financial management services. Council unanimously supported the contract renewal proposal and directed the city manager to place the item on the August 24 agenda for formal approval. Council Member London thanked Vicki Holthaus for illustrating the outsourcing costs within the budget document. City Council Work Session August 17, 2020 Page 4 MMKR LETTER OF ENGAGEMENT 2020 AUDIT/CAFR Item 11.6 Mayor Hemken introduced for discussion item 11.6, Review Letter of Engagement from MMKR to Perform 2020 Audit/CAFR. Mr. Kirk McDonald, city manager, stated the city has utilized the services of MMKR for several years for completion of the city’s annual audit. He stated a three-year proposal was approved at the October 28, 2019, Council Meeting. He stated Council is asked to consider the letter of engagement from MMKR to perform the 2020 audit and CAFR. Mr. McDonald stated the proposal includes a quote for preparation of the Comprehensive Annual Financial Report (CAFR) that was previously handled by AEM but is recommended to be performed by MMKR to improve the audit and financial reporting timeline. He stated the cost for the 2020 audit and CAFR is $38,730 plus a separate single audit of federal awards for the CARES/FEMA funding at a cost of $5,000 for a total cost of $43,730. Ms. Holthaus indicated CARES funding will cover the cost of the single audit. Council supported the letter of engagement and directed staff to place the item on the August 24 Council Meeting for approval. 2021 PRELIMINARY GENERAL FUND BUDGET AND TAX LEVY Item 11.7 Mayor Hemken introduced for discussion item 11.7, Discussion regarding 2021 preliminary general fund budget and tax levy. Mr. Kirk McDonald, city manager, stated the Council will be asked to set its maximum 2021 tax levy at the September 14 Council Meeting. The general fund budget will be reviewed and refined this fall and the final budget and tax levy will be adopted in December. Mr. McDonald stated the proposed preliminary maximum total tax levy of 3.4% is lower than the initial estimated levy of 6.7%. He stated the proposed general fund budget is $15,936,977, and the proposed general fund tax levy is $10,879,465 which is a 3.5% increase over last year. He explained $156,000 is budgeted for phase 1 of police department body and squad camera purchases and is recommended to be funded by a transfer in from the IT reserve fund in order to keep the general fund tax levy to a minimum. He reviewed other major changes including an increase in the budget for the fire district, a decrease in the elections budget, an increase in LGA, and an increase in wages. He stated all directors will be present at the September work session to review the proposed budgets in detail. Mr. McDonald stated the estimated overall impact of the city tax levy on residential properties will not be available from Hennepin County for a few weeks. Ms. Vicki Holthaus, AEM, explained the tax rate is preliminary and the actual tax impact on residential homes could vary from the preliminary budget document. Council agreed upon the recommended maximum tax levy and conducting the budget hearing on December 7. City Council Work Session August 17, 2020 Page 5 RESOLUTION CALLING FOR CLOSED MEETING Item 11.8 Mayor Hemken introduced for discussion item 11.8, Resolution calling for a closed meeting of the New Hope City Council authorized by Minn. Stat §13D.05, Subd. 3 to discuss and consider threatened litigation. RESOLUTION 2020-82 Item 11.8 Council Member Elder introduced the following resolution and moved its adoption: “RESOLUTION CALLING FOR A CLOSED MEETING OF THE NEW HOPE CITY COUNCIL AUTHORIZED BY MINN. STAT §13D.05, SUBD. 3 TO DISCUSS AND CONSIDER THREATENED LITIGATION.” The motion for the adoption of the foregoing resolution was seconded by Council Member Frazier, and upon vote being taken thereon, the following voted in favor thereof: Hemken, Elder, Frazier, Hoffe, London; and the following voted against the same: None; Abstained: None; Absent: None; whereupon the resolution was declared duly passed and adopted, signed by the mayor which was attested to by the city clerk. ADJOURNMENT The meeting was adjourned at 7:26 p.m. as there was no further business to come before the Council at its work session. Respectfully submitted, Valerie Leone, City Clerk