HomeMy WebLinkAbout2018-05-10 Council Minutes-
CITY OF CORCORAN
City Council Meeting Minutes
May 10, 2018 - 7:00 pm
The Corcoran City Council met on May 10, 2018 at City Hall in Corcoran, Minnesota.
Present were Mayor Thomas, Councilor Dejewski, and Councilor LaFave.
Excused were Councilor Bottema and Councilor Keefe.
Also present were City Administrator Martens, City Planner Lindahl, City Engineer Torve, Public
Works Superintendent Meister and Public Safety Director Gottschalk.
1. Call to Order / Roll Call
Mayor Thomas called the meeting to order at 7:00 pm.
2. Pledge of Allegiance
Mayor Thomas invited all in attendance to rise and join in the Pledge of Allegiance.
3. Agenda Approval
City Administrator Martens noted a corrected typo in the April 26th minutes, an updated resolution
for 11a, and added 11e to update the Council on the maintenance operator position.
MOTION: made by Dejewski, seconded by LaFave to approve the agenda as amended.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
4. Open Forum
No persons were present to speak.
5. Presentations
a. 2017 Audit — Justin Nilson, Abdo, Eick & Meyers
Justin Nilson, Audit Manager for the City of Corcoran, gave a presentation on the financial audit
for Corcoran in 2017. He noted that the auditor's responsibility is to give an opinion on how the
City is managing its finances. He explained that the auditor prepares the City's financial
statements and shared a finding that the City has insufficient collateral coverage. Nilson
discussed last year's recommendation of updating financial guidelines. This was completed by the
City of Corcoran in 2017 due to auditor recommendations. During this year's audit, it was
discovered that the City is holding approximately 80% of its cash and investments in accounts
earning an interest rate below 0.05 %, resulting in an approximate 0.13% average rate of return in
2017. Nilson recommends the City of Corcoran consider its investing needs and possibility
increase returns by diversifying some of its cash into other types of investments authorized under
Minnesota statutes. Nilson presented a graph of the general fund balance over the past 5 years.
He noted that in 2018 the balance was $4,520,261. This is a $1,193,323 or 35.87% increase from
a balance of $3,326,938 in 2017. He also noted that $460,031, or 10.1%, of the total fund balance
was assigned for long range planning. The Council inquired if other cities had a similar amount of
unrestricted funds. Nilson stated that their recommendation is 40 -50% with the minimum being
35% leaving the City of Corcoran within those guidelines at 36.7 %. Nilson then compared what
the City budgeted in the general fund to what was actually found. The City had budgeted
$3,987,106 for revenue and received $4,486,454, resulting in a surplus of $499,348. The City
budgeted $4,014,228 for expenditures and actually spent $4,200,392, resulting in additional
spending of $186,164. The difference between the received revenues and expenditures, as well
as an additional $10,000 from other financing sources, left the City a surplus of $323,184. The
Council noted that it is a challenge to estimate how much a City is going to grow and be able to
monitor those changes and inquired if the auditor had any recommendations on how to best do
that. Nilson responded that long-range planning is comparative and it requires looking at all the
funds and the entire picture. He also noted that budgeting conservatively is good practice. Nilson
then went over the general fund breakdown of revenues and transfers. The largest portion of
revenue came from taxes, licenses/permits, other revenue, intergovernmental, and charges for
services. The largest portion of expenditure came from public safety, public works, general
governmental expenses, and transfers. The Special Revenue Fund has increased from $61,619
in 2016 to $141,037 in 2017, resulting in an increase of $79,418 or 128.89%. Some sources of
income that comprise the Special Revenue fund are reserve donations, police donations, firearms
safety training donations, DWI forfeiture, drug forfeiture, truck safety donations, and lawful
gambling. Nilson presented the City's Debt Service Funds with a total of $7,456,000 in
outstanding debt and $1,645,473 in remaining interest payments. Capital Project Funds were
$3,402,760 in 2016 and $2,103,069 in 2017, resulting in a decrease of $1,299,691 or -38.2%.
Major expenditures were the Downtown Improvement Project and Hackamore Upgrades Project.
Nonmajor expenditures were Park Capital, Capital Equipment, Shannon Lane, wetland
restoration, asphalt maintenance, and the Public Works Facility. The Downtown Improvement
Fund decreased $1,514,485 during the year as a result of capital outlay expenditures. The
decrease in the Hackamore Upgrade Fund was due to capital outlay expenditures related to the
Hackamore Road Upgrade project exceeding current year sources. The increase in the Park
Capital Fund was due to Park Dedication Fund revenue. Nilson also noted that the Water Fund
increased $276,928 or 19.89% from $1,392,120 in 2016 to $1,669,048 in 2017 and the Sewer
Fund increased $62,434 or 12.17% from $513,099 in 2016 to $575,533 in 2017. Lastly, Nilson
presented the ratio analysis and found that the City of Corcoran had 54% debt to assets; $1,973
debt per capita; $687 taxes per capita; $762 current expenditures per capita; and $333 capital
expenditures per capita. He noted that some of these numbers are higher than other cities due to
the City of Corcoran being in the early stages of developing new infrastructure. The Council
inquired about the 35% minimum maintenance of the Fund Balance and asked if there were any
additional recommendations on how to manage that number. Nilson responded that although 35%
is on the lower end, it is not incorrect for a City to operate around that number due to the City's
priorities. He did not have any recommendations but did note that some cities start a Capital
Improvement Fund as their city grows bigger and suggested this would be a positive item to
budget for. The Council inquired if the auditing company had full cooperation from the staff. Nilson
stated that there was full cooperation and staff was great to work with. City Administrator Martens
acknowledged and appreciated the work that staff did in assisting the auditor.
MOTION: made by LaFave, seconded by Dejewski to accept the Audit as presented.
Voting Aye: Thomas, Dejewski, and LaFave.
(Motion carried 3:0)
6. Consent Agenda
a. Draft Minutes of April 26, 2018 Council Meeting
b. Cancellation of Special Assessment and Certain Fees- 20175 County Road 50
MOTION: made by Dejewski, seconded by LaFave to approve the consent agenda consisting of
items 6a and 6b.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
7. Claims as Presented
a. Escrow Claims (Fund #500)
MOTION: made by LaFave, seconded by Dejewski to approve escrow claims as presented.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
b. All Other Financial Claims
MOTION: made by LaFave, seconded by Dejewski to approve all other claims as presented.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
8. Staff Reports I Memos/Commissions
a. Commissioner Representatives
The Council acknowledged Planning Commission Representative Dorothy Theis.
9. Planning Business
a. Consideration of EAW- Encore (18-004)
City Planner Lindahl gave a verbal presentation of considering the Environmental Assessment
Worksheet (EAW) for the Encore development. She explained that the final step in the EAW
process is to determine what to do with the findings. She noted that EAWs are mandatory for
residential developments with more than 250 homes for a city the size of Corcoran. The intent of
the EAW is to identify potential environmental impacts and then adopt mitigation strategies that
could be included in conditions for future approval. If the EAW identifies significant environmental
impacts that cannot be mitigated, then it is required to order an Environmental Impact Statement
(EIS) which gives you additional alternatives. After reviewing the findings for an EAW, the Council
decides if they want to request additional information about the EAW, make a finding of "no need
for an EIS, or order an EIS. Based on the review of the EAW dated March 5t ", staff recommends
finding a "no need" for an EIS. The Council asked City Planner Lindahl to walk through the
process of an EIS. City Planner Lindahl explained that the EIS is similar to the EAW except that it
does not identify new impacts and rather finds alternative mitigation strategies for the findings in
the EAW. The Council noted surprise that there was no concern about the impact on adjacent
wetlands. City Planner Lindahl noted that most cities in the Metro area have rules for identifying
mitigation strategies and solutions to everything outlined in the EAW so it is less impactful in the
Metro than it would be in more rural areas that did not have mitigation strategies outlined. She
noted that there was not anything in the EAW that did not already come up in the feasibility study
or other planning reviews. She also noted that if the wetland was impacted, the City would have to
comply with the Wetland Conservation Act.
MOTION: made by LaFave, seconded by Dejewski to approve Resolution 2018-31 declaring
finding of "no need" for an Environmental Impact Statement (EIS) based upon the review of the
Environmental Assessment Worksheet (EAW) dated March 5, 2018 for the "Encore" Project
proposed Pulte Homes of Minnesota, LLC at 9975 County Road 101.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
10. Unfinished Business
No unfinished business was presented.
11. New Business
a. Awarding the Sale of General Obligation Bonds, Series 2018A
City Administrator Martens noted that at the April 12th, 2018 Council meeting a resolution was
approved providing the issuance and sale of bonds for the purchase of 20400 County Road 50, as
well as the 2018-2019 Capital Improvement Plan. The amount was for approximately $1,865,000.
In advance of the sale, a rating call was held with Moody's Investor Services who upgraded the
City's rating from an Al to Aa3 due to improved financial position, reserves growing healthily
relative to the budget, growing tax base, favorable location within the Twin Cities Metro area,
above average wealth levels, a moderate debt burden, and a moderate pension burden. Tammy
Omdal from Northland Securities gave a bond sale summary. She stated that on May 10th
Northland Securities took bids on behalf of the City of Corcoran. They received two bids and
chose the lower bid. She noted that the bonds are being sold to finance park land acquisition and
equipment totaling $1,835,000; which was $30,000 lower than previously estimated. She
explained that the bids were paid with premium meaning the buyer of the bonds is paying the City
of Corcoran more to have larger coupons on the bond which has a favorable impact on the City.
The estimated interest rate with the lower rating was 3.12% and is now down to 2.98%. The
Council inquired how many bids were received the last time there was a bond sale. Tammy
Omdal responded 3 or 4. She explained that this was a smaller size in the marketplace and that
the federal tax bill passed last December had implications on the tax exempt market. The Council
verified that it was a steady increase in the Reserve Fund that gave a better rating. Omdal
responded that was correct and there was a positive trend noted over a period of time. She noted
that a future challenge is the nominal size of those reserves and monitoring it does not go below
the current amount.
MOTION: made by Dejewski, seconded by LaFave to accept Resolution 2018-37 awarding the
sale of General Obligation Bonds Series 2018A, in the original aggregate principal amount of
$1,835,000; fixing their form and specifications; directing their execution and delivery; and
providing for their payment.
Voting Aye: Thomas Dejewski, and LaFave
(Motion carried 3:0)
b. Interfund Transfer
City Administrator Martens stated that the final step related to the bond sale is to approve
transferring $250,000 from the Park Dedication Fund to the Capital Fund related to the purchase
of 20400 County Road 50.
MOTION: made by Dejewski, seconded by LaFave to approve Resolution 2018-29 authorizing an
interfund transfer of $250,000 from the Park Dedication Fund to the Capital Fund.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
c. Public Hearing- 2018 Dust Control Project
City Administrator Martens gave a presentation on the 2018 Dust Control Project. He explained
that Dust Control was an annual project to apply chloride product on 27 of the 34 miles of gravel
road in Corcoran. The project cost $109,950 or $0.75 per linear foot which is subsidized by the
city based upon different types of roads. Collector roads and neighborhood roads connected to
collector roads are subsidized $0.24 per linear foot and neighborhood roads accessing paved
roads are subsidized $0.60 per linear foot. He noted that the percentage of the project to be
assessed has been reduced over time with incremental budget adjustments. Mayor Thomas
opened the public hearing. Tom Spiczka, 9103 Cain Road, addressed the Council and discussed
having to pay for general road improvements throughout the City regardless of the level of
personal use and inquired why property owners bear sole financial responsibility when other
residents also use those roads. Stan Littlefield, 7100 Old Settlers Road, addressed the Council
and inquired if the City did annual inspections to assess whether the application of chloride
product was necessary. He noted that in previous years dust control was applied when it was not
needed and stated that by only applying it when necessary would save money. Judith Herwig,
9410 Fox Valley Drive, addressed the Council and raised concerns about the numerous frost boils
on her road that have not been fixed in a long time. She also inquired about whether every house
on the road would be billed the same. Kari Heitke, 22201 Homestead Trail, addressed the Council
and asked why her property was now on the dust control list when it was not in previous years.
She also inquired about how payment was going to be divided. Dennis Covington, 7131 Old
Settlers Road, addressed the Council and stated that dust control should be a maintenance issue
and be evaluated on an every year basis.
MOTION: made by Dejewski, seconded by LaFave to close the public hearing.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
City Administrator Martens responded that evaluating the roads on an annual basis would be a
possibility and the City had not previously discussed doing so. City Administrator Martens also
explained that each property is billed on whether they are collector roads or neighborhood roads.
He noted that if an individual lives on a gravel road that has portions that are paved they could be
billed for a half-unit or quarter-unit. City Administrator Martens explained that Homestead Trail
between Willow Drive and Rolling Hills Road was added for the first time this year and that access
is the determining factor on whether certain properties will be included in dust control. The Council
discussed treating dust control as a maintenance item and noted that the topic had been
addressed at previous meetings. The Council noted that high-traffic gravel roads that produce a
lot of dust have been considered for paving. The Council also noted that it has tried to find a
balance between conflicting opinions by subsidizing more every year. The Council acknowledged
that giving Public Works more authority to determine the necessity of dust control on individual
roads could be a possibility. Public Works Superintendent Meister explained that roads that are
new to the dust control list are likely there because residents requested the application. He also
expressed reluctance on giving Public Works the authority to decide which roads to apply dust
control due to the subjective nature of that decision and the likelihood that some residents will
express dissatisfaction with the decision. He also noted that despite the roads being in fair
condition currently, the decrease in quality during the summer months and many residents on
roads that were applied for dust control request a second application. The Council noted that they
are doing comprehensive analysis on the roads in Corcoran and their maintenance needs and
once that is completed they will have a more informed decision on how to manage and maintain
certain roads.
MOTION: made by LaFave, seconded by Dejewski to accept Resolution 2018-38 ordering
improvement of dust control treatments to be applied to city streets in 2018.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
d. 2018 Pavement Overlay Program- Accept plans /specs, authorize bids
City Administrator Martens gave a presentation on the 2018 Pavement Overlay Program. He
stated that the Council approved a feasibility study to develop a 5 -year Capital Improvement Plan
(CIP) for Municipal State Aid (MSA) funding. One goal of this study was to review options for
project work that was warranted and eligible for MSA construction funds that could be completed
in 2018 to draw down the construction account balance below $1.5 million. He noted that during
preliminary analysis, it was evident that completion of an enhanced pavement overlay project on
previously constructed MSA projects were prime candidates. Two roads under consideration are
Larkin Road from Old Settlers Road to County Road 116 and Rolling Hills Road from north of
Horseshoe Trail to County Road 50. The estimated project cost was updated to $518,000 for
construction. The Larkin Road estimate was $222,000 and the Rolling Hills Road estimate was
$2967000. All costs are eligible for MSA reimbursement. The engineering and testing estimate is
$35,000 and the lab and field testing that is required for MSA projects will be subcontracted
through Wenck. The anticipated schedule is to accept the plan and authorize the bid at the May
10th Council meeting, open the bid on June 5th, award the bid on June 14th, and do construction
July- October.
MOTION: made by Dejewski, seconded by LaFave to direct staff to authorize bids for the 2018
Pavement Overlay Program.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3 :0)
e. Maintenance Operator Update
City Administrator Martens noted that the resignation notice of a maintenance operator from the
last meeting was rescinded and that Philip Medrano will remain with Corcoran Public Works.
12. 2018 Council Schedule
City Administrator Martens reviewed the upcoming schedule.
13. Council Liaison Calendar
The Council liaison calendar was not reviewed, but was available in the Council packet.
14. Adjournment
MOTION: made by LaFave, seconded by Dejewski to adjourn.
Voting Aye: Thomas, Dejewski, and LaFave
(Motion carried 3:0)
Meeting adjourned at 8:09 p.m.
Brad Martens —City Administrator