City Council Meetings

Watertown City Council Regular Meeting Mayor Michael Walters Adam Pawelk Fred McGuire Dan Schuette Kay Thul 12/12/2023 - Minutes 1. Call To Order And Roll Call Pursuant to due call and notice thereof, the regular meeting of the Watertown City Council was called to order in the Council Chambers of City Hall at 6:30 p.m. on Tuesday, December 12, 2023, by Mayor Mike Walters. Councilmembers present: Mike Walters, Adam Pawelk, Fred McGuire, and Kay Thul. Councilmembers absent: Dan Schuette City Staff present: City Administrator Jake Foster, Administrative Service Director Michael Sommerfeld 2. Adopt Agenda COUNCILMEMBER THUL MOVED TO APPROVE THE AGENDA AS PRESENTED. COUNCILMEMBER MCGUIRE SECONDED. MOTION CARRIED 4-0. 3. Consent Agenda Discussion And Approval COUNCILMEMBER MCGUIRE MOVED TO APPROVE THE CONSENT AGENDA AS PRESENTED. COUNCILMEMBER THUL SECONDED. MOTION CARRIED 4-0. 3.A. 3A - 2023 Mill And Overlay Pay App 5 3.B. 3B - WWTF Pay App 19 3.C. 3C - 2024 Property Assessment Services Contract 3.D. 3D - 2024 Firefighter PERA Increase 3.E. 3E - Fire Officer Appointments 3.F. 3F - 2024 Policing Services Contract 3.G. 3G - LMC Grant Navigator Funds  3.E. 3E - Fire Officer Appointments 3.F. 3F - 2024 Policing Services Contract 3.G. 3G - LMC Grant Navigator Funds 3.H. 3H - Crow River Bank Restoration Pay App 3 3.I. 3I - Firefighter Resignation 3.J. 3J - 2024 End Of Year Payments 3.K. 3K - City Hall Closure For Team Building And Holiday Party 3.L. 3L - September 26, 2023 - Regular Meeting Minutes 3.M. 3M - October 10, 2023 - Regular Meeting Minutes 3.N. 3N - October 24, 2023 - Regular Meeting Minutes 3.O. 3O - November 14, 2023 - Regular Meeting Minutes 3.P. 3P - September 26, 2023 - Work Session Minutes 3.Q. 3Q - October 10, 2023 - Work Session Minutes 3.R. 3R - November 14, 2023 - Work Session Minutes 3.S. 3S - December 2023 Personnel Handbook Updates 3.T. 3T - 2024 2AM Liquor License 3.U. 3U - 2024 Liquor Licenses 3.V. 3V - 2024 Tobacco Licenses 3.W. 3W - 2024 Waste Hauler Licenses 4. Open Forum 5. New/Old Business 5.A. 5A - 2024 Truth In Taxation Hearing And Final Budgets Mr Foster presented the background on the truth in taxation hearing & 2024 Budget process. The last actions that need to be taken for the 2024 budgets are holding the Truth in Taxation Hearing, and approving the 2024 CIP, 2024 budgets for all funds, and the 2024 final levies. There have been no additional changes to any of the budgets since the all- budget discussion at the November 18 th City Council meeting. The only change from what was presented during the all-budget discussion is the updated proposed stormwater rates for 2024-2032. These rates were updated based on the significant changes that were made to the CIP prior to the all-budget discussion. Those changes have resulted in a recommended monthly stormwater rate increase of $1.50 for 2024, whereas the previous proposal recommended an increase of $7.87 each month. The 2024 budget presentation summarizes the budgets and steps that have been taken for them to reach their current state. The attachments included have been denoted whether they are new/updated, or unchanged form the November 28, 2023 City Council meeting. 2024, whereas the previous proposal recommended an increase of $7.87 each month. The 2024 budget presentation summarizes the budgets and steps that have been taken for them to reach their current state. The attachments included have been denoted whether they are new/updated, or unchanged form the November 28, 2023 City Council meeting. At the September 26 work session, Council adopted a preliminary levy totaling $3,163,203. This total included all general fund and debt expenses, but not the EDA levy. Staff thought the EDA levy rolled into the total general fund levy number in the budget spreadsheets, but that was not correct. Staff has determined how the $30,000 2024 levy will be accounted for, and detail will be provided below. Prior to adopting the preliminary levy, Council discussed the general fund budget/levy at the July 11 th and 25 th work sessions, the CIP at August 8 th work session, and the 2024 contract for policing services at the August 22 nd work session. At the September 12 th work session Council was able to discuss the budget within the context of the 2024 assessment information from Carver County, and comparing the tax impacts for the median home value in the City of Watertown. The budget proposed at the September 12 th work session provided for a total levy increase of 16.40% from 2022 including the general levy (includes EDA levy) and debt levy. This budget impacted the median home value in Watertown of $304,600 at an increase of 18.06% or $247.25 annually. Given these somewhat dramatic increases, Council directed staff to make significant changes to decrease the proposed levy for preliminary levy prior to adoption. With that direction Council approved the following changes to the proposed 2024 budget: • -$100,000 = Removal of Public Services FTE • -$100,000 = Decrease in CIP transfer (general CIP fund) • -$50,000 = Using one-time public safety aid to offset increase in policing contract • -$38,500 = Decrease in EDA levy These adjustments decreased the budget a total of $288,500 from the original proposal. The revised budget would bring the total general fund levy (including EDA levy) and debt levy to an increase of 7.79% (down from 16.40%). The impact on the median home in Watertown would be 5.86%, or $80.17 annually. Since the preliminary levy has been adopted, staff has received insurance renewals. The health insurance premiums are to increase 9.3% from 2024. Staff and the City’s insurance brokers at NFP discussed other health insurance options, but each alternative resulted in a higher increase or immaterial costs savings with significant decreases in the benefit package. The preliminary levy accounted for an increase to health insurance premiums of 10%. Staff is recommending that this line item not be adjusted as the difference is largely immaterial and the actual amounts paid for premiums can change throughout the year based on employee turnover and employee elections. As stated above, staff is recommending a few minor changes to the preliminary budget to account for the $30,000 EDA levy. Those recommendations are as follows: Policing Contract: Remove the second squad car from the contract = $23,626 in cost savings Currently, the City has an open shift for Team 1 nights starting in 2024. As there is a vacancy, and no on-coming staff to full the role, Corporal Cripps will continue to work his typical Monday through Friday day shift to provide some coverage Monday and Tuesday (with the current vacancy, and if Corporal Cripps would change to the previously discussed Team 2 day shift, the City would have no coverage all day Sunday through Tuesday). Due to the vacancy, and Corporal Cripps staying on the shift described above, there is no need for a second squad car. Furthermore, the City will be reimbursed for any open shifts that don’t get back-filled by other no on-coming staff to full the role, Corporal Cripps will continue to work his typical Monday through Friday day shift to provide some coverage Monday and Tuesday (with the current vacancy, and if Corporal Cripps would change to the previously discussed Team 2 day shift, the City would have no coverage all day Sunday through Tuesday). Due to the vacancy, and Corporal Cripps staying on the shift described above, there is no need for a second squad car. Furthermore, the City will be reimbursed for any open shifts that don’t get back-filled by other deputies. If the Team 1 night shift get filled later in the year, the City could amend the contract to add the second car and use the cost savings from the open shifts to cover the cost. Local Government Aid Staff is recommending that $15,000 of Local Government Aid (LGA) be used to offset the remaining portion of the EDA levy and increased wage and benefit costs due to recent market findings and staffing recommendations. Final Decisions on other considerations: • Staffing (add back mechanic or any part-time help?) • Any adjustments to the use of one-time payments/aid (One-time Public Safety Aid, Transfer to general CIP fund, LGA? Staff recommendation: Staff recommends keeping the final levy consistent with the preliminary levy.As stated above, adopting the final levy consistent with the preliminary levy equates to a total general fund levy (including EDA levy) and debt levy to an increase of 7.79% (down from 16.40%). The impact on the median home in Watertown would be 5.86%, or $80.17 annually. If Council wishes to cut the levy further, staff would recommend using additional LGA funds to do so. A comparison of the preliminary levies for Carver County cities is provided below for additional context. Capital Improvement Program (CIP – Non-Enterprise Funds) Staff has also captured items from Council at their earlier CIP discussion and has made changes to the documents to reflect the direction of Council. Those items are as follows: General Capital Fund: • Decreased LGA revenue by $15,000 for 2024 (as reflected above) • Decreased CIP transfer by $100,00 as prescribed in the 2024 budget • Pushed City Hall Bathroom Floor Replacement for $25,000 outside of the 2024-2028 CIP • Removed alley paving projects in 2026-2028 for $75,000, $100,000, and $460,000 (deprioritized work) • Switched 2026 and 2027 Mill and Overlay Projects to coincide with stormwater project changes. • Will need to remove/delay “tools for mechanic” item in CIP if Council chooses to keep that item out of the budget • Pushed Landings Trail Connection from 2024-2028 CIP for $470,000 • Updated Prairie Maintenance costs from 2024-2028 ranging from $15,000 to $20,000 compared to over$40,000 each year. • Estimates for the 2024 Public Services expansion came in significantly over the $500,000 budget (over $3M) – Staff is recommending that this project be reevaluated. Additional documentation is attached. Fire Capital Fund: • Decreased One-time Public Safety Aid revenue by $50,000 as it is being used to offset the Policing Contract Parks Capital Fund: • Pushed Community Park – Park Shelter from 2024-2028 CIP for $327,818 • Removed Forest Hills 9 th Park Improvement for $150,000 Enterprise Funds The largest cost drivers in the enterprise funds (water, sewer, and stormwater) come from items in their respective Capital Improvement Program (CIP) funds. The following adjustments have been made to the CIP in attempt to limit future utility rate increases. • Removed Forest Hills 9 th Park Improvement for $150,000 Enterprise Funds The largest cost drivers in the enterprise funds (water, sewer, and stormwater) come from items in their respective Capital Improvement Program (CIP) funds. The following adjustments have been made to the CIP in attempt to limit future utility rate increases. Sewer Capital Fund: • Moved Sterling Jet Vac to 2028 for $750,000 • Moved Televising Camera to 2028 for $250,000 Stormwater Capital Fund • Moved utilities for mill and overlay projects to General Capital Fund for $50,000, $95,000, $60,000, $60,000, $60,000 from 2024 to 2028 • Pushed Tymco Sweeper from 2024-2028 CIP for $350,000 • Removed 2027 placeholder Stormwater Repairs – General item and pushed 2026 project to 2027. Also lowered the estimate from $487,000 to $400,000 (staff and the City Engineer believe we can reduce the scope of this project to realize a cost savings) • Removed stormwater portion of ½ ton pick in 2024 (it will be almost exclusively used for sewer and water) • Pushed track skid steer from 2024-2028 CIP for $70,000 • Removed 2024 Pond/Stormwater project as it was used for the additional 2023 projects and earmarked for the Kiefer Street Drainage Improvement project. • Removed the 2024 stormwater repairs for the same reason as the 2024 Pond/Stormwater project. Water Capital Fund: No changes were made to the water capital fund. However, staff needs direction on how to proceed with the water tower site. The property owner has not accepted any offers for the property. These include the City’s tentative offers, and those of other developers. Staff sees the only options for procuring the necessary land for the water tower are to pay the full asking price of the land, or begin the eminent domain process. (Please note the differences in utility rates for the water fund under Scenarios A (no purchase) and B (purchase at $699,000). There are several factors to the condemnation/eminent domain process to understand (from the City Engineer): 1. If we cannot provide Xcel Energy with an easement to put their new transmission lines in. a. If Xcel can’t move, they will need to stay in their existing easement, which in turn would have negative impacts with our agreement with Hecksel Machine. We are currently planning on getting ROW from Hecksel in exchange for some land swapping and can only do that if the transmission lines are moved. b. We will need an easement from either Xcel Energy or Waters Edge Townhomes to build the sanitary sewer. We would prefer to give Xcel Energy the easement through the property for their transmission line in exchange for an easement by the sub station off CR 24 & CR 10. Neither one would have to give us an easement and they could dig in and there could be a situation were we would need to condemn another property if we did come to an agreement, but would be more likely a scenario with the Townhomes. 2. Condemnation in general a. Is not a pleasant process and generally not b. Added cost for lawyers to work through condemnation process. c. Likely damage claim from the property owner for building the water tower on our site. This could mean that the City pays well over the $75,000 the land appraised for. It is uncertain if the ultimate cost for the land would be over $100,000 as much as $300,000 + or anything in between. d. Start date gets pushed back. If this happens and inflation is say 5% on the $6 million dollar water tower that would add $300k to project, which is certainly higher impact than the difference  could mean that the City pays well over the $75,000 the land appraised for. It is uncertain if the ultimate cost for the land would be over $100,000 as much as $300,000 + or anything in between. d. Start date gets pushed back. If this happens and inflation is say 5% on the $6 million dollar water tower that would add $300k to project, which is certainly higher impact than the difference between what the City offered for the property and the asking price. Enterprise Fund Rates: With all this information being considered, there are significant cost savings or delays in expenditures that should lessen the future rate increases for the sewer and stormwater funds, and also flatten them. Staff is recommending that the 2024 rates still be implemented as outlined by the City’s financial advisor, then having them updated again for 2025 and beyond to see the impact of these changes and how rate increase recommendations can be lowered. Provided below are the utility rate recommendations for each scenario as discussed during the first work session in September for reference. MAYOR WALTERS MOVED TO ADOPT RESOLUTION 2023-62 AND APPROVE THE 2023 CAPITAL INVESTMENT ACTIVITIES. COUNCILMEMBER MCGUIRE SECONDED. MOTION CARRIED 4-0. COUNCILMEMBER THUL MOVED TO ADOPT RESOLUTION 2023-60 AND APPROVE OPERATING BUDGETS FOR ALL GENERAL, ENTERPRISE, FIRE, AND EDA FUNDS. COUNCILMEMBER PAWELK SECONDED. MOTION CARRIED 4-0. COUNCILMEMBER MCGCUIRE MOVED TO ADOPT RESOLUTION 2023-61 AND APPROVE A FINAL LEVY CITY OF WATERTOWN. COUNCILMEMBER PAWELK SECONDED. MOTION CARRIED 4-0. 6. Other Reports Mr. Foster stated staff has not been able to flood the ice rink but they will do it as soon the weather cooperates. Councilmember Thul reported on the Senior Holiday Dinner and we had 150 people attend and everyone had a wonderful time that attended. Mayor Walters reported on the Santa Stravaganza and tree lighting event. He also wanted to make sure to thank all the awesome volunteers, organizations, businesses, and Chamber of Commerce for their sponsorship of the many great events they bring to the community. Also, recognized all of the local business for their exceptional contributions and they are truly the backbone of our community. Thank you to the local emergency services people, including our police, and awesome firefighters, and first responders for their unwavering commitments to keeping Watertown safe during the holiday season and throughout the year. Walters also would like to acknowledge the efforts of our public services team for maintaining our parks and keeping our roads clear. Thank you to our city staff for just being such a great group of hardworkers that make things happen here. 7. Claims COUNCILMEMBER THUL MOVED TO APPROVE THE DECEMBER 12, 2023, CLAIMS PACKET. COUNCILMEMBER MCGUIRE SECONDED. MOTION PASSED 4-0. 7.A. CLAIMS 8. Adjournment MAYOR WALTERS MOVED TO ADJOURN THE DECEMBER 12, 2023 MEETING. COUNCILMEMBER MCGUIRE SECONDED. MOTION PASSED 4-0. 309 Lewis Avenue South; P.O. Box 279, Watertown, MN 55388 ________________________________________________________ 309 Lewis Avenue South; P.O. Box 279, Watertown, MN 55388 ________________________________________________________ Michael Walters, Mayor ATTEST:__________________________________________________ Jake Foster, City Administrator