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06.a2 Draft minutes 10-02-24 Work SessionOctober 2, 2024 A work session meeting of the Scandia City Council was held on the above date. The meeting was conducted in the Council Chambers at the Scandia Community Center and over an electronic platform. All participants who joined the meeting remotely could hear each other and contribute to discussions. Mayor Christine Maefsky called the meeting to order at 6:30 p.m. The following were present: Council members Jerry Cusick, Mike Lubke, Steve Kronmiller, and Mayor Christine Maefsky. Staff present: City Administrator Kyle Morell, Public Works Director Charles Fischer and City Treasurer Colleen Firkus. APPROVAL OF THE AGENDA Kronmiller, seconded by Maefsky, moved to approve the agenda as amended to add an interview with Kathy Sanville for Park & Recreation Committee vacancy. Motion carried 4-0. INTERVIEW KATHY SANVILLE FOR PARKS & RECREATION COMMITTEE VACANCY Council members took turns asking Sanville prepared interview questions. Sanville outlined her qualifications and interests emphasizing her interest in outdoor sports and activities. Sanville asked what are the expectations were for this role on the Park & Rec Committee. The meeting was closed for Council discussion. Cusick, seconded by Lubke, moved to appoint Kathy Sanville to the Parks & Recreation Committee. The motion carried 4-0. CANNABIS ORDINANCE UPDATE Administrator Morell presented an updated draft of UDC language and a Cannabis Ordinance for Council to review based on Council’s desire to treat cannabis and hemp businesses similarly to the restrictions around alcohol and tobacco in terms of licenses allowed and restrictions on business locations. The items that still require Council attention are: 1) the number of licenses allowed within the City with one being the minimum. The consensus of the Council was not to limit the number of licenses and allow the market to determine how many businesses can survive. 2) Age Requirements which currently limit the sale of low-potency hemp to places that only allow persons 21 years of age and older which is more restrictive than the sale of tobacco and liquor. Council agreed with the staff recommendation to not keep this provision. City Planner Hofer also recommended the Council consider setting limits on distance of outside cultivation from schools, daycare facilities and churches as growing hemp has a distinct smell, and other communities are considering setting limits like 500 to 1,000 feet. Further discussion will occur at the next regular meeting October 15 when the City Planner and City Attorney will be present. The next step is to schedule a public hearing November 6 to be held at the work session. CITY TREASURER JOB DESCRIPTION Administrator Morell recommended posting the City Treasurer position as part-time at 24 hours per week with a start date of January 1st. Since no health insurance will be offered, the position will accrue paid time off (PTO) and receive holiday pay on a prorated basis to make the position more attractive to prospective applicants. The City currently defines a full-time employee as someone scheduled to work more than 32 hours a week. The new Treasurer would accrue PTO to 75% of full-time employees. The City’s Personnel Policy will need to be amended. The Fire Chief position would be exempt. Scandia City Council Agenda October 2, 2024 Page 2 of 3 Kronmiller, seconded by Lubke, moved to post the City Treasurer position as part-time at a minimum of 24 hours per week with PTO and holiday pay accrued on a prorated basis. The motion carried 4 – 0. 2025 DRAFT FINAL BUDGET Administrator Morell presented a draft final budget. Changes to the preliminary budget from last month include an increased beginning balance to the Equipment Replacement Fund to include ARPA funds to purchase fire engine this year. Doing so reduced the amount needed to borrow to purchase the fire truck from $800,000 to $340,000. The scheduled debt service payment for the 2024 Street Reconstruction and Seal Coating and Crack Filling Projects is $359,887.50. That obligation was reduced to $119,569 in 2025 by applying $40,319 in interest earnings and $200,00 in project savings. Total project savings are expected to be between $450,000 and $480,000. The remaining amount has been applied to the 2026 bond payment to help reduce the 2026 levy. The City will issue a $340,000 equipment certificate to pay for the new fire department engine before the end of 2024. ARPA funding and cash will be used to cover the remaining balance. This adds $37,000 to our debt service levy in 2025 (down from $89,000 without the use of ARPA funds). The budget also shows the issuance of $515,510 in equipment certificates in 2025, with payments beginning in 2026 for the new plow truck and fire department tanker. The City continues to make payments on the 2018 road bond, which is $343,166 in 2025. The total debt service levy is $501,732, $156,098, more than in 2024. Capital Improvement Funds have also been adjusted. The Capital Improvement Fund shows a reduction in the levy amount for 2025. Excess fund balance allowed for this reduction in revenue while still planning for six project expenditures in 2025. The Park Investment Fund shows the transfer of $125,000 in excess fund balance and the $150,000 transfer from the Capital Improvement Fund to pay for the tennis court reconstruction. The Equipment Replacement Fund shows the issuance of a $340,000 equipment certificate to pay for the new fire engine to be delivered in late 2024. The Local Road Improvement Fund levy amount has been increased at the recommendation of the CIP Committee. The total CIP levy is $730,000,which is $55,300 less than in 2024. Changes to the General Fund show health insurance premiums decreased by 5.1%. The Treasurer position is budgeted for full-time with benefits. If a qualified candidate can be found part-time, then further savings will be realized. General Funds expenses increased by 3.57%. The proposed preliminary 2025 levy amount is $3,125,639. This represents a $128,787 increase (4.3%) over the final 2024 amount. If this amount were approved as the City’s final levy, the 2025 tax rate would be 27.903%, 1.199% points higher than 2024, or a 4.49% increase. As these expenses are clarified between now and the December Truth-in-Taxation hearing, they and the final levy amount will be adjusted. A new page showing the estimated 2025 tax impact based on sample home values was added to the presentation. CITY COUNCIL VACANCY Councilmember Heather Benson has been appointed to fill a vacancy in the 10th Judicial District. Due to this appointment, she resigned from her City Council position, effective Thursday, September 12, 2024. Her term was up at the end of 2024. Scandia City Council Agenda October 2, 2024 Page 3 of 3 Maefsky, seconded by Kronmiller, moved to leave Benson’s seat vacate until January 2025 when the position will be filled for the next term following the November election. Motion carried 4-0. CARRIE MITCHELL - CONCERNS ABOUT THE BUILDING OFFICIAL Administrator Morell reviewed Mitchell’s concerns about the City’s inspection procedures, who was not in attendance to state her case. Staff believes that since the Building Official is an employee of the city of Hugo, then her concerns should be addressed to Hugo. Mitchell disagrees and wants Scandia to update their inspection procedures above and beyond MN Building Codes. Mitchell hired a consulting service which concluded the contractor was at fault and she should pursue the contractor. The Council consented for Morell to draft a letter to Mitchel stating the City’s position. Kronmiller suggested the city attorney be consulted. The Council would like to continue the discussion at the next meeting when the attorney is present. ADJOURNMENT Kronmiller, seconded by Lubke, moved to adjourn the meeting. Motion carried 3-0. The meeting adjourned at 7:30 p.m. Respectfully submitted, Colleen Firkus City Treasurer