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12-02-2020 Work Session December 2, 2020 A work session meeting of the Scandia City Council was held on the above date with modifications. Due to the health advisory issued by the State regarding the COVID-19 outbreak, to avoid public gatherings and limit social contact, the meeting was conducted over an electronic platform. All council members and staff who joined the meeting remotely could hear each other and contribute to discussions. City Administrator Cammilleri and City Clerk Eklund were present in the Council Chambers. Cammilleri was the presenter and displayed the meeting materials for participants to view on their remote screens. Mayor Christine Maefsky called the meeting to order at 6:30 p.m. The following were participants to the meeting: Council members Jerry Cusick, Steve Kronmiller, Chris Ness, Patti Ray and Mayor Christine Maefsky. Staff participating: City Administrator Ken Cammilleri, Fire Chief Mike Hinz, Public Works Director Adam Hawkinson, and City Clerk Brenda Eklund. APPROVAL OF AGENDA Additions to the agenda: • Park bench standards • Zoning and development code update with SHC consultant Ness, second by Ray, moved to approve the agenda as amended. Motion carried 5-0 by roll call vote. PUBLIC HEARING: TRUTH IN TAXATION HEARING ON THE 2021 BUDGET AND PROPERTY TAX LEVY City Administrator Cammilleri provided a summary of the 2021 budget and levy. In September the Council certified a preliminary levy of $2,613,824, a 7.06% increase over the 2020 levy. The Council can lower the levy before adopting the budget but cannot increase the amount. Cammilleri explained that this calculates to a 1.1% increase in the city’s tax rate. Cammilleri provided 2021 budget highlights: • $100,000 to the general capital fund for internet expansion; $250,000 has been tentatively scheduled for grant matching and other improvements for internet expansion • $130,000 to the capital improvement fund for public works equipment replacement • $845,000 to the road improvement fund for next year’s road project on 220th St/Peabody Trail • A reduction in debt service costs of $50,000 for paying off an equipment bond in 2020 • A 7% increase to Big Marine Sewer rates; 5% increase to Uptown Sewer rates Cammilleri presented options to the Council for adjusting the levy and tax rate, and explained that the City is in a good position to lower the levy amount. The CARES Act reimbursements, underutilized budgeted services for planning, and public works savings related to road maintenance, engineering, salt purchases, and equipment repair this year have contributed to an available fund balance at year-end of approximately $460,000. Option B, a 0% tax rate increase, would lower the levy to $2,584,824 (a 6% increase over last year). Budget summaries prepared for the meeting were based on this scenario. Cammilleri explained that $430,000 in fund balance December 2 2020 Scandia City Council Page 2 of 4 would be available to transfer with $230,000 allocated to road maintenance and $200,000 toward general capital for internet expansion. Mayor Maefsky opened the public hearing at 6:57 p.m. Steve Collier, 19960 Maxwill Avenue, asked about funding for internet expansion. Council member Ray explained that $165,000 is allocated in the budget only if Scandia is awarded a MN DEED Broadband Expansion Grant. There is potential for a neighborhood expansion program with a Midco partnership. The City will have a better idea once grant awards are announced early next year. Council member Kronmiller added that 800-1,000 Scandia homes have slow internet; the City is leveraging for state funding for improvements when it can. Administrator Cammilleri provided an email from Erich Kertzscher who was concerned about the City’s preliminary increase shown on his 2021 proposed property tax statement. He suggested more funding go to roads and emergency services. Cammilleri explained his response to Mr. Kertzscher that there is potential for a tax rate reduction before the final budget is adopted. There were no other comments and Mayor Maefsky closed the hearing at 7:04 p.m. Council member Ness said the City’s windfall of $460,000 in the fund balance should be passed along as savings to the taxpayers, and recommended the levy be lowered $115,000, still leaving over $280,000 for roads and internet expansion. Administrator Cammilleri reviewed the options for further lowering the tax rate, and explained that the City is in a good fiscal position with any of the scenarios; however, maintaining a targeted fund balance is the goal. Over time, it’s favorable to put extra dollars in the Road Improvement Fund because road improvements are not assessed to property owners but paid from this growing fund. Mayor Maefsky said Option D, to lower the tax rate by an estimated 3%, seems a reasonable position to take, as this is an unsettled time right now. This option would lower the tax levy by $103,000 to $2,510,824 for a 3.3% tax levy increase over 2020 and an estimated tax rate decrease of 3% to 30.509%. Proceeding with this option would leave the City with $280,000 of excess fund balance which could be used to distribute $200,000 for internet expansion and $80,000 towards road preservation. Maefsky, second by Ness, moved to direct staff to proceed with Option D for the 2021 budget and tax levy. Motion carried 5-0 by roll call vote. Staff will prepare the budget and tax levy adoption for the City Council meeting on December 15, 2020 based on Option D. DISCUSSION ON ICE RINK ADVERTISING Administrator Cammilleri explained that the Parks and Recreation Committee had adopted guidelines for the sale of rink advertisements in 2018 and now have 2 requests pending. The December 2 2020 Scandia City Council Page 3 of 4 Tourism Committee has recommended to discontinue ads on the ice rink because it is not consistent with the character of the Village Center. Cammilleri said the Council needs to provide a decision on rink ads based on the TC’s recommendation at this point. Mayor Maefsky added that rink advertising was intended to pay for improvements to the skate park at a time when Parks had a negligible budget, but funding the Parks budget has since been increased. The Tourism Committee is developing a cultural branding of the Village Center and ads on the rink boards would not be in line with this aesthetics. Terry Gorham and Greg Zauner, Parks and Recreation Committee, and Sarah Porubcansky, Tourism Chair, joined the meeting. Porubcansky said the tourism assessment prepared by the U of MN states a goal to protect and strengthen the Village Core as the focal point for tourism. They must carefully think about how the whole area looks. As well, the Committee is looking at adopting sign standards for a consistent look throughout. Gorham said the extra funds derived from ads on the rink would help the parks budget and give local businesses the chance to advertise. Maefsky said that the revenue may not be enough for major replacement of the rink boards; rather large projects for the skate park should be in the Capital Improvement Plan. Zauner said that in his travels to small towns he likes to see local advertising; the Community Center is not considered an historic site; and the signs placed along the west end of the rink would not be a distraction and only viewed from those on the grounds. Maefsky explained that the City is working to develop the grounds as an historic area, tied into the Water Tower Barn site on the south ballfield and intended to be a centerpiece in the future. Porubcansky added that the Committee is working to have brochures to provide for local advertising without the need for signage in the middle of town. Council member Kronmiller said that advertising is an important component of tourism, and many small towns have some sort of city center to promote local amenities. They need to look how to integrate advertising of some kind as a comprehensive solution in some form. Council member Cusick says he has no problem with ads which are a common sight on ice rinks. Sign pollution can be found on the roadways. In this case, the boards are already there. It’s a great way to generate income and help local businesses. Council member Ray said she favors no signage. Scandia should retain the charming small town look in the center of town. There is a bulletin board inside the warming house that businesses can post ads on. Cusick, second by Ness, moved to continue the existing policy to allow advertising on the rink boards. Ness said that many points have been brought up, but the advertisers agree to a 3-year term whereas the Water Tower Barn project is many more years out. Ads can be taken away if it’s a concern at that point. Why turn down money that can be used for parks improvements. Rink ads December 2 2020 Scandia City Council Page 4 of 4 can support local businesses in conjunction with brochures. Ness said he is completely in support. Maefsky noted that the two requests for ads are from businesses outside of Scandia, the amount of money generated from the sale of ads will not be significant for ice rink maintenance, and the ads will detract from the town’s historic image. Maefsky called for a vote on the above motion. Ray – no; Kronmiller – yes; Cusick – yes; Ness – yes; Maefsky – no. The motion carried 3-2. PARK BENCH STANDARDS At the October 20, 2020 Council meeting, accepting a memorial bench donation was tabled for staff to research if the bench conforms to adopted standards. The Parks Committee and staff approved that the bench donated in memory of Derek Keeney for placement near the Warming House meets these standards. Maefsky, second by Kronmiller, moved to accept the donation of a memorial bench from O’Neill Electric, St. Paul Engraving and the O’Neill Family. Motion carried 5-0 by roll call vote. DISCUSSION ON ZONING & DEVELOPMENT CODE UPDATE PROJECT Jennifer Haskamp, Swanson Haskamp Consulting, explained the recommended transition to a Unified Development Code (UDC) for the city’s zoning code update project. This concept was presented to the Planning Commission at their December 1st meeting with consensus to recommend this concept. Haskamp explained that a UDC provides a much more user-friendly platform with graphics and visuals, resulting in a simplified development code. Haskamp estimated the price increase over the contracted cost for the project would be less than $10,000. Council agreed this was the right direction but need to know the actual cost for this change order to the contract with SHC. Staff will provide this at the next meeting for a decision so that SHC can begin drafting the zoning documents. ADJOURNMENT Ness, seconded by Kronmiller, moved to adjourn the meeting. Motion carried 5-0 by roll call vote. The meeting adjourned at 8:25 p.m. Respectfully submitted, Brenda Eklund City Clerk