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11-22-2022 Work SessionNovember 22, 2022 A work session meeting of the Scandia City Council was held on the above date with modifications. The meeting was conducted in-person 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 11:05 p.m. The following were present: Council members Heather Benson, Jerry Cusick, Steve Kronmiller, Christine Maefsky, and Patti Ray. Staff present: City Administrator Ken Cammilleri, Treasurer Colleen Firkus, Public Works Director, and City Engineer Ryan Goodman. Fire Chief Mike Hinz joined remotely. APPROVAL OF THE AGENDA Benson, second by Ray, moved to approve the agenda as presented. Motion carried unanimously. RICHARD PAULSEN TABLED VARIANCE 18558 LANGLY AVE N. Mr. Paulsen gave background information on the property. Ordinance changes required a new septic tank to replace an existing shared tank at a great additional cost. Request is to build a house on 5 contiguous lots, which will be combined into one lot. A 6th lot across the street will be left open. One lot was turned into a drainage pond when the road was paved. The cabin has already been demolished. The neighbor's house to the south is 7.5' from property line with what was a shared septic tank in that area. Utility lines are on Paulsen property within 10 ft. of the property line to the south so there is no room for another septic tank. Paulsen hired an engineer to help with drainage issues, including the water from the neighbor's property. Extensive modifications were made to the original house plans and property drainage in order for water to shed to the back of the house to a rain garden, as well as moving the well to the back of the house, directing water shed in the front, and eliminating the second driveway. The process started in January 2020 with obtaining approved permits from the city and watershed and Paulsen just needs the variance to proceed. Engineer Goodman stated his satisfaction with the plan. Council asked for some assurance for oversight. Watershed monitors the project during construction and the City Engineer inspects the final project. Cusick, seconded by Ray, moved to approve Resolution 2022-39 for a variance at 18558 Langly Ave. N. property of Richard Paulsen. Kronmiller asked about the depth of the tank in relation to the water table. Motion carried 5 — 0. CONTRACT FOR INTERIM CITY ADMINISTRATOR SERVICES Cusick, seconded by Benson, moved to approve the contract with Anne Hurlburt for Interim City Administrator Services. The motion passed 5 — 0. 2023 BUDGET Administrator Cammilleri presented the draft 2023 budget covering the change in housing valuation and the effect on the tax base. The budget decreased the tax rate from 30.935% to 26.276% in order to modify its effects on the levy required. The Preliminary Levy is $2,803,556. Scandia City Council Work Session November 22, 2022 Page 2 of 3 Homes valued over $500,000 get a rate of 1.25% rather than 1% under $500,000. The increased valuation by the County in 2022 put many homes into a higher classification which made a big difference on their taxes. A chart showed Scandia's tax rate is lower than neighboring cities. Staff recommendations are to look at Capital Plan spending which has been reducing the fund balance over the last several years. Staff recommends the Council adopt a pay-as-you-go approach combined with borrowing 44% for the balance needed. Commitments to bringing broadband citywide has been the biggest drain. There is $432,000 allocated to Internet expansion in the 2023 budget. However, if a project is done with Midco in 2023, payout won't occur until 2024. There is a need to address a salary range for city admin position. Top of the range should be $120,000. There is a need to account for $105,000 difference in budget for transition costs for a new city administrator. Projects for the Capital Funds were reviewed. Topics for further discussion: 1) unanticipated costs for city admin transition $105,000, and 2) spending down Capital Improvement Fund balance, which has historically been a pay-as-you-go fund. Projects total for 2023 is $647,000: Internet $432,000, County Pedestrian Plan $50,000, urgent need to replace wall panels in Fire/Public Works building $65,000, and Bliss stormwater project $100,000 (there will be additional stormwater management costs not reimbursed by grants). Ray informed the Council that Frontier is applying for a DEED grant with no City cost share. Midco's project of 102 homes is on the back burner. A project for the northeast side of Big Marine Lake would constitute a Midco share of $280,000, a County share of $372,500, and a Scandia City share of $92,500. Ray also requested the city keep $200,000 for a potential project with Frontier. No is no letter of intent with Midco. Cammilleri pointed out road project costs are increasing with inflation and will require additional funding, or scaling back on projects. Kronmiller suggested the Capital Improvement Committee needs to start meeting in January to address the capital improvement funding issues and bring a recommendation to the Council. Cammilleri asked for direction from the Council on where to shift costs to cover the $105,000 unanticipated city administrator costs of $105,000. Council was amenable to Treasurer Firkus' suggestion that the $139,000 of the $432,000 allocated for Internet Expansion is no longer needed in 2023 that it could be used to address this shortfall. Cammilleri was instructed to make a shift of between $88,000 and $100,000 to the General Fund from the Capital Improvement Fund 401 depending on final projections for transitional costs. Cammilleri reviewed the Park capital projects and stated the new Park Comprehensive Plan will drive the capital needs of that fund. Cammilleri replied that the Equipment Replacement Bonding are local bank certificates covering two years (2023 & 2024) of equipment needs in response to Benson's question as why there are bond proceeds of $816,000 for $514,000 of capital projects in the Equipment Replacement Fund. The Council will decide next year how much they will need to borrow. It won't affect the 2023 budget as payments start in 2024. The next meeting is the Truth & Taxation meeting on Wednesday December 7 at 6:30 p.m. during the Council's regular business workshop meeting. Scandia City Council Work Session November 22, 2022 Page 3 of 3 CONTRACT FOR CITY ADMINISTRATOR SEARCH FIRM Mayor reviewed questions and answers for the two search firms. Ray, seconded by Benson, moved to hire GOVHR to assist the Council with the recruitment of a new city administrator. The next meeting is the Truth & Taxation meeting on Wednesday December 7 at 6:30 p.m. during the Council's regular business workshop meeting Benson, seconded by Ray, moved to adjourn the meeting. Meeting adjourned at 1:12 p.m. Respectfully submitted, Colleen Firkus City Treasurer