Loading...
HomeMy WebLinkAboutCC 03-08-1999 . . . MINUTES CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL MEETING MARCH 8, 1999 7:30 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof; Mayor Dennis Probst called to order the regular City Council meeting at 7:37 p.m. Present: Mayor Dennis Probst, Councilmembers Beverly Aplikowski, Gregg Larson, Paul Malone and Lois Rem. Absent: None. Also present were City Administrator, Brian Fritsinger; Assistant to the City Administrator, Kevin Ringwald; City Accountant, Terrance Post; Public Works Director, Dwayne Stafford; City Engineer, Greg Brown, BRW; and Recording Secretary, Lori Rolfson. ADOPT AGENDA MOTION: Councilmember Aplikowski moved and Councilmember Larson seconded a motion to adopt the agenda for the March 8, 1999, regular City Council meeting, as submitted. The motion carried unanimously (5-0). APPROVAL OF MINUTES A. February 8, 1999 Regular Council Meeting B. February 16, 1999 Council Worksession C. February 22, 1999 Regular Council Meeting Councilmember Malone requested a change to the February 22, 1999 Regular Council Meeting. On page 14, last paragraph, the second sentence should read, "...one issue is the statutorv low pension limits." The third and forth sentences should read, "...$25 per month, oer vear of service, witb an upper limit of 30 vears of service. He indicated that it is this time limit whicb mav be amended bv legislation." Mayor Probst requested a correction on page 14, second paragraph from the bottom, second sentence, "...it had been a rigorous effort." MOTION: Councilmember Malone moved and Councilmember Aplikowski seconded a motion to approve tbe meeting minutes of the February 8, 1999 Regular Council Meeting and the February 16, 1999 Council Worksession, as submitted, and the February 22, 1999 Regular Council Meeting, as amended. The motion carried unanimously (5-0). . . . ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 2 CONSENT CALENDAR A. Claims and Payroll B. 1999 Business License Renewal MOTION: Councilmember Malone moved and Councilmember Aplikowski seconded a motion to approve the Consent Calendar and authorize execution of all necessary documents contained therein. The motion carried unanimously (5-0). PUBLIC COMMENTS Mayor Probst invited those present to come forward and address the Council on any items not already on the agenda. There were no public comments. UNFINISHED AND NEW BUSINESS A. Resolution #99-11, Acknowledging the expiration of Tax Increment Financing District No.1 ofthe City of Arden Hills Mr. Post explained that this resolution is a statutory item in which the duration of the Tax Increment Financing (TIF) Districts is limited by State Statute. TIF District No. I is the first Arden Hills TIF District that has reached the ten-year duration limit. TIF District No.1 is located at tbe southeast corner of Round Lake and was set up in concert with the acquisition of the Kem Milling site. Mr. Post stated that the City cannot accept TIF funds after the expiration of the District. Therefore, included in the Staff memo, was a request of the County Auditor's Office to advance pay tbe TIF proceeds for the first half of the year. These proceeds would normally be received at the July tax settlement; however, this date is after the June 26, 1999 decertification date. This represents receipt of the May 15, 1999 property tax collections. Mr. Post advised that Staff recommends the City Council approve Resolution #99-11, acknowledging the expiration of Tax Increment Financing District No.1 of the City of Arden Hills. Councilmember Malone confirmed that, if the request for advance funding was not made, the City would not receive the prorated funds from the first ofthe year. Mr. Post stated that this was correct. He explained tllat tbe funds would be distributed between the other jurisdictions. MOTION: Councilmember Larson moved and Councilmember Aplikowski seconded a motion to approve Resolution #99-11, acknowledging tbe expiration of Tax Increment Financing District No. I of the City of Arden Hills. The motion carried unanimously (5-0). ARDEN HILLS CITY COUNCIL - MARCH 8 1999 3 B. Resolution #99-07, Accepting Bids and Authorizing Execution of Contract in the Matter of the Improvement of West Round Lake Road, Phase I . Mr. Brown explained that on January 14, 1999, eleven bids were received and opened for the West Round Lake Road, Phase 1 Improvement Project. The bids came in with a tight spread. Tbe lowest bid was 10% below the estimate, there were a total of four bids below tbe estimate and seven bids above the estimate. The three low bidders were Don Zappa & Sons, Inc., Arnt Construction Company, Inc., and Forest Lake Contracting. Tbe project was bid in four parts: I. The Basic Roadway, including storm sewer and ponds, watennain, and sanitary sewer. 2. Alternative A, removal of all excess soils from the Indykiewicz property. 3. Alternative B, landscaping, including trees, shrubs, sod, seed, and irrigation to the median area. 4. Alternative C, paver bricks in the narrow areas of the median versus concrete. The bid Alternate A is the most significant item and it ties in with the acquisition oftbe property. Most bids for Alternative A had been between $80,000 to $100,000, which is a common excavation price. With the exception of Jay Bros., the bids did not include a credit for the black dirt. Jay Bros., Inc. offered a $0.60 credit per cubic yard which would significantly reduce the cost for excavation, however, Jay Brothers would still be the sixth lowest bidder. . Iftlle Base Bid and Alternative B were chosen, Don Zappa & Sons would have the lowest bid. If Alternative A is included, Forest Lake Contractors would be the low bidder. The bids for Alternate C would not change the order ofthe lowest bidders. The City Staff had performed an extensive review of alternatives to avoid having the contractor deal with the black dirt. The hope was to find someone to buy the dirt to recoup some of the costs. The result of this effort was that the City did not receive any offers other than minor credits, whicb are not guaranteed. In most cases, when the transportation of the dirt was considered, tbere ended up being no credit. An option was offered to the three low bidders to extend tbe time for tbe removal of the black dirt. The original contract had stated a date of July 31, 1999. The bidders where asked, if they were allowed until the end of tbe year to remove tbe black dirt, would tbis change their bids. Revised quotes were received from Don Zappa & Sons, Inc. and Forest Lake Contracting. Forest Lake essentially proposed to remove the soil free of cost with the extension. Don Zappa & Sons, Inc. had offered a $2.06 unit price to remove the soil. This was lower than their original bid, however, it was still higher than the bid by Forest Lake Contracting. . Based on research by Staff to attempt to sell tbe black dirt, which did not result in a profitable route, including Alternative A in the contract pusbes the award of the bid to Forest Lake Contracting. If the City includes Alternative B for the landscaping package, as recommended by the Staff, Forest Lake Contracting's awarded bid would be $794,725.05. The City Council may also consider awarding Bid Alternative C, which would add approximately $10,000 to the contract. ARDEN HILLS CITY COUNC1L - MARCH 8 1999 4 . Considering the fact tbat the black dirt must be removed, the best way to achieve this would be to award Bid Alternative A with tbis contract. Once the contract is awarded, the price for tbe dirt must be changed to zero via a Change Order. Additionally, the City needs to re-negotiate the timing of the project. The City had hoped to begin tbe project before now and there are provisions in the contract to allow an extension. Mr. Brown stated that he anticipates the construction to begin on April 12, 1999, once the City acquires access to the site. If the City gains access earlier, the construction would begin sooner. The road should be active by tlle end of June and the final construction should be completed by the end of July. The black dirt would be removed by tlle end of December. Some dirt will need to be removed at the beginning of tbe project and tbis would be stockpiled on another portion of the site. As of this date, the option is open for the City or County to use the dirt if it is needed. However, once the bid is approved, the dirt would belong to the contractor. Mr. Brown stated that Staff is comfortable with Forest Lake Contracting and the subcontractors they have selected. Mr. Brown advised that the City Engineer recommends the City Council adopt Resolution #99- 07, Accepting Bids and Authorizing Execution of Contract in the Matter of the Improvement of West Round Lake Road, Phase I. The adoption of this Resolution will award the West Round Lake Road, Phase 1, Street Improvement Project, including Alternatives A and B to Forest Lake . Contracting at a project cost of $794,725.05. With regard to Alternative B, Councilmember Malone stated that it had been his understanding tbat this portion of the project was to be considered later on in the project pbase. It had also been his understanding that the median would be concrete, not landscaped. Mr. Brown explained that the majority of the landscaping would be around the pond areas and boulevard south oftbe intersection tbat would include trees and shrubs. The medians are to be landscaped and irrigated. Mr. Brown stated tllat Alternative B was added later in the project by request of City Staff in order to receive a price. Upon further evaluation, the landscaping may be modified. Councilmember Larson asked for confirmation that Forest Lake Contracting has agreed to reduce the $32,000 of Bid Alternate A to zero dollars ifthe time to remove the soil is extended to the end ofthe year. Mr. Brown stated that tbis was correct. He noted that the bid assumes the soil volume is 20,000 cubic meters, rather than cubic yards, whicb equates to approximately 28,000 yards. . Councilmember Larson asked, if the bid for Alternative A had been reduced to zero, why was it being included in the final bid price. Mr. Fritsinger explained that, per legal requirements, any revisions to a bid must be made via a Change Order. The decision to award tbe contract must be based upon the bids as presented. ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 5 . Mr. Brown noted that this change would not affect tbe dynamics of the award, it is simply a process of reducing the contract price after the fact. This does not mean that there would have been a different low bidder since Forest Lake Contracting is the low bidder, so long as the soil removal is included. Mayor Probst asked if the Staff expects any protest by the other contractors who were not awarded the bid. Mr. Brown stated that he does not anticipate any protest. He indicated that a representative of Zappa & Sons, Inc., was present at the meeting and there have been no comments from tlle other bidders. Mr. Fritsinger pointed out that the delay in the award ofthe project has been due to tbe fact that the City had not yet acquired tbe land from the Indykiewicz's. Additionally, the City had to determine what to do with the dirt. The removal of the dirt was included as a Bid Alternate, boping to get a reimbursement for the large anlount of dirt. When the bids came in and proved that this was not to happen, Staff undertook a process of determining how the City may be able to keep the dirt and try to sell it and accrue some of tbe costs incurred in the acquisition of the property. . Tbe Staff had contacted a number of dirt brokers in the Metropolitan area, and as far way as Colorado wbo are conducting projects in Minnesota, and there had been an interest in buying the dirt. However, tbe dollar amourt that the brokers would be willing to pay does not include moving the dirt. Wben the transportation costs are factored in, the net proceeds became a wash. It was determined that for the City to become involved in the brokering business would be much more costly than allowing tbe Bid Alternative A to be included as part of the project. Mayor Probst confirmed that, based on tbe action taken by the EDA this evening, it could cost the City an additional zero to $32,000 to remove the dirt from the site. Mr. Fritsinger stated tbat this was correct. Mayor Probst asked if Forest Lake Contracting would remain the low bidder whether the cost to remove tbe dirt is zero or $32,000. Mr. fritsinger stated that they would be. MOTION: Councilmember Malone moved and Councilmember Aplikowski seconded a motion to adopt Resolution #99-07, accepting tlle bid and authorizing execution of the contract with Forest Lake Contracting, as the lowest responsible bidder, in the matter of the improvement of West Round Lake Road, Phase I, including Bid Alternates A and B, at a project cost of$794,725.05. Counci\member Aplikowski asked if the City ever has a need to buy dirt for the City parks. Mr. Fritsinger stated that the Statlhad discussed this option. He indicated that, although there would be needs throughout the City and Ramsey County for dirt, neither would need the amount that is on the property. The Staff had felt it would be more effective to proceed with the removal of the entire dirt inventory. . Mayor Probst asked wbat the cost would be to move the dirt. Mr. Ringwald stated that it would cost approximately $1.00 per cubic yard, for a total of approximately $25,000 to $32,000 to move the dirt to a ditlerent part of the lndykiewicz site. . . . ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 6 Mayor Probst asked if there would be any value in storing the dirt at the Arsenal as a community asset. Mr. Ringwald pointed out that there would be additional costs to move the dirt to the TCAAP. Mr. Brown stated that it would cost between $1.70 and $2.00 per cubic yard to move the dirt. He noted that there had been an interested buyer at TCAAP who estimated it would cost $1.50 per cubic yard to haul the dirt. Mr. Fritsinger stated that Line Tech had offered to pay $2.00 per cubic yard if the dirt were delivered. If the dirt was not delivered, the offer would be reduced to $1.00 per cubic yard. Councilmember Larson asked if the dirt could be used in the Highway 96 improvement project. Mr. Brown stated that this project will most likely have an excess oftop soil. Councilmember Larson asked if Bethel College could use tbe dirt for their proposed park project. He noted tbat Bethel College bad looked to the City to help finance the project and suggested the City could use tbe dirt as a contribution. Mr. Fritsinger stated that the dirt intended to be used at the Betbel College ball fields would be of a bigher quality than the dirt on the Indykiewicz property. Councilmember Larson asked if the dirt could be used at the Tony Schmidt park. Mr. Fritsinger stated that this park had not been considered. Mr. Fritsinger indicated that the dirt issue had become a function oftime. Although the City may ultimately be able to find places to use the dirt, the City would have to stockpile it. The Staff had hoped to simply break even and it made more sense to pursue the Bid Alternative to tbe contract. Councilmember Aplikowski agreed that tbe Bid Alternative may be the best option as storage of tbe dirt would require the City to maintain it. Mayor Probst agreed and noted that the City would have to pay several times to move the dirt if it were stockpiled. The motion carried unanimously (5-0). C. Lift Station #3, Pay Estimate #2, Jay Brothers, Inc. Mr. Brown explained that the City of Arden Hills awarded Jay Bros., Inc. the Lift Station #3 Reconstruction Project on November 30,1998. Payment number one for $21,420.41 was approved by the City Council on January 25, 1999. Payment number two, in tbe amount of $39,253, represents the completion of the inner portion of the station including the electrical, pumping and plumbing equipment. The station is operational at this time and is working fine. The City Staff performed a walk through last week and a punch list was developed for project completion. Remaining work on this project includes site grading and clean-up, which will wait until spring. The original contract had stated that the station would be switched over by March 31, 1999 and the switch over occurred last week. Tbe final payment will be made following the final clean-up. ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 7 Mr. Brown advised that the City Engineer recommends the City Council approve Pay Estimate . #2 for Jay Bros., Inc. in the amount of$39,253. Mayor Probst asked Mr. Stafford if he concurred with the status of tbe project. Mr. Stafford stated that the lift station is working properly and there are a few small items that need to be completed. He noted that the City had not been pleased in the past by the performance of Jay Bros., Inc., however, tbe Staff is pleased with their performance on this project. MOTION: Councilmember Malone moved and Councilmember Aplikowski seconded a motion to approve Pay Estimate #2 for Jay Bros., Inc. of Forest Lake, Minnesota, in tbe amount of $39,253. The motion carried unanimously (5-0). D. 1998 Street Improvemcnt Project, Pay Estimate #4, T.A. Schifsky & Sons, Inc. Mr. Brown explained that the City of Arden Hills awarded T.A. Schifsky & Sons, Inc. the 1998 Street Reconstruction and Maintenance Improvements Project on April 27, 1998. The Contractor has substantially completed the project. A puncb list was developed last fall and several items remain to be accomplished, however, they are relatively minor and should not require much time this spring. Payment #4 includes work completed at the end of last year as well as the final anlounts of materials utilized on the project per weight tickets provided by the Contractor and reviewed by BRW for accuracy. . Mr. Brown indicated that the Contractor has a history of taking a long time to accomplish final punch list items. Based on tbis past history, the five percent retainage is being held by tbe City, ratber than the standard two percent. Mr. Brown advised that the City Engineer recommends the City Council approve Pay Estimate #4 for T.A. Schifsky & Sons, Inc. in the amount of$5l,145.79. Mayor Probst asked Mr. Stafford ifhe concurred with the status of the project. Mr. Stafford stated that he agrees with Mr. Brown. He indicated that the City did a walk through of the project and the minor items that need to be completed will be witbin the five percent retainage. MOTION: Councilmember Larson moved and Councilmember Aplikowski seconded a motion to approve Pay Estimate #4 for T.A. Schifsky & Sons, Inc. of North St. Paul, Milmesota in the amount of$5l,145.79. The motion carried unanimously (5-0). E. 1998 Sanitary Sewer Rehabilitation Project, Pay Estimate #2, Infrastructure Technologies . Mr. Brown explained that the City of Arden Hills awarded Infrastructure Technologies, Inc. the 1998 Sanitary Sewer Rehabilitation Project on July 13, 1998. The Contractor has completed most of the work for this project. The remaining work for tllis project is to finish sealing the 15 . . . ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 8 inch sewer main and complete some minor site clean-up. Some of the work was held off until winter in order to make use of the frozen ground along tbe low areas of the easements. Sealing quantities on all of the sanitary sewer lines bave been substantially less than anticipated. Once the final counts are in from the last line of pipe, a judgment will be made whether to continue to another block. Mr. Brown stated that Staff is pleased with the project and noted that repairs beyond those required by the contract bave been completed as well. There is a backlog for sanitary sewer rehabilitation and since the project is running light on sealant product, they will be able to accomplish more than was planned. Mr. Brown advised that the City Engineer recommends the City Council approve Pay Estimate #2 for Infrastructure Technologies, Inc. in the amount of$28,585.59. Mayor Probst asked Mr. Stafford if he concurred with the status of the project. Mr. Stafford stated that be agrees with Mr. Brown. Mayor Probst asked, since there had been less aggressive repairs required than anticipated, would it be possible to keep the contract open in order to do additional work. Mr. Brown stated that there is a backlog that would be well over tbis project's budget. At this point the project is approximately $30,000 under budget. Once tbe project is complete, the contract will be approximately $20,000 to $25,000 under budget. This would allow for the testing and sealing of lines on one to two more blocks. Some of the older lines are residential and are not as critical, however tlley should be tested and cleaned. Mr. Brown expressed his belief that, without going over budget, the funds available should be used for additional work. Mayor Probst suggested the Council take action on the Pay Estimate and discuss the issue of continuing the sewer rehabilitation afterwards. MOTION: Councilmember Aplikowski moved and Councilmember Malone seconded a motion to approve Pay Estimate #2 for Infrastructure Technologies, Inc. of Brooklyn Park, Minnesota in the amount of $28,585.59. The motion carried unanimously (5-0). Mayor Probst stated tbat it would be appropriate to come to a consensus on wbether or not to continue tbe sewer rehabilitation project. Councilmember Malone agreed to continuing the sewer rehabilitation project. Councilmember Larson asked if Mr. Brown had been referring to grouting or lining when stating that the sealant use was substantially less than anticipated. Mr. Brown stated tbat he had been referring to grouting. He indicated that the lining use has been on target. When figuring the ARDEN HILLS CITY COUNCIL - MARCH 8.1999 9 amount of grouting it is assumed that a certain percentage of the joints will fail and, for eacb . joint that fails, an estimate on how many gallons of grout will be needed is established. F or the most part, the larger, 15 inch diameter sewer lines have been running very well with an approximate 30 percent failure. In the cases that are failing, less grout is being needed to repair the joint than average. Tbe eight inch lines are running well under budget as well. Mr. Brown indicated that there is enough work to be accomplished that the project could continue indefinitely. Mayor Probst asked if tbe additional work would be more in the area of grouting or lining. Mr. Brown stated that tbe grouting and the sealing of manholes are much easier to accomplish on a moment's notice. Tbe in place lining is much more difficult and the Contractor may not agree to a request for additional lining work. Councilmember Malone asked ifby accomplishing tllis work tbe City's sanitary sewage flow and resulting treatment charges would go down. Mr. Brown stated that they should. Mayor Probst confirmed that the consensus of the Council was to continue the sewer rebabilitation work up to the maximum of the contract budget. F. Community Services Fund, Discussion . Mr. Post stated that this was an informational item for the City Council to discuss and no action is required. He explained that when the City of Arden Hills adopted Ordinances in 1989, and in 1990, related to tbe regulation of lawful gambling within the City, one ofthe regulations was the creation of a Lawful Gambling Fund #225 into which the licensed organizations contribute ten percent of their net profits. At that time City Attorney Filla had advised that the proceeds of the fund would have to be used for Lawful Purposes, which was a broad category. The philosophy of the City had been that it would not be prudent to supplement General Fund revenues witll ganlbling proceeds, as these funds may not always be available in the future. Over the years the Community Services Fund fund balance has grown. The only regular planned use of the Fund assets in the last several years bas been an operating transfer to the Recreation Fund to subsidize operating losses of program activities. In the last decade, the legislature bas been narrowing the focus in terms of what a Lawful Purpose is. Of the traditional kinds of services the City of Arden Hills normally engages in, the only types included in the current Lawful Purpose definition category are; construction or maintenance of recreational, community and athletic facilities intended primarily for persons under 21 years of age; and police, fire and emergency services. . Beginning with tlle calendar year ending December 31, 1998, the legislature included a reporting obligation on Cities or Counties, which had the 10 percent net profit dedication requirement, to identify the manner in whicb the 10 percent dedication funds have been used and, if a positive end-of-year fund balance exists, a brief explanation of why tbe budget balance will be remaining. ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 10 . This reporting must be completed and submitted to tbe Gambling Control Board by March 15, 1999. From a policy standpoint, tbe City of Arden Hills bas not previously defined the use of these funds. Although the City is allowed to maintain a fund balance, it must be specific in informing the Gambling Control Board what the intended uses are for the accumulated funds. The use of the current fund balance and any future surpluses must fall into two different categories. One is essentially a Parks and Recreation use and the other is emergency services of police or fire. The 1999 Budget assumes that a portion of the TCAAP implementation planning phase would be funded via an operating transfer from tbe Community Services Fund. Under Minnesota Statutes, this budgeted use does not appear to fall within the list of Lawful Purpose activities. As Council recently reaffirmed its commitment to 1999 TCAAP planning at the recent retreat, another funding source should be identified for these planning activities. The General Fund balance could be used and the PIR Fund had also been identified to be used for these TCAAP planning activities. . Councilmember Malone stated that when the City of Arden Hills reluctantly agreed to allow lawful gambling within the City, it was believed that the Lawful Purpose included most all activities the City would be involved in. He indicated that, in reading the Statute on Lawful Purposes, he was not sure the Statute section provided to the Council applies to the City. It would appear that the Statute applies to the gambling organizations. Mr. Post explained that the Statutes apply equally to cities and gambling organizations. Councilmember Malone pointed out that any money spent by the City is for Lawful Purposes. He suggested all or a portion of the funds could be dedicated to the Fire and Capital Equipment Revolving Fund, and the remainder to the Parks and Recreation Fund. He noted that, over the long-term, the City will need additional money for fire protection. Mayor Probst confirmed that as long as there is a clear dedicated llse oftbe money, the City does not necessarily have to spend it. Mr. Post concurred. Mayor Probst suggested the funds be dedicated to the Parks and Recreation Fund as part of the TCAAP project. He indicated that once permission is granted to proceed witb tbe four-city recreation complex, the City of Arden Hills will not have the capital funding source to be involved with the project. Councilmember Malone asked the Mayor if he was suggesting all the funds be dedicated in this way. Mayor Probst stated that this was something tbat would need to be discussed. . Mr. Post stated that the 1999 Budget contains a $200,000 operating transfer from Fund 225 to Fund 229. He reiterated that there is no problem with reporting a fund balance, however, the City must be specific in terms of what the balance is being held for, which has not been a past policy. . . . ARDEN HILLS CITY COUNCIL - MARCH 8 1999 11 Council member Aplikowski stated that she could not find an area within the Statute that would allow the funds to be used to build a ball field. She indicated tl1at the purposes defined in the Statute appear to be geared more towards a natural wildlife park, trails and equipment. Mr. Fritsinger stated that any type of park facility or ball field would qualifY as there is equipment involved. Councilmember Larson referred to page tlrree of Attachment B, item (b), (3) that discusses not using the funds for the acquisition ofreal property or capital assets. He suggested that within this paragraph tbere may be ways to fit a ball field into tbe lawful uses. Councilmember Malone restated that he does not believe that the Council was given the correct section of the Statute to consider, as the stipulations are clearly what the gambling organizations are subject to. Councilmember Aplikowski pointed out that the group that receives the money must qualify the use as a Lawful Purpose. Councilmember Malone suggested that tbere may be two sets of definitions for Lawful Purposes. He noted that item 11 on page three of Attachment B includes contributions to a church organization as a Lawful Purpose which is clearly not allowed by the City. Mr. fritsinger stated that the Statute section 349, used by City Attorney Filla, bas no specific reference within it that segregates municipalities outside of the information. Councilmember Aplikowski stated tbat sbe interpreted the Statute section to indicated that, as long as the funds can qualify for one criteria of lawful use, it would be acceptable to the Gambling Control Board. Councilmember Malone stated that, other than item number 10, he could not find where in the definition for La""i'ul Purpose it allows the funds to be used for fire protection. He reiterated that the Statute section being considered does not appear to be the correct one for the City. He indicated that this issue does not need to be debated at this time, however, it should be confirmed with Attorney Filla. Mr. Post stated that the Statute reference is tbe specific subsection of the reporting form that the City is required to submit. He indicated that tbe reporting form has a summarization of the Statute tbat is consistent witb tbis Statute subsection provided to tbe Council. Mayor Probst asked if there is a timeline in whicb the City must make a firm decision on the use of the funds. Mr. Fritsinger stated that no specific action was required at this time. The City is required to complete the report to tbe State tbis week, which will identify that there is balance of approximately $300,000. . . . ARDEN HILLS CITY COUNCIL - MARCH 8.1999 12 Councilmember Larson asked if the funds would qualify as a Lawful Purpose simply by transferring it from one fund to another. Mr. Fritsinger stated that he bad specifically posed this issue to Attorney Filla and was ensured that it would meet tbe intent of the State law. Councilmember Larson asked if. once the funds are transferred from one fund to another, is the City free to use the money for whatever it wants, even if it is not expended on a park facility or law enforcement. Mr. Fritsinger stated that the City is required by State Statute to identify where tbe money is to be spent. Mr. Post stated that within the Capital and Special Revenue Funds there are expenditures that more clearly match the requirements of a Lawful Purpose. Tbe General Fund is a pot of revenues which does not necessarily match up with expenditures such as police or fire protection. Mayor Probst asked if; in terms of the fund balance, it is a matter of deliberately defining what the money will be spent on. Mr. Post explained that up until now, the City has utilized the funds primarily to subsidize the Recreation Program. Beyond that tlle balance has been allowed to accrue and build over the years. Now the City has a substantial balance and is being asked to explain the intended use of the funds. Councilmember Larson asked why the State is interested is indiscouraging the City to build up a balance of funds. Mr. Post stated tbat carrying a balance is acceptable, tbe concern is that the balance must be tied to a specific purpose. Mr. Fritsinger indicated that this issue had also been raised by the gambling organizations contributing the money. Councilmember Aplikowski stated that the whole idea behind charitable gambling is tbat tbe money is to be used to improve the community. She suggested tbat the more this is done for the people oftbe community, the more people of the community will gamble. Councilmember Malone suggested that the funds be split 30 percent to the Parks and Recreation Fund, 40 percent to fire protection and the remaining 30 percent to park operations. He asked what the park deficit is each year. Mr. Post stated that it is approximately $40,000 this year. Councilmember Malone noted that this would take approximately 50 percent oftbe funds each year. Councilmember Aplikowski asked if any of the City's revenues are used to pay for residents to attend the Sheriff Academy. Mr. Fritsinger stated tbat the City does not pay for this type of activity. Mayor Probst asked how much money is received each year from charitable gambling. Mr. Post stated that tbe City receives approximately $80,000 per year. Mr. Fritsinger noted that the City has the ability to change the fund commitments each year. The only requirement is that the City specify tbe intended use of the funds. Mr. Post stated that the intent is to document the intended uses by the local jurisdiction. . . . ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 13 Councilmember Larson confirmed tbat, if the Council were to follow the option presented by Mr. Post to transfer $300,000 to subsidize police protection services, this would result in $300,000 being in the General Fund wbich would not be spent this year as a result of there being otber funding sources for this expenditure. Mr. Fritsinger stated that this was correct. Mr. Post explained that he had not intended for this option to be a recommendation to the City Council. He had simply offered this as way for there to be a planned use for the fund balance. Mayor Probst stated the issue with this option is the fact that the City bad budgeted $200,000 of these funds to finance the TCAAP implementation planning pbase. If TCAAP cannot be funded in this way, the City would bave to dig deeper into the PIR fund and utilize the $200,000 for a different use. Councilmember Larson asked, if the City is to report to the State what the money is intended to be used for, and it is not intended to be used for TCAAP, where will the $200,000 needed for TCAAP come from. Councilmember Malone suggested that other revenue sources could be used. Mayor Probst stated there are several options to fund TCAAP. He noted that there had already been a plan to partially fund the project with PIR funds that would be paid back with investment returns. He suggested, rather than debating this issue this evening, the Council should come to a general agreement on where to allocate the proceeds. This will allow the Staff to complete their report and the Council could discuss the issue further at another meeting. Councilmember Malone asked if the funds can be dedicated to park operations. Mr. Post stated tbat one stipulation for Lawful Purposes is that tbe funds be used for facilities intended primarily for persons under 21 years of age. Tbis would include both construction and maintenance of tbese facilities. Councilmember Aplikowski suggested allocating half of the proceeds to parks and half to fire protection. She noted that the park funds could be used for equipment and the allocations could be changed at any time. Councilmember Malone indicated that he would prefer to not split the funds fifty-fifty between the programs. Councilmember Larson confirmed that, at this time the Council is to instruct Mr. Post to report the intended use of the remaining fund balance to the Gambling Control Board and the Council has the option at a future meeting to determine what the funds will specifically be used for. Mr. Fritsinger stated that this was correct. MOTION: Councilmember Malone moved and Councilmember Aplikowski seconded a motion to direct the Staffto report to tbe Gambling Control Board that the Lawful Gambling Funds will be allocated 58 percent to parks and 42 percent to fire protection. The motion carried unanimously (5-0). . . . ARDEN HILLS CITY COUNCIL - MARCH 8.1999 14 ADMINISTRATOR COMMENTS Mr. Fritsinger had no comments. COUNCIL COMMENTS Councilmember Malone referred to the information in the non-agenda memo that MNDOT is moving ahead with the park and ride lot on County Road H2. Mayor Probst stated that Staff had noted that MNDOT has not offered any analysis but has suggested an interest in relocating the County Road I interchange improvements further to the south. He indicated that at some point the City should attempt to get a commitment on paper. Presumably the interchange to the south would be County Road H. He asked Staffifthere was a suggestion of wbere to take this concern, such as the Corridor Coalition. Mr. Fritsinger stated tbat at this point neither Staff nor the City Sboreview bave an idea what MNDOT's proposal may he. Tbe intent of Staff had been to bring to the Coalition meeting this month the suggestion presented by Councilmember Malone to tbe Council regarding the LRT Station. He indicated that tbis issue may fit part of this conversation as it is an issue that will affect three of the municipalities directly. Mayor Probst asked if the meeting date has been scheduled. Mr. Fritsinger stated tbat it bas been. Mayor Probst requested additional information regarding the meeting of the Fire Board and the issue of the cash reserves. Councilmember Larson stated that there is a concern for the continued reliance on this money. If an emergency situation were to come up, something else would have to be cut to pay for it wbile waiting for Board approval. Councilmember Larson stated that one item whicb had been discussed is the fact that the casb balance is $465,000 and the consensus was that only five percent of this is needed for operating each year. The rest of the funds could be set aside in a Capital Fund that tbe Fire Department could not spend without Board approval. Mr. Fritsinger indicated that one issue whicb Arden Hills will be faced with is the fact tbat tbe roof on Station number one is need of repair and may need to be done sooner than expected. Historically, Arden Hills does not prefer to pay for tbis sort of expense in an unbudgeted manner and as a result tbe City may be expected to use its otber funds to make these repairs or the department asked to forego other planned improvements. Mayor Probst asked how much the roof repairs would cost. Mr. Fritsinger stated that it would cost approximately $35,000. Mayor Probst stated tbat tbe reason he had brought this issue up was tbat, although there is a need for casb reserves, he believes $465,000 is too mucb. He stated tbat there should be a way to bring this down to a more reasonable balance. . . . ARDEN HILLS CITY COUNCIL - MARCI-I 8.1999 15 Mayor Probst referred to the note in the non-agenda packet regarding discussions ofthe super rink and the use of the current surplus to fund the vending concessions. He indicated that City of Arden Hills is currently not the city directing representation. He asked Staff if the Council should take formal action to make it clear that the City of Arden Hills would prefer to run a zero balance. Mr. Fritsinger stated that the message is being sent that the City of Arden Hills does not approve of the use of those funds. He noted that this is a function of the number of seats the City holds in relation to the overall organization. Mayor Probst asked if other representatives bave been spoken with regarding tbis issue. Mr. Fritsinger stated that Mr. Schwcrm participates in the meetings and offered to discuss this issue with him. He indicated that he was not sure of the position ofthe other cities. Mayor Probst stated that he had attended the Metro Transit workshop on Saturday, Marcb 6, 1999. He indicated that the Metropolitan area has been divided into nine sectors. The discussions on Saturday were regarding sectors one and two. The event was essentially a planning activity to discuss where the transit is today and how mucb service there is. The room was divided into groups and these groups were asked to take a budget and build a service plan into it. Mayor Probst stated tbat he was not sure how valuable this exercise had been. He indicated that one item whicb bad been discussed was the notion that there is a legislative mandate that the Metro Transit up their ridership. The Metro Transit is evaluating the extent to which their budget dollars are to be spent on coverage versus productivity. Mayor Probst indicated that by the end of April the Metro Transit will be presenting a proposal for the sector in wbicb Arden Hills is located. He indicated that the fundamental issue in the Metropolitan area is clearly that not enough money is invested in transit services. Mayor Probst asked if staff would be attending the MCES budget meeting. Mayor Probst stated that the School District is holding a luncheon on Thursday, March 25, 1999 and there should be additional information regarding the referendum. Mayor Probst stated that there will be an opening reception for Shoreview's gallery on Friday, March 12, 1999 from 6:00 p.m. until 9:00 p.m. He indicated he will not be able to attend as he will be out of town. Mayor Probst stated that TCF Bank is sponsoring a Twin Cities development group. The forum will be three breakfast meetings starting on March IS, 1999 in New Brighton. Mayor Probst stated that the City is due to receive the bids for the new City Hall on Thursday, March 11, 1999 and he hoped the numbers would be favorable. The timing for the formal transfer is a matter of scheduling the Officers of the National Guard and it should take place witbin the next two weeks. . . . ARDEN HILLS CITY COUNCIL - MARCH 8. 1999 16 ADJOURN MOTION: Councilmember Malone moved and Councilmember Larson seconded a motion to adjourn the meeting at 9:20 p.m. The motion carried unanimously (5-0). .~ City Administrator NOTICE OF MEETINGS The next regular City Council meeting will be held Monday, March 29, 1999 at 7:30 p.m. at the Arden Hills Council Chambers.