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121205 CC Reg Min CITY OF SHOREWOOD CITY COUNCIL REGULAR MEETING MONDAY, DECEMBER 12, 2005 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 P.M. MINUTES 1. CONVENE CITY COUNCIL MEETING Mayor Love called the meeting to order at 7:00 P.M. A. Roll Call Present: Mayor Love, Councilmembers Callies, Lizee, Turgeon, and Wellens; Administrator Dawson; Attorney Keane; Finance Director Burton; Planning Director Nielsen and Director of Public Works Brown Absent: None B. Review Agenda Lizee moved, Wellens seconded, Approving the Agenda as presented. Motion passed 5/0. 2. APPROVAL OF MINUTES A. City Council Work Session Minutes, November 28, 2005 Lizee moved, Wellens seconded, Approving the City Council Work Session Meeting Minutes of November 28, 2005, as Amended, on Page 3, Item 2, Paragraph 5, Sentence 1, change "fall short; therefore the proposed increase needs to be offset accordingly." to "are less than needed; therefore the proposed space increase is not as disproportionate as might seem". Motion passed 5/0. B. City Council Regular Meeting Minutes, November 28, 2005 Wellens moved, Callies seconded, Approving the City Council Regular Meeting Minutes of November 28, 2005, as Amended, on Page 3, Item 8A, Paragraph 1, Sentence 1, change "for removing his garage" to "moving his garage". Motion passed 5/0. C. Truth-in- Taxation Meeting Minutes, December 5, 2005 Callies moved, Wellens seconded, Approving the Truth-in-Taxation Meeting Minutes of December 5, 2005, as presented. Motion passed 5/0. 3. CONSENT AGENDA Mayor Love reviewed the Items on the Consent Agenda. Turgeon moved, Lizee seconded, Approving the Motions Contained on the Consent Agenda and Adopting the Resolutions Therein: A. Approval of the Verified Claims List CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 2 of 13 B. Staffing - No action required C. City Clerk's License Approvals 1. Adopting RESOLUTION NO. 05-103, "A Resolution Approving Licenses for Tree Trimmers." 2. Adopting RESOLUTION NO. 05-104, "A Resolution Approving Licenses for Refuse Haulers." 3. Therapeutic Massage D. Approving Year 2006 Agreements for Animal Control and Animal Impound Services E. Adopting RESOLUTION NO. 05-105, "A Resolution Authorizing the Mayor and City Administrator to Extend the EPDB Conditional Use License Agreement with Hennepin County." F. Authorizing the City Administrator to Enter into an Agreement for Computer Network Services for the Year 2006 G. Authorizing Services for the 2005 Audit H. Approval of Extension to Escrow Agreement Deadline Applicant: Michael and Jody Laughlin Location: 5665 Howards Point Road I. Adopting RESOLUTION NO. 05-106, "A Resolution Authorizing the Mayor and City Administrator to Enter into a Lease Agreement with Hennepin County for Election Equipment and Hardware Maintenance Service Agreement." J. Authorization for Benefits Consultant Services (This item was moved to Item 9E under New Business) K. Approval of Temporary Sign Permit Applicant: Cindy Berglund, rep. Curves for Women Location: 19905 Highway 7 (Waterford Shopping Center) Item 3J was removed from the Consent Agenda and moved to Item 9E on the Agenda. Motion passed, 5/0. With regard to Item 3D and Item 3G, Councilmember Turgeon asked for request for services proposals for Animal Control and Audit services provided in 2007 be prepared and distributed to interested parties in 2006. 4. MATTERS FROM THE FLOOR There were no matters from the floor presented this evening. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 3 of 13 5. REPORTS AND PRESENTATIONS None. 6. PUBLIC HEARING None. 7. PARKS Director Brown reported there had not been a meeting of the Park Commission since the most recent Regular City Council Meeting; thus, there was nothing to report on at this time. The next meeting of the Park Commission was scheduled for Tuesday, December 13, 2005, at City Hall at 7:00 P.M. 8. PLANNING Commissioner Gagne reported on matters considered and actions taken at the December 6, 2005, Planning Commission meeting (as detailed in the minutes of that meeting). A. Minor Subdivisions Applicant: Timothy Anderson Location: 20520 and 20540 Excelsior Boulevard Director Nielsen explained 10Spring, Inc., representing Timothy Anderson, had requested approval of a minor subdivision of the two lots located at 20520 and 20540 Excelsior Boulevard. The easterly lot (20520) lot was currently occupied by a single-family dwelling. The westerly lot was vacant. Pursuant to Section 1201.03 Subd.16 of the Shorewood Zoning Ordinance, the applicant proposed dividing the lots in order to build two, two-family dwellings that are subdivided for individual ownership. He went on to explain the subject properties were located in the R-2A, Single and Two-Family Residential Zoning District. The easterly lot contained 30,687 square feet of area. The existing home and detached garage would be demolished and replaced with a new two-family dwelling. The westerly lot contained 30,507 square feet. All four of the proposed unit lots would exceed 15,000 square feet. With regard to analysis for the case, Director Nielsen explained although the existing lots were platted prior to Shorewood having any provision in its zoning ordinance for dividing lots with two-family dwellings anthem, both of the base lots met the minimum 30,000 square-foot requirement. Similarly, the four new unit lots all met the minimum area requirement of 15,000 square feet. Based upon the provisions of the Shorewood Zoning Code, the request was consistent with Shorewood's zoning regulations and Comprehensive Plan. Staff recommended that the divisions be approved subject to the conditions specified by Staff. The Planning Commission unanimously voted to approve the Request for Minor Subdivision for Timothy Anderson, 20520 and 20540 Excelsior Boulevard subject to five conditions. Director Nielsen stated the applicant has yet to provide the escrow for demolition of the existing home and garage. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 4 of 13 Wellens moved, Turgeon seconded, Approving RESOLUTION NO. 05-107, "A Resolution Approving a Subdivision of a Two-Family Dwelling for 10Spring Homes, Inc." subject to Staff recommendations. Motion passed 5/0. B. Text Amendment of C-3 Zoning District Applicant: Lynne Fisher Location: 24285 Smithtown Road Director Nielsen stated the applicant, Lynne Fisher, requested this item be continued to a January 9, 2006, Regular City Council Meeting. Lizee moved, Wellens seconding, the Continuation of the Text Amendment of C-3 Zoning District action to the January 9, 2006, Agenda. C. Minor Subdivision Applicant: Mark Kennedy Location: 23975 Yellowstone Trail Director Nielsen explained the property located at 23975 Yellowstone Trail, owned by Mark Kennedy, had been rezoned to R-IC, Single-Family Residential, and Mr. Kennedy now proposed to subdivide the lot into two building sites. He went on to state the property contains 44,045 square feet of area and was occupied by the applicant's home and a detached garage. The proposed lots will be 23,886 square feet (westerly lot) and 20,159 square feet (easterly lot) in area. The property drops off to the southwest comer into a small wetland basin. Director Nielsen stated both of the proposed lots comply with the requirements of the R-IC zoning district. The westerly lot will have approximately 16.6 percent of hardcover. He noted the patio on the northeast side of the house encroaches into the required side yard setback. This should be corrected as a condition of approval. Director Nielsen explained the applicant had a scheduling conflict and the applicant questioned if his presence at the meeting was necessary. Nielsen told the applicant it was not necessary. The Planning Commission unanimously voted to approve the Request for Minor Subdivision for Mark Kennedy, 23975 Yellowstone Road, subject to the conditions set forth in the December 5, 2005, Staff report. In response to a question from Councilmember Turgeon, Director Nielsen stated the applicant agreed to move his patio; the timetable for the move may not be possible until spring due to weather conditions. To ensure the move happened Nielsen stated the applicant would need to fulfill an escrow requirement prior to releasing the resolution. Turgeon moved, Callies seconded, Approving RESOLUTION NO. 05-108, "A Resolution Approving Subdivision of Real Property for Mark Kennedy, 23975 Yellowstone Trail" subject to Staff recommendations. Motion passed, 5/0. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 5 of 13 9. GENERAL/NEW BUSINESS A. SLMPD Proposal 1) "Saunders Proposal" Administrator Dawson explained the "Saunders Proposal" had been continued from the November 14, 2005, and November 28,2005, Regular City Council Meetings. He stated Excelsior had requested some additions to the proposal which resulted in a "Revised-Binding Arbitration Proposal-12/5/05" (alk/a the "Revised Saunders Proposal" hereafter referred to as the "Proposal"). He went on to state the "Proposal" contained a number of conditions the Member Cities must agree to before binding arbitration can commence for SLMPD funding. He stated Excelsior approved the "Proposal" with a 5/0 vote on December 5, 2005, and Greenwood approved the "Proposal" with a 4/1 vote on December 6, 2005; the Tonka Bay City Council would consider the "Proposal" on December 13,2005. Administrator Dawson reviewed the highlights of a December 8, 2005, Staff memorandum to Council that provided a detailed synopsis and analysis of the "Proposal". The highlights were: 1) Excelsior would pay $420,000 for full service in 2006; 2) there were a number of amendments to the Joint Powers Agreement relating to withdrawal, dispute resolution, and budget approval; and 3) description of the binding arbitration regarding the funding allocation. He explained there is a need for timely action by Council as the "Proposal" calls for selection of an arbitration panel (composed of three retired judges/justices) by January 15, 2006. Administrator Dawson stated many of proposed amendments are similar to items identified by the Issues Group and others items are similar to those in the Excelsior Fire District Agreement. He explained how, under the "Proposal", the 2007 budget would be determined if the Member Cities do not unanimously agree on the approved budget by September 1, 2006. He stated the "Proposal" precluded two-tier levels of service and Member Cities could contract with SLMPD for additional services, provided all Member Cities agree and do not withhold unreasonably. Greenwood Councilmember Saunders explained the rationale behind the proposal was to perpetuate the SLMPD JP A. He thanked Council and Administrator Dawson for their support. In response to a question from Mayor Love, Attorney Keane sated the wording of Item 2F under Budget Approval in the "Proposal" was crafted to leave flexibility in interpretation. Greenwood Councilmember Saunders concurred with Attorney Keane. Greenwood Councilmember Saunders stated Excelsior and the other Member Cities had "mutual paranoia" regarding two-tier service. Excelsior did not want to receive two-tier service and the other Member Cities did not want to deliver two-tier service. He went on to state the Greenwood City Council discussed Item 2F at great length. Greenwood Council decided the statement "mutually-agreed" was ambiguous. He went on to state the Governing Body of the SLMPD is the Coordinating Committee and the Coordinating Committee makes decisions based on majority. Because of the ambiguity of the "mutually-agreed" statement and the role of the Coordinating Committee, Greenwood Council chose not to modify Item 2F; it felt any modifications to the "Proposal", which Excelsior had agreed to in a 5/0 vote, would probably result in continued lengthy discussions and delays in reaching consensus on the proposal. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 6 of 13 In response to a comment by Councilmember Turgeon regarding "supplemental services", Greenwood Councilmember Saunders stated Item 2Fdidnothave to be in the "Proposal" but was included at the request of Excelsior. He went on to state Item 2F makes the process for "supplemental services" cumbersome. In response to another comment by Councilmember Turgeon, Saunders stated from his perspective the requirement for approval of any request for supplemental service is very clear, though he could not speak for Excelsior. He explained Excelsior City Attorney Staunton, who participated in revising the "Proposal", was empowered to negotiate for Excelsior and Attorney Staunton clearly understood the meaning of Item 2F. During the proposal revision process Park Control, Dock Master, and Excelsior's Art on the Lake as well as Greenwood's use of "foot patrol" services were stated as examples to ensure clarity of the statement. In response to a question from Councilmember Turgeon, Administrator Dawson stated the supplemental services could be provided by dedicated personnel overtime work. Councilmember Callies stated she would prefer Item 2F not be in the proposal. She appreciated all the hard work that went into getting the "Proposal" to a place where Excelsior would agree to it. She stated it was worthwhile to stay in the JP A. She went on to state when the budget is fully funded, which it has not been, the need for two-tier service would be eliminated. Callies stated Council could spend time changing the wording of the "Proposal" to redress more of an emotional issue than the legal effect of the wording. In summary, Callies stated although the wording of Item 2F could possibly be worded differently or eliminated entirely she could support the "Proposal". Councilmember Turgeon clarified the budget would not be fully funded because the "Proposal" specified Excelsior was to pay $20,000 toward the 2006 budget shortfall; it did not address the entire $59,050 shortfall. She did not think a- Member City should have operating budget voting privileges if they have given notice to withdraw from the JP A, and the voting issue had been discussed in the Issues Group though not resolved. Mayor Love stated once a Member City has given notice to withdraw from the JP A it in effect becomes a client. He thought the Coordinating Committee would support the voting privilege revocation for the Member City. In response to Councilmember Turgeon's comment regarding the 2006 budget shortfall, Greenwood Councilmember Saunders stated the "Proposal" provided a safety net by specifying for purposes of determining the 2007 Operating Budget the "previous year's budget" would be $1,556,100. He went on to state it took considerable negotiation with Excelsior to have Excelsior agree with $1,556,100; ExceIsior wanted to use $1,355,900 (the "flat-lined" amount ofrequired municipal revenue for 2006) for the "previous year's budget". Mayor Love stated although the "Proposal" was not a perfect agreement (and none are) it was the first time in three years the "Proposal" reached Council for a vote. He went on to state over the past three years three of the Member Cities were in concert. He stated he had received emails regarding concerns people had with the "Proposal"; one in particular was Excelsior would be able to select one arbitrator and the remaining three Member Cities would select one arbitrator. Mayor Love did not foresee any problem with the three Member Cities being able to reach consensus on the arbitrator. He thanked Greenwood Councilmember Saunders for his hard work and patience in preparing the "Proposal". In summary, he stated in the spirit of cooperation that has existed with three Member Cities over the last three years Council owes it to their partners to proceed with the "Proposal". CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 7 of 13 Councilmember Wellens expressed concern with the Item 2F statement "as mutually-agreed by all Member Cities"; he interpreted the statement to mean any three councilmembers of a Member City council could veto a Member City's request for supplemental police support and that was totally unacceptable to Wellens. He went on to state the original JPA contained language subject to interpretation thereby creating the need for JP A arbitration. He stated the "Proposal" contains a great deal of vagueness which could cause interpretation issues in the future. Wellens explained why he could not support approving the "Proposal". His reasons are: 1) Council was elected to make decisions affecting residential taxes, not a non-resident arbitrator; 2) he did not think it was fair that Excelsior could be able to select one arbitrator and the other three Member Cities would collectively select one arbitrator; 3) he stated he thought SLMPD Chief Litsey would like to continue with the option of providing two-tier levels of service; 4) he stated the Member City Councils have approved the JP A for years and wondered why three Excelsior Councilmembers recently decided the JP A needed to be changed, and he thought the JP A should not be modified; and 5) he stated Excelsior Mayor Ruehl testified before Council that Excelsior did not claim any temporary budget problems as a reason for flat- lining. In conclusion, Wellens stated the JPA should not be modified and Shorewood should sue Excelsior for non-performance of the JP A. He would prefer Shorewood take an aggressive offensive approach rather than defensive approach to resolving this matter. Greenwood Councilmember Saunders stated the "Proposal" specifically states the arbitrators cannot specifically determine the allocation of the operating budget costs to Member Cities based on either the tax base or "call" volume alone. He explained the "Proposal" specifies the type of arbitration process to be used. The process entails each Member City providing the arbitration panel with that City's pertinent information for the JP A funding formula and the arbitration panel would make a funding formula finding to the Member Cities; this approach was not a win/lose arbitration method. Regarding the funding formula for the operating budget, Saunders stated the Member Cities have not demonstrated an ability to resolve the issue, thereby requiring a third party to assist with working the issue to resolution. He went on to state he thought the Member Cities could resolve the withdrawal, dispute resolution and budget issues. Saunders stated allowing Excelsior to select one arbitrator was done in the spirit of compromise; Excelsior felt victimized by the process to date. He then stated it was not appropriate for him to respond to whether or not Excelsior had budget problems nor could he speak for Chief Litsey. He did state he had had conversations with Chief Litsey and his understanding was Litsey was comfortable with the "Proposal" and acknowledged the process specified in Item 2F would be cumbersome but manageable. He again stated Item 2F is superfluous and thought the three Member Cities would agree. He explained Greenwood Council struggled with the wording of Item 2F and concluded it would be a moot point starting with 2007, a point Councilmember Callies made earlier. Mayor Love stated he had spoken with Chief Litsey and the police officers who were pleased the Member Cities were closer to agreement. He stated the two-tier service was difficult for the SLMPD to implement. Councilmember Wellens stated he interpreted vanous memos from Chief Litsey to mean that he preferred the two-tier service. Mayor Love stated he thought the desire for a two-tier service level was a reaction to a flat-lined operating budget and Chief Litsey would have preferred the tiered service to reducing the size of the police force. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 8 of 13 Councilmember Wellens again stated his interpretation of Item 2F statement "as mutually-agreed by all Member Cities" to mean any three councilmembers of a Member City council could veto a Member City's request for supplemental police support. Councilmember Lizee stated she was pleased with the positive movement to continue with the JP A and even more pleased with Excelsior's 5/0 approving the "Proposal". She would like to have Item 2F clarified or removed entirely in the future. She has concerns with the selection of the arbitration panel by the Member City Councils; she thought having the number of various Member Cities' councilmembers come to agreement on one arbitrator could be lengthy and suggested the Cities' Attorneys may be better equipped to make the selection expeditiously. Councilmember Turgeon thought Item 2F implied the Cities' Attorneys would recommend the arbitrator selections although it did not specifically state that, the lack of clarity supported Councilmember Wellens' point oflanguage ambiguity. She stated she was pleased Excelsior voted 5/0 on the "Proposal" it had wordsmithed, but reminded Council that no modifications were supposed to have been made to the Original Proposal. She expressed concern with items not contained in the "Proposal" that had been discussed in the Issues Group and believed those items could be areas of contention in the future. She then stated she would appreciate Council having the opportunity to wordsmith the "Proposal" and she was not in favor of the binding arbitration from the beginning. She stated: 1) the binding arbitration process language should be more specific (the Attorneys would select the arbitrators); 2) the rescinding of operating budget voting privileges for a Member City once they have submitted a withdrawal notice should be added to the JP A; and 3) she wanted Council to have an opportunity to make minor modifications to the "Proposal" as Excelsior did. Greenwood Councilmember Saunders clarified Excelsior Council did not wordsmith the "Proposal"; it did add the last two lines of Item 2F. He stated he had initial displeasure with Excelsior making any modification to the "Proposal", but after having spoken with Greenwood Mayor Newman and Greenwood Attorney Kelly regarding the modifications they concluded the changes appeared to be "harmless language". Councilmember Turgeon questioned why Excelsior did not approve the "October 28, 2005 Proposal" three weeks ago if all it did was make "harmless language" changes. Greenwood Councilmember Saunders stated he thought Excelsior was considering other opportunities, such as litigation, during that time period before it determined this was the best approach. Councilmember Callies stated maybe there should be some legal analysis of some of the issues discussed. Councilmember Wellens expressed his concern over whether or not Excelsior would have an entirely different interpretation of some of the language than Shorewood Council would. He stated he did not believe Excelsior's modification of Item 2F was done for no reason. He does not agree it was "harmless language"; he thought Excelsior included the language for a reason. He had concerns Excelsior would exercise its veto power with regards to delivery of supplemental services. Councilmember Callies stated Shorewood could bring Excelsior to litigation, but expressed concern for the livelihood of the SLMPD staff and the service they provide. She stated these concerns provide support bringing this issue to resolution. Attorney Keane stated there is some questionability of the Member City Councils' authority to delegate budget responsibilities to the arbitration panel. He went on to state he would need to research it. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 9 of 13 Mayor Love stated the arbitration process carries some level of risk for all Member Cities and it also has an out clause so any party can exit the process. He stated the "Proposal" was not perfect but was the best proposal to-date. He stated he supported the "Proposal" and he suggested Council demonstrate goodwill to the Member Cities. Councilmember Turgeon has concerns with the arbitration panel and the language that was added to Item 2F. Councilmember Wellens stated it could harm more than help the JP A. Councilmember Turgeon concurred with Councilmember Wellens. She expressed that she did not believe all Member Cities were acting in the spirit of cooperation and she believed there were a number of areas where the language in the "Proposal" needed clarification. Councilmember Callies stated the language could be clarified, and she will support the "Proposal" because it was the best to-date. Lizee moved, Callies seconded to Accept the "Revised Saunders Proposal" to resolve the SLMPD matters. Motion passed 3/2 with Turgeon and Wellens dissenting. Mayor Love expressed his gratitude to Council for the discussion and stated the concerns discussed needed to be discussed. Greenwood Councilmember Saunders concurred with Love. Love thanked Greenwood Councilmember Saunders for the leadership he demonstrated in the handling of this matter. 2) Funding for SLMPD for 2006 Administrator Dawson recapped his memo to Council dated December 8, 2005, addressing Funding for SLMPD for 2006. He explained in August 2005 Council approved a proposal for resolving SLMPD issues (which resulted in funding a 2006 operating budget shortfall of $59,050) by having Excelsior paying an additional $20,000 for full service in 2006, and Shorewood paying an additional $39,050 (the remainder of the shortfall) for full service in 2006. When Council considered the proposed budget and tax levy it added $39,050 to the budget to be prepared for that possibility. Administrator Dawson stated in November 2005 the Coordinating Committee approved a two-tier services plan based on what each Member City had authorized for 2006. The plan identified what services could be provided at the 0.0% increase in city funding for 2006, that funding being $200,000 less than what the Coordinating Committee recommended, and what would be provided with three cities funding for Tier II services. That plan would result in the Police reducing the number of officers by one, and the investigator position working with the State Task Force into 2007 would not be filled in 2006. No existing personnel would be laid off. Administrator Dawson then explained five different SLMPD funding options for the Council to consider. He also clarified the "Proposal" did not require Shorewood to fund the additional $39,050. Councilmember Turgeon moved, Councilmember Wellens seconded Approving $715,806 in the 2006 Operating Budget for Tier II service and to keep $39,050 in the 2006 Operating Budget for policing issues but not designated for SLMPD. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 10 of 13 In response to a request by Councilmember Wellens to accept an amendment to the motion to delete the $39,050 from the 2006 Budget and reduce the tax level accordingly, Councilmember Turgeon stated she wanted to keep the $39,050 in the 2006 budget. Motion passed, 5/0. B. Approving the 2006 Budget and Approving the Property Tax Levy Collectible in 2006 Administrator Dawson stated Staff removed the $40,000 Contingency expense and the $17,000 election equipment expense from the 2006 Proposed Budget presented at the December 5, 2005, Truth-In- Taxation hearing per direction from Council. He stated Staff was developing a fund balance guideline policy for Council's future consideration. And in response to questions from Council at that meeting regarding the authorized City Engineer position, Staff strongly believes that position remains warranted as planned and approved. He stated the proposed tax increase was approximately $359,000. Mayor Love explained the removal of the $40,000 Contingency expense means that line item would not be included in future budget years unless Council specifically requested it be added to the budget. Councilmember Turgeon stated the updated performance metrics data requested by Councilmember Callies at the December 5, 2005, meeting was not included in the December 12, 2005, meeting packet, nor was the cost comparison of a staff City Engineer versus consultant position Councilmember Turgeon had asked for at that meeting. Mayor Love stated he did not think the City Engineer position costs were going to be removed from the 2006 budget, but Council was going to have future discussion regarding the pros and cons of staff versus consultant as well as the justification for that position. Councilmember Callies concurred. Councilmember Turgeon stated if the monies budgeted were not spent they would end up in the General Fund and the taxpayer would be taxed for monies not used. Mayor Love stated Council had the opportunity to modify the proposed 2006 Budget, which they did, and Staff made the recommended changes. He stated Council can review the budget at any time and make agreed upon changes. He suggested Council move forward with approval of the Budget. Director Burton stated Director Brown explained the cost of a consulting engineer was approximately $209,000 per year and the cost of a staff City Engineer was approximately $90,000 per year. Councilmember Turgeon understood just because money was budgeted for something doesn't mean it would be spent, but the taxpayers are still taxed for that money. She went on to state she did not recollect when future years budgets were reduced by the amount of money that was not spent in the previous year. Councilmember Lizee stated the budget was heavily scrutinized each budget cycle. She felt Council was fiscally responsible in budget preparation activities. In response to a comment by Councilmember Turgeon, Director Burton stated the General Fund was approximately $2.9 million or approximately 57% of the budget. Burton stated the State Auditor recommends a minimum of 50% of the upcoming year's budget be available in the General Fund balance. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 11 of 13 Councilmember Lizee stated Council's history of spending had been responsible and is reflected in the City's bond rating. Councilmember Turgeon questioned if there was a way the City could do those things that were needed without imposing a 10.9% tax increase on its residents. Lizee moved, Callies seconded, Approving RESOLUTION NO. 05-109, "A Resolution Adopting the 2006 Budgets and Approving the Property Tax Levy Collectible in 2006." Motion passed, 4/1 with Wellens dissenting. Mayor Love stated because the issue of the City Engineer position was raised Staff should present council with the justification information again at a January 9, 2006, Council meeting. C. Establishing the 2006 Pay Scale and City Insurance Contribution Administrator Dawson explained the 2006 proposed budget included 2% salary increases for employees effective January 2006 and again July 2006. He then explained the 2006 proposed budget also included an increase in the City's monthly insurance contribution per employee to $750 in order to keep pace with medical rates. Councilmember Turgeon understood the cost of living has increased from 2005. She expressed concern with employee salary step increases being provided when performance criteria were lacking. She stated she had asked for performance criteria to be developed for five years and to-date had not provided with that information. She did not want the staff to be penalized for the lack of performance criteria as that was not the staffs fault. Wellens moved, Callies seconded, Approving RESOLUTION NO. 05-110, " A Resolution Revising the City's Wage and Salary Range Chart for 2006 and Setting the Monthly Employer Contribution Toward the Monthly Insurance Premium for City Employees." Motion passed, 5/0. Councilmember Turgeon asked Staff to provide Council with the amount of money spent for insurance brokerage services. D. Authorizing the Transfer of Funds Administrator Dawson stated Council had budgeted for transfers of monies to and from various funds for capital improvements and other purposes in the 2005 Operating and Capital Improvement Budgets. Director Burton added Council approved a year-end transfer from Tonka Bay reserves to eliminate the Waterford (East) store deficit and to split the remainder of the Tonka Bay reserves between the Shorewood Plaza (West) store and the Waterford (East) store. In response to a question from Councilmember Wellens, Director Burton stated the transfer from the General Fund to the Sewer Fund for debt services was for the property the City purchased in 2005. Callies moved, Wellens seconded, Approving RESOLUTION NO. 05-111, "A Resolution Authorizing the Transfer of Funds." Motion passed, 5/0. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 12 of 13 E. Authorizing Services for the 2005 Audit Administrator Dawson stated at a November 7, 2005, Work Session Meeting Council requested Staff provide Council with a recommendation for a benefits consultant to would review, compare and make recommendations on the City's employee benefits plan. Staff submitted request for service proposals to eight firms and recommended the engagement of the Stanton Services Group. He explained they were recommended based on their proposal, and their previous experience working with other local governments in the metropolitan area, and they had a national database of information of other public and private companies. Councilmember Turgeon explained the reason she asked this be pulled from the Consent Agenda and moved to New Business was out of concern for employees. Employees expressed concern over how the benefits were administered and communicated, and how activities associated with benefits changes were scheduled. She stated the proposal does not address those concerns and felt they needed to be included. In response to a question from Mayor Love, Councilmember Turgeon stated the plan should include an assessment of the quality of plan administration and the insurance rates charged by vendors/carriers, items specifically excluded in the Stanton Group's proposal. Administrator Dawson stated those items could be added to the proposal. Councilmember Callies questioned why the items were excluded and if the proposal included an assessment of how the money is invested. Administrator Dawson explained the City offers "457 Plan" deferred compensation options and reviewing them was not germane. In response to a comment by Director Burton, Councilmember Turgeon stated it was internal plan administration that should be assessed. Administrator Dawson stated the proposers were provided with the request for services proposal as well as the Benefits Committee Report. Based on those two pieces of information the proposers responded. Councilmember Wellens questioned if 75% of the staff is pleased with the benefits plan, why would the City hire a consultant to assess it. He went on to state that hiring a consultant would be spending money just in case there was a problem but there was no evidence there was a problem. Mayor Love stated there had been a lot of Council discussion regarding the benefits plan and the value of the plan and competiveness of the plan; he supported engaging a consultant to benchmark the plan. Councilmember Turgeon stated Staff lacked people with experience in administering benefits plans and a benefits consultant could determine if the administration could be improved and if there was a way to improve value added. She wanted to ensure the assessment addresses issued identified by the Benefits Committee and employees. Councilmember Callies stated the assessment of internal plan administration was not the Council's purpose in hiring a consultant to assess the benefits plan. Councilmember Turgeon stated would also like the consultant to review the plan administration workload issue; would there way to reduce the workload through performance improvement methods. CITY OF SHOREWOOD REGULAR COUNCIL MEETING December 12, 2005 Page 13 of 13 ___M~YQI1()y~~_~ls~<:1__~H::lff~()I~!1:1!:l1..t()ll:}l:ll1~~l)'_~,~Q9_~, ...g()tll1~g!11~_~!il1~~~!~5;<:>!-llcil-'E:~-'E:?~r Turgeon's . - - ... concems.-.addressedmin...the.nprop.osal. __ _..".__"_,.....n_,.__,,,_,,_._.__. __....._..,.._ 10. ENGINEERING/PUBLIC WORKS Director Brown stated there was nothing new to report. 11. STAFF AND COUNCIL REPORTS A. Administrator & Staff 1. County Road 19 Intersection The lights have been lit and the striping will be redone in the spring. B. Mayor & City Council Mayor Love distributed the retirement party flyer for Carol Eastlund and Bob Quam who are members of the Minnetonka School Board. He also stated there was an EFD Board Meeting on December 28,2005. 12. ADJOURN Wellens moved, Turgeon seconded, Adjourning the Regular City Council Meeting of December 12, 2005, at 8:48 P.M. Motion passed 5/0. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder Woody Love, Mayor