PRESENT

MOTION: Motion made by Forseth, seconded by McNeil, to approve the Consent Agenda of June 26, 2007, as amended.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

OPEN FORUM

Doug Baines, 13000 Overlook Road, came forward to express concerns of traffic during current area construction and in the future at Pineview Lane and Dayton River Road. The Council suggested the County be contacted, and there was mention of possibly a temporary stop sign there.

Jim and Arlene Kauppila, 13651 North Diamond Lake Road, were present officially requesting the lot equivalent credit on their property – one assessment instead of 1 ½, as they had not known of the option. The Council explained the deferral process and Administrator Orduno relayed that their letter was provided to the Council, since others had the opportunity, and action was taken administratively.

PRESENTATIONS:

ITEM J – 1) 2006 AUDIT PRESENTATION – KERN, DEWENTER, VIERE, LTD. (KDV)

Joe Rigdon from Kern, DeWenter, Viere, LTD., presented the Preliminary Audited Financial Statements and Management Letter for the Fiscal Year Ended December 31, 2006. It was reviewed that the assets of the City exceeded its liabilities by $8,481,006 for net assets and $2,777,451 for unrestricted net assets – used to meet the City’s ongoing obligations to citizens and creditors. The City’s total net assets increased by $215,530. The overall General Fund revenues were $2,303,060 ($386,367 over budget) as compared to $2,055,771 ($91 over budget) for expenditures.

At the close of 2006, the governmental funds reported combined ending fund balances of $12,402,768 – an increase of over $6,000,000 over the prior year, with about 32% reserved for Debt Service. The unreserved fund balance for the General Fund at year end was $1,803,715 – about 88%, or 10 ½ months, of total General Fund expenditures, over the recommended 50%, because of a transfer. The total debt increased by $9,249,055 and it was attributed to the issuance of the 2006A G.O. Improvement Bonds and 2006B G.O. Equipment Certificates.

Mr. Rigdon relayed KDV’s opinion, and mentioned Changes in Fund Balance on pages 27 and 56-58 regarding the General Fund Budget. It was later explained that to cover the Water & Sewer Funds operating expenses completely, adjusting the revenues/fees should be considered, which has been planned. With regards to most items of findings, detailed in the Management Letter for the Council, it was informed that the new Finance Director would aid in accomplishing them.

MOTION: Motion made by Forseth, seconded by McNeil, to approve the Audit Report for the Fiscal Year Ended December 31, 2006, as presented.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM K - 2) N.P.D.E.S. PHASE II ANNUAL PUBLIC MEETING – GREG HALVORSON, BONESTROO ENGINEERING

Greg Halvorson from Bonestroo Engineering was present regarding the NPDES Phase II annual public education meeting. He provided a PowerPoint to review the Goals of the Meeting, Origins of NPDES Phase II, Municipal/MS4 Program, Application Requirements, 6 “Minimum Control Measures”, MS4’s Legal Obligations, Environmental Impacts – Local & Global Effects, Current Status of Permit Compliance, Public Education & Outreach, Public Participation & Involvement, Illicit Discharge & Elimination, Construction Runoff Control, Pollution Prevention/Good Housekeeping, Restricted Discharge Waters Plan & Future Plan Changes, and the Process/Next Steps.

Mr. Halvorson relayed that the comments, which to date were none, would be responded to, and the Annual Report would be submitted to the Minnesota Pollution Control Agency (MPCA) by June 30^th. Administrator mentioned that these two items were State mandates which cost the City about $31,000. It was agreed the unfunded mandates be kept track of for public explanation.

COUNCIL BUSINESS

ITEM L – METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES (MCES) METER STATION SUBDIVISION & REZONING S.R.#86-2007

ORDINANCE #2007-08 – AMENDING THE CITY CODE FOR CREATING ESSENTIAL SERVICES RESIDENTIAL (R.E.) ZONING DISTRICT

RESOLUTION #40-2007 – GRANTING ADMINISTRATIVE SUBDIVISION FOR M.C.E.S. STATION AT LOT 14, BLOCK 2, DONAHUE DELLS 3^RD ADDITION, ONE LOT INTO TWO LOTS

ORDINANCE #2007-09 – REZONING ONE LOT FROM RESIDENTIAL (R-1) FOR M.C.E.S. STATION TO ESSENTIAL SERVICES RESIDENTIAL (R-1E) DISTRICT

Planner Stwora reported that representatives of the Metropolitan Council Environmental Services (MCES) have approached the City regarding adding a sanitary sewer meter station to accommodate the NE Dayton Utility Project. City Staff has been working with them on the administrative subdivision of one lot into two lots, and the rezoning of the subdivided property from R-1 to R-E to allow essential services for a meter station. The proposed site is located at 12900 Zachary Lane N.

The proposed property is currently zoned R-1, Single Family Residential District, and is approximately 18,750 sq. ft. in size and the applicants would like to subdivide 2,750 sq. ft. for the meter station location, but the Zoning Ordinance requires a 15,000 sq. ft. minimum. Staff understands the need for utility services in the community and have with the City Attorney, drafted an ordinance that would allow the possibility. The parent parcel would remain a conforming lot in a residential zoning district, and the subdivided parcel would be required to be rezoned R-E, Essential Service Residential District.

At their May 3^rd meeting, the Planning Commission held a public hearing and reviewed the application, voting in favor of the application. Staff recommended consideration of the application of MCES for 1) Amending the City Code creating an R-1E (Essential Services Zone), and allowing an administrative subdivision for property zoned R-1 (Residential District) to create one resulting lot zoned R-1E, 2) Administrative subdivision of one lot into two lots, and 3) Rezoning of one lot from R-1 to R-1E District. Planner Stwora suggested Ordinance #2007-08 be changed to 1.5 acres, instead of 1 acre, in Subd. 8., because of future needs. The Public Hearing was opened by Mayor Anderson, but no one came forward.

MOTION: Motion made by Forseth, seconded by McNeil, to waive the reading and adopt Ordinance #2007-08, with the change to 1.5 acres, Amending the City Code and Creating an R-1E, Essential Services Residential Zoning District, and allowing an Administrative Subdivision for property zoned R-1, Residential District, to create one resulting lot zoned R-1E.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

MOTION: Motion made by Hoke, seconded by McNeil, to waive the reading and adopt Resolution #40-2007, as presented, approving an Administrative Subdivision of one lot into two lots for the Metropolitan Council Environmental Services.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

MOTION: Motion made by Hoke, seconded by Forseth, to waive the reading and adopt Ordinance #2007-09, as presented, approving the Rezoning of one lot from R-1, Residential District, to R-1E, Essential Services Residential District.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM M – FINANCE DIRECTOR HIRE CONSIDERATION S.R.#87-2007

Administrator Orduno reviewed that the 2007 Budget provided for a part-time Finance Director. The City received applications, but none of which worked out. Hassan Township was also discussing a need for a Finance Director, and both communities realized there would be benefits to share a full-time position until Dayton requires a full-time position. The proposal was a 60/40 split with Hassan for 16 hours per week and Dayton the remainder, with Dayton having a service agreement executed with Hassan for the services.

The Council approved the shared position May 8^th and Hassan approved the proposal the following week with a range of $65,000– 80,000/year, for the range of municipal finance experience and financial duties desired and the financial obligations now facing Dayton. The most qualified, who demonstrated what was needed, was Mr. Richard Hill, who could begin employment mid-July. Based on his experience and expertise, Staff is recommending he start employment at $68,500 per year, plus benefits, and part of the negotiated Teamsters Union contract for 2008 and beyond, consistent with the union contract.

For 2007, the estimated cost for salary and benefits is Dayton - $24,000 ($36,000 for 20-hour/week salary and benefits was budgeted) and Hassan - $15,370. The necessary service agreement needs to be developed by the City Attorney and executed by both Dayton and Hassan, outlining the conditions of the shared position.

MOTION: Motion made by Forseth, seconded by McNeil, to approve the hiring of Richard Hill as the Finance Director (shared position with Hassan Township), effective as of July 23, 2007, contingent on Hassan Board approval and other contingencies listed in Section IID of the Administrator’s Staff Report.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM N – FINANCE CLERK HIRE CONSIDERATION S.R.#88-2007

Planner Stwora reported that the Finance Clerk position, formerly known as the Clerk III position, was advertised due to the current staff person’s pending retirement. Staff selected the only applicant meeting the minimum requirements of the ten, to interview. The position was advertised at $14.06/hr. to $19.77/hr., but the applicant declined the job, due to the level of pay. Staff has now re-posted the job on the League of Minnesota Cities Website today, and hope to have more applications in a couple weeks. No action was needed at this time.

ITEM O – RECYCLING CONTRACTOR CONSIDERATION & AUTHORIZATION OF MAYOR AND ADMINISTRATOR TO EXECUTE CONTRACT S.R.#89-2007

Planner Stwora reported that Assistant Planner Elhard sent out an RFP for recycling services to contractors in the metro area, and received two proposals, Randy’s Sanitation, Inc. and Waste Management of Minnesota, Inc. The length of the contract would be for three years and each proposal requires the pickup days be changed, every other Friday for Randy’s, the low bidder, at $1.80 per household per month for dual stream with no price escalators or surcharges. Currently, the City contracts with Waste Management for about $2.20 per household per month.

The Council suggested brochures/flyers be prepared to notify residents of the change. Staff relayed that the August City Newsletter would inform them, a postcard could be sent out, and the Council mentioned additional information by way of the City Website, inclusions in utility billings, or reminder magnets. Staff suggested the change go into affect September 1^st. It was relayed that there are about 800 households participating in the City recycling program.

MOTION: Motion made by Forseth, seconded by McNeil, to approve Randy’s Sanitation, Inc. as the City’s recycling contractor and for the Mayor and City Administrator to work with Randy’s Sanitation and the City Attorney to draft and execute and agreement.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM P – N.E. DAYTON EASEMENT PAYMENT DISCUSSION – 12300 OVERLOOK ROAD S.R.#90-2007

Engineer Hanson reviewed that the Council previously approved payment for road, drainage, and utility easement at 12300 Overlook Road at its May 22nd meeting for $5,745 ($0.50/sq.ft.), the budgeted amount. At that meeting it was stated that the property owner requested $0.75/sq. ft. ($8,617.50). The property owner has since prepared an official letter requesting that amount.

The history of the easement was discussed at the previous Council Meeting. The City attorney’s office has stated, based on the fact the cul-de-sac has existed for so long, the City has the right to the street easement, but not necessarily the utility easement. As a compromise, Staff offered the $0.50/sq. ft. The property is included in the NE Dayton Project and the property owner, Greg Kruse, is agreeable to the assessment for street and utility service, and was present and came forward, explaining his reasons for the request. Staff is recommending the Council confirm the easement price at $0.50/sq.ft., as previously approved, or $0.75/sq.ft., as requested by the property owner.

Mr. Kruse’s explained how this would limit the development of his property, since the easement would separate the property. The Council got clarifications on the cul-de-sac and maintenance of it, and agreed it was not Mr. Kruse’s fault the utility easement did not get recorded.

MOTION: Motion made by McNeil, seconded by K. Anderson, to approve the easement price at $0.75/sq. ft., as requested by the property owner.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM Q – RESOLUTION #42-2007 - AUTHORIZING STAFF TO APPLY FOR A $20,000 METROPOLITAN COUNCIL LOCAL PLANNING ASSISTANCE GRANT S.R.#84-2007

Planner Stwora reported that legislation was passed allowing the Metropolitan Council to make a transfer of up to $1,000,000 from the Livable Communities Demonstration Account to a planning assistance fund for grants for loans. They adopted criteria, including allowing the use of the fund for the 2030 Comprehensive Plan Update. The City of Dayton meets requirements and is eligible for a $20,000 grant, so the Staff has prepared the application and just needs Council approval to apply.

Planner Stwora reviewed that the City entered into an agreement with Bonestroo Engineering in February to update the Comp Plan at a cost of $66,000. The City received a loan from the Met Council in the amount of $40,000 to be repaid by the City at two $20,000 intervals in 2008 and 2009, with the City budgeting $20,000 for 2007. It was relayed that, if awarded, the grant would be dispersed at two intervals, and reduce the City’s cost by nearly one third.

MOTION: Motion made by Forseth, seconded by McNeil, to waive the reading and adopt Resolution #42-2007, as presented, authorizing Staff to apply for the Metropolitan Council Local Planning Assistance Grant.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM R – RESOLUTION #35-2007/RESOLUTION #36-2007 – RELEASE OF WICHT INDUSTRIAL PARK FROM RESOLUTION #40-2005 (WAIVER OF PLAT) & THE AGREEMENT S.R.#82-2007

At the previous Council Meeting, Planner Stwora reviewed the landowners request to have the release of Wicht Industrial Park (Cemstone Products Company and John Wicht) from Resolution #40-2005 (Waiver of Plat) and the Agreement, since the land is platted. The issue of Mr. Wicht’s escrow amount owing was discussed and the possibility of cashing his letter of credit for the amount due, so as not to affect Cemstone.

Planner Stwora relayed that no payment has been made to date, but that Cemstone’s representative, Ken Kuhn, has requested the tabling of the item, to work out the situation with Mr. Wicht. She reported that if no resolution is before the Council by their next meeting, the City will draw against the Letter of Credit for the escrow funds owing.

MOTION: Motion made by Forseth, seconded by McNeil, to TABLE the Resolution #35-2007, and Resolution #36-2007, indefinitely.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

ITEM S-1 – N.E. DAYTON UPDATE: S.R.#93-2007

1) DEWATERING PERMIT – THREE RIVERS PARK DISTRICT

Engineer Hanson reviewed the Temporary Encroachment Permit request for dewatering for the LaTour Contract for the City of Dayton to Complete Sewer Work North of Elm Creek Park Reserve by pumping water into the Park. He updated the Council on the Three Rivers Park District response and recommendation to alleviate the flooding concerns north of County Road #121, including the installation of about 1,700 feet of 12” diameter discharge pipe in Elm Creek Park Reserve.

A handout was provided showing the Profile Drainage Route map and outlet for the Wetland to Elm Creek, as Figures 1 & 2. The City Attorney’s comments were handed out by Administrator Orduno. The language changes at the end of paragraph 4 were suggested, “…, subject to the limitations found in Minnesota Statutes section 469.01, and nothing herein waives the protections afforded to the City there under.” Other risks were minimal in paragraphs 8, 12, and 13, so language remained as is.

Mayor Anderson noted the issue of the dewatering going on, informing that something needs to be done. Engineer Hanson relayed that currently there has not been any additional charge to the City. He mentioned the Galloway Park and that area, going to the Mississippi River, so the same issue does not happen on the north/east end of the NE Dayton Project. The Council got clarifications on the dewatering, and mentioned concerns of the water table being too high for hookup/connection.

MOTION: Motion made by McNeil, seconded by Forseth, to approve the Permit for Temporary Encroachment on Three Rivers Park District land, with the language changes, per the City Attorney.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.

2) RIGHT-OF-ENTRY – HAYDEN HILLS GOLF COURSE

A Right-of-Entry Agreement with the Hayden Hills Golf Course was provided to the Council and reviewed by Engineer Hanson, requesting the Mayor and City Clerk’s signatures. It was relayed that this was for information only, but that the two attorneys were having discussions, with nothing approved or signed, at this point.

3) DEWATERING GALLOWAY PARK - CHAMPLIN

A June 21^st Memo from Engineer Hanson to Jack Bittle, of the City of Champlin, regarding a proposal to dewater Dayton Road at Galloway Park in Champlin for the NE Project in Dayton, was provided to the Council and reviewed, for information only.

REPORT OF OFFICERS

COUNCIL UPDATES

Council member Forseth mentioned the Golfing for Kids event, and thanked Administrator Orduno, Mayor Anderson, and Chief Pietrzak’s participation.

CITY ADMINISTRATOR

Administrator Orduno mentioned the need to set Budget Work Session dates. After discussing possible options, there was CONSENSUS of the Council to meet Tuesday, July 31^st, and Thursday, August 16^th, starting at 6:30 p.m. Regarding the Logo/Slogans Contest, it was reported that July 10^th she would like the Council to pick their choices, so the winners can be chosen. She asked the Council to come in and vote before that time.

CITY PLANNER

Planner Stwora reported that the City Commission interviews as being planned for 5:45 p.m. prior to the July 10^th Council Meeting, with a 6:00 p.m. Work Session for the Comprehensive Plan Final Review of Goals. Mayor Anderson and Council member McNeil responded that they may be available.

POLICE CHIEF

Chief Pietrzak reported that, along with the State Patrol, his Department would be performing commercial vehicle inspections in the Historic Village and Dayton Mobile Home Park the next day.

CITY ENGINEER

Referring back to the wetland/dewatering issue and the property owner with the septic tank issues, Engineer Hanson updated that he is working with a sewer contractor and Staff has been talking with him about partial assistance from the City, because of the current conditions. The permanent fix of new tanks and the elevation of ground around them would be $5,000-$6,000. He explained that the City would not be responsible for all of the costs, but need to discuss a fair agreement, noting that the homeowner has been very cooperative regarding the big problem. Hanson reported that they can not use their septic system currently.

ADJOURNMENT

MOTION: Motion made by McNeil, seconded by Hoke, to adjourn.

Ayes: D. Anderson, Forseth, Hoke, K. Anderson, McNeil Nays: none

MOTION DECLARED PASSED.