PRESENT

MOTION: Motion made by Forseth, seconded by McNeil, to approve the Consent Agenda of May 8, 2007.

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

MOTION DECLARED PASSED.

OPEN FORUM

Lyle Talbot, 18771 Robinson Street, was present to speak of his concerns regarding the Historic Village City water. He presented documentation from the Minnesota Department of Health from April 2002 regarding his water complaint related to an unknown substance found in the water filter unit, and their August 2002 Laboratory report in response to his concerns. He mentioned questionable illnesses or deaths at his rental properties on Richardson and Robinson Streets after hooking up to City water in 2001. The Council questioned the lack of medical details, why each home had not been tested, and who had installed the filters. They suggested Staff have independent water testing done of the homes. Administrator Orduno reported that no other previous information was on City record, just now when Mr. Talbot was requested to hookup his home to City water, as required by City ordinance. The Council suggested testing the City well, also, for a comparison, and Staff relayed the main well is tested more than once a year. It was recommended that a sample of the filter substance be tested, as well.

COUNCIL BUSINESS

ITEM L-1 – RESOLUTION #30-2007 – PROPOSAL ON COMPETITIVE NEGOTIATED SALE OF $24,340,000 G.O. IMPROVEMENT BONDS, SERIES 2007A, PROVIDING FOR ISSUANCE, PLEDGING SPECIAL ASSESSMENTS FOR SECURITY, & LEVYING A TAX FOR THE PAYMENT S.R.#60-2007

Administrator Orduno reported that the resolution to provide for the issuance of the General Obligation Bonds, pledging Special Assessments for security and levying a tax for the payment, is one of the final steps in the process to bring water and sewer services to NE Dayton. She reviewed that the Council awarded the sale of the first series of bonds (2006A, July 11, 2006) which funded design and engineering work, approved the plans and specs for the NE Dayton project, authorized and accepted the project bids, conducted the Assessment Hearing and approved the final assessment role. At the last Council Meeting, the award of the project contracts was done.

The sale of the bonds took place earlier in the day, so the Council was provided with those results, and the amended resolution. The Council reviewed the financial details of the bond sale at prior Council Meetings, but the City’s Financial Advisor, Bruce Kimmel, was present to discuss details.

Mr. Kimmel came forward to review the results, and a new Resolution #30-2007, Resolution #32-2007, and the Bid Summary, was passed out to the Council. He mentioned the great bond rates that were received and reported on the results, with CitiGroup Global Markets, Inc. the winning bid for a price of $24,112,324.39 and at an interest rate of 4.3446%, which was better than projected. This would allow the debt service for this bond to be just under $42,000,000 over 25 years -- $920,000 less in interest. With the rate similar to the 2006A bonds, the blended rate is between 4.3 and 4.35, so he recommended the assessment rate on both the SW Dayton/Wicht Industrial Park and NE Dayton be 5.85%, well below the 6 or 7% estimated.

Lastly, Mr. Kimmel reported that, as part of the bond issue process, Moody’s Investment Services gave Dayton a favorable City Bond Rating – A2.

MOTION: Motion made by McNeil, seconded by Forseth, to waive the reading and adopt Resolution #30-2007, as presented, accepting the Proposal on the Competitive Negotiated Sale of

$24,340,000 General Obligation Improvement Bonds, Series 2007A, Providing for their Issuance, Pledging Special Assessments for the Security Thereof and Levying a Tax for the Payment Thereof.

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

MOTION DECLARED PASSED.

ITEM L-3-- RESOLUTION #32-2007 – AMENDING THE RESOLUTION ACCEPTING PROPOSAL ON THE COMPETITIVE NEGOTIATED SALE OF $9,495,000 G.O. IMPROVEMENT BONDS, SERIES 2006A

MOTION: Motion made by McNeil, seconded by Forseth, to waive the reading and adopt Resolution #32-2007, as presented, amending of Resolution Accepting Proposal on the Competitive Negotiated Sale of $9,495,000 General Obligation Improvement Bonds, Series 2006A.

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

MOTION DECLARED PASSED.

ITEM L-2-- RESOLUTION #31-2007 – APPROVING $750,390 OF THE PROCEEDS OF THE 2006A G.O. IMPROVEMENT BONDS FOR ADMINISTRATIVE COSTS & AUTHORIZING THE TRANSFER OF $750,390 FROM THE 2006A IMPROVEMENT BONDS TO THE GENERAL FUND S.R.#64-2007

Administrator Orduno reviewed that during discussions between Staff/Council, City Engineer and the City’s Financial Consultant, 3% of the project costs for both the NE Dayton Improvement Project and the Wicht Industrial Project were to be used to cover past, present and anticipated administrative costs associated with providing the expanded water and sewer utilities. Over the last several years, the City has incurred costs related to that project that were funded by the General Fund to be repaid when the bonds were sold. Now that both bond issues have been finalized and project costs determined, the Council needs to formalize the transfer of funds with a resolution, per the auditor’s recommendation.

At a subsequent Council Meeting, Administrator Orduno explained, Staff will request that a portion of the $750,390 be transferred into the Water and Sewer Funds, as well as department budgets for 2007, and held for inclusion in the 2008 Budget to fund related administrative costs, including the Water/Sewer Rate Study and updated software and hardware for billing.

MOTION: Motion made by Forseth, seconded by McNeil, to waive the reading and adopt Resolution #31-2007, as presented, approving $750,390 of the Proceeds of the 2006A General Obligation Improvement Bonds for Administrative Costs & Authorizing the Transfer of $750,390 from the 2006A Improvement Bonds to the General Fund.

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

MOTION DECLARED PASSED.

MOTION: Motion made by McNeil, seconded by Forseth, to approve the 1 ½% amount over the interest rate -- 5.85% -- for the interest percentage that would be charged to those people who will have the assessments certified to their taxes.

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

MOTION DECLARED PASSED.

The Council and Staff explained that the 1 ½% spread is an average rate used by cities to allow for defaults and early payoffs, legalities of the City with regards to investments, and administrative costs, including the County. It was confirmed if their ever were a surplus, it would remain in the Sewer/Water Fund.

ITEM M – FULL-TIME FINANCE DIRECTOR POSITION TO BE SHARED WITH HASSAN TOWNSHIP S.R.#61-2007

Administrator Orduno reported that the 2007 Budget provides for the position of a part-time Finance Director. The City advertised for the position in March/April, but prior interviews, all three applicants withdrew for various reasons. She now has been contacted by a Hassan Township representative, informing they also desire a part-time Finance Director, and they discussed how both communities could benefit from a shared position. The proposal is for an exempt full-time position with Dayton receiving 24 hours per week of position time and Hassan receiving 16 hours, with Dayton being the employer and Hassan contracting, possibly year by year.

It was recommended the interview process include both City Administrators and a finance director from a neighboring community, with both the Council and Board having final selection authority. Administrator Orduno relayed that the process could not proceed without unanimous agreement by both parties. Staff recommended recruiting begin promptly, assuming a starting salary of $65,000 for 2007, with benefits and requirements totaling $74,522.00 -- shared 60%/40%, well within each communities budgets.

The Council wondered when a full-time position would be needed, and Staff relayed that they new Auditor had commented there was enough work for full-time now. They suggested a 2 year contract be considered, but recommended the agreement not require the need for unanimous agreement, but a majority.

MOTION: Motion made by McNeil, seconded by Forseth, to approve the hiring process for a full-time Finance Director, to be shared between the City of Dayton and Hassan Township, and authorize the City Administrator to proceed with an Agreement, as amended, with Hassan Township for a shared Finance Director.

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

MOTION DECLARED PASSED.

ITEM N – AGREEMENT WITH HENNEPIN COUNTY FOR ASSESSMENT SERVICES FOR 2008-2010 S.R.#62-2007

Administrator Orduno reviewed that Dayton has contracted with the City of Champlin for assessment services for the past several years, until the death of their assessor. They will not be continuing their assessing department, but will contract with Hennepin County. As part of the agreement for this year, Hennepin County Assessing Staff have processed the 2007/pay 2008 property valuations and participated in Dayton’s Board of Review. The County re-submitted their proposal to contract with Dayton for a three-year period beginning in 2008, as was requested by the Council.

MOTION: Motion made by Forseth, seconded by K. Anderson, to approve the Agreement with Hennepin County for Assessment Services for 2008-2010, as presented, and authorizing the Mayor and City Administrator to execute the Agreement.

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

MOTION DECLARED PASSED.

Administrator Orduno and Planner Stwora left the meeting at this time to attend a conference.

ITEM O – ORDINANCE #2007-06 – IMPLEMENTATION OF ADMINISTRATIVE TAGS IN THE CITY CODE S.R.#63-2007

Chief Pietrzak reviewed that the Dayton Police Department desires to use administrative tags for minor traffic violations committed in the City. The Council previously discussed their recommendation and agreed to move forward with drafting an ordinance. The City Attorney has developed the ordinance presented, and Staff recommends the Council approve the ordinance, which also creates a penalty schedule for offenses. Pietrzak added two items to page 1 – Equipment Violation, State Statute 169.47, covering mufflers and lights, with a fine of $100; and Stop Signs & Semaphores, State Statute 169.30, with a fine of $100.

The Council received clarification on the initial penalty/cost for violation of the ordinance. It was suggested that the new Public Peace and Safety Ordinance could have items included in it that should be added to the list, which could be brought back before the Council at a later date.

MOTION: Motion made by Forseth, seconded by Hoke, to waive the reading and adopt Ordinance #2007-06, approving the implementation of administrative tags in the City Code, as amended, along with the ability to amend the Schedule of Administrative Offenses/Fines by resolution.

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

MOTION DECLARED PASSED.

ORDINANCE #2007-07 – IMPLEMENTATION OF ADMINISTRATIVE TAGS IN THE CITY CODE SUMMARY

MOTION: Motion made by Hoke, seconded by McNeil, to waive the reading and adopt Ordinance #2007-07 Summary, approving the publication of an appropriate Summary of the Administrative Tags Ordinance.

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

MOTION DECLARED PASSED.

ITEM P – CHANGE ORDER 1 – N.E. DAYTON CONTRACT 2, AREAS 3,4, & 6 UTILITY/STREET IMPROVEMENTS S.R.#65-2007

Engineer Hanson reviewed that on April 24^th the Council awarded the five contracts for NE Dayton Areas 1-6. Contract 2 was awarded to S. R. Weidema in the amount of $5,790,597.52. On January 9^th, the Council held a Work Session to define the project cost for the NE Dayton Areas 1-6 Projects and decided to reduce the pavement width of South Diamond Lake Road and elected to add the construction of the Noon Drive cul-de-sac.

In September, the Dayton was awarded a grant in the amount of $79,271 to fund a portion of the South Diamond Lake Road trail through the Safe Routes to School Program. The portion of the trail that will not be funded by the grant is included in this Change Order 1.

MOTION: Motion made by Forseth, seconded by McNeil, to approve the Change Order 1, as presented, for N.E. Dayton Contract 2, Areas 3, 4, & 6, in the amount of $18,167.28.

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

MOTION DECLARED PASSED.

ITEM Q – WEST FRENCH LAKE UTILITY IMPROVEMENTS CONCEPT REPORT S.R.#66-2007

Engineer Hanson reviewed that the Council, at their June 27^th meeting, authorized preparation of a Concept Report to serve the properties from 124th Avenue to ABC Auto Auction on Territorial Road. The areas included are identified as Phase 1B, Phase 3A and 3B for Southwest Dayton. The utilities would be extended from those constructed as part of the Wicht Industrial Park/SW Dayton Phase 1A.

Engineer Hanson passed out the Concept Report summary handout, which included the Project Limits of the four areas; Sanitary Sewer, Lift Station and Force Main; Water Main Improvements; Troy Lane Typical Sections; Project Costs; Assessment Rate (similar to Wicht Industrial Park) including Sanitary Sewer/Water/Street-Troy Lane; and Assessment Limits for Part 1, 2, 3, and 4; Revenue; and Schedule. There was discussion on the choice for Troy Lane’s Urban Street Design and that the property owners along that road should have more opportunity to comment and chose. The total Project Costs was estimated at $6,159,000 and the Parts Summary broke it down into the four Parts.

With regards to Water, Engineer Hanson explained the Connection Charge at Connection with Maple Grove and Dayton Future Storage, which would not be part of the Project Cost, but would occur when it has to occur. The Council got clarification on the REU – Residential Equivalent Unit charge. Hanson explained the shortfall/total deficit of $467,403 and reviewed the Schedule, noting the 27 different parcels involved. May/June the Neighborhood Meeting with representatives from West French Lake Addition, who is financing the Report, is planned; Present Feasibility Report – June/July and Public Hearing July/August.

MOTION: Motion made by Forseth, seconded by McNeil, to have Staff schedule a Neighborhood Meeting with the affected property owners in late May or June, to review the Concept Report.

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

MOTION DECLARED PASSED.

REPORT OF OFFICERS

CITY CLERK

Clerk Borders reported on the Dayton Cleanup Day and Tree/Plant Sale, noting revenues were down, but probably expenses, as well.

CITY ENGINEER

Engineer Hanson reported on the Pre-Construction Meeting dates for the NE Dayton Projects that would take place within the next week or two, and informed that a public notice would be sent out on the schedules.

N.E. UTILITY EASEMENT UPDATE

Lastly, Engineer Hanson reported that of the sixteen permanent easements, fourteen property owners have been met with, some of which will be challenging. Of the twenty-two temporary easements, he relayed that about half have been secured.

ADJOURNMENT

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

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

MOTION DECLARED PASSED.