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09-14-1998 CC MINMEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, SEPTEMBER 14, 1998 Members Present: Members Absent: Staff Present: Also Present: Mayor Dujtsman, Councilmembers Dietz, Farber, Holmgren and Thompson None Pat Klaers, City Administrator; Lori Johnson, Assistant City Administrator/Finance Director; Terry Maurer, City Engineer; Phil Hals, Street/Park Superintendent; Debbie Huebner, Recording Secretary Ron Westrum, Park & Recreation Commissioner; John Kuester, Park & Recreation Commissioner Call Meefin.q To Order Pursuant to due call and notice thereof, the meeting of the Elk River was called to order at 6:30 p.m. by Mayor Duitsman. Consider 9/14/98 A.ctenda COUNClLMEMBER HOLMGREN MOVED TO APPROVE THE AGENDA. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. Consider Consent Aqenda COUNClLMEMBER HOLMGREN MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1, 3.2. 3.3. 3.4. 3.5. 3.6. 8/31/98 CITY REQUEST FOR REQUEST FOR - APPROVED REQUEST FOR APPROVED COUNCIL MINUTES - APPROVED TOBACCO LICENSE FOR AMOCO STATION - APPROVED 3.2 PERCENT ON-SALE BEER LICENSE FOR CHINA HOUSE BUFFET ON-SALE WINE LICENSE FOR CHINA HOUSE BUFFET - REQUEST FOR EXEMPTION FROM LAWFUL GAMBLING LICENSE - CHURCH OF ST. ANDREW - APPROVED REQUEST FOR BUILDING AND ZONING DEPARTMENT TO PURCHASE FILING SYSTEM - APPROVED COUNClLMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. Open Mike No one appeared for Open Mike. City Council Minutes .September 14, 1998 Page 2 5.1. Consider Resolution Callinq Park and Recreation/Pool Ballot Question City Administrator Pat Klaers distributed and reviewed the question prepared by James O'Meara for the November 3, 1998 election ballot. The question will include an outdoor family aquatic center and park and recreation improvements in the amount of $3.95 million. Pat distributed a financial analysis prepared by Springsted and explained that the cost will be approximately $52 per year for 20 years to the average home owner which is based on property market value of $110,000. Mayor Duitsman opened the meeting for questions or comments from the audience. Paul Motin asked if bonding costs are generally included in a question. Assistant City Administrator Lori Johnson indicated that the city is allowed to add two percent for the bond discount over the amounted in the referendum question; other issuance costs must be included in the requested amount. Councilmember Thompson questioned if any sites other than Orono Park have been seriously considered for the pool. He felt a more centralized location would better serve the residents. Pat Klaers indicated that the only other city-owned site that would be large enough is Lions Park, and given the condition of the soils (peat), would likely not be suitable. Pat stated that staff will research the possibility of Lions Park being a location for a pool. COUNCILMEMBER FARBER MOVED TO APPROVE RESOLUTION NO. 98-97, A RESOLUTION CALLING FOR AN ELECTION ON THE ISSUANCE OF $3,950,000 OF GENERAL OBLIGATION BONDS OF THE CITY FOR PUBLIC PARK AND RECREATIONAL FACILITIES. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED $-0. 5.2. Interview Stoffel Reitsma for Park & Recreation Commission The City Council interviewed Stoffel Reitsma for the Park & Recreation Commission vacancy. 5.3. Consider Appointment for Park and Recreation Commission COUNClLMEMBER HOLMGREN MOVED APPPOINTMENT OF STOFFEL REITSMA TO THE PARK AND RECREATION COMMISSION, TO FILL THE VACANCY CREATED BY THE RESIGNATION OF KENT MADSEN, WITH THE TERM EXPIRING ON DECEMBER 31, 1999. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 3-2. Councilmembers Dietz and Thompson opposed. 5.4. Consider Purchase of Buildinq Inspector Truck City Administrator Pat Klaers indicated Steve Rohlf, Building and Zoning Administrator, has requested approval to purchase a new pick-up truck for the Building and Zoning Department. He noted that the 1998 budget included $15,000 in vehicle equipment reserves to purchase a truck. City Council Minutes September 14, 1998 Page 3 The Council discussed whether or not the additional expense for a four wheel drive pick-up was necessary, since the building department already has two trucks that are four wheel drive. COUNCILMEMBER HOLMGREN MOVED TO AUTHORIZE THE PURCHASE OF A NEW PICKUP FROM THE LOW BIDDER, ELK RIVER FORD, MINUS THE OPTION OF FOUR WHEEL DRIVE. COUNCILMEMBER FARBER SECONDED THE MOTION. Discussion followed regarding how many four wheel drive vehicles are needed for the Building and Zoning Depadment. It was the consensus of the Council that further information was needed before making a decision on this issue. COUNCILMEMBER HOLMGREN WITHDREW HIS MOTION. COUNCILMEMBER FARBER SECONDED. COUNCILMEMBER HOLMGREN MOVED TO TABLE THIS ISSUE TO THE SEPTEMBER 21, 1998, CITY COUNCIL MEETING FOR FURTHER INFORMATION. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.5. Lake Orono Sediment Removal Project Update City Engineer Terry Maurer updated the City Council on the Lake Orono sediment removal project. He indicated approximately 10-15% of the material has been removed from the lake bed. Due to the unstable condition of the eastern third of the western lobe, trucks are unable to drive on this material for loading. Terry explained that the best way to remove material is to use backhoes and stockpile the material in windrows. After it has had some time to drain, the bulldozers can operate on the windrows and push the material to the west where it can be loaded into waiting trucks. Terry indicated that it is estimated it may cost up to an additional ,$100,000 for the backhoe and bulldozer time. Terry felt that even with these additional costs, the project wil still be well within the original budget and Veit & Company, Inc. will still be under the second place bid. 5.6. Respond to Request for Council Participation in Homecominq Parade Mayor Duitsman and Councilmembers Thompson, Dietz and Farber indicated they will ride on the antique fire truck in the homecoming parade. Councilmember Holmgren indicated he will attend the parade but will not be riding on the fire truck. COUNCILMEMBER THOMPSON MOVED TO CALL A SPECIAL CITY COUNCIL MEETING ON FRIDAY, SEPTEMBER 25, 1998, IN ORDER FOR COUNCIL TO PARTICIPATE IN THE 1998 FALL HOMECOMING PARADE. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. 6. 1999 Bud,qet Lori Johnson explained that on September 11th the state notified the city of the 1999 Local Government Aid (LGA) loss due to Tax Increment Financing Districts. Because the state was very late in notifying the city, the state has granted an extension for certification of the levy until September 30, 1998. She also explained that penalties for the Tescom expansion tax increment financing project have City Council Minutes September 14, 1998 Page 4 doubled (an approximately $20,000 additional expense). The LGA losses may be recaptured through the tax levy and adjusted levy limit which increased to cover the losses. Members of the Council indicated their reluctance to add the $20,000 to the levy and felt it would be more appropriate that the penalties be paid using EDA or development funds. COUNCILMEMBER FARBER MOVED APPROVAL OF RESOLUTION NO. 98-100, A RESOLUTION APPROVING THE 1999 TAX LEVY FOR ECONOMIC DEVELOPMENT PURPOSES FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER FARBER MOVED TO APPROVE AMENDING THE DEBT LEVY AS PRESENTED. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED APPROVAL OF RESOLUTION NO. 98-101, A RESOLUTION APPROVING THE HOUSING AND REDEVELOPMENT AUTHORITY 1999 TAX LEVY. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5- O. COUNCILMEMBER FARBER MOVED APPROVAL OF RESOLUTION NO. 98-102, A RESOLUTION AUTHORIZING THE 1998 PROPOSED PROPERTY TAX LEVY FOR COLLECTION IN 1999. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED TO CALL THE CITY TRUTH IN TAXATION PUBLIC HEARING ON THE TAX LEVY AND BUDGET FOR DECEMBER 7, 1998, AT 6:00 P.M., WITH A CONTINUATION OF DECEMBER 14, 1998, AT 6:30 P.M. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 7. Review East Elk River Improvement Project The City Administrator reviewed the overall status of the East Elk River project and the purpose of the September 28th public: hearing. Councilmember Dietz asked City Administrator Pat Klaers to explain what his concerns are regarding too much business park land being on the market at one time in the eastern area. Pat indicated that the 30-35 acre Vandenberg property is proposed for business park development. If the city were to purchase the Brown property for business park development, even though the property would likely be purchased over time, the city could find itself in competition with its contracts with business property holders in the West Highway 10 area. He noted that Paul Steinman, Director of Economic Development, shares this concern. A discussion followed regarding a large or small project. Terry Maurer indicated that it would not make sense to build the southern portion of the road if the water and sewer were not also extended, since the utilities would run under the federally funded roadway. Terry explained why it would not be feasible to build one side of the road and then build the other side later when sewer and water is extended to the south. Councilmember Holmgren stated he felt more time is needed for public input and that he is not sure even the small the project can be done in 1999. City Council Minutes September 14, 1998 Page 5 Pat Klaers indicated that petitions have been received from developers of the large residential project and the commercial/industrial park project. He further explained that based on the two appraisals, staff is comfortable with the $6,000 per acre assessment proposal. Discussion followed regarding thee need for the TIF funds as part of the project and the overall commercial redevelopment TIF proposal. Mayor Duitsman indicated he would like to see a maximum of a 10 year district, but he is aware that funds are needed to finance the lift station and to extend the sewer and water under Highway 169. Councilmember Dietz asked for clarification on the deficits for the project. Pat Klaers indicated that better information is available now and the financial numbers have improved but a shortage in all the components of the project still exists. He noted the following issues have yet to be determined: - how much TIF assistance can be applied to this project, while keeping the life of the TIF district as short as possible; - how to best use the state and federal funding sources, how to provide the city 20 percent match, and how to keep the involvement of the city's MSA funds to a minimum; and, - how to fund for right of way acquisition north of County Road No. 12 Terry Maurer indicated that $3 million in federal funding has been committed to the project. Pat indicated that this will provide some benefit to the surface water management deficit. Discussion followed regarding the public hearing to be held on September 28th. Councilmember Holmgren requested that the September 28th public hearing be taped for broadcasting on cable television. Terry Maurer explained that the sewer and water project and the street/storm sewer project are separate and will be bid at different times. He felt that once the sewer and water project is bid, they will have a better understanding of the road project. Mayor Duitsman indicated he would like to have the bids back before the assessment hearing in order to be more certain that the $6,000 per acre proposed assessment amount was accurate. Pat Klaers indicated that it would be desirable for the Council to come to a decision on whether to build the large project or the small project at the September 28th meeting, so that better information can go out with the bids. MAYOR DUITSMAN MOVED TO INCLUDE THE AREA BETWEEN THE MISSISSIPPI RIVER AND HIGHWAY 10 IN THE EAST ELK RIVER IMPROVEMENT PROJECT. COUNCILMEMBER THOMPSON SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER FARBER MOVED APPROVAL OF RESOLUTION NO. 98-98, A RESOLUTION RECEIVING THE FEASIBILITY REPORT AND ORDERING A PUBLIC HEARING ON THE IMPROVEMENT IN THE MATI'ER OF THE EAST ELK RIVER PHASE I IMPROVEMENT City Council Minutes September 14, 1998 Page 6 OF 1998. COUNClLMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED ,5-0. MAYOR DUITSMAN MOVED APPROVAL OF RESOLUTION NO. 98-99, A RESOLUTION ORDERING THE PREPARATION OF PLANS AND SPECIFICATIONS IN THE MA'FrER OF THE EAST ELK RIER IMPROVEMENT OF 1998. COUNClLMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. Pat Klaers noted that the Council may consider taking action on any or all of the following at the September 28, 1998, public hearing: ordering the improvement, ordering preparation of the assessment roll, approving the plans and specifications, and ordering the advertisement for bids. Terry Maurer indicated an additional action the Council would need to take is authorization to negotiate utility easements. Discussion followed regarding the use of federal funds for road right of way acquisition costs, rather than MSA funds for the area south of County Road 12. Terry Maurer indicated the federal funding process and approval by MN/DOT will likely be completed in January 1999. At that time the city may enter into an agreement which will allow the city to purchase right of way and be reimbursed with federal dollars. Discussion followed regarding acquisition issues. Pat Klaers indicated he will update the property owners affected by the road right of way. He also noted there are right of way issues that need to be resolved for the commercial/business park project and the possibility the city may need to exercise its power of eminent domain to condemn land. The alternative would be an inflated price for the property which could extend the life of the TIF district. Mayor Duitsman indicated he was not in favor of condemning property, but it may be necessary in order to avoid extension of the TIF district. 9. Staff Updates a. Letter from Rick Foster Pat Klaers indicated a request has been received from Rick Foster to allow a group of people to hunt on his land know as "Pintail Ponds", which is located on the eastern edge of the city limits and is in a "no hunting" area. The Police Chief is reviewing the request and will have a recommendation for the Council at the September 21, 1998, meeting. b. September 21, 1998, City Council Meetinq Pat Klaers indicated he will be on vacation on the 21st and will not attend the City Council meeting. 10. Adjournment There being no further business, MAYOR DUITSMAN ADJOURNED THE MEETING. The meeting of the Elk River City Council was adjourned at 8:45 p.m. City Council Minutes September 14, 1998 Page 7 Respectfully submitted, Debbie Huebner Recording Secretary