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06-24-2002 CC MIN - SPECIALMEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, JUNE 24, 2002 Members Present: Mayor Klinzing, Councilmembers Dietz, Kuester, Motin, and Tveite EDA Members Present: Chair Gongoll, Commissioners Koenig and Dwyer Staff Present: City Administrator Pat K_laers, City Engineer Terry Maurer, Finance Director Lori Johnson, Director of Economic Development Catherine Mehelich, Recreation Director Michele Bergh, and Street and Park Superintendent Phil Hals 1. Call Meeting To Order Pursuant to due call and notice thereof, the meeting of the Elk River City Council was called to order at 7:20 p.m. by Mayor Kdinzing. 2. Consider 6/24/2002 Agenda Mayor Iadinzing added the following item to the agenda: 6.1. Consider Calling a Special Meeting of the City Council COUNClLMEMBER KUESTER MOVED TO APPROVE THE AGENDA AS AMENDED. COUNClLMEMBER MOTIN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 3. Consider Consent Agenda COUNCILMEMBER DIETZ MOVED TO APPROVE THE CONSENT AGENDA AS FOLLOWS: 3.1. 6/17/02 CITY COUNCIL MINUTES 3.2. CHECK REGISTER 3.3. TEMPORAY ON SALE BEER LICENSE FOR ELK RIVER LIONS FOR JULY 11-14 AT THE SHERBURNE COUNTY FAIRGROUNDS 3.4. PRIVATE KENNEL LICENSE FOR DONALD AND KATHRYN MARTIN AT 19947 POLK STREET COUNCILMEMBER KUESTER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 4. Open Mike No one appeared for Open Mike. City Council Nlinutes June 24, 2002 Page 2 5.1. Discussion with EDA on Tax Rebate Policy for Office Space Projects Director of Economic Development Catherine Mehelich stated that the City Council has directed staff to draft guidelines for review of the City's Tax Rebate Financing Policy as it relates to office development. She indicated that a recent proposal for office development has led to the need for clarification on the City's policy relating to public assistance for spectdative office developments. Catherine reviewed the legal requirements of abatement and policy issues related to office development. The Council and EDA discussed the requirement relating to job creation. Catherine noted that the proposed policy considers job creation as new jobs that have been created and not existing jobs within the city that are being relocated. Councilmember Dietz questioned the need for TRF as it has only been used once in the City for the last two years. He requested staff to provide information as to how many other cities use TRF. Councilmember Mot_in stated that he would like to see a stipulation in the policy allowing the City to review the project in two years to ensure that the applicant has met the job creadon and occupancy requirements of the TRF application, and if the requirements were not met, the applicant would be required to pay back the assistance received by the City. Discussion was held regarding whether speculative office should be included in the policy and if so, what the requirements should be. Councilmember Tveite indicated that he would be comfortable with the 50% minimum pre-leased occupied definition regarding speculative office space but would like to see minimum building sizes and minimum new job creations included in the policy. It was the consensus of the Council and EDA that there be a 25,000 square foot minimum requirement on office developments requesting TRF. Discussion was held on the location of eligible TRF office development. It was the consensus of the Council and EDA that applications be evaluated on a case-by-case basis. Discussion was held regarding the design requirements in relation to Energy City. Mayor IGinzing indicated that the Energy City Committee would not be able to review all of the applications. She suggested keeping the bonus ranking points for using energy efficiency types of technology. Councilmember Kuester suggested asking the Energy City Committee to put together some guidelines necessary for receiving bonus points so that they would not have to review every application. Mayor F'&inzing indicated that the Council consensus is that speculative office space not be eligible, with the definition of speculative being less than 50 percent of the space in the building be pre-leased. She further stated that she concurs with Councilmember Tveite that the goal is to try to attract new jobs to the City with a requirement that a certain percentage of new jobs within the entire building being new to the City. It was the consensus of the Council and EDA that there be financial review of TRF applications by Ehlers and Associates. It was the consensus of the Council and EDA that the current TRF application from Elk Path LLC should be reviewed based on the City's new policy. City Council Minutes June 24, 2002 Page 3 Councilmember Dietz reiterated that he would like to see how many other cities are using this tool. He stated that he felt the use of TRF was too arbitrary and that he does not see it as a valuable tool. 5.2. Discuss Public Safety Construction Bids 5.3. 5.4. 5.5. City Administrator Pat K_laers updated the Council on the bid opening for the public safety and city hall/utility projects. He noted that at this point, the public safety facility is about $620,000 over the funding level available. Pat indicated that the options to close the budget gap include downsizing of the building, redesigning some of the building systems, and identifying additional funds. Discussion was held regarding the possibility of eliminating the upstairs police station shell, which would save about $165,000. The City Administrator informed the Council that the building contingency could be reduced from 6% to 4%. The City Administrator noted that the bids came at or below the projection for the Geothermal system. Councilrnember Kuester introduced 4 representatives of Econair to explain the logistics of the Geothermal system. The Council discussed the $620,000 overage and indicated that the City should stay at the original project amount of $7 mill/on. The Council concurred that this would include the possibility of not building the second level shell. Discuss City Hall/Utilities construction Bids The City Administrator indicated that construction estimate for this project was in the $2.8 mill/on range. He noted that the project is slightly above $3 mill/on and does not include the new roof which w/Il cost about $250,000 - $300,000. The increase is due mainly to adding the basement to the project. The City Administrator indicated that the new roof would have to take place regardless of the remodel/expansion. The City Administrator recommended that the project move forward as designed. He stated that internal loans might be necessary to make the project cash flow but that the project should be paid off by the end of 2004. The Council concurred with the Administrator's recommendation. Consider Resolution Awarding Contract for Orono Parkway Improvements City Engineer Terry Maurer indicated that the City has tabulated the bids for the modifications to the Orono Parkway median adjacent to the City Hall Site. He noted that the bids came in much higher than estimated. He explained that the reason the bids were high was due to the removing of the existing lights including the bases, and reinstalling new bases, conduit and electrical wiring. Terry Maurer suggested that the Council consider removing the lights altogether and not replacing them due to the cost involved. The Council concurred. The City Engineer indicated that he would bring the issue back to the City Council on July 8, 2002. Consider Approval of Mn/DOT Signal Agreement for TH 10/Waco Street Intersection City Engineer Terry Maurer reviewed the Traffic Signal Agreement prepared by the Minnesota Department of Transportation for the signal system installation at the intersection of Trunk Highway 10 and Waco Street. He noted that the signal would be 50 percent funded by the City and 50 percent funded by Mn/DOT. City Council Minutes June 24, 2002 Page 4 COUNCILMEMBER TVEITE MOVED TO ADOPT RESOLUTION 02-51 ENTERING INTO AGREEMENT NO. 83307R WITH MN/DOT FOR THE INSTALLATION OF A TRAFFIC SIGNAL AT HIGHWAY 10 AND WACO. COUNCILMEMBER KUESTER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.6. Consider Resolution Awarding Contract for 2002 Signalization Improvements City Engineer Terry Maurer handed out a new resolution regarding this issue. He noted that the new resolution does include the Highway 10/Waco Street signal. The City Engineer recommended that the Council adopt the resolution awarding the bid to Design Electric, Inc. who was the low bidder. COUNCILMEMBER MOTIN MOVED TO ADOPT RESOLUTION 02-52, ACCEPTING BID AND AUTHORIZING EXECUTION OF CONTRACT IN THE MATTER OF THE 2002 SIGNAL IMPROVEMENTS. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.7. Consider Resolution Awarding Contract for 2002 Sealcoat Improvements City Engineer Terry Maurer recommended awarding the bid to the low bidder, Allied Blacktop Company at $37,614.88. COUNCILMEMBER MOTIN MOVED TO ADOPT RESOLUTION 02-53, ACCEPTING BID AND AUTHORIZING EXECUTION OF CONTRACT IN THE MATTER OF THE SEAL COAT IMPROVEMENT OF 2002. COUNCILMEMBER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.8. Discussion on Ciw Involvement With School Fields The Council discussed the issue of turning over the maintenance and scheduling of school fields back to the school district. Michele Bergh and Phil Hals were present. Following discussion, it was the consensus of the Council that the School and City work together to try to adopt similar policies to make it convenient for those organizations reserving the fields. It was also noted that the fees should be kept as reasonable as possible so as not to discourage weekend tournaments. COUNCILMEMBER TVEITE MOVED TO GIVE NOTICE TO THE SCHOOL DISTRICT OF THE CITY'S INTENTION TO TURN OVER THE MAINTENANCE AND SCHEDULING OF THE SCHOOL FIELDS TO THE SCHOOL DISTRICT. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. 6. Other Business 6.1. Call Special Meeting COUNCILMEMBER DIETZ MOVED TO CALL A SPECIAL MEETING OF THE CITY COUNCIL ON JULY 29, 2002, AT 5:00 PM. AT CITY HALL FOR City Council Minutes June 24, 2002 Page 5 THE PURPOSE OF MEETING JOINTLY WITH THE HRA TO INTERVIEW DEVELOPERS FOR THE DOWNTOWN REVITALIZATION PROJECT. COUNCILMEMBER KUESTER SECONDED THE MOTION. THE MOTION CARRIED 5-0. 7. Staff Updates The Mayor provided an update on the public information meeting held at City Hall regarding the R.C. Rolloff situation. The City Administrator informed the Council that July 1, 2002 is the deadline for the Tim Smith house to be removed. 8. Adjournment There being no further business, Mayor IClinzing adjourned the meeting of the Elk River City Council at 10:08 p.m. Sandra Peine City Clerk