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5.11. SR 12-17-2001TO: FROPI: DATE: SUBJECT: MEMORANDUM Playor and City Council Pat Klaers, City Administrator December 17, 200 I Consider Designation of Holt and Jackson Funds Item S. I I. On March 12, 2001, the City Council allocated into various funds the majority of the proceeds from the Holt/Jackson land transaction. Following the spring 2001 decisions, the Council also authorized the installation of a sidewalk along the Holt/Jackson commercial project and funded this improvement from the land transaction proceeds. At this time, approximately $60,000 of the land transaction proceeds remain undesignated. At the March 12, 2001, City Council meeting, staff was requested to provide options as to where the balance of the funds should be allocated. Some Councilmembers at that meeting expressed interest in having the balance remain undesignated and/or not spending the money in the near future. It is suggested that the Council place the $60,000 balance into a reserve for special unbudgeted projects, which develop from time to time. In a sense, this would be like a "contingency" reserve fund for the Council. For example, it would be appropriate to use this fund if the city hired a planning consulting firm to assist in updating the comprehensive plan and we had no funds in the 2002 budget for this activity. In the past, the Council has authorized a YMCA study and participation in a communications/customer service study without these activities being in the annual budget. Usually the annual budget contingency fund can be used for these expenses, but this may not always be the case. In many respects the more flexibility that the Council can have in addressing unforeseen expenditures the better off we are as a municipality. Sometimes we are doing budget work 18-20 months before an expenditure takes place and forecasting activities this far in the future can be difficult. If the Council would prefer to have these Holt/Jackson funds put toward a specific use, it is suggested that the Council look at the fact that ultimately the ice arena floor in the old barn will need replacing. When this will happen is unknown, but the expenditure is going to be high and may even approach $500,000. Starting a reserve for this inevitable expenditure would also be appropriate. Other possible uses of these funds include helping with: 1. The development of the two baseball fields at YAC ($110,000'). 2. The paving of the YAC parking lot ($150,000') 3. The FF&E fund for the city hall expansion project. * Amount~ are approximate. Recommenda tion It is recommended that the City Council allocate the approximately $60,000 balance from the Holt/Jackson land transaction into a council contingency reserve fund. City Council Minutes March 12, 2001 Page 2 3.6. REQUEST THAT THE SEASONAL BUILDING INSPECTOR POSITION BE MADE A FULL TIME POSITION - APPROVED RESOLUTION 01-12 ENTERING INTO AGREEMENT NO. 81236 WITH MNDOT FOR AC:QUlSlTION OF LANDSC:APE MATERIALS - APPROVED COUNCILMEMBER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 5-0. Review Use of Funds From Holt/Jackson Land Transaction City Administrator Pat Kiaers stated that the city-owned Holt and Jackson property has been sold for $348,085. Mr. Klaers suggested that $48,085 be put into the capital reserve fund, $150,000 into a TIF matching fund for business park activities, and that $82,546 be used for the ice resurfacer purchase. Mr. Klaers requested Council direction on the remaining balance of $67,454. Mayor Klinzing inquired how the $150,000 in the TIF matching fund would be used. Mr. Klaers stated that the money could be used for past or future Tlr projects where the city has an LGA penalty or a match requirement and that Council action would be necessary before any funds are spent or transferred. Councilmember Kuester suggested that the remaining $67,454 balance should remain undesignated at this time. COUNClLMEMBER DIETZ MOVED THAT $48,085 BE PUT INTO THE CAPITAL PROJECTS RESERVE FUND, $150,000 BE PUT INTO A TIF MATCHING FUND, $82,546 FOR THE ICE RESURFACER PURCHASE, AND THAT STAFF BRING OPTIONS TO COUNCIL AS TO WHERE THE $67,454 REMAINING BALANCE COULD BE ALLOCATED. COUNCILMEMBER TVEITE SECONDED THE MOTION. THE MOTION CARRIED 5-0. Councilmember Motin commented that he may not want to see the remaining $67,454 balance spent right away. 5. ,Open Mike Doug Franz, 19406 Dodge Street - Questioned if Item 6.3. was a public hearing. Mayor Klinzing stated that the public hearing was closed but Council would listen to comments. Michael Mass, 19374 Baldwin Street - Stated he had an issue with the names of the streets ali being similar in the proposed Hillside Development. He also stated that the proposed width of Dodge Street was too narrow to be safe. 6.1. Request for Preliminary Plat Approval (Twin Lakes Townhomes 2nd Addition, Public Hearinq - Case No. P 01-04 Request for Conditional Use Permit for Site Plan - Twin Lake Townhomes 2-d Addition, Public Hearinq - Case No. CU 01-04 Staff report submitted by Director of Planning Michele McPherson. Senior Planner Scott Harlicker stated that the developer, Phoenix Enterprises, is requesting preliminary plat approval of Twin Lakes Townhomes 2nd Addition and that they would like to amend the site plan for this addition. Mr. Harlicker stated that the developer has acquired additional land and is requesting to put in an easterly access on Twin Lakes Road, which would be in compliance with County MEMORANDUM Item # 4. I. TO: Mayor and City Council FROM: Pat Klaers, City Administrator DATE: March 12, 2001 SUBJECT: Review Use of Funds from Holt/Jackson Land Transaction The city owned Holt and Jackson property has been sold for a commercial development project. After closing costs the city received $348,085. It was a very long and difficult process to assemble this property with clear dale. Part of the side was Right-of-Way and part of the property was owned by the Elk River Associated Investors, Inc. In exchange for this Association deeding the property to the city, I indicated in a November 30, 1995, letter to them that (if the site sells) I would recommend to the Council that 50% of the revenues be dedicated toward Business Park or Industrial Park development. Assembling, platting, and getting clear dde to this property took years and the efforts of the city was contested by various groups throughout the process. Ultimately, the city did get clear fide (Order and Decree of Registration) in order to sell the property. Prior to selling the site, the City also had to provide sewer and water and this involved additional expenses as the utilities from the residential development around the cemetery did not get to the site and the water line from the northern part of Elk Park Center had not been looped through this area. In total, the city has somewhere in the neighborhood of $45-50,000 invested in assembling this property and providing it with full utilities. Furthermore, on June 14, 1999, the City Council purchased an Ice Resurfacer for the arena. The cost was $82,546 and the motion stated that money from the Holt and Jackson Avenue site be used to reimburse the reserve fund which originally financed this purchase. A summary of the figures looks something like the following: Revenues 348,085 - 48,085 300,000 -150,000 150,00O - 82,546 Balance $67,454 (goes back into the capital projects reserve fund) (for business park activity) (for ice resurfacer purchase) It is recommended that the money that goes toward business park activities actually go into a TIF matching fund. As the City Council knows, there is a penalty placed upon municipalities with each new TIF district and this results in either an LGA loss or a local match requirement. It is suggested that this $150,000 be dedicated toward this use. Staff needs Council input on what to do with the $67,454 balance that is unallocated. These funds could be used for any purpose including paying for part of the Library site expansion, funding new bleachers at the Ice Arena, financing some of the improvements at YAC, adding some beautification improvements to the downtown project such as tree gates, trash receptacles, planters, etc. or it could go into equipment reserve or any other reserve, such as one for a community center or YMCA project. There is no hurry for the Council to make this decision - and I need to know if you want more information on various opdons. Action Requested The City Council is ,requested to use the proceeds from the Holt and Jackson transaction as follows: · $48,085 into the CapitalProjects reserve · $150,000 into a Business Park TIF match reserve · $82,546 into the NSP reserve It is recommended that the City Council consider where to allocate the $67,454 remaining balance.