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01-08-1994 CC MIN - SPECIAL e SPECIAL WORKSESSION OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL - CONFERENCE ROOM A SATURDAY, JANUARY 8,1994 Members Present: Mayor Duitsman, Councilmembers Dietz, Farber and Holmgren (8:40 a.m.) Members Absent: Councilmember Scheel Stoff Present: Pat Klaers, City Administrator; Terry Mourer. City Engineer; Darrell Mack. WWTS Superintendent; Steve Ach. City Planner; Lori Johnson, Finance Director Pursuant to due call and notice thereof. the special worksession of the City Council was called to order at 8:05 p.m. by Mayor Duitsman. By consensus of the City Council. the agenda of the City Council worksession was accepted. It was noted that the Assessment Manual would likely not be discussed at this meeting due to time constraints and also that the Mayor would like to discuss the Menard's proposal. 1. 2. Wastewater Treatment Plant Exoansion East Trunk Hiahway 10 Utilities - The City Engineer distributed his 12/15/93 memo that outlined the survey results of the East Highway 10 property owners regarding their desire for municipal utilities. With the assistance of a colored map that visually showed the results of this utilities survey, the City Engineer reviewed the responses that were received. The City Engineer noted that the results were mixed. On the mop. the City Engineer showed three different potential service districts for the extension of municipal sewer and water. It was noted that if sewer and water is only extended through the Highway 169/101!l 0 intersection. then the $3,800 per acre trunk fees would fall approximately $1.000.000 short of financing the project. Additionally. if trunk sewer and water was extended approximately to 171 st Avenue. then the $3.800 trunk fee would fall approximately $500.000 short of financing this project. Finally. it was noted that if trunk sewer and water is extended to 165th Avenue. then the $3.800 per acre trunk fee would be sufficient to cover the trunk expenses. It was stated that the $3.800 per acre assessment amount should really be revised and redesignated as a trunk water and sewer and sewer plant impact fee. The City will need to evaluate this terminology change when it reviews the Assessment Manual. e The City Engineer distributed a waste water flow projection for the City of Elk River. It was noted that if total development of the parcels of property currently platted took place before 1998. the wastewater treatment plant would be at capacity. It was noted that this total development is unlikely. but also that utilities may be extended into other areas which would affect the plant capacity. The City will have to closely monitor its capacity at the plant. but it appears that sufficient capacity exists until 1998 unless a significantly larger than anticipated growth spurt takes place in Elk River. Special Worksession ofthe Elk River City Council January 8, 1994 Page 2 e The City Engineer distributed a wastewater treatment plant expansion timetable and cost estimate. It was noted that once MPCA approves the plans and specifications, the project can be completed within twenty months and ready for operation with increased capacity. At this time the earliest plans could be approved and ready for bidding would be in the spring of 1995. On a parrallel timetable is the expansion of utility pipes into the East Highway 10 area. The City Engineer noted that it takes approximately twenty months from the ordering of a public hearing for the project to completion of the installation of the pipes so that properties can hook up to the system. A determining factor in ordering the plant expansion and ordering the public hearing for the installation of utilities in the East Highway 10 corridor will be the available finances for the plant expansion. The Finance Director distributed a three page summary of wastewater treatment plant projected revenues and expenditures in order to help analyze when the City can afford a plant expansion. The Finance Director indicated that the projections for revenues were conservative and would change dramatically if higher than anticipated growth takes place. The projections provide an estimate of the amount available for debt service based on estimated growth factors. The amount available figures on Page 1 exclude depreciation. After the plant is expanded, these funds will need to be accumulated for the 2008 expansion; but prior to the expansion project currently discussed, the depreciation expense can be added to the total available in order to help service a portion of the bonded debt. At this time it appears that the City witl have about $215,000 in 1996 for debt payment and that this will increase to about $270,000 by 1999. e The Finance Director continued reviewing her handout and on Page 2 and Page 3 reviewed the amount available in 1994 for future projects as compared to the cost of the plant expansion. It was noted that if the project is not authorized until late 1996 or early 1997, then the City will have cash to buy down the bond issue to about $4.5 million. This can be financed over thirty years with a bond payment of approximately $345,000. At this time it appears the City will be short of that amount being available on an annual basis to meet the debt obligation. However, if growth exceeds projections and if less money is put away for the 2008 plant expansion, then it may be possible for the City to cash flow this debt around this timetable. It was noted that the timetable indicated by the Finance Director would allow for the plant to be expanded and in operation by 1998 which coincides with the plant capacity figures previously indicated by the City Engineer. Additionally, it is conceivable that this timetable can be moved up if higher than expected growth takes place. This will be closely monitored by the City staff. e Mayor Duitsman stated his desire to plan for the plant expansion and the extension of utilities to East Highway 10 for 1996 so that hook-ups can begin in 1997. The Finance Director indicated that the figures displayed in the handout are slightly conservative and that the Mayor's goal may be obtainable, but this will not be known until some time in 1995. The Finance Director indicated that a rate increase should be considered by the City Council if the plant is to be expanded in 1996 due to the need for funding the plant expansion and based on the ongoing operating expenses of the utility. Special Worksession of the Elk River City Council January 8, 1994 Page 3 e The City Planner discussed the updating of the Comprehensive Plan and the importance of knowing if the plant is going to be expanded so that residential and non-residential urban growth patterns can be forecasted and incorporated into the plan. Mayor Duitsman and Councilmember Farber both indicated their desire for urban growth in the east along with the need for a large vacant tract of property in case the School District decides to construct a new senior high in Elk River. It is estimated that an 80 acre parcel of property will be needed for a senior high school project. It takes the School District about three years to have a senior high facility constructed after a public referendum is approved. This timetable also coincides with expansion of the utilities to the east by 1998. The City Council directed the City Engineer to continue to work with MPCA on the approval of the wastewater treatment plans so that once finances become available the project can be bid and construction can take place. The City Engineer was instructed to prepare a report/memo on the scope of services that would be needed from his firm in order to update the East Highway 10 Feasibility Study for the expansion of municipal utilities into this area. The Finance Director was directed by the Council to prepare a resolution for their consideration on a sewer rate increase. 3. Storm Drainaae e The City Engineer reviewed a map with the City Council that showed the storm drainage work that was needed in Deerfield III to eliminate drainage problems around the Mike Poppen residential area. In order for this project to move forward, the City Engineer indicated that a drainage easement agreement had to be entered into between the City and Mr. and Mrs. Hartman, as the pipe is proposed to run along their property line. The City Engineer handed out a drainage easement agreement outline and reviewed the components of the agreement with the City Council. It was noted that bids have been received on this project to relieve drainage problems in this vicinity and that the total project is in the $125-$150,000 range. The Finance Director distributed a handout on the status of the storm sewer fund. It was noted that this fund has yet to establish a revenue stream. The revenues being discussed include a utility fee on most, if not all, properties within the City and a development fee on new projects. The fund is currently about $226,000 in debt due to storm drainage work associated with the Westwood and Fresno Street projects, smaller miscellaneous drainage system repairs, and for work on the Storm Drainage Master Plan. The Finance Director stressed the need for the Council to understand the funding sources of projects and the financial ramifications if the funding sources are not in place before a project is authorized. e The City Engineer reviewed a map with the City Council that outlined the drainage proposal for the Schultz/Deschenes area. It was noted that the ultimate solution for this problem involves a system of pipes, open ditches and ponding areas that ultimately will get storm water to the river through the new 72 inch culvert that is being installed as part of the Highway 101 improvement project. This storm drainage system is on the east side of Highway 169, affects the 5th Special Worksession of the Elk River City Council January 8, 1994 Page 4 e Street drainage area, and utilizes the County ditch system. The total project is estimated at $400,000. The City Engineer and the City Council reviewed the culverts underneath the highway and railroad crossing that is associated with this drainage district. The railroad crossing has a 36 inch culvert and this limits the amount of water and the rate that water can flow toward the highway culvert, and, ultimately, into the river. The Council discussed the County ditch system and the need to work with developers in the County to improve this system. The City Engineer reviewed with the City Council some of the options on the utility fee system. It was indicated that everyone in the urban area should pay some fee for storm drainage regardless of its development status. It was also noted that gravel mines and areas north of County Road 33 contribute very little storm drainage water and that these areas may not be required to pay the utility fee. Councilmember Farber left at this time (9:55 p.m.) e After further discussion, it was the consensus of the City Council that the City Engineer should take the next steps in the process to implement the Deerfield III and Schulz/Deschenes area drainage projects. The next step in the Deerfield III area would be to negotiate the easement with Mr. and Mrs. Hartman and present the bids for this project to the City Council for its consideration after the funding for the project is analyzed. The next step in the Schulz/Deschenes area project is to put together the easements necessary for the project and to have the City and the property owners enter into an agreement for the construction of this project. Regarding the Main and Evans project, the City Engineer reviewed the two different drainage options for this project. Both drainage options add water to the County ditch system. Either drainage option will cost a minimum of $175,000. The Elk Park Center development project will have some effect on the storm water problems in this area and the problems will increase unless an improvement project takes place. This project takes about 120 days to complete. The preferred option at this time is to install a pipe along Main Street toward the County ditch that currently exists near the southwest corner of the Main Street and Highway 169 intersection. The Council agreed to put this project on hold for at least thirty to sixty days. The Council directed staff to evaluate the option of simply having a tax levy approved by the City in order to raise funds for storm drainage projects. Some Councilmembers questioned whether or not this City-wide tax levy would be equitable and fair. The Council directed staff to put this issue on the 1/18/94 City Council agenda in order for the City Council to consider a motion that would request the Municipal Utilities assistance in implementing a storm drainage utility billing system. 4. Transportation Plan e The City Engineer reviewed the 3/93 preliminary transportation plan with the City Council. It was indicated that the City Council had three areas of concern with this preliminary plan and these three areas were labeled as areas C, D and E. The Special Worksession of the Elk River City Council January 8, 1994 Page 5 e City Engineer reviewed the proposed changes in these long range traffic corridors on a large map and the City Council agreed that the changes were acceptable. It was noted that the transportation plan for the City should be a topic for the joint City Council/County Board meeting. One reason for this topic being on this meeting agenda is that in the future, some County roads may be turned over to the City as they perform more of a local function and some new roads in the future may be required to be County roads as they will provide a regional or county function rather than a local function. The City Council discussed how the transportation plan should be adopted or incorporated into the comprehensive plan. It was noted that input from the City Attorney would be obtained on this issue. The Council discussed whether or not 221 st Street east of Highway 169 should be added to the transportation plan, but no consensus was reached on this issue. The Council discussed the transportation plan that becomes part of the gravel mining EIS and long range plans. It was noted that these transportation routes within the gravel mining areas would ultimately become part of the City transportation plan. e Mayor Duitsman requested the City Planner provide the Council with an update on the Menard's land use change application that has been received. Steve Ach indicated on a map the area being requested to be changed to Highway Business. It was noted that this area is currently zoned Light Industrial and is the area that has been targeted by the Business Park Task Force as Phase I of the proposed business park project. Discussion took place regarding the short term land use desires of business versus the long term needs of the community and how a balance and mix of appropriate land uses needs to be achieved for the long term benefit of the community. Everyone agreed that a Menard's would be beneficial to the community, but that a Highway Business zone of 45 acres in the western side of the City is a major deviation from the Comprehensive Plan forthe City. Forty-five acres of highway commercial property can accomodate upwards to 500,000 square feet of commercial buildings. The City Council agreed to adjourn the meeting at approximately 11 :40 p.m. Respectfully submitted, ?~~ City Administrator e