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08-22-1994 CC MIN e MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, AUGUST 22, 1994 Members Present: Vice Mayor Farber, Council members Dietz, Scheel and Holmgren Members Absent: Mayor Duitsman Staff Present: Pat Klaers, City Administrator; Sandra Thackeray, City Clerk; Lori Johnson, Finance Director; Terry Maurer, City Engineer Also Present: Dan Tveite, Planning Commission Chair 1. Call Meetinq To Order Pursuant to due call and notice thereof, the meeting of the Elk River City Council was called to order at 6:00 p.m. by Vice Mayor Farber. 2. Consider Aaenda e COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE AGENDA. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 4-p. 3.1. 3.2. Consider 5/15/94 City Council Meetina Minutes Consider 5/15/94 Executive City Council Meetina Minutes Council member Scheel requested the following amendment to the City Council minutes: "Councilmember Scheel stated that she voted against the motion because she felt a zone change would devalue the Custom Motors property." COUNCILMEMBER SCHEEL MOVED TO APPROVE THE 5/15/94 REGULAR CITY COUNCIL MEETING MINUTES AS CORRECTED AND TO APPROVE THE 5/15/94 EXECUTIVE SESSION CITY COUNCIL MEETING MINUTES. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4-0. 4. Plannina Commission Interviews The City Council interviewed the following candidates for Planning Commission position: Steven Stewart Tim Nelson Judy Thompson e The Council discussed the appointment to the Planning Commission upon completion of the interviews. Council member Holmgren brought up the issue of interviewing a candidate outside of the city limits. He referred to a letter from City Council Minutes August 22, 1994 Page 2 e Duane Kropuenske which was submitted to the Council opposing the issue of appointing a nonresident to the Planning Commission. Councilmember Holmgren disagreed with Mr. Kropuenske's concern of the nonresident being a non taxpayer as the applicant pays taxes to the school district and to the county. Council member Holmgren felt that Tim Nelson was a very good candidate but also felt that Judy Thompson was a very good candidate. He recommended that Tim Nelson be encouraged to reapply for the Planning Commission at another time and that the Council appoint Judy Thompson. Councilmember Scheel indicated that she does not disagree with Duane Kropuenske's letter and that she does not like having anyone outside of the city on any commission. She stated that Tim Nelson will not influence where the money goes any more than a park commissioner. Councilmember Scheel indicated that she felt Steve Stewart was the best candidate for the Planning Commission. . Planning Commissioner Tveite concurred with Council member Holmgren in that Mr. Nelson was an excellent candidate. He stated that because there was a viable candidate in the City of Elk River, he felt that candidate should take preference. Commissioner Tveite recommended appointing Judy Thompson. .e Council member Dietz indicated that he agrees with Commissioner Tveite in that Mr. Nelson was an excellent candidate. He further indicated that he concurred with Councilmember Scheel in that the Planning Commission would not have any more influence with spending city funds than the Park Board as both are advisory commissions. Councilmember Dietz indicated that because there is a viable candidate within the City, he would vote to appoint Judy Thompson. Vice Mayor Farber indicated that he concurred with all of the Councilmembers. He concurred with the recommendation that Judy Thompson be appointed. Vice Mayor Farber further requested that Mr. Nelson be encouraged to apply again. COUNCILMEMBER HOLMGREN MOVED TO APPOINT JUDY THOMPSON TO THE PLANNING COMMISSION TO COMPLETE THE TERM OF CHRIS CARR WHICH WILL EXPIRE ON DECEMBER 31, 1996. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED. 3-1. COUNCILMEMBER SCHEEL OPPOSED 5.1. Consider City reauest to American Leaion for donation of $1,300 for the purchase of flaas COUNCILMEMBER SCHEEL MOVED THAT THE CITY REQUEST $1,300 FROM THE AMERICAN LEGION FOR THE PURCHASE OF AMERICAN FLAGS. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4-0. 5.2. Verbal update on Health Insurance - Lori Johnson e Finance Director Lori Johnson indicated that the police union has decided to split away from the City group for health insurance. Under the Minnesota Care Law, the police union will be will be eligible for lower health insurance rates. Lori City Council Minutes August 22, 1994 Page 3 e Johnson explained that the remainder of the City employees will be eligible for the lower rates under the Minnesota Care law in July, 1995. Vice Mayor Farber questioned what would happen with the health insurance premiums until July. Lori suggested that the City could rebid its health insurance in January or February if certain health conditions are resolved. She indicated that PEIP requires that the City stay with the plan for a minimum of two years and that this might not be in the best interest of the employees as premium rates could increase dramatically. Lori Johnson explained that the City will save approximately $10,000 to $16,000 with the reduction in the premiums from the police union in 1994-95. She suggested that the Council consider subsidizing the family rates for the City employees with the savings from the police union until the City could rebid its insurance and receive coverage under the Minnesota Care Law. At that time, when the premiums are decreased, the City would then withdraw its subsidization of family insurance premiums. . . The Finance Director also indicated that the Council may want to consider a co- pay plan. She indicated that this could be a savings of up to five percent. It was the consensus of the Council to authorize the Finance Director to provide written documentation to the Council on August 29, regarding the savings in premiums from the police union and the cost of health insurance premiums for family coverage under a co-pay plan. e 4. Open Mike Ken Jude, State Senate District 19 candidate introduced himself to the Council. Steve Stewart - 18290 Ogden St. NW questioned whether the Council read the letters that were presented at the 8/15/94 City Council meeting. The Council indicated that the letters had been read and the City Clerk indicated that they were made part of the official record of the Council Meeting. Deb Kelly of 19352 Carson Circle questioned whether the public hearing notice of the Northeast trunk sewer and water improvements would affect her neighborhood. Terry Maurer, City Engineer, informed Ms. Kelly that there would be no assessments to the neighborhood because the developer is bearing the cost of the improvements. 5.3. Review City and County Transportation Issues e The City Administrator indicated that the City had requested to purchase an additional .67 acres of property from the County for the construction of Orono Parkway. The .67 acres would allow the City to save some trees in the area. The County indicated that the only way it would concede the .67 acres to the city is through an equal land exchange. The City Administrator indicated that due to a variety of issues the City staff is recommending that no land exchange be made and that the City move forward with the construction of Orono Parkway using the 1 .3 acres that was purchased from the County in 1993. City Council Minutes August 22, 1994 Page 4 e Council member Holmgren indicated that the situation is frustrating, as some of the articles in the newspapers imply that the City is in some type of war with the County Commissioner and Fairboard. Council member Holmgren indicated that he has had no conversation with either the newspaper, Fairboard or the County Commissioners, however, the City is looking like the "heavy" in the local media and is, in fact, trying to do something positive. Council member Dietz indicated that it was worth the effort to try to attain the .67 acres from the County but, because it did not happen, he concurs with staff recommendation to remove the .67 acres of trees and put the road in its original location. He indicated that he does not see a benefit of exchanging any land as the E & 0 Tool site could be developed into park land and the land around City Hall could be used for a number of purposes in the future. COUNCILMEMBER DIETZ MOVED TO ACCEPT THE STAFF RECOMMENDATION OF EXTENDING. ORONO PARKWAY USING THE 1.3 ACRES THAT WAS PURCHASED IN 1993 . AND TO RECOMMEND TO THE COUNTY THAT THE CITY IS NOT INTERESTED IN A LAND EXCHANGE. COUNCILMEMBER SCHEEL SECONDED THE MOTION. THE MOTION CARRIED 3-0-1. COUNCILMEMBER HOLMGREN ABSTAINED DUE TO HIS EMPLOYMENT WITH THE COUNTY. 5.4. Consider delay of County Road 12/13 drainaae oroiect - City Engineer, Terry Maurer indicated that he has contacted the low bidder of the County Road 12/13 Drainage Improvement Project to inquire about his willingness to extend the award period for this project. Mr. Perkins has indicated that he will extend the award date until late fall or spring of 1995, however he is asking for a change order in the amount of $4,890. Terry Maurer explained that Mr. Perkins is requesting the change order to compensate him for the cost of holding a bond for a period of approximately three to six months. Terry Maurer stated that Mr. Perkins has been informed that if the project does not move forward, he would receive no compensation. Councilmember Scheel questioned whether the contractor is agreeable to Terry Maurer's recommendation, specifically to not paying the contractor for the performance bond if the project is canceled. The City Engineer indicated that the contractor is aware of the situation and has no problem with the recommendation made by staff. Terry Maurer further indicated that the City is not obligated to pay the bond if the project does not go through, however the Council could change that decision. COUNCILMEMBER DIETZ MOVED TO ACCEPT MR. PERKINS OFFER AND AUTHORIZE THE CHANGE ORDER IN THE AMOUNT OF $4,890 CONTINGENT UPON A SUCCESSFUL PETITION FROM THE COUNTY TO DISCHARGE WATER INTO DITCH 10. COUNCILMEMBER SCHEEL SECONDED THE MOTION. THE MOTION CARRIED 4-0. 5.5. Aoooint Council reoresentative to attend Board of Canvass Meetinq e COUNCILMEMBER HOLMGREN MOVED TO APPOINT COUNCILMEMBER SCHEEL TO THE COUNTY BOARD OF CANVASS TO BE HELD SEPTEMBER 16, 1994, 10:00 A.M. AT THE COUNTY GOVERNMENT CENTER. VICE MAYOR FARBER SECONDED THE MOTION. THE MOTION CARRIED 3-0-1. COUNCILMEMBER SCHEEL ABSTAINED. City Council Minutes August 22, 1994 Page 5 e 5.6. Consider Chanqe Order to Arcon's contract for underqround construction in the Hillside Crossinq Development Terry Maurer informed the Council that underground utility improvements in the Hillside Crossing development are proposed to be accomplished by a change order to the existing contract. The Developer will be contracting independently for the street improvements. Mr. Foster, the developer, concurs with the change order in the amount of $241,670.49. COUNCllMEMBER SCHEEL MOVED TO AUTHORIZE CHANGE ORDER #2 TO ARCON CONSTRUCTION CONSISTING OF SANITARY SEWER, WATER, AND STORM SEWER IMPROVEMENTS IN THE HillSIDE CROSSING PLAT IN THE AMOUNT OF $241,670.49. COUNCllMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 4-0. 7.1. Consider the results of the $250,000 Small Cities Economic Development Proqram Grant from DTED/Public Hearin<;:l e Bill Rubin, Economic Development Coordinator, stated that in 1992 a public hearing was conducted and an application authorized and submitted to DTED to assist with the expansion of Tescom Corporation. In October of 1992, DTED informed the City of Elk River that its application for an Economic Development Program Grant in the amount of $250,000 had been approved. Bill Rubin explained that the grant award was made from federal Community Development Block Grant dollars. The Tescom expansion, which was funded by CDBG money, met the requirement of benefiting persons falling into the low to moderate income category. This was met by Tescom agreeing to create approximately 45 new permanent jobs, of which, 34 would be considered for low or moderate income persons. Bill Rubin indicated that through June 30, 1994, Tescom has created 62 jobs but, due to attrition in the company, a more reflective number of the permanent jobs created would be about 44 or 45 to date. Bill Rubin reviewed the amount and type of funding and financial support provided by the City for this project. Bill Rubin indicated that Tescom is current on its repayment of loans to the City. He further explained that the City of Elk River will retain 100 percent of Tescom's principal and interest payments throughout the life of the DTED loan providing $316,947.46 to help capitalize the block grant micro-loan fund. Vice Mayor Farber opened the public hearing. There being no one for or against the matter, Vice Mayor Farber closed the public hearing. No formal action was required by the Council on this issue other than to hold a public hearing. 7.2. Consider Northeast Area Assessments/Public Hearinq e Terry Maurer, City Engineer, indicated that assessment notices have been sent to affected property owners for the Northeast Area utility Improvement. He indicated that the assessment notices that were mailed to the property owners e - e City Council Minutes August 22, 1994 Page 6 ---------------------------------- reflected on assessment rote of $3,800. Terry Mourer explained that this rote has been revised to $2,588 per acre by the Council and the issue of the cost for deferring assessments is still under consideration. The City Engineer indicated that he expected the issue to be resolved by the Council on August 29. Vice Mayor Farber opened the public hearing. No one from the public spoke to the issue. COUNCILMEMBER SCHEEL MOVED TO CONTINUE THE ASSESSMENT HEARING TO AUGUST 29. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4-0. 8. Stoff UDdates There were no stoff updates 9. Other Business There was no other business. 10. Adjournment There being no further business, COUNCILMEMBER SCHEEL MOVED TO ADJOURN THE MEETING. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4-0. The meeting of the City Council adjourned at 7:52 p.m. Respectfully Submitted, ~cf?-ay City Clerk