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06-01-1993 CC MIN - SPECIAL . . . SPECIAL MEETING OF THE ELK RIVER CITY COUNCIL CAPITAL IMPROVEMENT PROGRAM WORK SESSION HELD AT THE ELK RIVER CITY HALL - CONFERENCE ROOM A TUESDAY, JUNE 1, 1993 Members Present: Mayor Duitsman, Councilmembers Scheel, Farber, Dietz, and Holmgren Members Absent: None Staff Present: Lori Johnson, Finance Director; Phil Hals, Street Superintendent; Pat Klaers, City Administrator Also Present: Library Board Chair, Vicki Sullivan; Library Board Member, Deborah Anderson; Librarian, Mick Stoffers; Great River Regional Library Representative, Ken Behrenger 1. Call Meeting To Order Pursuant to due call and notice thereof, the special meeting of the Elk River City Council/CIP Work Session was called to order at 6:00 p.m. by Mayor Duitsman. 2. Consider 6/1/93 City Council/CIP Agenda COUNCILMEMBER SCHEEL AGENDA AS PRESENTED. MOTION CARRIED 5-0. MOVED TO APPROVE THE 6/1/93 CITY COUNCIL/CIP COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE 3. Library Board Presentation Library Board Chair, Vicki Sullivan, presented to the City Council an overview of the proposed library expansion project. Vicki indicated that during the Library Annual Report presentation, the Board was directed to analyze the available finances for a library expansion project and to present the findings to the City Council. It was indicated that the library expansion report (August, 1992) showed a proposed project in the $740,000-$894,000 range which included remodeling expenses for the existing facility in the $182,000-$239,000 range. Of the remodeling expenses, approximately 25% are required due to handicapped accessibility and Americans with Disabilities Act, but the remaining 75% of the remodeling expenses were in the "nice to have" category. Additionally, the construction expenses of the 4,400 square foot addition of $418,000-$462,000 was believed to be a high estimate and it was thought that the project could be completed for less than that amount. The Board is hoping that a total expansion project can be completed for approximately $500,000. Vicki Sullivan also indicated that Lori Johnson, Finance Director, has been working with the Board on available finances for the project. Lori and Vicki reviewed the finances that are available for the project . . . Special City Council/CIP Work Session June 1, 1993 Page 2 and indicated that it could be possible to finance the project over twenty years with available designated revenues. This financing plan is based on the assumptions of a $500,000 project with $160,000 cash being available as of January, 1994. Additionally, it was assumed that $127,000 would be available from TIF Plans No. 1 and No. 3 to help finance this project. The balance could be financed over twenty years based on available funding from the designated landfill reserve and through using about $7-$10,000 from the annual library budget that is approved by the City Council. The key issue in this proposal is the use of TIF monies. Lori indicated there were several possible financing options available depending upon the Council's commitment of TIF Funds. Discussion took place regarding use of TIF funds, the amount of money available on an annual basis to finance a bond or a lease/purchase plan, and the commitment from the Great River Regional Library System for materials and staff if the expansion project takes place. It was noted that a $500,000 project is very tight based on the initial library proposal and that it may be appropriate to look at a project more in the $550,000 range. This would require an additional commitment of TIF funds. It was noted that if completed within this to be scaled down. difficult to obtain. a 4,400 square foot addition could not be budget framework, the project expansion may have Additional funding beyond $550,000 would be It was the general agreement of the City Council that a project of $550,000 for a library expansion would be acceptable. Also, it is anticipated that this project would not happen until 1994 based on the amount of preliminary work that would be needed before ground could be broken. COUNCILMEMBER HOLMGREN MOVED TO AUTHORIZE STAFF TO PREPARATION OF A TIF AMENDMENT ALLOWING THE USE OF TIF AND NO. 3 FUNDS AS PART OF THE CITY PARTICIPATION IN THE $550,000 LIBRARY EXPANSION PROJECT. COUNCILMEMBER THE MOTION. THE MOTION CARRIED 5-0. PROCEED WITH THE DISTRICT NO. 1 THE FINANCING OF DIETZ SECONDED City staff was directed to move forward with a TIF District No. 1 and No. 3 amendment to allow the use of these funds for this project. COUNCILMEMBER HOLMGREN MOVED TO AUTHORIZE THE CONSTRUCTION OF A LIBRARY EXPANSION PROJECT IN AN AMOUNT NOT TO EXCEED $550,000. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. The Council indicated that the Library Board should develop an action plan which would outline the steps necessary before bidding out the project. The first step is assumed to be the selection of an architect for the project. . . . Special City Council/CIP Work Session June 1, 1993 Page 3 The City Administrator distributed a letter from Don Robinson which requested appointment to the Library Board. It was noted that Ken Ringstad has resigned from the Board. COUNCILMEMBER DIETZ APPOINT DON ROBINSON TERM OF OFFICE. MOTION CARRIED 5-0. MOVED TO ACCEPT KEN RINGSTAD'S RESIGNATION AND TO TO THE LIBRARY BOARD TO FILL OUT KEN RINGSTAD'S COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE 4. Finance Department Annual Report - Lori JOhnson, Finance Director Finance Director, Lori Johnson, reviewed with the city Council her 1992 Annual Report. Lori indicated that most of the numbers related to the finances of the City were presented last week with the Audit presentation and her Annual Report would deal more with trends and issues related to her department and only generally to the overall financial status of the City. Lori reviewed with the Council the work duties that are undertaken by her department and examples of some projects that she has worked on in 1992. The city Council discussed in detail the special assessment searches issue and the concern over responding to verbal requests and how these verbal requests are a drain on the Finance Department staff time. COUNCILMEMBER FARBER MOVED TO ADOPT A CITY POLICY CALLING FOR THE CITY STAFF TO RESPOND TO SPECIAL ASSESSMENT SEARCHES ONLY WHEN THE REQUESTS ARE PRESENTED IN WRITTEN FORM. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. Lori reviewed with the Council the list of activities that took place in 1992, the growth in the activity level from 1985 to 1992, the list of all of the 1992 funds managed by the Finance Department, bond issues for 1992 and the City bond rating, the 1992 General Fund Revenue and Expenditure breakdowns along with the analysis of the General Fund Cash Flow Balance, and the City investments for 1992. Additional discussion took place on a City investment policy. The Finance Director provided a handout outlining a City investment policy. COUNCILMEMBER FARBER MOVED TO ADOPT THE CITY INVESTMENT POLICY AS PRESENTED BY THE FINANCE DIRECTOR. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. Lori continued with her Annual Report and discussed the 1992 interest income for the City and the 1993 (and beyond) projects forecasted to be undertaken. The City Council indicated that they would like to see something happen very soon on the urban/rural tax district ratio and also on a city-wide storm sewer funding mechanism. The City Council thanked the Finance Director for her Annual Report. 6. Other Business/Staff Updates . . . special City Council/CIP Work Session June 1, 1993 Page 4 The City Administrator indicated that the City has received some legal documents from the Attorney representing Tom Brindamour and indicated that the City is being sued for the taking of land from Tom Brindamour without adequate compensation. The City Administrator reviewed with the City Council the Chamber of Commerce Fourth of July parking plans and the fact that the Chamber is anticipating to use the City Hall parking lot. The majority of the Council felt that the parking lot at City Hall should be available for the Fourth of July under the same terms and conditions as other parking lots in the vicinity. Councilmember Farber discussed with the City Council a concern condition of bulk fuel tanks along the railroad tracks west of Avenue. Additionally, Councilmember Farber discussed with Council a citizen question regarding snow removal and the no restrictions along Proctor Avenue. over the Proctor the City parking The Finance Director requested Council approval for the Liquor Store to add two additional part time employees. COUNCILMEMBER HOLMGREN MOVED TO MICHAEL VANGUILDEN AND JEAN EMPLOYEES. COUNCILMEMBER DIETZ CARRIED 5-0. THE LIQUOR STORE TO AS PART TIME LIQUOR THE MOTION. THE AUTHORIZE BURANDT SECONDED HIRE STORE MOTION 5. Capital Improvement Work Session Mayor Duitsman indicated that it was his goal to complete the 1993 CIP at this Work Session. The Mayor also indicated that it was his strong feeling that the City should function with an informal CIP Work Plan and that this document should not be formally adopted by the City Council at this time. The City Administrator indicated that he is comfortable with this approach to accomplishing capital improvements and stated that this is how the City has operated for the past few years. In this manner, the City Council reviews potential new projects and recently completed work projects in the first few months of each year and then determines the appropriate work plan for the upcoming year along with some goals for the next few years. The Council concurred that it would not formally adopt a CIP in 1993 and it would continue to function with an informal plan. The City Administrator briefly reviewed the available CIP financing mechanisms that were presented on 3/30/93. These finance mechanisms included Municipal State Aid monies, the Capital Projects Fund, the Landfill Fund (designated for the Library, the City Hall/Police Department facility, and the Streets Department), the Equipment Reserves Fund, and the Park Dedication Fund. The handouts for these . . . Special City Council/CIP Work Session June 1, 1993 Page 5 funds that were distributed on 3/30/93 were distributed again for review by the Council. The City Administrator reviewed in more detail the other funds available to finance capital improvement projects. These other funds included the Liquor Store Fund, the Self-Insurance Fund, the NSP Contributions, TIF, and a variety of miscellaneous funds (including grants, special assessments, bond referendums, and HRA/EDA monies). These funds were also outlined in handouts distributed by the City Administrator. Additional discussion took place regarding the following funds: Liquor Store Fund - Discussion took place regarding the future need for a second municipal liquor store. There was no agreement reached on when this store would be needed, however, a great deal of discussion took place regarding the need to obtain the property for a second liquor store in the near future before all the best locations are sold or redeveloped. Concern was also expressed regarding whether or not enough funds would be accumulated to construct a future building without going into debt, or whether or not some of the existing liquor store reserves would be used to supplement other projects, specifically the East Highway 10 project. It was the general consensus of the majority of the Council that the City should at least investigate land options around key intersections of the city for a future second liquor store. - Self Insurance Fund - With limited additional funds being able to be added to this category, and with expenditures being unknown at this time, the Council had a very limited discussion on this fund. The City Administrator noted that if the City health insurance plan changes in the future and that if the City gets into a type of self insurance for City employees, this fund may be used to offset expenses. - NSP Contribution at least part $90,000 per year The Council took - It was noted that funds are committed through of 1995, but that beginning in 1996, approximately would be available to be allocated on projects. no action on allocating these funds at this time. - TIF Funds It was noted that the funds from TIF No. 4 are available for a water tower on the west side of the City and that without any official designation or allocation of these funds, the Council has committed them for this project to the Utilities Commission. It was noted that there are available funds in TIF Districts No. 1 and No.3, but that the funds are going to be in demand and that the amount available has already been reduced based on the library project commitment the City made earlier in the evening. Typically, these funds are used for economic development projects, but they could also be used for park projects including the purchase of land from the County for parking for the softball complex. . . . Special city Council/CIP Work Session June 1, 1993 Page 6 - Bond Referendum - Limited discussion took place on this financing tool and the Council understood that it may be necessary to move forward with the bond referendum in 1994 for some type of community center or park issue. If this is to take place in 1994, the Community Center Task Force needs to reconvene or the City Council needs to appoint a new Task Force. The City Administrator reviewed with the City Council the 5/26/93 memo from the City Engineer on the status of current projects. Additionally, the City Administrator distributed a 6/1/93 East Highway 10 property owner letter inviting these individuals to a 6/15/93 informational meeting on the possibility of extending sewer and water into this area. The City Council directed staff to continue to work on 1993 projects as outlined in the 3/30/93 minutes and as discussed at subsequent City Council meetings. The City Administrator indicated that he would try to put together some type of summary documentation on the issues discussed on the 1993 and the 1993-97 CIP. This material would serve as the starting point for the 1994 CIP work scheduled in January/February, 1994. 7. Adjournment There being no further business, COUNCILMEMBER DIETZ MOVED TO ADJOURN THE CITY COUNCIL/CIP MEETING. COUNCILMEMBER FARBER SECONDED THE MOTION. THE MOTION CARRIED 5-0. The special meeting of the Elk River City Counci1/CIP Work Session was adjourned at 10:00 p.m. Respectfully submitted, {JoJ-t.idc Klaus ~ Patrick D. K1aers City Administrator