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09-08-1992 CC MIN . . . MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL TUESDAY, SEPTEMBER 8, 1992 Members Present: Mayor Tralle, Councilmembers Schuldt, Holmgren, Dietz and Kropuenske Members Absent: None Staff Present: Pat Klaers, City Administrator; Sandy Thackeray, City Clerk; Lori Johnson, Finance Director; Bill Rubin, Economic Development Coordinator; Russ Anderson, Fire Chief 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 7:05 p.m. 2. Consider 9/8/92 City Council Agenda Item 5.5., Sign Permit Fees, was added to the agenda. COUNCILMEMBER SCHULDT MOVED TO APPROVE THE 9/8/92 CITY COUNCIL AGENDA AS AMENDED. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. 3. Consider 8/31/92 City Council Minutes The following corrections were made to the minutes. Item 5.4., the motion should read, "The motion carried 4-1. Councilmember Holmgren opposed." On Page 4, Item 6.2., the last sentence should read as follows: "Once the City Council has adopted a Resolution establishing a speed zone, MnDOT has 10 days to object to the request." COUNCILMEMBER KROPUENSKE MOVED TO APPROVE THE 8/31/92 CITY COUNCIL MINUTES AS AMENDED. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 4.1. Garbage Appeal Applicant Mr. Roy Draper, 22034 Jarvis Street, stated that he had a hearing before the Refuse Appeal Board and was denied exempt status from garbage service. He stated that he did not agree with the Appeal Board's decision. He indicated that he is a single person and does not generate enough garbage to pay for a biweekly refuse service. He stated that since the City has delivered the container, he has never used the container for garbage pick-up. . . . City Council Minutes September 8, 1992 Page 2 Councilmember Kropuenske stated that there are in Mr. Draper's situation and indicated if the mandatory garbage and recycling pick-up, precedent. probably several people the Council deviates from it could be setting a Councilmember Dietz indicated he concurred with Councilmember Kropuenske. If the Council allows Mr. Draper to be exempt from garbage service, then the Council will have to look at several other cases. He suggested that this issue be discussed with the refuse haulers in order to try to resolve the issue by offering other options other than weekly and biweekly pick-up. COUNCILMEMBER DIETZ MOVED TO DENY THE APPEAL BY MR. ROY DRAPER. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. Councilmember Schuldt stated that Mr. Draper is the exception to the rule because Mr. Draper has not used the garbage service since it has started. THE MOTION CARRIED 3-2. Councilmember Schuldt and Mayor Tralle opposed. The Council directed Gary Schmitz to look at other options such as a one time per month pick up and report back to the Council with his findings. 5.1. Public Hearing Tax Increment Financing District No. 10 Elk Terrace Apartments Bill Rubin explained that the HRA is proposing the creation of Tax Increment Financing District No. 10 which will be comprised of two parcels located on the corner of Holt Avenue and Fourth Street. The request for tax increment assistance is from Elk Terrace Ltd. Partnership in the amount of $92,000 to support the construction of a 23 unit senior housing project which will be financed by Farmers Home Administration. He stated that the $92,000 in tax increment assistance will be used for the installation of public improvements and for developer installed public improvements. Bill Rubin explained that the HRA has approved the Contract for Private Development. Mayor Tralle opened the public hearing. Brad Larson, Elk Terrace Ltd. Partnership, stated that closing of the property is scheduled with Farmers Home Administration on September 17, 1992. There being no further comments from the public, Mayor Tralle closed the public hearing. Councilmember Dietz questioned whether the City has ever used TIF funds to pay for public improvements. Bill Rubin stated that the use of TIF funds for public improvements is an eligible cost and that the City has used TIF funds for improvements in other cases. Councilmember Dietz further questioned the risk to the taxpayers. Bill Rubin indicated . . . City Council Minutes September 8, 1992 Page 3 that there would be no risk to the taxpayers and the money will be paid back in sixteen yearly increments. Councilmember Dietz questioned whether State Aid funds that may be lost would be paid for by the developer. Bill Rubin indicated that the Developer's Agreement stated that the developer would be responsible for possible lost State Aid funds. Councilmember Holmgren questioned whether there would be excess TIF funds for this project and what they would be used for. Bill Rubin stated that if there were excess funds collected, the District would be retired early. COUNCILMEMBER SCHULDT MOVED TO ADOPT RESOLUTION 92-86, A RESOLUTION FOR THE CITY OF ELK RIVER RELATING TO THE ESTABLISHMENT OF TAX INCREMENT FINANCING DISTRICT NO. 10 AND THE ADOPTION AND APPROVAL OF THE TAX INCREMENT FINANCING PLAN RELATED THERETO LOCATED WITHIN DEVELOPMENT DISTRICT NO.1. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.2. Consider Development Agreement By and Between the City of Elk River and Elk Terrace Ltd. Partnership COUNCILMEMBER DIETZ MOVED TO APPROVE AND EXECUTE THE CONTRACT FOR PRIVATE DEVELOPMENT WITH ELK TERRACE LTD. PARTNERSHIP, THE CITY OF ELK RIVER AND THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.3. City Hall Update Items 5.3a. Request Advertisement for Security System The Council discussed the City Hall/Police Station memorandum from Zack Johnson dated September 3, Johnson reviewed the proposed security system plan. security 1992. plan Zack COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE ADVERTISEMENT FOR THE SECURITY SYSTEM FOR THE CITY HALL/POLICE COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION 5-0. FOR BIDS STATION. CARRIED 5.3b. Mechanical and Electrical Change Order Zack Johnson stated that when the construction contract was awarded, it was felt that the mechanical and electrical portions of the bid were too high. He stated that he has worked with mechanical and electrical contractors and has revised the design of the system as he felt the mechanical and electrical portion of the system was over designed. He stated he is recommending a change order of -$53,900. COUNCILMEMBER HOLMGREN MOVED TO APPROVE THE CHANGE ORDER FOR THE MECHANICAL AND ELECTRICAL PORTION OF THE CITY HALL FOR A . . . City Council Minutes September 8, 1992 Page 4 -$53,900. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. 5.3c. Change Order The City Administrator stated that the change order authorized a minor expansion of the garage. He expansion would be approximately six feet for one stall necessary to accommodate the size of the ERU van. He change order would be in the amount of $7,000. committee stated the which is stated the Zack Johnson also explained that the builders risk insurance was less expensive through BOR-SON than through the City's carrier. Therefore, he recommended that the City use BOR-SON's builders risk insurance. 5.3d. City Hall Plaque Zack Johnson stated that the construction contract includes an allowance for a dedication plaque for the new facility. It was the consensus of the Council to discuss this at a later date. Zack Johnson distributed a site observation report to the Council. He indicated that the contractor is ahead of schedule. 5.4. Resolution to Create Property Taxpayers Trust Funds Mayor Tralle requested the Council to consider the adoption of a resolution in support of dedicating $.02 of the 6.5% sales tax collected by the State to be put into a Property Taxpayers Trust Fund. Hank Duitsman, Elk River citizen, stated he was opposed to the adoption of the resolution as he feels the property tax system for the State is in disarray. He stated that there must be something done to show equity to business and property taxpayers. He indicated that the adoption of the resolution ties the hands of the State Legislators. Mayor Tralle indicated he concurred with Hank Duitsman and requested that the Council not consider the adoption of the resolution at this time. 5.5. Sign Permit Fees Councilmember Dietz stated that a representative of C.A.E.R. has indicated that in order to get a sign permit, a fee must be paid by nonprofit organizations. Councilmember Dietz suggested that the City Council consider exempting nonprofit or charitable organizations from sign permit fees. COUNCILMEMBER DIETZ ESTABLISHING SIGN ORGANIZATIONS FROM MOTION. THE MOTION MOVED TO ADOPT RESOLUTION 92-87, A RESOLUTION PERMIT FEES WHICH EXEMPTS NONPROFIT OR CHARITABLE THE FEES. COUNCILMEMBER HOLMGREN SECONDED THE CARRIED 5-0. . . . City Council Minutes September 8, 1992 Page 5 The Council recessed at 8:30 p.m. and reconvened at 8:40 p.m. 6. Continue 1993 Budget Worksession Pat Klaers reviewed his September 4, 1992, Budget Worksession memo. The tax estimate information was discussed. The Council agreed that it did not want to increase taxes above the proposed levy which was presented on August 31, 1992. Pat Klaers indicated that a new Pay Plan Exhibit 2 reflecting a 3% increase was being presented as requested by Councilmember Holmgren. The August 25, 1992, Agenda Item 7.5, memo was reviewed. The City Administrator reviewed options available to reduce the $75,650.00 budget gap. Revenue options as outlined in the memo were reviewed. The Council agreed that the Utilities would not be asked to increase the annual contribution to the City; instead, the Council will request funds to pay for the Fire Department's requested equipment van. Mayor Tralle indicated that the Utilities Commission tabled discussion on the van until a formal request was made by the City Council. The Council acknowledged the increased contribution of $2,000.00 from Guardian Angels to fund the Senior Citizen program. Possible expenditure reduction options were reviewed. It was Council consensus that part of the Chamber of Commerce budget request be transferred to the EDA budget as it relates to economic development. The Council will request that the EDA approve an expenditure of 1992 funds in the amount of $1,600.00 to repaint the two Welcome signs. Additionally, $4,000.00 will be requested from the 1992 budget to finance Fourth of July activities. Discussion of the Arts Council and Historical Society expenditures took place. The Council agreed that the $5,000.00 Arts Council expenditure in the Mayor/Council budget not be deleted. However, the Arts Council must match the contribution. The Council further agreed to reduce the Historical Society membership to $100.00. The Council requested that the Planning Commission budget be reduced to reflect funds for only one Planning Commission member to attend a national convention and the Mayor/Council budget be reduced by deleting funds for a Councilmember to attend a national convention. This does not preclude either a Planning Commissioner or a Councilmember from later requesting permission to attend a national convention and using contingency funds for the expenditure. Additional discussion took place on the $19,000 line item for Capital Outlay in the Fire Department budget. The Council concurred that the Liquor Store contribute $30,000.00 to the purchase of the van, that a formal request for $30,000.00 be made to the Utilities Commission, and that the $19,000.00 Capital Outlay line item in the 1993 budget be eliminated since lease payments would not start until 1994. The General Fund would have to include $19,000 for the next 8-9 years to finance the balance of the equipment van expenditure. . . . City Council Minutes September 8, 1992 Page 6 The City Council also discussed the Fire Department retirement fund. The Council agreed that no funds would be included in the Fire Department budget for the Relief Association Retirement fund. Funds would be available in the Council Contingency budget for this expenditure. The Council will review the request in July when the Relief Association requests approval of the annual benefit amount. The Council stressed that this issue is not related to the allocation of funds to purchase an equipment van. The City Administrator reviewed the Special Revenue fund budgets as outlined in his 8/26/92 agenda memo. The Council discussed Equipment Certificate purchases and expressed concern over the purchase of a four wheel drive vehicle by the Police Department. The Council agreed that special approval is required before proceeding with this purchase. The Council commended Phil Hals on his purchasing ability and good use of Capital Outlay funds. Pat Klaers informed the Council that the Recycling Coordinator's time included in the Landfill budget has been reduced to 60 percent. The remaining 40 percent has been transferred to the Garbage Fund to more accurately reflect time spent in administering the garbage collection program. The Council reviewed the City's special assessments due in 1993. The City Administrator informed the Council that the Western Area assessments on the park and ballfield property were included and would be paid over a 20 year term. He further indicated that the City Hall assessments were proposed to be paid from the Equipment Reserve Fund designated for utilities. The Council agreed with this financing arrangement and with the concept of using TIF No. 4 funds for a Western Area watertower. The Council recessed at 10:15 p.m. and reconvened at 10:20 p.m. Additional discussion was held on the Pay Plan. Councilmember Kropuenske expressed concern over the pay ranges for the hourly employees being high as compared to the Elk River private market. It was noted that two new pay ranges were included in the Pay Plan but that these ranges could be adjusted before the positions were authorized. Lori Johnson explained the Liquor Store part-time clerk Pay Plan and the changes in the pay ranges for the Senior Citizen Coordinator, Maintenance I and WWTS positions. The Council discussed insurance benefits and the possibility of changes in this area. The Council agreed that the pay plan should reflect a 3% increase. COUNCILMEMBER KROPUENSKE MOVED TO ADOPT RESOLUTION 92-88, ADOPTING 1993 PAY PLAN FOR NON-ORGANIZED EMPLOYEES. DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. A RESOLUTION COUNCI LMEMBER Lori Johnson stated that the Council has the authority to adjust Debt Service Levies. She indicated that the 1985 Refunding and Improvement Bond fund currently has a surplus and City intentions are to call the bond in February, 1993. Therefore, the $117,872.00 scheduled levy could be cancelled. The 1986 Improvement Bond has a scheduled levy of . . . City Council Minutes september 8, 1992 Page 7 $14,524 which could also be cancelled because of a surplus on hand from prepaid special assessments. COUNCI LMEMBER HOLMGREN MOVED TO CANCEL THE 1985 IMPROVEMENT BOND AND THE 1986 IMPROVEMENT BOND LEVIES. DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. REFUNDING AND COUNCILMEMBER It was agreed that the remaining items in the August 26, 1992, Item 7.7 memo be discussed at a later date. Pat Klaers reviewed the Item 7.8, August 26, 1992, memo. made decisions on each of the items outlined in the memo. The Council 1. Consensus was reached that the levy for the 1985 G.O. Bonds be cancelled and transferred to the General Fund. 2. The Council would not request an increase in the annual Utilities contribution but would request $30,000 for the fire equipment van. 3. The Council would contribute $2,000 to the Chamber of Commerce and the EDA would be asked to contribute $5,600 ($4,000 for the Fourth of July from the 1993 budget and $1,600 for signs from the 1992 budget) which is $2,000 less than the Chamber request. 4. The City will contribute $5,000 to the Arts Council on a matching fund basis. 5. The Council will pay for a $100 membership to the Sherburne County Historical Society. 6. The Council agreed to add $17,200 in Transfers-In from the Equipment Reserve for capital outlay expenditures. The Council further requested that each proposed capital outlay item be reviewed by the Council prior to being purchased. 7. The Council agreed that the data processing capital outlay purchase be excluded from the General Fund budget. 8. A fire department equipment van purchase was authorized to be financed as previously stated. (See the end of page 5). 9. Additional Retirement Funds will be available Association within the Council contingency fund will be evaluated in July. to the Fire Relief and any requests 10. The Council agreed with the proposed method Western Area assessments as previously discussed. of financing the (see page 6). 11. No additional transfer will be made from the Street Reserve fund. 12. The Council agreed that an additional transferred in from the Liquor Store. $13,050 should be . . . City Council Minutes September 8, 1992 Page 8 13. The Council acknowledged the addition of two and one half employees in the 1993 budget. 14. The Council stated that the Contingency budget should be reduced by $10,000. COUNCILMEMBER HOLMGREN MOVED TO REQUEST THE EDA TO PAY $1,600 FOR CHAMBER SIGN EXPENSES IN 1992 AND $4,000 FOR THE FOURTH OF JULY CELEBRATION IN 1993. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED TO INCREASE THE LIQUOR STORE TRANSFER IN BY $13,050 AND TO REDUCE THE CONTINGENCY BUDGET BY $10,000. COUNCILMEMBER DIETZ SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER KROPUENSKE MOVED TO CALL THE BUDGET HEARING FOR MONDAY, DECEMBER 14, 1992, AT 8:00 P.M. AT THE ELK RIVER PUBLIC LIBRARY. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER SCHULDT MOVED TO ADOPT RESOLUTION 92-89, A RESOLUTION APPROVING THE ELK RIVER HOUSING AND REDEVELOPMENT AUTHORITY 1993 TAX LEVY. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED TO ADOPT RESOLUTION 92-90, A RESOLUTION APPROVING THE 1993 TAX LEVY FOR ECONOMIC DEVELOPMENT PURPOSES FOR THE ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER SCHULDT MOVED TO APPROVE THE EQUIPMENT CERTIFICATE BUDGET WITH THE UNDERSTANDING THAT THE COUNCIL APPROVE ALL QUOTES AND THE CSO VEHICLE BEFORE FINAL COUNCIL APPROVAL. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER KROPUENSKE BUDGETS. COUNCI LMEMBER CARRIED 5-0. MOVED SCHULDT TO APPROVE THE SPECIAL REVENUE FUND SECONDED THE MOTION. THE MOTION COUNCI LMEMBER KROPUENSKE MOVED TO ADOPT RESOLUTION 92-91, A RESOLUTION AUTHORIZING THE PROPOSED TAX LEVY FOR CALENDAR YEAR 1993. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. COUNCILMEMBER HOLMGREN MOVED TO ADOPT THE 1993 GENERAL FUND BUDGET AS PRESENTED WITH THE FOLLOWING CHANGES: REVENUE INCREASES OF $13,050 IN TRANSFERS IN FROM THE LIQUOR STORE, $17,200 FROM EQUIPMENT RESERVES AND A $2,000 INCREASE IN THE GUARDIAN ANGEL'S CONTRIBUTION. EXPENDITURE DECREASES OF $1,500 IN THE MAYORI COUNCIL AND PLANNING COMMISSION BUDGETS FOR NATIONAL CONFERENCES, $400 IN THE HISTORICAL SOCIETY MEMBERSHIP, $10,000 IN THE CONTINGENCY BUDGET, $7,000 IN PERSONAL SERVICES, $19,000 FOR CAPITAL OUTLAY IN THE FIRE DEPARTMENT AND THE TRANSFER OF $4,000 IN CHAMBER EXPENSES FROM THE ECONOMIC DEVELOPMENT BUDGET TO THE EDA. . . . City Council Minutes September 8, 1992 Page 9 THE BUDGET IS IN SECONDED THE MOTION. THE AMOUNT OF $3,006,400. THE MOTION CARRIED 5-0. COUNCILMEMBER KROPUENSKE COUNCILMEMBER DIETZ MOVED TO CALL A SPECIAL MEETING OF THE CITY COUNCIL FOR SEPTEMBER 14, 1992, FOLLOWING THE EDA MEETING. COUNCI LMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 5-0. 8. Check Register COUNCILMEMBER HOLMGREN MOVED TO APPROVE COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE CHECK REGISTER. THE MOTION CARRIED 5-0. 9. Staff Updates The City Administrator distributed a letter from the Orono cemetery Association signed by Jim Nystrom which request the City to proceed with road repairs for which the Association will be assessed. The City Administrator distributed a letter to Frances O'Neil from Richard Hinkle, HRA Chairman, regarding her mortgage refinancing policy in the Deerfield and Royal Oaks Subdivisions. Pat Klaers stated that the he had made contact with Victoria Kreger at the Elk River Landfill regarding scheduling a meeting. 10. Adjournment There being no further ADJOURN THE MEETING. MOTION CARRIED 5-0. business, COUNCILMEMBER HOLMGREN MOVED COUNCILMEMBER DIETZ SECONDED THE MOTION. TO THE The meeting of the Elk River City Council adjourned at 11:30 p.m. Respectfully submitted, danLtUt ThaL~/[a~4:/ Sandra Thackeray City Clerk