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03-26-1990 CC MIN e e - MEETING OF THE ELK RIVER CITY COUNCIL HELD AT THE ELK RIVER CITY HALL MONDAY, MARCH 26, 1990 MEMBERS PRESENT: Vice Mayor Schuldt, Councilmembers Kropuenske, Holmgren and Dobel MEMBER ABSENT: Mayor Tralle (illness) STAFF PRESENT: Pat Klaers, City Administrator; Lori Johnson, Finance Director; and Harry Hoffman, Financial Consultant 1. Call Meetin~ to Order Pursuant to due call and notice thereof, the meeting of the Elk River City Council was called to orde~ at 7:00 p.m. by Vice Mayor Schuldt. 2. Consider 3/26/90 City Council A~enda COUNCILMEMBER DOBEL MOVED TO APPROVED THE 3/26/90 CITY COUNCIL AGENDA AS SUBMITTED. COUNCILMEMBER HOLMGREN SECONDED THE MOTION. THE MOTION CARRIED 4-0. 3. Open Mike Otsego Township resident, Wally O'Dell, was present to discuss with the City Council his concerns over the use of Tax Increment Financing. Mr. O'Dell indicated that he was present to discuss his concerns from three different points of view. These points of view were as a partner in the Darkenwald Development Group, a resident tax payer of the area, and as a concerned citizen over adequate funding for the school system. Mr. O'Dell stated his concern about the very thin line between appropriate use of Tax Increment Financing and the abuse of this economic development tool. His concern regarding Tax Increment Financing (TIF) related to the removal of funds away from the tax base which has a direct relationship to the amount of funds available to the school system. As a developer, Mr. O'Dell indicated is concern about unfair competitive advantage being given to one project versus another project which has similarities and yet not receiving an economical advantage through Tax Increment Financing. Mr. O'Dell indicated his position that TIF should only be used when it is going to help provide additional jobs to the community. Vice Mayor Schuldt thanked Mr. O'Dell for his comments and indicated that the EDA has expressed its desire to use extreme caution in authorizing future Tax Increment Financing Districts. Additionally, Vice Mayor Schuldt noted that the Legislature may greatly reduce or eliminate this economic development tool in the future. City Council Minutes March 26, 1990 Page 2 e 4. 4/12/90 Board of Review Meetin~ Discussion Councilmember Holmgren introduced County Assessor, Ty Bischoff, to the Ci ty Council. Mr. Bischoff indicated that he was present to discuss the upcoming 4/12/90 Board of Review meeting for the City of Elk River. This Board of Review meeting is scheduled for 6:00 p.m. at the County Administration Building. Ty stated that the location of this meeting may be subject to change as the building is undergoing renovation at this time. e Ty stated that his purpose for attendance at this meeting is to discuss evaluation issues and assessment issues wi thin the City of Elk River with the City Council prior to the Board of Review meeting. It was noted by the County Assessor that two of the seven County Assessing Department employees are working almost exclusively in the City of Elk River area. Appraiser, John Collins, works the rural residential area in the City of Elk River. Appraiser, Jerry Kritzek, works the urban residential area in Elk River and all of the commercial/industrial properties within Elk River. Because of the high rate of growth in Elk River in terms of new constructions, the County Assessing Department is having difficulty re-evaluating 1/4 of the total existing businesses and households annually. Ty stated that the sales ratio in the area of Elk River is slightly low. The state requires that properties be valued at 90 percent of the sales ratio. At this point, Elk River is at the 87-88 percent ratio in the urban residential area and slightly below this level in the rural residential area. In this regard, the County is considering a "blanket" increase of five percent in the urban residential area and ten percent in the rural residential area. This blanket increase would not affect taxes due this year, but would affect taxes paid in 1991. The County Assessor indicated that the commercial/industrial properties are at an acceptable level. In this regard, Ty discussed recent transactions at the post office site, Dick's Main Tap, and the Irma Jenne purchases of commercial property. e A general discussion took place regarding the composition of the Board of Review. It was noted that the Board of Review does not have to be composed of the City Council. The City Council has the authority to select a different group to function as the Board of Review. This issue was raised because Councilmember Holmgren works for the County Assessing Department and cannot sit on the City Board of Review. It was the consensus of the City Council, that the Board of Review would remain the same for 1990, but that this issue can be further discussed at a later date prior to the 1991 Board of Review meeting. The County Assessor indicated that he expects approximately the same number of people to make an appearance in 1990, as the previous few years. In this regard, the City Council can expect somewhere between 50 and 60 people showing up a the 4/12/90 Board of Review meeting. City Council Minutes March 26, 1990 Page 3 e Discussion took place regarding the blanket increase that is being proposed by the County Assessor. It was noted that this is the second year in a row for which Elk River would received a blanket percentage increase. The lack of ability by the County Assessing Department to re-evaluate one quarter of the City each year was highlighted by the City Council as a major concern. Discussion took place regarding addi tional staff at the County Assessing Department or increasing the fees paid to the County Assessing Department for services in order to add additional staff to meet the State mandate of reassessing 1/4 of the City each year. The City Council thanked the County Assessor for his appearance at this Council meeting and indicated that if there is a change in the meeting location for the 4/12/90 Board of Review meeting, that they would like to be advised as early as possible so that notice to the public can be made. 5. Authorization to Issue an Award Sale of $400.000 General Obli~ation Taxable TIF Bond e Finance Director, Lori Johnson, introduced this agenda item by indicating that for Tax Increment Financing District #7, which is the AmericInn Motel project, the City is planning to issue $400,000 of taxable general obligation bonds. Ms. Johnson indicated that bids have been received for the selling of this $400,000 bond issue. At this time, the Finance Director introduced Harry Hoffman, from Springsted, Inc., the City's Financial Consultant. Mr. Hoffman indicated that the firm has received three bids for this taxable issue. Two of the bids came from Minneapolis firms and one of the bids came from a Milwaukee firm. The bids ranged from 9.84 to 10 percent. It was noted by Mr. Hoffman that this range was slightly higher than the estimate given a few months ago, but that the market has gone up over the last few months and taking this into consideration then the bids were very close to the original estimate. Mr. Hoffman recommended award of the low bid in the amount of 1.8481 percent to the firm of Miller, Johnson, and Kuehn. In response to City Council inquiry, Mr. Hoffman indicated that the number of bids received on any given issue depends on the size of the issue, the type of community, the type of bond (taxable versus nontaxable), and the bond rating of the community. COUNCILMEMBER DOBEL MOVED TO APPROVE RESOLUTION 90-10, A RESOLUTION AUTHORIZING ISSUANCE, AWARDING SALE PRESCRIBING THE FORM AND DETAILS, AND PROVIDING FOR THE PAYMENT OF $400,000 GENERAL OBLIGATION TAX INCREMENT BONDS, SERIES 1990A. COUNCILMEMBER KROPUENSKE SECONDED THE MOTION. THE MOTION CARRIED 4-0. e City Council Minutes March 26, 1990 Page 4 e 6. Plannin~ Discussion with Plannin~ Commission Chairman. Peter Kimball The City Administrator noted that he is had not discussed this agenda item with Mr. Kimball for approximately one week and that he had neglected to send Mr. Kimball an agenda or call him as a reminder about this agenda item. The City Administrator indicated that the main discussion item that Peter was going to present to the City Council was the recent public informational meeting on the BRW Planning Studies. These two planning studies were for the western area of the community and the Highway 169 area. These two studies have been reviewed by staff, Planning Commission, and presented to the public. A second set of two studies, along east Highway 10 and the area between the mobile home park and Rail 10 industrial plat, would be reviewed by staff and the Planning Commission in later April. This information would then be presented to the public. Following this review, all the information will be processed to the City Council for their review and discussion with staff, Planning Commission, and Consultants. Following this review, public meetings will be held. It was noted by the City Administrator that the first BRW report that has been presented to the public has also been distributed to the City Council. e 7.1. Northbound LiQuor Store Annual Report/Fritz Dolejs The Liquor Store Manager, Fritz Dolejs, discussed with the City Council the operation of the Liquor Store in 1989. In general, Fritz indicated that the store had stabilized in its annual sales, but that the stabilization point of approximately $200,000 profit was a very good level for the size of the Liquor Store operation. In round numbers, Fritz indicated that for the past two years the sales have been approximately at the $1.8 million level; expenditures at approximately $220,000; and profit at approximately $200,000. The actual amount of profit in 1989, as compared to 1988, was down approximately 1.5 percent, or $3,300. A key point indicated by Fritz was the net income as a percentage of sales. In this regard, Elk River was ranked #1 in the metropolitan area in 1988. This level in 1988 was 12.44 percent. The projection for the 1989 level is 12.46 percent. Accordingly, it is anticipated that Elk River will be near the top in the metro area in this regard. e The Liquor Store Manager discussed trends of the municipal liquor industry with the Council. It was noted that there are approximately 290 municipal liquor operations in Minnesota and about 1/2 of these stores are having a difficult time financially. This is especially true in the smaller communities. Facts noted in this regard include five municipalities that closed their liquor stores in 1988, compared to 11 in 1987; 86 stores in 1989 made no contribution to the city's general fund; and 36 stores suffered a loss of net income. An additional fact presented to the City Council was that there are 24 City Council Minutes March 26, 1990 Page 5 e metropolitan municipal liquor operations and 266 municipal liquor store operations in the outstate area. Regarding activities in 1989, the Liquor Store Manager indicated that the staffing level was the same in 1988. The municipal Liquor Store has four permanent full-time employees and six part-time employees. The part-time employees fluctuate from season to season, but this is the general level of operation on a annual basis. Capital improvements that took place in 1989 include the completion of the stucco on the north and east outside wall; the improvement of the outdoor advertising sign; the addition of the one cash register and scanner; and the sealcoating of the parking lot. Regarding future capital outlays, it was noted that a desired improvement in 1990 and one which is included within the adopted 1990 budget, is for improved lighting of the parking area. Fritz discussed the possibili ty of adding lighting which is similar to what has taken place in the Central Business District. Another more long term capital improvement includes the improvement of the entrance doorway along with the possible expansion of the store. The other long term capital improvement discussed was the potential additional municipal liquor store within Elk River. e Fritz discussed with the City Council the approval by the State to sell lottery tickets. The first type of lottery ticket to be sold are the instant tickets. It is a desire of the Liquor Store to be successful in this endeavor in order to be awarded the authority to sell the computer tickets. The City will receive a 5 percent commission on the sales. It is not anticipated that people will come to the Liquor Store simply for lottery tickets, but it may be an assistance to the store in generating additional traffic. Major legislation which is of concern to the municipal liquor store operation includes additional taxes on liquor; the selling of wine in grocery stores; and the elimination of 3.2 beer in Minnesota. The Council discussed with the Liquor Store Manager, the "Westbound" municipal liquor store possibility and the effect this would have on the Northbound Liquor Store operation. It was noted that this is not an activity that is going to be pursued immediately, but a possibility for future years as the City continues to grow. In this regard, preferred sites for such a location need to be evaluated. At this time the City Council thanked Fritz for his annual report and commended him on his management of the Liquor Store the past few years. 7.2. Police Department Annual Report e Elk River Chief of Police, Tom Zerwas, was in attendance to present his annual report to the City Council. Chief Zerwas introduced Sergeants Brad Rolfe and Tom Tyler who would also be presenting sections of the Police annual report. City Council Minutes March 26, 1990 Page 6 e Chief Zerwas began his annual report for 1989 by presenting a general overview of the year. Tom informed the Council that 1989 was the first year in a number of years which the department did not loose any personnel. This is a result of a better selection process by the Police Department and the fact that benefits and wages are in closer proximity to the wages and benefits for Police Departments in the metropolitan suburban areas. Chief Zerwas indicated that calls for services took a dramatic increase in 1989. Calls for services increased by 18 percent over 1988. Total calls for services (CFS) in 1989 amounted to $9,632. CFS over the last ten years has averaged an 11 percent increase. Using this figure as a projection factor, it can be anticipated that CFS by the year 2000 will approach 30,000. e As with CFS, the Chief noted that Part I crimes increased significantly. In 1989, Part I crimes increased by 21 percent over 1988. Total Part I crimes for 1989 amounted to 504. On the positive side, the Chief stated that 23 percent of these Part I crimes were successfully cleared. This compares very favorably to the 22 percent experienced in 1988. Addi tionally, this high clearance rate was also experienced in 1987. Regarding past trends and projections for Part I crimes, the Chief noted that these crimes have increased an average of 13 percent over the last five years. Using 13 percent as a growth factor, it can be projected that the Part I crimes could approach 2,300 by the year 2000. Using this 13 percent growth factor would represent a 10 year increase of approximately 400 percent. Chief Zerwas stressed to the City Council that these facts highlight the need for additional manpower in the Police Department. It was noted that the current manpower is stretched to its very limits and that the City still does not have two police officer on duty 24 hours per day. The City will need to position itself in terms of police manpower to deal with the inevitable increase in crime that is a direct result of growth in our community and our proximity to the metropolitan area. Additional information regarding activities in 1989 that the Chief presented included the initiation of a canine unit; the very high and unusual approval rating of the Elk River Police Department that was documented in the community survey conducted by Decision Resources, Inc.; and the continued significant manpower assistance of the Elk River Reserve unit. e Before elaborating on the calls for services and Part I and II crime in 1989, Chief Zerwas discussed with the City Council parking enforcement and parking fines. It was noted that parking fines have not increased for several years and that the City's level of $5.00 per offense is rather low in comparison to neighboring communities. The Chief noted that a higher fine level is often times needed in order make the local drivers respect city rules and regulations. Sometimes the fine level can be so small that it is insignificant. It was the consensus of the City Council to have the Police Department staff prepare a brief City Council Minutes March 26, 1990 Page 7 e report which will include recommendations on parking fine increases and also the report should include a resolution which will call for the increase in parking fines for various offenses. Three of the total calls for services areas that were highlighted by the Chief and discussed by the City Council included the parking arrests which saw over a 100 percent increase in 1989 to the level of approximately 700 tickets being issued; a 50 percent increase in the number of speeding tickets issued to adults to the level of almost 1000 in 1989; and the continued high rate of assistance for car lockouts which in 1989 was at 1339, which is an average of over three per day. Chief Zerwas indicated that of all the increases in acti vi ty in the Police Department, the increases in reported Part I crimes is the most significant and serious issue facing the City. In 1986, 1987, and 1988 Part I crimes were around the 400 level; and in 1989, this increased to over 500. Regarding Part I I crimes, a minor increase was seen and approximately 887 were reported in 1989. A trend in Part II crimes which show a minor percentage increase is not expected to continue in the future. e Sergeant Brad Rolfe, who is in charge of the patrol division, presented a general overview of the patrol to the City Council. Brad indicated that the manpower for the patrol division is approximately 7 1/2 as he spends about 1/2 of his time on administrative duties. Like the Chief of Police, Brad stressed the need for additional manpower to take pro-active police measures rather than simply responding to calls. Sergeant Rolfe highlighted the training of the patrol officers to the Ci ty Council. Brad noted that he is exceptionally proud of the high level of training which his officer have and stated that this is the foundation, along with experience, to a quality police force. Sergeant Rolfe then briefly highlighted the personnel and work schedules of the officers. Sergeant Rolfe discussed with the City Council the equipment needs of the Department and highlighted the importance of high quality police vehicles. e A major accomplishment in 1989 that was highlighted by Sergeant Rolfe was the development of an emergency response unit. It is expected that this unit will be ready for activation in the summer of 1990. This uni t is being trained to respond to any type of potentially dangerous incidence wi thin the City. Other accomplishments in 1989 included stabilization of the force and establishment of a fitness program. Goals for 1990 in the patrol division as stated by Sergeant Rolfe include reduction in thefts of motor vehicles, continued development of the emergency response unit, implementation of a business addressing ordinance, manpower increase, development of the canine unit, progress in locating a permanent police facility, and as always, continued professionalization of the police force. City Council Minutes March 26, 1990 Page 8 e Sergeant Tyler discussed with the City Council the areas which he supervises. These areas include in the investigation division, the juvenile division, and the community service officers. It was noted that the department was slightly reorganized in 1988 so that a sergeant would be in a supervisory position over all three of these areas. Since that reorganization, Sergeant Tyler has initiated an evaluation process on all employees in each unit. It is a goal to have these evaluations conducted on a six month basis. It was noted by Sergeant Tyler that all of his employee were performing their duties at a very high quality level in 1989. Regarding goals for 1990, Sergeant Tyler indicated that the community service officers will be increasing education and public awareness of crime prevention techniques; that the juvenile officers will receive increased education in the areas of criminal investigation; and that a cooperative agreement between other police department investigators will be pursued. e In the investigations area, it was noted that a part-time investigator, Steve Bockwitz, became a full-time investigator in 1989 and that this had a dramatic affect in allowing the department to investigate more crimes which were reported. Sergeant Tyler noted that in the future additional equipment in the investigation area and additional manpower may be needed to meet the needs of the department. Sergeant Tyler updated the City Council in the continued success of the juvenile program and the high support level of the newly initiated D.A.R.E. program. Sergeant Tyler discussed the community service officers (CSO) with City Council. It was indicated that these employees are an important ingredient in the overall efficiency of the . department. These employees view their job as a permanent position and not as a stepping stone to becoming a police officer. Work conducted by the two Elk River CSO's include clerical backup and support, animal control, parking enforcement, and equipment maintenance scheduling. Chief Zerwas discussed with the City Council the significant impact the clerical staff has in the efficiency of the department and highlighted some requested equipment needs within the department for improved efficiency in the future. As the crime work load increases within the overall department, so does the paperwork of the clerical staff. e Chief Zerwas discussed with the City Council the importance of the police reserve in helping to offset he manpower shortage of the department. It was noted that the reserves spend a significant amount of time assisting the department. Major functions of the reserve include crowd control at community events and assistance of the police patrol division during weekends. e e e City Council Minutes March 26, 1990 Page 9 Chief Zerwas concluded his annual report by summarizing the goals for 1990 and accomplishments from 1989. It was stressed by the Chief the need for addi tional manpower to maintain the high quality level of service which was currently being provided to the citizens and also the need for a permanent police facility. 8.1. Community Center Task Force UDdate-Ro~er Holm~ren Councilmember Holmgren briefly updated the Council on recent tours conducted by the Community Center Task Force. It was noted that each community has a different concept of the Community Center and that any such facility in Elk River will have to be tailored to meet the needs of the community. It was noted that the next Community Center Task Force meeting will be held at Elk River City Hall on Thursday, April 5, 1990. 9. City Administrator Update The City Administrator advised the City Council that a letter had been sent to the School Board members regarding concern over possible funding cuts in the juvenile program. Addi tionally the Ci ty Administrator advised the City Council that the City has not yet received a response from John MacGibbon regarding a possible settlement over the Main Street construction project in 1988. 10. Adjournment There being no further business, COUNCILMEMBER HOLMGREN MOVED TO ADJOURN THE 3/26/90 CITY COUNCIL MEETING. COUNCILMEMBER DOBEL SECONDED THE MOTION. THE MOTION CARRIED 4-0. The meeting of the Elk River City Council adjourned at 11:00 p.m. Respectfully submitted, c(J?Cl({,S Patrick Klaers City Administrator f " ) c~t Cc