06-09-1986 CC MIN
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REGULAR MEETING OF THE ELK RIVER CITY COUNCIL
HELD AT THE ELK RIVER CITY HALL
MONDAY. JUNE 9. 1986
Members
Present:
Councilmembers Schuldt. Williams. and Gunkel.
Councilmember Engstrom arrived at approximately 6:45
p.m.
Members Absent:
Mayor Hinkle
Staff Present:
Patrick Klaers, City Administrator; Lori Johnson,
Finance Director; and Fritz Dolejs, Liquor Store Man-
ager
Also Present:
Dale Palmer. County Auditor; Carolyn Drude.
Ehlers and Associates, Inc., and Mr. George Deschenes
1. Acting Mayor Schuldt called the meeting to order at 6:30 p.m.
2. Consideration of Agenda
Item #6 Park Dedication Fees. was
June 9, 1986 City Council Agenda.
removed
from
the
Monday.
COUNCILMEMBER GUNKEL MOVED TO
COUNCIL AGENDA AS AMENDED.
THE MOTION. THE MOTION PASSED 3-0.
APPROVE THE JUNE 9.
COUNCILMEMBER WILLIAMS
1986 CITY
SECONDED
3. Consideration of June 2, 1986 City Council Minutes
COUNCILMEMBER GUNKEL
2, 1986 CITY
SECONDED THE MOTION.
MOVED TO APPROVE THE
COUNCIL MEETING.
THE MOTION PASSED 3-0.
MINUTES OF
COUNCILMEMBER
THE JUNE
WILLIAMS
4. Bonding for County Jail
Sherburne County Auditor Dale Palmer introduced Ms. Carolyn
Drude. the County's bond consultant. of Ehlers and
Associates. Inc. to members of the City Council. Ms. Drude
reviewed a proposal in which the City would represent the
County by issuing bonds to finance the construction of new
County jail/law enforcement facilities. Ms. Drude indicated
that for the past several months. the County Board has been
reviewing funding options for expanding the current County
facility located west of town on Highway 10 to house not only
the jail facilities. but additional facilities for
courtrooms, judges offices, county attorney office, health
services. veteran's services, extension office, social
services, and Board of Commissioners. Mr. Palmer indicated
that the only services to remain in the central city would be
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City Council Minutes
June 9. 1986
the Highway Department and central administration offices.
Ms. Drude indicated that Minnesota Statute 641.24 allows a
City located within the County or a duly appointed County HRA
the authority to issue Unlimited Tax Lease Obligation bonds
to finance the jail and law enforcement portion of the
County's building program. Ms. Drude reviewed her memorandum
to the County Board. dated May 13. 1986 (attached and made
part of these official minutes). Ms. Drude indicated that
Page 1 outlines costs anticipated for jail/law enforcement
section of the project at a total of $1.690.000. Ms. Drude
further reviewed costs for the remainder of the project at a
total of $2.667.275.
Ms. Drude explained the financing options available to the
County. She further explained that the County Board has
directed her and Mr. Palmer to request that the City of Elk
River become involved since the facility is located within
the City limits of Elk River and would be beneficial to the
City. She further indicated that at this time the County
Board is unsure as to whether or not they should pursue the
entire project or only the jail facilities. which is most
urgently needed. Ms. Drude indicated that if part of the
financing were provided through the Unlimited Tax Lease
Obligation bonds. the County may be able to come up with the
remaining monies to finance the entire building program and
bid as a large project. Ms. Drude explained that to pursue a
referendum to raise the tax levy would be time consuming.
She further explained that if the referendum failed. the
County would still have an option for mandatory levy. but
that would drag out the process even longer.
Ms. Drude explained the bonding process as follows: The City
would lease the existing facilities from the County. the City
would issue bonds to finance the project. and the City would
then lease the upgraded facility back to the County. who
would make lease payments to trustee on behalf of both the
City and County. who would then make the bond and interest
payments. At the end of the lease term. the title would be
conveyed to the County.
Ms. Drude assured
the City. such as
would be covered
fund. Ms. Drude
the costs to
parties involved.
the City Council that any
legal fees for review of
in the bond issue and come
indicated that they would
a minimum to protect the
costs incurred by
the documentation.
out of the County's
attempt to keep
interests of all
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City Council Minutes
June 9, 1986
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Councilmember Engstrom questioned the phrase, "Without
significant risk to the City" in the City Attorney Dave
Sellergren's memo, and wanted to know just what risks were
involved in this type of arrangement. Ms. Drude indicated
that most any undertaking has a certain degree of risk
involved, but felt that Mr. Sellergren was referring to a risk
that might be involved if an error were made in the
documents. She stated that she felt that under the watchful
eyes of all parties involved, this risk was minimal. Also,
she stated, that there was also a minimal risk that the
County would not make their lease payments, but that State
Statutes allow for special levies to pay debts of this
nature.
Councilmember Gunkel indicated that she supported the
of the City's involvement in issuing the bond. but felt
formal approval should be contingent upon the County
an old debt of approximately $30,000 to the City as part
land exchange involving the fairgrounds property.
concept
that
paying
of a
Councilmember Engstrom also expressed his support
bond issue. but would also like to see the debts paid first.
for
the
e
Discussion was carried
resolution presented by
County Board.
on
Ms.
regarding
Drude on
the
behalf
wording
of the
of the
Sherburne
Further discussion
transfer process.
was
carried
on
regarding
the
lease
Counc ilmemb er Williams expressed his concern whether or not
the City could be liable for any incident that may occur
during the transition period. Ms. Drude indicated that the
paperwork would be written as such to protect the City.
Councilmember Williams questioned whether or not
figure for legal, fiscal and administrative
accurate. City Administrator Pat Klaers stated
was a reasonable amount, in that he estimated not
to 8 hours would be spent by the City's Attorney
the documentation for the project since he is
on the bonding process.
the $30,000
costs was
he felt it
more than 6
in reviewing
knowledgeable
Discussion was carried on regarding the possibility of
the City's attorney serve as bond counsel. It
consensus of the City Council that Dale Palmer and
Drude ask the County Board if it would be acceptable
to have the City's attorney serve as bond counsel.
hav ing
was the
Carolyn
to them
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City Council Minutes
June 9. 1986
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COUNCILMEMBER WILLIAMS MOVED TO ACCEPT THE CONCEPT OF THE
PROPOSED ARRANGEMENT BETWEEN THE SHERBURNE COUNTY BOARD AND
THE CITY OF ELK RIVER FOR THE ISSUANCE OF BONDS TO FINANCE
ADDITIONAL JAIL/LAW ENFORCEMENT FACILITES. PENDING: (A)
DETERMINATION OF BOND COUNSEL. AND (B) PAYMENT OF MONIES OWED
BY THE COUNTY TO THE CITY FOR FAIRGROUND PROPERTY .
COUNCILMEMBER GUNKEL SECONDED THE MOTION. THE MOTION PASSED 4-
o.
Discussion was carried on regarding
bond sales and also the possibility of
the County facilities in the future.
the bond
sanitary
rate.
sewer
current
serving
Dale Palmer indicated that the
next Tuesday and that the
would be addressed at that time.
County
Counc il ' s
Board would
questions
be
and
meeting
concerns
It was the consensus of the City Council that
resolution regarding the bond issue would be
further at the June 23. 1986 City Council Committee Meeting.
the formal
addressed
5. George Deschenes
Repairs
Cul-de-Sac ,Easement
and
Drainage
Way
e Mr. George Deschenes was present to discuss the is sue of
granting an easement for a cul-de-sac at the end of Line
Avenue coming out of Elk Hills. He stated that he wanted
payment of a 1984 bill for cost he had incurred in restoring
his property from damage done during the Barrington Pl ac e
construction. and an additional $300.00 in exchange for the
cul-de-sac easement.
Mr. Deschenes explained that at the onset of the Barrington
Place development. he had given Mr. Gary Santwire of Gar-San
Enterprises an easement for construction of drainage
improvements. with the condition that his property would be
returned to its orginal condition. Mr. Deschenes further
explained that due to rainy weather. the equipment Mr.
Santwire had available to do the restoration was too heavy.
Wet conditions the following spring also prevented the work
from being completed. and that as a result. Mr. Deschenes
decided to go ahead on his own to hire someone with lighter
equipment to do the work. so that he could properly maintain
his property the way it was before the construction. Mr.
Deschenes stated that he felt it was not his responsibility
to absorb the costs. as he had an agreement with the
developer.
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City Council Minutes
June 9, 1986
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Acting Mayor Schuldt indicated that the reason
to appear before the Council was to determine
the bill for $935 was reasonable for the amount
and to determine who was responsible for payment.
he was
whether or
of work
asked
not
done,
Discussion
Deschenes
contractor
the extent
property.
was
property
for the
of work
carried on
was left
Barrington
done by
regarding the
in by Mr.
Place drainage
Mr. Deschenes
condition Mr.
Howard Blomker,
work, and also
in restoring his
Acting Mayor Schuldt and Councilmember Gunkel questioned Mr.
Deschenes as to why he had waited so long to present the bill
to the City. Mr. Deschenes stated that he had orginally
given the bill to Mr. Santwire and that Mr. Santwire had told
him he gave the bill to the City. Upon contacting Mr.
Santwire several times since, Mr. Santwire stated that he did
not know what had become of the bill and that the City must"
have misplaced or misfiled it.
e
Acting Mayor
payment laid
the one that
the damage to
with acting
developer's
Santwire was
project, the
very slim.
schuldt stated he felt
with the developer, Mr.
obtained the easement
Mr. 'Deschenes property.
Mayor Schuldt, but stated
financial condition and
no longer involved in
chances that Mr. Santwire
the responsibility for
Santwire, since he was
and was responsible for
Mr. Deschenes agreed
that due to the
the fact that Mr.
the Barrington Place
would pay the bill was
Mr. Deschenes
to grant an
opportunity to
stated that when
easement for the
finally recover his
he was approached by
cul-de-sac, he saw
expenses.
the
it as
City
an
Councilmember Engstrom stated that
obtain the easement since it is
blacktopped, but felt that the proper
bill Mr. Deschenes was presenting.
the Ci ty
already
people
would like
in place
should pay
to
and
the
Discussion was carried on regarding
system in the area came to be.
how
the
existing
drainage
e
City Administrator Pat
not he had been
property clearly
Deschenes stated that
further questioned Mr.
donate the easement if
stated that he stood
sac in exchange for
invoice.
Klaers asked Mr. Deschenes whether or
assessed for the cul-de-sac, since his
benefits from the improvement. Mr.
he had not been assessed. Mr. Klaers
Deschenes if he would be willing to
the City paid the bill. Mr. Deschenes
firm in his offer to grant the cul-de-
$300.00 cash and payment of the $935.00
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City Council Minutes
June 9. 1986
Discussion was carried on regarding
placing the responsibility for payment
present owners of the Barrington Place
M & S Development Corporation.
possibility of
b ill on the
in question.
the
of the
property
COUNCILMEMBER WILLIAMS MOVED TO TABLE A DECISION ON PAYMENTS
TO MR. DESCHENES IN EXCHANGE FOR THE CUL-DE-SAC EASEMENT ON
LINE AVENUE. UNTIL THE CITY STAFF COULD CONTACT M & S
DEVELOPMENT CORPORATION FOR PAYMENT OF THE $935.00 BILL.
COUNCILMEMBER GUNKEL SECONDED THE MOTION. THE MOTION PASSED
4-0.
6. Park Dedication Fees
This item was removed from the June 9th City Council agenda.
7.
Improvement Bond
Mr. Klaers indicated that he has met with the bond counsel
regarding the bond issue to finance overlay projects. the
School Street Project. the Simonet Project and the Deerfield
3rd Addition project. He further stated that he would be
meeting with the bond counsel again on the 16th. along with
the City Engineer and City Attorney. Mr. Klaers further
informed the City Council that it appears the bond issue is
approaching the 2 million dollar figure. as construction cost
estimates now total 1.8 million. not including the Tyler
Street project. Mr. Klaers indicated that the Tyler Street
project would be handled as an option.
9.
City Audit
Mr. Gary Groen of Abdo, Abdo and Eick, was present to review
the 1985 audit with the City Counc il. Mr. Groen stated that
he felt it was important to strive to combine the water and
City funds into one document in the future.
When reviewing the outstanding special
Councilmember Gunkel mentioned that a comment
at a public meeting suggesting the City was
favorable financial position. due to bad
indicated that the majority of debts owned
unpaid special assessments and that these
the debt limits set by the State.
had
assessments,
been made
in a very
Mr Groen
City were
well within
not
debts.
to the
were
Councilmember Williams
criticism toward the
finance such items
equipment, etc. Mr.
levy limit so low,
the only means the
purchases.
commented that he had also heard some
City's use of equipment certificates to
as squad cars. street department
Groen indicated that with the City's
sometimes equipment certificates may be
City has to finance necessary major
Page 7
City Council Minutes
June 9. 1986
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Discussion was carried on regarding the possibility
seeking special legislation to raise the levy limit.
request through the City's legislative representative.
of
by
Also discussion was carried on regarding
balance. Mr. Groen estimated that it should
$400.000 to $450.000. At the end of 1985.
fund balance is approximately $267.000
approximately $100.000 in superfunds
landfill taxes. It was the consensus
that a notation be made under the
that the $100.000 superfund was included in
the City's fund
be approximately
he stated. the
which includes
from accumulated
of the City Council
fund balance. explaining
the total.
The following
audit:
comments
were
offered
in
rev iew
of
the
1985
In the future.
Municipal Building
departments.
all utility expenditures
rather than shown
will
under
be under
individual
e
On page 24. the unfavorable
expenditures flowing through
budget. which had not been
time of the audit. Also.
funds went throught this department.
balance was due
the Street
completely recovered
the street light
to Lawcon
Department
at the
refunding
Mr. Groen suggested that at
Council should take a look at
retire the debts in the debt service
budget time.
implementing a
fund (page 28).
the
program
City
to
Lori Johnson indicated that she has been unsuccessful in
obtaining cost documentation from Wright County in order
to request payment from the state of Minnesota for costs
in relation to the CSAH #42 bridge. She further
indicated that she has recently spoke with Dave Reed on
MN/Dot and obtained the name of an alternate person to
contact at Wright County who would be more helpful.
All incoming MSA funds will
account and dispersed to
This way. the City Council
MSA Discretionary funds
MSA projects over costs) at
now be channeled
specific funds
will know the
(excess funds
all times.
through one
when needed.
balance of the
from individual
City staff was asked to further investigate the entry
for Highway 1110 Street light work. Dave Reed of MN/Dot
has indicted that the bill was for additional work to
located the el ec t ric al lines underground. and that the
work was ordered by the Municipal Utilities. The City
Council felt that the res pons ibli ty for payment of the
e costs lies with the Municipal Utilities.
Page 8
City Council Minutes
June 9. 1986
It
Mr. Groen suggested that
look at the $74.438 in
Hobbil Hills. to determine
obtain payment (page 32).
the City Council
delinquent special
what action could
also take
assessment
be taken
a
for
to
Most of the deficits for the projects shown on page 33
are costs for engineering and feasibility stud ies which
will be eliminated as projects are paid. If a project
is not done. the general fund must absorb these costs.
Liquor Store The position of the Liquor
favorable with the gross profit at about 20%
the net income approximately 8 1/2% of sales.
Store is
of sales;
Mr. Groen stated that it
position of the sewer fund
in the State. although some
repairs is not currently
in the future.
was his opinion
was comparable to
means of providing
available and must
that
most
for
be
the
cities
major
studied
Mr. Groen commented
favorable increase over
a formal purchase order
better budget management.
that the
1984.
system
general fund shown a
Mr. Groen suggested that
be implemented to provide
e
COUNCILMEMBER WILLIAMS
PRESENTED. COUNCILMEMBER
MOTION PASSED 4-0.
MOVED
GUNKEL
TO ACCEPT
SECONDED
THE
THE
1985 AUDIT
MOTION.
AS
THE
9. Liquor Store Appraisal
Mr. Fritz Dolejs. Liquor Store
appraised value for the liquor
$475.000 and inventory at $150.000.
Manager.
store
indicated
property
that
c an in
the
at
Discussion was carried
discussion was carried
expenditures including
a face lift for the store.
on
on
cash
regarding
regarding
registers
the
the
and
appraisal.
need
the
Further
for future
possibility of
COUNCILMEMBER
COUNCILMEMBER
PASSED 4-0.
ENGSTROM
WILLIAMS
MOVED TO
SECONDED
ACCEPT THE
THE MOTION.
APPRAI SAL
THE
REPORT.
MOTION
Mr. Dolejs
insurance
liquor to
to address
presented a memo to the
and employee responsibility
minors. It was the consensus
this issue at a future date.
Ci ty Counc il
regarding
of the
regarding
sale of
City Council
e
Mr. Dolejs advised the City Council that a
tax increase has been proposed called the
that he would keep the Council updated on its status.
significant liquor
Packman Act and
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City Council Minutes
June 9. 1986
10.1 Joint Meeting with Planning Commission
It was
Planning
Meeting.
the consensus
Commission to
of
the
the
July
City
14th
Council
City
Page 9
to
Council
invite the
Committee
There being no further business. COUNCILMEMBER GUNKEL
THE MEETING BE ADJOURNED. COUNCILMEMBER ENGSTROM
MOTION. THE MOTION PASSED 4-0.
The meeting was adjourned at 10:30 p.m.
Respectfully submitted.
~b-rn~ KI{~
Deborah Kleckner ~
Recording Secretary
MOVED
SECONDED
THAT
THE