02-06-2006 CC MIN
MEETING OF THE ELK RIVER CITY COUNCIL
HELD AT THE CITY OF ELK RIVER
MONDAY, FEBRUARY 6, 2006
Members Present: Mayor Klinzing, Councilmembers Dietz, Farber, Gumphrey, and Motin
Members Absent: None
Staff Present: City Administrator Lori Johnson, Fire Chief Bruce West, Community
Development Director Scott Clark, Director of Economic Development
Catherine Mehelich, Assistant Director of Economic Development Heidi
Steinmetz, and Recording Secretary Jessica Miller
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 6:30 p.m. by Mayor Klinzing.
2. Consider February 6, 2006 Agenda
MOVED BY COUNCILMEMBER FARBER AND SECONDED BY
COUNCILMEMBER MOTIN TO APPROVE THE FEBRUARY 6, 2006
AGENDA. MOTION CARRIED 5-0.
3. Consider Consent Agenda
MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY
COUNCILEMBER FARBER TO APPROVE THE FOLLOWING CONSENT
AGENDA:
3.1.JANUARY 17, 2006 MINUTES
3.2.CHECK REGISTER
3.3.ADVERTISE FOR PAID ON-CALL FIREFIGHTERS
3.4.PARKING EASEMENT AGREEMENT WITH FIRST NATIONAL
BANK OF ELK RIVER
3.5.APPOINTMENT OF STEPHEN ROHLF TO THE HERITAGE
PRESERVATION COMMISSION (EFFECTIVE MARCH 1, 2006) FOR A
THREE-YEAR TERM TO EXPIRE FEBRUARY 28, 2009
3.6.RESOLUTION 06-10 APPROVING A PREMISE PERMIT FOR
COMMUNITY CHARITIES OF MN
3.7.RESOLUTION 06-11 APPROVING A PREMISE PREMIT FOR
FRATERNAL ORDER OF EAGLES AERIE 3264
3.8.RESOLUTION 06-12 APPROVING A PREMISES PERMIT FOR
AMERICAN LEGION POST 112
3.9.APPROVAL FOR CITY CLERK TO ATTEND IIMC ANNUAL
CONFERENCE
3.10.APPLY FOR METRO GREENWAYS GRANT
3.11.ADVERTISE FOR ICE ARENA OFFICE ASSISTANT
3.12.ADVERTISE FOR PARK MAINTENANCE WORKER
City Council Minutes Page 2
February 6, 2006
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3.13.WESTBOUND LIQUOR GRAND OPENING
3.14.RESOLUTION 06-13 ACKNOWLEDGING CONTRIBUTION TO THE
ELK RIVER POLICE DEPARTMENT FROM THE FRATERNAL
ORDER OF EAGLES
MOTION CARRIED 5-0.
4. Open Mike
No one appeared for Open Mike.
5.1. Consider Outcomes of the 2003 MN Investment Fund Program for Sportech, Inc.
Expansion Project, Public Hearing
Assistant Director of Economic Development Heidi Steinmetz explained that in 2003, the
city received a $200,000 grant from the Minnesota Department of Employment and
Economic Development (DEED) under its Minnesota Investment Fund Program. Ms.
Steinmetz stated that the DEED grant funds were loaned by the city to Sportech, Inc.at 2%
interest to assist with the purchase of equipment related to the 20,000 square foot
manufacturing facility expansion. She indicated that as the loan is paid back to the city by
Sportech over a period of seven years, the city is able to retain the full $200,000 to be used
for economic development purposes. Ms. Steinmetz reviewed the goals and outcomes of the
loan to Sportech. She reported that one of the primary goals was the creation of 15 new full-
time positions (above the existing 23 jobs) at a wage of $12.00 per hour. Also, eight of the
15 were required to be taken by persons of low to moderate income. Ms. Steinmetz noted
that the company met the stated job and wage goals and today employs approximately 60
full-time employees.
Chris Carlson, President of Sportech, Inc. – indicated that the loan has been very
beneficial to Sportech and has allowed them to expand their current facility, purchase new
state of the art equipment, and hire additional employees. Mr. Carlson stated that obtaining
the loan through the city saved Sportech about $19,000 in interest over a conventional loan.
Mayor Klinzing opened the public hearing. There being no one to speak on this issue,
Mayor Klinzing closed the public hearing.
5.2. The Bank of Elk River Expansion Project
5.2.A. Consider Property Tax Abatement and Business Subsidy, Public Hearing
5.2.B. Resolution 06-14 Authorizing Execution of a Tax Abatement and Business Subsidy
Agreement
Director of Economic Development Catherine Mehelich stated that The Bank of Elk River
submitted an application for Tax Rebate Financing (Tax Abatement) for their 20,000 square
foot corporate office expansion to the existing downtown facility. Ms. Mehelich indicated
that the applicant is requesting the city rebate up to $300,000 of its portion of the new
property taxes generated as a result of the expansion project and for Sherburne County to
rebate a matching share for a combined total of $600,000.
Ms. Mehelich explained that at their January 3, 2006 meeting, the Housing and
Redevelopment Authority reviewed the abatement application and recommended that the
City Council approve providing up to $300,000 of tax abatement to The Bank of Elk River
City Council Minutes Page 3
February 6, 2006
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based on only the new market value generated as a result of the expansion project for a
maximum of 12 years, along with The Bank’s commitment to create 20 new full-time
positions at a minimum hourly wage of $15.00 within two years of project completion.
Ms. Mehelich explained that normally, a financial but for analysis would be completed to
determine the amount of public assistance necessary for the project to proceed but this
application is being processed under the premise that The Bank is incurring substantial
additional construction costs by converting the existing facility rather than building on land
it owns in Otsego.
Ms. Mehelich noted that the Sherburne County Economic Development Alliance (SCEDA)
considered The Bank’s request for tax abatement from the County at their January 25, 2006
meeting and adopted a motion to recommend to the Sherburne County Board of
Commissioners approval of up to $300,000 in tax abatement for a maximum of 10 years.
Mayor Klinzing opened the public hearing. There being no one to speak on this issue,
Mayor Klinzing closed the public hearing.
MOVED BY COUNCILMEMBER FARBER AND SECONDED BY
COUNCILMEMBER GUMPHREY TO ADOPT RESOLUTION 06-14
AUTHORIZING EXECUTION OF A TAX ABATEMENT AND BUSINESS
SUBSIDY AGREEMENT. MOTION CARRIED 5-0.
Pat Dwyer, Senior Vice President of The Bank of Elk River – thanked the City Council
and stated that The Bank is looking forward to their expansion and hopes to get it started
soon.
5.3. Resolution 06-15 Providing for the Issuance and Sale of #3,595,000 Electric Revenue
Bonds, Series 2006A and Pledging Net Revenues for the Security Thereof
City Administrator Lori Johnson explained that the Utilities Commission held a special
meeting earlier this afternoon to consider bids for the bond sale of $3,595,000 Electric
Revenue Bonds.
Sid Inman, Senior Vice President of Ehlers & Associates – reviewed the bid results.
Mr. Inman indicated that nine bids were received and the recommendation is to award the
bid to the lowest bidder, Northland Securities, Inc. of Minneapolis, Minnesota.
Councilmember Dietz questioned if the Utilities Commission would have received a better
interest rate by using the city’s A1 bond rating rather than obtaining their own rating of A2.
Mr. Inman indicated that the city’s bond rating cannot be used for Electric Revenue Bonds.
MOVED BY COUNCILMEMBER MOTIN AND SECONDED BY
COUNCILMEMBER FARBER TO ADOPT RESOLUTION 06-15
CONCURRING IN THE ACTION OF THE BOARD OF COMMISSIONERS OF
THE PUBLIC UTILITIES COMMISSION OF THE CITY OF ELK RIVER,
MINNESOTA, IN PROVIDING FOR THE ISSUANCE AND SALE OF
$3,595,000 ELECTRIC REVENUE BONDS, SERIES 2006A. MOTION
CARRIED 5-0.
City Council Minutes Page 4
February 6, 2006
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5.4. Presentation of Thank You for Donation of Fire Truck from the Maple Hill Volunteer Fire
Department
Fire Chief Bruce West stated that in April 2005, the City Council approved donating the
1980 Ford L9000 General Safety pumper to the Maple Hill Volunteer Fire Department and
that another used truck was donated to them in late 2003. Mr. West stated that as a token of
their appreciation for the donation of the trucks, the Maple Hill Volunteer Fire Department
asked him to present a plaque on their behalf to the Mayor and City Council. He stated that
the Maple Hill Volunteer Fire Department is very appreciative of the assistance they have
received from the City of Elk River.
Mayor Klinzing accepted the plaque on behalf of the City Council.
5.5. Discuss Council Worksession Agendas
City Administrator Lori Johnson reviewed the tentative worksession agendas for February
and March. Ms. Johnson indicated that City Attorney Peter Beck will be present at the
February 13 worksession to provide an update on the Pinewood Agreement. She also stated
that she has received a proposal for consulting work on the city’s pay structure and would
like to discuss this at the February 13 worksession.
6. Other Business
There was no other business.
7. Council Updates
There were no council updates.
8. Staff Updates
Fire Chief Bruce West formally thanked Dennis Anderson for his 21-years of service to the
Elk River Fire Department. Chief West stated that Dennis was an asset to the department
and will be missed.
Mayor Klinzing stated that she would like to see resignations of firefighters and other
employees who have been long-term employees of the city to be brought forward to the
Council so both the Council and the public are aware of the years served.
Chief West stated that it is very difficult to keep firefighters due to the huge time
commitment required for training and fire calls.
9. Adjournment
There being no further business, Mayor Klinzing adjourned the meeting of the Elk River
City Council at 7:13 p.m.
Minutes prepared by Jessica Miller.
____________________
Joan Schmidt
City Council Minutes Page 5
February 6, 2006
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City Clerk