City Council Agenda Packet 02-26-19904
AGENDA FOR THE MEETING OF THE CITY COUNCIL
Monday, February 26, 1990 - 7:00 p.m.
Mayor: Ken Maus
Council members: Fran Fair, Warren Smith, Shirley Anderson, Dan
Blonigen
1. Call to order.
2. Approval of minutes of the regular meeting held February 12,
1990, and the special meeting held February 20, 1990.
3. Citizens comments/petitions, requests, and complaints.
4. Public hearing and consideration for adoption of a resolution
relating to the modification by the Housing and Redevelopment
Authority in and for the City of Monticello of the
redevelopment plan relating to Redevelopment Project No. 1,
the modification of the tax increment financing plans relating
to Tax Increment Financing District Nos. 1-1 through 1-8, and
the establishment of Tax Increment Financing District No. 1-9,
all located within Redevelopment Project No. 1, and the
approval and adoption of the tax increment financing plan
relating thereto.
5. Consideration of adopting a resolution calling for a public
hearing on the proposed modification by the Housing and
Redevelopment Authority in and for the City of Monticello of
the redevelopment plan for Redevelopment Project No. 1, the
modification of the tax increment financing plans for Tax
Increment Financing District Nos. 1-1 through 1-9, and the
approval and adoption of the tax increment financing plan for
Tax Increment Financing District No. 1-10, all located within
Redevelopment Project No. 1.
6. Consideration of a resolution calling for a public hearing on
the tax increment financing plan--K-Mart.
7. Review and authorization to proceed with fire department
tanker truck modifications.
B. Consideration of an additional extension to probationary
period/residency requirement --Tony Strands.
9. Consideration of adopting settlement agreement with Jones
Intercable and adoption of cable franchise ordinance
amendment.
l 10. Consideration of renewing gambling license request --Wright
County Ducks Unlimited.
Council Agenda
February 26, 1990
Page 2
11. Review of annual liquor store financial report for 1989.
12. Consideration of bills for the month of February.
13. Adjournment.
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MINUTES
REGULAR MEETING - MONTICELLO CITY COUNCIL
Monday, February 12, 1990 - 7:00 p.m.
Members Present: Ken Maus, Warren Smith, Shirley Anderson,
Fran Fair, Dan Blonigen
Members Absent: None
Approval of minutes.
Motion was made by Warren Smith, seconded by Shirley
Anderson, to approve the minutes of the regular meeting
held January 22, 1990, with the addition of a notation
that the public hearing was opened and closed under item
#4. Motion carried unanimously.
Citizens comments/petitions. requests, and complaints.
Ben Smith, member of the Monticello Housing and
Redevelopment Authority, thanked Council for sending him
to the tax increment financing all -day seminar. During
his presentation, Smith reviewed proposed legislation
affecting the use of tax increment financing. He also
noted that every city needs a comprehensive tax increment
financing policy and that a joint policy should be
adopted by the City and by the HRA. Smith noted that the
HRA and the City should discuss this matter together and
establish a common guideline.
Ken Maus thanked Smith for his comments and agreed that
the City and the HRA should sit down together and develop
a policy statement guiding the City in its use of tax
increment financing.
Public hearinq on proposed increases in retail license
fees for non-intoxicatinq and intoxicatinq liquor
licenses.
The public hearing was opened. There being no comments
from the public, the hearing was closed. Administrator
Wolfstollor reviewed his recommendation regarding liquor
license fees. Wolfstollor noted that he surveyed a
number of communities and established a proposed foe
structure based on the average fees charged by other
communities. Fran Fair asked if there had been any
comments regarding the proposed fee schedule from
individuals affected. Administrator Wolfsteller replied
that no comments had been forthcoming.
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` After discussion, a motion was made by Fran Fair,
seconded by Dan Blonigen, to adopt the proposed
recommended fee schedule for all intoxicating and non -
intoxicating liquor licenses as follows:
On -sale liquor $3,750
Sunday liquor $ 200
On -sale 3.2 beer $ 275
Off -sale beer $ 75
On -sale wine $ 275
Set-up license $ 275
Combination wine/3.2 beer on -sale $ 500
Motion carried unanimously.
5. Public hearinq - 7th Street improvement prosect. AND
6. Consideration of a resolution ordering plans and
specifications for street and utility improvements and
appurtenant work - 7th Street and Minnesota Street.
Mayor Maus opened the public hearing. Assistant
Administrator O'Neill requested that Council consider
ordering plans and specifications for plan 01 or plan A2.
O'Neill noted that due to timing constraints, it may not
be possible to wait until March 12, 1990, to decide on
which plan to follow. OSM needs time between February 12
and March 26 to complete the plans.
O'Neill went on to review the finance plans associated
with the two plans. Discussion focused on the financing
of the extension of sanitary sewer and water services
from the present location at the corner of Minnesota
Street and 7th Street to the freeway.
O'Neill explained that the cost to the Brennan and Kramer
property to extend sewer and water amounts to $24,000.
Council discussed a proposal to defer these assessments
until such time that the utilities were needed. Under
this sconorio, the assessment amount would equal the cost
to install the improvements at the time they are needed.
Adjustments to the assessment to be based on the
construction index. Tax increment financing revenue
would be used to pay the initial cost of the improvement.
Tom Brennan indicated that he would support the plan to
extend sewer and water as proposed if the assessment for
such improvement is deferred. He also noted that he
would record the proposed assessment at such time that
the final construction cost is known.
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Council also discussed the extension of storm water
service to serve the Brennan property as well. The
estimated cost to serve this area is $23,000. It was
proposed that tax increment financing be used to finance
the initial cost with Brennan paying an assessment for
this service at such time that the property being served
is developed. Under this scenerio, the assessment amount
would equal the cost to install the improvements at the
time they are needed. Adjustments to the assessment to
be based on the construction index. The City Engineer
noted that the City will save $30,000 in the future by
installing this structure as part of the 7th Street
improvement project.
Dan Blonigen asked if plan t2 can be bid as an alternate.
John Badalich responded by saying that the reduced plan
can be bid as an alternate and could be selected at a
later date.
After discussion, motion was made by Fran Fair, seconded
by warren Smith, to authorize plans and specifications
per
plan 11 contingent on The Lincoln Companies paying
$10,000 toward the cost of plan development. Said plan
development will not begin until a $10,000 deposit is
provided to the City by The Lincoln Companies. Motion
carried unanimously.
SEE RESOLUTION 90-4.
Consideration of the petition from McAdnw Onk development
residents.
Council reviewed a petition submitted by Meadow Oak
residents which requested that the City take action to
control development of proposed low income, first-time
home buyer housing in the Meadow Oak Second, Third, and
Fourth additions, as such a development will decrease the
value of their current residences.
Building Inspector, Gary Anderson, indicated that plans
for development of this typo of housing have been
withdrawn by the developer; therefore, the problem
identified by the Meadow Oak residents has been
eliminated for the time being.
Mayor Maus noted that the withdrawal of the development
plans gives Council the opportunity to housing
development explore alternatives.
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Pat Faltersack, area resident, noted that he was not
against the housing program; however, he did feel that
the homes proposed were not consistent with the nature of
the existing subdivision.
Rhonda Thielen noted that this type of development could
happen in any neighborhood and that it is not a city-wide
problem. She also noted that the public nuisance
ordinance violations are not corrected on a timely basis.
Fran Fair commended the local residents for their
attempts to upgrade their neighborhood and thereby
improve the community. She supported stronger efforts to
eliminate public nuisance problems.
Warren Smith asked what the minimum standards are for
residential construction in neighboring cities. He
wondered if Monticello's residential housing construction
standards should be changed. Ken Maus noted that the
size of a home is not a major factor in establishing its
value. It's not so much the size, as small homes are not
always the cause of a poor neighborhood.
Assistant Administrator O'Neill noted that there is a
ry demand in the Monticello area for starter homes. A plan
`- should be developed to accommodate this need without
creating a negative impact on established residential
areas. Mayor Maus concurred that City staff contact the
City planner and develop a proposal for accommodating the
single family housing need in the community without
creating a negative impact on existing residential
neighborhoods.
Motion was made by Shirley Anderson, seconded by Fran
Fair, to authorize City staff to contact the City planner
for the purpose of studying this matter further. Motion
carried unanimously.
8. Consideration of an ordinance amendment further defininq
public nuisances.
Administrator Wolfsteller noted that since our underlying
purpose in having a public nuisance ordinance is to
eliminate blight and unsightly conditions in both
residential and commercial noighborhoods, the staff and
the City attorney feel that it is necessary to amend our
ordinance to eliminate the possibility of individuals
storing a large number of automobiles outdoors. As a
result, it was suggested by tho City attorney that the
ordinance amendment be adopted, which would strengthen
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the City's ability to control storing of unused vehicles
on residential property. At this po'_nt, Council reviewed
the proposed amendment.
Council did not achieve a consensus on this matter;
therefore, motion was made by Shirley Anderson, seconded
by Fran Fair, to postpone a decision regarding this
matter until the second meeting in March. Motion carried
unanimously.
Consideration of ordinance to requlate cigarette vendinq
machines.
Mori Malone was in attendance and reviewed the reasons
why she submitted the idea of development of the
ordinance. Malone noted that by eliminating cigarette
vending machines we can improve the health of our youth
by decreasing the easy availability of cigarettes. She
also noted that it's the 16th anniversary of D -Day, which
had its origin in Monticello.
Assistant Administrator O'Neill noted that prior to
development of the final wording of the ordinance, staff
would like to know if Council wishes to enact a complete
ban on cigarette vending machines or a partial ban.
O'Neill went on to note that the City of Big Lake
prohibits cigarette sales through vending machines
everywhere except in an establishment that has on -sale
intoxicating liquor licenses. On the other hand, the
City of white Bear Lake does not allow cigarettes to be
sold through vending machines anywhere in the city.
Ken Maus noted that in Minneapolis, cigarette machines
are allowed to operate in motels.
Dan Blonigon reviewed his opposition to regulating
cigarette sales through vending machines. He noted that
tobacco is a legal substance and is even still subsidized
by the government. By eliminating vending machines, we
will create a now set of problems. Our efforts would be
better spent educating youth regarding the hazards of
cigarette smoking.
Aftor discussion, it was the general consensus to develop
an ord nance which would allow cigarette vending machines
to be operated in liquor establishments or other areas
where it is impossible for individuals under 18 years of
age to access the cigarette vending machines.
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10. Update by City Attornev on current litigation issues.
City Attorney, Tom Hayes, updated the Council on the
status of the Senior Citizen Director lawsuit. Hayes
informed Council that the note of issue has been filed
and no response to the City's offer has been received.
A pre-trial conference is now coming forward. Council
took no action on this matter.
11. Review of Monticello Softball Association financial
report for 1989 and update on expenditures relatinq to
NSP softball field complex.
Rick Wolfsteller updated the Council on total
expenditures at the softball complex and reviewed the
Softball Association's financial report. Wolfsteller
noted that the fees collected from the Softball
Association do not cover 1009 of the annual maintenance
cost of the field; however, he also noted that the Men's
Softball Association is not the only organization that
utilizes the field. Wolfsteller went on to say that if
Council feels additional revenue is needed, we may want
to investigate charging other organizations that utilize
the complex also or charge the Softball Association a
higher fee to use the field.
Ken Maus asked how the Monticello fees compare to fees
required by other communities. Roger Mack noted that the
fee schedule was established two years ago and was based
on fees charged at a field in Mankato. Maus suggested
that once we demonstrate what others are requiring for
fees, we can then set our own fees. Warren Smith noted
that the Softball Association is doing a good job, and he
saw no need to adjust fees at this time.
After discussion, motion was made by Fran Fair, seconded
by Warren Smith, to accept the financial report submitted
by the Monticello Softball Association. Amendments to
the existing fee structure to occur only after review of
fees charged by other cities. Motion carried
unanimously.
12. Consideration of award of bids for Project 90-1, booster
Pump refurbishment, at the water reservoir on Chelsea
Road.
John Simola reported that it's the recommendation of the
City Engineer, Public Works Director, and Water
Superintendent that the City Council award the
refurbishment of existing pumps to the lowest bidder able
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Council Minutes - 2/12/90
to satisfy technical requirements. The two bids received
were submitted by E.H. Renner b Sons at a cost of
$35,296. The second alternative would be to award the
bid to Traut Wells, Inc., in the amount of $39,900.
Simola went on to note that the last estimate given the
City Council for the work was $42,000; therefore, the
bids are within the latest proposed budget projections.
After discussion, motion was made by warren Smith,
seconded by Shirley Anderson, to award the bid to the
lowest bidder able to satisfy technical requirements.
Motion carried unanimously.
13. Consideration of renewinq contract for enqineerinq and
consultinq services and revised enqineerino fee schedule.
Shirley Anderson noted her concern regarding the length
of time it takes for the City to obtain updated base
maps. John Badalich responded by saying that updates to
base maps are usually done on an annual basis and are not
done at the end of every project. It is less expensive
in terms of printing costs to update maps on an annual
basis rather than on a project basis. Shirley Anderson
also was concerned that the City did not receive up-to-
date monthly reports on project expenditures. John
Badalich responded by saying OSM will make a better
effort to make sure that the City receives up-to-date
project cost information on a monthly basis.
Rick wolfsteller noted that the continuation of
engineering services with OSM does not have to be a
guaranteed commitment that all engineering services have
to be performed by OSM. The City Council may wish, and
the staff would like the option, to utilize other
engineering firms should the need arise for a specific
project or task. If staff feels that a future project
would be more appropriately handled by another
engineering firm, this would be brought to the Council
for their approval. Assistant Administrator O'Neill and
Public Works Director, John Simola, both indicated that
the engineers from OSM supporting John Badalich have been
doing a good job of late and have boon providing timely
service to the City.
After diecussion, a motion was made by Fran Fair,
seconded by Warren Smith, to continue the consulting
services agreement with OSM and adopt the revised foe
schedule. During discussion, Ken Maus noted that this
agreement can be terminated upon 30 days notice if the
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Council Minutes - 2/12/90
need arises. Voting in favor of the motion: Ken Maus,
Fran Fair, Warren Smith, Shirley Anderson. Opposed: Dan
Blonigen. In explaining his opposition, Dan Blonigen
stated that he was not satisfied with the number of
change orders associated with projects throughout the
years. John Badalich responded by saying that many of
the change orders were not foreseeable and were found
necessary only after the project is started.
14. Consideration of hirinq an inspector.
John Simola reported that over the last few years we have
considered hiring our own inspector for various public
improvement projects. In addition, the work load in
other departments, primarily the sewer and water
utilities department, has increased to a point where
additional staffing is needed. In addition, OSM
indicated that if the individual hired was competent, the
City engineer would have no problems signing off on
improvement projects. Simola also noted that in 1989 the
City spend $42,000 on improvement inspections. About
7.38 of this time was on private projects. At the same
time, it would cost the City approximately $29,000 to
$34,000 per year to hire an inspector, including salary
and benefits. Based upon OSM's new rate for construction
observation, it is easy to see that we only need to
provide 655 hours of inspection work on public projects
to pay for 1008 of the individual's salary for the whole
year. Aside from the public improvement projects, there
are other numerous duties that the inspector could
perform for the City.
Ken Maus noted his support for the idea, as hiring an
inspector will improve quality control while saving money
at the same time.
After discussion, motion was made by Fran Fair, seconded
by Warren Smith, to develop a job description based on
the above task descriptions and advertise for a full-time
inspector with a salary range of $24,000 to $27,000 per
year depending on qualifications. Motion carried
unanimously.
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15. Consideration of adontina a resolution calling for a
public hearing on the proposed modification by the
Housinq and Redevelopment Authority in and for the City
of Monticello of the redevelopment plan for Redevelooment
Project N1, the modification of the tax increment
financing plans for Tax Increment Financing District Nos.
1-1 through 1-8, and the approval and adoption of the tax
increment financinq plan for Tax Increment Financinq
District No. 1-9.
After discussion, motion was made by Dan Blonigen,
seconded by Shirley Anderson, to adopt a resolution
calling for a public hearing date on February 26, 1990,
for TIF plan relating to Tax Increment Financing District
1-9. SEE RESOLUTION 90-5.
16. Consideration of adoptinq a resolution qivinq preliminary
approval for the Tapper, Inc., project and qivinq
preliminary approval. for the issuance of small business
development loan revenue bonds.
Shirley Anderson asked if adopting the resolution will
create a financial liability for the City. Pat Pelstring
of Business Development Services responded by saying that
the resolution states that the City supports the
development proposed by Tappor, Inc., which gives the
State the authority to issue the small business
development loan revenue proceeds to Tapper, Inc., for
purposes of financing a portion of the Tapper, Inc.,
project.
After discussion, a motion was made by Warren Smith,
seconded by Fran Fair, to adopt a resolution giving
preliminary approval for the Tapper, Inc., project and
giving preliminary approval for the issuance of small
business dovelopmont loan rovenuo bonds. Motion carried
unanimously.
SEE RESOLUTION 90-6.
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17. Reconsideration of adopting a resolution relating to the
modification by the Housinq and Redevelopment Authority
in and for the Citv of Monticello of the Redevelopment
Prosect No. 1, the modification of the tax increment
financinq plans relating to Tax Increment Financing
District Nos. 1-1 through 1-10, and the establishment of
Tax Increment Financing District No. 1-11, all located
within Redevelopment Prosect No. 1, and the approval and
adoption of the tax increment financinq Plan.
011ie Koropchak reported that the Housing and
Redevelopment Authority requests that Council reconsider
this resolution which was not adopted at the previous
Council meeting. Koropchak went on to report that
additional information is available that might cause
Council to reconsider its previous position on this
matter.
Ken Maus noted that the Council may have misunderstood
the main thrust of Martie's Farm Service business
activity. He went on to note that after reading the
business description submitted by Mr. Martie, a large
portion of the business activity is commercial rather
than retail. At this point in the meeting, Council
discussed policies with regard to the use of tax
increment financing. Pat Pelstring of Business
Development Services noted that the Housing and
Redevelopment Authority struggled with the same issue
that Council discussed at the previous meeting. The HRA
was also concerned that this type of project was purely
retail versus commercial. As a result of the HRA's
concern, the HRA recommended that the use of tax
increment financing equal the portion of the project
focusing on commercial rather than retail business use.
Pelstring went on to note that the HRA supported the
project because it folt that the local business community
and business owners should receive consideration when
requesting assistance via TIF; and although the Martie's
Farm Service project is not pure manufacturing, it does
have substantial aspects that relate to manufacturing.
Dan Blonigon noted that he's bothered by the fact that
the City is forced into using tax increment financing in
order to compete with financial programs provided by
other cities. He noted his desire that the State
restrict it appropriately and that it is out of control.
Ken Maus noted that it is likely that the legislature
will modify the TIF statutes so as to control its use.
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He also went on to note that the Martie's Farm Service
business is a business that has a regional draw. In
fact, the farm service could locate elsewhere. It may
make sense for the City to utilize tax increment
financing in order to keep this business in Monticello.
Mr. Martie mentioned that he did not attend the original
meeting. He apologized for not making it. It was his
understanding that his presence would not be necessary.
He went on to note that he does operate a unique business
that is generally non-competitive with other retail
businesses in the community and that his draw is regional
and local.
Fran Fair asked why tax increment financing is necessary
when it appeared that the business is going to relocate
anyway.
Mr. Martie indicated that the use of tax increment
financing was always a major component of the finance
plan and that the relocation to a large degree was
predicated on the ability to obtain the financing.
Ken Maus asked Martie to describe the ratio of retail
versus wholesale business that his business conducts.
Martie explained that a major portion of his business
comes from wholesale distribution of salt, pet food,
oats, animal feeds. Fran Fair asked if Martie is going
to expand into other product lines. Martie explained
that yes, he will be expanding into agriculture related
hobby farm products, different foods for different
animals. He did note that he would be doing some retail
but not a lot of volume.
Ken Maus noted that the HRA felt an obligation to bring
this information forward regarding the nature of the
business. He also went on to note that the State will
act to rectify the tax increment financing legislation;
however, at this time we are bound to operate within the
rules that exist.
Shirley Anderson asked, "Are we satisfied that this
development would not occur without tax increment
financing?" Ken Maus responded by saying that the "but
for" question is not simply a findncial distinction. In
other words, if it was not "but for" tax increment
financing used in Monticello, the development would have
gone elsewhere.
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if Dan Blonigen brought the discussion to a close by making a
motion to reverse the previous decision and adopt the
i resolution approving use of tax increment financing in this
case. Warren Smith seconded by motion. Motion carried
unanimously. SEE RESOLUTION 90-7.
18. Consideration of change order 11 and final payment for
Improvement Project 88-06, water main and appurtenant work
near the old wells and to the new water tank.
Motion was made by Warren Smith, seconded by Fran Fair, to
approve change order 01 in the amount of $4,153.25 and approve
final payment to the contractor, Richard Knutson of Savage,
Minnesota, in the amount of $25,993.99. Motion carried
unanimously.
19. Consideration of authorizing the purchase of Remmele property.
Rick Wolfsteller informed Council that City staff has been
working extremely hard in attracting Remmele Engineering,
Inc., of Big Lake to locate their new facility in Monticello.
As part of the proposal to relocate in Monticello, Remmele
proposed that the City purchase 68.7 acres of land adjacent to
the city. The money used in this purchase would be
contributed toward the costs associated with building the
manufacturing plant in Monticello.
Ken Maus noted that he supports the purchase of the property
at its appraised value and noted that the property is a
sellable piece of property, which would allow the City to
recover its investment.
After discussion, motion was made by Dan Blonigen, seconded by
Shirley Anderson, to authorize the preparation of a purchase
agreement at the stated market appraisal of $55,000 contingent
upon Remmele starting construction of their new facility in
Monticello. Motion carried unanimously.
20. Consideration of a resolution adopting a records retention
schedule.
After discussion, a motion was made by Shirley Anderson,
seconded by Warren Smith, to table adoption of the resolution
adopting a records retention schedule pending further review
by staff. Motion carried unanimously.
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21. ouarterly department head reports.
At this time in the meeting, department head reports were
received from Don Hozempa, Karen Hanson, Jerry Wein, Rick
Wolfsteller, Jeff O'Neill, Gary Anderson, John Simola,
and 011ie Koropchak.
There being no further discussion, the meeting was adjourned.
Jff Neill
Ass Stant Administrator
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MINUTES
SPECIAL MEETING - MONTICELLO CITY COUNCIL
Tuesday, February 20, 1990 - 7:30 a.m.
Members Present: Ken Maus, Fran Fair, Warren Smith, Dan
Blonigen, Shirley Anderson
Members Absent: None
Assistant Administrator, Jeff O'Neill, reported that 80 acres
of land near the site of the existing Pilot's Cove Airport is
available for sale and that Council might wish to consider
purchasing this land in anticipation of potential development
and expansion of the existing airport. O'Neill noted that the
existing airport land area is too small to qualify for State
funding. In order for the airport to expand, a portion of the
land north of the airport must be purchased. At this time,
Council has the opportunity to buy 80 acres north of the land
needed for purchase and then attempt to work a trade with the
owner of the property directly north of the airport. O'Neill
went on to note that the State will fund 500 to 758 of the
land cost purchase if the airport development plans qualify
for funding. The City must provide up -front money with
reimbursement from the State of Minnesota when the project is
funded by the State.
In reviewing the proposal to purchase the land, O'Neill noted
that there is considerable risk involved. For instance, there
is no guarantee that the airport would qualify for State
fundiny; the State does not generally fund airports with
north/south runway alignments; there is no guarantee that the
City could work out a deal with the owner of the property
directly north of the existing airport; in order for the
airport to expand, rezoning must occur, and there is no
guarantee that an application for rezoning acceptable to the
State will be approved by the local jurisdiction. To mitigate
the risk, the City could rent the land and resell it if the
airport did not get funded; however, the total cost of the
land might not be recovered. In addition, there would be
considerable staff and consultant time and expense necessary
to see the project through without any guarantees.
Mayor Maus noted that development of an airport represents an
investment in the City's future and that tho City should
seriously consider development of the airport; however, he was
not sure if it is the right time to purchase the land that is
now available given the numerous unansworod questions
regarding airport development at the site.
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Dan Blonigen mentioned his opposition to the idea of investing
significant money into a facility that is not used by the
general public and that benefits a small group of fliers. He
also noted that it is not clearly demonstrated that the
presence of the airport would encourage economic development.
Fran Fair agreed that significant research needs to be
conducted prior to a major investment by the City.
Shirley Anderson agreed that we should look at development of
the airport carefully and make sure that we have support from
the local jurisdictions before investing a significant amount
of money toward the development of the airport.
It was the general consensus of Council that staff, working
with the airport development advisory committee, should
prepare additional information as follows:
1. Determine the true potential of development and
expansion of the airport at its existing site.
2. Obtain a clear idea of who is using other municipal
airports in an attempt to determine the economic
development benefit of an airport in Monticello.
�P-D
Jeff 1
Assis an Administrator
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3. Citizens comments/petitions, requests, and complaints. (R.W.)
Mr. Tom Moores, representing the Little League Baseball
organization, has indicated he will be attending the Council
meeting under citizens comments to discuss with the Council
the Little League program and its needs in the future.
Mr. Moores may have briefly discussed his intentions with the
Council members prior to the meeting; and since there has not
been a specific request, I felt he could approach the Council
under citizens comments at this time.
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Council Agenda - 2/26/90
Public hearing and consideration for adoption of a resolution
relating to the modification by the Housing and Redevelopment
Authority in and for the City of Monticello of the
op
redevelopment plan relating to Redevelment Project No. 1,
the modification of the tax increment financing plans relating
to Tax Increment Financing District Nos. 1-1 through 1-8 and
the establishment of Tax Increment Financing District No. 1-9,
all located within Redevelopment Project No. 1-9, and the
approval and adoption of the tax increment financing plan
relating thereto. (O.K.)
A. REFERENCE AND BACKGROUND:
The public hearing may be opened for oral or written comment
from the public and oral or written comment from the school
district, the hospital district, and the county commission.
Bill and Barb Tapper, owners of Tapper, Inc., contacted the
City of Monticello last summer/fall of their interest and need
to expand their operations. They considered Elk River, the
St. Michael area, Monticello, and others for a possible site
location. Tapper, Inc., does business as Genereux Fine Wood
Products and Westlund Distributing. Genereux manufactures a
full line of unfinished custom storage systems primarily for
the single family home market. Westlund Distributing
distributes hardware to the cabinet manufacturing industry.
The company currently operates out of a 12,000 sq ft facility
in St. Michael, which is leased.
The initial Monticelln PxpanRinn will he a 24,000 sq ft
manufacturing facility with a 3,000 sq ft mezzanine/office
area. Jobs will include the retention of 25 plus an
approximate addition of 25 skilled and semi -skilled labor.
Location site is Lot 4, B1ocY 2, Oakwood Industrial Park,
7.6 acres.
The Induotrial Development Promotion/Prospect Committee
visited their operations in St. Michael. The Tappers were
guests at the fall IDC banquet, they have toured Monticello
and its industrial parks, and they have appeared before the
HRA and the Planning Commission for approval of their planned
project and TIP plan.
C
Council Agenda - 2/26/90
As part of the industrial recruitment process, Business
Development Services, Inc., prepared a financial package for
Tapper, Inc., based on the total project cost (uses) and
sources. The financial package includes TIF, $77,500 land
acquisition; Small Business Development Loan, approximately
$820,000; Greater Monticello Enterprise Fund, approximately
$100,000; and equity, approximately $28,800 for building,
equipment, and soft costs. The SBDL soon to be approved for
dollar allocation will determine the dollars requested from
the GMEF.
upon financing approvals, the Tappers plan to begin
construction in March/April with construction completion in
the fall. Bill and Barb Tapper will be present at the City
Council meeting to present their expansion plans. Deb Grains
of BDS, Inc., will also be present.
The City Council, after having called for a public hearing
date of February 26 at the previous Council meeting, after
notice having appeared in the local newspaper for two weeks,
and with the assumption of no public comment, may close the
public hearing, and the Council should consider adoption of
the resolution for Tax Increment District and Finance
Plan No. 1-9 (Tapper, Inc.).
B. ALTERNATIVE ACTIONS:
1. Adopt the resolution relating to the modification by the
Housing and Redevelopment Authority in and for the City
of Monticello of the redevelopment plan relating to
Redevelopment Project No. 1, the modification of the tax
increment financing plans relating to Tax Increment
Financing District Noe. 1-1 through 1-8, and the
eatablishment of Tax Increment Financing
District No. 1-9, and the approval and adoption of the
tax increment financing plan relating thereto.
2. To not adopt the resolution.
1. Table adoption of the resolution.
C. STAFF RECOMMENDATION:
Recommendation to City Council is for the adoption of the
resolution because the project increases the annual tax base
by approximately $25,000, the project provides increased
employment of approximately 25 now jobs, and has a positive
impact to the community at large. The HRA approved the
finance plan meeting HRA policy considerations: The project
is consistent with the City's comprehenaive plan, the project
demonstrates long-term economic and housing benefits to the
community, the project shall create employment, and the
C
L
Council Agenda - 2/26/90
project shall be deemed to promote additional desired spin-off
development. The Planning Commission approved the finance
plan, as the project was consistent with the comprehensive
plan. The project also meets several of the Redevelopment
Project No. 1 objectives. The IDC, the HRA, Business
Development Services, Inc., and the City staff have put ample
time into the recruitment of Tappers, Inc., and find the
company and owners to be of high equality, interested in the
community, and a growing, well-managed company.
D. SUPPORTING DATA:
Copy of the resolution for adoption; Copy of a portion of the
TIF plan; Project plans to be presented at the Council
meeting.
Councilmember introduced the following
resolution, the reading of which was dispensed with by unanimous
consent, and moved its adoption:
CITY OF MONTICELLO
WRIGHT COUNTY
STATE OF MINNESOTA 10 -
RESOLUTION NO.
A RESOLUTION RELATING TO THE MODIFICATION, BY
THE HOUSING AND REDEVELOMENT AUTHORITY IN AND
FOR THE CITY OF MONTICELLO, OF THE
REDEVELOPMENT PLAN RELATING TO REDEVELOPMENT
PROJECT NO. 1, THE MODIFICATION OF THE TAX
INCREMENT FINANCING PLANS RELATING TO TAX
INCREMENT FINANCING DISTRICTS NOS. 1-1 THROUGH
1-8 AND THE ESTABLISHMENT OF TAX INCREMENT
FINANCING DISTRICT NO. 1-9, ALL LOCATED WITHIN
REDEVELOPMENT PROJECT NO. 1, AND THE APPROVAL
AND ADOPTION OF THE TAX INCREMENT FINANCING
PLAN RELATING THERETO.
BE IT RESOLVED by the City Council (the "Council") of the
�► City of Monticello, Minnesota (the "City"), as follows:
Section 1. Recitals.
1.01. It has been proposed and adopted by the Housing And
Redevelopment Authority in and for the City (the "Authority")
that the Authority modify, by increased project costs,
Redevelopment Project No. 1, pursuant to and in accordance with
Minnesota Statutes, Sections 469.001 to 469.047, inclusive, as
amended. It has been further proposed and adopted by the
Authority that the Authority modify the Tax Increment Financing
Plans for Tax Increment Financing Districts Nos. 1-1 through 1-8
and establish Tax Increment Financing District No. 1-9, located
within Redevelopment Project No. 1, and approve and adopt the Tax
Increment Financing Plan relating thereto, pursuant to and in
accordance with Minnesota Statutes, Sections 469.174 to 469.179,
inclusive, as amended.
1.02. The Authority has caused to be prepared and this
Council has investigated the facts with respect thereto, a pro-
posed Modified Redevelopment Plan (the 'Modified Redevelopment
Plan") for Redevelopment Project No. 1, defining more precisely
the increased project costs to be made to Redevelopment Project
No. 1, the proposed Modified Tax Increment Financing Plans for
C Tax Increment Financing Districts Nos. 1-1 through 1-8 and the
proposed Tax Increment Financing Plan (the 'Tax Increment
Financing Plan") for Tax Increment Financing District No. 1-9
(collectively referred to as the "Plans").
G)
1.03. The Authority and the City have performed all actions+
required by law to be performed prior to the modification of
Redevelopment Project No. 1, the modification of Tax Increment
Financing Districts Nos. 1-1 through 1-8 and the establishment
of Tax Increment Financing District No. 1-9 and the adoption of
the Plans relating thereto, including, but not limited to,
notification to Wright County, Independent School District
No. 882 and Monticello -Big Lake Community Hospital, having
jurisdication over the property to be included in Tax Increment
Financing District No. 1-9; a review by the City Planning
Commission of the proposed Modified Redevelopment Plan for
Redevelopment Project No. 1, the proposed Modified Tax Increment
Financing Plans for Tax Increment Financing Districts Nos. 1-1
through 1-8, and the proposed Tax Increment Financing Plan for
Tax Increment Financing District No. 1-9; and the holding of a
public hearing upon published and mailed notice as required by law.
1.04. The Authority hereby determines that it is necessary
and in the best interest of the City at this time to modify
Redevelopment Project No. 1, to modify Tax Increment Financing
Districts Nos. 1-1 through 1-8 and to establish Tax Increment
Financing District No. 1-9 and approve the Plans relating
thereto, contingent upon execution of the Redevelopment and
Assessment Agreements by and between the Housing and
Redevelopment Authority of the City of Monticello, and William R.
Tapper and Barbara R. Tapper.
Section 2. Findings for the Modification of Redevelopment
Project No. 1, Modification of Tax Increment Financinq Districts
Nos. 1-1 throuqh 1-8, and the Establishment of Tax Increment
Financinq District No. 1-9.
2.01. The Council hereby finds, determines and declares that
the modification of Tax Increment Financing Districts Nos. 1-1
through 1-8 and the establishment of Tax Increment Financing
District No. 1-9, all located within Redevelopment Project No. 1,
is intended and, in the judgment of the Council, its effect will
be, to further provide an impetus for commercial and industrial
development, increase employment and otherwise promote certain
public purposes and accomplish certain objectives as specified in
the Modified Tax Increment Financing Plans and Tax Increment
Financing Plan for Tax Increment Financing Districts Nos. 1-1
through 1-9.
2.02. The Council hereby finds that Tax Increment Financing
District No. 1-9 does meet the requirements of an economic
development district in that it consists of any project, or any
portions of a project which does not meet the requirements found
in the definition of a redevelopment district, mined underground
space development district, housing district or soil corrections
district, but which the Authority and City finds to be in the
( public interest because:
1. It will discourage commerce, industry, or manufacturing
from moving their operations to another stater or
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n
1. It will discourage commerce, industry, or manufacturing
from moving their operations to another state; or
2. It will result in increased employment in the
municipality; or
3. It will result in preservation and enhancement of the tax
base of the municipality.
2.03. The Council finds, determines and declares that the
proposed development, in the opinion of the Council, would not
occur solely through private investment within the reasonably
foreseeable future and, therefore, the use of tax increment
financing is deemed necessary.
2.04. The Council finds, determines, and declares that the
proposed Tax Increment Financing Plan for Tax Increment Financing
District No. 1-9 will afford maximum opportunity and be consistent
with the sound needs of the City as a whole for the development or
redevelopment of Redeveloment Project No. 1 by private enterprise.
2.05. The Council further finds, declares and determines
that the City made the above findings stated in Section 2 and has
set forth the reasons and supporting facts fcr each determination
in writing, attached hereto as Exhibit A.
2.06. The Council determines and declares that Redevelopment
Project No. 1 is hereby modified, that Tax Increment Financing
Districts Nos. 1-1 through 1-8 are hereby modified and that Tax
Increment Financing District No. 1-9 is hereby established,
contingent upon execution of the Redevelopment and Assessment
Aqreements by and between the Housinq and Redevelopment
Authority of the City of Monticello and William R. Tapper and
Barbara R. Tapper.
Section 3. Adoption of Respective Plans.
3.01. The respective Plans presented to the Council on this
date are hereby approved and adopted, contingent upon execution
of the Redevelopment and Assessment Agreements by and between the
Housing and Redevelopment Authority of the City of Monticello and
William R. Tapper and Barbara R. Tapper, and shall be placed on
file in the office of the City Administrator.
Section 4. Implementation of the Modified Redevelopment
Plan, Modified Tax Increment Financinq Plans and Tax Increment
Financinq Plan.
4.01. The officers of the City, the City's financial advi-
sor, underwriter and the City's legal counsel and bond counsel
are authorized and directed to proceed with the implementation of
the respective Plans and for this purpose to negotiate, draft,
prepare and present to this Council for its consideration all
further plans, resolutions, documents and contracts necessary to
accomplish this purpose.
-3-O
The motion for the adoption of the foregoing resolution was y
duly seconded by Councilmember , and upon
vote being taken thereon, the following voted in favor thereof:
And the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted, and was signed by the Mayor and attested to by the City
Administrator.
Dated February 26, 1990
Attest:
City Administrator
(SEAL)
C
Mayor
EXHIBIT A TO RESOLUTION NO. G
l
� J
The reasons and facts supporting the findings for the
establishment of the Tax Increment Financing Plan for Tax
Increment Financing District No. 1-9 as required, pursuant to
Minnesota Statutes, Section 469.175, Subd. 3, are as follows:
1. Finding that Tax Increment Financing District No. 1-9 is a
"economic development district" as defined in Minnesota Statutes,
Section 469.174, Subd. 12.
Tax Increment Financing District No. 1-9 consists of one
parcel which does not meet the requirements of a redevelopment
district, mined underground space development district, housing
district or soils correction district. The Authority and City
find Tax Increment Financing District No. 1-9 to be in the public
interest because:
1. It will discourage commerce, industry, or manufacturing
from moving their operations to another state; and
2. It will result in increased employment in the municipa-
lity; and
3. It will result in preservation and enhancement of the tax
base of the municipality.
2. Finding that the proposed development, in the opinion of the
Council, would not occur solely through private investment within
the reasonable foreseeable future, and therefore, the use of
tax increment financing is deemed necessary.
City staff has reviewed the available financing costs for the
development. Due to the high costs of the public improvements,
the project would not be financially feasible without the City's
assistance.
3. Finding that the Tax Increment Financing Plan conforms to the
general plan for the development or redevelopment of the munici-
pality as a whole.
The Monticello Planning Commission reviewed the Tax Increment
Financing Plan for Tax Increment Financing District No. 1-9 on
February 6, 1990, and determined that the Tax Increment
Financing Plan for Tax Increment Financing District No. 1-9
conforms to the Comprehensive Plan of the City.
4. Finding that the Tax Increment Financing Plan for Tax Increment
Financing District No. 1-9 will afford maximum opportunity,
consistent with the sound needs of the City as a whole, for the
development of Redevelopment Project No. 1 by private enterprise.
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C
The project to be developed, which will be located within
Tax Increment Financing District No. 1-9, consists of the
construction of a 25,000 square foot office/production facility
to be ccnatructed in the spring of 1990 and completed by
December 31, 1990. It is anticipated that 25 additional full-
time jobs will result from this project.
5. Finding regarding. the method of tax increment computation set
forth in Minnesota Statutes, Section 469.177, Subd. 3, Clause
(b), if applicable.
The Council does not elect the method of tax increment com-
putation set forth in Minnesota Statutes, Section 469.177, Subd.
3, Clause (b).
6. Finding regarding duration of Tax Increment Financing
District No. 1-9.
The duration of Tax Increment Financing District No. 1-9 will
be eight (8) years from the date of receipt of the first tax
increment or ten (10) from the approval of the Tax Increment
Financing Plan, whichever is less. Pursuant to Minnesota
Statutes, Section 469.177, Subd. 3, the City requests 100 percent
of the available increase in assessed value for current
expenditures.
BUDGET
Land Acquisition $104,000.00
Current Assessment 6,600.00
Future Assessment 11,600.00
Plan/Agreement 5,000.00
City Contingency 8,200.00
Discount 2,000.00
Financial/Bond Counsel 12,100.00
Capitalized Interest 20,500.00
$170,000.00
Tax Increment Financinq District No. 1-8.
(As'adopted January 23, 1989)
BUDGET
Land Acquisition
$21,200.00
Improvements
1,800.00
Subtotal
$23,000.00
Administration
500.00
Professional Services
3,500.00
Capitalized Interest
7,000.00
$34,000.00
rTax Increment Pinancinq_District_No. 1-9
(As adopted February 26, 1990)
�BtlDC;ET—�
Land Acquisition $ 77,500.00
Subtotal $ 77,500.00
Administration 15,000.00
Professional Services 5,000.00
Capitalized Interest 24,500.00
Discount 3.000.00
$125,000.00
(As adopted November, 1982)
Subsection 1.11. Land Use. All new and/or existing
development on land identified on Exhibits I -C through I -F
as •property to be acquired" or 'possible acquisition• will be
subject to the following uses and requirements:
1. Uses Permitted in Designated Areas.
a. Industrial --All permitted, accessory and conditional uses
as specified in Chapters 15 and 16, Monticello Zoning
ordinance, relating to 1-1 (Light Industry) and I-2
(Heavy Industry) zones. Planned Unit Developments. where
r applicable, will be considered.
1 I-27
D
I
AN
I
SECTION X
TAX INCREMENT FINANCING PLAN FOR
TAX INCREMENT FINANCING DISTRICT NO. 1-9
Subsection 10.1. Statement of Objectives. See Subsection
1.4 of the Redevelopment Plan.
Subsection 10.2. The Redevelopment Plan. See Section I,
Subsections 1.1 through 1.20.
Subsection 10.3. Description of the Project. The project,
located within Tax Increment Financing District No. 1-9,
consists of the construction of a 25,000 square foot office/
production facility. This facility is to be constructed in
the spring of 1990, and completed by December 31, 1990.
It is anticipated that 25 additional full-time positions
will be created as a result of this construction.
Subsection 10.4. Parcels to be Included in Tax Increment
Financinq District No. 1-9. The following property is located in
the City of Monticello, County of Wright, State of Minnesota.
Leqal Description
Lot 4, Block 2, Oakwood Industrial Park, City of Monticello,
Minnesota, County of Wright.
PTD NO.: 155-018-002040 Owner: Oakwood Industrial Park
Subsection 10.5. Parcels in Acquisition. The Authority
intends to acquire the property listed in Subsection 10.4, which
property is located within Tax Increment Financing District No.
1-9.
Properties identified for acquisition will be acquired either
by the City or the Authority in order to accomplish public
improvements listed in Subsection 1.9 of the Redevelopment Plan
hereof.
X-1
J
c
Subsection 10.6. Development Activity in Tax Increment
Financinq District No. 1-9 for Which Contracts will be Siqned.
The following contract(s) will be entered into by the Housing
and Redevelopment Authority and the person(s) named below:
Prior to the certification of Tax Increment Financing
District No. 1-9, a Development and Assessment Agreement will be
executed between the Housing and Redevelopment Authority of
Monticello and William R. Tapper and Barbara R. Tapper.
Subsection 10.7. Other Specific Development Expected to
Occur within Redevelopment Protect No. 1.
(As specific development is expected to occur, it will be
inserted into this Subsection.)
Subsection 10.8. Estimated Public Improvement Costs and
Supportive Data. See Subsection 1.10 of the Redevelopment Plan
for estimated costs associated with Redevelopment Project No. 1.
Subsection 10.9. Sources of Revenue. Public improvement
costs, and other costs outlined in Subsection 1.10 of the
Redevelopment Plan will be financed through the annual collection
of tax increments.
Subsection 10.10. Oriqinal Tax Capacity. Pursuant to
Section 469.177, Subd. 1, of the Tax Increment Financing Act, the
original tax capacity value for Tax Increment Financing District
No. 1-9 is estimated to be $2,641, based on the tax capacity
value of all taxable real property within Tax Increment Financing
District No. 1-9. Pursuant to Section 469.177, Subds. 1 and 4,
of the Tax Increment Financing Act, the County Auditor of Wright
County (the "County Auditor') shall certify in each year the
amount by which the original tax capacity value has increased or
decreased as a result in a change in tax-exempt property within
Tax Increment Financing District No. 1-9, reduction or enlarge-
ment of Tax Increment Financing District No. 1-9 or changes
in connection with previously issued building permits. In any
year in which the current tax capacity value of Tax Increment
Financing District No. 1-9 declines below the original tax
capacity value, no tax capacity value will be captured and no tax
increment will be payable to the Authority.
x-2 0
l
Subsection 10.11. Estimated Captured Tax Capacity Value.
Pursuant to Section 469.175, Subd. i, and Section 469.177, Subd.
2, of the Tax Increment Financing Act, the estimated captured tax
capacity value in Tax Increment Financing District No. 1-9 at
final completion will approximate $2,849. This estimated annual
captured capacity value is determined in the following manner:
Estimated Tax Capacity Value at Final Completion $31,130
Original Tax Capacity 2,641
Captured Tax Capacity Value $28,489•
'Please refer to Exhibit X-8 for the year-to-year expected tax
increment for Tax Increment Financing District No. 1-9.
Subsection 10.12. Type of Tax Increment Financinq District.
Tax Increment Financing District No. 1-9, is pursuant to Section
469.174, Subd. 12, an Economic Development District as described
below:
"'Economic Development District' means a type of tax increment
financing district which consists of any project, or portions
of a project not meeting the requirements found in the definition
of redevelopment district or housing district, but which the
authority finds to be in the public interest because:
(a) It will discourage commerce, industry or manufacturing from
moving their operations to another state; or
(b) It will result in increased employment in the municipality;
or
(c) it will result in the preservation and enhancement of the
tax base of the municipality,•
Subsection 10.13. Duration of Tax Increment Financing
District No. 1-9, Pursuant to Section 469.176, Subd. 1, of the
Tax Increment Financing Act, the duration of Tax Increment
Financing District No. 1-9 will be ten (10) years from the
approval of the Tax Increment Financing Plan, or eight (8) years
from receipt of the first tax increment, whichever is less.
Subsection 10.14. Proposed Development Analysis, Pursuant
to Minnesota Statutes, Section 469.175, Subd. i(7), specific
findings and analysis relating to the proposed development in Tax
Increment Financing District No. 1-9. Additional relevant
documentation relating to the findings and analysis will be on
file and available for review in the City Administrator's office.
X-3 0
Subsection 10.15. Estimated Impact on Other Taxing
Jurisdictions.
Test No. 1: The estimated impact on other taxing jurisdic-
tions assumes construction would have occurred without the
creation of Tax Increment Financing District No. 1-9. If the
construction is a result of Tax Increment Financing, the impact
is $0 to other entities.
Test No. 2: Notwithstanding the fact that the fiscal impact
on the other taxing jurisdictions is $0 due to the fact that the
financing would not have occured without the assistance of the
City, the following estimated impact of Tax Increment Financing
District No. 1-9 would be as follows if Test No. 1 (the 'but for•
test) was not met:
IMPACT ON TAX BASE
Original Future Captured
Net Tax Net Tax Net Tax
Capacity Capacity Capacity District
Payable Payable Payable % of
Entity Tax Base 1990 1990 1990 Entity
Wright
County S 42,798,916 $2,641 $31,130 $28,489 .0678
City of
Monticello $ 15,874,595 $2,641 $31,130 $28,489 .1799
I.S.D. 882 $ 18,312,425 $2,641 $31,130 $28,489 .1568
Hospital
District $ 22,886,660 $2,641 $31,130 $28,489 .1249
IMPACT ON TAX CAPACITY
MILL RATES
Net Tax Capacity Potential
Entity Rate 1990 Taxes
Wright County 21.314 $ 6,072
City of Monticello 16.187 4,612
School District 882 40.861 11,641
Hospital District 2.813 801
81.1758 $226
Please refer to Exhibit X -B for the year-to-year expected tax
increment for Tax Increment Financing District No. 1-9.
Subsection 10.16. Cash Plow Assumptions and Analysis.
A. Future Tax Capacity. The estimated future tax capacity of
Tax Increment Financing District No. 1-9 at final completion
C as determined by the City Assessor is $31,130 payable 1992.
Please refer to Exhibit X -e for the year-to-year expected
tax increment from Tax Increment Financing District No. 1-9.
X_4 0
R
B. Projected Timing. The payment of the first full tax
increment from Tax Increment Financing District No. 1-9 will
be received by the Authority in 1992.
C. Oriqinal Tax Capacitv. The County Assessor's records show
the original tax capacity of Tax Increment Financing District
No. 1-9 to be $2,641 for taxes in 1989 and payable in
1990.
D. Gross Tax CapacitY Rate. The gross tax capacity rate is
81.175 percent.
E. Tax Increment. Total tax increment at the completion of all
redevelopment activity has been calculated assuming a static
gross tax capacity rate and a valuation increased by zero
percent (08) compounded annually.
F. Capital Expenditures. Capital expenditures are a summary
of the items associated with the public improvement costs set
forth in Subsection 10.8 and are to be financed from the pro-
ceeds of the Bonds and tax increment revenue.
Subsection 10.17. Estimated Amount of Bonded Indebtedness.
It is anticipated that $125,000 of bonded indebtedness will be
incurred with respect to this portion of the Redevelopment
Project.
Subsection 10.18. Tax Increment Pinancinq Account for Tax
increment Pinancinq District No. 1-9. The tax increment received
with respect to Tax increment Financing District No. 1-9 will be
submitted by the Authority to the City and segregated by the
Authority in a special account or accounts (the "Tax Increment
Account*) on its official books and records or as otherwise
established by resolution of the city to be held by a trustee or
trustees for the benefit of holders of the Bonds.
Subsection 10.19. Modification of Tax Increment Pinancinq
District No. 1-9. As of February 26, 1990, there have been no
modifications made to Tax Increment Financing District No. 1-9.
X-5 0
EXHIBIT X -A
M 0
hanesota
DE-ARNA.147. OF ECONOMIC DEVELOPMENT,
Industrial Park Profile
Oakwood Industrial Park
Monticello, Minnesota
0 200 400 FEET 0 A1AA.AaLE PARCELS
ga
PARK
so
1 r �IA'
VIAL.
ou—m
X -A
0
C
EXHIBIT X -B
EXPECTED YEAR-TO-YEAR TAX INCREMENT'S RELATING TO TAX INCREMENT
FINANCING DISTRICT NO. 1-9 AND TAX CAPACITY ANALYSIS
YEAR BASE TC ADJ FACTOR ADJ BASE FUT TC NET CAP TC 1990 TCR ANNUAL TI
$180,793
X -B
0
$31,130
89/90
$2,641 1.04
0.81175
90/91
$2,747
$28,383
91/92
$2,857
$28,273
$22,951
92/93
$2,971
$28,159
$22,858
93/94
$3,090
$28,040
$22,762
94/95
$3,213
$27,917
$22,661
95/96
$3,342
$27,788
$22,557
96/97
$3,475
$27,655
$22,449
97/90
$3,614
$27,516
$22,33E
98/99
$3.759
$27,371
$22,218
$180,793
X -B
0
EXHIBIT X-C
DISTRICT CERTIFICATION FORM
Date Prepared: January 26, 1990
Name of District or Modification: Tax Increment Financinq
District No. 1-9
Date of City Council Approval: February 26. 1990
ECONOMIC DEVELOPMENT DISTRICT CERTIFICATION
At the time of district creation or modification, the followinq
conditions apply:
X The project does not meet the requirements found in the
definition of a redevelopment district, housing district,
or a mined underground space development district.
X The project was created after August 1, 1979, and was
designated an economic development tax increment district,
as defined in Minnesota Statutes, Section 469.174, Subd.
12, because:
X a) It will discourage commerce, industry or
manufacturing from moving their operations
to another state.
X b) It will result in increased employment in the
municipality.
X c) It will result in preservation and enhancement of
the tax base of the municipality.
Supportinq documentation on file:
Land Use Plan Map
X City Council Resolution
Project Objectives
Other:
This Form Prepared by:
Business Development Services, Inc.
Title
Original Building Condition Data Collected bys
N/A
Title
i Documentation in support of District Certification is on file at
the City offices.
X-C 0
Council Agenda - 2/26/90
Consideration of adopting a resolution callinq for a public
hearing on the proposed modification by the Housinq and
Redevelopment Authority in and for the City of Monticello of
the redevelopment plan for Redevelopment Project No. 1, the
modification of the tax increment financlnq plans for Tax
Increment Financinq District Nos. 1-1 throuqh 1-9, and the
approval and adoption of the tax increment financinq plan for
Tax Increment Financing District No. 1-10, all located within
Redevelopment Project No. I. (O.K.)
A. REFERENCE AND BACKGROUND:
This agenda item is to call a public hearing for the adoption
of the TIF plan for Remmele Engineering, Inc. Remmele
Engineering is a supplier of high quality, technologically
advanced services in the areas of: 1) contract fabricating,
machining, and assembly; 2) designing and building custom
equipment for automating or mechanizing a variety of
manufacturing processes; and 3) fabricating and building
machinery designed by customers where it fits our
manufacturing capabilities. Customers for all Remmele
Engineering services consist primarily of manufacturing
industries.
Remmele Engineering currently has 400 employees located in
four plants. Two plants are located in Big Lake and two
plants are located in St. Paul. Based upon the long term
needs of the company, the site muse be able to accommodate
future expansion of a facility up to 60,000 sq ft. The
initial plant will be 23,333 sq ft with two planned
expansions. Initial employment will be 50 skilled labor Jobs.
Site location is Lot 6, Block 1, Oakwood Industrial Park,
6.58 acres; vacated Fallon Avenue, .82 acres; Boyle property,
2.1 acres for a total of 9.4 acres. Additionally, Remmele
Engineering will purchase an approximate .92 acres and deed to
the City for realignment of Fallon Avenue. Plane call for the
City to acquire a small triangular piece of Boyle property
south of Chelsea Road to complete the realignment of Fallon
Avenue.
The TIF plan relating to TIF District No. 1-10 is available in
complete form for review at the City Hall. A portion of the
plan will be included with the March Council agenda. The
total Phase I TIF budget is $260,000 (land acquisition
$120,000 and on -alto uti1itles/grading/landscaping $65,000
from the HRA oxcoss fund). Remaining costs are soft costs,
capitalized interest, otc.
Representatives from Rommole Engineering will be present at
the March 12 Council mooting.
C
Council Agenda - 2/26/90
The Council should consider calling for a public hearing for
the Remmele TIF plan relating to District No. 1-10, said
hearing to be Monday, March 12, 1990.
B. ALTERNATIVE ACTIONS:
To adopt the resolution calling for a public hearing on
the proposed modification by the Housing and
Redevelopment Authority in and for the City of Monticello
of the redevelopment plan for Redevelopment Project
No. 1, the modification of the tax increment financing
plans for Tax Increment Financing District Nos. 1-1
through 1-9, and the approval and adoption of the tax
increment financing plan for Tax Increment Financing
District No. 1-10.
2. Do not adopt the resolution.
3. Table adoption of the resolution.
C. STAFF RECOMMENDATION:
Recommendation is for the City Council to adopt the resolution
calling for a public hearing on March 12, 1990, for the TIF
plan relating to TIF District No. 1-10. Recommendation is
consistent with HRA approval of the TIF plan and with the
assumption of the HRA public hearing for disposition of lands
not hearing public opposition, and with the assumption the
Planning Commission approves the project plan being consistent
with the City's Comprehensive Plan, respective meeting to be
held on March 7 and March 6.
D. SUPPORTING DATA:
Copy of the resolution for adoption; Copy of site location
plan.
6
Councilmember introduced the following
resolution, the reading of which was dispensed with by unanimous
consent, and moved its adoption:
CITY OF MONTICELLO
WRIGHT COUNTY
STATE OF MINNESOTA
RESOLUTION NO.
RESOLUTION CALLING FOR A PUBLIC HEARING ON
THE PROPOSED MODIFICATION, BY THE HOUSING AND
REDEVELOPMENT AUTHORITY IN AND FOR THE CITY
OF MONTICELLO, OF THE REDEVELOPMENT PLAN FOR
REDEVELOPMENT PROJECT NO. 1, THE MODIFICATION
OF THE TAX INCREMENT FINANCING PLANS FOR TAX
FOR TAX INCREMRNT FINANCING DISTRICTS NOS.
1-1 THROUGH 1-9 AND THE APPROVAL AND ADOPTION
OF THE TAX INCREMENT FINANCING PLAN FOR TAX
INCREMENT FINANCING DISTRICT NO. 1-10, ALL
LOCATED WITHIN REDEVELOPMENT PROJECT NO. 1.
BE IT RESOLVED by the City Council (the "Council") of the
City of Monticello, Minnesota (the "City"), as follows:
Section 1. Public Hearinq. This Council shall meet on
March 12, 1990, at approximately 7:00 p.m., to hold a public
hearing on the following matters: (a) the proposed modification,
by increased project costs, of the Housing and Redevelopment
Authority's (the "Authority") Redevelopment Project No. 1; (b)
the proposed modification, by increased project costs, of Tax
Increment Financing Districts Nos. 1-1 through 1-9, located
within Redevelopment Project No. 1; (c) the establishment of Tax
Increment Financing District No. 1-10, located within
Redevelopment Project No. 1; (d) the proposed adoption of the
Modified Redevelopment Plan for Redevelopment Project No. 1; (e)
the proposed adoption of the Modified Tax Increment Financing
Plans for Tax Increment Financing Districts Nos. 1-1 through 1-9;
and (f) the proposed adoption of the Tax Increment Financing Plan
for Tax Increment Financing District No. 1-10, all pursuant to
and in accordance with Minnesota Statutes, Sections 469.001 to
469.047, inclusive, as amended, and Sections 469.174 to 469.179,
inclusive, as amended.
0
Section 2. Notice of Hearing{ Filinq of Proqram. The City `
Administrator is authorized and directed to cause notice of the
hearing, substantially in the form attached hereto as Exhibit A,
to be given as required by law, to place a copy of the proposed
Modified Redevelopment Plan, Modified Tax Increment Financing
Plans and Tax Increment Financing Plan on file in the
Administrator's Office at City Hall and to make such copy
available for inspection by the public no later than
February 16, 1990.
The motion for the adoption of the foregoing resolution was
duly seconded by Councilmember , and upon vote
being taken thereon, the following voted in favor thereof:
And the following voted against the same:
Whereupon said resolution was declared duly passed and
adopted by the Council in and for the City of Monticello,
Minnesota, on February 26, 1990.
ATTEST:
C
Administrator
Mayor
L
r
,0,901
p,XNiQ1T XI -A 1 �
Council Agenda - 2/26/90
6. Consideration of a resolution calling for a public hearing on
the tax increment financing plan--K-Mart. W .O.)
A. REFERENCE. AND BACKGROUND:
Council is asked to consider calling a public hearing on the
proposed establishment by the City of Monticello of
development district -1, the proposed establishment of the
development program relating thereto, the proposed
establishment of a tax increment financing district.• 1-1, and
the proposed adoption of the tax increment financing plan
relating thereto.
B. ALTERNATIVE ACTIONS:
1. Motion to adopt the resolution.
The public hearing is scheduled for March 12, 1990, at
7:00 p.m.
2. Motion to deny adoption of the resolution.
C. STAFF RECOMMENDATION:
Staff recommends adoption of the resolution. According to
state statutes, in order for the K-Mart tax increment finance
plan to be adopted, Council must first call the public hearing
as outlined in the resolution. Unless Council has a change of
heart regarding the K-Mart development finance plan, Council
should adopt this resolution.
D. SUPPORTING DATA:
Copy of resolution.
7
J
Councilmember introduced the following
l resolution, the reading of which was dispensed with by unanimous
consent, and moved its adoption:
CITY OF MONTICELLO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO.
RESOLUTION CALLING FOR A PUBLIC HEARING ON THE PROPOSED
ESTABLISHMENT BY THE CITY OF MONTICELLO OF DEVELOPMENT
DISTRICT NO. 1 AND THE PROPOSED ESTABLISHMENT OF THE
DEVELOPMENT PROGRAM RELATING THERETO AND THE PROPOSED
ESTABLISRMENT OF TAX INCREMENT FINANCING DISTRICT NO.
1-1 AND TRE PROPOSED ADOPTION OF THE TAX INCREMENT
FINANCING PLAN RELATING THERETO.
BE IT RESOLVED by the City Council (the 'Council') of
the City of Monticello, Minnesota (the "City"), as follows:
Section 1. Public Hearing. This Council shall meet on
March 12, 1990, at approximately 7:00 P.M., to hold a
public hearing on the following matters: (a) the proposed
establishment of the City's Development District No. 1, (b)
the proposed adoption of the Development Program relating
thereto, (c) the proposed establishment of Tax Increment
Financing District No. 1-1 therein, and (d) the proposed
adoption of the Tax Increment Financing Plan relating thereto,
all pursuant to and in accordance with Minnesota Statutes,
Chapter 669, as amended.
Section 2. Notice of Hearinq: Filinq of Proqram. The
City Clerk is authorized and directed to cause notice of the
hearing, substantially in the form attached hereto as Exhibit A,
to be given as required by law, to place a copy of the proposed
Development Program and the Tax Increment Financing Plan on file
in the Clerk's office at City Hall and to make such copy
available for inspection by the public no later than
February 15, 1990.
The motion for the adoption of the foregoing resolution
was duly seconded by councilmember , and
upon vote being taken thereon, the following voted in favor
thereof:
C
9
Council Agenda - 2/26/90
Review and authorization to proceed with fire department
tanker truck modifications. (R.W.)
A. REFERENCE AND BACKGROUND:
On January 8, the City Council was presented with a proposal
by the fire department and Monticello Township Board member,
Ted Holker, regarding the purchase of a used 1982 Ford chassis
to be utilized for a new water tank truck for the fire
department. The City Council had approved the concept of
purchasing the used chassis and authorized an estimated
$21,500 to be allocated for improvements to the truck for a
tank and related items.
The Fire Board did acquire the 1982 Ford chassis for $6,500.
The chassis was then taken to Gould Brothers Chevrolet for a
mechanical inspection, which determined that a number of items
needed to be repaired prior to the fire department utilizing
the vehicle for its Intended purpose. It was naturally
assumed that a paint job would be required and that some minor
mechanical improvements would be necessary; but the inspection
also noted that a brake job would be needed at an estimated
cost of $800 to $1,100. In addition, a couple of the tires
are in need of replacement, and it is also being suggested
that six new tires for approximately $800 be part of the
Improvements in the future.
The Joint Fire Board met on February 8 to discuss the needed
repairs to the truck and to review quotations on the best
method for installing a tank for the vehicle. Initially, the
fire department had anticipated purchasing a stainless steel
water tank but later determined that the chassis was not of
sufficient gross vehicle weight capacity to utilize a
2,000 gallon steel tank, and thus we're researching a
fiberglass tank option. Apparently, a number of fire
departments have gone to fiberglass tanks as a method of
reducing weight and still supplying the necessary volume of
water for smaller trucks.
Attached is a summary of the anticipated expenditures to date
nocessary for refurbishing a now tanker truck. Although the
joint board is assuming there may be some additional items
necessary, it appears they should have no problem coming in at
or under the budgeted $21,500 figure utilizing a fiberglass
tank.
The main purpose of this agenda item is to update the Council
on the progress and also to seek the Council's authorization
regarding miscollanooue repairs that may be needed to the
mechanical system, especially a brake overhaul. ouotations
wore received from Gould Brothers Chevrolet for a complete
brake job at $1,100 and from Hoglund Bus Company for $855; but
Council Agenda - 2/26/90
the Monticello Township members have indicated that they have
current staff that is available to do the brake job at what
they feel will be a reduced cost in the neighborhood of $500
to $600 total. The Township is willing to purchase the parts
and have their personnel do the brake job; but they would like
to be able to have the Joint Fire Board reimbursed for their
labor cost. Prior to starting the repairs, I felt the Council
should be aware of this possibility and approve the concept of
utilizing Township employees to do the repair with the labor
cost being reimbursed by the fire fund.
B. ALTERNATIVE ACTIONS:
1. The first alternative would be to accept the Township's
offer of utilizing Township employees to do the brake
repairs and other miscellaneous mechanical repairs with
the understanding that the joint fire fund would
reimburse the Township for any labor cost. It is
anticipated that under this option, the joint fire fund
could realize a savings of up to $500 in repair cost
versus utilizing an auto repair facility.
2. Do not accept the offer of utilizing Township employees
to do the repairs.
C. STAFF RECOMMENDATION:
While the purpose of this item was to update the Council on
the progress toward meeting the budget allocated for this new
fire truck, I felt it was important that the Council be aware
of the Joint Fire Board's proposed cost saving measure of
having the Township employees do the mechanical repairs to the
truck instead of a service garage such as Gould's or Hoglund
Bus Company. While the fire department members do not have a
problem with the Township doing the work, I thought it was
best that the City Council be aware of this option prior to
any work being done. If the Council has a problem with this
arrangement and would rather see a service establishment do
the repairs, we should so inform the Township at this time.
If the Council doesn't have a problem with this arrangement,
I will contact Ted Holkor of the Township and arrange to have
the work commenced.
D. SUPPORTING DATA:
Estimated cost summary of refurbished tank truck as of
February B, 1990.
I
SUMMARY OF ESTIMATED COSTS FOR
FIRE DEPARTMENT TANK TRUCK
•Could Brothers Chevrolet Estimated:
Brake job $1,100
Misc. meth, repairs 1,000
��
Hoglund Bus Company estimated brake job @ $855.
Township estimates brake job could be done for $450-$600 using
Township employees.
0
1982 Ford Chassis
$ 6,500
Repairs (brakes 6 mist)•
1,500
Radio, lights, electronics
1,000
New tires
1,000
Paint
1,500
2,000 gallon fiberglass tank
6,000
with valves, etc.
Shorten frame
600
Side cabinet for portable pump
850
TrF—lm
•Could Brothers Chevrolet Estimated:
Brake job $1,100
Misc. meth, repairs 1,000
��
Hoglund Bus Company estimated brake job @ $855.
Township estimates brake job could be done for $450-$600 using
Township employees.
0
Council Agenda - 2/26/90
Consideration of an additional extension to Drobationary
period/ residency requirement --Tony Strande. (R.W.)
A. REFERENCE AND BACKGROUND:
On June 10, 1988, the City hired Tony Strands to work in the
water department to fill the vacancy that was created by Walt
Mack's retirement. Matt Theisen was offered the supervisor's
position, and Tony then filled Matt's former job
classification. The union contract requires a six-month
probationary period at 808 of the prevailing wage for the
first six months, then 908 of the prevailing wage for the next
year. But because Tony had been a past City employee, we
started him at 908 of union scale and made a separate
agreement with him that he signed that would increase his wage
to 1008 of union scale upon completion of the probationary
period. In addition, because of the time factor on answering
emergency calls in the water and sewer collection system, we
also included in the agreement that Tony would be required to
move from Palmer, Minnesota, into the Monticello area within
six months so that he could answer an emergency call within a
10 -minute time period. Currently, it takes Tony at least
20-25 minutes to reach the city after being notified of an
emergency.
The original six-month probationary period expired on
December 10, 1988, and the City Council on December 12, 1988,
agreed to extend Tony's probationary period for an additional
eight months or until he had relocated. I believe the reason
for the eight-month extension was to allow Tony sufficient
time through the summer of 1989 to sell his house and relocate
to within that 10 -minute response time area.
On August 14, 1989, the City Council again agreed to extend
Tony's probationary period for another six months or until he
relocated. As of today, Tony has not yet sold his home and
relocated. The question now being asked of the City Council
is whether additional extensions should be granted or whether
the terms of the employment agreement should be initiated
which would result in a termination notice being given to
Tony.
Although there has not been a life or death emergency call
situation relating to his ability to respond, there have been
numerous occasions where he has been difficult to got ahold of
or Matt Theisen, the Water Superintendent, has boon required
[o respond to the emergency calls. To give you an idea, Matt
has had to respond to at least 26 call-backs or emergency
situations after hours or on weekends; whereas Tony has only
responded to 6 in the last 1-1/2 years. Since it is to be the
responsibility of. Tony to rospond to these emergency calls or
call-backs and not the Superintendent's normal responsibility,
10
Council Agenda - 2/26/90
you can see that a disapportioned amount of calls are being
taken by the supervisor due to his residency in Monticello
versus Tony who is up to one-half hour away. This current
situation is putting our supervisor in an uncomfortable
position in knowing that if he waits to rely on Tony to
respond to any call, the situation could become an emergency
or result in further problems or damage by waiting for Tony to
respond. When Walt Mack was the Water Superintendent, it was
Matt's responsibility to answer the emergency calls. Now that
Matt is the supervisor, it should be Tony's responsibility to
be the first one to respond to the calls; but as you can see
by the number taken by Matt, this is not being done. I
believe the requirement of the job position, having the
employee within a 10 -minute response time, is a valid concern
and a reasonable condition of employment in this position.
While it was Initially felt that there was enough incentive to
anticipate Tony moving closer to Monticello because of the 90%
pay scale, over 18 months have passed since his employment;
and it does not appear that at this point Tony is any closer
to moving than he was the day he started. I have discussed
this situation with our labor attorney, Mr. Mike O'Connor, who
has Indicated that our employment agreement requiring Tony to
move was a valid condition of employment; but he did caution
that continued extensions of the probationary period may not
be appropriate forever. He cautioned that if any additional
extensions are granted, the next one should be the last one
with a specific date being established and termination
proceedings being initiated if this date is not met.
B. ALTERNATIVE ACTIONS:
The first alternative could be to extend Tony Strande's
probationary period again for a reasonable time period
with a specific ending date, at which time his employment
would be terminated if he did not meet the conditions
agreed to.
Under this alternative, the Council would be reaffirming
that the 10 -minute response time is a valid concern of
the City, and the Council would indicate that this
condition must be mot to retain employment. Also, it is
/ e recommended that Tony again acknowledge this
� -4--understanding by./ resigning the original employment
agreemdnt with those terms and conditions spelled out.
2. The second alternative would be to end Tony Strande's
probationary period and increase his wages to 1006 of
union scalo.
Under this alternative, the Council would be agreeing to
eliminate the 10-minuto response time as a condition of
X
Council Agenda - 2/26/90
employment and as a result would be resigning itself to
requiring the supervisor to respond to emergency calls
rather than the operator. Although the City's policy
could be to have Tony still respond to all emergency
calls instead of Matt, we would in effect be accepting
the fact that emergency calls would be handled probably
30 minutes after we were notified and would be taking a
chance that no serious problem would occur during that
time period. As I indicated before, Matt, being a
conscientious employee, is responding first because he
knows that Tony would not be able to get here before a
half hour has passed. I think this puts Matt in an
uncomfortable position if he chose not to respond; and if
we waive the condition of employment now for Tony, we are
In effect condoning this in the future.
3. The third alternative would be to not grant any
additional extensions and initiate termination
proceedings at this time for not meeting the conditions
of his original employment agreement.
While I feel it's not in the best interest to continue to
grant extensions on the employment agreement forever, it
may be appropriate to allow some additional time for Tony
to meet his residency requirement but with the knowledge
that this would be the last time it would be extended.
4. The fourth alternative could be to transfer Tony to
another department within the public works and reassign
a current employee to the water system operator position.
Public Works Director, John Simola, and myself discussed
this briefly; and while there is one employee who had
previously expressed an interest in working within the
water/collection system, this employee also is not a
current resident of the city but does live closer. While
I do not know if this option is feasible, John may have
more comments at the Council meeting on this option.
C. STAFF RECOMMENDATION:
The staff's position has not changed in our opinion that a
10 -minute response time is necessary for this position. In
light of the recommendations made by our labor attorney, Mike
O'Connor, continued extensions of the probationary period
should not be granted forever. Because the City has
previously granted extensions, it is recommended that any
termination proceedings against Tony provide for a reasonable
advance notice that the City intends to terminate his position
undor the terms of the agreement. As a result, it is the
staff's recommendation that alternate I1 be adopted informing
Tony that the probationary period would be extended one more
12
14
Council Agenda - 2/26/90
time only until April 1 and that the notification should be
given to Tony that the position will be terminated on that
date if he has not completed his move to within a 10 -minute
response time. By April 1, Tony would have been given almost
two years to make the move, which certainly has been a
reasonable amount of time to accomplish this. Two weeks prior
to this date, I would also send a second notice to provide
ample warning that the position would terminate April 1. This
recommendation is based upon the assumption that the City
Council does not wish to change the job description to require
the supervisor to be responsible for all emergency calls.
Although I•m sure the Council does not wish to cause any
hardship to any employee, I do want to again point out that
Tony accepted Lhe job with the full understanding that a
relocation would be required, and he did sign the agreement
indicating he would do this within a reasonable amount of
time. In addition, I would recommend that the City, if
adopting this motion, also require Tony to sign an additional
acknowledgement of the employment agreement and the conditions
being imposed for the April 1 deadline.
D. SUPPORTING DATA:
Copy of employment agreement of June 13, 1988.
13
A
C
[YyI. a hY31&1
WATER SYSTE24S/WASTfi:7ATER COLLECTION SYSTEM OPERATOR POSITION
I, , hereby acknowledge that I have received
a rnpy t e job escription for the Water System/Wastewater Collection System
Operat and understand that the general requirement of this position with the
City of Monticello is to be able to respond to emergency needs of the community
in regards to the water and sewer systems and understand that as a condition of
employment within this position for the City of Monticello that I must be able
to respond to an emergency call within a 10 -minute period of time after being
notified at my residence.
Because the response time to an emergency is a bona fide condition of
employment, I understand that 1) although residency within the corporate city
limits is not a requirement, a condition of employment with the City requires
the ability to respond to any emergency within the city within a 10 -minute
period of time; 2) I understand that if I am not presently residing in the city
or within an area within a 10 -minute response time, I agree to relocate my
residency within a 6 -month period of time; 3) failure to do so will result in
termination of my employment with the City of Monticello.
F M0
d\mw
'John Simola, Public Works Director
R2V�Iof`ste�r, City Administrator
-/4EMp e �
S
DATED: 3, /9Pp 4
s�
OF
Council Agenda - 2/26/90
Consideration of adopting settlement agreement with Jones
Intercable and adoption of cable franchise nrdinance
amendment. (R.W.)
A. REFERENCE AND BACKGROUND:
The City of Monticello, as one of ten cities comprising the
Sherburne/Wright County Cable Communications Commission, has
been involved in a lawsuit with Jones Intercable, the
franchise holder for our cable TV system, for over a year. A
settlement agreement has been reached with Jones Intercable
and the Commission which now requires each member city to
adopt along with an ordinance amendment relating to our
franchise agreement with Jones Intercable.
Enclosed with the agenda package is a memorandum from the
Commission's Attorney, Mr. Tom Creighton, which summarizes the
lawsuit settlement and also the recommended ordinance
amendments you are asked to adopt. While I do not want to
make this a lengthy item, I will provide a brief summary of
the reasons for the lawsuit and the effects of the settlement
agreement.
In the fall of 1988, Jones Intercable had requested permission
of the Commission to delete the USA network channel and
replace it with TNT, Turner Network Television. The
commission voted to deny Jones' request to delete USA after a
public hearing was held, finding that the substitution of TNT
for USA would affect the level of service required by the
franchise ordinance. Jones Intercable then initiated a
lawsuit against the Commission and the cities contending that
the Commission's decision was erroneous and not valid. Over
the past year or so, the Commission's Attorney, Mr. Tom
Creighton, has been negotiating with Jones Intercable to
arrange a suitable settlement, which the Commission has
recently approved.
A summary of the agreement indicates that the Cable Commission
will drop its objection to the substitution of USA network
with TNT conditioned upon:
1. The cable television franchise fee being increased from
3% to 58, effective September 1, 1989.
2. Jones Intercablo be required to hire a part-time employee
for local origination programming.
As a result of the increase in franchise fees being charged to
Jones Intercable and the hiring of the part-time employee for
a local origination, tho Cable Commission agreed to a two-year
/ delay in requiring Jonas to Implement a regional channel 6,
the elimination of the narrow casting requirements of the
ordinance until franchise renewal or sale of the system,
14
Council Agenda - 2/26/90
allowing Sones to provide one letter of credit for $10,000
rather than ten separate letters of credit to each city, and
finally, allowing the cable company to move access programming
currently carried on channels 10 and 13 to a higher channel
designation.
The ten member cities' commission representatives voted in
favor of the settlement agreement, as it was our primary
concern to have the franchise fees increase from 3% to 56 in
an effort to help support the Commission and generate more
revenue for all member cities. It should be pointed out that
the City of Monticello was named in the lawsuit, but only
because it was a member of the Commission and the Commission
itself has covered all legal expenditures. The Commission
feels that the settlement is a fair compromise and will
certainly benefit all communities in the future.
The settlement agreement and the adoption of the ordinance
amendment are required of all ten city commission members to
be effective. As I indicated, the Commission members'
representatives have all voted in favor of accepting the
settlement offer which now only requires City Council approval
and adoption of the ordinance amendment that increases the
franchise fees, etc.
B. ALTERNATIVE ACTIONS:
1. Adopt the enclosed settlement agreement and adopt the
ordinance amendment. The changes in the ordinance are
underlined.
2. Do not adopt the ordinance amendment or the settlement
agreement.
C. STAFF RECOMMENDATION
As the Commission member for the City of Monticello, I
recommend that the settlement agreement and the attached
ordinance agreement be adopted. I am not aware of any reason
why the member cities would not approve this settlement
agreement and resulting ordinance agreement, as the
Commission, as a result of a lawsuit, was able to obtain a
franchise fee Increase to 5% without sacrificing the quality
of service provided for our residents.
D. SUPPORTING DATA:
Memorandum from Commission Attorney; Settlement agroemont;
Ordinance agreement.
15
O'CONNOR 6 HANNAN
ATTORNEYS AT LAW
,y...i°.bo�,•om. ria
3800 IDS CENTER
1O;',b°,'^'•"'
80 SOUTH EIGHTH STREET
Y•'"`.
MINNEAPOLIS, MINNESOTA 55402.2254
s. 00 ��•
18121 341-3800
""'a•"'
TELEX 29-0584
TELECOPIER 16121 343.1256
""
THOMAS D. CREIGHTON
16121 343.1298 INCLUDING THE FORMER FIRM MACINTOSH & COMMERS
lCENDRANDUM
DATE: January 8, 1990
TO: Cities of Buffalo, Big Lake, Cokato,
Dassel, Delano, Elk River, Maple Lake,
45.<t icello, Rockford and Watertown
FROM: Thomas D. Creighton, Legal Couns
Sherburne/Wright County Cable C cations Comm ssion
RE: Settlement of Jones Intercable, Inc. vs.
Commission and Member Cities Litigation
As you know the Cable Commission has worked for a number
of months in an attempt to settle the lawsuit by Jones Intercable
against the Commission and its Member Cities. The lawsuit stems
from the Commission's objection to the substitution of the USA
Network with Turner Network Television (TNT) by Jones Intercable.
Please be advised that the Commission has negotiated a
Settlement Agreement. In summary, the Settlement Agreement
provides that the Cable Commission and its Member Cities will
agree to drop the objection to the substitution of USA Network
with TNT conditioned upon the following ordinance amendments
by the Member Cities:
1. The Cable Television Franchise Fee will be increased
from an annual Franchise Fee of three percent (39)
to five percent (56), effective September 1, 1989.
I
The cable company will be relieved of its obligation
to implement the "narrow -casting requirements" of
the ordinance until the earlier of tat the renewal
of the Franchise Ordinance, or (b) the sale or transfer
of the system.
3. The cable company will be relieved of its obligation
to implement the regional channel 6 for at least two
years from the date of the adoption of the enclosed
Ordinance,
4. The cable company will be allowed to provide one $10,000
irrevocable and unconditional Letter of Credit naming
the City as one of the drawers thereon, as opposed
to ten $10,000 Letters of Credit, one to each City.
This one Letter of Credit will be replenishable and
available to each City so as not to appreciably decrease
the security available to each City.
5. The cable company will implement immediately its obliga-
tion to hire a part-time employee who will focus on
local origination programming.
6. The cable company may move the access programming
currently carried on channels 10 and 13 to a higher
L channel designation.
The hiring of a part-time employee for local origination
as well as the increase in the Franchise Fees from three percent
(38) to five percent (58) are both significant concessions by
the cable company which will enhance the long term health of
the community programming and franchise administrative efforts
of the Member Cities for the years to come.
Please find enclosed the Settlement Agreement, the proposed
Ordinance Amendments, and the Stipulation of Dismissal for the
lawsuit. In order to effect the Settlement Agreement the Commis-
sion requests that each Member City:
1. Adopt the enclosed Settlement Agreement and execute
the document on behalf of your City at the correct
signature block at the end of the document. Please
be sure to date your signature.
2. A.dopp�tt the enclosed Ordinance Amendments through your
Clty'a regular ordinance procedures. Please fill
in the ordinance number at the top of page 1, in the
second all capitalized paragraph of page 1, and in
-2-
the paragraph numbered "2" on page 1. Please fill
in the City's name at the top of page 1 and on signature
page 8. please fill in the appropriate dates, and
execute the document on page 8.
3. Please return the executed original_ Settlement Agreement
and executed original ordinance to this office so
that they may be forwarded to Jones Intercable for
its signature.
I will execute 'the Stipulation for Dismissal with Prejudice
and forward it to Jones Intercable for its signature and transmit-
tal to Federal District Court.
If you have any questions, please feel free to contact
me. Thank you for your cooperation in this matter.
TDC/be
Enclosure
cc: Edward J. Pluimer, Esq.
Barbara Guffey, Cable Administrator
3
Ordinance No
THE CITY OF MINNESOTA, DOES
ORDAIN AS FOLLOWS:
ORDINANCE NO. OF THE CITY ENTITLED CABLE
COMMUNICATIONS ORDINANCE IS HEREBY AMENDED AS FOLLOWS:
1. ARTICLE III, Section 8 is amended by addition as
follows:
The Grantee its successors or assiqns will not be
required to implement the "narrow—casting requirements"
until the earlier of (a) the renewal of the Franchise
Ordinance by the City or the Commission, or (b) the sale or
transfer of the system.
2. ARTICLE III, Section 9 is amended by addition as
follows:
The obliqation of Grantee to implement a "reqional
channel" will be stayed and deferred for at least two years
from the date of this Ordinance No. Future stays or
deferrals of this obliqation are subject to further approval
by the City.
3. ARTICLE VI, Section d.B. is amended by addition as
follows:
(1) Throughout the term of this Franchise, Grantee
shall pay to the City or its designee, within sixty (60)
days after the end of each fiscal year of Grantee, an annual
Franchise Fee of five percent (5t) of all Gross Revenues.
C
EXHIBIT 1 C -D
This change in the annual Franchise Fee shall be effective
i,
as of September 1, 1989. No payment will be allowed of any
Franchise Fee that is different from five percent (50),
other than the filing fee and payment required of the
guccessful applicant as established by City to recover the
cost of franchising and any other additional payments which
are required by the terms of this Franchise.
(2) Payment will be made to City or its designee with
an itemization of the Gross Revenues.
4. ARTICLE VII, Section 4 is amended as follows:
A. At the time of acceptance of this PranchiseY
Grantee shall deliver to eity Commission an irrevocable and
unconditional Letter of Credit, in form and substance
acceptable to the eity Commission from a National or State
bank approved by eity Commission, in the amount of Ten
Thousand Dollars ($10,000.00)x, naminq City as one of the
drawers thereon.
B. The Letter of Credit shall provide that funds will
be paid to City or Commission upon written demand of City or
Commission and in an amount solely determined by City or
Commission in payment for penalties charged pursuant to this
section, in payment for any monies owed by Grantee pursuant
to its obligations under this Franchise, or in payment for
any damage incurred as a result of any acts or omissions by
Grantee pursuant to this Franchise.
J
C. In addition to recovery of any monies owed by
Grantee to City or Commission or damages to City or
Commission as a result of any acts or omissions by Grantee
pursuant to the Franchise, City or Commission in its sole
discretion may charge to and collect from the Letter of
Credit the following penalties:
(1) For failure beyond the reasonable control of
Grantee to complete System construction in accordance
with Grantee's initial service area plan, unless City or
Commission approved the delay, the penalty shall be Two
Hundred Fifty Dollars ($250.00) per day for each day, or
part thereof, such failure occurs or continues.
(2) For failure to provide data, documents, re-
ports or informatiori after adequate notice or to co-
operate with City or Commission during an application
process or System review, the penalty shall be One
Hundred Dollars ($100.00) per day for each day, or part
thereof, such failure occurs or continues.
(3) For failure to reasonably comply with any of
the provisions of this Franchise for which a penalty is
not otherwise specifically provided pursuant to this
Paragraph C, the penalty shall be One Hundred Dollars
($100.00) per day for each day, or part thereof, such
failure occurs or continues.
(4) For failure to test, analyze and report on the
performance of the System within sixty days following a
C
request by City or Commission the penalty shall be One
Hundred Dollars ($100.00) per day for each day, or part
thereof, such failure occurs or continues.
(5) For failure beyond the reasonable control of
Grantee to modify the System or to provide additional
services within sixty days after required by binding
arbitration the penalty shall be Two Hundred Fifty
Dollars ($250.00) per day for each day, or part thereof,
such failure occurs or continues.
(6) Forty-five days following notice from City or
Commission of a failure beyond Grantee's reasonable
control of Grantee to comply with operation or main-
tenance standards and sixty days following notice from
City or Commission of a failure beyond Grantee's
reasonable control of Grantee to comply with construc-
tion standards, the penalty shall be Two Hundred Fifty
Dollars ($250.00) per day for each day, or part thereof,
such failure occurs or continues.
(7) For failure beyond the reasonable control of
Grantee to provide the services Grantee has proposed or
their equivalent, including but not limited to the
implementation and the utilization of the access chan-
nels and the making available for use of the equipment
and other facilities, the penalty shall be Two Hundred
Fifty Dollars ($250.00) per day for each day, or part
thereof, such failure occurs or continues.
-4-
(8) Each violation of any provision of this Fran-
chise shall be considered a separate violation for which
a separate penalty can be imposed, but in no event shall
the City or Commission maximum daily penalty exceed One
Thousand Dollars ($1,000.00) per day.
D. Whenever City or Commission finds that Grantee has
violated one or more terms, conditions or provisions this
Franchise, a written notice shall be given to Grantee
informing it of such violation. At any time after twenty
days following local receipt of notice provided Grantee
remains in violation of one or more terms, conditions or
provisions of this Franchise, in the sole opinion of City or
Commission, City or Commission may draw from the Letter of
Credit all penalties and other monies due City or
Commission.
E. Whenever a penalty has been assessed, Grantee may,
within thirty days of local receipt of notice, notify City
or Commission that there is a dispute as to whether a
violation or failure has, in fact, occurred. Such notice by
Grantee to City or Commission shall specify with
particularity the matters disputed by Grantee.
(1) City or Commission shall hear Grantee's
dispute at the next regularly scheduled Council or
Commission meeting. City or Commission shall supplement
the Council or Commission decision with written findings
of fact.
(2) Upon.determination by City or Commission that
l no violation has taken place, City or Commission shall
C
refund to Grantee without interest all monies drawn from
the Letter of Credit by reason of the alleged violation.
F. If said Letter of Credit or any subsequent Letter
of Credit delivered pursuant hereto expires prior to 15
months after the expiration of the term of this Franchise,
it shall be renewed or replaced during the term of this
Franchise to provide that it will not expire earlier than 15
months after the expiration of this Franchise. The renewed
or replaced Letter of Credit shall be on the same form and
with a bank authorized herein and for the full amount stated
in paragraph A of this section. Failure to renew or replace
the Letter of Credit shall be grounds for termination of
this Franchise.
G. If City or Commission draws upon the Letter of
Credit or any subsequent Letter of Credit delivered pursuant
hereto, in whole or in part, Grantee shall replace the same
within fifteen days and shall deliver to City or Commission
a like replacement Letter of Credit for the full amount
stated in paragraph A of this section as a substitution of
the previous Letter of Credit.
H. If any Letter of Credit is not so replaced, City or
Commission may draw on said Letter of Credit for the whole
amount thereof and hold the proceeds, without interest, and
use the proceeds to pay costs incurred by City or Commission
- 6 -
0
/ in performing and paying for any or all of the obligations,
duties and responsibilities of Grantee under this Franchise
that are not performed or paid for by Grantee pursuant
hereto, including attorneys' fees incurred by City or
Commission in so performing and paying. The Eailure to
replace any Letter of Credit may also, at the option of the
City or Commission be deemed a default by Grantee under this
Franchise. The drawing on the Letter of Credit by City or
Commission and use of the money so obtained for payment or
performance of the obligations, duties and responsibilities
of Grantee which are in default, shall not be a waiver or
release of such default.
I. The collection by City or Commission of any
i
damages, monies or penalties from the Letter of Credit shall
not affect any other right or remedy available to City or
Commission nor shall any act, or failure to act, by City or
Commission pursuant to the Letter of Credit, be deemed a
waiver of any right of City or Commission pursuant to this
Franchise or otherwise.
C
r Passed and adopted this _ day of , 19_
ATTEST: CITY OF
By By
Mayor
This Franchise, as amended, is accepted, and we agree to
be bound by all its terms and conditions subject to federal,
state and local laws.
JONES INTERCABLE, INC.
By
Its
Date:
By
Its
Date:
- 8
O
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT is made and entered into upon
the last of the dates of signature herein by and between
JONES INTERCABLE, INC., General Partner of Cable T.V. Fund
14-A Ltd., a Colorado limited partnership ("JONES");
SFIERBURNE/WRIGHT COUNTY CABLE COMMUNICATIONS COMMISSION
("the COMMISSION"); and the CITY OF BUFFALO, Minnesota, CITY
OF BIG LAKE, Minnesota, CITY OF COKATO, Minnesota, CITY OF
DASSEL, Minnesota, CITY OF DELANO, Minnesota, CITY OF ELK
RIVER, Minnesota, CITY OF MAPLE LAKE, Minnesota, CITY OF
MONTICELLO, Minnesota, CITY OF ROCKFORD, Minnesota and CITY
OF WATERTOWN, Minnesota (collectively referred to as the
"CITIES"). The COMMISSION is a duly constituted joint
powers commission of which the CITIES are members. JONES
and Cable T.V. Fund 14-A Ltd. hold the franchises for the
cable television system located in and serving the CITIES
and adjacent areas.
RECITALS
1. In 1984, the CITIES entered into franchise
agreements and passed ordinances granting cable television
franchises to Rite Cable Company of Minnesota, Ltd. to serve
the CITIES and adjacent areas.
2. In 1987, Cable T.V. Fund 14-A, Ltd., a Colorado
limited partnership for which JONES is the General Partner,
purchased the franchises for the CITIES from Rite Cable
Company of Minnesota, Ltd., and assumed all obligations
under the franchises with the approval and consent of the
CITIES and the COMMISSION.
3. The cable television franchises and ordinances of
the CITIES presently in effect granting JONES and Cable
T.V. Fund 14-A, Ltd. the right to be the cable television
operator and franchisee in the CITIES are substantially
identical in form and content.
4. In September 1988, JONES sought the approval of the
COMMISSION, as agent for the CITIES, to change the
programming provided to the CITIES by deleting the USA
Network ("USA") and replacing it with Turner Network
Television ("TNT").
5. - At a meeting of the COMMISSION held in Buffalo,
Minnesota on November 16, 1988, the COMMISSION voted to deny
JONES' request to delete the USA service and to replace it,
with TNT. On January 20, 1989, the COMMISSION, as agent for
the CITIES, approved formal Findings of Fact and Conclusions
denying JONES' request.
6. JONES has initiated litigation against the
COMMISSION and the CITIES, contending, among other things,
that the actions of the COMMISSION in denying JONES' request
were erroneous under the Cable Communications Policy Act of
1984. The lawsuit, Jones Intercable, Inc. v.
Sherburne/wright County Cable Communications Commission, et
al., is presently pending before the United States District
Court for the District of Minnesota, Case No. 4-88 Civil
1115.
7. In addition to the disputes between JONES, on the
one hand, and the COMMISSION and the CITIES, on the other,
relating to the replacement of USA with TNT, other issues
and disputes concerning the franchise agreements have arisen
between the parties.
8. As a result of settlement discussions and
negotiations in which all parties were represented by
counsel, all parties to the litigation and to this Agreement
have agreed, and desire, to settle and compromise all
outstanding disputes between the parties. To effect this
Agreement, the parties have agreed to dismiss the pending
litigation, and to effect certain changes in the franchise
agreements and ordinances between JONES and Cable T.V. Fund
14-A, Ltd., on the one hand, and the CITIES, on the other.
AGREEMENT
In consideration for the mutual promises and agreements
set forth herein and the Exhibits to this Agreement, it is
hereby agreed by and between the parties hereto as follows.
1. The COMMISSION and CITIES acknowledge that there
were certain errors and omissions in the previous action
taken by the COMMISSION denying JONES' request to delete the
USA service and to replace it with TNT. The COMMISSION, as
agent for the CITIES, agrees to rescind its Findings of Fact
and Conclusions dated January 20, 1989.
- 3
V
2. JONES, Cable T.V. Fund 14-A Ltd. and the CITIES
will enter into written amendments to the CITIES' Cable
Television Franchise Ordinances in a form attached hereto as
Exhibit 1 for each city in order to resolve various other
issues and disputes that have arisen concerning the
interpretation and application of the Cable Television
Franchise Ordinances with the CITIES. The COMMISSION and
the CITIES undertake and agree to use their best efforts to
secure passage of the amended ordinances, with full
compliance with applicable law, as soon as practicable.
3. JONES, the COMMISSION and the CITIES will dismiss
with prejudice and without costs to any party the litigation
now pending between them. The parties will instruct their
legal counsel to execute and file a Stipulation for
Dismissal with Prejudice and related Order in the form
attached hereto as Exhibit 2 immediately upon the
COMMISSION'S rescinding the Findings of Fact and
Conclusions. Immediately upon execution of this Agreement,
counsel for the parties will jointly approach the United
States District Court for the District of Minnesota, and
request that further proceedings in the litigation be stayed
or held in abeyance pending the COMMISSION'S rescinding the
Findings of Fact and Conclusions.
4. JONES shall, implement, as soon as practicable, its
obligations under the Franchise Ordinances to hire a part-
time employee whose work will focus on local origination
4 -
programming. The COMMISSION agrees that a part-time
l
position for such programming will satisfy JONES'
obligations related to such a part time position, 'and
further acknowledges that the local origination position is
not and will not be eligible for full-time employment
benefits.
5. The COMMISSION agrees that JONES may move the
access programming currently carried on channels 10 and 13
to a higher channel designation.
6. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto, and their
successors, administrators and assigns.
7. This Agreement has been entered into by the parties
as an accord and satisfaction to settle and compromise
pending litigation and other disputes. Nothing contained in
this Agreement, nor the dismissal of the pending litigation,
shall be interpreted nor construed to be an admission on the
part of, nor to the prejudice of, any party executing this
Agreement.
8. Each of the parties named below, and the persons
executing this Agreement on behalf of any party, represents
that he/she has been duly authorized to enter into and
execute this Agreement on behalf of the party named.
9. Each party acknowledges it has been represented by
counsel with respect to this Agreement, and has been fully
advised in respect to all the rights which are affected by
this Agreement and the Exhibits thereto.
5 -
O
C10. This Agreement shall be construed and the legal
relations between the parties determined in accordance with
the laws of the State of Minnesota.
11. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an
original without the production of the others, but all of
which together shall constitute one and the same instrument.
12. Each of the parties named below, and the persons
executing this Agreement on behalf of any party, represents
that he/she has been duly authorized to enter into and
execute this Agreement on behalf of the party named.
The parties below named have executed this Settlement
Agreement as of the day and year first above written.
Dated: JONES INTERCABLE, INC.
C,
By
Its
Dated: SHERBURNE/WRIGHT COUNTY
CABLE COMMUNICATIONS
COMMISSION
By
Its
Datedi CITY OF BUFFALO
By
Its
6 -
O
Dated:
CITY OF
BIG LAKE
By
Its
Dated:
CITY OF
COKATO
By
Its
Dated:
CITY OF
DASSEL
By
Its
Dated:
CITY OF
DELANO
By
!I
L
Its
Dated:
CITY OF
ELK RIVER
By
Its
Dated:
CITY OF
MAPLE LAKE
By
Its
Dated:
CITY OF
MONTICELLO
By
Its
C
Dated: CITY OF ROCKFORD
By
Its
Dated: CITY OF WATERTOWN
By
Its
-e-
11
Council Agenda - 2/26/90
10. Consideration of renewinq gamblinq license request --Wright
County Ducks Unlimited. (R.W.)
A. REFERENCE AND BACKGROUND:
The Wright County Ducks Unlimited organization has applied to
the State Gambling Board for an exemption from licensing
requirements for a one -day gambling license to conduct raffles
and tip boards at the banquet scheduled for May 7 at the
Monticello Roller Rink.
The City of Monticello has a permit fee for these one -day
events of $20; and unless the City Council passes a resolution
to specifically deny the activity, the State will issue the
license within 60 days.
No action is necessary by the Council unless they wish to
specifically prohibit the State from issuing this license.
D. SUPPORTING DATA:
Copy of gambling license application.
16
CGY20 Minnesota L=dW OamDUng
d''• Oft Application for Exemption from Far office Use, only
Lawful Gambling License
RlInthumha*dpordmddr4ppfl=kvAxemn,* nwemnddUatwtfSdrysbobvYftr9a 0(41111= 11*
1*
Name and Address of Organization -
o'o.+:,mn aemep..e-Hamm@maee aimopW-UA I nmm�
l4 �-rr-r-�! �G((/�7! 4)(rC.FS L%✓/%f%q7C� k j(p(1/Z� %� I /_= G�i�r/%�
n SM by as carp
4ra
i 3 . C,l a •7 Z %(:,I ice I�c� �l�i! 55�(oZ 1�.�/�, yT
: /Ile-
»Mbr�iG����
Type of Non-prgfit Organization
Years InaxWertoe I M Attedt proo/d Uwo yaan a mora d a d9&v& Nwnbw d ago mwnbare Q
0 Fratemal ❑ Relgimn O Veteraru 210ther nonVofi
you dt.dred ear bradma nprol4 dtaatt ww d th bbwktp and.t�d� proof d wpvft staan
❑ IRS desipnalbn 0' - - p orated with so ma y d State 9YMim of pared nortprdi oryankiffi- (darter)
Gambling Site
Nome of do woos aaMpr WE tdu p =
;��, r,�•;f�Lr.L' ..rI.LFI.: rC�IN1L
Street
t1.1n� .l?;K ►vIVL- f�4�
,�I(,Ir, fl1?Jm5S36T 6uw(kti°'T
Des(e) of *Wft 5 _ . 90
nines of Gamin
Financial Report
ame Tee w Onw♦ wwba Learnrr. YnMMeN rtt swat tYrter Veale
Set>r Etl�
Dior ^ �
@i91lt f;e' rl ,
PaMkMh IS r] d
TWmards 011 ❑ 1}�
pulkabe f- Gy q
Now WID pro(A bed
DYMamr San whan g etsrlpe ors PWO-ed
9 %, ( ^,'•'tL E%F:lf� L b , u. obvALears know nwbw 1
I erdere d b6maim erbrrtlfd b dor Qepwetwdd Ge rAV I d An of b*m dm awdon/erd to dr Dryaraene el Orem
b Mo. aoa.ar.sold coves" b etq.ae/abt atdeemplle •. ..�'Ia{t .
'-/5-90
.,W r hr
Lova! Gooernment Acknowledgement
I haw naaiwd a dopy of f epploeAott. rrh eppk.Sm wN be Is by dor Depenneut of Gwft end we borne efeotee AO em
do
r Flu n�iunt»,i.oeb�ee�eyd�iea ftT&V�~30jpa�ot eddMb inbbww. C"a tWI tdWhM60dIPh
eAi)dt b de.ftw M ecAelgr.
Clty or County Towtehlo
&y or campy na ns , Townkp rune
Slpnwte d paean rpplatbn SWUS" d ocean ntaeM tp epploSat
Ti1e_n I Oew Tye ' OefetedeAed
MO 00 vOkslim and 1n o1 SIS (duds made an b Camniuiaw d Rentor) to: `
.�°C....ew.r. Dapartnwo of aaminp • GambWtp ConW Walon
a•— �"""' htaY brt 331 /D
St. P" MN 53148 -MIS
Council Agenda - 2/26/90
11. Review of annual liquor store financial report for 1989.
(R.W.)
REFERENCE AND BACKGROUND:
Enclosed with your agenda you will find a copy of the
financial report for the year 1989 with a comparison to 1988.
Joe Hartman, Liquor ;tore Manager, will be available at the
meeting to answer questions you may have regarding this report
and/or other items relating to the liquor store operation.
In a brief review of the financial statement, sales for the
year were up approximately $35,574 (38 increase) while,
unfortunately, cost of goods sold was also up 58, or $43,924,
resulting in a gross profit decline of approximately 39 when
compared to 1988. General operating expenses also increased
4.88 or $7,446 above last year's when excluding transfers out
of the liquor fund to other funds. As a result, the operating
income, which is the important figure for determining how the
store is doing, was down approximately $15,800, or 148 decline
when compared to 1988. The overall net operating income
amounted to $97,250 compared to approximately $113,000 during
the previous year.
While the net income is still respectable at 8.138 of sales,
I think our target for our off -sale operation should be in the
9-1/28 to 109 range. This means that our operating income
should be 9% to 104 of sales, and we are a little short this
year over what I would like to see. It appears that the gross
profit on liquor and beer is slightly below what it was last
year, and it looks like these areas do need some improvement;
and Joe and I will be looking at whether our pricing is
appropriate to accomplish our 99 to 108 return.
An item that Joe and I have talked about concerning the liquor
store inventory process is computerization at the liquor
store, especially for inventory purposes. Currently, the
Inventory and the resulting quarterly financial statements do
take a while to prepere, which loavos us receiving the
information sometimes two months after the end of each
quarter. If a computer system can be found that would allow
us to got an accurate inventory after the close of each
quarter, we would be better able to determine if adjustments
are needed to keep us on our goal during the year. Joe is
currently checking on the type of equipment and software that
is available that possibly could be used with our existing
cash register system.
I
Council Agenda - 2/26/90
No action is needed by the Council other than acceptance of
the report as presented at this time.
D. SUPPORTING DATA:
Copy of financial report.
Is
MONTICELLO NUNtC.-AI LIQUOR
REVENUE ANO EXPENSES
RUNICIPAL LIQUOR STORE
..............................
FOR
...................................................................................................�..
iH[ T... AOnTNS AND TWEIv[ NONTN9 EnDlO DECC HOER
7l, 1898 AND if 81
CURRENT
-PERIOD
CUR -PD
YEAR -TO -GATE
Y -T -D
FARE-PD-LST-YA
PO-LYR
Y-T-O-LST-YA
YTO-LY
AROUNT
RATIO
AAOUNT
RATIO
ANOUNi
RATIO
AR0 UNT
RATIO
SALES
LIQUOR
f
7]1.770.1!
28.:1 t
136,77o.1f
28.21
1 111.717.11
20 ..5 S
311,311.11
21.68
SEER
681.77..70
67.06
181.778.30
67.01
8{2.89!. 12
57.21
6{2. {!8.12
67.21
DINE
140.011.7{
11.17
160.071.1{
11.73
116.360.11
12.46
164,340.11
12.46
OTHER ROSE
]1.116.71
3.11
37,110.71
].11
71,216.67
7.21
37,216.63
3.2L
RISC. NON-TAXA:LI SALES
2.608.86
.71
2.508.8/
.21
6.!/8.67
.47
4.168.6]
.4]
DEPOSITS AND RC IUNO!
(7.8!0.06)
(.10)
(3.950.06)
(.70)
(3.:03.77)
(.1{)
11.80].771
(.381
5077![ DEPOSIT - RISC
71.83
.00
7!.67
.00
11.11
.01
47.91
.01
OISCOUNTS
(305.60)
(•03)
(]08.101
(.031
(676.37)
(.04)
(425.37)
(.04)
TOTAL SALE{
•------------
f
1.196,004,00
----•-
f9.f8 1
---•-____---_
1.194.001.00
----__
99.;9
_--________
S 1.368.130.26
------
100.00 t
--------•----
1.168.670.24
100.00
COST of GOODS SOLO
S
(976.120.71)
(18.3215
(!35.320.11)
(79.32)
1 (591,198.21)
(76.931f
(191.118.21)
(71.63)
LRO51 PROFIT
f
----------
259.683.29
......
21.61 5
-------------
268,887.29
------
21.61
---------- ---
S 267,234.04
------
27.01 f
...---------
267.234.04
------
2].07
GENERAL AND AOIM. EXPENSES
1I:VLALf
tA/E{O.
LAA[NR[R
f
13.001.27
1.11 1
77,001.21
1.31
i f9, 56].!0
6.07 6
{1.847.10
1.07
►CRA
2,685.63
.72
2.68! .62
.J7
7.6.2 ,67
.22
2.612.47
.2E
REOICARC WITNNOl0IN.8
194.6]
.02
194.47
.02
170.17
.Ol
170.77
.01
IN SURA HCI. MlOIC AL AMO LIFE
5.206.72
.95
8.209.15
.If
1.129.7•
.85
I,Itf
LOGIA! 7LCURlTY
6.105.11
.71
6.105.17
.77
1,{13.26
.7f
1,567.2!
.Sf
U14EMPLOYRENT SENCFIT
.00
!.
.00
.00
.00
36.51
.00
36.41
.00
TOTAL PERSONAL SERVICES
-----------
f
11.795.11
------
1.11 1
-------------
55.39!.11
---- -
7.41
-------------
f 0].986.15
-----
1.27 f
--------.....
a J95.11
._----
7.2]
f UPPLI..
0111,E fund I
GENERAL OPERATIRI fUP PLIC!
AA INT!RANCE e► 5LO:. SUnlltt
CI NOR [QUI►N[NT
TOTAL SUPPLICf
(D
S 170.{1 .O1 f U{. Lf .01 f 11!.13 .O1 / 1{2.11 .01
0.1]1.10 .\I •.1]1.10 .{1 f.lf1.14 .\0 •.100.16 .10
.00 .eo .er 21:.rz .oa
206,6: .O2 214.40 .02 271,1. .O2 7]7,10 .Or
1 6.002.27 .64 S 6.562.22 .64 S 0,111, 1f .96 f 6,117.9! .50
Y
E
7
MONTICELLO MUNICIPAL LIQUOR
REVCnUC NND Cf►ENSlS
nUNICIPAI LIQUOR STDRE
70R
....................................................................................................................................
T."C TNR:! MONTHS AMO TY!LVC MONTHS [XDCO DCCCNf lA
7l. 1109 AND 19th
CLARE NT-/lRI00
CUR PO
YlAR-TO-DAT!
Y -T -D
SARI -/D-l3T-YR
ID-LYA
r-T-O-ISi-YR
YTD -LY
AMOUNT
AATIO
AROUMT
RAT 10
A10UMY
RA T10
AROUNT
RATIO
OTNCA Sl:VICl3 ANO CHARGES
PROIC3f IONAL SERV.[.! (AUDIT) t
],170.00
•2! {
3.120.00
.2! f
3.602.00
.31 6
7.{02.00
.J1
CONMUNICATION
817.{7
.07
:17.{]
.07
727.:7
.Of
127.+2
.06
TRAVEL -CONFERENCE -SCHOOLS
10.00
.00
10.00
.00
2]1./0
.02
231./0
.02
AOVlRTItiM6
1,{07.{6
.7f
1.{07./6
.]!
3.166.!/
.30
3.166.!6
.30
IM3UTAMC[. GE X[RAL
17,2{].t2
1.16
17,263.02
1.16
17.00+ .1f
1.61
17.081./!
1.61
UTILITIES. ELECTRICAL
0.26:.l1
.ft
:.266•+1
.{9
0.316.61
.72
0.36{.{1
.72
UTILITICO. HIATIN6
1.111.0]
.10
1.1{1.03
.10
1.161.16
.10
1.161.15
.10
UTILITIANC 6 i W
17!.10
.01
1]9.60
.01
226.01
.02
226.01
.02
OF EOUIPRENT
2,020.21
.21
2.020.21
.2/
1.727.16
.16
►.722.16
.16
'AINTCNAICC
COOI►RENT
1.107.61
.09
1.107.01
.0!
+71.11
.06
911. 11
.08
outs. 1[1111/."11. tUOSCRI►TION
310.00
.07
710.00
.01
.00
.00
.00
.00
TA[E! AMD IICEM6lf
2{2.00
.02
217.00
.02
310.00
.03
360.00
.01
CAPITAL OUTLAY BUILDING 1MPR.
.00
.00
.00
.00
031.+2
.07
011.62
.07
6AR0A0C
1.011.60
.16
1.081•!0
.1/
1.{30.00
.11
1.1,0.00
.3A
OCP:. - ACQUINtO ASSETS
16.169.2:
1.27
16.1!+.2+
1.27
17,061.31
1.17
17,061.31
1.17
6CCU1ITr
0.+87.00
.76
6.: p.00
.71
{.I p,00
.1/
s.Ip .00
.0
OTNEN
116.06
.07
116.:6
.03
113.71
.01
113.3A
.O1
IRAN GF[N OUT
.Go
.00
.00
.00
►6.100.00
6.S1
7{,100.00
..........._.
6.67
-.......
.............
TOTAL OTHER SERVICES G CHAR4916
{0.675.03
......
f.6! 1
.............
{6.676.03
......
S.;S S13+.02,.31
.-........._-.
.__...
12.0{ f
1,+.12].31
12.06
0[l7 !CAVI[[
y 431
TRAN:I[R OUT S
l
f
7.00 f
:2.000.00
--------
7.00
------
-----
TOTAL DEBT SERVICES {
------00
----00
60 f
___-___--..00
__--00
{
__-_42.000.00
------
1.01 1
_....-
;--;;
__-_02.000-00
7,01
........
-----
TOTAL GENERAL 6 ADIN. CMPENSLS{
-_-__
161.{72.37
___
---
13.51 {
-------- ---60
161,632.71
---
13.61 {
----02-0000:
----
712.201.71
2t.f2 S
312.296.31
------'.-..-.
26.12
...-...
.............
TOTAL OPERATING INCOME {
97,250.92
......
0.13 {
.............
97,2+0.12
.13
.....
0.17 {
.-.-......__.
(16.062.011
------
17.:f )3
f .711
17./6)
71f;,CyP
OTNCR I1CO1L IEXPENSES)
INTEICST IOR[ 1
1+.17:.0f
1.17 {
1+.171.0+
1.1! f
16.100.91
7.11 {
10.18/.91
7.17
OTX[1 INC*:[R
91.24
.01
ff.21
.Ol
+11.0:
.01
{II.Of
.01
CASH LOWSHORT
790 as
.O1
1:0.:9
.:7
181:. 97)
(.01)
(810.811
(•O:)
TOTAL OTHER INCOME (EXPENSES) {
70.066.10
A.2- !
SO.{f G.30
1.20 {
79.961.01
-------..-...
1.11 {
---...
ft.:61.07
....-_...-...
7.11
...-..
-------
MCT INCOME {
.............
-- --- -
117,711.10
------
12.77 8
......
----- --------
117.717.1:
.............
•_�---
12.73 {
......
(1,1/0.711
.............
!•111{
......
16.1+0.711
....I........
......
�p
oV
I
i
PRIOR YE11R
I.500.00
.:20.0 7
150. 717. 71 -
210:77
119.719.00
6:710.79 �
6 591.711.20,
r
116 .666.70 oE,
7..753.00
60.006.11.
(66.1
66;7}0.:16.601
(7)
----(1i"-61950) 4
6 161,.6}0.95 6
-------------- 0
t° ISIB. 912.1$1 g
�U
° U
�i
MONTICELLO MUNICIPAL LIQUOR
BALANCE '11:'TNUNICIPAL°LIQUOR
STORE
oecca:ea 71, 1989 -AND '1900
CURRENT YEAR
ASSEl
CURRENT ASSETS
CNANOE PUMD {
1'.500:00,
I
CASH IX BARK - CNCCRIN6
67,177.60
G
INVCST RCNI9
100.916.16
N8P CNEC K�- aECE IVASLE
66.12
]NV[XT0RIC9
170.619.91
PREPAID INSURANCE
7.961.91
TOTAL CUaRENT ASSETS
o {
692.766.69
PROPERTY AND EOUIPRENT
IAN.. 6
6,019.95
{
BUILDINGS AND , IRPAQVERENTS
186:665AB
PARKINDLOT'
79;151.00
'UR..". RC AND PIKTURCS
60,}92.11
ACCUR. DCPR. - BUILDINOB„
166.0}6.60)
ACCUM .EPR-PURNITUREi PIRTUPE
(67;162:16)
'
ACCUM., DEP.:- PARKIN. LOT
(16,167.60 )
1 TOTAL PROPERTY `AND IOUIPe6N7
'6
167.906:66
10TAI ASSETS:
{ ... 050.677:7:
PRIOR YE11R
I.500.00
.:20.0 7
150. 717. 71 -
210:77
119.719.00
6:710.79 �
6 591.711.20,
r
116 .666.70 oE,
7..753.00
60.006.11.
(66.1
66;7}0.:16.601
(7)
----(1i"-61950) 4
6 161,.6}0.95 6
-------------- 0
t° ISIB. 912.1$1 g
�U
° U
�i
CURRENT LIABILITIES
ACCOUNTS PAYABLE
SALES TAI PAYABLE
PAYROLL V/X - CREDIT UNION
PAYROLL N/X - PICA
PAYROLL U/N - PERA
ACCRUED SICK LEAVE 6 VACATIONS
SALARIES PAYABLE
PAYROLL WIN - MEDICARE
PAYROLL WIN - INSURANCE
TOTAL CURRENT LIABILITIES
LONG-TERM LIABILITIES
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
EQUITY
RCTAINEO EARNINGS
PEVENUE9 OVER EXPENDITURES
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
DECEMBER 71. 1969 ANO 1988
..................................................................................................
CURRENT YEA P PRIOR YEAR
LIABILITIES AND EQUITY
6x.77 t
(17.00)
7.07
116.01
105.00
2.011.55
2.192.44
(276.571
100.00
--------------
1 5.002.47
--------------
.00
S 6.082.4]
1.467.41
.00
.00
176.26
100.00
1.720.06
2.654.67
1 i of
.00
S 6.125.77
--------------f
00
t 6.126.71
696.277.92 6 767,986.06
147,711.10 (6,196.74)
-------------- --------------
6 646,690.92 f 767.786.02
--------------
f 860.677.70 f 766.912.19
.............. ..............
a
f
MONTICELLO MUNICIPAL LIQUOR
BALANCE SHEET
MUNICIPAL LIQUOR STORE
CURRENT LIABILITIES
ACCOUNTS PAYABLE
SALES TAI PAYABLE
PAYROLL V/X - CREDIT UNION
PAYROLL N/X - PICA
PAYROLL U/N - PERA
ACCRUED SICK LEAVE 6 VACATIONS
SALARIES PAYABLE
PAYROLL WIN - MEDICARE
PAYROLL WIN - INSURANCE
TOTAL CURRENT LIABILITIES
LONG-TERM LIABILITIES
TOTAL LONG-TERM LIABILITIES
TOTAL LIABILITIES
EQUITY
RCTAINEO EARNINGS
PEVENUE9 OVER EXPENDITURES
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
DECEMBER 71. 1969 ANO 1988
..................................................................................................
CURRENT YEA P PRIOR YEAR
LIABILITIES AND EQUITY
6x.77 t
(17.00)
7.07
116.01
105.00
2.011.55
2.192.44
(276.571
100.00
--------------
1 5.002.47
--------------
.00
S 6.082.4]
1.467.41
.00
.00
176.26
100.00
1.720.06
2.654.67
1 i of
.00
S 6.125.77
--------------f
00
t 6.126.71
696.277.92 6 767,986.06
147,711.10 (6,196.74)
-------------- --------------
6 646,690.92 f 767.786.02
--------------
f 860.677.70 f 766.912.19
.............. ..............
a
f
ROATICEILO RUIICIPAL LIQUOR
GROSS PROFIT BY PRODUCT 5010
for the Period 10101/89 to 12/31189
....................................................................................................................................
C
Current - Period
Year - to - Data,
Sue-FArind-East-Tr
Tau-lo-Date-Laot-Tr
Amount
1
Amount
1
Amount
1
Amount
1
LIQUOR SALES
1 99,582.45
100.11 1
336,110.19
:00.09 1
94,220.66
100.19 1
111.361.15
100.14
DISCOUITS
(109.55)
.11
(308.60)
.09
(III.OS)
.19
(425.311
.16
COSI OF SALES - LIQUOR
21,102.10
18.11
259,418.95
11.12
13,235.15
11.11
....__ •--•---------
251,19S.81
16.36
......
GROSS PROFIT
-••..........
1 21,110.10
.............
...... •••----_____-
21.19 1
......
16,982.64
.............
...... -------------
22.11 1
...... .............
20.106.56
22.12 1
...... .............
13,116.51
23.62
......
BEER SALES
152,705.81
160.30
661,318.10
100.53
153,110.65
100.09
612,699.12'
100.21
DEPOSITS AND WORDS
(595.53)
.31
(31590.05)
.63
(131.60)
.09
(1,103.33)
.22
COST OF SALES - BEER
121,994.40
11.61
$50.661.34
11.25
121,265.16
19.11
619,004.10
10.04
.............
.-----
......
.._---•......
.............
...... ----
...... .............
32,021.11
20.19 1
......
111,130.99
........ I....
19.96
......
HIRE SAILS
66,169.23
100.00
160.011.16
100.00
46,661.22
100.00
111.311.11
100.00
COST 09 SALES - HIRE
21,511.01
62.31
90,511.19
66.61
30,111.41
66.09
13.116.14
65.04
GROSS PROFIT
1 11,215.16
31.69 1
69,111.51
31.33 1
15.190.81
33.91 1
60.413.31
34.96
(0:0
.............
......
.............
...... .............
......
.............
......
SALES
1,611.35
99.11
31.06.31
91.19
1.191.13
100.01
31,216.53
99.12
BOTTLE DEPOSIT - RISC
9.10
.13
39.63
.11
(6.60)
.01
11.11
.10
COST 02 SALES - 01111
1,093.21
10.21
21,046.22
11.61
1,169.52
$3.11
11,261.11
50.33
GROSS PROFIT
1 1,191.61
.............
19.13 1
......
10,119.62
.............
21.31 1
...... .............
3,112.41
16.66 1
......
11,611.21
.............
19.61
......
RISE. 101-TAIAILE 1111$
666,22
100.00
2.606.66
100.00
1,116.13
100.00
1,911,63
100.00
COS - RISt. 101 T{IAILE
536.11
10.61
1,111.25
10.10
1,312.13
116.66
6.124.16
111.30
GROSS PROFIT
1 129.11
.............
19.43 1
......
129.31
.............
29.10 1
...... .............
1116.001
11,66 1
......
(1.111.211
.............
21.30
......
TOTAL SARIS
310,191.11
516.14
1,194.213.01
116.90
103,116.19
801.11
1.I61,III.I1
322.55
TOM COSI 01 SARIS
242,461.14
196.10
93S,120.11
306.94
212,101.65
116.)$
N1,11{.21
931.12
TOTAL GROSS PROFIT
1 61,132,12
.............
111.11 1
......
259.112.36
.............
131.96 1
...... .............
10.151.06
015.13 1
......
261.191.60
.............
316.13
......
C