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City Council Minutes 04-11-1983MINUTES REGULAR MEETING - MONTICELLO CITY COUNCIL April 11, 1983 - 7:30 P. M. Members Present: Arve A. Grimsmo, Fran Fair, Dan Blonigen, Ken Maus, Jack Maxwell. 2. Approval of Minutes. A motion was made by Blonigen, seconded by Fair to approve the minutes of the regular meeting held on March 28, 1983 as presented. Voting in favor were Jack Maxwell, Fran Fair, Dan Blonigen and Ken Maus. Abstaining was Grimsmo due to his absence from the last meeting. 4. Consideration of a Petition Requesting Re -Assessment of the 78-1 Improvement Project. Since December, 1982, when a petition was presented by property owners affected by the 78-1 and 79-1 Improvement Projects ask- ing for re -assessments of their assessments to a longer period of time, the City Staff along with the bonding consultants, Springsted, Inc., has reviewed the various alternatives that might be available. The recommendation of the bonding con- sultant and the City Staff would be to take the original principal amount of the 78-1 Improvement Project and set it up on a 10 year assessment roll dating from the original date and then determine what amounts would have been due during the years 1980 through 1984 based on this 10 year assessment roll. Using this procedure, the City would then request that the property owners pay both the principal and interest due under the recalculated figures for a 10 year assessment for the first 4 years and then the City could re -assess the balance over the remaining 6 years. Although this proposal has been presented to some of the property owners involved under the 78 project, the biggest problem to date is that this would still require a substantial payment from each of the property owners if they were entirely delinquent the past three years and if these delinquencies were not brought current, there would possibly be no benefit to the City in re -assessing to a longer period of time unless these delinquencies were brought current. The property owners who were affected by the 78 five year assessment were present and the following comments were expressed by these individuals. - 1 - Council Minutes - 4/11/83 Mr. Larry Flake suggested that another solution would be to have the City amortize the payments on the project over 20 years but have a balloon after 10 years. He felt that this would help everybody,including the City, receive some money and also the property owners would have smaller payments due each year and would allow the property owners time to prepare for the lump sum balloon payment due at the end of the 10th year. Jenny Hoglund indicated the the City government should try and help the people affected by this problem rather than working against them and possibly the City should consider assessing this project over a 15 year term. Howard Gillham noted that when he first considered platting the property that is now known as Country Club Manor, the City's policy was to assess for improvements over 20 years and after his platting was approved, the assessments were dropped to 5 years. He noted that although he does not currently own the Country Club Manor property, he is involved with the Monticello Country Club which has a problem in that they cannot afford the large $50,000 assessments. He felt that it would be in the best interest of the City to work out some type of solution to this assessment problem in that nothing would be gained by anybody if the property eventually has to default and end up in the City's hands. In the long run, he felt by having all property owners default, it may give a bad image to the City. Property owner, Rick Longley, noted that he has been trying to sell some of his commercial property along Hwy 25 South, but that he cannot find a buyer for what he has into the property. He noted that he is 2 years delinquent at the present time and hopes that the City can work out some type of solution to help everybody. Property owner, Mike Reher, who is not affected by the 78 Improvement Project, noted that the economy over the past couple of years has been tough on real estate developers and felt that people do need some type of lower payments to get them over their current hurdle and felt that in the long run the City will be better off if some sort of re- assessment can be accomplished. It was noted by the City Administrator that if the assessments were to be amortized over a 20 year schedule with a balloon after the 10th year, there would still be no guarantee that the large balloon payment in the 10th year would be paid as scheduled. If the property owner then became delinquent, the City would still be in a position to wait 3 or more - 2 - Council Minutes - 4/11/83 years before the property would go under tax forfeiture., As a result, he recommended that the City pursue other altern- atives if the property is re -assessed, such as entering into a separate contract with each property owner in regard to assess- ment payments. His reasoning was that then if the property owner did become delinquent after one year, the City could force foreclosure and would not have to wait an additional three years or longer to wait for tax foreclosure. It was also noted that for the City to consider re -assessing this project over a longer period than 10 years, the City might be faced with refinancing its bonds which would cost additional money for the refinancing and could possibly hurt the City's credit rating. It was the recommendation of the Council that the property cwners affected by the 78-1 Improvement Project get together a proposal under their suggested 20 year amortization schedule with a 10 year balloon and see how many of the property owners would go along with such a re -assessment policy. It was felt that the people involved should have all the figures available as to what their delinquency amount would be under a revised schedule and that the Council would again address this issue at the next Council meeting. 5. Consideration of Change Orders #91 through #96 for the Waste- water Treatment Plant Construction Project. John Simola, Public Works Director, reviewed with the Council the proposed change orders #9.1 through #96 as follows: #91 - This change involves adding valves to the boiler hot water circulation pumps to balance or restrict the flows to different areas. Total addition cost is $6,601. #92 - Involves replacing the existing air compressor pressure control switch for an additional $812. #93 - Involves changing two smaller impellars on several of the pumps in the plant. Additional cost is $2,589. #94 - Involves adding methane gas piping to the hot water boiler to allow for dual fuel conversion (natural gas and methane) and adding a moisture drain in the methane gas line from the digesters to the gas burn off relief device. The additional cost is $7,774. #95 - Involves insulating the relief valves on the methane gas system for the installation of additional outlets for heat tapes for an additional $475- - 3 - Council Agenda - 4/11/83 #96 - Involves the installation of an electronic variable speed on one of the smaller raw sewage pumps which first lifts the wastewater from the wet well to the diverter structure. The additional cost is $16,800 (estimate). The total of change orders #91 through #96 is estimated at $35,051. Some concerns were expressed by Council Members over whether some of these change order items were necessary because of design Iflaws. Mr. Chuck LePak of Consulting Engineering Firm, OSM, noted that on a project this large, contingencies are built in for the very purpose of providing money for the altera- tions that will be necessary during the actual construction process. During an initial design stage, many of these items cannot be predicted and are not necessarily related to design flaws. A motion was made by Maxwell, seconded by Blonigen and unanimously carried to approve Change Orders #91 through #96 as presented with Blonigen noting that he seconded the motion only because the City has no other choice at this point in the construction. 6. Consideration of Change Order #2 for the 82-2 Improvement Project. As part of the 82-2 Improvement Project to serve Meadow Oak Sub- division, the City Council agreed at the time the subdivision was approved to assume some of the additional work proposed within the subdivision as part of the City's improvement contract with Richard Knutson, Inc. The estimated construction cost was placed at approximately $76,000. A change order was negotiated by the City Engineer with the contractor, Richard Knutson, Inc. for the following additional work. 1. Streets, entrance, parking lot, water, storm and sanitary sewer in a manufactured model home area. 2. Filling over water main just east of Cty Rd. 18. 3. One right turn lane for the manufactured model home area and one right turn lane for the executive home area. After renegotiating prices, and reducing the amount of fill over the water main by lowering the pipe, the recommended change order #2 would amount to $97,794.60. Of this amount, $15,892.50 was the amount needed to construct the two right turn lanes. The $76,000 estimate for this additional work which the City agreed to assume did not include any amounts for right turn lanes which have later been required by the Department of Transportation. The amount of the change order without the right turn lanes would be $81,902.10. - 4 - Council Minutes - 4/11/83 The Council discussed whether the developers of the Meadow Oak Subdivision should be responsible for the right turn lanes as the City did not originially agree to include these improve- ments as part of its contract. As a result of the discussion, a motion was made by Fair, seconded by Maus to approve change order #2 on the 82-2 Improve- ment Project with Richard Knutson, Inc. in the amount of $81,902.10 for the additional work within the subdivision without the right turn lanes as part of the contract. Voting in favor were Grimsmo, Fair, Maus, and Maxwell. Opposed was Blonigen since this amount was still over the estimated $76,000 price. It was noted that the cost of installing the right turn lanes should be borne by the developers at their expense. Public Works Director, John Simola, again reviewed with the Council the potential problems that may be expected in the Meadow Oak Subdivision with poor quality water. He noted that recent tests on city water show a very small chlorine residue in the Oakwood Industrial Park and when the water reaches the Meadow Oak Subdivision, most of the chlorine will no longer be in the water and also the water could have iron and magnesium separation. In light of this an- ticipated poor water quality, Mr. Simola requested that the Council approve installing 3 extra valves and approximately 40 feet of 12 inch water main as part of the construction project into the entrance of the proposed park property at the west entrance of the Meadow Oak Subdivision. The esti- mated cost of this additional piping and valves was placed at $3,300 and if installed now, this service would be available in the future should the City determine if necessary to install chlorine treatment facilities for the Meadow Oak ,Subdivision. It was noted that if a chlorine installation facility is not constructed, these additional valves and water main could be used within the park land for sprinkling or providing water services. A motion was made by Maus, seconded by Fair and unanimously carried to authorize the contractor as part of the 82-2 Project to install three extra valves and approximately 40 feet of 12 inch water main as extra quantities based on the bid price in the contract. 7. Consideration of a Joint Power Agreement Establishing a Cable Communication's Commission. Recently, an Ad Hoc Committee with representatives from the Cities of Elk River, Big Lake, Buffalo and Monticello selected Attorney Tom Creighton, to draft a Joint Powers Agreement for - 5 - Council Minutes - 4/11/83 establishing a cable communication's commission. A Joint Powers Agreement has been prepared whereby 11 communities would be eligible to join the commission for the purpose of being the decision making body for establishing a cable communication',s system within these communities. The intent of the commission would be to have Mr. Creighton as its attorney draft ordinances and regulations in regard to the future granting of a franchise for cable T.V. The initial contribution to fund the attorney's fees was proposed to be based on the size of each community's potential dwelling units. If the City of Monticello would join this Joint Powers Commission, it is anticipated that its share of the cost would be approximately $2,000. Although the entire $2,000 has not been committed, this would be the City's share at the present time. Discussion by the Council concerned whether there had actually been an interest by the City residents for cable television and it was noted that before any franchise would be given to a corp- oration, numerous studies would be completed to determine if there is an interest. A motion was made by Fair, seconded by Maxwell authorizing the City to enter into a Joint Powers Agreement establishing the Cable Communication's Commission and appoint City Administrator, Tom Eidem, as the City's representative on this commission. Voting in favor was everybody but Blonigen. 8. Report by the Oakwood Block Sub -Committee. City Administrator, Tom Eidem, informed the Council that Security Federal Savings & Loan had,.made a new offer for one-half of the Oakwood Block at one-half of the City's asking price. It was also noted by Security Federal that if this was not suitable by the City, Security Federal would, if necessary, purchase the entire block for the City's original asking price of $300,000. The City Administrator also noted that another offer for half of the Oakwood Block had been received from the owner of the Ben Franklin Store. The Council discussed whether the entire block should be sold as one parcel to eliminate the need of working with two individual parties on the development of the block. It was the consensus of the Council to inform Security Federal that the City would sell the property for $300,000 for the entire block and requested that Security Federal prepare a purchase agreement for this amount if they are interested with the understanding that all of the property would be paid for within 60 days. MOM Council Minutes - 4/11/83 9. Consideration of Authorizing the Preparation of Plans and Speci- fications fications for the Gould Brothers Overlay. Public Works Director, John Simola, requested that the Council authorize the Public Works Department to prepare plans and specifications for a one-half to two inch overlay and regravel- ing of the shoulders for the service road from Hwy 25 to Gould Brothers Chevrolet. The estimated cost of the project is approximately $17,000. A motion was made by Blonigen, seconded by Maxwell and unani- mously carried to authorize the Public Works Director to pre- pare plans and specifications for the Council's review. 10. Consideration of an Application for a 3.2 Beer On -Sale License Softball League by Monticello Jaycees. The Monticello Jaycees requested a 3.2 beer license for the summer months to be able to sell beer for the Softball League. A motion was made by Fair, seconded by Blonigen and unanimously carried to approve the issuance of a 3.2 beer license for the summer months to the Monticello Jaycees at the softball park contingent upon proper surety bonds and insurance coverage. 11. Consideration of Renewing Garbage Contract - Corrow Sanitation. Corrow Sanitation recently requested that the City consider extending its current garbage contract for an additional three years. Previous negotiations were held and it was decided that the City would prepare plans and specifications for rebidding garbage contract sometime during the summer of 83. Since that time, Corrow Sanitation has indicated a will- ingness to extend the contract for an additional three years effective August 1, 1983 at a price of $4,260 per month, which is a $500 per month increase over the present contract. The present contract has been in effect since August 1, 1980 and it was felt by the Council that this was a fair increase and would avoid going through the bidding process. As a result, a motion was made by Blonigen, seconded by Maxwell and unani- mously carried to authorize the City Administrator to prepare a new contract extending the current garbage contract with Corrow Sanitation through August lst., 1986, at a monthly price of $4,260 per month for the 36 month term. Meeting Adjourned. 01 Rick Wolfstell r Assistant Administrator - 7 -