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City Council Minutes 01-29-1990 I I I MINUT S SPECIAL MEETING - MONT CELLO CITY COUNCIL Monday, January 29, 990 - 7:00 p.m. Members Present: Ken Maus, Fra Anderson, Dan Fair, Warren smith, 10nigen Shirley Members Absent: None 2a. 2b. Consideration of accept~!.~. fJibili.!:,y re.l20Y'1: and estimate of costs for street and utilitv 1m rovements to 7th street and Minnesota street. ~ Consideration re ort for im Council reviewed the feasibil"ty report and hydrologic study completed in conjunction with development of the K-Mart addition. The information co tained in both reports provided cost information that assists the City in developing a finance plan for the public improvem nts associated with the K-Mart project. In addition, t e hydrologic study provides information that allows th City to complete short-term planning for the management f storm water created by the K-Mart addition and also provides information that assists the City in its planning for fut re storm water improvements in the area. After discussion, motion made by Shirley Anderson, seconded by Fran Fair, to ac ept the feasibility report and estimate of costs for street and utility improvements to 7th Street and Minnesota Street nd accept hydrologic study and feasibility report for im rovements to the 7th street watershed. Motion carried u animously. 3 . Consideration of ro'ect fi ance Ian and consideration of revised Ian for use of tax ncrement financin . Assistant Administrator 0' eill outlined two plans for construction and financing of the improvements associated with the 7th Street improvement roject/K-Mart development. He noted that on September 25, 1989, Council adopted the basic package for use of tax incre ent financing, which called for use of TIF primarily for cost associated with realignment and construction of 7th Stree. After adding soft costs, including bonding, capitaliz d interest, and contingency, the original level of TIF con ribution amounted to $470,000. Subsequent to September 25, 989, TIF approval, Council acted pag 1 I Spec al Council Minutes - 1/29/90 I to remove the Kramer property rom the list of property to be acquired, which resulted in a net reduction of $129,000. O'Neill reported that chan es to the plan for public improvements, along with the development of more detailed engineering data, necessitate another look at the project finance plan. The origin I finance plan called for development of the 7th Street ight-of-way along a grade that would have allowed the Hornig property to have access to 7th Street right-of-way on the sou h side of the Hornig property. Due to the need to elevate 7th treet, project costs increased and caused the elimination of Hornig property access to 7th Street right-of-way. O'Neill hen went on to review two basic proposals for public improvements and financing of improvements for Council revi w. The first proposal called for development of total priva e and public improvement costs in the amount of $822,000. Th second plan calls for a total public and private improvement cost of $752,000. O'Neill went on to break down the propose sources of funding for both plans. O'Neill noted that the added expense associated with the first plan involves added sanitary sewer and water cost associated with extending sew r and water from its present position at the intersection o. Minnesota and 7th Street all the way to the freeway. Under the second alternative, sewer and water would not be extend d to the freeway and would be terminated at the intersectio of 7th Street and Minnesota Street. The added cost of thi alternative is approximately $38,000. The first alternativ also calls for development of additional storm water sectio which would service drainage coming from the Brennan prope ty. The added cost of this improvement amounts to approxi ately $32,000. O'Neill also reviewed the finan e plan which proposed deferral of assessments against the B ennan property for the storm sewer and sanitary sewer until such time that those utilities would actually be utilized. I addition, the plan called for deferring The Lincoln Companies' sewer and water assessment until such time that the parcel immediately west of the K-Mart site is developed. O'Neill oted that the tax increment financing district proceeds can be used to pay for the cost of the improvements. At the same time, the City, on a deferred basis, may assess the benefi ing property owners for the improvements that have been re eived. of designing the plans as of scaling back the plans are excessive. He also noted to pay an assessment in the property I Dan Blonigen supported the con outlined in plan #1 with an op in the event the project costs that Mr. Brennan should agree future equal to the benefit hi Page 2 I I I Spec"al Council Minutes - 1/29/90 receives with the installatio of the utilities as proposed. Blonigen also noted that the p tential assessment against the Brennan property should be orded against the property. Warren Smith noted that the pu lic improvements as proposed in plan #1 are acceptable and th t they look toward the future while staying within financia means. Shirley Anderson was concerned about the precedent that might be set by deferring some of t e assessments associated with the improvement project. Fran Fair noted that in her object to extending the sanit Minnesota street to a positio placed under the freeway, the the south side of the freeway view, the citizens would not ry sewer and water lines from where they can be more easily eby encouraging development on Ken Maus, in reviewing the fi ance plan, noted that the plan is consistent with Council's original concept adopted in September of 1989. Chuck DuFresne of The Lincoln ompanies noted to Council that his company prefers option #1 Pat pelstring noted that the C ty could develop a TIF plan and distribute it based on financ plan #1. Council at a later date can always make reductio s but not additions. After discussion, motion was ade by Fran Fair, seconded by Shirley Anderson, to approve construction and finance plan #1 and include both option #1 and option #2 in the development of plans and specifications fo the 7th Street improvement project. Plan #1 should inc ude development of 7th street storm sewer. Final design is to be addressed at the public hearings on the improvements and at the TIF public hearing scheduled for March 12, 1990. Motion carried unanimously. 4. hearin on street and and Minnesota Street. for Februar 12 1990. Motion was made by Fran Fair seconded by Warren Smith, to call a public hearing on t e 7th Street/Minnesota Street improvement project, public h aring to be conducted February 12, 1990. Motion ca ried unanimously. SEE RESOLUTION 90-3. Page 3 I I I Spec al council Minutes - 1/29/90 There being no further discussion, the meeting was adjourned. /;{1 ~/Z~ Jeff O'Neill Assistant Administrator pa e 4