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City Council Minutes 02-12-1990MINUTES 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 2. 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. 3. Citizens comments/petitions, r&quests,, 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. 4. Public hearing on proposed increases in retail license fees for non -intoxicating and intoxicating liquor licenses. The public hearing was opened. There being no comments from the public, the hearing was closed. Administrator Wolfsteller reviewed his recommendation regarding liquor license fees. Wolfsteller noted that he surveyed a number of communities and established a proposed fee 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. 1 5. go Council Minutes - 2/12/90 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 Sunday liquor On -sale 3.2 beer Off -sale beer On -sale wine Set-up license Combination wine/3.2 $3,750 $ 200 $ 275 $ 75 $ 275 $ 275 beer on -sale $ 500 Motion carried unanimously. Public hearing - 7th Street improvement project. AND 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 #1 or plan #2. 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 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. 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. K 7. Council Minutes - 2/12/90 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 #2 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 #1 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 Meadow Oak 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 type 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. 3 ME Council Minutes - 2/12/90 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 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. Consideration of an ordinance amendment further definin 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 neighborhoods, 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 the City attorney that the ordinance amendment be adopted, which would strengthen 4 Council Minutes - 2/12/90 the City's ability to control storing of unused vehicles on residential property. At this point, 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. 9. Consideration of ordinance to regulate cigarette vending 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 Blonigen 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 new set of problems. Our efforts would be better spent educating youth regarding the hazards of cigarette smoking. After 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. 5 Council Minutes - 2/12/90 10. Update by City Attorney 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 relating 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 100% 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 2 Council Minutes - 2/12/90 to satisfy technical requirements. The two bids received were submitted by E. H. Renner & 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 renewing contract for engineering and consulting services and revised engineering fee schedule. Shirley Anderson noted her concern regarding the length of time it takes for the City to obtain updated base miaps. 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 been providing timely service to the City. After discussion, a motion was made by Fran Fair, seconded by Warren Smith, to continue the consulting services agreement with OSM and adopt the revised fee schedule. During discussion, Ken Maus noted that this agreement can be terminated upon 30 days notice if the 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 hiring 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 7.30 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 100% 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. Council Minutes - 2/12/90 15. 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 #1, 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 financing plan for Tax Increment Financing 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 adopting a resolution giving preliminary approval for the Tapper, Inc., project and giving 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 Tapper, 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 development loan revenue bonds. Motion carried unanimously. SEE RESOLUTION 90-6. W7 Council Minutes - 2/12/90 17. Reconsideration of adopting a resolution relating to the modification by the Housing and Redevelopment Authority in and for the City of Monticello of the Redevelopment Project No. 1, the modification of the tax increment financing 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 Project No. 1, and the approval and adoption of the tax increment financing 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 felt 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 Blonigen 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 wikely that the legislature will modify the TIF statutes so as to control its use. 10 Council Minutes - 2/12/90 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 financial distinction. In other words, if it was not "but for" tax increment financing used in Monticello, the development would have gone elsewhere. 11 Council .Minutes - 2/12/90 Dan Blonigen brought the discussion to a close by snaking a motion to reverse the previous decision and adopt the 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 01 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 spade by Warren Smith,, seconded by Fran Fair, to approve change order 11 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 Resninele property. Rick Wolfsteller informed Council that City staff has been working extremely hard in attracting Reinmele Engineering, Inc., of Big Lake to locate their new facility in Monticello. As part of the proposal to relocate in Monticello, Resninele 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 ;Wade 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 Resninele 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 spade 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. W Council Minutes - 2/12/90 21. Quarterly 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. J f 'Neill Assistant Administrator 13