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City Council Minutes 11-22-2004 SpecialMINUTES SPECIAL MEETING - MONTICELLO CITY COUNCIL Monday, November 22, 2004 - 7 p.m. Members Present: Roger Carlson, Glen Posusta, Robbie Smith, Brian Stumpf and Bruce Thielen Members Absent: None 1. Call to Order. Mayor Thielen called the special meeting to order at 5 p.m. and declared a quorum present. 2. CSAR 18/1-94 Interchange. Jeff O'Neill provided background information on what has transpired to date on the interchange project. The Council will be asked at the regular meeting to reaffirm the previous work and to authorize a feasibility study. Previously the Council had ordered plans and specifications with the contingency that the developers of affected property provide waivers of assessment. The developers will not commit to signing a waiver unless they have a firm commitment date from the City as to when the interchange will be started. The City does, however have letters from Ryan Companies and Shawn Weinand outlining their level of commitment. Jeff O'Neill reviewed the project history noting this project has been in the City's plan since the early 1990's. At that point they were looking at developing two legs of the interchange. MnDOT indicated they would not approve anything unless there was a full access. With the submittal of the Ryan proposal the layout of the interchange was changed slightly. The City has received a concept stage planned unit development for the Ryan Companies development project. Bret Weiss discussed the scope of the work which includes the reconstruction of CSAH 18 from Hart Boulevard to School Boulevard. This would be a four lane design with turn lanes and signals. There would also be some improvements to the intersection of Chelsea Road. Chelsea Road would be re -constructed to Fallon Avenue as an urban section. The project would include 7" Street through the Ryan property. Highland Way (formerly called the north -south street) would also be included in this project. Also included would the south frontage road which would provide a detour around the bridge. There are some trunk improvements such as the sanitary sewer trunk line adjacent to St. Benedicts/St. Henrys that crosses the freeway to tie into the existing line. This line would serve future annexed areas. This would maximize what they can actually do at the wastewater treatment plant. The Fallon Avenue overpass is being pulled from the project for now. Brian Stumpf asked if MnDOT gave the City a time frame in which Fallon Avenue would have to be constructed. Bret Weiss indicated MnDOT was just requiring the City to commit construction of the road at some point. Jeff O'Neill asked about the AVR site and what was budgeted for acquisition. Bret Weiss noted that right of way acquisition was based on the appraisal value. Bret Weiss stated there was a 10% contingency on construction cost and 28% indirect cost. Special Council Meeting Minutes - 11/22/04 MnDOT is agreeing to $3,800,00 which includes right of way, engineer and construction cost. If these costs go up MnDOT's share will go up. Wright County is contributing $1,900,000 to the County Road 18 improvements. The City's share is $4,600,000 which includes right of way cost for the interchange and a portion of the Chelsea Road improvements and part of the south Frontage Road. Bret Weiss said the signal lights are included but not other street lighting. Jeff O'Neill stated that the City of Lakeville recently completed three interchanges and St. Cloud did one as well. He felt the City of Monticello's project show a great collaboration of financing sources. Jeff O'Neill outlined some of the potential benefits from the project: Currently there is a good amount of land available to assess for the interchange. That may not be the case in the future. MnDOT"s share of the project is relatively large and there is no assurance that MnDOT funding would be available in the future. TH 25 is becoming more congested and these improvements will distribute traffic relieving some of the congestion. It will provide linkage to the commercial area and direct traffic away from the residential areas. If the City needs to issue bonds for the interchange it is anticipated that the taxes generated by the new development would cover debt cost so the City wouldn't be losing anything.. If the interchange is not done, it is not known when development would take place. Glen Posusta asked about traffic and crime problems that Albertville is experiencing because of their development. Jeff O'Neill felt the interchange design makes the best use of the land, provides for the most efficient traffic pattern and is a design that would be approved by MnDOT. This project will allow for extension of trunk lines and utility easements. It was noted that many of the stores this area would attract, like Target, have their own security forces so crime wouldn't necessarily increase. At the November 22nd regular meeting, the Council will be asked to direct the engineer to continue with work on the interchange project and authorize the preparation of a feasibility report. The project would not be ordered until such time as development agreements are in place. If the project should fall apart, the City would be responsible for all costs incurred to date. A second option is to have staff continue negotiations with developments and the a third option is to put all design activity on hold and pay design costs incurred to date. Brian Stumpf felt 7th Street needs to be constructed and cited traffic concerns. Glen Posusta noted that Chelsea Road will take away a lot of traffic from the area. Roger Carlson felt this was a good project. Glen Posusta said the scary part of the project is the City's share of $4,600,000 which he anticipates will increase to $6,000,000. He also questioned the amount of tax revenue generated by the Weinand project and the fact that the developer was requesting the assessments be deferred. Shawn Weinand stated his development is not driven solely by the interchanges whereas the Ryan Properties development is. Shawn Weinand stated he believes in the project. He added that they do not have any buyer in place for their site. Since they don't think their development would be able to bring in a big box store, it will take a little longer for their development to fall into place. Bret Weiss said costs are not really known until the project is bid. Bret Weiss outlined some of the things their firm did that they feel will keep construction costs in line with the estimate. Bret Weiss said one wild card in this is the AVR site. Wayne Mayer asked if talks had taken place 2 Special Council Meeting Minutes - 11/22/04 between the Council and AVR. Tom Scott, City Attorney, noted that the City had been waiting for the appraisal on the property to be completed. The appraisal of this site sets the appraisal value at $2,300,000. Another issue is relocation benefits and that amount is hard to quantify. Tom Scott has not had any discussions with AVR and is not sure if staff has had any discussions with AVR. Tom Scott noted that while the property owner has completed his property appraisal, he is not under any obligation to give the City a copy of the appraisal. Tom Scott noted that relocation benefits is an item that can be hotly disputed. Bruce Thielen said relocation costs will depend on where the business decides to relocate. Wayne Mayer asked if the appraisal figures will be presented to AVR. Tom Scott said the appraisal was just recently finalized. Glen Posusta stated that at a previous Council meeting staff was directed to contact AVR. Glen Posusta said the reason that AVR was not interested in other sites was because they want to do a 1031 land exchange. Bret Weiss noted that according to Dan Wilson since the City is purchasing all of the assets there should not be relocation costs. Bruce Thielen noted that throughout the project the Council will have the opportunity to be voting on items as they come up. Bret Weiss said Ryan Companies will not be closing on any project until they know the City is going to proceed. Right-of-way should be in place by April 15t". If the City does not have the right of way in place MnDOT will not proceed with the project. Glen Posusta asked what the City has from the developers. Bret Weiss said it is $8,700,000 including improvements. Bret Weiss said both Weinand and Ryan Companies will be entering into development agreements. Tom Perrault expressed his concerns about cost overruns and the problem of relocation for AVR since the Our Back Yard site was not a viable option. He felt that relocation to the new industrial park would be a better solution. Bruce Thielen noted the concerns of the IDC that locating a cement plant in the industrial park would not be a compatible use. Rick Wolfsteller said once the City sits down with AVR they will know more whether AVR wants to relocate in Monticello. Mayor -elect Clint Herbst also expressed his concern about cost overruns. Bret Weiss asked Shawn Weinand if the interchange went in would he be actively marketing his site. Shawn Weinand indicted they would as it is not their practice to sit on property indefinitely. Clint Herbst said they want to make sure that this improvement brings tax benefits to the City. He said he didn't want the project stopped but cost overruns is still a concern. Glen Posusta asked Shawn Weinand how he would feel about paying a percentage of cost rather than a fixed amount. Shawn Weinand replied that they could not participate based on that kind of commitment as they feel that they have put all they can on the table. He said that as developers they are taking a risk and he felt the City should take some risk as well. Shawn Weinand stated that with the interchange in place a lot of secondary growth will take place. Glen Posusta asked if the assessments are deferred on the Weinand property what incentive does Weinand have to develop any of his property. Core Street Project for 2005. Kevin Kawlewski explained the proposed 2005 Core Street Reconstruction Project. This is the third year of the overall street reconstruction program. The 2005 project area covers the streets north of County Road 75 in the northwest area of town. Two options are proposed. Option #1 includes B618 curb and gutter, storm sewer and regrading of the ditches to function as they should. River Street is proposed to be widened to 32 feet and the other streets would be widened to 28 feet. Glen Posusta asked if the street widening would J Special Council Meeting Minutes - 11/22/04 require relocating of telephone poles and utility lines. Kevin Kawlewski pointed out that a lot of the utilities in the area are overhead. The utility companies have the option to upgrade their facilities at this time if they so desire. Option #I would also include either a 6' concrete sidewalk or an 8' bituminous trail along River Street to Sandy Lane. Brian Stumpf said since the sidewalk would be an assessment to abutting property owners, there will be opposition to the placement of the sidewalk. Kevin Kawlewski indicated that the Otter Creek crossing would be looked at as well as the need to extend the pipes in this area. It is proposed to lower the streets somewhat which would eliminate some of the ditches. Some sanitary sewer repair is required on Chestnut Street and Oakview Lane and construction of some storm water ponding area will also be required. John Simola asked about the NPDES Phase II permit. The Phase II permit would require a city over 10,000 in population to put together a program that outlines how they will reduce ponding to downstream bodies. Bret Weiss said if the city does an urban section design they would want to put in ponding. The cost for option #1 is $3,200,000 for construction plus indirect cost of 22% making a total project cost of $3,990,000. Street reconstruction funds would cover $500,000 and there would be contributions from the utility trunk funds to pick up some of the costs.. The proposed assessment for the street reconstruction portion would be $2,722/lot. The street widening cost would be $2,380/lot and there would be a separate cost for those properties receiving curb and gutter and storm sewer improvements. This project will affect approximately 3 miles of streets. It was suggested that the project be spread over two years. Although this would delay the overall program it would allow another year of tax levy for the street reconstruction to help fund the proj ect. Kevin Kawlewski reviewed the cost factors. Bret Weiss noted that if a rural section is constructed then the issue would be how to put a sidewalk on it. Brian Stumpf questioned the designation of the Ritze site as commercial property. Bret Weiss responded that they look at how the property is used not necessarily how it is zoned. Option #2 is a rural section design with no curb and gutter. River Street would be left at 28 feet. There is no pathway or sidewalk proposed under this option and no storm water ponding area. The construction cost for this option is $2,200,000 and with 22% indirect cost the estimated project cost total would be $2,700,000. It is proposed that the project would be assessed in 2005. There would be a $500,000 contribution from the street reconstruction fund and a $259,000 from utility trunk funds. Approximately $1,900,000 construction costs would remain to be financed. Brian Stumpf asked about spreading this project over two years. Kevin Kawlewski noted that there would some re -alignment of River Street and County Road 75 on the north and south side. This re -alignment might require some additional right-of-way. They are also proposing to look at the Otter Creek Road/County Road 75 intersection. Brian Stumpf suggested they look at the drainage problem in the area by Larry Nolan. Brian Stumpf expressed his concerns about the assessment cost for the properties in the project area and suggested that widening the streets be omitted from the project area . Bret Weiss said after the public hearing, the Council could give direction on the scope of the project. Clint Herbst said he 11 Special Council Meeting Minutes - 11/22/04 would like the public hearing to be delayed until after the first of the year. Glen Posusta felt the project should be spread over two years. Bruce Thielen noted the $8,000 assessment would be much higher than what other properties in the reconstruction program had paid. Rick Wolfsteller noted that the larger assessment is for improvements that this area did not have before like curb and gutter. Brian Stumpf said he would like to take the cheapest approach which is to go without the curb and gutter and the street widening. Glen Posusta didn't see any reason to tear up the street without making it an urban section. WSB will amend the feasibility report and present the revisions to the Council at the December 13, 2004 meeting. The workshop session closed at 6:50 p.m. Recording Secretary 5