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City Council Minutes 09-27-1993MINUTES REGULAR MEETING - MONTICELLO CITY COUNCIL Monday, September 27, 1993 - 7 p.m. Members Present: Ken Maus, Shirley Anderson, Brad Fyle, Clint Herbst, Patty Olsen (arrived during discussion on item #4) Members Absent: None 2. Consideration of approval of minutes of the regular meeting held September 13, 1993. After discussion, a motion was made by Brad Fyle and seconded by Shirley Anderson to approve the meeting minutes as submitted. Motion carried unanimously. 3. Citizens comments/petitions, requests, and complaints. A representative from the Minnesota Community Forest Program, presented the City with a plaque recognizing the City for its efforts to maintain an urban forest program. The plaque recognizes Monticello for being designated as a "Tree City." 4. Public hearing for the application of funding to the State of Minnesota for The H -Window Company, and consideration to adopt the resolution of applicant, City of Monticello. 011ie Koropchak requested that City Council conduct a public hearing associated with an application for funds to be provided by the State of Minnesota, channeled through Monticello and offered to The H -Window Company to assist in funding a portion of the expenses associated with the expansion of The H -Window Company. Koropchak noted that the amount funded through the state program is $400,000. If the state approves the requested grant, the City will receive the grant and, in turn, provide the funds to the H -Window Company as a loan. The City has the right to retain the first $100,000 principal and interest payback while the state retains the remaining $300,000 principal and interest payback. Koropchak stated that it is recommended by City staff Council approve the $400,000 loan structure with an interest rate schedule designed to assist The H - Window Company in the first critical years of the company's growth and expansion. Interest rate schedule is proposed as follows: Years 1-2 0% Year 3 2% Year 4 3% Year 5 4% Year 6-10 5% Page 1 Council Minutes - 9/27/93 Brad Fyle asked who is paying for the cost to apply for the state funds? 011ie Koropchak responded by saying that the funds necessary to pay the cost to apply for the loan will be derived from the revenue received by the City when H -Window pays back the loan which was originally funded by the State. Brad Fyle mentioned that he continues to be opposed to the use of tax increment financing funds for expansion. Businesses already located here will expand on their own due to the benefits that this area provides in terms of location on the freeway, work force, etc. Fyle also noted, however, in this case, since State funds do not originate from Monticello yet a portion of the loan money is paid back to the City for future loans, this is an excellent deal. Ken Maus mentioned that this company could have easily moved rather than expand in Monticello. The expansion will create 60 new jobs that may have gone elsewhere if the City had not provided TIF assistance that any other would have provided. Shirley Anderson concurred that the City can't pass up an opportunity to encourage expansion of an existing proven business. There being no further comments, Ken Maus closed the public hearing. After discussion, a motion was made by Shirley Anderson and seconded by Clint Herbst to adopt a resolution authorizing the City Administrator to submit a Community Development application on behalf of the City of Monticello to the Department of Trade and Economic Development and approve the recommended loan terms. Motion carried unanimously. SEE RESOLUTION 93-35. 5. Public hearing and the consideration to adopt a resolution relating to the modification of the Redevelopment Plan for Redevelopment Proiect No. 1, the modification of the plans for Tax Increment Financing Districts Nos. 1-1 through 1-12 and Tax Increment Financing Districts Nos. 1-14 through 1- 15, and the adoption of the Tax Increment Financing Plan for TIF District No. 1-13 (Standard Iron and H -Window TIF plan amendments). 011ie Koropchak asked that Council consider approval of an amendment to TIF District No. 1-7 (H -Window), which will increase the district budget by $126,000. H -Window will be expanded by 25,600 sq ft and office space by 4,000 sq ft, resulting in the creation of 60 new jobs. Page 2 Council Minutes - 9/27/93 Council is also asked to approve creation of TIF District 1-13 (Standard Iron). Budget for District 1-13 totals $334,000 and calls for $311,000 in pay-as-you-go TIF assistance for land right, town, and site improvements. The TIF plan is based on construction of a 48,000 sq ft facility, 32,000 sq ft manufacturing space, and 16,000 sq ft office space. Final site plan shows a 52,000 sq ft facility. The project will result in creation of 65 jobs in the first year and 115 within 3 years. Rusty Demeules, president of Standard Iron, was present to describe the type of manufacturing that Standard Iron is involved in. He noted that this facility will be constructing components used in construction of farm implement equipment and other machinery. He also noted that it is expected that in 5 years there are plans for a 30,000 sq ft addition to the structure which would result in a total employee base of 200. After discussion, a motion was made by Clint Herbst and seconded by Patty Olsen to adopt a resolution relating to modifications of the Redevelopment Plan for Redevelopment Project No. 1, the modification of the plans for TIF Districts Nos. 1-1 through 1-12 and TIF Districts Nos. 1-14 through 1-15, and the approval and adoption of the TIF Plan for TIF District No. 1-13. Motion carried unanimously. SEE RESOLUTION 93-36. 6. Continuation of public hearing on Project 93-09C, Alley Improvements. John Simola reported that the public hearing was continued to today's date due to the previous lack of bids for the project. We have now obtained bids for the work and have put together a list of properties with proposed costs for each property. At the same time, we have received information from land owners adjacent to the alley that would like to see additional work done in conjunction with the alley improvements. The work proposed by the adjacent property owners would make the project less of a patch job and could involve replacing portions of existing parking areas. Simola summarized the situation by saying that there is support for the project but not as it is presently designed and suggested that since the project as designed doesn't seem to address the needs of the local businesses, perhaps a committee could be formed to improve the design. At this point in the meeting, Ken Maus closed the public hearing. After discussion, a motion was made by Shirley Anderson and seconded by Brad Fyle to establish a committee for the purpose of preparing an improved plan for reconstruction of subject alleys and associated improvements. Motion carried unanimously. Page 3 Council Minutes - 9/27/93 7. Consideration of storm sewer improvements for Monticello Ford. John Simola reported that since there is no storm sewer system leading from the Ford property other than the Highway 25 ditch, Monticello Ford is faced with needing a large drainage pond on the south end of their property near the Hart Clinic, or they must construct a storm sewer from the south end of the property over to the pond in Sandberg South. If they construct a pond on their property, they are using valuable property that could be used for expansion of their business in the future. If they build and pay for a storm sewer system leading to the Sandberg South pond, they would have to pay 100% of that cost and would have to share the cost of an outlet to be constructed in the future. The estimated cost of constructing the storm sewer connection is $35,000. Including all contingencies and indirect costs, the cost could be $46,700. Simola went on to report that Dave Peterson is seriously considering requesting that the City complete this improvement project with the cost of the project being assessed back to his property. According to Assistant Administrator O'Neill, Peterson is willing to pay 10% of the cost of the project up front with the balance of the cost assessed against his property to be paid back over a period of 10 years at the prevailing interest rate. It was the consensus of Council that the terms proposed by Peterson as outlined by O'Neill were acceptable. After discussion, a motion was made by Brad Fyle and seconded by Shirley Anderson to authorize the installation of storm sewer by change order on the Hart Boulevard project or authorize the City Engineer to develop full plans and specifications and bid the project, whichever is found to be the least expensive, and grant Monticello Ford the right to stop the project in the event the bid amounts exceed an acceptable level. Motion carried unanimously. 8. Consideration of accepting conveyance of tax forfeiture parcel from Wright County --former Gille Auto property. Rick Wolfsteller requested that Council consider taking ownership from the County to expedite cleanup of the site, which includes building demolition, underground fuel tank removal, and soil contamination cleanup through the Minnesota Petrofund. Wolfsteller suggested a number of conditions associated with accepting ownership from the County. Clint Herbst noted that taking ownership of this property has some risk. What if contamination on site is in excess of what is expected? The costs to clean it up could rocket up. Ken Maus responded by saying that the site evaluation that was recently completed has given us a good understanding of the problem. Even if a bigger problem is discovered once the cleanup Page 4 Council Minutes - 9/27/93 begins, the City exposure is 10% of the additional cost with the Petrofund paying the rest. Clint Herbst emphasized that he supports the cleanup; however, we should recognize that there are risks. Ken Maus concurred that there are some unknowns, but the risks in accepting the property is not excessive. Brad Fyle indicated that he would like to see it cleaned up; however, he felt that the penalty and interest that the County requests to be paid before conveying the property to the City should be forgiven by the County. In this situation, the City is taking the initiative and the risk associated with cleaning up the site; therefore, the County should consider forgiving the penalty and interest. After discussion, a motion was made by Clint Herbst and seconded by Brad Fyle to agree to ownership of the property at no cost under the following conditions: a. After cleanup, City can sell the property and keep sufficient funds to cover all out-of-pocket costs. b. Remaining funds will be applied to the County expenditures. C. If there are any remaining funds, they will be applied to the delinquent taxes of approximately $11,300 without delinquent penalty and interest of approximately $9,000. d. Any funds remaining after the above expenditure reimbursements would be the City of Monticello's. e. If the City did not seek sufficient funds to cover its own out-of-pocket expenditures, the County would agree to split any additional expenditures on a 50/50 basis. In addition, City staff is directed to determine whether or not new bids need to be obtained for the work associated with cleaning up the site. If new bids need to be obtained, staff is authorized to seek new bids. Motion carried unanimously. 9. Consideration of change order #4 to the vehicle storage building, Proiect 92- 06. John Simola reported that all the work from Monticello vehicle storage building has been completed with the exception of painting. Painting was attempted last fall; however, cold weather hampered the operation. A portion of the exterior painting was not the proper thickness. Portions of the building were painted the wrong color. Still other portions of the Page 5 Council Minutes - 9/27/93 building were painted during sub -freezing temperatures, which does not comply with the manufacturer's application specifications. The painting contractor agreed to prime the building and repaint the entire building and provide a 3 -year extended warranty for $11,304. After several months of negotiation, the painter's insurance company agreed to pay damages in the amount of $11,304 so that the building could be repainted. The insurance company requested that they make payment to the City of Monticello, as we were the owners of the building. Consequently, in order to pay Rochon Corporation the $11,304 for the painting that was completed, we must do so through the change order process. Change order #4 has been developed for that purpose. After discussion, a motion was made by Brad Fyle and seconded by Patty Olsen to approve change order #4 in the amount of $11,304. Motion carried unanimously. 10. Consideration of change order #1, the trunk storm sewer extension and appurtenant work to Hart Boulevard, City Project 93-06C. John Simola reported that the Hart Boulevard Storm Sewer Project is well underway and should be completed in the near future. The City Engineer and Contractor, LaTour Construction of Maple Lake, have requested that we modify the payment units for rip rap from the cubic yard to the square yard. There will be no increased cost to the project for making this change. Secondly, during the excavation through the existing parking lot, a large pile of buried demolition was uncovered consisting mainly of large pieces of concrete and steel rebar. These materials were removed from the street area and pipe zone and were replaced with suitable fill. The cost of removal, replacement, and disposal is $26.50/cubic yard. Based upon the estimated quantity of 100 yards, the cost to the project is $2,650. This is the amount requested for change order #1. After discussion, a motion was made by Shirley Anderson and seconded by Brad Fyle to approve change order #1 for Project 93-06C in the amount of $2,650. Motion carried unanimously. 11. Consideration of approval of plans and specifications and authorization to proceed for bids for Improvement Project 93-11C, chlorination and dechlorination improvements to the wastewater treatment plant. John Simola reported that OSM has completed the plans and specifications for the chlorination and dechlorination system at the Wastewater Treatment Plant. Our deadline for the project is to have the systems in place and in operation during the month of October 1994 so that we can demonstrate to the Minnesota Pollution Control Agency that we can dechlorinate prior to the end of our permit in December 1994. Since we do Council Minutes - 9/27/93 not chlorinate after November 1, the October deadline is necessary. City staff and OSM have discussed moving up the timetable due to the necessity to chlorinate during the summer months of 1994. It would be very difficult to continue chlorination during the summer while the construction is going on in the existing chlorine room. We, therefore, feel that it would be in our best interest to move the timetable up for winter construction and the spring of 1994 for startup and request that Council approve the plans and specifications and authorize advertisement for bids, contingent upon approval of the plans and specifications by the Minnesota Pollution Control Agency. This would allow us to be out for bids in November or December and would allow us to award the project around the first of the year. Anticipated construction cost for this improvement is $51,000. After discussion, a motion was made by Shirley Anderson and seconded by Clint Herbst to approve plans and specifications and authorize advertisement for bids contingent upon approval of plans and specifications by the Minnesota Pollution Control Agency. Motion carried unanimously. 12. Consideration of bills for the month of September. Motion made by Brad Fyle and seconded by Patty Olsen to approve the bills as submitted. Motion carried unanimously. 13. Other Matters A. John Simola reviewed the modifications made to the Recycling Program. He noted that as part of the program to encourage better participation in the program, Vasko Sanitation was authorized to leave garbage containers that were filled with recyclables. Simola reported that this affected about 7% of the property owners. It was the consensus of Council to accept this short-term measure as a wake-up call to people refusing to recycle. B. Clint Herbst noted that he had received a call .from a property owner requesting a burning permit. It was his view that taking a poll of the Council is not the best way to determine whether or not to issue a burning permit. Assistant Administrator O'Neill noted to Council that during the Council's previous discussion on this general topic, Council directed staff to refuse issuance of any burning permit applications that do not comply completely with the ordinance governing outdoor burning. Such applications were supposed to be submitted to the City Council at a regular meeting, whereupon Council could consider waiving requirements that could not be met. Page 7 Council Minutes - 9/27/93 It was the consensus of Council to reaffirm the previous policy in regard to open burning, and all applicants that cannot comply with the permit requirements noted by ordinance must come before Council for specific approval. There being no further discussion, meeting was adjourned. J eW WK eill Assistant Administrator Page 8