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City Council Minutes 09-25-1989MINUTES REGULAR MEETING - MONTICELLO CITY COUNCIL Monday, September 25, 1989 - 7:00 p.m. Members Present: Ken Maus, Warren Smith, Shirley Anderson, Dan Blonigen Members Absent: Fran Fair 2. Approval of minutes. Motion was made by Dan Blonigen, seconded by Shirley Anderson, to approve the minutes of the regular meeting held September 11, 1989. Motion carried unanimously. 3. Citizens coments/petitions, requests, and complaints. Lee Parks requested that the City investigate the potential of extending city sewer service to his property located between Joyner's Bowling Alley and the NAWCO structure. Mayor Maus suggested that Mr. Parks work with the Building Inspector and City Engineer toward development of a plan that could result in the extension of sewer to the property owned by Parks. It was suggested that OSM work on an hourly basis toward resolution of engineering problems relating to extension of sewer to the Parks property. 0. Kenneth Kooser noted that a Toastmaster's Club is forming in Monticello, and he invited those in attendance to become part of the Toastmaster's Club. Harold Pittman was present to discuss his concerns regarding the increase in water pressure that will result from bringing the new water tower on line. John Simola reported the plans that the City has in place to mitigate water pressure related problems. 4. Consideration of conditional use permit which would allow expansion of a shopping center in a B-3 zone. Gordon Orschlager from KKE Architects reviewed the proposed site plan. Orschlager reviewed the building layout, landscaping plan, and parking design. City Planning Consultant, John Uban, provided a site plan review and noted his observations regarding the site plan and its impact on Monticello in general. He stressed the importance of designing a good road system connecting the 7th Street shopping area to Broadway. He noted that continuation of Minnesota to Broadway should be considered in order to achieve the proper traffic flow from Broadway to the 7th Street shopping area. Uban also noted that the K -Mart addition will have a significant visual impact on the residential areas north of the development. Uban recomended that this impact be buffered by landscape plannings or by creating a deeper green area between the 7th Street right-of-way and the parking area or by eliminating access to the apartment using the 7th Street right-of-way as an obstruction to site lines between the apartment and the K -Mart. 1 Council Minutes - 9/25/89 Uban also noted that KKE has responded to some suggestions by the City Planner and OSM's traffic engineer which has resulted in an improvement to the traffic flow and parking plan as originally proposed at the Planning Comnission meeting of September 20, 1989. In addition, the landscaping plan has been slightly modified to reflect his concerns. Uban recomended that the City Council adopt the Planning Comnission recomendations that a conditional use permit be granted to Lincoln Companies for the expansion of the existing mall subject to the conditions noted by the Planning Coimnission. Dan Kling reviewed the site drainage plans and noted that the water discharging from the site should not exceed 5 cubic feet per second. Ken Maus noted his concern regarding the traffic that will be created at Highway 25 and 7th Street. Maus suggested that since the development is highly dependent on the intersection and because the development will create a significant increase in traffic in this area that it should in the future participate in funding any street light improvements that would be needed on Highway 25 and 7th Street. After discussion, motion was made by Warren Smith, seconded by Dan Blonigen, to approve the conditional use permit subject to the following conditions: a. Approval of site drainage plans by the City Engineer. Excavation permit provided only after site drainage plans have been approved by the City Engineer. Storm water discharge from the site must be restricted to 5 cubic feet per second. b. In the event the public improvements are installed privately, all improvement specifications and construction must be approved by the City Engineer. c. Lincoln Companies' dedication of land to the City which is necessary for 7th Street alignment. d. City acquisition of utility easement areas as defined by the Building Inspector and City Engineer. e. Alternate site plan approved contingent on meeting or exceeding standards associated with site plan presented to City Council at the meeting of September 25, 1989. John Uban and City staff charged with evaluating and judging alternative site plan relative to performance standards established with initial plan. f. Staff and Planning Consultant approval of landscaping plans. g. Planning Consultant and City Engineer approval of revised parking plan. 5. Council Minutes - 9/25/89 Motion based on the finding that the conditional use perinit is consistent with comprehensive plan, geographic area involved, character of the area, the need has been sufficiently demonstrated, and the development will not have a negative impact on the adjoining land values. Motion carried unanimously. Consideration of utilization of tax increment financing to fund a portion of public improvements associated with the K -Mart project. `O'Neill reported that at the previous meeting of the City Council, Council discussed use of tax increment financing for the purpose of assisting with realignment of the 7th Street right-of-way. As a result of that meeting, staff was directed to work with the HRA, property owners, and Lincoln Companies towards development of a finance plan that would achieve the straight alignment utilizing finance option 2A as the basis of the negotiations. Since that time, Tom Holthaus has reduced the price of his property from $56,000 to $49,900, and Marvin Kramer has reduced his property price from $197,000 to $187,000. The HRA met to discuss option 2A and concluded that although the straight alignment is the best alignment, the cost to achieve this alignment is not offset by the benefits or public purpose achieved. The HRA in their motion referred the matter of whether or not to use tax increment financing to assist realignment of 7th Street back to City Council. On September 20, 1989, the Planning Comnission recomended approval of Lincoln Companies' conditional use permit request and indicated support for the straight alignment in a separate motion. The motion was based on long term benefit of the straight alignment. O'Neill stated that the most significant development, however, since the previous meeting pertains to Lincoln Companies' new request for a much greater TIF contribution than previously requested. O'Neill reviewed the letter submitted by Tom DuFresne to the City of Monticello dated September 21, 1989, in which Lincoln Companies outlines the need for tax increment financing based on financial need. O'Neill noted that Lincoln Companies' request changes the focus of Council's decision from determining to what extent TIF could be used to achieve the straight alignment to determining to what extent tax increment financing should be utilized as an incentive for Lincoln Companies to proceed. O'Neill noted that the HRA decision to reject use of tax increment financing was based on financing of the street portion only, and TIF use based on financial need was never presented to the HRA. The HRA was never asked to review use of TIF under the terms presented to Council. O'Neill reported that the addition housing the K -Mart facility will generate approximately $105,000 annually in revenue available to pay off public improvement related debt accrued at the outset of the project. Over the life of an eight-year economic development district, this project has the capacity to pay off a potential debt of $600,000. 3 Council Minutes - 9/25/89 Lincoln Companies is asking for TIF assistance equal to $452,400. Under this scenerio, it would take about seven years to pay this debt before the taxes would be available to the City, school, and county. In their proposal, Lincoln Companies requests that tax increment financing be used to finance the construction of 7th Street in the amount of $130,500; partial payment of acquisition costs associated with Pratt and Holthaus property in the amount of $71,500; acquisition of the Kramer property in the net amount of $127,000; installation costs associated with sanitary sewer connections and temporary ponding in the amount of $84,000 and $39,400 respectively. Altogether, use of tax increment financing dollars requested amounts to $452,400. Under this scenerio, Lincoln Companies is asking that Council establish its own tax increment district and finance plan associated with the addition. This plan will be separate from the project area now managed by the Housing and Redevelopment Authority. Utilizing Council authority to develop this alternate TIF district represents a break from City tradition; however, it is totally legal and permissable for Council to establish its own tax increment financing program. Chuck DuFresne noted that use of tax increment financing is proper in this situation, as TIF will be used to offset the cost for improvements that benefit the City as well as Lincoln Companies. In addition, it is appropriate to use tax increment financing dollars to help defray the cost of site reclamation. Assistant Administrator O'Neill reviewed the various potential financing plans and suggested that Council review its philosophy towards use of tax increment financing and develop a financing plan accordingly. Ken Maus noted that there appears to be strong comunity support for the straight alignment of 7th Street. He went on to state that this alignment which benefits the City would not occur unless the City participates in the use of TIF in financing of the straight alignment. Shirley Anderson concurred by saying that the majority of the people she has spoken to as well indicated that the straight alignment is the better of the two alignments, and the City should do what it can to promote the highest and best use of the land between the freeway and 7th Street right-of-way. Warren Smith noted the long term benefit of the straight alignment and supported the notion of financing the cost to create the straight alignment. After discussion, motion was made by Warren Smith and seconded by Shirley Anderson to utilize tax increment financing for the purpose of financing the City's portion of the 7th Street right-of-way which equals 25 percent of the total cost for collector street oversizing and approximately 25 percent of the non -assessable street frontage. Motion to include 4 Council Minutes - 9/25/89 use of tax increment financing dollars to finance land acquisition and demolition costs associated with purchasing three properties in the net amount of $216,000. Voting in favor of the motion: Shirley Anderson, Ken Maus, Warren Smith. Opposed: Dan Blonigen. 6. Consideration of reviewing requirements for Star City recertification. Economic Development Director, 011ie Koropchak, reviewed the Star City Program, informed the Council of the Star City recertification requirements, and asked Council to consider approval or denial of Monticello's continued participation in the Star City Program. Koropchak noted that the Star City Program is designed to assist cities in developing and maintaining an organized economic development program. Monticello was certified as a Star City in 1982, and today Monticello is one of 90 coirununities that are now organized as Star City coimnunities. The Star City Program explores ways a counnunity can reach economic development objectives by organizing. The Star City Program provides the framework that can be used in organizing the comunity which creates a coimnon purpose, focal point, and coimnunity theme which results in greater opportunity for economic development. Ken Maus asked if the program is truly effective and if the City is in a better position in terms of economic development by maintaining certification. 011ie noted that the benefits of the program are difficult to measure. However, as a result of the program, the City is better organized and able to respond to companies that may wish to locate in Monticello; and, therefore, the program has a positive impact on the City's ability to encourage industrial development. After discussion, motion was made by Warren Smith, seconded by Dan Blonigen, to continue participation in the Minnesota Star City Program and to seek recertification. Motion carried unanimously. 7. Consideration of Town of Monticello ordinance prohibiting the use of sewage sludge within the Town of Monticello. John Simola noted that Monticello Township passed an ordinance on September 5 prohibiting the use of sewage sludge from our municipal waste water treatment plant anywhere in the Township. In addition, Monticello is prohibited from transporting sludge across any Township roads and further from depositing sludge in any waste facility located in Monticello Township which would include a co -composting facility for garbage. The Township did not notify the City of the passage of this ordinance, which took effect on its publication date of September 14. Staff found out about the ordinance in the Monticello Times on the afternoon of September 12 when the Monticello Times called to ask if we had any coments. Simola then outlined the action that he has taken since that point, which included a letter to the Township asking that the Township consider revoking or modifying their ordinance to allow Monticello to utilize, at a minimum, PCA approved sludge disposal sites. 5 9. Council Minutes - 9/25/89 After discussion, motion was made by Warren Smith to submit a formal request to the Township asking the Township of Monticello to revoke, rescind, or modify their ordinance in such a way as to allow the City legal use of existing permitted sites and develop a coimnittee to work with the City to locate a single site in Monticello Township where the intended purchase by the City of Monticello was continued agricultural use by area farmers. Motion seconded by Shirley Anderson. Motion carried unanimously. Consideration of maintaining old water tower as a backup and Monticello landmark. John Siinola noted that the new 800,000 gallon above ground tank will go on line toward the end of September. At that time, we will empty our existing elevated tank and remove it from service. Simola noted that the City has discussed the pro's and con's from moving the tank or letting it stay and explained that the cost to remove the tank could easily be between $10,000 to $15,000. The cost to leave the tank in service would amount to $9,200, which would include interior sand blasting and painting. In addition to that, of course, there would be long term maintenance cost associated with leaving the tank in place. Siinola recoimnended that the City keep the existing tower as a standby unit and for a Monticello landmark and to authorize City staff to have the interior of the tank painted at a cost of $9,200 and obtain estimates for fitting the ladder with a safety fall device. Warren Smith noted that the obvious decision is to keep the water tower, as it provides a good backup and a community landmark. Dan Blonigen stated that he was glad that John changed his mind regarding the future for the water tower in that he supports keeping the old water tower. After discussion, inotion was made by Warren Smith, seconded by Dan Blonigen, to keep the existing tower as a standby and to authorize staff to have the interior of the tank painted at a cost of $9,200 by H & H Watertower of Sleepy Eye. Motion carried unanimously. Consideration of bills for the month of September. Motion was inade by Warren Sinith, seconded by Shirley Anderson, to approve payment of bills for the month of September. Motion carried unanimously. Other Matters. Motion inade by Shirley Anderson and seconded by Dan Blonigen to adopt a resolution adopting a proposed 1990 budget and setting a proposed tax levy. A budget workshop ineeting was scheduled for 6:00 p.m. on October 10, 1989, with the final public hearing on the budget scheduled for October 23, 1989. SEE RESOLUTION 89-27. R Council Minutes - 9/25/89 Dan Kling requested that Council provide City staff with the authority to snake the final payment to Richinar once the final problems regarding the well construction and pump house project are resolved. Kling noted that the City will get lien waivers prior to authorizing payment. Motion was made by Dan Blonigen, seconded by Shirley Anderson, to grant City staff authority to make final payment to Richmar once the remaining problems regarding the control system development and other problems have been resolved. Motion carried unanimously. Refinishing the front of the Hi -Way Liquor Store was discussed. After discussion, motion was made by Warren Smith, seconded by Dan Blonigen, to remove and replace trim boards and then stain the boards for the sum of $2,530. Motion carried unanimously. John Simola asked Council for authorization to spend $3,800 and $1,650 toward application of lime on PCA approved sludge deposit sites. After discussion, motion was made by Warren Smith, seconded by Shirley Anderson, to approve said expenditure. Motion carried unanimously. John Simola noted that he has not obtained a quote to install skating rink lighting and other park lights at the Meadow Oaks Park. Administrator Wolfsteller noted that a public hearing will be conducted on October 25, 1989, at which time changes in the method of valuating public utilities will be discussed. There is a potential that if the changes as proposed are made, the City would lose $26,000 in tax revenue. The proposed change in the method of calculating valuation would have even greater negative impact on the school and county. Although the dollar amounts are not extremely significant, the proposed changes present a foot in the door toward continued changes in the method of calculating valuation which could result in further deterioration of the City's tax base. Ken Maus noted that we need to be involved, and we should be present for the public hearing scheduled for the 25th. Warren Smith noted that the City should contribute towards any lobbying efforts necessary to retain the City's tax base. City Administrator Wolfsteller submitted a letter to Council from Vaughn Veit which outlines problems Veit has had in working with Public Works Director, John Simola. Wolfsteller noted that problems noted by Veit need to be reviewed on a case by case basis to explain to Veit what actions have been taken by Simola as a result of City policy. He went on to note that Council needs to be aware of both sides of the issue. 7 Council Minutes - 9/25/89 Motion was inade by Dan Blonigen to direct the Administrator to prepare a written report outlining what circumstances instigated the letter and to include any other clarifications that can be provided. There being no further discussion, the meeting was adjourned. Jeff O'Neill Assistant Administrator N.