HomeMy WebLinkAbout[04a] Minutes July 31, 2013
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Pursuant to due call and notice thereof, the City Council for the City of St. Joseph met in regular session
on Wednesday, July 31, 2013 at 5:00 PM in the St. Joseph City Hall.
Members Present: Mayor Rick Schultz. Councilors Dale Wick, Bob Loso, Renee Symanietz, Steve
Frank. Administrator Judy Weyrens.
City Representatives Present: City Attorney Tom Jovanovich, City Engineer Randy Sabart, Finance
Director Lori Bartlett.
Others Present: Mike McDonald
Orderly Annexation: Weyrens stated that over the past months the City and Township have been
meeting to discuss the updating of the existing Orderly Annexation Agreement. Discussion has focused
on the time zones and whether or not they should be extended and whether or not the City has the ability
to annex property outside of OA if a property owner petitions. Weyrens stated that the City Attorney has
reviewed the OA and is prepared to comment on the concerns of the Council.
City Attorney Tom Jovanovich stated that he has spent time reviewing the OA to discuss the rights of the
City for expired zones, zones that are expiring and areas outside of the current OA. First, with regard to
property located within zones that are expired, the City has the ability to annex those properties provided
the criteria for annexation is satisfied. In this situation, the property owners or Township cannot petition to
stop the annexation. The criteria requires that the property for which annexation is sought is contiguous,
the City has the immediate ability to extend utilities and the property can be platted. The OA agreement
identifies a tax sharing formula that the City would pay the Township to help relieve the financial loss of
tax revenue.
With regard to property in zones that is not expired, the City cannot annex such properties unless the City
has received a petition of 100% of the property owners, and the criteria for annexation is satisified. If the
City receives a petition from at least 60% of the property owners, a hearing is held before the City and
Township and each entity must vote on the matter. The criteria for annexation must also be satisfied and
tax sharing would apply. Jovanovich clarified that the tax sharing is based on the taxes paid by the
property owner at the time of annexation.
Jovanovich stated that some sentiment by the Township had been expressed where their understanding
of the OA is that the City is prohibited from annexing any property outside the OA area unless the
Township agrees. During his review of the agreement he could find no such reference. Jovanovich
stated it is his opinion that the City can annex property outside the OA area if the property owner petitions
for such and the criteria for annexation is satisfied. Annexation outside of the OA area would require the
same tax sharing as if it were located within the OA
When questioned how annexation would occur without an OA, Jovanovich stated that annexation would
follow the process allowed under MN Statute which allows annexation up to 120 acres. Annexing by
utilization of MN Statute would not require tax sharing, but would still require the ability to provide
services.
The Council discussed the existing Industrial Park located adjacent to the City and whether or not utility
services can be provided. City Engineer Randy Sabart stated that the City would have the ability to
provide service, the challenge would be assessing the property owners. While the service is new, so the
benefit is easier to assess, it will be difficult to assess a property owner who has a new septic system and
well. The City would still be required to show the benefit of the utility extension. Sabart stated that he
has reviewed how the property could be served and it would include the construction of an additional lift
station, which is more costly than just extending pipes The lift station would service a larger area, which
is a future cost held by the City. Jovanovich stated that residents are becoming more litigious making
assessments more difficult and costly. The City needs to determine what realistically can be assessed
and if the project is financially feasible.
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Park Terrace Improvement: Weyrens reported that the Council has previously identified the Park Terrace
Improvement as a project that would be anticipated to be constructed in 2014. If the Council would like to
move the project forward, the Council must decide whether or not to order a new assessment analysis
and authorize the engineer to update the feasibility report prepared in 2011. The feasibility report at that
time identified two options for constructing utility services, one keeping the lines in the existing location,
backyards, and one moving the sewer line to the street. In addition, the report identified the possibility of
lining the sewer line that is currently in the backyards; however, that option only saved $ 200,000 and
does not resolve the issue of sewer lines located without easements for ongoing maintenance.
Weyrens reminded the Council that previously the Council conducted a public hearing at which time the
proposed assessment was less than 20% and considerable objection from those not being assessed was
heard. The project would require bonding and using 429 GO Revenue Bonds would require at least 20%
of the project to be assessed. If that threshold is not met, the City could issue capital improvement
bonds; however, they are subject to reverse referendum. In 2011 the proposed assessment was less
than 20% so the only option for financing was capital improvement bonds. This financing mechanism
includes a provision whereby residents can petition to place the improvement on the ballot. If that occurs
and the voters reject the project, the City cannot bond for the improvements and the project cannot move
forward.
Jovanovich stated that he has researching assessments and alternative methods by contacting City
Attorney's and appraisers. As stated earlier in the meeting, when it comes to assessing property owners
it has become very litigious and there is not one set standard. Some Cities have been successful in
assessing for underground improvements using the useful life argument and percentages for assessing
are wide ranging. In talking to appraisers, the market has changed over the past two years, and the
vendor the City used for the 2011 benefit analysis indicated that she would increase the amount that
could be assessed. Jovanovich stated that if the City does not want to take the financial risk of the
improvement they can wait until the resident's petition for the improvements and if they fail before they
petition for improvement the City has the ability to assess a larger portion as properties without services is
less valuable. He further stated that there is a value to the property owner for the new improvements as
the existing infrastructure has served it useful life and in some areas has indication of failure.
Sabart concurred with Jovanovich and stated that there are sections of pipe where it is cracked or the
pipe is at an inverse angle creating flow issues. He stated that even if the City does nothing at this time,
we still have pipes located in backyards without easements. This causes maintenance issues for the
staff. The decision as to whether or not to move forward must also include the decision as to whether or
not the pipes should be located to the street. Loso stated that the residents should not be required to
relocate the internal sewer lines due to the City relocating the sewer line. That cost should be one of the
City. Weyrens stated that at the time the original sewer lines were installed it was common practice to
place the infrastructure in the backyards as development at that time included the use of alleys. Sabart
stated that the City could provide for an allowance to residents who have to relocate their internal system
so that the City does not get in the middle of restoration matters.
Frank questioned the recent improvements on 16th Ave and what portion of the project was assessed.
Sabart stated that the residents were assessed 60% of the improvement, but the City paid the storm
water costs. The project did not include water or sewer as that was done previously. Frank stated that
he will be looking at an assessment in the near future as Clinton Village is the next area that is projected
for improvement. He stated that he can understand the 60%when you are just talking about streets, but
adding water and sewer improvements change the formula as at some point you cannot expect that
burden to be paid by the residents. It becomes too great of a burden and residents will not be able to
afford the additional cost.
The Council discussed the different options to include just repairing the street and waiting for the
residents to petition for the other improvements. Loso stated that the sewer could be left in place, it is the
water that needs improvement. The Council questioned whether or not the City would be required to
complete maintenance above and beyond the normal maintenance if the residents did not want the sewer
improvements. Weyrens stated that the insurance carrier for the City would require that preventive
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maintenance be completed; therefore staff would have to perform whatever maintenance was necessary
to keep the service working. Jovanovich stated that if homeowners have sewer issues such as backup or
service interruption that will affect the value of their home.
Loso questioned the Council on what they want to do, is it less of an assessment or waiting. Wick and
Symanietz stated that the City should continue the improvement process as proceeding under the
assessment policy. They further stated that all the residents in the City have paid a larger portion of the
assessment and the City should be consistent. The process includes public hearings and residents have
the opportunity to express their opinion. Further the statutes that outline the process include provisions
for residents is they wish to object.
Jovanovich stated that with regard to a baseline for assessments, two different approaches could be
used. The first is having an appraiser prepare a statement of benefit based on the scope of the project
and current market values. This number would then be used for the assessments and if the assessment
is challenged, this same appraiser would then prepare a more extensive analysis. As an alternative the
City could prepare a new benefit analysis report as was completed in 2011. When questioned if the
report from 2011 is still valid, Jovanovich stated that market conditions have changed and one could
argue that it was flawed as it did not give value to underground utilities. Wick stated it is his opinion that if
the residents wish to object to an assessment they can hire an appraiser. Jovanovich stated that in cases
where the City has been proactive and completed an analysis before assessing courts have ruled in their
favor; however this is a decision for the Council.
Wick stated that it comes down to the impact to the residents and taxpayers and finding that balance. It is
difficult when all other residents have paid a larger portion and now they will asked to pay for someone
else's assessment. Jovanovich stated that it is costly for one resident to contest an assessment but if
residents join as a group it becomes more cost effective and more likely. The Council agreed that the
project should be placed on the next agenda for consideration of updating the feasibly report and
possibility scheduling the public improvement hearing.
2013 Wastewater Plant Improvement: Sabart presented the Council with information regarding the
proposed wastewater improvement. The project includes two components, one replacing the existing
pipe under CR 2 as it is in need of replacement and will position the City for extending the sewer service.
The second component is replacing and updating the controls and wet wells. Based on the feasibility
report the anticipated cost of the project is approximately 2M.
Sabart stated that he met with staff to look at alternatives to reduce the project cost. The Council
questioned the need to replace or pave the road down to the facility, to which Sabart responded this is
one area that staff has identified as a possible reduction. The revised plan would include paving to the
base of the hill, providing stability and then gravel. Wick questioned some of the equipment identified in
the project such as a trailer mounted bypass pump and if the equipment is needed why has it not been
included in the CIP previously. Sabart stated that this item again, is one that staff identified as a possible
reduction.
The Council discussed the cost to relocate and improve the RV dump station. The current location
makes it difficult for users to navigate and staff has requested the site be relocated. When questioned
how much the site is utilized staff was uncertain. Frank questioned where residents would go if St.
Joseph eliminated the site to which staff responded Waite Park. The site in Waite Park is also free and
open to the public. Sabart stated that since the area is being disturbed, it made sense to look at making
the site navigable for the users. This portion of the project could be bid as an alternative, eliminated or it
could remain in its current condition.
Ad�journ: The meeting was adjourned by consensus at 7:15 PM.
Judy Weyrens
Administrator
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