HomeMy WebLinkAbout[04a] Minutes - June 15, 2015
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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 Monday, June 15, 2015 at 6:00 PM in the St. Joseph City Hall, opening the meeting with the Pledge of
Allegiance.
Members Present: Mayor Rick Schultz, Councilors: Dale Wick, Bob Loso, Matt Killam, Renee Symanietz.
City Administrator Judy Weyrens
City Representatives: City Engineer Randy Sabart, Police Chief Joel Klein, Finance Director Lori Bartlett,
Public Works Director Terry Thene
Others Present: Mike McDonald, Ellen Wahlstrom, Bob Wahlstrom, Jim Graeve, Irene Reber, Monte
Eastvold.
Public Comments
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Mike McDonald, 213 – 13 Ave SE: McDonald approached the Council regarding the purchase
agreement for Colts Academy. McDonald questioned why the City feels the need to close on the
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purchase by September 1, 2015 when the school will remain in the building rent free until July 2017.
McDonald added the City’s use of the building will be extremely limited for the next two years. McDonald
questioned if the City had conducted a cash flow analysis showing what the costs of building would be to
City residents. McDonald added that the school district stated the average costs to operate the building a
year is $160,000.
McDonald stated the memo in the Council packet is a bit misleading in that it leaves out some important
information such as that the City will be partially responsible for paying for repairs that exceed $5,000
until July 2017. Additionally the City, or residents will have to absorb the cost of the water/sewer bill
during this time. McDonald went on to say the memo does not include the $13,106.00 in property taxes
paid to the County each year.
McDonalds questioned if the City will raise the cost of the lease agreement with the private daycare
business currently in the building. What will be the cost of the new roof? How much will it cost to remodel
the building to fit the needs of the Community Center? Will a grade school gym be enough to fit the needs
of the Community? How was the purchase amount of $2.3 million arrived at? Why does the City perceive
the school property as highly valuable? What plans does the City have in using the former grade school
area as a community center? What is the projected annual programming and staffing costs of the
community center, and how will those be funded?
McDonald requested the Council provide legitimate reasoning for the purchase of the school and plans
for what is going to be done to the school.
Jim Graeve, 619 MN St E: Graeve approached the Council commending them for moving towards
providing a Community Center for the residents. Graeve believes the school site is a great place for a
Community Center.
Symanietz made a motion to approve the agenda with the request to move
Approval of the Agenda:
up the Cable Franchise Agreement to item 6a. The motion was seconded by Wick and passed
unanimously.
Wick made a motion to approve the consent agenda. The motion was seconded
Consent Agenda:
by Symanietz and passed unanimously.
a. Minutes – Approved the minutes of May 25 and June 1, 2015
b. Bills Payable – Approved check numbers 049325-049372, Payroll EFT#001073-001077
and Accounts Payable EFT#001693-001695.
c. Treasurer Report – Accepted the May 2015 Treasurer’s Report as presented.
d. Liquor Licenses – Authorized execution of the intoxicating liquor licenses
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e. Data Practices Policies – Adopted the Data Practices policies as required by MN Statute
13.025, Subdivision 3
f. Donations – Accepted the donations and their purposes as presented
g. School Resource Officer – Authorized the Mayor and Police Chief to execute the Joint
Powers Agreement between the City of St. Joseph and ISD 742 for providing
Cooperative Funding of the School Resource Officer.
h. Performance Survey – Adopted Resolution 2015-020 Accepting the St. Joseph
Performance Measure Results.
Purchase Agreement, Colts Academy: Weyrens stated that on behalf of the City Council, the City
Attorney negotiated a draft purchase and lease agreement with ISD 742 for purchase of Colts Academy
for a future Community Center. The Council had previously agreed to the purchase price of 2.3 M and
outlined conditions for purchase. The draft agreement includes the provisions identified by the City
Council and has already been presented and accepted by ISD 742.
Loso stated he would like to see the lease agreement with Little Saints prior to approving the purchase
agreement. Weyrens stated that the Council will be working on the lease with Little Saints in the
upcoming weeks.
Wick questioned if there is any recourse if the school district doesn’t utilize the gym on the dates they
have reserved. Weyrens stated there is not. If it happens often, the City could approach ISD 742 and
discuss an amendment or revised schedule. With regard to ISD 742 using the gym on Saturdays in
2015/16, they already had programming in place so they could not change them. Dates in 2016 and
2017 will be negotiated. Weyrens added that the programming planned for 2015/2016 would allow for
public participation based on the program offered.
Losos stated he would like to have an inspection done on the building to see what still needs to be taken
care of. Wick stated the purchase agreement allows for the City to conduct inspections 45 days after
acceptance of the agreement.
Wick made a motion authorizing the Mayor and Administrator to execution of the purchase and
lease agreement between the City of St. Joseph and ISD 742 for the purchase of Colts Academy at
a purchase price of 2.3 M. The motion was seconded by Symanietz and passed unanimously.
Symanietz questioned who carries the insurance. Weyrens stated the City will carry the liability insurance
for the building with Little Saints and the School District providing the City with certificates of insurance for
their uses of the building. Killam stated he would like to start working on what types of services the
building will provide, staffing that is needed, and programs offered. Weyrens stated that discussion will be
part of the budget process as well as discussions with the architectural services.
Public Hearing, 2015 Abatement Bonds: Weyrens stated staff reviewed the financing options for the
purchase of Colts Academy and considered both Sales Tax Revenue Bonds and Tax Abatement Bonds.
If tax abatement bonds are utilized the debt issue will be paid through sales tax proceeds, not the taxes
derived from the parcels identified for the abatement. Tax Abatement Bonds have a lower interest cost as
they are considered GO Bonds whereas Revenue Bonds to not afford the same type of guarantee, thus a
higher interest rate. It is anticipated that the City will save approximately $ 110,000 by using abatement
bonds.
Schultz opened the public hearing.
Monte Eastvold, Northland Securities: Eastvold approached the Council to discuss the tax abatement
process. Eastvold stated there are two options for funding, sales tax revenue bonds, or tax abatement
bonds. With sales tax revenue bonds, the interest rates are higher and do not carry the full faith and credit
of the City. Tax abatement bonds have a lower interest rate and are the cheaper way to go in order to
save the most money.
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With abatement bonds the City identifies parcels whose taxes would total the amount of the abatement.
The taxes generated from those parcels will be used to pay for the debt in the bond issue rather than go
into the general fund. Eastvold added that since the City is receiving revenue from the ½ cent sales tax,
the revenue from that fund would offset the taxes from the identified parcels. Therefore, it is the sales tax
revenue expiring the debt, not general property taxes. It is estimated that the annual debt payment will be
between $155,000 - $160,000 annually.
Loso questioned if down the road the City could use sales tax monies to bond for additional building
either onto the building or on the property. Weyrens stated that it would be a project that would be eligible
for sales tax use.
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Mike McDonald – 213 13 Ave SE: McDonald stated that the payment on the bond issue are really
general fund obligation bonds rather than a sales tax revenue. The public hearing notice stated that the
bonds are general obligation bonds, not sales tax abatement bonds. McDonald questioned why the
repayment plan is only alluded to in the Council packet rather than in the published public hearing or the
resolution. Why did the publication not appear in the Newsleaders? Who will cover the bill if the rental
tenant decides to move elsewhere? Why is sales tax money being used for a building in which a
significant portion is being used by a private source?
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Ellen Wahlstrom, 409 – 8 Ave NE: Wahlstrom questioned if sales tax can be used for the project?
Weyrens stated it can be. Wahlstrom noted that even though money can be saved, it seems like a lot of
hoops have to be gone through in order to go through the tax abatement process. Wahlstrom added that
she is in favor of the school purchase.
As no one else present wished to speak, Schultz closed the public hearing.
Loso questioned if the bond is a general obligation bond? Eastvold stated it will be called a General
Obligation Tax Abatement Bond. As part of the tax abatement plan, the tax revenue from the 13 parcels
identified will be used to fund the abatement bond. Loso questioned how the 13 parcels will benefit.
Eastvold stated that having a community center in the City will benefit the entire community.
McDonald questioned how the building can be paid for with sales tax funds when part of the building is
being occupied for a private use. Weyrens stated that this matter was discussed with bond counsel and
they approved the use and financing mechanism.
Wick questioned if the School District is paying only the increase in their taxes or their current taxes plus
any increase. Eastvold stated that the School District would only pay the increase amount which is why
there are 13 additional properties to cover the bond issue.
McDonald stated that in section 3 of the resolution it states that the only money that can be used for the
bond issue is the increased amount after improvements have been made. McDonald does not feel that
will be enough money to cover the bond issue. Schultz stated he is comfortable with how the resolution is
written as it was written by the bond counsel.
Wick made a motion authorizing the Mayor and Administrator to execute Resolution 2015-021
Approving the property tax abatement related to financing the acquisition and construction of
public facilities in the City of St. Joseph. The motion was seconded by Killam and passed
unanimously.
Schultz made a motion authorizing the execution of the abatement agreement between the City of
St. Joseph and ISD 742. The motion was seconded by Wick and passed unanimously.
Cable Franchise Agreement: Weyrens stated the Council has previously been notified that the cable
franchise agreement between the City of St. Joseph and Midcontinent expires shortly. The City Attorney
has been negotiating the new franchise agreement with Midcontinent and the only outstanding item is the
application of the franchise fee. The current agreement applies the fees to gross revenues including
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basic television service, tier service and pay cable. The language suggested by Kadlec applies the
franchise fee to all revenue derived from the providing of cable services whether from basic cable, tier
service, pay cable, service charges and any other fees from video service, installation, and equipment
rental charges, but no tax on service. The impact of the new language could increase a resident’s month
fee up to $ 1.20 per month; it is based on the level of service.
Wick question the change to which Weyrens stated that Kadlec reviewed the existing contract and it is not
uncommon for the franchise fee to be added to all video services. The agreement is for a 10 year period
so it was an opportunity for the Council. Schultz stated he would like to see the number of residents the
fee increase impacts. The Council by consensus agree to leave the language as is currently written, not
charging all video services. Weyrens confirmed that the agreement will be finalized and placed on the
consent agenda at an upcoming meeting for adoption.
Committee Reports
Aquatics Committee: Weyrens stated that she has received an update from USaquatics regarding the
status of the design and they are still working on final documents; however they did forward some of the
design sheets already. Since the Council last discussed the matter she has talked to the realtor about the
soils on the preferred site and they did not have soil data. If the City wishes such data, soil borings would
need to be completed. If the Council opts to move forward a budget of $ 6,000 to $ 8,000 needs to be
established.
Killam stated that the property adjacent to CR 133 is the preferred site. The site has a park look and the
cost is reasonable. The land not used for the water amenity could be used to develop a park.
Loso suggested the aquatics committee should come up with a definite site. Loso added there are no
definite things to this project, no donations, and no definite plans on the project. He does not want to stick
money into the project that does not happen.
Symanietz stated that she wants another survey to go out to just the residents of the City who pay the
taxes asking if they want the water amenity. Loso stated he does not support the project and wants the
water amenity committee to do its due diligence.
Symanietz added that she does not know what the cost would be to maintain the facility every year. Wick
stated the costs are estimated at $250,000 a year. The revenue is based on a $6.00/person entry along
with spending $1.00/person at the concession stand. It would amount to $280,000. Symanietz stated the
math does not add up. There will be rainy days that the park will need to close and that will decrease the
revenue. Symanietz questioned what the max capacity of the park is. Wick stated that all the information
requested by Symanietz has already been presented and forwarded in a written report.
Schultz requested that Council review the data regarding the Water Amenity at the next Council meeting,
to which Wick stated he would prepare a summary of information, addressing the concerns.
Fire Relief Committee: Schultz stated the Fire Relieve Committee met where members discussed the
potential up increasing the annual funding level. Staff requested that the Fire Relief consider the options
of PERA as it has some cost saving features and handles all the administrative task. The level of funding
is still determined by the City and the benefit would not change.
Administrator Reports
2016 Budget: Weyrens stated the Council started the discussion for the 2016 budget at the beginning of
June and requested the budget continue to be a discussion at future meetings. Suggestions from the last
meeting have been used to start a project list for 2016. Loso stated he would like to consider adding
Field Street into the budget.
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COPS Grant: Weyrens stated there is an opportunity to apply for a COPS grant. The grant will help offset
the cost of hiring an entry level police officer with a focus on community policing and be a school resource
officer. Over the three year period the City could phase in the full funding as the grant reimburses up to
75% of the allowed costs during the three years. The grant is being requested to add needed staff.
Schultz made a motion authorizing staff to submit a grant for funding through the COPS
community policing program. The motion was seconded by Wick and passed unanimously.
Architectural Services: Weyrens stated that she has contacted Murray Mack of HMA regarding
architectural services. At a special Council meeting the Council requested Mack provide a cost estimate
to engage addition architectural services to include: 1) reviewing the 2014 plans to see if the can be
modified for the existing site give the recent purchase of Colts, reducing the need for a community room;
2) reviewing placing the government center designed in 2014 to the Colts property, attaching to the
community center; or 3) considering renovating the existing building.
With the understanding that the proposal does not include detailed plans, rather concept drawings, Mack
estimate a budget of $ 10,000 to $ 20,000 should be established and would include a couple of
committee meetings and a presentation to the City Council. The amount actually spent will depend on
the details requested by the Council. With regard to financing, Weyrens stated that the building permit
revenue is exceeding the adopted budget and would cover the expense.
Loso made a motion authorizing the allocation of funds not to exceed $20,000 to be used for
architectural services regarding the government center. The motion was seconded by Schultz and
passed unanimously.
Loso stated that he would like the meetings with architect to be with the Council. Schultz stated that the
last time that it was the Council and the architect, residents stated the Council was too closed off;
therefore, he is looking to expand the committee.
Engineer Reports
Proposed Water Line Extension: Sabart stated the City was approached by Resurrection Lutheran
Church regarding an extension of the water line as they will be adding on to the church. As part of the
building permit they are required to add fire suppression, hence the need for City water. City water is
available and they could extend a private service line at the intersection of Fir Street, extending the nline
north. Staff has discussed the water service with the Church and they are willing to participate in the
extension of the water line as a public service connecting off of First Avenue. If the project is constructed
as a private project, extending the line as a private service line it will be difficult to assess the church in
the future as they already have water. The extension of this water line is in the long term CIP.
The city has the opportunity to cost share for the installation of the water main. Sabart stated the
construction cost of a 12 inch pipe would be estimated around $90,000 and quotes will be sought for the
project. Wick questioned how much the city would be responsible for. Sabart stated that the City would
be responsible for about 40% of the costs. Sabart stated the project will be relatively quick being it will not
have to go through the bidding process.
Loso stated that he does not see the benefit in the participating in the extension, adding that the Church’s
water might not be the best quality due to the large water main that will be installed and the lack of users
or looping of the system. Thene stated that if any calls are received regarding the quality of water, the
maintenance department will check it out.
Schultz made a motion authorizing staff to move forward with the proposed water line extension
to Resurrection Lutheran Church. The motion was seconded by Wick and passed unanimously.
Project Updates: Sabart reported the improvements at the main pump station are almost complete. The
station is operational and running.
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Park Terrace is at a state where the maintenance stage is almost complete. There is one remaining lot
that needs to connect and that is the one lot that sod has not yet been laid. The remaining pieces are to
abandon the old sewer line and to put the final layer of black top which will be completed in late July into
August.
Wick made a motion to adjourn at 7:40 PM; seconded by Wick and passed unanimously.
Adjourn:
Judy Weyrens
Administrator