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HomeMy WebLinkAbout2016 [02] Feb 25 [joint with EDA] February 25, 2016 Page 1 of 3 Pursuant to due calf and notice thereof, the St. Joseph City Council and St. Joseph Economic Development Authority met in special session on Thursday February 25, 2016 at 7:00 AM in the St. Joseph City Hall. City Council Members Present: Mayor Rick Schultz. Council Members Daie Wick, Bob Loso, Matt Killam, Renee Symanietz. Administrator Judy Weyrens EDA Members Present: Chair Dale Wick. Board Members Larry Hosch, Gary Osberg, Rick Schultz. Absent: Doug Danielson. Others Present: Police Chief Joel Klein, Finance Director Lori Bartlett, Jon Petters, Frank Ostendorf, Ellen Wahlstrom, Margy Hughes, S. Thomasette Schuller. Government Center: Mayor Schultz stated that the purpose of the meeting was to discuss financing and alternatives for the proposed government center. Schultz stated that the City Council had authorized the final design and bid process for the proposed government center. 7he bids were advertised on February 18, 2016 with a bid opening date of March 10, 2016. In addition, Schultz stated that the Council had conducted a public hearing on February 1, 2016 to issue Capital Improvement Bonds. This financing mechanism allows for a thirty day period in which residents can petition to place the matter on the next general election. The petition minimally must include 5% of the total voters voting in the last general election. The City received such a petition on Friday, February 19 at 4:20 PM, consisting of 141 signatures. Schultz went on to explain that if the petition is valid, the City needs to determine if the bidding process should be halted or if other forms of financing should be considered. Weyrens stated that historically the City has utilized Public Project Lease Revenue bonds to finance facilities such as the current City Facility and the Maintenance Facility. The EDA would own the facility and lease it back to the City. Staff had recommended utilizing CIP Bonds as the interest rate was$400,000 less than the revenue bonds. Weyrens stated that at this time the City and EDA should determine if other financing mechanisms will be considered. Options for financing include: 1) halt the current process, determine if the petition meets the statutory requirement and if so, place the matter on the November ballot; 2) Consider issuance of public project revenue bonds; 3) revise the scope of the project and conduct a new public hearing for a revised CIP bond issue; 4) consider a private developer constructing the facility and the City could then lease back the building; 5) do nothing, halt the process and reconsider; 6) re-direct the project to remodel the existing facility to resolve the immediate needs, with the potential issuance of public project revenue bonds. Weyrens further stated that the City has received a purchase agreement for the sale of the current facility, which was scheduled to be placed on the March 7 agenda, but if the project does not move forward, the purchaser would need to be contacted to halt the safe. Wick stated that he was surprised by the submission of the petition; especially some of the comments that the community did not know what was happening. Wick stated that the City has spent considerable resources fn planning and engaging the community in discussions. Wick referred to the detail of the history of the project since 2013 and stated there were many instances where the project was discussed. He understands the concern over the cost of the facility, but for the safety of the employees and community the City needs to do something, doing nothing is not the answer. Hosch stated that he did not support placing any additional funds in the currently facility. The facility was too small from the start and placing more money in the building will not place the City in a better situation for the future. Killam stated that he supports moving forward as the City has a buyer for the existing facility and it makes sense to construct a building on the Colts property, creating a campus with the future community center. Symanietz stated that she was part of the facility committee and they worked to use the existing plans and place the building on the new site. The building will meet the current and future needs of the City. February 25, 2016 Page 2 of 3 Schultz stated that he has heard concerns that the City has shelved the Community Center in exchange for the building of the Government Center. He clarified that the City will not have full use of the Colts facility until at the earliest June 2017 and with the failed ISD 742 referendum, fhat could be extended. The City has not abandoned the planning; rather resolving the public safety need for additional space and get the project underway and then initiate the planning process to develop the community center. Schultz stated that he anticipates the Council establishing a facility committee shortly. Gary Osberg stated that it is his opinion that it is not the function of the EDA to finance the Government Center. He believes it is a communication issue between the City and residents. The goals and mission of the EDA do not include building a facility. Hosch stated that financing facilities is a role of the EDA governed by MN Statutes. Osberg stated that while he understands the MN Statutes allow for the financing, he does not see it as a role for the EDA. He questioned if the City understands why the petition was submitted. Wick stated that he talked to one of those involved in the petition and heard concerns from one person that signed the petition. He stated that from what he understands there was miss-information. Wick reiterated the comments of Schultz that some people thought the City forgot about the community center. He further understands that some of those signing the petition did not have full information. Weyrens stated that she has been asked by a couple of residents signing the petition if they could remove their name as they did not have full understanding. Loso stated that he supports moving forward and his only concern is the revenue stream that will be used to retire the debt. When questioned on the process for utilizing Public Project Revenue Bonds, Weyrens stated that the first step is conducting a public hearing creating an economic development district. At this time bonds are not being issued. The purpose of the public hearing is to simply create a district where different types of funding couid be utilized. The hearing would have to be conducted by the EDA with the Council acting on the recommendation of the EDA. Weyrens stated that the development district would include more property than just the City owned property. There is currently an undeveloped lot north of Baker Street and east of CR 121/College Avenue. Including this property wouid allow a developer to utilize incentives such as TIF. Hosch questioned if the creation of the district would limit the financing sources for the Community Center. Weyrens stated that the City is proposing to use Sales Tax revenue for the Community Center and creating the district would have no impact. Hosch stated that he is not prepared to agree to issue bonds; rather he would like to move forward with the hearing and have staff identify options and provide detaii for the hearing. Wick and Schultz clarified that the City does need to decide if the EDA will issue the bonds and if not the project will need to be halted. Wick clarified that the City is pursing parallel tracks for bonding at this time. If the petition is determined to be sufficient, Public Project Revenue bonds will be initiated and if the petition is not sufficient, the City will continue with the CIP bond process. EDA ACTION Schultz made a motion to initiate the process for issuing pubtic project revenue bonds to finance the proposed Government Center,setting the public hearing to establish the Economic Development district. The motion was seconded by Wick. Discussion: It was clarified that due to the significant savings on interest, CIP financing is preferred and the pubfic project revenue bonds will be used in the event that the submitted petition does not meet the statutory requirements to place the bond issuance on the November ballot. Ayes: Wick, Schultz, Hosch. Nays: Osberg Motion Carried 3:1:0 CITY COUNCIL ACTION February 25, 2016 Page 3 of 3 Killam made a motion to accept the action of the EDA financing the Government Center with Public Project Revenue bonds in the event that CIP bonds cannot be issued. The motion was seconded by Symanietz and passed unanimously by those present. Other Matters: Weyrens requested the EDA and Council revise the date for interviewing the candidates for Community Development Director as not all the candidates could make the previous date. Those present agreed to schedule the interviews starting at 8:00 AM on Friday, March 4, 2016. Adjourn: As the agenda was compfete, the City Council and EDA adjourned at 7:40 PM. ��� Judy eyrsrfs Admi istrator