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HomeMy WebLinkAbout08 15 11 City Council minutes 4646 Dakota Street SE Prior Lake, MN 55372 REGULAR CITY COUNCIL MEETING MINUTES August 1 5 , 2011 CALL TO ORDER The meeting was called to order at 7 :00 p.m. Present were Mayor Myser, Council members Erickson, He d- berg, Keeney and Soukup , City Manager Boyles, City Attor ney Pace , Finance Director Erick son, City Eng i- neer /In s pections Director Poppler, Public Works/Natural Resources Director Gehler, Police Chief O’Rourke, Fire Chief Hartman, Natural Resources/Facilities/Fleet Manager Friedges, Assistant City Manager Kansi er , Assistant City Manager Meyer an d Administrative Assis tant Green. PUBLIC FORUM The Public Forum is intended to afford the public an opportunity to address concerns to the City Council. The Public Forum will be no longer than 30 minutes in length and each presenter will have no more than ten (10) minutes to speak. Topics of discussion are restricted to City governmental topics rather than pr i- vate or political agendas. Topics may be addressed at the Public Forum that are on the agenda except those topics that have been or are the su bject of a scheduled public hearing or public information hearing before the City Council, the Economic Development Authority (EDA), Planning Commission, or any other City Advisory Committee. The City Council may discuss but will not take formal action on Public Forum presentations. Matters that are the subject of pending litigation are not appropriate for the Forum. Comments: No person stepped forward to speak. APPROVAL OF AGENDA City Manager Boyles requested tha t Old Business items 9A and 9B be reversed in order to allow Mr. Mattson of Northland Securities an opportunity to address the Council earlier in the evening. MOTION BY HEDBERG , S ECOND BY KEENEY TO APPROVE THE AGEND A AS MODIFIED . VOTE: Ayes by Myser, E rickson, Hedberg, Keeney and Soukup. The motion carried. APPROVAL OF MEETING MINUTES MOTION BY SOUKUP, SECOND BY KEENEY TO APPRO VE THE MINUTES OF THE AUGUST 1 , 2011 MEETING AS PR E SENTED. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The m otion carried. CONSENT AGENDA City Manager Boyles reviewed the items on the consent agenda. A. Consider Approval of Invoices to be Paid. B Consider Approval of Building Permit Summary Report. C Consider Approval of Animal Control Services Report. D. Consider Approval of Fire Department Report. E. Cons ider Approval of Resolution 11 - 094 Approving a Joint Powers Agreement for Assessment Services B e- tween Scott County and the City of Prior Lake. F. Consider Approval of Resolution 11 - 095 Approving a Spec ial Hunt on the Vierling Property. G. Consid er Approval of Resolution 11 - 096 Approving a Special Hunt on the O’Loughlin Property. Phone 952.447. 9800 / F ax 952.44 7 . 4245 / www.cityofpriorlake.com H. Consider Approval of Resolution 11 - 097 Approving the Combined Pr eliminary and Final Plat to be k nown as Eastwood 3 Ad dition. rd Councilmember Erickson requested that items 5F and 5G be removed from the Consent Agenda for di s- cussion. MOTION BY ERICKSON, SECOND BY HEDBERG TO APPROVE THE CONSENT AGENDA AS MO D- IFIED . VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Souk up. The motion carried. Comments: Erickson : Asked if the hours requested for the special hunts are consistent with the noise guidelines set out in ordinance. O’Rourke : Replied that the start time is consistent with the ordinance for 7 a.m. on week day s and 8 a.m. on weekends. Boyles : Added that the ordinance addresses construction noises and 10 p.m. is when neighborhood noi s- es are sup posed to cease, whereas the hunts are scheduled to finish earlier. O’Rourke : Noted that the language on this propo sed resolution is the same as approved by the Coun cil last year. Myser : Asked how many years there has been a special hunt on the Vierling prope r ty. O’Rourke : Four or five. Myser : Asked if there are changes in hours from the first hunt. O’Rourke : Stat ed that previously the hunt did not begin until 9 a.m. ; and comments were made expres s ing concern about p edestrian traffic going to Jeffers Elementary. Noted that, generally, p eople are aware that fire arms disc harge is not allowed in the City so they call to ask about it. Stated there were no issues last year with the noise and the time frame . Boyles : Stated the Council may want to consider the degree of urbanization in the areas. CR 21 to the north will be opening soon which will bring more traffic to the area. Ordinance does provide for special hunts, but with more urbanization in the area, review may be d e sired. O’Rourke : Commented that the language about the time of the hunts in the resolution is consistent with water fowl hunting laws in the State rather than with language for construction equipment noise. The City’s f irearms ordinance allows hunts that are consis tent with State laws, but the Council can set whatever hours it wishes. Erickson : Stated he would like an ending time of 7 p.m. or half hour after sunset , whatever comes first. Keeney : Stated his understanding that this activity occurs only three or four days out of the year. O’Rourke : Concurred adding that O’Loughlin intends to only hunt in the morning. Keeney : P utting a 7 p.m . restriction on the hunt shouldn’t be a problem. Soukup : B elieves the Minnesota hunting laws are from sun - up to sun - down and suggested that perhaps the issue is the noise. Suggested that the resolution should follow the M innesota hunting laws. Hedberg : A sked if there have been complaints from nearby residents for past hunts. O’Rourke : Replied that the only calls received have been questions, not complaints. Hedberg : Assum es these are the same terms as in the past and there have been no problems so th ere is no reason to change the Vierling hunt request. Stated the O’Loughlin property is less urban so the State h unting laws should be applied . Myser : Concurred there is no reason to change this year. Would like to see future hunt requests reviewed f or safety concerns since the volume of traffic will be increased near the O’Loughlin property. 2 08 15 11 City Council meeting minutes A motion was made by Erickson to amend the resolution to end the hunt s at either 7 p.m. or a half hour a f- ter sunset, whichever comes first. The motion fail ed for lack of a second. MOTION BY HEDBERG , SECOND BY SOUKUP TO APPROVE ITEM 5F, RESOLUTION 11 - 095 A P- PROVING A SPECIAL HU NT ON THE VIERLING P ROPERTY AND ITEM 5G, RESOLUTION 11 - 096 A P- PROVING A SPECIAL HU NT ON THE O’LOUGHLIN PROPERTY. VOTE: Ayes by Myser , Erickson, Hedberg, Keeney and Soukup. The motion carried. PRESENTATION Consider Approval of a Report Regarding Advisory Committee Vacancies. City Manager Boyles reported on the upcoming term completion of advisory committee members. D e- scribed th e kinds of advisory commit tees that have been established and the process for eligible members to apply for another term , as well as recruitment of new members. Encouraged viewers to consider volu n- teering for service on an advisory commi t tee . Comments : Soukup: Stated that service on an advisory committee is a great way for people to become involved in the community. Encouraged everyone to look into it and see if there are areas of interest for them . Hedberg : Concurred with Soukup’s comments. Stated that the City moves forward with active involv e- ment of volunteers from the community and many knowledgeable people serve on the committees. Keeney : Asked how many members have reached term limits. Boyles : Responded that three members have reached term limits . Keeney : Clarified that the Planning Commission has official actio n to enact and without a quorum it ca n not serve its function. Boyles : Affirmed that it is a statutory body that has final authority on certain matters subject to appeal to the City Council. Keeney : S uggested t hat there should be a priority on recruiting for the Planning Commission. Co n curred that serving on an advisory committee is a good way to provide input to the process and learn more about what is going in the particular area of interest as well as providing a chance to have a say in advising on policy in certain areas. Erickson : T hanked all of the people who have and are serving. Commented on some of the responsibil i- ties and activities of various committees. Myser : Enco urage d citizens to become involved and commented that serving on an advisory committee is an opportunity to get to know the City and community. PUBLIC HEARING None scheduled. OLD BUSINESS Consider Approval of a Resolution Providing for the Issuance and Sale of $3,295,000 General Obl i- gation Bonds, Series 2011A. Finance Director Erickson r eviewed the projects that are being bond ed . Introduced Steve Matt son of Northland Securities. Mattson advised the Council that Moody’s upheld the City’s rating of Aa2, which is a high - quality rating. Commented that the Fed eral government’s rating was reduced by S tandard & P oor ’ s and the fallout of that is good for the City as it tends to make high quality muni cipal bonds in demand . Stated he was able to sell the bonds for 2.02% in terest for a total package of $ 3,240,000 total package. Reviewed the interest yields and debt service compar i sons. 3 08 15 11 City Council meeting minutes Comments: Keeney : Thanked Mattson for negotiations on our behalf and expressed excitement about the timing of the opportu nity to take advantage of the market. Asked staff for its recommendation on the accuracy of doc u- mentation. Pace : Replied that City’s bond counsel is responsible for reviewing the documents. Erickson : Commented that with these rates, o ther opportunities for the City might be found . Soukup : Commented that the city hall and police station debt could be refinanced but would incur neg a tive arbitrage. Hedberg : Queried about the other fo ur cities whose bonds were sold the same day. Mattson : C ommented on in terest rates other cities received . Hedberg : Remarked on the favorable inte r est rates. Will support Myser : Asked about the Moody comment that the City’s tax capacity is going down and whether or not Prior Lake’s tax capacity is going down faster than others. Mattson : Believes Moody’s was looking for a reason not to increase the City’s rating. Stated he does not believe the City’s valuation is going down any more than any where else. MOTION BY HEDBERG , SECOND BY KEENEY TO APPROVE RESOLUTION 11 - 101 P ROVIDING FOR THE ISSUANCE AND SALE OF $3, 240 ,000 GENERAL OBLIGATION BONDS, SERIES 2011a, PLED G- ING FOR THE SECURITY THEREOF SPECIAL ASSESSMENTS AND TAX INCREMENTS AND LEV Y- ING A TAX FOR THE PAYMENT THEREOF. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. Mattson reviewed the City ’s three larger bond issues that will be good refinancing candidates, but noted that they will not reach their early redemption period for up to three years. Bel ieves there is potential to sell thos e bond issues and invest the monies in government securities. The government securities will pay the interest on the new 2011 bonds until 2013 and then to call all the old bonds. Believes that approximately $1 million dollars can be saved for refinance w ith a net of approximately half a million after the negative a r- bitrage. Stated the Federal Reserve Open Market Committee plans to keep interest rates low for two years which is when the bonds are ready for redemption. D escribed potential for saving costs and the cha l lenges of needing to stay below $10 million to receive bank qualified status. Would have to sell reconstruction bonds for 2012 in November or December to meet the bank qualification and maximize interest sa v ings. Comments: Erickson : B eliev es the amount for bank qualifi cation was raised from $10 million. Mattson : Responded that it was increased to $20 million and then returned back to $10 million. Erickson : Asked if there is any likelihood of that going back up to $20 million. Mattson : Be lieves that would be unlikely and we should assume that it will remain $10 million . Proposed that the City could re finance $ 9.9 million of city hall bonds in 2012 and try to sell the 2012 reconstruction project bonds in 2011. Erickson : Asked the Finance Director if she perceives any issues with that strategy. J. Erickson: Replied that Mattson is the expert on bond issuance and bond counsel Briggs and Morgan can verify it. It is c onsistent with the issue of $2 - 3 million range for bonds. Erickson : Asked how it will affect the budget regarding Truth in Taxation me etings. J. Erickson: Replied that is related to the tax levy we would issue. We would need to keep the structure of the debt in mind regarding when it will be paid and hav ing the tax levy to pa y it. Mattson: Added that the 2012 issue for streets would be structured for late in 2011 and plans would be made to set aside enough money for capitalized interest in the bond structure assuming that everything would happen as normal from a construction standpoint in 2012. Should be able to accommodate it by ca l- 4 08 15 11 City Council meeting minutes culating the interest on the bonds for the additional six to seven months. Tax levies would not come any earlier than normal and assessments would still be scheduled for first year collection 201 3. Keeney : Clarified Mattson’s comments that it might be possible to wait two years to do this and continue the benefit of the call feature without negative arbitrage. Asked what the downside might be to take this a c- tion now. Mattson : Replied that the downside is that if done now, the City would save half million and lose half mi l- lion in negative arbitrage . If interests are kept low, it would be worthwhile to plan to do this in 2012 . Re c- ommended watching the market and suggested that he commu nicate with the Council regularly on the st a- tus of the market. Keeney : Asked if refinancing could be done in increments if the street bonds were not accelerated, but we want to stay under the $10 million limit . Mattson : Replied that it makes sense to keep it together in one bond issue and believes the m ost effective way to do it would be to sell all $ 9.9 million in 2012 using bank qualification and try to sell the 2012 street reco n struction bonds late in 2011. Hedberg : Believes we will want to watc h this carefully as we are in turbulent times . Concurred that it is sensible to wait for seven to eight months and early next year watch the financial condition on a month - to - month basis. Acknowledged the Committee’s statements to hold interest rates lo w for two years, but b e- lieves that w orld events could overtake the desire to keep rates down. Would favor considering selling 2012 reconstruction bonds late this year. Soukup : Concurs with previous comments. Would like monthly or bimonthly report s on status of the ma r- ket watch. Myser : Suggested direct ing staff to work with b ond counsel to come up with a plan and strategy . The plan and strategy could include some of the risks that are involved with the changing marketplace, how it might work and the best strategy for moving forward. The plan could be brought back to the Council at a work session. Asked when a reasonable timeline would be for bringing such a report back to the Council. J. Erickson: Believes a plan would need to be put together with in 30 - 45 days in order to be ready by this fall. Plans have not been developed and contracts are not awarded, so all of those amounts would be e s- timations in the plan. MOTION MADE BY HEDBERG, SECOND BY SECOND TO DIRECT STAFF TO WORK WITH BOND COUNSEL TO DEVELOP A PLAN AND STRATEGY FOR DETERMINING WHETHER AND WHEN TO TAKE THE 2012 STREET CONSTRUCTION BONDS TO MARKET IN LATE 2011 AND SELL $9.9 MI L- LION OF CITY HALL CONSTRUCTION BONDS IN 2012. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. Consider Approval of Three Resolutions Relating to the Capital Improvement Program (CIP): 1) Approving the 2012 - 2016 CIP; 2) Approving the Street Reconstruction Plan; and 3) Approving the Establishment of the Facilities Management Fu nd and Closing the Building Fund. City Engineer Poppler reviewed the CIP which includes the equipment replacement, park equipment r e- placement , and technology and facilities management plan. Stated that w ater, sewer and water quality plans will be reviewe d with the budget. Comments: Hedberg : Commented that there are several important features in t he CIP including an accelerated street reconstruction effort to get to a sustainable long - term plan for streets , as well as establishment of the facil i- ties and technology refurbishing and replacement plans. Highlighted that there are no funds planned in the CIP to deal with alignment of CR 21 beyond the scheduled intersection project on Arcadia . Asked if this proposed CIP plan includes a future southern entranc e into downtown on Pleasant. Poppler : Replied that is scheduled for 2016. 5 08 15 11 City Council meeting minutes Hedberg : The Council will be making a decision on the CR 21 alignment through downtown. Believes f u- ture CIP plans will potentially include funds for either dealing with CR 21 realignments or completion of A r- cadia to the south to Pleasant . Another major item will be the development of Spring Lake Park play fields. Various youth groups are talking about the usage of those parks a t a higher demand than current parks will suppor t. Such planning might entail a referendum so voters can help determine that planning. Spoke of the need of capital to support the City in the way it has been run in the past. Will support the CIP. Soukup : Will support the CIP. Commented that the sa le of bonds was approved for reconstruction of the Boudin’s area ; park sustainability and p ark equipment replacement plans are re viewed annually; and w ater rates will be proposed for systematic increases. J. Erickson: Added that the water/sewer rates were last adjusted in 2005 and the stormwater rate was i n- creased in 2009. All rates are projected to be adjusted in 2012. Erickson : Noted that even though a small annual incr ease is planned for water rates, Prior Lake has the lowest water rates in the ar ea. Questioned whether the Sunset Avenue reconstruction project is projected to be moved up to 2013 . Poppler : Responded that the County has verbally agreed to complete that project in 2013 if the City and Township support that time frame. Erickson : C larified whether the project will also bring sewer to those areas. Poppler : Affirmed and stated the project will serve a number of the homes around the lake on CR 12 as well as Sunset Avenue. Stated that the Annexation Task Force met l ast week to discuss this topic and supports moving the project t o 2013. Keeney : Commented that the report refers to a 500,000 gallon water storage project for 2013. J. Erickson: Affirmed stating that was in last year’s CIP as well . Keeney: Commented on the projected d ebt balances increasing in 2013 and then lessening even while there are increases in the debt levy and asked if that is d ue to the transition from longer te rm bonds to short term bonds. J. Erickson: Replied that typically street bonds are ten years and bu ilding bonds are 20 years. Have structured bonds for incrementally increased payments for principal redemption each year. The interest rate is going down. Keeney : Reiterated that the City is p aying off the debt faster than with a preponderance of 20 - yea r bonds and more of the n ew debt is weighted toward ten - year bonds. J. Erickson: Bonds are structured based on demand for a given term, interest rates and what investors are looking for and the assessment stream. Between two to three million dollars of p rincipal debt are being paid off each year. Keeney : Recapped the plan to move up the reconstruction project on Sunset and CR 21 to deal with se w- er problem ; some alternatives such as signaling, etc. are still be ing considered for the Arcadia intersection based on future decision of align ment . Poppler : Affirmed that most of the alternatives on hold are for streetscaping and indicated that a ppro x- imately $250,000 of $300,000 might not be spent depending upon the decision made . Keeney : Asked how many vehicle s the City currently has. Friedges : Replied there are 140 pieces of equipment including fire, police, streets, parks, staff and utilities. Keeney : Asked what change in the number of vehicles is projected to change. Friedges : Replied that two additional pieces are planned over the next 12 years : a vehicle lift and an a n ti - icing piece . In the past ten years , the City has purchased 19 additional pieces of which 13 are specialized or safety equipment at an a v erage cost of $15,000 each . Keeney : Understan ds that additional police vehicles were pu r chased. Friedges : Confirmed that five were purchased in 2011 with two placed in storage until 2012. One more vehicle is p lanned for 2012 in the revolving equipment plan. 6 08 15 11 City Council meeting minutes Keeney: Stated he likes having a plan t hat is projected into the future believing that is needed for a well - managed operation. Managing by reaction would not generate the kind of savings we experienced t o night with the bond sale. This planning will be a benefit to the City for years to come. Myser : Asked about item CIP 9 and whether it is for operational expenses. J. Erickson: Replied that it is f or capital improvements, but is included in the Parks operating budget. Myser : Clarified that the funds will be used for equipment replacement, n ot operating expenses. Friedges : Affirmed. Myser : Commented that the technology plan appears to be an operating plan rather than capital improv e- ment. J. Erickson: Replied that the fund covers the hardware and software associated with technology u p- gra de s, but does not cover associated licensing fees, etc. Added that there is a supporting detailed matrix for this plan. Myser : Asked if these items are shorter term investments. J. Erickson: Replied that c omputers are on a four - year cycle. Myser: Ask ed if there are specifications about life cycle before it is put on the CIP and when does it b e- come capital rather than operating. J. Erickson: Replied that the threshold is dependent on the value of the item purchas ed . C apital pu r- chases for hardware an d software are included in the capital account as capital outlay, but technically they don’t meet the threshold for capitalization so they are not capitalized in fixed assets. Myser : Asked if a financial software package could be charged to enterprise fun ds. J. Erickson: Replied that a portion of it would be funded by the enterprise and g eneral funds . Myser : Queried whether the $1.5 million designated for water storage could be considered a placehol d er. Poppler : Agreed stating that the water storage stu dy is being done and a recommendation will be made. More definite information about cost will be learned before purchasing decisions are made . Myser : Asked if there are ways to look at rate structure or growth pattern changes to see if water storage will be needed by 2013. Poppler : Replied that the water operating plan will be reviewed again and again and when the water sy s- tems supply study is completed and if it is learned that there will be savings, it can be applied towards rate increases in future ye ars. Myser : Expressed his understanding that the f iber optic network connection would improve the service connection to the water treatment facility and maintenance center and asked if there might be less expe n- sive ways to accom plish it such as new deve lopment. Poppler : Replied that most of the conduit is in place, so some of the links can be made easily. Believes this will be the most reliable option for connectivity. Meyer : Stated there were radio read towers that connected Fire Station No 1 which no longer work. A point - to - point T1 line is being used for the maintenance center and water treatment facility which is expe n- sive. The fiber optic system will be the backbone of collaboration with County and a report will be fort h- coming about that part nership and how it sets us up for the f u ture. Myser : Asked how the current value relates to the future replacement value in the equipment inventory. Friedge s : Replied that the current value reflects the cost of a new vehicle today and inflationary facto rs are built in for future year replacement. MOTION BY HEDBERG, SECOND BY SOUKUP T O APPROVE RESOLUTION 11 - 098 APPROVING THE 2012 - 2016 CAPITAL IMPROVEMENT PR O GRAM. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. MOTION B Y HEDBERG, SECOND BY KEENEY TO APPROVE RESOLUTION 11 - 099 ADOPTING THE STREET RECONSTRUCITON PLAN AND THE INTENT TO ISSUE GENERAL OBLIGATION STREET RECONS T RUCTION BONDS. 7 08 15 11 City Council meeting minutes VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. MOTI ON BY HEDBERG, SECOND BY SOUKUP TO APPROVE RESOLUTION 11 - 100 APPROVING THE ESTABLISHMENT OF THE FACILITIES MA N AGEMENT FUND AND THE CLOSURE OF THE BUILDING FUND. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. NEW BUSINESS Consider Approval of a Resolution Authorizing the Mayor and City Manager to Execute an Eas e- ment Agreement with Burt and Georgiann Olson, Eugene and Sandra Tofanelli and the Tofanelli Trust. City Engineer Poppler stated that the City was approached by Ol son’s requesting an easement in Lak e- front Park to allow driveway access to their home and other lots. Described the area. Described top o- graphic al challenges. Described proposed easement. Stated that Tofanelli’s have expressed agreement to paying for an easement as well as the cost of staff and attorney time. Comments : Hedberg : Stated the Planning Commission held a public hearing and support s the easement request with comments that the steepness of grade in the area makes this only practical solution; the easement will pr o- vide better public safety access; and the easement serves the Olson property as well as access to two a d- ditional pl a tted lots. Stated there is no meaningful loss of the use of parkland as it is very r e mote. Soukup : Sees no issues w ith easement. Erickson : Commented that this seems to be serving three lots and asked if it is a driveway or a private street . Poppler : Responded that the easement will serve f our lots with two property owners and the area is pla t- ted as a 20 - foot driveway . Erickson : Asked if there should be a street sign. Pace : Reiterated that it is platted as a driveway, not a street. The driveway was dedicated to the owners of all the lots. Since it cannot meet the criteria for a street, the classification should not be changed. Keeney : Commented that many properties border parks and he does not want to set precedence that we would sell pieces of parks to adjoining properties . Wants to acknowledge that this is necessity and not just a convenience. Asked why the Cit y does not just sell the property to them rather than having an eas e ment. Pace : Responded that in order to sell property there would have to be a finding. The Planning Commi s- sion made a finding that the proposed action was consistent with the C omprehensi ve P lan , but sale of park land would not be consistent with the Comprehensive Plan. Also, in order to sell public property, the City would have to advertise it and it could then potentially be sold to someone else. Third, t here are several other lots tha t benefit from how this driveway is constructed and having an easement agreement requires Olson’s to share the construction method, etc. so there can be no argument about having access impaired. Finally, this original driveway was dedicated to the public and by selling it to a private party, it would take away something that is dedicated to the ben e fit of all people. Keeney : Asked if all owners of properties benefitted by this easement are benefitted by the agreement. Pace: A ffirmed. Keeney : Regardi ng the question of whether this should be a private drive vs. private road , asked if clarif i- cation would be needed regarding future taxation and whether it has been specifi ed that this is a shared driveway and there would be share d responsibility for any f uture improv e ments. Questioned whether this could introduce additional complexities to any future special assessments. Suggested there be specific language in the easement agreement to avoid it. Boyles : Commented that this e asement has been negotiated and executed and the e asement document may not be the appropriate document for clarifying policy on shared driveways . 8 08 15 11 City Council meeting minutes Erickson: Believes the City has already established the process for such a scenario with the CR 12 project where an area was defined as a driveway and all property owners had to pay special assessments for the project. I f there is special assessment on West Avenue, this area is defined as a driveway and all homes using this driveway to access West Avenue would be assessed as part of th e project. Myser : Asked if there have been situations where people who shared a private drive sought to have it d e- clared a private road and subsequently a public road which the City then becomes r e sponsible for it. Pace : Stated this easement agreement m akes it clear what it is, as does the dedication of the plat. Poppler : Added that it does not meet requirements for a public drive which requires specific amounts of right of way, street width, etc. Pace: Commented that concerns about precedence were sha red and that is part of the r eason why a sale was not considered. The agreement specifies the uniqueness of the situation and will distinguish it from any other sit u ation so it should not set a preceden t . MOTION BY SOUKUP, SECOND BY HEDBERG TO APPROVE RESOLUTION 11 - 102 AUTHORIZING THE MAYOR AND CITY MANAGER TO EXECUTE AN EASEMENT AGREEMENT WITH BURT AND GEORGIANN OLSON, EUGENE AND SANDRA T O FANELLI AND THE TOFAN ELLI TRUST. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. Consider Approval of a Resolution Calling for a Public Hearing on the Proposed Modification of the Development Program for Municipal Development District No. 1; The Proposed Establishment of Tax Increment Financing District No. 1 - 4; The Propose Adoption o f the Tax Increment Financing Plan Therefore and on the Proposed Awarding of a Business Subsidy. Assistant City Manager Kansier s tated that River Valley Veterinary Service desires to expand and is a s k- ing for tax increment financing of approximately $57,000 over a nine year period. Described the process for establishing a TIF noting that a public hearing must be held. Ehlers has determined this request meets statutory criteria. Described costs associated with adm i nistering a TIF. Comments: Keeney : Sta ted he is not excited about the use of TIF as a mechanism to encourage business develo p- ment believing the benefit is often overestimated and it is too generous of a program when used to max i- mum benefit. Believes it t ends to be somewhat of an overestimatio n t o say the development would not happen but for the tax deferral. Concerned that they are asking for the maximum available TIF. Boyles : Responded it would be approximately $6,400 annually. Keeney : Sought clarification of the statement that the improve ment would have a 15 - year life. Kansier : Responded that the owners feel it would meet their needs for the next 15 years after which they might sell the business or move on. Keeney : Asked how long the building would b e on the tax roll. Kansier : Replied that it would be on the tax roll for its life ; likely more than 50 years. Keeney : Stated he would be more agreeable to a lesser amount. Erickson : Commented this might meet the “but for” test in that the owners would probably look at altern a- tives other t han expanding their business if the TIF is declined . Believes advantages to the City include the continued collection of taxes as in the past even though the increased value of the property wo uld not be taxed for nine years ; as well as the i ncreased taxes received afterwards for an additional 20 or more years. Soukup : Believes TIF could be a tool to offer people to redevelop and stay in P rior Lake rather than move. Would like to hear what the EDA and EDAC have to say about this issue. Favors a public hearing. Hedberg : Stated he s erves on the EDA and they have carefully considered incentives to attract and r e tain businesses and would consider each situation on its merits. Believes the City needs to be more a g gressive in use of tools to promote econom ic develop ment . After a public hearing, the Council will determine whet h- er to approve this TIF. Expressed his opinion that the incentive c ould encourage them to stay in P rior Lake , 9 08 15 11 City Council meeting minutes add jobs and grow the tax base. This particular business has a large nu mber of local clientele who appr e- ciate the service offered. Noted that the proposed $57,000 is not money that the City is paying out; but is money the business owner will be paying . T he public entities will collect what they have always received ; and th e remainder will be recycled back to the owner. Supports holding a public hearing. Myser : Stated he is a strong proponent of economic development because it provides jobs, services and a more stable and broader tax base. Believes that TIF is a viable e conomic tool; but it should be balance d with the idea of using the funds judiciously spur ring economic development rather than provid ing tax base. Support s moving this to a public hearing. Would like to see the EDA move toward formalizing what the proce ss should be and perhaps develop a policy on the use of TIF. Keeney : C larified that this would be TIF issued by the City not the EDA and the public hearing would be with the Council, not the EDA. Kansier : Noted there is a 30 - day notice period for the pub lic hearing so there is time to take it to the EDA for its opi nion. Confirmed that the public hearing would be before the Council. MOTION BY HEDBERG, SECOND BY SOUKUP TO APPROVE RESOLUTION 11 - 103 CALLING FOR A PUBLIC HEARING ON THE PROPOSED MODIFICATION OF THE DEVELOPMENT PROGRAM FOR M U NICIPAL DEVELOPMENT DISTRICT NO. 1: THE PROPOSED ESTABLISHMENT OF TAX INCR E- MENT FINANCING DISTRICT NO. 1 - 4; THE PROPOSED ADOPTION OF THE TAX INCREMENT F I- NANCING PLAN THEREFORE AND ON THE PR O POSED AWARDING OF A BUSINESS SUBS IDY. VOTE: Ayes by Myser, Erickson, Hedberg, Keeney and Soukup. The motion carried. OTHER BUSINESS Community Events Erickson: Stated the Shakopee Mdewakanton Sioux Community is hosting its Wacipi this weekend . Keeney: Sought clarification about wh ether the Economic Development Authority (EDA) took action on the CR 21 decision. Hedberg : Replied that the most recent meeting was a joint meeting of EDA and E conomic Development Advisory Committee (EDAC) and the EDAC gave its position. The EDA did not take a position because there is more information co m ing in. Myser : Added that the EDA as a group will not take a position as two of its members are on the City Council, although individual members of the EDA may express a position. Stated that taking a position on the CR 21 decision was not an agenda item. ADJOURNMENT With no further comments from Council members, a motion to adjourn was made by K eeney and seconded by S oukup . With all in favor, the meeting adjourned at 9:34 p.m. ___ __________________ _____________ __ ________________________________ _ Frank Boyles, City Manager Charlotte Green, Administrative Asst. 10 08 15 11 City Council meeting minutes