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HomeMy WebLinkAboutDraft 09/19/11 MinutesPKIp ti V 4646 Dakota Street SE Prior Lake. MN 55372 REGULAR CITY COUNCIL MEETING MINUTES September 19, 2011 CALL TO ORDER The meeting was called to order at 8:00 p.m. Present were Mayor Myser, Council members Erickson, Kee- ney and Soukup, City Manager Boyles, City Attorney Girouard, Finance Director Erickson, City Engineer / Inspections Director Poppler, Public Works /Natural Resources Director Gehler, Community and Economic Development Director Rogness, Fire Chief Hartman, Police Lieutenant Hofstad, Assistant City Manager Kansier, Assistant City Manager Meyer and Administrative Assistant Green, Councilmember Hedberg was absent. 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 pri- 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 subject 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 MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE THE AGENDA AS PRESENTED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. APPROVAL OF MEETING MINUTES MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE THE MINUTES OF THE SEPTEMBER 6, 2011 MEETING AS PRESENTED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion 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 August 2011 Treasurers Report. C. Consider Approval of Building Permit Summary Report. D. Consider Approval of Animal Control Services Report. E. Consider Approval of Fire Department Report. F. Consider Approval of Resolution 11.109 Authorizing the Mayor and City Manager to Execute a Memoran- dum of Understanding Between the County of Scott and the City of Prior Lake Regarding Outdoor Emergen- cy Warning Sirens. G. Consider Approval of a Resolution Declaring Costs to be Assessed and Ordering Preparation of an Assess- ment Roll for 2011 Unpaid Special Charges, and Establishing the Date of the Assessment Hearing for the Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 2011 Unpaid Special Charges. City Manager Boyles requested that item 5G, Consider Approval of a Resolution Declaring Costs to be Assessed and Ordering Preparation of an Assessment Roll for 2011 Unpaid Special Charges, and Estab- lishing the Date of the Assessment Hearing for the 2011 Unpaid Special Charges, be removed from the Consent Agenda and placed with New Business agenda items so the decision regarding the assessment policy will precede it. MOTION BY SOUKUP, SECOND BY ERICKSON TO APPROVE THE CONSENT AGENDA AS MOD- IFIED. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. PRESENTATION Constitution Week Proclamation. City Manager Boyles introduced Daughters of the American Revolution (DAR), John Witherspoon Chapter Chair Betty Schneider. Schneider commented on the organization stating it is a volunteer organ- ization based upon lineage to someone who supported or fought in the Revolutionary War which promotes patriotism, preserving American history, and securing America's future through better education for child- ren. Spoke of activities being conducted for Constitution Week. Comments: Erickson: Spoke of the parameters of the essay contest being conducted. Myser: Complimented DAR on the activities they have planned. Read a proclamation declaring Septem- ber 17 -23 as Constitution Week in Prior Lake. VFW Donation of Misting /Cooling Fans and Video Upgrades to Fire Safety Smokehouse. Fire Chief Hartman thanked the VFW for its current donation of equipment to the Fire Department. Stated that the VFW has made significant donations for many years as well as serving as an active partner with the annual chicken BBQ. Introduced Commander Eric Satersmoen and Gambling Chair Chuck Dre- sen. Satersmoen commented that it is the VFW's pleasure to work with both the Fire Department and Po- lice Department. Dresen stated the VFW's motto is to honor the dead by helping the living. Dresen an- nounced that at its last post meeting the VFW pledged $5,000 toward the purchase of a new fire rescue boat. Comments: Keeney: On behalf of the citizens of Prior Lake, thanked the VFW for its generosity. Added that the active involvement of civic organizations is an attractive feature of Prior Lake. Erickson: Concurred with Keeney comments and expressed appreciation for everything the VFW has done for the City. Soukup: Commented that in addition to its generosity, the VFW is a great place to hang out. The $5,000 contribution to the boat is wonderful. Myser: Agreed that the VFW has always been there for community and helps to make it what it is. Swearing in of Officer Steven P. Griffin. Police Lieutenant Hofstad introduced Steve Griffin and provided a biography of his experience and train- ing. Mayor Myser administered the police officer oath of office and welcomed Griffin to the City. Domestic Violence Awareness Month Proclamation. 2 DRAFT 09 19 11 City Council meeting minutes Community Safety Advisory Committee (CSAC) Chair Spitzmueller informed the Council of the upcom- ing 2nd Annual Domestic Violence Awareness Walk on October 1 to benefit the Southern Valley Alliance for Battered Women. Committee member Pat Dougherty was also in attendance. Stated the Walk will include a memorial for Ruth Anne Maddox, a Prior Lake resident who was a victim of domestic violence. Volunteer opportunities for the event were identified and a contact number provided for those persons interested in volunteering. Mayor Myser read a proclamation declaring October as Domestic Violence Awareness Month in the City. Comments: Erickson: Thanked the CSAC for its work. Commented that he was pleased by the turnout for last year's walk and looks forward to the event again this year. Asked Spitzmueller if he wanted to talk about the bat- tered women's shelter. Spitzmueller: Responded that it serves the entire County and has served 16,000 residents since its incep- tion. Keeney: Commented that the CSAC has continually identified domestic violence as one of top concerns for safety in the community and believes that many people do not know the staggering statistics of people who are impacted by domestic violence. Stated it is good for people to be aware of resources that are available to help them if needed. Soukup: Agreed it is important to bring awareness to this issue and get people involved. Amazing how many people are affected by it. Myser: Read a proclamation declaring October as Domestic Violence Awareness Month in Prior Lake. PUBLIC HEARING Consider Approval of Resolutions Relating to Tax Increment Financing: 1) Adopting the Modifica- tion to the Development Program for Municipal Development District No. 1; 2) Establishing Tax In- crement Financing District No. 1.4 Therein and Adopting a Tax Increment Financing Plan Therefor; and 3) Authorizing an Interfund Loan for Advance of Certain Costs in Connection with Tax Incre- ment Financing District No. 1-4. City Manager Boyles provided a background on tax increment financing noting that it is one of the few - tools available for economic development. Provided an explanation of the process noting there are several requirements to fulfill including a public hearing. Introduced Rebecca Kurtz from Ehlers. Introduced City Attorney Mark Girouard. Explained there are three resolutions to consider: one for establishing a munic- ipal development district, one for establishment of a tax increment financing district and another to allow in- terfund loans. Community and Economic Development Director Rogness summarized the River Valley Veterinary Service proposal. Displayed the site proposed for expansion and explained the access points. Described the proposed tax increment financing assistance. Discussed the advantages and disadvantages of creat- ing a municipal development district. Described the "but for' test component and stated the findings state that this business will not expand in the foreseeable future on this site without TIF assistance. Described public financing assistance options. Stated the fiscal disparities impact has been calculated. Described the interfund loan indicating it would be established as a precaution to create a source to pay eligible TIF ad- ministrative expenses prior to tax increment monies being received. Stated the Economic Development Advisory Committee recommends approval of TIF assistance for this project. Comments: Keeney: Asked about the parameters of the existing District No. 1 and the purpose for which it was estab- lished. DRAFT 09 19 11 City Council meeting minutes Kurtz: Replied that review of original documents shows it to be a portion of the northern part of the down- town area and was intended for redevelopment of that portion. Recommended that District No. 1 be ex- panded to provide additional opportunity and flexibility in using TIF money within the development district. Keeney: Questioned whether establishing the entire city limits as one district would no longer differentiate types of property involved. Rogness: Responded that some housing districts can be eligible. Keeney: Clarified that some past senior housing projects were TIF eligible. Rogness: Stated that the idea is focused on industrial and commercial areas and to be more flexible about areas where it may be used. Keeney: Queried what the distinction is between the overall district and the particular project since the term "district" has been used for both. Rogness: Replied that the development district with the city boundary is the large area in which you can create a TIF district. TIF districts are the ones that capture increments. The money can be spent with some restrictions in the development district. Some cities create the city boundaries to be the entire devel- opment district to get the flexibility. Keeney: So an alternative could be to identify just commercial zones that match up with the zoning map. Rogness: Affirmed, adding that an alternative could be creating an industrial park as a development dis- trict and as various properties within them develop, they might be TIF districts. Keeney: Asked if there would be issues with overlapping since the city has other development districts. Rogness: Replied that this action would replace all of them. MOTION BY ERICKSON, SECOND BY SOUKUP TO OPEN THE PUBLIC HEARING. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried and the public hearing opened at 8:50 p.m. Comments: Dr. Cindy Sellin, 7511 175th Street, stated she is a veterinarian and owner of River Valley Veterinary Ser- vices and a partner of the Jordan Real Estate Partnership. Provided a history of her business' growth up to now and her observations of economic conditions. Considered what she could do to upgrade the Gateway area and grow her business. Commented on roadblocks to growth such as TIF and engineering fees. MOTION BY ERICKSON, SECOND BY SOUKUP TO CLOSE THE PUBLIC HEARING. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried and the public hearing closed at 8:59 p.m. Comments: Erickson: Asked if the development district boundaries would expand to encompass annexation as it oc- curs. Kurtz: Affirmed that the proposed language was drafted to accomplish that. Erickson: Asked for an explanation of the "but for" criteria as it pertains to the entire development district. Rogness: Replied that any future proposal for TIF assistance would have to go through the approval process and but for requirements, but the larger development district would not have to be amended. Erickson: Stated this does not negatively affect the taxpayers as this would add incremental tax monies that would ultimately be received by the City; and it would improve the area to attract additional businesses with high quality development. Clarified his understanding that the interfund loan collects no additional mo- nies but would allow the City, if necessary, to borrow from a different fund and pay itself in the development fund. Rogness: Responded that about two - thirds of the administrative work for a TIF project is done at the be- ginning of the project so the costs are incurred early but the increment monies come in over a period of 4 DRAFT 09 19 11 City Council meeting minutes years. This would allow the City to borrow those funds from an interfund and then pay it back as the tax in- crement monies arrive. Kurtz: Added that interfund loans have been an option for communities for several years. A sizeable es- crow is put in place to cover much of the upfront cost. It is not anticipated that the interfund loan would be enacted for this veterinary clinic project because there was enough for an escrow payment and the agree- ment has the developer responsible for the up -front costs; but having the interfund loan option would pro- vide the worst case scenario risk coverage. Generally, there are small dollar amounts found when the TIF reports are being completed that "fall through the cracks" and an interfund loan provides documentation to the State Auditor that those small amounts can be reimbursed through TIF proceeds rather than from another fund. Keeney: Stated that the information the City has comes as statements from Sellin that this would not hap- pen without TIF. Asked why this additional $60,000 would make the project feasible. Sellin: Replied the business' profit margin is anticipated to be six to seven percent and the annual $6,000 this represents might be 25 percent of the profit. Reviewed some of the overhead expenses of the busi- ness. Stated new services, such as boarding, are anticipated to recover costs. Keeney: Reviewed that the project is to add 7,000 square feet of space and 4.5 positions. Sellin: Affirmed, detailing the space and positions. Keeney: Queried about the plan for the TIF being assigned to the Jordan Real Estate Partnership entity but the jobs will be assigned to the veterinary business. Asked who would be making the assurance of the jobs. Sellin: River Valley Veterinary will be creating the jobs. Keeney: Commented on the idea of making the entire city a development district stating he favors target- ing some specific areas that are eligible for TIF and more strategic. Gateway is an area that could be fo- cused on. Stated that in the past he has not favored TIF for spurring development believing that it is basi- cally the City being asked to give a tax break in exchange for the idea that there may be jobs or increased business and the City doesn't seem to get assurances on the return. Concerned about targeting one busi- ness at a time with this district and posed that it might make sense to have various owners in Gateway come forward with their interest. Commended Sellin for wanting to make something happen. Generally, does not favor TIF in this fashion. Soukup: Asked if having a development district consisting of the entire City would be of value to future business owners. Rogness: Replied that it makes a statement by the City Council that says it is interested in the potential of assisting and receiving requests from businesses throughout Prior Lake for future establishments of TIF districts; and the City is not targeting a certain area but rather is open to redevelopment potential in loca- tions throughout Prior Lake. Noted that it only removes one step in future processes and the Council would still have to approve a particular TIF district in conjunction with a business project. Soukup: Stated TIF is great way to have growth in the City which has been known as a bedroom commu- nity. Asked if the Economic Development Advisory Committee (EDAC) supported the request. Rogness: Replied that the EDAC did not comment on the overall development district discussion. Soukup: Asked the specific amount being requested by River Valley. Rogness: Replied the amount can fluctuate depending upon actual tax increment over the nine year pe- riod. Property value may either increase or decrease. The projection has estimated a four percent market value increase, but the County does not believe that will occur. The proposal is establishing a cap of $60,000. Soukup: Asked if the TIF will be adjusted every year based on the valuation of the property. Rogness: Replied that the increment can go down if value goes down. Soukup: Commented that this is proposed as a "pay as you" TIF rather than a bonded TIF. Clarified that if it were a bonded TIF, the City would be responsible for repayment. DRAFT 09 19 11 City Council meeting minutes Rogness: Affirmed. Noted that pay as you go is safer and more commonly used. Bonding is used more in large development projects. This agreement will be with the Jordan Real Estate Partners who is on year seven of a ten -year lease with River Valley Veterinary. Such an arrangement is fairly common and the his- tory of the strength of the River Valley business will be more important that the real estate business. Sellin: Explained the financial environment and relationship of the two entities. Soukup: Supports what River Valley Veterinary wants to do. Stated she would like to know how the EDAC weighs in on the development district in general. Boyles: Commented that tonight's action is to approve the proposed resolutions and, if approved, the next step is to put together the development contract which addresses many of the legal issues that are now be- ing identified. That contract will come to the Council for approval. Myser: Asked Sellin about their decision to grow their business. Sellin: Replied that having Snyder's leave Gateway was impactful. Stated they considered options of moving or expanding. Interest rates are favorable and there seems to be a good labor market. Com- mented that the fixed costs and fees with the TIF application are difficult. Myser: Asked Kurtz about the but for test. Kurtz: Replied that one part of the test is a formula outlined in statutes and a second part looks at addi- tional costs of expansion, utilities, etc. and what type of return is anticipated. By the time a project gets to the public hearing, those questions have been answered and the criteria have been met. Myser: Asked if this project would have met the but for test if the law had not changed in 2010. Kurtz: The 2010 Jobs Bill allowed TIF to be used for any projects where jobs are created. This project would not have qualified if that expansion definition had not been broadened. Myser: Noted that the school made no comment. Boyles: Stated that there are requirements to notify the school district and county and they have much of the data for this project. Some entities choose not respond. Myser: Asked what percentage of cities enacts interfund loans. Kurtz: Replied that in the past year, most communities have adopted the resolution because the State Au- ditor recommends it. Myser: Asked how common it is to create a development district across an entire city. Kurtz: Replied that outside of the metro area, it is very common. Core cities such as Minneapolis and St. Paul have specific areas targeted for specific development. Outer ring suburb cities have a mix. Myser: Asked if there would be a time frame for the development district. Kurtz: Economic development districts have nine years, redevelopment districts have 26 years and devel- opment districts do not have a Iifespan. It sets up a framework for the maximum area where TIF develop- ment could happen. Myser: Asked what the impact to financial calculation net is if this TIF district is approved. Kurtz: Fiscal disparities change each year. Stated she has not done the calculation to see if this puts the City over the edge for being a giver or receiver. Will not affect other properties. River Valley Veterinary will pay the fiscal disparities and other properties will not have to make up the payment. Not sure how it will af- fect benefit for the City as a whole. Myser: Understanding the fiscal disparities would be very valuable. Boyles: Commented that the formulas do not change so much as the values that go into them. Believes it would take a lot of commercial and industrial valuation to change the City into an entity that would pay in. Myser: Stated he is a proponent of economic development for the community. Supports moving the en- tire City to a development district. Believes the City has to compete and TIF is one of the tools. Will sup- port this project for River Valley Veterinary and will support establishing the interfund loan. Keeney: Asked if the $60,000 cap is intended for the amount captured or the amount paid out. Rogness: Replied the cap is for the amount paid out. Keeney: Asked if TIF will continue to be captured if the cap is reached. DRAFT 09 19 11 City Council meeting minutes Rogness: Replied that the District can be decertified when the cap is reached. Discussed decisions that would need to be made in order to do so. Keeney: Stated he is seeking assurances that when cap is met, we would stop capturing the increment and taxes go back to taxing authority, particularly the school district. Kurtz: Responded that the development agreement will have that cap and when it is reached the pay- ments to the developer will be done. If that occurs prior to the nine year time frame, Council would need to take action. Noted that there is not a lot of flexibility on what the funds could be used for and that current law states that when the cap is met, Council must take action to decertify. Keeney: Asked if there is anything that can be done now to tie the cap to the term of the district. Girouard: Noted that the resolutions before the Council tonight do not deal with the development contract. But that can be dealt with in the agreement rather than the resolution. Keeney: Stated he would like to seek that in the resolution now. Girouard: Stated the agreement would be the binding contract that will carry forward. Myser: Asked if there is a difference if it is in the resolution rather than the agreement and if staff should be directed to put it in the agreement. Boyles: Replied that the development agreement is a contract between the City and the developer and the terms and enforcement will be in the agreement. The agreement is the detail aspect and the resolutions are boilerplate and subject to statutory requirements. The city council can give direction to staff to include the specific details in the agreement. Keeney: Reiterated his desire to assure the school district would not be deprived of revenues when the cap is reached. Erickson: Noted that the City has retired TIF districts early before and this has not historically been an is- sue for concern. It has been stated that it will maximize at $60,000. Soukup: Added that every opportunity has contracts and decisions that must be made and believes it best to go forward on the resolutions for now. A motion was made by Keeney to amend the proposal for district No. 1.4 so the term will be limited to the earlier of nine years or when the $60,000 tax increment financing cap is reached in order to not deprive the other taxing entities of their tax revenue. The motion died for lack of a second. MOTION BY SOUKUP, SECONDED BY ERICKSON TO APPROVE RESOLUTION 11.110 ADOPTING THE MODIFICATION TO THE DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DIS- TRICT NO. 1. VOTE: Ayes by Myser, Erickson and Soukup. Nay by Keeney. The motion carried. MOTION BY ERICKSON, SECOND BY SOUKUP TO APPROVE RESOLUTION 11 -111 ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 1 -4 THEREIN AND ADOPTING A TAX INCREMENT FI- NANCING PLAN THEREFOR. VOTE: Ayes by Myser, Erickson and Soukup. Nay by Keeney. The motion carried. MOTION BY ERICKSON, SECOND BY SOUKUP TO APPROVE RESOLUTION 11 -112 AUTHORIZING AN INTERFUND LOAN FOR ADVANCE OF CERTAIN COSTS IN CONNECTION WITH TAX INCREMENT FINANCING DISTRICT NO. 1 -4. VOTE: Ayes by Myser, Erickson and Soukup. Nay by Keeney. The motion carried. MOTION BY KEENEY, SECOND BY SOUKUP TO DIRECT STAFF TO INCORPORATE A STATEMENT INTO THE DEVELOPMENT AGREEMENT FOR TAX INCREMENT FINANCING DISTRICT NO. 1 -4 THAT THE DISTRICT WILL BE DECERTIFIED WHEN THE $60,000 CAP FOR TAX INCREMENT FINANCING 7 DRAFT 09 19 11 City Council meeting minutes IS PAID, SO THE SCHOOL DISTRICT AND THE COUNTY WILL NOT BE DEPRIVED OF TAX REVE- NUES BEYOND THE AGREED UPON CAP. VOTE: Ayes by Myser, Keeney and Soukup. Nay by Erickson. The motion carried. MOTION BY SOUKUP, SECOND BY KEENEY TO DIRECT STAFF TO CLARIFY IN THE DEVELOP- MENT AGREEMENT THE RIGHTS, RESPONSIBILITIES AND OBLIGATIONS OF THE RIVER VALLEY VETERINARY SERVICES AND JORDAN REAL ESTATE PARTNERSHIP AS THEY RELATE TO TIF TO ASSURE THAT CITY LIABILITIES ARE MINIMIZED AND EVERYONE'S RESPONSIBILITIES ARE ARTI- CULATED AND UNDERSTOOD. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. OLD BUSINESS Consider Approval of a Resolution Amending the Special Assessment Policy. City Engineer 1 Inspections Director Poppler discussed the most recently proposed revisions. Noted that the Assessment Review Committee met to discuss the revised language and endorsed it. Commented on the impact of changing the interest rate for special assessments now or after the Boudin's project is completed. Comments: Keeney: Stated general agreement with the language proposed. Questioned whether additional guidance should be provided when using commercial properties that use the front footage assessment method. Poppler: Suggested retaining the language proposed as it would still allow use of residential equivalency units. Erickson: Questioned language regarding private streets and common driveways. Poppler: Referred to the section of the policy stating that the language is adding clarification and the sec- tion explains the common driveway scenario. The language gives ultimate flexibility and proof of the as- sessment will be in the special benefit. Erickson: Believes the language should be switched from will to may. Boyles: Commented that proving special benefit determines whether any of the policies stand. Erickson: Suggested that the section regarding double frontage lots should be phrased with the word may instead of will, and should read "two or more" streets rather than "two" streets. Poppler: Noted that the actual language in the policy does say two or more streets. Soukup: All special assessments come before the Council so she does not see the need to change this language. Commented about the average interest rate over the past few years noting that a four percent drop is significant. Myser: Commented that the proposed interest rate is two percent over the rate of bonding so it would vary each year. Stated he is agreeable to the language as proposed as it still has to come before the Council. Erickson: Asked if the Special Assessment Committee has as much flexibility if the language uses will or may. Boyles: Replied that will is a stronger term and provides more adequate direction to staff and committee. Noted that the final determination is whether the benefit can be proven and if it cannot, there will be no as- sessment. Myser: Stated that staff needs feedback on when the proposed changes in the assessment policy should be implemented. Poppler: Reviewed that the bonds for the 2011 reconstruction project ( Boudin's) were reviewed based on a 6% interest rate on assessments and if the newly proposed assessment policy is applied to that project, it will result in a $69,000 difference. Keeney: Favors option #3 as described in the agenda report, which would charge six percent for the first phase of the project and two percent over the net interest cost for the second phase. DRAFT 09 19 11 City Council meeting minutes Erickson: Favors option #1 as described in the agenda report which would charge two percent over the net interest cost for both phases. Council members discussed the impact the implementation of the various options would have on the Bou- din's project. Finance Director Erickson stated the amount of the bond is based on the project costs and repayment is funded by tax levy, assessments and any interest earnings on the assessments and monies paid into the debt service funds. Changing the assessment policy will not change the amount of the bond. Soukup: Favors option #3. Myser: Favors option #3. Poppler: Asked if the intent of the Council is to implement the adopted assessment policy language on the interest rate at a later date. Boyles: Stated the policy, if approved now, would be in effect on the date of the special assessment hear- ing on October 17. Keeney: Clarified that first phase has not yet been assessed. Poppler: The next agenda item will establish the public hearing for assessments which is proposed to be October 17 so this language should not be changed until after the public hearing if the intent is to have it remain at six percent. Keeney: Stated he thought the second phase assessments were under discussion and had not wanted to have the policy be retroactive. Since the first phase is still in the assessment process, prefers to follow op- tion #1. Soukup: Clarified the status of the project. Poppler: Replied that the second round of bids was approved, the project is under construction and phase one has been bonded. Now the assessments must be calculated and applied. Erickson: Reiterated that this has no bearing on the amount bonded. Keeney: The effect will be on the notice that is given for this hearing about the option of paying the as- sessment in full or paying a given amount of interest on delayed payments. Myser: Asked why there will be an impact on the residents if the policy is approved to be effective on the first phase of the project. J. Erickson: Replied that it just recognizes that what was anticipated for a revenue stream when the bonds were issued is going to be different if the interest rate is changed. Myser: Asked how that can change actual cash. J. Erickson: Replied that it only changes projected revenue of what was going to be used to pay the debt from assessment revenue vs. tax levy. Keeney: Reiterated that the City will be collecting less money. The plans changed. Favors changing the policy now and proceeding. Myser: Also favor option #1. MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE RESOLUTION 11.113 AMENDING THE CITY ASSESSMENT POLICY. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. NEW BUSINESS Consider Approval of a Resolution Declaring Costs to be Assessed and Ordering Preparation of an Assessment Roll for the 2011 Improvement Project, and Establishing the Date of the Assessment Hearing for the 2011 Improvement Project (Project 11.011). D DRAFT 09 19 11 City Council meeting minutes City Engineer 1 Inspections Director Poppler updated the Council on the status of work on the Boudin's project which is planned as a two -year project. Identified costs to be assessed at 40% of project cost using the unit assessment method. Requested that the public hearing be set for October 17, 2011. Comments: Soukup: Asked whether the recalculation of the apartment units caused the increase per unit. Poppler: Replied that the total number of units is 151.2 and recalculation of the apartment units had little effect. The primary effect was that the construction bids were higher than anticipated. Keeney: Commented that the benefit to the properties was significantly higher than the assessments will be. Properties are getting excellent value in terms of increased value. Erickson: Stated that these residents have been asking for improvements for years. Thanked them for their patience in the face of exceptional issues with this construction projects such as pumps running, etc. and appreciates that they have had the ability to withstand those challenges. Will support. Myser: Will support. MOTION BY SOUKUP, SECOND BY ERICKSON TO APPROVE RESOLUTION 11.114 DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL FOR THE 2011 IMPROVEMENT PROJECT 11 -011 AND ESTABLISHING THE DATE OF THE ASSESS- MENT HEARING AND PUBLICATION THEREOF. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. Consider Approval of a Resolution Declaring Costs to be Assessed and Ordering Preparation of an Assessment Roll for 2011 Unpaid Special Charges, and Establishing the Date of the Assessment Hearing for the 2011 Unpaid Special Charges. Finance Director Erickson explained the costs to be assessed and the properties. Stated the assess- ments will be certified to the property owner's property taxes for a one -year term. Noted that, historically, the interest rate was 8 %; but this year's assessment for unpaid special charges will have an interest rate of 4.6% based on the newly adopted assessment policy. Comments: Soukup: Understands this will also include an assessment of a $30 administrative fee to each assessed property. J. Erickson: Affirmed. MOTION BY KEENEY, SECOND BY ERICKSON TO APPROVE RESOLUTION 11.115 DECLARING COSTS TO BE ASSESSED AND ORDERING PREPARATION OF AN ASSESSMENT ROLL FOR 2011 UNPAID SPECIAL CHARGES, AND ESTABLISHING THE DATE OF THE ASSESSMENT HEARING FOR THE 2011 UNPAID SPECIAL CHARGES. VOTE: Ayes by Myser, Erickson, Keeney and Soukup. The motion carried. OTHER BUSINESS Community Events Erickson: Stated that the Benson's experienced a garage fire a couple of weeks ago and asked him to thank boaters who came off the lake and assure that people and pets were out of the home. On Saturday the Scott County Historical Society is hosting Hangar Dance and Flying Cloud Airport. Keeney: Reminded viewers that the Domestic Violence Awareness Walk and Autumn Gathering will be held on October 1 at Lakefront Park. Soukup: Stated there was a great turnout at the Community Fall Fest tonight. 10 DRAFT 09 19 11 City Council meeting minutes ADJOURNMENT With no further comments from Council members, a motion to adjourn was made by Soukup and seconded by Erickson. With all in favor, the meeting adjourned at 11 p.m. Frank Boyles, City Manager Charlotte Green, Administrative Asst. DRAFT 0919 11 City Council meeting minutes