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HomeMy WebLinkAbout05 11 15 Draft City Council Minutes ti U 4646 Dakota Street SE Prior Lake,MN 55372 4firvivEsolt. REGULAR CITY COUNCIL MEETING MINUTES May 11, 2015 CALL TO ORDER The meeting was called to order at 7:00 p.m. Present were Mayor Hedberg, Councilors McGuire, Keeney, Morton and Thompson. Also present were Manager Boyles, Attorney Johnson,Accounting Manager Erickson, Engineering/Inspections Director Poppler, Public Works Director Gehler, Community and Economic Development Director Rogness, Police Chief Elliott, Communications Coordinator Peterson and Administrative Assistants Green and Pint. Mayor Hedberg commented that the City Council conducted an executive session regarding city hall security during the 4:30 p.m. work session. PUBLIC FORUM City Manager Boyles reviewed the process for the public forum. Curt Hennes, 17286 Sunset Trail, informed the Council of upcoming Prior Lake Spring Lake Watershed District activities including a public meeting regarding stormwater management and the annual carp tournament. APPROVAL OF AGENDA City Manager Boyles stated that the developer requested that agenda item 9A be removed; and that staff is recommending that agenda item 9D be moved to consent. MOTION BY THOMPSON, SECOND BY MORTON TO APPROVE THE AGENDA WITH THE REMOVAL OF ITEM 9A AND MOVING 9D TO CONSENT AGENDA AND IDENTIFIED AS ITEM 5F. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ►_� ►� Nay 0 ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent 0 ❑ ❑ ❑ ❑ The motion carried. APPROVAL OF APRIL 27,2015 CITY COUNCIL MEETING MINUTES MOTION BY MCGUIRE, SECOND BY KEENEY TO APPROVE THE MINUTES OF THE APRIL 27, 2015 MEETING AS PRESENTED. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® ►-� ® ►—� Nay 0 ❑ ❑ ❑ 0 Abstain ❑ 0 0 ❑ 0 Absent 0 0 ❑ ❑ ❑ The motion carried. CONSENT AGENDA Boyles: Reviewed the items on the consent agenda. 1 A. Consider Approval of Claims Listing B. Consider Approval of Resolution 15-078 Authorizing 2015 Insurance Policy Renewals C. Consider Approval of Resolution 15-079 Approving the Prior Lake Economic Development Authority 2014 Annual Report D. Consider Approval of First Quarter Investment Report E. Consider Approval of First Quarter Financial Report F. Consider Approval of a Report with Respect to a Possible Amendment to Section 804.400 of the Prior Lake City Code Ordinance Relating to Bow Fishing MOTION BY THOMPSON, SECOND BY MCGUIRE TO APPROVE THE CONSENT AGENDA WITH ADDITION OF 9D WHICH BECOMES 5F . Hedberg: Commented on the EDA annual reporting noting that primary goals were established to increase employment and businesses in Prior Lake as well as the overall tax base. The report shows that employment has risen to 8,098, businesses have declined to 528 and the overall market value of the tax base has increased to $134.9 million. VOTE Hedberg Keeney McGuire Morton Thompson Aye E ►� ►_� Nay 0 ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent 0 ❑ 0 ❑ ❑ The motion carried. PRESENTATIONS 6A PROCLAMATION DECLARING MAY 10-16,2015 AS POLICE WEEK IN THE CITY OF PRIOR LAKE Police Chief Elliott recited events from 1907 when a police officer was killed in the line of duty. Mayor Hedberg read the proclamation. 6B SCOTT COUNTY LOCAL SALES TAX PRESENTATION FOR TRANSIT AND TRANSPORTATION Scott County Commissioners Beard, Marshall and Wolf were present with Scott County Administrator Shelton and Scott County Director of Transportation Programs Freese who addressed the Council and provided information regarding the County's consideration of a local sales tax for transit and transportation. Authority and eligibility to assess the sales tax was reviewed. Discussion regarding the approximate revenue anticipated and projects that would be impacted by the revenues were cited. Sunset on the tax would be seven years. Morton: Asked what language is included to assure the sales tax would not be extended in the future. Beard: Replied that by law the states sales tax would expire in seven years. A future commission might enact another tax, but it would be new rather than a continuation. Stated that 13 projects have been identified to use the funds from the sales tax. Morton: Queried whether the Counties Transit Improvement Board (CTIB) would enact the full 3/4% sales tax if the County does not act to adopt a 1/2%sales tax. Beard: Responded regarding the Legislature imposition of%% and if the proposal does not survive the Legislative session, the County may propose the 1/2%. Morton: Clarified that if the Legislature acts on the tax and the County also acts, the County would get to keep the 1/2% tax funds. Beard: Affirmed. Morton: Asked about the reference for keeping the funding in County and local control. DRAFT 05 11 15 City Council Meeting Minutes 2 Shelton: Replied that if the Legislature passed 3/4% and the County passed 1/2%, it would mean that the County keeps 2/3 of what the Legislature enacts. Morton: Asked about the likelihood of the CTIB opt out resulting in double taxation. Beard: Replied that they could, but we have been assured they will not put 3/4%on top of the County's %%. Commented that as long as the CTIB exists, the County could be enrolled into their program. Morton: Asked when the Legislature is slated to make a decision and questioned whether the County should defer action to see what they will do. Beard: Replied that if the County does not act and the Legislature does, the money will be gone. McGuire: Asked if the 1/2% is enacted if it will apply the the Shakopee Mdewakanton Sioux Community (SMSC) businesses. Beard: Replied that legally it does not; however there are talks underway that if the County levies, they will participate. Hedberg: Understands that the SMSC collects various taxes and hopes they would add this to one of their agreements. Beard: They may amend current agreements. Morton: Asked if the estimated revenue is using the SMSC contingency. Shelton: Affirmed. Stated the SMSC has many agreements with the County, but currently not for sales tax. They have been participatory in all transportation projects and brought money to the table that was not anticipated. Keeney: Asked about the timeline for completing the identified 13 projects. Shelton: Replied that projects will move forward when all participants are ready and commented that most likely the Hwy 169/CR 41 project would be first. Stated that TH 13/CR 42 is in the County's Transportation Improvement Program (TIP) and TH 13/CR 21 would likely be completed within the seven year time frame. Freese: Concurred that all of the projects mention by Shelton are in the County's TIP. Stated that Federal funding applications have been submitted and if they are funded, the projects would need to be completed by 2019. Marshall: Reiterated that the County Commissioners will debate the topic at the May 12, 2015 meeting. Hedberg: Referred to a draft letter by the Council supporting the sales tax implementation. Keeney: Queried whether the TH 13/CR 21 project has been moved out of the City's five-year Capital Improvement Program (CIP). Poppler: Replied that the TH 13/CR 42 project is in the CIP for 2017. He anticipates discussion with this cycle's CIP planning to see if TH 13/CR 21 will be slated for 2019. Keeney: Stated that if he supported sending the letter, he would support a City CIP amendment to move that project up to fit in the seven year cycle. McGuire: Stated money is needed for Prior Lake projects too and believes it is likely the Legislature will take action if the County does not. Supports sending the letter. MOTION BY MCGUIRE. SECOND BY KEENEY TO SEND THE LETTER OF SUPPORT TO SCOTT COUNTY. Morton: Asked the County Commissioners to be mindful of promises made by the Legislature to go forward and protect the best interests of Scott County. Hedberg: Noted that CTIB does not consider Hwy 169 a transitway and the County would not be eligible to get any of the CTIB money. Keeney: Clarified that a 3/4%tax and 1/2%tax would not compound. Beard has assurances that it would not happen; and the County can rescind the 1/2%tax if things change. DRAFT 05 11 15 City Council Meeting Minutes 3 VOTE Hedberg Keeney McGuire Morton Thompson Aye ® _� ® ® ►� Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ The motion carried. PUBLIC HEARINGS 7A CONSIDER APPROVAL OF A RESOLUTION MODIFYING MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND MODIFYING THE DEVELOPMENT PROGRAM THEREFORE,AND ESTABLISHING TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-5 THEREIN,AND APPROVING A TAX INCREMENT FINANCING PLAN THEREFORE FOR GATEWAY REDEVELOPMENT. Community and Economic Development Director Rogness reviewed the May 11, 2015 agenda report associated with this topic. Rusty Fifield from Northland Securities reviewed the objectives of the proposed TIF district and discussed the financing structure. Rogness referred to amendments needed to the previously approved PUD agreement in regards to park dedication fee and tower fees as well as relocation caveats, and suggested the motion proposed in the agenda report be amended to be contingent upon approval of a future development agreement. Fifield provided an analysis of public finance assistance meeting the but-for test and concluded that the assistance proposed will be necessary to make the project feasible. Rogness noted that written comments from the County should be entered into the record of the public hearing. McGuire: Clarified the amount needed to move from a 15-to 20-year TIF. Hedberg: Replied that the$500,000 amount would bring the TIF to 15 years and the $200,000 amount would bring it to 17 years. Morton: Asked what the relocation state statute is referring to. Johnson: Replied that the relocation statute applies if the city is asking to acquire the property. This request is only for financial assistance so the relocation section should be removed. Morton: Asked about any adverse consequences if using the$500,000 funds and why those funds are not being used in the area they are currently assigned. Rogness: Replied that the funds are in dedicated account where they have accrued and have to be specifically related to a project. The City must demonstrate that administrative time has gone to that project. At the end of the life of the TIF district, funds would go back to the County for distribution. If it is important to get length of this TIF district down, the funds are available to do that. Hedberg: Ask if the projected table of revenues has already taken the park dedication fee reduction into consideration. Rogness: Affirmed. Keeney: Asked why the actual rate that conduit bonds would come through at is not being used in projections. Rogness: Replied that the rate is established by the City and currently 3-5%on TIF notes is being experienced. The actual interest rate would be established in the development agreement. Keeney: Clarified amount paid by the City and who will be receiving it. MOTION BY MCGUIRE, SECOND BY THOMPSON TO OPEN THE PUBLIC HEARING. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® ® ® ►� Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ 0 Absent 0 ❑ ❑ ❑ 0 DRAFT 05 11 15 City Council Meeting Minutes 4 The motion carried and the public hearing opened at 8:33 p.m. No person stepped forward to speak. Keeney: Asked if the Council is being asked to approve a TIF plan that goes to 20 years. Rogness: Yes, since the project is a redevelopment rather than development bare land. Longer terms needed for redevelopment. Keeney: Noted that the original project stated the City was not going to waive fees and not go beyond 15 years. Asked if the project will not go forward if$500,000 from TIF District 6-1 is not used. Rogness: Replied that Dominium projected $2.2 million for original TIF and it is now$1.8 million. Believes it will not move forward if not approved at this amount. Noted that the City's assistance is 5.6%of the total project. Hedberg: Asked what is considered an acceptable rate of return on this project. Rusty: Replied it is calculated at 5.3%with assistance and 3.2%without assistance. Agreed the charge from the Council was clear and stated that staff and consultants have worked to develop the best package for the project to move forward. The TIF plan is empowering, not compelling. It is the development agreement that will set forth the actual use of the TIF. McGuire: Recalled 15 years being the preference for the TIF, but believes the last work session discussed 18 years and everyone seemed comfortable with that. Asked what will happen if the project is put off for a public hearing on pooling resources. Rogness: Believes that would be problematic for Dominium because of their purchase agreement. Pooling is not necessary for Dominium as it would change the length of therm, not the amount. Hedberg: Believes that is a separate decision. Rusty: Noted that the net effect is to shortern the term of TIF district. Thompson: Clarified that the amount of fees the City would not receive is expected to be $187,500. Keeney: Calculated that the cost to the taxpayers for this project would be$284 per household. Hedberg: Noted that amount would be spread over 20 years. Stated the City has a growing demand for affordable housing and there are public reasons why it should be provided. There are few tools available to close the gap between market and affordable market housing. McGuire: Commented that there is no other project on the sidelines for this site. Keeney: Reiterated his concern about the existing households subsidizing the City's services to the proposed new construction and stated he wanted that to be transparent. Stated that the 15-year term is a firm limit for him and only supports this with the condition that if pooling passes, the TIF term must be confirmed at 15 years. McGuire: Stated he concurs with a 15-year term, but feels reluctant to commit$300,000 in future pooling money. Believes that$200,000 will bring the term to 17— 18 years. Stated that revenue will be better when the TIF is paid off; and it will be better than what is currently being earned from that site. MOTION BY MCGUIRE, SECOND BY HEDBERG TO CLOSE THE PUBLIC HEARING AND APPROVE RESOLUTION 15-XXX MODIFYING MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND MODIFYING THE DEVELOPMENT PROGRAM THEREFORE, AND ESTABLISHING TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-5 THEREIN, AND APPROVING A TAX INCREMENT FINANCING PLAN. Morton added the above friendly amendment to condition the TIF to extend to no more than 18 years. McGuire and Hedberg accepted the friendly amendment. DRAFT 05 11 15 City Council Meeting Minutes 5 City Attorney Johnson suggested that approval of the motion be conditioned upon removing the 2.1 relocation segment in the development agreement and that both the PUD and the TIF agreements come back to the City Council and are accepted. MOTION BY MCGUIRE, SECONDED BY KEENEY THAT THE MOTION BE AMENDED TO INCLUDED THAT APPROVAL IS CONTINGENT UPON THE DEVELOPMENT AGREEMENT AND PUD AGREEMENT THEREFORE FOR GATEWAY REDEVELOPMENT. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® N Nay ❑ ❑ 0 0 0 Abstain ❑ ❑ ❑ 0 0 Absent 0 ❑ ❑ ❑ ❑ The motion carried and the amendment passed. MOTION BY MCGUIRE, SECOND BY HEDBERG TO APPROVE RESOLUTION 15-080 MODIFYING MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND MODIFYING THE DEVELOPMENT PROGRAM THEREFORE, AND ESTABLISHING TAX INCREMENT FINANCING (HOUSING) DISTRICT NO. 1-5 THEREIN, AND APPROVING A TAX INCREMENT FINANCING PLAN NOT TO EXCEED 18 YEARS AND CONTINGENT UPON THE DEVELOPMENT AGREEMEMT AND PUD AGREEMENT THEREFORE FOR GATEWAY REDEVELOPMENT. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® ® Nay 0 0 ❑ 0 ❑ Abstain ❑ ❑ ❑ ❑ 0 Absent ❑ 0 0 ❑ ❑ The motion carried. 7B CONSIDER APPROVAL OF A RESOLUTION RECITING A PROPOSAL FOR A MULTIFAMILY HOUSING DEVELOPMENT PROJECT,APPROVING A HOUSING PROGRAM AND INDICATING PRELIMINARY INTENT TO ASSIST IN THE FINANCING OF THE PROJECT PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C (PRIOR LAKE SENIOR APARTMENTS PROJECT). Rusty Fifield reviewed the agenda report from May 11, 2015 related to this project. Stated the proposal is for the City to act as a conduit bond issuer for a tax exempt bond of$21 million. No City funds would be used and it will not impact the capacity of the City to seeking bonds. MOTION BY KEENEY, SECOND BY THOMPSON TO OPEN THE PUBLIC HEARING. VOTE Hedberg Keeney McGuire Morton Thompson Aye @ ® ® ► Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ The motion carried and the public hearing opened at 9:05 p.m. DRAFT 05 11 15 City Council Meeting Minutes 6 No person stepped forward to speak. Keeney: Questioned language in third therefore of the proposed resolution. Johnson: Responded regarding the statutory language. Hedberg: Reiterated that this does not affect the taxpayers of the City nor the City's bonding capacity. If the bond is defaulted, the risk is potential bond rating for the City. Asked Dominium if they have ever been involved in a bond default. Frank Hogan, Senior Vice President, Dougherty&Company LLC, financial underwriter stated that Dominium has not defaulted on any loan in the 40 years they have been in business. Morton: Commented that the total project amount is$34 million and the bond amount is$21 million. Hogan stated the requirements to qualify for financing. Rusty: Stated there is no chance of the City's bond rating being affected and this project would be an asset in the next bond rating. MOTION BY KEENEY, SECOND BY THOMPSON TO CLOSE THE PUBLIC HEARING,APPROVE RESOLUTION 15-081 RECITING A PROPOSAL FOR A MULTIFAMILY HOUSING DEVELOPMENT PROJECT, APPROVING A HOUSING PROGRAM AND INDICATING PRELIMINARY INTENT TO ASSIST IN THE FINANCING OF THE PROJECT PURSUANT TO MINNESOTA STATUTES, CHAPTER 462C (PRIOR LAKE SENIOR APARTMENTS PROJECT) CONTINGENT UPON THE DEVELOPMENT AGREEMEMT AND PUD AGREEMENT THEREFORE FOR GATEWAY REDEVELOPMENT. City Attorney Johnson recommended the motion be subject to the approval of the two development agreements being found agreeable. Keeney and Thompson agreed to the friendly amendment and it has been included above. VOTE Hedberg Keeney McGuire Morton Thompson Aye ►_ Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ ❑ All ayes. The motion carried. OLD BUSINESS No old business was scheduled. NEW BUSINESS 9B CONSIDER APPROVAL OF A RESOLUTION ESTABLISHING A TARGETED COMMERCIAL ASSISTANCE PROGRAM ASSOCIATED WITH THE GATEWAY REDEVELOPMENT PROJECT. Community and Economic Development Director Rogness reviewed the May 11, 2015 agenda report on this topic. MOTION BY MORTON, SECOND BY KEENEY TO APPROVE RESOLUTION 15-082 ESTABLISHING A TARGETED COMMERCIAL ASSISTANCE PROGRAM ASSOCIATED WITH THE GATEWAY REDEVELOPMENT PROJECT. DRAFT 05 11 15 City Council Meeting Minutes 7 Hedberg: Commented that the EDA recommends approval of this resolution. Morton: Noted that this will only apply to the three busineses currently in this location. Will not exceed the amount proposed. Rogness: Affirmed, adding there is a sunset clause of August 1, 2015. Hedberg: Suggested that businesses can apply for the funding by August 1 and if the project stalls out the applications could be rejected. Johnson: Noted this proposal is not to follow relocation requirements provided for by statute; but is above and beyond the law. Keeney: Asked if this will enable the businesses to relocate and save their business. Rogness: One business has indicated it would relocate to a Prior Lake site. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® ® ® ►_� Nay ❑ ❑ ❑ ❑ ❑ Abstain ❑ ❑ ❑ ❑ ❑ Absent ❑ ❑ ❑ ❑ 0 The motion carried. 9C CONSIDER APPROVAL OF A RESOLUTION CONSENTING TO THE PROCESS FOR THE CREATION OF A HOUSING TAX INCREMENT FINANCING DISTRICT IN SUPPORT OF THE PROPOSED RON CLARK MULTIFAMILY HOUSING PROJECT. Community and Economic Development Director Rogness reviewed the May 11, 2015 agenda report associated with this topic. Described the property site and summarized the elements of the proposed building. Noted the TIF request is for$600,000 with a 15-year term. If the TIF is kept open for 26 years, additional amounts could be used for the east-west roadway but tonight's proposed action does not commit the City to that. MOTION BY MCGUIRE, SECOND BY MORTON TO APPROVE RESOLUTION 15-083 CONSENTING TO THE PROCESS FOR THE CREATION OF A HOUSING TAX INCREMENT FINANCING DISTRICT IN SUPPORT OF THE PROPOSED RON CLARK MULTIFAMILY HOUSING PROJECT FOR$600,000 AND A MAXIMUM 15-YEAR TERM. VOTE Hedberg Keeney McGuire Morton Thompson Aye o ® a Nay o ❑ ❑ ❑ ❑ Abstain 0 0 0 0 0 Absent 0 ❑ 0 ❑ ❑ The motion carried. 9E CONSIDER APPROVAL OF A RESOLUTION MAKING AN APPOINTMENT TO FILL THE VACANCY ON THE PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY. City Manager Boyles reviewed the declaration of vacancy, recruitment and interview processes. Hedberg: Sought input from the City Council before making his recommendation for appointment. McGuire: Stated he could support either candidate, but believes that Sheehan-Kerber's background gives her an edge. DRAFT 05 11 15 City Council Meeting Minutes 8 Morton: Supports Sheehan-Kerber. Thompson: Stated that both candidates were well qualified and supports Voreis complimenting her fresh ideas. Keeney: Thanked the candidates for their interest and stated he favors Sheehan-Kerber. MOTION BY HEDBERG, SECOND BY MORTON TO APPROVE RESOLUTION 15-084 APPOINTING ANNIE SHEEHAN-KERBER TO SERVE ON THE CITY OF PRIOR LAKE ECONOMIC DEVELOPMENT AUTHORITY. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® o Ell [E Nay ❑ ❑ ❑ ❑ ❑ Abstain o 0 0 0 ❑ Absent 0 0 0 0 0 Keeney: Queried whether this appointment would disqualify Kerber from serving on the EDAC. Hedberg: Affirmed, suggesting that Marie Voreis be recruited for appointment to the EDAC. The motion carried. 9F CONSIDER APPROVAL OF A RESOLUTION SUPPORTING THE MAYORS REGIONAL INDICATORS INITIATIVE PROGRAM. Mayor Hedberg provided background information about the Mayor's group and City Manager Boyles described the regional indicators initiative program. MOTION BY HEDBERG, SECOND BY MCGUIRE TO APPROVE RESOLUTION 15-085 SUPPORTING THE REGIONAL COUNCIL OF MAYORS REGIONAL INDICATORS INITIATIVE PROGRAM. VOTE Hedberg Keeney McGuire Morton Thompson Aye ® ® _a 0 a Nay ❑ ❑ 0 ® 0 Abstain ❑ ❑ ❑ ❑ o Absent ❑ ❑ ❑ ❑ ❑ Morton: Stated she does not support as the organization is in opposition to some of her personal views. The motion carried. OTHER BUSINESS I COUNCILMEMBER REPORTS None. EXECUTIVE SESSION This agenda item will be moved to a future meeting. ADJOURNMENT With no further business brought before the Council, a motion to adjourn was made by Morton seconded by Thompson. The motion carried and the meeting adjourned at 9:50 p.m. Frank Boyles, City Manager DRAFT 05 11 15 City Council Meeting Minutes 9