City Council Meeting Minutes - May 28, 2013

Date: 
May 28, 2013

OFFICIAL PROCEEDINGS

MINUTES OF THE CITY COUNCIL MEETING

MAY 28, 2013

Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Saint Peter was conducted in the Governors' Room of the Community Center on May 28, 2013.

A quorum present, Mayor Strand called the meeting to order at 7:00 p.m.  The following members were present:  Councilmembers Pfeifer, Kvamme, Zieman, Eichmann, Carlin, Brand, and Mayor Strand.  The following officials were present: City Administrator Prafke, City Attorney Brandt, and City Engineer Domras. 

Approval of Agenda – A motion was made by Pfeifer, seconded by Brand, to approve the agenda.  With all in favor, the motion carried. 

Public Hearing:  Housing Tax Increment Financing District No. 1-19 – Mayor Strand opened the public hearing at 7:02 p.m.  City Administrator Prafke reviewed the process for conducting a public hearing.  Shannon Sweeney of David Drown Associates provided background information on the proposed Tax Increment Financing District including the purpose of the district which was to assist the Park Row Crossing development by capturing the new tax increments generated to assist with cash flow of the project and to allow the rents to be more affordable.  Sweeney pointed out that the developer would be unable to construct the project without Tax Increment Financing.  Sweeny stated the district can be as long as 26 years and it would be 2015 before the first taxes are collected from the district.  Sweeney also noted the budget identified in the Tax Increment Financing District plan was established to give flexibility to the district and identified the maximum expenditures and collections proposed. Councilmember Kvamme questioned why the district was being established differently than has been done in the past.  Sweeney pointed out that establishing the district as identified in the plan puts the risk for development costs on the developer and not the City.  City Administrator Prafke indicated this plan had previously been discussed as being a “pay as you go” plan which meant that if taxes were not paid on the property, no taxes would be provided to the City and in turn, no increments would be turned over to the developer who would still be required to pay the development costs.  There being no further speakers, the hearing was declared closed at 7:15 p.m.

Approval of Minutes – A motion was made by Pfeifer, seconded by Eichmann, to approve the minutes of the May 13, 2013 regular City Council meeting.  With all in favor, the motion carried and the minutes were approved.  A complete copy of the minutes of the May 13, 2013 regular City Council meeting is contained in the City Administrator’s book entitled Council Proceedings 18. 

A motion was made by Carlin, seconded by Brand, to approve the minutes of the May 20, 2013 special City Council meeting.  With all in favor, the motion carried and the minutes were approved.  A complete copy of the minutes of the May 20, 2013 special City Council meeting is contained in the City Administrator’s book entitled Council Proceedings 18. 

Consent Agenda – In motion by Kvamme, seconded by Zieman, Resolution No. 2013-77 entitled “Resolution Approving Consent Agenda“ was introduced.  City Administrator Prafke reported that the damage at the main lift station, the cost of which was included on the consent agenda, was caused by residents flushing baby wipes.  Prafke explained that although manufacturers indicate the product is flushable, when placed in the sewer system, the wipes tend to form large balls of material which causes major and expensive repair problems at the City’s lift stations.  Prafke asked residents to place baby wipes in the refuse rather than flushing them into the sewer system.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-77 is contained in the City Administrator’s book entitled Council Resolutions 19.

Housing Tax Increment Financing District No. 1-19 – City Administrator Prafke recommended approval of a resolution establishing Tax Increment Financing District No. 1-19.  Councilmember Brand questioned what would happen regarding the district when taxes are increased.  Mr. Sweeney responded that when taxes are raised, more increments will be generated and if taxes were lowered, fewer increments would be generated.  In motion by Eichmann, seconded by Carlin, Resolution No. 2013-78 entitled “Resolution Approving The Establishment Of Tax Increment Financing District No. 1-19, And Adoption Of The Tax Increment Financing Plan Relating Thereto“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-78 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Traverse des Sioux Library System Agreement –  City Administrator Prafke recommended approval be provided for execution of a renewal contract with the Traverse des Sioux (TdS) Library System to provide services to the Saint Peter Library that City staff is unable to provide.  Prafke noted the charges for the services are based on the actual number of services utilized and $25,000 had been budgeted for the contract.  Prafke stated, “TdS is the library for libraries”.  In motion by Kvamme, seconded by Brand, Resolution No. 2013-79 entitled “Resolution Approving Execution Of Library Services Contract With Traverse des Sioux Library System“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-79 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Washington Avenue Link Project Land Acquisition And Sale –   City Administrator Prafke recommended approval be provided for the City to purchase the property at 1724 North Fifth Street for $168,000 which would be used as the new connecting roadway between North Fifth and North Washington Avenue.  Prafke noted the property owners, John and Jill Gatzke, would be able to lease the property back from the City until October 13, 2013 while their new home was being constructed and they would have to make all repairs necessary during that time as well as keep full insurance coverage on the property.  Prafke pointed out that the second proposed resolution was to allow the Gatzke’s to purchase from the City for a price of $26,200, the property at 1728 North Fifth Street, which would be demolished in the near future.  Councilmembers questioned what items the Gatzke’s would be allowed to remove from their home.  City Attorney Brandt indicated the agreement specified they could remove basement cabinets, an exterior shed, deck, outdoor plants, and steel fencing.  Councilmember Kvamme questioned whether the City would be required to comply with rental regulations during the term the Gatzke’s were renting back the property.  Prafke indicated in the affirmative.  Prafke also noted that the Council had not yet determined whether the Gatzke home would be demolished, moved, or if groups like Habitat for Humanity would be allowed to come in and remove items from the house for resale.  In motion by Eichmann, seconded by Carlin, Resolution No. 2013-80 entitled “Resolution Approving Real Estate Purchase For Property Located At 1724 North Fifth Street“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-80 is contained in the City Administrator’s book entitled Council Resolutions 19. 

In motion by Brand, seconded by ZIeman, Resolution No. 2013-81 entitled “Resolution Approving Sale Of Property Located At 1728 North Fifth Street“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-81 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Unbudgeted Purchase:  Display Projector – City Administrator Prafke requested approval for the unbudgeted purchase of a new display projector in the amount of $586.74 from Staples.  Prafke noted that the City had previously purchased two display projectors, one at a cost of over $10,000 and one at approximately $5,000 and the new projector was substantially smaller which would allow staff to easily transport the equipment for public meetings, training, and other events where staff provides visual presentations.  Prafke noted the cost of the unbudgeted purchase could be funded by general fund reserves.  In motion by Pfeifer, seconded by Carlin, Resolution No. 2013-82 entitled “Resolution Approving Unbudgeted Purchase Of Display Projector“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-82 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Unbudgeted Purchase:  Replacement Library Computers – City Administrator Prafke requested approval for the unbudgeted purchase of twelve replacement computers for the Library at a cost of $7,200 to be funded by a donation from the Ted Moline estate.  Prafke indicated that some of the existing Library computers would be refurbished and utilized by the Recreation and Leisure Services Department.   In motion by Zieman, seconded by Brand, Resolution No. 2013-83 entitled “Resolution Authorizing Unbudgeted Purchase Of Twelve Computers For The Library“, was introduced.  Upon roll call, with all in favor, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-83 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Revolving Loan Modification Request:  MSLH Real Estate Management –  Community Development Director Wille presented the Economic Development Authority’s recommendation for approval of a request by the principals of the MSLH Real Estate Management holding company to extend the balloon payment due on their 2008 revolving loan.  Wille indicated the recommendation was for a 24 month extension to June 1, 2015 at the same payment amount and interest amount.  Wille reported the company had not reached a high enough equity level for Nicollet County Bank to approve a refinance of the loan and Dr. Hulsebus and Dr. Snyder had funded repairs to the building such as reroofing and re-grading of the parking area which made it impossible for them to make the balloon payment.  Wille also pointed out that the remaining balance on the $62,000 loan was $55,245, but stated the applicants had made prompt and full payment each month.

Councilmember Pfeifer stated he was uncomfortable with granting the 24 month extension and suggested a 12 month extension be authorized with the understanding that the request would be reconsidered next year.  Pfeifer also indicated he was uncomfortable with City loans always being subordinated to bank loans and suggested the loan program should be run as a business when he felt was not currently the case.  Pfeifer stated the process was flawed and the EDA should be considering changing loan rates and requiring proof that applicants had received multiple denials from traditional financing sources before extending balloon payment dates, and possibly eliminating balloon terms in future loans. 

Councilmember Zieman questioned what motivation loan recipients have to go to banks to refinance when the Council approves all requests to extend balloon payments.  Zieman also expressed his belief that amortizing the loans over 30 years was too long and created monthly payments which were too low.   Zieman suggested loan amortization terms be reduced to no longer than 15-20 year so that loan recipient’s pay down the balances faster.

In motion by Pfeifer, seconded by Eichmann, Resolution No. 2013-84 entitled “Resolution Extending Real Estate Management Balloon Payment By Twenty-Four Months“, was introduced.  Upon roll call, Councilmembers Pfeifer, Kvamme, Eichmann, Carlin, Brand, and Mayor Strand voting aye, Councilmember Zieman voting nay, the Resolution was declared passed and adopted.  A complete copy of Resolution No. 2013-84 is contained in the City Administrator’s book entitled Council Resolutions 19. 

Reports

Mayor’s Reports - Mayor Strand reported on his recent activities which included attending Region Nine Development Commission meetings, business after hours, and providing the Memorial Day ceremony welcome.

City/School Committee Meeting Discussion – Councilmember Kvamme reported on discussion at the City/School meeting which included plans for an upcoming joint meeting of the City Council and School Board.

Hazardous Waste Collection Report – City Administrator Prafke provided a report on the amounts and types of materials collected at the May 18th hazardous waste collection sponsored by Tri-County Solid Waste and the appliance and electronics collection sponsored by the Nicollet County Environmental Services Department.  Prafke also reminded residents that the City will be providing a curbside collection for appliances and electronics and encouraged those interested to sign up for the collection at the City’s Finance Department.

Upcoming Workshop – City Administrator Prafke reminded Councilmembers that the June 3rd workshop will take place at the Public Works building where Councilmembers will tour the facility before continuing with the workshop in the Public Works conference room.

There being no further business, a motion was made by Pfeifer, seconded by Brand, to adjourn.  With all in favor, the motion carried and the meeting adjourned at 7:55 p.m.