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020190 CC SP Min . . " . CITY OF SHOREWOOD SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY I, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD 7:30 PM MINUTES CONVENE Mayor Haugen opened the workshop meeting at 7:30 PM. ROLL CALL Present: Mayor Haugen, Councilmembers Stover, Brancel, Gagne and Watten Staff Present: Administrator Whittaker, Attorney Froberg, Engineer Norton, Planner Nielsen, Finance Director Rolek, Public Works Director Zdrazil, and Assistant Clerk Niccum Also Present: Dan Nelson of Holmes and Graven Law Firm and Bob Thistle of Springsted APPROVAL OF AGENDA Watten moved, Stover seconded, to approve the agenda with the addition of discussion of Tad Jude's letter and an executive session to follow the special workshop meeting. Motion carried - 5/0. SURVEY FOR S. E. AREA WATER TREATMENT The Council reviewed the draft questionnaire and made several changes. Gagne moved, Brancel seconded, to send "water quality questionnaires" to all property owners currently hooked into the S.E. Area System, and all property owners in the Commercial and double bungalow area who will be attached to the S.E. Area System - not to include Shady Hills area at this time. Motion carried - 5/0. SITE FOR PUBLIC WORKS GARAGE AND COMPOSTING Administrator Whittaker reminded the Council that this had been on the last agenda, identifying a Public Works site, with the potential for a temporary compost transfer site. He said the issue has now become more critical. Information from Tad Jude showed that the County is thinking about having a meeting February 6 where they would approve giving the tipping fees on compost to the cities so they could run their own compost sites. Planner Nielsen described two sites that the City is considering for Public Works sites: 1. The John Cross property at 24250 Smithtown Road (33-117-23-11-0004). Next to this property is the Bishop property at 24140 Smithtown Road (33-117-23-11-0003). These two pieces of property are approx- imately 7 acres in size apiece. Cross has mentioned splitting off approximately 1 acre with the existing house on it. -1- SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page two . SITE FOR PUBLIC WORKS GARAGE AND COMPOSTING - continued 2. The Wagner property at 25720 State Highway 7 (32-117-23-44-0004) which abutts Freeman Park. Nielsen said they had put together a list of site characteristics appropriate for a Public Works site. I. decent buildable soil 2. 5-6 acres for Public Works alone-if compostin& need additional land 3. access - a 9 Ton road available all year (Hwy 7 or Cty Rd 19) 4. minimal surrounding residential area 5. relatively flat 6. fairly central location (central 1/3rd of City) 7. enough turnaround area for a tractor/trailer 8. sufficient parking 9. salt/sand storage room Nielsen said a third possibility would be the property the Baywood Shops were considering, but this has considerable wetlands and residential to the north. Public Works Director Zdrazil said he felt the Cross/Bishop property would best meet the City's needs. It is a more central location, especially if Tonka Bay, Shorewood, and Excelsior would combine any services. . Haugen asked if getting out on Cty Rd 19 would create more of a problem than they currently have? Zdrazil said no, he didn't think so. He mentioned the fact that the traffic coming from Mound does not have to stop. Gagne felt it was important to stay away from residential, and make sure the site is large enough. He felt if both pieces were acquired, they could be sufficiently buffered. Gagne moved, Stover seconded, to give staff the authority to discuss the sale of the Cross and Bishop properties with the owners, including finding out if they intend to retain the homes or sell them. Motion carried - 5/0. Planner Nielsen said it might be worth considering rezoning the area residential/commercial. Whittaker discussed composting. He said if the City had to do this, it would be similar to the burning site the City had in the past, it Would require 2 full-time people and equipment, and may be costly to the City. Council discussed compost sites vs. transfer stations. . The Council feels it is the County's responsibility to find a site(s). Mayor Haugen and Councilmember Watten will make the City's opinion known to the County Board. -2- SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page three . REWARD FOR RECYCLING The Council discussed various methods of rewarding residents for recycling. They made the following decisions: 1. Draw a name from all residents 2. Draw every recycling day 3. Start with $25. 4. Have Public Works check to see if this person recycled 5. If they did, pay them $25 by check 6. If they did not recycle, use progressive method, next week draw for $50, etc. WORKSHOP FOR FINANCING ALTERNATIVES - WATERFORD 3RD ADDITION . Planner Nielsen explained the improvements. He said they tried to separate the internal and the external improvements. Only the external inprovements are being considered tonight, the intersection itself, a watermain that would be extended from the water tower across the highway for future extension to the north, a watermain that would extend over to Shady Hills and loop the water through Shady Hills and back into the present vlater system, and the upgrading of the service r-oads-ro - tb-e edge.of the Waterford III project. He also mentioned the upgrading of the service road frOG the edge of \~aterford Phase III west to Vine Hill - intersection, and west from the intersection to Vine Hill Road. Haugen asked if the area from the end of Covington Road to Vine Hill Road is included? Nielsen said not at this time. Presumably this would fall into a 5 year Capital Improvemen~ Plan. Where it falls within the plan is up to the Council. He said it would be eligible for MSA Funds. Engineer Norton presented the following costs: Old Market Road Intersection to Shady Hills - frontage road Figures by Schoell Madsen......... .... ....... ..$ 480,000 Service Road - 400' - East end.. ......... ...... 75,600 Service Road - 550' - West end................. 104,000 Total frontage road project cost.. .........................$ 659,000 Intersection construction cost... ... ...... .....$ Water pipe to Shady Hills, Lights, semiphores.. (signalization approximately $ 108,000) Tota I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 393,500 137,500 531,000 Total Cost $ 1,190,000 . Engineer Nor~on recalled a conversation held with Craig Robinson MnDOT who tvorkc;d wIth Hark .Benson on the intersection. .MIl-Dot has-. ' , a specIal cooperatIve agreement program where, If a project IS scheduled for years down the line, and the City wants to finish it sooner, they will pay up to $250,000, when th~City pays 1/2 the costs. Engineer Norton recently had another conversation with SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page four . WORKSHOP FOR FINANCING ALTERNATIVES - WATERFORD 3RD ADDITION - continued Chuck Weichselbaum, the person in charge of this program. He sends out letters in May to communities to see if the City wants to participate in a "cooperative agreement program". If interested, they have until July or August to respond. If a community responds positively, those projects more or less fall into a priority listing, and they are done after the State does their main projects. The money from the state would be available as soon as the project is approved and a cooperative agreement contract is signed. He said the State budgets for these projects. FY91 runs from July 1990 to June 1991. Haugen asked if it was $250,000 for the whole project? Norton said yes. Haugen asked if they did one section one year and another section another year, would it be double? Norton said maybe that would, then be two projects. The Council asked who would be responsible for closing the ramps? Norton said the State will do this. Norton also said the State will cover the entire cost of the Vine Hill Intersection. . Planner Nielsen asked Engineer Norton if any funding is available for the Old Market Road Intersection? Norton said Craig Robinson had said "no", but did not give a direct answer. Administrator Whittaker was directed to ask MnDOT for an official answer. Finance Director Rolek and Bob Thistle of Springsted reviewed the following options outlined in the January 29, 1990 memo from Finance Director Rolek and Administrator Whittaker with the City Council: 1. General Obligation, Property Tax supported bonds (General Fund) Selling Bonds after a referendum and spreading the cost over the entire City. 2. General Obligation, Special Assessment supported bonds Special Assessments levied on properties which would receive direct benefit, through increased property values, from the improvements. 3. State Aid Funds - MSA funds could probably not be used as the finished streets would not be a part of the City's MSA system. 4. MnDOT Participation - 5. Tax Increment Financing - . The Council discussed the options and decided that Tax Increment Financing should be explored further. -4- ~- SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page five . WORKSHOP FOR FINANCING ALTERNTIVES - WATERFORD 3RD ADDITION - continued Council Discussion Council asked what the risks to the City are with Traditional Tax Increment Financing? Bob Thistle of Springsted said it is very similar to special assessment. If the taxes aren't paid, the City has the shortfall. However, if they are not paid for 3 years, the property falls back to the mortgage holder. The taxes will then be paid because the mortgage holder would not want to lose the property. Thistle said the City could negotiate conditions into the development agreement to assure funding. Gagne expressed concern over what the State Legislature is going to do about Tax Increment Financing, and asked what would happen if they cut it? Thistle said if the City gets three or four months into tax increment financing and the State acts, the City will have to face that reality. Generally, changes in thax increment financing in Minnesota have not been retroactive. . Thistle said you can go back later and make changes. He said right now the undeveloped area would generate $2,200,000 in increment. This leaves $500,000 the developer adds to the pot. The City can either redistribute this money to the other taxing authorities or go in and make additional improvements. Stover said if you plan ahead well enough, you can include future improvements like iron removal in the project area. Thistle said that a TIF District is 10 years in duration and would receive 8 increments out of the district. . Council asked what happens if the project goes under in 18 months? Thistle said that you build securities into the development agreement. The ideal way would be a letter of credit for the bond amount. Gagne asked who is hired to set up the TIF District? Attorney Froberg said Kurt Pearson, a bonding Attorney will review and approve bonding for the project. The League of Cities will work with the City in drafting the conditions. Administrator Whittaker said Springsted would do the tax increment plan, and assess all the conditions. Dan Nelson of Holmes and Graven Law Firm, representing the developer, said this project has some advantages. The developer is willing to have the commercial 70% built by the end of 1990, and the Commercial will be finished by the end of 1991. There will be a bank loan in place to do the improvements by the time the contract is signed. He said when the Commercial is built, the debt will be off the single family lots and they SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page six . WORKSHOP FOR FINANCING ALTERNATIVES - WATERFORD 3RD ADDITION - continued Council Discussion - continued can do some mortgaging there. He said a tax increment guarantee isn't troublesome to someone who pays their taxes, and they know they have to pay them. Nelson said the City and the developer have been working together to try to come up with a conservative approach. The Council asked if "Traditional" and "Pay-as-you-go" can be combined? Thistle said it can be researched but he's not sure they I d want to do that. Planner Nielsen said the City can do a tax increment study but this does not commit them to anything. Administrator Whittaker said a public hearing must be held on the TIF Plan. Finance Director Rolek, discussing the pay-as-you-go plan, said if the developer pays, the financing cost is higher, and there is less increment to work with. . Planner Nielsen said you may not be able to do as many improvements with pay-as-you-go, such as the service road. Nielsen also said a tax increment plan will cost. He said the devleoper should escrow $10,000-15,000 with the City to finance the TIF Plan preparation. Finance Director Rolek said if the project goes ahead and TIF is used, the cost incurred in doing the TIF Plan would be rolled into the project and the escrow would be returned to the developer. COUNCIL BREAK - 9:15 - 9:20 Thistle said it is important to define the district area, and to define what the City wants to do. Watten moved, Stover seconded, to direct the staff to investigate a tax increment financing plan, define a district, and to report back with: 1. A tax increment plan 2. A developed district plan 3. An outline of public improvements that could take place. Motion carried - 5/0. . Dan Nelson expressed condern over developing the housing, getting the development moving, and shifts in State law. Haugen said she felt it was important for the Council to take as long as necessary to study the issue and make a decision, especially as tax increment financing is new to them. SPECIAL WORKSHOP MEETING THURSDAY, FEBRUARY 1, 1990 Page seven . WORKSHOP FOR FINANCING ALTERNATIVES - WATERFORD 3RD ADDITION - continued Thistle led the Council through the process, the sequence of events for creation of a project area and establishment of tax increment financing district (see page 4-1 in his handout). Administrator Whittaker said every step will be under review by the Council. Thistle explained that the project area can be larger than the TIF District and that there can be more than one TIF District in the project area. The information requested will be reviewed at the March 5, 1990, Study Session. Stover moved, Brancel seconded, that the developer be required to escrow $15,000 with the City to provide for the cost to prepare the plans required for a TIF District. If the project uses TIF, the cost of TIF plan preparation will be rolled into the district. Motion carried - 5/0. TAX FORFEITED PROPERTY RESOLUTION NO. 14-90 . Gagne moved, Stover seconded, to adopt Resolution No. 14-90, "A Resolution approving the Sale of Certain Parcels of Tax-Forfeited Land". MOtion carried - 5/0. PAYMENT OF CLAIMS SUBJECT TO APPROVAL OF CLAIMS AND EXECUTIVE SESSION Stover moved, Brancel seconded, to adjourn the special workshop meeting at 10:02 PM, with the direction that the list of claims will be at City Hall, and each Councilmember will review and approve them individually at City Hall. Council entered into an Executive Session. Motion carried - 5/0. EXECUTIVE SESSION Council entered the Executive Session at 10:07 PM. REGULAR SESSION RECONVENED the Regular session reconvened at 10:34 PM. ADJOURNMENT Stover moved, Brancel seconded, to adjourn the Special Workshop meeting at 10:35PM. Motion carried - 5/0. RESPECTFULLY SUBMITTED, Susan Niccum . Assistant City Clerk Laurence E. Whittaker Administrator/Citv Clerk