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122790 CC SP Min , . . CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY, DECEMBER 27, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 1 M I NUT E S CALL TO ORDER Mayor Haugen called the meeting to order at 7:00 P.M. ROLL CALL Present: Mayor Haugen. Councilmembers Gagne. Stover. Brancel and Watten. City Attorney Froberg. City Administrator Whittaker. Mayor Haugen said the Environmental Protection Agency has passed rule changes for water treatment equipment. The EPA thinks these changes will have little impact on cities. Haugen thought the bill might impact the City. The rule changes deal with lowering the sulfate levels in municipal systems. Haugen said the City can write to the Criterion Standards Division of the EPA for information. Councilmembers Watten. Gagne and Stover said the Staff should write the EPA to get the facts. REVIEW AGENDA Gagne moved, Watten seconded, to approve the agenda. Motion carried - 5/0. APPROVAL OF MINUTES A. December 10. 1990. Regular City Council Meeting. Gagne moved, Stover seconded, to approve the Minutes of the Dec. 10, 1990, Regular City Council Meeting. Motion carried - 5/0. WATERFORD III BOND PURCHASE AGREEMENT AND CONTRACT FOR TIF DEVELOPMENT RESOLUTION NO. 139-90 RESOLUTION NO. 140-90 RESOLUTION NO. 141-90 City Attorney Froberg advised the Council that the City was served with a lawsuit by a group of residents to restrain the City from proceeding further on the Waterford III Bond Purchase Agreement and TIF Development Contract. A hearing was held on Dec. 27. 1990 for a temporary restraining order. The residents allege that the City acted improperly and illegally in modifying the TIF plan without holding another public hearing. Froberg said the Court determined the City had not had sufficient time to respond to the action and the City would have until January 18. 1991 to respond. with a hearing on an injunction to be held later. Based on the information presented by the City on Dec. 27th, the Court denied the resident's request for a temporary restraining order. 1 4.e. CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY, DECEMBER 27, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 2 . The Court cautioned the City that after a hearing on this injunction. the Court's earlier decision could be sustained or reversed. If the City Council took action tonight (Dec. 27th). the action should be subject to the Court's ultimate decision that the actions taken by the City Council in modifying the TIF plan did not require a public hearing. Froberg recommended that the City accept the Court's recorrrnendation that any action taken tonight be subject to the Court's ultimate decision; and. if the City's actions are deemed illegal. then the contract is null and void. Haugen said the City has already incurred costs on this project. Froberg said the City has incurred these costs as a result of dealings with Sherman~Boosalis. Gagne asked if a payment was received from Trivesco? He heard that the check was stopped. Froberg said the check for $53.000 was given to the City on Dec. 18th. On Dec. 19 a stop payment was placed on the check after no action was taken by the City Council. Froberg also said the developer has a certified check for $99.000.00 to present to the Council tonight. Jerry Steiner - Attorney for Trivesco was concerned about the conditions. Would the $99.000.00 be refunded if the contract were determined by the City to be null and void? Froberg said it would. . Gagne asked Froberg if all action on the development would cease until Jan. 18th? Froberg recommended that no further action be taken until the hearing. Gagne also asked Froberg's opinion on the Council's decisions tonight. Froberg said any action taken tonight should be subject to the caveat stated previously. Stover asked how long the Court decision could take? Froberg said there should be a trial before May 1. 1991. the date set for sale of the bonds. Councilmember-Elect Lewis asked about the liability of the City if the City approved the contract tonight. Froberg said there would be none if the City's approval was subject to the ruling of the Court. A. Consider - Resolution Rescinding Resolution Approving Contract for Tax Increment Finance Development with Sherman-Boosalis. Watten moved, Stover seconded, to adopt RESOLUTION NO. 139-90 "A Resolution Rescinding Resolution Approving Contract for Tax Increment Finance Development by and between the City of Shorewood, Minnesota and Sherman-Boosalis Interests, Inc." . Councilmember Brancel asked if this resolution would release Sherman-Boosalis of the obligation to pay the $53.000.00 he owes the City? Froberg said this would not release Sherman-Boosalis from the obligation. The TIF contract was never signed by Sherman L CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY, DECEMBER 27, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 3 . Whittaker said the application for development for Waterford III signed by Sherman-Boosalis obligates them to pay for the costs incurred to date. Motion carried - 5/0 on a roll call vote. B. Consider - Resolution Approving Contract for Tax Increment Finance Development by and between the City of Shorewood, Minnesota, and Trivesco, A Minnesota General Partnership. Stover moved. Watten seconded, to adopt RESOLUTION NO. 140-90 "A Resolution Approving Contract for Tax Increment Finance Development by and between the City of Shorewood. Minnesota. and Trivesco, A Minnesota General Partnership," . Froberg reviewed the changes to the document. 1. Pg. 1, first paragraph - Steiner was corrected, Robert H. Mason Homes was changed to Robert H. Mason, Inc. Pg. 2, "Development Property" - Exhibit 1 was changed to Exhibit 3. Pg. 5, first paragraph - The last sentence was added to the document and the date October 26, 1990 should be added. Section 3.1. "Construction done by Developer" - this paragraph was added. Parcel A will be unchanged but Parcel B will be developed under a PUD agreement which is not yet signed. Pg. 6 & 7, Sections 3.6, 3.7 and 3.8 - The following sentence was added: "So long as any of the Bonds are outstanding under this Contract and prior to the sale of completed improvements comprising the Development Property," The last sentence on section 3.8 was added: "and the City shall use the amount so paid for repayment of the Bonds," Section 4.1 - contractual duties was deleted and the last line of the paragraph. Pg. 8, Section 5.1 "Issuance of Tax Increment Revenue Bonds" Public Improvements was capitalized. Pg. 10. Section 6.1 "Termination" - this section was added. Pg. 11, Highland Properties should be Highland Properties, Inc. 2. 3. 4. 5. 6. 7. Stover asked what would happen to this agreement if there was no Court decision by May 1, 1991. Froberg said everything could proceed as planned until a decision was reached. Gagne said that Trivesco may not want to wait for a decision. Jerry Steiner said the Court rules allow for expedition of the trial and he is confident it can be resolved. He asked who had brought the lawsuit? Froberg said it was Jay Hare and Bob Snyder with Stuart Finney as their attorney. . ...> CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY, DECEMBER 27, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 4 . Froberg stated that the following paragraph should be added to the Resolution in the packet. # 2 - "That such approval is subject to the Council's action in approving this contract without resort to further public hearings. being upheld by the Court, in the event the matter is contested," # 3 - "That the Mayor and City Administrator/Clerk are hereby authorized to execute said Contract on behalf of the City Council, with inclusion of the additional provision as set forth above and that in the event the court determines the contract is null and void the parties are released from any further obligations thereunder, Froberg said this language was acceptable to Trivesco. Brancel said she would still vote no on the Resolution because she feels the concerns of the residents were not addressed. She also said many risks are involved in the project. Gagne said he will vote yes because he made a commitment to the project many years ago. Motion carried 4/1 (Brancel-nay) on a roll call vote, C. Consider - Resolution Approving Bond Purchase Agreement City of Shorewood Tax Increment Revenue Bonds - $920,000.00. . Stover moved, Gagne seconded. to adopt RESOLUTION NO. 141-90 "A Resolution Approving Bond Purchase Agreement City of Shorewood Tax Increment Revenue Bonds - $920,000.00." Froberg said there are minor changes to the agreement. 1. Pg. 2, first paragraph - the following sentence was added after "herewith," provided that such Public Improvements shall not include extension of the water main to the Shady Hills subdivision or construction of a frontage road or other improvements east of the easterly line of TIF district 1, The section - "Use of Bond Proceeds, Adjustment of Bond Amount" $126,350.00 was filled in the blank for Engineering and $84,150.00 for Contingency Fees." 2. Pg. 5, Robert H. Mason Homes should be Robert H. Mason, Inc. 3. Pg. 6, "Reimbursement of City Costs." The last paragraph was added: "The City shall attempt to recover from Sherman- Boosalis Interests. Inc,. all amounts that may be recoverable by the City for administrative costs and engineering fees and all amounts so recovered shall be paid by the City to Trivesco after deduction of the City's attorneys' fees and other expenses incurred in obtaining recovery," . Froberg said this last paragraph does not guarantee that the City will recover the costs from Sherman-Boosalis. If litigation was necessary, the City would probably assign the claim to Trivesco and let them sue it out. Brancel and Haugen asked why it can't be worded In the contract that Trivesco will attempt to recover. .i.j. CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY, DECEMBER 27, 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 5 . Froberg said the City was the primary claimant against Sherman- Boosalis. The following changes were made to the Resolution: 1. =11= 2 - "That such approval is subject to the Council 's action in approving this agreement without resort to further public hearings, being upheld by the Court, in the event the matter is contested. II 2. =11= 3 - "That the Mayor and City Administrator/Clerk are hereby authorized to execute said Agreement on behalf of the City Council, with inclusion of the additional provision as set forth above and that in the event the court determines the agreement is null and void the parties are released from any further obligations thereunder and all payments made to the City by the developer should be refunded to the developer. Haugen asked Steiner if there was anything in the agreement abou~ dragging their feet in developing the residential property. Froberg said a schedule will be set forth in the PUD agreement. Steiner said Trivesco has a greater interest in seeing the project developed. He said the commercial alone won't repay the TIF bonds. . Councilmember-Elect Lewis said the surplus from the project will not be available for 10 years. Steiner said there is a projected surplus of $600,000.00 and they hope to do the project faster, so the surplus would be greater. Watten asked if there will be a revision in the design? Steiner said they have been left with the design of Sherman- Boosalis and will have to review it. The commercial will remain the same but there may be revisions in the multiple housing. Brancel asked the starting date for the commercial? Froberg said the PUD agreement will specify start and completion dates. Administrator Whittaker advised the Council that there may not be a surplus. Froberg said there is no requirement for 54 units, The bond payment schedule contemplates 54 lots. Whittaker said the debt repayment schedule is conservative and does not include homes. He said Springstead prepared the schedule based on these assumptions. . Stover said the original agreement required a percentage increase in the value of the land, was this in the new agreement? Froberg said these bonds are Revenue Bonds and not General Obligation Bonds and therefore there is no requirement that the increments be guaranteed. Brancel said she is voting against the Resolution because she doesn't agree that the City should try to recover costs from Sherman-Boosalis. She also feels the interest rate of 10% is too high. 1:;:' ~.J . . . CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY. DECEMBER 27. 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 6 Brancel said she asked that the purchase agreement be referred to the Finance Committee and it was not. Haugen said she was worried about the interest rate, at first, but Springstead said it was not too high for the type of bond. Motion carried - 4/1 (Brancel-nay) on a roll call vote. D. Update on the Approval Process for Waterford III Project. Whittaker said there are other processes to be completed in conjunction with the development. 1. Final plat approval including the Development Agreement. 2. The plans and specifications for the Public Improvements. 3. Bids and Contract approval for the Public Improvements. Froberg said no further work should be done by the City until the Court reviews the matter. Steiner said Trivesco should be able to intervene in the lawsuit to expedite the process. He said the $99,000.00 would be given to the City when the contracts are signed. COUNCIL REPORTS A. MAYOR HAUGEN Haugen said she received a request from a Shorewood resident on Howard's Point Rd. to have the City replace his mailbox. He said he has had to replace it 3 times. Whittaker said the City policy was to replace the mailbox if the City hits it with a plow, otherwise they do not. Gagne said he did not want to change the policy. The Council agreed to keep the policy. Mayor Haugen agreed to advise Mr. Schulberg of the decision RESOLUTION NO. 142-90 Gagne moved. Brancel seconded. to adopt RESOLUTION NO. 142.90 "A Resolution commending Dr. Kaiser for his outstanding contributions to needy children suffering from Cardiac disease." Motion carried - 5/0 on a roll call vote. RESOLUTION NO. 143-90 Stover moved. Haugen seconded. to adopt RESOLUTION NO. 143-90 "A Resolution commending Madonna Kerber for her International Volunteer Award. " Motion carried - 5/0 on a roll call vote. .' L..I . . . CITY OF SHOREWOOD SPECIAL CITY COUNCIL MEETING THURSDAY. DECEMBER 27. 1990 COUNCIL CHAMBERS 5755 COUNTRY CLUB ROAD PAGE 7 Brancel said she received a letter from Mr. Bruce Sullivan stating that the Minutes of Nov. 26th were incorrect. The Police contract increase was 3.94% not 6%. The 6% increase included the encoders for Civil Defense. Brancel moved. Gagne seconded. to correct the Regular City Council Minutes of Nov. 26. 1990 to reflect the correct figure. Motion carried - 5/0. Councilmember Watten told the Council this was his last City Council meeting and that it was a privilege working with them. He would also be going into professional retirement. Gagne thanked him and said he has done a super job. ADJOURNMENT Haugen closed the meeting to the public at 8:35 P.M. and asked that it be adjourned to Executive Session. Haugen moved. Watten seconded, to adjourn the meeting to Executive Session. Brancel objected to the Executive Session because, she said, the new City Council should handle the matter under discussion. She said it was not appropriate to handle this matter at this time of year and the new Council could rescind any decision. Haugen said she would like to finish the work she started. Motion carried - 3/2 (Brancel and Gagne-nay) The Council reconvened the public meeting at 9:47 P.M.. There were no decisions made in the Executive Session. Watten moved. Gagne seconded. to adjourn the meeting at 9:49 P.M. Motion carried - 5/0. RESPECTFULLY SUBMITTED Katie Snyder Recording Secretary i