City Council Minutes

Pursuant to due call and posted notice thereof, the regular meeting of the Victoria City Council was called to order at 6:30 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose Street.

Members Present: Mayor: Mary Hershberger Thun; Councilmembers: Jim Paulsen, Kim Roden and Rick Tieden.

Absent: Councilmember Tim Amundsen.

Staff Present: Don Uram, City Administrator; Holly Kreft, Community Development Director; Mike Norton, City Attorney; Jylan Johnson, Finance Director; and Cara Geheren, City Engineer.

Others Present: Sue Orsen, The Victoria Gazette; Terry Hartman, Business Development Committee, and others.
 

Mr. Uram stated that item E, under the consent agenda, has been modified to show that Anne Lustig has accepted another position. He stated the authorization should only be to hire Scott Spehar.

A motion was made by Councilmember Paulsen, to adopt the Agenda as amended. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

Mayor Hershberger Thun read aloud the items to be considered under the Consent Agenda.

The Consent items were as follows:

Councilmember Roden asked to remove items 3B, 3C and 3F.

A motion was made by Councilmember Roden, to adopt the Consent Agenda as amended. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Councilmember Roden asked if this is consistent to what was presented by the Carver County City Attorney. Mr. Uram said yes.

A motion was made by Councilmember Roden, to approve the 2009 Prosecution Contract. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Councilmember Roden explained that there was a difference of opinion with regard to contract obligations. She said it was the goal to make sure all the entitled fees were recovered and they are getting some back. She noted they took action and worked with the party.

A motion was made by Councilmember Roden, to Approve the Settlement Agreement and Release between the City of Victoria and the Minnetonka Youth Hockey Association as indicated in Resolution No. 08-97. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Councilmember Roden asked if discussions have begun with the electric utility for beginning an energy audit that may result in reducing the costs. Mr. Uram said that MN Valley Electric Company was out to do an energy audit and stated they are taking steps.

A motion was made by Councilmember Roden, to Adopt the Financial Reports for the month-ending August 31, 2008 as in agenda statement 08-268. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

(4) VISITORS PRESENTATION:

Ms. Eckhoff, Speech Language Pathologist, said KidTalk is a pediatric rehabilitation center. She said they offer speech and occupational therapy for children starting at birth. She noted that currently they have six speech pathologists and three occupational therapists. Ms. Eckhoff said they work with a variety of kids and disabilities. She noted they have been open since 2001. She talked about speech and occupational skills.

Councilmember Roden asked how business is. Ms. Eckhoff said it is growing every year. Councilmember Roden asked if they get any parking complaints. Ms. Eckhoff said they do get complaints and one of the issues is not having a handicap parking space allocated specifically for them. Mr. Uram said they will take care of it.

Mr. Taylor stated they are looking at a 70-mile loop that connects 9 cities. He said the first project goal is to connect county, city, school district and other government entities to a high-speed fiber. The second goal is to increase efficiency. He said the last goal is to act in the best interest of Carver County. Mr. Taylor said they also have priorities and the first is to connect county buildings. The second priority is to partner with schools, cities and other governmental entities to leverage partnership. The third is economic development.

Mr. Taylor explained that fiber is a 30-year-old technology and is extremely fast and reliable. He said they do have a desire to enter into a partnership with a private sector firm. He stated there are also budget issues related to this and they need to become more efficient with fewer staff. He noted they are looking at a six to seven year payback.

Mr. Taylor said they are looking at an enterprise system where the county would purchase the software application. He commented on the backup data center and said they are looking at creating a larger center to share.

Mr. Taylor said another benefit would be with internet access and talked about some of the needs.

Mr. Taylor explained they are looking at a county commitment of about 1.5 million dollars for 72 fiber optic strands. The private sector would have more strands and their interest would be for residents and businesses.

Mr. Taylor stated the county board has directed him to enter into final negotiations with Jaguar Communications.

Councilmember Roden asked who pays for all the streets to be dug up. Mr. Taylor said that in the bid there are permitting fees. He said the county pays for the 1.5 million and the rest is on the private firm. Councilmember Roden asked if they are going to pay the county for the use of the right-of-way. Mr. Taylor said that will be part of the negotiations. Councilmember Roden recommended that the county do a lot of research on major public works projects similar to this and build in contingencies and define who pays. She said that all the details need to be looked at. Mr. Taylor said a proposal is different than a contract and the diligence needs to be done earlier rather than later.

Councilmember Tieden been asked if there has been any more talk about extending it further to Hamburg. Mr. Taylor said they asked Jaguar to go and revisit New Germany and Hamburg and they were supposed to have done that last weekend. He noted the cost to create two laterals to those communities is around $200,000.

Councilmember Paulsen said he is supportive of this. He clarified that because the speed of the loop is so fast the size of it doesn’t really matter. Mr. Taylor said that is a true statement. Councilmember Paulsen commented on the employment growth and said he encourages them to seek out major corporations such as Cargill. He said it needs to be maintained over time.

Mayor Hershberger Thun asked how the county is going to recover its costs. Mr. Taylor said they spend approximately $200,000 a year on 22 T1 lines and DSL lines. He said they are probably looking at a lease purchase and the payments would be significantly less. The county would own the public part.

Mayor Hershberger Thun asked if there is anything else Jaguar Communications is paying to the County. Mr. Taylor said other things have been negotiated informally. He talked about road realignments and said they agreed to escrow $20,000 a year and the county would pay for half up to $20,000 of moving fiber optic lines as part of road realignment and Jaguar Communications would pay the balance.

Councilmember Tieden stated that Jaguar Communications would take care of the maintenance. Mr. Taylor said that is correct and it would be $100,000 a year.

Mayor Hershberger Thun asked how many residents are in Carver County. Mr. Taylor said the 2030 comprehensive plan shows 200,000. Mayor Hershberger Thun commented on the number of households Jaguar will have access to that will have to pay Jaguar for service and clarified there will be no ongoing money the county gets from Jaguar. Councilmember Tieden said the individual cities would have the opportunity to deal with Jaguar. Councilmember Paulsen said that raises a question of sequence because if the county makes a deal the city has to. Mr. Taylor said there is competition and it would be up to the resident.

Mayor Hershberger Thun said she wants to know why the tax dollars are going into a private company who has an edge on the market and why the tax dollar is being used for that. She said the county better be getting a lot of money from them because every other company will be shut out. Mr. Taylor said they hope they do well financially and Jaguar is taken a big risk. Councilmember Tieden reiterated that it will be up to the city to proceed with Jaguar.

Councilmember Paulsen stated he thinks there should be a formal letter signed by the Mayor with Council input and concerns.

Ms. Johnson said there have been many discussions on the financing of the street reconstruction projects. She explained that they thought it would be important to look at other funding mechanisms and one of those is a permanent improvement revolving fund bond. She reviewed the power point presentation and said the permanent improvement revolving fund is similar to 429 bonds and has long-term focus. She stated the success is to adopt and adhere to a permanent improvement revolving fund goals and objectives.

Paul Donna, Northland Securities, said he has the financial plan summary to review.

Councilmember Paulsen referred to the permanent improvement revolving fund and clarified that there is a chance for misuse. He said there is a strategy based on the prepayment of bonds and those could be used as a down payment. He asked how many prepayments they get a year. Ms. Johnson said it depends on the neighborhood and the amount of the prepayment. Mr. Donna noted that you can prepay but it wouldn’t be economically beneficial.

Mr. Uram stated that with the fund structure the opportunity is in new neighborhoods. Ms. Johnson noted the city would be putting in the infrastructure as opposed to the developer. Mr. Uram said they have had discussions with other communities that do it. Ms. Johnson said Andover is one and they got the prepayments back within a three-year period. Mr. Uram said other cities use it has an economic development tool.

Councilmember Paulsen said this is the first of many conversations on this and he is not inclined to do it at this time. Ms. Johnson noted that they need to set a sale date for the bonds.

Mayor Hershberger Thun stated she is in favor of doing this right now and said they need to look to the future.

Mr. Donna stated that with the permanent improvement revolving fund if they don’t plan on using these dollars for future projects there is flexibility in reinvesting. He said another reason to do it is to better manage the debt service fund cash flow in the event prepayments are received.

Mr. Donna explained the total bond issue is for $2,160,000 which takes in to account funds to be contributed from the sewer fund. He said the estimated interest rate is 4.3 percent over 15 years.

Mr. Donna said the bids would be opened on October 23^rd at 10:00 a.m. He explained the City’s general obligation debt is currently rated A2 by Moody’s Investors Service and they would like to explore, with permission, a credit rating with Standard & Poors. He noted that local governments won’t be considered until January and it is possible that it could go up to AA1.

Mr. Donna reviewed the debt service schedule and operation of the service fund in the packet. He noted this does not assume any prepaid assessments.

Councilmember Paulsen clarified that construction contracts have been issued. He asked what the rate is if they had to sell today. Mr. Donna responded about 35 basis points higher so about a 470. Councilmember Paulsen clarified they either have no market or have $6,000 more interest a year. He noted it would be a cash call and said to go for it. Councilmember Roden said she agrees.

A motion was made by Councilmember Roden, to Adopt Resolution 08-101, allowing the City of Victoria to Set Sale for $2,160,000 General Obligation Permanent Improvement Revolving Fund Bonds, Series 2008B. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Mayor Hershberger Thun asked when the policy would be drafted for review. Ms. Johnson said if will hopefully at the first meeting in October. She noted the Finance Committee will be looking at it on September 30^th.

Councilmember Paulsen clarified that Ms. Johnson and Mr. Donna will be in touch on rates and will be watching the market.
 

(5) OPEN FORUM:

None.
 

-A- Public Hearing for Establishment of TIF District 1-4

Ms. Kreft provided a brief overview and explained the City would need to establish TIF District 1-4. She said included in the packet is the TIF plan for this district and a map with the parcels located in the district. Ms. Kreft stated there are two resolutions; one is to remove certain parcels from districts 2 and 3 and place those in district 4 and the second resolution is for the establishment of TIF District 1-4.

Mr. Sweeney explained the purpose of the hearing is to receive public comment. He said it is a redevelopment district and new property taxes would be captured as a result of new redevelopment activities within the 52-parcel area for a period of up to 26 years beginning in 2011. He noted there are some new parcels around the "Dairy Queen" area. Mr. Sweeney stated this is a tool for promoting redevelopment that allows property taxes to be redirected for the purpose of paying public infrastructure that promotes redevelopment and for the purpose of subsidizing projects. He said then when increments are spent they need to go towards resolving the conditions that cause the district to be created in the first place. Mr. Sweeney stated the two most important components within the TIF plan are the budget, which is set very large for purpose of flexibility and the other is the map which defines the area from which the tax increments are captured.

Mayor Hershberger Thun opened the public hearing at 7:43 p.m.

Mayor Hershberger Thun closed the public hearing at 7:43 p.m.

Councilmember Paulsen asked if there is anything in the documents they are not comfortable with. Mr. Sweeney said no, that staff has reviewed this thoroughly and they are comfortable with the findings.

Mayor Hershberger Thun stated this is a tool to allow them to move ahead with a plan in the future.

A motion was made by Councilmember Paulsen, to Approve Resolution No. 08-102, removing parcels from TIF Districts 1-2 and 1-3 and placing them in TIF District 1.4. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

A motion was made by Councilmember Paulsen, to Approve Resolution No. 08-103, establishing TIF District 1-4. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Mayor Hershberger Thun said this should also go to the finance committee in the future for review.
 

-A- 2007 Street and Drainage Improvements ~ Resolution Declaring Cost to be Assessed, Ordering Preparation of Proposed Assessment, and Calling for Hearing on Proposed Assessment

Ms. Geheren stated the costs need to be declared to be assessed to order preparation of the proposed assessment and call for a hearing on the proposed assessment. She said the 2007 street project is complete. She noted the final project cost was $583,110 which shows a reduction.

A motion was made by Councilmember Roden, to Adopt Resolution No. 08-104, Declaring Costs to be Assessed, Ordering Preparation of Proposed Assessment, and Calling for the Hearing on the Proposed Assessment for the 2007 Street and Drainage Improvements in an amount of $583,110. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Ms. Geheren stated the final project costs for Smithtown Road were $1,634,510 which shows a slight reduction.

Mayor Hershberger Thun asked if the assessment of $5,250 for the Harborage Condos is for each unit. Ms. Geheren responded yes.

A motion was made by Councilmember Roden, to Adopt Resolution No. 08-105, Declaring the Costs to be Assessed, Ordering Preparation of Proposed Assessment, and Calling for the Hearing on the Proposed Assessment for the Smithtown Road Street and Drainage Improvements in an amount not to exceed $1,634,510. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Mayor Hershberger Thun asked when the road is going to open. Ms. Geheren said the road has curb and gutter, gravel and the sidewalk is almost completely poured. She noted that it is estimated to be opened middle October and will know more tomorrow.

-C- Review of Final Plat for Victoria City Center LLC – Fresh Seasons Market and Drugstore

Ms. Kreft showed the site plan and said there are been no major changes. It shows 75 parking stalls with access on Victoria Drive, extension of Tower Boulevard and reconstruction of Quamoclit Street.

Ms. Kreft referred to the parking and showed the downtown master plan, which will come to the City Council on October 9^th. She noted this scenario shows a realignment of Rose Street which would expand the parking where the City Hall is and south which would consist of approximately 136 spaces. Ms. Kreft said another area discussed is the corner of Steiger Lake Lane and Quamoclit Street which could have 86 spaces on one level.

Ms. Kreft stated that staff is recommending approval of the final plat with the 11 conditions recommended and that any signage plans will need to be reviewed by the Planning Commission. She noted the park dedication fees may need to be discussed further. Ms. Kreft said the Planning Commission recommending approval with the additional condition that the Planning Contract address the access onto Victoria Drive and that the City will continuously monitor the access and at some point in the future may require the access to be an entrance only at the sole cost of the developer. She noted the Planning Contract is not in the packet.

Councilmember Roden asked what the recommendation is from the Business Development Committee on the park dedication fees. Ms. Kreft said that the Park and Recreation Committee could discuss that.

Councilmember Paulsen asked about the costs on the handout that was provided. Mr. Uram said they put together the cost of the infrastructure surrounding the new grocery store. He stated the City’s contribution is $1,072,098 including the infrastructure improvement for the north half of Quamoclit and short segment of Steiger Lake Lane which will cost $400,000. He noted there will be additional assessments. Councilmember Roden asked if the adjacent property owners are aware of the $100,000 in assessments. Ms. Geheren said that anyone with property along Quamoclit and Tower would be assessed.

Councilmember Paulsen commented on paying for Tower Boulevard and said there are no major traffic impacts and asked why they are extending it. Mr. Uram said in order to maintain a traffic pattern there needs to be access throughout the downtown area. Ms. Geheren noted the cost to construct Tower would be $153,000 and said if Tower and Quamoclit aren’t done at the same time it will cost more money.

Councilmember Paulsen asked for a break out of what the contracts would look like.

Mayor Hershberger Thun clarified that the $29,000 for the abatement and demo of City property was done because it was an eyesore. Mayor Hershberger Thun asked about the grant for $164,000. Ms. Kreft explained that the grant is a matching grant and will be used to offset the cost for the private assessments for the project.

Councilmember Paulsen questioned the precedent setting with the contribution amount in terms of other development coming. Councilmember Tieden said they have been thinking this through. Councilmember Roden commented on the market timing and the desire in this community.

Councilmember Paulsen commented on the shared parking ordinance. Mayor Hershberger Thun stated she is a proponent of shared parking and supports it. Councilmember Tieden noted there are many communities that have shared parking. The City Council discussed shared parking.

A motion was made by Councilmember Tieden, to Adopt Resolution No. 08-106, Approving the Final Plat for Victoria City Center LLC – Fresh Seasons Market and Drugstore with the conditions. The motion was seconded.

Mayor Hershberger Thun said she is uncomfortable with this the amount of money and doesn’t support the long years with the tax increment financing, but said she believes downtown Victoria needs this and it will kick off the future.

Mr. Wartman asked for a clarification on the park and recreation fee and said it is not something they have in the budget and respectfully asked that it be waived. Councilmember Tieden said they have worked with companies in different ways.

With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

The City Council took a break at 8:26 p.m.

The City Council reconvened at 8:30 p.m.

Mr. Norton gave details on article 3, the assembly of the land and article 7 which is the financing. He stated there are three City parcels and the developer’s parcels are the C.H. Carpenter site and 7998 Quamoclit Street and those are assembled into the development property. He explained that the City is contributing the three parcels for a reduced cost of $3.00. Mr. Norton said there is a TIF note in the amount of $400,000 which will be reduced by the DEED Grant, so the TIF note would be valued at about $235,000. He stated that the construction start date is now November 1, 2008 with a completion date of June 1, 2009.

Mr. Norton talked about the financing and said they are recommending 7% interest over the life of the TIF note. The TIF will be coming from TIF district 1-4. He explained the maximum the developer could get is $235,000. Mr. Norton said there will be a city road improvement project that will be done by October of 2009.

A motion was made by Councilmember Tieden, adopt Resolution No. 08-107, authorizing execution of the Contract for Private Development between the City of Victoria and Victoria City Center LLC. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

None.
 

Councilmember Tieden read a letter from Positively Minnesota regarding the redevelopment grant and said there were 12 applications and this project was selected for an awarded of $164,000. He thanked Ms. Kreft.

Councilmember Roden and Councilmember Tieden thanked everyone who helped with Volksfest.

Mayor Hershberger Thun asked that a Resolution of Thanks be drafted for making Volksfest so successful to the following: Lois Plocher owner of Floyds, Mary Hadaway from the Chamber of Commerce, Mary Erickson with School District 112 and Linda McNulty serves as Senior Commission Chair and City employee.

-A- Update on 13.5 Acres

Ms. Kreft reported that the developer is working with their land planner and is hoping to meet within the next month.

Mr. Uram reported that the majority of the trees are taken down and said they are working with the school district on the necessary easements. He noted the neighbors to the west of the Field House have raised concerns about screening and want to continue talking about berming.

Mr. Uram noted that he heard they are postponing the project to spring.

Mr. Uram said he will have a timeline for developing an emergency management plan at the next meeting.

Mr. Uram commented on the speeding on Narcissus and Kelzer Pond and said they will be making a detailed presentation on October 9^th to discuss strategies.

Mr. Uram commented on the building department and the workload decreasing. He said they did an analysis and met with the Personnel Committee. Based on the current workload, they are recommending too reduce the number of hours for both building officials down to a four-day work week. He suggested having further review in three months. Mr. Uram noted that one of the employees will be used in other departments. He said they did get nine building permits this month. Councilmember Paulsen commented on the uncertainty for these employees. Councilmember Tieden said they do talk about those items and try to resolve the lack of work.
 

None.
 

None.
 

A motion was made by Councilmember Roden, to adjourn the meeting at 8:51 p.m. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.

Respectfully submitted,

Tanya Schmieg
TimeSaver Off Site Secretarial, Inc.