Owatonna City Council Minutes Administration Building Tuesday, March 17, 2015 7:00 o’clock p.m. The Owatonna City Council met in regular session on Tuesday, March 17, 2015 at 7:00 p.m. in the Council Chambers of the City Administration Building. Council President Abraham called the meeting to order. Present were: Council Members Abraham, Dotson, Burbank, Raney, Svenby, Schultz, and Okerberg; Mayor Kuntz; City Attorney Walbran; Public Works Director Skov; Community Development Director Klecker; Police Chief Hiller; Park Recreation Superintendent Knutson; Human Resource Director Gorski; City Administrator Busse and Assistant City Clerk Clawson. Council Chairman Abraham welcomed everyone to the meeting and Council Member Burbank led everyone in the Pledge of Allegiance. Council Chairman Abraham advised there is one addition to the Agenda, Resolution 37-15 to set a date for a public hearing regarding TIF 3-9 for the Bushel Boy Farms Expansion Project. Council Member Svenby made a motion to approve the agenda with this addition, Council Member Schultz seconded the motion; all members voted aye for approval. Community Development Director Klecker presented the Development District 7 Plan and proposal for Tax Increment Financing (TIF) District 7-1 for construction of a 36 unit apartment building. This will be the second phase of the Gateway Apartments at 131 W Rose Street. The city currently owns the land and can transfer the land to the developer for payments via TIF over the next 25 years. TIF will assist the developer in securing funds through the Minnesota Housing Finance Agency and also pay for several public improvements included in the project. The proposed public improvements are: an additional row of paved parking in the public parking lot on the east side of the property; the alley on the south side of the property will be widen by 8 feet to allow two-way traffic and several overhead power lines currently between the buildings will be buried. Tonight’s public hearing is for comments regarding the establishment of Development District 7 and approval of TIF 7-1. Ed Tschida, Consultant with Advanced Resources was introduced to explain the resolutions which will be presented for approval following the public hearing. Resolution 28-15 to decertify parcels in TIF 1-6. TIF No. 1-6 was established on March 16, 1999 as a "redevelopment district", consisting of 12 contiguous parcels on the periphery of the downtown, encompassing approximately 3.05 acres. These parcels were occupied by substandard buildings, which were subsequently removed to provide for redevelopment with rental housing. The western portion of the District was redeveloped with a 60-unit residential rental project. Six parcels located on the east side of the District were cleared of blighted structures; however, these have remained under developed. After five years of certification of an original development district, there can be no additional expenditures to be paid with TIF so the current district TIF No. 1-6 cannot be used. A parcel cannot be in two separate districts so these six parcels will be removed from TIF No. 1-6 for the current project. The city has received a proposal to develop a 36-unit, work force, rental apartment project that encompasses these six parcels. The developer requested tax increment financing assistance in the development of this project so the city has scheduled a public hearing on the formation of Tax Increment Financing District No. 7-1. To establish a new tax increment financing district, the city must undertake decertification of the following parcels in Tax Increment Financing District No. 1-6: 17-100-1906, 17-100-1907, 17-100-1908, 17-100-1909, 17-100-1910, 17100-1911. The current proposal to remove the above parcels from Tax Increment Financing District No. 1-6 conforms to the statutory limitations. Council Minutes March 17, 2015 Page 2 of 10 Resolution 29-15 is for approval of Development District No. 7 and Tax Increment Financing District No. 7-1 and the use of Tax Increment Financing. The district includes six parcels and the City owned property as well as, the public right-of-way in Rose Street West adjacent to the parcels in the TIF District, public right-of-way in the alley adjacent to the south side of the parcels in the TIF District and the public right–of-way in Oak Avenue North Between Pearl Street West and Rose Street West. Council Member Dotson asked if this TIF would be a bond and if there would be any cash out to the developer. Mr. Tschida explained it is a TIF similar to a bond and no cash would be paid out to the developer. Resolution 30-15 authorizes the advance of up to $472,889 to TIF District 7-1 for qualified costs incurred in connection with the establishment of the TIF District. Qualified costs include, but not limited to, land acquisition, site improvement, utilities, other public improvements and administration costs. This would be an inter-fund transfer from Economic Development Funds, the City’s General Fund or such other fund designated by the City. The value will be established to cover the minimum payment needed to cover the increment and tax owed during the duration of the TIF, a maximum of 25 years. Council Member Svenby questioned what percentage of the new apartments would be leased to low income and if follow-up was done to certify this each year. Mr. Tschida explained the TIF sets a minimum threshold requiring 20% of the units must be rented to individuals making less than 50% of the area median income. In this instance, the state financing is more restrictive and all of their units meet this requirement. There is a compliance requirement to certify residency of individuals meeting the residency requirement each year to the City’s Finance Department prior to distribution of the TIF funds. The current Steele County median income is $36,000. At 7:14 p.m. a public hearing was open for comments regarding creation of Development District 7 and TIF 7-1. With no comments heard, at 7:15 p.m., Council Member Svenby made a motion to close the public hearing, Council Member Burbank seconded the motion; all members voted aye and the motion carried closing the public hearing. Council Member Dotson asked what process was used to determine the need for housing within the City. Community Development Director Klecker advised a city-wide housing study is completed every three years to document housing needs. The last study completed during 2013, showed 40-50 apartment units are needed within the next seven years. Council President Community Development Director Klecker introduced Resolution 28-15 to decertify parcels in TIF 1-6. TIF No. 1-6, Council Member Schultz made a motion to approve Resolution 28-15, Council Member Okerberg seconded the motion; all members voted aye for approval. Community Development Director Klecker introduced Resolution 29-15 to approve Development District No. 7 and Tax Increment Financing District No. 7-1 and the use of Tax Increment Financing. Council Minutes March 17, 2015 Page 3 of 10 The district includes six parcels and the City owned property as well as, the public right-of-way in Rose Street West adjacent to the parcels in the TIF District, public right-of-way in the alley adjacent to the south side of the parcels in the TIF District and the public right–of-way in Oak Avenue North Between Pearl Street West and Rose Street West. Council Member Okerberg made a motion to approve Resolution 29-15, Council Member Svenby seconded the motion; all members voted aye for approval. Community Development Director Klecker introduced Resolution 30-15 authorizing the advance of up to $472,889 to TIF District 7-1 for qualified costs incurred in connection with the establishment of the TIF District. Qualified costs include, but not limited to, land acquisition, site improvement, utilities, other public improvements and administration costs. This would be an inter-fund transfer from Economic Development Funds, the City’s General Fund or such other fund designated by the City. Council Member Burbank made a motion to approve Resolution 30-15, Council Member Okerberg seconded the motion; all members voted aye for approval. Community Development Director Klecker introduced the Preliminary Plat for the Gateway Addition requested by LWO Limited Partnership #114. This is a subdividing of the property into two lots; Lot 1 will be constructed into a 36 unit apartment project and Lot 2 will contain all of the public parking lots as well as the previously constructed rain garden. An additional 8’ of alley will also be dedicated as right of way with this plat. The Planning Commission recommends approval of the preliminary plat with the conditions: 1) The final plat shall be approved within 12 months or the preliminary plat shall be considered null and void. 2) The south 8’ of the plat shall be dedicated as right of way to allow for a 24’ wide alley to be constructed. 3) An access easement shall be provided to the public to allow the public to access Oak Avenue and the alley through the vacated portions of Oak Avenue. Council Member Okerberg made a motion to approve the Preliminary Plat as recommended by the Planning Commission, Council Member Svenby seconded the motion; all members voted aye and the motion carried. Community Development Director Klecker introduced the application received from LWO Limited Partnership #114 for a variance for the number of off street parking stalls required at 131 Rose Street West. Application V-1374 will allow only 63 off street parking stalls to be constructed and not 72 as required in the City’s current ordinance for a 36 unit apartment building. Many single apartments would not use two spaces and this will also allow for additional green spaces. The Planning Commission held a public hearing and recommend approval of the variance with the provision, “If parking becomes an issue as determined by the Planning Commission, the applicant shall construct the required parking stalls.” There is space available to accommodate 72 parking spaces but the developer prefers to leave more green space. Council Member Dotson made a motion to approve V- 1374 with the provision recommended by the Planning Commission, Council Member Schultz seconded the motion; all members voted aye for approval and the motion carried. Council Minutes March 17, 2015 Page 4 of 10 Mayor Kuntz thanked Student Representative Robert Sorensen for attending the March Council Meetings and made proclamation for the Month of April to be Blue Ribbon Month. The Blue Ribbon Campaign is to help bring an end to child abuse and child neglect. Council Vice President Schultz recapped the expenses for the period totaling $324,682.60. Council Member Raney made a motion to approve payment of these bills; Council Member Dotson seconded the motion; all members voted aye for approval. President Abraham advised council members review the Consent Agenda Items prior to the meeting to approve in one motion. Consent Agenda Items for approval include: Minutes: City Council Meeting – March 3, 2015. Event Permit – Gus’ Station Car Show – July 18, 2015. Event Permit – Bark & Rec 5K Run – April 25, 2015. Event Permit – OHS Baseball Salt Sale – April 25, 2015. Event Permit – From the Heart Half Marathon & 5K – May 2, 2015. Event Permit – National Day of Prayer – May 7, 2015. Event Permit – Federated Picnic – June 19, 2015. Event Permit – SCFF – August 18 – 23, 2015. Event Permit – Corky Early Bird Tournament – May 1-3, 2015. Temporary Liquor Permit – SCCF – August 16, 2015 – August 23, 2015. Temporary Liquor Permit – Knights of Columbus – Corky Early Bird Tournament on May 1- 3, 2015. Temporary Liquor Permit – Night of Knights at St Mary’s School – April 24, 2015. Temporary Liquor Permit – Owatonna Eagles a fight event at the Four Seasons Center April 18, 2015. Exempt Permit – St Joseph Church for bingo at the SCCF – August 18-20, 2015. Exempt Permit – Sacred Heart Church for bingo at the SCCF – August 21-23, 2015. Renew Annual Tree Trimmers License – Effective April 1, 2015 for these vendors: ORGANIZATION STREET CITY Dave's Tree Care 1350 Cherry Street Owatonna Johnson Construction & Tree Service 29763 900th Ave Austin Owatonna Groundmasters Inc 560 26th St NE, PO Box 671 Owatonna Knutson Bros. Tree Service 7154 75th St SW Ellendale Boyum Tree Service 603 74th Ave SE Owatonna Wolff & Son's, Inc. 846 SE 38th St Owatonna Meixner Tree Service Llc 30 SE 5th ST Medford Council Minutes March 17, 2015 Page 5 of 10 ORGANIZATION JW Johns Handyman & Trees Services McClune Tree Service Carr's Tree Service Inc STREET CITY 416 11th Avenue NE Blooming Prairie Waseca PO Box 250 Ottertail 3101 128th St SE Minutes – Human Rights Commission Meeting – February 10, 2015. Minutes – Planning Commission Meeting – February 10, 2015. Minutes – Library Board Meeting – January 20, 2015. Monthly Report - Building Inspections – February 2015. Approve Update the 3-year Strategic Plan: FY2014-2016 with long and short range plans including a ten year facility plan showing the CIP Financial Impact. This plan sets a course for the City to ensure accomplishment of the City’s vision, “To Enhance Quality of Life”, the foundation for the City’s four Key Focus Areas: Infrastructure, Economic Vitality, Quality of Life, and Residential Redevelopment. Council Member Burbank made a motion to approve the Consent Agenda Items, Council Member Dotson seconded the motion. Council Member Svenby stated he is personally involved with the “From the Heart” event and the Steele County Fair. Council Member Raney expressed concern about the estimated costs the city incurs for the Steele County Fair and suggested the Fair Board ask Steele County to furnish some of these requested services. Public Works Engineer Skov explained his comments on the SCCF Event Permit Application included the estimated city expense but not the estimated revenue. Last year, approximately of the half of the estimated $11,000 Public Works’ expenses were reimbursed by SCCF. With no additional comments, all members voted aye for approval of the Consent Agenda Items. City Attorney introduced the first reading of Proposed Ordinance 3-15 for adoption of the 2015 Ordinance Code of the City of Owatonna. A Minnesota State Statute provides that a City may revise and codify the Code of Ordinances from time to time and publish the same. The most recent codification of the City Ordinance Code was published in 1992. Codification is a process by which ordinances adopted by the City are organized according to topic, assigned a section number, and printed and published in a book format in order that the Ordinances are available for reference to the public. American Legal Publishing Corporation, a publisher of municipal codes affiliated with the League of Minnesota Cities completed the recodification effort. The $17,366 cost of codification was included in the City’s budgets over the last three years. A Code of Ordinances in Folio was purchased for $775 and the annual website hosting fee of $450 for American Legal Publishing Corporation will be included in future budgets. Council Member Dotson made a motion to approve the first reading of Proposed Ordinance 3-15, Council Member Svenby seconded the motion. With a roll call vote, all members voted aye. The second reading of proposed Ordinance 3-15 5 will be held at the next council meeting on April 7, 2015. Council Minutes March 17, 2015 Page 6 of 10 City Attorney introduced the first reading of Proposed Ordinance 4-15 to prohibit feeding of raccoons and other animals with the objective to prevent nuisance conditions associated with their feeding. The Minnesota Department of Natural Resources Information Sheet states: Feeding of raccoons is strongly discouraged and is prohibited in some areas. Raccoons that have been intentionally fed tend to become very bold and dependent on people and can become especially troublesome in the neighborhood where the feeding occurs. This ordinance will prohibit feeding of raccoons, deer, turkey, ducks and geese. A violation of the ordinance will be a petty misdemeanor. The first violation of the ordinance would result in a written warning. A petty misdemeanor is an offense for which the law provides a fine of not more than $300.00. Council Member Raney made a motion to approve the first reading of Proposed Ordinance 4-15, Council Member Schultz seconded the motion. With a roll call vote, all members voted aye. The second reading of proposed Ordinance 4-15 will be held at the next council meeting. Community Development Director Klecker introduced Proposed Ordinance 5-15 to rezone lots 1, 2 and 3, Block 1, Emerald Acres No. 3. The property owned by James Wanous, Wanous Farms is currently vacant and farmed. Ryan Wempen, The Cottages, LLC is proposing to purchase the property and construct four 24 unit assisted living memory care units. The project will be phased in over the next 10 years based on market conditions. The property is currently three platted parcels, the applicant will file for an administrative lot combination for the three parcels to be combined into one lot. The Planning Commission held a public hearing on this matter and recommend approval of the zoning change from B-2, Community Business District to PUD, Planned Unit Development with the following recommendations: 1) The City Engineer shall approve of all final grading, drainage, and utility plans prior to construction commencing. 2) The lots shall be combined into one parcel prior to the first building permit being issued. 3) All signs shall have sign permits issued. 4) One 12’ x 12’ gazebo will be permitted to be constructed at the rear of each building. No other accessory structures will be permitted on the site. 5) The shed on the north side of the property shall be removed prior to the occupancy of the first building. 6) The private communication easement shall be released or relocated prior to a building permit being issued for the second building. The applicant has contacted adjoining property owners and no negative comments have been heard regarding the proposed project. Comments heard after the Planning Commission Meeting have been concerns about stormwater in two areas: 1) The south east area in the 4th Avenue area which is included in Phase I of the Stormwater Management Plan for this year. 2) The area along 18th Street and 4th Avenue will be Phase II which we should be receiving the consultant’s report any day with recommendation for storm water control in this area. Klecker recommended council approve the first reading of this proposed ordinance with requirement the second reading be scheduled after the consultant’s report has been reviewed. Council Member Raney made a motion to approve the first reading of Proposed Ordinance 5-15 with the recommendations proposed by the Planning Commission and staff recommendation the Council Minutes March 17, 2015 Page 7 of 10 second reading be held after review of the consultant’s report for storm water management along 18th Street SE. Council Member Burbank seconded the motion and with a roll call vote, all members voted aye for approval. Public Works Director Skov presented Resolution 31-15 authorizing membership with the Minnesota Environmental Science and Economic Review Board (MESERB). MESERB is a joint powers organization made up of cities, public utilities commissions, sanitary sewer districts, and business associates committed to using established principles of science, law and engineering to advocate for sound and cost-effective environmental regulations. The City of Owatonna has been invited to participate in MESERB effective July 1, 2015. The current cost of membership is $0.85 per wastewater billing account; approximately 9,500 accounts for membership fee of $8,075 per year. The waste water permit will be renewed with state this year and an affiliation with this group will be beneficial for the City to be aware of and involved with lobbying for changes. Council Member Dotson made a motion to approve Resolution 31-15, Council Member Raney seconded the motion; all members voted aye for approval. Public Works Director Skov presented Resolution 32-15 to accept the bids received and award the contract for the 2015 Mineral Springs Parkway Project No. 14002. Council Member Schultz recused himself as he owns property in the project area. Bids were received on March 11th from six companies: James Brothers Construction Inc., of Elysian, MN $529,398.60 Wencl Construction Inc., of Owatonna, MN $531,586.00 BCM Construction, of Faribault, MN $548,575.05 Heselton Construction, LLC of Faribault, MN $562,260.00 R.A.W. Construction, LLC of Faribault, MN $585,772.55 Borneke Construction, Inc. of Janesville, MN $619,631.50 The Engineer’s Estimate for this project was $631,807.00. The cost of this project will be paid for from levy and assessments. Council Member Svenby made a motion to accept the bids and award the contract to the lowest responsible bidder, James Brothers Construction Inc., of Elysian, MN with a bid of $529,398.60. Council Member Burbank seconded the motion; all members voting voted aye for approval. Council Member Schultz returned to his council seat. Public Works Director Skov presented Resolution 33-15 to accept the bids received and award the contract for the 2015 Lemond Road Project No. 13002. The five bids received on March 11th were: James Brothers Construction Inc., of Elysian, MN $564,490.94 BCM Construction, of Faribault, MN $589,555.51 Heselton Construction, LLC of Faribault, MN $650,940.65 Borneke Construction, Inc. of Janesville, MN $673,342.00 Wencl Construction Inc., of Owatonna, MN $694,396.10 Council Minutes March 17, 2015 Page 8 of 10 The Engineer’s Estimate for the Lemond Road Project No. 13002 was $588,416.00. The proposed project repairing Lemond Road from Selby Avenue to Kim Lane received no objections during the neighborhood meeting held in February. The cost of this project will be paid for from State Aid and assessments. Council Member Dotson made a motion to accept the bids and award the contract to the lowest responsible bidder, James Brothers Construction Inc., of Elysian, MN with a bid of $564,490.94. Council Member Okerberg seconded the motion; all members voted aye for approval. Public Works Director Skov presented Resolution 34-15 to amend the Municipal State Aid Streets (MSAS) Routes. The change requested is: Extension of MSAS 135 Cedar Avenue – Rose Street (CSAH 19) to North Street (0.38 existing miles). Council Member Schultz made a motion to approve Resolution 34-15, Council Member Raney seconded the motion; all members voted aye for approval. Public Works Director Skov presented Resolution 36-15 requesting the Minnesota Department of Transportation advance Municipal State Aid funds for the construction of State Aid Bituminous Reconstruction and Lemond Road. The amount of advance will be approximately $743,127 in addition to the amount received for 2015. MSA Cities can advance up to 4 years of funding, this will tie up a portion of the 2016 allocation. Council Member Dotson made a motion to approve Resolution 36-15, Council Member Schultz seconded the motion; all members voted aye for approval. Community Development Director Klecker introduced Resolution 37-15 setting a public hearing on April 21, 2015 for consideration of TIF No. 3-9, the Bushel Boy Farms expansion project. Bushel Boy Farms is planning an expansion to their greenhouse space and have requested a pay as you go TIF not to exceed $100,000 for a period not more than nine years. Detailed information regarding the TIF will be available at the public hearing. This resolution will set the hearing during the regular council meeting on April 21, 2015 beginning at 7:00 p.m. Council Member Schultz made a motion to approve Resolution 37-15, Council Member Raney seconded the motion; all members voted aye for approval. Public Works Director Skov presented a request for authorization to proceed with the 2015 Crack Sealing Project by placing advertisement for bids. Streets in need of crack sealing are evaluated and proposed for construction annually. The streets proposed to be included in the 2015 project are: STREET FROM TO Bigelow Ave NE 20th St NE 22nd St NE Chambers Ave SE School St Main St East Broadway St Lincoln Ave Chambers Ave Chambers Ave Rice Lake St East Broadway 12th Ave NW East Frontage Rd 250' W of 12th Ave 1487' North E Frontage Rd 100' W of Brady Blvd Council Minutes March 17, 2015 Page 9 of 10 STREET FROM TO 14th St SE Lincoln Ave Truman Ave 15th St SE Lincoln Ave Truman Ave Selby Ave SW Mound St W Bridge St Willow Ave NE Rice Lake St E Rose St Barney St SW 2nd Ave SW Oak Ave S Truman Ave Eldorado St 18th St SE Smith Ave 18th St SE 16th St SE Landmark Dr. NE 26th St NE 28th St NE (Both Legs) Northridge Ln NE 28th St NE 3rd Ave NE Stoneridge Ln NE NorthRidge Ln NE 3rd Ave NE 28th St NE Cedar Ave N. 3rd Ave NE 3rd Ave NE Hickory Ln NE North End Northridge PL NE Northridge Ln NE Cul-de-Sac Myers Dr NE 25th St NE 3rd Ave NE Gray Fox Dr NE Deer Trail Ln NE Deer Trail Ln NE Academy St Grove Ave S Lincoln Ave S Countryview Ave Rose St E N Leg of Mossy Creek Dr Mossy Creek Dr Countryview Ave Countryview Ave Franklin Ave Mound St W. Bridge St Riverwood Dr SW Beacon Dr SW Lemond Rd SW Alexander St SW 24th Ave SW Cu!-de-Sac 24th St NE St. Paul Rd 7th Ave NE 23rd St NE St. Paul Rd 7th Ave NE Fremont St Cedar Ave N. Grove Ave N. Grove Ave N Fremont St Front St Front St Elm Ave N. Grove Ave N. Elm Ave N. North St 16th St NE 20th St NE Hemlock Ave Bigelow Autumn Pl NE Rice Lake St Cul-de-Sac Stony Creek Dr Countryview Ave Timberwood Ln NE Council Minutes March 17, 2015 Page 10 of 10 Council Member Dotson made a motion to proceed with the project and advertise the bids and Council Member Svenby seconded the motion. With all members voting aye, the motion was approved. There were no comments heard during Public Comments. During Council Comments, Council Member Burbank was glad the Lemond Road Project is finalizing, he has received many calls requesting this road be repaired. Council Member Raney thanked Robert Sorenson for participating in the March Council Meetings as a Student Representative. Council Member Svenby was pleased the Mineral Springs Parkway Project is progressing and is looking forward to this project completion and the option of safer access to the park area. Council Member Dotson wished everyone a Happy St Patrick’s Day. Student Representative Sorensen thanked everyone for the opportunity to serve as the first Student Representative to the Council, he has felt very welcomed and hopes this opportunity will help advance his interest in politics. Mayor Kuntz distributed a list of the seven Legislative Priorities of the Coalition of Greater Minnesota Cities and the Greater Minnesota Partnership. Mayor Kuntz reminded everyone of: the MnDOT meeting on March 30th for I35 Repairs and Hwy 14 Improvement; Aspen Dental ribbon cutting will be held Thursday, March 19th at 1:00 p.m.; on April 14th at 4:00 p.m., Mayo Clinic will present Rick Ellingson the Outstanding Service Award which was awarded during the March 3rd Council Meeting but Rick was unable to be present to receive. At 7:51 p.m., Council Member Raney made a motion to adjourn to closed session to complete the annual evaluation of City Administrator Kris Busse. Council Member Schultz seconded the motion, all members voted aye for approval. Council moved to the Lower Level Conference Room for the closed session. At 8:58 p.m., Council Member Okerberg made a motion to return to open session, Council Member Raney seconded the motion; all members voted aye. With no other business requiring consideration, at 8:59 p.m., Council Member Dotson made a motion to adjourn the meeting. Council Member Svenby seconded the motion; all members voted aye for approval and the meeting was adjourned. Dated: March 18, 2015 Respectfully submitted, Jeanette Clawson, Assistant City Clerk
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