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HomeMy WebLinkAbout07/30/1987CITY OF APPLE VALLEY Dakota County, Minnesota July 30, 1987 Minutes of the special meeting of the City Council of Apple Valley, Dakota County, Minnesota, held July 30th, 1987, at 8:00 o'clock p.m. at the Central Maintenance Facility, 6442 West 140th Street, Apple Valley. PRESENT: Mayor Branning; Councilmembers Goodwin, Humphrey and Savanick. ABSENT: Councilmember Holton. City staff members present were: Acting Administrator Gretz, City Clerk Mueller, City Attorney Sheldon, City Engineer Gordon, Finance Director Ballenger, Personnel Director Boland, Recreation Services Manager Johnson, City Planner Kelley, Assistant Administrator Lawell, Planning Assistant McMonigal and Police Chief Rivers. Mayor Branning called the meeting to order at 8:05 p.m. following a public open house held at the Facility. Mr. Gretz advised the Council that information necessary for approval AMEND AGENDA of plans for Project 87-271, Cherry Oaks and Bubbers-Krause Improve- ments, and receipt of the preliminary report for Project 87-279, Eagle Ridge 2nd Addition Improvements, is not ready and these items are being removed from the agenda. Due to time involved in cleaning up after last week's storm, information for the informal meeting to discuss future roads and 153rd Street and Galaxie Avenue has also not been prepared and the informal meeting should be cancelled. MOTION: of Goodwin, seconded by Humphrey, authorizing renewal of public officials liability insurance with Markel/National Casualty Company at the iow quoted annual premium of $9,075.00. Ayes - 4 - Nays - 0. PUBLIC OFFICIALS LIABILITY INS. Mr. Sidney Inman, of Publicorp, Inc., the consultant retained by the PUBLICORP, INC. City to assist in economic development matters, was present to discuss ECONOMIC DEV. the program with the Council. He distributed copies of policies on POLICY DISGUSSN. industrial development and tax increment financing used in other cities for the Council to review. He said the first step will be for the Council to establish a policy to accomplish its objectives and Publicorp will work under this policy. He would strongly suggest adoption of a policy, as a guide; however, the Council can vary from it when necessary. Once the program in underway, he would expect to be involved on special issues with City staff handling the day-to-day development issues. Mr. Inman reviewed the topics on the outline distributed and noted the basis for a city providing tax increment financing should be need. A developer should provide adequate information to meet the "but/for" test when it applies for financing. This includes market analysis, letter of feasibility, financial statements and payment of a deposit, such as $5,000, to cover costs of processing. There are generally four types of development districts; economic development, redevelopment, senior housing and multifamily housing. Types of assistance in these districts can include land write downs, soil corrections, demolition/relocation and upgrades of existing businesses under certain conditions. The most common method of inducement has been tax increment general obligation bonds. Special assessment bonds CITY OF APPLE VALLEY Dakota County, Minnesota July 30, 1987 Page 2 can be done if structured in such a way as to remain tax exempt. One of the newer methods is "pay-as-you-go" where funds are paid over a period of time. The developer funds the up front costs and payments are made from the captured increment. Part of the policy should include a return on investment strategy. Because it may take some time to realize results from an inducement, it helps to have a determination or measurement. Other issues for consideration may be using development accounts for a source of on going revenue, common bond funds for taxable I.D.B.'s and economic development authorities. The policy should address a time limit on district close out, whether it should be self-supporting and the cost of development; i.e., staff time involved, length of time to see results. In addition, the City has infrastructure needs which will probably involve some bonding to accomplish. Mr. Inman said the policy can be flexible, but the City needs to be in a position to require developers to tell the City what they need and prove their need. Councilmember Humphrey said the City has used tax increment financing to influence a developer to build a larger more quality development than initially proposed and to help develop property on a larger scale than a one lot at a time piecemeal development and asked Mr. Inman's opinion. Mr. Inman said these are appropriate uses provided the financial statements and amount of increment generated have been reviewed to make sure they are viable. One of the policy objectives could be to encourage the highest and best use for the property provided it is financially feasible. Mr. Gretz said staff will attempt to put together a draft policy for the Council's consideration and asked for direction. The Council concurred the policy should require developers to prove financial need and pay an up front deposit. They agreed staff should make recommendations on other issues in the policy for discussion and further review. Mr. Gretz said staff has been asked by some Councilmembers to look into CITY HALL leasing administrative office space in the Commons II building. Before SPACE proceeding, he would like some direction from the Council, as a whole. MOTION: of Humphrey, seconded by Savanick, directing City Staff to look into a lease or lease-purchase for administrative space in part of or all of "The Commons II Building" and lease- purchase information on any other buildings for sale in the City. RESEARCH ADMIN. SPACE LEASE Mayor Branning said this would be direction for Staff to look into and get information for the Council on leasing and a lease-purchase for space. Councilmember Goodwin asked how much space would be involved? Mr. Gretz said the initial study recommended 15,000 square feet. Depending on how it is arranged, 10,000 square feet may be enough. Councilmember Savanick asked if it will include space for the Police Department and Parks & Recreation? Mr. Gretz said no it would not. Councilmember Goodwin asked if the lease-purchase information would be on the entire building? Councilmember Humphrey said the information should include two options; on part of the building and all of it. He said the reason for looking at the entire building is flexibility. Since part of the County offices have moved to Apple Valley, CITY OF APPLE VALLEY Dakota County, Minnesota July 30, 1987 Page 3 it might be possible to lease part of the building to the County. Mr. Gretz said if the building can be condominiumized, a lease-purchase on part of the building could be looked at. Mayor Branning said the information should be obtained on 10,000 square feet of space and on the entire building. Councilmember Goodwin said he does not believe staff time should be spent obtaining information on buying a commercial building. If the City were to build, it would not design that type of structure even if it was to be shared with the County. The Council already knows what a lease will cost because the information was in the space needs study. Councilmember Savanick said this is an important issue and the Council should take the time to look at all aspects of it. Councilmember Humphrey said the reason for pursuing this now is that the City has immediate short term space needs. The long term goal is to move to a downtown location in a government center approach and we are making progress toward that goal. If we need to move now, the object of pursuing a lease-purchase is to get as much out of our dollar as possible which would be the reason for an ultimate purchase. The. County is looking for 85,000 square feet of space and if the City owned the building, it may be in a position to be landlord for them. Councilmember Goodwin said the City needs a few thousand square feet of space to get by for a few years. We have 2,000 square feet of garage bays which could be converted. A 60,000 square foot building is not needed now and the Commons II building is not designed for the City's purpose. It is a waste of staff time to look at an inappropriate building. Vote was taken on the motion. Ayes - 3 - Nays - 1 (Goodwin). Police Chief Rivers distributed a memo dated July 30, 1987, concerning STORM DAMAGE storm damage on July 23, 1987. A natural disaster assessment survey REPORT is underway on known flooding problems and 20 form have been returned thus far. The Metropolitan Area is being considered for a Presidential Disaster Declaration which would entitle citizens to Small Business Administration low interest loans for damage repair or rebuilding. It would also make the City eligible for reimbursement funds for some storm-related costs. Mr. Gretz said it is important to note the funds for citizens would be loans and would have to be repaid. Mr. Gretz said most of the flooding damage in the City occurred at the Fischer and McNamara gravel operations. Lake Alimagnet is being pumped and the ponding chain from it flows to the Fischer pond. This pond is being pumped to the south, under County Road 42, and the City will probably incur some crop damage claims in that area. Other ponding areas throughout the City have caused damage and a report will be prepared on recommended changesand additions to the storm sewer system to minimize future problems. Several homes in the Reflection Road area also suffered sanitary sewer backups. Mr. Gretz said this resulted from a power failure which prevented the lift station from operating. When this happens, an alarm sounds and a portable generator is brought out. Because of intersection flooding and other storm-related problems, they were not able to CITY OF APPLE VALLEY Dakota County, Minnesota July 30, 1987 Page 4 get the generator connected in time. Mr. Gordon said some homes in that area have had gate valves installed and the residents who shut them did not have a backup. This may be something to look at for other houses. A more detailed report will be prepared for the August 13, 1987, meeting. Mayor Branning expressed appreciation to all City employees who worked extra hours during the storm and clean up afterwards. MOTION: of Goodwin, seconded by Savanick, to pay the claims and bills, cheeks numbered 56087 through 56200, in thc total amount of $3,308,160.66. Ayes - 4 - Nays - O. CLAIMS & BILLS Mr. Gretz said the County has previously authorized purchase of its LIBRARY SITE half of the libravy site, located north of County Road 42 and east of ACQUISITION Glazier Avenue; however, the formal agreements have not been executed until yesterday. P.R. Development, from which the City and County are purchasing the site, has advised that the agreement under which it is purchasing the site has an escalator clause providing for a $20,000 price increase July 31, 1987, if full payment has not been made. They need $450,000 to close so the price will not increase. The City could use tax increment funds to pay the $450,000 and get repayment from the County. The total purchase price is approximately $670,000 and the City's half would be $335,000. The City would be funding an additional $115,000 until the County funds its half. There is some risk in using tax increment from the Apple Valley Business Center district if it would not proceed with completion of the other buildings. Mr. Sheldon said the Joint Powers Agreement with the County for the site purchase has been executed and the City can proceed with acquisition. The risk the City is taking is funding its half of the purchase plus the balance of $115,000 until the County can fund its share. The only delay in payment by the County would probably be completion of the requirement that existing buildings be removed from the site. MOTION: of Goodwin, seconded by Savanick, authorizing execution of the Joint Powers Agreement for Acquisition of the Library Site with Dakota County by the Mayor and Clerk and payment of $450,000 to P.R. Development toward purchase of the site at this time. Ayes - 4 - Nays - O. LIBRARY SITE AGREEMENT & PAYMENT MOTION: of Goodwin, seconded by Humphrey to adjourn. Ayes - 4 - Nays - O. The meeting was adjourned at 9:45 o'clock p.m.