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HomeMy WebLinkAbout05.07.07 Council Minutes COUNCIL MINUTES PRE-MEETING May 7, 2007 1. CALL TO ORDER The meeting was called to order by Mayor Soderberg at 6:30 p.m. Members Present: Members Absent: Also Present: Soderberg, Fogarty, McKnight, Pritzlaff, Wilson None Joel Jamnik, City Attorney; Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Randy Distad, Parks and Recreation Director; Lee Mann, Director of Public Works/City Engineer; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Jen Collova, Natural Resources Specialist; Cynthia Muller, Executive Assistant 2. APPROVE AGENDA MOTION by McKnight, second by Wilson to approve the Agenda. APIF, MOTION CARRIED. 3. CITIZEN COMMENTS 4. COUNCIL REVIEW OF AGENDA Councilmember Fogarty added an announcement by Randy Oswald regarding lacrosse. She also added under New Business a resolution opposing Farmington being in the Transit Taxing District. Councilmember McKnight asked about a payment to First American Title and what project it was for. Finance Director Roland noted it was for the purchase of the property on Akin Road. Councilmember McKnight then asked about the PERA payment being so high. Finance Director Roland replied that is the regular contribution. Councilmember Wilson asked about the Economic Development proposal containing a statement about adding other personnel and asked if it will add cost. City Administrator Herlofsky noted the cost would remain the same. Councilmember Wilson then asked about paying reasonable expenses and stated he was uncomfortable with that statement. City Administrator Herlofsky stated that will be worked out before the expense is generated. Councilmember Wilson noted under scope of duties it states developments near the new high school. City Administrator Herlofsky stated that is covering general provisions. Councilmember Wilson did not see any indication about how this will tie in with the comprehensive plan. City Administrator Herlofsky stated there are two separate contracts. One is to cover the Community Development Director position. The other contract is the market study which is related to the comprehensive plan. Councilmember Wilson then asked if this would tie in with the PEER review process. City Administrator Council Minutes (Pre-Meeting) May 7,2007 Page 2 , Herlofsky noted as part ofthe PEER review, they were to come back in one year to evaluate the changes made. Councilmember Wilson stated he was not aware ofthe 2003 Market Study until six months into his term. That study covered only the Vermillion River Crossing area. This study will be more comprehensive and up-to-date. Whether the study will also cover the townships will be determined. Currently a study has been approved to review commercial and industrial, not residential. Councilmember Pritzlaff noted in the contract he was uncomfortable with the statement to review development near the high school when there was not supposed to be development until 2020. He asked ifthe life span of the study done now would still be good then. City Administrator Herlofsky noted the Planning Commission was looking at a scale-type development for the community and they would like to have a workshop with Council to review that, possibly in May. Councilmember Pritzlaff asked why we are getting two engineering interns. Staff noted the City has had interns for many years. This falls under seasonal help and they will be City employees. Councilmember Wilson stated what caught him off guard about the scope of work for Mr. Fursman is that it is very definite to include those categorical items. Vermillion River Crossing and Pilot Knob and Hwy 50 are priorities. He hoped the work would not be limited to these and not include any other larger economic development initiative that should be addressed. Councilmember McKnight asked how Mr. Fursman will get his work assignments. City Administrator Herlofsky and Council will be controlling what Mr. Fursman is working on. Councilmember Wilson noted the Post Office dedication during Rambling River Days is scheduled for 10:30 a.m. This is the same time as the dodge ball tournament. It was determined to have Council representation at the Post Office event. 5. STAFF COMMENTS City Administrator Herlofsky noted in the weekly update was a Bonestroo evaluation form. He asked Council to complete that form and return it as this would be used for the 2008 budget. Council should complete this by the next Council meeting. Council pictures will be scheduled at 6:00 on May 21 at Heikkila Studios. Administrative Services Director Shadick stated the Planning Commission interviews need to be rescheduled. There are two applicants. Council decided to conduct the interviews on May 14 at 5:30 prior to the workshop. City Administrator Herlofsky provided a proposal from Holmes & Assoc. regarding Vermillion River Crossing. He suggested Council use the strategic planning checklist to see how Vermillion River Crossing matches up. Council Minutes (Pre-Meeting) May 7,2007 Page 3 6. ADJOURN MOTION by Fogarty, second by Pritzlaffto adjourn at 6:50 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~~??7~ Cynthia Muller Executive Assistant COUNCIL MINUTES REGULAR May 7, 2007 1. CALL TO ORDER The meeting was called to order by Mayor Soderberg at 7:00 p.m. Mayor Soderberg called for a moment of silence for Bill Patterson, Community Education Director. 2. PLEDGE OF ALLEGIANCE Mayor Soderberg led the audience and Council in the Pledge of Allegiance. 3. ROLL CALL Members Present: Members Absent: Also Present: Audience: Soderberg, Fogarty, McKnight, Pritzlaff, Wilson None Joel Jamnik, City Attorney; Peter Herlofsky, City Administrator; Robin Roland, Finance Director; Randy Distad, Parks and Recreation Director; Lee Mann, Director of Public Works/City Engineer; Lisa Shadick, Administrative Services Director; Brenda Wendlandt, Human Resources Director; Cynthia Muller, Executive Assistant Randy Oswald, Todd Seeman, Tasha Corcoran, Kevin Corcoran, Kyle Oswald, Ty Leeman, Riley Leeman, Denise Leeman, Kyle Hanson, Lynn Weierke, Chastiti Schultz, Terry Pomerening, Bob Knutson, Art Dickinson, Stan Knutson, Robert Pitner 4. APPROVE AGENDA Councilmember Fogarty added under Announcements 5d) Randy Oswald to talk about lacrosse. She also added 12d) Resolution Opposing Farmington being placed in the Metropolitan Transit Taxing District. MOTION by Pritzlaff, second by Wilson to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) Homecoming Event Presentation - Marianne Feely This was postponed to the May 21, 2007 Council meeting. b) Introduce New Employee - Police Department Sondra Baar was introduced as the new Administrative Support Specialist in the Police Department. Marilyn Walton was recognized for 34 years of service in the Police Department. Council Minutes (Regular) May 7, 2007 Page 2 c) Proclaim Historic Preservation Month - Administration MOTION by Pritzlaff, second by McKnight to proclaim Mayas Historic Preservation Month. APIF, MOTION CARRIED. d) Randy Oswald - Lacrosse Mr. Randy Oswald stated previously he asked ifthe City, school district and FY AA could communicate to see ifthere was interest in bringing the sport of lacrosse to Farmington. As word spread, they found there are a lot of kids with an interest in lacrosse. He announced a kick-off meeting to form a club on Tuesday, May 15, 2007 at the Public Library at 7:00 p.m. Lacrosse players from Lakeville and Apple Valley were present. There are also players in Eagan and Burnsville. There are 11 boys from Farmington on the Lakeville team and 45 Farmington kids participating in Apple Valley teams. Councilmember Fogarty thanked Mr. Oswald for his hard work. Ms. Lynn Weierke stated she serves on the board for the Lakeville lacrosse association and stated there is huge enthusiasm on the part of parents and kids. She will be resigning from Lakeville and joining Farmington. This is an amazing sport and felt it was time we have a place for kids to play after 8th Grade. 6. CITIZEN COMMENTS 7. CONSENT AGENDA MOTION by McKnight, second by Fogarty to approve the Consent Agenda as follows: a) Approved Council Minutes (4/16/07 Regular) b) Approved School and Conference - Administration c) Approved Temporary On-Sale Liquor License - Administration d) Adopted RESOLUTION R38-07 Accepting Arbor Day Donation from Dakota Electric - Parks and Recreation e) Approved Grant from NRP A for Take Me Fishing Program - Parks and Recreation f) Approved Professional Services Agreement - Police Department g) Received Information 2007 Assistance to Fire Fighters Grant - Fire Department h) Acknowledged Resignation Fire Department - Human Resources i) Approved Appointment Recommendation Public Works - Human Resources j) Approved Wetland Alteration Permit Fairhill - Engineering k) Adopted RESOLUTION R39-07 Approving Farmington Department Directors Contract - Human Resources I) Approved School and Conference - Fire Department m) Approved Appointment Recommendation Engineering Intern - Human Resources n) Approved Appointment Recommendation Engineering Intern - Human Resources 0) Approved Bills APIF, MOTION CARRIED. 8. PUBLIC HEARINGS Council Minutes (Regular) May 7,2007 Page 3 9. AWARD OF CONTRACT 10. PETITIONS, REQUESTS AND COMMUNICATIONS a) Neighborhood Preservation Overlay District Update - Administration Administrative Services Director Shadick updated Council on the progress of the Neighborhood Preservation Overlay District. In January 2006 Council held a joint workshop with the Heritage Preservation Commission and a number of residents. Following the workshop, Council directed staff and the HPC to develop a zoning classification to regulate infill development in historic neighborhoods. An ordinance has been developed to regulate this. The timeline for approval of the ordinance is on May 8,2007 it will go to the Planning Commission for discussion, a neighborhood meeting will be held on May 16, 2007 for residents in the proposed district, June 12, 2007 a public hearing will be held at the Planning Commission, and on June 18,2007 the ordinance will come to Council for approval. Councilmember Wilson asked ifthis is the first communication since 2006. Administrative Services Director Shadick replied the HPC and staff have been working on this. Councilmember Wilson asked if the boundary lines suggested there were no historic properties outside this area within the downtown area. Staff stated we are trying to create an initial district and start with a small area. There are historic properties outside the district boundaries. To obtain approval ofthe overlay district, 50% approval of the residents is required. Councilmember McKnight asked ifthe public hearing notices have been mailed for the public hearing. Staff stated notices have not been mailed, the public hearing notice will appear in the paper this week. Neighborhood meeting notices have been mailed. Councilmember McKnight stated he expressed this concern a year ago, that he wants to make sure the neighbors in this district fully understand how this impacts them even though they are not in a historic dwelling. Staff noted that is the reason for the neighborhood meeting. Councilmember McKnight asked staffto stress that in the notices and at the meeting that it will regulate demolition and construction even if they are not in a historic home. Staff noted that was included in the notice. Mayor Soderberg noted this would require a majority vote of the residents. The ordinance would be approved and then the vote for the district would come after that. b) Federal Solicitation for TH3 Funds - Engineering There is a potential opportunity to obtain funds from the Federal Surface Transportation Program to obtain funds for improvements to TH3. $92 million will be awarded from the federal program. Solicitation will begin this summer Council Minutes (Regular) May 7,2007 Page 4 and selection will be made in 2008. Projects would be funded in 2011 or 2012. Improvements to TH3 could qualify under this program. The road is an "A" Minor Arterial- Connector." The program requires a 20% local match which can come from the applicant and any other partners, including the State. At some point TH3 will be reclassified to a Principal Arterial which would make the process more competitive for the funding. The application needs to be completed by the end of July. Farmington would be the lead agency on the project and would have to commit to the funding on the application. The project would include a median, accesses, and frontage road. Staffwill bring costs and more details to the May 21, 2007 Council meeting. 11. UNFINISHED BUSINESS a) Boulevard Tree Policy Financial Update - Engineering Staff presented financial information for the removal, stump grinding, and replacement for the backlog of boulevard trees. Staff has taken an inventory of all locations on the backlog list and found there are 225 trees that need to be replanted. An estimate was received from a contractor for $125,000 to remove trees, grind stumps and replace the trees. Funding would come from the Private Capital Projects Fund. Staff requested approval to go out for bids. Councilmember Wilson was concerned that we should not set an expectation that future boulevard trees would be replaced. City Administrator Herlofsky noted that is where the policy would come into place and that will be brought to Council at the next meeting. The City would continue to maintain boulevard trees. Councilmember Pritzlaff agreed with getting the backlog up-to-date. His concern was once it is up-to-date how do we not fall back into this same type of inventory for tree removal. Staff explained Council set April 2, 2007 as the cutoff date. If the policy is approved that when boulevard trees come down, they would not be replaced, but the City would remove the tree, that would solve the backlog problem. Last year 31 trees blew down and that is a manageable number. The problem was the funding to replant the trees. City Administrator Herlofsky explained in the past people were promised the trees would be replaced by the City. That practice will end, and trees will not be replaced in the boulevard. MOTION by Wilson, second by McKnight to authorize the advertisement of bids to remove, grind stumps and replace the trees on the backlog list. APIF, MOTION CARRIED. b) Approve 2007 Storm Water System Monitoring - Engineering Staff contacted the Vermillion River Watershed Joint Powers Organization, the MnDNR, and the Dakota County Soil and Water Conservation District regarding assistance with funding this project. The VRW will be able to fund a portion of the project. The DNR is not able to help financially, but will help with staff time and equipment. The Soil and Water Conservation District is not able to assist with the project. The cost of the project is $14,880. MOTION by McKnight, Council Minutes (Regular) May 7, 2007 Page 5 second by Fogarty to approve the proposed 2007 Prairie Waterway monitoring project. APIF, MOTION CARRIED. c) Approve Park Planning Services Proposal- Parks and Recreation Parks and Recreation Director Distad requested approval for master planning services from Hoisington Koegler for Riverbend park, Farmington Preserve, and the community park area in the southwest corner of the Fairhills development. In 2007 staff proposed for the Riverbend park and Farmington Preserve staff would be responsible for holding public meetings and developing the master plans. In the Fairhill development, staff would like to use Hoisington Koegler throughout the process. Staff would also like to use the consultant for developing cost estimates for all three parks and to create a final rendering ofthe parks. Councilmember Fogarty agreed with using the consultant for the Fairhills park and asked if we would be able to use the knowledge gained from this park for an adult softball type complex in the southern area of 195th and not have to use a consultant. Staff noted the softball complex was created by the consultant last year. She assumed by electronically retaining the plans for these three parks, that would decrease consultant costs to put more money in the parks. Staff agreed. Staff would like to utilize professional services for the community parks, the next one being Rambling River Park. Community parks bring a number of different issues because of the number of users ofthe parks. Councilmember Wilson felt it was nice to have a good plan, but he also wanted to have the work done. He did not want to use a consultant, and then wait 2-3 years for the work to be done. Staff agreed it is important to implement the plan once it is done. MOTION by Fogarty, second by Wilson to approve the proposal submitted by Hoisington Koegler for park planning services. APIF, MOTION CARRIED. 12. NEWBUSINESS a) Workshop Meeting Schedule and 2008 Budget Calendar - Administration City Administrator Herlofsky provided a schedule for 2007 workshops as well as the 2008 budget. On June 11,2007 the Planning Commission would like to meet with Council to discuss stage development and then Council can discuss priorities for the 2008 budget. On July 9,2007 there will be another budget workshop. August, November, and December dates are still open. Councilmember McKnight noted Council will bring their budget priorities to the June 11 Workshop, but by June 14 departments have to submit their budget requests, which does not leave a lot oftime. City Administrator Herlofsky noted having Council priorities will help staff review the budget documents and be aware of Council concerns. Council Minutes (Regular) May 7,2007 Page 6 b) Approve Economic Development Contract and Market Study Contract - Administration As a result of the EDA meeting in April, two proposals were brought to the EDA. One was to hire a consultant to assist with economic development activities with a retainer, and the second was to address the need for a market study for commercial and industrial properties. The source of funding is due to a vacancy in 2007 which will provide 40% of the funding. Councilmember McKnight asked about the contract with Mr. Fursman and the estimated cost being $12,000. There is a monthly retainer and an hourly rate. $12,000 will not provide much for an hourly rate. City Administrator Herlofsky noted that is for activities in excess ofthe retainer hours. Councilmember McKnight stated the EDA reached an agreement on the need for these two contracts. City Administrator Herlofsky will control the contract with Mr. Fursman. The commercial/industrial study is the gap the Planning Commission was missing for the comprehensive plan. Councilmember Wilson stated the previous study focused primarily on the Vermillion River Crossings area. He asked ifby spending this money we will get a better picture of what the market can handle. City Administrator Herlofsky replied we need to determine what businesses are looking for to come into the community. The study will put us in a position to say what do we have and what do businesses look for in the quality of a community to help us determine what are our strengths and what do we need to look at. Mayor Soderberg stated the Spruce Street market study helped us determine how much retail space the area could support. That was around 200,000 sq. ft. He assumed we would obtain that same type of data for industrial development. Councilmember Wilson suggested making a CD showcasing what we are about in Farmington and making that available to people who are interested in bringing business here. City Administrator Herlofsky felt that would be good to do after the market study. Councilmember Pritzlaff stated we will be able to figure out more of what the community needs rather than marketing the City to the businesses. City Administrator Herlofsky replied we will be more effective in marketing the City with this information. The first study was specific to one area, this will look at the entire City. Councilmember Pritzlaffhad a concern with wording in the contract regarding looking at development near the new high school. Councilmember Fogarty noted the EDA will be paying for half ofthis plan. They are trying to form an economic development plan. Councilmember McKnight asked ifthis study will incorporate the types of businesses to come to Farmington in 5-20 years. City Administrator Herlofsky stated he will be putting the contract together with Mr. Fursman for the Maus Group to fine tune issues and to make the document more useful over a long period of time. Council Minutes (Regular) May 7, 2007 Page 7 MOTION by Fogarty, second by McKnight to approve the Economic Development Consultant Contract from Mr. Richard Fursman and a proposal for a Commercial/Industrial Market Study from the Maus Group with the funding sources identified. APIF, MOTION CARRIED. c) Vermillion River Crossing Update - Administration In August 2005 Council approved a development agreement with Vermillion River Crossings, LLC. At that time as part of the development agreement the Council agreed to the extent then permitted by law, the City will enter into a tax abatement agreement with respect to the project as soon as reasonably possible and as to the extent that tax abatements are received, the City will pay the proceeds to the developer in order to reimburse the developer for the cost of the assessments paid including any interest. The tax abatement agreement would provide that tax abatements would be paid for the maximum 10 year term allowed by law for each parcel, commencing in the year of full assessment of the initial improvements. This was to pay for the assessments that would be paid by the developer to pay for the bonds which paid for the Spruce Street extension. Subsequent to this developer agreement, on May 15, 2006, the Council amended the developer agreement, which excluded a couple of parcels from special assessments, and extended the period to a 15-year abatement period which is now accepted by law. The statute was changed between 2005 and 2006. Instead of a lO-year period, there is now a 15-year period for abatement. There is the possibility of a 20-year period for abatement. This requires the City to request of the school district and the county to participate in the abatement. Negative declarations would be needed from one or both of those entities in order to extend the abatement to 20 years. Vermillion River Crossings LLC is in the process of changing partners and financial support. As part ofthat, the Knutson's, have requested staffbring the abatement to Council originally agreed upon in the development contract in 2005. As part of that abatement agreement, a public hearing is required and is proposed to be held on May 21, 2007. At that public hearing the actual abatement agreement would be prepared and brought to Council for review to come to an agreement with the developers on the abatement agreement. Because ofthe change in financial partners, the developer is requesting the abatement agreement would include the 20-year provision. The amount of abatement which would be necessary to pay back the special assessment of $2 million plus interest, would be more easily paid back over the 20-year period than over a 15-year period. The amount of market value build out required by the project to pay back the assessments would take longer than 15 years. This means if the Council directs staff to include the 20-year provision, the properties in the development area would not contribute to the City's tax base for an additional five years. Those properties would contribute to the school district and the county tax base. Because of the election of abatement, the property tax value which would be included in the City's taxable area would not include the abatement area. If Council Minutes (Regular) May 7,2007 Page 8 Council chooses the 20-year period, there would be an additional five years that those properties would not be on the entire tax rolls ofthe City. The developer and partners are requesting this so they might recoup as close to the full amount of the $2 million plus interest as they can. They believe 15 years will give them significantly less than $2 million plus interest. A public hearing will be held on May 21, 2007 after staff receives Council direction on the abatement agreement. Councilmember McKnight asked for the pro's and con's of going to 20 years. Finance Director Roland replied the idea of doing abatement was put forward as part ofthe development agreement in order to assist the developer in bringing commercial and retail properties to the City. Council was committed to that at that time and saw the need to provide additional incentive in order to support the development. The developer would have difficulty paying the $2 million worth of assessments and providing themselves with an appropriate internal rate of return. The properties would not contribute to the tax base for 15 years. They would be paying the special assessments which support the bond issue. The availability of abatement would bring a more palatable situation to the development. It does mean foregoing an additional five years oftax base. Councilmember McKnight stated this comes down to Council's desire for an expanded commercial tax base in the area, compared to Council's desire to have more businesses in town for the resident's to spend their money. Finance Director Roland stated the first year for the abatement is 2006. The properties currently there do not see increased taxable market value until 2008. Once entered into the abatement agreement, the assessments would be paid and the developer would receive the City's portion of the taxes rebated to them to the extent ofthe special assessments and if there is any money in addition to that amount, there would be pre-payment of special assessments out ofthose funds. Going to 20 years would not re-start the time the abatement started. Councilmember Pritzlaff asked ifbuild out was done in 15-20 years, what type of dollar amount would the City not receive. Finance Director Roland replied the market value required to substantiate tax abatements for $2 million plus interest would have been in the $39 million market value range. This would equate to $700,000 in tax capacity value per year. Mr. Tim Velner, Attorney with Holmes and Associates, explained what they are proposing. The taxes generated by a parcel are split among the City, county, and school district. Each jurisdiction has the option of granting abatement which means that its portion oftaxes generated by a parcel of property can be assigned to an entity that provides a public benefit. There are some restrictions. One is the term. The statute was changed to 15 years and can be extended to 20 years upon a request to the other taxing jurisdictions and either a denial from them to contribute or failure to respond within a specific period oftime. Another limitation on tax abatement is once a parcel of property is granted tax abatement, it can no longer be granted abatement for an additional eight years after that. The terms of the development agreement were that the developer would be reimbursed Council Minutes (Regular) May 7, 2007 Page 9 $2 million plus interest they would pay through special assessment through tax abatement. Through abatement, once the $2 million is repaid, the abatement ends. If it is extended to 20 years and the abatement is paid back in 10 years, the abatement is done. It is not true the abatement would be for 20 years; that would be the worst case scenario. If it went for 15 years, and the $2 million plus interest was not paid back in 15 years, the developer would lose, because there is no condition to extend it. If the abatement is capped at 15 years and the developer does not meet the $2 million, the City gets a windfall and the developer is left holding the bag. The extra five years is not anything the City has not already bargained for, it is putting the parties in a position they bargained for in the development agreement. Finance Director Roland stated that is a true statement if you believe that the build out to the market value level is going to be achieved in less than 20 years. You can only get taxes off of properties that have market value. Ifthere is no market value, there are no taxes and therefore, it is not paid back. If the market value exists then it could go less than 20 years. However, ifthe market value ofthe property does not exist, you would have to go the full 20 years in order to pay back the developer. Councilmember Pritzlaffwas concerned with changing the agreement. Finance Director Roland stated Ehlers will be present to present the abatement agreement on May 21,2007. Councilmember Pritzlaffwanted a timeline of what will happen when. Staffhas asked for timelines and the developer has done their best to provide them. The abatement agreement that is being put forward in two weeks hinges on the 15 or 20-year period in order to satisfy the banker's request to make them feel comfortable enough to finance the project. Mr. Art Dickinson, with Moss and Barnet and representing the Knutson's, understood the assessments related to the Spruce Street extension and bridge was not something the developer had asked for at the time, but was something the City wanted to connect the old downtown with the new development. The developer did not ask for special treatment, the City wanted that connection to keep everyone from going to the new development. The developer agreed to the special assessments, but that was under the condition they would have a good shot at getting them paid back. They are hoping to have a closing on the refinancing on May 22, 2007 if the abatement agreement is approved on May 21, 2007. This would be the final stage in the Pederson's being bought out of the partnership and the development being able to move forward. Councilmember Wilson asked ifit was possible to obtain a broad sense of how the developer pictures the rest of 2007 and 2008 based on current market conditions. Mr. Dickinson replied there is interest and we need to do it one step at a time. The first step is taking care of the partners, and then they would be glad to give a presentation to Council. Council Minutes (Regular) May 7,2007 Page 10 Councilmember Fogarty stated she wanted to correct Mr. Dickinson. It is true the City wanted the bridge to connect the area, but it is also true Council was looking at the different options because the development would need more than just access from CSAH 50. The abatement was more of a compromise in that we recognize that the type of infrastructure needed to make it work nicely with the City was terribly expensive. There was a grant from the Met Council for part of the bridge and that is why Council was willing to do the abatement for the 10 years, because we acknowledged that was an expensive infrastructure. The developer went into it with the understanding that it was also something where we needed more access than just CSAH 50. She noted Mr. Velner commented that if we only did 15 years and the infrastructure was not paid off with the abatement by then, that the City would get a windfall and that your developer would be holding the bag. That is not necessarily fair. This was necessary infrastructure, maybe it did not need to be this type of infrastructure, but it was needed. She was uncomfortable with some of the language being used, because this was needed. She asked if she was being told that the Knutson's will not be able to get the financing they want going into this with a new developer if we do not grant a 20- year abatement. Mr. Dickinson stated the Knutson's have talked to over 25 lenders to come into the transaction. The project is at a critical stage. He could not tell Council the person will not come in if it is not 20 years. He could say the person has a tremendous issue with the amount of abatements and the potential ifthe lender had to take over the project, that they would not be able to get the full amount of their abatement back. It makes it easier in that it gives some breathing room. He has indicated this is the final issue that has to be dealt with before he will fund, which will take care ofthe Pederson situation and allow the project to move forward. The Knutson's will be the only owners of the entity. The abatement agreement is contingent upon the Knutson's being able to get the funding to take out their partners. The Knutson's have found a great partner in First Capital to promote the project and to bring the project to what everyone had envisioned. Councilmember Fogarty asked if Council were to agree to extend the abatement agreement for 20 years are the Knutson's or First Capital comfortable with inserting language with some guaranteed deadlines. If Council extends the agreement for 20 years, they will be asked what assurances did you get from this developer that it will happen. Mr. Dickinson felt they would be open to discussing it, but the lender's pressure is far greater than what she has suggested. If the project is going to go, it has to be quicker than 50% build out in three years. Mayor Soderberg stated there is no lessening of incentive to get the project going and have businesses built out there and finishing the infrastructure. Mr. Dickinson replied the incentive is much greater because ofthe time ofthe year it is already. Mayor Soderberg stated if the school and the county say yes, how much would that change things? Finance Director Roland stated that would be more along the lines of traditional TIP. If one or both were to agree that would Council Minutes (Regular) May 7,2007 Page 11 double the amount oftax dollars going to the project and that would pay back the assessments in a much quicker time frame. However, historically neither the county nor the school district would be interested in an abatement agreement since the City would be the lone beneficiary ofthe abatement agreement. Mr. Dickinson noted counties and schools have never said yes. Mayor Soderberg stated Vermillion River Crossing is 29 developable acres out of a 40 acre parcel. That is 10% of the whole Spruce Street development. When looking at the plan put in place to develop the whole area, this is a catalyst to get things going. He supported the abatement in order to provide the catalyst. There has been demonstrated interest in that area and it is ready to go. The businesses there are doing better than projected. While Council would be abating taxes potentially up to 20 years, it will provide a new foundation for additional development. This is 10% of the whole Spruce Street corridor. It does not abate taxes on any of the residential proposed south ofthe river, it does not abate taxes on any of the development proposed west of the Vermillion River Crossing, and those are areas that once this is up and running, will generate interest that will spread quickly. We have committed to this project and we have committed to paying off the bridge and that is what this will do. He supported the change to 20 years for the abatement agreement. Councilmember Pritzlaff asked if this sets a precedent for any commercial to the west. Finance Director Roland replied there is that potential. However, with the study that will be done by the EDA, Council will have more of an outline of what the market will bear and will be able to say this is how far we will go and not any further. Council will have more substance behind decisions they make. Mr. Dickinson noted the Knutson's are the sole equity owner, but they are using experienced developers. First Capital has done numerous projects and they will be providing the expertise and make sure things move along quickly. Councilmember Wilson stated there is a ceiling of $2 million plus interest, so we are discussing a greater period of time for the developer to capture their maximum potential dollars. The dollar amount has not changed. Councilmember McKnight stated staffheard Councilmember Fogarty's concerns for outcome based information in the abatement agreement. With that he will support the 20 years. Council reached consensus to support the 20 years for the abatement agreement. Performance measures will be placed in the abatement agreement and it will be brought to the May 21,2007 Council meeting. The road will be completed by August 1, 2007 so the bridge can be opened. Council Minutes (Regular) May 7, 2007 Page 12 d) Adopt Resolution - Opposing Farmington Being Placed in the Metropolitan Transit Taxing District Councilmember Fogarty proposed a resolution opposing Farmington being placed in the metropolitan transit taxing district. Representative Garofalo was concerned the Governor would sign this bill. The transit taxing district pays a tax for public transportation. Farmington does not have any busses or park and rides and would not benefit from this, yet the legislature is proposing to include everyone in the seven county metro area in the transit taxing district. For Farmington, the first year would cost $209,000 which the City would pay in taxes and receive no benefit. MOTION by Fogarty, second by McKnight to adopt RESOLUTION R40-07 opposing Farmington being placed in the metropolitan transit taxing district. APIF, MOTION CARRIED. 13. COUNCIL ROUNDTABLE a) May 14, 2007 Council Workshop This workshop will be a tour of the parks. The workshop starts at 6:00 p.m. with Planning Commission interviews being held at 5:30 p.m. Councilmember Fogarty: She encouraged everyone to vote tomorrow. She read an e- mail she received from a resident regarding the election for the sportsplex. Councilmember McKnight: Thanked the Police Chief and Fire Chief for the mock crash held at the high school. It was very well done. He attended the Arbor Day celebration and thanked staff for their work. He noted in the update it was mentioned a couple businesses being left offthe Elm Street project mailing. He asked if there would be another mailing. City Administrator Herlofsky stated if another mailing is done, it will be expanded. Councilmember McKnight realized no offense was meant to any of the businesses and Council will do their best to remind residents to shop downtown while Elm Street is under construction. He reminded everyone to vote. Councilmember Wilson: Attended the National Day of Prayer and thanked Justine Jacobson and everyone on the committee for planning the event. He was with his cub scouts at the park and pond clean-up and it was a nice event. Parks and Recreation Director Distad noted 1.58 tons of garbage was picked up. Councilmember Wilson thanked the Parks and Recreation Department and Solid Waste for working along with the volunteers. He stated there are several ways to communicate with Council. Yesterday he received a communication from his second grade neighbor which was taped to his door saying no more houses in Farmington. He thanked her for this communication. Councilmember Pritzlaff: Asked how many businesses were left off the Elm Street mailing. City Administrator Herlofsky replied it was a small area across from the Eagle's. Staffis determining how much of an area towards TH3 should be included. Councilmember Pritzlaffhad a resident contact him regarding a pond behind his house with a thistle problem. City Engineer Mann replied depending on the time of year depends on whether they spray or cut them down. Councilmember Pritzlaff noted there Council Minutes (Regular) May 7,2007 Page 13 was a petition for the Elm Street detour route. One person suggested three speed bumps on Division Street. City Administrator Herlofsky and staff have talked with the resident and the traffic will be managed. Councilmember Pritzlaff asked if notices for the assessment have been sent to Sunnyside. Staff noted notices have not been sent yet, because it was late in the year and notices will be sent when the final lift is put on. Councilmember Pritzlaff noted some ofthe sportsplex signs were defaced and stolen from personal property last week. Whatever group of people is responsible for this, this is not acceptable. Signs are a way for everyone to get their message across. This was a rude act by a group of people. Taking signs off personal property, wrecking signs on personal property, makes it personal. He would like the group to come forward. He asked everyone to vote. Ifit fails, he would be one of the people at the table to partner and work out issues where the current ice arena is located. Mayor Soderberg: Encouraged people to vote. The sportsplex has received a lot of attention and there are feelings on both sides ofthe issues. He attended the National Day of Prayer and noted it was well attended. Council recessed at 8:50 p.m. 14. EXECUTIVE SESSION a) City Administrator Performance Review Council reconvened at 9:03 p.m. for the City Administrator's performance reVIew. 15. ADJOURN Respectfully submitted, ~/l'i~ { Cynthia Muller Executive Assistant