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HomeMy WebLinkAbout05.21.07 Council Minutes COUNCIL MINUTES PRE-MEETING MAY 21, 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; Cynthia Muller, Executive Assistant 2. APPROVE AGENDA MOTION by Wilson, second by Pritzlaffto approve the Agenda. APIF, MOTION CARRIED. 3. CITIZEN COMMENTS 4. COUNCIL REVIEW OF AGENDA Councilmember McKnight asked about the location of the two City lots for the Elm Street project. One easement is for the entrance to Rambling River Park and the other is the Depot Way Park. Councilmember Wilson asked about the Fairhills slope project and if staff was confident the $474,000 cost was conservative. Staff felt this should cover the cost. The project was necessary because of the grading of the lots along the pond and concentrated discharges from sump pumps, etc. Councilmember Wilson then asked about the abatement for Vermillion River Crossings and what happens if the project falls apart. City Administrator Herlofsky explained the property would be tax forfeited and the property can be purchased for the amount of the special assessments plus interest. Councilmember Pritzlaff asked about the cost and number of people attending the conference for Parks and Recreation. Parks and Recreation Director Distad explained last year two people went to a national conference for $2500. For another $600 two more staff people could attend this year. This conference is within driving distance. Council Minutes (Pre-Meeting) May 21,2007 Page 2 Councilmember Pritzlaff then asked about the payment to Gerster Jewelers. Human Resources Director Wendlandt explained this was for employee recognition and also another recognition plaque was ordered. Employees receive a monetary recognition starting with 10 years of service. Mayor Soderberg felt a letter from Council acknowledging their service would be appropriate. Staffwill compile a list of benchmark . . annIVersanes. Councilmember Pritzlaff asked about the timeline for build out for Vermillion River Crossings. He asked how the developer can determine they will have a hotel within three years, etc. Finance Director Roland replied the developer provided that schedule. The Abatement Agreement addresses what happens if the developer defaults. If there is no build out, there is no money in taxes to be rebated to the developer. The special assessments are the City's biggest recourse. City Administrator Herlofsky explained all the properties have special assessments. Whoever owns the property is obligated to pay the special assessment. The abatement reimburses the developer only to the degree that development takes place. Their incentive is to get development in as quickly as possible. Councilmember McKnight stated if the development falls through, we cancel the abatement. Council suggested moving items lOa) and 10e) to the consent agenda. 5. STAFF COMMENTS City Administrator Herlofsky informed Council that Tuesday night is the last Rambling River Days meeting at 7:00 p.m. at the ice arena. Finance Director Roland advised Council that the attorney for the City will be providing revisions to the Abatement Agreement. 6. ADJOURN MOTION by Pritzlaff, second by McKnight to adjourn at 6:49 p.m. APIF, MOTION CARRIED. Respectfully submitted, f7~~7YldYL Cynthia Muller Executive Assistant COUNCIL MINUTES REGULAR MAY 21, 2007 1. CALL TO ORDER The meeting was called to order by Mayor Soderberg at 7:00 p.m. 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; Jen Collova, Natural Resources Specialist; Cynthia Muller, Executive Assistant Douglas Bonar, Ed Samuelson, David McMillen, George & Sharon Flynn, Marianne Feely, Youth Development, Marlys Guildner, Betty Steege, Richard Ludwig, Martha Mena, Steve Frandrup 4. APPROVE AGENDA Councilmember McKnight moved items lOa) Hometown Development Letter of Credit and lOe) Elm Street Project Update - Bids to the Consent Agenda. MOTION by Pritzlaff, second by McKnight to approve the Agenda. APIF, MOTION CARRIED. 5. ANNOUNCEMENTS a) Homecoming Event Presentation - Marianne Feely Students from the Farmington High School Youth Development gave a presentation on the success of the 2006 Homecoming celebration. They also presented the schedule of events for 2007. b) Introduce New Employee - Public Works Kris Keller was introduced as the new Civil Engineer. c) Heritage Preservation Awards - Administration Ed Samuelson presented the Heritage Preservation Award to Marlys Guildner for her work in preserving Farmington's history. David McMillen presented the Heritage Preservation Award to Juan and Martha Mena for their work in restoring the State Bank building. Council Minutes (Regular) May 21,2007 Page 2 6. CITIZEN COMMENTS Mr. Doug Bonar, 18120 Echo Drive, had some questions and comments regarding the new City Hall project. It was his understanding that the project is moving out of design development and into construction documents. He believed the history ofthe project was in 1999-2000 there was a facilities task force to review the condition of all City facilities. Some ofthe most recent additions to the area include the Police Station, the second Fire Station, and the Central Maintenance Facility which were a direct result of that task force, which concluded its work in April 2000. Several years later the Council, in a workshop in December, gave consideration to the remodeling ofthe current City Hall. There were also subsequent blind appraisals put together for the consideration of expanding the current facility to the north and east. Around July 2004, the project changed to a new construction at a budgeted amount of$7.6 million. He asked when it comes to the change in Council's direction, he assumed this was a direct result of some analysis that would be created to show the benefits and causes of remodeling and/or expansion of the current facility versus new construction. He could not find this in the public record. He wanted to gain a better understanding of how we moved from a simple remodeling to a full replacement. As time has passed, the project has grown in scope and has experienced inflation and grown to $9.1 million. In his reading he stated he lacks a clear understanding ofthe tax impact to an average home in Farmington. A credible job has been done in demonstrating the cost ofthe project, but it has not been broken down in a simple denomination for the taxpayers. He welcomed a staff response in writing. Councilmember Wilson stated regarding the second question, it is a very good question especially with the public facilities construction in the Farmington area. He did bring this up a couple weeks ago to the City Administrator and Finance Director to make information on the tax impact available to residents. 7. CONSENT AGENDA MOTION by McKnight, second by Pritzlaffto approve the Consent Agenda as follows: a) Approved Council Minutes (5/7/06 Regular) b) Adopted RESOLUTION R41-07 Revising City's Capitalization Policy - Finance c) Received Information April 2007 Financial Report - Finance d) Approved School and Conference - Parks and Recreation e) Adopted RESOLUTION R42-07 Accepting Donations Annual Ice Skating Competition - Parks and Recreation f) Approved Agreement with Premier POS, Inc for Providing Web Based Services - Parks and Recreation g) Approved Request to Waive Fees Rambling River Days - Parks and Recreation h) Approved Appointment Recommendation Fire Department - Human Resources i) Approved School and Conference - Fire Department j) Approved School and Conference - Fire Department k) Approved Rescue Squad Membership - Fire Department I) Approved Easement Acquisition - Hunter Lift Station Project - Engineering m) Adopted RESOLUTION R43-07 Authorizing Advertisement for Bids - Hunter Lift Station - Engineering n) Authorized Elm Street Project Temporary Easements - Engineering Council Minutes (Regular) May 21,2007 Page 3 0) Approved Bills p) Approved Drawing on Hometown Development Letter of Credit - Administration q) Received Information Elm Street Project Update - Bids - Engineering APIF, MOTION CARRIED. 8. PUBLIC HEARINGS a) Adopt Resolution - Designate Farmington Heritage Landmarks - Administration Homes owned by George and Sharon Flynn, 320 Walnut Street, and Gary and Cynthia Raynor, 421 Oak Street were designated as Farmington Heritage Landmarks. George and Sharon Flynn gave a presentation on their home. They were very honored with the designation. MOTION by Pritzlaff, second by Fogarty to close the public hearing. APIF, MOTION CARRIED. MOTION by Pritzlaff, second by Wilson to adopt RESOLUTION R44-07 designating the Flynn House, 320 Walnut Street, and the Raynor House, 421 Oak Street as Farmington Heritage Landmarks on the Official City Zoning Map. APIF, MOTION CARRIED. b) Consider Tax Abatement Agreement Vermillion River Crossing - Finance In 2005 the City and the developer entered into a Development Agreement which agreed to the following. The City would assess the cost ofthe Spruce Street extension and bridge project against the properties of Vermillion River Crossings and in return the City would consider an Abatement Agreement which would reimburse the developers for up to $2 million plus interest with regard to the special assessments that they would have already paid, but they would be rebated the taxes in order to make the properties and the project more financially palatable to the developers. But for this assistance, the project would not work as well and development would not occur. During the course of developing this agreement, staff worked with Lynette Crandall from Dorsey and Whitney who is an expert in abatement and Sid Inman from Ehlers and Associates. The Abatement Agreement had some changes and Council was given a revised agreement prior to the meeting. The agreement says that the properties in the Vermillion River Crossings project will be given tax abatement over a 20-year period commencing with this agreement based on the tax base which was in place as of 2005. An article in the agreement shows the tax base the project started with and anything above this amount will be subject to tax abatement to reimburse the developers for the assessments they are paying on the Spruce Street extension project. The agreement also states the tax base is exclusive of fiscal disparities. Commercial/retail properties in Minnesota pay into a fiscal disparities pool. Fiscal disparities means that a certain portion of the tax is paid into the state pool and the City receives money back. Ifwe have less commercial/retail than the rest ofthe metro area, we get more money back. Ifwe have more commercial/retail we pay in. At this point, it is not in the City's best interest to consider tax Council Minutes (Regular) May 21,2007 Page 4 abatement inclusive of fiscal disparities. The agreement says it is written out. However, there is a caveat in Section 3.2 under abatement. This is included in order that the developer be encouraged to meet the deadlines in Exhibit C. The developer expressed a desire from the beginning to have fiscal disparities completely abated. Staff did not feel they could do that, but they were given the consideration in this section which reads, in the event on the date that is three years from the date hereof, the targeted completion date set in Exhibit C, have been met by the developer and it is determined by an independent financial advisor that the projected aggregate payment for the abatement period will not equal $3,050,000 then for all payment dates, the tax capacity used to determine the semi-annual abatement amounts shall include tax capacity subject to the areawide tax rate. This means if in three years the developer has met their targeted goals and they still need additional help, according to an independent financial advisor, the City will include fiscal disparities. It is to the developer's benefit to build out quickly and to the greatest extent possible, so their abatement amount comes back to them. Ifthis is not done, they will not be able to recoup the money they are paying out in special assessments. There is also a section on business subsidy, which is a policy Council adopted in 2002. Councilmember Fogarty noted in Section 2.2 e) language was added stating, while failure to construct in accordance with Exhibit C will negatively impact reimbursement of the Developer under this agreement, such failure shall not constitute default. She asked if that took the teeth out ofthe deadline. Ms. Lynette Crandall responded one option would be to make a failure to construct the project as contemplated an event of default. This means the City would have the opportunity to recoup the abatement that has been paid out. However, the way the agreement is structured, the abatement or the incentive the developer is getting to improve the property is somewhat limited by what they actually do on the land. In the event they do not meet the timeline, they are hurting themselves because they are not getting the full value of the abatement. The timeframe is limited. Abatement can only be paid over a period of 20 years. It does have teeth in that if they do not do what they say they will within the timeframe, they will not realize the economic benefit. Councilmember Fogarty stated the abatement agreement at first was for 10 years, then 15 years, and now 20 years. At the last meeting she asked for assurances from the developer to put the pressure on them to work really hard. Ms. Crandall stated to the extent the build out does not happen on schedule, the developer never has an opportunity to tap into the fiscal disparities pool contribution. Another safeguard is they do not have unlimited time to get the project moving. In the definition of abatement period, the clock starts no later than August 1,2012 as to when the first payment must be made. A failure to meet the deadlines of December 31,2008,2009,2010, for construction in each of the phases is not a default. If those dates are not met there is not an opportunity for the developer to get the fiscal disparities contribution. 2012 is when the 20- year time period for the abatement ends. The time lines in Exhibit C are goals. Council Minutes (Regular) May 21,2007 Page 5 Mr. Sid Inman explained if a building is completed in 2010, it is assessed in 2011, and taxes are payable in 2012. Mayor Soderberg asked if a letter has been received from the school district and the county that they declined to participate. Finance Director Roland noted that process is not complete, so the agreement is contingent on receiving the denials. Both the school board and the county are requiring the City go before their individual boards. Staff anticipates they will be denied by both entities. The law requires only one entity needs to deny the request. Councilmember McKnight asked about the abatement period, and was told at the last meeting the clock started in 2005. Finance Director Roland replied that was the original date as far as the tax base. There are currently properties in Vermillion River Crossing where the clock is ticking. The discussion at the time of the development contract and the initial abatement agreement was whether to do the whole area for 20 years or as the parcels develop. In reality there are two parcels that have property on them that are generating property taxes and using 2005 as the base they would be subject to the 20-year period. However, there is also vacant land that has to be built on, assessed, and the clock starts ticking at the time of development. 2012 is the latest time and all the properties start at 2012. Councilmember McKnight clarified the tax abatement period could run anywhere from 2005 to 2032. Exhibit C states in 2008 the development will start with 7500 sq. ft. of commercial/retail. The abatement could be triggered in 2009 if the 7500 sq. ft. does not develop in 2008. He does not like an out the next year after this is approved. In Article 3 Section 3.2 it states if we are not meeting the abatement terms financially, we would then consider fiscal disparities. This increases his concerns. Mr. Inman explained fiscal disparities are about 30% of all new commercial/industrial value. This would be 30% times the total tax capacity times the tax rate. If the developer was to build out what they intend to it could be $40,000 - $50,000/year. Mayor Soderberg noted the fiscal disparities come into play ifthey meet the goals and get it built out and the projection shows they will not reach the $2 million. Councilmember McKnight stated at the last meeting, Council wanted some protection. He discussed the definition of abatement and ifthe agreement is suspended or terminated what happens to the tax abatement. Ms. Crandall noted if the developer does not perform as contemplated, noting that the build out dates are not defined dates, but goals, the abatement would not be payable. The City is only agreeing to abate the property taxes to the extent the developer complies with the agreement. If the developer is in default, they are given notice and an opportunity to cure the default within 90 days. Councilmember McKnight noted there are infrastructure deadlines so the bridge can open by August 1, 2007. City Attorney J amnik stated the security for this is covered under the infrastructure improvements in the development agreement. This could be a default that could condition the payment of the abatement. Council Minutes (Regular) May 21,2007 Page 6 Councilmember Wilson was very concern about the short time frame Council had to review the abatement agreement and stated he would not support it. Councilmember Pritzlaff asked if Ms. Crandall was comfortable with the answers she was giving and if Council should be comfortable with receiving them. Ms. Crandall stated the original agreement gave away a lot more than Council would be willing to give. The developer was hoping Council would consider this tonight. She had made extensive revisions to the developer's version. Councilmember Pritzlaff asked if making a decision tonight makes or breaks a deal with their financing. Mr. Jim Holmes of Holmes and Associates, representing the developer, stated he was hired by the developer to convince a lender to come into the deal. The existing lender has grown very impatient and there is a new lender willing to come in and take the old lender out. The abatement agreement is needed to convince the new lender that the agreement will take care of a major portion of the assessments. The term of 15 years will not assure the full $2 million will be reimbursed through assessments. The agreement has to be for 20 years. Councilmember McKnight asked about the aggregate payment for the abatement period changing from $2.8 million to $3.0 million. Finance Director Roland replied the original proposal from staffwas for the abatement for the special assessments to be rebated at the special assessment plus the bond rate of 4.3%. However, that is not what is assessed. According to the fee schedule, the City assesses at a rate of 1.5% above the bond rate. The City used the 5% rate as that is what is listed in the development agreement. The $2.8 million is at the 4.2% rate, the $3 million is at the 5% rate. Councilmember McKnight noted the new language in Section 2.2 e) takes the teeth out of Exhibit C. It states that ifthe dates in Exhibit C are not met, that is not a default. City Administrator Herlofsky noted the biggest issue is that the City is reimbursing the developer's requirement to pay the City for the special assessment. The Council has to determine if they are comfortable with the extension of time. Councilmember McKnight stated he was comfortable with the 20 years. The City has done TIP districts for many years. If the language in Section 2.2. e) was removed, he would support the agreement. Councilmember Fogarty was also uncomfortable with the language. She needed enforceable deadlines. This does not abate the taxes the county and the school district receives. This should relieve some ofthe residents' tax for those areas. Councilmember Pritzlaff asked how Council can be sure the developer will meet the deadlines and do they have businesses signed up? Mr. Art Dickinson, representing the developer, replied no because of the issue with the partners. Knutson's do not have control over Vermillion River Crossing so they cannot commit that area to anything until the Pederson's are out of the deal. The lender will not come in until there is an abatement agreement. Regarding having firm deadlines for the build out, the issue for the developer is it becomes a double penalty. Because of the date set that will start the clock, if the developer has not Council Minutes (Regular) May 21,2007 Page 7 met those, they will not get back the full $2 million. If it also becomes an issue in the abatement agreement, they will not get any abatement on the $2 million when it was an agreement between the City and the developer that those special assessments would be used for Spruce Street. The development would have to cover a $2 million cost that they will not be able to recoup. Finance Director Roland stated Council has agreed to consider an abatement agreement as part of the development agreement which was signed in 2005. Council has the version that was sent on Friday and the redlined version. It is a policy decision to be made by the Council. The agreement can be anything Council wants it to be. This is staffs suggestion. If there are parts Council does not agree to, then the agreement can be adopted with those changes, accepted as is, accept Friday's version, it is up to the Council. Staffhas put forth a reasonable effort at a compromise with the developer for Council's consideration. Mayor Soderberg stated he did not realize Council was asking for the timelines to be default points. Council was asking for the developer's best guess as to how they can build this out. That is what they have provided in Exhibit C. He was comfortable with the timelines as goals. The teeth he is looking for is opening the road. Ifwe clarify the connection to the development contract that gives us the teeth we are looking for. If the road is not open by the date set in the development contract that is a default. MOTION by Wilson, second by Pritzlaffto close the public hearing. APIF, MOTION CARRIED. Councilmember McKnight asked what would happen if the first year's expectations of7500 sq. ft. of commercia lire tail was not met by December 31, 2008. Finance Director Roland replied under Section 2.2. e) that would not be a default and consequently the defaults and remedies under Section 6 would not kick in. It would be a detriment to the developer because they would not have the tax base to generate taxes to be abated but they would have still paid the special assessments on the property. Mayor Soderberg noted if they do not meet the timelines, the penalty is that the developer does not have access to the fiscal disparities. Councilmember Pritzlaff requested the language in Section 2.2 e) be left the same as it was in the previous version. Mr. Art Dickinson stated a large part of this is in the lender's hands. The more risk the lender takes, the less likely they will be able to make a deal with the lender. Mayor Soderberg called for a recess at 8:50 p.m. to allow the developer to discuss the agreement. The meeting reconvened at 9:05 p.m. The developer came back to the meeting with some proposed changes to the agreement. Mr. Jim Holmes stated the developer proposes: Council Minutes (Regular) May 21,2007 Page 8 1. Assuming the additional language in Section 2.2. e) comes out so that Exhibit C would be mandatory and would constitute an event of default if not complied with, then the developer asked the current three years in Exhibit C be expanded to five years. 2. Convert the type and the square footages to value in Exhibit C. 3. Propose leaving the 2008 performance as is in Exhibit C and take the balance of the development, now converted to value, and pro-rate it equally over four years. 4. This should be subject to unavoidable delay. City Attorney Jamnik stated converting three years to five years with a 2012 deadline rather than 2010 is understandable. Converting the type and square footage to value is not uncommon. The main concern is how tight are Councilmembers to particular aspects of the development. The provision for unavoidable delay would include significant changes in the market according to Mr. Holmes' comment which injects a level of uncertainty into the definition that Attorney Jamnik was not comfortable with. Mr. Holmes clarified the definition of unavoidable delay would remain the same and he did not intend to expand on that definition. Councilmember Wilson stated he has never liked Exhibit C. He proposed striking Exhibit C and the attachment and put in a new clause that would require the developer to report to Council at set periods of time for a formal update. MOTION by Fogarty, second by McKnight to approve the version ofthe Abatement Agreement received tonight excepting the last sentence of Section 2.2. e) and adding a new Exhibit C as follows: 1. Expanding the three years to five years. 2. Converting the type and square footage to value. 3. Leaving 2008 as is, but pro-rate the other four years. 4. Subject to unavoidable delay as defined in the contract. In addition to the technical and grammatical errors and adding the 1 %. Voting for: Soderberg, Fogarty, McKnight, Pritzlaff. Voting against: Wilson. MOTION CARRIED. 9. AWARD OF CONTRACT Council Minutes (Regular) May 21,2007 Page 9 10. PETITIONS, REQUESTS AND COMMUNICATIONS b) Adopt Resolution - Trinity Health Care 1 st Addition Preliminary and Final Plat - Planning Trinity Care Center is planning to add on to the southern portion of the care center. The addition will cross the property line, therefore the area has to be platted into one lot. The addition will be 22,000 square feet and will contain 30 units. This will allow the double rooms to be converted to single rooms. Staff recommended a sidewalk be added along Elm Street. The comprehensive plan shows a trail located in the area. Due to the drainage and the location of the proposed building the trail is not feasible. The Planning Commission reviewed the plat on May 8, 2007 and recommended approval. Contingencies include: 1. The submittal of a landscaping plan that is acceptable to the City Planner. 2. Additional drainage and utility easements must be provided for the proposed drainage systems as required by the Engineering Division prior to recording of the mylars. 3. Satisfaction of the Park and Recreation requirement regarding sidewalks along Elm Street. Councilmember Fogarty asked ifit was possible to narrow the trail and convert it to cement as it is an important connection for the trail system. Staff noted the issue will be the drainage and would be very difficult to place a sidewalk in that location. As no additional lots are being created, park dedication does not come into affect. MOTION by Wilson, second by Pritzlaffto adopt RESOLUTION R45-07 approving the preliminary and final plat for Trinity Health Care 1 st Addition with the above contingencies. APIF, MOTION CARRIED. c) Adopt Resolution - Fairhills Pond Slope Feasibility Report - Engineering The Fairhills pond has experienced erosion over the last several years and the trails along the top of the slopes need to be reconstructed. This would include reconstructing the slopes and repaving the trail from 190th Street to 193Td Street and the trail north of 195th Street to Englewood Way. A rail would also be constructed along the trail in the areas of steep slopes. The total project cost is $474,000 and would be funded from the storm water utility fund. MOTION by Fogarty, second by McKnight to adopt RESOLUTION R46-07 accepting the feasibility report, order the project and authorize the advertisement for bids. APIF, MOTION CARRIED. d) Approve Federal Surface Transportation Program Application Proposal- TH3 - Engineering There is an opportunity to obtain funds for the project on TH3. $92 million will be awarded. The improvements would include a median along TH3 and frontage roads. Empire Township has agreed to assist in the funding of the application in the amount of$5,OOO. The Board will be considering a resolution to be a Council Minutes (Regular) May 21,2007 Page 10 participant in the mandatory local 20% match for the project. The amount available for each project is up to $5.5 million, but there would have to be a 20% match from the local agency which would be $1.1 million. The cost to prepare the funding application is $21,600. MOTION by Pritzlaff, second by Fogarty to approve completing the application to procure funding from the Federal Surface Transportation Program for improvements to TH3. APIF, MOTION CARRIED. f) Approve MCES/Farmington Lakeville Agreement - Flagstaff Interceptor Agreement - Engineering Staff presented a proposed agreement between the Met Council, Farmington and Lakeville for cost sharing and construction cooperation for the Flagstaff Avenue interceptor. This project would become a Met Council project and they would assume ownership, operation and maintenance responsibilities once the interceptor is completed. They will share in one third ofthe cost ofthe project. The cost to the school district will be reduced by $1 million. There will be Met Council review ofthe plans which will delay construction by one month. MOTION by McKnight, second by Fogarty to adopt RESOLUTION R47-07 approving the Cost Sharing and Construction Cooperation Agreement between the Met Council, Farmington and Lakeville for the Flagstaff Avenue Interceptor. APIF, MOTION CARRIED. g) MnDOT Cooperative Agreement Update - Engineering MnDOT will fund the roundabout project for TH3 in 2008. They have indicated an amount of $450,000, but it is possible they may be able to fund $594,000. As funding is available the project will have to be let by end of June 2008. The state is considering funding the PEER review required for this project. If this is done, the City will not have to go through a joint powers agreement with the state. MOTION by Fogarty, second by Wilson to direct staffto forward a letter to the Department of Transportation accepting the funding and project responsibilities as outlined in the attached letter for the TH3 roundabout project. APIF, MOTION CARRIED. 11. UNFINISHED BUSINESS a) Boulevard Tree Policy - Engineering The current practice is for the City to remove and replace trees in the boulevard. Staff is recommending the City continue the removal and stump grinding of trees in the boulevard, but will no longer replace trees in the boulevard. This will be communicated to residents through the website, newsletter and cable. Staff has also drafted a letter for residents who call. MOTION by Pritzlaff, second by Wilson to approve the recommended boulevard tree replacement policy change. APIF, MOTION CARRIED. Council Minutes (Regular) May 21,2007 Page 11 12. NEW BUSINESS a) Ice Arena Feasibility Report - Administration Staff updated the feasibility report for the ice arena. Councilmember McKnight stated he and Councilmember Fogarty spoke with the Farmington Youth Hockey Association about upgrading the current facility and a second sheet of ice. He wanted to know what the impact to the river would be before we go further. Phase one would cost $3700. MOTION by McKnight, second by Fogarty to authorize all three steps and leave it to staff whether to move on to steps two and three depending on the outcome of step one. APIF, MOTION CARRIED. 13. COUNCIL ROUNDTABLE Councilmember McKnight: At the last three DCC meetings, they awarded bids for the radio consoles, furniture, and phone lines. The project is on budget and on schedule. The DCC will open November 9,2007. They took a tour of the facility last week and it is a very impressive building. Councilmember Pritz/aff: When Council was on the park tour, he noticed Sunnyside had the second lift on. He did not know that had occurred until the tour. A concern he had last year was to try to minimize the sections paved and suggested using a wider paver and have two sections rather than three. City Engineer Mann replied the second lift was done last year and the contractor did not have the equipment to allow them to pave it in two sections. Regarding the Ash Street sod, he asked when the areas that are dead would be replaced. City Engineer Mann replied the analysis will be done to determine a cost and it will be brought back to Council. City Attorney Jamnik: The summary for the City Administrator's evaluation is complete and will be on the next Council agenda. City Engineer Mann: Jen Collova updated Council on the Prairie Waterway monitoring proposal. At the next Vermillion River Joint Powers Board meeting on Thursday, they will be considering participating in the project up to $3,000 which is 25% of the project. 14. ADJOURN MOTION by Fogarty, second by McKnight to adjourn at 10:18 p.m. APIF, MOTION CARRIED. Respectfully submitted, ~ /Y7~ Cynthia Muller Executive Assistant