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08-12-2003 CCM MINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, AUGUST 12, 2003 1. CALL TO ORDER - 5:30 P.M. Mayor Marlm Torgerson called the meeting to order. Members present were Jim Haugen, Duane Hoversten, Kay Peterson and Bill Arndt. Other present was Ken Merrill, Finance Director. 2. INVOCATION - Rev. Todd Ertsgaard, Oak Heights Covenant Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. MINUTES (a) REGULAR MEETING OF JULY 22,2003 (b) BID OPENING FROM AUGUST 5, 2003 (c) BID OPENING FROM AUGUST 11, 2003 Minutes were approved as presented. 5. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. PIONEERLAND LIBRARY SYSTEM FINANCIAL REPORT FOR JUNE 2003 2. BUILDING DEPARTMENT MONTHLY REPORT FOR JULY 2003 3. HUTCHINSON AREA HEALTH CARE FINANCIAL REPORT FOR JUNE 2003 4. HUTCHINSON UTILITIES COMMISSION FINANCIAL REPORT FOR JUNE 2003 (b) RESOLUTIONS AND ORDINANCES 1. CONSIDERATION OF ORDINANCE NO. 03-349 - ENTERING INTO A FRANCHISE AGREEMENT WITH NOOK AND CRANNY FOR THE RIGHT TO OUTDOOR DISPLAY OVER AND ABOVE CERTAIN PROPERTY LOCATED IN THE PUBLIC RIGHT-OF-WAY AT 34 MAIN STREET NORTH (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION FOR AUGUST 12,2003) 2. CONSIDERATION OF ORDINANCE NO. 03-351 - AN ORDINANCE ADOPTING THE 2003 EDITION OF THE MINNESOTA STATE FIRE CODE, REGULATING AND GOVERNING THE SAFE GUARDING OF LIFE AND PROPERTY FROM FIRE AND EXPLOSION HAZARDS ARISING FROM THE STORAGE, HANDLING AND USE OF HAZARDOUS SUBSTANCES, MATERIALS AND DEVICES, AND FROM CONDITIONS HAZARDOUS TO LIFE OR PROPERTY IN THE OCCUPANCY FOR BUILDINGS AND PREMISES IN THE CITY OF HUTCHINSON; PROVIDING FOR THE ISSUANCE OF PERMITS FOR HAZARDOUS OPERATIONS (SECOND READING AND ADOPTION) 3. CONSIDERATION OF ORDINANCE NO. 03-352 - AN ORDINANCE AMENDING HUTCHINSON CITY ORDINANCE 02-308 REGULATING THE LICENSING OF EXCAVATORS (SECOND READING AND ADOPTION) 4. RESOLUTION NO. 12234 - A RESOLUTION TO SELL AT AUCTION SURPLUS PROPERTY 5. RESOLUTION NO. 12238 - RESOLUTION FOR PURCHASE CITY COUNCIL MINUTES - AUGUST 12, 2003 (c) CONSIDERATION FOR APPROVAL OF AWARDING BID FOR ROBERTS PARK PARKING LOT IMPROVEMENTS (d) CONSIDERATION FOR APPROVAL OF OUT-OF-STATE TRAVEL FOR MARION GRAHAM TO THE WASTEWATER LAB EXAM WORKSHOP FROM SEPTEMBER 19 - 28, 2003 (e) CONSIDERATION FOR APPROVAL OF OUT-OF-STATE TRAVEL FORBARRYGREIVE TO ATTEND CODE HEARINGS IN NASHVILLE, TENNESSE, THE WEEK OF SEPTEMBER 7,2003 (t) CONSIDERATION FOR APPROVAL OF LOT SPLIT REQUESTED BY RTM RESTAURANT GROUP FOR CONSTRUCTION OF AN ARBY'S RESTAURANT LOCATED AT 1340 HWY 15 SOUTH (g) CONSIDERATION FOR APPROVAL OF GAMBLING LICENSE FOR HUTCHINSON HOCKEY ASSOCIATION (SECOND LOCATION) (h) CONSIDERATION FOR APPROVAL OF SHORT-TERM GAMBLING LICENSE FOR DUCKS UNLIMITED ON SEPTEMBER 2,2003, AT CROW RIVER COUNTRY CLUB (i) CONSIDERATION FOR APPROVAL OF DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT AND SETTING REVISED HEARING DATE FOR PROPOSED ASSESSMENT ON ASSESSMENT ROLL NO. 5064 & 5064, LETTING NO.5, PROJECT NO. 03-12 & 03-19 (j) CONSIDERATION FOR APPROVAL OF ACCEPTING BID AND AWARDING CONTRACT ON LETTING NO. 13, PROJECT NO. 03-15 & 03-23 Item 5(b )5. It was noted that an additional purchase of bags for the compost site was authorized as outlined in the memo distributed to the City Council and included in the packet. Motion by Haugen, second by Arndt, to approve consent agenda. Motion carried unanimously. 6. PUBLIC HEARINGS - 6:00 P.M. (a) SOUTH FORK CROW RIVER SHORE LAND HABITAT PROJECT Julie Wischnack presented before the Council. Ms. Wischnack explained that this hearing is a requirement of the National Guard. This project is being conducted free of charge by the National Guard. This public hearing is to allow any other parties that would like to offer their services for the project for the same cost. Motion by Arndt, second by Peterson, to close public hearing. Motion carried unanimously. Motion by Arndt, second by Hoversten, to approve the National Guard assisting with the South Fork Crow River Shore Land Habitat Project. Motion carried unanimously. (b) CONSIDERATION OF ORDINANCE NO. 03-353 - AN ORDINANCE AUTHORIZING ESTABLISHMENT OF SPECIAL SERVICE DISTRICT NO. 1 (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION FOR AUGUST 26, 2003) 2 CITY COUNCIL MINUTES - AUGUST 12, 2003 Lisa McClure presented before the Council. Ms. McClure explained that the Downtown Association had presented a petition to the Council containing 32.9% population of a geographical location ofthe targeted area. Ms. McClure clarified that city staff is facilitating this project, however is not spearheading it. Ms. McClure noted that the hearing tonight is to have a first reading and set the second reading ofthe ordinance establishing the special service district, with a second public hearing being held August 26,2003, to discuss the service rates that will be imposed. Ms. McClure further explained that the purpose of this type of district is to provide further services to the downtown area, such as marketing, advertising, personnel, beautification, etc. Ms. McClure further noted that these monies will not be going to the refurbishing of the State Theatre or the Hutch Hotel. Matt McMillian, Hutchinson Downtown Association, presented before the Council. Mr. McMillian requested of the Council that a special service district be established. Mr. McMillian gave background information as to other projects that had occurred in the downtown area to enhance services, such as increased public parking and the establishment of districts for Shopko and Econo Foods. Mr. McMillian noted that 50 of the 64 parcel owners signed the petition in favor of establishing such a district. A few other businesses did not sign the petition, however have stated that they will not oppose the establishment. The rate of $.19 per square foot is being suggested as the imposed rate, which will bring in approximately $100,000 per year. Mr. McMilhan also noted that Roger Olson, American Legion, informed him that the LeglOn is in support of the petition. Rusty Fifield, Hoisington Koegler, presented before the Council. Mr. Fifield emphasized the point that this project was not city-instigated, however public-instigated. Mr. Fifield further explained that at the next public hearing, the services that could be provided will be outlined more specifically. Concerns by property owners over the assessable amount need to be submitted to staff prior to the public hearing on August 26,2003. Mr. Fifield further explained that if the ordinance should have a first reading, 35% of the geographical location can petition to reject the original petition prior to the second reading. It was noted that property owners have not had an opportunity to review the ordinance as it is drafted. Mr. Fifield explamed that the drafted ordinance covers requirements of statute, however boundaries haven't changed nor the amount per square footage since the original plan was outlined. Lisa McClure did state that no one had requested a copy of the ordinance. Mayor Torgerson recited the ordinance to the audience and a copy of was handed out. Lisa McClure stated 124 property owners are eligible to be assessed within the district. 71 property owners signed the petition. Du Wayne Peterson presented before the Council. Mr. Peterson explained that at a previous meeting he had suggested adding a sunset provision. He recommends that this language be included in the ordinance. Mr. Peterson further noted that state statute allows for property owners to have a benefit of objection of being assessed for this special district after filing a written request with the City. Mr. Peterson also requested that this information be included in the ordinance. Maria Oman, 141 South Main Street, 25 Washington Ave. North and will be purchasing the Kelly's Dance Studio building. Ms. Oman noted that she does not receive the Hutchinson Leader and that she has not received anything from the City regarding the establishment of this district. The only notification she has received was from the assessor's office showing the proposed amount to be taxed. Ms. Oman stated that she surveyed property owners in the proposed district. Ms. Oman voiced concerns over the fact that neither she nor her renters are able to access these funds for their own personal improvements. Ms. Oman has concerns that rental rates will need to be increased in order to cover the new tax, which in turn will drive out renters. Ms. Oman would like to be able to use the funds for her own property and not to substantiate the district as a whole. Ms. Oman also questioned whether or not there is a cap of the price per square footage, or if that would be evaluated after so many years. Myron Johnson, VFW, presented before the Council. Mr. Johnson expressed that the VFW is not necessarily in favor of the establishment of this district, as they are a service organization. Mr. Johnson further noted that the VFW's membership is depleting and they have concerns over the numbers that they will be able to retain in future years. 3 CITY COUNCIL MINUTES - AUGUST 12, 2003 Don Walser, 'presented before the Council. Mr. Walser explained that his law firm is in support ofthis endeavor as it will only revitalize the downtown, and increase the property value. Jill Corson, Corson's, presented before the Council. Ms. Corson explained that her store is not in favor of this at all, simply because they cannot afford it. She wants to know if they will be forced to pay these taxes if the ordinance passes. Woody Lamprecht, Bavarian Haus, presented before the Council. Mr. Lamprecht asked what happens if this is not passed. And what happens to the $100,000 paid to Hoisington Koegler. Jim Kuehl, presented before the Council. Mr. Kuehl stated that he would like to have a sunset provision as well. He would like to have more information as to what specifically, and the amount of money, spent on which projects. Rusty Fifield, Hoisington Koegler, presented before the Council. Mr. Fifield explained that the service charge that will be imposed is capped and cannot be collected for more than 15 years. The City Council has no right to extend the service charge as originally adopted. The amount is also capped at $. 19/square footage for those 15 years. The only way either ofthese items could be changed is ifthey would be petitioned and instigated by the property owners. Mr. Fifield expressed that this is a type of sunset provision. Sharon Gruenhagen, 27 Main St. North, presented before the Council. Ms. Gruenhagen explained that she is against the establishment of this district. Ms. Gruenhagen explained that a large portion of the funds will be used for payroll, and she feels that inflation would take up most of this money. Ms. Gruenhagen also expressed that she does not feel that these funds would help her property specifically. Ms. Gruenhagen felt that those properties that want to be included for such improvements should be included. She also felt that there are no guarantees for her business that it will benefit from being a part of this district. Cheryl Labat, owner of Glass Apple, presented before the Council. Ms. Labat stated that the property tax would be a burden for her. She also noted that she is afraid that by adding additional taxes, she is afraid that it could possibly push out the independent specialty stores. Ms. Labat asked the Council to think about what their vision is for downtown and what type of businesses they would like to have in the downtown area. Skip Quade presented before the Council. Mr. Quade expressed that he believes that if nothing is done downtown now, it may hurt it more so in the long run. Mr. Quade expressed that he is in favor of this program, however there may be other issues that need to be reviewed as well. Lee Gruenhagen, owner of Vacuum Gallery and Bike Shop, presented before the Council. Mr. Gruenhagen stated that his business would not benefit from the services that will be provided from these funds, and that issues such as parking need to be addressed. Tim Ulrich, EDA President, presented before the Council. Mr. Ulrich clarified that the EDA paid for the Hoisington Koegler downtown study via a small cities grant from the State. Mr. Ulrich reminded residents that the extra parking installed behind the businesses was paid for by assessments. These funds could be used for items such as additional parking. Nancy Murphy, owner of Nook and Cranny, presented before the Council. Ms. Murphy explained that she is a member of the Downtown Association. Ms. Murphy also voiced that she has some concerns about rising renter rates. Gerry Jones, 140 North Main, presented before the Council. Mr. Jones pointed out that he is unclear as to whether or not all the businesses would benefit from this district. Keith Kamrath, presented before the Council. Mr. Kamrath expressed that having a sunset provision is more acceptable. Mr. Kamrath also expressed that he would like to have the opportunity to spend these dollars on his business specifically, as opposed to supporting all ofthe businesses. Mr. Kamrath expressed that he would like to have a property owner vote. 4 CITY COUNCIL MINUTES - AUGUST 12, 2003 Mr. Fifield reminded the listeners that any property owner can sign a petition to veto the decision of the City Council. 35% of the landowners must sign the petition m order to veto the petition. Art Benjamin, Nemitz & Sons, presented before the Council. Mr. Benjamin expressed that he likes the sunset provision option. Gail Cox, Main Clips, presented before the Council. Ms. Cox asked what the definition of commercial tax is and questioned why these property owners should be incurred more costs when they are already paying for good services. Robert Powell presented before the Council. Mr. Powell questioned the administration ofthe special service district. Mr. Powell questioned whether or not the district would have the ability to bond in and of itself. Mr. Fifield explained that the City could issue bonds for improvements within the special service district. Only service charges from the district could be used to pay the bonds back. Lee Stritesky presented before the Council. Mr. Stritesky commented that other areas of the commercial/retail district should be tapped into to include the entire economic community. Dave Skoog, 22 1 st Avenue, presented before the Council. Mr. Skoog clarified that the tax capacity could be less than what is portrayed. Lisa McClure did share with the residents that the EDA does have low interest loans for residential and business buildings. Motion by Arndt, second by Haugen, to close public hearing. Motion carried unanimously. Kay Peterson stated that one of her concerns is the tax capacity issue. Ms. Peterson clarified that this is only a first reading of the ordinance with the second reading being considered in two weeks. Duane Hoversten commented that he has been closely following this through the study. Mr. Hoversten further commented that this program can only increase the value of buildings. For small business owners, the more business that this can potentially bring in outweighs the few hundred dollars that it will cost each year. Jim Haugen appreciated the fact that any taxes are regressive taxes. Mr. Haugen asked ofMr. Fifield if the Council can deny the petition as presented. Mr. Fifield explained that state statute gives the Council the authority to design the program once the petition has been presented. Mr. Fifield again clarified that the original signers of the petition still maintain the right to veto the ordinance. Motion by Arndt, second by Hoversten, to set second reading of Ordinance No. 03-353 for August 26, 2003. Mr. Feifer clarified that veto provisions are outlined in state statute 428A. Motion carried unanimously. 7. COMMUNICATIONS. REQUESTS AND PETITIONS Vi Mayer, Chamber of Commerce, presented before the Council. Mr. Mayer thanked the City of Hutchinson for all of their assistance over the past five months. City parks have been used for several events and Mr. Mayer expressed his thanks for the various departments in the preparation for these events. 8. UNFINISHED BUSINESS (a) CONSIDERATION OF ORDINANCE NO. 03-347 AN ORDINANCE AMENDING SECTIONS 3 AND 7 OF SECTION 12 OF THE HUTCHINSON ZONING ORDINANCE ADDING DEFINITION OF RESIDENTIAL DOG KENNEL AND REGULATION OF PLACEMENT OF RESIDENTIAL DOG KENNELS IN YARDS WITH STAFF RECOMMENDATION AND FAVORABLE RECOMMENDATION (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION FOR AUGUST 26,2003) 5 CITY COUNCIL MINUTES - AUGUST 12, 2003 Julie Wi schnack, Director of Planning/Zoning/Building, presented before the Council. Ms. Wi schnack explained that the Planning Commission had voted 4-3 to approve the ordinance as indicated in the Council packet. Ms. Wischnack explained that at the last Council meeting, this item was tabled to give the Council to receive more community comments. Mayor Torgerson noted that little comment had been received. Kay Peterson stated that at the last meeting it was noted that there is a current ordinance that can enforce nuisances, such as the issues arised out of the drafting of this ordinance. Duane Hoversten echoed the same comments as Ms. Peterson made. Jim Haugen stated that this ordinance may be somewhat ineffective as the current ordinance may take care of the problem. Ms. Wi schnack suggested revising the current nuisance ordinance that has a stronger effect. She stated that within a couple of weeks staff will present a revised ordinance. Motion by Hoversten, second by Arndt, to reject Ordinance No. 03-347 for August 26,2003. Motion carried unanimously. 9. NEW BUSINESS (a) UPDATE ON HUTCHINSON LIQUOR STORE Ms. Wi schnack presented before the Council. Ms. Wischnack stated that staff is requesting Council's guidance in proceeding with the construction of a new liquor store. Mayor Torgerson noted that the appraised value ofthe targeted property came in lower than the assessed value. The property owners therefore have reservations about selling the property for lower than the assessed value. Duane Hoversten suggested that the Council review the appraisal values, current budget, and other options before proceeding further. Duane Hoversten suggested that the process slow down for further research, but that the City is still committed to launching this project in the future. Motion by Arndt to cease with the progression of this project currently, to provide more time to research other options, no second. Motion died. No official action taken. (b) CONSIDERATION FOR APPROVAL OF FINAL PLAT TO BE KNOWN AS SOUTHWIND SUBMITTED BY HUTCHINSON HOLDINGS LLC Julie Wischnack presented before the Council. Ms. Wi schnack explained that this area is west of Jefferson Street and south of Edmonton Avenue. This development includes 94 lots. The action tonight is for the first phase of the plat as well as a subdivision agreement. Motion by Peterson, second by Haugen, to approve final plat to be known as Southwind. Motion carried unanimously. (c) CONSIDERATION FOR APPROVAL OF FILLING OPEN PUBLIC WORKS POSITIONS Brenda Ewing, Human Resources Director, presented before the Council. Ms. Ewing explained that this request is part of the overall Public Works reorganization, which was approved by the City Council a few weeks ago. This request is to fill current open positions, not newly created positions. John Olson explained that part ofthe reorganization is to center the positions around functions and not departments. Motion by Hoversten, second by Arndt, to approve filling open Public Works positions. Motion carried unanimously. (d) CONSIDERATION FOR APPROVAL OF PURCHASE AGREEMENT FOR INDUSTRIAL PARK LAND Lisa McClure presented before the Council. Ms McClure explained that the EDA is requesting that this property be purchased for Industrial Park land development. 6 CITY COUNCIL MINUTES - AUGUST 12, 2003 Motion by Haugen, second by Hoversten, to approve purchase agreement for Industrial Park land currently owned by Lee Stritesky. Motion carried unanimously. (e) CONSIDERATION FOR APPROVAL OF CALLING FOR PUBLIC HEARING ON SENIOR HOUSING PROJECT AND THE PROPOSED ISSUANCE OF REFUNDING REVENUE BONDS Jim Haugen will be abstaining from this action. Ken Merrill, Finance Director, noted that this action is to set a public hearing to sell revenue bonds which is for refinancing Prince of Peace bonds to take advantage of the low mterest rates. Motion by Peterson, second by Arndt, to approve calling for public hearing on senior housing proj ect (Prince of Peace) for September 9,2003. Motion carried unanimously. (t) CONSIDERATION FOR APPROVAL TO ACCEPT PROPOSAL OF ABDO ABDO EICK & MEYERS FOR AUDITING SERVICES Ken Merrill explained that these audit services would cover 2003-2005. Mr. Merrill further noted that this firm has been the City's auditing firm for several years and have performed very well. Although the rates are increasing somewhat, there is a not to exceed number built in to the agreement. Duane Hoversten requested that Mr. Merrill receive further quotes for service rates to make sure the rates are competitive. Motion by Hoversten, second by Haugen, to table this item until Mr. Merrill is able to obtain comparable service rates. Motion carried unanimously. (g) CONSIDERATIONFORAPPROV AL OF SETTING HEARING DATE FOR WALMARTLIQUOR LICENSE VIOLATION Motion by Haugen, second by Peterson, to approve setting hearing date for Walmart liquor license violation for September 3, 2003, at 12:00 p.m. Motion carried unanimously. 10. MISCELLANEOUS (a) COMMUNICATIONS Melissa Starke noted that at the July 8, 2003, City Council meeting, the Council approved entering into a lease agreement with the State of Minnesota for use of the Council Chambers for a drivers exam test station. Along with that they approved Resolution No. 12205. Ms. Starke noted that the lease was actually for motorcycle testing in the Roberts Park parking lot and requested that the Council take action to revise Resolution No. 12205 to clarifY the location and purpose of the testing. Motion by Arndt, second by Peterson to approve revised Resolution No. 12205. Motion carried unanimously. Bill Arndt - Mr. Arndt encouraged residents to give blood at the blood drive this week. Mr. Arndt also requested that everyone attend the McLeod County Fair. Ken Merrill- Mr. Merrill requested an informational meeting be set for August 26,2003, for the purpose of discussing the 2004 budget. Motion by Haugen, second by Peterson to set informational meeting for August 26,2003, at 4:00 p.m. Motion carried unanimously. 11. CLAIMS. APPROPRIATIONS AND CONTRACT PAYMENTS (a) VERIFIED CLAIMS A Motion by Peterson, second by Arndt, with Hoversten abstaining, to approve and authorize payment 7 CITY COUNCIL MINUTES - AUGUST 12, 2003 of Verified Claims A from appropriate funds. Motion carried unanimously. (b) VERIFIED CLAIMS B Motion by Hoversten, second by Haugen, to approve and authorize payment of Verified Claims B from appropriate funds. Motion carried unanimously. 12. ADJOURN With no further business to discuss, the meeting adjourned at 8:05 p.m. 8