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08-26-2003 CCM MINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, AUGUST 26, 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. Others present were Ken Merrill, Finance Director and John Rodeberg, Director of Engineering/Public Works. 2. INVOCATION - Rev. Todd Ertsgaard, Oak Heights Covenant Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. MINUTES (a) REGULAR MEETING OF AUGUST 12,2003 (b) BID OPENING MINUTES FROM AUGUST 12, 2003 Minutes were approved as presented. 5. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. CITY OF HUTCHINSON FINANCIAL REPORT FOR JULY 2003 2. CITY OF HUTCHINSON INVESTMENT REPORT FOR JULY 2003 3. HUTCHINSON AREA HEALTH CARE FINANCIAL REPORT FOR JULY 2003 4. HUTCHINSON AREA HEALTH CARE BOARD MINUTES FROM JULY 15,2003 5. HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES FROM JULY 15,2003 6. HUTCHINSON PLANNING COMMISSION MINUTES FROM JULY 15,2003 7. PIONEERLAND LIBRARY SYSTEM BOARD MINUTES FROM JUNE 19,2003 (b) RESOLUTIONS AND ORDINANCES 1. RESOLUTION NO. 12241 - A RESOLUTION TO SELL AT AUCTION COMPUTER EQUIPMENT DECLARED UNUSEABLE BY THE CITY 2. RESOLUTION NO. 12244 - RESOLUTION TEMPORARILY SUSPENDING PARKING RESTRICTIONS ON JEFFERSON STREET DURING ARTS & CRAFTS FESTIVAL 3. RESOLUTION NO. 12246 - RESOLUTION FOR PURCHASE 4. RESOLUTION NO. 12252 - RESOLUTION AUTHORIZING CITY OF HUTCHINSON TO APPL Y FOR MINNESOTA OFFICE OF ENVIRONMENTAL ASSISTANCE GRANT APPLICATION FOR COMPOST FACILITY CITY COUNCIL AGENDA - AUGUST 26, 2003 (c) PLANNING COMMISSION ITEMS 1. CONSIDERATION OF ANNEXATION OF 25.86 ACRES REQUESTED BY RODNEY RIEWER LOCATED IN HASSAN VALLEY TOWNSHIP ALONG JEFFERSON STREET SE WITH STAFF RECOMMENDATION AND A FAVORABLE RECOMMENDATION (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION OF ORDINANCE NO. 03-354 FOR SEPTEMBER 9, 2003) 2. CONSIDERATION TO REZONE PROPERTY FROM R2 TO C4 LOCATED AT 222 5TH AVENUE NW FOR OFFICE BUILDING SUBMITTED BY STEPHEN GASSER, APPLICANT WITH STAFF RECOMMENDATION AND A FAVORABLE RECOMMENDATION (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION OF ORDINANCE NO. 03-355 FOR SEPTEMBER 9, 2003) 3. CONSIDERATION OF A CONDITIONAL USE PERMIT REQUESTED BY FLORIAN THODE TO ALLOW OUTDOOR STORAGE ON PROPERTY IN THE 1-1 DISTRICT LOCATED AT 327 HWY 7 EAST WITH STAFF RECOMMENDATION AND A FAVORABLE RECOMMENDATION (ADOPT RESOLUTION NO. 12242) 4. CONSIDERATION TO AMEND CONDITIONAL USE PERMIT TO ALLOW FOR A ZERO FOOT SETBACK FOR PAVING PARKING LOT LOCATED AT 225 3RD AVENUE NW REQUESTED BY FORD ROLFE WITH STAFF RECOMMENDATION AND A FAVORABLE RECOMMENDATION (ADOPT RESOLUTION NO. 12243) (d) CONSIDERATION FOR APPROVAL OF TRANSIENT MERCHANT LICENSE FOR CLINT KRAFT AT NATIONAL GUARD ARMORY ON AUGUST 28, 2003 (e) CONSIDERATION FOR APPROVAL OF SHORT-TERM GAMBLING LICENSE FOR VFW AUXILIARY ON OCTOBER 18 AND NOVEMBER 26,2003 AT VFW POST 906 (t) CONSIDERATION FOR APPROVAL OF NON-INTOXICATING MALT LIQUOR LICENSE FOR ST. ANASTASIA CATHOLIC CHURCH ON SEPTEMBER 6 & 7, 2003, AT ST. ANASTASIA CATHOLIC CHURCH Item 5(c)1 was pulled for further discussion. Motion by Arndt, second by Haugen, to approve consent agenda, excluding Item 5( c) 1. Motion carried unanimously. Item 5(c)1 had further discussion. Julie Wischnack, Director of Planning/Zoning/Building, presented before the Council. Mayor Torgerson noted that he felt the City should be held harmless ifthere are noise complaints in this area as it is surrounded by the Compost Facility and the Police/Fire Training Station. Ms. Wischnack did state that the developers are aware of this condition and it was noted in the pre-development minutes. Ms. Wischnack stated that some sort of documentation could be included in the resolution. Motion by Arndt, second by Hoversten, to approve setting second reading and adoption of 2 CITY COUNCIL AGENDA - AUGUST 26, 2003 Ordinance No. 03-354 for September 9,2003. Motion carried unanimously. 6. PUBLIC HEARINGS - 6:00 P.M. (a) CONSIDERATION OF IMPOSING SERVICE CHARGES FOR SPECIAL SERVICE DISTRICT NO.1 Lisa McClure, Interim EDA Director, presented before the Council. Ms. McClure explained that this action would be to impose the service charges to fund the district. $. 19/square foot is what is being proposed for commercial property. The calculations per property were determined by staff using the County Assessor's records. Ms. McClure distributed letters from property owners disputing their assessment amounts based on the calculations. Approximately 30 properties had adjusted square footage calculations. Rusty Feifer, Hoisington Koegler, explained the fundamentals ofthe resolution being presented. The current surcharge amount proposed is $.19/square foot and can be lowered, but not raised. These funds would create the total revenue for the district. This revenue can only be used within the Special Service District and only for those items listed in Ordinance 03-353. In addition, an advisory board would be created to provide recommendations to the Council. This service charge will be in place for 15 years. The assessments would be placed on property owners' tax bill each year. An annual review would be required of the properties in the district to review any square footage changes. Once adopted, this resolution may be petitioned to be vetoed by the property owners. 35% of the property owners is required for the petition to be vetoed. Property owners have 45 days to submit a veto petition. The veto petition needs to have a specific objection, signed by the property owner and include the parcel identification number. Following the adoption of this resolution, within five days notice must be sent out to the property owners explaining the veto process. Mr. Feifer continued to explain there would not be a need to veto the ordinance because the ordinance is powerless without revenue. Andrea Hetke, Dorsey & Whitney, presented before the Council. Ms. Hetke explained again that 35% signatures of the property owners is required for a veto. Rusty Feifer informed the Council that an Advisory Board could be established to review the objections on the assessments. Ms. Feifer also explained that the Advisory Board is just that, advisory to the Council. The Council still makes final decisions on the use of the funds. Mr. Feifer clarified that a property owner could present a benefit of objection annually. Kay Peterson clarified that in Section 2.04 the first sentence should read that "the service charge shall be a maximum of $.19 per square foot..." Mr. Feifer stated that this section will be reworded to reflect that the maximum is $.19 per square foot and will not exceed that. Sharon Gruenhagen, 27 Main Street, presented before the Council. Ms. Gruenhagen recapped the points she made at the last public hearing. Ms. Gruenhagen stated that there are 129 parcels that are scheduled to be taxed in the district. 103 property owners are involved in this district. 54 of these property owners have signed a counter petition to oppose the district. 35 of these property owners signed the petition to begin the process and now 25% ofthem have signed the counter petition. More than 7% ofthe tax capacity has changed their minds of establishing the district. Ms. Gruenhagen gave examples of tax capacity. Ms. Gruenhagen stated that this project has divided the downtown businesses. Ms. Gruenhagen stated that during her discussion with other downtown property owners, she found that they are all progressive and would like to use their funds in the Downtown Association, if the fees would be lowered. Matt McMillian, Hutchinson Downtown Association volunteer, presented before the Council. Mr. McMillian clarified that the dues to the Hutchinson Downtown Association are $125 and goes up minimally per employee. Mr. McMillian illustrated examples of various businesses that have moved their businesses outside of the downtown area and detailed revenue returns. Al Kramer, Ace Hardware, presented before the Council. Mr. Kramer expressed that he feels this is an unfair tax and the business owners are responsible for enhancing their businesses. 3 CITY COUNCIL AGENDA - AUGUST 26, 2003 Skip Quade, 101 Park Place, presented before the Council. Mr. Quade expressed that he feels if nothing is done downtown, it could harm the downtown. Rich Peterson presented before the Council. Mr. Peterson expressed that he is opposed to the portion of the administrative portion of the revenues, but not opposed to the capital improvements. Jim Kuehl presented before the Council. Mr. Kuehl reviewed the services provided with these revenues. Mr. Kuehl feels that there are still several unanswered questions. Mr. Kuehl suggested that this item be tabled until more questions can be answered. He further suggested that a downtown committee be formed to look at ways to progress the downtown area. Dwayne Peterson presented before the Council. Mr. Peterson stated that he had reviewed the Downtown Revitalization Master Plan final report. Mr. Peterson feels that the advisory board should establish the price per square foot annually and adjust it as needed. Mr. Peterson did voice that he is in support of this district. Keith Kamrath presented before the Council. Mr. Kamrath compared this project to the failed school bond referendum that occurred in 2002. Mr. Kamrath voiced that he feels that the downtown property owners agree that there may be a problem downtown, however this may not be the solution. Motion by Peterson, second by Hoversten, to close public hearing. Motion carried unanimously. Duane Hoversten suggested that this item be tabled until more information can be researched. Mr. Feifer stated that the Council has six months to act upon this item. Jim Kuehl stated that he was informed that copies ofthe Master Plan were available for $25.00 and he was wondering if they could be available free of charge. Lisa McClure stated that this plan is available on line, in the EDA office, at the Planning/Building desk and at the public library, as well as paper copies available for $25.00 and a CD available for $15.00. Julie Wi schnack explained that it costs staff approximately $100 to produce this plan. Sharon Gruenhagen iterated that almost half of the property owners are against the establishment of a district. Andrea Hetke again outlined the veto process. Rich Peterson stated that he feels that the citizens can veto the ordinance, per his interpretation ofthe ordinance. Andrea Hettke clarified that the ordinance does not specifY the same veto provisions for the ordinance as there is for the resolution. Motion by Hoversten, second by Arndt, to table this item until September 23, 2003, so further information can be researched. Motion carried unanimously. Lisa McClure stated that a revised notice will be sent out to property owners clarifying the action taken tonight. (b) LETTING NO.5, PROJECT NOS. 03-12, 03-19 - EDMONTON AVENUE/TH 7 FRONTAGE ROAD - ADOPTING ASSESSMENT John Rodeberg stated that this project has been awarded and it includes three properties. Mr. Rodeberg outlmed the project for the Council. The total project cost is $1.7 million. Mr. Rodeberg explained how the costs are divided. Mr. Rodeberg broke down the assessments for each property owner. Mr. Rode berg stated that no curb and gutter will be conducted on Edmonton Avenue this year, but the remainder of the project will be completed. TH7 is scheduled to be paved by September 15,2003. 4 CITY COUNCIL AGENDA - AUGUST 26, 2003 Motion by Peterson, second by Arndt, to close public hearing. Motion carried unanimously. Motion by Arndt, second by Peterson, to approve adopting assessments for Letting No.5, Project Nos. 03-12 and 03-19. Motion carried unanimously. (c) CONSIDERATIONOFV ACATIONOFEASEMENTS LOCATED AT 810 AND 820 HILLCREST ROAD NE BETWEEN LOTS 5 AND 6, BLOCK 1, WALNUT RIDGE ESTATES PLAT 3 John Rodeberg explained that these properties were replatted by Paul Betker a number of years ago for single family dwellings. Mr. Betker would now like to build duplexes. A citizen asked whether or not this was too close to the property lines. Mr. Rodeberg explained that the side property lines are not at issue, however it's the center property line which does not concern the other property lines. Motion by Haugen, second by Hoversten, to close public hearing. Motion by Haugen, second by Hoversten, to approve vacating easements located at 810 and 820 Hillcrest Road NE between Lots 5 and 6, Block 1, Walnut Ridge Estates, Plat 3. Motion carried unanimously. 7. COMMUNICATIONS. REQUESTS AND PETITIONS 8. UNFINISHED BUSINESS (a) CONSIDERATION OF ORDINANCE NO. 03-353 - AN ORDINANCE AUTHORIZING ESTABLISHMENT OF SPECIAL SERVICE DISTRICT NO.1 (SECOND READING) Motion by Haugen, second by Hoversten, to approve Ordinance No. 03-353, authorizing the establishment of Special Service District No.1. Kay Peterson explained that she would be voting against the establishment of this district for two reasons. One being that the percentage of signatures needed to begin the process is very small and ont a one-one vote. Ms. Peterson also expressed that she feels this has divided the downtown property owners and there is not enough cooperation amongst them. Bill Arndt also explained that he would be voting against the establishment mainly for the same reasons as Ms. Peterson and that there are still too many unanswered questions. Rusty Feifer, Hoisington-Koegler, eXplained that this action is to establish the district. However, if there is no revenue to support it, the district would not be operable. Duane Hoversten commented that much information has been presented over the last two years and the process has been followed as prescribed by the State. Mr. Hoversten continued by saying that he would like to find a way to bring the property owners together on this subj ect. Marlin Torgerson suggested tabling this item until more questions can be answered. Motion by Haugen, second by Hoversten to approve Ordinance No. 03-353, establishing Special Service District No.1. A roll call vote was taking with Haugen voting aye, Arndt voting nay, Peterson voting nay, Hoversten voting aye, and Torgerson voting aye. Motion carried 3-2. (b) CONSIDERATION FOR APPROVAL TO ACCEPT PROPOSAL OF ABDO ABDO EICK & MEYERS FOR AUDITING SERVICES Ken Merrill, Finance Director, stated that he had done further research on what other communities are doing in reference to writing their own audit reports. Duane Hoversten stated he was satisfied with the comparison numbers. 5 CITY COUNCIL AGENDA - AUGUST 26, 2003 Motion by Hoversten, second by Peterson, to accept the proposal of Abdo Abdo Eick & Meyers for auditing services from 2003 - 2005. Motion carried unanimously. 9. NEW BUSINESS (a) REVIEW OF COMPREHENSIVE & GENERAL LIABILITY INSURANCE RENEWAL Jeff Borkenhagen, Insurance Planners, presented before the Council. Mr. Borkenhagen reviewed the insurance coverages and premiums for the upcoming insurance benefit year. Overall, rates have risen 6.25%, which is vefY.low. The City is expected to save $107,000 by staying at the same deductible of $25,000. Ken Mernll, Finance Director, clarified that the City budgets for this amount of deductible. Motion by Arndt, second by Hoversten to approve renewing comprehensive and general liability insurance coverage with a $25,000 deductible. Motion carried unanimously. (b) CONSIDERATION FOR APPROVAL OF GRANTING BUSINESS SUSBIDY AND REDEVELOPMENT AGREEMENT WITH EARTHLY DELIGHTS Lisa McClure, Interim EDA Director, presented before the Council. Ms. McClure requested that the Council pull this item and take no action as issues rose throughout the day and more questions need to be answered. This item was pulled and no action was taken. ( c) CONSIDERATION OF RESOLUTION NO. 12249 - SETTING TRUTH IN TAXATION HEARING DATE FOR TAXES PAYABLE 2004 Motion by Haugen, second by Peterson, to set Truth in Taxation hearing for December 2,2003, at 5:30 p.m. in the Council Chambers. Motion carried unanimously. (d) CONSIDERATION OF RESOLUTION NO. 12250 - SETTING 2004 PRELIMINARY TAX LEVY FOR CITY OF HUTCHINSON Ken Merrill stated that these numbers would be used for the preliminary tax statements that are sent out prior to the truth-in-taxation hearing. This is an increase from the 2003 tax levy, partly because of the reduction in state aid dollars as well as an increase in debt service dollars. This levy amount cannot be increased but may be decreased. John Rodeberg reminded the Council that the general fund is down, however the levy has increaded due to other conditions. Motion by Peterson, second by Arndt, to approve setting 2004 preliminary tax levy for the City of Hutchinson in the amount of$4,780,880.00. Motion carried unanimously. (e) CONSIDERATION OF RESOLUTION NO. 12251-SETTING2004PRELIMINARYTAXLEVY FOR SPECIAL TAXING DISTRICT HUTCHINSON REDEVELOPMENT AUTHORITY Motion by Hoversten, second by Haugen, to approve setting 2004 preliminary tax levy for Special Taxing District Hutchinson Redevelopment Authority in the amount of$87,720.00. Motion carried unanimously. 10. MISCELLANEOUS Melissa Starke, Administrative Secretary, explained that at the last Council meeting the Council had approved Resolution No. 12240, authorizing the sale of surplus property at auction. Ms. Starke noted that an additional item had been added to the list of items to be sold, and therefore asked for Council's approval of the revised list. Motion by Peterson, second by Arndt, to approve the revised list of items to sell at auction as attached to Resolution No. 12240. Motion carried unanimously. (a) COMMUNICATIONS John Rodeberg explained that the bid opening held August 12,2003, for Letting No.2, Project No. 6 CITY COUNCIL AGENDA - AUGUST 26, 2003 03-02 brought in one bid which was 30% higher than estimated. Mr. Rodeberg requested that the Council reject this bid and the project will be readvertised at a later date. Motion by Haugen, second by Hoversten, to reject the bid for Letting No.2, Project No. 03-02. Motion carried unanimously. John Rodeberg also informed the Council that at an earlier meeting the Crow River Channel Protection project, Letting No. 13, Project No. 02-22, was discussed and approved, however it was delayed due to concerns of high water. Due to current conditions and the amount of time that has lapsed, Mr. Rodeberg requested of the Council that the bids be rejected and to authorize the readvertisement for bids on this project. Motion by Peterson, second by Hoversten to reject bids and authorize readvertisement for bids on the Crow River Channel Protection project, Letting No. 13, Project No. 02-22. Motion carried unanimously. John Rodeberg updated the Council that the power outage yesterday was due to a line break near the hospital. This line may not have been appropriately marked by Gopher State One. John Rodeberg also explained that the 2nd Avenue block in front of Park Elementary should be complete by September 1. However, the Dale Street/Roberts Road intersection will probably still be closed. Bill Arndt suggested that parking issues will need to be addressed if alternate routes are used. Galen Houk addressed the Council in regard to the Riewer annexation (Item 5( c) 1). Mr. Houk stated that he has concerns about being annexed in the future due to being surrounded by annexed properties. Mr. Houk expressed that he has no interest in being annexed any time in the near or distant future. John Rodeberg suggested that an orderly annexation agreement be put in place with the Houks and the City. This agreement would outline unknowns and address issues as to why/how the city would annex. Mr. Houk would like to have an agreement in place as to have a certainty of some sort. 11. CLAIMS. APPROPRIATIONS AND CONTRACT PAYMENTS (a) VERIFIED CLAIMS A Motion by Hoversten, second by Peterson, to approve and authorize payment of Verified Claims A from appropriate funds 12. ADJOURN With no further business to discuss, the meeting adjourned at 7:45 p.m. 7