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04-27-1976 CCMMINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, APRIL 27, 1976 1. CALL TO ORDER Mayor Black called the meeting to order at the hour of 7:30 P.M. Members present: Aldermen Westlund, Lueneburg, Haag and Peterson in addition to Mayor Black. Members absent: None. Also present: Administrative Assistant Fleetham, City Attorney Schantzen, and City Engineer Priebe. 2. INVOCATION Due to the absense of Reverend Natwick, the invocation was dispensed with. 3. MINUTES On motion by Alderman Westlund, seconded by Alderman Lueneburg, the minutes of the regular meeting of April 8, 1976 and the special meeting of April 13, 1976 were unanimously approved. 4. PUBLIC HEARINGS None 5. COMMUNICATIONS, REQUESTS, AND PETITIONS (a) REQUEST OF HUTCH ELK'S, INC. TO USE LIBRARY SQUARE ON FLAG DAY JUNE 14, 1976 After discussion, it was moved by Alderman Peterson, seconded by Alderman Haag, to approve the request and authorize use of the Library Square. Motion carried unanimously. 6. RESOLUTIONS AND ORDINANCES (a) ORDINANCE NO. 12/76 - ORDINANCE AMENDING SECTION 560 OF THE 1974 ORDINANCE CODE OF THE CITY OF HUTCHINSON ENTITLED WATERWORKS AND SEWER DEPARTMENT - RATES AND CHARGES Mr. Rex Stockwell of Toltz, King, Duvall, Anderson and Associates, Inc. gave his comments regarding the questions raised by Hutchinson Industrial Corportion at the regular Council meeting of April 20, 1976 as follows: e-� Council minutes, April 27, 1976 1. If 3M is given credit for water which is discharged to storm sewers or evaporated in cooling towers instead of being discharged into the Sanitary Sewer System, what affect with that have on the currently proposed rates? Stated that estimating their yearly useage at 40 million gallons, the City would lose approximately $22,850 in revenue yearly. He further recommended the following: 1. Continue with the rate of 59¢ per 1,000 gallons 2. Review the rates after one year 3. City adopt the same credit policy for any other industry with this problem 4. Write to 3M informing them of the required action to substantiate any changes in current billing methods 5. Not to change rates at this time 2. If the City does not provide for future improvements in the sanitary sewer and water capital costs as suggested by Mr. Grant Merritt, what will be the effect on rates when the future improvement capital expenditures are made and must be financed by the rate system? Reviewed the future improvements for the Water and Sewer Departments and made the following recommendations: 1. Proceed with the current recommended rates 2. Not to try and annually adjust water rates because of problems in evaluating annual revenue and expenses, problems in billing adjustments, problems in revising rate ordinance and confusion to users 3. How does the operation and maintenance costs for sanitary sewer system and water system for Hutchinson compare with other communities? Reviewed a table of operation and maintenance costs and the per capita costs for surrounding cities. He then reviewed the preliminary report on charges for Hutchinson Industrial prepared by Mr. Harry Grounds stating that the report utilizes a substantial reduction in costs for Hutchinson Industrial that must be returned by the remaining users. Reviewed a Schedule of Future Improvements and Funding for the City. In summary, Mr. Stockwell stated that the City of Hutchinson must develop a self-sustaining utility and have funds on had for unforeseen expenses. - 2 - Council minutes, April 27, 1976 Mr. Grant Merritt of Nielsen, Blackburn & Merritt and Mr. Jon Geiss of Hutchinson Industrial Corporation requested to make a presentation. Mr. Merritt stated there is a matter of conflicting evidence and testimony for each side in this matter. He further discussed the decision making process. He stated that Hutchinson Industrial Corporation is concerned with the future of Hutchinson. Mr. Merritt went on to review a letter from Mr. Bob Sanders of Juran & Moody, Inc. regarding future bonding stating that the City has sufficient money to cover its principle and interest requirements and quoted a representative of Juran & Moody, Inc. regarding our bond rating. He further stated that it has been brought out in two hearings that there is a lack of understanding regarding interest revenues,and routine betterments. He stated that he felt it is not necessary to adopt the total proposed rate increase at this time. Mr. Merritt then proposed a two step increase with one step to go into effect immediately and the second step to go into effect after the publication of the Audit Report if it was deemed necessary. Mr. Harry Grounds of Harry Grounds & Associates presented his views on the financing of Waste Treatment Plants. City Attorney Schantzen inquired if Mr. Grounds stated that heavy waste users should be charged a surchage based on monitoring of flow. Mr. Grounds restated his basic views. Mr. Thomas Brunburg of the M.J. Long Co. discussed the two concepts of funding. Administrative Assistant Fleetham stated that the Accountants have estimated a $23,000 accrued loss and $90,000 cash loss from general operation for fiscal year ending March 31, 1976. He further stated that there will be insufficent time between the publishing of the Audit Report and the selling of bonds to do a new rate study. He further stated that the projected improvements is not a definite plan and the cost estimates are very conservative. Mr. Rex Stockwell stated that the Routine Betterments are used for unforeseen expenses and not projected improvments. He further asked why a domestic user should pay for industrial waste. Mr. Stockwell stated that certain guidelines published have established Routine Betterments as a necessary budgeting factor in a Sewer Rate Study. He further stated that the Sewer Rate Study pro -rated costs in acknowledging the type of process of our Treatment Plant. He further stated that he has never seen a Rate Study done without including Routine Betterments and a Five Year Plan. - 3 - Council minutes, April 27, 1976 Mr. Ben Stolpman stated that if it wasn't for industry people would not live here. Mr. Harry Grounds stated he believed that the City Council should be considering lower rates because of the surplus indicated in the Rate Study. Alderman Peterson stated that she felt the sewer rate increase would be too severe for the average homeowner. Administrative Assistant Fleetham stated that with the Cash on Hand to date and the projected improvements for the next five years, the surplus would be eliminated. Mr. J.W. Joyce of Minnesota Mining and Manufacturing stated that his Company is pleased with the report of the consultants regarding the credit for water not emmitted into the sanitary sewer. Mayor Black reviewed the events surrounding the building of the Water Treatment Plant. He stated that when it was discovered that the Sewer Fund was experiencing a deficit it was decided tc hire a consulting firm to get an unbiased, factual report on the Water and Sewer Fund's operation. He further stated the City has also maintained an "A" Bond rating and unless there are corrective steps taken in the Water and Sewer Funds to eliminate this deficit the City could possibly lose its "A" rating. Such a loss would incur higher interest costs in bond principle and interest payments. He also noted that once the "A" rating is lost, it is almost impossible to get it back. Alderman Lueneburg stated that the increase is more severe for the homeowner on a fixed income than for Hutchinson Industrial Corporation. Alderman Westlund stated that he would like to see a two step increase but if it will greatly effect our future bonding, he agreed to go ahead. City Attorney Schantzen stated that he agreed with Administrative Assistant Fleetham that if the Audit Report shows a deficit in the Water and Sewer Funds, and no corrective steps are taken, we would probably lose the "A" Bond Rating. Mr. Merritt stated he believed that by adopting Hutchinson Industrial's proposed two step increase, the City would protect this "A" Bond Rating. After discussion,it was moved by Alderman Lueneburg, seconded by Alderma Westlund, to waive second reading and adopt Ordinance No. 504, entitled, Ordinance Amending Section 560 of the 1974 Ordinance Code of the City of Hutchinson entitled, Waterworks and Sewer Department, Rates and Charges. Motion carried on a vote of 4-1 with Alderman Peterson voting in opposition. It was then moved by Alderman Lueneburg, seconded by Alderman Haag, to review the Audit when published. Motion carried unanimously. After the adoption of the Ordinance, Mr. Jon Geiss raised additional questions, but Mayor Black directed the Council to proceed with the -4- Council minutes, April 27, 1976 next item of business. (b) ORDINANCE NO. 15/76 - AMENDING SECTION 270:40 OF THE 1974 ORDINANCE CODE OF THE CITY OF HUTCHINSON ENTITLED, METERING OF WATER, PRIVATE SUPPLY, RELATING TO WATER AND SEWER DEPARTMENTS, REGULATIONS After discussion, it was moved by Alderman Westlund, seconded by Alderman Peterson, to waive second reading and adopt Ordinance No. 506, entitled, Amending Section 270:40 of the 1974 Ordinance Code of the City of Hutchinson entitled, Metering of Water, Private Supply, relating to Water and Sewer Departments, Regulations. Motion carried unanimously. (c) ORDINANCE NO. 13/76 - AMENDING SECTION 570:20 OF THE 1974 ORDINANCE CODE OF THE CITY OF HUTCHINSON, ENTITLED, BICYCLE LICENSES After discussion, it was moved by Alderman Haag, seconded by Alderman Lueneburg, to waive second reading and adopt Ordinance No. 507, entitled, Amending Section 570:20 of the 1974 Ordinance Code of the City of Hutchinson, entitled, Bicycle Licenses. Motion carried unanimously. (d) RESOLUTION NO. 5687 - AUTHORIZING LEASE AGREEMENT WITH STATE OF MINNESOTA, DEPARTMENT OF EMPLOYMENT SERVICES FOR BUILDING AT 34 FRANKLIN STREET After discussion, it was moved by Alderman Peterson, seconded by Alderman Haag, to waive reading and adopt Resolution No. 5687 entitled, Authorizing Lease Agreement with State of Minnesota, Department of Employment Services for Building at 34 Franklin Street. Motion carried unamimously. (e) RESOLUTION NO. 5688 - DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL NO. 61 After discussion, it was moved by Alderman Westlund, seconded by Alderman Peterson, to waive reading and adopt Resolution No. 5688, entitled, Declaring Cost to be Assessed and Ordering Preparation of Proposed Assessment Roll No. 61. Motion carried unanimously. (f) RESOLUTION NO. 5689 - FOR HEARING ON PROPOSED ASSESSMENT ROLL NO. 61 After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Westlund, to waive reading and adopt Resolution No. 5689, entitled, For Hearing on Proposed Assessment Roll No. 61. Motion carried unanimously. (g) RESOLUTION NO. 5690 - DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL NO. 62 After discussion, it was moved by Alderman Peterson, seconded by Alderman Westlund, to waive reading and adopt Resolution No. 5690, entitled, Declaring Cost to be Assessed and Ordering Preparation - 5 - Council minutes, April 27, 1976 of Proposed Assessment Roll No. 62. Motion carried unanimously. (h) RESOLUTION NO. 5691 - CALLING FOR HEARING ON PROPOSED ASSESSMENT ROLL NO. 62 After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Haag, to waive reading and adopt Resolution No. 5691, entitled, Calling for Hearing on Proposed Assessment Roll No. 62. Motion carried unanimously. (i) RESOLUTION NO. 5692 - DECLARING COST TO BE ASSESSED AND ORDERING PREPARATION OF PROPOSED ASSESSMENT ROLL NO. 63 After discussion, it was moved by Alderman Westlund, seconded by Alderman Peterson, to waive reading and adopt Resolution No. 5692, entitled Declaring Cost to be Assessed and Ordering Preparation of Proposed Assessment Roll No. 63. Motion carried unanimously. (j) RESOLUTION NO. 5693 - CALLING FOR HEARING ON PROPOSED ASSESSMENT ROLL NO. 63 After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Westlund, to waive reading and adopt Resolution No. 5693, entitled, Calling for Hearing on Proposed Assessment Roll No. 63. Motion carried unanimously. (k) ORDINANCE NO. 11/76 - AMENDING ORDINANCE NO. 464, ZONING REGULATIONS OF THE CITY OF HUTCHINSON, SECTION 5, SUBDIVISION SECTION 5.01, NONCONFORMING LOTS, USES AND STRUCTURES WITH FAVORABLE RECOMMENDATION OF THE PLANNING COMMISSION After discussion, it was moved by Alderman Haag, seconded by Alderman Lueneburg, to waive first reading and set second reading for May 11, 1976 of Ordinance No. 11/76, entitled, Amending Ordinance No. 464, Zoning Regulations of the City of Hutchinson, Section 5, Subdivision Section 5.01, Nonconforming Lots, Uses and Structures. Motion carried unanimously. (1) RESOLUTION NO. 5694 - PROVIDING FOR TRANSFER OF $15,000 FROM THE LIQUOR STORE FUND TO THE GENERAL FUND After discussion, it was moved by Alderman Westlund, seconded by Alderman Haag, to waive reading and adopt Resolution No. 5694, entitled, Providing for Transfer of $15,000 from the Liquor Store Fund to the General Fund. Motion carried unanimously. 7. REPORTS OF OFFICERS, BOARDS AND COMMISSIONS (a) MINUTES OF THE PLANNING COMMISSION MEETINGS DATED MARCH 16, 1976 AND APRIL 20, 1976 There being no discussion, the minutes were ordered by the Mayor received for filing. - 6 - Council minutes, April 27, 1976 8. UNFINISHED BUSINESS None 9. NEW BUSINESS (a) CONSIDERATION OF RECOMMENDATION TO ADVERTISE FOR RADIO PAGING DEVICES Mayor Black inquired if the specifications have been written so that any supplier could submit a bid. Administrative Assistant Fleetham indicated they could. Mayor Black requested that City Attorney Schantzen review the specification. After further discussion, it was moved by Alderman Westlund, seconded by Alderman Lueneburg, to authorize publication of the advertisement for bids. Motion carried unanimously. (b) CONSIDERATION OF HUTCHINSON'S CIVIL DEFENSE EMERGENCY PLAN Mayor Black stated said plan was submitted to the State six months ago for approval and was returned for amendments and now is ready to be submitted again. After discussion, it was moved by Alderman Westlund, seconded by Alderman Lueneburg, to approve the Plan and authorize the Mayor to sign said plan. Motion carried unanimously. (c) CONSIDERATION OF CHANGE ORDER NO. 2 TO CONTRACT WITH MILLER, MILLER & MAC FOR CONSTRUCTION OF DEWATERING EQUIPMENT BUILDING Said Change Order is for additional excavation and gravel backfill which increased the original contract price by $906.41. After discussion, it was moved by Alderman Haag, seconded by Alderman Peterson, to approve Change Order No. 2. Motion carried unanimously. (d) CONSIDERATION OF CHANGE ORDER TO CONTRACT WITH PETERSON SHEET METAL FOR REMODELING OF KITCHEN AT BURNS MANOR FOR EXTENSION OF COMPLETION TIME TO JUNE 22, 1976 Administrative Assistant Fleetham gave an explanation of the change order. After discussion, it was moved by Alderman Westlund, seconded by Alderman Lueneburg, to approve said change order. Motion carried uanimously. (e) CONSIDERATION OF APPLICATIONS FOR RENEWAL OF ON AND OFF SALE NON -INTOXICATING MALT LIQUOR LICENSES The following applications were received for consideration for renewal: - 7 - Council minutes, April 27, 1976 ON -SALE MALT LIQUORS OFF -SALE MALT LIQUOR 1. Bolduc's Corner 1. Gibson's Discount Center 2. Christy's 2. Lee's Red Owl 3. Hutch Bowl 3. Erickson's Valu Center 4. J's Pizza Garten 4. National Food Store 5. Jack's Tavern 5. Johnson's Super Valu 6. Crow River Country Club 6. Peterson Oil Co. 7. Dinner Bell After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Peterson, to approve the applications and authorize issuance of the licenses. Motion carried unanimously. (f) CONSIDERATION OF APPLICATION FOR ON -SALE NON -INTOXICATING MALT LIQUOR LICENSE - PIZZA HUT Reverend Maynard Johnson opposed approval of the license stating that there should be one establishment in Hutchinson that does not serve alcoholic beverages. Mayor Black stated that if the establishment complies with all State requirements the City has no grounds to reject the application. It was noted Chief O'Borsky approved the application. After discussion, it was moved by Alderman Haag, seconded by Alderman Peterson, to approve the application and authorize issuance of the license contingent that the appropriate fee is paid. Motion carried unanimously. (g) CONSIDERATION OF APPLICATION FOR LICENSE TO SELL CIGARETTES AT RETAIL - PIZZA HUT After discussion, it was moved by Alderman Haag, seconded by Alderman Peterson, to approve the application and authorize issuance of the license contingent that the appropriate fees are paid. Motion carried unanimously. (h) CONSIDERATION OF PRELIMINARY PLAT - OAKWOOD AND FAVORABLE RECOMMENDATION OF PLANNING COMMISSION Mr. Robb Toteshek was present and requested Council approval of the plat. He further requested that when the plat was annexed to the City, City Water be extended to the plat and a roadway be constructed. City Engineer Priebe requested that the easements be widened to 10 feet. After discussion, it was moved by Alderman Peterson, seconded by Alderman Lueneburg to approve the preliminary plat. Motion carried unanimously. It was then moved by Alderman Westlund, seconded by Alderman Lueneburg, to waive reading and adopt Resolution No. 5695, entitled, Ordering Preparation of Report on Watermain and Roadway Improvement. Motion carried unanimously. - 8 - Council minutes, April 27, 1976 (i) CONSIDERATION OF PRELIMINARY PLAT SUBMITTED BY WILLIAM HELLAND AND FAVORABLE RECOMMENDATION OF PLANNING COMMISSION Considerable discussion was held on the proposed new entrance to the Crow River Country Club which abuts onto Shady Ridge Road. It was then moved by Alderman Haag, seconded by Alderman Peterson, to refer said plat back to the Planning Commission for further consideration. Motion carried unanimously. (j) CONSIDERATION OF REGISTERED LAND SURVEY SUBMITTED BY MR. JOHN MILLER City Engineer Priebe gave a background of the land survey. After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Westlund, to approve the Registered Land Survey. Motion carried unanimously. (k) CONSIDERATION OF APPLICATIONS FOR PERMITS AND LICENSE SUBMITTED BY HUTCHINSON JAYCEE WATER CARNIVAL COMMITTEE 1. Street Use 2. Kiddie Day Parade Permit 3. Grande Day Parade Permit 4. Fireworks Display Permit 5. Retail "On -Sale" Non -Intoxicating Malt Liquor License After discussion, it was moved by Alderman Westlund, seconded by Alderman Peterson, to approve the applications and authorize issuance of the permits and license contingent that Certificate of Insurance is presented and the appropriate fees are paid. Motion carried unanimously. (1) CONSIDERATION OF REQUEST FROM DOWNTOWN COUNCIL FOR THE FOLLOWING PERMITS AND LICENSES: 1. Street Use 2. Public Dance Permit 3. Retail "On -Sale" Non -Intoxicating Malt Liquor License Mr. Jon Holmquist, representative of the Downtown Council, stated that they are proposing to hold a Street Dance on Thursday, June 17, 1976 and further requested use of the Bandstand in Library Square. Discussion was held on the request for a Non -Intoxicating "On -Sale" Malt Liquor License. After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Peterson, to approve the following requests: 1. Street Use 2. Use of Library Square Bandstand 3. Public Dance Permit and to defer consideration of request for Retail "On -Sale" Non -Intoxicating Malt Liquor License until an affirmative recommendation is received from Chief O'Borsky. Motion carried unanimously. - 9 - Council minutes, April 27, 1976 (m) REVIEW OF PROPOSED WAREHOUSE DEVELOPMENT BY MILLER, MILLER & MAC WITHIN TWO MILE AREA BOARDERING THE CITY McLeod County Zoning Administrator Ed Homan informed those present that the warehouse is proposed to be built at the Satterlee Gravel Pit Site 1 1/2 miles west of the City. He further stated that it was an oversight on his part that this was not brought before the Council until this time. He further stated that the County Planning Commission had approved the Special Use Request contingent upon City Council approval. After discussion, it was moved by Alderman Lueneburg, seconded by Alderman Haag, to notify the County Board of Commissioners that the City Council of the City of Hutchinson has no opposition to the Special Use Request. Motion carried unanimously. 10. MISCELLANEOUS (a) COMMUNICATIONS FROM CLERK -ADMINISTRATIVE ASSISTANT 1. Reminded of the Bicentennial Tree Planting on Friday, April 30, 1976 at 1:00 P.M. on the Washington Avenue Side of the Elementary School. 2. Reminded of the Department Head/City Council Meeting on Thursday, April 29, 1976 at 8:00 A.M. 3. Discussion was held on the new Water and Sewer Rates in relationship to the 1976 Projects and future bonding. 4. Stated that the City could possibly receive a grant in addition to the Community Development Grant from the Housing Finance Agency for housing rehabilitation. (b) COMMUNICATIONS FROM MAYOR BLACK 1. Acknowledged the invitation to attend the American Legion Memorial Day Parade at 10:00 A.M. Monday, May 31, 1976. 2. AcknowledgEd receipt of Hand's Inc. Financial Report for 1975. 3. Acknowledged correspondance from the League of Minnesota Municipalities for nominations for League Officers. 4. Reminded that the Assessment Board of Review will be Tuesday, May 11, 1976 at 10:00 A.M. at City Hall. (c) COMMUNICATIONS FROM ALDERMAN WESTLUND 1. Reminded of the Bicentennial Time Capsule Burial on Monday, May 10, 1976 at 4:00 P.M. in Library Square. - 10 - Council minutes, April 27, 1976 (d) COMMUNICATIONS FROM ALDERMAN PETERSON 1. Informed that she and Administrative Assistant Fleetham has met with Senator John Bernhagen to acquire the Bass Pond Property owned by the State either by a land swap or transfer of title. (e) COMMUNICATIONS FROM CITY ENGINEER PRIEBE 1. Presented a memorandum regarding the request for water by Farmer's Elevator Association as their new location in the Industrial Park. After discussion, it was moved by Alderman Peterson, seconded by Alderman Lueneburg, to waive reading and adopt Resolution No. 5696, entitled, Calling for Report on Watermain Extension. Motion carried unanimously. 2. Presented a letter from Rieke Carroll Muller Associates stated that Braun Testing Company's total costs have exceed their original estimate by $3,000. (f) COMMUNICATIONS FROM CITY ATTORNEY SCHANTZEN 1. Gave his first reactions to the appeal to the Minnesota Supreme Court by the Citizens for a Better Hutchinson regarding the West River Bridge. 11. CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS (a) VERIFIED CLAIMS It was moved by Alderman Westlund, seconded by Alderman Lueneburg, to approve the verified claims and authorize payment from the appropriate funds. Motion carried unanimously. 12. ADJOURNMENT There being no further business to come before the Council, the meeting was declared adjourned at 11:00 P.M. on motion by Alderman Westlund, seconded by Alderman Lueneburg and carried unanimously.