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07-11-2017 CCMHUTCHINSON CITY COUNCIL MEETING MINUTES TUESDAY, JULY 11, 2017 CITY CENTER — COUNCIL CHAMBERS (The City Council is provided background information for agenda items in advance by city staff, committees and boards. Many decisions regarding agenda items are based upon this information as well as: City policy andpractices, inputfrom constituents, and other questions or information that has not yet been presented or discussed regarding an agenda item) 1. CALL MEETING TO ORDER — 5:30 P.M. Mayor Gary Forcier called the meeting to order. Members present were Mary Christensen, John Lofdahl, Chad Czmowski and Steve Cook. Others present were Matt Jaunich, City Administrator, Kent Exner, City Engineer and Marc Sebora, City Attorney (a) Approve the Council agenda and any agenda additions and/or corrections Matt Jaunich noted that an item will need to be added to the agenda as 13.1— Consideration for Approval of Street Closure for Orange Spectacular Parade Motion by Lofdahl, second by Christensen, to approve the agenda with the addition noted. Motion carried unanimously. 2. INVOCATION — Oak Heights Covenant Church 3. PLEDGE OF ALLEGIANCE 4. RECOGNITION OF GIFTS, DONATIONS AND COMMUNITY SERVICE TO THE CITY (a) Resolution No. 14734 — Donation of $2500 from American Legion for Restroom Project at VFW Park Motion by Cook, second by Christensen, to approve Resolution No. 14734. Motion carried unanimously. (b) Recognition of Donations of $35,000 from VFW Post 906 and $2,500 from Disabled American Veterans for VFW Park Bathroom Project Marty Berg, VFW, presented before the Council. Mr. Berg provided a check to Mayor Forcier in the amount of $35,000 for the VFW Park Bathroom Project. Mr. Berg also mentioned that the VFW recently purchased a sign and have been informed that only the weather, temperature and time can be placed on their digital sign located at the VFW. Mr. Berg asked if that could be waived otherwise there is no need for the $20,000 sign. Mr. Jaunich noted that he has learned that no permission was acquired before the sign was installed and the sign ordinance only allows for certain types of information to be included on the sign. This will be discussed further and more information will be provided to the VFW organization. Van Karg, Disabled American Veternas, presented before the Council. Mr. Karg provided a donation of $2500 for the VFW bathroom project as well. PUBLIC COMMENTS (This is an opportunity for members of the public to address the City Council on items not on the current agenda. If you have a question, concern or comment, please ask to be recognized by the mayor state your name and address for the record. Please keep comments under S minutes. Individuals wishing to speakfor more than five minutes should askto be included on the agenda in advance of the meeting. All comments are appreciated, but please refrain from personal or derogatory attacks on individuals.) 5. CITIZENS ADDRESSING THE CITY COUNCIL 6. APPROVAL OF MINUTES CITY COUNCIL MINUTES JULY 11, 2017 (a) Workshop with Hutchinson Utilities Commission of June 26, 2017 (b) Workshop with Economic Development Authority of June 27, 2017 (c) Regular Meeting of June 27, 2017 Motion by Czmowski, second by Cook, to approve minutes as presented. Motion carried unanimously. CONSENT AGENDA (The items listed for consideration will be enacted by one motion unless the Mayor, a member of the City Council or a city staff member requests an item to be removed. Traditionally items are not discussed.) 7. APPROVAL OF CONSENT AGENDA I (a) Consideration for Approval of Street Closure for Blessing of the Riders Event on July 16, 2017 (b) Consideration for Approval of Issuing Short -Term 3.2 Malt Liquor License to McLeod County Fair Association on August 16, 2017, and a Temporary Liquor License to McLeod County Fair Association from August 17 — 20, 2017 (c) Consideration for Approval of Issuing Transient Merchant License to Jay Malone Motors from August 12 - 19, 2017 (d) Claims, Appropriations and Contract Payments — Register A Motion by Cook, second by Lofdahl, to approve Consent Agenda L Motion carried unanimously. 8. APPROVAL OF CONSENT AGENDA II (a) Claims, Appropriations and Contract Payments — Register B Motion by Lofdahl, second by Christensen, with Forcier and Czmowski abstaining, to approve Consent Agenda IL Motion carried unanimously. PUBLIC HEARINGS — 6:00 P.M. 9. PUBLIC HEARING FOR CITY ALLEY 436 IMPROVEMENTS (Letting No. 13/Project No. 17-13) (a) Approve/Deny Resolution No. 14735 - Ordering Improvement and Preparation of Plans and Specifications (b) Approve/Deny Resolution No. 14736 - Approving Plans and Specifications and Ordering Advertisement for Bids Mr. Exner explained that property owners adjacent to City Alley 436 have petitioned for surfacing improvements. This project is included within the 2017 Infrastructure Improvement Program and will be reviewed by the City's Resource Allocation Committee as the project delivery/funding process proceeds in the near future. The project includes mill and overlay with an estimated project cost of $19,250. The project is proposed to be funded 50% from improvement assessments and 50% from the infrastructure maintenance account. The estimated assessments are $5.54/frontage foot or $366.00 for a typical city lot. Motion by Czmowski, second by Lofdahl, to open public hearing. Motion carried unanimously. 2 CITY COUNCIL MINUTES JULY 11, 2017 Brad Wick, 535 Main Street South, presented before the Council. Mr. Wick has some concerns with the slope of the alley due to difficulties in the winter. He asked that it be elevated a bit. Mr. Exner noted that staff will do what is possible to alleviate issues. Jon Otteson, 558 Hassan Street, noted he is in favor of the project. Greg Jodzio, 549 Main Street South, expressed concerns on the west side of the alley with many holes and sink spots so inquired as far it had to be dug down. Staff noted that patching is included with this project. Motion by Christensen, second by Lofdahl, to close public hearing. Motion carried unanimously. Council Member Cook asked how many residential alleys are paved. Mr. Olson estimated that two alleys are paved throughout the City. Mr. Cook asked what it would take if more residents would like their alleys paved. Mr. Olson noted that the best process is via property owner petition. Mr. Olson noted that paved alleys are easier to maintain than non -paved, however many things need to be considered when determining whether or not an alley should be paved. Motion by Czmowski, second by Forcier, to approve Resolution Nos. 14735 and 14736. Motion carried unanimously. COMMUNICATIONS, REQUESTS AND PETITIONS (The purpose of this portion of the agenda is to provide the Council with information necessary to craft wise policy. Includes items like monthly or annual reports and communications from other entities.) 10. REVIEW AND APPROVAL OF 2016 AUDIT REPORT Andy Reid, Finance Director, presented before the Council. Mr. Reid mentioned that a workshop was held prior to the Council meeting and reviewed in detail. The City is financially healthy. Mr. Reid introduced Kyle Meyers of the City's auditing firm. Mr. Meyers noted that the audit opinion is unmodified or "clean" which is the best it can be. There were no findings and the audit tested Minnesota Legal Compliance, internal control over financial reporting, provision of laws, regulations, contracts, grant agreements, etc. and administering federal award programs. Mr. Meyers mentioned the new standards that have been implemented and that the City received the GFOA certificate for 20 years in a row. Mr. Meyers further reviewed financial results from the 2016 audit. Mr. Jaunich noted that a more detailed presentation was given at the workshop and can be provided to anyone that may be interested. Mr. Reid noted that the audit report will be printed in tomorrow's newspaper and the full audit will be on the City's web site, at City Center and the public library. Motion by Cook, second by Lofdahl, to approve and accept the 2016 audit report. Motion carried unanimously. 11. DISCUSSION ON REQUIRING A PERFORMANCE BOND FROM THE HOTEL DEVELOPER PRIOR TO ACCEPTING THE BID TO CONSTRUCT THE ACCESS ROAD Matt Jaunich noted that this item was mentioned at a previous meeting this spring. Council Member Cook requested that this item be placed on the agenda to discuss whether or not the City should be requiring the developer of the hotel project to put up a performance bond prior to the City accepting the bid to construct the proposed access road. The purpose of a performance bond would be to insure some sort of a financial "guarantee satisfaction" that the completion of the hotel project will take place by the developer. Council Member Cook noted his main concern is protecting the City and the EDA should the project not move forward. CITY COUNCIL MINUTES JULY 11, 2017 Council Member Cook noted he had spoken with the EDA Director, Miles Seppelt, about this and Mr. Seppelt suggested setting up an escrow account due to the cost of acquiring a performance bond. Mr. Jaunich explained that typically performance bonds are approximately 10% of the project. Mr. Exner explained that letters of credit have been required on improvement projects as well. Mr. Exner noted that in the bid documents, the City stated that the project would be awarded no later than August 8, 2017. Now the developer intends to come to Planning Commission on August 15, 2017, with Council action on August 22, 2017. Therefore, the award date will need to be negotiated with the contractor. At this time, it does not appear to be an issue with the contractor for the project to be pushed out two weeks. The main issue is ordering retaining wall block in time for the project to be included. Mr. Seppelt stated that he did speak with the developer who shared with him how much he has spent on this project, including $40,000 in engineering/environmental costs and has been working on this project for two years. Local financing is in place and information has been disseminated state-wide about the hotel. The developer has suggested that the City not approve the project until SBA financing is approved. If financing is approved, the project will proceed as planned; if financing is not approved then the project could not move forward. Mr. Seppelt stated that he has been working with the developer for 20 months and he has never given an indication that the project will not proceed. Mr. Seppelt did speak with him about a letter of credit and the developer was hesitant as that has a cost to it as well. Council Member Czmowski expressed that the worst case scenario is a road is built and the developer goes bankrupt. Council Member Czmowski feels that another developer will come along if the road is built and available, especially with such a prime location. Consensus of the Council is that if financing is approved, the Council will award the project at that time for the road work/retaining wall. 12. DISCUSSION ABOUT PARTNERING WITH THE COUNTY ON MAINTENANCE EFFORTS RELATING TO THE LUCE LINE Council Member Steve Cook asked that the Council have a conversation about giving staff authorization to discuss options with the County on how the City can partner with the County in providing maintenance efforts to the Luce Line Trail for purposes of horse use. Some initial discussion has centered around the shared use of equipment for mowing. Commissioner Wright and Parks Superintendent Al Koglin met with the DNR about the trail and it has been suggested to mow the trail wider and trim trees back further as it would aid the DNR in maintaining the trail at a higher level. The County Board approved use of equipment and personnel to achieve this, however the county has asked from the City for use of a mowing attachment to assist with this. Mr. Exner noted that staff has had some discussions on this and concerns of the wear and tear this might be on the City's equipment. Staff is suggesting to rent this piece of equipment for a cost of approximately $1500 to prevent damage to the City's piece of equipment. Council Member Czmowski expressed some of this thoughts which were that: the annual equestrian trail pass fees could possibly be used to pay for maintenance, the majority of horse owners live throughout the county and not in the city and if McLeod County owns a similar mower adapter, which is very possible, why should the City have to rent a piece of equipment. Staff noted that the County Board has adopted a Resolution formalizing a partnership for this trail maintenance. It was suggested that perhaps the City should adopt a similar Resolution which would have more concrete information related to the partnership, responsibilities and costs associated. Council Member Czmowski did ask that it be inquired of the County whether or not they already have the piece of equipment they are asking of the City. UNFINISHED BUSINESS NEW BUSINESS 11 CITY COUNCIL MINUTES JULY 11, 2017 13. APPROVE/DENY LEASE AGREEMENT FOR HANGAR 1760 — TNT, LLC AND GIVING THE MAYOR AND CITY ADMINISTRATOR AUTHORITY TO SIGN ASSOCIATED CLOSING DOCUMENTS John Olson, Public Works Manager, introduced Tom Ashenfelter of ASI Jet AG, LLC. Mr. Ashenfelter explained that his operation has grown with two mechanics, a shop hand, and an office administrator on staff and therefore need more space. The group began by leasing a main hangar and then leased another space when another tenant left. Because of the growth his company is experiencing and the amount of equipment they have, they would like to construct additional hangar space. The lease has a lifetime of 50 years with an option to extend at that time. TNT, LLC would be required to obtain a building permit and comply with other regulations relating to the construction of the hangar. The agreement is contingent upon TNT, LLC receiving SBA financing from Citizens Bank. Motion by Cook, second by Christensen, to approve lease agreement for Hangar 1760 — TNT, LLC and authorizing mayor and city administrator to sign associated closing documents. Motion carried unanimously. 13.1 CONSIDERATION FOR APPROVAL OF STREET CLOSURE FOR ORANGE SPECTACULAR EVENT ON JULY 20, 2017 Matt Jaunich noted that the AC Tractor Club is requesting the closing of First Avenue SE between Main Street and Hassan Street as part of the Orange Spectacular Event. A number of tractors will be on display during a concert in the park. These tractors will be parked on First Avenue SE and they are asking for the street to be closed from 4:00-8:00 p.m. Motion by Christensen, second by Cook, to approve street closure on July 20, 2017, for Orange Spectacular Event. Motion carried unanimously. GOVERNANCE (The purpose of this portion of the agenda is to deal with organizational development issues, including policies, performances, and other matters that manage the logistics of the organization. May include monitoring reports, policy development and governance process items.) 14. MINUTES FROM COMMITTEES, BOARDS OR COMMISSIONS (a) Liquor Hutch Quarterly Report (b) Library Board Minutes from May 22, 2017 MISCELLANEOUS 15. STAFF UPDATES Kent Exner — School Road/Roberts Road project going well —paving near SuperAmerica north of the bridge will begin tomorrow — due to this the bridge will not open until July 17, 2017, instead of July 10, 2017; 2nd Avenue Bridge - $400,000 in bridge bonding dollars has been received — the estimated construction cost is $950,000; County trails committee meeting was held last night which was very productive and positive — unanimous recommendation to administer a preliminary engineering study from the City of Hutchinson to County Road 1 on the west side of Lester Prairie Matt Jaunich — Mr. Jaunich reminded the public of the City's Facebook page. He also acknowledged the vast amounts of financial donations from the community (over $100,000 in the last two years) to care for the needs throughout the parks system. These donations are very much appreciated by the City of Hutchinson. 16. COUNCIL/MAYOR UPDATE Steve Cook — Council Member Cook noted that Amy Solinger, who spear headed raising CITY COUNCIL MINUTES JULY 11, 2017 funds for the dog park, had asked if the dog park construction could begin in August. The Council feels that the plan should be adhered to and see if the City is awarded the grant that it applied for which will aid in defining the scope of the project Gary Forcier — Mayor Forcier asked Mr. Jaunich if he could look into seeing if music could be added to the aquatic center through the PA system ADJOURNMENT Motion by Christensen, second by Czmowski, to adjourn at 7:25 p.m. Motion carried unanimously. ATTEST: Gary T. Forcier Mayor Matthew Jaunich City Administrator