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cp08-28-2007 c . AGENDA REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, AUGUST 28, 2007 I. CALL TO ORDER - 5:30 P.M. 2. INVOCATION -Rev. Greg Nelson, Bethlehem United Methodist Church 3. PLEDGE OF ALLEGIANCE 4. PUBLIC COMMENTS 5. MINUTES (a) REGULAR MEETING OF AUGUST 14,2007 (b) BID OPENING MINUTES OF AUGUST 13, 2007 (SAW LOGS) Action - Motion to approve as presented 6. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS 1. AIRPORT COMMISSION MINUTES OF JUNE 21, 2007, AND JULY 19,2007 PARKS, RECREATION, COMMUNITY EDUCATION BOARD MINUTES OF JUNE 4, 2007 HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES OF JULY 17, 2007 HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY ANNUAL BOARD MEETING MINUTES OF AUGUST 15,2006 PLANNING COMMISSION MINUTES OF JULY 17,2007 CITY OF HUTCHINSON FINANCIAL REPORT JULY 2007 CITY OF HUTCHINSON INVESTMENT REPORT JULY 2007 (b) RESOLUTIONS AND ORDINANCES . 2. 3. 4. 5. 6. 7. . 1. ORDINANCE NO. 07-0469 - AN ORDINANCE ADOPTING THE 2007 EDITION OF THE MINNESOTA STATE FIRE CODE (SECOND READING AND ADOPTION) 2. RESOLUTION NO. 13258 - RESOLUTION FOR PURCHASE OF ENGINEERING AGREEMENT FOR SERVICES FOR MERCURY AND WATER SYSTEM WITH DONOHUE & ASSOCIATES 3. RESOLUTION NO. 13257 - RESOLUTION TO PAR TICIP A TE IN MCLEOD COUNTY HAZARD MITIGATION PLAN CITY COUNCIL AGENDA - AUGUST 28, 2007 . (c) PLANNING COMMISSION ITEMS 1. CONSIDERATION OF CONDITIONAL USE PERMIT, SITE PLAN AND V ACA TION OF DRAINAGE AND UTILITY EASEMENTS TO ALLOW A CHARTER SCHOOL FACILITY IN THE I-I (LIGHT INDUSTRIAL) DISTRICT LOCATED AT 100011010 5TH AVENUE SOUTHEAST WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPTING RESOLUTION NO. 13255 AND WAIVING FIRST READING AND SETTING SECOND READING AND ADOPTION OF ORDINANCE NO. 07-0472 FOR SEPTEMBER 11, 2007) 2. CONSIDERATION OF CONDITIONAL USE PERMIT TO MOVE A HOUSE TO I65-5TH A VENUE NORTHWEST REQUESTED BY PAUL AND ROSE BOLDUC WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13254) . 3. CONSIDERATION OF ZONING ORDINANCE AMENDMENT REGARDING NON- CONFORMING USES AND STRUCTURES WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (WAIVING FIRST READING AND SETTING SECOND READING AND ADOPTION OF ORDINANCE NO. 07-0468 FOR SEPTEMBER 11,2007) (d) APPOINTMENTS TO PUBLIC ARTS COMMISSION o TOM WIRT TO AUGUST 2008 o BUZZ BURICH AUGUST 2009 o TERRY KEMPFERT AUGUST 2010 o JOANNE WILMERT AUGUST 2010 o JIM HAUGEN TO JANUARY 2008 (COUNCIL REPRESENTATIVE) (e) CONSIDERATION FOR APPROVAL OF TRANSIENT MERCHANT LICENSE FOR CHARLES HOMIER JR. AT NATIONAL GUARD ARMORY Action - Motion to approve consent agenda 7. PUBLIC HEARINGS - 6:00 P.M. (a) 2008 BUDGET DISCUSSION Action - (b) CONSIDERATION OF APPROVING THE GRANTING OF A BUSINESS SUBSIDY TO CUSTOMER ELATION CALL CENTER AND APPROVING THE FORMS OF A BUSINESS SUBSIDY AGREEMENT (ADOPT RESOLUTION NO. 13259) Action - Motion to reject - Motion to approve 8. COMMUNICATIONS, REOUESTS AND PETITIONS (a) PARKING OF TRACTOR TRAILERS NEAR MAPLE STREET/NORTHWOODS A VENUE AS REQUESTED BY RUSS MERKINS Action - . 2 CITY COUNCIL AGENDA - AUGUST 28, 2007 .. UNFINISHED BUSINESS (a) CONSIDERATION OF AMENDING SECTION 73.15 OF THE HUTCHINSON CITY CODE RELATED TO REGULATIONS OF ALL-TERRAIN VEHICLES Action - 10. NEW BUSINESS (a) CONSIDERATION FOR APPROVAL OF A ORDINANCE APPROVING THE DEBT SERVICE RESERVE ESCROW AGREEMENT WITH HUTCHISON HEALTH CARE (ADOPT ORDINANCE NO. 07-0474) Action - Motion to reject - Motion to approve (b) CONSIDERATION FOR APPROVAL OF A ORDINANCE OUTLINGING ATTORNEY SERVICES BETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE (ADOPT ORDINANCE NO. 07-0476) Action - Motion to reject - Motion to approve (q) .cONSIDERATION FOR APPROVAL OF A ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF HUTCHINSON AND HUTCHINSON HEALTH CARE TO DETERMINE THE VALUE OF PROPERTY CURRENTLY USED BY THE HUTCHINSON AREA HEALTH CARE (ADOPT ORDINANCE NO. 07-0475) Action - Motion to reject - Motion to approve . (d) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE (ADOPT ORDINANCE 07-0473) Action - Motion to reject - Motion to approve (e) CONSIDERATION FOR APPROVAL OF AN ORDINANCE APPROVING THE ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE (ADOPT ORDINANCE NO. 07-0470) Action - Motion to reject - Motion to approve (t) HIGHWAY 7 CORRIDOR STUDY UPDATE AND REQUEST CITY COUNCIL WORKSHOP FOR OCTOBER 9, 2007, AT 4:00 P.M. REGARDING HIGHWAY 7 CORRIDOR STUDY Action - Motion to reject - Motion to approve (g) CONSIDERATION OF LOT SPLIT AT 1316 DELAWARE STREET TO CREATE A NEW LOT WITHIN THE SHORELAND DISTRICT AND FLOOD PLAN WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13256) Action - Motion to reject - Motion to approve (h) CONSIDERATION FOR APPROVAL OF TAX INCREMENT ASSISTANCE AGREEMENT DISTRICT NUMBER 7 . Action - Motion to reject - Motion to approve 3 CITY COUNCIL AGENDA - AUGUST 28, 2007 . (i) CONSIDERATION FOR APPROVAL OF PRELIMINARY AND FINAL PLAT FOR JENSEN SECOND ADDITION WITH FAVORABLE PLANNING COMMISSION RECOMMENDATION (ADOPT RESOLUTION NO. 13240) 11. MISCELLANEOUS (a) COMMUNICATIONS 12. CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS 13. ADJOURN . . 4 . MINUTES REGULAR MEETING - HUTCHINSON CITY COUNCIL TUESDAY, AUGUST 14,2007 1. CALL TO ORDER - 5:30 P.M. Mayor Steve Cook called the meeting to order. Members present were Bill Arndt, Jim Hau~en and Casey Stotts. Council Member absent was Kay Peterson. Others present were Gary Plotz, City Admimstrator, Kent Exner, City Engineer, and Marc Sebora, City Attorney. 2. INVOCATION - Rev. Brian Brosz, First Congregational- UCC Church, delivered the invocation. 3. PLEDGE OF ALLEGIANCE 4. PUBLIC COMMENTS 5. MINUTES (a) REGULAR MEETING OF JULY 24, 2007 (b) BID OPENING MINUTES OF JULY 20, 2007 (CROW RIVER DAM REPLACEMENT) Motion by Arndt, second by Stotts, to approve the minutes as presented. Motion carried unanimously. 6. CONSENT AGENDA (a) REPORTS OF OFFICERS, BOARDS AND COMMISSIONS . 1. PUBLIC LIBRARY BOARD MINUTES OF JUNE 25,2007 2. PIONEERLAND LIBRARY SYSTEM BOARD MINUTES OF JUNE 21, 2007 3. HUTCHINSON HOUSING & REDEVELOPMENT AUTHORITY BOARD MINUTES OF JUNE 19, 2007 4. BUILDING DEP AR TMENT MONTHL Y REPORT FOR JULY 2007 (b) RESOLUTIONS AND ORDINANCES 1. RESOLUTION NO. 13249 - RESOLUTION TEMPORARILY SUSPENDING PARKING RESTRICTIONS ON JEFFERSON STREET DURING ARTS AND CRAFTS FESTIVAL 2. RESOLUTION NO. 13250 - RESOLUTION CALLING FOR A PUBLIC HEARING ON THE GRANTING OF A BUSINESS SUBSIDY (CALL CENTER) 3. RESOLUTION NO. 13251 - RESOLUTION FOR PURCHASE (UNLEADED GASOLINE AND BIODIESEL) 4. ORDINANCE NO. 07-0467 - AN ORDINANCE AMENDING SECTION 154.067 OF THE ZONING ORDINANCE ADDING SCHOOLS TO THE CONDITIONALLY PERMITTED USES IN THE I-I (LIGHT INDUSTRIAL DISTRICT) (SECOND READING AND ADOPTION) . 5. ORDINANCE NO. 07-0469 - AN ORDINANCE ADOPTING THE 2007 EDITION OF THE SCo.) CITY COUNCIL MINUTES - AUGUST 14, 2007 . MINNESOTA STATE FIRE CODE (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION FOR AUGUST 28, 2007) (c) CONSIDERATION FOR APPROVAL OF PARADE PERMIT FOR HUTCHINSON HIGH SCHOOL STUDENT ADVISORY COUNCIL ON SEPTEMBER 28, 2007 (d) CONSIDERATION FOR APPROVAL OF PROJECT AWARD FOR THE 2007 PAVEMENT REHABILITATION SEALCOA TING (LETTING NO.5, PROJECT NO. 07-05) (e) CONSIDERATION FOR APPROVAL OF IMPROVEMENT PROJECT CHANGE ORDER NO.3, LETTING NO. 3/PROJECT NO. 06-03 - DENVER AVENUE PROJECT (t) REAPPOINTMENTS TO PRCE BOARD AND HRA BOARD a. RUTH KIMBALL TO HRA BOARD TO AUGUST 2012 b. DEANE DIETEL TO PRCE BOARD TO AUGUST 2010 c. LORA MUILENBURG TO PRCE BOARD TO AUGUST 2010 d. BETH HEPOLA TO PRCE BOARD TO AUGUST 2010 Motion by Haugen, second by Arndt, to approve consent agenda with the exception ofItem 6(b)5. Motion carried unanimously. Item 6(b)5 had further discussion. Mayor Cook asked if the fire code could be adopted in such a fashion as the building code was adopted, as a self-perpetuating ordinance. City Attorney Marc Sebora expressed that he felt it would be a good idea to have it adopted as a self-perpetuating ordinance and that in the future in should be done as so. . Motion by Arndt, second by Haugen, to approve Item 6(b)5. Motion carried unanimously. 7. PUBLIC HEARINGS - 6:00 P.M. (a) CONSIDERATION FOR APPROVAL OF ISSUING ON-SALE INTOXICATING & SUNDAY LIQUOR LICENSE TO EL LORO II, INC., LOCATED AT 705 ATLANTA AVENUE SW Motion by Arndt, second by Stotts, to close public hearing. Motion carried unanimously. Motion by Stotts, second by Cook, to approve on-sale intoxicating and Sunday liquor license to El Loro II, Inc., located at 705 Atlanta Avenue SW. Motion carried unanimously. 8. COMMUNICATIONS, REOUESTS AND PETITIONS (a) DISCUSSION AND POSSIBLE RECONSIDERATION OF RECREATIONAL VEHICLE PUBLIC HEARING Mayor Steve Cook suggested the Council reconsider holding a public hearing on this issue as it seems that the Council has already heard the comments they will need to hear, as well as the fact that they have received information on how other communities regulate the issue. Council Member Stotts noted that the majority of the phone calls he has received are residents stating that they wish for Hutchinson's ordinances to remain as they are and not have more regulations pertaining to recreational vehicles. Council Member Haugen also noted that the readers' poll on the Hutchinson Leader showed that the citizens wish for the City Council to leave the issue alone. . 2 sCrJ. ') CITY COUNCIL MINUTES - AUGUST 14, 2007 . Motion by Cook, second by Stotts, to cancel the public hearing set for August 28, 2007, and leave the ordinances as written. City Attorney Marc Sebora noted that one clarification that should be addressed is the prohibition of parking in the roadway right-of-way as compared to solely the right-of-way as currently written. Roll call vote was taken: Haugen - aye; Arndt - nay; Stotts - aye; Cook - aye. Motion carried 3 to 1. (b) DISCUSSION OF COMMUNITY VISIONING PROCESS Mayor Steve Cook suggested putting together a group that will study and address various projects for the city, such as use of local sales tax, comprehensive plan, school district issues, etc. Mayor Cook noted that the local extension office provides training and assistance with developing processes and groups such as these. Mayor Cook suggested holding a Council session with a representative from the extension office in October or November to determine whether or not it would be a good process to follow. The rest of the Council concurred. Mayor Cook will bring back available dates of the extension representative. 9. UNFINISHED BUSINESS 10. NEW BUSINESS (a) CONSIDERATION FOR APPROVAL OF 2007 HUTCHINSON JAYCEES HAUNTED HOUSE Josh Gehlen, Hutchinson Jaycees Vice President, presented before the Council. Mr. Gehlen explained that he, the City Administrator and Fire Chief had met a couple of weeks ago and agreed upon conditions for the use of the training tower site for the Jaycees haunted house. Motion by Stotts, second by Arndt, to approve 2007 Hutchinson Jaycees Haunted House using the fire . training tower site. Motion carried unanimously. (b) CONSIDERATION OF AMENDING SECTION 73.15 OF THE HUTCHINSON CITY CODE RELATED TO REGULATIONS OF ALL-TERRAIN VEHICLES (WAIVE FIRST READING AND SET SECOND READING AND ADOPTION OF ORDINANCE NO. 07-0471 FOR AUGUST 28, 2007) City Attorney Marc Sebora noted that the proposal of this ordinance is to align it with the city's snowmobile ordinance. The proposal is to allow ATV usage on city streets only to gain access to trails. Chief Hatten noted that very few complaints regarding A TV usage have been received by the police department, however this ordinance has been instigated by A TV operators that wish to have guidelines in place. Council Member Stotts noted that he would like Class 2 A TV s to be regulated differently than Class 1 A TV s. Chief Hatten suggested that a possible exemption could be placed into the ordinance for certain types of vehicles. Council Member Stotts suggested adopting the ordinance for Class 1 ATVs however conducting more research on the use of Class 2 A TV s. Council Member Stotts also noted concerns that Class I A TVS are used for snow removal, therefore he would like to have an exemption for that as well. Council Member Stotts suggested removing A(3) and allow an exemption for using Class 1 ATVs for snow removal. Mayor Cook suggested tabling the ordinance until it can be completely revised. . Brent Wiehr, 14594 State Hwy 7, presented before the Council. Mr. Wiehr spoke about state regulations 3 S;>- ') CITY COUNCIL MINUTES - AUGUST 14, 2007 . . . of A TV s and about the difference between Class 1 and Class 2 A TV s. Bob Wiehr, 495 Shady Ridge Road, presented before the Council. Mr. Wiehr also spoke about the difference between A TV I and A TV 2 vehicles. Overall, A TV 2 vehicles are operated much more like a motor vehicle than an off-road vehicle. A TV 2s are allowed on state highways, however not on interstates nor in the ditches. He did not feel it was necessary to implement a new law regulating ATVs. Rex Erickson, 590 Peterson Circle, presented before the Council. Mr. Erickson expressed that Class 2 A TV s are operated frequently in Phoenix, AZ, and there are little to no issues. He does not think Hutchinson needs a new law. Motion by Arndt, second by Haugen, to table this item to August 28, 2007. Motion carried unanimously. (c) CONSIDERATION FOR APPROVAL OF AUTHORIZATION TO ENTER INTO PURCHASE AGREEMENT WITH CENEX CO-OP AND APPROVE PROJECT FINANCING Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt explained that the EDA has been working avith Cenex to acquire their property on 3rd A venue. The deal consists of the EDA purchasing four lots on 3' Avenue and will include Cenex demolishing all of the structures on these lots by 12/31/07, Cenex covering the match requirements for state clean-up programs, the EDA will gain 1.0 I acres for industrial park right-of-way and a 1.14 acre "triangle" piece in the industrial park. For this, Cenex will be paid $300,000 as well as approximately 1.8 acres ofthe easternmost Goebel lot in the industrial park, and a three- year option, at no cost, on up to five acres of the Stritesky property at $10,000 par acre (industrial park proJ?erty). The goals that will be accomplished with this transaction will include removal and clean-up of the fertIlizer site near the Crow River, providing needed right-of-way to access the new industrial park and providing land that can facilitate buffering of the scrap yard in the industrial park. The EDA is recommending that the project be funded with $150,000 from the Do~town Revolving Loan Fund and $150,000 from the city's development fund. After the fertilizer site on 3' Avenue is redeveloped and sold, both the downtown revolving loan fund and the city's development fund will be reimbursed. Council Member Arndt asked that staff confirm whether or not any railroad property runs through the piece of land that is being acquired in the industrial park. Motion by Stotts, second by Arndt, to approve authorization to enter into purchase agreement with Cenex Co-op and approve project financing m the amount of $300,000, using $150,000 from the downtown revolving loan fund and $150,000 from the city's development fund. Motion carried unanimously. (d) CONSIDERATION FOR APPROVAL OF PROJECT FINANCING PLAN FOR CUSTOMER ELATION CALL CENTER Miles Seppelt, EDA Director, presented before the Council. Mr. Seppelt explained that an intake call center is going to be located in Hutchinson and has chosen a location in the industrial park. The EDA is recommending that the call center be financed with a lease-revenue bond. Lease payments from the company will be set at a level sufficient to make the bond payments as they come due. The EDA' s request is that the City "co-sign" the loan for the EDA. The details of the financing plan include: the EDA will own the call center building, the EDA will rent the building to the city, the City will rent the building back to the EDA, the EDA will then rent the building to the company and hopefully within 5-8 years, the company will purchase the building. The protections in place for the City and the EDA include the lease with the call center, the building itself as an asset, JOBZ protections, bond structure and the EDA's assets. Council Member Arndt asked that staff contact Region 6E for additional revolving loan fund dollars. 4 (~~p, ') CITY COUNCIL MINUTES - AUGUST 14, 2007 . (e) UPDATE ON PROPOSED 2008 BUDGET Motion by Haugen, second by Stotts, to approve project financing plan for Customer Elation Call Center. Motion carried unanimously. Ken Merrill, Finance Director, presented before the Council. Mr. Merrill distributed a draft of the 2008 budget and asked that the Council review and provide feedback as it relates to the format. Mr. Merrill also inquired of the Council as to whether or not they wish to hold a public hearing related to the ,Proposed budget. Last year, a similar hearing was held at the last meeting in August. Mr. Merrill remmded the Council that the Truth in Taxation hearing must be set by September 15, 2007, as well as have a preliminary tax levy set for 2008. The truth in taxation hearing will then be held in NovemberlDecember and the final tax levy will be adopted following the truth in taxation hearing. Mr. Merrill explained that the proposed 2008 budget currently has expenses exceeding revenues by $270,000. In addition, the budget does include fee increases and a proposed implementation of rental property registration/inspection program. General discussion was held related to how the budget could be adjusted to make up the current deficit. Mayor Cook also noted that he hopes to have the rental property registration/inspection program designed more for the sake of safe properties as opposed to being a revenue generator. Mayor Cook also asked that city staff contact the county in regard to an annual reimbursement from the county for dispatch services. Motion by Stotts, second by Haugen, to set public hearing related to the proposed 2008 budget for August 28,2007, and set Council budget workshop for 3 :30 p.m. on August 28, 2007. Motion carried unanimously. (t) CONSIDERATION FOR APPROVAL OF POLICY ON FUND BALANCE Ken Merrill, Finance Director, presented before the Council. Mr. Merrill noted that the City's auditor, as well as the State Auditor, has recommended that the City maintain a minimum fund balance approximately 40% of planned expenses. Motion by Stotts, second by Haugen, to approve policy on fund balance maintaining 40% of planned expenses. Motion carried unanimously. . 11. MISCELLANEOUS (a) COMMUNICATIONS Mayor Cook noted that a workshop was held regarding Creekside on July 31, 2007. The expectation from that workshop was that the Council would provide direction to staff as to future operations of the site. Mayor Cook recommended that staff continue with the Minneapolis contract. Approximately $115,000 in cost savings is appreciated by residents just by having the compost facility in place and material not being brought to the landfill. Scenarios #3 and #4 were requested to be used by Doug Johnson, compost site coordinator. Mr. Johnson also suggested having a refuse rate increase by $1.50 per household per month. Mayor Cook noted he was hesitant to institute any rate increases. Motion by Stotts, second by Cook, to move forward with operations at Creekside using scenarios #3 and #4 as presented at the workshop. Motion carried unanimously. Kent Exner - Mr. Exner provided an update to the Council on the Crow River Dam project. The dam will be drawn down beginning September 4, 2007, with work beginning on the dam September 17, 2007. Mayor Cook - Mayor Cook commented that he and Gary Plotz had attended the Coalition of Greater Minnesota Cities conference last month. The Coalition is able to provide some services that the League of Minnesota Cities is unable to. The Coalition could be used as a lobbyist on many issues. Mayor Cook also suggested on looking at ways of funding projects without considering implementing a local sales tax. 12. CLAIMS, APPROPRIATIONS AND CONTRACT PAYMENTS . Motion by Arndt, second by Stotts, to approve claims, appropriations and contract payments. Motion carried 5 SC?c ') CITY COUNCIL MINUTES - AUGUST 14, 2007 unanimously. .. ADJOURN Motion by Stotts, second by Arndt, to adjourn at 7:40 p.m. Motion carried unanimously. . . 6 sC~ . . . BID OPENING PUBL. NO. 7608 SAW LOGS August 13,2007, at 12:30 p.m. Present: Kent Exner, City Engineer Melissa Starke, Recorder The Bid Opening was called to order at 12:30 p.m. by Kent Exner. The reading of the Advertisement for Bids was waived and the following bids were opened and read aloud: Leon Madson 17898 Kale Ave. Hutchinson, MN 55350 Base Bid: $161.00 Robert Anderson 1545 Adams St. S.E. Hutchinson, MN 55350 Base Bid: $187.50 (revised bid) 8(13/07 Robert Anderson 1545 Adams St. S.E. Hutchinson, MN 55350 Base Bid: $135.00 submitted 8/10/07 Farley Gruning 27976 County Rd. 45 Bingham Lake, MN 56118 Base Bid: $252.00 Closed: 12:35 p.m. ATTEST: Steven W. Cook, Mayor Gary D. Plotz, City Administrator 6(10') . . . . . . +HUTCHINSON AIRPORT COMMISSION June 21, 2007 5:30 p,m. Airport Arri vallDeparture Building Minutes Members present: Dave Skaar, Chuck Brill, Doug McGraw, Dick Freeman Members absent: Joel Schwarze Others Present: John Olson, City of Hutchinson; Tom Parker, Hutchinson Aviation; Daryl Luthens, tenant; Julie Neubarth, tenant; Todd Walters, tenant; Tim Miller, Air Methods/Life Linl" Meeting called to order at 5:34 p.m. There was a quorum of members present. 1. Approve Minutes of Mav 17 meetin2 Motion made by Brill, second by McGraw to approve minutes. Unanimous approval. 2. Review Updated Han2ar Assi2nments Review latest map (wI updates). There were updates since the last meeting. Since the last meeting, Ed Klima, M'Cloud Aviation vacated Hangar 3-8. Using the priority list, the hangar was assigned to Fuzzy Flyer (Karl Heisel). Karl Heisel vacated Hangar 2-5, moving to Hangar 3-8. Using the priority list, Hangar 2-5 was offered to Julie Neubarth. Julie Neubarth vacated Hangar 1-12, moving to Hangar 2-5. Review latest priority list. Commissioner Freeman indicated that M'Cloud Aviation (Ed Klima) 07-01-86 should be removed, He also noted that Jeffrey Lux 05-01-05 should be removed. Staff will remove these names as they both indicated they would vacate their hangars. Currently there are six open hangars available. 3. Operational Issues 2007 Airport Improvements - Airport Layout Plan. Commissioners asked Olson to invite Lyle Kratzke, TKDA, to the July 19,2007 Airport Commission meetipg to discuss the ALP. Of particular interest is the likelihood that a modest runway extension or displaced threshold could be added. 4. Other Discussionsl New Business a. HAM radio club activities scheduled for this weekend. This is an exercise using HAM radios to establish communications during an emergency situation. The HAM radio club will be selling up their equipment for a period of24 hours on Saturday June 23 and Sunday June 24. They have made contact with other airport tenants to let them know about their exercise. If there are any problems, the contact will be John Olson at 583-8145. b. Water Carnival / Flv-in Debriefinf!.. Commissioners thanked the CAP, Hutchinson Aviation, Life Link 1II and others that participated in or had their operations affected by the pancake breakfast and pork chop dinner. There were reports that the event was successful, even though aircraft counts were down from last year's, due to windy conditions. c. Giencoe Airoort, Olson updated Commissioners on the resolution for support ofGlencoe Municipal Airport's request to be included in the NPIAS. Gaining that status would allow Glencoe to access federal funding through their AlP program. Airport Commission Minutes leU'-') \ . . . June 21, 2007 Page 2 d. Ref!ional Airvort. Commissioners also discussed the possibility of a regional airport. Most Commissioners believed that if the Highway 15 corridor is improved, that would allow the airport in Hutchinson to expand to the point where this airport could serve as a regional. Commissioners acknowledged the other transportation assets in the area, such as the Highway 15 corridor from Fairmont to SI. Cloud (190 to 194), as well as the developing 4-lane east-west route, Highway 212. With a bypass around Hutchinson for Highway 15, the Hutchinson Airport could be easily expanded and be used for a regional airport. Commissioners felt this made sense, compared with other areas in the county. The Hutchinson airport lays in close proximity to the industrial and population center of the county, has better potential access to utilities, and it seems more likely that airport land could be developed to offset some potential costs of expansion. e. Budtlet. Olson reported the City was likely to experience significant revenue decreases. The City has lost around $200,000 of Local Government Aid, another approximately $200,000 of engineering revenues on top of a budget that was already over $200,000 behind the parameters set by the City Council. This puts 2008's budget on par with the budget from 2003, when it was necessary to cut approximately 14 positions. Commissioners reviewed the budget, identifying potential increases in revenue for hangar rentals. The revenue increases would likely be modest, as there was already a significant increase in 2007. Commissioners looked at the top 3 expenses, which were, in descending order, utilities. vehicles/equipment, and personnel. Personnel costs are about as low as they can be, considering the amount of area required to be maintained. Vehicle/equipment costs could potentially be slightly lower for fuel and maintenance, assuming that the level of service is reduced drastically. The primary uses for utilities are for airfield lighting and heating of various buildings. One potential cost saving measure, provided there could be grant money secured, perhaps as part of the Utilities Commission energy conservation program, would be installation of LED lights. Another potential cost saving measure would be introduction of alternative fuel heating in the buildings (e.g., com stove, wood, etc.). Any of these measures, however, would require initial funding. f. Fuel Svstem. A discussion was held regarding the condition of the A vgas hose. The hose has deteriorated significantly and is worn through the protective outer layer in several spots. This condition is exacerbated by exposure to weather and sun. For safety reasons, the Commissioners had asked staff to look for options. The cost of the hose is expected to be approximately $1,500, but that would not take care of the exposure issue, so it was recommended the hose be housed on a reel, up off the ground. A motion was made by Freeman, second by Brill to purchase a replacement hose and hose reel for the Avgas tank for $4,084 from Westmor Industries, LLC. Unanimous approval. g. Miscellaneous. i. Janet from Life Link III requested to be on the mailing list for airport information. She would plan to represent Life Link III at Airport Commission meetings. ii. Diesel for the mowers needs to be filled. iii. Staff was directed to put "No Parking" signs/pavement markings on the apron by the main entrance to the Arrival/Departure building, and along the roadways to aprons, and in front of the CAP building. iv. When the Avgas reel and hose are installed, Westmor should be directed to slow the rewind on the Jet A hose. The reel is moving to quickly and could be a safety hazard if someone were to catch their leg on the hose or dispenser during rewinding operations. v. Staff was asked to review a potential request for a leasehold improvement in Hangar 3-8 vi. Staff was asked to remove approximately 3 buckets of salt from Hangar 2-5. At 6:38, a motion to adjourn was made by Freeman, second by Brill. Unanimous approval. NEXT MEETING: July 19,2007 at 5:30 p.m. r;C O\J \ . . . +HUTCHINSON AIRPORT COMMISSION July 19,2007 5:30 p.m. Airport Arrival/Departure Building Minutes Members present: Mayor Steve Cook, Dave Skaar, Chuck Brill, Doug McGraw, Dick Freeman, Joel Schwarze Members absent: none Others Present: John Olson, City of Hutchinson; Tom Parker, Hutchinson Aviation; Lyle Kratzke and John Peterson, TKDA. Meeting called to order at 5:30 p.m. There was a quorum of members present. 1. Review T -hanl!ar Punch list Items Lyle Kratzke, TKDA listed items that Midland Bi-Fold Doors had corrected, with the only issues remaining being a few areas of pavement that needs to be patched. TKDA will be contacting Midland Bi-Fold Doors with the three areas of pavement that need to be repaired. Regarding raising the bi-fold doors, Kratzke reported there is little adjustment left in the doors, due to the grade of the apron, therefore it will be unlikely the doors could be raised by the inch or so that was talked about in prior meetings. The pedestrian doors and locks were corrected, and touch-up painting was done to the doors. 2. ALP Discussion Kratzke and Peterson went over the preliminary ALP that has been generated to date. They infonned the Commission that new wind rose infonnation will be included in the fmal ALP. The Commission will seek input from Life Link III regarding the appropriate location for their operations, including a helipad. Life Link/Air Methods staff will be infonned of the August meeting. Commissioners will also review location of private GA hangars, private commercial hangars, and a potential snow removal equipment building and include those locations in the new ALP. Commissioners will review the potential location and/or combination of an agricultural spray containment area and wash pad. Land currently available at the airport will be reviewed as to its suitability for potential improvements, beyond agricultural use. Commissioners requested that fencing be removed from the ALP and be added only upon receiving direction from TSA or Homeland Security. Kratzke infonned the Commission that FAA had hired consultants to begin the process of putting together a GPS approach to the airport. This work is expected to be done in the near future. The future of aircraft will not likely affect the potential design of the airport, but TKDA will be in contact with FAA regarding the possibility of displaced threshold or other method of lengthening the runway without potential zoning conflicts. Based on the condition of hangar # I, TKDA did not advise enclosing the hangar. Airport Commission Minutes loCc.A-j \ . . . July 19, 2007 Page 2 Lyle and John distributed the narrative report to Olson, who will be reviewing the document and be in contact with TKDA regarding any potential changes. 3. Capital Improvement Plan & FAA Fundine Kratzke explained the current CIP, as proposed. In 2007, the ALP will be updated. There are no scheduled projects for 2008 and 2009. In 20 I 0, runway and taxiway improvements are scheduled, mainly consisting of maintaining existing structure to extend the life of the runway and taxiway. In 20 II, aT-hangar is proposed. In 2012, there are no planned projects. Proposed FAA funding is one of the main reasons the CIP has changed. This year, the FAA will be changing its program. The current program expires on September 30, 2007. The new bill will likely reduce the GA entitlement for Hutchinson to $100,000 per year, down from $150,000, based on between 10 and 50 aircraft being based here. The debate about the proposal continues, and it is too early to predict what comprehensive changes will be made. No details ofthe program can be anticipated until fmal work is done on the proposal by the federal legislature, which has historically taken place in late faU or early winter. 4. Miscellaneous. a. Olson was informed that the AlC unit in the CAP building was not functional; staff will investigate and report in Augnst, if it cannot be fixed beforehand. b. A question was raised regarding the terms of Commission members. Olson will report on terms of all members at the August meeting. At 7:00, a motion to adjourn was made. Unanimous approval. NEXT MEETING: August 16, 2007 at S :30 p.m. fRCO\) \ . MINUTES Parks, Recreation & Community Education Advisory Board June 4, 2007 Members present were: Deane Dietel, Beth Hepola, Mike Cannon, Lora Muilenburg, Bill Arndt and Keith Kamrath. Also present were Dolf Moon, Jeremy Jordan and Karen McKay. The meeting was called to order at 5:20 pm. A motion was made by Beth Hepola and seconded by Deane Dietel to approve the minutes dated April 2, 2007. The board unanimously agreed. OLD BUSINESS HalfPennv Sales Tax - The final meeting is scheduled for June 4th. There have been eight meetings in the past four months. The committee will determine if the sales tax is a viable way to fund city projects. If recommended, the City Council will unanimously decide which projects would be funded. There may be legislation coming to eliminate additional sales tax to fund projects. Disc Golf - Many people are using the disc golf course and South Park is a good location. Shane Kruse spearheaded the project and raised a large portion of the money. Park Elementary had six classes out in the park. . Mav Registration - Early summer program registration went well. Dolf thanked the Board members for helping out. NEW BUSINESS Summer Proiects . Rolling Meadows East is located east of Montana Street. A $23,000 playground unit will be installed in June with nearly $15,000 raised by MOPS, (mothers ofpre-schoolers). The playground will include several features designed for handicapped accessibility. The purchase request will be presented at the next City Council meeting, June Ith. . Driftrider Park is located on five acres of land along Otter Lake. A shelter is planned overlooking the lake, it will be constructed with the help of Driftrider volunteers. Pre- engineered boulders with a natural look are planned for the play structure. The cost for the structure is estimated at $14,000. . Rotary Park - The shelter will get a serving counter and electricity installed some time this summer. Rotarians will be planting trees this fall. . Dam - The City of Hutchinson has $1.2 million available for the project. The first set of rock will begin 100 feet from the current dam and continue downstream. 600 loads of rock from farm fields will be needed to complete the dam. Work on the darn will begin in August. . HarringtonlMerrill House - The house is almost all enclosed, the west end will be completed by the end of the year. Lumber from the area is being used for the project. Construction is historically correct. The project is in the third year of the 10 year process and is currently ahead of schedule. . (pC~)~ . . . MINUTES PRCE Advisory Board June 4, 2007 Page Two . Firemen's Park - The walkway be will finished and the cupola painted. Running water, a stone arched bridge and water fall will be completed in the park. . Hwy. 7 - The highway is closed from School Road to Shady Ridge Road now, the intersection will be closed Monday, June 11th. The work on the sewer system is the campground and Oddfellows Park is complete. Construction on the underpass will begin this summer. Landscape materials will be planted in 2008, city staff will be mixing compost from Creekside into the topsoil. . Veterans Park Sign - Hutch Manufacturing is finishing a 36' sign for Veterans Memorial Ballfield to be placed over the scoreboard. Julv Meeting - There won't be a regular meeting the first Monday of July with it so close to the Fourth of July holiday. The Board is invited to tour the park system and see the construction projects. BOARD MEMBER ITEMS Outdoor Ice - Lora Muilenburg asked Dolfwhat was needed to get outdoor ice in the parks going again. There has been outdoor ice at the Park Elementary rink, however the past seven winters have been very mild and warm. The city has had volunteers do some flooding at the outdoor rinks, it is a time consuming process that requires a certain amount of technique. The rink at Northwoods Park was discontinued due to lack of skaters. John McRaith, Recreation Services Coordinator has organized outdoor broomballleagues in the past for a group of individuals that work at H.T.I. Luce Line Trail- There is no change in the status of the possible paving of the Luce Line Trail. There are approximately 700 names on a list of support for paving the trail and approximately 400 against. Lion's Park - Keith Kamrath asked if the welcome sign, play equipment and shelter would be reconstructed in Lion's Park. Dolftold the board that the situation will be evaluated when the highway construction was complete. ADJOURNMENT The meeting was adjourned at 6:15 pm by a motion made by Mike Cannon, seconded by Deane Dietel. The board unanimously agreed. klm (OCc.)~ . ~..Jt5lri~n~_ Hutchinson Housing & Redevelopment Authority Regular Board Meeting Tuesday, July 17,2007,7:00 AM Minutes I. CALL TO ORDER: Chairman Casey Stotts called the meeting to order. Members Present: La V onne Hansen, Ruth Kimbal and Joel Kraft. Staff Present: Jean Ward and Judy Flemming. 2. MINUTES OF THE HRA BOARD MEETING ON JUNE 19,2007 Joel Kraft moved to approve the Minutes as written. La V onne Hansen seconded and the motion carried unanimously. 3. FINANCIAL REPORTS a. Joel Kraft moved to approve the Financials Reports. Ruth Kimball seconded and the motion carried unanimously. b. LaVonne Hansen moved to approve the 2006 HRA Audit Report. Ruth Kimball seconded and the motion carried unanimously. . 4. PARK TOWERS a. Jean Ward reviewed with the Board the Vacant Unit Turn Around Report. b. Jean Ward updated the Board on the progress of the Cingular Cell Tower. Construction is expected to start the beginning of August. c. Jean Ward gave the Board an update on the replacement of the boiler controls. d. Jean Ward reviewed with the Board the Resident Handbook updates. Ruth Kimball moved to approve the revised Resident Handbook. La V onne Hansen seconded and the motion carried unanimously. e. Jean Ward informed the Board that the HUD resident satisfaction survey is postponed until August 2007. 5. FRANKLIN GROVE EXPANDED REHAB PROJECT UPDATE Joel Kraft requested that a name is also given when the loans are presented to the Board for approval. Ruth Kimball moved to approve EFG Meece Loan #8682, Schuette Loan #8683 and Koeppen Loan #8684, contingent to the Loan Review Committee's Approval. LaVonne Hansen seconded and the motion carried unanimously. 6. UPDATE ON THE SCHOOL CONSTRUCTION HOUSE a. Jean Ward reviewed with the Board the final report on the sale of the school construction house located at 1150 Prairie View Drive. b. Judy Flemming reviewed with the Board the Bids for the 2007/2008 School Construction House. Joel Kraft moved to approve the bids ofUBC with the vinyl siding option, Mikolichek Plumbing & Heating with the programmable digital thermostat and low flow shower head options, Lite Electric, and Juul Contracting. Ruth Kimball seconded and the motion carried unanimously. 7. UPDATE ON HIGHWAY 7 CORRIDOR STUDY Rebecca Bowers, the Planning and Zoning Director, updated the Board on the Highway 7 corridor study. . 8. HOUSING SITES FOR DOWNTOWN REDEVELOPMENT Rebecca Bowers and Jean Ward reviewed with the Board some different downtown redevelopment housing sites. July 17,2007 Minutes Page] of2 loCo- )~ 9. . HHPOP/CASA UPDA IE a. Jean Ward told the Board that a Super RFP Application for affordability gap for 4 homes in Rolling. Meadows East was submitted July 11,2007 for CRV funds and 3 homes for GMHF furniing. b. Judy Flemming updated the Board on the 1 st closed loan from the 2006 CASA Workforce Initiative for purchase of an existing home. c. Judy Flemming updated the Board on Rolling Meadows East Loan #8827 that Closed 6/2912007. d. La V onne Hansen moved approve the Karg and Burnison HRA Entry Cost Assistance Loans for existing homes contingent to the loan review committees approval. Ruth Kimball seconded and the motion carried unanimously. ] O. REVIEW OF HRA CITY CENTER BUDGET Ruth Kimball moved to approve the HRA City Center Budget. Joel Kraft seconded and the motion carried unanimously. 11. ADJOURNMENT There being no other business, Chairman Casey Stotts declared the meeting adjourned. Recorded by Jean Ward, HRA Executive Director a /:J.-., -- t':-Uf/h-.; :k-b~~ ' rBecky Felli ~.8ecretary/Treasurer . . July] 7, 2007 Minutes Page 2 of2 ~ CIA ')3 . Hutchinson Housing & Redevelopment Authority Annual Board Meeting - August 15,2006 Minutes 1. CALL TO ORDER: SecretarylTreasurer Becky Felling called the meeting to order. Members Present: Thor Skeie, and Joel Kraft. Staff Present: Jean Ward, and Judy Flemming. 2. MINUTES OF ANNUAL HRA BOARD MEETING ON AUGUST 16,2005 Thor Skeie moved to approve the Minutes of Annual HRA Board Meeting on August 16,2005. Joel Kraft seconded and the motion carried unanimously. 3. ELECTION OF OFFICERS Thor Skeie moved to nominate Casey Stotts as Chairman of the Board; Joel Kraft as Vice Chairman and Becky Felling as Secretary/Treasurer and Joel Kraft for the Loan Review Committee and to keep the other position open until the other Board Members are selected. Joel Kraft seconded and the motion carried unanimously. 4. FINAL REPORT: FRANKLIN GROVE SCDP REHAB PROJECT Jean Ward and Judy Flemming gave a presentation to the Board on the Franklin . Grove neighborhood rehab project. 5. REVIEW OF 2007 HRA PLANS/OBJECTIVES Jean reviewed the 2007 HRA Plans/Objectives with the Board. 6. ADJOURNMENT Joel Kraft moved to adjourn and Thor Skeie seconded the motion. There being no other business, Secretary/Treasurer Becky Felling declared the meeting adjourned. Recorded by Jean Ward, HRA Executive Director r.' I -. - ;," / , i., --r: i/ ,~" .J /./1 /: {~""'1 I----'-....-A-'-/;', \ Becky Felling(" Secretarytfreasurer . c.e L O1.)Li . . . . MINUTES HUTCHINSON PLANNING COMMISSION Tuesday, July 17, 2007 Hutchinson City Council Chambers 1. CALL TO ORDER 5:30 P.M. The meeting was called to order by Chairman Lynn Otteson at 5:30 p.m. with the following members present: Chris Kovacic, Christie Rock, John Lofdahi, Jim Haugen, Mike Flaata, Farid Currimbhoy and Chairman Otteson. Absent: None Also present: Rebecca Bowers, Planning Director, Kent Exner, City Engineer, Marc Sebora, City Attorney and Bonnie Baumetz, Planning Coordinator 2. PLEDGE OF ALLEGIANCE 3. CONSENT AGENDA a) Consideration of Minutes dated July 2, 2007 Mr. Lofdahl moved to approve the consent agenda as submitted. Seconded by Mr. Currimbhoy, the consent agenda was approved unanimously. . 4. PUBLIC HEARINGS a) PRELIMINARY AND FINAL PLAT (ONE LOT) JENSEN SECOND ADDITION AND VACATION OF DRAINAGE AND UTILITY EASEMENT Chairman Otteson opened the hearing at 5:35 p.m. with the reading of publication #7599 as published in the Hutchinson Leader on July 5, 2007. Ms. Bowers commented on the request and explained the history of the properties, lot arrangements and location of the plat. She commented on the shoreland property regulations. She explained a new home has been approved to begin construction on the existing lot which was platted in 2006, subject to not exceed the 25% coverage maximum allowed in the shoreland district. She commented on the 25% iot coverage requirement for both the new and old lots. Staff requested a survey for the existing Jensen home lot, however it has not yet been provided. There are options if the old lot does not meet the requirement, such as reducing the amount of coverage or removing area from the plat to add to the existing home site. The new lot would meet requirements for lot area and width. She commented on the staff conditions as follows: . 1. The plat must comply with the requirements of the R-2 zoning district, subdivision requirements, and the shoreland district requirements. Ltl~6 Minutes Planning Commission -July 17, 2007 Page 2 . 2. Prior to the City signing the final plat, the applicant shall provide a survey to demonstrate that the 25% maximum is not exceeded on the existing Jensen home site. If the property exceeds the 25% impervious coverage, the applicant will need to either remove hardcover or revise the plat to allocate additional property to the westerly site, subject to meeting the requirements of the zoning ordinance. 3. Relocation of utility services is required prior to vacation of easements. The relocation and any fees will be at property owner's expense. 4. An easement of 20 feet on each side of the sanitary line to the north shall be provided to the City prior to the City signing the final plat for recording. She explained that the vacation of easements is no longer be necessary for construction of the new home and the applicant may withdraw that portion of the application. Services would need to be relocated before the easements could be vacated. Discussion followed on the driveway easements with the property to the west for the drives that cross the subject property. . Mr. Jensen explained the lot configuration and what was purchased by the Jensen's. He commented on the history of the property to the north and the process to the platting. He commented on the options he would have. He stated he does not need to vacate the easement and will withdraw the request for vacation of easements. He stated he will provide an easement to the city for the sanitary line to the north. He explained he will amend the plat to include a 10 foot strip north to the lake which will remain with the original/ot. Ms. Bowers explained the complexity of the property history and the changes and commented on the changes which would require the original lot to maintain the 25% coverage requirement. She commented on past correspondence in the file. She stated the new plat should comply with all regulations. Discussion followed on the original plat being a nonconforming lot. . Mr. Jensen stated that the plat would conform to the requirements. There was discussion on the coverage of the lots. Jeff Rauch, surveyor, explained the location of the 10 foot strip. Discussion continued on the existing lot coverage and changing the plat. Atty. Sebora stated the percentages must not be exceeded, on both lots, in the end. There was futher discussion on the need for the existing lot to meet the lot coverage standards. Mr. Jensen stated if the 10 foot strip is placed back on the existing lot the lot coverage does not have to be met. Discussion followed. Chairman Otteson stated this is an opportunity to make both lots conforming. Mr. Jensen stated there are many nonconforming lots on the river in the city. lPU-')S Minutes Planning Commission - July 17, 2007 Page 3 . Mr. Flaata made a motion to close the hearing. Seconded by Mr. lofdahl the hearing closed at 6:08 p.m. Mr. Flaata made a motion to recommend approval of the request removing recommendation #3 and adding, "the existing structure pass as a nonconforming iot and the plat should be revised to include the 10 foot strip to the north with the existing lot". Seconded by Mr. Haugen, the motion carried unanimously. Chairman Otteson stated this item will be placed on the City Council consent agenda at their meeting held July 24, 2007, in the Council Chambers at 5:30 p.m. b) AMEND SECTION 154.067 OF THE ZONING ORDINANCE ADDING SCHOOLS TO THE CONDITIONAllY PERMITTED USES IN THE 1-1 (LIGHT INDUSTRIAL) DISTRICT Chairman Otteson opened the hearing at 6:09 p.rn. with the reading of publication #7599 as published in the Hutchinson leader on July 5, 2007. Ms. Rock abstained from discussion and voting. . Ms. Bowers commented on the request and explained the change in the text proposed by the charter school. She explained the request should include all schools. She reminded the Commissioners to look at the 1-1 district as a whole. She noted, if approved, the individual site will be discussed at the conditional use permit public hearing. Chairman Otteson reminded the audience the Commissioners will not be discussing a particular site at this time. Ms. Bowers commented on the existing ordinance and permitted uses and conditionally permitted uses. She explained the difference between a permitted use and conditional use. Planning Commission should consider the consistency with the comprehensive plan. She stated that the applicant considers the charter school learning style to benefit from uses within industrial districts. She pointed out the potential impacts in the packet as follows: . Consistency with Comprehensive Plan . Intent of 1-1 (Light Industrial) zoning district . Characteristics of industrial uses, such as noise, truck traffic, appearance, safety issues, etc. . Conflicts between industrial truck traffic with buses and vehicles dropping off(picking up students . Noise, smell, and potential environmental impacts of industrial uses on outdoor play areas . Expansion of existing industrial uses in the future . Future development of vacant industrial property and inability to restrict permitted uses . Potential for conflict and complaints from school and parents regarding industrial uses and traffic surrounding the school. . Ms. Bowers explained the Commissioners should consider future impacts and complaints. She commented on the other cities surveyed and the (QL~)6 Minutes Planning Commission -July 17, 2007 Page 4 . many different responses. Discussion followed on the changes in schools. She explained the existing ordinance allows K-12 schools in most residential and commercial districts with a conditional use permit. Trade and Vocational schools are allowed in the industrial district with as permitted use. There was discussion on the trend to allow non-traditional schools in light industrial or business park districts in other cities. Ms. Bowers expialned the Commissioners should consider future use and expansions of surrounding properties. Discussion followed on the conditionally allowed uses of adult oriented uses and tattoo parlors in the industrial districts. Tim Ulrich, 14568 155'h St., representing a group of investors, commented on the appropriate area for this type of facility to be constructed. There is a proposed 15 yr. lease of the building to the school. Dave Conrad, 1110 Lewis Ave, representing the New Century School and Montessori New Discoveries School, stated this is an opportunity for a home for the school. He explained New Century has been in an industrial area leased from HTI for 5 years. He stated the charter schools are financially sound and enrollment is strong in Hutchinson. He commented there are ind icators of future viability. . Discussion followed on the neighboring uses. Mr. Conrad stated the same questions have been asked by the school. He explained the concerns with safety near the elevator would not be not much different than HTI. He stated the school takes safety seriously. There are plans in place to deal with potential hazards. He commented on the potential benefits of expanding for high school students. He stated elementary students will be separated from the high school students. The school focuses on the specific needs of the age groups. Mr. Conrad stated buffering will aid in addressing safety. The type of existing industry in the area does not concern the school. He explained the lease will have options to be re-evaluated. They are looking at the present and future of the school. The current leases are for one year. There was discussion on property availability in the community for the school. Luann Hoffman, parent, New Discoveries, stated this is an opportunity to combine the elementary and high school which is an attraction for her. Jack Yates, 20404 205th Crt., representing HTI, commented on the lease with the school. He stated it has worked well with the school in HTI. There have been no issues from the industrial standpoint. He explained there are plans that the school must follow in an emergency. Plan, prepare, train and be ready in case of emergency. Another benefit is for the parents that work at the industry with children in the school. . Mr. Currimbhoy made a motion to close the hearing. Seconded by Mr. Lofdahl. Discussion followed on the request. Ms. Bowers commented on that schools are currently allowed as conditional uses in most residential (c{o.)6 Minutes Planning Commission - July 17, 2007 Page 5 . and commercial districts. She stated that the Commission should state their findings in their recommendation to Council and a resolution would be drafted accordingly. The hearing closed at 6:45 p.m. Discussion followed on allowing churches and day care facilities in the 1-1. Ms. Bowers cautioned on expansion of the request at this time and reiterated that uses should be consistent with the purpose and goals of the industrial district. Mr. Flaata made a motion to recommend approval of the request to add "schools" as a conditional use to the J-1 district with the conditions as follows: 1. The amendment would be consistent with the intent of the Comprehensive Plan as allowing schools as a conditional use in the 1-1 district would aid in training students and would be complementary to industrial uses. 2. The change in the ordinance to add schools in 1-1 is necessary to modernize the ordinance to reflect the changing times and nature of education. Seconded by Mr. Haugen. The motion carried with a roll call vote Mr. Currimbhoy, Chairman Otteson, Mr. Haugen and Mr. Flaata voting aye. Mr. Kovacic and Mr. Lofdahl voting nay. Ms. Rock abstained. Ms. Bowers stated this item will be placed on the City Council regular agenda at their meeting held July 24,2007, in the Council Chambers at 5:30 p.m. Mr. Ulrich stated he did include the District 423 in the discussions. . c) CONDITIONAL USE PERMIT TO ALLOW CONTRACTING BUSINESS IN THE C5 DISTRICT LOCATED AT 261 - 3RD AVE. NW. Chairman Otteson opened the hearing at 6:53 p.m. with the reading of publication #7599 as published in the Hutchinson Leader on July 5,2007. Ms. Bowers explained the need for a conditional use permit in the C5 district. She stated any use change requires a conditional use permit. She commented on the location and stated there will be no exterior building changes. They will remodel the interior for a construction business. The site has been cleaned up and is now vacant. She explained the site is within the Hwy 7 corridor study and in the moratorium area. The proposed use meets requirements. Staff would recommend approval with the following recommendations: 1. The proposed use would be in an existing building and would comply with the standards of the C-5 district. Outside storage of materials is not permitted. All materials must be contained within the building. Parking of company vehicles on the site is allowed. The parking area shall be paved within 6 months of approval. Construction of the parking area shall comply with the requirements of the Zoning Ordinance, including parking stall and drive aisle dimensions. Sign permits are required prior to installation of any signage. 2. 3. . 4. w[CtjS Minutes Planning Commission -July 17, 2007 Page 6 5. No encroachment into the State right-of-way is allowed. . Discussion followed allowing licensed company vehicles parked outside including trailers and trucks. Ms. Bowers stated outdoor storage is materials, etc. Mr. Haugen made a motion to close the hearing. Seconded by Mr. Lofdahl, the hearing closed at 6:59 p.m. Mr. Lofdahl made a motion to recommend approval of the request with staff recommendations. Seconded by Mr. Currimbhoy. the motion carried unanimously. Chairman Otteson stated this item will be placed on the City Council consent agenda at their meeting held July 24, 2007, in the Council Chambers at 5:30 p.m. 5. NEW BUSINESS a) SITE PLAN REVIEW FOR O'REILLY AUTO PARTS STORE TO BE LOCATED AT 1500 HWY 15 SOUTH . Ms. Bowers explained the location and the lot of record. She commented on the C4 zoning. She stated they provided a clean site plan that meets the required setback and parking requirements. Revisions recommended by staff include removing the easterly access near Highway 15, which is specified in the City Engineer's memorandum. Discussion followed on the proposed and future access in and out of the site. Staff recommended approval with following conditions and fees: 1. The proposed building and site improvements would comply with the standards of the C-4 district and the Zoning Ordinance, subject to the conditions stated. 2. Final plans shall be revised according to the City Engineer memo dated July 10, 2007. Plans must be approved by the City Engineer prior to construction. Approval of the City Engineer is required prior to any excavation, grading, or construction on site. 3. Sign permits are required prior to installation of the signage. 4. Park dedication and trail fee in the amount of $6,000 will be due at the time of building permit. The City will construct the trail along the easterly property line 5. SACfWAC fee in the amount of $7,375 (2.5 units x $2,950) will be due at the time of building permit. 6. The City Forester recommends revising the landscape plan to diversify the tree plantings. Landscape plan must be reviewed and approved by the City Forester. 7. Exterior lighting must be shielded and shall not cause glare for adjacent properties. . Discussion followed on the continuation of the trail along the east side of the property as the sites develop in the area. The Commission discussed the loading areas. Staff stated that the loading areas are adequate. laC~Js Minutes Planning Commission - July 17, 2007 Page 7 . Mark Wold, representative for O'Reilly, stated they would agree with removing the easterly access but the westerly access cannot be cut off with a median in the future. He stated this store will work for the area. He commented on the present location being tight for parking. Ms. Rock made a motion to recommend approval of the resolution with staff recommendations. Seconded by Mr. Lofdahl, Mr. Exner commented on the removal of the east access. He stated the City will not place a median at the westerly access to prohibit traffic. There is an easement for accessing the southerly properties in the future. The motion carried unanimously. Ms. Bowers stated this item will be placed on the City Council consent agenda at their meeting held July 24, 2007, in the Council Chambers at 5:30 p.m. b) LOT SPLIT SUBMITTED BY KEN COTE TO SPLIT A SHORELAND PARCEL INTO TWO LOTS . Ms. Bowers commented on the proposed lot split, which is located within the 100 year floodplain and is subject to the shoreland district requirements and flood plain requirements. She reported the DNR Hydrologist recommendation was to deny the proposed construction in the 100 year flood plain. She commented on the city flood plain buyout project that was funding largely by DNR funds and was used to remove structures from the flood plain. She commented the applicant has discussed alternative building methods to be used to elevate the home above the regulatory flood plain elevation. Staff stated the DNR recommends denial due to the fact that the property is not suitable in it's natural state for building without extraordinary measures. Staff compiled conditions prepared in the event the commissioners would approve the request. Ms. Bowers explained the road was not platted as right of way. The City has been maintaining the road. The road should be deeded to the City or platted. Discussion followed on the construction proposed for building methods out of the flood plain. Mr. Cote, property owner, explained his intent to retire on this property. He addressed the DNR concerns. He stated he will get engineered designs to minimize the impact of the structure. The existing lot will meet the requirements of the City. Mr. Cote explained the proposed design of the structure will meet all City requirements. He addressed the elevation and with suitable construction, the building would be elevated 3' above the 100 year flood plain. He stated he will hire an engineer when he receives approval of the lot split. . Concerns were raised by some Commissioners allowing a lot split with an existing garage and no principle building. Another concern was with the site line changing with raising the new home. Mr. Cote intends to build a retirement type home on the new lot. He stated the existing home would have to be considerably remodeled to make it iivable. There was discussion of the concerns with splitting the lot. l.cL~)5 . . . Minutes Planning Commission - July 17, 2007 Page 8 Mr. Cote asked if the council would consider remodeling the existing home and remodeling the existing garage to a home. Ms. Bowers would not recommend this due to the proximity to the shoreline and high water level. Discussion followed regarding the recommendation by the DNR. There was further discussion on the existing garage if the lot is split. Mr. Cote addressed the concern by stating he would put money in a fund for removal if allowed. Atty. Sebora commented that the ordinance does not allow an accessory structure without a primary structure. Ms. Bowers stated a recommendation could be to remove the garage before construction of the home. Mr. Cote stated he will employ an architect and engineer to meet requirements. He stated the existing neighbors have been informed. He will provide everything necessary to conform. He would like to begin construction in Spring 2008 and move into the house in the Fall of 2008. Ms. Bowers explained the DNR does understand a structure can be constructed if eievated above the 100 year flood plain, however it is also a policy issue to be decided by the City. Discussion followed on the age and condition of the shed. Mr. Cote stated the shed is approximately 25 years old. There was further discussion regarding the pOSSible conditions if allowing the lot split with an accessory building on the new lot. Mr. Cote explained he would get soil borings and engineered drawings. He was asked by the Commissioners to provide renderings or photos of the type and square footage of the building proposed for staff review. Mr. Lofdahi made a motion to table to next month. Seconded by Mr. Currimbhoy, the motion carried unanimously. 6. OLD BUSINESS 7. COMMUNICATION FROM STAFF 8. ADJOURNMENT There being no further business the meeting adjourned at 7:55 p.m. l.t(~)S . . 2oo7u .JULY i REVENUE REPORT - GENERAL 1"'---------- -[i1~~E~' . !f'ERMITS AND FEES. ' ,INTERGOVER-NMENTAL REVENUE iC___HARI3ESFOR SERVICES i1I11EEl& FORFEITS .- ,I NTEREST u ... u_ . REIMBURSEMENTS iIRANElFEREl_u_ _. _, ..___ 'SURCHARGES - BLDGPERMITS rTOTAl- T -----.1 1-- 2007; JULY , ,EXPENSE REPORT - GENERAL : ()()1MAYOR & CITY COUNCIL l()02CITY ADMINis-TRATOR - OO~ ELECTIONS ___ . _._ . 004 FINANCE DEPARTMENT , 005 MOTOR VEHICLE 1- 006 ASSESSING i 007 LEGAL , OOBPLANNING : 009 INFORMATI6NElERVICES_ &.110 POLICE DEPARTMENT - .115 EtvlER(3ENC'y'MANAGEMENT 116 SAFETY COMM ITTEE '120 FIRE DEPARTMENT . .... _. U_30_PROTECTIVE INSPECTIONS . 150 ENGINEERING - - 1?2 STREETSaALLEYS :1~o.CI"T'(HALL BUILDIN(3 : 201 PARK/RECREATION ADMINISTR , 202 RECREATION 203 SENIOR CITIZE:NCENTER 2D4ClvIC-ARENAu_' . un_ 205 PARK DEPARTME-NT -206 R-ECREATloN BUILDING & pool' '207 EVENTS CENTER ' - 208 EVERGREEN BUILDING 250 LI BRARY -- 301 CEMETERY , 310 DEBT SERVICE 320 AIRPORT . ._~ 350 UNALLOCATED GENERALEXPE ,TOTAL . 'cITYoFHUTCHINSON-FiNANCIACREPORT 2006 2007 2007 2007' JULY JULY YEAR TO ADOPTED YTD MONTH DATE ACTUAL BUDGET 1,753,055.89 _ 37,478.50. 232,076,01 : _ 1,363,919,82_ 751,917.39 ' ---- --I 26,281.53 , _ (6,,407.51); 158,264.81 549,19862 1,361,03_ 4,867,145.89 1,787,038.55 . .3,404,94 58,211,05 (25.86) 13(),322.47 __ 5,082.93 801.18 35,521,11 . 269.362.39 2,44.0,51 _ u2,292.15927_ 1,]87,038.55. 38,10308 179,99693 126,632A2 815.975.41 ' . 28)6568' (10,640J2)i 152,431.68 , _ 561 ,510,99 . 2,506.46 3,681.820.38 3,800.665.00 48,400.00 .320,700.00 : 2,764,45100 1,690,312.00 68,000.00 70.000.00 290,116.00 1,673,100.00.. 500.00 10,726.244.00 . CITY OF HUTCiiiNSONFiNANC:IALREPORT 2006, JULY' YTO . _ 38,90411 164,401.56 .8,416.58 ._ 228,741.42,1, 116.897,92 97,689.22 _ 86,91335 116,854.30 1.498.26493 __7,181,58 7,570.01 , 177,470.98 ' 115_,256.56 ' 289,126.39 655,767.73 79.676.51 110,088.70 n. 130,28,0)9 ' 50,82052 .. 182,497,34 . 43.5,45172,:_ 69,310,02 ' 130,862,.18 ' 6,97332 79,11734, 77c86053 2,791.25 56,750.66 335,911.72 ' 5,357,84852 200i!- 2007. JULY: YEAR TO! MONTWDATE ACTUAL, 2,729.16 .25.209.85 45,64526 16,852.44 - . 20,133.38-' - .12,968501 19,088.55 I . 207,D3858 I 1,0~~.40 j 4.542.60 . 32,454.46 15,683.47 33,879.69 _. 72,366.81 9,824.20. . 14,212.84 39,il18.44 8.632.93 19,781 47 ' _ 78.498,17, '10,326.54 I 18,965,03 .. 728.76 2,931.39 , !lj56.09 .,.- 5,672.84 ' 115,23050 842,69735 41,850.36 194,148.16 715.40 312,312.36 120,67040 . 106.129.47 96.074.46 ' . _140,362.75 : 1.594,876.75 , 10,979.70, 13,659.07 , 205,720.91 J 129.031.09 . _.263,001.33 791.128.22 , 72,568.02 116_,47466 153,35473 __ 48,154,41 ,_ 170,252.40 ' _ 455,799,:>9 88,119.99 140,080.77 . 6,42020 ! 88,333.32 . 76,303.05 48,196.46 350,787.51 5,835.505.34 2007 ADOPTED BUDGET 60,198.00 , 341.142.00 2,375.00 584,932.00 . 201,825.00 51,840.00 . 201,734.00 178,910.00 260,503.00 , 2,919,593.00 19,000.00 . 20,375.00 434,510.00 267,359.00. 607,218.00 1,268,242.00 . 155.499.00 , 202,557.00 207.970.00 59.397.00 299,265.00. 831,579.00 . 134,45000 234,41.0.00 I 16,000.00 ' 175,634.00 142,760.00 25,000.00 103,017.00 718,950.00 10,726.244.00 2007 n -JULY BALANCE PERCENTAGE REMAINING USED 2,013,626.45 10,29692, 140,703.07 2,637,81858 874,33659 39,734,32 80,640.82 137,68432- 1,111,589.01 (2,006.46) 7.044,423.62 47.02% 78.73% 56.13% 4.58% 48.27% , 41.57% -15.20% 52.54% 33.56% 34.33% 2007 JULY BALANCE PERCENTAGE REMAiNING, -USED 18.347.64 146,993.84 1,659.60 ' 272,619.64 81,154.60 _ 51,840.00 95.604,53 . 82,835.54 , 120,140.25 1,324.716.25 8,020.30 6,715.93 228,789.09 138,327.91 344,216.67 477,11378 82.930.98 86.082.34 54,615.27 11,242.59 12i:(012.60C 375,779.61 46,33001_. 94,329.23 i 9,579.815 .. 87,300.68 : 66,45695 . 25,000.00 54.820.54 368.162.49 4,890,738.66 69.52% 56.91% 30.12% 53.39% 59.79% 0.00% 52.61% 53.70% 53.88% 54.63% 57.79% 67.04% 47.35% 48.26% 43.31% 62.38% 46.67% 57.50% 73.74% 81.07% 56.89% 54.81% 65.54% 59.76% 40.13% _5_0.29% , 53.45% 0.00% 46.78% 48.79% 54.40% loClAJ La 2007 JULY REVENUE REPORT - GENERAL .A)(ES......... , LICENSES PERMITS AND FEES ------ -- INTERGOVERNMENTAL REVENUE ,CHARGES FOR SERVIC-ES :FINES-&FORFEITS ..-.. INTEREST! .REIMBURSEMENTS TRANSFERS ,SURCHARGES - BLDG PERMITS TOTAL 2007' JULY ! EXPENSE REPORT - GENERAL 'SUMMARIZED General Govt. 'Public Safety : Streets & 'Alleys ;-Parks &. Recreation Miscellaneous TOTAL . . ,CITY OF HUTCHINSON I'INANClAD~EPORT 2006! 2007 - 2007 2007 ACTUAL' JULY YEAR TO ADOPTED Year 10 Date, MONTH ,DATE ACTUAL BUDGET' - - 1,753,055.89. .37.478.50 . 232,076.01 1,363.919,82 751,917-39' 26,281,53. (6,40751) i 158,264,61 549,198,62 1,361,03 4,867,145,89., 2006 JULY YTD 938,49495 . 1,805,744,06 944,894.12 1,276.053.01 392,662.38 5,357,848,52 ' 1,787,038.55: 3.40494 58,211.05 -25,86 130,322.47 5,082,93 801,18 35,52111 269.362.39, 2.440.51_ 2,292,159.27 1,787,038.55 38,103.08 179,996.93 126,632.42 815,975.41 . 28,265.68 , (10,640,82) 152,431.68, 561,510.99 , 2,506.46 . 3,681,82038 2007: 2007 JULY, YEAR TO MONTH' DATE ACTUAL 152,451.34 260,744,51. 106,246.50 202,351.66, 120,903.34 842,697.35, 1,084,831,38 1,954,267,52 , 1,054,129,55 : 1,343,292,92 , 398,983.97 ' 5.835,505.34 3,800,66500 . 48.400,00 320,700.00 2,764,451,00 1,690.312,00 ' 68,000,00 70,000.00 290,116.00 1,673,100.00 500.00 10,726,244.00 2007 ADOPTED BUDGET 2,038,95800 3,660,837,00 1.875.460.00 2.304,0~2.00 846,967,00 10,726,244,00 2007 BALANCE PERCENTAGE REMAINING USED 2,013.626.45 . 10,296.92 , 140,703.07_~ 2,637,818.58 ' . 874,336.59 39,734,32 80.640!l2 . 137,684,32 : 1.111,589.01' (2,006.46)[ 7,044.423.62 ' 47.02% 7873% 56,13% 4.58% 48.27% 41.570/0 -15.20% 52,54% 33,56% 0,00% 34,33% 2007 JULY BALANCE PERCENTAGE REMAINING USED: 954,126,62 1,706,569.48 , 821,33045 960,72.9.08 ' 447,983.03 : 4,890,738.66 ' 53,21% 53,38% 56.21 % 58.30% 47.11% 54.40% LaC~)G2 CITY OF HUTCHINSON CERTIFICATES OF DEPOSIT . 23-Aug-07 July 31, 2007 Date Date Interest Of Of Institution Description Rate Purchase Maturity Amount US BANK FHLB 4.10% 11/3/2004 11/19/2008 375,000.00 Smith Barney FHLMC med 4.00% 7/30/2004 7/27/2012 300,000.00 step up Smith Barney FHLB C 4.50% 1/7/2004 7/30/2009 300,000.00 Smith Barney FHLB C 4.500% 4/28/2005 10/28/2008 750,000.00 Smith Barney FHLB C 5.010% 4/26/2005 4/26/2010 270,000.00 Smith Barney FHLM -C 5.500% 4/5/2007 4/5/2012 300,375.00 Smith Barney FHLM -C 5.550% 3/1(2006 3/1/2011 500,000.00 Wells Investmen FHLN 5.279% 03/22/06 01/29/07 500,000.00 Edward Jones FNMA 5.00% 10/12/2006 11/23/2007 500,000.00 Wachovia FHLB 5.00% 5/22/2003 6/12/2013 300,000.00 Wachovia FHLB 5.00% 6/12/2003 6/12/2013 300,000.00 . Wachovia FHLB 5.000% 6/26/2003 06/26/13 400,000.00 Wachovia FHLB 4.000% 7/16/2003 7/16/2013 200,000.00 Wachovia FHLB step 5.375% 2/14/2007 8/14/2009 625,000.00 step up Wachovia FHMA 5.350% 03/16/06 09/18109 200,000.00 5.350% 03/16/06 09/14/07 Wachovia FHLB = step UI 5.330% 10/26/06 10/26/09 300,000.00 Wachovia FHLB = step ul 6.000% 06/29/07 06/27/14 500,000.00 step up First Minnesota 5.180% 02/20/07 03/13/08 400,000.00 First Minnesota 4.650% 11/21/06 11/21/07 750,000.00 ---~~--------_._---------- $7,770,375.00 . (QCOr.~r . . . . . . This ordinance adopts the ~ 2007 Minnesota State Fire Code and amendments for the City of Hutchinson. ORDINANCE NO. 07-0469 AN ORDINANCE OF THE CITY OF HUTCHINSON ADOPTING THE ~ 2007 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 USES OR OPERATIONS; THE COUNCIL OF THE CITY OF HUTCHINSON HEREBY ORDAINS: Section 1. That a certain document, one copy of which has been marked as the official copy and is on file at the City of Hutchinson-Fire Chiefs Office, beinll marked and designated as the ;;WW 2007 Minnesota State Fire Code, including AppendIx Chapters B, C, D, H, and I, is hereby adopted as the Fire Code for the City of Hutchinson, Minnesota, for the purpose of prescribing regulations governing conditions hazardous to life and property from fire or explosion, except such portions as are modified or amended by Section 7 of this ordinance. Every provision contained in this code, except as modified or amended by this ordinance is hereby adopted and made a part of this ordinance as if fully set forth herein. The Appendix referenced in this Section I are further identified as: APPENDIX B - FIRE-FLOW REQUIREMENTS FOR BUILDINGS. APPENDIX C - FIRE HYDRANT LOCATIONS AND DISTRIBUTION. APPENDIX D - FIRE APP ARA TUS ACCESS ROADS. A Cul-de-sac shall have the Minimum diameter of 120' were parking is provided. APPENDIX H - OPEN FLAME AND FUEL STORAGE PROHIBITED ON BALCONIES OR PAnOS I. I Open Flame Prohibited. In any structure containing three or more dwelling units, no person shall kindle, maintain, or cause any fire or open flame on any balcony above ground level, or on any ground floor patio within 15 feet of the structure. 1.2 Fuel Storage Prohibited. No person shall store or use any fuel, barbecue, torch, or other similar heating or lighting chemical or device in the locations designated in Section 1.1. It(b'J \ . . . Exception: Listed electric or gas-fired barbecue grills that are permanently mounted and wired or plumbed to the building's gas supply or electrical system and that maintain a minimum clearance of 18 inches on all sides, unless listed for lesser clearances, may be installed on balconies and patios when approved by the fire chief. APPENDIX I - SPECIAL LOCKING ARRANGEMENTS FOR GROUP I OCCUPANCIES State Adopted Amendment. Section 1. That the following sections are hereby revised: 105.6 Required operational permits. Section 105.6 is amended to read "The code official Is authorized to issue operational permits for the operations set forth in Sectionsl05.6.I through 105.6.4.6. Operational Permits required by the Fire Department": 105.6.15 105.6.17 105.6.28 Fireworks Flammable and combustible liquids LP Gas 105.6.31 is amended to read "An operational permit is required for the kindling or Maintaining of an open fire or fire on any public street, alley, road, or Other public or private ground" Instructions and stipulations of the permit Shall be adhered to. Item #3, To install, alter, remove, abandon or place temporarily out of service or otherwise dispose of a flammable or combustible liquid tank. LP gas 105.7.5 105.7.8 (See Minnesota State Fire Code Section 10 1.2.I,~ 2007 edition), as published by the International Code Council, be and is hereby adopted as the code of the City of Hutchinson for regulating and governing the safeguarding of life and property from fire and explosion hazards arising from the storage, handling and use of hazardous substances, material and devices, and from conditions hazardous to life or property in the occupancy of buildings and premises in the City of Hutchinson and providing for the issuance of permits for hazardous uses or operations; and each and all of the regulations, provisions, conditions and terms of such Minnesota State Fire Code ~2007, ~ 2006 edition, published by the International Code Council, on file in the office of the City of Hutchinson are hereby referred to, adopted and made a part hereof as if fully set out in this ordinance. 2 taCk,') \ . SECTION 2. That the following sections are hereby revised: Section 101.1 Insert: City of Hutchinson Fire Department Section 109.3 Insert: Violations penalties. Persons who shall violate a provision Ofthis code or shall fail to comply with any of the requirements thereof or who shall erect, install, alter, repair. or do work in violation of the approved construction documents or direction of the fire official, or of a permit or certificate used under provisions of this code, shall be guilty of a Misdemeanor, punishable by a fine of not more than $1,000, or by imprisonment not exceeding 90 days, or both such fine and imprisonment. Each day that a violation continues after due notice has been serviced shall be deemed a separate offense. Section 111.4 (Failure to Comply) Insert: Any person who shall continue any Work after having been served with a stop work order, except such work as that person is directed to perform to remove a violation or unsafe condition, shall be liable to a Misdemeanor charge/fine of not less than $1,000 dollars or more than 90 days by Imprisonment. . SECTION 3. That the limits referred to in certain sections of the ;WW 2007 Minnesota State Fire Code are hereby established as follows: (limits in which open burning is prohibited): City of Hutchinson 307.1 General. A person shall not kindle or maintain or authorize to be kindled or Maintained any open burning unless conducted and approved in accordance with This section. 307.2 Permit required. A permit shall be obtained from the fire official in accordance With Section 105.6 prior to kindling a fire for recognized silvicultural or range or Wildlife management practices, prevention or control of disease or pests, Recreational permits, or special circumstances. Application for such approval shall Only be presented by and permits issued to the owner of the land, or their Designated agent, upon which the fire is to be kindled. 307.2.1 Authorization. Where required by state or local law or regulations, open Burning shall only be permitted with prior approval from the state or local Air and water quality management authority, provided that all conditions Specified in the authorization are followed. . 307.2.2 Is amended to read: Open burning that will be offensive or objectionable Due to smoke or odor emissions when atmospheric conditions or local 3 (aCb) \ . Circumstances make such fires hazardous shall be prohibited. The fire official is authorized to order the extinguishment by the permit holder or the fire department of open burning when it creates or adds to a hazardous or objectionable situation. Open burning of debris piles, leaves, and yard waste and burning in barrels is prohibited. 307.3 Location. The location for open burning shall not be less than 50 feet from any structure, and provisions shall be made to prevent the fire from spreading to within 50 feet of any structure. Exceptions: I. Fire in approved containers that are not less than 15 feet from a structure. 2. The minimum required distance from a structure shall be 25 feet where the pile size is 3 feet or less in a diameter of 2 feet or less in height. 307.3.2 Recreational fires. Recreational fires shall not be conducted within 25 feet Of a structure or combustible material unless the fire is contained in an Approved device or method, such as a fireplace, charcoal grill, etc. located at least 15 feet from any buildings, fences or structures. . 307.4 Attendance. Open burning or recreational fires shall be constantly attended until the fire is extinguished. A minimum of one portable fire extinguisher complying with Section 906 with a minimum 4-A rating or other approved onsite fire extinguishing equipment, such as dirt, sand, water barrel, garden hose or water truck, shall be available for immediate utilization. 307.5 Open flame-cooking devices. Charcoal burners and other open-flame cooking devices shall not be operated on combustible balconies or within 15 feet of combustible construction. Exceptions: 1. One and two family dwellings. 307.5.1 Liquefied-petroleum-gas-fueled cooking devices. LP gas burners having A LP gas container with a water capacity greater than 2.5 pounds LP gas Capacity shall not be located on combustible balconies or within 15 feet of Combustible construction. Exception: I. One and two family dwellings. . 4 ~b)\ . . . Chapter 314 - INDOOR DISPLAYS is amended to read: COVERED MALLS Section 314.5 Main Aisle Width: Main aisles shall be a minimum of 10 feet in width or The minimum required means of egress width, whichever is greater, and Shall be maintained clear from any obstructions. Section 314.6 Cross Aisle Width. Cross aisles shall be a minimum of 15 feet in width or The required means of egress width, whichever is greater, and shall be Maintained clear from any obstructions. Section 314.7 Fixtures. Fixtures shall not be located in main aisles or cross aisles. Section 314.8 Sprinkler Obstructions. Roofs or coverings for kiosks, display booths, Concession equipment or similar structures shall not exceed 4 feet in Dimension unless the area beneath the roofs or coverings is protected by an Approved automatic fire-extinguishing system. EXHIBIT HALLS AND ASSEMBLY OCCUPANCIES Section 314.9 Solid Fuel Burning Appliances. Use of solid fuel burning appliances for Display purposes shall not be allowed in assembly occupancies other than Cooking fuel as described in NFPA 101,2000 Edition, and Section 12.7.1.4. Solid fuel burning appliances may be defined as any appliance that uses Decomposition of cellulose material, hydrocarbon solids, animal fat or Proteins to produce heat or leaves an ash residue. This would include plant Products or materials, wood, coal, mesquite, etc. Section 314.10 Compressed flammable gas cylinders and flammable or combustible Liquids used for display purposes shall be prohibited within exhibit hall and assembly occupancies. Section 314. 11 Fireworks use, sales display or storage shall not be allowed in assembly occupancies or within 100 feet of the structure or unless separated by an Approved permanent partition such as a building wall. Section 314.12 Overcrowding and admittance of persons beyond the approved capacity ofa Place of assembly are prohibited. The Fire Official or their designated Agent, upon finding overcrowding conditions or obstructions in aisles, Passageways, or other means of egress, or upon finding a condition which Constitutes a serious menace to life, is authorized to cause the performance, Presentation, spectacle or entertainment to be stopped until such condition or 5 t?Cb'J \ . . Obstruction is corrected. Section 314.13 Standby Personnel. When, in the opinion of the Fire Official or their Designated agent, it is essential for public safety in a place of assembly or Any other place where people congregate, due to the number of persons, Or the nature of the performance, exhibition, display, contest, or activity, The owner, agent or lessee shall employ one or more qualified Persons, as required and approved, to be on duty at such place. Such Individuals shall be subject to the Fire Officials orders at all times when So employed and shall be in uniform and remain in duty during the times Such places are open to the public, or when such activity is being Conducted. Before each performance or the start of such activity, such Individuals shall inspect the required fire appliances provided to see that They are in proper place and in good working order, and shall keep Diligent watch for fires during the time such place is open to the public or Such activity is being conducted and take prompt measures for Extinguishment of fires that may occur. Such individuals shall not be Required or permitted, while on duty, to perform any other duties than Those herein specified. Section 503.4 Obstruction of fire apparatus access roads is amended to add: Section 503.4 Parking of motor vehicles in, or otherwise obstructing fire lanes shall be Prohibited at all times. Any vehicle so parked is the act of a registered Owner as well as the act of the person actually parking the vehicle. For Purposes of this section, registered owner is defined to include motor Vehicle leasing agencies and corporate owners. It shall be a defense to any Violator ifthe registered owner shows that on the date of the offense, title Has been transferred to another. A violation of this section is a petty Misdemeanor as defined by Minnesota Statute 609.02, Subdivision 4a, and Shall be punished by a fine not to exceed $200. Minnesota State Fire Code ;WW 2007 shall be amended to read: Section 903.4.2 Alarms: An approved sprinkler flow alarm shall be provided on the Exterior of the building in a location to be approved by the Fire Department. An approved audible sprinkler flow alarm to alert the Occupants shall be provided in the interior ofthe building in a normally Occupied location. Chapter 32 CRYOGENIC FLUIDS is amended to read: Section 3204.3.1.1 (limits in which the storage of flammable cryogenic fluids in Stationary containers are prohibited): City of Hutchinson. The storage and use of flammable cryogenic fluids in stationary containers in any . amount is prohibited within the corporate limits of the city without 6 loeb') \ . . . prior approval. Prior approval requires the submittal of a proposed storage use and will require technical assistance as specified in section Chapter 33 EXPLOSIVES AND FIREWORKS is amended to read: Section 3304.1.1 The storage of explosives and blasting agents is prohibited within the corporate limits of the city Chapter 34 FLAMMABLE AND COMBUSTIBLE LIQUIDS is amended to read: Section 3404.2.9.5.1 The storage of class I and class II liquids in above ground tanks outside of buildings is prohibited within the corporate limits of the City with exception ofthose areas zoned 1-2 industrial, agricultural and also other remote areas with quantities as approved by the fire Official. Section 3406.2.4.4 (limits in which the storage of Class I and Class II liquids in aboveground tanks are prohibited): City of Hutchinson. The storage of class I and class II liquids in above ground tanks is prohibited within the corporate limits of the city with exception of those areas zoned 1-2 industrial, agricultural and other remote areas with quantities as approved by the fire official. Chapter 38 LIQUEFIED PETROLEUM GASES is amended to read: Section 3804.2. (Limits in which the storage of liquefied petroleum gas is restricted for the protection of heavily populated congested areas): City of Hutchinson. The limits referred to in section 3804.2 storage of Liquid Petroleum gas is prohibited within the corporate limits of the city with exception to those areas zoned 1-1 & 1-2 Industrial, Agricultural and also Residential locations and quantities as approved by the fire official. SECTION 4. That Ordinance of City of Hutchinson entitled Minnesota Uaiforffi State Fire Code Standards, +991 2003 Edition and all other Ordinances or parts of ordinances in conflict herewith are hereby repealed. SECTION 5. That if any section, subsection, sentence, clause or phrase ofthis ordinance is, for any reason, held to be unconstitutional, such decision shall not affect the validity of the remaining portions of this ordinance. The City of Hutchinson hereby declares that it would have passed this ordinance, and each section, subsection, clause or phrase thereof, irrespective of the fact that one or more sections, subsections, sentences, clauses and phrases are declared unconstitutional. 7 lPC\o') \ . . . SECTION 6. That the City of Hutchinson-Administrator's Office is hereby ordered and Directed to cause this ordinance to be published. SECTION 7. That this ordinance and the rules, regulations, provisions, requirements, orders and matters established and adopted hereby shall take effect and be in full force and effect Marell 31, 2003 Julv 10. 2007 from and after the date of its final passage and adoption. Adopted this Minnesota. day of , 2007 by the City Council of Hutchinson, Mayor - Steve Cook City Administrator- Gary D. Plotz 8 toe b ') , RESOLUTION NO. 13258 CITY OF HUTCHINSON . RESOLUTION FOR PURCHASE The Hutchinson City Council authorizes the purchase of the following: ITEM COST PURPOSE DEPT. BUDGET VENDOR Mercury plan & plant $17,000 Required for permit WWTP yes Donohue & Assoc. water system re-design expiring in Nov 2007 .e following items were authorized due to an emergency need: ITEM COST PURPOSE DEPT. BUDGET VENDOR eotion Made By: Seconded By: Resolution submitted for Council action Kenneth B. Merrill by: Finance Director Date Approved: August 28, 2007 lo[lo) 2- . . . MCLEOD COUNTY EMERGENCY MANAGEMENT . Division af Mcleod County Sheriff Mcleod County law Enforcement Center 801 10th Street East Glencoe, MN 55336 Kevin J. Mathews Director Business Phone: ,(320) 864-1339 FAX: (320) 864-5920 August 2, 2007 Gary Plotz, Administrator 111 Hassan Street SE Hutchinson, MN 55350 Dear Mr. Plotz: . Enclosed you will find a resolution that was handed out at the Hazard Mitigation kickoff meeting that was held in December 2006 in Glencoe. r have not received a signed copy back from the City of Hutchinson. rfyou do not sign this resolution to participate in McLeod County's hazard mitigation pIan, you will not be eligible to receive any money from the hazard mitigation fund in the future. This money would be used to lessen damages from happening in future disasters. If you have any questions about this, please let me know. Thank you for your assistance! /& /tVkV# Kevin Mathews McLeod County Emergency Management Director 801 10th Street East Glencoe, MN 55336 (320) 864-1339 phone (320) 864-5920 fax kevin .mathews@co.mcleod.nm.us . McLeod County is an Equal Opportunity Employer lPCIo)3 . . . Resolution No. 13257 RESOLUTION TO PARTICIPATE IN MCLEOD COUNTY'S HAZARD MITIGATION PLAN City/Township of Hutchinson , McLeod County, Minnesota. WHEREAS, McLeod County is participating in a hazard mitigation planning process as established under the Hazard Mitigation Act of 2000; and WHEREAS, the Act establishes a framework for the development of a county hazard mitigation plan; and WHEREAS, the Act as a part of the pla:1l1ing process requires public involvement and local coordination among neighboring local units of government and businesses; and WHEREAS, the plan must include a risk assessrnent including past hazards, hazards that threaten the county, maps of hazards, an estimate of structures at risk, estimate of potential dollar losses for each hazard, a general description of land uses and development trends; and WHEREAS, the plan must include a mitigation strategy including goals and objectives and an action plan identifying specific mitigation projects and costs; and WHEREAS, the plan must include a maintenance or implementation process including plan updates, integration of plan into other planning documents and how the county will maintain public participation and coordination; and WHEREAS, the draft plan will be shared with Minnesota Planning for coordination of state agency review and comment on the draft; and WHEREAS, this ResoIution does not preclude the CitylTownship from preparing its own plan in the future. NOW THEREFORE BE IT RESOLVED, that the CitylTownship of Hutchinson supports McLeod County's hazard mitigation planning effort, wishes to join McLeod County in preparing the plan and recognizes that the plan applies within the CitylTownship. Adopted this (month), 2007. (day) of Signed: Name, Title, Date Steven W. Cook, Mayor Attest: Name, Title, Date Gary D. Plotz, City Administrator 1o(b')3 . MEMORANDUM DATE: TO: August 22, 2007 for the August 28, 2007 City Council meeting Hutchinson City Council FROM: SUBJECT: Rebecca Bowers. AICP, Planning Director CONDITIONAL USE PERMIT, SITE PLAN, AND VACATION OF EASEMENTS TO ALLOW A CHARTER SCHOOL IN THE 1-1 (LIGHT INDUSTRIAL) DISTRICT AT 100011010 5TH AVE S.E. Backaround: The applicant is requesting a conditional use permit, site plan, and vacation of easements to construct a charter school in the 1-1 District. An approximately 38,000 sq. ft. building is proposed for the 5 acre site. The proposed use would be a school occupied by New Century Charter School and New Discoveries Montessori Academy. The school would be K-12 and would have approximately 300 - 350 students. A school could be allowed with approval of a conditional use permit as Zoning Ordinance was recently amended to allow schools as a conditional use in the 1-1 (Light Industrial) district. Additional information is contained in the attached Planning Commission staff report. . Revised plans and additional information was received between the writing of the staff report and consideration by the Planning Commission, therefore an update is provided below in the following section. Plannina Commission Meetina: The Planning Commission held a public hearing and considered the request at their August 21,2007. meeting. Staff stated that stormwater and drainage plans were recently provided and have not been reviewed by the City Engineer. Revised plans were also provided after the staff report was written for the site plan, building elevation, and floor plans. The revised floor plan identifies a 2-foot larger building than shown on the site plan, which will need to be revised to show the side yard and parking setbacks would still be met. Several changes to the drive-aisles, parking and drop-off areas recommended at the one-stop shop have been incorporated into the revised site plan, however will require additional review and approval by the City Engineer. The landscape plan has not been finalized as the school wants to work with the City Forester to develop the plan as a learning exercise for students. The Commission recommended the required landscaping and buffering be completed by November 2008. . There were several comments from the public in addition to representatives from the Charter school and investors. Representatives of Hutchinson Coop expressed concerns about their business next to a school, stating the nature of their business is noisy and dusty, with heavy truck and farm traffic. He said that they would not be the best neighbor to a school. Another Coop representative questioned how the school would affect the future LuevJ \ . . . City Council Memo August 28, 2007 Charter School in 1-1 Page 2 development of the industrial park, particularly the Stritesky property to the south. The applicants stated they understand the potential issues with operating in an industrial area and that Hutchinson residents are used to rural businesses with the associated smells, dust, noise, etc. They will try to be a reasonable neighbor with the industry near them and will work with the Coop to identify the issues and develop plans to deal with challenges. Traffic levels were also discussed in comparison to other areas with schools, such as School Road. The applicants stated they would not encourage children to walk or bike to school unless there was a dedicated safe route. Recommendation: , The Planning Commission unanimously recommended approval of the conditional use permit, site. plan, and vacation of easements, with the findings and conditions in the attached resolution. Le Lc.-) \ . . . RESOLUTION NO. 13255 RESOLUTION APPROVING A CONDITIONAL USE PERMIT, SITE PLAN AND V ACA TION OF DRAINAGE AND UTILITY EASMENTS TO ALLOW A CHARTER SCHOOL FACILITY IN THE 1-1 (LIGHT INDUSTRIAL) DISTRICT LOCATED AT 1000(1010 - 5TH AVENUE S.E. Whereas, TRJR,LLC, applicants, have requested approval of a site plan, conditionaI use permit, and vacation of easements to allow a charter school facility in the I-I District with the following legaI description: Legal Description: Lots 2 and 3, Block 2, Goebel's Addition Whereas, the Planning Commission has held a public hearing on August 21, 2007, on the request and considered the requirements of the Zoning Ordinance and the effects of the proposal on the health, safety, and welfare of the occupants of the surrounding lands, existing and anticipated traffic conditions, and the effect on values of properties in the surrounding area and consistency with the Comprehensive Plan, and hereby recommends approval of the request. The City Council has considered the recommendation and findings of the Planning Commission and hereby does recommend approval of the site plan, conditional use permit, and vacation of easements subject to the following findings and conditions: 1. The proposal would meet the standards for granting a conditional use permit and the standards in the Zoning Ordinance, subject to the conditions stated. 2. The proposed building and site improvements must complywith the standards of the I-I district and the Zoning Ordinance, subject to the conditions stated. No variances are granted or implied. 3. Stormwater calculations and pIans must be submitted and approved by the City Engineer prior to any construction on site. 4. A private easement will be required from the property to the west for the benefit of the subject property and the EDA site to the east to allow a drainage swaIe or stormwater pipe to be constructed to direct drainage to the regional pond. The applicant will be responsible for preparing and obtaining the necessary easements. 5. City Engineer's approval of the final construction plans is required prior to any excavation, grading, or construction on site. 6. Review and approval by the City Engineer and Planning Director of the final parking arrangement and site circuIation is required prior to construction. 7. The applicant should be aware that unusual pedestrian crossings, reduced speed signs or special turning lanes are not recommended due to the industriaI uses in the area and truck traffic on 5th Avenue. 8. The two parcels must be tax combined at the County prior to approval of the building permit for construction ofthe building. 9. Sign permits are required prior to installation of the signage. 10. SACIWAC fee in the amount of $47,200 (16 units x $2,950) will be due at the time of building permit. loCC--) \ . . . Resolution #13255 Conditioual Use Permit, Site Plan, Vacation Charter School-lOOO/IOlO - 5'h Ave SE City Council- August 28, 2007 Page 2 11. Landscape plan must be reviewed and approved by the City Forester. Required landscaping and buffer shall be completed by November, 2008. 12. Details on the fence construction and approval of a fence permit are required prior to construction. 13. Exterior lighting must be shielded and shall not cause glare to adjacent properties. Adopted by the City Council this 28th day of August, 2007. ATTEST: Gary D. Plotz City Administrator Steven W. Cook Mayor ~ ( c, J' .. t: _ -..." ~."""",.;;lllI'.~~...:.l.'*~~ ......"..""lI "I'~.jj. ~ &~~ Co ~ ',,"" rolil7l4;.~;'~~8Y~';.;;"Hlr1.--,it' .""., ,,-0;0......... '-k'~ ~-;,- T, '''_<", 'it.... ........ ... _ .r II Ii'" _....= _ ....'_ .;r ~ '.;.IF r--.- ..r r ~ '" ~ 1",... DIRECTORS REPORT - P'LANNING DEPARTMENT ~ ~~~J:: .......,........"";~-;:II>;.";i!IiI!..;::-;it' . r ,&""....0/. _ ~ . ~ "" ,,-... _ -"~-_ -r;rt;.;N:-"iF';;4"',.. ,.&" '"".-,,& ..._.. - -... ~-::. .:'-4'7;rJ,r'ilr~"",,',II,,".,jl - - '* ..PI'."' ~..~ -'_ oS _...,..~.;r _" iC.- ,;......_ ~ .. To: Hutc'binson Planning Commiss,ion From: :Brad E,mans, Dolf Mo:on, Dave Hunslad, MilesSeppelt, Shan Ghimire, Jean Ward, Judy Flemming, John Webster, Joh.n Olson, Lenny Rutledge, Kyle Dimler, Kent Exner, John Paulson, Mark Schnobricb) Marc Sebora, Gary Plotz)' Ken Menill, Jim, 'Popp, Da,o Batt:en, Dick Nagy, Rebe,c)ca Bowers and Bonnie Baumetz (pers,ons in attendanc.e at Planning Staff Meeting (in bold) Date: August 9, 2007, for oI~DguSt 2.1, 2007', Planning Commiss,ion Meeting Applicati,on: Conditional Use Pe.rmlt, Site Plan Revie,v and Vacation of Easements to allow a charter school in the 1-1 (Light Industrial) District located at 1000/1010 - 5th Ave S.E. Applicant: TRJR, LLC, c/o Jim Fabey CONDITIONAL USE P~ERMIT, SITE P.LAN RE"VIEW ,AND VACATION OF EASEMENTS Brief Description: The applicant is requesting a conditional use permit, site plan, and vacation of easements to construct a charter school in the- I-I District. An approximately 38,000 sq. ft. building is proposed for the 5 acre site.A. vacation of easements along the property line between lots 2 and 3 and parcel consolidation is also Tequired~ tncv') \ . . . Conditional Use Permit, Site plan and Vaeation of easements Charter Sehool- 1000/1010 5th Ave. S.E. Planning Commission - 8/21/07 Page 2 Existing Zoning: Property Location: Lot Size: Existing Land Use: Adjacent Land Use And Zoning: Comprehensive Land Use Plan: Zoning History: Applicable Regulations: Transportation: Analysis: GENERAL INFORMATION 1-1 (Light Industrial) 100011010 - 5th Ave S.E. 5 acres Vacant Industrial uses to the north, east, and west of the site. The property to the south is currently residential, however is outside city limits and guided for future industrial use in the Comprehensive Plan. Industrial The subject property is part of Goebel's Addition, which was a 6 lot plat approved in 1998. The City approved a zoning ordinance amendment on August 14, 2007, to allow schooIs in the I-I district with a conditional use permit. Sections 154.067, 154.170, 154.169 of Hutchinson City Code and City Charter 5th Avenue S.E. Approval of a site plan, conditional use permit, and vacation of easements is required to construct the proposed 38,000-square foot building. The proposed use would be a school occupied by New Century Charter School and New Discoveries Montessori Academy. The school would be K-12 and would have approximately 300 students. A school would be allowed with approval of a conditional use permit as Zoning Ordinance was recently amended to allow schools as a conditionaI use in the I-I (Light Industrial) district. A one stop shop was held on August 7, 2007, at which revised plans were provided by the applicant. Staff discussed the following site issues: drainage and stormwater, utilities, traffic, parking, unloading areas, entrance drives, site circulation, handicapped parking, landscaping, building layout, and play ground area. Staffreview and comments on these items are included in the in the relevant sections of this report. Conditional Use Permit In reviewing an application for a CUP, the Commission should consider ifthe proposal meets the standards for a CUP. A CUP shall be granted only if evidence is presented to establish the following: toCL-) \ Conditional Use Permit, Site plan and Vacation of easements Cbarter Scbool-lOOOIlOlO Sib Ave. S.E. Planning Commission - 8/21107 Page 3 . (a) The proposed building or use at the particular location requested is necessary or desirable to provide a service or a facility which is in the interest of the public convenience and will contribute to the general welfare of the neighborhood or community; The proposed building or use will not have a substantial or undue adverse effect upon adjacent property, the character of the neighborhood, traffic conditions, utility facilities and other matters affecting the public health, safety and general welfare; and The proposed buiIding or use will be designed, arranged and operated so as to permit the development and use of neighboring property in accordance with the applicable district regulations. (b) (c) The property proposed for the conditional use should be reviewed to consider any site issues and appropriate conditions incIuded with the CUP based upon the characteristics of the site. Two of the key factors for the Commission to consider are 1) how the school may be impacted by nearby industrial uses, as well as 2) how the school could potentially impact development of adjacent industrial property, particularly the EDA site to the east of the site. Conditions may be placed upon a conditional use permit in order to alleviate potential concerns created by the proposed use or to reduce potential impacts of surrounding properties (such as requiring screening). Site Plan . Building: The proposed building would be an approximately 38,000-square foot one-story metal buiIding. Draft buiIding floor plans and elevations are attached, however the applicant has not yet finalized the plans or location of windows. The building height would be approximately 22 feet. Setbacks: The proposed site plan would meet the required building setbacks. The proposed building setbacks and requirements for the I-I district are identified below. Required Proposed Structure Setback Structure Setback Street Right of Way (front) 25 feet 120 feet (north) Interior Lot Line 20 feet 45 feet (east) (sides and rear) 200 feet (south) 82 feet (west) . Traffic, Access and Circulation: The proposed site plan identifies two access drives into the site with a one-way bus drop off at the front entrance. Staff recommends changing the front parking lot to one way diagonal parking and signage at both entrances to reduce traffic conflicts. Also recommended is moving the barrier-free parking away from the bus drop off area into the front parking lot. This would allow space for a drop off area at the front of the building for vehicles. The rear parking lot is identified as one-way, however reversing the direction should be considered to increase visibility around the building. lP Cu) \ Conditional Use Permit, Site plan and Vacation of easements Charter School - 1000/1 01 0 5tb Ave. S.E. Planning Commission - 8/21/07 Page 4 . Staff recommends that the westerly drive be moved west to align with the center of Michigan Avenue to reduce traffic conflicts at that intersection. At the one-stop shop, staff also stated that the applicant should be aware that this is an industrial area and that requests for unusual pedestrian crossings, reduced speed signs or special turning lanes will not be recommended due to the industrial uses in the area and truck traffic on 5th A venue. A concrete walkway is shown on the plans to connect the school's main entrance to the existing sidewalk along 5th Avenue. The applicant will be working on the recommended revisions after discussing their operations. A revised plan may be presented at the Commission meeting. Parking and Drive-Aisles: The site plan identifies two parking areas, one at the front for visitors and one at the back for high school students and overflow parking. Persons parking in the rear lot would be required to walk to the front entrance to enter the building. The proposed parking area and drive aisles meet the required 20-foot setback to the right of way and 10' to interior lot lines. For school uses, the Zoning Ordinance requires 1.6 parking spaces for each elementary through junior high classroom and 4.5 spaces for each senior high classroom. Based upon the allocation of 13 classrooms for elementary and junior high and 8 classrooms for senior high, approximately 57 parking spaces are required. On the site plan received August 7th, 92 spaces are proposed, which would exceed requirements. However, as noted above, due to the need to revise the parking arrangement for improved traffic circulation as noted above, the number of parking spaces is likely to be reduced. . Stormwater Management and Engineering Review: At the time of writing the report, no stormwater management or drainage plans were avaiIabIe for review. In order to move stormwater from the site to the west into the regional stormwater pond, either a stormwater pipe or drainage swale must be constructed at the south end of the property. This will also require a private easement to be obtained from the property to the west for the benefit of the subject property and coordination/easement dedication with the EDA site to the east to account for the routing of their stormwater to the regional pond. The applicant will be responsible for preparing and obtaining the necessary easements. As noted at the one-stop shop meeting, stormwater calculations must be provided to the City Engineer accounting for the regional pond drainage Curve Number of 85 (approximate maximum impervious of 65%) for this site. Final approval will be subject to City Engineer's review and approval. Landscaping: The applicants have submitted a draft Iandscape plan, however are requesting to work with the City Forester in using the landscaping project as a learning exercise for the students. A single line of trees is proposed along the easterly property line to provide some buffering between the EDA site to the east, however there is limited landscaping room available in this area under the proposed layout. . ~Cu)\ Conditional Use Permit, Site plan and Vacation of easements Charter School- 1000/1010 S'b Ave. S.E. Planning Commission - 8/21/07 Page 5 . The species and sizes oflandscaping will need to be further refined and a deadline established for completing the landscaping. Staffhas added a condition to the draft resolution that the landscape plan shall be reviewed and approved by the City Forester. Playground and Play Areas: The elementary playground area is proposed at the northwest comer of the site in front of the building. The applicant has indicated that the playground would be fenced and provide a connection to the building for safe movement of children to the play area. Details of the fencing have not been provided, however will be required as a condition of the fence pennit. An open play yard to the south of building is also shown for older children. Signage and Lighting: A freestanding sign is identified along 5th Avenue, however no details on the signage have been provided. All signage must comply with sign reguIations in the Zoning Ordinance will be reviewed after a sign permit is submitted. Vacation of Easements: A vacation of easements for the drainage and utility easements along the property line between lots 2 and 3 is required for construction of the building over the property line. The easements were placed along the Iot lines with the plat for Goebel's Addition and are standard drainage and utility easements surrounding both lots. The two parceIs must be tax combined at the County as construction over Iot lines is not permitted by the Zoning Ordinance or Building Code. As the properties will be combined, there is no longer a purpose for the easements. . Recommendations: Stafft~ically provides a recommendation from the Planning Staff meeting, which was held on July 30t. However, as the application was substantially incomplete for that meeting, staff was not able to make a recommendation. Staff discussed general issues with the conditionaI use related to potential impacts on existing industries and future industriaI development. The following general site issues were also identified: the need to align entrance drives with Michigan Avenue to reduce traffic conflicts, assuring safe unloading and parking circulation, the need for landscaping and screening, and the location and fencing of the playground. Most of the site plan-related issues have been either addressed or discussed with the applicant at the one-stop shop on August 7th However, storm water and drainage plans have not been provided at the time of writing the report. Staff has developed the following recommended conditions to address items that are incompIete or require additional review or revisions: . 1. The proposed building and site improvements must comply with the standards of the I-I district and the Zoning Ordinance, subject to the conditions stated. No variances are granted or implied. 2. Stormwater calculations and plans must be submitted and approved by the City Engineer prior to any construction on site. ~(6) \ . . . Conditional Use Permit, Site plan and Vacation of easements Charter School-lOOO/lOlO 5th Ave. S.E. Planning Commission - 8/21/07 Page 6 3. A private easement will be required from the property to the west for the benefit of the subject property and the EDA site to the east to allow a drainage swale or stormwater pipe to be constructed to direct drainage to the regional pond. The applicant will be responsible for preparing and obtaining the necessary easements. 4. City Engineer's approval of the final construction plans is required prior to. any excavation, grading, or construction on site. 5. Review and approval by the City Engineer and Planning Director of the fmal parking arrangement and site circulation is required prior to construction. 6. The applicant should be aware that unusual pedestrian crossings, reduced speed signs or special turning lanes are not recommended due to the industriaI uses in the area and truck traffic on 5th Avenue. 7. The two parcels must be tax combined at the County prior to approval of the building permit for construction of the buiIding. 8. Sign permits are required prior to installation of the signage. 9. SACfWAC fee in the amount of $47,200 (16 units x $2,950) will be due at the time of building permit. 10. Landscape plan must be reviewed and approved by the City Forester. Landscaping shall be completed by 2008. 11. Details on the fence construction and approvaI of a fence permit are required prior to construction. 12. Exterior lighting must be shielded and shall not cause glare to adjacent properties. The Planning Commission should hold a public hearing on the proposal and provide a recommendation to the City Council. Staff has provided a draft ordinance for vacation of easements along with a draft resoIution for approval of the site plan, conditional use permit, and vacation of easements with the above noted conditions. Should the Commission find that the proposal does not meet the standards for granting a conditional use permit, the Commission should state the reasons the proposal does not meeting the conditional use permit standards. Staff will draft a resolution with findings to the Council accordingly. Cc: Jim Fahey, 446 Main SI. S. Tim Ulrich, 14568 - 155th SI. lo LV) \ . ADDITION 1 + ~ I N.",,,,..,,,,, ':2\~',~~ ,,,,,.., 2 1 3 1 4 1 5 . I "IW \/" at S'~I!"n~, T.,~, ~;:>~ 'N., J I NQ"" lint of La' \;), AUD,!PlAT Of TIi( , ',- ____ ____-LW_I/~~N~~~9~~, --L-__ : CITY OF HUTCH~SON STR!;EI RIGm:-or Viii"! FL"IlT . ,-r FIFTH AVENUE SE (FORMERLY ARCH STREET) ... r _519047'54'E 198. I ~ _,?~~E : S89045'3S'E '97.761""SkOOI' _~__ .---" S89'4~'39'E 531.33 (chi...:I2'8.001 'is _ _, " FIF H I AVENUE SE ".9'1-', ,-" I 34.3~ 0 ! ".2'-- ..'ID' W<.xL ~fJ:"mi05...QQ. H89'33'~I'E 214,," .~: , :: -. 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BACKGROUND Reasons for the request for a conditional use permit: The existing charter schools serving Hutchinson, Minnesota are both in temporary locations at this time. A group has come up with a long range solution to house the two schools in a new aprox 40,000 sq ft building proposed for the 1000 block of 5th Ave SE, Charter school buildings are funded in Minnesota through lease aid from tbe State of Minnesota based on a formula using the student population of the schools, Charter schools may not bond or use bond issues to fund buildings, Charter schools may not own real estate. Most charter schools are owned by private parties or entities such as non-profits, school districts, universities, etc, Charter school facilities must meet strict E (education) building codes, local zoning ordinances and safety criteria before lease aid is made available by the Minnesota Department of education, Charter schools are entrepreneurial in nature and share a common interest with the business community, It is common for charter schools to use community experts from area businesses and manufacturers to help educate the students on certain subjects, Many charter schools, including New Century Charter School in Hutchinson are "project based" which requires project space and community experts assist and direct the projects. This makes for a unique relationship with area businesses and manufacturers. The need for future project space could be met by renting space from the proposed business incubator project being considered by the Hutchinson EDA, From an investment standpoint, it is not economically sound to construct a commercial building for charter school use in a non- industrial or non-commercial area. Use of the building years in the future could be a hardship for the owners and blight for a residential area, Many Charter schools are similar in nature to trade schools. f..o L(/ J \ . . . City of Hutchinson Forestry Department 1400 Adams St SE Hutchinson, MN 55350 Phone (320) 234-4459 Fax (320) 234-6971 August 15, 2007 Charter School Landscape Plan 5THAVESE Hutchinson, MN I have reviewed the landscape plan for the Charter School located at 5th Ave SE and I will be discussing the specie selection and also the location of the plant materials on the site with them as they progress with the project. I aIso will be working with their education department and John Olson, Hutchinson Public Works Manager, on a vegetated drainage system on the south and west side of their property. find that their selection of tree species is acceptable. I highIy recommend they plan for an extensive buffer between their property and the industrial park to the east. We will work with them on this aspect oftheir project and assist where we can. Mark Schnobrich City Forester 1400 Adams St SE Hutchinson, MN 55350 320-234-4459 mschnobrich@ci.hutchinson.mn.us laCY) \ . . . RESOLUTION NO, 13255 RESOLUTION APPROVING A CONDITIONAL USE PERMIT, SITE PLAN AND VACATION OF DRAINAGE AND UTILITY EASMENTS TO ALLOW A CHARTER SCHOOL FACILITY IN THE 1-1 (LIGHT INDUSTRIAL) DISTRICT LOCATED AT 100011010 - 5TH AVENUE S.E. Whereas, TRJR,LLC, applicants, have requested approval of a site plan, conditionaI use permit, and vacation of easements to allow a charter school facility in the 1-1 District with the following legal description: Legal Description: Lots 2 and 3, Block 2, Goebel's Addition Whereas, the Planning Commission has held a public hearing on August 21, 2007, on the request and considered the requirements of the Zoning Ordinance and the effects of the proposal on the health, safety, and welfare of the occupants of the surrounding lands, existing and anticipated traffic conditions, and the effect on values of properties in the surrounding area and consistency with the Comprehensive Plan, and hereby recommends approval of the request. The City Council has considered the recommendation and findings of the Planning Commission and hereby does recommend approval of the site plan, conditional use permit, and vacation of easements subject to the following findings and conditions: 1. The proposal would meet the standards for granting a conditional use permit and the standards in the Zoning Ordinance, subject to the conditions stated. 2. The proposed building and site improvements must comply with the standards of the I-I district and the Zoning Ordinance, subject to the conditions stated. No variances are granted or implied. 3. Stormwater calculations and plans must be submitted and approved by the City Engineer prior to any construction on site. 4. A private easement will be required from the property to the west for the benefit of the subject property and the EDA site to the east to alIow a drainage swale or stormwater pipe to be constructed to direct drainage to the regional pond. The applicant will be responsible for preparing and obtaining the necessary easements. 5. City Engineer's approval of the final construction plans is required prior to any excavation, grading, or construction on site. 6. Review and approval by the City Engineer and Plarming Director of the final parking arrangement and site circulation is required prior to construction. 7. The applicant should be aware that unusual pedestrian crossings, reduced speed signs or special turning Ianes are not recommended due to the industrial uses in the area and truck traffic on 5th Avenue. 8. The two parcels must be tax combined at the County prior to approval of the building permit for construction of the building. 9. Sign permits are required prior to installation of the signage. 10. SAC/WAC fee in the amount of $47,200 (16 units x $2,950) will be due at the time of building permit. Co (y) ) . . . Resolution #13255 Conditional Use Permit, Site Plan, Vacation Charter School - 1000/1010 - 5th Ave SE City Council- August 28, 2007 Page 2 11. Landscape plan must be reviewed and approved by the City Forester. Required landscaping and buffer shall be completed by November, 2008. 12. Details on the fence construction and approval of a fence permit are required prior to construction. 13. Exterior lighting must be shielded and shall not cause glare to adj acent properties. Adopted by the City Council this 28th day of August, 2007. ATIEST: Gary D. Plotz City Administrator Steven W. Cook Mayor wcp)] . . . PUBLICATION NO, ORDINANCE NO. 07-0472 AN ORDINANCE OF THE CITY OF HUTCHINSON, MINNESOTA VACATING UTILITY AND DRAINAGE EASEMENTS LOCATED BETWEEN LOTS 2 AND 3, BLOCK 2, GOEBEL'S ADDITION THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA ORDAINS: Section I. Notice of hearing was duly given and publication of said hearing was duly made and was made to appear to the satisfaction of the City Council that it would be in the best interests of the City to vacate utility and drainage easements located between Lots 2 and 3, Block 2, Goebel's Addition. Section 2. That the utility and drainage easements to be vacated are described as follows: Vacate part of the 6.00 foot wide drainage and utility easement lying westerly of and adjoining the east line of Lot 2, Block 1, GOEBEL'S ADDITION, according to the recorded plat thereof. The north line of said part of the easement to be vacated being the south line of the North 20.00 feet of said Lot 2 and the southerly line of said part of the easement to be vacated being the northerly line of the Southerly 10.00 feet of said Lot 2. Also, vacate part of the 6.00 foot wide drainage and utility easement lying easterly of and adjoining the west line of Lot 3, Block I, GOEBEL'S ADDITION, according to the recorded pIat thereof. The north line of said part of the easement to be vacated being the south line of the North 20.00 feet of said Lot 3 and the southerly line of said part of the easement to be vacated being the northerly line of the Southerly 10.00 feet of said Lot 3. Section 3. This ordinance shall take effect from and after passage and publication. Adopted by the City Council this 11 th day of September, 2007. ATTEST: Gary D. Plotz City Administrator Steven W. Cook Mayor ~c~)\ . MEMORANDUM DATE: TO: FROM: August 22, 2007 for the August 28, 2007 City Council meeting Hutchinson City Council Rebecca Bowers, A1CP, Planning Director SUBJECT: CONDITIONAL USE PERMIT TO MOVE A HOUSE TO 16S_STH AVE. N.W, REQUESTED BY PAUL AND ROSE BOLDUC Backaround: The applicant is re~uesting a conditional use permit to move a house onto an existing vacant lot located at 1155-5 Ave. N.W. There is a large drainage and utility easement on the property, which is planned for a stormwater pond to be constructed by the City in 2008. The lot area is 35,380 sq. ft., however the easement area covers approximately 23,389 sq. ft. ofthe lot. The applicants propose to move an approximately 2,000 sq. ft. house and a 960 sq. ft. detached garage onto the site. The main issue for this site is drainage. Additional information is contained in the attached Planning Commission staff report. . Plannina Commission Meetina: The Planning Commission held a public hearing and considered the request at their August 21,2007, meeting. There were comments from adjacent property owners with questions and concerns over drainage in the area. The area has long term issues with drainage and standing water. Staff stated that the pond to be constructed will provide stormwater holding capacity and that the new structure will be required to have all building openings two feet higher than the pond elevation. Another neighbor asked why another pond was needed and didn't feel that drainage was enough of a problem to construct another pond in the city. Discussion continued on stormwater drainage and the functions of holding ponds. The applicant clarified that he would build a garage on site, instead of moving a garage to the property. Also discussed were the elevations of adjacent property compared to the subject site and pond. Staff stated that a large amount of fill would need to be removed from the site and that no stockpiling or grading will be allowed within the easement area. After expressing caution to the applicants regarding drainage and fill issues on the site, the i Commission recommended approval. Recommendation: The Planning Commission unanimously recommended approval of the conditional use permit, with the findings and conditions in the attached resolution. . 02&') d-. -, ~"P'~ ,../.... .z.,')t!'Ao-.:.... '.~'" _~ _1.,.....~.>>...... ""..I'......wP'>..... 1/.6/f.:""'~... ..t".I:.'JII' _.....- _ __ .JP:.oiL.-...,i/r.....,.../I1~/lis ....""74 :&"......~,rI:-~,,!I ..,,J/II".~.::II.~/,-.J;I.:r'/I7','AfII)-.y:IJI'>'~..~I.:,~...:.6N#t,.~.I,,I1If";~ .4'I~ DIRECTORS REPORT - PLANNING DEPARTMENT ~ r. ~ .... _ _ .__.:._ .r _ ~ ..~ ~ _ _ ~.A. _.,,, _1';r'L" _ "'::::t',,""'::; ..v...,.....~... ~ _. _.~ -u.'.. _. _-:........... '._~~-:,':. ~-,...:F..'-'-'I _ ~".__ _ .11';,";:-' ..t:',/;'c~JIr.',I!:";....7..!I/lfI!,.~".~"r..#;,~__.Il-I.!-:II':.~..::t'~~Jf!'_ ..<<.~::& <I: .:iIP'_.I..AI. ~!A!t'..'..J1I: ",,:~;jpnJ~~ .J4 To: Hntchin$on Planning Commission Franl: Brad Emans,Dolf Moon, Dav'e Hunstad, Miles Seppelt, Shan Gbimire; Jea.n Ward" Judy FlemmiI).g,... John Webster, Joh.n O!lson, Lenny Rutledge, Kyle Dimlet, Kent Exner, John Paulson, Mark Schnobtich,Marc'Sebor3;; Gary Plotz, Ken Merrill, Jim Popp, Dan H~tten, Dick Nagy, Rebecca Bowers and Bonnie Baumetz (persons. in attendance ~t Planning Staff Meeting (in bold) Date: August 8, 2007, for August 21, 2007,. Planning Commission M'eeting Application: Conditional U'sep'ermit to mQve a hou~e and gar-~ge onto vacant. property located at 165 - SOl Ave. N.W. Applicant: Paul and Ros,e Bolduc~ applicant P3tJI Betker, property owner CONDITIONAL. USE PERMIT Brief Description : The applicant is requesting a conditional use permit to, move a house and garage onto an existing vacant lot locQ.ted at 165-Sth Ave,. N.W. There is a.large drainage and utility easeme.nt on the property~ which is planned for a stormwater pond to 'be constructed by the City in 2008. The lot area is 35,380 sq. ft~,however the easement area covets approximately 23,389 sq. ft. bfthe lot. The applicants propose t9 move an ~pprox:imate]y 2,000 s,q. ft. house c;lnd a 960 sq. ft. detach.ed garage onto the site. The main issue for this site is drainage. The following map identifies the. site and surrounding area. Lc>CG)~ . . . Conditional Use Permit 165 - 51b Ave. N.W. Planning Commission - 8/21/07 Page 2 GENERAL INFORMATION Existing Zoning: R2 (Single and Two fantily residentiaI) Property Location: 165 - 5th Ave. N.W. Lot Size: 35,380 sq. ft. Existing Land Use: Vacant Adjacent Land Use And Zoning: Single family Comprehensive Land Use Plan: Traditional Residential Neighborhood Zoning History: The lot was platted as Lot 5, Block 7, North Half of Hutchinson, in IS79. The City purchased a drainage and utility easement from the property owner in 2005. The easement was requested for stormwater protection in the area. Applicable Regulations: Section 154.121 and 154.20, Hutchinson City Code Transportation: 5th Avenue N.W. Analysis and Recommendation: The applicants propose to move an existing home and garage onto the subject property. The main concern with this site is drainage, specifically with the property to the east and drainage flowing from the fann field to the north that flows through this subject site. The elevation of the home will be critical in reducing potential drainage issues on the site. Staff discussed protection of the property to the east and the future stormwater pond which is planned for construction in 200S. There was also discussion regarding the amount of soil correction that may be needed on the site. Staff met with the applicants on site to discuss the placement of the home and garage on the lot and required elevations. Staff advised the applicants that no grading, sloping, or storage will be allowed in the easement area, all work must be dope outside of the easement. Staff discussed with the applicants that there will likely be water on site in the future and that the pond will likely have water present throughout the year as it is designed to hold water. Staff recommends approval with the following conditions and reservations: 1. A pre-move inspection of the house and garage by the Building Department is required prior to moving any structures onto the site. All required work must be completed before a certificate of occupancy will be issued. 2. Approval of a moving permit is required prior to moving any structures. The applicant shall compIy with Section 150.20 of the City Code regulating the moving of buildings, including detaiIs on the dates of moving, hours, rerouting, movement, parking, and appropriate fees. 3. The property must comply with the standards of the R2 (Single and Two family residentiaI) zoning district. No variances are granted or implied. /.Q [c- J 3. Conditional Use Permit 165 - 5th Ave. N.W. Planning Commission - 8/21/07 Page 3 . 4. 5. 6. 7. 8. 9. The lowest building opening must be at or above 1071 feet, to allow an elevation at least 2 feet above the pond elevation, which is planned to be approximately 1069 feet. Building Department approval of the fill and building pad is required prior to construction. Soil correction may be needed to provide a suitable building pad. Structures must be placed on suitable fill. Existing fill located on the site cannot be used for building area. The property owners are advised that the subject property and surrounding properties have had drainage issues in the past. Construction of the stormwater pond on site is proposed to provide storage of stormwater and the site is likely to have standing water on site. No structures, grading or fill will be allowed in the drainage and utility easement. All construction work, including grading and sloping, must be done outside of the easement area. Property owners are responsibIe for all labor and material costs if needed for moving overhead lines or other utilities during and after the house move. . Cc: Paul and Rose Bolduc, 326 Monroe St. S.E. Paul Betker, 37 Monroe St. S.E. . &l (j- ') d-.. 11~ 1:'>.2 [.i,ling I-IQ"" 7~.~ . LOT 6 74.4 . ---- PELlINEN LAND SURVEYING r;;- f? u '}-J . 68.1 )(%.0 'M 1l1l.1 69.ff . -. :l! '~ ~ ,- '" 251'-;..: ":;; 0 ". .. - ... .3~ :~ . -~ ;~ \ ". 73.11 . . 70.~ }2.3 SOllrhwU'corMr 01 LOI~, 810ck 7 'M . 14~6 76.50 'M . ., ~"( . ".. ~ ~6 ~ e ~ . o - . . "'" ",o"'>2.Q) \' X1\.1 111"''''0 ....., 13.3Z 8M "'" 153.00 (Mia..) 7&.00 , Nor111 lint tJ( 8/.0<:/1.7. NORTH HALF...... OF HlITCHIN~ (as mOf\\lfl'lfnl.dl .l'-' .... DRAINAGE 8 . 6M "" . U')-T 5- . ...' BUILDING PeRMIT SURVEY FOR PAUL 8 ROSE BOLDUC . LOT 5, BLOCK 7, NORTH HALF OF HUTCHINSON EASEMENT DESCRIPTION An lo.emlnt for drolftC191 and utility plWpOJlS over, undlr and acro:sl tMt ptJI't 0' LOI .,. 8k1clt 7. NORTH HAlF OF HUtCHINSON, dlscrlbed tiS follows: Com""nclng at thl southw"t cornlr ot said Lot .5: ~I Nsterl,., aloDQ 'he louth 11" of 1010' Lot' a dlstancl of 80.00 flit to the beginning oft'" IGslIMnt to bl descrlbld: thlftCe northlrly, pOl'12I111 with thl west lint of 1010' Lot :5 a distance of 1"'-00 f..r. Ihlncl w..terl,. to a polnl on thl W.S, Ilnl of ackf ,"ot ~ distant lro.OO fea, IlOf1herJy 1>1 'hi SOUthWlSt cornlr of sold Lot 5: tntncI northtrly, along lhe WI,t line of sold Lol 5 to the .north.." corner of sold Lot 5: tlMinel 10sl.rl)', (I/Ono the norm Unl of solei Lot 5 to thl northl<lsl CtM'nef of said Lot 5: thlncl soum.r1y, along the losl Un. of sold \.ot 5 t4 the southID5f corner of :sold LOI 15: thlnee ..."rly. along IhI south line of $010' Lot ~ 10 the point of blglnnlng. TOfal Lot Area 30380 Sq Ff Easement Area 23389 Sq Ft Building Footprint Neo 0' $I'lown . 2178 Sq Ft Gara~ Foolprlnt Nea as shown . 87!5 Sq rt Pr~pli5ld Orlvew~~ ArlO (It ehown . 2.00 Sq Fl ,/1_6 blsllng Houl' __~-----l~,t --.. "" q I UTILITY U.S 3S ~ I ....., 6 13 P~OPOSEO ~ - - - -r -~l- AGE )C NOI'III11",el,"!Vlell1'>o_ to- ~ &U ell,l $W1/.e'S..3I,T.ll1lC.,R.25W. iJ LOT 4 68.1 3! .,/'~l (71.01 ~ I (71.3J/d' \"' i ori 67.S \~ ~ -.... / \ .. :2 jo 61.Sa I ~~ ~6 ~ ii o 2.18 8M I 0:1: l;l ..~ 2 . \ li~ EASEMENT a~ z.,9!l ~\ 14 I =i 61.1)( ~ 18iiE PROPOSED Id.g HOUSE !::; I~'i~ al ~; ~, ~~ -1 I I I. x 1~6 70,z I I x 6&.' ..... . '" , " N seulhllnloILol!l,Blotk1'l HORTli HALF (j; HUTCHINSON 1,z___------ . f1T.r BENCHMARK . R. 5064.14 (M.as.) 81.2 . 1&t. ".6 =-tJlu" .,.'lI<"" 10.87 . "'" . ,. ba.M <urto<... ..... FIFTH HUTCHINSON MN AVENUE NW PRELIMINARY GRADES (SubJlct to City approval and pond dlSlgn) PROPOS€O TOP Of fOUNOATION . 1072,15 PROPOSED BASEMENT FtOOO . 1064.8 "u.. PROPOSEO GARAGE FLOOR . 1011.!l 6UNi Point spot on top of curb n.or the southw'" corMr of Lof 5. Block 7. Elevation. 1073.32 JOB NO. 07120 ~ fIEC5IVED AUG 7 2007 CItY,,,.,,,,,,."" 1l8P<<l P.z. &8 o " 60 '0 seal. " ,.,,, . Olnolos iron monument found o Oenotn Iron monumenl $el Oenotos exlstln!) elevation Denottspro,DosedelevOtlon I her.b, urtlfy Ihal lhl. Survly, Plan or RIPort wo. prepar.d by IIlIl or und.r my dlrle1 IUp.rvlllon and tllOl I am a duly Ilcenled Lond Surveyor under tll. 101111 01 11'l. SUit ot .,~ ,{. .{n/AV-< J~ It nch '''''#0/ ~ ;?dO? LIC.HorY~~ ex P-3!l6 PG 29 ,--.L C'A.$I "..; .t..:.. " . '.'-.- J.;";'" --"-~ ~~ ~.- ~ ~!:.- r~4:- . . .!~,.,... ~:=--' ...-;-":': .j\'~~'':' ~; ~-:':.~':lf -::.. . .-IL _.~.'-.,~~, 4! C G J~ ~ .~~ . RESOLUTION NO, 13254 RESOLUTION APPROVING A CONDITIONAL USE PERMIT TO MOVE A HOUSE TO PROPERTY LOCATED AT 165 - 5TH AVENUE N,W, Whereas, Paul and Rose Bolduc, applicants, have requested approval of a conditional use permit to move a house to I 65_5th Avenue N.W. with the following legal description: LegaI Description: Lot 5, Block 7, North Half of Hutchinson Whereas, the PIanning Commission has held a public hearing on August 21, 2007, on the request and considered the requirements of the Zoning Ordinance and the effects of the proposal on the health, safety, and welfare of the occupants of the surrounding lands, existing and anticipated traffic conditions, and the effect on values of properties in the surrounding area and consistency with the Comprehensive Plan, and hereby recommends approval of the request. The City Council has considered the recommendation and findings ofthe Planning Commission and hereby approves the conditionaI use permit subject to the following findings and conditions: 1. 2. . 3. 4. 5. 6. 7. 8. 9. A pre-move inspection of the house by the Building Department is required prior to moving any structures onto the site. All required work must be completed before a certificate of occupancy will be issued. Approval of a moving permit is required prior to moving any structures. The applicant shall compIy with Section 150.20 of the City Code reguIating the moving of buildings, including details on the dates of moving, hours, rerouting, movement, parking, and appropriate fees. The property must comply with the standards of the R2 (Single and Two family residential) zoning district. No variances are granted or implied. The lowest buiIding opening must be at or above 1071 feet, to allow an elevation at least 2 feet above the pond elevation, which is planned to be approximately 1069 fi:et. Building Department approval of the fill and building pad is required prior to construction. Soil correction may be needed to provide a suitable building pad. Structures must be pIaced on suitable fill. Existing fill located on the site cannot be used for building area. The property owners are advised that the subject property and surrounding properties have had drainage issues in the past. Construction of the stormwater pond on site is proposed to provide storage of stormwater and the site is likely to have standing water on site. No structures, grading or fill will be allowed in the drainage and utility easement. All construction work, including grading and sloping, must be done outside of the easement area. Property owners are responsible for all labor and materiaI costs if needed for moving overhead lines or other utilities during and after the house move. Adopted by the City CounciI this 28th day of August, 2007. ATTEST: Gary D. Plotz City Administrator Steven W. Cook Mayor . ~Cc-J ~ . . . . . . MEMORANDUM DATE: TO: August 22, 2007 for the August 28, 2007 City Council meeting Hutchinson City Council FROM: Rebecca Bowers, AICP, Planning Director SUBJECT: ZONING ORDINANCE AMENDMENT REGARDING NON-CONFORMING USES AND STRUCTURES BackQround: The proposed ordinance amendment regarding legally non-conforming uses and structures is needed to bring the City's zoning ordinance into conformance with changes in the State Statutes. The Statute was changed to allow a legally non-conforming use or structure to rebuilt if damaged beyond 50% of the assessed value, provided a building permit is applied for within 180 days of when the property is damaged. Additional information regarding the ordinance is contained in the attached Planning Commission staff report. PlanninQ Commission MeetinQ: The Planning Commission held a public hearing and considered the request at their August 21,2007, meeting. There were no comments from the public on the request. After briefly discussing the merits of the ordinance, particularly in older areas of the city, the Planning Commission unanimously recommended approval. Recommendation: The Planning Commission unanimously recommended approval of the zoning ordinance amendment as stated in the attached ordinance. &JCL-J S DIRECTORS REPORT - PLANNING DEPARTMENT :.,,,""';w:_ ~':-k':~~'__""fi;"";$';~F"' ,r ;"'_;".~ -"'.~. .-",.",:.:,--.:=<,:,#/,/,t?-_jJf;;j!#,/'#;~"",':'-'C""" U';';- . To: From: Date: Subject: Hutchinson Planning Commission Brad Emans, DoIf Moon, Dave Hunstad, Miles Seppelt, Shan Gbimire, Jean Ward, Judy Flemming, John Webster, John Olson, Lenny Rutledge, Kyle Dimler, Kent Exner, John Paulson, Mark Schnobrich, Marc Sebora, Gary Plotz, Ken Merrill, Jim Popp, Dan Hatten, Dick Nagy, Rebecca Bowers and Bonnie Baumetz (persons in attendance at Planning Staff Meeting (in bold) July 31, 2007 for August 21, 2007 Planning Commission Zoning Ordinance Amendment to Section 154,150 Regarding Non-conforming Uses and Structures . . ZONING ORDINANCE AMENDMENT: The proposed ordinance amendment regarding legally non-conforming uses and structures is needed to bring the City's ordinances into conformance with changes in the State Statutes. A "legally non-conforming use or structure" is that which was legal when it was constructed, however it has become non-conforming due to adoption of ordinances over the years. The City of Hutchinson has many structures that were built prior to modern zoning ordinances that have become non- conforming due to ordinance changes. ExampIes would be a house with non-conforming setbacks that was constructed prior to current setback regulations or a single family home located in the C-3 (Central Commercial) district. The existing ordinance does not allow rebuilding of non-conforming uses or structures if damaged beyond 50% of the current value, unless it is reconstructed in conformance with the current ordinance. Therefore, if a structure burned down, it could only be rebuilt by conforming to zoning regulations, uses, setbacks, etc. The intent of the existing regulations is to replace non-conforming structures and uses with conforming structures and uses as they are rebuiIt. However, State Statutes have changed regarding legaI non-conformities requiring an update ofthe City's ordinances. The Statute allows a legally non-conforming use or structure to rebuilt if damaged beyond 50% of the assessed value, provided a building permit is applied for within I80 days of when the property is damaged. Additional language was also added to update the language for reconstruction within the flood plain. The attached draft ordinance contains the necessary changes for the PIanning Commission's review. Conclusion: Staff recommends approval of the attached ordinance to bring the City's regulations into compliance with current Statutes. The Commission should hold a public hearing and provide a recommendation to the City Council. laL~') 3 . . . PUBLICATION NO, ORDINANCE NO. 07-0468 AN ORDINANCE AMENDING THE HUTCHINSON CITY CODE SECTION 154.153 REGARDING NON-CONFORMING USES AND STRUCTURES THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA ORDAINS: Notice of public hearing and publication of said hearing was duly made and determined to the satisfaction of the City Council that it would be in the best interests of the City to amend the City Code to update regulations of nonconforming uses to comply with State Statutes. 9154.153 NONCONFORMING USES OF STRUCTURES. (A) If a lawful use of a structure, or of a structure and premises in combination, exists at the effective date of adoption or amendment of this chapter that would not be allowed in the district under the terms of this chapter, the lawful use may be continued so long as it remains otherwise lawful. (B) The continued use is subject to the following provisions. (1) No structure thus described may be enlarged, extended, converted, reconstructed or structurally altered unless the use of the structure is changed to one permitted within the district in which the building is located. The nonconforming use shall not thereafter be resumed. (2) Should the structure be destroyed by any means to an extent of more than 50% of its assessed market value at time of destruction, it mav be reconstructed if a buildinf! permit is applied for within 180 davs from the date of destruction and the nonconformity is not increased. In this case. the Citv mav impose reasonable conditions upon a buildinfl permit in order to mitiflate anv newlv created impact on adiacent property. shell net bc recanstructed exccpt in cenfa_it}' '.l'it,~ the pr-8',isians af this chapter. (3) Should the structure be moved for any reason for any distance whatsoever, it shall thereafter conform to the regulations for the district in which it is located after it is moved. (4) When a nonconforming use of a structure, or a structure and premises in combination, is discontinued or abandoned for more than one year, the structure, or structure and premises in combination, shall not thereafter be used except in conformance with the regulations of the district in which it is located. Leee-) ~ . . . Ordinance 07-0468 Section 154.153 - Non-conforming uses and structures City Council- 9/11/07 Page 2 (5) When a nonconforming use status applies to a structure and premises in combination, removal or destruction of the structure shall eliminate the nonconforming status of the land. (6) If any nonconforming structure in the floodway or floodfringe district is destroyed by any means, including floods, to an extent of 5 0% or more of its market value at time of destruction, it shall not be reconstructed except in conformity with the provisions of this chapter. However, the City ~ Planning Cemmis,si811 may issue a conditional use permit for reconstruction if the use is located outside the floodway and, upon reconstruction, is adequately flood proofed, elevated or otherwise protected in conformity with H I 54. 085 - I54. 099 of this code, to the extent necessary to maintain elirdbilitv in the National Flood Insurance Prof!ram and not increase flood damaf!e votential or increase the def!ree of obstruction to flood flows in the floodwav. (7) An alteration or addition to any nonconforming structure located only in the flood plain which would result in substantially increasing its damage potential shall be protected in accordance with S S 154.085 - 154.099. (89 Code, S 11.4.04) (Ord. 464, passed I--96) Penalty, see S 10.99 EFFECTIVE DATE OF ORDINANCE. This ordinance shall take effect upon is adoption and publication. Adopted by the City Council this 11th day of September, 2007. Attest: Gary D. Plotz City Administrator Steven W. Cook Mayor 1ou-'J3 . . . MEMORANDUM POLICE I EMERGENCY MANAGEMENT SERVICES TO: Sharon Anderson FROM: Officer Theresa Leider/Investigations DATE: 8/20/2007 RE: Transient Merchant License Background As of today's date, I have completed a background investigation on Charles Homier for a Transient Merchant's License. Mr. Homier has applied and been granted transient merchant license by the City of Hutchinson in 2004, twice in 2002 and in 2001. During the course oLeo in the applicant's b If you have any fu contact me. othis matter, please /1J Ce ') ~ CIi"'\'6/ . III Hassan Street Southeast Hutchinson, MN 55350 (320) 587-5151IFax: (320) 234-4240 City of Hutchinson APPLICATION FOR PEDDLERS, SOLICITORS, AND TRANSIENT MERCHANTS Application Type (choose one) o Solicitor Oil Transient Merchant o Peddler OParade Peddler $100.00 $100.00 $100.00 $25.00 Date of Application 7/18/07 Date(s) of Sale 9/5/07 A lieant Information 2" X 2" Picture Required Name: CHARLES F. HOMIER, JR. Height: ~, 11" Weight: 200 Eye Color: BROWN Driver's License Number: _ State: IN Permanent Address: 601 E. LAMONT RD/HUNTINGTON, IN 4675 . ffilNTINQTON IN 46750 City Stale Zip Permanent Telephone: 260-356-0146 Temporary Address: N If. City Slale Zip Temporary Telephone Access: N I A Have youlJeen convicted of any crime, misdemeanor, or violation of any municipal ordinance, other than traffic violalions? 0 yes ~ no If yes, slate the nature of offense and punishment or penalty assessed therefore: . fJ (e ') . . . City of Hutchinson Applicationfor Peddlers, Solicitors, and Transient Merchants Page2of4 Location Infonnation NATIONAL GUARD ARMORY Localion Name 1200 ADAMS STREET S,E, Location Address HUTCHINSON Ci MN State 55350 Zi Business Infonnation Describe relationship between applicant and employer: SELF - OWNER Describe nature of business and describe item(s) offered; DIRECT RETAIL SALE OF NEW FIRST QUALITY TOOLS AND GENERAL MERCHANDISE, Describe method of delivery: CUSTOMERS WILL TAKE THE MERCHANDISE WITH THEM AT TIME OF PURCHASE, Describe source of supply: HOMIER DISTRIBUTING COMPANY PURCHASES MERCHANDISE FROM NUMEROUS SUPPLIERS Supplier Name S1;/er Phone Numher WEEKLY, MERCHANDISE IN OUR WAREHOUSE IS REPLENSIHED WEEKL , AND IS Supplier Address City State lip MANUFACTURED DOMESTICALLY AND IN THE ORIENT, Supplier Name Suppler Phone Number Supplier Address City Stafe Zip Supplier Name Suppier Phone Number Su lier Address City Stale Z'D Reference Information Provide two (2) property owners (preferably in McLeod County) for character references: SF:F. ENCLOSED Property Owner Name Property (fi1'ner Phone Number Property Owner Address City Slale Zip Property Owner Name Property Owner Phone Number Pro er Owner Address Ci State Zi Loee) . . . City of Hutchinson Applicationfor PeddJers, Solicitors, and Transient Merchants Page 3 of4 Reference Information (continued) List last (up to three (3)) previous city(ies) where you earned on same activity: HOUMA LA 7/1R to 7/72 Date(s) of Activity . City State THIBODAUX T,A 7 III City State CUT OFF LA 7/4 City State to .. 7,1 15 Oate(s) of ActiVIty to 7/P. Date(s) of Activity Checklist The following items need to be completed andlor attached in order for the application to be processed: Application/Investigation fee paid in full (check or money order): Oo/es D no Aoolication comoleted in full and sirned: iJI: yes D no I hereby certify I have completely filled out the entire above application and that the application is true, correct, and accurate. I fully understand that any person who violates any provision of the Peddlers, Solicitors, and Transient Merchants Ordinance No. 673 is guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not exceeding $1,000.00 or by imprisonment for a period not exceeding 90 days or both, plus, in either case, the costs of prosecution. 7/19/07 Date ~/-z.olo'1 H/LkenseslApplicalions/Peddler, Solicitor, TramienLdo<: /.QCe') . . . . CITY OF HUTCHINSON MEMO Finance Department August 23, 2007 TO: MAYOR & CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: 2008 BUDGET HEARING At the last City Council meeting a public hearing was scheduled for the 2008 budget. This will provide the public an opportunity to give their input on the 2008 budget. As we move to the first deadline of September 15th for setting a preliminary tax levy, we will provide you an update on the 2008 proposed budget. H:\DOC\City council memo l.doc -r Co. ~ . . . . . . MEMORANDUM Date: August 15, 2007 To: Honorable Mayor & City Council From: Miles R. Seppelt Economic Development Director RE: "Business Subsidies" Public Hearing for Customer Elation Call Center Before we provide any type of assistance to a business, we are required by state law to hold a public hearing on the proposed assistance. This public hearing has been called and will take place at the City Council meeting of August 28, 2007. Included in your Council packet are: A) Copy of the agreement with Customer Elation, which details the assistance provided as well as the obligations of the company. B) Copy of the resolution approving the granting of a business subsidy. Everything has been previously reviewed and approved by the EDA Finance Team and the EDA Board of Directors. For the public hearing, Shan Ghimire, our EDA intern, will be making a presentation to go through all the provisions of the Business Subsidy Agreement for the benefit of the public and the City Council. 1Gb) Hutchinson . . An fconomic Dcvclopmcnr Aurhority CITY OF HUTCHINSON BUSINESS SUBSIDY AGREEMENT WITH CUSTOMER ELATION, INC. 7[b) . This Business Subsidy Agreement (the "Agreement") is made as of this _ day of August 2007, between the City of Hutchinson, Minnesota (the "Grantor") and Customer Elation Inc. (the "Recipient"). In order to satisfy the provisions of Minnesota Statutes, Sections 116J.993 through 116J.995 (the "Act"), the Recipients acknowledge and agree as follows: 1. Descriotion of Business Subsidy. The Business Subsidy shall include the following: . a. Enactment of a Job Opportunity Build Zone, which shall include all tax exemptions, job credits or other business subsidies provided from the Approval Date until the last date of the Job Zone Term, including but not limited to: i. Exemption from individual income taxes as provided under M.S. 469.316; and ii. Exemption from corporate franchise taxes as provided under M.S. 469.317; and iii. Exemption from the state sales and use tax and any local sales and use taxes on qualifying purchases as provided in M.S. 297A.68, subdivision 37; and iv. Exemption from the state sales tax on motor vehicles and any local sales tax on motor vehicles as provided under M.S. 297B.03; and. v. Exemption from the property tax as provided in M.S. 272.02, subdivision 64; and vi. Exemption from the wind energy production tax under M.S. 272.029, subd. 7; and vii. The jobs credit allowed under M.S. 469.318; b. A Loan in the amount of $500,000 at an annual interest rate of 0% with a term of 7 years funded by the Minnesota Investment Fund. c. At the option of the company. sale of 3.89 acres of the Development Site, legally described as Block 2, Lot 2, Hutchinson Fifth Avenue Industrial Park, under the Hutchinson Economic Development Authority's Land Write Down Program. d. At the option of the company. sale of 1.797 acres of the adjoining development site. Block 2, Lot 1, Hutchinson Fifth Avenue Industrial Park, under the Hutchinson Economic Development Authority's Land Write down Program, provided that the company uses the property for the expansion of its business. . 2. Public Puroose of the Business Subsidv. The publiC purposes of this Business Subsidy are to: a. Enhance the economic diversity of the city b. Create high quality job growth c. Stabilize the community d. Increase the tax base of the community iLb) . 3. Goals of the Business Subsidv. The measurable, specific and tangible goals of the business subsidy that the Qualified Business must achieve are to: a. Create 100 new full-time or full-time equivalent (FTE) jobs within two years of the Benefit Date. As used herein, the terms "full-time", "full-time equivalent" and "(FTE)" means those jobs providing at least 2,080 work hours in a given year. "Benefit Date" means when a Certificate of Occupancy is issued for the Recipients new call center facility located in Hutchinson, Minnesota. b. Maintain the new FTE jobs created as a result of the Project for the entire length of the Job Zone Term and within the subzone boundary. c. Provide a cash wage for the new FTE jobs created at least equal to the U.S. Department of Health & Human Services Poverty Level for a family of four as it stands on the date this agreement is signed, exclusive of benefits. (As of 8(2(2007 this is $9.93 ( hour). d. Provide combined compensation (wage & benefits) for each FTE job created at least equal to 110% of the Federal Poverty Level for a family of four. (As of 8(2f2007this is $10.92 f hour). . 4. Whv the Business Subsidv is Needed. The Business Subsidy is needed because the Grantor is desirous of the Recipient undertaking the Project in order to enhance the economic diversity of the city, create high quality job growth, stabilize the community and enhance the tax base in the Grantor's area of operation and because the Project is not economically feasible for the Recipient to undertake without the Business Subsidy. 5. Continued Operations. The Recipient agrees to continue its operations in the City for at least five (5) years after the Benefit Date, or until the expiration of the JOBZ benefit (currently scheduled for December 31, 2015) whichever is later. As used herein "Benefit Date" means when a Certificate of Occupancy is issued for the Recipients new call center facility located in Hutchinson, Minnesota. 6. Financial Obliqation of the Recipient if Aqreement Not Fulfilled. As required in Minnesota Statutes, Section 116J.994, Subdivision 6, if the Recipient fails to meet the goals contained in paragraph 3 herein, the Recipient will repay all of the Business Subsidy to the Grantor plus interest set at the implicit price deflator defined in Minnesota Statutes, Section 275.70, Subdivision 2, accruing from and after the Benefit Date, compounded semiannually. 7. Reportinq Requirements. a. The Recipient agrees to furnish to the Grantor on or before March 1 in each year the report required in Section 116J.994, Subdivision 7 of the Act on forms developed by the Minnesota Department of Employment and Economic Development. . 7(6) . . . b. If the Grantor does not receive the reports, it will mail the Recipient a warning within one week of the required filing date. If within fourteen (14) days of the post marked date of the warning the reports are not made, the Recipient agrees to pay to the Grantor a penalty of $100 for each subsequent day until the report is filed up to a maximum of $1,000. 8. Parent Corporations. The Recipient warrants that it has no parent corporation. 9. Other Grantors. At this time, the Grantor and the Recipient understand that no other financial assistance aside from that enumerated in this Business Subsidy Agreement is being provided by other state or local government agencies for the Project. 10. Term of Aoreement. This Agreement will be in full force and effect until the earlier of the Recipient meeting all of their obligations hereunder or the provisions of the Act no longer apply to the Grantor, the Recipient or the Project, in which case this Agreement will be terminated. 11. Not a Relocatino Business. The Recipient warrants that it is a business that is expanding its operations and its payroll within the City of Hutchinson JOBZ subzone while maintaining its current operations at its present location. Further, the parties are relying on an opinion provided by the Minnesota Department of Employment and Economic Development (DEED) that the Qualified business IS NOT a relocating business as defined by the JOBZ statute, M.S. 469.310 ~ 469.320. The Grantor and the Recipient have executed this Agreement as of the date written above. Grantor: CITY OF HUTCHINSON, MINNESOTA By Steven W. Cook Mayor By Gary D. Plotz City Administrator Recipient: CUSTOMER ELATION, INC. By Its 7(6) . . . Exhibit A TAX PARCEL Parcel Number Address 23-470-0030 1150 5th Avenue SE Hutchinson, Minnesota, 55350 LEGAL DESCRIPTION Lot 2, Block 2, Hutchinson Fifth Avenue Industrial Park City of Hutchinson, McLeod County, Minnesota 7(b) . RESOLUTION NO. 11~'iq RESOLUTION APPROVING THE GRANTING OF A BUSINESS SUBSIDY WHEREAS, it is the responsibility of the City Council to provide for the health, safety and general welfare of the community, and; WHEREAS, to achieve those goals it is necessary to have a strong and diversified local economy, and; WHEREAS, creating new, high paying jobs and increasing the local tax base provides benefits for the entire community and enhances the long-term economic viability of the City of Hutchinson, and; WHEREAS, Customer Elation, Inc. is a successful and rapidly growing company that will be a valuable addition to Hutchinson's economic base, and; WHEREAS, the Hutchinson Economic Development Authority has carefully reviewed the project and the proposed business subsidies and recommends their approval; . THEREFORE BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF HUTCHINSON, MINNESOTA, Hereby approves the granting of the following business subsides to Customer Elation, Inc.: a. Enactment of a Job Opportunity Build Zone, which shall include all tax exemptions authorized by the JOBZ statute: i. Exemption from individual income taxes as provided under M.S. 469.316; and ii. Exemption from corporate franchise taxes as provided under M.S. 469.317; and iii. Exemption from the state sales and use tax and any local sales and use taxes on qualifying purchases as provided in M.S. 297A.68, subdivision 37; and iv. Exemption from the state sales tax on motor vehicles and any local sales tax on motor vehicles as provided under M.S. 297B.03; and, v. Exemption from the property tax as provided in M.S. 272.02, subdivision 64; and vi. Exemption from the wind energy production tax under M.S. 272.029, subd. 7; and vii. The jobs credit allowed under M.S. 469.318; . b. A Loan in the amount of $500,000 at an annual interest rate of 0% with a term of 7 years funded by the Minnesota Investment Fund. 1 ()-::> ) . . . c. At the option of the company, sale of 3.89 acres of the Development Site, legally described as Block 2, Lot 2, Hutchinson Fifth Avenue Industrial Park, under the Hutchinson Economic Development Authority's Land Write-down Program. d. At the option of the company, sale of 1.797 acres ofthe adjoining development site, legally described as Block 2, Lot 1, Hutchinson Fifth Avenue Industrial Park, under the Hutchinson Economic Development Authority's Land Write-down Program, provided that the company uses the property for the expansion of its business. Adopted by the City Council this 28h day of August 2007. ATTEST: Steven W. Cook Mayor Gary D. Plotz City Administrator 7()Q) . . . ORDINANCE NO, 07-0471 ~ 73,15 ALL-TERRAIN VEHICLE TRAFFIC CONTROL AND REGULA nONS (f.) Seope of applieatiell. Netwithstandiag previsiells efthis tit~e to the eeooary, this seetiell saall apply to eOlltr-ol of traffie ane regulatioll of that eertaill class ef yehieles falliflg within ilie eefinitioH of all terraiH vellicles as to matters set forth hereil'i. .\11 pro'/isiefls ef this title Hot relatiHg to matters herein statee, apj3ly as ellHally to sfle'.vmoeiles as other vehicles. (B) Certain starntes aeoj'ltee. M.S. ~~ 84.92 84.929,asitmltyeeamefldedfrem time to time, together with rules and regulations promulgated therelHlder, are hereey adoj3ted ey reference, iHcol'j'lorated herein, and made a part hereof. (A) DEFINITIONS (1) All-terrain vehicle or vehicle. "All-terrain vehicle" or "vehicle" means a motorized flotation-tired vehicle of not less than three low pressure tires, but not more than six tires, that is limited in engine displacement of less than 800 cubic centimeters and includes a class 1 all-terrain vehicle and class 2 all-terrain vehicle. (2) Class I all-terrain vehicle. "Class I all-terrain vehicle" means an all-terrain vehicle that has a total dry weight of less than 900 pounds. (3) Class 2 all-terrain vehicle. "Class 2 all-terrain vehicle" me.ans an all-terrain vehicle that has a total dry weight of 900 to 1,500 pounds. (B) OPERATING RESTRICTIONS. It is unlawful to operate a Class 1 or 2 ATV as follows: (I) On a public sidewalk or walkway used for pedestrian travel, or upon any boulevard; (2) On private property of another without lawful authority or permission of the occupant or owner; (3) On school grounds, park property, playgrounds, recreational areas and golf courses, without express permission to do so by the property authority; (4) Upon any county road or state highway within the city, or within the designated downtown area as set forth in Chapter 74 Schedule I of this code; (5) Upon any street, other than the most direct route from the owner's or operator's residence to the nearest departure point from the city or appropriate sflo',vmobile trail. When no such route exists without using a county road or state highway, then, in that qC~) . . . event, the owner or operator may operate a sfls'.vmsaile an A TV on the county road or state highway only to the intersection with a street, taking thereafter the most direct route to the nearest departure point from the city or appropriate sHsvlHIsaile trail; (6) During the hours between 10:00 p.m. and 7:00 a.m. of the day next following, Sunday through Thursday, and the hours between 12:00 midnight and 7:00 a.m. of the day next following, Friday and Saturday; (7) At a rate of speed greater than reasonable or proper under all of the surrounding circumstances or in any instance in excess of 20 mph upon a public street; (8) At a speed greater than 10 mph when within 100 feet of any lake shore except in channels or when within 100 feet of a fisherman, ice house, skating rink or sliding area, or where the operation would conflict with the lawful use of property or would endanger other persons or property; (9) In a careless, reckless or negligent manner, so as to endanger the person or property of another or cause injury or damage thereto; (10) To tow any person or thing other than a disabled ATV upon a public street except through the use of a rigid towbar; or (11) To chase or run over any animal, wild or domestic. (C) EQUIPMENT REQUIREMENTS. A person shall not operate an all-terrain vehicle unless the vehicle is equipped with at least one headlight and one taillight, each of minimum candlepower as prescribed by rules of the Commissioner of Public Safety, and with brakes conforming to standards prescribed by rule of the commissioner, and all of which are subject to the approval of the commissioner of public safety. (D) EMERGENCY OPERATION. Notwithstanding any prohibition in this section, an ATV may be operated upon a public street in an emergency during the period of time when, and at locations where, snow upon the roadway renders travel by automobile impossible. (E) OWNER RESPONSIBILITY. It is unlawful for the owner of any A TV to permit its operation in violation of this subchapter. The party holding title to the A TV shall be conclusively presumed to be the owner unless the A TV shall have been stolen and so reported to a law enforcement agency. C1[o.- ) . . . Adopted by the Hutchinson City Council this Steven W. Cook Mayor day of ,2007. Gary D. Plotz City Administrator '1[-"') . . . DEBT SERVICE RESERVE ESCROW AGREEMENT . THIS DEBT SERVICE RESERVE ESCROW AGREEMENT, dated as of 2007, by and between the CITY OF HUTCHINSON, MINNESOTA, a Minnesota municipal corporation (the "City"), HUTCHINSON HEALTH CARE, a Minnesota nonprofit corporation ("HHC") and , a , as Escrow Agent (the "Agent"). RECITALS: WHEREAS, the City and HHC are simultaneously herewith entering into a Lease and Agreement dated as of , 2007 (the "Lease"), pursuant to which the City leases and transfers the operation and assets of the Health Care System (as defined therein) to HHC. WHEREAS, pursuant to the Lease, HHC is required to pay Annual Rent to the City on the dates and in the amounts set forth therein (or otherwise incorporated therein by reference), including an amount equal to all principal and interest due on, or with respect to, the Existing Bonds (defined herein). WHEREAS, the Lease contemplates that the parties will enter into this Debt Service Reserve Escrow Agreement providing for, among other things, the creation and operation of a debt service reserve account upon the terms and conditions hereof. . WHEREAS, the Agent is willing to enter into this Debt Service Reserve Escrow Agreement and to undertake the duties set forth herein upon the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows: 1. DEFINITIONS The following terms when used herein shall have the following meanings: Agent: in, Minnesota, or any successor bank or trust company acceptable to the City and HHC, acting as escrow agent hereunder. Existing Bonds: The following bonds issued by the City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities Revenue Refunding Bonds, Series I998B; Taxable Medical Facilities Gross Revenue Bonds, Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. . fb.us.2146671.02 1 IbCe.. J . . . Maximum Annual Debt Service: As of any date, the greatest amount of principal of and interest due on the Existing Bonds in the then current or any future twelve-month period ending Permitted Investments: Any of the following or any combination of one or more thereof: fb.us.2J 4667 J .02 (a) Direct obligations of the United States of America or obligations the principal and interest of which are unconditionally guaranteed by the United States of America. (b) Bonds, debentures, certificates of participation or notes issued by the Bank of Cooperatives, Federal Financing Bank, Federal Land Banks, Federal Home Loan Mortgage Corporation, Federal Home Loan Banks, Federal Intermediate Credit Banks, Federal National Mortgage Association, Export-Import Bank of the United States, Farmers Home Administration, Government National Mortgage Association or any other agency or corporation which has been or may hereafter be created by or pursuant to an Act of the Congress of the United States or an agency or instrumentality thereof. (c) Shares of an Investment Company registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, which has as an investment objective maintenance of a net asset value of $1.00 per share by investment in "money market" instruments. (d) Commercial paper of United States corporations rated P-l by Moody's Investors Service or rated A-I by Standard & Poor's Ratings Group. (e) Repurchase agreements entered into with dealers in U.S. government securities collateralized at least 102% by bonds or other obligations described in clauses (a) and (b) above if: (i) such obligations are delivered to the Depository or are supported by a safekeeping receipt issued by a depository satisfactory to the Depository, (ii) the value of the underlying obligations shall be maintained at a current market value, calculated no less frequently than monthly, of not less than the current balance of the deposit; (iii) a prior perfected security interest in the obligations which are securing such agreement has been granted to the Depository and (iv) such obligations are free and clear of any adverse third party claims. (f) Interest-bearing time or demand deposits, certificates of deposit, bankers acceptances or other similar banking arrangements with any bank or savings institution (including the Depository), provided that such deposits, certificates and other arrangements are fully insured by 2 I DCA) . the Federal Deposit Insurance Corporation, or secured by obligations described in clauses (a) and (b) above, or a combination thereof. (g) Written investment contracts with a bank, bank holding company, trust company, domestic branch of a foreign bank, domestic corporation or insurance company whose similar obligations are rated "A2" or better by Moody's Investors Service or "AA" or better by Standard & Poor's Ratings Group. Person: Any individual, corporation, partnership, limited liability company, Jomt venture, association, joint stock company, trust, unincorporated organization, government or Indian tribe, or any agency, instrumentality or political subdivision thereof. 2. DEBT SERVICE RESERVE ACCOUNT . Section 2.1. Debt Service Reserve Account. There is hereby created with the Agent a separate account in the name of the Agent on behalf of HHC under this Debt Service Reserve Escrow Agreement designated as the "Debt Service Reserve Account." HHC shall make an initial deposit to the Debt Service Reserve Account on the date hereof in the amount of $ , which is equal to Maximum Annual Debt Service on the Existing Bonds. In the event that amounts paid by HHC pursuant to Section 3.I(a)(2) of the Lease are not sufficient to pay principal of and interest on the Existing Bonds when due, and the City shall give written notice thereof to the Agent, with a copy to HHC, the Agent shall transfer the amount of the deficiency as specified in such written notice from the Debt Service Reserve Account to the City to be applied to the payment of principal of and interest on the Existing Bonds then due. HHC shall promptly restore the amount of any such transfer by deposit with the Agent of moneys in the amount transferred. Section 2.2. Release from Debt Service Reserve Account. The Debt Service Reserve Account shall be maintained by HHC for the benefit of the City for so long as any Existing Bonds remain outstanding. In the event that the amount in the Debt Service Reserve Account exceeds the Maximum Annual Debt Service at any time, HHC shall be entitled to withdraw such excess amount from the Debt Service Reserve Account, by notice in writing to the Agent, with a copy to the City. All investment earnings on amounts on deposit in the Debt Service Reserve Account shall be transferred to HHC upon receipt. Upon written notice from the City that all Existing Bonds have been paid in full, any and all amounts remaining in the Debt Service Reserve Account shall be transferred to HHC. Section 2.3. Investment of Funds. The Agent shall invest and reinvest all money held in the Debt Service Reserve Account in such Permitted Investments as HHC shall from time to time direct pursuant to written instructions. Such Permitted Investments shall be registered in the name of the Agent and held by the Agent. The Agent may purchase or sell to itself or any affiliate, as principal or agent, investments authorized by this Section, as directed in writing by HHC. The Agent shall, without further direction from HHC sell such investments as and when required to make any payment required to be made from the Debt . fb.us.2J46671.02 3 IOLo...) . . . Service Reserve Account. The Agent shall not be responsible or liable for any loss resulting from the making or disposition of any investment pursuant to this Section. Section 2.4. Statements. The Agent shall provide monthly statements to HHC and the City which monthly statements shall include the market value of the investments on deposit therein, and the amount of any investment earnings on deposit therein. 3. THE AGENT Section 3.1. Agent's Rights and Duties. (a) The Agent undertakes to perform such duties as are specifically set forth in this Debt Service Reserve Escrow Agreement, and no implied covenants or obligations shall be read into this Debt Service Reserve Escrow Agreement against the Agent. (b) In the absence of its own negligent acts or omissions, the Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent and conforming to the requirements of this Debt Service Reserve Escrow Agreement; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Agent, the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements hereof. (c) The Agent shall exercise such of the rights and powers vested in it by this Debt Service Reserve Escrow Agreement, and use the same degree of care and skill in its exercise, as a fiduciary would exercise or use in connection with the care and control of another Person's funds. (d) No provision of this Debt Service Reserve Escrow Agreement shall be construed to relieve the Agent from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct. Section 3.2. No Set-Off. The Agent shall not set-off from amounts on deposit in the Debt Service Reserve Account, any obligations or other amounts which may be payable to the Agent by HHC or by any other Person. Section 3.3. Fees and Expenses. HHC agree to pay the Agent its fees and charges for serving as Agent hereunder and to pay and reimburse the Agent on demand for all out-of-pocket expenses (including in each case all filing and recording fees and taxes and all reasonable fees and expenses of counsel) incurred or expended by the Agent in connection with the creation, perfection, satisfaction, foreclosure or enforcement of the security interests granted hereby and the preparation, administration and enforcement of this Debt Service Reserve Escrow Agreement. 4. MISCELLANEOUS tb.us.2146671.02 4 16C~) . . . Section 4.1. Governing Law. This Debt Service Reserve Escrow Agreement shall be construed in accordance with and governed by the internal law of the State of Minnesota. Section 4.2. Severability. If any provision of this Debt Service Reserve Escrow Agreement is prohibited by, or is unlawful or unenforceable under, any applicable law of any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such prohibition without invalidation the remaining provisions hereof. Section 4.3. Limited Indemnity. HHC agree to indemnify and hold the Agent harmless against any loss, cost, expense, damage or liability arising out of or resulting from any misrepresentation by HHC under this Debt Service Reserve Escrow Agreement or from the failure by HHC to observe or perform any agreement or undertaking made by it in this Debt Service Reserve Escrow Agreement or pursuant hereto. Section 4.4. Notices. Any notice to any party to this Debt Service Reserve Escrow Agreement shall be in writing and shall be sent by manual delivery, telegram, telex, facsimile transmission, overnight courier or United States mail (postage prepaid), addressed to such party at the address specified on the signature page hereof, or at such other address as such party shall have specified to the other parties hereto in writing. Section 4.5. Captions. Captions herein are for convenience only and shall not be deemed part of this Debt Service Reserve Escrow Agreement. Section 4.6. Binding Effect. This Debt Service Reserve Escrow Agreement shall be binding upon and inure to the benefit of HHC, the Agent, the City and their respective successors and assigns. Section 4.7. Entire Agreement. This Debt Service Reserve Escrow Agreement constitutes the entire understanding of HHC and the City with respect to the subject matter addressed and supersedes any prior representations or agreements, whether written or oral, with respect to the subject matter hereof. fb.us.2146671.02 fb.llS.214667L02 5 \oc~) . . . HUTCHINSON HEALTH CARE By: Its: And by: Its: Address: fb.us.2146671.02 7 loQAJ . . . IN WITNESS WHEREOF, the parties hereto have executed this instrument under seal as of the day and year first above written. CITY OF HUTCHINSON By: Its: And by: Its: Address: fb.us.2146671.02 6 \bLA) . . . . [AGENT] By: Its: Address: fb.L1s.2146671.02 8 to CIA) . . . Ordinance No. 07-0474 AN ORDINANCE APPROVING A DEBT SERVICE ESCROW AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, the City of Hutchinson has enacted ordinance number 07-0474 which authorizes the City to enter into a lease agreement with Hutchison Health Care concerning the lease of certain property currently owned by the City; and, WHEREAS, said lease requires Hutchinson Health Care to undertake certain financial obligations and make rent payments to the City; and, WHEREAS, to facilitate the exercise of those obligations, the City and Hutchinson Health Care desire to enter into a debt service agreement to ensure that there is adequate security to make said payments in a timely manner, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE DEBT SERVICE ESCROW AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THA T THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of ,2007. Attest: Gary D. Plotz, City Administrator Steven W. Cook, Mayor \6C{,~) . City of Hutchinson - Hutchinson Health Care Summary of Expectations for Attorney Services Background: Hutchinson Area Health care (HAHC) is the City-owned organization that will transfer its operations to Hutchinson Health Care (HHC), a private, nonprofit, 501 (c)(3) organization, on December 31,2007. Over the years, HAHC has paid the City for and used up to 25% ofthe City Attorney's time. As part of the lease arrangement between the City and HHC, HHC will be paying the City a set amount ($160,000 initially, escalating annually by 5%) for use of the property assets and the services of the City Attorney. Following are mutually agreeable expectations that define how HHC can continue to access and use the City Attorney's services on a non-exclusive basis. General Provisions: The parties recognize that the Citv Attorney will be working as General Legal Counsel for both HHC and the City and as such both parties agree to this dual representation as required under Rule 1.7 of Minnesota Rule of Professional Conduct. As previouslv stated in the lease agreement between the parties, the use of the City Attornev services bv HAHC/HHC may be terminated bv either partv at anv time with no reduction in the amount of the payment and its escalator bv HAHC/HHC. . Responsibilities of the City Attorney: . Be available to HHC during normal business hours to respond to requests ofHHC for legal services, and be available for urgent issues during evenings and weekends when not on vacation or away from the area; . Provide legal assistance to HHC, including but not limited to contract review and legal advice on a wide range of issues; . Be present on the HHC campus at least 1 day per week, with the understanding that the Attorney may perform non-HHC work during this time ifHHC does not require legal services and Attorney documents the time spent on non-HHC matters; . Recognize that HHC, not the City, is the client, maintain the attorney-client privilege and confidentiality of all HHC information obtained in representing HHC (both with respect to the City and all other third parties) when working on HCC matters, and address conflicts of interest with the City and other persons in accordance with the rules of professional conduct. . ID (b ') . . . Responsibilities ofHHC: . Provide a locked office area with a telephone and computer access that is secure and used only by the Attorney and Attorney's staff; . Limit requests and usage of the Attorney and staff to 25% of their time, unless mutually agreed to by both parties; . Provide adequate lead time for the Attorney to respond. If there is a time- sensitive need, work will be prioritized; . Reimburse at the sole expense ofHHC Legal Malpractice, errors and omissions and all other appropriate insurance coverage in an amount not less than 4 million dollars. Gary Plotz, City Manager Mary Ellen Wells, HHC President and CEO lOCk::>) . . . Ordinance No. 07-0476 AN ORDINANCE APPROVING AN ATTORNEY SERVICE AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, the Hutchinson City Attorney office has acted as general legal counsel for Hutchinson Area Health Care for the past several years; and, WHEREAS, the Hutchinson City Attorney office is familiar with the operations and staff of Hutchinson Area Health Care; and, WHEREAS, as the successor to Hutchinson Area Health Care, Hutchinson Health Care will employ substantially the same operations and staff; and WHEREAS, Hutchinson Health Care desires to employ, and is willing to pay for, the services of the Hutchinson City Attorney, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ATTORNEY SERVICE AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of ,2007, Attest: Gary D. Plotz, City Administrator Steven W, Cook, Mayor \0 ( ~::;) . . . ASSET VALUATION AGREEMENT The parties to this agreement, the City of Hutchinson ("City") and Hutchinson Health Care ("HHC"), agree that a business valuation study should be undertaken to determine the fair market value, as of December 31, 2007, of the enterprise comprising the Health Care System as that term is defined in Section 1.21 of that certain Lease and Agreement between the City and HHC effective as of December 31,2007 (the "Lease"). Appraiser. The parties agree that the City, as the present owner of the assets, shall select the person or firm that will conduct the valuation of the Health Care System. Method. The City shall select the method after consultation from HHC. Cooperation. The parties shall provide any and all information, financial and otherwise, to the appraiser and will timely respond for inquiries and requests for information from the appraiser and will direct those under its control (e.g. auditors, accountants, etc.) to provide information in this same fashion. Prior to the report's final issuance, the City shall share a draft with HHC. The City shall afford HHC a reasonable opportunity (not less than 30 days) to submit any written comments to the report, which shall be appended to the report as finally issued. The City would have their response to any comments by HHC appended to the report as well. Completion Date. The valuation report shall be completed no later than May 31,2008. Cost. The parties shall split the cost of the valuation equally. HHC City Signature: By: Its: Signature: By: Its: Draft SCMEW823 \() ( C ') . . . Ordinance No. 07-0475 AN ORDINANCE APPROVING AN ASSET V ALUA TION AGREEMENT WITH HUTCHINSON HEALTH CARE WHEREAS, THE City of Hutchinson has enacted ordinance number 07-0475 approving a lease with Hutchinson Health Care for certain assets in Hutchinson used for health care purposes; and, WHEREAS, the parties to the lease agree that the value of those assets be determined in the event, ifat sometime in the future, that those assets are transferred to a third party or are returned to the City; and, WHEREAS, the parameters of that valuation are set forth in the attached exhibit A, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ASSET VALUATION AGREEMENT ATTACHED AS EXHIBIT A TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of ,2007. Attest: Gary D. Plotz, City Administrator Steven W. Cook, Mayor 10([;) . . . ., . . . '., HHCDRAFT 8/14/07 LEASE AND AGREEMENT between CITY OF HUTCHINSON and HUTCHINSON HEALTH CARE Dated: ,2007 \oCJ) " . . . TABLE OF CONTENTS Article Page Article 1. Definitions.. .............. ...... ..... ......... ........ ................... ..................................................2 1.1 Agreement. ............ ......... ..... ..... ............. ............................... ........................... ...2 1.2 Alteration ... ............ .......... ..... .... ........... ..... ......... ... ........ ..... ..................... ............2 1.3 Annual Rent.... ............................... ............... ................... ............... ....................2 1.4 Assigned Contracts.. ............. .... ............ .............. ........ ....... ............. ....................2 1.5 Assumed Liabilities ....... ......... ..... ..... ........ ... ............ ... ..... ...................... .......... ...2 1.6 Auxiliary Improvements......... .......... ...... ....................... ............ ........ ........... ...... 3 1.7 Auxiliary Land .... .... ... .................. ............... ....... .............. ..... ..... .... .....................3 1.8 Auxiliary Property. ................ ..... ......... ..... ........... ......... ......... .............................3 1.9 Birchwood Property.................. ........ ..... ...... .... ...... .......... ................... ................3 1.10 Dassel Medical Center Improvements................................................................3 1.11 Dassel Medical Center Land ..............................................................................3 1.12 Dassel Medical Center Property.........................................................................4 1.13 Effective Date. ....................................................................................................4 1.14 Event of Default..................................................................................................4 1.15 Excluded Assets......... ............... .............. ............... ................ .............................4 1.16 Excluded Liabilities ............................................................................................4 1.17 Existing Bond Documents ..................................................................................4 1.18 Existing Bonds....................................................................................................4 1.19 Hazardous Material.................. ...........................................................................4 1.20 Hazardous Materials Laws .................................................................................5 1.21 Health Care System ............................................................................................5 -1- \C(J) " . 1.22 Health Care System Employees .........................................................................5 1.23 Health Care System Funds .................................................................................5 1.24 Health Care Systems Operations ........................................................................5 1.25 Health Care System Personal Property...............................................................5 1.26 Health Care System Real Property.....................................................................7 1.27 Hospital Improvements ......... ........ .......... ........ .......... ...... ...... .......... ............... ....7 1.28 Hospital Land ................ ............ ......... ....................... ... .... ........ ........... ...............7 1.29 Hospital Leases. ..................... ........ ....... ......... ....... ............ ..... ............... ........ ......7 1.30 Hospital Property.. ....... ........... ....... ....... .......... ...... ................ ................ ..............7 1.31 Improvements ...... ......... .......... ....... ........... ...... ...... ......... ....... ..... ..... .... ............ ....7 1.32 Internal Revenue Code .......................................................................................7 1.33 Inventories and Supplies. ...... ..... ......... ...... ....................................... ..... .............. 7 1.34 Land....... .... ........ ........ ...... ..... ............ .......... ...... ...... .... .......... ..... ...... ..... ... ...........7 1.35 Medical Office Building Improvements.............................................................7 1.36 Medical Office Building Land............................................................................8 1.37 Medical Office Building Leases .........................................................................8 1.38 Medical Office Building Property ......................................................................8 1.39 Nursing Home Improvements ............................................................................8 1.40 Nursing Home Land ...........................................................................................8 1.41 Nursing Home Property ......................................................................................8 1.42 Operating Parameters.... ................ ........ ....... ..... .... ...................... ........... ...... ......8 1.43 Purchase Option.. ........... ....................... ........ ........ ........ ................ .......... .... ........8 1.44 Regional Eye Improvements ..............................................................................8 1.45 Regional Eye Land .............................................................................................8 1.46 Regional Eye Property...................... ..................... .... ................................... ......8 . . -11- \c(~) Restore or Restoration. .......................................................................................8 Shopping Center Improvements....... ............. ................. ...... ..............................9 Shopping Center Land. ........... .............. .... ................... ..... ..... ............. ................ 9 Shopping Center Leases .....................................................................................9 Shopping Center Property ..................................................................................9 Taking. .... ........... ...... ........ .......... ........ .... ........ ........... ............ ..............................9 Tax Exempt Bonds .. ........... ....... ............. ... .... ...,....... ............ ....................... ....... 9 Term.. ...... ............ ..... ........ ... ....... ......... .... ....... ........... .......... ................................ 9 Unavoidable Delays. ........ ........ ... ........ .... ... ........ ..... ...... ...... .............. ........ ..........9 Article 2. Lease, Transfer of Health Care System.....................................................................9 2.1 Lease of Health Care Center Real Property .......................................................9 2.2 Transfer of Health Care System Personal Property.......................................... 10 Article 3. Rent; Consideration........ ...... ...... .... ..... ................ ...... ......... ...... ............ ........ ........ ...1 0 3.1 Annual Rent. ...... ..... ....... ......... ............ ..... ............... ..... ........ .......................... ...1 0 3.2 Assumed Obligations..... ......... ........ ......................... ........... ....... ............... ....... .11 3.3 Additional Costs ...................................................... ........... .... ........... ....... ....... .12 Article 4. Payment of Taxes ....................................................................................................12 Article 5. Repairs and Maintenance ........................................................................................12 Article 6. Insurance.............................. ...................... ............... ..... ...... ............ ....... ....... .... .... ..12 Property Insurance. ..... ........ ....... .............. .......... .:........... ...... .................... ....... .12 Liability Insurance. ......... ..................................... .... .......... ...... ...... ........ ........ ...13 Director/Officer Insurance.... ....... ................. .............. ......... ..................... ....... .13 Worker's Compensation ...................................................................................13 Automobile Insurance ...... ................ ................................................................13 Crime Fidelity......................................................... .................... ... ...... ...... ... ........ 13 " 1.47 . 1.48 1.49 1.50 1.51 1.52 1.53 1.54 1.55 . 6.1 6.2 6.3 6.4 6.5 . 6.6 -111- IO(cI ) . . . 6.7 Policy Requirements ........ ....... .................. ....... ............. .... ..... .... ........ ....... ..... ...13 6.8 HHC's Insurance. .............................................................................................14 6.9 Certificate of Insurance. ...................................................................................14 Article 7. Damage To or Destruction of the Improvements ....................................................14 7.1 Notice; Restoration. ..........................................................................................14 7.2 Payment of Costs; Application of Proceeds. ....................................................14 7.3 No Abatement. ........................... ........ ........ ...... ....... .......... .............. .......... ........14 7.4 Mutual Release. ................................................................................................14 Article 8. Condemnation...... ........... ..... ........ ..... .............. ..... ........ ..... ......... .................. .......... ..15 8.1 Total Taking. ....................................................................................................15 8.2 Partial Taking. ... .............. ................... .............. ...... ...... .................. ........ ..... .....15 8.3 Determination of Partial Taking. ......................................................................15 Article 9. Alterations..... ........ .... .... ........ .......... ..... ....... ............. ... ............... ................ .... .........16 9.1 General........ ............ ........ ................. ..... ...... .......... ......................... ........ ...... .....16 9.2 Permitted Alterations ........................................................................................16 9.3 Permits. .... .......... ............ ............. ....... ............ ......................... ................. .........16 Article 10. Discharge of Liens.................................................................................................16 Article 11. Use of Health Care System Real Property ............................................................16 Article 12. Entry on Property by City......................................................................................17 Article 13. Utilities ....................... ......... ..... ............... ............... ..... ......... ..... ..... ...................... .17 Article 14. Indemnification.... ..... .... .......... ........ ...... ........ ... ... ....... ................................. ..... ..... .17 Article 15. Transfers ................................................................................ ................................17 15.1 By City ..............................................................................................................17 15.2 By HHC ....................................................... ................. ....................................18 -lV- lDCd) . . . Article 16. Estoppel Certificates...... ..... ....... ... .... ....... ............. ................. ........... ...... ............ ...19 Article 17. Representations and Covenants of City .................................................................20 17.1 Power and Authority.........................................................................................20 17.2 Agreement Valid and Binding..........................................................................20 17.3 Tax-Exempt Bonds ...........................................................................................20 17.4 Existing Bonds. ................. ..... .................. ......... ...... ..... ...... .............. .... ....... ......20 17.5 Assigned Contracts; Consents ..........................................................................20 17.6 Cooperation.. ........ .... ......... ...... ........... ....... ..... ................ .......................... ..... ...20 17.7 Trade Secrets ...................................... ..............................................................20 17.8 Environmental Condition .................................................................................20 17.9 Employees.... ............ ................. ... .................. ............. ...... .................. ..... ........21 17.10 Future Financings .............................................................................................21 Article 18. Representations and Covenants of HHC ...............................................................21 18.1 Formation of HHC.... .......... .......... ...... ................. ... ..... .......... ....... ....... ..... ....... .21 18.2 Power and Authority........... .......... ............. .......... ........ ..... ....... ........ .... ....... ......21 18.3 Agreement Valid and Binding..........................................................................22 18.4 Nonprofit Status; Principal Office; Primary Service Area ...............................22 18 .5 Tax-Exempt Bonds.......... ... .......... ..................... ................ .............. .... ...... .... ...22 18.6 Existing Bonds.................... .......... ........... ............ .... ......... ....... .............. ........ ...23 18.7 Health Care Licenses ........................................................................................23 18.8 Medicare Certification............... ................................ ... ........... ......... ......... ...... .24 18.9 Accreditation. ............. ..... ........................ ................. .......... .................. ....... .....24 18.10 Medical Staff..... ...................... ......................................... ..... ..................... ......24 18.11 Employment Offers to Existing Employees; Certain Liabilities ......................24 18.12 Operating Expenses and Taxes.........................................................................25 -v- 10(d) 18.13 Reporting Requirements.. ....... ...... ........ ...... ............. ......... ...... .... ............. .........25 18.14 Indigent Care .............. ........ ... .............. ......... ..... ............. .......................... ....... .25 18.15 Operating Parameters. ..... ...... ...... .............. ........ ............... ......... ...................... .25 18.16 Investments... ..... .............. ........ ...... ................. .................. ........ .................... ....26 Article 19. Condition of Property ............................................................................................26 Article 20. Events of Default; Termination .............................................................................26 20.1 Events of Default. .............................................................................................26 20.2 Repossession. ..... .... .......... ........ ......... ........ ................ .... ...... .................... .... ......27 20.3 Continued Liability........ ......... .... ........ ..... .......... .......... ............. ................ ....... .27 20.4 Re-Ietting .. ....... ............. ........ ........ .... ...... ........... ............. ....... ......... ........ ....... ...27 20.5 No Waiver. .... .... .... ...... .................. ... ..... ......... .... ................... .............. .... ....... ...27 20.6 Exercise of Rights While in Default.................................................................28 Article 21. Surrender of the Property ......................................................................................28 21.1 Surrender of Health Care System Real Property..............................................28 21.2 Disposition of Health Care System ..................................................................28 Article 22. No Merger of Title................................ ............. ...... .......... .... ......... ..................... ..28 Article 23. Quiet Enjoyment. ..... ... .......... ............ ...... ................ ........ ............. ............ ...... ....... .29 Article 24. Notices .................. ...................... .................. ............... ........ ... ....... ....................... .29 Article 25. Contests .................. ...................... ...... ................................. ................ ............... ...30 25.1 Contest.... ............... .......... ........... ......................... ........ ........................ ...... .......30 25.2 Suspension of Obligation............. ... ........................................ ....................... ..30 25.3 Procedure ............... ......................... .... ..... ........ ................. ........................ ........30 Article 26. Purchase Option...... ................................................. .......... ......... ...........................30 26.1 Grant... ................ ........................... ..... .................. ........................ ....................30 . 26.2 Title.............. ............... ....................................................... .... ...........................31 . . -Vl- /D(d) . . . 26.3 Closing.. ......... ......... ...... ................. ........ ........ ....... ......... ................. ............... ...31 26.4 Effect of Non-Exercise .....................................................................................31 Article 27. Miscellaneous...... ......... ........................ ..... ............................ .... ... ....... ..... ............. 31 27.1 Consent ......... ....... ....... ... .......... ...... ........ ........... ........ .... ..... ..........................:....31 27.2 Relationship of Parties.... ...... ......... ...... ......... ............ ......... ............. ................. .32 27.3 Miscellaneous. ....... ..... .... ..... .......... ...... ..... ............ .... ....... ............... ..................32 27.4 Recording...... ...... ........... ....... ......... .................. ................ ..... .......... ..... ........ ..... 32 27.5 Non-Delegation and Lack of Control...............................................................32 Exhibit A - Legal Description of the Land Exhibit B - Excluded Assets Exhibit C - Motor Vehicles -VB- lOCd) . . . LEASE AND AGREEMENT This Lease and Agreement is made and entered into as of the _ day of , 2007, by and between the City of Hutchinson, a Minnesota municipal corporation ("City"), and Hutchinson Health Care, a Minnesota nonprofit corporation ("HHC"). RECITALS WHEREAS, City owns the Hospital Property, the Nursing Home Property, the Medical Office Building Property, the Shopping Center Property, the Dassel Medical Center Property, the Regional Eye Property, and the Auxiliary Property, each as hereinafter defined. WHEREAS, the Hospital Property, the Nursing Home Property, the Medical Office Building Property, the Shopping Center Property, the Dassel Medical Center Property, the Regional Eye Property, and the Auxiliary Property (collectively, the "Health Care System Real Property") are operated by City as elements of a coordinated Health Care System, as hereinafter defined. WHEREAS, City has determined that it is in the best interest of the delivery of health care to residents of the City of Hutchinson and the community served by the Health Care System to lease and transfer the operation and assets of the Health Care System to a private, nonprofit, non"governmental corporation. WHEREAS, HHC is a nonprofit corporation organized under the laws of the State of Minnesota for the purpose of acquiring and operating the Health Care System. WHEREAS, City has the statutory power and authority, pursuant to Minnesota Statutes ~~ 144.581 and 447.47, to lease and transfer the Health Care System to HHC. WHEREAS, HHC has the power and authority to accept the lease and transfer of such assets and operations from City under the terms and conditions set forth herein. WHEREAS, City has concluded, following many months of analysis, public input and consultation with health care experts, that the lease of the Health Care System is likely to: (i) enhance operating efficiencies and effectiveness, (ii) enhance the Health Care System's ability to form linkages with other health care institutions and providers to form an integrated delivery system offering an increased continuum of care to the residents of City, (iii) improve the environment for physician and allied health professional recruitment and retention, and (iv) promote the Health Care System's ability to maintain financial viability and adaptability to future changes and challenges in the health care environment, especially those posed by state and national health care reform. -J- I oC.J ) . . . WHEREAS, City has concluded that the community served by the Health Care System will be best served by undertaking transactions described in this Agreement. WHEREAS, City and HHC intend for HHC to operate the Health Care System in a private, non-governmental capacity, not subject to any of the laws of the State of Minnesota or of the federal government that apply exclusively to governmental bodies or instrumentalities thereof. WHEREAS, HHC intends to operate the Health Care System in a manner consistent with its charitable purposes, including, but not limited to enhancing the health of people in the communities it serves without expectation of financial gain. NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth herein, the parties hereto agree as follows: Article 1. Definitions The following terms shall have the meanings set forth in this Article: 1.1 Agreement. This Lease and Agreement, including the following exhibits attached hereto and made a part hereof: Exhibit A - Legal Description of the Land Exhibit B - Excluded Assets Exhibit C - Motor Vehicles 1.2 Alteration. Construction, reconstruction, replacement, repairs, renewals, alterations, changes, additions, improvements and demolitions of or to the Improvements and all excavations at any time made or to be made in, or on about the Land, or any part thereof. ].3 Annual Rent. The Annual Rent at the per annum rate provided for in Section 3.1 of this Agreement. 1.4 Assigned Contracts. All service and maintenance contracts, commitments, guarantees, indentures, insurance policies and contracts, leases and other contracts regarding the Health Care System Real Property and the Health Care System Operations, but excluding any contracts that are part of the Excluded Assets. ].5 Assumed Liabilities. All of the following debts, obligations, accounts payable, claims and other liabilities of City (excluding, in each case, any Excluded Liabilities): (a) All payment obligations, other obligations and liabilities arising under the Assigned Contracts; -2- 10(4') . . . (b) Any materialmen, mechanics or other liens against the Health Care System Real Property; (c) All employee liabilities arising from Health Care System Operations, including but not limited to any costs, settlement amounts, insurance deductibles and other expenses associated with any employment-related legal claims brought by City employees arising from the termination of their employment for Health Care System Operations; (d) Any fines, penalties or other payments, or repayments, required to be made to any governmental entity in connection with Health Care System Operations prior to the Effective Date; (e) Claims relating to generation, manufacture, storage or release of Hazardous Materials on or about the Health Care System Real Property or with respect to the Health Care System Operations; and (f) All other liabilities and obligations of City, whether known or unknown, contingent or otherwise, incurred or arising in connection with Health Care System Operations prior to the Effective Date. 1.6 Auxiliarv Improvements. The building, fixtures and other improvements now or hereafter located on the Auxiliary Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.7 Auxiliarv Land. The land, but not any Improvements, situated in McLeod County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.8 Auxiliarv Propertv. The Auxiliary Land and the Auxiliary Improvements, collectively. 1.9 Birchwood Propertv. The land and improvements at 710 Park Island Drive SW, Hutchinson, Minnesota. 1.10 Dassel Medical Center Improvements. The building, fixtures and other improvements now or hereafter located on the Dassel Medical Center Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.11 Dassel Medical Center Land. The land, but not any Improvements, situated in Meeker County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. -3- I Oed) . . . 1.12 Dassel Medical Center Propertv. The Dassel Medical Center Land the Dassel Medical Center Improvements, collectively. 1.13 Effective Date. December 31, 2007. 1.14 Event of Default. As defined in Section 20.1 of this Agreement. 1.15 Excluded Assets. Those assets owned by City as of the Effective Date which shall be and remain the assets of City and not leased or transferred to HHC pursuant to this Agreement, as such assets are more specifically identified on the attached Exhibit B. 1.16 Excluded Liabilities. Any and all debts, obligations, claims, and other liabilities of City: (a) to the extent such debts, obligations, claims or other liabilities of City are covered by an existing insurance policy maintained by City; (b) to the extent that the assumption of which by HHC would eliminate or limit the governmental immunity which would otherwise be available in regard to such debt, obligation, claim or other liability (and nothing herein shall grant to any person not a party hereto any right to payment or indemnification for any event occurring prior to the Effective Date which would not have existed had City not entered into the transactions contemplated hereby); (c) which results from any act or omission of City (or any of its elected officials, employees, contractors, or agents) acting in, or in furtherance of, City's governmental function, and not in connection with, or in furtherance of, the Health Care System or Health Care System Operations; or (d) which results from a breach of this Agreement by City or the existence of which constitutes a misrepresentation by City under this Agreement. 1.17 Existing Bond Documents. All documents, instruments and agreements executed and delivered in connection with the issuance of the Existing Bonds. 1.18 Existing Bonds. The following bonds issued by City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities Revenue Refunding Bonds, Series 1998B; Taxable Medical Facilities Gross Revenue Bonds, Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. 1.19 Hazardous Material. Any substance, chemical, waste or material that is or becomes regulated under applicable law because of its toxicity, infectiousness, radioactivity, explosiveness, ignitability, corrosiveness or reactivity, including asbestos, urea -4- ]C{j) . . . formaldehyde, polychlorinated biphenyls, nuclear fuel or materials, radioactive materials, explosives, known carcinogens, petroleum products and by-products and any substance, chemical, waste or material regulated by any Hazardous Material Law. 1.20 Hazardous Materials Laws. Each federal, state, county, municipal, local or other law, statute, code, ordinance, rule or regulation which relates to or deals with human health or the environment in the jurisdiction in which the Health Care System, or any part thereof, is located. 1.21 Health Care System. The Health Care System Real Property, the Health Care System Personal Property, and all other real or personal property purchased, leased or otherwise acquired by HHC (or by City, with respect to any real property acquired by City for the use of HHC and inclusion with the Health Care System Real Property) on or after the Effective Date, together with the operations, infrastructure, systems, processes, assembled work force and other intangibles necessary for the conduct of a healthcare delivery system of the scope and nature as that operated by City prior to the Effective Date. 1.22 Health Care System Employees. All full and part time employees of the Health Care System as of the Effective Date. 1.23 Health Care Svstem Funds. All of City's right, title and interest in or to all cash, bank accounts, savings and loan accounts, certificates of deposit, money market accounts, treasury bills, investments (whether debt or equity, liquid or illiquid), reserves or other cash items held in the name of, or on behalf of, City in connection with Health Care System Operations. 1.24 Health Care Svstems Operations. The operation of the Health Care System, including operation of its various components as an acute care hospital, a surgical center, a skilled nursing facility, a medical office building, an outpatient clinic, and administrative facilities. 1.25 Health Care Svstem Personal Property. All right, title and interest of City in and to the following property (excluding, in each case, the Excluded Property): (a) All machinery, furniture and equipment, including hospital, medical and office equipment, and other fixed assets owned by City and used in connection with the operation of the Health Care System Real Property, or any part thereof; (b) All motor vehicles owned by City and used in connection with the operation ofthe Health Care System Real Property, including without limitation the motor vehicles listed on the attached Exhibit C; (c) All trademarks, servicemarks and names owned by City and used in connection with the operation of the Health Care System Real Property, Health Care System Operations, or any part or combination thereof; -5- \o{J) . (d) All accounts receivable and other amounts owed to City or its health care operating units and arising out of the use, operation or ownership of the Health Care System Real Property or arising from Health Care System Operations; (e) The benefit, but not outright ownership, of the gifts, bequests, donations or other endowments specifically given for the benefit of or restricted to'the use of the Health Care System Real Property, Health Care System Operations, or any part or combination thereof; (f) All rights under the Assigned Contracts, including all rights to receive goods or services, to use and occupy personal and leased real property or to receive payment for goods or services rendered, or other benefits arising under such contracts; (g) All Inventories and Supplies; (h) All trade secrets and other confidential information concerning Health Care System Operations not in the public domain and in existence on the Effective Date; . (i) All medical records of Health Care System patients in existence on the Effective Date; (j) All business records arising from the use of the Health Care System Real Property or Health Care System Operations in existence on the Effective Date; (k) All Health Care System Funds; (I) Any prepaid expenses arising from the operation or use of the Health Care System Real Property or from Health Care System Operations in existence on the Effective Date; (m) any and all shares, member interests, partnership interests, member control agreements or other interests held by City in any joint venture, partnership, limited liability company, corporation, or other entity or organization formed in relation to, in support of, or otherwise in connection with the Health Care System Real Property or Health Care System Operations, including, without limitation, City's interests in the joint ventures known as ConnectCare operating from the Birchwood Property and Hutchinson Diagnostic Center; . (n) The right to any and all recovery from all collection cases in progress on the Effective Date for goods furnished or services rendered in connection with Health Care System Operations; -6- I o [d) . . . and all of such other assets owned by City in connection with the operation of the Health Care System Real Property, other than the Excluded Assets, as of the Effective Date. Further, for purposes of this Agreement, the term "Health Care System Personal Property" shall (i) include all additions, alterations, changes, and substitutions in and to all or any part of the Health Care System Personal Property made after the Effective Date, and (ii) exclude all Health Care System Personal Property transferred or sold in accordance with Article 15 hereof on or after the Effective Date. 1.26 Health Care System Real Property. As defined in the Recitals hereof. 1.27 Hospital Improvements. The building, fixtures and other improvements now or hereafter located on the Hospital Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.28 Hospital Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.29 Hospital Leases. Any and all tenant leases with respect to the Hospital Land or Hospital Improvements in effect on the Effective Date. 1.30 Hospital Property. The Hospital Land, the Hospital Improvements, and the Hospital Leases, collectively. 1.31 Improvements. The Hospital Improvements, the Medical Office Building Improvements, the Nursing Home Improvements, the Shopping Center Improvements, the Dassel Medical Center Improvements, the Regional Eye Improvements, and the Auxiliary Improvements, collectively. 1.32 Internal Revenue Code. The Internal Revenue Code of 1986, as amended, and any replacement or successor code. 1.33 Inventories and Supplies. All items of consumable personal property owned by City or held by City in connection with the Health Care System Operations. 1.34 Land. The Hospital Land, the Nursing Home Land, the Medical Office Building Land, the Shopping Center Land, the Dassel Medical Center Land, the Regional Eye Land, and the Auxiliary Land, collectively. 1.35 Medical Office Building Improvements. The building, fixtures and other improvements now or hereafter located on the Medical Office Building Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. -7- IOCA) . 1.36 Medical Office Building Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.37 Medical Office Building Leases. Any and all tenant leases with respect to the Medical Office Building Land or Medical Office Building Improvements in effect as of the Effective Date. 1.38 Medical Office Building Propertv. The Medical Office Building Land, the Medical Office Building Improvements, and the Medical Office Building Leases, collectively. 1.39 Nursing Home Improvements. The building, fixtures and other improvements now or hereafter located on the Nursing Home Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.40 Nursing Home Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.41 Nursing Home Propertv. The Nursing Home Land and the Nursing Home Improvements, collectively. . 1.42 Operating Parameters. The financial, quality and operating parameters set forth in Exhibit A to the Bylaws of HHC, as amended from time totime. 1.43 Purchase Option. HHC's right to purchase City's interest in the Health Care System Real Property in accordance with Article 26. 1.44 Regional Eve Improvements. The building, fixtures and other improvements now or hereafter located on the Regional Eye Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.45 Regional Eve Land. The land, but not any Improvements, situated in McLeod County, Minnesota, and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.46 Regional Eye Property. The Regional Eye Land and the Regional Eye Improvements, collectively. 1.47 Restore or Restoration. The repair, restoration or rebuilding of the Health Care System or any part thereof following any Taking, damage to or destruction of the same by fire or other casualty, in accordance with applicable legal requirements, with such Alterations as may be determined by HHC, together with any temporary repairs and property protection pending completion of the work. . -8- IOCJ) . . . 1.48 Shopping Center Improvements. The building, fixtures and other improvements now or hereafter located on the Shopping Center Land and all alterations and additions thereto and replacements thereof, including by reason of Restoration. 1.49 Shopping Center Land. The land, but not any Improvements, situated in McLeod County, Minnesota and legally described on Exhibit A attached hereto, together with all easements, appurtenances and hereditaments pertaining thereto. 1.50 Shopping Center Leases. Any and all tenant leases with respect to the Shopping Center Land or Shopping Center Improvements in effect as of the Effective Date. 1.51 Shopping Center Propertv. The Shopping Center Land, the Shopping Center Improvements, and the Shopping Center Leases, collectively. 1.52 Taking. A taking of all or any part of the Health Care System Real Property, or any interest therein or right accruing thereto, including, without limitation, any right of access thereto existing on the date of this Agreement, as the result of or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain. The Taking shall be deemed to occur on the date on which the condemning authority takes possession. 1.53 Tax Exempt Bonds. The following bonds issues by City; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A 1.54 Term. The term of this Agreement as provided in Article 2. 1.55 Unavoidable Delavs. Acts of God, casualties, war, civil commotion, embargo, riots, strikes, unavailability of materials (but not unavailability of funds), contractor defaults and any other events which are not within the reasonable control of the party in question to prevent, control or correct. Article 2. Lease. Transfer of Health Care Svstem 2.1 Lease of Health Care Svstem Real Propertv. City does hereby demise and lease to HHC, and HHC does hereby take and hire, upon and subject to the terms and conditions of this Agreement, the Health Care System Real Property for a term commencing on the Effective Date and ending thirty (30) years after the Effective Date. As long as HHC is not in default of this Agreement and at any time prior to the commencement of the 29th year of this Agreement HHC may notify City of its intention to renew this Agreement upon the same terms and conditions as contained herein for one additional thirty (30) year term or -9- IO{d) . . . exercise the Purchase Option described in Section 26.1 of this Agreement as of the expiration of the initial term. 2.2 Transfer of Health Care Svstem Personal ProDertv. In consideration of the amounts paid and to be paid by HHC pursuant to Article 3 of this Agreement, City hereby grants, bargains, sells and conveys unto HHC all of City's right, title and interest in and to the Health Care System Personal Property, effective as of the Effective Date. Article 3. Rent: Consideration 3.1 Annual Rent. (a) For the Health Care System Real Property, the Annual Rent during the Term shall be the following: (1) One Hundred Sixty Thousand and nollOOths Dollars ($160,000.00) per annum for the calendar year ending on December 31, 2008, which per annum amount shall be adjusted for calendar year 2009, and each calendar year thereafter during the Term, to equal, in each calendar year, 105% of theamount payable for the immediately precedingcal~Ildar ear; verify whether the current "payment in lieu" isalsQma~'; . basis, and jf not, whether the first year's rentorthe 11lstyi:l!.l:*)iP~ needs. to be pro-ratedtothes~b-year.] (2) an amount equal to all principal, interest, paying agent fees, registrar fees, bond trustee fees and expenses incurred under the terms of the applicable bonds, and bond reserve fund payments due on, or with respect to, the Existing Bonds and any additional Tax-Exempt Bonds or other bonds issued pursuant to Section 17.10 of this Agreement; (3) an amount equal to all reasonable sums, fees and expenses, including reasonable legal fees, of City incurred in connection with the issuance, payment, redemption and exchange of the Existing Bonds; (4) an amount equal to all expenses, including reasonable legal fees, incurred by City in order to enforce any obligation materially breached by HHC under this Agreement; and (5) an amount equal to any reasonable, direct, out-of-pocket transaction expenses, including reasonable legal fees and consulting fees, incurred by City in connection with any transfer, sublet, sale, assignment, release or other transaction involving any Health Care System Real Property under Article 15. -10- I DCd) . (b) Commencing as of the Effective Date and continuing thereafter for the Term, HHC covenants and agrees to pay to City the Annual Rent: (I) in the case of that part of Annual Rent specified in Section 3.1(a)(l), at the per annum rate set forth in Section 3.1(a)(I), payable in two equal installments in advance on or before the 15th day of May and October during the Term, and at that rate prorated and payable in advance for any portion of a calendar year at the commencement or the end of the Term; and (2) in the case of that part of Annual Rent specified in Section 3.1(a)(2), the amounts required from time to time due on, or on account of, the Existing Bonds, payable at least fifteen (15) business days prior to the date each such payment is due on, or on account of, the Existing Bonds; (3) in the case of any other component of Annual Rent specified in Section 3.1, payable in the ordinary course of business following receipt of an invoice from City or copies of applicable vendor invoices, but in any event not more than sixty (60) days following receipt by HHC of such invoices, and . (4) on the Effective Date of the Lease, deposit by HHC of funds into an escrow account in accordance with the Escrow Agreement attached as Exhibit D, which City may draw upon in the event monthly rent payments made to City on the payment due dates for the Existing Bonds are insufficient to make the full payment required. In the event of an early termination of this Agreement for any cause other than HHC's default, any Annual Rent paid in advance shall be prorated as of the date of such termination with the portion properly allocated to the period following termination refunded to HHC upon such termination. (c) All Annual Rent shall be paid by HHC to City at the address of City set forth in Section 24, or to such other address as City may direct by written notice to HHC. (d) It is the purpose and intent of City and HHC that the Annual Rent shall be net to City and that HHC shall pay Annual Rent and other amounts payable by HHC under this Agreement without notice or demand and without abatement, deduction or setoff, except as otherwise provided in this Agreement. 3.2 Assumed Obligations. In consideration of the leases and transfers made by City to HHC pursuant to Article 2 hereof, HHC hereby agrees (a) to assume, pay, and perform the Assumed Liabilities, effective as of the Effective Date, and (b) to operate the Health Care System in accordance with the covenants set forth in this Agreement, including, without limitation, the covenants set forth in Article 18 hereof. HHC shall pay, or otherwise . -I] - loci) . . . cause to be satisfied or discharged, all Assumed Liabilities when due under their terms. HHC may, at its expense and in its own name and behalf, or, to the extent lawful, in the name and behalf of City, in good faith, contest the payment of any such Assumed Liabilities and, in the event of any such contest, permit any such Assumed Liabilities to remain unpaid during the period of such contest and any appeal therefrom. City will cooperate fully with HHC, at HHC's expense, in any such contest. City shall continue to be responsible for the Excluded Liabilities, except as specifically provided herein. 3.3 Additional Costs. On or before the Effective Date, HHC shall pay City's reasonable, direct, out-of-pocket transaction expenses, including reasonable legal fees and consulting fees incurred by City in connection with the transactions contemplated by this Agreement. Article 4. Payment of Taxes City and HHC anticipate that some or all of the Health Care System Real Property is or will be exempt from real estate taxation. However, if and to the extent that real estate taxes or installments of special assessments became due and payable with respect to the Health Care System Real Property during the Term, HHC agrees to pay all such amounts, prorated for any period before or after the Term. City and HHC agree that HHC's agreement to pay all applicable real estate taxes and special assessments does not constitute a waiver of any exemption from said taxes or assessments to which the Health Care System Real Property or HHC may be entitled. Article 5. Repairs and Maintenance Throughout the Term, HHC, at its sole cost and expense, shall take good care of the Health Care System Real Property, and shall at all times keep the same in good order and condition, ordinary wear and tear excepted, and make all necessary repairs thereto, interior and exterior, structural and non-structural. All repairs by HHC shall be effected with due diligence and in a workmanlike manner in compliance with all legal requirements and shall be fully paid for by HHC. Article 6. Insurance 6.1 Property Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term a so called "all-risk" property insurance policy including the perils associated with mechanical breakdown (boiler and machinery) insuring the full replacement cost of the Improvements exclusive of excavations, footings, and foundation below the lowest floor level. The property policy shall also provide "all risk" coverage insuring at full replacement cost values for the improvements & betterments and -12- lord} . . . personal property. Such insurance shall name City and HHC as insureds as their interest may appear. 6.2 Liabilitv Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term commercial general public liability and professional liability insurance against claims of bodily injury, death, personal injury or property damage occurring on, in or about the Property, with a combined single limit of not less than $2,000,000 each claim/occurrence and an aggregate limit of not less than $4,000,000, naming City as an additional insured. 6.3 Director/Officer Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, insurance or self-insurance with a minimum limit of $2,000,000 each claim/aggregate against all such liabilities and in such amounts as are required and procurable to reasonably protect the directors, officers and employees of HHC from claim of liability in connection with the management, operation, administration and maintenance of the Health Care System and the selection and supervision of its employees, volunteers and medical staff. 6.4 Worker's Compensation. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, workers compensation insurance or self- insurance in accordance with applicable Minnesota Statutes. 6.5 Automobile Insurance. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, automobile insurance with a minimum liability limit of $2,000,000 naming the City as an additional insured. Such coverage shall extend to all owned, hired and non-owned automobiles. 6.6 Crime Fidelitv. HHC, at its cost, shall procure and maintain or cause to be procured and maintained during the Term, Employee Dishonesty and Depositors Forgery coverage with minimum limits of $500,000. 6.7 Policy Requirements. Employer's Liability, Commercial General Liability, Professional Liability and Automobile Liability may be arranged under single policies for the full minimum limits required, or by a combination of underlying policies with the balance provided by an Excess or Umbrella Liability policy. All insurance provided for in this Article 6 shall: (a) be issued by insurance companies carrying an A M Best policyholder rating of at least A- and a financial size rating of at least VIII or subject to acceptance by the City, or be provided under a plan of self-insurance; (b) provide that policies of insurance may not be changed or canceled without at least 30 days (or 10 days, in the case of non-payment of premium) written notice of cancellation to the City and HHC; and -13- IOCc\) . (c) provide that, in the case of the property insurance required by Section 6.1, losses shall be adjusted with the insurers and/or underwriters by City and HHC, unless HHC Restores the Improvement, in which event HHC shall be authorized exclusively to adjust the loss and receive the proceeds to pay for Restoration as Restoration progresses in accordance with this Agreement. 6.8 HHC's Insurance. Proceeds' of any insurance carried by HHC on the Health Care System Personal Property shall be payable directly to HHC and HHC shall have the exclusive right to adjust and settle losses with respect thereto. 6.9 Certificate of Insurance. On or before the Effective Date and thereafter prior to expiration of the term of any expiring policy, HHC shall provide to City original certificates from the issuing insurance companies evidencing that the policies required to be carried by HHC are in full force and effect. Article 7. Damage To or Destruction of the Imorovements 7.1 Notice; Restoration. In case of any material damage to or destruction of any part of the Improvements, HHC shall give notice thereof to City and HHC shall promptly and with all diligence at HHC's expense, commence and complete Restoration of such portion of the Improvements so damaged or destroyed. Unless City otherwise consents, any replacement building(s) to be constructed shall be of a quality not less than the quality of the Improvement, as the same existed immediately prior to such damage or destruction. . 7.2 Pavment of Costs; Aoplication of Proceeds. The costs of any Restoration performed by HHC in accordance with Section 7.1 shall be paid by HHC, and any insurance proceeds that are received by it in accordance with subsection 6.6(c) on account of any damage to or destruction of the Improvements or any part thereof shall be used for that purpose. Any insurance proceeds remaining following the payment of all costs of Restoration shall be retained by HHC, for its use in the operation of the Health Care System, and otherwise for its use in a manner consistent with its mission and purpose. 7.3 No Abatement. There shall be no abatement of Annual Rent in the event of any damage or destruction to all or any part of the Health Care System. 7.4 Mutual Release. Notwithstanding any other provision of this Agreement, each party hereby releases the other (and each party for which such other may be responsible) of liability for any damage to the Improvements and the Health Care System Personal Property which is coverable by the insurance described in Section 6.1 above (or which could be covered by such insurance ifHHC were to carry insurance on the Health Care System Personal Property), whether or not such damage is caused by the negligence or other fault of the party so released or any party for which it may be responsible. . -14- \oed) . . . Article 8. Condemnation 8.1 Total Taking. In the event of a Taking of the whole or substantially all of the Health Care System Real Property, this Agreement shall terminate on the date of such Taking, and the Annual Rent and all other sums and charges required to be paid by HHC hereunder shall be apportioned and paid to the date of such Taking. In the event of any such Taking and notwithstanding the termination of this Agreement, and provided City is not the party which commenced the Taking, City and HHC shall together make one claim for an award for their combined interests and the net award received shall be allocated between City and HHC on the basis of their respective interests therein, including in the case of City the value of its reversion interest in the Health Care System Real Property and, in the case of HHC, the bargain value, if any, of its leasehold estate computed as though the Agreement had not been terminated, and damages sustained as a result of termination of the Agreement prior to the end of the Term. In addition, HHC shall be entitled to any award made in respect of or allocable to the Health Care System Personal Property and for moving, relocation and other statutory benefits. 8.2 Partial Taking. In the event of a Taking of less than substantially all of the Health Care System Real Property, this Agreement shall continue in full force and effect, and HHC shall at HHC's expense with reasonable diligence (subject to Unavoidable Delays) commence and complete Restoration, except to the extent made unfeasible by any reduction in area of the Land or Improvement caused by such Taking. All awards made in respect of or allocable to the Health Care System Real Property shall be distributed as follows and in the following order: (a) For the purpose of Restoration, in accordance Section 7.2, including the last sentence thereof, as if the same were insurance proceeds; and (b) HHC shall receive the balance of the award, for its use in the operation of the Health Care System, and otherwise for its use in a manner consistent with its mission and purpose. (c) In the event of a Partial Taking, City shall, to the extent there are available condemnation proceeds therefor, make a good faith effort to acquire such adjacent land in lieu of that taken as may be needed for restoration of the Property and requested in writing by HHC. 8.3 Determination of Partial Taking. As used herein, a Taking of substantially all of the Health Care System Real Property shall mean a Taking of such portion as renders it in HHC's good faith business judgment uneconomical or unfeasible to operate the Health Care System Real Property for the purpose for which the Health Care System Real Property was operated prior to such Taking. -15- I DC c\ ) . . . Article 9. Alterations 9.1 General. HHC shall have the right from time to time during the Term to make, at its expense, Alterations in or to the Improvements, subject in all cases to the further provisions of this Article 9 and to all other applicable provisions of this Agreement. 9.2 Permitted Alterations. Subject to any applicable provisions of this Agreement, HHC shall have the right at any time during the Term to make such reasonable changes in and additions and alterations, structural or otherwise, to the Health Care System Real Property as HHC shall deem necessary or desirable for its operation of the Health Care System, provided that: (a) the work is performed in a good and workmanlike manner and in accordance with all applicable laws, ordinances, rules and regulations; and (b) no change, alteration, modification, or addition shall at any time be made that shall impair the structural soundness or diminish the value of any improvement. 9.3 Permits. Before any Alterations are begun, HHC shall procure, at its expense, all necessary licenses, permits, approvals and authorizations from all governmental authorities and shall, on demand, deliver photocopies thereof to City. Upon HHC's request, City shall join in the application for such licenses, permits, approvals and authorizations whenever such action is necessary. All Alterations shall be made and completed in accordance with all legal requirements. Article 10. Discharge of Liens Each of City and HHC agrees not to create, and shall discharge, liens or notices of claims of liens of mechanics and materialmen for work or materials contracted to be supplied to the Health Care System Real Property by City or HHC, respectively, subject to contest by HHC in accordance with Article 25. Article 11. Use of Health Care System Real Property HHC may use and occupy the Health Care System Real Property for Health Care System Operations, and any other lawful purposes, subject to the requirements ofHHC's Articles ofIncorporation and Bylaws and the Existing Bond Documents. -16- lo(J) . . . Article 12. Entrv on Property bv City HHC shall. permit City and its authorized representatives to enter the Health Care System Real Property at all reasonable times for the purpose of inspecting the same, and showing the same to prospective purchasers and (during the last six (6) months of the Term only) tenants. Article 13. Utilities HHC shall pay all charges for the use at the Health Care System Real Property of water, sewer, electricity, heating, air conditioning and all other utilities consumed during the Term. Article 14. Indemnification Subject to Section 7.4, HHC shall defend, indemnify and save City harmless from and against all liabilities, claims, judgments, costs and expenses, including, but not limited to, reasonable attorneys' fees, to the extent arising by reason of or relating to the Health Care System, Health Care System Operations, or Health Care System Employees, whether known or unknown, whether arising before or after the Effective Date, excluding, in each case, all liabilities, claims, judgments, costs and expenses that constitute Excluded Liabilities. Article 15. Transfers 15.1 Bv Citv. The City agrees as follows with respect to its interest in the Health Care System Real Property; (a) City agrees not to transfer, mortgage, pledge, lease, or encumber all or any part of its interest in the Health Care Center Real Property or its rights under this Agreement, except with the prior written consent ofHHC. (b) If, in the ordinary course of business and in a fair market value transaction, HHC proposes to sell or transfer a portion or portions constituting less than all or substantially all of the Health Care System Real Property in accordance with Section 15.2(c), City agrees, following sixty (60) days prior notice by HHC, to cooperate with such sale or transfer, including by executing and delivering such reasonable and customary agreements and instruments as may be necessary or desirable (i) to release from this Agreement that part of the Health Care System Real Property proposed to be sold or transferred by HHC; (ii) to transfer and convey the interest of City in that portion of the Health Care System Real Property proposed to -17- \OCd~ . . . be sold or transferred by HHC, and (iii) to permit application of any net proceeds of sale Of tfansfer in accordance with Section 15.2(c). Notwithstanding the foregoing, if during the sixty day notice period, the City notifies HHC that the City wishes that the subject property be released from the Lease and returned to City control, City and HHC will cooperate to accomplish that result provided that HHC shall receive from the City at the time of the release an amount equal to the net proceeds anticipated by HHCfrom the transaction referenced in the initial notice to the City, such that HHC continues to have resources equivalent to the released property available for the mission and purposes of the Health Care System. 15.2 Bv HHC. HHC and City agree as follows with respect to HHC's interest in the Health Care System Real Property: (a) HHC's interest in the Health Care System Real Property may, in the ordinary course of its business, be sublet, in whole or in part, provided that: (I) no such sublease shall extend beyond the Term; and (2) no such sublease shall be inconsistent with HHC's mission; and (3) any such sublease shall not involve in excess of thirty percent of the square footage of the Hospital Property, without the written consent of City. (The parties intend that HHC be the primary accountable party for delivery of healthcare services in and around the City of Hutchinson and have chosen the thirty percent limit as a measure aimed at insuring the continuing primary role ofHHC.) City agrees to execute a reasonable non-disturbance agreement (which includes provisions by which the subtenant agrees to recognize City as its direct landlord, and City agrees to recognize the subtenant as its direct tenant, following any early termination of this Agreement) as may be requested by the subtenant under any such sublease. (b) HHC's interest in the Health Care System Real Property, in the ordinary course of its business, be assigned, provided that: (I) no such assignment shall extend beyond the Term; and (2) no such assignment shall be inconsistent with HHC's mission; and (3) any such assignments in the aggregate shall not involve in excess of thirty percent of the square footage of the Hospital Property, without the written consent of City. -18- \ o( d ') . (c) If from time to time HHC determines that any portion of the Health Care System Real Property is no longer essential to Health Care System or its mission, HHC may release such portion of the Health Care System Real Property from this Agreement (returning control of such Real Property to City). Any net proceeds resulting from a sale or transfer allowed under Sections 15.1 may be used to further the mission and purposes of the Health Care System, but only after any net proceeds are applied in accordance with the provisions of the Existing Bond Documents. Upon the closing of any sale or transfer of any portion of the Health Care System Real Property pursuant to this Section, such portion shall cease to be a part of the Health Care System Real Property under this Agreement. (d) HHC's interest in the Health Care System Personal Property may, in the ordinary course of its business, be transferred or sold. (e) HHC shall have the right to mortgage, pledge, or otherwise encumber as collateral or security for debt held by an institutional lender or bond trustee all or any part of its interest in the Health Care System in the ordinary course of business financing transactions, provided that the proceeds of such transactions are used to support Health Care Systems Operations, and provided further that no right, title or interest of City shall be encumbered thereby. City agrees to cooperate reasonably with HHC in connection with any such financing, including the signing of such additional documents as may be required to obtain such financing. . (f) HHC shall not assign, sublet or otherwise transfer its rights and obligations under this Agreement, except as permitted under Section 15.1 and 15.2, without the consent of City. Article 16. Estoppel Certificates Each party hereto agrees from time to time, upon not less than twenty (20) days' prior notice from the other, to execute, acknowledge and deliver, without charge, to the other or its designee, a statement in writing, certifying that this Agreement is unmodified and in full force and effect (or if there have been modifications, identifying the same by the date thereof and specifying the nature thereof), the dates to which the Annual Rent and other sums and charges payable hereunder have been paid, the amount of the Annual Rent, that to its actual knowledge there are no claims against the other hereunder (or ifthere are any such claims, specifying the same) and that to its actual knowledge the other party is not in default and there exists no circumstance which with the giving of notice or lapse of time, or both, would constitute a default (or if such party is aware of any such default or circumstance specifying the same). . -19- IO(4~ . Article 17. Representations and Covenants of Citv 17.1 Power and Authoritv. City has the power and authority to execute and deliver this Agreement, and to carry out the transactions contemplated herein. The Hutchinson City Council, acting on behalf of City in connection with this Agreement, is the properly appointed, acting and duly authorized governing body of City, and is acting in accordance with the provisions of all applicable laws and regulations. 17.2 Agreement Valid and Binding. The Agreement is duly executed and delivered and is a valid and legally binding obligation of City enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, result in the creation of any lien, charge or encumbrance or the acceleration of any indebtedness or other obligation of City, and are not prohibited by, in violation of or in conflict with any provisions of, and will not result in a default under or a breach of (i) any constitutional provision affecting City; (ii) any ordinance, law or regulation; or (iii) any order, decree or judgment or any court of governmental agency to which City or the Health Care System is a party or is bound. 17.3 Tax-Exempt Bonds. City has not, by act or omission, caused any of the Tax- Exempt Bonds to lose their exemption from federal income taxation. . 17.4 Existing Bonds. The Existing Bonds are the only bonds authorized and issued by City which are outstanding as of the Effective Date and applicable to the Health Care System. City will make such reports and disclosures from time to time as are required under the Existing Bond Documents. 17.5 Assigned Contracts; Consents. City shall make a good faith effort to obtain such consents and give such notices as may be required in connection with the assignment to HHC of Assigned Contracts. 17.6 Cooperation. City, at HHC's expense, shall cooperate reasonably with HHC in any manner necessary to enable HHC to fulfill HHC's obligations and exercise HHC's rights under this Agreement. 17.7 Trade Secrets. City understands that certain records that are defined as "trade secret information" pursuant to Minnesota law are of substantial value of HHC, and, except as otherwise required by law, are and have been maintained in the strictest confidence as trade secrets, and agrees, except as otherwise required by law, not to divulge, furnish, or make accessible to anyone (other than HHC and its designees) any trade secrets at any time. 17.8 Environmental Condition. Except for Hazardous Materials used by City in the ordinary course of operating the Health Care System and in accordance with Hazardous Substance Laws: (a) City has not generated, manufactured, stored or released any Hazardous Materials on or about the Health Care System Real Property, and has permitted no other . -20- lO{.J) . party to do any of the same; and (b) City has received no notice of and has no knowledge (i) that any Hazardous Material are or have ever been generated, manufactured, stored or released about the Health Care System Real Property, (ii) of any, requests, notices, investigations, demands, administrative proceedings, hearings, litigation or other action proposed, threatened or pending relating to any of the Health Care System Real Property alleging non-compliance with or liability under any Hazardous Material Law, or (iii) that any above-ground or underground storage tanks or other containment facilities of any kind containing any Hazardous MaterialS are or have ever been located about the Health Care System Real Property. 17.9 Emoloyees. City will take such actions with respect to Health Care System Employees as and when required under Section 18.11. 17.10 Future Financings. HHC may during the term of this Agreement undertake capital improvements to all or part of the Health Care System or replacements thereof, and during the term of this Agreement may further improve or expand the Health Care System for the purpose of serving community health care needs ("Future Improvements"). In order to undertake and complete any such Future Improvements, HHC must secure adequate and affordable long-term financing. City has, pursuant to the authority vested in it under applicable law, the ability to issue revenue bonds or general obligation bonds for this purpose. Upon the request of HHC, City agrees to consider use of its authority to issue such bonds, provided: . (a) City determines that issuance of revenue bonds or general obligation bonds (i) would advance HHC's purpose of serving community health care needs, (ii) is authorized by law, and furthers City's interests, (b) such bonds may be issued only for the construction of Future Improvements, or for the refunding, refinancing or otherwise defeasing the Existing Bonds or other bonds issued to finance Future Improvements, and (c) HHC executes and delivers all documents and instruments, and otherwise delivers or causes to be delivered to City all certificates and opinions, as may be reasonably requested by City and are customarily provided in connection with bonds financings. Article 18. Reoresentations and Covenants of HHC 18.1 Formation of HHC. HHC is a nonprofit corporation duly organized and in good standing under the laws of the State of Minnesota. HHC has the power to lease and to own assets and to carryon its business as contemplated under this Agreement. 18.2 Power and Authority. HHC has the power to execute and deliver this Agreement and to carry out the transactions contemplated herein. All corporate actions . -21- I o (d) . . . required to be taken by HHC to authorize the execution, delivery and performance of this Agreement and all transactions contemplated hereby have been duly and properly taken. 18.3 Agreement Valid and Binding. The Agreement is duly executed and delivered and is a valid and legally binding obligation of HHC enforceable in accordance with its terms. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, result in the creation of any lien, charge or encumbrance or the acceleration of any indebtedness or other obligation of HHC, and are not prohibited by, in violation of or in conflict with any provisions of, and will not result in a default under or a breach of (i) any contract, agreement or other instrument to whichHHC is a party or is bound; (ii) any ordinance, law or regulation; or (iii) any order, decree or judgment or any court of governmental agency to which HHC is a party or is bound. 18.4 Nonprofit Status: Principal Office: Primary Service Area. HHC shall remain throughout the Term qualified to do business as a Minnesota nonprofit corporation with its principal office in the City of Hutchinson, Minnesota. HHC will operate the Health Care System such that the City of Hutchinson will always be in the HHC Geographic Service Area as that term is defined at the date hereof in the Bylaws of HHC. 18.5 Tax-Exempt Bonds. The parties intend that the interest paid on the Tax- Exempt Bonds will not be included in the gross income of the holders thereof for federal income tax purposes within the meaning of Section 103 of the Code. In furtherance thereof, the parties agree that each will take any and all necessary actions in order for the interest on the Tax-Exempt Bonds to remain exempt from federal income taxation. Without limiting the foregoing: (a) HHC represents that it is an organization described in Section 501 (c)(3) of the Code (a "sOI(c)(3) Organization") and agrees that it shall maintain its status as an organization described in Section 501 (c)(3) of the Code,.and exempt from federal income tax under Section sOI(a) of the Code, and it will not receive or realize any unrelated trade or business income to the extent such income would adversely affect the tax-exempt status of the Tax-Exempt Bonds. (b) So long as any Tax-Exempt Bonds are unpaid, no more than five percent (5%) of the facilities financed by the net proceeds of the Tax-Exempt Bonds will be used by any person other than: (1) a Governmental Unit; (2) a 501 (c)(3) Organization in a trade or business, the conduct of which is substantially related to the exercise or performance by the nonprofit corporation of its charitable, educational, or other purpose or function which constitutes the basis for its exemption under Section 501 of the Code; or -22- ID{.d>) . . . (3) a limited liability company, the sole member of which is a sOI(c)(3) Organization, that operates as described in subparagraph (2) above; unless the Tax-Exempt Bonds which financed such facilities are redeemed within ninety (90) days. from date on which there is a change from such an ownership. (c) So long as any Tax-Exempt Bonds are unpaid, HHC shall not take or omit to take, and shall not permit others to take or omit to take, any action that would adversely affect its qualification as a sOI(c)(3) Organization. (d) HHC shall not take any action or omit to take any action with respect to the gross proceeds of the Tax-Exempt Bonds or with respect to any amounts expected to be used to pay the interest thereon or the principal thereof, which if taken or omitted, would cause any of the Tax-Exempt Bonds to be determined to be an "arbitrage bond," within the meaning of Section 148 of the Code. (e) HHC shall not enter into any "management agreement," as defined in Revenue Procedure 97-13,1997-1 COB. 632 (February 3,1997) ("Rev. Proc. 97- 13"), that does not satisfy the "safe harbor" provisions of Rev. Proc. 97-13, except to the extent City receives an opinion of Bond Counsel to the effect that nonobservance of this representation will not cause interest on any Tax Exempt Bonds to be included in gross income for federal income tax purposes. (f) HHC shall not take or omit to take, nor permit others to take or omit to take, any action, which, if taken or omitted, would adversely affect the exclusion of interest on the Tax-Exempt Bonds from gross income for federal income tax purposes. (g) HHC shall immediately remit to City any amount required to be rebated to the Internal Revenue Service pursuant to the provisions of Section 148 of the Code. 18.6 Existing Bonds. HHC shall cooperate with City and shall provide such instructions and requests to City from time to time as may reasonably be necessary to enable City to timely make such reports and disclosures as are required under the Existing Bond Documents. HHC shall not, by any act or omission, cause City to fail to comply with the financial and other covenants set forth in the resolution of City Council approving the Taxable Medical Facilities Gross Revenue Bonds, Series 1998, nor with any financial or other covenants set forth in documents governing any Future Financing issued pursuant to Section 17.10. 18.7 Health Care Licenses. HHC shall obtain on or before the Effective Date such licenses to operate the Health Care System from the Minnesota Department of Health , including a hospital license, and shall maintain such licenses in good standing throughout the Term. -23- lOrd) 18.8 Medicare Certification. HHC shall comply with all Medicare conditions of participation or submit timely corrective action plans satisfying same throughout the Term. . 18.9 Accreditation. HHC shall maintain the Health Care System accreditation by the relevant state survey agency or The Joint Commission throughout the Term. 18.10 Medical Staff. On or before the Effective Date, HHC shall adopt the Medical Staff Bylaws of Hutchinson Health Care, including the Policy on Appointment, Reappointment & Clinical Privileges, Organization and Functions Manual, and Rules and Regulations in effect as of the Effective Date and shall extend privileges to all members of the Health Care System medical staff and its independent allied health professional staff on the same terms that were in effect as of the Effective Date. 18.11 Emolovment Offers to Existing Emolovees; Certain Liabilities. . (a) Effective as of the Effective Date, City shall terminate the employment of all Health Care System Employees and HHC shall offer employment to all such Health Care System Employees under the same job title, responsibilities, salary and substantially similar employee benefits in effect as of the Effective Date. This covenant, however, shall not be construed to create any right for any individual to be employed by HHC, it being understood that HHC shall have the right to make personnel changes consistent with its operating needs; and no Health Care System Employee shall be offered employment by HHC unless such employee agrees to the transfer by City to HHC of the employment records with respect to such employee. HHC shall assume and shall pay and satisfy when due, all of City's obligations to pay accrued, but not paid, wages, paid time off, to Health Care System Employees. City shall make all scheduled payroll disbursements until the Effective Date. Except as provided in Section 18.11(b) below, HHC does not hereby assume any other obligations with respect to City's employees. HHC will adopt, at its sole election, either a Section 401 (a) or a Section 403(b) defined contribution retirement plan. The initial contribution rate by HHC shall be the percentage of employee covered salary utilized by City immediately prior to the Effective Date. (b) Any unemployment benefits costs associated with the termination of the employment of an employee with City or with any other subsequent employer where City would be an employer for the previous four (4) quarters will be the sole responsibility of HHC, and HHC shall reimburse City for any such costs billed to it. HHC shall remain obligated under this subparagraph until such time as City is no longer an employer of record for the previous four (4) quarters for the benefit year indicated by the unemployment statement of benefits. . (c) City maintains the Hutchinson Health Care Deferred Compensation Plan, an eligible governmental plan described in Section 4s7(b) of the Code, (the "4s7(b) Plan") for the benefit of certain Health Care System Employees. Those Health Care System Employees shall no longer be eligible to participate in said plan -24- \oCd) . following severance of employment with City. HHC agrees to act as City's delegate and accept appointment as the Administrator of the 457(b) Plan in order to carry out the terms of the 457 (b) Plan until distribution of all accounts held under the plan are made following severance of employment with City by the participants in the plan. HHC shall be responsible for the costs and expenses incurred in the administration of the 4s7(b) Plan. 18.12 Operating Expenses and Taxes. In addition to HHC's agreement to pay certain taxes, maintenance expenses and insurance associated with the Health Care System Real Property pursuant to Articles 4,5 and 6 hereof, HHC shall pay, or otherwise cause to be paid, all Operating Expenses, whenever incurred. For purposes of this Agreement, the term "Operating Expenses" means all costs associated with operation of the Health Care System including, but not limited to, the costs of maintenance and repair, utilities, equipment rental, professional fees, salaries, wages, employee benefits, permit fees, license fees, and, as the same respectively become due, all taxes, assessments and governmental charges that may be lawfully assessed or levied against or otherwise attributable to the Health Care System during the Term; provided, however, that with respect to taxes, assessments or governmental charges that may lawfully be paid in installments over a period of years, HHC shall be obligated to pay only such installments as are required to be paid during the Term. HHC may, at its expense and in its own name and behalf, or, to the extent lawful, in the name and behalf of City, in good faith, contest any such taxes, assessments and governmental charges in accordance with Article 25 hereof. . 18.13 Reporting Requirements. HHC shall deliver to City copies of HHC' s audited annual financial statements prepared in accordance with GAAP within one hundred fifty (150) days after the end of each fiscal year during the Term and HHC shall provide proof to City annually that all applicable health care accreditations have been maintained. In addition, HHC shall provide both (i) an annual letter from HHC's Board of Directors and Chief Executive Officer to the effect that nothing has come to their attention to indicate that an Event of Default has occurred that has not been cured pursuant to Section 20.1, or if such an uncured Event of Default exists, such letter shall set forth the details thereof; and (ii) any and all documentation provided to and from Moody's, Standard & Poor's and like agencies evaluating the financial and operating performance of the Hospital or the Health Care System. 18.14 Indigent Care. HHC shall operate the Hospital Property as a hospital open to the general public providing emergency and acute care services, from time to time at no charge or at reduced charges in accordance with charity care, discount and community benefit policies consistent with HHC's charitable purposes approved by HHC's board of directors and in compliance with any applicable federal, state and City statute or ordinance and regulations with respect thereto. . 18.15 Operating Parameters. City has entered into this Agreement in the belief that HHC can effectively and efficiently operate the Health Care System. Accordingly, in addition to the qualitative performance covenants set forth above herein, HHC agrees to -25- IO(d) . . . operate the Health Care System such that, at all times during the Term, the Health Care System is in compliance with the Operating Parameters (including the cure provisions applicable thereto), all covenants and obligations set forth in Section 18.5 with respect to the Existing Bonds, and any such covenants and obligations undertaken by HHC in connection with financing referenced in Section 17.11 of this Agreement. The parties acknowledge that the Operating Parameters have been designed as indicators of financial and quality jeopardy under current market conditions. HHC and City shall, from time to time, amend the Operating Parameters as necessitated by changes in market conditions in order to maintain their status as indicators of financial and quality jeopardy, taking into consideration the performance of similarly situated nonprofit corporations having operations comparable to HHC's Health Care System Operations. 18.16 Investments. HHC, acting through its board of directors, agrees to invest all Hospital Funds in accordance with the standard of care set forth in Minnesota Statutes Section 309.62 et seq. and consistent with the standard of care set forth in Minnesota Statutes Section 1 LA.09. Article 19. Condition of Prouertv 19.1 Except as expressly stated herein, City does not make any representations or warranties regarding the Health Care System. HHC agrees that it is leasing and acquiring the Health Care System on an "AS IS", "WHERE IS" and "WITH ALL FAULTS" basis, based upon its own judgment. CITY MAKES NO WARRANTY WITH RESPECT TO THE HEALTH CARE SYSTEM OR ANY PART THEREOF, EXPRESS OR IMPLIED, AND CITY SPECIFICALLY DISCLAIMS ANY WARRANTY OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OF OR THE INABILITY TO USE THE HEALTH CARE SYSTEM OR ANY PART THEREOF. Article 20. Events of Default: Termination 20.1 Events of Default. If anyone or more of the following events ("Events of Default") shall happen, then and in any such event, City may give notice to HHC specifying such Event or Events of Default and stating that this Agreement and the Term shall expire and terminate on the date specified in such notice, and on such date, unless such specified Event or Events of Default shall have been cured, this Agreement shall terminate and HHC shall remain liable as hereinafter provided: (a) HHC defaults in the payment of any Annual Rent payable under this Agreement and HHC does not cure such default within fifteen (15) days after actual receipt of notice thereof; -26- lo(J) . (b) HHC fails to satisfy an Operating Parameter giving rise to the City's voting member amendment rights set forth in Section 7.3(d) ofHHC's bylaws, and the City provides written notice to HHC within the time period specified in the Operating Parameter that such amendment rights shall take effect. (c) HHC fails to pay any other monetary obligation when due or observe or perform any of the other terms, conditions, covenants or agreements required to be observed or performed by it under this Agreement and such failure shall continue for a period of, in the case of a monetary obligation, thirty (30) days or, in the case of a non-monetary obligation, sixty (60) days, following actual receipt of written notice of such failure by HHC, or, in the case of a non-monetary default which cannot with due diligence be cured within such period of sixty (60) days, HHC fails to proceed with due diligence within such period of sixty (60) days to commence to cure the same and thereafter to prosecute the curing of such default with due diligence. 20.2 Repossession. If this Agreement is terminated pursuant to Section 20.1, City may enter upon and repossess the Health Care System Real Property (said repossession being hereinafter referred to as "Repossession") by legal process, and may remove HHC and all other persons therefrom. . 20.3 Continued Liabilitv. No termination of this Agreement pursuant to Section 20.1 and no Repossession of the Health Care System Real Property pursuant to Section 20.2 or otherwise shall relieve HHC of its obligation to pay Annual Rent or any of its other obligations under this Agreement, all of which shall survive any such termination or Repossession. 20.4 Re-Ietting. In the event that the Term shall terminate as provided in this Article 20 before its scheduled expiration, City, at its option, may elect from time to time following Repossession to rent the Health Care System Real Property or any part thereof in its own name, or for the account of HHC, for the residue of the then Term or for a longer period of which said residue is a part, or for a shorter period or periods, at such rentals and upon such terms as City deems best, and may receive rents therefor, applying any monies collected for the residue of such term, first, to the payment of such reasonable expense, including reasonable attorneys' fees, to which City may have been put to obtain possession, accomplish such reletting and care for the Health Care System Real Property while vacant; and, second, the balance of the net amount of the rents to the performance of HHC's obligations under this Agreement. Any surplus shall belong to City but HHC shall remain liable for any deficiency. City shall act reasonably to mitigate damages. 20.5 No Waiver. No failure by any party to insist upon the strict performance of any term hereof or to exercise any right or remedy consequent upon a breach thereof, and no acceptance of full or partial rent during the continuance of any such breach, shall constitute a waiver of any such breach or of any such term. . -27- weA) . . . 20.6 Exercise of Rights While in Default. HHC may exercise and continue to exercise all of its rights under this Agreement upon the occurrence and during the continuance of any default and Event of Default under this Agreement up to the point of termination of this Agreement and actual Repossession, including but not limited to the Purchase Option. Article 21. Surrender of the Property 21.1 Surrender of Health Care System Real Property. In the event HHC does not exercise and fulfill the requirements of the Purchase Option, upon the expiration or sooner termination of this Agreement, HHC shall quit and surrender the Health Care System Real Property leased to it pursuant to this Agreement, in the condition required to be maintained in accordance with this Agreement (subject to ordinary wear and tear and damage by fire or other casualty excepted), to City, without any payment therefor by City, without delay, free and clear of alllettings and occupancies (other than assignments and subleases entered into as permitted under this Agreement). 21.2 Disposition of Health Care Svstem. The parties acknowledge that in certain situations, including in the event HHC does not exercise and fulfill the requirements of the Purchase Option, the bylaws of HHC provide City certain corporate membership rights which could affect the disposition of the assets of the Health Care System upon termination of this Agreement. In such situations, in addition to the specific rights set forth in Section 21.1, City may assert such membership rights and take such other actions as it deems advisable to cause the return or distribution to City, and the manner thereof, of such Health Care System assets as the City may determine at that time and as allowed by law. It is understood that, depending on the manner of such actions, City may be required to assume certain liabilities as required by law. Article 22. No Merger of Title There shall be no merger ofHHC's interest in this Agreement nor of the leasehold estate created by this Agreement with the fee estate in the Health Care System Real Property or any part thereof by reason of the fact that the same person may acquire or own or hold, directly or indirectly, (a) HHC's interest in this Agreement or the leasehold estate created by this Agreement or any interest therein and (b) the fee estate in the Health Care System Real Property or any part thereof or any interest therein, and no such merger shall occur unless and until all persons then having an interest in, which interest shall have been voluntarily created by the holders of, the ownership interests described in (a) and (b) above, shall join in a written instrument effecting such merger and shall duly record the same. -28- \dd) . . . Article 23. Quiet Enioyment City covenants that HHC shall quietly have, hold and enjoy the Property during the Term without hindrance or molestation, subject only to Article 20. City represents, warrants and covenants to HHC that the Health Care System is free and clear of all prior liens and encumbrances except for the Medical Office Building Leases, the Shopping Center Leases, and except to the extent that the Existing Bond Documents create any liens or encumbrances. Article 24. Notices All notices, requests, demands, consents, approvals, and other communications that mayor are required to be served or given hereunder (for the purposes of this Article collectively called "Notices") shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight courier, addressed to the party to receive such Notice at the following addresses: If to City: City of Hutchinson Attention: If to HHC: Hutchinson Health Care Attention; With a copy to: Attention: Either party may, by Notice given as aforesaid, change its address for all subsequent Notices, except that neither party may require Notices to it to be sent to more than two addresses. Mailed Notices shall be deemed given when mailed in the manner aforesaid, provided that in the case of a notice of default to HHC the same shall be deemed given only upon actual receipt by HHC. -29- IOCd) . . . Article 25. Contests 25.1 Contest. After written notice to City, HHC may at its expense contest, by appropriate proceedings conducted in good faith and with due diligence (all such proceedings together with appeals therefrom being hereinafter referred to as "Contests") the amount, validity or application, in whole or in part, of any tax, assessment, mechanics' lien, encumbrance, charge or any other adverse claim for which HHC is responsible under this Agreement (hereinafter collectively "claims") provided that: (a) In the case of an unpaid claim, such Contest shall operate to suspend the collection of the same from City and HHC therein; (b) HHC shall have furnished such security, if any, as may be required in the proceedings or reasonably required by City; and (c) No part of the Health Care System or any interest therein shall be, in the reasonable opinion of City, in imminent danger of being forfeited or lost. 25.2 Suspension of Obligation. During the period HHC carries forward any such Contest in good faith, HHC shall be relieved from its obligations herein contained to pay the claims, or to clear the liens with respect to which such contest is conducted. If and to the extent HHC shall not prevail in any such Contest, HHC shall immediately pay and discharge the claim in question to such extent. 25.3 Procedure. All such Contests may be brought by HHC in the name of HHC or, if reasonably necessary, in the name of City or HHC and City, as may be appropriate. Each party agrees to cooperate with the other in such Contests, short of the payment of money with respect thereto, except where this Agreement otherwise requires payment. Each party will endorse such pleadings, checks and other documents as will be appropriate to carry out the purposes of this Article 25. Article 26. Purchase OPtion 26.1 Grant. Notwithstanding any other provision in this Agreement to the contrary, HHC shall have the option to purchase the Health Care System Real Property from City at the expiration of either Term for a purchase price equal to the greater of (i) the then-existing balance of the Existing Bonds and interest accrued thereon, and (ii) one dollar ($1.00). HHC must give City written notice of its intent to exercise its Purchase Option at least ninety (90) days prior to expiration of the Term. The Parties acknowledge that the purchase price represents a bargain sale and has no relation to the value of City's membership rights set forth in the Bylaws of HHC. -30- lo{.J ) . . . 26.2 Title. Upon proper exercise of the Purchase Option by HHC, City agrees to convey the Health Care System Real Property to HHC free and clear of all liens and encumbrances, except for the Medical Office Building Leases, the Shopping Center Leases, and any other lien or lease created, suffered or granted by HHC (or those claiming by, through or under HHC). In connection with exercising the Purchase Option, HHC may, at its expense, obtain a title insurance commitment. If such commitment reflects any matter affecting title to the Health Care System Real Property that is objectionable to HHC (other than this Agreement and any encumbrances created on or after the date hereof by HHC or those claiming by, through or under HHC), then HHC may give written notice to City of such matter. If HHC gives City such notice prior to closing, City shall at its expense within sixty (60) days cause all encumbrances not permitted as provided above to be removed and corrected of record. If City fails to do so within sixty (60) days, time being of the essence, HHC may at its option; (a) attempt to cause such encumbrances to be removed, (b) proceed to close without waiving any rights to damages hereunder, or (c) terminate the agreement formed by exercise of the Purchase Option, this Agreement, or both, by giving written notice thereof to City. If HHC elects alternative (a) above, closing shall be postponed until the encumbrances in question are removed and, if HHC is unable within a further period of sixty (60) days to cause such encumbrances to be removed, HHC may then elect either alternative (b) or (c) above. No such postponement shall alter the purchase price. All costs and expenses incurred by HHC in causing or attempting to cause such encumbrances to be removed, including reasonable attorneys fees, shall be payable by City if attributable to any fault or action by City. 26.3 Closing. Except as postponed pursuant to Section 26.2, the closing shall take place at the time and place agreed to by City and HHC within the last sixty (60) days of the Term. At the Closing, City and HHC shall execute and deliver such reasonable and customary documents and instruments as may be necessary or desirable to convey City's interest in the Health Care System Real Property to HHC, as herein provided. This Agreement and all of the terms and provisions hereof shall remain in full force and effect until the purchase has closed, except as otherwise provided in this Agreement. 26.4 Effect of Non-Exercise. If HHC does not exercise its Purchase Option, upon termination of the Agreement HHC shall surrender the Health Care System Real Property to City in the condition specified herein. Article 27. Miscellaneous 27.1 Consent. In any case under this Agreement which requires consent or approval such consent or approval shall not be unreasonably withheld, conditioned or delayed unless otherwise specified; provided that any consent relating to Section 17.10 as to which a vote of City Councilor City Electorate is required, the decision of such body shall not be deemed unreasonable, conditioned or delayed. -31- \D(J) . . . 27.2 Relationship of Parties. It is agreed that nothing herein contained is intended or should be construed in any manner as creating or establishing the relationship of joint venturers or as constituting HHC or any of its employees or agents as the employees or agents of City, except as otherwise provided herein. 27.3 Miscellaneous. This Agreement shall be governed by the laws of the State of Minnesota. If any term of this Agreement or any application thereof shall be invalid or unenforceable, the remainder of this Agreement and any other application of such term shall not be affected thereby. This Agreement may be changed, waived, discharged or terminated only by an instrument in writing signed by the then owners of City and HHC interests herein. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. The headings of this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which is an original, but all of which shall constitute one and the same instrument. 27.4 Recording. This Agreement, or a short form of this Agreement, may be recorded in the real estate records of the Counties in which the Health Care system Real Property is situated. HHC and City agree to cooperate with each other in the preparation and recordation of any such short form of this Agreement. 27.5 Non-Delegation and Lack of Control. No provision of this Agreement shall be construed as a delegation by City to HHC of any governmental function of City. Further, HHC and City have determined that the rights of City under this Agreement and the rights granted to City by HHC under its Articles of Incorporation and Bylaws do not, and are not intended to, give City direct or indirect control over the conduct of the Health Care System or its operations. [Signature pages follow] fb.us.1682982.05 -32- ICCd) . IN WITNESS WHEREOF, the parties hereto have executed this instrument under seal as of the day and year fIrst above written. CITY OF HUTCHINSON By: Its: And by: Its: STATE OF . COUNTY OF ) ) ss. ) . The foregoing instrument was acknowledged before me this _ day of , 2007, by and , the and ,respectively, of the City of Hutchinson, a Minnesota municipal corporation, on behalf of the municipal corporation. Notary Public iD( d) . . . STATE OF COUNTY OF HUTCHINSON HEALTH CARE By: Its: And by: Its: ) ) ss. ) The foregoing instrument was acknowledged before me this _ day of ,2007, by and the and ,respectively, of Hutchinson Health Care, a Minnesota nonprofit corporation, on behalf of the nonprofit corporation. Notary Public THIS INSTRUMENT WAS DRAFTED BY: Faegre & Benson LLP 2200 Wells Fargo Center 90 South Seventh Street Minneapolis, MN 55402 Phone: (612) 766-7000 lLX''* ') . . . Hospital Land: Medical Office Building Land: . Nursing Home Land: Shopping Center Land: Dassel Medical Center Land: Regional Eye Land: Auxiliary Land: EXHIBIT A Legal Description of the Land ID(c\) EXHIBIT B . Excluded Assets . . \ o Cd} EXHIBIT C . Motor Vehicles . . \c{J) EXHIBIT D . Escrow Agreement . . \ o{ 4) . Ordinance No. 07 -0473 AN ORDINANCE APPROVING LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE WHEREAS, in conjunction with its operation of a health care system in the City of Hutchinson, City owns Hospital Property, Nursing Home Property, Medical Office Building Property, Shopping Center Property, Dassel Medical Center Property, Regional Eye Property, and Auxiliary Property, and other real property in the Hutchinson area, each as hereinafter defined; and, WHEREAS, also in conjunction with its operation ofa health care system in the City of Hutchinson, the City owns equipment, fixtures and other tangible property; and. WHEREAS, City has concluded, following many months of analysis, public input and consultation with health care experts, that the lease ofthis property is likely to: (i) enhance operating efficiencies and effectiveness, (ii) enhance the Hutchinson health care system's ability to form linkages with other health care institutions and providers to form an integrated delivery system offering an increased continuum of care to the residents of City, (iii) improve the environment for physician and allied health professional recruitment and retention, and (iv) promote the Hutchinson health care system's ability to maintain financial viability and adaptability to future changes and challenges in the health care environment, especially those posed by state and national health care reform; and, WHEREAS, City has determined that it is in the best interest of the delivery of health care to residents of the City of Hutchinson and the community served by the health care system to lease and transfer the operation and assets of the health care system to a private, nonprofit, non-governmental corporation; and, WHEREAS, HHC is a nonprofit corporation organized under the laws of the State of Minnesota for the purpose of acquiring and operating the health care system; and, . WHEREAS, City has the statutory power and authority, pursuant to Minnesota Statutes 99144.581 and 447.47, to lease and transfer the health care system to HHC; and, WHEREAS, HHC has the power and authority to accept the lease and transfer of such assets and operations from City under the terms and conditions set forth herein; and, WHEREAS, City has concluded that the community served by the health care system will he best served by undertaking transactions described .in this Agreement; and, WHEREAS, City and HHC intend for HHC to operate the health care system in a private, non- governmental capacity, not subject to any of the laws of the State of Minnesota or of the federal government that apply exclusively to governmental bodies or instrumentalities thereof; and, WHEREAS, HHC intends to operate the health care system in a manner consistent with its charitable purposes, including, but not limited to enhancing the health of people in the communities it serves without expectation of financial gain, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE CITY HEREBY AUTHORIZES THE LEASING OF CERTAIN LAND, BUILDINGS AND OTHER PROPERTY TO HUTCHINSON HEALTH CARE AS OUTLINED AND DEFINED IN SAID LEASE AGREEMENT HEREBY ATTACHED AS EXHIBIT A TO THIS ORDINANCE. Signed this day of ,2007. Attest: . Gary D. Plotz, City Administrator Steven W. Cook, Mayor I,OCA) . . . HHC 8-22-07 DRAFT RESTATED BYLAWS OF HUTCHINSON HEALTH CARE PREAMBLE Hutchinson Health Care (the "corporation") is a nonprofit health care corporation, including a hospital, nursing home, and clinic, organized under the laws of the State of Minnesota. The mission ("Mission") of Hutchinson Health Care is "to promote health and provide care alternatives to our community." The Board of Directors of Hutchinson Health Care is responsible for the quality of care rendered by the corporation and must accept and discharge this responsibility to do all that is necessary to fulfill the corporation's obligation to its patients, clients, and residents. The corporation is formed as the result of the conclusions of a community task force which has recommended that assets and activities of the City of Hutchinson, Minnesota ("City") with respect to delivery of health care services be transferred to a private nonprofit entity not controlled by the City as a way to more effectively and efficiently provide for the health care needs of residents in the primary service area of Hutchinson Community Hospital ("Hospital"). The corporation was formed under the auspices of community representatives serving on the task force and not by the City under Section 144.581 of the Minnesota Statutes. Acknowledging that the corporation needs the cooperation of the City of Hutchinson to deliver on certain aspects of its mission, the corporation has provided for certain rights to be exercised by the City as provided in these Bylaws. At the time of adoption of these Restated Bylaws, the corporation offers a wide variety of services including, in addition to hospital inpatient and outpatient services and clinical services, emergency room, and nursing home services. The corporation defines its fundamental nature ("Fundamental Nature") as an independent private health care provider, providing a reasonable range of acute care and outpatient hospital services and clinic services. DIRECTORS SECTION 1.1 Number and method of election. The Board of Directors of this corporation shall consist of an odd number of no fewer than seven (7) and no more than eleven (11) persons, and, subject to such limitation, the number of members of the Board of Directors shall be such as may be designated from time to time by the Board of Directors. Members of the Board of Directors shall be elected or appointed as set forth below in accordance with the nominations process described in Section 4.5 of these Bylaws. (a) Appointed Directors. Within the Board size parameters established from time to time by the Board, the largest number of directors which constitute a minority of the total lo(e) - . - number of authorized directors shall be appointed by the City Council of the City (the "City Council"). No more than two (2) of such appointees may concurrently serve as members of the City Council. (b) Ex Officio Director. There shall be one (1) Ex Officio Director, who shall be the physician serving from time to time as the Chief of the Medical Staff of the Hospital. The Ex Officio Director shall have voting rights. (c) Communitv Directors. The remainder of the directors shall be elected by the Board of Directors of this corporation at the annual meeting of this corporation and shall be known as Community Directors. At least two (2) of the Community Directors shall be residents of the Hospital's Geographic Service Area at the time of election, and of those, at least one director shall be a resident of the City. The Geographic Service Area shall mean the area composed of the lowest number of contiguous zip codes from which the Hospital draws at least 75 percent of its inpatients. SECTION 1.2 Board Composition. The composition of the Board of Directors is subject to the following limitations: (a) Credentialed practitioners. At any given time, no more than one-third of the directors may be health care professionals credentialed to provide services at the Hospital or any other health care facility owned by this corporation. (b) Directors of other systems. At any given time, a majority of the directors of this corporation shall be persons who are neither: (i) directors of any other health care providers or health care systems residing outside the Hospital's Geographic Service Area; nor (ii) directors of any single health care provider or health care system. (c) Emplovees. No employee ofthis corporation shall be a member of the Board of Directors; provided, however, that this requirement shall not apply to health care professionals credentialed to provide services at the Hospital or any other health care facility owned by this corporation. SECTION 1.3 Terms. Except as otherwise provided in Section 1.1, each director of this corporation other than the Ex Officio Director shall be elected or appointed to serve for a term of three years, and, unless the Board of Directors has determined that a successor will not be elected or appointed, until his or her successor has assumed office; or until the director's prior death, resignation or removal. Each Community Director and Appointed Director is limited to serving four consecutive terms. The term of office of the Ex Officio Director shall be coterminous with his or her term as Chief of the Hospital's Medical Staff. The Community Directors and Appointed Directors shall each be divided into three classes as nearly equal in number as possible, so that the terms of office of approximately one-third of the Community Directors and approximately one-third of the Appointed Directors shall expire each year. -2- lo(e. ') - It . SECTION 1.4 Compensation. Directors shall not receive compensation for their service as directors; provided, however, that this corporation may reimburse directors for reasonable and necessary expenses incurred while performing the duties of a director. SECTION 1.5 Removal; resignation; vacancies. Any director may at any time be removed with or without cause by the Board of Directors; provided, however, that an Appointed Director may be removed by the Board of Directors only for cause by the affirmative vote of two-thirds of the directors of this corporation. For purposes of the foregoing sentence, "cause" shall mean breach of fiduciary duty. An Appointed Director may also be removed with or without cause by the City Council. Any director may resign at any time by giving written notice to the Chair or the Secretary. The resignation shall be effective without acceptance when the notice is received by the Chair or the Secretary, unless a later effective date is specified in the notice. Any vacancy occurring because of the death. resignation or removal of a Community Director may be filled by a person elected by the Board of Directors for the unexpired term of such director provided; however, that the Board complies with the requirements of Section 1.1 (c) and Section 1.2 of these Bylaws. Any vacancy occurring because of the death, resignation or removal of an Appointed Director shall be filled by a person appointed by the City Council; which shall fill the vacancy within 60 days following the date the vacancy occurs. Any vacancy resulting from an increase in the number of Community Directors may be filled by a person elected by the Board of Directors for a full term of office unless the Board of Directors designates a shorter term of office. MEETINGS OF THE BOARD OF DIRECTORS SECTION 2.1 Annual meeting. The annual rneeting of the Board of Directors for the purpose of electing Community Directors and officers and transacting such other business as may properly come before the meeting shall be held in the City at the time and place designated from tirne to time by the Board of Directors, provided that, by unanimous action of the Board of Directors, another place of meeting within the State of Minnesota may be designated. SECTION 2.2 Other meetings. Other meetings of the Board of Directors may be held at such time and place as are announced at a previous meeting of the Board of Directors, however the Board of Directors shall meet at least quarterly. The annual meeting serves as a quarterly meeting. Meetings of the Board of Directors may also be called at any time (a) by the Chair, (b) by the Board of Directors, or (c) upon the request of three or more members of the Board of Directors. Anyone entitled to call a meeting of the Board of Directors may make a written request to the Secretary to call the meeting, and the Secretary shall give notice of the meeting, setting forth the time and place thereof, to be held between two and thirty days after receiving the request. If the Secretary fails to give notice of the meeting within seven days from the day on which the request was made, the person or persons who requested the meeting may fix the time and place of the meeting and give notice in the manner hereinafter provided. -3- loCe) - - e SECTION 2.3 Notice of meetings. Notice of each meeting of the Board of Directors for which notice is required, and of each annual meeting, stating the time and place thereof, shall be given to all directors by electronic communication or in person at least two days before the meeting, or shall be mailed to each director at least five days before the meeting. A director may be given notice by electronic communication only ifthe director has previously consented to receive notice in such form of electronic communication. All such notices not given in person shall be sent to the director at his or her postal or electronic address according to the latest available records of this corporation. Any director may waive notice of a meeting before, at or after the meeting, orally, in writing, by electronic communication, or by attendance. Attendance at a meeting is deemed a waiver unless the director objects at the beginning of the meeting to the transaction of business because the meeting is not lawfully called or convened and the director does not participate in the meeting. SECTION 2.4 Ouorum and voting. The presence of at least a majority of the members of the Board of Directors shall constitute a quorum at any meeting thereof, provided that at least one Appointed Director is present. The directors present at any meeting, although less than a quorum, may adjourn the meeting from time to time. If a quorum is present when a duly called meeting is convened, the directors present may continue to transact business until adjournment, even though the withdrawal of one or more directors leaves less than the number otherwise required for a quorum. At all rneetings of the Board of Directors, each director shall be entitled to cast one vote on any question coming before the meeting. A majority vote of the directors present at any meeting, if there be a quorum, shall be sufficient to transact any business, unless a greater number of votes is required by law or these Bylaws. A director shall not appoint a proxy for himself or herself or vote by proxy at a meeting of the Board of Directors. For purposes of determining whether a director has met his or her fiduciary duties as a director, but for no other purpose, a director who is present at a meeting of the Board of Directors when an action is approved by the Board of Directors is presumed to have assented to the action unless the director votes against the action or is prohibited from voting on the action. SECTION 2.5 Action without a meeting. Any action that could be taken at a meeting of the Board of Directors may be taken by written action signed by all of the directors. SECTION 2.6 Meetings held using remote communication. A director may participate in a meeting of the Board of Directors by means of conference telephone or, if authorized by the Board of Directors, by such other means of remote communication, in each case through which that director, other directors so participating, and all directors physically present at the meeting may communicate with each other on a substantially simultaneous basis. Participation in a meeting by remote communication constitutes presence at the meeting. -4- lo(e. ) - . e SECTION 2.7 Actions Subiect to Supermaioritv Approval. The following actions shall require the approval of at least two-thirds of the total number of authorized directors; provided, however, that the actions listed in subsections (a) through (i) shall not be effective unless the voting mernber has approved the action or waived its rights as described in Article VIII of these Bylaws: (a) Amendments to the Articles ofIncorporation of this corporation. (b) Amendments to the Preamble and Sections 1.1, 1.2, 1.4, 1.5,2.4,2.5,2.7,4.1, 4.2,4.3,4.5,8.1,8.2,8.3,8.4, or 8.5 of these Bylaws, including Exhibit A, in accordance with Section 7.3 of these Bylaws. (c) Merger, consolidation. liquidation. dissolution. or sale or lease, or other transfer, or mortgage or other grant of a security interest, of or in, all or substantial1y al1 of the assets of this corporation, provided that nothing herein is intended to restrict the ability of the corporation to mortgage, grant a security interest or otherwise encumber as col1ateral or security for debt held by an institutional lender or bond trustee al1 or any part of the corporation's assets in the ordinary course of business financing transactions where the proceeds of such transactions are used to support the corporation's health care operations. (d) Any subleases or assignments which if executed would bring the aggregate of subleased or assigned space to a percentage of 30% or more of the space identified with orreferenced in the corporation's hospital license (provided, however, that space associated with leases or assignments in which the services provided in such space or spaces are "provider-based services" billed by and in the name of this corporation under applicable Medicare statutes and regulations as in effect from time to time shal1 not be deemed a lease or assignment for purposes of this limitation). (e) Closure ofthe Hospital. (t) Contributions of cash or cash-equivalents that in the aggregate exceed 1.5 percent of the net income of the corporation during any fiscal year to any person(s) or entit(ies) without receipt of fair market value consideration in return; provided, however, that such contributions shall be made for the charitable purposes described in Section 50 I (c )(3) of the Internal Revenue Code ("IRC") and shall be in furtherance of the corporation's health care mission; and provided further that this provision shal1 not prohibit: (1) the provision of free or reduced price medical care in accordance with the Hospital's charity care/community benefit policies or payor agreements; (2) payment of recruitment incentives to physicians and other health care practitioners provided in accordance with the applicable policies of this corporation; or (3) donations of used equipment or supplies to a governmental -5- lo(~ ) -- tit e entity or nonprofit organization exempt from income tax under IRC Section sOI(c)(3). (g) Add additional members or create additional member rights. (h) Any action(s) the result of which would cause this corporation to fall outside the definition of the Fundamental Nature of the corporation, or a transfer of assets to a joint venture in which this corporation is a participant (whether or not controlled), the result of which would be that this corporation would no longer directly meet the Fundamental Nature definition. (i) Transfer of assets to an entity wholly owned or wholly controlled by this corporation (unless such wholly owned or controlled entity gives to the City the same director appointment, membership, and other rights as the City possesses with respect to this corporation, in which case, such transfer will require in any event a supermajority approval). (j) Transfer of assets to an entity wholly owned or wholly controlled by this corporation, in which the City has the same director appointment, membership, and other rights as the City possesses with respect to this corporation. (k) Transfer of assets to a joint venture in which this corporation is a participant (whether or not controlled). (I) Closure of Emergency Room or transfer of nursing horne. (m) Entering into a management agreement with a third party, other than the manager as of the date of approval of these Bylaws, covering the day-to-day operations of all or substantially all of the Hospital and/or nursing home owned by this corporation. (n) Declaration ofa dividend. (Dividends are not contemplated, however, the tool is available if extraordinary/windfall circumstances arise, should the Board of Directors choose to use it.) (0) Delegation of authority to the Executive Committee to approve specific transactions identified in Section 4.3(e). OFFICERS SECTION 3.1 Designation and term. The officers of this corporation shall include a Chair, a Vice Chair, a Secretary, a Treasurer, and a President. Officers other than the President shall be elected by the Board of Directors to serve for terms of one year and until their respective successors are elected and have qualified. The President shall serve at -6- !ct"e. ) ., ., - the pleasure of the Board of Directors. Any officer may at any time be removed by the Board of Directors with or without cause. Any officer may resign at any time by giving written notice to the Chair or the Secretary. The resignation shall be effective without acceptance when the notice is received by the Chair or the Secretary, unless a later effective date is specified in the notice. The same person may hold more than one office at the same time, except the offices of (a) Chair and Vice Chair and (b) Chair and Secretary. The officers, except the Chair and Vice Chair, need not be directors of this corporation. SECTION 3.2 Chair. The Chair shall, when present, preside at meetings of the Board of Directors, and shall perform such other duties as are prescribed by the Board of Directors. The Chair shall not also be the President. SECTION 3.3 Vice Chair. During the absence or disability of the Chair, it shall be the duty of the Vice Chair to perform the duties of the Chair. SECTION 3.4 Secretarv. The Secretary shall perform or properly delegate and oversee the performance of the following duties: (a) keep accurate minutes of all meetings of the Board of Directors and of the members; (b) be responsible for the custody of the records, documents and papers of this corporation; and (c) keep proper records of all transactions of this corporation. The Secretary shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of Secretary, or imposed by these Bylaws. SECTION 3.5 Treasurer. The Treasurer shall perform or properly delegate and oversee the performance of the following duties: (a) keep accurate financial records of this corporation; (b) deposit money, drafts, and checks in the name of and to the credit of this corporation in the banks and depositories designated by the Board of Directors; (c) endorse for deposit notes, checks, and drafts received by this corporation as ordered by the Board of Directors, making proper vouchers for the deposit; (d) disburse corporate funds and issue checks and drafts in the name of the corporation, as ordered by the Board of Directors; and (e) upon request, provide the Chair and the Board of Directors an account of transactions of this corporation and of the financial condition of this corporation. The Treasurer shall have and may exercise any and all other powers and duties pertaining by law, regulation or practice to the office of Treasurer, or imposed by these Bylaws. SECTION 3.6 President. The President shall be the chief executive officer of this corporation. He or she shall: (a) have general active management of the business of this corporation; (b) see that orders and resolutions of the Board of Directors are carried into effect; and ( c) have the authority to sign and deliver in the name of this corporation deeds, rnortgages, bonds, contracts, or other instruments pertaining to the business of this corporation, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Articles of Incorporation, the Bylaws or the Board of Directors exclusively to one or more other persons. -7- bCe) - - - SECTION 3.7 Additional powers. Any officer of this corporation, in addition to the powers conferred upon him or her by these Bylaws, shall have such powers and perform such additional duties as may be prescribed from time to time by the Board of Directors. COMMITTEES SECTION 4.1 Committees. Except as provided in Section 4.2 of these Bylaws, regarding the Executive Committee, this corporation shall not have committees with the authority of the Board of Directors. The Board of Directors may establish advisory committees, the members of which shall be appointed by the Board of Directors or, if expressly authorized by the Board of Directors, by the Chair. Each such committee shall at all times be subject to the control and direction of the Board of Directors. Except as otherwise provided in these Bylaws, committee members need not be directors. SECTION 4.2 Executive Committee. There shall be an Executive Committee consisting of the Chair, Vice Chair, Secretary, Treasurer, and at least one Appointed Director of this corporation, elected by the Board, who shall be voting members of the Executive Committee, and the President, who shall serve as an ex officio non-voting member. The Chair of this corporation shall be the chair of the Executive Committee. The Executive Committee shall have the authority of the Board of Directors in the management of the business of this corporation in the interval between meetings of the Board of Directors, provided, however, that the Executive Committee shall not have authority to act on any matter described in Section 2.7 of these Bylaws or matters listed in Section 4.3 below, except as specifically provided in Section 4.3( e) and Section 2. 7( 0). The presence of all the members of the Executive Committee shall constitute a quorum at any meeting thereof, but the committee members present at any meeting, although less than a quorum, may adjourn the meeting from time to time. SECTION 4.3 Prohibited Actions. Notwithstanding any provision of these Bylaws apparently to the contrary, the Executive Committee shall not have the authority to take any of the following actions: (a) Amend or repeal the Articles ofIncorporation or Bylaws of this corporation; (b) Elect, appoint, or remove any member of the Board of Directors or the Executive Committee, or any officer of this corporation; (c) Adopt or approve a plan of merger or consolidation with another corporation; (d) Authorize the sale, lease, exchange, mortgage or other disposition of all or substantially all the assets of this corporation; (e) Authorize the sale, lease, exchange, mortgage or other disposition of the assets of this corporation in the ordinary course of business, unless the Board of -8- IO(~) -- . . Directors has by resolution approved such delegation as provided in Section 2.7(0) and such resolution references both the specific transaction and the specific assets for which authority is delegated; (t) Authorize the voluntary dissolution of the corporation or revoke proceedings therefor; or (g) Amend or repeal any resolution of the Board of Directors. SECTION 4.4 Audit/Compliance Committee. There shall be an Audit/Compliance Committee consisting of the Treasurer, one Community Director, an Appointed Director and one other individual, who need not be a director of this corporation, with expertise in the areas of finance or consumer advocacy. The Treasurer of this corporation shall be the chair of the Audit Committee. The Audit/Compliance Committee shall (a) review this corporation's financial matters and report on them to the Board of Directors, (b) recommend independent auditors for approval by the Board of Directors, and (c) review this corporation's compliance program, including matters relating to charity care, discounts and collections and report on the program to the Board of Directors. SECTION 4.5 Governance Committee. There shall be a Governance Committee consisting of one Appointed Director and two Community Directors. The Governance Committee shall nominate individuals to serve as Community Directors and officers of this corporation, shall supply criteria and desired competencies, may suggest candidates to the City for Appointed Director positions and shall have such other duties as the Board of Directors shall determine from time to time. The corporation is committed to maintaining a Board having diverse competencies, aimed at effective oversight ofthe health care enterprise. The Governance Committee shall periodically review and recommend to the Board the general and special competencies that should be reflected in Board membership and create, manage'and regularly review a list of potential board members from which a slate of candidates for Board of Director vacancies can be developed (the "Candidate List"). For vacancies in Appointed Director positions, the Governance Committee will forward to the City the Board's most recently adopted competency based board criteria, identify the special competencies with respect to which the Governance Committee believes the current Board has gaps, and list those candidates from the Committee's Candidate List who would comply, in the Committee's judgment, with the criteria, given the competencies of the other current Board members. In making its appointments, the City will review the corporation's board criteria, the special competency gaps and consider names forwarded, if any, by the Governance Committee, but shall be free to appoint whomever the City determines. For vacancies in Community Director positions, the Governance Committee will identify and forward to the Board the special competencies with respect to which the Governance Committee believes the current Board has gaps, and list those candidates from the Committee's Candidate List who would comply, in the Committee's judgment, with the Board's most recent competency based board criteria, taking into account the competencies -9- 16{ e. 'J ., -- - of the other current Board members. In filing vacancies for Community Board positions, the Board will review the corporation's board criteria, the special competency gaps and consider names forwarded by the Governance Committee, but shall be free to elect such individuals as it determines. SECTION 4.6 Meetings and voting. Meetings of each advisory committee shall be called and held in accordance with the provisions of Sections 2.2 to 2.6 of these Bylaws as they apply to meetings of the Board of Directors. INDEMNIFICA nON SECTION 5.1 Indenmification. This corporation shall indemnifY its directors, officers. committee members. and employees against such expenses and liabilities, in such manner, under such circumstances, and to such extent, as required or permitted by Minnesota Statutes, Section 317A.s2I, subd. 2, as amended from time to time, or as required by other provisions oflaw; provided, however, that no indemnification shall be made with respect to any claim, issue or matter as to which the person shall be adjudged to be liable to this corporation. SECTION 5.2 Advances. This corporation shall advance expenses in such manner, under such circumstances, and to such extent, as required or permitted by Minnesota Statutes, Section 317 A.s21, subd. 3, as amended from time to time; provided, however, that this corporation shall not advance expenses incurred in defense of a claim brought by or in the right of this corporation or expenses incurred in pursuing a claim against this corporation. The provisions of this Section are not intended to limit the ability of a person to receive advances as an insured under an insurance policy maintained by this corporation. SECTION 5.3 Insurance. This corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, committee member, or employee against any liability asserted against and incurred by such person in or arising from such capacity, whether or not this corporation would otherwise be required to indemnify the person against the liability. MEDICAL STAFF SECTION 6.1 Authoritv. In accordance with applicable law, the Board of Directors shall have the ultimate authority to determine the categories of practitioners eligible and criteria for appointment to the medical staffs of facilities operated by the corporation. The Board of Directors shall have final authority on all matters involving medical staff membership, clinical privileges and corrective action after consideration of the medical staffs recommendations; provided, however, that the Board of Directors may act in any event in which the medical staff fails to adopt and submit such recommendations within the time frame set forth in the rnedical staff bylaws and any supporting documents. -10- . '\ bee.. J e - - SECTION 6.2 Delegation. Subject to the ultimate authority of the Board as set forth in Section 6.1 of these Bylaws and in accordance with legal and accreditation requirements, the Board of Directors has authority to delegate to the medical staffs of the facilities operated by the corporation the responsibility for monitoring and ensuring the quality of care provided in such facilities, making recommendations concerning applications for appointment and reappointment to the medical staff and clinical privileges, and such other matters as the Board of Directors in its discretion deems appropriate. MISCELLANEOUS SECTION 7.1 Fiscal year. Unless otherwise fixed by the Board of Directors, the fiscal year of this corporation shall begin on January 1 and end on the succeeding December 31. SECTION 7.2 Corporate seal. This corporation shall have no seal. SECTION 7.3 Amendments. The Bylaws of this corporation may be amended only as provided in this Section 7.3. (a) The Board of Directors may amend the Sections of the Bylaws listed in Section 2.7(b) of these Bylaws by the approval of at least two-thirds of all directors ofthis corporation as provided in Section 2.7, provided, however, that no such amendment shall be effective without the approval of the voting member. (b) The voting member may propose amendments to the Sections of the Bylaws listed in Section 2. 7(b) above, provided, however, that no such amendment shall be effective without the approval of at least two-thirds of all directors of this corporation as provided in Section 2.7 of these Bylaws. (c) Sections of the Bylaws other than those listed in Section 2. 7(b) above may be amended by the affirmative vote of a majority of the directors present at a meeting of the Board of Directors at which a quorum is present. Such amendments shall be effective without approval by the voting member. The voting member shall have no power to propose amendments to Sections other than those listed in Section 2. 7(b) above. (d) Notwithstanding the foregoing, the voting member may unilaterally amend any Section of the Bylaws ofthis corporation upon any of the following events: (i) the Lease between this corporation and the City effective December 31, 2007 terminates for any reason other than as a result of the exercise of the purchase option set forth in such lease, (ii) continued noncompliance by this corporation with the Operating Parameters set forth in Sections B, C or D of Exhibit A attached to these Bylaws at the expiration of the cure period as -11- bee.') - . - provided for such Operating Parameters, or (iii) the Board of Directors votes to undertake any action described in Section 2.7(c) or 2.7 (d) of these Bylaws or to cease all or substantially all the operations of this corporation. The voting member shall have no power to amend these Bylaws unilaterally in any other. circumstance. SECTION 7.4 Authority to borrow. encumber assets. No director, officer, agent or employee of this corporation shall have any power or authority to borrow money on its behalf, to pledge its credit or to mortgage or pledge its real or personal property except within the scope and to the extent of the authority delegated by resolutions adopted from time to time by the Board of Directors. Authority may be given by the Board of Directors for any of the above purposes and may be general or limited to specific instances. SECTION 7.5 Execution of instruments. Deeds, mortgages, bonds, checks, contracts and other instruments pertaining to the business and affairs of this corporation may be signed on behalf of this corporation by the President, the Chair, the Vice Chair, or such other person or persons as may be designated from time to time by the Board of Directors. SECTION 7.6 Deposit of funds. All funds of this corporation shall be deposited from time to time to the credit of this corporation in such banks, trust companies or other depositories as the Board of Directors may approve or designate, and all such funds shall be withdrawn only in the manner or manners authorized by the Board of Directors from time to time. LIMITED MEMBER RIGHTS SECTION 8.1 Context for Creation of Member Rights. As described in the Preamble to these Bylaws, this corporation was formed by a community task force, which believed that this corporation should provide certain limited rights to the City concerning the commitment of this corporation to continue its mission. This corporation agrees that the City should receive the benefit of all residual assets should all or substantially all of the assets of the corporation be sold, merged with, or leased or transferred to others, or should this corporation cease operations as a health care provider of the type contemplated under these Bylaws. Although this corporation had no voting members when it was incorporated, the Board of Directors has determined that it is in the best interests of this corporation to permit the City to become a voting member solely for the purpose of ensuring that the City receives the benefit of any residual assets or resources and has the opportunity to approve the final disposition ofthe corporation's assets or the proceeds from disposition thereof. Accordingly, these Bylaws confer on the City certain limited member rights which become exercisable only upon the occurrence of events or Board of Director actions described herein. If or when those events occur, the City may exercise the membership rights described in these Bylaws. The City shall have no membership rights other than those described in these Bylaws. The rights set forth herein require acceptance of such membership rights by action of the City Council at any time following adoption of these Bylaws. -12- bC~) .. . -- SECTION 8.2 Limited Membership Rights. The City shall have the following membership rights, and only these membership rights: (a) In the event that the Board of Directors approves an action described in Section 2.7(a)-(i) of these Bylaws, the City has the power to approve or veto the action. The action shall not be effective without the approval of the City. (b) As described in Section 7.3 of these Bylaws, the City has the power to approve and propose amendments to these Bylaws. (c) The City may sell or transfer its membership rights to this corporation or to a third party, but only if such sale or transfer is approved in advance by at least two-thirds of the directors of this corporation. The consideration given in exchange for such membership rights will be determined by the parties to the transaction, but in any event, is wholly unrelated to any purchase option or payment obligations set forth in the Lease. SECTION 8.3 Resignation. The City may resign one or more of its enumerated membership rights at any time, but shall not have the right thereafter to reinstate such rights. SECTION 8.4 Dues. This corporation shall not have the right to impose dues, assessments or fees on the City without the consent of the City. SECTION 8.5 Dividends. The City shall have the right to receive dividends as a member. (Dividends are not contemplated, however, the tool is available if extraordinary/windfall circumstances arise, should the board ever choose to use it.) SECTION 8.6 Member Meetings. This corporation shall not be required to hold annual meetings of the member as a result ofthe limited membership rights set forth in Section 8.2 of these Bylaws. tb.us.J284955.26 -13- laCe. J - - - BYLAWS EXHIBIT A Operating Parameters, and Effects of Default The corporation and the City (as a limited member) have agreed that the corporation will exceed certain performance parameters and fundamental standards set forth in Sections A, B, C and D, below (collectively, the "Operating Parameters"). On or before the ls0th day after the end of this corporation's Fiscal Year, this corporation will submit to the City its computations and certification of compliance with each of the Operating Parameters set forth in Sections A and B, based on financial results audited by a firm of qualified Certified Public Accountants. Section A If this corporation is not in compliance with any of the Operating Parameters set forth in this Section A when such computations are due, this corporation shall provide a written plan detailing how it will satisfy the Operating Parameters in this Section A within a reasonable time period specified by the City (the "Workplan"). The City may also require this corporation to engage, within forty-five (45) days of the City's written notice, a management consultant mutually selected by the City and this corporation (the "Consultant") for the purpose of reviewing the deficiency and making recommendations regarding the operation and administration of the health care system. This corporation shall give full and prompt consideration to the Consultant's recommendations and, to the fullest extent feasible and consistent with this corporation's charitable mission, its obligations under this Agreement, and the interests of the community it serves, this corporation shall undertake its best efforts to implement such recommendations. Notwithstanding the foregoing, this corporation shall take no action pursuant to its Workplan or in response to the Consultant's recommendations that would jeopardize this corporation's sOI(c)(3) status, compliance with bond covenants under any Existing Bonds or Future Bonds, or its adherence to legal, regulatory or accreditation standards and requirements. So long as this corporation fails to comply with any of the Operating Parameters set forth in Section A, the corporation will provide to the City, not later than on the last day of each fiscal quarter, or at such other interval as the corporation and the City may agree, a letter from the Consultant (if engaged) to the effect that in his or her judgment, this corporation is implementing such recommendations in orderly fashion. (I) Maximum Annual Debt Coverage Ratio of at least 1.3 times. (2) Cash to Debt Ratio of at least 50 percent. (3) Days Cash on Hand of60 days. -14- lc:(e ') tit . -- (4) Operating Margin of at least 1.5 percent in at least 1 of the last 2 Fiscal Years. Section B If the corporation is not in compliance with the Operating Parameters set forth in this Section B, or fails to submit its required computations and certification of compliance with the Operating Parameters, then no later than one hundred twenty (120) days from its receipt of such computations and certification, or in the event of a failure to submit such computations and certifications, no later than one hundred twenty (120) days from their due date, the City may provide written notice to the corporation that its voting member'S amendment rights set forth in Section 7.3(d) shall be effective as of such 120th day. The failure to provide such notice in anyone Fiscal Year shall not constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section B, or fails to submit its required cornputations and certification of compliance. (1) Maximum Annual Debt Coverage Ratio of at least 1.15 times in at least 1 of the last 3 Fiscal Years. (2) Cash to Debt Ratio of at least 30 percent. (3) Days Cash on Hand of 45 days. (4) Operating Margin of at least 1.5 percent in at least I of the last 3 Fiscal Years. Section C If at any time, this corporation is not in compliance with any of the Operating Parameters set forth in this Section C, following either (i) a period equal to the cure period stated in the notice from the applicable agency threatening revocation of authority or applicable statute or regulation with respect thereto, or (ii) ifno specific cure period is provided by any such notice, statute, or regulation, a period of thirty (30) days from the date of the notice or actual knowledge ofthe event which resulted in the noncornpliance, then no later than one hundred twenty (120) days from the close of such cure period or the date of such notice or knowledge of the event, as applicable, the City may provide written notice to the corporation that its voting member's amendment rights set forth in Section 7.3(d) shall be effective as of such I 20th day; provided, however, that the aforementioned cure periods will be tolled during any period in which both (i) the corporation complies with the applicable administrative and/or legal process necessary to challenge or appeal the noncompliance or noncompliance determination, and (ii) during the pendency of such challenge or appeal, and before final determination ofthe matter, the corporation continues to have authority to provide care and to bill and collect payment for the services rendered to all its patients for whom, otherwise, the noncompliance would prohibit the corporation from billing and collecting for services -15- I o (e) - - -. provided to such patients. The failure to provide such notice in anyone Fiscal Year shall not constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section C. (a) The corporation shall obtain such licenses from the Minnesota Department of Health as are necessary to operate in accordance with its Fundamental Nature, including a hospital license, and maintain such licenses in good standing. (b) The corporation shall comply with all applicable Medicare conditions ofparticipation or submit and implement corrective action plans satisfying same (or the federal govemrnent's primary health insurance program from time to time if the existing Medicare program is supplanted at any time). (c) The corporation shall obtain and maintain the health care system accreditation by the relevant state survey agency or the Joint Commission. (d) The corporation shall maintain tax-exempt status as an organization described in Section sOI(c)(3) of the Internal Revenue Code, as amended. (e) At all times, the corporation shall be authorized and permitted to bill and collect for the provision of hospital and clinic services to patients under such government programs by which they are covered and services to members of the general public. Section D If the corporation is not in compliance with the Operating Parameters set forth in this Section D, then no later than one hundred twenty (120) days from its receipt of notice with regard to a default under paragraph I or deficiency under paragraph 2, the City may provide written notice to the corporation that its voting member's amendment rights set forth in Section 7 .3( d) shall be effective as of such 120th day. The failure to provide such notice in anyone Fiscal Year shall not constitute a waiver of the City's notice and member amendment rights in any subsequent Fiscal Year in which the corporation is not in compliance with the Operating Parameters set forth in this Section D. (1) Compliance with any financial covenants made by this corporation in connection with any future outstanding debt of the corporation issued as described in Section 17.10 of the Lease, which, if not complied with, would constitute an event of default; provided that this corporation shall be considered compliant during any period with respect to which the lender, or trustee acting on its behalf, has waived all defaults. (2) This corporation shall always operate such that the City is within the Hospital's Geographic Service Area as defined in Section 1.1 ( c) of these Bylaws. -16- loce) It II . Amendments The parties acknowledge that the Operating Parameters have been designed as indicators of financial or quality jeopardy under current market conditions. It is also acknowledged that the Operating Parameters are also based on Generally Accepted Accounting Principles ("GAAP") that currently exists. This corporation and the City shall, from time to time, amend the Operating Parameters as necessitated by changes in GAAP and market conditions in order to maintain their status as indicators of financial or quality jeopardy, taking into consideration the performance of similarly situated nonprofit corporations having comparable operations to this corporation's. Certain Definitions: Cash To Debt Ratio: For any Fiscal Year, shall mean the ratio of (I) Unrestricted Liquid Funds of the corporation to(2) the Long-Term Debt less cash or investments restricted under any Indenture (that has been excluded from Unrestricted Liquid Funds) ofthe corporation, all as shown in the audited financial statements of the corporation for any Fiscal Year. Days Cash on Hand: means the result of dividing the Unrestricted Liquid Funds of the corporation by daily operating expenses. Daily operating expenses is computed by dividing Total Operating Expenses less depreciation and amortization expense for such Fiscal Year by the number of days in that Fiscal Year. Existing Bonds: The following bonds issued by City: General Obligation Medical Facilities Revenue Refunding Bonds, Series 1997B; General Obligation Medical Facilities Revenue Refunding Bonds, Series 1998A; General Obligation Taxable Medical Facilities Revenue Refunding Bonds, Series 1998B; Taxable Medical Facilities Gross Revenue Bonds, Series 1998; General Obligation Medical Facilities Revenue Bonds, Series 2002D; and General Obligation Medical Facilities Revenue Bonds, Series 2003A. Future Bonds: Any indebtedness of the corporation that is entered into on or after the December 31, 2007 effective date of the Lease between the City and the corporation. Fiscal Year: Each 12 month period ending on the date specified in the Bylaws of this corporation. Currently, the fiscal year ends on December 3 I. Generally Accepted Accounting Principles (GAAP): GAAP is the standard framework of guidelines for financial accounting, as established in the United States of America. It includes the standards, conventions, and rules accountants follow in recording and summarizing transactions, and in the preparation of financial statements. GAAP for this purpose means those guidelines and rules applicable to this corporation. -17- IoC~ ') -. -. -- Long-Term Debt: All obligations which appear as a long-term liability on this corporation's financial statement in accordance with GAAP, including but not limited to revenue bonds, capital leases, bank or installment debt, and contracts for deed, plus or minus any amounts for unamortized discounts/premiums or deferred losses on refunding. However, Long-Term Debt excludes the debt to the City related to the payment required in Section 3.1 of the Lease Agreement. Maximum Annual Debt Coverage Ratio: Net Revenues for a Fiscal Year divided by the Maximum Annual Principal and Interest Requirement due in future fiscal years. The ratio is to be computed based on this corporation's audited financial statements. For any computation that requires reference to one or more Fiscal Years prior to the effective date of the Lease Agreement, the ratio is to be computed using the Net Revenues and Maximum Principal and Interest Requirement from the applicable Fiscal Year audited financial statements of the City enterprise Hutchinson Area Health Care. Maximum Annual Principal and Interest Requirement: The sum of the maximum principal and interest payments required to be paid in any future Fiscal Year on Long-Term Debt. If a Long-Term Debt issue has a balloon payment, for the purposes of this computation that balloon payment is to be amortized over a period of years equal to the lesser of30 years less the total number of years that the issue has been outstanding (from inception) prior to the date of the balloon payment, or the remaining useful life of the asset being financed. For purposes of the preceding sentence, the "remaining useful life" shall be defined as the number of years remaining until the asset is fully depreciated per the depreciation schedule maintained by the corporation in accordance with GAAP. The interest rate to be applied during this period is equal to the rate required to be paid on the issue in the fiscal year preceding the balloon payment. The principal and interest amortization for the Fiscal Years including and subsequent to the balloon payment is to be computed assuming an equal annual amortization. If Long-term Debt includes a debt issue that has a variable interest rate, for purposes of computing future year interest requirements, the interest rate to be used is the rate in effect at the end of the Fiscal Year for which this computation is being made. Net Revenues: The aggregate of all operating and nonoperating revenues less Total Operating Expenses, except excluding (I) depreciation (2) amortization and (3) interest expense of this corporation, all determined in accordance with GAAP, for a Fiscal Year. However, Net Revenues are to exclude any (I) contribution or investment income that has been restricted by its donor for endowment (permanently restricted) purposes (2) unrealized gains and losses on investments (3) extraordinary or non-recurring items including gains or losses on refinancing, extinguishment of indebtedness, gains or losses of sales or other dispositions of property not in the ordinary course of business. Operating Margin: The sum of Total Operating Revenues less Total Operating Expenses divided by Total Operating Revenues for a Fiscal Year. The ratio is to be computed based on this corporation's audited financial statements. For the two Fiscal Years immediately after the effective date of the Lease Agreement, the prior year(s) ratio is to be computed using the -18- IDee.) - - - Total Operating Revenues and Total Operating Expenses from the applicable Fiscal Year audited financial statements of Hutchinson Area Health Care. Total Operating Expenses: All expenses reported as operating expenses, in accordance with GAAP, that this corporation reports for a Fiscal Year, including (I) depreciation (2) amortization and (3) interest expense. Total Operating Revenues: All revenues reported as operating revenues, in accordance with GAAP, that this corporation reports for a Fiscal Year excluding any (I) contribution or investment income that has been restricted by its donor for endowment (permanently restricted) purposes (2) unrealized gains and losses on investments (3) extraordinary or non- recurring items including gains or losses on refinancing, extinguishment of indebtedness, gains or losses of sales or other dispositions of property not in the ordinary course of business. Unrestricted Liquid Funds: means (i) unrestricted cash, (ii) cash equivalents, (iii) escrow funds, if any, under that certain Escrow Agreement effective December 31,2007 by and between this corporation and the City of Hutchinson, and (iv) board designated marketable debt and equity securities, but excluding and exclusive of: (I) all trustee-held funds; and (2) borrowed funds that are entrusted with a lender. fb.lls.1284955.26 -19- I DCe-) . . . . . . HAHC DRAFT 8-14-07 RESTATED ARTICLES OF INCORPORATION OF HUTCHINSON HEALTH CARE ARTICLE I The name of this corporation shall be: Hutchinson Health Care ARTICLE II This corporation is organized and shall be operated exclusively for charitable, scientific, public, and educational purposes. In furtherance of its purposes, this corporation may engage in, advance, promote, support and administer charitable, scientific, public, and educational activities and projects of every kind and nature whatsoever in its own behalf or as the agent, trustee or representative of others. All the powers of this corporation shall be exercised only so that this corporation's operations shall be exclusively within the contemplation of Section 501 (c)(3) of the Internal Revenue Code. All references in these Articles of Incorporation to sections of the Internal Revenue Code are to the Internal Revenue Code of 1986 and include any provisions thereof adopted by future amendments thereto and any cognate provisions in future Internal Revenue Codes to the extent such provisions are applicable to this corporation. ARTICLE III This corporation shall not afford pecuniary gain, incidentally or otherwise, to its members, if any, other than the City of Hutchinson, Minnesota. No part of the net income or net earnings of this corporation shall inure to the benefit of any member, private shareholder or individual, other than the City of Hutchinson, Minnesota. Except as permitted by Minnesota Statutes, Section 317 A.sOl, this corporation shall not lend any of its assets to or guarantee the obligation of any officer, director, or employee of this corporation, or a member of the family of such a person. Nothing herein shall be construed to establish or prohibit the payment of reasonable compensation to any person for services actually rendered by such person to this corporation. ARTICLE IV No substantial part of the activities of this corporation shall consist of carrying on propaganda or otherwise attempting to influence legislation. This corporation shall not participate in or intervene in (including the publishing or distributing of statements) any political campaign on behalf of (or in opposition to) any candidate for public office. 16&) . . . ARTICLE V The period of duration of this corporation's existence shall be perpetual. ARTICLE VI The registered office of this corporation shall be located at 1095 Highway 15 South, Hutchinson, MN 55350. ARTICLE VII The City of Hutchinson, Minnesota shall be the sole voting member of this corporation, and shall have only the membership rights described in the Bylaws of this corporation. The Board of Directors may establish one or more classes of non-voting members upon such conditions and terms as it from time to time deems appropriate. ARTICLE VIII The management and direction of the business of this corporation shall be vested in a Board of Directors. The number, term of office, powers, authority and duties of members of the Board of Directors, the time and place of their meetings, and such other regulations with respect to them as are not inconsistent with the express provisions of these Articles of Incorporation shall be as specified from time to time in the Bylaws of this corporation. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken by written action signed by all the directors. ARTICLE IX This corporation shall have no capital stock. ARTICLE X The directors and officers of this corporation shall not be personally liable for the debts or obligations of this corporation of any nature whatsoever, nor shall any of the property of the directors or officers be subject to the payment of the debts or obligations of this corporation to any extent whatsoever. -2- lc(e) . . . ARTICLE XI These Articles of Incorporation may be amended from time to time in the manner provided by law; provided, however, that during the term of that certain operating lease of substantially all of the operating assets of this corporation with the City of Hutchinson, Minnesota, no amendment to the Articles of Incorporation will be effective without the approval of the City of Hutchinson, Minnesota as required by Section 2.7(a) of the Bylaws of this corporation. ARTICLE XII This corporation may be dissolved in accordance with the laws of the State of Minnesota; provided that any special notice and approval requirements described in the Bylaws of this corporation are met. In the event of the dissolution of this corporation any surplus property remaining after the payment of its debts shall be disposed of by transfer to the City of Hutchinson, Minnesota, or its successor, to be held and used exclusively for the charitable, scientific, public, or educational purposes of this corporation or other purposes of the City of Hutchinson, Minnesota as the City Council may determine; provided, however, that if the City of Hutchinson, Minnesota declines to accept all or any part of said surplus property, then said surplus property shall be disposed of by transfer to one or more corporations, associations, institutions, trusts, or foundations organized and operated for one or more of the purposes of this corporation, and described in Section sOI(c)(3) of the Internal Revenue Code of 1986, or to the State of Minnesota or any political subdivision or agency thereof for exclusively public purposes, in such proportions as the Board of Directors of this corporation shall determine. Notwithstanding any provision herein to the contrary, nothing herein shall be construed to affect the disposition of property and assets held by this corporation upon trust or other condition, or subject to any executory or special limitation, and such property, upon dissolution of this corporation, shall be transferred in accordance with the trust, condition or limitation imposed with respect to it. Ml:1284899.03 -3- laCe) . . . Ordinance No. 07-0470 AN ORDINANCE APPROVING ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE WHEREAS, as a result of 3 years of analysis, public input and consultation with health care experts, the City and Hospital agree that at the current time it is in the best interest of the residents of Hutchinson and the surrounding area that the Hospital be governed by a not-for-profit organization under Internal Revenue Code Section 50I(c)3; and, WHEREAS, a non-profit corporation, Hutchinson Health Care, has been created to serve as the governing entity to serve the health care needs of the Hutchinson area and, WHEREAS, the City of Hutchinson will continue to be a part of Hutchinson Health Care through membership rights and the Board of Directors of Hutchinson Health Care the Articles of Incorporation and the bylaws of Hutchinson Health Care, the City Council of the City of Hutchinson must approve said Articles and Bylaws, NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HUTCHINSON, THAT THE ARTICLES OF INCORPORATION AND RESTATED BYLAWS OF HUTCHINSON HEALTH CARE AS A TT ACHED AS EXHIBIT A AND B TO THIS ORDINANCE IS HEREBY ADOPTED BY THE CITY COUNCIL AND THAT THIS ORDINANCE SHALL BE EFFECTIVE UPON PUBLICATION. Signed this day of ,2007, Attest: Gary D. Plotz, City Administrator Steven W, Cook, Mayor \oCe) . . . . . . MEM()I{ANDlJ~1 DATE: August 22, 2007, for the August 28,2007, City Council Meeting TO: Hutchinson City Council FROM: Rebecca Bowers, AICP, Planning Director SUBJECT: Request for Special Joint Council and Planning Commission Workshop for the Highway 7 Corridor Study on October 9th at 4:00 p.m. Staff is requesting a joint Council and Planning Commission workshop to review progress on the Highway 7 Corridor Study on October 9th at 4:00 p.m. The Advisory Panel and staff have been providing feedback on the study, however at this point we feel it is critical to review progress and obtain feedback from the Council and Planning Commission before the concept plans and recommendations are developed for the final open house this fall. There would be some additional cost beyond the original contract for reimbursement for staff hourly rates and expenses for the workshop, however staff will work to minimize the cost. There are additional funds available from the Highway 7 project planning fees fund to pay for the workshop. The corridor study schedule and notes from the last Advisory Panel meeting are attached for the Council's information. The next advisory panel meeting will be held on September 20th. Attachments: Project Schedule Meeting Notes from July 12, 2007 Advisory Panel lb~) ~ v . Proposed Schedule . LANDFORM Task I: Establish Communlt Vision Gather and Review Past Plans. Existing Camp Plan, Zoning, and Ordinances; sel- up background maps, ale Kick-off Meeting with Staff - workplan, schedule AP mtgs, public open house Conduct Physical.visual Survey (walk, photo. map), land Use Inventory Kick-off and Visioning Meeting with Advisory Panel Prepare presentation of Analysis - physical. visual, land use, needs, issues Prepare for Open House - sign-in sheets, comment.survey materials Conduct Public Open House wlvislJal and priorities survey. interviews Define Goals-Objectives, Needs and Priorities Prepare Vision Slatement . document Vision Process and Guiding Concepts Add'l Review Meetings with Slaff . teleconference? (2) SIaff 10 Updale CDC, Planning Commission and City Council Task 2: Land Use Oevelo ment Strate Conduct Market Analysis. Focus on Feasibility/Strategies for Achieving Vision Based on Inventory - Identify Opportunities for Development/Redevelopment Organize Draft Land Use Plan based on Vision and Market Analysis Review Markel Analysis and Opportunities with Advisory Panel Identify Potential Impacts on Existing Utilities Identify Potential Transportation Needs, Consider MnDaT Hwy Access Policy Develop Concepts (2-3) for Hwy 7 and 15 intersection redevelopment Develop recommendations for Design Guidelines, Improvement, Zoning changes Recommend Improvements: Safety, Traffic, Connect- PedestrianlBikelTransit Review Redevelopment Concepts & Recommendations with Advisory Panel Review Meetings with Staff - teleconference? (2) Staff 10 Update COC, Planning Commission and City Council Task 3: Present the Plan Document and Communicate the Vision and Recommendations Prepare Graphics and Maps (Boards, Plan Document and digital Web-ready) Publish Draft with Graphics for Staff Preliminary Review Prepare materials for Public Open House Conduct Public Open House Make Plan Revisions (one round, text primarily) Review Meetings with Staff - teleconference? (2) Present Plan to CoC/Planning Commission and City Council 2001 Au ust Se lember I ..~! ! i . !AP meeting (M~y 24) I ..~t I I i ~bli< OpeR Hou.. (June 6) . h~ L ll....r i<ll <>, ; I .. I I...~ 1 ...... I I I · lAP mHUng fJUr 12) ..,,~ I I..!. .. I 1 I ......~ I I I 1.....\ I I ... i I I ,.' ....Un. (~'P1207) i 0 i <> ' i i I I October December November .... ..... .aftP/., i ..~ ' '* Public Open House (TBD) ....... I <> <>* '* ! a!tt~ ~ LANDFORM . M INN EA PO LIS, PHO EN IX City of Hutchinson Hwy. 7 Corridor Study MEETING NOTES 800C BUTLER SQUARE 100 NORTH SIXTH STREET MINNEAPOLIS, MN 55403 OFFICE: 612.252.9070 FAX: 612.252.9077 DATE 12-Jul-Q7 TIME PURPOSE OF MEETING ATTENDEES Rebecca Bowers Dolf Moon Miles Seppelt Lynn Otteson Chris Kovacic Jean Ward Jim Haugen Jennifer Zierke Carolyn Krall Matt Mullins Hutchinson City Hall 10:00 Am LOCATION Advisory Panel Meeting #2 REPRESENTING City of Hutchinson City of Hutchinson City of Hutchinson Chair, City of Hutchinson Planning Com. City of Hutchinson Planning Commission Hutchinson HRA City of Hutchinson City Council Landform Landform Maxfield Research PHONE # EMAlL RBowers@ci.hutchinson.mn.us DMoon@ci.hutchinson.mn.us MSeppelt@ci.hutchinson.mn.us jzierke@landfonnmsp.com ckrall@landformmsp.com mmullins@maxfieldresearch.com MEETING SUMMARY: Proiect Schedule: The schedule to date was reviewed. The Landform Team has completed Task 1 and is part way through Task 2. (see AP meeting date on schedule chart) . ODen House Overview: An overview of the results of the Open House was discussed. Generally, attendees felt that Highway 7 was a place to move through but would prefer that It was a place people will stop, shop and enjoy the natural amenities. Attendees placed dots on images that they liked, including parks and trail connections; additional commercial uses; and historic architecture. Communitv Vision: Based on input at the Open House, a vision statement with specific goals and objectives were developed. The vision statement and goals focus on the unique qualities of Hutchinson, including the small-town atmosphere; historic riverfront; parks and trails; creating a destination; and providing a safe place to work, shop, visit and live. The vision statement and goals reinforce past goals identified in the 2002 Comprehensive Plan and in the more recent Downtown Planning Study (this should be explicitly stated and previous planning studies referenced). Concern was raised about the costs of implementation. Market Analvsis: A review of the draft Market Analysis was provided and reviewed. The study shows that about 20% of the uses along Highway 7 are currently auto-related. Some of the strengths of the corridor area are the high traffic counts for retail uses; additional growth of population to support retailers; and the positive long term impacts of the Highway 7 improvements. The weaknesses of the study area include competition with big box retail to the south on Highway 15; incompatible land uses; and limited vacant land for development. . The Market Analysis supports additional multiple family housing units, office and retail Page 1 \c{f') August 23, 2007 . uses. There is a demand for neighborhood retail and professional services. Upper-end housing -- luxury rental, active senior housing and townhomes are also recommended. Additional market-supporting priorities for the corridor were identified as: redevelopment of the Highway 7 and Highway 15 intersection, connecting Highway 7 to the natural amenities and downtown, and addressing incompatible uses. The term "incompatible land uses" was discussed. Properties along the corridor that are adjacent to noncompiementary uses were identified (i.e. an industrial use next to a residential use). It was noted that industrial uses with a lot of outside storage for example, may discourage new retaii commercial uses, reducing new investment in the corridor. Land Use Planninq: Opportunity Sites Boards (in draft form) illustrating Opportunity Sites and potential changes to the Land Use maps and Zoning maps were presented and discussed. The "Highway 22 gateway" was identified as one gateway along the eastern edge of Hutchinson that offers future development opportunities that should be better defined by zoning. A secondary gateway can be identified as you approach the City, where the road turns (at the new REMAX building) and drops into the City, offering views towards downtown. The south side of the highway (currently apartments and a few houses, some of which are used by businesses) provides opportunities for connections to the Luce Line trail and is appropriate for higher density housing. Along the Highway frontage there may be more opportunities for new mixed use (housing and commercial). . The Highway 7 and Highway 15 intersection is the next gateway to the downtown. There could be design standards developed to identify and reinforce the "Main Street" connection. There may be opportunity for luxury condos in this location, and consideration should be given to a 'backage' road system on the north side, to provide access suitable for mixed use or more commercial uses. Along Highway 7 there are also a lot of single family residences which are very close to the busy highway, with driveways which present safety concerns. These areas may eventually offer opportunities for commercial development. On the south side of the corridor, there is opportunity for redevelopment of the Cenex site and the area adjacent. Due to floodplain issues, additional parcel assembly may be critical for redevelopment to work. The extension of Montana may provide an opportunity for redevelopment as well, depending on how the road connections are made. Just to the east (east of the office building) are several underused parcels facing the highway (storage or industrial buildings, some vacant). At the western edge of the project area on the north side, a vacant parcel zoned residential provides a future corner commercial development. There are several areas on the north side of the Highway which offer opportunities including vacant sites, several car sales lots and a couple of larger residential parcels (some may already be used for commercial) with commercial parcels on either side. In these locations, the lower traffic counts and the more limited access are more appropriate to service commercial than to retail uses. . At the western edge of the project area near the Old School Road intersection (on the south side) is an opportunity site (vacant Wendys, bowling alley, etc) which might be suitable for restaurant and entertainment uses or higher density-housing adjacent to the park and trails. 2 16C~) . . . August 23, 2007 Land Use PlanninQ: Land Uses and Zoning The discrepancies between the future land use and current zoning should be addressed, and spot zoning/rezoning discouraged. The zoning districts that provide striclly conditional uses and no permitted uses are more of a hinderance to well planned redevelopment than a tool to control redevelopment. Amending the language of these districts to define allowable uses (and allow for mixed use) will also present opportunities. It may make sense to phase out the IIC zone over time. Also, a large number of properties are zoned C-4, "commercial fringe" which should perhaps should be broadened to allow for a wider range of commercial uses. The other applicable "C" zones should also be reviewed. . The possibility of a river overlay district, to incorporate some of downtown's historic guidelines close to the Highway 7 and Highway 15 intersection was also discussed. The draft maps were left with the City for their review. Recommendations for alterations to the zoning and land use maps will be reviewed in detail with Rebecca in the next conference call, and included in Landform's recommendations for the final plan. Next SteDs: Landform will hold conference calls with Rebecca on July 26 and August 23. The next meeting will be held on Thursday, September 20 at1 0:00am at Hutchinson City Hall. ACTIONS: TEAM MEMBER Matt Mullins TASK Estimate area supportable for business/industrial park type uses; couid attract new businesses or relocation of uses on opportunity sites where future mixed-use of housing is anticipated DEADLINE Rebecca Bowers, Jennifer Zierke, Carolyn Krall Review questions-recommendations for revisions to the zoning and land use maps - discuss at next conference call 7/26/2007 2:00 PM 3 IbC f) . . . 'MEMORANDUM DATE: TO: FROM: August 22, 2007 for the Au,gust 28, 2007 City Council meeting Hutchinson ,City Council Rebecca Bowe'rs~ AICP, Planning Director SUBJECT: LOT SPLIT AT 1316 DE'L.AWARE STREET TO CREATE A NEW LOT WITHIN THE SHORE LAND DISTRICT ANI;) FLOOD PLAIN Ba,ckaround: The property owner is requesting a lot split for property loCated at 1316 Delaware Street in order to construct a single family home on a new lot east of the existing h~ome.. The property is located within the shoreland district of the South Fork of the Crow River and is within in the 100' year flood plain. Add,itional information is contained in the attached Planning Commission staff report and attachments. :& .. f:< .'. . I -I i' \1"". ~ ~:- " t'Q\, N. .; y,~ ~ I 1~"'''' _ Plann'ina Commission MeetinQs: The Planning Commission first considered the rt3.quest at their July 17 t 20,07, meeting, how~ver the item was table,d until the August 21 5t mee'tin'9 in order for the applicant to provide additional information as the Commission discussed the proposal at length. IOCj ') . City Council Memo August 28, 2007 Ken Cote Lot Split 1316 Delaware St. NW Page 2 Details on the July 17th meeting discussion is included in the attached staff report to the Commission. At the August 21st meeting, the Commission discussed the drawing provided by Mr. Cote showing an example of the proposed post and girder construction to elevate the home out of the 100 year flood plain. Mr. Cote did not attend the meeting, however provided a drawing as an example. If the lot split is approved, he will need to hire an architect and engineer to design the structure to meet requirements. He also provided the proposed impervious surface coverage on the lot, which would be approximately 24% and would meet the 25% maximum allowed. . The Commission discussed whether the lot split should be allowed with the detached garage on the new lot. The detached garage is considered non-conforming as it does not meet the 50' structure setback required in the shoreland district ordinance. Additionally, accessory buildings are not allowed without the house as a primary structure. The Commission discussed previous problems in allowing a lot split with an accessory building on a lot, in which no home was later constructed on the lot. Additional discussion occurred on requiring the garage to be removed prior to the lot split being approved and recorded at the County. The Commission stated that removing the nonconforming garage should be required as a condition of approving the lot split for the new home. A larger attached garage could also be constructed by the applicant if needed. Also discussed was the recommendation for denial by the DNR (letter attached) and whether the city should allow the creation of new residential lots and homes to be built within the 100 year flood plain. The Commission also discussed if there was any regulations to preserve views of the lake. Staff stated there is a 25' building height maximum allowed in the shoreland district, but no other regulations to preserve views. The building height is defined as: "the vertical distance between the highest adjoining ground level at the building or 10' above the ground level, whichever is lower, and the highest point of a flat roof or average height of the highest gable of a pitched roof'. The applicant will need to consider this requirement in the design of the home. As no building plans have been provided yet, staff could not review this requirement. Information from Applicant after the Meetina: As the applicant did not attend the meeting, staff has advised the applicant that the Commission recommended approval, subject to removing the garage first. The applicant objects to removing the garage and will be at the Council meeting to request the garage to be allowed to be remain on the proposed lot. . I DCj) City'Council Memo August '28, 2007 Ken Cbte Lot Split 1316, Delaware St. NW Page 3 Recommendation: The Planning Commission recommended approval of the lot split, with the state.d findings and. conditions' in the attached resolution., including removal of the detached garage. View showing the existing detached garage on proposed lot \bC c;J DIRECTORS REPORT - PLANNING DEPARTMENT ....~...~...-=- ~ 4-....r_-.....-JlbJ ~~_H:..,.___-,..:1'~:':iI.:-_-=.:,;:.; _-_ _...,...-~..~--.:::"':~ .. _ _ ..: _ - _ ~:::r__..;:;,......:7.~ -r... _.... .;_~ ":;'~___~...-_-,;' J .: ~,;= _..r ~JI ____>> .... From: Hutchinson Plan.Ding Commission Rebecca Bowers, .AICP, Planning Director August 8, 2007, for Angust 21, 2007, Planning Commission Meeting (Tabled from ti,e July 111' nzeetil'g) Application: LOT SPLIT AT 1316 DELAWARE ST.REET TO CREATE A NEW LOT WIT'DIN TIlE SHORELAND DISTRICT AND FLOOD PLAIN D'ate: To: Applicant Kenneth Cote, Property owner LOT SPLIT Brief DescriptioD The property owner is requesting a lot split for pro:perty located at 1316 Delaware Street in order to construct a sin.gle fanlily home on anew lot east of the existing home. The pro'perty is located within the shoteland district of th,e South Fork of the Crow River and. is within in the 100 year flQod plain. This oitem was discussed at the July 17th Commission meeting, however was tabled to allow the applicant time to provide information to address con.cems of the Commission. .' . " ~ - ~ t -' - -' , - ~_.~~j ..'." .. '.,;o:~...t~" .:";-:- "- ~.-. '.~'~' 1m ?: .. ~~.:-:<::' ~ -:- --- - ..:;.' . . -. T If c- ""F"-:~>>. . \o(5) Staff Report - August 21, 2007 Lot Split -1316 Delaware St. NW Kenneth Cote Page 2 . Existing Zoning: Property Location: Lot Size: Existing Land Use: Adjacent Land Use And Zoning: Comprehensive Land Use Plan: Zoning History: Applicable Regulations: Transportation: . Analysis and Recommendation: GENERAL INFORMATION R2 ( Medium Density Residential) 1316 Delaware St. NW Northwesterly parcel- 15,100 sq. ft. Southeasterly parcel- 17,600 sq. ft. Single Family Residential R2 (Single and Two Family Residential) Traditional Residential Neighborhood The properties within the Riverside Addition were platted in 1968. Section 152 and 154.057 of the City Code Delaware St. N.W. The following information was provided in the July 17th Commission report: The subject property is located along the South Fork of the Crow River and within the 100 year flood plain. The proposed lot split was submitted to the DNR Area Hydrologist for review. Hydrologist Rob Collett reviewed the request and recommends denial of the lot split to create a new lot within the 100 year flood plain (letter attached). The survey shows that there is no location where a home can be built with natural ground above the 100 year flood elevation. As stated in the letter from the DNR, "The City has worked very hard together with the DNR in eliminating structures in the jloodplain. It seems contrary to long-term efforts to allow a lot split in the flood plain." He also states: "Subdividing this lot is not consistent with MN Ru/es 6120.3500 subpart 1. Land Suitability: Each lot created through subdivision must be suitable in its natural state for the proposed use with minimal alteration. Suitability analysis by the local unit of government shall consider susceptibility tojlooding... or any other feature of the natural/and likely to be harmful to the health, safety, or welfare of future residents of the proposed subdivision or of the community ". The proposed lot split was reviewed by City staff at the April23rd planning staff meeting and was recommended for denial due to the strong objection by the DNR. At the staffrevie:w meeting, staff discussed the long term negative impacts of creating new lots and residences within the flood plain, echoing the concerns of the DNR Area Hydrologist. . , bCcjJ Staff Report - August 21, 2007 Lot Split -1316 Delaware St. NW Kenneth Cote Page 3 . After providing the review letter from the DNR recommending denial, the applicant provided a 60 day time waiver and requested delaying consideration of the lot split at the Planning Commission until additional information on construction methods could be provided to the City. If the flood plain and DNR concerns can be addressed, staff notes that the proposed lot size and dimension requirements of the shoreland district would be met as follows: Shoreland District Proposed Reouirements Lot Area 15,000 sq. ft. Northwesterly: 15,100 sq.ft Southeasterly; 17,600 so. ft Lot Width 75 ft. Northwesterly: 115 ft. Southeasterly; 100 ft. In researching the existing plat, staff discovered that the street lies within an Outlot (Outlot A) that is divided among adjacent property owners and hasn't been deeded to the City. The deed for the subject property shows a shared 1/3 interest in Outlot A. Staff is recommending that area containing Delaware Street from Hwy 7, including Outlot A, either be deeded to the City or Riverside Addition be replatted to show appropriate right of way for a public street. The applicant recently advised staff that he would use a post and girder construction method to elevate the structure above the flood plain elevation. Staff has requested additional information on building plans for review by the Building Official . Discussion and Information Provided after Planning Commission Meeting: At the Commission meeting, the Commissioners brought up concerns regarding residential construction in the floodplain, shoreland district requirements, and allowing a detached garage on a lot before a primary structure is constructed. Also discussed was the need for additional information on the construction methods, drawings of the structure, and square footage of proposed buildings and impervious surface coverage. Since the meeting, the applicant provided impervious surface coverage calculations showing that the coverage on the proposed lot would be 23.8%, which would meet the shoreland district coverage maximum of 25%. The calculations are based upon a drawing provided by the applicant and are not surveyor's calculations. Ifthe lot division is approved, an updated certified survey would be required. The applicant has provided a sample drawing showing the proposed foundation system, which includes a precast concrete plank, girder and pilings along with some general information about pilings. The building official has indicated that the plans are not sufficient for review and that an Engineer must be hired to prepare plans. The applicant states in his letter that he will hire an engineer to provide the required building plans for the soil conditions if the split is approved. . If the Commission finds the lot split should be approved, staff notes the following conditions should be included in the recommendation to the City Council: \oC J ') Staff Report - August 21, 2007 Lot Split-13I6 Delaware St. NW Kenneth Cote Page 4 . 1. 2. 3. 4. Construction on both lots shall comply with the shoreland district and requirements of the R-2 Zoning district. No variances are granted or implied. Lot split shall be recorded at the County prior to issuance of any building permit. Impervious surface shall not exceed 25% on either lot. A survey documenting all impervious surface coverage will be required prior to issuance of any building permit, The area containing Delaware Street from Hwy 7, including Outlot A, shall either be deeded to the City or Riverside Addition be replatted to show appropriate right of way for a public street. 5. SACIWAC fees in the amount of$2,9s0 must be paid at the time of building permit. 6. Park fees in the amount of$175 must be paid at the time of building permit. 7. Tree fees in the amount of$400 (2 trees per lot x $200) must be paid at the time of building permit 8. Moving or removing of any utility services, if necessary, will be at property owner's expense. 9. The property owners are responsible for updating and recording their property deeds and survey at McLeod County prior to submitting a building permit for the new lot. If the Commission recommends denial of the lot split, findings for the denial should be discussed and included in the findings resolution recommending denial to the Council. Items for special consideration by the Commission would be the recommendation for denial by the DNR, which has not been removed, the location within the 100 flood plain, and unsuitability of the land in it's natural state for construction. . Ceo Kenneth Cote, P.O. Box 216, Walnut IA 51577 Rob Collett, DNR . toe'] J - Q .(") UI '-"'" . ",...rOO -~'-'-'~-""- . SaM t<LL~_-_cLE.-}~iJ.cLJ.uLV\~~ -h~_ , 7--..-----.-...--.---.. ........---.---..-..-.-... /" /' ./~ " r Pr.e.cc,s1 Ct>VI~I'~LJ~l..t'l.k._ .=-~.~~._---~_._-~'_._-~"._----- - GI(J~ . / ,~ ? /,., v/': / /~ ~'I\'.1\~~ ./ G("''^~ fi l-<<-~ . 7-------.;---- " ------ " OUTLOT,A ~ ---- ----- " " " NW.o'n'f -x!=__ orLQ'4~ ~~,. -N3027'E 15+ '\' ""= - \ --- ---- II~ ~UG f;' arfoCl-'u\~:;;: {)8clt.~P,tc. REC&NED AUG 6 Z007 ~~~'Fs PROPERTY IS IN ZONE X AND ZONE AE FLOOD INSURANCE RATE MAP FOR THE CITY OF HUTCHINSON COMMUNITY PANEL NO 270264 0003 0 Sase Flood Elevation shown To be 1045 BENCHMARKS USED - o ~ V ----- , "",'t-. ><41,0 -~ o~ '. O/J '", ~ %., .. '.. '''''-(..,/-------.",,/ / ""- ~.,'f> h-, ""- AREA OF SOUTHEASTERLY PARCEL' 17600 Sq Ff~ '-, ""- ""- ""- RIVERSIDE ""- ""- ""- ""- .' " " ...,. ~ 44.5>< ,> " ~') .. /r--~'" .!itl \ ' \, ( ~ ..~, Y' .,~~,J''P rJ" " "..,,!> . It,"''''' " " )I"'l.~ 3 / \ /, \ \ . PROPOSED DEseR Th.at pon of LOI 4 nonhwesTerly of ..Q. Commencing 01 thE minutes Eost, OSSl feer fO lhe ongle I minUTes Easf, olon, The beginning of It seconds WesT ObOl terminaTing. PROPOSED OESCRI That part of Lot 4 southeasterly of a Commencing Ot tI'le minutes Eost, OSSU feet fO the ongle p minutes East, olon~ the beginning of th seconds WesT obou TerminaTing. \ ~ L / r".'I"'\'.'. 'ON f.-l.Uulll I " \ , \ . . . August 3, 2007 1'ECi.Ne.f Rebecca Bowers Planning Director h\jG ~o\l-\';c, ~,C\,. Hutchinson Pl:mning and Zoning III Hanson Street SE Hutchinson, MN 55350-2522 Subject: Lot Split at 1316 Delaware Street N. W. Dear, Mrs. Bowers Item 1. Percentage of permeability surrace of each proposes lot. Based on survey done by Jeff Rausch Dated March 30th 2007. Northwesterly Lot Total lot with existing home square footage, 15,100.SF Home with garage. 1790 SF Driveway with sidewalk. 720 SF Allowed Percentage 25% 3775 SF Southeasterly Lot Total 17,600 SF Existing Shed 1,200 SF --1 Existing Drive to Shed 600 SF \ Proposed Home with garage 1,916 SF i Proposed Driveway and sidewalk 465 SF ~ Allowed Percentage 25% 4,400 SF 0\.',';:;' - w ':(\ ....I;! t: lC ~ See attached drawing for location and elevation of proposed home on southeasterly lot, Item 2, Type of construction proposed for the new home would be accomplished with pile and girder construction. With means and method of pile and girder construction in flood plane provides a suitable and stable foundation in the event of flood see attached drawings. \0 G:) . . . The type and amount piles will be determined by engineering requirements for existing soil conditions. The proposed structure elevation will be placed above the 100 year flood plane. See attached drawing for illustration. In closing, all concerns should full fill the requirements set forth by the pbmning commission. It is my intent to employ the services of an engineer, if the split is approved. So I can meet all the needs and requirements set forth by the building department. Also to start with construction the spring of 2008. Thank you, Ken Cote '0 C~) '. .' ---ro...... .....r-.--- ------ ____----.:::r - . -. .. --- - .. . - -- .-- Click HeN to Order this In_ on CD-ROM Page Tille: Bearll1\l Piles B_IUpINexl Google' Click here to make toub.com YOur Home Paae Back PILE CONSTRUCllON Up Engineering Aid 1 Seon:Il I () Web o'fiwww.tpub.CCD flPARTS HA~GAR Q..ICK HEJUi TO ORDER !'ARTS ItELATaJ TO THl:.CONTEl\."T ON THIS PMil:: Home Information Categories Administration Advancement Aerographer Automotive Aviation . Combat Construction Diving Draftsman Engineering ....Electronics Food and Cooking 'Math Medical Music Nuclear Fundamentals Photography Religion USMC Producla Educational CD-ROM's Printed Manuals Downloadable Books ~est Yourself! Click here to get Certified . f2 Click Here to Download this Informlllion In PDF Format Itck here for a printable version Noxl WATERFRONT STRUCTURES VinYl ....~ ...se.w... M.rbw Tim... . Pllna Hanulllctures vlnyI sheet piling for seawalls, butkheltds, c:ut-off WBIls. TlmberGuanlls polymer pnltected wood for marine projects. WWVI.EverlastSeawalls.com _.cmlwaterfront.com r / / ~ ".. I I( lilt i: j iill i I CXlMII'OII1'e AA'nICfIg SIfIIIII'lD PU smo-TIoPSI PO: "'" .......""'" .... "'" J'Ipre 1~10.-Types .r ~ piles. -.... ,,_J. --- 45'=:;< -- ~~, .~... " " Pipre I-IL-SteeI ~ -- "...n:,.IUl ,.... MIOOllDOYt: ........ ~ l.u'-Woodskeet pIIeL Timber bearing piles are usualJy stmil!bt _ ttunks ' with the limbs and bark I'elllOVOlI. These piles if..llw. C.A<;'1g is filled with coocreIe, The casing" then continuously wet, will last fur oenturies; however. 'they -ii!iDoved, leaving the conctele in contacl with the earth. are used for low design loads because of their vulnerability to damage while they are being dri.... into -- .... the ground The smalJ end of the pile is called the tip; Sheet piles. made of wood, steel, or con<:n:te. are the larger end is called the butt. Timber piles range fronequipped or constructed fur edge-joining. so they can be 16 to 90 feet in length with a tip diameter of at least 6 driven edge-tO<dge to form a continuous wall or inches, The bun diameter is seldom less than 12 inches,bulkhead A few common uses ofsbeet piles are as A steel bearing pile migbt be an H"1'ile (having an follows: H-sbaped cross section), These piles are usually used fur ' . dri' t L_~_'. A steel pile al be 'il 1. To res.st lateral soil pressure as part of a vmg 0 lXiu.n."'.... can so a pIpe p e . . with a circular cross section. A pipe pile can be eithet antemponlly or permanent structure, sucb ns a retammg open....d pile or a closed-<:nd pile. depending on Wall whether the bottom end is open or closed, 2, To CODSIIUCl cofferdams or sttuctures built to Conaete piles, such as those shown in figure 1.] 0, exclude water from a construction area maybe either precast or.cast in place. Most precast pil~ 3. To prevent slides and cave-ins in trenches or used today are pretens.oned and are manufactured m., vab'o bli bed Ian Th il __~_ ' omer e,co ns esta s p 15. ese p es are lWJUC m square, cy1indrical, or octagonal shapes, If they are being driven The edges of _1 sheetpiling are called ......- into soft or mucky soil, they are usually tapered. (fig, 1-11) because they are shaped for locking the piles Cast-in-place piles are cast on the jobsite and are together edge-to-<:dge, The pan of the pile between the classified as shell type or shell-less type, The shell type interlocks is called the -, is fonned by driving abollow steel tube (shell). with a A wood sheet pile might consist ofa single, double. closed end, into the ground and filling it with concrete, or triple layer of planks. as shown in figure 1-12, The shell-less type is formed by first driving a casing Concrete sheet piles are cast with tongue-and.groove and core to the required depth, The core is removed and edges for edge-joining, ,., IOC<J j 7/31/2007 7:07 PM ---T- llUp.IIWWW.lpuu.\;iUUIIVVJJl.Cll&lWU1DU....".UVUfJ.....f.\rtJ......~J.".f.V....t..}_kJ.L.J.lU" Integr.... ~ Floe .... hr/(J '!I!,~'''''iiI.e-f'-'. QIII-1Me ."- e" Click Hen! to Order this Informdon on CD-ROM Click Hefe to Download lbl. Informotion In PDF Format Poge Title: Pile Conotructlon a_I Upl Next IIcIl: here for a pri~table version Coogle' Click here to make tDub.com vour Home Paae Sock Figure 8-11.-$oIclier pile systems. Up BullW Advor<ed -. PIJe.o.Mng Operdoo Sea"",1 e, Web iti www.tpob.com ;:IPARTS Ik\'liAR CLICK Hf:RE TO OaDa. PARTS R.EL....,.ffi TO THI:.: CONrE1\-r ON nus PAGE Home Information Catogorleo Administration Advancement Aerographer Automotive Aviation Combat . Construction Diving Draftsman Engineering ""Electronics Food and Cooking Math Medical Music Nuclear Fundamentals Photography Religion USMC Producto Educational CD-ROM's Printed Manuals Downloadable Books -;,(:.,\-L -"'\-1lest Yourself! Click here to llet Certified . 2 VinYl .'fllch...... -S-Walls ,..lInUhIctu~ 'lI'tnyl sheet piling for M8WBIIs, bulkheB1C1s, cut-off walls. www.E"enastSeaw~lIs.CQm Com:::rete o.sian SOftware ._L..... __... ..._._ ____...... ___ _.__ __.. PILE CONSTRUcrJON As a Builder, you will coordinate and direct piIe-driving operation C1CWS, Piles include many dilferent types and materials, The more common types " are covered next. "'I ir."" i BEARING PILES ~ ~ ' TIMBER BEARING PILES are usually straigh tree trunks witb the limbs and balk removed, and all timber will be PRESSURE-TREATED, These piles, ' kept eonIinuously ..... will last for centuries; h they are used for low-<lesillD loads because of vu1nembility to damage while they are being driven . the ground, The sma1I end of the pile is ca11ed tbe tip; the larger end is ca11ed the botl Timber piles range from 16 10 90 feet in 1ength with a tip diameter of at Jeast 6 inches, The butt diameter is seldom less than 12 inches, I ~I IIII! e 'J 'g ! . I I I II" Ii ~ 'Iq i ~ s . i ~ B i ~ ~ I Ii' 5 ~ I I I i nO' Q i " II . Iii Ii 1 ~ ~z 'I Iii STEEL BEARING PILES are usually H'1Iile ....... .' (baving an II..JJaped cross so::tiOD), These piles .....,.. ...- usually used for driving through bedrocI< or until'" '~r"" refusal, A steel pile can also he a pipe pile with a cUcolar cross sectionA pipe pile can he either an open-end pile or a closed-end pile, depending on whether 1he bottom end is open or closed. CONCRETE PILES, as shown in figure 8-12, may be either precast or oast in place, Most precast piles used today are pretensioned and are III8D1lfiIcture in be driven edge-to-<:dge to form a continuous wall or established plants, These piles are made m square ' cylindrical, or octagonal shapes, When driven into soilbulkbead. A few common uses of sheet pdes are as or I1llIOky soil, they are usual1y~, Cast-in'1llace foil",",: piles are oast on the jobsite and are elassified as shell I To resist Imaal soil pressure as part of . type or shell-less type, The shell type is formed when ' . ' the hollow steel tube (shell) with a elosed end is driventemponuy or permanent structure, such as a retaJJUDg inlO the ground and it is filled witb eoncrete, Thewa11 shell-less type is formed when first a casing and core 2, To construct cofferdams or structures built to are driven 10 the required depth, The core is removed, exclude water from a construction area and the casmg IS filled With concrete. The casmg IS then removed. leaving the concrete in contaCt with the earth, 3, To prevent slides and cave-ins in trenches or otI1er ex<:ovations -- ... ....... ... - "'" F1pre 1-1l._TypesoflCOllCl'lte,.. SHEET PILES The edges of steel sheetpi1ing llIO ca1Ied INTERLOCKS (fig, 8-10), because they are shaped for locking the piles togethel- edge-to-<:dge, The part of the pile between the interlocks is called tbe WEB. Sheet piles, made of wood, steel or conerete, are equipped or constructed for edge-joining, so they can 8-9 loC'~) 7tll "'on; 7.''') Dl.A . RESOLUTION NO. 13256 RESOLUTION APPROVING A LOT SPLIT OF LOT 4, RIVERSIDE ADDITION, LOCATED AT 1316 DELAWARE STREET N.W. Whereas, Ken Cote, property owner, has requested approval of a lot split of Lot 4, Riverside Addition with the following legal description: Northwesterly Parcel: That part of Lot 4 of Riverside Addition, according to the recorded plat thereof, lying northwesterly of a line described as follows: Commencing at the northwest comer of said Lot 4; thence South 86 degrees 33 minutes East, assumed bearing, along the north line of said Lot 4 a distance of 75,83 feet to the angle point in said north line of Lot 4; thence South 46 degrees 11 minutes East, along the northeasterly line of said Lot 4 a distance of 183.00 feet to the beginning of the line to be described; thence South 55 degrees 19 minutes 00 seconds West about 159 feet to the shoreline of the Crow River and said line there terminating. Southeasterly Parcel That part of Lot 4 of Riverside Addition, according to the recorded plat . thereof, lying southeasterly of a line described as follows: Commencing at the northwest corner of said Lot 4; thence South 86 degrees 33 minutes East, assumed bearing, along the north line of said Lot 4 a distance of 75.83 feet to the angle point in and north line of Lot 4; thence South 46 degrees II minutes East, along the northeasterly line of said Lot 4 a distance of 183.00 feet to the beginning of the line to be described; thence South 55 degrees 19 minutes 00 seconds West about 159 feet to the shoreline of the Crow River and said line there terminating, Whereas, the Planning Commission considered the lot split request on August 21, 2007, and considered the requirement of the Zoning Ordinance and effects of the proposal on the health, . safety, and welfare of the occupants of the surrounding lands, existing and anticipated traffic conditions, and the effect on values of properties in the surrounding area and consistency with the Comprehensive Plan, and hereby recommends approval of the request. The City Council has considered the recommendation and findings of the Planning Commission and hereby does recommend approval ofthe lot split, subject to the following findings and conditions: L Construction on both lots shall comply with the shoreland district and requirements ofthe R-2 Zoning district. No variances are granted or implied, . 2. Lot split shall be recorded at the County prior to issuance of any building permit. !ODJ) . . . Resolution #13256 Lot Split - 1316 Delaware St. NW August 28, 2007 Page 2 3, Impervious surface shall not exceed 25% on either lot. A survey documenting all impervious surface coverage will be required prior to issuance of any building permit. 4. The area containing Delaware Street from Hwy 7, including Outlot A, shall either be deeded to the City or Riverside Addition be replatted to show appropriate right of way for a public street. 5, SACIWAC fees in the amount of$2,950 must be paid at the time of building permit. 6. Park fees in the amount of $175 must be paid at the time of building permit. 7, Tree fees in the amount of $400 (2 trees per lot x $200) must be paid at the time of building permit 8, Moving or removing of any utility services, if necessary, will be at property owner's expense, 9, The property owners are responsible for updating and recording their property deeds and survey at McLeod County prior to submitting a building permit for the new lot. 10. The applicant shall remove the detached garage from the proposed new lot prior to recording the lot division at McLeod County and prior to submitting a building permit for the new lot. Adopted by the City Council this 28th day of August, 2007, ATTEST: Gary D, Plotz City Administrator Steven W, Cook Mayor I DC)) . . . . . . CITY OF HUTCHINSON MEMO Finance Department August 23, 2007 TO: MAYOR & CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: TAX INCREMENT DISTRICT NUMBER 7 We have had on going discussions with Prince of Peace management regarding future increment capture. At the time the district was established, discussion had focused on capture until the loan to the city was repaid. In reviewing the original document, by our legal counsel, language was unclear as to amount to reimburse Prince of Peace. The attached document clarifies and allows reimbursement of expense incurred for acquisition, relocation, demolition, and allowable other costs. With City Council approval, the document continues reimbursement to Prince of Peace for reimbursement of the documented reimbursable costs. H:\DOC\City counci2 memo l.doe lOCh) . . . TAX INCREMENT ASSISTANCE AGREEMENT DEVELOPMENT DISTRICT NO, 4 - TAX INCREMENT FINANCING DISTRICT NO, 7 CITY OF HUTCHINSON, MINNESOTA AND PRINCE OF PEACE SENIOR APARTMENTS, INC, August 28, 2007 loCh) . TAX INCREMENT ASSISTANCE AGREEMENT This Agreement is made as of August 28, 2007, by and between the CITY OF HUTCHINSON, MINNESOTA, a municipal corporation of the State of Minnesota (the "City"), and PRINCE OF PEACE SENIOR AP ARTMENTS, INC" a Minnesota nonprofit corporation ("Developer"), WITNESSETH: WHEREAS, the City has designated a development district in the City denominated Development District No, 4 (the "Development District") and has approved a development program for the Development District (the "Development Program") pursuant to and in accordance with Minnesota Statutes, Sections 469.124 to 469.134 (the "Act"); WHEREAS, pursuant to a Development Agreement dated June 22, 1994, between the City and the Developer, the Developer purchased certain property from the City in the Development District legally described in Schedule A hereto (the "Development Property") and the Developer has constructed on the Development Property a 40-unit senior residential rental housing development (the "Development"); WHEREAS, to assist the Developer in financing costs incurred by the Developer in acquiring and constructing the Development pursuant to the Development Agreement the City loaned to the Developer $397,000 (the "1994 Loan"); . WHEREAS, on behalf of the Developer the City has issued its Housing Facilities Refunding Revenue Bonds (Prince of Peace Senior Apartments, Inc. Project), Series 2003A and B, under Minnesota Statutes, Chapter 462C (the "2003 Revenue Bonds"), on behalf of the Developer and loaned the proceeds to the Developer to refund revenue bonds previously issued on behalf of the Developer by the City to finance the acquisition and construction of the Development, and to prepay the 1994 Loan in full; WHEREAS, to provide financial assistance to the Developer with respect to the Development, the City has included the Development Property in a tax increment financing district designated as Tax Increment Financing District No, 7 (the "Tax Increment District") within the Development District, and authorized the financing of the Development Program pursuant to a Tax Increment Financing Plan For Tax Increment Financing District No, 7 (the "Financing Plan") pursuant to and in accordance with Minnesota Statutes, Sections 469. I 74 through 469. I 79 (the "Tax Increment Financing Act"), and the City has been providing to the Developer a portion of the tax increment from the Tax Increment District to reimburse it for a portion of the debt service paid on the 1994 Loan and, following the prepayment of the 1994 Loan, the debt service of the 2003 Revenue Bonds issued to prepay the 1994 loan; WHEREAS, the City and the Developer desire to enter into this agreement to set forth the application of tax increment from the Tax Increment District by the City to reimburse the Developer for the payment of a portion of the debt service on the 2003 Revenue Bonds and any . indebtedness incurred by the Developer to refund such 2004 Revenue Bonds; IbCh) . . . NOW, THEREFORE, in consideration of the foregoing premises and the mutual obligations set forth in this Agreement, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS Section 1, I. Definitions, In this Agreement, unless a different meaning clearly appears from the context: "Act" means Minnesota Statutes, Sections 469.124 through 469.134. "Agreement" means this Agreement, as the same may be from time to time modified, amended or supplemented. "Available Tax Increment" means 90% of the Tax Increment received by the City, "City" means the City of Hutchinson, Minnesota, a Minnesota municipal corporation. "City Council" means the City Council of the City, "Development Area" means the area included in the Development District. "Development District" means Development District No.4 designated by the City under the Act. "Developer" means Prince of Peace Senior Apartments, Inc., a Minnesota nonprofit corporation, "Development Agreement" means the Development Agreement dated June 22, 1994, between the City and the Development. "Development Property" means the portion of the Development Area described on Schedule A attached hereto. "1994 Loan" means the loan in the principal amount of$397,000 made by the City to the Developer pursuant to the Development Agreement. "Section" means a Section of this Agreement, unless used in reference to Minnesota Statutes, "Series 2003 Bonds" means the City's Housing Facilities Refunding Revenue Bonds (Prince of Peace Senior Apartments, Inc, Project), Series 2003A and B, and any bonds or other indebtedness which refunds the Series 2003 Bonds, "State" means the State of Minnesota, 2 lOCh ') . . . "Tax Increment" means tax increment received by the City from the Tax Increment District. "Tax Increment Act" means Minnesota Statutes, Sections 469.174 through 469.179, "Tax Increment District" means Tax Increment Financing District No.7 created by the City pursuant to the Tax Increment Financing Plan, "Tax Increment Financing Plan" means Tax Increment Financing Plan for Redevelopment Tax Increment Financing District No, 7, as amended. ARTICLE 11 REIMBURSEMENT TO DEVELOPER FROM TAX INCREMENT Section 2.1, Reimbursement to Developer of Certain Costs, In order to reimburse the Developer for a portion of the debt service on the Series 2003 Bonds issued to prepay the 1994 Loan, the City agrees to pay to the Developer all Available Tax Increment up to an aggregate maximum amount of $375, 939. On each February I and August I the City shall pay to the Developer all Available Tax Increment received to such date by the City and not previously paid by the City to the Developer, until such time as the aggregate amount of such payments equals $375,939; provided that if on such date there exists any delinquencies in the payment of real estate taxes or special assessments with respect to the Development Property, the City shall apply amounts otherwise to be paid to the Developer hereunder to pay delinquent real estate taxes and special assessments, and any amount remaining after such payment shall be paid to the Developer. The Developer acknowledges (i) that the payments to be made by the City under this Section 2, I (including any amount applied to pay delinquent real estate taxes and special assessments) are limited to an aggregate amount of$375,939 and shall be made solely from Available Tax Increment, (ii) that Available Tax Increment is determined solely from Tax Increment received by the City with respect to the Tax Increment District, and that tax increment received by the City with respect to any other tax increment financing districts of the City does not constitute Available Tax Increment, and the City shall not be obligated to make this payment from any other funds of the City, (iii) no interest is payable on the amounts to be paid under this Section 2.1, and (iv) that neither the full faith and credit nor taxing power of the City is pledged to such payment. The Tax Increment District will terminate on December 31, 2009, and the obligation of the City to make payments under this Section 2.1 shall terminate once the Tax Increment District is terminated and the City has paid all Available Tax Increment on hand with the City to the Developer, The City makes no representation or warranty that the Available Tax Increment will aggregate $375,939 over the remaining term of the Tax Increment District. ARTICLE III ADDITIONAL PROVISIONS Section 3,1, Conflict of Interests; City Representatives Not Individually Liable, No member, official, employee, or consultant or employees of the consultants of the City shall have 3 1 D eh ') . . . any personal interest, direct or indirect, in this Agreement, nor shall any such member, official, consultant or the consultant's employees or employee participate in any decision relating to this Agreement which affects his or her personal financial interests or the financial interests of any corporation, partnership, or association in which he or she is directly or indirectly interested, No member, official, consultant or the consultant's employees, or employee ofthe City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by the City or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement. Section 3.2. Titles of Articles and Sections. Any titles of the several parts, Articles, and Sections of this Agreement are inserted for convenience of reference only and shall be disregarded in construing or interpreting any of its provisions. Section 3.3, Notices and Demands. Except as otherwise expressly provided in this Agreement, a notice, demand, or other communication under this Agreement by either party to the other shall be sufficiently given or delivered if it is dispatched by registered or certified mail, postage prepaid, return receipt requested, or delivered personally as follows: (a) in the case of Developer, addressed to or delivered personally to Developer at 301 Glen Street, Hutchinson, Minnesota 55350, Attention: Executive Director; (b) in the case of the City addressed or delivered personally to the City Administrator at City Center, ] 11 Hassan Street SE, Hutchinson, Minnesota 55350; or at such other address with respect to any such party as that party may, from time to time, designate in writing and forward to the other party as provided in this Section, Section 3.4, Term of Agreement. This Agreement shall terminate upon the payment in full of the payments to be made by the City pursuant to Section 2,1 hereof, Section 3,5, Complete Agreement. This Agreement constitutes the entire agreement and understanding between the City and the Developer and supersedes any offers, negotiations, previous agreement or understanding, written or oral, between the City and Developer with respect to payment of any Tax Increment to the Developer by the City, Section 3,6, Counteroarts. This Agreement is executed in any number of counterparts, each of which shall constitute one and the same instrument. 4 lOCh) . . . IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first above written, CITY OF HUTCHINSON, MINNESOTA By Its Mayor By Its City Administrator PRINCE OF PEACE SENIOR APARTMENTS, INC. By Its 5 lOCh) . SCHEDULE A DEVELOPMENT PROPERTY Lot One (I), Block One (I), Prince of Peace Addition to the City of Hutchinson, according to the Plat on file in the office of the County Recorder, McLeod County, Minnesota, . . 6 \6 (:V0 .. MEMORANDUM . . DATE: August 22, 2007 for the August 28, 2007 City Council meeting TO: Hutchinson City Council FROM: Rebecca Bowers, AICP, Planning Director SUBJECT: PRELIMINARY AND FINAL PLAT FOR JENSEN SECOND ADDITION (Tabled from July 24th Council meeting) Backaround: The property owners have submitted a one lot Preliminary and Final plat for Jensen Second Addition to construct a new home. The building permit has been approved to allow construction on the previously platted parcel that was recorded in 1/2007, which created the new home site, with the condition that the coverage not exceed 25% as the property is subject to shoreland district requirements, The plat would add approximately 17,000 square feet from the river portion onto the lot under construction. The subject property has had many subdivisions and lot combinations over the years. As the property has had many modifications, maps are attached which show the lot changes on record over the last couple of years (refer to attachments). The applicant originally requested to vacate easements between the two properties, however the vacation is not necessary for construction of the home and was withdrawn. Additional information is contained in the attached Planning Commission staff report. PlanninQ Commission Meetina: The Planning Commission held a public hearing and considered the request at their July 17, 2007, meeting. Staff explained the complexity of the property history and the changes over the last couple of years (refer to attached maps). Staff stated the subdivision is reallocating land between two home sites and each must not exceed the 25% coverage requirement within the shoreland district. Construction has started on the parcel that was platted in 2006 (recorded in 1/2007), which created a new home site, with the condition that the impervious coverage does not exceed 25%. As the new plat proposes to transfer approximately 17,000 square feet of river front property to the new home site, it makes the existing Jensen home site lot considerably smaller than it currently is and coverage is an issue. Mr. Jensen commented on the history of the property. He no longer needs to vacate the easement and will withdraw the request for vacation, He will provide an easement to the city for the sanitary sewer line to the north He stated he would amend the plat to include a 10 foot strip to the lake which will remain with the original lot so it would meet the requirements, loCI) . City Council Report August 28, 2007 Page 2 of 5 Commission discussion followed on the original plat being a nonconforming lot. There was discussion on the coverage of the lots. Jeff Rauch, surveyor, explained the location of a 10 foot strip that Mr. Jensen said would be left with the existing home site. Discussion continued on the existing lot coverage and changing the plat. City Attomey Sebora stated the percentages must comply, on both lots, in the end. There was further discussion on the need for the existing lot to meet the lot coverage standards. Mr. Jensen stated if the 10 foot strip is placed back on the existing lot the lot coverage does not have to be met. A survey was requested from the applicant to demonstrate the coverage would not be exceeded, however it has not yet been provided. Chairman Otteson stated this is an opportunity to make both lots conforming. Mr. Jensen stated there are many nonconforming lots on the river in the city. After additional discussion, the Commission recommended that plat be approved with the following finding and changes to the draft resolution: 1) Condition #3 can be removed regarding the vacation of the utility easement, and 2) adding the finding that the existing home site pass as a nonconforming lot and the plat shall be revised to include the 10 foot strip to the north with the existing lot. . Additional Information Provided After Commission Meeting: The applicant has stated that the approximately 17,000 square foot area along the river was never combined with the existing home site and that the existing home site should be considered legal non-conforming. Staff met with the applicant to discuss the property and requested information to show that they were not combined as parcel information obtained from the County shows the property as one, It is staff's understanding that the new plat proposes to transfer approximately 17,000 square feet of river front property to the new home site, which would make the existing Jensen home site lot smaller and non-conforming for coverage. Additional information may be provided to show the lots were not combined and the parcel data is in error. The City Attorney will be meeting with the applicant prior to the Council meeting to review documents and will update the Council with any new information. If the new lot arrangement with the existing house does not comply with the coverage maximum, there are options available such as: 1) removal of impervious surface (a problem due to existing shared driveways), 2) dividing the 17,000 square feet of riverfront land between the two properties to add additional open space to the westerly lot, or 3) a variance to exceed the 25% maximum coverage. Recommendation: . The Planning Commission recommended approval of the Preliminary and Final Plat, with the stated findings and conditions in the attached resolution. 100) City Council Report August 28, 2007 Page "3 of 5 ~ - ~ '7 .. - .. , , ' I , _ .:~j~ ~ / _1 .. , . ('" . -"," . - :;-~ :, -~: ~-<~,- . - -- Lot arrangement per County parcel records 2006 (prior to 1/2007 plc.lt) \0 Ci ') City Council Report August 28, 2007 Page 4 of 5 ~ . "" L... -~~t ,.,~ , r"-~. ~ 1 . - .':~- " -- I : , , - - ~ - ~J--; .~/' -- - ' . .~~:~. ;' . ~ ~ J . , -~- ~- . - . . I . 1 . '" . / . 'I " ,J . '. . , , '.r~'" L..:.. ,J ., T ' ,. ~ . 1 Lot arrangement after Jensen Addition Platted 2006 Reco'rded 1/2007 lol\ ') City Council Report August 28, 2'007 Page 5 of S" ~~ ;:, < 'J ' I ....." f 1 - ! ~) - ,t-," V. ~ " .. .-r.... , " ~ ~ t ~ ,;., . - ' . " , . I ' r ^ . _ -ll/Jl. . " . - ~ _...~ ".,~::~~'~ht~:. ;" Pr,oposed plat 7/2007 \0 C'\ ') :r~"""'-:'.",!,r..En.i:'~"*"""I~~~7,.;;o<3I'~''''':i~''''e''''~~', ~...W--"';-~~""'~4 :-:..r~....-:".. '.(M"~ -,-~r _<'.c _-.r'i-7'~7'''''.Y7;':;-'J7j'".~'~-':Ir;r:.-:..~;a~'~"r'4>~,,,,,-;,,-&'7 ~.~r _' I.D'.. ,J: _ ~'-r-P-^," "~-~'j r DIRECTORS REPORT - PLANNING DE,P ARTMENT ',....r7..F\ ....- -zPI ~- "......-.:i ~.:4':~::liP';r;-.' 6,i..lit",rr'r .: _-A" "J.-'ST'r' ""..41';;1. ..r.,~ 1If:........~hIl1',.;& '" ....r' ~ _-. ~ .- _- -''I r 'A6"':~.""- ,...:t..-:r .....~.Ifl7~/~hr ,K .A:' ~/r;<rJ:""-~..~(,.r~.- r ,- ..... ~ :- r - --;If'" ~,.#, ''I To: Date: HutcbinsonPlanning Commission Brad E.mans, Dolf Moon, D'ave Hunstad, Miles Seppelt, Shap Ghimire, Jean Ward, Judy Flemming, John Webster, John Olson, Lenny Rutled,ge~ Kyle Dimler~ Kent 'Exner, John P,aul~on, Mark Sch'nobri~b, Marc Sebora, Gary Plotz, Ke.n, Merrill, JimPopp, Dan H,atte~, Dick Nagy, Rebecca Bower's and Bonnie Baumetz (Persons in attendance at Planning Staff Meeting (in bold) July 11, 2007,.:for July 17, 2007, Planning Commission Meeting From: Application: Jensen Second Addition Prelimina,ry and Final Plat and Vacation of Easements Applicant: N'eiJ Jensen, Property owner 60 Day Deadline: .July 29, 2007 PRELIl\fiNARY AND FINAL 'PLAT V ACA nON OF EASEMENTS Brief Description The property owner has submitted ~ one lot preliminary and final plat for Jensen Secon'd Addition. The plat proposes to divide the portion of the property alo'hg the river from the existing Jensen home site in order to add it to the lot to the east for Gonstruction of a new 110me~ The ,applicant is also requesting to vacate easem~ntsbetweel1. the two properties. The subject property has had several subdivisions and con'solidations. The subject property has two shared drives crossing the property which serve the home to the west This property 18 subjec~ to t.he slloreland district requirements. The following map shows the approximate layout of the proposed plat,.in shadow with 110tes to describe the lot existing arrangement: to C; "] . . . Jensen Second Addition - Preliminary and Final Plat Neil Jensen - 425 Washington Ave W Page 3 applicant will need to relocate utilities into existing easement areas at his own cost before the requested easement can be vacated, However, due to the location of the new building pad, the vacation of easements may not be necessary and the applicant could withdraw his request for the vacation. Standard fees for the new plat were charged on the building permit, including fee for two trees ($200.00 per tree) and the standard park fee of $215 ,00, Staff would recommend approval of the requested preliminary plat, final plat, and vacation of easements with the following conditions: 1. The plat must comply with the requirements of the R-2 zoning district, subdivision requirements, and the shoreland district requirements, 2, Prior to the City signing the final plat, the applicant shall provide a survey to demonstrate that the 25% maximum is not exceeded on the existing Jensen home site. If the property exceeds the 25% impervious coverage, the applicant will need to either remove hardcover or revise the plat to allocate additional property to the westerly site, subject to meeting the requirements of the zoning ordinance, 3, Relocation of utility services is required prior to vacation of easements, The relocation and any fees will be at property owner's expense. 4, An easement of 20 feet on each side ofthe sanitary line to the north shall be provided to the City prior to the City signing the final plat for recording. Attachments: Preliminary and Final Plat Survey of Proposed Home Previous Plats for Clarification Cc: Neil Jensen, 22 Main Street North Kevin Compton, Compton Anderson Construction, 18482 - 202nd Cr. Rob Collett, DNR \Oe\) . . . RESOLUTION NO. 13240 RESOLUTION APPROVING A ONE LOT PRELIMINARY AND FINAL PLAT FOR JENSEN SECOND ADDITION Whereas Neil and Lynette Jensen, property owners, have submitted a one lot preliminary and final plat for Jensen Second Addition with the following legal description: Lot 1, Block I, Jensen Addition, according to the recorded plat thereof. Also, The East 33 feet of Lot 3 and Lot 2 except the East 74.25 feet of said Lot 2, all in Block 39, Townsite of Hutchinson, North Half. Also, Commencing at a point 43 feet West of the Southeast comer of Lot 3, Block 39, Townsite of Hutchinson, North Half, according to the map or plat on file and of record in the office of the Register of Deeds in and for McLeod County, Minnesota; thence North 180 feet to a point; thence West 15 feet; thence North to the North line of said Lot 3; thence Northeasterly along the North line of said Lot 3 to a point 33 feet West of the East line of Lot 3; thence South to the South line of Lot 3; thence West along the South line of Lot 3 to the place of beginning, Subject to easements of record, Whereas, the Planning Commission held a public hearing and considered the preliminary and final plat and vacation of easements request on July 17, 2007, and considered the requirements of the Zoning Ordinance and effects of the proposal on the health, safety, and welfare of the occupants of the surrounding lands, existing and anticipated traffic conditions, and the effect on values of properties in the surrounding area and consistency with the Comprehensive Plan, and hereby recommends approval of the request. The City Council has considered the recommendation and findings of the Planning Commission and hereby does recommend approval of the preliminary and fmal plat and vacation of easements, subject to the following findings and conditions: I, The plat must comply with the requirements of the R-2 zoning district, subdivision requirements, and the shoreland district requirements. 2, Prior to the City signing the final plat, the applicant shall provide a survey to demonstrate that the 25% maximum is not exceeded on the existing Jensen home site. If the property exceeds the 25% impervious coverage, the applicant will need to either remove hardcover or revise the plat to allocate additional property to the westerly site, subject to meeting the requirements ofthe zoning ordinance. 3, Relocation of utility services is required prior to vacation of easements, The relocation and any fees will be at property owner's expense, 4, An easement of20 feet on each side of the sanitary line to the north shall be provided to the City prior to the City signing the final plat for recording, Adopted by the City Council this 28th day of August, 2007, ATTEST: Gary D, Plotz City Administrator Steven W. Cook Mayor \OCI} N ~ ~~ $u/. I~ !==::t::::,,~'~,"l."" 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I IF I I I I I I l,?-- ~> ~,\y.. ~o ". ~ k.....t< )I; 0'< y..t;l>5 .. .. oJ .. ... ,. BLOCK 39 1-. 10 6 PEll.lHE N lANO SIJa\IEYlHG LOT AAEA . !S1794:!: ~ foolpr\M AtM _ sbowfl . 3838 Sq Ft SitcoM GclrQOtI Foo1Pf1M At" . 676 Sq '1 bbMg~NfIO. lMOSqfl~ Pnpo5e4....C\fllMWeylll-.o.3130$4Fl! ot:SCIllPllON .. .. !!! N~~ ~~'<-~ y..~'" Lot I. BIodt I. ..ENSEH .ADOmOH. GCC:ordlnO t1) 'M r~pkKlhereo'. .\bo. TIM Eo. 33 ..... of lor ;) 0Ad Lo' 2. o.upf IMo Eal' 74.20 '"' of aGld Lot 2. 011 In Stock 39. TowMtle of ~ ..... Holt. I Abo, CocrIJIl,u;"" Of a point 43 .... Wu. .t "'* SovtMoat c:omer 01 1M :s.. Block :sa. Townsl.. .f ItutcNftaon. Nortb Hotf. GCCOIdIftO to 1M Mop or I 2 pIa1onftleOftdolt'eCOAdln....oMc.oftbe ~.... of 0Mlb .. aM lor McLHd CcHIArJ. ....1OtC tMfta Hor'lh 180 fMt to Q poIM: I tMne. w..,. 15 tter. 1MnCtI Hot1h to 1M Nonn 11M of IGId Lot 3; dMAce NortMollltftJ along 1M - --Norah 1M of MId Lor 3 to CI point 33 fH' Wal of V - - -- the Eat.... of LoI !: IMnce Soutl\ to tM SouU\ I ...... of 1.01 :so tbHCe w." aIofto .... South 11M .f Lot 3 to .... pIaa of NgIMInO. S41bjKt to , __"ueM"of'~ L--.---- PROPOSED DESCRIPTION - LOT I, BLOCK I, r .IONSEN SECOND ADDITION 00 pkl"k19 .......J I I 3 II :<,p~ ~\)\ j\>l ,. ~ BLOCK I NO"e: Oralnoge and u'lAf)' easemenls as shown ore (UI propo," tor ..ENSeN SECONO AOOmoN. ,> ... ~ , 589'57' .... IrAOO"" ,. ~ o , ,20 '1/0 80 . ,.,1 ~,,- .. N~7'03.E 2~.70 ~ PROPOSED GARAGE flOOR . 1077,0 C!, ....'. n p oS; """,,~...t,.. 'b ' ();l, , q 10-+",,,4 f"t ..../,ovt:. 13 M. $ctll. In PROPOSED TOP CE FOUNOATlON . 1082.0 PROPOse> GARAGE flOOR . 1081.7 PR~ eASaIENT flOOR . 1013.3 a ..- , \ , ------- , (SI,!)): M.67 ~ ~ ,I 1("'\ ....\ ~ 13 ~O\~. 'I "5:)\)"~ ,I 1li ,w ," ~ ' '--...:-..... . ...........~ -~ ~ Top nul of Hydront on north alOe of "'GdlnQton M at \f\t<<'HCttoc\ wIth \.'If\C\ ftoG4. Ellvollofl . 1013.98 so~ cl~' -.(-:.::,'\ AJ J S-40~ , t-).A", ",,< /ll-S 1'~1' . Denol.s 1r000lfl9lWlMnf fturKI o D.not., Iron rnonumenl III Denot.s .llllllng elwol\On ( ) Dtono,., propouO .~Y'IoA '" I ".r.by ,.,tU'J tbat thl. Surv.y. Pion or Roep;11 wo. pr.pOlld DJ" " uAllle, In)I cUrtCI 'Up"VI, lOti G",d Illot I _ (I 4uly j IUIl,'f Lon~ SIUV'l'or undu (Ill toO..'" of HI. Slll" of IoIlnll'tOlo. " ,,' ~ .<'~--~~ .J f R Guu'h 00"': '?~~..::z1l. ~? 1.1C. No.;J~P9 WASHINGTON AVENUE \D(I) HUTOiINSOH MN ..108 NO. 070149S" ,.... ~"x~': ""'011 W-" .-,."","""".-. 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RESOLUTION NO. 13260 RESOLUTION FOR CREATING A PRIORITIZED BRIDGE REPLACEMENT LIST WHEREAS, the City of Hutchinson has reviewed the pertinent data on bridges requiring replacement, rehabilitation, or removal, supplied by local citizenry and local units of government, and the regional development commission; and WHEREAS, the City of Hutchinson has identified those bridges that are high priority and that require replacement, rehabilitation, or removal within the next five years; NOW, THERFORE BE IT RESOLVED that the following deficient bridges are high priority and the City of Hutchinson intends to replace, rehabilitate, or remove these bridges as soon as possible when funds are available, Old Road Number Total Project Township or Federal Local or State Proposed Bridge or Name Cost State Bridge Funds Aid Funds Construction Number Funds Year 43506 2"" Ave SE $725,000 $0 $0 $362,500 2012 (MSAS 109) FURTHERMORE, the City of Hutchinson does hereby request authorization to replace, rehabilitate, or remove such bridges, Adopted by the Council this 28th day of August 2007, Mayor: Steven W, Cook City Administrator: Gary D, Plotz STATE OF MINNESOTA COUNTY OF I hereby certify that the foregoing Resolution is a true and correct copy of the Resolution presented to and adopted by the City of Hutchinson at a duly authorized meeting thereof held on the 28th day of August, 2007, as shown by the minutes of said meeting in my possession, City Administrator: Gary 0 Plotz Notary Public: My Commission Expires: \ \ (q.) \ . . . . . 13261 Resolul1on No, Resolution Providing for tbe Negotiated Sale of $2,150,000 (Approximate) Taxable Public Project Revenue Bonds, Series 2007 A WHEREAS, the Board of the Economic Development Authority (the "Authority") of the City of Hutchinson, Minnesota (the "City"), has heretofore determined that it is necessary and expedient to issue the Authority's $2,150,000 (Approximate) Taxable Public Project Revenue Bonds, Series 2007 A (the "Bonds"), to finance the construction of a 20,000 square foot building on certain land (the "Facilities") owned by the Authority and to lease the Facilities to the City; and; WHEREAS, the City Council has been advised that, in order to make the Bonds marketable, they will be requested to enter into a lease agreement with the Authority pursuant to which the City may be requested to make an annual appropriation in an amount sufficient to meet the rental payments that will be due under the lease; NOW, THEREFORE, BE IT RESOLVED by the City Council of Hutchinson, Minnesota, as follows: I. Authorization: Findings, The City Council hereby authorizes Ehlers to solicit proposals from financial institutions for the negotiated sale of the Bonds, 2, Meeting; Proposals Considered, The City Council shall meet at City Hall on September 11,2007, for the purpose of considering the proposals received; approval of the bond sale resolution and all related documents will occur at subsequent meetings of the City Council and Authority, 3, Official Statement. In connection with said sale, the officers or employees of the City are hereby authorized to cooperate with Ehlers and participate in the preparation of an official statement for the Bonds and to execute and deliver it on behalf of the Authority upon its completion. Steven W, Cook Mayor ATTEST: Gary D, Plotz City Administrator \\(01)7- . . . CITY OF HUTCHINSON MEMO Finance Department August 28, 2007 TO: MAYOR & CITY COUNCIL FROM: KEN MERRILL, FINANCE DIRECTOR SUBJECT: PUBLIC HEARING City of Hutchinson has issued bonds for hospital improvements. We are in progress of a lease to a non profit corporation that will pay principal and interest when due to the City of Hutchinson. A public hearing is required for this transition and would request the City Council to: Set a public hearing for September 11, at 6 p.m. for public comment. H:\DOC\City council memo 3.doc II (CI)3