1992-07-13 CC Minutes Special
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ALBERTVILLE CITY COUNCIL
SPECIAL MEETING
July 13. 1992
Albertville City Hall
6:00 PM
PRESENT: Mayor Jim Walsh, Councilmen Duane Berning, Mike
Potter, Donatus Vetsch, City Clerk Linda Houghton, City Engineers
Thore Meyer and Norm Gartner, City Attorney Mike Couri, Maintenance
Foreman Ken Lindsay, and Secretary Ann Culley
ABSENT: Councilman Mark Barthel
Mayor Walsh called the special meeting to order, The purpose
of the meeting was to discuss the expansion and financing of the
proposed wastewater treatment facility and possible alternatives to
the proposed improvement to 50th Street,
Also present were Steve Mattson and Tom Truzinski of Juran &
Moody, Scott Murphy of James M, Montgomery, Tom Holstrom of MPCA,
George Yankoupe, Doug Psyk, Clem Marx, and Kevin Mealhouse,
Norm Gartner stated that the Council had selected option #4 at
the last meeting and that the matters to be discussed at the
present time were:
1, What capacity would be needed for the new facility
2, Financing of the facility
3, A final decision would need to be made to proceed with the
project
The two proposals before the Council with regard to capacity
are a 315,000 gallon per day versus a 515,000 gallon per day
system, The cost for these proposals is estimated to be $795,000
and $1,180,000 respectively,
Mattson presented Juran & Moody's financing proposals, Mike
Couri presented his alternate financing proposals, The basic
differences between the two is that:
1, Juran and Moody's proposals:
a, include more options at the present time
b, assume no tax levies
c, assume that the system will be self-supporting
through user fees, higher rates, and SAC fees
d, addresses debt service of the 1988 bond issues
e, assumes single family annual connections of 40-15 and
multi-family connections of 75-8, these numbers
starting out optimistically and decreasing in the
more distant future
f, leaves surplus after 20 years of from $741 to
$21,654, depending on the proposal
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CITY COUNCIL
SPECIAL MEETING - 7/13/92
Page 2
2, Couri's proposals:
a. include more options for the future, i,e, expansion
and/or replacement funds will be needed after 20
b. assume tax levies will take place
c. assumes revenue from user fees, higher rates, and SAC
fees
d, assumes the City will continue to levy, as it has in
past years to cover debt service of the 1988 bond
issues
e, assumes 30 single family connections per year and no
multi-family connections
f, leaves surplus after 20 year of from $522,099 to
$735,576, depending on the proposal
g, does not include bond discount (could be as much as
2%)
h, does not include additional 5% funds needed in debt
service fund as required by statute,
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Details of all submitted proposals are hereby attached as an
official part of the minutes.
Berning questioned if, at the growth rate assumed by Juran &
Moody, the City would be at capacity prior to the bond issue being
paid, Meyer stated that should not happen, there will be a lot of
capacity left.
Berning stated that he still feels it important that the City
obtain a second opinion on this expansion project and that he also
wants three bids on all plans and specifications. Walsh stated
that he had no problem with these requests,
Mattson stated that the City could finance under one of two
different statutes, Statute #444 which provides for payment by
rates and charges only, or Statute #115 which also allows for tax
levies, Mattson stated that Statute #115 is the more flexible of
the two and that no public hearings would need to be held,
Mattson also stated that in two or three months the City could
refinance its current bonds and realize an estimated savings of
$30,000 per year due to the currently lower interest rates,
Walsh stated that the engineers would have to figure charges
and/or fees for replacement and maintenance due to deterioration,
He feels strongly that this must be addressed now and not in ten or
~ twenty years,
Gartner suggested that the City could raise its SAC fees in
order to pick up some of the slack and to help keep possible tax
levies down, Walsh stated that he has heard that Albertville is
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CITY COUNCIL
SPECIAL MEETING - 7/13/92
Page 3
already very expensive to develop in and he doesn't want the City
to discourage or prohibit developers from working in this area due
to high fees. Walsh asked George Yankoupe for his input with
regard to the fees currently charged by the City, Yankoupe stated
that Albertville's charges are in line with other communities in
the area with the exception of the fees charged by the Joint Power
Board, Doug Psyk stated that he felt the users should be charged
a higher user rate and that he is against the SAC fees,
Potter questioned why the force main on 60th Street was not
included in and of the financial proposals, The cost for the force
main is estimated to be $109,000, Gartner stated that this wasn't
included due to the fact that he didn't feel it would be needed for
a long time.
Gartner recommended that the City finance the expansion
project privately and that they finance replacement of 10 blocks of
sewer lines through PFA due to time constraints,
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Gartner stated that, based on the 1991 figures, the cost is
$2,11 per 1,000 gallons, The City currently charges the user $2,10
per 1,000 gallons, Walsh asked Gartner what he recommended the
City charge as a user fee in order to cover costs, Gartner stated
that the user fee should be $2,23 per 1,000 gallons,
Gartner next reviewed his estimated time frame for project
completion, The project schedule was based on receiving
authorization to prepare plans and specification at tonight's
meeting,
Gartner recommends that the City design the treatment plant
around 515,000 gallons per day, but build the 315,000 gallon per
day thus leaving room for future growth potential with an eye to
completing the project in 5 to 6 years, Mattson stated that by
doing this the City could possibly save interest in the meantime,
depending on what happened to interest rates and building costs in
the next 5 to 6 years, Tom Holstrom of the MPCA stated that they
had evaluated the plan and that even if the City built the 515,000
gallon per day plant, no more than 315,000 gallons per day could be
discharged based on current BOD, Suspended Solids, PH, etc,
Holstrom also reminded the Council that their permit is only
effective for 5 years and then would have to be renewed, All
standards could change in that time and the City would have to
conform to whatever standards are in effect at the time of proposed
expansion, Gartner stated that he was unaware of this and would do
~ some research and report to the Council at the July 20th meeting.
Walsh stated that he feels the Council needs to have another
meeting in order to look at possible rate increases and also to
find out a more precise actual cost of operating figure,
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CITY COUNCIL
SPECIAL MEETING - 7/13/92
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Potter made a motion to schedule another special meeting to
discuss expansion of the sewer treatment plant on Tuesday, July 21,
1992, at 7:00 PM, Vetsch seconded the motion, All voted aye,
Page 4
Meyer presented his alternate cost figures for the 50th Street
Improvement project, The first proposal includes at 32' street, a
6' bike lane, a 12' westbound traffic lane, and a 14' eastbound
traffic lane. The cost for this project, including storm sewer is
$237,850, deduct $17,218 if the street is to be a 7 ton as opposed
to a 9 ton road, and add $23,600 for a 4' concrete sidewalk or
$13,100 for a 4' bituminous sidewalk,
The second proposal includes a 24' bituminous street, with 6'
class 5 shoulders, The cost for this project, including culverts
and culvert aprons is $191,791, add $8,700 for bituminous
shoulders, deduct $16,921 if street is to be a 7 ton as opposed to
a 9 ton road, This does not include sewer, storm water, bike path,
or sidewalk,
Potter stated that he would feel comfortable deducting the
$3,000 that the City currently pays annually for maintenance of the
existing dirt road for a period of 5 years, for a project cost
reduction to the homeowners of $15,000, Walsh stated that there
would still be maintenance, such as seal coating, for the
bituminous road and that he didn't feel this would be fair to the
other City residents,
The City is only allowed to assess the amount of benefit to
the property, therefore, the Council feels it is necessary to
obtain an appraisal in order to determine benefit, The estimated
cost for an appraisal of this nature is $400 per lot, The Council
feels strongly that an appraisal is necessary prior to reaching a
final decision,
Potter made a motion to adjourn the meeting at 9:45 PM, The
motion was seconded by Berning, All voted aye,
Ann Culley, Secretary