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1989-01-24 CC Work MtgWORK MEETING JANUARY 24, 1989 A work meeting of the Council was called tA:) order by Mayor Gary Schwenzfeier. Members present included Jim Krystosek, Donatus Vetsch, Don Cornelius and Bob Braun. Others present included Maureen Andrews, Bob Miller, Bob Sullentropp and Brad Farnham. The Vjrrpose of the work meeting was to discuss the Citv`s options in undertaking the implementation of the WEST ALBERTVILLE STORM WATER STUDY and discuss the options of refunding the FmHA loan and take any necessary action regarding the same. The Council first discussed in some detail what options the City might, have available to finance and install the needed storm sewer system for the drainage of the west portion of the City. Options discussed included the use of County Ditch #9 or establishing another system which would tie into the C,ity's existing storm sewer system. Bob Miller reminded the Council that by outletting the water into the County Ditch the City of Albertville would be char z'ng the purpose for which the ditch was originally installed, that is county ditches were guilt in order to reclaim land for farming that would otherwise be too wet to cultivate. He also pointed out, that this fact would not preclude the City from looking into the option, because in other instances county ditches have been used in the urbanization process of rural areas. It was noted that if the City proceeds with requesting outlet into County Ditch #9 that, there could be a lot of opposition from others on ditches #9 and #21 and from the City of St. Michael and the City would not be guaranteed approval of the County Board. This could result in costly delays in developing the western portion of the City. A member of the Council stated �. that if this is true that it was his opinion that should the City decide tr) go to the expense of outletting, the storm water through a different manner than the county ditch system then the County Board should recognize it and take it into consideration when additional work needs to be done in the area being discussed. The other option that the City is considering is that of transferring the water over to the existingstorm sewer system which would involve the acquiring of land to install the system in. This proposal would most likely require the City negotiating a purchase of the land required to undertake this option or if needed acquire the land through the condemnation process. It was pointed out that if the City wrxxld proceed with this option that both the negotiation and condemnation processes should start at the same time so that there would not be any untimely delays. At this point Bob Sullentrop discussed with the Council some preliminary costs that might be involved if the City options to discharge water to the east through a connection to the existing storm sewer. Some issues discussed was whether or not the City would be able to open cut C.S.A.H. 19 and if so would if be advantages to install the proposed sewer interceptor line for future development so that, the City would not have to incur the labor costs twice or whether or not the County would even grant, a rmit for cross cutting C.S.A.H. 19. Bob pointed out that if the City would have to jack under the highway that there was no real cost savings to install the interceptor at this time, rx--cause of the depth of the line. There was some discussion regarding the fact that the WESTWIND commercial plat will really be impacted by what action the Council takes on this matter. The question was raised regarding whether or not the developers would be required to pick up most of the cost related to this issue. Bob pointed out that John George, Inc. could be wired to cover some of the front end cost of this proiect but that in all actuality, everyone benefitting from the improvement will need to share in the crst of installation. The engineers had prepared a series of quarter section maps showing who would be impacted by the installation of this storm sewer. In reviewing this map there was some additional discussion about the acquiring of the land. At this time Brad Farnham arrived at the meetingand was asked how the City should be looking at financing a project of this type. He first questioned whether or not the City was changing the drainage a great, deal and how many people might 1-.,e impacted by the installation of the new storm sewer. After receiving some of the general background information that had already been discussed, Brad stated that it would be his initial reaction t,o attempt to do this type of improvement through a taxing district. Brad went on to explain that, the use of taxing district simply means that the cost is levied against the entire district arlrl riot just, those immediately benefitting from the Improvement,. He explained that this kee the cost of an undertaking of this type to a minimal, therefore reducM the impact on individuals that might otherwise benefit. He also explained that once the districts are set up initially that there is no appeal process to the costs levied against the property, provided that costs do not differ greatly than those proposed at the public hearing. Brad noted that this process works the best if the City creates large enough districts so that costs can be spread over a larger number of properties. There was a question regarding whether or riot "old town" would be placed into a storm water taxing district since it is already sergiced? It was suggested that it should be placed in a district of its own, because at some point. the City will 1-Je looking at repairs or future improvements in the area and mechanism will be in place to undertake any work that might be needed. In order for the City to undertake the establishment of storm water taxing districts the following events will need to occur: The City Engineer will need to update the drainage study to include discussion pertaining to area being proposed for the new taxing districts. 2. The City Engineer will need to redefine the map included in the drainage study into larger taxing districts. 3. The City will need to pass an Ordinance pertaining to the use of taxing districts for stoat: water drainage. 4. A mailing of public notice would need to be prepared and sent to all effected land owners (basically this would require a mailed notice to all land owners in the City of Albertville). 5. Public hearings would need to be held on the formulation of taXina districts and for arty work that might be undertaken in the Phase I improvement. At this point the Council asked the engineer to make the necessary changes to the report and come back to the Council so that the City cr, a consider proceeding with the project. The next issue the Council discussed was the advanced refunding of the FmHA money that the City had received to finance the Main Avenue Improvements in 1979. The minutes should note that the definitive financing by FmHA was gait, into place in 1981 to replace the temporary financing of 1979. Brad explained to the Council, that as in the past few years, FmHA was offering cities with projects financed through them, a bilyout o tion in order to reduce their holdings. He pointed out that this has been �he first time that, the City has been in a position to refund their issue with any type of savings and therefore was recommending that the Council consider the issue. Because of the new Council member Brad walked through the schedule in great, detail. The minutes should note that the schedules snowing the savings have been attached to the minutes for review. The net, effect of the refunding is that. the City would save $16,584.81 over the life of the issue. Brad pointed out that, the savings comes as a result of FmHA`s offer to sell back the debt for less than the dollar amount the debt was originally issued at, in this case, fora proximately 79.5 cents on the dollar for the FmHA R.-1 issue and 71.5 on the FmHA R-2 issue. It was pointed out, that the City would be using some $8t?f, .ram of cash on hand to reduce the debt Brad did note that there would be a paying agent and re inters fee charge that, would need to be figured into tree issue since it was nof, required with FmHA money. -2- There was some discussion regarding the assessments already paid on the improvement and the fact that it appears that the City had been underlevying to cover the debt. With the refunding the City will now have a new debt structure prepared to assure that there are adequate funds set aside to pay the debt. It was pointed out to the Council that FmHA had structured the ability to refund into gridCouncils with "windows" that close on regular basis. Because of the rid Brad informed the Council that the City needed to close on the issue fore February 9th in order to realize the savings already discussed. With this in mind, Juran and Moody was prepared to pmrchase the bonds at the meeting through a negotiated sale. If the Council decided to sell the - bonds the rates would be locked in at the rates on schedule 03, which had a net effective rate of 7.76%. When asked what needed to be done to Trove things into action, Brad stated that the City would need to enter into a contract, with Juran and Mcxody for the sale of the bond and authorize the sale through a motion of the Council. After some limited discussion the Council agreed that the savings on the refunding was too great to wait so it was agreed to sell the bonds. A motion was made to approve Resolution 1989-2 Authorizing the Sale of $2101,0caeneral Obligation Refunding Bonds of 198K The motion was made by Lionatus Vetsch and seconded by Don Cornelius. All were in favor and the motion carried. The Council next entered into an agreement with Juran and Moody to Do�rchase the bonds at rates established in the contract. A motion was made by n Cornelius and seconded by Jim Krystosek to authorize the Mayor and the City Administrat..or/Clerk to enter into the contract with Juran and Moody for the sale of. $216,.00. All were in favor and the motion carried. The Council was also informed that there needed to be some work done orl the pickup. It was agreed that Ken should go ahead and make arrangements for the work to be completed. There was some other discussion regarding the burning of the old building at the wastewater plant. No action was taken on this matter. With no other business the meeting was adjourned.