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MINUTES–MORRIS CITY COUNCIL-REGULAR MEETING-NOVEMBER 27, 2012

The regular meeting of the Morris City Council was called to order at 5:15 p.m. this 27th day of November, 2012, by Mayor Giese in the Council Chambers of the Morris Senior Citizens/Community Center.

PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was recited.

ROLL CALL: Roll call was taken with the following members present: Council member Solvie, Miller, Storck and Mayor Giese. Council member Carrington arrived at 5:16 p.m. Also present was City Manager Hill, Finance Director Raasch, Police Chief Beauregard and City Attorney Jordan.

CITIZEN'S COMMENTS: None

PUBLIC HEARINGS: Public Hearing on Pacific Avenue Improvements: Mayor Giese opened the public hearing at 5:16 p.m.

Hill stated this project came about through some stimulus money. The storm sewer was bulging out of the road and that is now fixed. The assessments are for sanitary sewer work. The majority of the project was paid for with state and federal funds so it is a small assessment at 15 years and 5% interest. Hill did not hear from anyone who had an issue with the assessment.

Mayor Giese closed the public hearing at 5:19 p.m. and brought the matter back to the council for action.

Council member Miller moved, seconded by Storck, to adopt Resolution #3117-11-12, Resolution Adopting Assessments in Conjunction with the Pacific Avenue Improvement Project. Upon a roll call vote taken and all present voting in favor, motion carried.

Public Hearing on Proposed Modification to TIF Districts No. 4 and No. 8 and Creation of TIF District No 15: Mayor Giese opened the public hearing at 5:21 p.m. Mark Ruff of Ehlers and Associates was present at the meeting. Ruff stated the city has not created a new district for a number of years. Ruff explained that TIF is a tool that has been around since the 1970's. The idea behind TIF is to level the playing field to use future taxes to help pay for the demolition of the school and some of the public improvement costs. When homes or apartments are built the increased taxes will go back to help pay for the demolition and public improvements. The time frame for a district is 26 years but the council can do less. Ruff pointed out when a TIF district is created and transferred to private parties there will be new taxes generated and right now it is exempt.

Ruff stated TIF district 4 was the Garden Lots and district 8 was done for Service Options for Seniors. District 15 will be a redevelopment district. Ruff noted there has to be more than 50% of the buildings viewed as substandard in order to use TIF for redevelopment. Ruff noted there is a catch with TIF district 8 because it is a housing district and there are income restrictions attached to those dollars but that’s a decision that can be made in the future. District 8 produces $98,000 and district 4 produces $20,000 of TIF so there is over $100,000 available each year.

Ruff stated when and if the property is developed the council will have some choices to make. There may be certain minimum sale prices or values associated with that. With regard to the infrastructure the city will probably want to go through an assessment process or use TIF to pay for it. The city has flexibility in how much the land is sold for and zoning powers. The city does not need permission from the county and the school to set this up or move forward.

Council member Carrington asked how taxes in a district affect a property owner. Ruff stated taxes would be based on values. A homeowner doesn't pay any more or less if they're in a TIF district. The only difference is how it looks on a tax statement.

Hill stated he asked the county a few years ago to look at the value of the property and the building is now valued at $10,000 and the land at $122,000. Ruff indicated anything above that will start generating TIF.

Hill reviewed the inspection summary. There are two main criteria in order to qualify as a redevelopment district and this property meets both those criteria. The proposed TIF District has a coverage calculation of 100% which is above the 70% requirement. Also, 100% of the buildings are structurally substandard which is above the 50% requirement. Hill noted originally the estimate to rebuild was $13 million or $7-8 million to renovate. Hill pointed out there has been 75 fire/police calls to that building since the city has taken over.

Ruff noted TIF can become controversial when trying to describe a blighted or substandard building. Ruff indicated people have argued that it costs more for plowing, police service, etc. Hill stated the city will not have to buy any additional equipment to take care of this area.

Kevin Wohlers asked if the city’s underground system would be able to handle the additional development. Hill stated he did not think it would be an issue and East 5th Street will be done within 3 or 4 years. Storck noted the pumps at Iowa Avenue are oversized and the Columbia Avenue lift station was abandoned. Hill noted in talking with City Engineer Fier he is confident utilities will be able to be brought into this property. Hill stated the plan is to utilize as much of the TIF from the other districts as possible to tear down the building.

Sue Granger, 407 West 7th Street, stated she was on the school reuse committee with Sue Dieter that began meeting in the spring of 2001 and met for 9 years. There were anywhere from 5-15 people involved and they met more than 60 times with a substantial amount of public interest. Granger pointed out the area has been in public ownership since 1914 and would be the largest redevelopment project ever within the inner city of Morris. Granger stated this group applied for several grants and the public hearings were very well attended. Granger asked the council not to forget about the community and take a thoughtful approach to the redevelopment and to help make it an asset because it is a very important piece of property.

Sue Dieter, 608 West 8th Street, stated she would rather be in this situation then have regrets that they didn't try harder. Dieter noted she appreciated that the council was deliberate and thoughtful and patient during this whole process.

Carrington stated there was a study done about the housing in Morris in general and there wasn't much demand at that time for additional housing. Storck stated he believes there are people that are getting older and want to move into town from the country. Miller indicated there is a lot of substandard housing so hopefully this would generate some affordable housing. Miller pointed out if you talk to anyone that's renting you will find out that a lot of neighborhoods are in tough shape.

Hill pointed out the best gauge for need is developers. They were not called or asked to come to town but they want a return on their money and they see an interest in Morris. Hill indicated it would be interesting to see if a developer builds an apartment building.

Mayor Giese closed the public hearing at 6:11 p.m. and brought the matter back to the council for action.

Resolution Adopting a Modification to the Development Program and Redevelopment Plans for the Moris EDA Project and a Modification to the TIF Plan for TIF District No. 4: Mayor Giese moved, seconded by Council member Miller, to adopt Resolution #3118-11-12, Resolution Adopting a Modification to the Development Program and Redevelopment Plans for the Morris Economic Development Project and a Modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 4. Upon a roll call vote taken and all present voting in favor, motion carried.

Resolution Adopting a Modification to the Development Program and Redevelopment Plans for the Morris EDA Project and a Modification to the TIF Plan for TIF District No. 8:

Council member Storck moved, seconded by Solvie, to adopt Resolution #3119-11-12, Resolution Adopting a Modification to the Development Program and Redevelopment Plans for the Morris Economic Development Project and a Modification to the Tax Increment Financing Plan for Tax Increment Financing District No. 8. Upon a roll call vote taken and all present voting in favor, motion carried.

Resolution Adopting a Modification to the Project Plan for Morris EDA Project and Establishing TIF District No. 15 Therein and Adopting a Tax Increment Financing Plan Therefor: Council member Miller moved, seconded by Storck, to adopt Resolution #3120-11-12, Resolution Adopting a Modification to the Project Plan for Morris Economic Development Project; and Establishing Tax Increment Financing District No. 15 Therein and Adopting a Tax Increment Financing Plan Therefor. Upon a roll call vote taken and all present voting in favor, motion carried.

Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection with TIF District No. 15: Hill explained this authorizes the city to do an interfund loan without having to borrow money and it can be reimbursed through TIF. For example, it may be used for the preparation of the plans and specs or part of the demolition costs.

Giese asked what the time frame was on the tax increments. Ruff noted TIF doesn't start until there is new development. Ruff explained on the old districts 2013 would be the first time those could be used. Hill explained that any time any money will be spent internally a resolution will be presented to the council.

Mayor Giese moved, seconded by Council member Miller, to adopt Resolution #3121-11-12, Resolution Authorizing an Interfund Loan for Advance of Certain Costs in Connection with Tax Increment Financing District No. 15. Upon a roll call vote taken and all present voting in favor, motion carried.

Update on Healthcare Bonds: Ruff stated these bonds will help St. Francis refinance some existing bonds. A big portion of the bonds that would be refinanced are to help with the West Wind project in Morris and a property in Duluth. These are tax exempt bonds but they carry no financial obligation to the city. Ruff explained the IRS requires that a local government be the issuer. The bonds will be placed with Bremer Bank with a 5 year variable rate and 20 year financing. There is no new construction associated with these bonds. Ruff stated the city has worked with these folks before and there should not be any issues.

READING AND APPROVAL OF MINUTES: 11/13/12 Regular Meeting Minutes: Council member Miller moved, seconded by Carrington, to approve the 11/13/12 regular meeting minutes. Motion carried.

11/13/12 Condensed Version Minutes: Council member Storck moved, seconded by Solvie, to approve the 11/13/12 condensed version minutes. Motion carried.

CONSENT AGENDA: Mayor Giese moved, seconded by Council member Miller, to approve the consent agenda with the following items:

         A.      Audit of City Bills

         B.      SCMC Administrative Report

         C.      Gambling Reports

         D.      10/10/12 Library Board Minutes

         E.       10/17/12 Tourism Board Minutes

         F.       9/17/12 Community Ed Information

         G.      Revenue & Expenditure Report & Fund Summary

         H.      Planning Commission Minutes, 10/16/12

Motion carried.

PETITIONS, REQUESTS AND COMMUNICATIONS: None

ORDINANCES AND RESOLUTIONS: Resolution Approving a Proposal for a Wastewater Facility Plan and Water Treatment Report: Hill indicated this is another proposal from Bolton & Menk to do a study on the city’s water and wastewater operations to determine what the city’s needs are for the future and to make sure the city is in compliance with all State and Federal rules and regulations. Hill recommended the council approve the proposal from Bolton & Menk for the study with the cost not to exceed $15,750.

Council member Carrington moved, seconded by Miller, to adopt Resolution #3121-11-12, Resolution Approving a Proposal for a Wastewater Facility Plan and Water Treatment Report. Upon a roll call vote taken and all present voting in favor, motion carried.

CITY MANAGER’S REPORTS & RECOMMENDATIONS: City Manager Report: This was informational for the council.

Change Meeting Date for Second Meeting in December: Council member Miller moved, seconded by Mayor Giese, to hold the second meeting in December on the 27th instead of the 25th, due to the Christmas holiday.

Tourism Reimbursement Request: Hill explained this tourism reimbursement request from the Chamber is for the 2nd, 3rd and 4th quarters of 2012 for a total of $15,377.43.

Mayor Giese moved, seconded by Council member Carrington, to approve reimbursement to the Chamber for the 2nd, 3rd and 4th quarters for tourism activities. Motion carried.

NEW BUSINESS: None

OLD BUSINESS: None

INFORMATIONAL ITEMS: None

ADJOURNMENT: There being no further business, Mayor Giese adjourned the meeting at 6:36 p.m.

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