08/11/1986 Council Minutes - Laserfiche WebLink

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161 COUNCIL MEETING August 11, 1986 Page Five ICircle Pines is looking for an agreement from Lino Lakes that if for some reason the development goes into default that Lino Lakes will reimburse Circle Pines for any out of pocket expenses that they incur. It was determined that the letter of credit or developers contract would not cover the installation of the gas service. There was discussion regarding the agreement with Circle Pines and it was determined that if Lino Lakes did have to reimburse Circle Pines the system would belong to Lino Lakes because of the franchise agreement. Mr. Reinert asked if the negotiating committee had resolved the questions that had previously been raised about the operation of the Circle Pines gas system and its allocation of costs to the Lino Lakes portion of the system. Mr. Marier said all but two issues have been resolved and he expected the remaining issues to be resolved before the agreement on a new franchies. Mr. Bohjanen expressed concern because nothing was on paper for the Council to consider in making their decision as to which gas utility to designate for the Rice Lake Estates area. Mr. Bisel said he would feel better about a decision if the franchise agreement were already in place. Mr. Marier moved to authorize the Circle Pines Gas Utility to start servicing the Rice Lake Estates area and have the Circle Pines City Attorney draw up an agreement as to Lino Lakes responsibility as to Icovering costs and Lino Lakes interests into the future. There was no second to the motion. Mr. Reinert stated that the Council kn nvs what North Central would and could do and noted that Circle Pines had not acted in real good faith in the past so that there was not a high level of trust. Mr. Marier felt that the negotiating committee has kept the Council informed on their progress, felt that the City should not give money to a utility that will not give anything back and there has never been a complaint or a service problem with Circle Pines Gas Utility as there has been with North Central. Mr. Reinert noted there has been a lot of time spent in negotiations and felt they were doing a fine job. Mr. Schumacher told the Council that if this City enters into an agree- ment with Circle Pines Gas Utility and the Rice Lake project defaults the worst possible case would be that Lino Lakes would purchase the system. Mr. Bisel said that since this Council approved allowing Circle Pines Gas Utility to install gas lines in the Rice Lakes Estates area and since they were under the impression that they had these customers, Ihe would move to accept Circle Pines application and draft a letter of compliance. Mr. Marier seconded the motion. Mr. Gearman, developer of Rice Lakes Estates asked for a written state- ment that he would not be responsible for a $49,000 installation fee.