12/22/1986 Council Minutes (2) - Laserfiche WebLink

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1 1 081 COUNCIL MEETING December 22, 1986 Mr. Bohjanen moved to approve the Kennel License for Dr. John Baillie, requested by James Flannery, and it is to be reviewed annually. Mr. Marier seconded the motion. Motion carried unanimously. 8:00 P.M. - PUBLIC HEARING - ESTABLISH A TAX INCREMENT FINANCING DISTRICT Mr. Marier moved to continue the hearing to January 26, 1987, 8:00 P.M. Mr. Bisel seconded the motion. Motion carried unanimously. Mr. Hawkins said that legally this does not have to be published again. If there is a change in the material, it should be published again. SECOND READING - ORDINANCE #13-86. CIRCLE PINES GAS FRANCHISE Mr. Schumacher explained the Gas Negotiating Committee met on December 17, 1986 to prepare the final language adjustments. A copy of the franchise was given to the Council on Friday, December 19, 1986. Mr. Schumacher explained the language adjustments. Mayor Benson was con- cerned because the proposed franchise allows Lino Lakes to purchase the Lino Lakes portion of the system at "fair market value" rather than "depreciated value ". The previous franchise had used "depreciated value" and this was one important point stipulated by the Council. Mr. Schumacher explained that the Committee felt if the system was a work- able system, a profitable system for Circle Pines there would be no reason for selling it. Mr. Marier felt this City is protected under the term "fair market value" since an arbitrator would make the de- cision regarding the "fair market value ". Also the Committee felt if Lino Lakes is going to buy the system they should do it now. Mayor Benson said it was his understanding that if the franchise was ex- tended for only five years this City would have the option of buying it at the "depreciated value ". That was the reason for going only five years. In reality, if this franchise is negotiated for five years, this eliminates Lino Lakes' opportunity for going into the gas busi- ness. This forces the City to make a decision now as to whether or not the City will go into the gas business. Mr. Hawkins explained the Negotiating Committee felt that Lino Lakes will never run a gas system because the expense is too great. Therefore, they conceded on the "depreciated value" versus the "fair market value" issue and insisted on other concessions, such as not being obligated to purchase the Lino Lakes portion of the system. The feeling of the Committee was that if Lino Lakes wants the franchise bad enough they will concede on the value issue. Mayor Benson referred to a meeting held with Circle Pines when they agreed to the concept of "depreciated value ". Now Circle Pines has changed the agreement and this compromises the agreements made at this meeting. Mr. Bohjanen noted that what Circle Pines tells you and what you get on paper are two different things. He felt it would be in the best interest of Lino Lakes to sell the Lino Lakes portion of the system to a company who knows how to operate a gas system. Mr. Marier explained that the document before the Council is basically a document approved by the Negotiating Committee. It does not appear to be feasible to operate a Lino Lakes gas sytem. This document would