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HomeMy WebLinkAbout06-06-2016 Council Work Session MinutesCITY COUNCIL WORK SESSION APPROVED June 6, 2016 1 CITY OF LINO LAKES 2 MINUTES 3 4 DATE June 6, 2016 5 TIME STARTED 6*00 p.m. 6 TIME ENDED 10010 P.M. 7 MEMBERS PRESENT Councilmember Rafferty, 8 Maher, Manthey and Mayor Reinert 9 MEMBERS ABSENT Councilmember Kusterman 10 11 Staff members present: City Administrator Jeff Karlson; Community Development 12 Director Michael Grochala; City Planner Katie Larsen; City Engineer Diane Hankee; 13 Finance Director Sarah Cotton; Public Safety Director John Swenson; City Clerk Julie 14 Bartell 15 16 1. Review 2015 Annual Audit, CliftonLarsonAllen, LLP — Finance Director 17 Cotton noted a written presentation before the council and introduced auditor 18 representatives. 19 20 Daniel Persaud, CliftonLarsonAllen, began the PowerPoint presentation (on file). He 21 noted review of internal controls, adding that there were no weaknesses indicated. They 22 do review legal compliance and found no exceptions. Regarding required 23 communications, he noted the reasonable assurance, new accounting policies, significant 24 accounting estimates, the change in estimate for depreciation and adjustments. 25 26 The council reviewed slides indicating cash and investments, expenses and the 27 expendable net position. Mr. Persaud reviewed with the council a graph of the city's 28 revenues and expenditures in order to see any significant changes. It was noted that the 29 change in finance systems has allowed the depreciation within funds to occur more 30 regularly. 31 32 Chris Knopik, CliftonLarsonAllen, continued the presentation. He reviewed information 33 on expenditures and transfers from the city funds. In looking at the water and sewer 34 fund, there is a one year dip in operating income but it is really related to the effect of the 35 previously explained depreciation catch-up and it will correct itself next year. Another 36 graph indicated that the spendable position of the water and sewer funds is rising. Debt 37 service for the next five years was presented in a graph. Also pointed out was the City's 38 receipt of the GFOA Certificate of Excellence in Finance Reporting and Governmental 39 Accounting Standards Board (GASB) Statements. He noted finally that the change in 40 financial software is something they watch very carefully but that has been well managed 41 by the city. 42 43 Council Member Manthey noted the debt service graph and asked, looking past five 44 years, would it be typical to see debt going up and down? Mr. Knopik explained that it is 45 average to see debt coming on as other is paid off. Mayor Reinert suggested that CITY COUNCIL WORK SESSION APPROVED June 6, 2016 46 maintaining an even line on debt is favorable and allows the city to keep taxes from 47 rising. 48 49 It was noted that the audit consultants will be at the city council meeting to again present 50 the audit results. 51 52 2. VLAWMO Joint Powers Agreement — Mr. Grochala introduced Stephanie 53 McNamara, Administrator of the Vadnais Lakes Area Water Management Organization 54 (VLAWMO). The organization is created by a joint powers agreement among several 55 jurisdictions. 56 57 Ms. McNamara noted that VLAWMO represents a small area of Lino Lakes (Lake 58 Amelia) but the city is beautiful and they are happy to provide representation. They are 59 working on their ten year update of the water management plan. There are a few changes 60 proposed to the joint powers agreement and they are outlined in the staff report. At the 61 request of the Mayor, Ms. McNamara reviewed the changes proposed within the JPA. 62 63 Council Member Rafferty, who represents the City on the VLAWMO Board, confirmed 64 that the changes are basically updating and although this group represents a small portion 65 of the city, the work they do is important and he's glad to be involved. 66 67 The council concurred that they will consider approval of the JPA at the council meeting. 68 69 3. 550 Lilac Assessment Appeal — Community Development Director Grochala 70 explained that the council considered this matter at a previous work session. It involves 71 an outstanding SAC fee and the sale of some property. He reviewed the history that 72 brings the matter forward and that is outlined in the staff report. Currently, the matter is 73 to be considered in court but the date for that hearing was moved to allow more 74 investigation and discussion. The charges under discussion have actually already been 75 paid to the Metropolitan Council from the city's funds. 76 77 Mayor Reinert noted that the council has discussed different ways to approach this 78 situation — abatement, no change or a compromise. He sees that the building did receive 79 some benefit. He feels that the penalties attached are related to administrative errors so 80 they aren't appropriate charges at this point. Also he recalls that Mr. Selehi paid for title 81 insurance services but now they will not assist with this problem. 82 83 Council Member Maher recalled that funds were put into escrow in order to allow a 84 liquor license at the property to go forward. 85 86 The council concurred that there should be no fees charged for late payment, etc. That is 87 not appropriate. 88 89 Mayor Reinert noted that the city would incur legal fees to go to court. He asked Mr. 90 Salehi if splitting the $6,300 (no late fees would be charged) would be acceptable. �a CITY COUNCIL WORK SESSION APPROVED June 6, 2016 91 92 Mr. Salehi noted that he has already spent $3,000 in attorney fees. Further he has paid 93 the value for the building in 2010 and now he is losing money. 94 95 Council Member Rafferty said he is inclined to waive only the fees. He sees there have 96 been improvements to the property and the $6300 assessment should stand. 97 98 The council discussed the schedule of when the assessment actually appeared against the 99 property. Originally, the city wasn't aware of the sale and was still dealing with the 100 previous owner. 101 102 Community Development Director Grochala noted a process that would allow the costs to 103 be reassessed to the property and spread over five years for payment. 104 105 Mayor Reinert remarked that the council is attempting to work this out in a fair and 106 reasonable way for Mr. Salehi and for the taxpayers. He suggests that Mr. Salehi let the 107 city know when he has made a decision on the offer to settle the matter. 108 109 4. Watermark — Mattamy Homes — City Planner Larsen presented an update on the 110 proposed development (presentation on file). Actions for the council are included on the Ili next council agenda. 112 113 The mayor asked the council bring forward any concerns: 114 115 - Don't see anything problematic; the developer has responded to concerns as they 116 come up; 117 - Don't like townhomes; would like to see larger lots; homes without three -car 118 garages are not desirable; 119 - Pricing information was requested (low to high); current projects run mid-200's to 120 $50000 - $6001000; 121 - What will the home owner association (HOA) include (staff explained the 122 elements of the master HOA; the townhomes will have additional HOA and each 123 neighborhood will probably have sub HOAs; much will be market driven); the developer 124 representative explained that an HOA is actually set up after a development occurs; 125 - Traffic is a concern for the mayor — there will be a lot of cars using 201h Avenue 126 and he wonders about moving that to a four -lane; it will be very busy at certain times. 127 Staff explained that traffic counts don't warrant a four -lane roadway based on study; 128 - The berm and screening was mentioned by the mayor, making sure that is 129 adequate especially adjacent to interstate; 130 - The mayor asked about the concept that the project would be divided between 131 three different school districts and is there a way to deal with that. The developer 132 representative explained that they are already looking at the prospect of adjusting lines 133 but there is little likelihood of achieving one school district for the whole area. A council 134 member noted that open enrollment is an option when considering schools; CITY COUNCIL WORK SESSION APPROVED June 6, 2016 135 - Council Member Maher suggested that the developer choose one garbage 136 collector to avoid problems in the future; 137 - Mayor Reinert doesn't want all the park dedication fees to be absorbed ahead of 138 time; he'd like to see some of that funding available to work with; the council discussed 139 phasing of park development. 140 141 Mayor Reinert noted that this is the largest development to occur to this point in Lino 142 Lakes. He asked about issues because it's important to understand if there's something 143 that should change prior to considering formal council approval. 144 145 Les Winter, a city resident who was present in the audience, said, regarding the school 146 district question, you can request the legislature to change the taxation from one school 147 district to another. 148 149 The mayor noted that the matter will be on Monday's agenda but if more time is needed 150 that is okay. 151 152 5. NE Area Drainage Study —City Engineer Hankee noted that the feasibility study 153 for this project will come to the council on June 27; it has been reviewed by the 154 Environmental Board. An option for a more green, open channel has been developed. 155 Another consideration is flexibility for future development and that resulted in a new 156 alignment. 157 158 Katy Thompson, WSB and Associates, noted comments heard on the proposal and 159 options developed. In the end, going with Option 4 outlined in the report seemed to 160 provide the most. They have met with Rice Creek Watershed District about using the 161 existing ditch but upgraded. Using an open channel makes more sense than a large pipe 162 for future development considerations. 163 164 Ms. Hankee indicated that staff is working on grant opportunities. 165 166 Mayor Reinert noted the $4 million plus cost; how would that be funded. Staff noted 167 estimates included in the staff report. Ms. Hankee explained the funding concept of 168 utilizing city Surface Water Management funds and seeking grants, perhaps through the 169 watershed district. The mayor wondered how much would be coming from the 170 Watermark development and staff noted it is in the area of $2 million but some of that 171 would be going back to them for their work on the system. Community Development 172 Director Grochala further discussed financing and noted that staff may soon be speaking 173 with the city's financial advisor, Springsted, Inc. about financing options. 174 175 Mayor Reinert asked about timing for the project and Ms. Thompson noted that Mattamy 176 really needs to have something in place as they move ahead. The matter is coming to the 177 council soon. 178 CITY COUNCIL WORK SESSION June 6, 2016 APPROVED 179 6. FEMA Floodplain Update — City Engineer Hankee and Katy Thompson of WSB and 180 Associates reported. Ms. Hankee noted that staff had previously been directed by the 181 council to provide additional information to impacted residents. They are proposing a 182 newsletter update and a website that could be linked to the city's website. (The proposed 183 website and features included was reviewed.) 184 185 Mayor Reinert noted that city resident Brian Fossey is present and he's been involved in 186 some research on the subject. Mr. Fossey suggested that the process for the update has 187 been ambiguous and the overlay used is not definitive and he has found that the resulting 188 maps are not very precise. It's got a plus or minus of two feet and then you bring in the 189 contures. It's an especially difficult process and in a low lying area such as Lino Lakes 190 and there is great impact. He received notice from his mortgage company that they will 191 need flood insurance even though they built their home with original knowledge of the 192 elevation and now that's not enough. He mentioned that there is a website noted by city 193 staff that provides additional insight. From that he learned that to qualify for a reduced 194 insurance cost, he needs a certain certificate. He's concerned that FEMA should be 195 notifying property owners and not mortgage companies. He is also concerned that 196 people who don't have a mortgage don't find out about the situation and may pass on a 197 property without proper knowledge. He also touched on the process of going through 198 FEMA for a map change. He has discovered that FEMA seems to be rolling this out 199 nationwide and he's actually spoken with people from other states. The most recent 200 development is that the City of Anoka has residents impacted and they are taking an 201 aggressive stand in fighting this (helping property owners to get an exclusion). There are 202 questions arising about whether or not FEMA should have rolled this out with the data 203 they have used. 204 205 Ms. Thompson explained the large scale review that the FEMA takes and how 206 discrepancies can occur. 207 208 Mr. Fossey noted that there are exceptions on record based on past information. Ms. 209 Thompson explained that the system can be unfair but currently it is based on certain 210 rules. 211 212 Mayor Reinert suggested that he would like to see a different track. This is based on 213 erroneous data and FEMA will continue to practice this unless they are challenged. Ms. 214 Thompson noted that there are cities on the west coast who have been fighting it for ten 215 years. She added that FEMA doesn't actually create the data but are provided with it and 216 will continue to use that until it is corrected if need be. Mayor Reinert remarked that it 217 is a mess and it can't be allowed to proceed unchecked; Ms. Hankee added that Anoka 218 County has put this on their radar screen also and may be asking more questions. 219 220 Mayor Reinert asked how the city can back away from its involvement and Mr. Grochala 221 suggested the city would have to remove its flood plain ordinance and would then no 222 longer quality for flood insurance. Mr. Grochala suggested that "the chain" is mostly 223 involved and that is something that could be restudied. Mayor Reinert suggested that 5 CITY COUNCIL WORK SESSION June 6, 2016 APPROVED 224 developing something more accurate would be more palpable for people. Mr. Grochala 225 noted the finer information would still not be available without survey. Mr. Fossey added 226 that everyone that he knows who has purchased the flood insurance have been told that 227 the rates will be going up significantly next year although he doesn't know why. 228 229 Mayor Reinert noted that information given and proposed is good and it's also good to 230 hear of the county and a congressman pushing back on this. He can't live with the 231 mistakes and bad data involved in this whole process. 232 233 Council Member Manthey asked Mr. Fossey if the mortgage company gave him a 234 timeline and he responded that he was allowed 45 days to sign up. Ms. Thompson added 235 that the timeline would depend upon the lender. 236 237 Ms. Hankee reviewed the council's direction to get information to the residents and to 238 join efforts to challenge the bad information involved in the process. Ms. Thompson 239 noted that the city can participate in an accreditation process that will lower premiums for 240 those people that continue to need the coverage. Mayor Reinert suggested the city 241 should proceed on that. 242 243 Staff and the council discussed the involvement of the Rice Creek Watershed District in 244 providing data used for the maps. Mayor Reinert indicated that he will contact them for 245 further discussion. 246 247 7. American Legion Parking Lot — Community Development Director Grochala 248 noted the written staff report. The city has pretty much explored options from its 249 standpoint. The Legion has recently indicated that they are discussing submitting a 250 formal proposal that may include financing. 251 252 8. Business Subsidy Criteria Amendment — Community Development Director 253 Grochala explained that there is a council and EDA item coming to the council on 254 Monday involving this subject matter. There is certain criteria that are in place and 255 changes are recommended by the city's bond counsel. The amendments are included in 256 the staff report and were reviewed by staff. The process will include a public hearing 257 and legal staff will be present. 258 259 Mayor Reinert asked what prompts the changes and Mr. Grochala noted a development 260 and timing that are linked to cleaning up the criteria. 261 262 9. United Properties 35E Distribution Center/TIF Request — Community 263 Development Director Grochala noted that this project has been discussed and is moving 264 to the advisory board process. The development site itself is 56 acres and it would 265 consist of an 8 acre building. A preliminary estimate of new value is about $18 million. 266 There are flood plain implications, public improvements for streets, and the developer is 267 requesting tax increment. The city's financial consultants are looking at an application. 268 The city would capture six years' worth of increment to be provided back (estimate $1.2 CITY COUNCIL WORK SESSION APPROVED June 6, 2016 269 million). More information will be coming to the July work session. The ballpark for 270 tax base would be about $700,000 but that includes payments to local, school, county. 271 This would be an expansion project of Distribution Alternatives, an existing business in 272 town. He discussed that the developers have looked at land in Centerville also. 273 274 The report is intended to be an update for the council as the matter will next be going to 275 the Planning and Zoning Board. Staff is recommending it be postponed because there is 276 some outstanding information needed. 277 278 The council discussed the job element. Staff indicated the possibility of 120 full time 279 jobs and some seasonal based on the warehouse nature of the facility. 280 281 Looking ahead, Mr. Grochala expects they will be at the next work session and a public 282 hearing scheduled at the council level following that. 283 284 10. Council Updates on Boards/Commissions — 285 286 North Metro Telecommunications —Council Member Maher reported that the board 287 reviewed the results of a recent 2015 audit. There is interest in expanding services to 288 cities through use of their drone. HD upgrade is on schedule. 289 290 Mayor Reinert noted there was an awesome event last weekend at the new fire house. It 291 was well done by the public safety department. 292 293 11. Monthly Progress Report -Administrator Karlson reviewed the written report. 294 295 -Veterans Memorial, Mr. Karlson asked if council would like to discuss further based on 296 council visits to four possible sites. Council Member Rafferty said he doesn't have new 297 information but would still speak in favor of the civic center location and against adding a 298 memorial to an open space that maybe use for activities. Other council members and 299 the mayor suggested that they could support the island area with some persuasion. 300 Community Development Director Grochala noted his idea of a recreation area/complex 301 that is named for veterans and would support the American Legion baseball team on 302 fields. That concept could include a smaller monument but be a place to bring kids and 303 families regularly. 304 305 12. Review Regular Agenda —The regular council agenda of June 13, 2016 was 306 reviewed. 307 308 The meeting was adjourned at 10:10 p.m. 309 310 These minutes were considered, corrected and approved at the regular Council meeting held on 311 June 27, 2016. 312 313 7 CITY COUNCIL WORK SESSION APPROVED 314 315 316 317 Jeff Reinert, Mayor 6, 2016