HomeMy WebLinkAbout06-07-2010 Council Minutes (2) CITY COUNCIL WORK SESSION June 7,2010
APPROVED
CITY OF LINO LAKES
2 MINUTES
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4 DATE : June 7,2010
5 TIME STARTED : 5:40 p.m.
6 TIME ENDED : 11:15 p.m.
7 MEMBERS PRESENT : Councilmember Gallup, O'Donnell,
8 Rafferty, Roeser and Mayor Reinert
9 MEMBERS ABSENT : None
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12 Staff members present Acting City Administrator Dan Tesch; City Attorney Joseph
13 Langel (part); Community Development Director Michael Grochala; City Engineer Jim
14 Studenski; Public Safety Director Dave Pecchia; Economic Development Coordinator
15 Mary Alice Divine; City Planner Paul Bengtson; City Clerk Julie Bartell (part)
16
17 1. Cottages of Willow Ponds, request from buyer to subordinate city's contract
18 and covenants to HUD (purchaser Chuck Reisenberg,Lino Lakes Housing Limited
19 Partnership)—Economic Development Coordinator Divine explained that the council is
20 being asked to reconsider agreements in place regarding the Cottages of Willow Ponds
21 senior housing project. There is a proposal to purchase the property with the U.S.
22 Department of Housing and Urban Development(HUD) as underwriter and there is an
23 agreement in place that HUD will not accept. The agreement relates to a requirement that
24 the project remain senior housing. She introduced Attorney Steve Bubul of Kennedy and
25 Graven (representing the city) and Mr. Chuck Reisenberg, proposed purchaser of the
26 property.
27
28 Mr. Bubul explained that the agreement in question dates back to 1995 and is tied to the
29 city's dedication of tax increment funds to the project. The tax increment element has a
30 final payment in 2012 but an attached agreement includes a requirement for senior
31 housing at the facility through 2026. It is a situation that HUD will not accept as they
32 always require first position.
33
34 Mr. Reisenberg reported that basically this is a situation where the current property owner
35 wants to move the property due to its tax credit status. The best way to finance a
36 purchase of the property is through HUD. He was ready to close on the deal when the
37 aforementioned agreement with the city to maintain senior housing was found. He
38 wishes to buy this property to keep and enhance it as senior housing. It is common to
39 have income requirements and this housing also has a disabled element. He reminded the
40 council that the situation includes the end of the tax increment on the project as well as
41 the first mortgage coming due, and adding to that the future capital needs that go with any
42 housing project, it could be a challenging situation. Those are all big deals. His group is
43 looking ahead and believes their proposal to purchase the project betters its future
44 financial health. There is a market rate conversion option here and although he doesn't
CITY COUNCIL WORK SESSION June 7, 2010
APPROVED
45 intend to go in that direction, another buyer might. He is anxious to work with the
`, 46 council to find a solution.
47
48 Council Members received more information from Mr. Reisenberg on the future capital
49 needs for the project. They also discussed that the agreement in question doesn't seem
50 unusual so it shouldn't have come as such a surprise to Mr. Reisenberg. Also noted was
51 that the biggest question is whether the project remains guaranteed senior housing. The
52 council also questioned, if the agreement were subordinated as is being requested, could
53 he (Mr. Reisenberg)change it from senior housing with or without HUD approval and
54 also who would hold that right if there was a foreclosure? The council asked Mr.
55 Reisenberg for some background information on his other projects and he explained his
56 record. There was some discussion amongst the council about the capital needs and
57 maintenance and some concern that the maintenance is coming due because it hasn't been
58 done appropriately to this point. Mr. Reisenberg pointed out in response that the
59 condition of the property is excellent and the only immediate need is the addition of some
60 smoke detectors and to overlay the parking lot; what he has spoken about are the capital
61 needs of the future and they are generally common things that need to happen in the
62 second 15 year period of a project's existence. He added that HUD requires a capital
63 needs plan as part of the financing package. He characterized this as a nice project the
64 way it is.
65
66 Attorney Bubul added that there is no issue realistically with maintaining the senior
67 requirement unless the project goes into foreclosure. He has to state that there is no "iron
68 clad" guarantee however.
69
70 Ms. Divine explained that this is an Economic Development Authority(EDA)decision
71 but of course the council acts as the economic development authority for the city. If the
72 council concurs, their comments would be forwarded to the EDA who could move to
73 finalize the necessary documents.
74
75 The council confirmed with Mr. Reisenberg that he would be willing to do a senior
76 convenant for a 35 year period (term of the mortgage). Mr. Reisenberg added that there is
77 no doubt that this sale will not happen if the subordination on the covenant does not
78 occur; he doesn't know if there is anyone else out there waiting to purchase. The council
79 confirmed that Mr. Reisenberg's proposed mortgage would be assumable (but only with
80 approval of all attached parties). Mr. Reisenberg also confirmed that he has not had any
81 projects that have failed; generally he is working on 5-6 projects at any given time. He
82 also noted that the failure of senior projects financed by HUD is rare to non-existent.
83 When the council asked if Mr. Reisenberg could request a change through HUD after the
84 deal is cut, Attorney Bubul responded that it would be very rare for that to occur and, in
85 fact, it is difficult to even conceive.
86
87 The council concluded that more discovery and discussion is needed on this matter. They
88 want to ensure that the city's best interest is secure with any change. They will continue
89 discussion at the next regular work session.
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90
91 2. County Ditch 10-22-32 Repair Report—Doug Thomas, Rice Creek Watershed
92 District (RCWD) explained the history and status of a ditch system partially located in
93 Lino Lakes that is known as County Ditch 10-22-32. As part of preparing repair plans for
94 the ditch system, a report is being prepared that will include this ditch. The county is
95 requesting city consideration of a resolution consenting to their proposal to conduct
96 proceedings regarding this ditch. This permission is requested under the state's Ditch
97 Law rather than the Watershed Law to save costs.
98
99 Community Development Director Grochala noted that the Environmental Board
100 considered this request,made a minor change to the proposed resolution and staff is now
101 recommending that the resolution be forwarded to the full city council meeting for
102 consideration.
103
104 When a council member asked what this approach means practically, Mr. Thomas
105 explained that it means little specifically. He did note that the city could be assessed for
106 any affected city owned property; for area residents this approach means the project will
107 be less costly.
108
109 The council concurred that they are most concerned that the cost implications to the
110 citizens are understood and that this approach will indeed be the best deal. Mr. Thomas
111 assured the council that the RCWD is very conscious of spending; the method of charging
112 for the improvements would be similar to a storm water utility that is considered an
113 equitable approach. The council concurred that staff should bring the resolution to the
114 full city council meeting.
115
116 3. English as Official Language—Acting Administrator Tesch explained that a council
117 member brought forward the concept of the city council adopting English as the official
118 language of the city. He received information on the subject from the League of
119 Minnesota Cities (LMC) and has attached it to his staff report. It appears this type of
120 designation has been done by some entities and some challenges have occurred. There is,
121 however, no clear case law on the subject. The city has had very limited requests for
122 translator services (police department only).
123
124 Council Member Roeser indicated that he brought the matter forward during recent
125 budget discussions as a potential cost saving measure. He provided a written report
126 indicating his reasoning for such an effort. He doesn't want the city to not do the right
127 thing for fear of a challenge.
128
129 The council discussed the possibility that there is some risk in going forward and that
130 such a move could create a feeling that the city is unwelcoming. It was suggested that it
131 is a matter of treating everyone the same (not discriminating) and the council member
132 who brought the issue forward indicated that he may bring a resolution to the council
133 floor.
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134 4. Liquor License Renewal Issue—City Clerk Bartell reported that the council will
135 soon be asked to consider the renewal of liquor, wine, beer and dance licenses for the
136 city. One liquor license holder has a long-standing concern about the city's practice of
137 doing a background investigation annually on all applicants as well as charging a fee for
138 that investigation. That licensee did not pay the fee for the last licensing period and
139 therefore staff finds that, under City Code Section 701.07, his establishment is not
140 eligible for a license. Staff does not intend to bring forward to the council the renewal
141 request for that license and the establishment would be left without authorization for
142 liquor sales as of July 1, 2010.
143
144 The council concurred that there is no discussion about the delinquent fee—it must be
145 paid to continue discussion.
146
147 The discussion turned to the city's practice of doing an annual investigation and charging
148 for it. The council received information from the 2009 discussion of investigation fees
149 representing the policies of some other cities.
150
151 Chief Pecchia remarked that the decision on whether or not to do an annual background
152 check and the cost are policy decisions. The city's practice of doing them and the charge
153 of$250/$450 is a decision made by a previous council. He clarified that the Police
154 Department gets no revenue for the work. It is his opinion that doing an annual
155 investigation is due diligence in this day and age.
156
157 The council discussed the appropriateness of charges for a renewal in relation to the cost
158 of the license fee and whether the background fee could be incorporated. Some council
159 members felt the issue merits more discussion especially if it helps keep a business open;
160 one council member suggested that the investigation has a cost and to not charge would
161 mean passing that on to the citizens.
162
163 The council asked about the licensee's concern and City Clerk Bartell explained that she
164 has heard the licensee express concern that an annual background check is not generally
165 needed or appropriate and the cost is out of line.
166
167 City Attorney Langel opined that it is appropriate to inform the licensee that he is in
168 violation of the ordinance because of the delinquency and is not eligible to apply for
169 renewal until that is paid. There would not be sufficient time to modify the city's
170 ordinance. The issue raised can be legitimately discussed but not in perspective of this or
171 the previous renewal cycle. The licensee owes the investigation fees now. If he wants to
172 present the issue of change in the future to the council, that is an appropriate discussion
173 then. The council indicated they are open to future discussion and will look at it when
174 fees are discussed.
175
176 5. Police Department Annual Report—Chief Pecchia indicated he would review the
177 annual report and respond later to council member questions. The entire report will
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CITY COUNCIL WORK SESSION June 7, 2010
APPROVED
178 remain on-line on the department's Web site and will be brought to the council for formal
179 approval at the council meeting. He reviewed all elements of the report (on file).
180
181 6. Police Officer Position - Chief Pecchia explained that he is asking the council to fill a
182 vacant police officer position through the promotion of a current Community Service
183 Officer(CSO) officer. This vacancy occurs due to the promotion of Officer Dale Hager
184 to a sergeant position. The position is included in the approved 2010 budget. He
185 provided information on the financial impact of the promotion and the status of the
186 department budget. He added that another element of the department's budget is that one
187 officer will soon be reactivated to the National Guard. Filling the position is a policy
188 decision but the Chief noted that he believes that moving to do so would be prudent in
189 consideration of the terms of the department's retention grant and the department's
190 budget situation. Further it would be in line with a policing philosophy that works and is
191 working for this city.
192
193 The council discussed the request in terms of the budget challenges that lay ahead. There
194 is concern about adding positions at a time when there are such uncertain budget times
195 ahead. The council will not be considering the promotion at this time.
196
197 When the chief asked how the council feels about the retention grant proposal,the
198 council concurred that the grant application should go ahead.
199
200 7. Signal Justification Report Update—Regarding the council's proposal to put
201 together projects to signalize the intersections of Birch St/Ware Rd and Lake Dr/Main St
202 both to be considered as a referendum item, Community Development Director Grochala
203 updated the committee. Both intersections were considered within the scope of a signal
204 justification report. Main St/Lake Drive passed the county criteria and would probably
205 receive county funding. Birch St/Ware Rd did not meet the criteria due trip volume
206 through the intersection although future traffic volume may be a consideration. He
207 reminded the council that the deadline for submitting ballot language is August 19, 2010
208 and there needs to be pretty specific cost information in order to propose a project.
209 Getting a feasibility study done for the intersections is required now in order to stay on a
210 schedule that will work.
211
212 The council discussed whether or not it is appropriate to proceed with a feasibility study.
213 Staff will put the matter on the council agenda for Monday's council meeting. The
214 council will have to decide if they want to go ahead with one or both or none.
215
216 8. Comprehensive Plan—The council set a special meeting to specifically discuss
217 elements of the city's proposed comprehensive plan amendment. They will meet
218 following the regular council meeting on June 14, 2010.
219
220 9. 2008 Charter Commission Proposed Charter Amendment—Community
221 Development Director Grochala noted that the council had requested a recap of the
222 amendment proposed by the Charter Commission in 2008. He has provided the
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CITY COUNCIL WORK SESSION June 7,2010
APPROVED
223 amendment and background information, including an opinion prepared by Attorney
L 224 Steve Bubul pinpointing some issues with the commission's proposal. He also provided
225 some background information on the citizen task force amendment proposal as well as
226 the commonly used Chapter 429 language. He believes the council decided to not go
227 forward with the Charter Commission amendment but rather the citizen task force
228 proposal without the tax exempt language which was found to be obsolete. The
229 commission's proposal included a reverse referendum element but along with that some
230 processes that would be extremely cumbersome.
231
232 The council discussed the need to put the past aside and work in a cooperative way with
233 the Charter Commission to find the best approach for the road situation. There are
234 Charter Commission members who have knowledge of the issue from the beginning and
235 they are important. The council discussed the upcoming joint meeting with the
236 Commission and a member suggested the idea of having a subcommittee of charter and
237 council representatives to work on the issue once and for all. There was some
238 discussion about the Commission's past use of funds. There was recollection of the one
239 road improvement project that passed on the ballot and some ideas of what could have
240 made that a successful effort.
241
242 10. Joint Meeting with Charter Commission—Acting Administrator Dan Tesch noted
243 that the Charter Commission Chair saw the information included in the packet for this
244 item and asked that he hand out the Charter Commission's response to the audit which he
245 did.
246
247 The council reiterated that the attorney has said that it is illegal for the council to provide
248 funding for anything other than what is allowed by statute.
249
250 In reviewing the items laid out in the staff report(items that had previously been
251 identified for discussion with the commission)the council elected for just one agenda
252 item, "road improvements and how to get there". The Commission will of course add the
253 items of their choice.
254
255 11. Organizational Study—Acting Administrator Tesch noted that this item is not ready
256 for consideration but was added to the agenda so that it doesn't fall off of the council's
257 radar screen.
258
259 There is a desire among council members to have the new city administrator involved in
260 this process. In the meantime staff should be investigating the possibilities that have
261 been brought forward by council members.
262
263 12. Reschedule July Work Session—The current city council schedule for the year
264 doesn't include a regular work session in July because it would have fallen on July 5, a
265 holiday.
266 The council concurred that there should be a meeting in July and that they will reschedule
267 to July 6, 5:30 p.m.
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CITY COUNCIL WORK SESSION June 7,2010
APPROVED
268
269 Review Regular Agenda—The regular agenda for the council meeting on June 14, 2010
270 was reviewed and there were no changes.
271
272 The meeting was adjourned at 11.15 p.m.
273
274 These minutes were considered, corrected and approved at the regular Council meeting held on
275 June 28, 2010.
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280 Julianne B tell, City Cl rk Jeff emert a or
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