HomeMy WebLinkAbout09/05/1984 Council MinutesSpecial Council Meting
September 5, 1984
293
A special meeting of the Lino Lakes City Council was called to order
by Mayor Benson at 6:30 P.M. on Wednesday, September 5. The purpose
of the meeting was to discuss the proposed sewer issue with the con -
tractors involved.
Also present councilmembers were Mr. Kulaszewicz, Mr. Bohjanen, and
Mr. Marier. Mr. Reinert entered the meeting at 6:50 P.M. Others
present were Mr. Schumacher, Mr. Wetzel (engineer), and Mr. Langness
(fiscal agent from Springstad), and Mrs. Anderson
Representative for contractors were present as follows: Harvey Gearman
. and Jim Shafer for Rice Lake Estates, Roy Stanley for Tilsen Properties,
Allan and Dennis Ulmer for Ulmer Construction, Harvey Karth for Rehbein
Excavating. Shilling Construction was not represented.
RESOLUTION 84 -25
Mayor Benson referred to Resolution 84 -25 wherein it is noted that the
City and the contractors involved are required to enter into a developers
agreement in order to continue with the proposed sewer project.
Mr. Schumacher pointed out that there seems to be four basic points
that need to be discussed and hashed out, those being:
1. The developers have expressed a desire for a long repayment sched-
ule. The past policy of the City has been a five -year repayment
schedule.
2. Developers request a one year capitalized interest in bond issue
(one year to start paying).
3. Developers are supportive of a letter of credit for internal
systems only and feel it is unfair for the City to require them
to submit letter of credit for trunk line or anything other than
internal systems.
4. Developers feel the City should take into consideration their
past tax payment record of no delinquencies in making a decision
on this matter.
Mr. Langness outlined some letter of credit alternatives which the
Council proceeded to discuss. He stated that from the City's stand-
point capitalized interest should not present a problem.
Several items such as - -35% versus 100% letters of credit, temporary
improvement bonds, five year versus 15 year payment schedule, risks
and benefits of each- -were brought up and discussed at length.
Mr. Hawkins wanted to remind all involved that a sewer project of
this cost has significant impact upon a City the size of Lino Lakes
and the importance of making a mutually agreeable decision was great.
Mr. Marier moved to ajourn the meeting, seconded by Mr. Kulaszewicz.
Mr. Marier and Mr. Kulaszewicz voted aye, others nay; thus motion
failed.
Ulmer Construction voiced that they were anxious to have the Council
make a decision on this issue.
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Special Council Meeting
September 5, 1984
Mr. Marier moved to request that the Council receive, in the form of
a developers agreement, commitments from Rehbein, Tilsen and Shilling
on their individual projects, in regard to what their plans are as
far as developing in stages and by what extended period of time.
Although it is understood what Rice Lake Estates and Ulmer's commit-
ments are, they should be included in this request. Motion seconded
by Mr. Kulaszewicz.
Mr. Hawkins pointed out that the City would legally have to treat each
contractor equally in terms of the percent letters of credits and other
similar terms and conditions of the developers' agreements. He felt
that the present policy of 100% letter of credit has been acceptable
in small projects in the City, but a project of this magnitude may re-
quire new terms.
Mr. Reinert felt that the purpose of this meeting was to decided upon
that policy and whether or not the City should consider changing it,
and that is why he did not want to adjourn as moved earlier.
On voting upon Mr. Marier's motion above, Mr. Marier and Mr. Kulaszewicz
voted aye, others voted nay, thus motion failed. Mr. Reinert asked that
Mr. Langness explain the concept of 35% letter of credit and the feasi-
bility of same.
Mr. Langness said, " The concept of 35% came from: If you assess this
over a 15 -year period and have a letter of credit for 5 years of
assessments, that would be about 35% and that would be a letter of
credit on assessment of 100% of the cost with a letter of credit of
35% renewable every year. The risk factor for the City is minimized
because it covers the time period up to tax forfeit, if it ever got
that far. I feel this is feasible and that the City is adequately
protected."
Mr. Hawkins also added that the policy would also call for assessments
to be paid in full at time of the sale of each lot which would also
provide for a little cushion in the risk to the City.
Mr. Reinert moved that the City establish a policy for this particular
project at 35% of credit and assessed over a 15 -year period, assessing
100% of the cost and that the assessments be paid in full as the lot
is sold or building permit issued. I would ask that Rehbein Excavating,
Shilling Construction, Ulmer Construction, Tilsen Properties and Rice
Lake Estates respond to this policy. Motion seconded by Mr. Bohjanen.
Motion carried with Mr. Marier voting no.
Mr. Kulaszewicz moved to adjourn. Seconded by Mr. Reinert. Aye.
These minutes were considered, corrected and approved at a regular
meeting on September 10, 1984.
Marilyn inderson, Deputy Clerk