Melrose City • April 21, 2016

The Melrose City Council met in a Regular Meeting on Thursday, April 21, 2016 at 6:15 p.m. at the Melrose City Center pursuant to due notice being given thereof. Present were Council Members Jenny Mayers, Tony Klasen, Dick Christenson, Josh Thieschafer, Mayor Joe Finken, City Administrator/Treasurer Michael Brethorst and City Clerk Patti Haase. Mayor Finken presided thereat. The Council then recited the Pledge of Allegiance.
A motion was made by Ms. Mayers seconded by Mr. Christenson and unanimously carried to approve the agenda as amended.
Mayor Finken then opened the floor to public comment. There were no comments.
a. the minutes from the Council’s December 10, 2015 Special Joint Meeting Special with the Public Utilities Commission, MADA and the Land Acquisition/Disposition Committee, the February 16, Special Joint Meeting with the Public Utilities Commission and the March Regular Meeting, and the March 17 Regular Meeting Minutes.
b. list of bills in the amount of $456,802.27.
c. list of investments for the month of March.
d. Ambulance Department uncollectible accounts in the amount of $4,432.90 have been submitted to Revenue Recapture, collections, or written off. A complete list of accounts is on file at the City Office. There was also a total of $1,469.05 collected from account holders during this quarter.
e. Fire Department uncollectible accounts in the amount of $325.00 have been submitted to Revenue Recapture, collections, or written off. A complete list of accounts is on file at the City Office. There was also a total of $1019.49 collected from account holders during this quarter.
f. 1) On May 9 Police Chief Craig Maus will complete two years of service as Chief for the City of Melrose. City Administrator Brethorst has conducted a review and it is favorable; therefore, recommends approval of a step increase from Step 5 to Step 6. The Council to take action approving Chief Maus’s increase.
2) On May 14 Police Officer Matt McDonald will complete two years of service. Police Chief Craig Maus conducted a review and it is favorable; therefore, recommends approval of a step increase from Step 1 to Step 2. The Council to take action approving Officer McDonald’s step increase.
g. Gambling Resolution: 1) Proposed Resolution No. 2016-11, Resolution Approving Gambling License to the Melrose Knights of Columbus Council 1633 for an exemption from lawful gambling license to conduct a bingo and raffle on June 19, 2016, St. Mary’s Church 203 5th Ave SE in Melrose.
2) Proposed Resolution No. 2016-12 Resolution Approving Gambling License to the Melrose Area Chamber of Commerce for an exemption from lawful gambling license to conduct a bingo on June 24-25, 2016 at the Riverfest Celebration at 206 5th Ave NE in Melrose.
h. The Council to give consideration to approval of the following Temporary On-Sale 3.2% Malt Liquor License application: Melrose Chamber of Commerce for the Riverfest Celebration – June 24-25, 2016. Approval of the license should be contingent upon receipt of the necessary certificates of insurance as to dram shop and general liability coverage. Action: The Council to give consideration to approve/deny the 3.2% Malt Liquor License Application.
i. Resolution No. 2016-13, donation in the amount of $500 from the Melrose Lions towards the Melrose Area Chamber of Commerce. A motion was made by Mr. Christenson, seconded by Mr. Klasen and unanimously carried to approve the Consent Agenda.
a. Mayor Finken welcomed the foster grandparents and their guests to the meeting. He thanked the foster grandparents for their work in the program and for helping our youth. Mayor Finken presented a Certificate of Appreciation to the volunteers of the Foster Grandparent Program.
a. Stearns County Attorney Janelle Kendall gave an update on the Stearns County Prosecution Services provided by the County. Ms. Kendall thanked the City of Melrose for participating in the Stearns County Attorney’s Office Diversion Programs. In the City of Melrose there were no adults who qualified for diversion. There was one juvenile who qualified and was admitted to the program in 2015. The individual successfully completed the program. In 2015 Stearns County prosecuted 109 cases for the City of Melrose, of these 10 were gross misdemeanors the remaining 99 misdemeanors. Ms. Kendall commented on two arrests made by the Melrose Police Department Chief Maus and commended him and the police officers for their hard work and dedication. Ms. Kendall noted her appreciation for the opportunity to work with the City of Melrose.
b. Elementary Principal Greg Seawell and School Board Members John Funk and Pat Schad presented the projects in the proposed upcoming referendum. Residents of the Melrose School District will vote on the two question ballot on Thursday, May 26.
c. A written report was received from Planning and Development Director Walz.
d. A written report was received from Police Chief Craig Maus.
e. A written report was received from Finance Director Beuning.
f. A written report was received from City Attorney Scott Dymoke.
a. Mayor Finken stated that staff has been contacted by the Stearns County Auditor’s Office regarding absentee balloting for the upcoming Primary and General Election. The County has asked if the City of Melrose would again assist with absentee balloting. The City assisted the County in 2014. This would require staffing at the City office one or two Saturday’s. Division Director for Service Centers and Elections Dave Walz was in attendance. Mr. Walz stated that in 2014 the City office processed 97 absentee ballots. However this being a presidential election year he would anticipate that number to be higher. Administrator Brethorst noted that City staff would be trained and would rotate shifts to assist with the absentee voting.
A motion was made by Mr. Thieschafer seconded by Mr. Klasen and unanimously carried approving the request of Stearns County adding the City of Melrose as an absentee ballot location.
b. Mayor Finken noted that as we have done historically, we have hired a seasonal part-time position to assist with Summer workload. The City has budgeted for this for FY 16. When Ron Tiemann retired from the full-time Maintenance Worker position, temporary seasonal worker Allen Wolbeck was moved to part-time Maintenance Worker. This leaves a vacancy in the Temporary Summer/Seasonal Worker position held by Mr. Wolbeck in 2014 and 2015. Because the full-time position of Maintenance Worker became a part-time position, Streets/Parks Supervisor Gary Middendorf is requesting approval to move forward with the hiring process of a temporary summer/seasonal worker for 24 hours per week to assist with lawn and park maintenance, cleaning, etc. The rate of pay is $10.37 per hour.
A motion was made by Ms. Mayers seconded by Mr. Christenson and unanimously carried authorizing City staff to move forward with hiring of a temporary summer/seasonal worker.
c. Police Chief Craig Maus has obtained two quotes for equipment for the new squad car. Chief Maus is recommending the Council approve the quote from Emergency Auto. The price includes installation. A motion was made by Ms. Mayers seconded by Mr. Thieschafer and unanimously carried approving the purchase of the squad car equipment from Emergency Auto in the amount of $8,791.57 which includes installation.
a. Mayor Finken noted that at the February 18, 2016 Council meeting, the Council directed WSB & Associates to develop a Scope of Work for a study to determine the feasibility and cost of replacing the Kraft Wall in cooperation with replacement of the 5th Ave Bridge. Carl Osberg from WSB & Associates participated via phone conference and provided an overview on the three proposals that were presented to the Council.
After further discussion a motion was made by Mr. Klasen seconded by Mr. Christenson and unanimously carried for staff to conduct additional research on an alternative retaining wall specifically relating to a rocked slope. This item will be tabled and brought back to the May meeting for further consideration.
b. The Council at its September 17, 2015 meeting authorized WSB & Associates to provide Project Administrative Support and Sediment and Settlement Testing of the Melrose Lake Dredging Project. Bob Barth with WSB presented the results of the bathymetric survey of Melrose Lake. From these results, hydraulic dredging is the most likely approach to removing sediments from Melrose Lake. The dredging project’s goal is to remove material to the depth of this interface between muck and hard bottom. The estimated cost to dredge Melrose Lake, Southeast Reservoir is approximately $6,024,200 and the Northwest Reservoir $3,753,357. Mr. Barth noted that the next steps would be the following:
• Work session with the City Council and Lake Association to determine the feasibility of proceeding.
• Meeting with the MPCA on dredged materials disposal.
• Determine the scale of the dredging project.
• Identify potential spoil disposal site near dredging project.
• Engage in the multiple watershed planning efforts to advocate for the dredging project and advocate for pollution reduction projects within the Melrose Lake direct tributary area.
• Begin discussions with various grant agencies about the feasibility of funding all or a portion of the project.
After further discussion a motion was made by Mr. Klasen seconded by Mr. Thieschafer and unanimously carried directing staff to research funding options, work jointly with Melrose Lake Association to develop a Master Lake Plan, and contact the Sauk River Water Shed District to enlist their support and request they consider heading the project.
At that time the Council, Melrose Lake Improvement Association, and the Sauk River Watershed District would conduct a work session to determine the project feasibility of proceeding.
c. Mayor Finken stated that since June 2015, Connie and Jay Petermeier have been giving consideration to the establishment of a dog day-care, dog grooming, etc. facility to serve the Melrose community. Presently, the City’s Code of Ordinances, like those of many other communities, prohibits the housing anywhere within the City of any more than three dogs or cats, a ‘kennel”, excluding when puppies or kittens are born, on a single parcel of property regardless of its zoning. Initially, Mr. and Mrs. Petermeier had asked that the City consider allowing commercial kennels within the City so that they could place it on their residential property. Later, they gave consideration to other locations both within and outside of the City for their proposed commercial kennel. Their request to the Council was referred to the Commission at the recommendation of Administrator Brethorst although the kennel prohibition is in the City Code of Ordinances and is not a Zoning Ordinance restriction. It was noted at a MADA meeting on February 4, 2016 that the proximity of kennels to potential new food processing facility locations is a concern to be considered.
Mr. and Mrs. Petermeier withdrew their request from the Commission’s meeting agenda in November 2015 and they had conflicts for the evening of the Commission’s February 8th meeting and were unable to attend. At its February 8th meeting, the Commission asked that the regulations of Stearns County regarding kennels be researched by staff which was done. The Stearns County kennel regulations were presented to the Commission by staff. Stearns County does not regulate kennels within in a city. However, there are numerous regulations and conditions for a kennel to be located in a township, outside of a city, in Stearns County. These include the need for the kennel to be located on a parcel containing a minimum of 10 acres, the kennel must be situated a minimum of 100 feet from the parcel’s property boundaries and it must be located at least 500 feet from the nearest residence excluding the owner’s. Based largely on the extensive guidelines of Stearns County the Commission took action stating its belief that animal kennels as presented are not compatible with anticipated development within the City and did not recommend a change to the City’s Code of Ordinances to accommodate them.
A motion was made by Mr. Thieschafer seconded by Mr. Klasen and unanimously carried acknowledging and concurring with the Planning & Zoning Commission that animal kennels as presented are not compatible with anticipated development within the City.
a. Police Chief Craig Maus noted that animal licenses will be issued from May 2-31 at the Melrose City Center for residents who own a dog or cat. The Melrose City Code requires the following:
• All dogs and cats six months and older, kept or harbored in the City, must be licensed with a City of Melrose license. A maximum of three domestic animals is allowed on the same premise.
• A valid rabies vaccination certificate indicating the animal has been vaccinated within three years must be presented before a license can be issued. The earliest age to vaccinate for rabies is three months old.
• The license fee for all dogs and cats is $15 if spayed or neutered or $20 if not spayed or neutered.
• The dog or cat owner is subject to a penalty of $5 for late registration and costs incurred for impounding the animal. These fees are in addition to the license fee.
• Pet owners are required to clean up animal waste.
• Animals are prohibited from running at large.
b. Planning and Development Director Gary Walz stated that in 2003, the City used tax increment financing and a $100,000 mortgage to assist GCI Builders Inc/Dynamic Investments of St. Cloud LLC with the construction of a 24 unit market rate, multi-family apartment facility at 200 Country Club Road SW. The housing facility is known as Meadowlark Apartments and the TIF District is No. 5. The current owners, who are working with Granite City Real Estate/Granite City Properties, have found a qualified buyer for the facility with the purchase agreement being contingent upon the assignment of the remaining TIF increments to the proposed new owner. This assignment requires MADA and Council approvals. The buyer and seller desire an early May closing. The remaining TIF increments due the current owner of Meadowlark Apartments over the remaining 10 years of the District are estimated at a maximum of approximately $158,320.43 assuming all conditions associated with the project and the District continue to be met. According to Granite City Real Estate/Granite City Properties, as part of the sale and the requested assignment of the TIF rights and obligations, the current owner proposes to pay off the outstanding mortgage debt to the City of approximately $30,690.27 plus a small amount of interest.
Article IX Prohibitions Against Assignment and Transfer; Indemnification of the Development Agreement By and Between City of Melrose, Minnesota and Granite City Innovative Builders Inc dated October 9, 2003 states in Section 9.4 Approvals on page 22 that: “Notwithstanding Sections 9.1 and 9.2, any approval of a transfer of interest in the Developer, this Agreement, or all or a part of the Development Property required to be given by the City under this Article IX may be denied only in the event that the City reasonably determines that the ability of the Developer to perform its obligations under this Agreement and its obligation to pay ad valorem real property taxes assessed with respect to the Development Property, or the overall financial security provided to the City under the terms of this Agreement, of the likelihood of the Minimum Improvements being successfully constructed and operated and maintained pursuant to the terms of this Agreement will be materially impaired by the action for which approval is sought”.
The prospective buyers are James R. and Mary L. Schwebel. Mr. Schwebel is a partner with the law firm of Schwebel Goetz & Sieben. He and his wife own other multi-family housing properties which are operated by an experienced real estate management company such as Metroplains Management Company. In the assignment request, it is noted that the buyer’s “intent is to continue to operate the property as high quality, market rate multifamily housing similar to the way the property has been operating since its inception”. This “market rate” statement does not appear in Mr. Schwebel’s correspondence, which is likely an oversight. The following documents are associated with this request:
• Revised assignment request dated April 12, 2016 from Granite City Real Estate .
• Correspondence/Introduction from prospective buyer James R. Schwebel dated April 06, 2016.
At its meeting on April 14, 2016, MADA reviewed the requested TIF assignment from GCI Builders Inc/Dynamic Investments of St. Cloud LLC to James R. and Mary L. Schwebel. MADA took action approving the proposed assignment and recommending to the Council that it proceed with the transfer subject to the payoff of the existing mortgage balance due the City, subject to the condition that the facility continue to provide market rate housing and that all the necessary documents be properly executed.
A motion was made by Ms. Mayers seconded by Mr. Christenson and unanimously carried approving the requested assignment of the TIF increments from District No. 5 Meadowlark Apartments from the current owners to the prospective buyer James R. and Mary L. Schwebel subject to the facility continuing to provide market rate housing, the existing mortgage being paid off and the execution of the appropriate documents.
1. Approval of the assignment of all rights and obligations contained in the above referenced Tax Increment Finance Development Agreement. A motion was made by Mr. Christenson seconded by Mr. Thieschafer and unanimously carried approving the assignment of all rights and obligations contained in the above referenced Tax Increment Finance Development Agreement.
2. Release of the Authority’s right of reversion contained in the Quitclaim Deed dated November 4, 2003. A motion was then made by Mr. Thieschafer seconded by Mr. Klasen and unanimously carried approving the Release of the Authority’s right of reversion contained in the Quitclaim Deed dated November 4, 2003.
3. Approval of the assignment of the Assessment Agreement contained in the above referenced Development Agreement. A motion was made by Mr. Klasen seconded by Ms. Mayers and unanimously carried approving the assignment of the Assessment Agreement contained in the above referenced Development Agreement.
c. Mayor Finken noted that at a recent joint meeting of the Council and Utilities Commission, Director Walz presented Business Development Project(BDP) #01-12-2016A for Council and Commission review. BDP #01-12-2016A is a proposal by Melrose Multi Family LLC, an experienced commercial property and multi-family housing developer, to construct a multi-story, market-rate apartment facility on the City-owned Melrose RiverView Addition site located along the Sauk River Mill Pond directly east of the Melrose City Center.
Unlike previous development proposals for the site which were for condominiums or cooperatives, this one is for a market-rate apartment rental facility containing 24 or more rental units. The proposed development to be undertaken by Melrose Multi-Family LLC is scheduled to be planned between now and May 2017 and constructed between May 2017 and May 2018 with occupancy to occur beginning May 2018. In order to incur the expense and investment associated with planning the proposed facility, the developer wishes to control the property through an option agreement while planning/pursuing its development over the next 14 months. BDP #01-12-2016A has been presented to and received the preliminary support of various City boards and commissions including the Council, Melrose Public Utilities Commission, Planning and Zoning Commission and Melrose Area Development Authority.
There was general consensus to granting the developer’s request for its acquisition of the property for $1.00. A concern was noted regarding the vehicles currently parked on the development site. It was noted by several board and commission members as well as staff that part of the impetus for the City’s acquisition of multiple residential parcels adjacent to the west side of the Melrose City Center was the provision of additional city center parking and the provision of additional city/downtown parking if the Melrose RiverView Addition site were to be developed.
The draft option agreement prepared by City Attorney Scott Dymoke, reviewed by City staff, and revised and reviewed by the developer and its attorney contains a schedule of project events/timelines and renewal periods stating July 15, 2016, December 15, 2016 and April 14, 2017 with a closing scheduled for May 15, 2017. At its meeting on March 21, 2016, the Planning and Zoning Commission determined this proposed option agreement and anticipated future sale to be in compliance with the City’s Comprehensive Plan.
Corey Gerads, a partner of Melrose Multi-Family LLC addressed the Council stating that it is their intent to build a high end apartment complex. One of the challenges of the site will be providing ample parking for the tenants and are therefore considering underground parking. The complex would also include amenities such as a community room and/or fitness center. Mr. Gerads noted that they have existing complexes in Sartell, St. Augusta, Paynesville, and Waite Park.
After further discussion a motion was made by Mr. Thieschafer, seconded by Ms. Mayers and unanimously carried approving and authorizing the execution of the proposed option agreement for the Melrose RiverView Addition market-rate apartment project.
The following informational items were reviewed:
a. The following is a list of upcoming schools and conferences: 1) Minnesota Mayors Association Annual Conference in Bloomington MN April 29-30 Attending: Mayor Joe Finken.
b. Utilities Commission’s March 14 Regular Meeting minutes.
c. Efforts are underway to recover and rebuild the St. Mary’s Church. As per the request of St. Mary’s Building Committee, the City has been asked to assist in their development efforts. Specifically, they have asked City Administrator Brethorst to help with grant applications and academic research.
d. 2016 Tax Capacity Rates for Stearns County
e. EMS week is May 15 – 22. This year’s theme is “Called to Care”.
Julie Ulbricht will be recognized for 25 years of service and Steph Tillman will be acknowledged for five years of service.
f. The Building Permit Summary Log for First Quarter 2015. The total number/value of building permits issued in the first quarter for the past five years were:
2016 2015 2014 2013 2012
14 15 12 7 23
$290,700 $497,792 $297,027 $48,878 $215,560
A motion was made by Ms. Mayers, seconded by Mr. Klasen and unanimously carried that the meeting be adjourned at 9:00 p.m.
Patricia Haase, City Clerk