Melrose City January 19, 2017

The Melrose City Council met in a Regular Meeting on Thursday, January 19, 2017 at 6:00 p.m. at the Melrose City Center pursuant to due notice being given thereof. Present were Council Members Dick Christenson, Tony Klasen, Josh Thieschafer, Justin Frieler, Mayor Joe Finken, City Administrator Michael Brethorst, and City Clerk Patti Haase. Mayor Finken presided thereat. The Council then recited the Pledge of Allegiance.
A motion was made by Mr. Christenson, seconded by Mr. Frieler and unanimously carried to approve the agenda as amended.
Mayor Finken then opened the floor to public comment. There were no comments.
The following items were considered for approval under the Consent Agenda: the minutes from the December 15, 2016 Special Joint Meeting with the Public Utilities Commission, the December 15, 2016 Regular Meeting, the January 5 Regular Meeting, and the January 5 Special Meeting; list of bills in the amount of $1,145,076.36; list of investments for the month of December 2016.
Gambling Resolutions:
1) Resolution No. 2017-3, Resolution Approving Gambling License to the Sauk River Phantom Bucks Chapter of MN Deer Hunters Association for an exemption from lawful gambling license to conduct a raffle on March 25, 2017 at the Melrose American Legion.
2) Resolution No. 2017-4, Resolution Approving Gambling License to the Church of St. Mary’s for an exemption from lawful gambling license to hold a bingo and a raffle on March 26, 2017 at St. Mary’s School located at 320 5th Avenue SE in Melrose.
3) Resolution No. 2017-5, Resolution Approving Gambling License to the Church of St. Mary’s for an exemption from lawful gambling license to conduct a raffle on June 24, 2017 2017 at St. Mary’s School located at 320 5th Avenue SE in Melrose.
4) Resolution No. 2017-6, Resolution Approving Gambling License to the Church of St. Mary’s for an exemption from lawful gambling license to hold a raffle on December 31, 2017, at St. Mary’s School located at 320 5th Avenue SE in Melrose.
A motion was made by Mr. Thieschafer, seconded by Mr. Christenson and unanimously carried to approve the Consent Agenda items.
Stearns County Attorney Janelle Kendall gave an update on services provided by the Stearns County Attorney’s Office. Ms. Kendall stated that Melrose had no adults who qualified for the Diversion Program in 2016; however, two juveniles qualified and were admitted. Both have completed their program.
Ms. Kendall provided a summary of the City’s violations as well as the numbers as they relate to all of Stearns County.
Community Development Director Creelman provided an update on MADA matters. Mr. Creelman stated that MADA approved the fourth application for the Deferred Loan Program.
Police Chief Craig Maus presented the Police Department’s December report. He noted that a total of 25 citations were issued in the month of December. There were 123 verbal warnings and 19 written warnings. Chief Maus stated there were 334 calls for service during this month compared to 323 for December of 2015. The year-to-date number of calls is 4,028 compared to 3,229 in 2015. For the month of November 2016, the Department received 26 agency assist calls. Chief Maus stated that the Reserves continue to do ride-along on a regular basis to maintain their required hours. The Reserves currently has one member. Recruitment efforts are being pursued. If interested, please contact the Melrose Police Department.
City Attorney Scott Dymoke reported on projects he has been working on for the City:
• Community Development: Jennie-O Turkey Store Project: Obtained Order of Minnesota Boundary Unit completing annexation requirements. Forwarded Annexation Order to Minnesota Secretary of State, Minnesota State Demographer, Stearns County Auditor, and Melrose Township.
• Nuisance Actions: Prepared Notice of Motion and proposed Order to Abate Nuisances on Kraker, Rodriquez, and Ambriz properties. Filed Rodriquez and proof of service with court.
• Deferred Loan Program: Reviewed proposed deferred loan documents for local business improvements. Recommended revisions to documents and prepared checklist for City staff to use with program
City Administrator Brethorst presented the Fire Department Year End Report and the 2018 proposed budget. Also presented were the Expenditure & Revenue Reports for 2016 and 2015. Fire charge revenue totaled $18,525 compared to $15,270 in 2015.
The 2017 credit is $7,457.31 as presented at the February 18, 2016 meeting with contract area officials. The 2018 credit will be $3,489.39 and is calculated as shown on the 2016 revenues and expense sheet.
Over the course of many years, some additional funds have accumulated in the Fire Department. Since no funds are received on the contracts until December of the contract year, it is recommended that $50,000 be designated for operating costs for the year. Based on the principal of requiring the $50,000 for operations, and the amounts set-aside for future vehicles and equipment, a refund of $3,489.39 will be applied to the 2018 contract. This is how all future refunds are recommended to be calculated.
Fire #2 also includes the information on set-aside funds. A balance of $116,859.05 is available for vehicle equipment replacement set-aside at year-end 2016. For years 2017 and 2018, $36,100 is budgeted annually for Capital Outlay/Vehicles. A new fire truck was purchased in 2016. There are no anticipated purchases in 2018.
There are protective gear/clothing/equipment set-aside funds of $85,036.16. For 2017 and 2018, $15,010 is budgeted for Capital Outlay/Equipment & Clothing.
Projected 2018 Budget and Contract Charges – he 2018 Expenditure Budget, as proposed, has a small increase of $2,500 from the approved 2017 Expenditure Budget.
The proposed 2018 fire contract charges are based on the total budget amount of $177,753, less excess fund balance funds being applied. Annual anticipated revenues from fire charges are $17,000.
A motion was made by Mr. Thieschafer, seconded by Mr. Frieler and unanimously carried adopting the 2018 Fire Department Budget.
Mayor Finken stated that after review of the Housing Code Ordinance and the process necessary to bring the affected properties into compliance, it was learned there are restrictions, which hinder the City’s ability to do this in a way which is effective, and will bring the property into compliance with allowable enforcement action.
It is proposed to follow the same process as the Nuisance Ordinances and allow abatement of the property at a local level and court action if that step does not bring the property into compliance.
Council Member Klasen questioned the ambiguity of the definition of “poorly maintained” in the amendment and if it was left open to interpretation. Attorney Dymoke stated that it would follow the guidelines of the Nuisance Ordinance.
After further discussion, Mr. Thieschafer introduced Ordinance No 1-19-2017, An Ordinance Amending Melrose City Code Chapter 151, Housing Code. The motion was seconded by Mr. Frieler with a roll call vote recorded as follows: For: Council Member Thieschafer, Frieler, Christenson, and Mayor Finken; Against: Council Member Tony Klasen
The Council next gave consideration to approval of the following renewal liquor license applications:
1) Intoxicating Liquor: a. License #2: LKMTA Inc. DBA Anthems @ MP’s – On Sale; b. License #3 – Melrose Bowl Inc. DBA Melrose Bowl – On Sale, and License #3 – Sunday On Sale; c. License #4 – The Dam, Inc. DBA The Dam Bar – On Sale, License #2 – Off Sale, License #4 – Sunday On Sale; d. License #4 – LQR, Inc. DBA SPIRITZ Off Sale Liquor – Off Sale; e. License #6 – Meadowlark Country Club – On Sale, and License #2 – Sunday On Sale; f. License #7 – Ana Hernandez DBA El Portal – On Sale, License #6 – Sunday On Sale; g. License #5 – Coborn’s Inc. DBA Coborn’s Liquor – Off Sale.
2) Club and Sunday On Sale: a. License #1 – American Legion Post #101 – Club On Sale License, and License #1 – Sunday On Sale.
3) Wine License: a. License #1 – John Dough’s Pizza – Wine License & 3.2% On Sale Malt Liquor; b. License #2 – Martinez Meat & Grocery – Wine License & 3.2% On Sale Malt Liquor.
4) 3.2% Off Sale Malt Liquor License: a. License #1 – Martinez Meat & Grocery – 3.2% Off Sale Malt Liquor; License #2 – Petro Plus #101 – 3.2% Off Sale Liquor.
All applications must be executed, fees paid, and certificates of insurance as to liquor liability coverage obtained for Council approval.
Minnesota law requires cities to obtain proof that all licensees provide workers’ compensation insurance for their employees. The City must also obtain licensees’ social security numbers, and Minnesota and federal tax identification numbers for the Department of Revenue’s use.
All of the Off Sale Intoxicating Liquor License applications must be signed by the Police Chief.
The licenses to be effective March 1, 2017 to March 1, 2018.
A motion was made by Mr. Christenson, seconded by Mr. Klasen and unanimously carried approving the liquor license renewal applications contingent upon receipt of all necessary documentation and payment of all necessary fees.
Mayor Finken stated that WSB & Associates have prepared the plans and specifications for the 2017 Chip Seal Project. Because the project is estimated to be under the $100,000 threshold, competitive bidding requirements are not applicable and obtaining bids from a minimum of two qualified bidders is acceptable. WSB would send the request for quotes to a minimum of three contractors that have provided quotes to the City in the past. In addition, the project would be listed on the QuestCDN website for any other contractors that may be interested in quoting the project.
If the Council prefers to advertise, the ad for bid would be due on January 20 and the ad would run in the paper on January 25. Bids would be opened on February 8 and the bid information would be available for the Council on February 10.
WSB is requesting authorization to obtain quotes from at least two contractors, or if the Council prefers, advertise for bids.
A motion was made by Mr. Klasen, seconded by Mr. Christenson and unanimously carried authorizing WSB & Associates to seek quotes as outlined.
Mayor Finken noted that the State of Minnesota Department of Commerce has established a list of cities that have created a fire escrow account. This is a program that allows cities to create policy that would require insurance companies to hold back 25% of the insurance proceeds pending cleanup of the site if needed.
This would not apply to the 400 Block fire as it is not retroactive nor is there any belief that the owners will not clean up the site. This would only apply to possible future fires. This is a proactive step for a city to protect the taxpayer from having to pay for demolition in full if a property owner were to not meet their civic obligation to clean up the site. The steps are as follows:
1. The Council adopts the resolution to establish a fire escrow account and notifies the Minnesota Department of Commerce.
2. The Minnesota Department of Commerce notifies insurance companies operating within the State that Melrose has established a fire escrow account.
3. If there is a fire in Melrose, the insurance company holds back 25% of the insurance proceeds and notifies Melrose.
4. Melrose has 30 days to notify the insurance company that it wants the 25% escrowed as security for the repair or removal of the building.
5. The insurance company either forwards the funds to Melrose to hold in escrow or retains the funds in escrow itself.
6. The property owner either completes repairs and removal, or authorizes payment directly to a contractor to complete repairs or removal.
7. If the property owner does not act within 45 days, Melrose can use the funds to pay for demolition and removal.
Two important details:
1. If the Resolution is adopted, Melrose must file a report with the Minnesota Department of Commerce every two years accounting for its use of the escrow fund.
2. It only applies to fires occurring after adoption of the resolution and notice to the Minnesota Department of Commerce. It will not apply to the 400 Block fire or the St. Mary’s Church fire.
City Attorney Scott Dymoke reviewed the program and after further discussion, the Council, by consensus, decided not move forward with the establishment of a Fire Escrow Account.
Mayor Finken stated that Fire Chief Jeremy Kraemer is requesting Council approval to rehire Edwin Santana as a firefighter which would bring membership to 31 members versus 30 members as outlined in Department policy. Mr. Santana served on the Department from 2009-2014. Chief Kraemer anticipates there may be several retirements within the next few years which would bring membership back down to 30 members.
Chief Kraemer, City Administrator Brethorst, and HR Coordinator Diane Gruber have met and discussed this hiring. It is anticipated that the annual payroll expense for the additional member would be roughly $1,000 or less and can be supported by the current budget. Turnout gear, key to fire hall, and pager are all available so there would be no additional cost for these items. They are recommending a background check and pre-employment physical be done due to the lapse in service time.
A motion was made by Mr. Christenson, seconded by Mr. Klasen and unanimously carried approving the rehire of Mr. Santana to the Fire Department contingent upon a successful background check and pre-employment physical and to temporary increase the Fire Department staffing to 31.
The Council, at its January 5 Special Meeting, tabled action regarding the Police Department staffing. Police Officer Matt McDonald will be placed on military leave beginning on January 26, 2017 and lasting up to 400 days. Chief Maus stated that after looking at the various options, it is his preference to return to having a five-officer Department.
City Administrator Brethorst stated that the budget does have funding to cover a fifth officer for 2017; however, a portion of funding for 2018 and 2019 would need to come from cash reserves. It would not be until 2020 when a bond payment drops off that the General Fund would be able to fund the fifth officer.
Council Member Thieschafer had asked staff to look at ways to fund the position for 2018 and 2019 and bring it back to the Council for consideration.
Chief Maus presented the various options for coverage and ways for funding an additional officer.
Mr. Thieschafer stated that due to budget constraints, he would prefer utilizing the part-time officers and Stearns County assistance at least on a trial basis.
Council Member Frieler supported a five-officer Department as so did Mayor Finken.
Mr. Christenson would also like to see utilizing the part-time officers along with County assistance. Mr. Klasen also supported this option.
A motion was made by Mr. Christenson, seconded by Mr. Klasen and unanimously carried to utilize part-time officers and contract with Stearns County for staffing support during Police Officer McDonald’s military leave.
Mayor Finken stated that the 3rd Avenue resurfacing project includes the resurfacing of 3rd Avenue SW from 100’ north of Kraft Drive to Main Street and 3rd Avenue NW from Main Street to 1st Street NW and a 50’ patch near the Munson Feed elevator entrance to 3rd Avenue. A resurfacing project includes the reclamation of the existing bituminous surfacing and Class 5 base for reuse as aggregate base in a new pavement. The estimated average daily traffic for the street is 3,000 vehicles per day and an anticipated 20-year growth rate at 3% per year. The proposed pavement design will provide a 10 ton pavement section with a design life to 20 years.
The coring will be completed January 16, 2017 and following those results, WSB & Associates will be able to complete the plans and specifications. They will be reviewing the existing storm sewer catch basins to determine if the adjusting rings need to be replaced and/or the entire catch basin. WSB will be requesting the Council authorize the placement of the ad for the bid at the February 23 meeting.
The Council requested WSB & Associates to provide alternative pricing for cement in the area in front of the Munson Feed Mill scale.
Mayor Finken noted that the Council, at its January 5 meeting, provided staff direction in further discussions with the Melrose Multi-Family project developer. As of now, the City has committed to the following items as far as assistance to the project:
1. Selling the development property for $1.
2. Establish a Redevelopment TIF District upon approval of all financing and funding sources.
3. In exchange for the covenants of the Developer outlined above, the City will issue a Pay-As-You-Go Note in the amount of up to $594,004 or actual documented costs, whichever is less, subject to the following terms:
• The Note shall be issued on or around January 1, 2018 following Developer’s submission to the City of paid invoices or other documentation for the site improvement costs associated with the project incurred after the approval of the TIF District.
• The Note shall not exceed $594,004, but could be less dependent upon the amount of actual increment and paid invoices for eligible expenses actually submitted to the City by the Developer.
• The Note payments will be made utilizing 95% of the increment generated by the project.
• Pay-As-You-Go Note payments will be made twice per year for increments collected the previous six months for a term of 10 years. The first payment date shall be August 1, 2019 and continue every six months until final maturity of February 1, 2029 or until the Note is satisfied, whichever is sooner, and carry an interest rate of 0% per annum.
• The Note is a special and limited obligation of the City. Should tax increments be insufficient to fully repay the Note, the City is not required to make up any shortfalls for any reason.
Community Development Director Creelman stated that the City will not offer any additional incentives. The developer notified Mr. Creelman that it is their intent to still move forward with the project.
Council Member Thieschafer introduced Resolution No. 2017-9, Calling for a Public Hearing on the Establishment of Municipal Development District No. 11, the Approval of the Development Program Related Thereto, and the Creation of Tax Increment Financing District No 11-1 Therein, and the Adoption of Tax Increment Finance Plan Relating Thereto, in Relation to the Former Kraft Site and the 400 Block. The motion was seconded by Mr. Frieler with a roll call vote recorded as follows: For: Council Member Thieschafer, Frieler, Klasen, Christenson, and Mayor Finken; Against: None.
Mayor Finken stated that Jennie-O Turkey Store (JOTS) has notified the City of its option to purchase the property as described in the Option Agreement contingent on the following:
• Conveyance of the Eich/Engebretson property pursuant to and in accordance with the City Option and this Agreement
• JOTS being satisfied that all approvals are in place and that all periods of review and approval with respect to such approvals have expired; and
• There being no material changes to the physical or legal condition of the property between the date JOTS issues its exercise notice and the closing date
The Council to schedule a Public Hearing on the Establishment of Municipal Development District No. 10, The Approval of the Development Program Related Thereto, The Creation of Tax Increment Financing District No. 10-1 Therein, and the Adoption of Tax Increment Finance Plan Relating Thereto, in Relation to the Jennie-O Plant and Related Public Improvements.
Mr. Christenson introduced Resolution No. 2017-8, Calling for a Public Hearing on the Establishment of Municipal Development District No. 10, The Approval of the Development Program Related Thereto, The Creation of Tax Increment Financing District No. 10-1 Therein, and the Adoption of Tax Increment Finance Plan Relating Thereto, in Relation to the Jennie-O Plant and Related Public Improvements. The motion was seconded by Mr. Klasen with a roll call vote recorded as follows: For: Council Member Christenson, Klasen, Thieschafer, Frieler, and Mayor Finken; Against: None.
Mayor Finken stated that with Jennie-O Turkey Store’s notification to exercise the Option Agreement, the City will need to execute the Land Option Agreement with Eich/Engebretson.
A motion was made by Mr. Thieschafer, seconded by Mr. Klasen and unanimously carried authorizing staff to execute the Land Option Agreement between the City of Melrose and Eich/Engebretson.
The following informational items were then reviewed:
The following are schools and/or conferences where registrations were made:
1) MCMA Workshop on February 2-3. Attending: City Administrator Michael Brethorst.
2) Pavement Rehabilitation on February 9. Attending: Streets/Parks Supervisor Gary Middendorf.
3) MMUA Firstline Supervision on February 22-24. Attending: Streets/Parks Supervisor Gary Middendorf.
Utilities Commission December 12, 2016 Regular Meeting minutes.
The City hosts an annual meeting with the Fire Department contracted Area Township and City Officials. In an effort to consolidate the meeting and duplicate reporting needs from the Fire Chief and Ambulance Coordinator, it is proposed to hold the joint meeting on the night of the regular meeting at the Fire / Ambulance Station.
A motion was made by Mr. Klasen, seconded by Mr. Christenson and unanimously carried that the meeting be adjourned at 7:50 p.m.
Patricia Haase, City Clerk