Melrose City – June 28, 2012

Melrose City
June 28, 2012
The Melrose City Council met in a Regular Meeting on Thursday, June 28, 2012 at 6:00 p.m. at the Melrose City Center pursuant to due notice being given thereof. Present were Council Members Joe Finken, Tony Klasen, Dick Christenson, Mayor Tim Vogel, City Administrator Michael Brethorst, and City Clerk Patti Haase. Council Member Jenny Mayers was absent. Mayor Vogel presided thereat.
A motion was made by Mr. Klasen, seconded by Mr. Finken and unanimously carried to approve the agenda as amended.
Alan Schulzetenberg spoke in opposition to the implementation of the gas franchise fee. Mr. Schulzetenberg stressed that he would prefer the Council not pass the gas franchise fee; however, should they decide to move forward, he asked that this be reviewed on a regular basis. He additionally stated that he would like to see all customers treated the same versus a break on large volume customers.
Jerry Primus of Jennie-O Turkey Store spoke in opposition to the franchise fee. Mr. Primus noted that if any type of gas franchise fee is adopted, that it would be more fairly assessed based on a customer charge rather than a gross revenue basis.
Joe Roelike noted that he is very dissatisfied with the Council’s decision not to move forward with the reconstruction of County Road 186 – northerly ditch from the intersection with Industry Parkway NW to a point approximately 1500 linear easterly (wetland). The Council, at its May 22 meeting, concluded that the City should remove the sediment and continue to monitor the situation during its maintenance efforts of the ditch. Mr. Roelike stated that the establishment of the Melrose I-94 Industrial Park and drainage of said site caused an increase in water levels on his pond located in the vicinity of County Road 186 which has resulted in the destruction of vegetation around the pond area located on his property.
The following items were considered under the consent agenda: Approval of the following:
a. The minutes from May 22 Special Meeting and the May 22 Regular Meeting.
b. list of bills in the amount of $332,254.89.
c. list of investments for the month of May.
d. Resolution No. 2012-28, Resolution Appointing Election Judges. The election judge appointments are for the Primary Election that will be held on Tuesday, August 14, 2012.
e. A notice was sent by Street/Parks Supervisor Maus to the property owner at 310 3rd Avenue SE requesting that the grass be cut. As per City Code 95.38, all property owners shall be responsible for the removal, cutting, or disposal and elimination of weeds, grasses, and rank vegetation or other uncontrolled plant growth on their property that, at the time of notice, is in excess of eight inches in height.
A notice was also sent by Street/Parks Supervisor Maus to the property owner at 308 1st St NW requesting that the grass be cut. As per City Code 95.38, all property owners shall be responsible for the removal, cutting, or disposal and elimination of weeds, grasses, and rank vegetation or other uncontrolled plant growth on their property that, at the time of notice, is in excess of eight inches in height.
A notice was also sent by Street/Parks Supervisor Maus to the property owner at 6 Riverside Avenue NW requesting that the grass be cut. As per City Code 95.38, all property owners shall be responsible for the removal, cutting, or disposal and elimination of weeds, grasses, and rank vegetation or other uncontrolled plant growth on their property that, at the time of notice, is in excess of eight inches in height.
It is recommended that the Council approve the destruction orders as it then becomes effective for the entire growing season, meaning that if at any time after the issuance of the notice a violation reoccurs, the City shall abate the weeds without further notification to the property owner. It should be noted that any unpaid grass cutting bills can, and will, be certified against the property prior to year-end.
f. 1) Resolution No. 2012-32, Resolution Approving Gambling License to New Munich Jaycees for an exemption from lawful gambling license to hold a raffle on November 18, 2012 at the Melrose Area High School Auditorium.
2) Resolution No. 2012-33, Resolution Approving Gambling License to Health System for an exemption from lawful gambling license to hold a raffle on September 22, 2012 at the Melrose American Legion.
A motion was made by Mr. Finken, seconded by Mr. Christenson and unanimously carried to approve the Consent Agenda items.
Police Chief John Jensen presented the Police Department’s May report. Chief Jensen noted that 14 citations were written for the month of May 2012. He stated there were 288 calls for service during this month compared to 343 for May of 2011. The year-to-date number of calls is 1134, compared to 1375 in 2011.
City Attorney Scott Dymoke reported on the projects he has been working on for the City:
• Gas Franchise Fee: Worked with City staff to prepare ordinance adopting and implementing a gas franchise fee, together with a summary for publication.
• Golf Cart Ordinance: Worked with City staff to prepare ordinance permitting and regulating the operation of golf carts and ATVs on designated streets, together with a summary for publication.
• Electric Utility Ordinance: Reviewed legal authority for certifying unpaid utility charges for collection with property taxes; worked with City staff to prepare ordinance implementing collection procedures.
• Peterson House: Office work preparing pleadings seeking court approval of expenses incurred in razing Peterson house and certification of expenses for collection with property taxes.
Planning and Zoning Commission Member Klasen reported on the Commission’s June 14 meeting. Agenda items included the Commission’s project to update the City’s Zoning and Land Subdivision Ordinances, a possible “Danzl Plat” request, a possible request for the vacation of part of the Kraft Drive SE road right-of-way, and the possible expansion of the parking facilities at Rose View Manor.
City Administrator Brethorst noted that in an effort to secure all funds payable to the Public Utilities Electric Department due to foreclosure or other reasons, it is the recommendation of the Public Utilities Commission (PUC), MMUA and staff to implement an additional revenue recapture program for the PUC. The current methods available to the PUC are: State Tax Revenue Recapture and Collection Agencies. Ordinance No. 6-28-2012-1 allows the City to certify any unpaid electric fee together with all costs of collection, including attorney fees. The amount certified will be extended by the County Auditor on the tax rolls against the premises in the manner of other taxes collected by the County Treasurer and paid to the City Treasurer, along with other taxes. Mr. Klasen noted that he was opposed to applying these charges as a lien against the property due to the fact that electricity is a necessity not a discretionary service.
It was noted that if the electric bill is in a renter’s name and the renter does not pay the bill, placing the uncollected amount on the property tax is not an option.
Mr. Christenson introduced Ordinance No. 6-28-2012-1, An Ordinance to Establish Charging a Lien on Premises. The motion was seconded by Mr. Finken with a roll call vote recorded as follows: For: Council Members Christenson and Finken; Against: Council Member Klasen; Abstain: Mayor Vogel; Absent: Council Member Mayers. Ordinances must receive a majority vote of all the members of the Council to pass. Therefore the motion failed.
Mayor Vogel next reported that the City received their annual quote for general liability, errors and omissions, auto, equipment, and property insurance through the League of Minnesota Cities Insurance Trust (LMCIT). The total quote is $76,388 compared to $69,374 for 2011-2012 coverage resulting in a 10.1% increase. This increase is due to the fact that insurance year 2007 has been removed from the insurance history, and in 2007, the City did not have insurance claims. For years 2008 through present, the City has had insurance claims each year which impacts our premium cost.
The City’s insurance coverage has a $5,000 deductible, $15,000 aggregate. The cost for the premium is shared between the General and Utility Funds, $27,196 and $49,192 respectively. The City needs to decide whether or not to waive the statutory tort liability limits. The decision to waive or not to waive the statutory limits has the following effects:
1) If the City does not waive the statutory limits, an individual claimant would be able to recover no more than $500,000 on any claim to which the statutory limits apply. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would be limited to $1,500,000. These statutory tort limits would apply regardless of whether or not the city purchases the optional excess liability coverage.
2) If the City waives the statutory tort limits and does not purchase excess liability coverage, a single claimant could potentially recover up to $1,500,000 on a single occurrence. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to $1,500,000 regardless of the number of claimants.
3) If the City waives the statutory tort limits and purchases excess liability coverage ($1 million for $11,099), a single claimant could potentially recover an amount up to the limit of the coverage purchased. The total which all claimants would be able to recover for a single occurrence to which the statutory tort limits apply would also be limited to the amount of coverage purchased, regardless of the number of claimants. In the past, the City has not purchased the excess liability coverage. In the past, the City has chosen option #2.
A motion was made by Mr. Finken seconded by Mr. Klasen and unanimously carried concurring with the Commission approving option #2; waiving the excess liability coverage in option #3.
Mayor Vogel noted that at its April 19 meeting, the Council approved the concept of implementing a gas franchise fee. The Council, at its May 22 Special Meeting, reviewed the draft ordinance as well as the various scenarios calculating the gross revenues. The majority of the Council favored the percentage approach with a cap on the franchise fee. The City Administrator spoke with CenterPoint regarding the cap amounts on our customers. They stated that they do not have any customers that currently place a cap on the customers that use a percentage. Additionally, their billing software does not allow for a “cap” on a particular fee when calculating a percentage fee.
If the City were to proceed with a “cap”, the only work around for this is for the customer to bring the bill to the City and we would then reimburse them after they pay their bill to CenterPoint. In essence, it would be a reimbursement model, if we are to use a cap.
The Council gave consideration to adopting Ordinance No. 6-28-2012-2, An Ordinance Implementing a Gas Franchise Fee on CenterPoint Energy Minnesota Gas (“CenterPoint Energy”) for Providing Gas Energy Service Within the City of Melrose, Stearns County, Minnesota. Mr. Klasen again reiterated his concerns with implementing a gas franchise fee for the reason that heating a home is a necessity and, therefore, did not believe imposing a tax was justifiable.
After further discussion, Mr. Finken introduced Ordinance No. 6-28-2012-2, An Ordinance Implementing a Gas Franchise Fee on CenterPoint Energy Minnesota Gas (“CenterPoint Energy”) for Providing Gas Energy Service Within the City of Melrose, Stearns County, Minnesota. The motion was seconded by Mr. Christenson with a roll call vote recorded as follows: For: Council Members Finken, Christenson, and Mayor Vogel; Against: Council Member Klasen; Absent: Council Member Mayers. A copy of the Ordinance is on file in the City Administration Office.
Administrator Brethorst also recommended the Council approve the Official Title and Summary for this Ordinance. This Official Title and Summary is proposed to be published on July 4, 2012 in lieu of the entire Ordinance containing the amendments. A vote to support the summary publication of Ordinance No. 6-28-2012-2 does not constitute support for Ordinance No. 6-28-2012-2 and the actions thereto within said Ordinance.
Ordinance No. 6-28-2012-2 will be available at the Melrose City Center and posted at the Great River Regional Library, Melrose Branch. State Statute requires that approval of the Official Title and Summary by the Council be by a 4/5 vote.
A motion was made by Mr. Christenson to adopt Official Title and Summary, Ordinance No. 6-28-2012-2, An Ordinance Implementing a Gas Franchise Fee on CenterPoint Energy Minnesota Gas (“CenterPoint Energy”) for Providing Gas Energy Service Within the City of Melrose, Stearns County, Minnesota. The motion was seconded by Mr. Klasen with a roll call vote recorded as follows: For: Council Members Christenson, Finken, Klasen, and Mayor Vogel; Against: None; Absent: Council Member Mayers. A copy of the Official Title and Summary is on file in the City Administration Office.
The Council next gave consideration to adopting Ordinance No. 6-28-2012-3, An Ordinance Regulating the Use of Motorized Golf Carts and All-Terrain Vehicles on City Streets. Mr. Christenson introduced Ordinance No. 6-28-2012-3, An Ordinance Regulating the Use of Motorized Golf Carts and All-Terrain Vehicles on City Streets. The motion was seconded by Mr. Finken with a roll call vote recorded as follows: For: Council Members Christenson, Finken, Klasen, and Mayor Vogel; Against: None; Absent: Council Member Mayers. A copy of the Ordinance is on file in the Administration Office.
Mr. Klasen then introduced Resolution No. 2012-29, Resolution Adopting the City of Melrose Specialized Permit Application Form and Establishing Permit Fees. The motion was seconded by Mr. Finken with a roll call vote recorded as follows: For: Council Members Klasen, Finken, Christenson, and Mayor Vogel; Against: None; Absent: Council Member Mayers.
City Administrator Brethorst also recommended the Council approve the Official Title and Summary for this Ordinance. This Official Title and Summary is proposed to be published on July 4, 2012 in lieu of the entire Ordinance containing the amendments. Ordinance No. 6-28-2012-3 will be available at the Melrose City Center and posted at the Great River Regional Library – Melrose Branch.
A motion was made by Mr. Klasen and seconded by Mr. Finken to adopt Official Title and Summary, Ordinance No. 6-28-2012-3, An Ordinance Regulating the Use of Motorized Golf Carts and All-Terrain Vehicles on City Streets. A roll call vote was recorded as follows: For: Council Members Klasen, Christenson, Finken and Mayor Vogel; Against: None; Absent: Council Member Mayers. A copy of the Official Title and Summary is on file in the City Administration Office.
The Council next reviewed the draft outline of the plan for establishing a capital campaign for the Sauk River Splash Pad/Skate Park. The goal is to create a sound fundraising plan to offset 100% of the construction costs. A motion was made by Mr. Finken, seconded by Mr. Christenson and unanimously carried to approve the fundraising plan.
Council Member Klasen left the meeting at 7:20 p.m.
City Administrator Brethorst noted that Development Consultant Traci Ryan of David Drown Associates has informed City staff that due to legislative changes in tax increment financing (TIF) related statutes, modifications need to made to Sections 7 and 11 of the City’s recently approved TIF Plans for District 7-2 (Carstens Project) and District 8-1 (Danzl Project). Section 7 of each of these two Plans contains language relating to the budget and the City’s ability to adjust all line items so long as the total budget is not exceeded.
The proposed amended language to the Plans would comply with the changes in TIF statutes and the comments of the Office of the State Auditor (OSA) by clarifying that capital/project costs and administrative line items can be adjusted but that if financing costs (principal and interest) change, a properly noticed public hearing will now be required.
Consultant Ryan also noted that the respective Carstens Project and Danzl Project TIF Districts are unique in that their respective budgets did not provide for financing costs because it was expected that all TIF projects within the City would continue to be pay-as-you-go. However, since it is the intention of the City with regard to both Districts to advance the funds to cover the costs of creating the Districts and the legal costs associated with preparing the development agreements, this use of City funds is considered to be an internal loan from the City to the TIF fund. Ms. Ryan goes on to note that OSA has correctly asserted that these internal loans are, in fact, bonds. Because there are no financing costs within the approved budgets, this means that either the City will reimburse itself without interest or modify the budgets for each of these two Districts. Considering the small amount of funds that will be generated for administration of the Districts, it is Ms. Ryan’s recommendation that Section 11 of the Plans be clarified and that the approving resolutions previously adopted by the Council for each of the two respective TIF Districts be amended to indicate that no interest will be charged on the internal loans.
If the Council concurs with Ms. Ryan’s recommendation, it should give consideration to approving Resolution No. 2012-30, Amended Resolution Approving the Modification of Municipal Development District No. 7, the Adoption of the Modified Development Program Relating Thereto, the Creation of Tax Increment Financing District No. 7-2, and Adoption of the Tax Increment Financing Plan Relating Thereto (Carstens Project). If Resolution No. 2012-30 receives Council approval, Ms. Ryan will replace the existing TIF Plan with a Plan containing the amended language which will then be forwarded to the OSA.
Mr. Christenson introduced Resolution No. 2012-30, Amended Resolution Approving the Modification of Municipal Development District No. 7, the Adoption of the Modified Development Program Relating Thereto, the Creation of Tax Increment Financing District No. 7-2, and Adoption of the Tax Increment Financing Plan Relating Thereto (Carstens Project). The motion was seconded by Mr. Finken with a roll call vote recorded as follows: For: Council Members Christenson, Finken, and Mayor Vogel; Against: None; Absent: Council Member Mayers and Klasen.
Mayor Vogel noted that based on the information received from Development Consultant Ryan and presented in Agenda Item #7f regarding modifications to the TIF Plans for the Carstens and Danzl TIF Projects, the Council to give consideration to approving Resolution No. 2012-31, Amended Resolution Approving the Creation of Municipal Development District No. 8, the Adoption of the Development Program Relating Thereto, the Creation of Tax Increment Financing District No. 8-1, and Adoption of the Tax Increment Financing Plan Relating Thereto (Danzl Project).
It was noted that if Resolution No. 2012-31 receives Council approval, Ms. Ryan will replace the existing TIF Plan with a Plan containing the amended language which will then be forwarded to the OSA.
Mr. Finken introduced Resolution No. 2012-31, Amended Resolution Approving the Creation of Municipal Development District No. 8, the Adoption of the Development Program Relating Thereto, the Creation of Tax Increment Financing District No. 8-1, and Adoption of the Tax Increment Financing Plan Relating Thereto (Danzl Project). The motion was seconded by Mr. Christenson with a roll call vote recorded as follows: For: Council Members Finken, Christenson, and Mayor Vogel; Aganist: None; Absent: Council Member Mayers and Klasen.
City Administrator Brethorst has prepared the 2013 Budget Timeline. The memo outlines the budget preparation process which includes Capital Outlay request form and New Position request form.
Mayor Vogel volunteered to serve on the Ad Hoc Budget Review. It was noted that Mr. Christenson and Mr. Finken are currently serving on the Engineering Selection Committee. A motion was made by Mayor Vogel, seconded by Mr. Finken and unanimously carried appointing Council Member Klasen to serve on the Budget Review Ad Hoc Committee.
Due to a number of other activities occurring the week of August 13-17, staff is recommending the Council give consideration to rescheduling the August 16 Regular Meeting to Thursday, August 23. A motion was made by Mr. Finken seconded by Christenson and unanimously carried to reschedule the August 16 meeting to Thursday, August 23.
The following informational items were discussed:
a. Correspondence from Charter Communications.
b. Utilities Commission’s May 23 Regular Meeting minutes, the May 31 Bid Opening Meeting minutes, the June 7 Special Meeting with Industry minutes, the June 11 Special Meeting minutes, and the June 11 Regular Meeting minutes.
c. The Melrose Lions have completed the improvements and renovations to the shelter at the Melrose Lions and Jaycee Community Park.
d. The City of Melrose video records all regular City Council meetings. They are aired on DTV 20 with Arvig Communication. The meetings are rebroadcasted on Saturday at 12:00 p.m. and 7:30 p.m.
e. The following is a list of upcoming schools and conferences: 1) Dealing with Difficult People on June 21 at Resource Training and Solutions in St. Cloud. Registration fee: $15 per person. Attending: Human Resource Technician Diane Gruber; 2) City Employees and Off Duty Conduct – LMC Webinar July 12. Registration fee: N/A. Attending: Human Resource Technician Diane Gruber.
f. Correspondence from the Initiative Foundation.
g. Correspondence to Mr. Roelike regarding damages for loss of grazing pasture, and Investigation Report from Stantec.
h. Planning and Zoning Commission’s May 10 Regular Meeting minutes.
i. Jenny Linning, a German Exchange Student, will be shadowing City staff during the month of July. She will have a broad exposure to all City services and will be assisting City staff with some special projects.
A motion was made by Mr. Finken, seconded by Mr. Christenson and unanimously carried that the meeting be adjourned at 7:30 p.m.
Patricia Haase, City Clerk