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HomeMy WebLinkAboutSP March 16, 1989 /~' if "\\ CITY of ANDOVER \,tl 1685 CROSSTOWN BOULEVARD NW. . ANDOVER, MINNESOTA 55304 . (612) 755-5100 ~ ~ '-~:!~",..,......"....;."'"~~~~~' "'-'.,~~~--- City Council Work Session - March 16, 1989 7:30 P.M. 1. Call to Order 2. Water & Sewer Budget 3. Coon Creek watershed District Financing Discussion 4. 5. Adjourn - ... __,¡;r_ .~ , CITY of ANDOVER 1685 CROSSTOWN BOULEVARD NW. . ANDOVER. MINNESOTA 55304· (612) 755-5100 SPECIAL CITY COUNCIL MEETING - March 16, 1989 MINUTES A Special t1eetlng of the Andover City Council was called to order by Mayor Jim El ling on March 16, 1989: 7:30 p.m., at the Andover City Hall. 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmen present: Jacobson, Knight, Orttel, Perry Councilmen absent: None Also present: City Administrator/Engineer, James Schrantz: and others COON CREEK WATERSHED DISTRICT FINANCING DISCUSSION County Commissioner Natalie Haas-Steffen and Don Ogaard, State Board of Soi I and Water Resources, were present. Mayor El ling reported on a meeting held In Senator Dahl's office this afteroon on this Issue In an attempt to resolve the financial Issues of the Coon Creek Watershed. He reviewed the summary sheet of the options available under current law and possible special legislative opt! ons. And the City now needs to decide which option would be acceptable. The deficit of the Coon Creek Watershed Is approximately $350,000: however. they have approximately $60,000 in their operat!ng funds. They are allowed to levy approximately $120.000 per year for their operating and administrative budget, and they have been fronting that money for these projects until benefits are redetermined and reassessed. Mayor Elling continued that the authority exists for the Watershed Board to levy to payoff the deficit. Under the 509 Plan they are attempting to set up, there would be an area-wide levy to pay for the pondlng and an ad valorum tax for each ditch section that would pay for the ditch repair. Commissioner Haas-Steffen explained the way the ditch law is written, they must spend the funds for engineering. etc. , before the project Is levied. So the way they have done It is standard practice across the State In terms of borrowing from Administration or another ditch fund. The County was ordered by the court to advance the Watershed $100,000 for Ditch 57 because they didn't have enough In the Administrative fund to take care of It. Councllmember Jacobson questioned how someone can be taxed for a benefit they neve. .ecelve. Mr. Ogaard revIewed the procedures al lowed by existing ditch law regarding ditch improvements and financing and pointed out some of the reasons why the deficit is so high. As of today, the State Board has some recommendations for the funct!onlng of the Coon Creek Watershed Board. - ... - ~ Special City Council Meeting Minutes - March 16. 1989 Paç¡e 2 (Coon Creek Watershed District Financing Discussion. Continued) Commissioner Haas-Steffen stated this Is the first step in the process. Changes on the Board cannot occur un t I I a member's term expires, but they would like to put some procedures in place that this type of thing wi I I not happen again. It was her opinion that the Watershed Board abdicated their authority and gave i t to Staff, who dl d what they thought was best without using good practices that could have held down some costs. Mayor Elling felt the City could infJuence some changes by requiring some administrative changes and that accounting princlples be adhered to that are not now. Mr. Ogaard stated they are making some recommendations, but he cannot require them to be done. The deficits are from the Administrative account and are not amounts owed to anybody. So If everyone would agree, the debt could be wiped out, except for the $100,000 to the county. Mr. Ogaard though t there is another possibility, that of wiping out the deficits fOL each ditch on a pro-rata basis, which he felt would be the most fair method. Another method would be to use the ad valorem tax under 509 and buy that portion which is "marketable value" of engineering data. Discussion was on what took place regarding the Ditch 57 project, the actions of the Watershed Board and what they could have or should have done Instead. Then the discussion moved to the various options for eliminating the deficit, the advantages and disadvantages of each. There was some concern on the part of the Counc i I that not only Is there II t tIe that can be done about the figures, but without some changes on the Watershed Board, the same thing could happen again. Jack McKelvey noted no one has been appointed to the Board for Mr. Slyzuk's position, suggesting the City recommend to the County that someone other than Mr. Slyzuk be appointed to that position. Mayor EI ling noted there Is a tendency by the other cities and Senator Dahl to favor Option Bl, to require the administrative fund to absorb the dl tch 10ans. Mr. Ogaard stated that option would not quite wipe the slate clean for Ditch 57 because of the $100,000 loan from the county. Mayor EJ ling reported the City of Blaine has said they are wllling to go ad valorem over the district for administrative costs and ImpLovements. Coon Rapids has said they wi]] not pay for any of the legal fees incurred by the ditch projects in Ditches 57, 58, and 59. They feel the costs should be assessed to each ditch system, including legal fees. Ham Lake generally is in the same position as Andover. Mayor EI ]Ing explained Option Bl would pay al I the deficit except the $100,000 Joan to the county, which would cost Andover residents $3.37 peL $90.000 house in the ditch system. There Is also a possibility Special CI ty Councl] Meet!n9 Minutes - March 16, 1989 Page 3 (Coon Creek Watershed District Financing Discussion, Continued) the county will be wl]]lng to forgive the Interest due on that loan, which Is about $33.000. Councilmember Orttel questioned the $3.37 figure, thinking It is out of ]Ine with the previously mentioned figure that it would cost an Andover resident $111 for its share of the $172,000 deficit on Ditch 57. Mayor El ling noted the figure shown for the number of residents is about five years old; the number of parcels in the ditch system has Increased considerab]y since then. Mr. Ogaard also noted the Intent is to buy back the engineering cost in this process. as a majority of the engineering work is usable information. The rest of the $172,000 has been expended but has no value. Mr. McKelvey stated Mr. Ogaard has recommended the Watershed Board slow down their projects for the moment. The Board has $67,000, pius the 8 percent interest they were drawing on it, of the $100,000 from the county which is sti I] in the bank and which they plan on using as their administrative funds. He felt that should be required to be paid back, so then only $33,000 of that loan pius the $33.000 interest wi I I have to be paid by the residents. Mr. Ogaard then went into greater detail regarding another proposal to reso]ve the financial def I c It. The slmpllest and cheapest would be to have the Board move to wipe out the deficit by having the administrative fund absorb the deficit. But to be the most fair, the amount to be absorbed by each ditch system should be determined based on Its size and value and pro-rated from the administrative fund. He has not done the calculations to determine the specific figures, but It was his opinion that It would be the most fair method. Discussion continued with Mr. Ogaard abou t the problems, what the best solutions would be for Andover residents, and what would be acceptable to the other three cities invo]ved. It was noted that Senator Dahl wi I I not introduce a bl I I unless there Is agreement among the four ci ties; and a decision must be reached by April 1 . the dead] ine by which new bil]s can be introduced for this legislative session. Mayor El]ing expressed a willingness to meet with Coon Rapids in an attempt to arrive at a compromise solution. Several Counc II members indicated a wi]]lngness to remove the legal fees from the amount that would be absorbed by the Administrative Fund as proposed in Bl if Coon Rapids wou]d agree. Councilmember Orttel estimated a cost of $50 or $60 per household in Andover to payoff the $100,000 loan to the county, assuming Option Bl is agreed to. Councilmember Jacobson calculated a cost of $83 per household if the legal and engineering would also be paid by affected property owners along Ditch 57. Special Ci ty Council Meeting Minutes - March 16. 1989 Page 4 (Coon Creek Watershed District Financing Discussion, Continued) Mayor El ling suggested any agreement should be contingent upon the administrative and accounting firm for the Watershed Board be split and that the Slyzuk appointment be reconsidered. MOTION by Jacobson, Seconded by Perry, that of the options presented that we are in favor of Option Bl which requires the Administrative Fund to absorb the ditch ioans. and attach a list of options to this motion. Motion carried unanimously. MOTION by Jacobson, Seconded by Knight, that we request of the Anoka County Board of Commissioners to send back to the Andover City Council their list of names that was sent to them for our representative on the Coon Creek Watershed Board for us to reconsider those names. DISCUSSION: Mayor Elling stated the Council could also consider other names if it so chooses. The Counc i 1 also preferred to have al I four cities involved agree to a solution of the administrative/accounting situation of the Watershed Board. Motion carried unanimously. MOTION by Orttel, Seconded by Knight, that the Staff draft a letter to the Board of Soil and Water Resources of our appreciation for allowlng Don Ogaard to help with the Coon Creek Watershed situation and to thank him for coming before the Council tonight. Motion carried unanimously. WATER AND SEWER BUDGET MOTION by Orttel, Seconded by Jacobson, that the Enterprise Fund budget be carried to Tuesday evening. (March 21) Motion carried unanimously. Mr. Schrantz briefly summarized the budgets, highlighting various items for Council consideration at the next meeting. (Counci lmember Knight left the meeting at 9:50 p.m.) MOTION by Jacobson, Seconded by Perry. to adjourn. Motion carried on a 4-Yes~ l-Absent ( Kn i gh t ) vote. Meeting adjourned at 9:51 p.m. Respectfully submitted, \~~l '~L Mar ella A. Peach Recording Secretary