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HomeMy WebLinkAboutSP October 5, 1989 !.~ CITY of ANDOVER Special city Council Meeting-October 5, 1989 7:00 P.M. 1. Call to Order 2. Defeasance of Bonds 3. Crosstown Storm Drain Discussion 4. Assessment Manual 5. Adjournment . _. 'tA' CITY of ANDOVER 'b , > .I.. I 1685 CROSSTOWN BOULEVARD NW. . ANDOVER. MINNESOTA 55304 . (612) 755-5100 SPECIAL CITY COUNCIL MEETING - OCTOBER 5, 1989 MINUTES A Special Meeting of the Andover City Council was calJed to order by Mayor Jim Elling on October 5, 1989: 7:02 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, Minnesota. Councilmembers present: Jacobson, Kn Ight, Orttel, Perry Councilmembers absent: None Also present: City Attorney, William G. Hawkins: TKDA Engineers John Davidson and John Rodeberg: City Finance Director, Howard Koollck; City Administrator/Engineer, James Schrantz; and others AGENDA Counc II agreed to add Item 4, Hay's Trailer Park, and Item 5, Delinquent Sewer Bill, to the Agenda. DEFEASANCE OF OUTSTANDING BONDS Attorney Hawkins stated the purpose of the Item Is to explain the concept of defeasance of the City's outstanding bonds, noting the City Is In the unique position of being able to defease a number of funds. He has talked with Mr. Koollck and Jim Casserly, and al I are of the opinion that It Is definitely something the City should do. Jim Casserly of Casserly MoJzahn explained defeasance means the City would have enough money in special escrow accounts to guarantee all future debt service payments of a bond, and a trustee would be instructed to pay the remaining debt service every six months. The City absolutely guarantees the balance of the debt service of that bond. The bondholder is In favor because he is guaranteed all future payments, making the bond worth more. It Is to the City's benefit because the debt can be removed from the accounting books since all future debt service payments are guaranteed. Plus the restrictions upon the City of pledging revenues to meet the bond debt are no longer pledged to that bond and are available to the City for other uses. Mr. Hawkins noted prudent financial planning would dictate the City leave those revenues from special assessments In a revolving Improvement fund for future improvements or emergencies. However, the funds could be used for other things such as deferral of assessments, water treatment, etc. Not al I of the City's bonds have call provIsIons, so not a]] bonds would be defeased. . .. Special CI ty Counci I Meet!ng October 5, 1989 - Minutes Page 2 (Defeasance of Outstanding Bonds, Continued) Mr. Casserly noted his costs would all be received up front. which Is Included In the two percent figure noted In hIs report. That also includes the costs of the escrow and for the trustee to make the bond payments. He also explained that the timing and yield of the securltes purchased have to match all of the debt service payments. The CI ty Is always liable for those general obligation bonds, but he explained the procedure of going through two brokers to be sure that the securltes purchased will yield the amount needed to meet the bond payments. The entire process Is done within a 24-hour time frame and taken to a speclaJist accounting firm to verify the opinions of the first two brokers. Mr. Hawkins assured the Council al I rates are fixed, with securities bought that are priced at a yield that will exactly match the bond payments. He also felt the cost to the City of $32,000 to $36,000 Is not excessive on $1.6 million of defeased bonds. The exact costs and amount of bonds to be defeased will need to be determined, noting the CI ty wi II need to hire a bond counsel to put together the entire package. Mr. Hawkins also noted there will be no change to those persons paying assessments, and the City has the power to continue collecting the remainder of the assessments due. Mr. Casserly stated he would like to get this done by Thanksgiving, as It Is advantageous right now because Interest rates are stilI good. They feel this is such a good move for the City that there wi I I be no charge to the City unless the Council actually goes ahead with it. If, after the report is done, the Counc il chooses not to defease the bonds, then he will not receive a fee. MOTION by Orttel, Seconded by Knight, that the Counc II authorize Casserly Molzahn and Associates, Inc. , in conJunction with the City Staff and consultants, to begin the analysis phase of the defeasance program proposed, up to the preliminary report stage based on the proposal letter dated October 3, 1989. Motion carried unanimously. Mr. Casserly stated he would attempt to have the presentation ready for the Council at its November 7 meeting. HAY'S TRAILER PARK Mayor Elling explained he and several others met with Mr. Hay yesterday and there are several differences of opinion on this first phase. The first one Is on park dedication. Mr. Hay is of the opinion that if he gives 15 percent of the I and that it would be a private park, not City owned or maintained, and that he Is not required to give anything else for parks. Special City Council Meet! ng October 5, 1989 - Minutes Page 3 (Hay's Trailer Park. Continued) Attorney Hawkins stated the City's authority for park dedication comes from the subdivision of the land: and the trailer park Is not a subdivision. He stated he will review the Mobile Home Ordinance again as to what the City can require for parks. He though t it wouJd be acceptable to have a private park and that no other park fees could be required. However, under the development plan, the City has the authority to make sure the park Is developed in a proper fashion. Also, the City doesn't have to take parkland that Is low. The CI ty determines what Is a reasonable location for the park. Mr. Hawkins also noted the plat Itself was not approved by the court, and the City stl I I has the authority to control that development according to the ordinance. Mayor Elling stated Mr. Hay wants to put up 2-foot shrubs that will eventually grow to 6-, 8-, or 10-feet high as screening. Attorney Hawkins stated if the ordinance Is not clear, the City should look at what other communities require and require Mr. Hay to adhere to the same standards. Mayor Elling noted Mr. Hay believes the 1973 ordinance applies to him since that is when the Special Use Permit was issued, not the current updated ordinances. Attorney Hawkins stated he will check that further. But he felt the City made reasonable changes to update the ordinances, and Mr. Hay must abide by the all the ordinances of today, including the Shoreland Management Ordinance, the FloodpJaln Ordinance, the construction of garages, etc. Mayor Elling stated Mr. Hay asked to construct wooden decks in lieu of the cement patios for each unit. Counc II agreed the standards In the ordinances should be meet unless there Is some basis for changing it. A suggestion was for Mr. Hay to show that wood Is better than cement. Mayor Elling said Mr. Hay is saying Ordinance 8 does not applY because the land was a lot of record before Ordinance 8 was adopted and the Special Use Perml twas Issued by 1974. Attorney Hawkins noted It Is the same Issue, that al I current ordinance provisions must be met. Mayor Elling noted Mr. Hay Is agreeable to building a road south to CoRd 116 from the subdivision. A concept talked about was a PUD with single family homes along the west and north sides, townhomes in the next tier, and condominiums In the middle and to the east side of the property. But to do that Mr. Hay asked for an extension of the two-year time Ilml t following Metropolitan Council approval. Mr. Hay would like four years to build under that proposal. Also, Mr. Hay would like a variance on the density of a PUD. After some discussion, the Counc il liked the PUD concept; but they were unwilling to vary from the ordinance requirements to do so, feeling Mr. Hay should be treated the same as any other developer in the City. No further action was taken on the matter. : Special Ci ty Counci I Meet!ng October 5, 1989 - Minutes Page 4 CROSSTOWN BOULEVARD STORM DRAINAGE DISCUSSION Paul Ruud, Anoka County Highway Department, and Jerry Windschitl, Developer of Kensington Estates, were present. Mr. Ruud concurred wi th a letter sent to the City that the County would not pay for the retaining wal I along Crosstown Boulevard north of South Coon Creek Drive. The problem Is what was paid for the wall and Its maintenance In the future. They didn't see any estimates on acquiring more right of way nor any other options to putting In the retaining wall. The Counc il and engineers noted the wall was put In because It was not possible to get the correct slope without affecting the trees and several houses. It was not reasonable to acquire more right of way. Mr. Rodeberg stated he would provide Mr. Ruud with the background material on the retaining wall. Mr. Ruud stated they would look at the matter again and discuss it with the City Staff and engineers. They are not locked Into their decision, but they are concerned about the long-term maintenance of the wall as well as the original costs. Mayor Elling asked Mr. Ruud why the elevation of the road was changed. Mr. Ruud explained the grades were set to match driveways and street Intersections, and there Is less vertical curvature on county roads. He also explained the eight percent engineering fee was In the agreement signed with the City, which is what the county normally does wi th all other cl t!es. Mr. Ruud then went through the procedure they use for calculating their portion of the storm sewer costs, noting they use the same formula anywhere In the county. Mayor Elling asked what the storm sewer costs would have been I f there had been no development along Crosstown Boulevard. Mr. Ruud didn't think the roadway would have been built without an overall plan to Include a subdivision. Also, in this case the road would not have been put in by the county, but would have been updated through the normal county priority system. An option of the City was to replace Crosstown to Its existing 24-foot width. But because of the size of the utility projects and surrounding development, the county felt that was the best t!me to Improve the street. Mr. Davidson explained the problem of the storm drainage from South Coon Creek Drive north and reviewed the options looked at when designing the storm sewer system. The storm sewer was designed for a 10-year storm, with the remainder going across the surface. The option was to build a hugh storm sewer system at about double the present capacity. By going across the surface, the hump on Crosstown north of South Coon Creek Drive by the retaining wall needed to be taken out. The storm sewer proJect was awarded separately from the remainder of the project because It was redesigned to reduce the cost. Special Ci ty Council Meeting October 5, 1989 - Minutes Page 5 (Crosstown Boulevard Storm Drainage Discussion, Continued) Councilmember Orttel then asked Mr. Ruud If the county has considered an exit off State Highway 10 directly onto the new Crosstown Boulevard and County Highway 242, noting a traffic problem in the future If the exist remains at 242 and Crooked Lake Boulevard. Mr. Ruud agreed to look into that further and then left the meet!ng. Counc II then reviewed the previous assessments to the subdivisions along Crosstown Boulevard. Mr. Rodeberg explained those storm sewer assessments In Kensington Estates and Shady Knoll were for internal storm sewer costs within the developments. There has never been an area charge for storm sewer to pay for the trunk to carry the water away from the subdIvisIons. The cost of 3.2 cents was determIned the same way as the other subdivisions in the City such as Old Colony Estates, Oak Bluff and Winslow Hil Is. The Oaks was not assessed for storm sewer laterals because there was no City storm sewer Inside the project. It all runs out to Crosstown over the surface. Mr. Davidson explained the area between 139th and 140th has been included now at the suggestion of the City to treat everyone equally. Mr. Windschltl stated there has been trunk storm sewer costs In this plat, explaining the three positive outlets out of the plat right now. Mr. Rodeberg noted no storm sewer trunk charges have been paid by that area which drains down to and over Crosstown Boulevard, that drainage basin Involved In the proposed assessment. Mr. Windschltl felt the Counc II needs to consider the consistency of Its polley. Over the years all the projects done In conjuction with the county have been paid for by the county and City. Nothing was ever assessed. He felt this proposal Is "opening up a can of worms", asking how far back is the Council going to go to assess costs -- two, four, six years? The polley over the years has been not to assess these projects. Mr. Davidson felt there was Justification to assess In this case for work done to existing developments and to developers. Assessments have been deferred when going past pre-existing developed lots, noting several examples. But developers have not had any assessments deferred for any reason, and some developers have paid all costs In lieu of involving those who have built around him. In this case, pondlng would have been an option to the developer (Mr. Windschltl). At this time the Council has the option of doing nothing or assessing the storm sewer trunk costs in some fashion. Counc II discussed what took place and the options available at this time. Mr. Wlndschltl stated the county Is only paying a small port!on of the strom water pipe, that they would have paid a much higher rate than what they are talking about here If they had done the road on their own. Mr. Rodeberg stated conversely Mr. Windschitl's share of the pipe would have been larger I f the storm sewer system had not been done In conJuctlon with Crosstown Boulevard. -- -- Special City Council Meet!ng October 5, 1989 - Minutes Page 6 (Crosstown Boulevard Storm Drainage Discussion, Continued) Mr. Wlndschl t I stated there Is no storm sewer trunk assessment In most developments. Mr. Rodeberg stated most of the time the storm sewer system serves only the development and the developer pays the whole thing. In this case It encompasses an entire area, and the storm sewer was put in by the City. Mr. Windschitl stated he could have run his water directly to Coon Creek. If he had envisioned an assessment for this, he would have looked at alternative outlets which cost much less. Mr. Rodeberg argued those alternatives were looked at, and it was determined the project done was the most cost effective. He a I so though t the outlet directly to the creek for KensIngton Estates would not have satIsfIed the lOa-year event. Mr. Wlndschltl stated If it had gone directly to the creek, MSA funds would have been applied to the positive outlet because South Coon Creek Drive would have drained Into It. Mr. Schrantz stated the storm sewer cost for South Coon Creek Drive was only $4,000, and the CI ty never made application for MSA funds for it since it was such a small amount. Those funds came out of the City's State Aid fund. There was no further action taken at this time noting the residents have been notified of the public hearing on the improvement. IN-HOUSE ASSESSMENTS Mayor Wlndschltl suggested the bills sent to developers by the City on April 15 and September 15 include Interest up to those days only, not for the calendar year as It Is currently done. Under the current system, It Is cumbersome to determine the interest due whenever a lot Is sold, and the developers do not know the exact assessment when they sel] lots. By accruing Interest to April 15 and to September 15, they are still billed for one-half year's Interest but they have a current Interest balance on all the lots. Mr. Koolick was directed to look at the assessment procedure and make a recommendation to the Council. CANCEL BUDGET HEARING OF OCTOBER 25 Mr. Koolick recommended cancelling the scheduled hearing on the proposed 1990 budget because of the new tax laws passed last week by the Legislature. The hearing was scheduled for October 25 with an alternate date of November 1. MOTION by KnIght, Seconded by Perry, to so move. MotIon carrIed unanimously. Special CI ty Counci I Meeting October 5, 1989 - Minutes Page 7 DELINQUENT SEWER BILL Mayor EI ling explained Tony Lithe asked If it would be possible to pay off his delinquent bill in three payments, one October, one In November and one in December, rather than have It certified. After some discussion, the Counc II agreed the polIcy must be applied equa I I y to a I I delInquent accounts. No action was taken; the account will be certified as moved at the October 3 meeting. ASSESSMENT MANUAL Mayor Elling suggested the manual also Include policIes for MSA rlght- of-way acquisition and assessment policy, for county roads, for city roads, for plat and regional ponding, and for street lighting. Mr. Schrantz stated the current MSA policy is Included on Pages 14 and 15, and the storm sewer and ponding policies could be considered those used in Old Colony Estates. Counc I I asked that the TIF polley be Included. Mr. Schrantz noted that policy Is a whole manual In Itself. Counc I I thought some reference should be made to it. Mayor Elling asked whether the Council Is interested In considering an assessment policy for sealcoatlng. The majority preferred not assessing at this time. No further action was taken on the matter. Several changes in the manual were suggested: Page 14 MSA roads: Counc il suggested the wording be clarified and punctuation be corrected. Page 8: Counc I I asked that the issue of temporary bonding be Included In the manual. In the last paragraph under "Indexes", second line, the words "may be used." should be removed and the index actually used put into the polley. ResolutIon 78-6 at the end of the manual needs to be updated. Discussion was then on a policy to defer assessments on larger parcels to prevent premature development. Mayor Elling stated he talked with Staff and the consulting engineers and found no effective method of deferring those assessments. Councllmember Knight stated he calJed half a dozen cities and all have some deferment polley on agricultural property or pieces over ten acres. AI I policies are different, and he briefly reviewed those policIes. After further dIscussion, the Counc I I agreed to discuss the matter of deferred assessments and the Assessment Manual at a future date. MOTION by Jacobson, Seconded by OrtteJ, to adjourn. Motion carried unanimously. Meeting adJourned at 9:58 p.m. R~~l ~a ella A. Peach, Recording Secretary - -