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HomeMy WebLinkAbout05-12-14 Special WS lt �- I�EN HILLS Approved: June 30, 2014 CITY OF ARDEN HILLS,MINNESOTA SPECIAL CITY COUNCIL WORK SESSION MAY 12,2014 5:30 P.M. -ARDEN HILLS CITY HALL CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the special City Council work session at 5:34 p.m. Present: Mayor David Grant; Councilmembers Brenda Holden (arrived at 5:46 p.m.), Fran Holmes, Dave McClung, and Ed Werner Absent: None Also present: City Administrator Patrick Klaers; Director of Finance and Administrative Services Sue Iverson; Public Works Director Terry Maurer; Assistant City Engineer John Anderson; Community Development Director Jill Hutmacher; Associate Planner Matthew Bachler; City Planner Ryan Streff; and City Clerk Amy Dietl 1. AGENDA ITEMS A. 1203 County Road E Update Community Development Director Hutmacher stated that the potential buyer of the property located at 1203 County Road E West (the former Carroll's Furniture) has withdrawn her purchase agreement. Although the real estate broker of the property is speaking with other potential buyers, no serious proposals for redevelopment or reuse seem imminent at this time. Based on the Economic Development Authority discussion on April 28, 2014, staff indicated to the broker that the City might be interested in purchasing the property if no viable private buyers come forward. The City, however, would need a better understanding of the demolition costs. Community Development Director Hutmacher reported that although a demolition contractor could provide a very rough estimate of costs by doing a walk-thru, the real uncertainty with demolition is the amount of asbestos which can be hidden behind walls, under tiles, or in roofing materials. The City could obtain quotes for an Asbestos and Hazardous Materials (HazMat) Survey which would include taking samples and testing for asbestos. Hazardous materials such as fluorescent lights and thermostats, which need to be removed prior to demolition, would also ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 2 be identified. The HazMat survey could be shared with demolition contractors, either formally through an RFP process for actual costs or informally to get an estimate of costs. She reported that a rough estimate to demolish the building is $95,000; however this amount does not include any HazMat cleanup, so total demolition costs could run upwards of$150,000. Community Development Director Hutmacher stated that because the HazMat survey requires sampling and damage to building materials and surfaces, US Bank, the owner of the foreclosed property, is unwilling to allow the survey to proceed unless there is a general agreement on acquisition price and terms. City staff has communicated to the broker that the City would consider its total cost of acquisition to include demolition and remediation. It was noted that the building is approximately 40,000 square feet on a 1.14-acre parcel. Staff requested Council feedback regarding this property. Councilmember Holmes did not support the City buying this property. Councilmember McClung thanked staff for the information on this property. He expressed concern with the uncertainty of the expense of demolishing the building. He believed it would be a positive thing to have this building removed and the site redeveloped, and he would like to see the Council begin working towards its vision for the B-2 district. Councilmember Werner stated that the HazMat unknowns made him leery of purchasing the property. Mayor Grant asked if the City could pursue grants to assist in defraying the costs of purchasing and demolishing this property. Community Development Director Hutmacher stated that she did not believe that there were grant funds available for this type of property. She reported that the market price for the property was $450,000. She discussed what the City might recoup if the building was demolished and the site was cleaned, but she noted it may take several years to clean up and sell. In the end, the property would be a net loss, but the blight would be removed, and the sidewalk issue could be addressed. City Administrator Klaers commented that the lot was 1.14 acres in size and had a County assessed value of$397,000. Mayor Grant questioned what the property could sell for.after demolition and cleanup. Community Development Director Hutmacher discussed the range of the potential sales price. She explained that the City always has the option of putting in an offer on the property for less than the market price. Councilmember Holden was willing to spend money on the demolition of this property if someone was willing to purchase the site. This would allow the City to complete a sidewalk. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 3 Community Development Director Hutmacher indicated that the City's revolving loan fund could be structured to provide a loan to assist a potential developer with redeveloping this property. Councilmember McClung commented that he might be able to support this idea. Mayor Grant recommended that staff speak to the bank about financing options for the redevelopment or demolition of this site. He stated that the Council was not comfortable with purchasing the property outright at this time. B. TCAAP • Infrastructure Study Update and City Cost Participation Agreement Public Works Director Maurer explained that Ramsey County received four proposals on Thursday, May 1 st. The selection committee reviewed the four proposals on Monday, May 5th and chose two teams to interview. The top two teams were a combination of Kimley- Horn/Wenck & Associates and Bolton & Menk/SEH. Interviews were held for the top two candidates on Monday, May 12th. The consensus of the group was to proceed with Kimley- Horn/Wenck & Associates. He explained that the County would begin negotiations with this group. Staff reviewed the items that would be included within the study and how the costs would be divided between the City and the County. Public Works Director Maurer estimated that, based on the Kimley-Horn proposal, the City's cost for the preliminary work would be in the range of$175,000. Cost participation in the final design would be an estimated additional $200,000. These studies would include a Chapter 429 feasibility study, anticipating assessments, along with 20 year maintenance costs. He explained that after the County finishes negotiations, he would bring back the Cost Participation Agreement with firm numbers for the preliminary work component and this would be presented to the Council at a future meeting. City Administrator Klaers reported that the cost for the study would be paid for initially through an internal loan that would then be reimbursed to the City in the future through assessments. Councilmember Holmes inquired why the study was being completed in two phases. Public Works Director Maurer stated that the two phases were similar to the process that was followed for all City projects, with a feasibility report laying out concepts and costs followed by final plans and specs. Mayor Grant requested that staff provide the Council with a complete budget for TCAAP expenses on the capital side. Councilmember Holden agreed that this would be valuable information for the Council to have throughout the TCAAP planning process. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 4 Director of Finance and Administrative Services Iverson explained that she was working on a financial document for the Council. Councilmember Holden asked if the City would have to pay for any roads in TCAAP. Public Works Director Maurer reported that the spine road would make the site developable and this would be paid for by the County. The remainder of the roads would be within the developments on the TCAAP property and would be a negotiation process between the City and the developer. He anticipated that most internal development streets would be completed by developers similar to the Fox Ridge project. Councilmember Holden inquired if the City would have to pay for a portion of County Road H. Public Works Director Maurer commented that he did not see any cost participation on the City's part for County Road H and the roundabout. The City may have some costs in the County Road H Bridge over I-35W for pedestrian facilities. Councilmember Holmes stated that as part of the TCAAP infrastructure, the City would be responsible for 100% of the trunk sanitary sewer and water expenses. Public Works Director Maurer reported that the cost for both of these items would likely be assessed to the developable property. Councilmember Holden asked what percentage the City would be paying for the storm water - water feature. Public Works Director Maurer did not know the City's share but had a general idea of how the expense should be calculated. He believed that the feature would benefit the surrounding properties as well as the development. For this reason, the expense should be split between the City and the County. Councilmember Holden recommended that security and public safety expenses during the redevelopment of the TCAAP site be considered. Community Development Director Hutmacher explained that this would be a private contractor expense. • TCAAP Discussion on Financial Issues City Administrator Klaers stated that Mayor Grant indicated in a previous meeting that he would like staff to present information to the Council that would help "demystify" the City financial issues related to the TCAAP redevelopment. As such, some financial issues to be discussed and considered are the following: • Public Infrastructure Improvements: Trunk sewer ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 5 Trunk water Storm water mains Storm water- water feature • Park acquisition and development • City fees (i.e. SAC, WAC, and Park dedication) • Planning studies • Additional studies that are not part of the sewer and water and storm sewer feasibility studies • Private development requests for public improvements • City expenses (staff time and/or hired consultants) to review development proposals and for the building inspections • Future expenses to provide municipal services to TCAAP City Administrator Klaers indicated that in general terms, the City TCAAP expenses can be separated out in to a Capital category and in to an Operating category. City Administrator Klaers reported that capital expenses are for one time, large expenditures such as trunk sewer and water lines or storm sewer mains and ponds. Some of these capital expenses are best completed in advance of the redevelopment projects and some are best completed concurrent with redevelopment activities. Municipal bonds are often used to finance capital improvements and the bonds are typically repaid through assessments to benefitted property owners. City Administrator Klaers stated that everyone understands that financing the trunk utilities is a major concern for the City Council. Article III of the Joint Powers Agreement (JPA) reviews this and some of the other City financial issues. (Article III was provided in the agenda packet as reference.) Regarding the trunk sewer and water utilities, the plan is to assess 100% of the costs out to the benefitted property owners. Originally, at the time of approving the JPA, it was anticipated that the trunk utilities would be installed in phases from south to north but it now looks like they will be installed all at once between County Road 96 and the County Road H/1- 35W intersections. While the likely financing method to recapture the costs is known; the unknowns are the total cost of the trunk utilities, the per developable acre assessment amount, and the repayment schedule. City Administrator Klaers explained that on the topic of the trunk storm sewer mains and ponds, these utilities can be looked at as being both similar and yet different than the trunk sewer and water utilities. They are similar in that they can be 100% assessed; and they are different in that some of the system (the pond especially) may be constructed in phases as development occurs. Also, Rice Creek Watershed regulations are a major determining factor in the final size, location and design of the storm water system. Right now it is very hard to tell where the surface water management requirements end and the water feature amenity begins. This utility is also more likely than the trunk sewer and water to be funded by methods other than assessments (i.e. by storm water fees collected as development happens; similar to City SAC and WAC). City Administrator Klaers stated that concerning park development, the City should be able to acquire all of the desired land for parks through the park dedication/platting process, but if there ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 6 is not enough money for park development, it may be the City's responsibility to fund part of the park improvements. Funding options to finance the park improvements, other than using park dedication money or City reserves (PIR fund), are limited. City Administrator Klaers discussed private developers who might request public improvements for their subdivisions. These localized capital improvements can be funded by the City and assessed; or they can be funded and installed by the private developer (the City reviews and approves plans/specs and inspects construction). City Administrator Klaers stated that operating expenses are future ongoing expenses for the maintenance of the improvements such as manpower, equipment and supplies required to operate and maintain local streets, parks, and surface water ponds. Other operating expenses include providing municipal services such as public safety services. Tax revenues from the new development needs to be sufficient to fund these expenses. The key to successfully funding the future operating expenses will be the balance of the land uses and the amount and type of redevelopment that takes place. Generally speaking, the City pays more for services than what it receives in property taxes in the residential areas. The opposite is true for commercial and business park developments. City Administrator Klaers commented that most of the immediate City financial issues are related to capital expenditures. In this regard, the City ,is well positioned to issue public improvement bonds for the projects and assess the cost to the benefitted property owner. The structure (repayment schedule) of the bonds is the key to having the project be acceptable to all the partners. City Administrator Klaers indicated that his comments have been offered to continue the conversation regarding TCAAP financial issues. The TCAAP redevelopment project is very complex and discussion regarding the financial issues will require a series of meetings dedicated to specific topics. Understanding the TCAAP financial issues at the staff level is an ongoing and evolving process. City Administrator Klaers requested Council feedback on the following two questions: What is your number one concern for TCAAP? And, what is your number one goal for TCAAP? City Administrator Klaers stated that as time allows, he would like the City Council to discuss establishing a policy on the use of the Met Council SAC credits that have been issued to the TCAAP site. The topic was briefly discussed on March 31St and at that time it was noted by staff that one of the top priorities for use of these funds may be to pay for the Master Plan studies that are currently underway; and that other priorities to consider included: • The City share of the water feature; • Park Development; • Special needs in the Town Square area(i.e. public space or parking); and/or • SAC waivers as an economic development incentive for special opportunities. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 7 City Administrator Klaers stated that he would also like the City Council to discuss the issue of City fees — specifically the City Sewer Availability Charge (SAC), the City Water Availability Charge (WAC), the City Sewer and City Water connection charges, and the possibility of the City establishing a Storm Water Availability Charge. Mayor Grant commented that he wants to see a list of costs, mapped out for the Council to review as development of TCAAP occurs. He understood that this document may change, but he believed that this would be a vital tool for the Council to have as redevelopment continues. Councilmember McClung stated that a best guess scenario would be better than the lack of information that the Council has right now. Director of Finance and Administrative Services Iverson reported that she is currently working on such a document for the Council. Councilmember Holden expressed confusion regarding who Mark Ruff represents. Councilmember Holmes agreed that this is confusing because the City has Stacie representing them, while the JDA has Mark. She asked if the County was also using Mark for representation. Stacie Kvilvang, Ehlers & Associates, explained that Mark Ruff works for the JDA, which is comprised of both County and City representatives. Part of the City's analysis is to understand all costs for the project and Mark Ruff is running those numbers on behalf of the JDA. Councilmember Holmes questioned who the City will be assessing for utility improvements. Ms. Kvilvang reported that the City will be assessing the County for these improvements, or if the land is sold for redevelopment, then the developer will be the one who is assessed. She explained that the end landowner would pay 100%of these costs. Councilmember Holmes inquired how the City would cover the expense of the studies. Ms. Kvilvang stated that based on discussions with the City Administrator, it is staff's recommendation that these expenses be covered through the Met Council SAC credit program. City Administrator Klaers gave an overview of the Met Council SAC credit program. He estimated that the City would receive between $4-4.5 million in SAC fees after TCAAP fully develops. He discussed the manner in which the City can use these funds such as park development, parking structures, public art, study expense reimbursement, and for economic incentives. He requested that the Council discuss how to prioritize the use of SAC funds. Councilmember McClung commented that the City could allocate 50% of the AUAR expense to developer costs and 50% to SAC credits. He understood that the City wanted to keep the cost of the TCAAP development low; however, he wanted to make sure the costs were properly allocated to the development. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 8 Mayor Grant preferred to use fees to cover costs within TCAAP. This would then provide the City with greater options on how SAC fees are utilized. He did not want to see the SAC fees used for development incentives. Councilmember Holden agreed. She wanted to see fees cover the expenses for developers within TCAAP. City Administrator Klaers further discussed in detail the fees that would be charged to developers within TCAAP. Ms. Kvilvang provided further comment on how these fees could impact the purchase price for the land and how this may affect the future development. Councilmember McClung agreed with the priorities listed by staff apart from the Master Plan study. He believed the water feature and park development are critical, with the Town Square area being of next importance. Councilmember Holden questioned what special expenses there would be for the Town Square area. City Administrator Klaers explained that this could include a public parking ramp or parking space, or an art feature. Mayor Grant believed that the Council was getting an idea of how the meetings are progressing with the County on a weekly basis. He questioned if the Council wanted to proceed with SAC waivers. He stated that he was leery about endorsing these. Councilmember Holden recommended that the Council not discuss this matter in detail until further financial information on TCAAP is made available. Councilmember McClung suggested that this be reviewed by the Council on a case by case basis. • TCAAP Legislative Update City Administrator Klaers stated that the legislature is scheduled to adjourn on Monday, May 19, 2014. One of the primary legislative actions remaining this session is the bonding bill. Ramsey County and the St. Paul Chamber of Commerce have been working to support the inclusion of$29 million in funding for TCAAP transportation projects including: • The 1-35W/Highway 96 interchange; • The 1-35W/County Road H interchange; and • The Spine Road through the TCAAP site. City Administrator Klaers reported that the Governor included $29 million for TCAAP transportation funding in his bonding recommendation. The Senate has included $22 million in ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 9 TCAAP transportation funding in its bonding bill. The most recent House bonding proposal includes $34 million in cash spending for three projects including TCAAP. He explained that the County was optimistic that some funding would be approved for the TCAAP project. Mayor Grant questioned how much the Senate had proposed to bond for TCAAP. City Administrator Klaers reported that the Senate had set aside $22 million for TCAAP. Councilmember Holden was pleased by the support that the Governor was showing for TCAAP funding. C. Respectful Workplace Guidelines City Administrator Klaers stated that on March 14t" and 15`", the City Council and the City Department Directors participated in a Leadership Team/Council retreat. This retreat was facilitated by Sheila Krejci and was a follow-up to some 2013 discussions on "the five behaviors of a cohesive team". One of the follow-up action itemsthat came out of the retreat was the desire to put in writing some of the discussed guidelines.,on what constitutes a respectful workplace. In this regard, Ms. Krejci worked with Councilmember Holmes on the language to include in a respectful workplace guidelines document. City Administrator Klaers discussed the draft respectful workplace guidelines document. It was noted that this draft document incorporates some of the "in practice this means..." examples that came out of the retreat. Councilmember McClung believed that the guidelines could serve as a general philosophy for City Council and staff to be respectful when conflicts do arise. Director of Finance and Administrative Services Iverson agreed that this was a set of guidelines and was not meant to change the way people speak. She reported that Ms. Krejci was available for further discussion with the Council. Councilmember Holmes questioned where the Civil Discourse page was located. Director of Finance and Administrative Services Iverson stated that she would speak with Ms. Krejci further and would email the file to the Council. City Administrator Klaers inquired how the Council wanted to proceed with this document. Councilmember Holmes did not believe the document needed Council approval. Mayor Grant saw the document as a set of guidelines to be used when issues arise. The Council was in agreement. 2. COUNCIL COMMENTS AND STAFF UPDATES ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION—MAY 12, 2014 10 Mayor Grant commented that the County would be taking down the last building on TCAAP on June 6th which happens to be the 701h anniversary of D-Day. He explained that the County was hoping to have members of the City Council present for the event. Councilmember Holden believed this to be a great idea as long as the City was viewed as a partner in the event. Councilmember McClung was not available on June 61n ADJOURN Mayor Grant adjourned the special City Council work session t 6:59 p.m. 41�IwA�6 Amy Dietl 0 David Grant City Clerk Mayor It' --A EN HILLS Request for Special City Council Work Session A special meeting may be called by the Mayor or by any two Councilmembers. Topics for meeting: A. 1203 County Road E Update B. TCAAP • Infrastructure Study Update and City Cost Participation Agreement • Discussion on Financial issues • Legislative Update C. Respectful Workplace Guidelines Requested Date: 5/12/14 Requested time: 5:30 PM Open meeting X Closed meeting Signature of person(s) making request: h4444Z� 05/08/14 Mayor or Councilmember Date Councilmember Date -This section to be completed by City staff- Date received: s / a / i y Date meeting to be held: 5/12/14 Time of meeting: 5:30 PM Location: City Hall All necessary posting and notices have been completed. ,ri V 5 / 6 / N Signature of Cit Jerk Date City of Arden Hills * 1245 West Highway 96 * Arden Hills,MN 55112-5743 Phone 651-792-7800 * Fax 651-634-5137 * www.cityofardenhills.org