SANDSTONE CITY COUNCIL

REGULAR MEETING

April 6, 2005

CALL TO ORDER

Mayor Atterbury called the meeting to order 7:00 at  p.m.

ROLL CALL

Members present:            Edmond, Atterbury, Gafkjen, Bonander

Members absent:            Johnson

Staff present:                Administrator Griffith, Recording Secretary Hormillosa, Stadin, CATV

Other present:               Shannon Smith of SEH, Mike Monzel, Tim Franklin, Gordon Britton, Gary Stafne, Mike Johnson, John Stafne, Darlene Moseng, Brent Moseng, Judy Britton, Geoff Hilty, Floyd Sears, Brad Hiler

PLEDGE OF ALLEGIANCE

Mayor Atterbury introduced Brent Moseng, East Central student, who then led everyone present in reciting the Pledge of Allegiance.

ADDITIONS OR CORRECTIONS TO THE AGENDA

Motion Gafkjen, second Bonander to approve the agenda.  Motion carried 4-0.

SPECIAL ITEMS OF BUSINESS

Shannon Smith, S.E.H., reviewed for the Council and the public the rationale and goals of the storm water utility.

Johnson arrives at 7:07 p.m.

PRESENTATION OF AWARDS, PETITIONS OR COMPLAINTS

In response to the hydrologist’s presentation, the following issues were raised:  how the revenues would be spent, who would do the work, if there were other cities on the Kettle River utilizing a storm water utility, and the equity of the rates.  Mike Monzel and Brad Hiler distributed pictures of previous and current flooded areas as evidence of drainage problems.  Griffith requested that the Council consider two issues:  should the City proceed with the storm water utility and how perceived inequities in rates could be adjusted.

Motion Johnson, second Gafkjen to proceed with the storm water utility ordinance and to direct residents who are requesting adjustments to explain their particular situation in writing for the Council’s consideration.  Motion carried 5-0.

Additionally, Shannon Smith will conduct a 6 p.m. workshop on April 20^th regarding rate calculations.

Mayor Atterbury read a proclamation inviting all residents to join the president and governor in remembering the National Day of Prayer on May 5, 2005. 

Bonander announced a meeting on April 12^th at the Gaslight regarding the Highway 18 corridor as a tourism route from Sandstone to Onamia.

APPROVAL OF MEETING MINUTES

Motion Johnson, second Bonander to approve regular meeting minutes for March 16, 2005.  Motion carried 5-0.

PUBLIC HEARINGS

There were none.

CONSENT AGENDA

Motion Johnson, second Gafkjen to approve the consent agenda as follows:  Hand checks; Authorize Fire Department application for 2005 FEMA grant for search and rescue equipment; Authorize use of airport for DNR fire suppression helibase; Approve renewal of contract with ASG for Golf Course Clubhouse kitchen.  Motion carried 5-0.

FINANCE OFFICER’S REPORT

Claims

Motion Gafkjen, second Johnson to approve and pay claims in the amount of $34,034.97.  Motion carried 5-0.

NEW BUSINESS

Park & Recreation Commission request

Park & Recreation Commission has prioritized work and improvements to be done.  The Council has previously reviewed their plans. 

Motion Johnson, second Bonander to authorize Park & Recreation Commission to spend budgeted funds for prioritized activities.  Motion carried 5-0.

The Commission also requested authorization for additional activities.

Motion Gafkjen, second Johnson to authorize logging on the KREEC property as per forest management plan.  Motion carried 5-0.

Motion Johnson, second Gafkjen to direct Public Works staff to aerate and reseed Train Park.  Motion carried 5-0.

The Commission requested the Council to incorporate Old Wagon Bridge Road drainage work into Capital Projects budget.  S.E.H. has prepared an engineering proposal.   

Motion Gafkjen, second Johnson to direct Staff to obtain more detailed information and cost estimates on repairs needed on the Wagon Bridge Road.  Motion carried 5-0.

The Commission also requested that the Council authorize Public Works to undertake some work to repair and protect the old wagon bridge abutment.  There is some deterioration in the stone work and S.E.H. has recommended that all trees and brush be removed from the abutment and that barricades be placed so that no vehicles can drive or park on the abutment.  There is some additional work that could be done to the stone work that is not reasonable to do at this time.

Motion Gafkjen, second Johnson to direct Public Works staff to clear the trees and brush and to place appropriate barricades.  Motion carried 5-0.

The Commission has requested that the City consider budgeting for a paid position at the Lions Hill warming house.  The Council agreed to consider this item during their budget discussions in the fall.

Election equipment

There are some new requirements for voting in 2006, including Assisted Voting Technology and optical scan ballots.  The County will be paying some of these costs.  The City can save on some of its costs by participating with the County in programming the equipment.  Additionally, the County is considering combining some polling locations.

Motion Johnson, second Gafkjen to participate in the County’s plan for the purchase and programming of the AVT machine and the Optical Scan machine.  Motion carried 5-0.

Motion Johnson, second Gafkjen to direct Staff and the Intergovernmental Committee to discuss combined polling places with Sandstone Township.  Motion carried 5-0.

Excavation Permit Renewal – Stafne

Stafne Construction has applied for renewal of their annual fill and excavation permit.  All required information has been submitted, the restoration bond will be coming from the insurance agent and the required fee has been paid. 

Motion Edmond, second Johnson to approve the renewal of the excavation permit for Stafne Construction with the same conditions as last year, subject to the receipt of the restoration bond and inspection by the Administrator.  Motion carried 5-0.

Approve Golf Course hires

The Golf Course manager has reviewed applications, conducted necessary interviews and made recommendations regarding golf course hires. 

Motion Johnson, second Bonander to approve the following temporary golf course positions and pay, per Golf Course Manager recommendation:  Clubhouse attendants – Karen Herman, Barb Bowen, Bonnie Fyle and Tamara Maloney and Groundskeeper – Lawrence Klingsheim.  Motion carried 5-0.

Accessibility standards

Council member Edmond has raised the issue of accessibility in public buildings.  He wanted the other Council members to be aware of some of the issues and needs of the community.  No action was taken.

OLD & CONTINUING BUSINESS

Tax Abatement Policy

Staff had prepared a proposed tax abatement policy per Council direction.  The Council reviewed the policy and found no corrections.  However, Gafkjen suggested that the statement, “The City reserves the right to approve or reject projects on a case by case basis…” be placed in bold type.

Motion Gafkjen, second Bonander to adopt the proposed Tax Abatement Policy.  Motion carried 5-0.

Tax Abatement Policy

And Procedures

City of Sandstone Minnesota

Adopted: April 6, 2005

I.                     POLICY PURPOSE
The purpose of this policy is to establish the City of Sandstone’s position on the use of Tax Abatement for private development above and beyond the requirements and limitations set forth by State Law. Furthermore, it is the City’s intent to coordinate the use of Tax Abatement with other local taxing jurisdictions.

This policy shall be used as a guide in the processing and review of applications requesting tax abatement assistance. The fundamental purpose of Tax Abatement in the City of Sandstone is to encourage desirable development or redevelopment that would not otherwise occur but for the assistance provided through Tax Abatement.

It is the intent of the City to provide the minimum amount of Tax Abatement, as well as other incentives, at the shortest term required for the project to proceed. The City reserves the right to approve or reject projects on a case by case basis, taking into consideration established policies, project criteria, and demand on city services in relation to the potential benefits from the project. Meeting policy criteria does not guarantee the award of Tax Abatement to the project. Approval or denial of one project is not intended to set precedent for approval or denial of another project. All applications for abatement must also meet all City Business Subsidy guidelines and requirements. Absent an agreement to the contrary, the City reserves the right to adjust the abatement during the abatement period

II.                    POLICIES FOR THE USE OF TAX ABATEMENT

A. Policies and Limitations:

1. Policies:
       
a. Tax Abatement assistance will be provided to the developer upon receipt of taxes as a pay-as-you-go method. All taxes on the subject parcel need to be paid to date before a rebate payment will be made. Requests for up-front financing (bonds) will be considered on a case-by-case basis.
       
b. Developer shall be able to demonstrate a need for a proposed project and for assistance.

c. Tax Abatement shall not be used for projects or businesses that would place extraordinary demands on city services considering the benefit to the City.
       
d. The developer must enter into an abatement agreement to ensure compliance with City policies and requirements.
       
e. The developer shall demonstrate his or her ability to complete the project in an adequate and timely manner.
       
f. The developer/business shall provide information necessary for the City to make a determination on the project.

g. The City will view projects having a county/school district tax abatement commitment more favorably.
       
h. The project supports and furthers the City’s Comprehensive Plan and/or other public policies, as adopted by the City.
       
i. The business subsidy funding for any project shall be the lowest amount feasible for the shortest period of time. Business/developers shall exhaust all possible forms of non-business subsidy funding, i.e. private debt and equity financing prior to using business subsidy funding.

2. Limitations
       
a. Any recipient of Tax Abatement assistance will be required to provide an equity investment in the project.
       
b. Tax Abatement will not be used in circumstances where land and/or property prices are in excess of fair market value.
       
c. Tax Abatement will not be utilized in cases where it would create an unfair competitive financial advantage over other projects or businesses in the area.

d. No abatement of taxes will be granted on property currently in a TIF District.

e. The project shall comply with all provisions set forth in the state’s Tax Abatement Law.

f. Abatement can only be granted, if it benefits the City to a level equal to or greater than the abatement cost to the City.

g. In any year, the total amount of property taxes abated by the City may not exceed five percent (5%) of the current City levy, or $100,000 (maximum under state law) whichever is greater.
       
h. No tax abatement period shall exceed 10 years from the date of approval by the City Council unless the affected county or school district has refused to approve the abatement. If the county or school district does not approve abatement, the abatement period may be increased to 15 years.

III.   Project Goals

All Tax Abatement projects considered by the City of Sandstone must meet one of the following goals:
               
A.                Provide economic development in the Downtown area.
               
B.                 Retain local livable wage jobs.
               
C.                Increase new employment opportunities, which provide benefits and living wage jobs.
               
D.                Create a diversity of jobs that offer stable employment and diversify the City’s economic                 base.
               
F.                Create additional unsubsidized private development in the area, either directly or                 indirectly through “spin off” development.
               
G.                Facilitate development on sites that would not be developed without Tax                 Abatement assistance.
               
H.                Remove blight, remove nonconforming uses and structures that perpetuate blight,                 develop all areas designated for development or redevelopment, and facilitate historic                 preservation.
               
I.                Create high-quality redevelopment and private reinvestment.
               
J.                 Assist existing affordable housing to undertake rehabilitation projects to stay affordable.

               
                K.        Construct affordable rental and owner occupied housing.
                               
                L.                Maintain and expand public infrastructure.

                               

SUBSIDY AGREEMENT & REPORTING REQUIREMENTS

All developers/businesses receiving Tax Abatement assistance from the City of Sandstone shall be subject to the provisions and requirements set forth by Minnesota Statute 116j.993.

The developer/business owner shall maintain and operate its facility at the site where Tax Abatement assistance is used for a period of five years after the benefit is received unless the Council approves a change.

IV.                APPLICATION PROCESS FOR TAX ABATEMENT

A.            City of Sandstone/EDA
               
1. Preparation of a Tax Abatement Plan starts with the applicant providing the information to complete the City’s request for financing assistance forms. The information will include fees to process the project.
                               
2. City Staff and Staff Committees will review the information and complete the City portion of the application.
                               
3. The Application is submitted to the City Council for preliminary review and comment.
                               
4. If preliminary approval is granted, all necessary notices are prepared and distributed and the staff prepares the required documents.          
                               
5. The City Council schedules and holds a public hearing on the proposed project and renders a decision.

B.                 Applications to other political subdivisions

Applicants requesting Tax Abatement for projects in the City of Sandstone shall also seek tax abatement from the county/school district in which the proposed project is located. Applicants shall make their applications to the county and school district concurrent with their application to the EDA. For more information on applying for tax abatement to Counties and/or School Districts contact the following offices.

                Pine County                                                   East Central School District 2580
                315 Main Street South                                     61085 Highway 23
                Pine City MN 55063                                     Finlayson MN 55735
               
DIFFERENCE BETWEEN TAX ABATEMENT & TAX INCREMENT FINANCING

The primary difference between Tax Abatement and Tax Increment Financing (TIF) is the way in which the dollars are awarded to the project. When TIF is awarded to a project, the other political subdivisions (the school district and the county) are required to contribute their portion of the increased taxes to the project. Conversely, when Tax Abatement is requested, each political subdivision has the option of granting its portion of property taxes to the project. Subsequently, the dollars generated for the project with Tax Abatement are generally less than the dollars generated with TIF.

Consider adoption of standing rules for Council meetings

Council member Edmond has suggested that the Council adopt more formal rules for public participation in Council discussion.  Some possible rules, taken from Robert’s rules of order, were suggested.

Johnson expressed strong feelings that public input be welcomed, not curtailed.

Edmond stressed the need for order and decorum in Council meetings.

Motion Atterbury, second Johnson to table this discussion on standing rules until a later date.  Motion carried 5-0.

REPORTS

Motion Johnson, second Gafkjen to accept the reports as follows:  Summary of paid claims; Fire & Rescue minutes – February 28.  Motion carried 5-0.

WRITTEN NOTICES AND COMMUNICATIONS

There were none.

ADMINISTRATOR’S REPORT

Griffith reminded the Council of the workshop with Shannon Smith of S.E.H. on April 20^th and the Board of Review on April 28^th at 7 p.m.  He also mentioned the need for Skate Park Booster club members, the Northern Technology Initiative annual meeting on May 12, the Golf Advisory Commission meeting on April 12, the Spring Clean Up on June 11 that the West Side Study would be presented to the Planning Commission on April 13.  The compost pile will reopen within a couple weeks.  However, there will be a $10 charge for non-residents.

ADJOURN

Motion Johnson, second Gafkjen to adjourn at 10:17 p.m.

                                                                        ____________________________________

                                                                        Randy Atterbury

                                                                        Mayor

Attest:

_____________________________________

Donna Hormillosa

Recording Secretary