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06/26/1989 - 00006961� � � CITY OF FRIDLEY SPECIAL CITY COUNCIL MEETING, JUNE 26, 1989 CALL TO ORDER• Mayor Nee called the June 26, 1989 City Council Conference meeting to order at 7:30 p.m. ROLL CALL• Members Present: Members Absent: Mayor Bill Nee Councilmember Councilmember Councilmember Councilmember None Nancy Jorgenson Dennis Schneider Ed Fitzpatrick Steve Billings Others Present: Bill Burns, City Manager Jock Robertson, Community Development Director Barbara Dacy, Planning Coordinator Jim Casserly, Casserly, Molzahn and Associates Jerry Best, Attorney for Onan Corporation Karen Arnold, 1400 - 73rd Avenue N.E., Fridley MOTION by Councilmember Schneider, seconded by Councilmember Jorgenson, to open the public hearing. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR NEE DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING OPENED AT 7:35 p.m. PUBLIC HEARING ON THE APPROVAL AND ADOPTION OF THE MODIFIED REDEVELOPMENT PLAN FOR THE HRA'S REDEVELOPMENT PROJECT NO. l: Jock Robertson, Community Development Director, stated that the onan Corporation is currently investigating an option to develop the southeast 35 acres of it's Fridley complex. It would include both research and development office and waTehouse space to accommodate consolidation of all off-site operations. The early cost estimates indicate project would fall into the $20,000,00 -$25,000,000 range. Approximately 80 to 90 new skilled and semi-skilled jobs would be created. Mr. Robertson stated that in order to preserve future options for assisting in this project, the City and the Housing & Redevelopment Authority notified the School District and the County on May 26, 1989 of the intent to hold this hearing and create the district and also published a notice in the official newspaper on June 14, 1989 and June 21, 1989. The e�� �. �� SPECIAL CITY COIINCIL MEETING, JUNE 26, 1989 PAGE 2 � notice stated that the City intended to hold a public hearing to consider expanding the Housing & Redevelopment Authority's development program and establishing a redevelopment tax increment district. Mr. Robertson stated that at the June 8, 1989 Housing & Redevelopment Authority meeting, the members accomplished the following: A. Approved modification of Redevelopment District No. 1 and approved the modified redevelopment plan related thereto; B. Approved modification of Tax Increment Financing Districts 1 through 8; C. Approved and adopted the modified Tax Increment Financing plans relating thereto; D. Approved creation of Tax Inorement Financing District No. 9 and approved and adopted the proposed Tax Increment Financing plan relating thereto; E. Recommended that the City Council hold a public hearing 1 and the district be established at the June 26, 1989 City Council meeting. Mr. Casserly gave a brief history of the Fridley continuing master district process since May 15, 1979. He stated that the Tax Increment Financing District No. 9 for Onan Corporation would be a catalyst for a number of long needed improvements in that district area. Mr. Casserly stated that there is no question that the proposed plan and financinq plan meets all State legal requirements. He noted that newly proposed State leqislation which was included in the vetoed omnibus tax bill would have made the Tax Increment Financing District No. 9 much more difficult to implement. He concluded that it was prudent for the Housing & Redevelopment Authority and the City to proceed inasmuch as the vetoed legislation may be revived. Councilmember Schneider commented that there appeared to be no changes to Tax Incremant Districts No. 1 through 8. Mr. Casserly replied that was essentially correct; but that the financing plans were being amended to reflect the increased project costs and geographic area; and only No. 9 was being added. Mr. Best, an attorney for Onan Corporation, commented that Onan is in the formative stages of this proposed project and they are seeking cost reduction methods for the warehouse � storage and production facilities. He further noted that the land proposed avoids the contaminated areas which had been previously platted into separate lots. Mr. Best concluded JIti $PECIAL CITY COUNCIL MEETING JUNE 26 1489 PAGE 3 � that Onan Corporation is considering this project to increase the internal efficiencies of the company. Councilmember Jorgenson asked whether the jobs would be relocated or new jobs. Mr. Best replied that initially they would be relocated jobs from elsewhere; however, but later there is potential for creation of new jobs. Mayor Nee asked what is the potential contribution to the other taxing districts. Mr. Casserly replied that the answer to the Mayor's question is summarized in the last page of the agenda materials, Exhibit X-E, which shows the worst possible case. Essentially, the creation of this tax increment district would prevent the reduction of the tax base over time due to depreciation. Councilmember Schneider, referring to Exhibit X-E 1, asked if Mr. Casserly would explain the section entitled "Impact on Tax Capacity Rate". Mr. Casserly replied that the tax capacity rate increase equals a percent reduction of what used to be called the "mill rate", all things being equal. This assumes the development would have occurred anyway. Mr. Casserly demonstrated that with more value, 1 mill raises more money, but in fact what happens is the State makes up any differenae. ' The State legislature is well aware of this mechanism. Councilmember Fitzpatrick asked if otrier taxing districts are aware of this potential. Mr. Casserly said yes. Mayor Nee asked about the benefit to the public and increasing the tax base. Mr. Casserly responded that the City's goal is to retire the tax increment financing districts as soon as possible in order to share the increased increment with the other taxing jurisdictions. Bill Burns, City Manager, asked what were the indirect benefits of this proposal. Mr. Casserly replied that there is a multiplier effect. Every primary job creates certain additional retail and service jobs. Mr. Casserly went on to note that City of Fridley has a AA+ bond rating due to a very favorable property tax mix of residential, commercial and industrial properties. He noted again that building the tax base through tax increment financing incentives is a desirable method of prevention of property tax loss through depreciated values. Mayor Nee asked if there was any representative of the school district present, or if we had received any comments. No one responded. � Mayor Nee then asked if there were any additional comments from the Anoka County Board of Commissioners. Mr. Robertson � � � SPECIAL CITY COUNCIL MEETZNG, JIINE 26, 1989 PAGE 4 replied that he had made a presentation on the proposed modification and district to the Anoka County Board of Commissioners on Tuesday, June 13, 1989. He had subsequently received a copy of the certified motion relatinq to the presentation. That was the extent of any further County comment. Mayor Nee asked if there was any member of the public that wished to comment on the proposed modification. There was no response from the audience. MOTION by Councilmember Fitzpatrick, seconded by Councilmember Schneider, to close the public hearing. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR NEE DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE PUBLIC HEARING CLOSED AT 8:05 p.m. MOTION by Councilmember Schneider, seconded by Councilmember Jorgenson, to adopt Resolution No. 57-1989, adopting the Modified Redevelopment Plan for the HRA's Redevelopment Project No. 1. 2. SELECTION OF A CURBSIDE RECYCLING CONTRACT: Barbara Dacy, Planning Coordinator, stated that staff's recommendation is very similar to one of the three scenarios regarding solutions to the recycling service which were summarized by the City Manager in a previous budget session. Staff used 14 criteria to evaluate five potential recyclers. Staff recommends a six month contract to carry on the recycling service. Ms. Dacy recommended that the Super Cycle/RECOMP contract be approved by the City Council even though it is $10,000 more than the EZ Company. Ms. Dacy noted that EZ Company lacks a proven track record and service data and was unable to post a performance bond. Ms. Dacy noted that both New Brighton and Arden Hills have contracted with EZ Company. Staff's conclusion was that Super Cycle was the best cost effective alternative for the next six months. Mayor Nee asked if EZ Company has a contract with any other cities. Ms. Dacy replied that there are two sub-districts in the City of St. Paul. She stated that EZ Company's performance could be monitored over the next six months. Mayor Nee asked if the City would have to pay extra for service to multiple dwellings. Ms. Dacy answered no. ...y „ � � � SPECIAL CITY COUNCIL MEETING, JUNE 26, 1989 PAGE 5 Councilmember Schneider asked if Super Cycle would likely come back after the six month contract with price quotations closer to those of the higher ones proposed by BFI and Waste Management Inc. Ms. Dacy replied that Super Cycle uses a per tonnage rate rather than a household rate as used by BFI and Waste Management. She stated she cannot speculate as to what price Super Cycle will give. MOTION by Councilmember Fitzpatrick, seconded by Councilmember Jorgenson, to adopt the staff recommendation to approve Super Cycle�s contract for six months. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR NEE DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Schneider stated he felt comfortable with this proposal to buy time for the City and the County to assess alternatives. Councilmember Jorgenson commented that it have continuity to prevent interruptions service. 3. CLAIMS: was important to and lapses in MOTION by Councilmember Schneider, seconded by Councilmember Jorgenson, to adopt the claims. Upon a voice vote, all voting aye, Mayor Nee declared the motion carried unanimously. ADJOURNMENT• MOTION by Councilmember Schneider, seconded by Councilmember Jorgenson, to adjourn the meeting. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR NEE DECLARED THE JUNE 26, 1989, SPECIAL CITY COUNCIL MEETING AA70URNED AT 8:35 p.m. Respectfully submitted, w� � �- Jock Robertson Recordinq Secretary � `i