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HomeMy WebLinkAboutCouncil Workshop Minutes 07.14.2009MINUTES COUNCIL WORKSHOP JULY 14, 2009 6:30 P.M. COUNCIL CHAMBERS A Council Workshop was held in the Council Chambers and called to order by Mayor Ken Olson at 6:30 p.m. on July 14, 2009. COUNCIL MEMBERS PRESENT: x Emelie Eaton Kate Hart _x Chuck Rodgers Alex Wilkins _x Doug Poehls _x Mark Mace _x Chuck Dickerson Norm Stamper OTHERS PRESENT: Sam Painter Mary Embleton Bill Sheridan Kurt Markegard Derek Yeager Public Input (three-minute limit): Citizens may address the Council regarding any item of City business not on the agenda. The duration for an individual speaking under Public Input is limited to three minutes. While all comments are welcome, the Council will not take action on any item not on the agenda. There was no public input. Fire Department: • Resolution - Fire District Contracts Chief Derek Yeager stated that the one-year fire protection contract with the Laurel Airport Authority is ready for council approval. The resolution will be on the July 21' council agenda. Planninia: • Ordinance -- Zone change request by CHS from Residential Manufactured Homes to Light Industrial Bill Sheridan stated that the zone change request from Residential Manufactured Homes to Light Industrial is for a piece of property owned by Cenex Pipeline and Circle Land Management. The property is north of South 9"' and Interstate 90 between South 8"' Avenue and Yellowstone Avenue. The Planning Board recommends approval of the zone change. There was discussion regarding the Planning Board's concerns about the issue, which are noted in the July 2nd Planning Board minutes. Doug asked regarding sewer and water services to this area. Bill explained that Cenex has stated they cannot afford to assist the city with sewer and water services to this area, but Cenex would pay its fair share of what is needed for improvements to this particular piece of property. Emelie asked regarding the plan for development of this area. Bill stated that there would be an office building and some storage buildings. Council Workshop Minutes of July 14, 2009 Mayor Olson stated that the plan is for additional buildings to house the maintenance division and the lab. • Resolution -Task Order No. 14 with Great West Engineering for old Laurel city dump site Bill stated that the task order for $25,000 is needed to deal with issues at the old Laurel dump down by the river. Over the last six months, the State expressed concern regarding the old Laurel dump by the river and asked the city to improve the situation and ensure that it does not contaminate soils or the river. The city was awarded one grant to help determine the scope of work and the amount of contamination in the old Laurel dump. Great West Engineering will assist to identify the problems and determine how to resolve them. The city will continue to look for grants to help with this project. • Request for Annexation - Sid's Place for water and sewer service extensions Kurt Markegard stated that the owner of Sid's Place has requested annexation of some property into the City of Laurel. Because it is less than one city block, the property owner must ask the council for permission to go forward to the Planning Board. Randy Peers, with Sid Corp. attended the meeting to ask the city for that permission. With that, Randy is asking to hook into city water and sewer and extend lines to service his property. The property is already served by water, but not by sewer. He would like to install a new water line and also develop a private sewer line and hook into an existing city manhole a half block away from his property. Randy Peers displayed a map and explained what he would like to do. First, he would like approval to annex into the city. Second, he requested approval to upgrade his water service, which he is most concerned about. Right now his water service is an old poly line that wraps around his building. He knows that the line will blow up as soon as MDT starts working on East Main Street. He asked for the council's approval to start replacing the water line as he works through the annexation process. He proposed bringing the six-inch line that dead ends at the end of Mulberry all the way out to Main Street so he could install a fire hydrant there. Regarding the sewer line, he cannot gravity feed it as the manhole is only four feet high. In the annexation request, he proposed installing a grinder rejecter system. The water main would become city property after it is finished, and the sewer line would remain private and be his responsibility to maintain. Randy stated that his neighbors, Ray Cotter, Cotter's Sewer Service, and Jeanette Wilm, with Crazy Mountain Gas & Oil Exploration, have also shown interest in annexation. Mark asked if the water line would become public property. Kurt stated that the water line would become public property, dedicated, and be part of the City of Laurel's utility assets. Work is being done on the easement issues. The city has a storm water ditch that goes through the property, and there are also gas, water, and sewer lines. Because the property is less than one city block, Randy must ask the council for permission to go forward with the annexation. The second part is that Randy would like permission to allow him to modify his existing water service and to start the improvements before the State rebuilds Main Street. Mayor Olson stated that the city will enter into an agreement with Mr. Peers regarding improvements and annexation, if the council deems it is in the city's best interest to allow it, so he could start the improvements before the annexation process is completed. The city would also have the added coverage of a contract to cover all the work. 2 Council Workshop Minutes of July 14, 2009 There was further discussion regarding the existing dead end line on Mulberry, the proposed fire hydrant, the protection the hydrant would provide to Sid's and other properties, the curb and gutter that will be installed with the State project, issues regarding flushing the line and storm water drainage, and the possibility of annexation of Ray Cotter's property. Mayor Olson stated that two motions for council action would be on next week's council agenda. Public Works: • Street Project update and Resolution for Change Order - Hardrives Construction - Chad Hanson of Great West Engineering Kurt Markegard stated that the change order resolution is for changes in the original scope of the project to add more asphalt patching for Hardrives Construction. Chad Hanson, Great West Engineering, stated that the original scope of work for the street project is 94 percent complete. Mary, Bill, and Kurt reviewed the street maintenance budget and proposed that an additional $150,000 is available for asphalt patching. Hardrives finished the work they could do, and still has chip sealing left to do on West Avenue and Alder Avenue. Alder Avenue will be redone with millings from the highway project prior to chip sealing. Hardrives is doing a job in Wyoming, but they want to do the additional asphalt patching. The crews could return the second week in August to do additional work. Crack sealing is scheduled to start on July 27d. A Hardrives spokesman told Chad that the City of Laurel is their priority, as it was a good project for them and they would like to continue doing it in the future. Hardrives will do anything the city wants to add before their crews head to Arizona in September. • Extension of water line across East Main Street Kurt stated that the city asked Chad to come up with a plan to install a fire hydrant on the south side of Main Street prior to the State's paving project. Currently, there is not water service or a fire hydrant on the south side of Main Street, and the line would be located in the first block of East Main Street near the Chamber building. There was discussion regarding the sewer line in Montana Avenue that comes from the alley, crosses between the glass and detail shop and the Chamber building in the park, and runs underneath the railroad tracks and heads to the plant. The city can work with MRL to extend the sewer lines into the park or to the east along the railroad tracks. Chief Administrative Officer • Construction of sound barrier wall by Elena Subdivision Bill stated that this is a difficult situation. In the Subdivision Improvement Agreement between the developer and the city, it was agreed that a barrier or a wall would be located on the south side of West Maryland between Elena Subdivision and the subdivision to the south. There has been no action taken to build a barrier wall, and communication with the developer indicates that it may not happen. Bill was asked to find out the cost to build a permanent wall. He asked for the council's consideration as to whether or not the city should be involved in the construction of the wall. He has received complaints from people that do not live in Elena Subdivision, but live south of the subdivision, in regards to the barrier wall. If the city builds the wall, it could take some kind of action to find a way to pay for that. Chuck Dickerson asked whose property this is now. 3 Council Workshop Minutes of July 14, 2009 Bill stated that the wall would be built in the right-of-way, adjacent to property owners that are not in the city limits. The property owners directly south of West Maryland would apparently be receptive to the construction of the wall. He has not received any complaints from property owners in Elena Subdivision itself. Chuck Dickerson asked who is responsible for the right-of-way. Bill stated that the city is responsible for the right-of-way. The Subdivision Improvement Agreement indicates that the wall would be transferred to the city after it was constructed, but the developer involved would be responsible for construction of the sound wall. Chuck Dickerson stated that the weeds in this location are substantially higher than the eight inches allowed within the city limits and should be addressed. Bill stated that the city is responsible to cut the weeds and is trying to find the time, money, and personnel to deal with weeds generally throughout the city. Doug stated that the contractor made an agreement with the city and has not performed the agreement and is obviously not going to perform the agreement. Although he does not know where the funds would come from, he thinks the city should proceed with a letter to the developer stating that the wall will be done by a certain date, and if not, the City of Laurel will proceed with construction on his dime. Chuck Dickerson stated that a plan is needed for recovery of the money, as it is obligation and commitment the developer made to the city. Mayor Olson stated that the developer has indicated that he does not have funds to construct the wall. It is legal's opinion that the most likely avenue of compensation to the city for the wall would be through a demand letter, which would be the initial steps in a lawsuit. Sam Painter stated that basically the city is looking at a breach of contract or action against the developer. He is concerned that, if the city expends its own funds and then expects to file suit and get the money back immediately, it is not going to be that quick and could drag on for a couple years. After a judgment is obtained, it has to be enforced. It would be necessary to find some assets that the developer may or may not have that are not already mortgaged. It is not a quick easy solution, if the plan is to try to finance the fence through a short-term loan. It would not be a short-term affair. The city can file breach of contract action, proceed, find the developer, get him served, and then start the process. If the city does not want to build the fence, it could ask the court to order the developer to specifically perform under the contract, which is to build the sound barrier fence. That might come a little quicker, but the developer might not have assets. Sam's second concern is that, if the developer is in dire straights, he could file bankruptcy. At that point, the city would not have any claims. It is a difficult issue and he does not know how to recommend to the council to proceed as far as payment. Fronting the costs is a decision the council needs to talk about. It is not a cheap investment to build a fence. His advice is to proceed as a breach of contract action against the developer. The SIA has a provision for the recovery of attorney's fees. Mayor Olson stated that the two bids for the sound barrier were $31,000 and $34,000. 4 Council Workshop Minutes of July 14, 2009 Chuck Rodgers asked if the developer owns all the property to the north of that street. Mayor Olson stated that some of the lots have been purchased by individual residents, and at one time the developer still had eleven lots left. Chuck Rodgers asked regarding a way to claim a portion of that in compensation for the wall. Sam stated that a judgment should be obtained against the person and enforced through a sheriff s sale of one of the lots. Sam does not know if the developer owns the lots free and clear. If those lots are mortgaged 100 percent, the city would not jump ahead of the bank. Emelie asked why a sound wall is needed. Bill stated that the folks south of the development felt that the sound would hamper their mode of living and pushed for it in the Subdivision Improvements Agreement. The developer and the investors signed the agreement in order to go forward and start construction of homes in Elena Subdivision. Sam stated he does not recall the purpose for it, but it had something to do with the neighbors being bothered by the increased noise from the subdivision. Mistakes were made when that subdivision improvements agreement was negotiated and signed between previous staff and the developer. Typically, SIA's require the developer to either put up cash or put up a bond for the improvements. For whatever reason, that was not required and thus the city ended up in this situation where the developer says he does not have the money and the city does not have a bond or cash. The city is in an odd situation from a bad mistake, which is not done any more. Mark questioned if the city should find out if the sound wall is still needed by sending letters to the residents. Bill has been contacted by four or five property owners south of the subdivision regarding when the sound wall will be installed. He stated that the city could try to contact everyone adjacent to the subdivision on the south side of West Maryland to get a response regarding this issue. Mark asked if the residents know it would be a concrete fence. Bill stated that they do not know. In order to ensure that there would not be continuing squabbles, Bill personally made an effort to obtain two quotes to build a concrete wall. There is also the possibility of building a different kind of wall. Chuck Dickerson stated that the city would need to build the type of wall that is going to be less expensive for the city at this point and is going to serve the purpose. The city cannot be putting in the type of wall behind each property that the property owner wants to see put up there. If the city comes up with a design for a concrete wall, and this is what the city can come up with, that's what it is. Mayor Olson asked the council to allow staff to return to the next council workshop with funding options, the results of contacting the residents, and answers to the questions presented tonight. 5 Council Workshop Minutes of July 14, 2009 Chuck Dickerson stated that a letter should be sent to the property owners on the south side of the wall indicating the type of wall proposed and asking if they are still interested. Mayor Olson stated that this could be done. Mary Embleton stated that she remembers the issue of Elena Subdivision. When the street was proposed, it was supposed to be an extension of Maryland all the way through out to Golf Course Road. The reason for the sound wall barrier was because the residents thought there would be a huge amount of traffic going through there and they wanted it quiet. Mary stated that the road has not been developed. It is a dead end and there is no access through, so the urgency of this issue is not there. She stated that Council Member Eaton had a good point in questioning why the wall is needed. Mary stated that she has been in a quandary to identify appropriate funding for the wall and cannot identify any of it. More time is needed to take an overall look at this before the city decides to build a wall. Doug asked regarding the possibility of talking to the landowners to come to an agreement with them that, when it becomes appropriate after a bridge is built across the ditch and traffic flow has increased, then the sound barrier would be implemented. He stated that it is obviously not needed now. Mayor Olson stated that the language could be incorporated into a letter to the property owners. Emelie stated that the comments assume that the city is the entity that should build the wall. The developer should have built the wall when the subdivision was first put in. She does not want the city to set a precedent with building privacy walls or sound walls in subdivisions. For that reason, she hesitates to go forward with this unless there is a way to incorporate the fact to these people that it is not the city's responsibility to build that wall. It is the developer's responsibility. Sam stated that, if this had been properly set up from the beginning, the city would go out and build the fence and then sue the surety company for the bond put up by the developer. The surety company would pay for it, unless the bonding company found a cheaper way to do it. In this situation, Emelie is exactly right. The developer agreed to something and now is basically saying that he cannot do it. Whether that is true or not, the city does not know. With the written contract, the city has eight years to go after the developer. Sam did not want to dissuade the council from any sort of legal action, but he wanted to dissuade the council from thinking that the city could get immediate repayment for the fence. It would be a long process. There is definitely a cause of action, and the developer can be located and potentially has some assets. Mayor Olson stated that the barrier wall was a requirement of the SIA. The formation of a park maintenance district was also included in the SIA's for Elena Subdivision and Iron Horse Station Subdivision and will be presented for council discussion in the future. Executive Review: • Appointments o Library Board - Nathan Baillet to a five-year term ending June 30, 2014 Mayor Olson stated that the appointment will be on the July 21" council agenda. Public road easement or right-of-way agreement for construction of access road through city container site 6 Council Workshop Minutes of July 14, 2009 Bill Sheridan stated that Riverside Sand & Gravel wants to purchase the mining rights on this property. He showed a map to the council. The property owner asked the city to help provide an access road in this area, as there is a need to build an adequate road for heavy equipment to the mining area. Eventually when the mine is completed, the area will be a subdivision. Bill stated that a suggestion was given regarding the need to provide potable water for the city. Today it was determined, with the Chad Hanson's help, that a high hill (shown on the map) would be deeded to the city with additional access for a water line and an access road. It could be decades before a storage facility is actually built, but it will be needed in the future. Bill stated that a few things need to be worked out, but it is a good project and will be a long-term improvement for the city. Bill displayed a map that showed the topography of the area, with the actual roadway. This is the best location for a water storage facility, and the owner is willing to provide the property as a part of the agreement to allow for mining in this area. Mayor Olson stated that an RSID and a maintenance agreement were discussed with the commissioners and the principals at a meeting yesterday. After the meeting, it was realized that the city would be the participants in the RSID. Allowing the principals to go over the road to the mining area would be to their advantage. The county would receive the revenue from the new business. The City of Laurel would not receive much, but would be responsible for funding the maintenance of the road. Mayor Olson stated that the resolution would be removed from the council agenda if the issue is not resolved prior to the council meeting. The compensation would be the land for the future water tower. Mayor Olson stated that Kurt Markegard suggested a rounded route through the container site, in order to make it less dangerous for oncoming traffic. There will be one way in and one way out, which should prove to be beneficial and less hazardous and will not require changes to city operations. Other items • Water rate increase - Resolution of Intent Mayor Olson spoke regarding the moratorium for water re-sellers and how to address the water rate structure. He asked Chad Hanson to speak. Chad Hanson explained the draft resolution of intent to raise rates. With the TSEP Grant for the water project, the council passed a resolution and committed to raise water rates to a certain target rate as part of the conditions of the grant. The city was awarded the grant and now has to raise the rates. Right now, the existing rate system is based on a graduated base rate based on the size of the service, except there is really no consistent formula as to how the base rates are calculated. The American Water Works Association (AWWA) came up with an EDU (equivalent dwelling unit) method. He explained the method. They use a '/-inch service, which is a standard service size to a house or residence and is considered as one unit, and then take the area of that and divide the area of a 1-inch service by the %-inch service and get a multiplier of 1.79. Then it keeps going up. AWWA decided that is a fair and equitable way of increasing the base rate because it is a direct way of comparing the impact and the draw consistently. The bigger the service, the more water that can be drawn. This option would adjust the rates correctly and would use a straight EDU multiplier to determine them. It would have an impact on the larger services. There is a 10-inch service to the refinery, and it would be good to visit with the refinery. 7 Council Workshop Minutes of July 14, 2009 Chad stated that some changes are needed to the draft resolution, which was prepared by Dorsey & Whitney. The resolution will go to the funding agencies for approval and comments, so it could change slightly. He pointed out that the intent to raise rates is not an overnight process. If the council passes the resolution of intent next week, it begins a 30-day public comment period that includes publishing it three times in the paper, sending out a notice to every user, having a public hearing, and then actually passing the resolution to raise the rates. The new rates have to be in place before loan closing, which is typically at the end of construction on the projects. There is time, but the process needs to begin to get everything in place to finalize the TSEP Grant and the SRF loan. Chad explained the changes. With the new rate proposal, the consumption rate is actually based on 1,000 gallons vs. 100 cubic feet. Since 100 cubic feet is roughly 750 gallons, it would be about $1.81 instead of $1.36. The raw water rate will be removed entirely. The city provides raw water to the refinery with a direct dedicated line. The city cannot provide raw water for others. The raw water rate belongs in the Schedule of Fees and Charges and should be a negotiated contract specifically with the Refinery, because it is not a service the city can offer to everyone. When the funding agencies submit comments and calculations on the reserve funds necessary for the loans and grants, the rates may adjust a few cents to a dollar up or down. A reserve fund is required as part of the agreement. There will be some fine tuning to the document, but that will be part of the information process and Chad will submit it as it becomes available. Chad stated that, since there will be an impact to some of the larger services, including MRL and Cenex, he would like to meet with them to explain how the EDU calculation occurs. It is a justifiable rate structure that is nationally accepted, and this removes the argument that someone is being treated unfairly because their service is bigger. Chad will continue working with the funding agencies and the bond counsel to get the resolution finalized. If the resolution of intent is passed, there will still be opportunity to modify it before approval of the actual resolution. Mayor Olson spoke regarding the moratorium on the water re-user rates. The resolution stated a 120- day moratorium or until the council deems necessary. The extension is needed to review the current public water resale in statute to bring a direction change to the council. This should be presented in the next few weeks. Chad stated that the water resale was discussed as part of the rates. Based on Harry Whalen and Sam's advice, if there is a resale rate and someone wants to sell water, they cannot be stopped. If someone wants more water that the city can produce, they cannot be stopped. Similar to the raw water, the advice provided to the city is that it should be in the Schedule of Fees and Charges, such as $5 per 1,000 gallons. Then a negotiated contract should be presented to the council regarding the maximum number of gallons per day to ensure that the city's capacity is not overextended and the residents are without water. Staff will review the statutes to see how this can be included in the fee schedule. • Resolution - TSEP contracts Mary stated that the water project is going forward and the rate increase resolution is part of the intricacies of the process. Another part is the Treasure State Endowment contract. Treasure State Endowment is one of the city's funding sources for Phase 2 of the water improvements. The legislature approved the city for $625,000. The contract was developed by the Montana Department of Commerce. Mary pointed out the highlights for the council's consideration. First, the contract is for $625,000, which is not the maximum but the city was not eligible for the maximum because of the 8 Council Workshop Minutes of July 14, 2009 size of the project. The last two pages of the contract is a requirement to have an implementation schedule and a budget. The city is on the fast track with this project and will be advertising this week to go to bid on this project. The second phase of the project is mostly system related. The budget will require several different sources of funding, including, TSEP ($625,000), DNRC ($100,000), $350,000 of the city's reserves, and a SRF loan of $1.25 million. The city is positioning itself for any bonding requirements, and in order to borrow that money, the rates need to be in place. Review of draft council agenda for Jul 21 2009 A second motion for Randy Peer's request to upsize the water line will be added to the council agenda. Attendance at the July 21, 2009 council meeting All present will attend. Announcements Doug stated concerns regarding the Asphalt Plant because the recent winds have caused insulation and siding to blow off the building. He also mentioned the weed issues at the plant. Chuck Rodgers gave an update on the flower pot holes drilled at the cemetery. The project has been completed, with a few minor problems that need to be resolved. Some holes had to be drilled deeper and will have to be filled with sand or pea gravel. He will get Kurt's judgment on this. Emelie asked that an update on the Asphalt Plant be added to the next council workshop agenda. Mayor Olson spoke regarding his participation in an online mayors' forum and stated that other communities deal with problems and issues similar to those in the City of Laurel. The council workshop adjourned at 7:47 p.m. Respectfully submitted, Cindy Allen Council Secretary NOTE: This meeting is open to the public. This meeting is for information and discussion of the Council for the listed workshop agenda items. 9