[0:00] Mayor Mary Fasbender: questions for all thank you and welcome seeing that this partially meeting is being remote and we have one of our council members on zoom tonight i'm going to ask clerk murtaugh to please call the role [0:00] Kelly Murtaugh: council member brox [0:00] Councilmember Brox: here [0:00] Kelly Murtaugh: council member folch [0:00] Councilmember Folch: here [0:00] Kelly Murtaugh: council member fox [0:00] Councilmember Fox: here [0:00] Kelly Murtaugh: council member leiffeld [0:00] Councilmember Leifeld: here [0:00] Kelly Murtaugh: council member lund [0:00] Mayor Mary Fasbender: councilmember vaughn [0:00] Councilmember Vaughn: here [0:00] Kelly Murtaugh: mayor fassbender [0:00] Mayor Mary Fasbender: here and a quorum has been established with the absence of council member london he will be coming [0:46] just will be late so tonight we do have a proclamation supporting hastings family service so kelly if you would join me at the diaz or at the microphone thank you [1:09] Mayor Mary Fasbender: whereas minnesota food chair has coordinated a march campaign for 41 years to restock food shelves throughout the state of minnesota and whereas 3.7 million visits were made to food shelves during 2021 in minnesota and whereas hastings family service serves up to 135 families each week through many different food programs and [1:46] whereas 50 of those served by the market food shelf at hastings family service are children and whereas the generosity of our community makes it possible for the hastings family service to provide help and hope to our neighbors who need assistance with food housing clothing or transportation and whereas all gifts of money and food throughout the month of march are appropriated matched by minnesota food share therefore be it resolve that i may or mary fassbender of the city of hastings do hereby declare together with the hastings community will drive out hunger during minnesota food chair month to restock the market food shelf at hastings family service tonight we have with us kelly carter who [2:33] is here with hastings family service and kelly i would like to present you with the proclamation and just say we appreciate hastings family ser service so much for what it does in our community and we know that more and more every day that people need your assistance so we appreciate all you do for us thank you [2:33] Kelly Carter: our goal is to make minnesota food share this year one of the best that it's been in dedication to the retirement of our food shelf director mary koch cost of food is skyrocketing and the need is still strong so community support is needed more than ever and we thank you for this proclamation [3:18] we thank you for your continued support thank you thanks kelly [Applause] [3:18] Mayor Mary Fasbender: council members are there any corrections to the minutes of the workshop and regular meeting of january 18th seeing none they are approved comments from the audience for public comments we have options for comments to be mailed in prior to the meeting as well as interactive feature during the meeting for the email comments they have been forwarded to the city council and their receipt is acknowledged please recognize that items not on the agenda tonight will not be discussed this evening for live comments there may be either through zoom link or in person [4:05] we ask that attendees either raise their hand in person or use the raised hand feature in zoom and they will be invited to speak one at a time is there anyone who would like to address the council at this time no one in the audience no one on zoom okay council members uh are there any items to be considered okay and consent agenda council i would accept a motion to accept the consent agenda [4:52] Councilmember Leifeld: council member lifefelt [4:52] Councilmember Vaughn: councilmember vaughn ii [4:52] Mayor Mary Fasbender: discussion council clerk murtaugh please call the rule [4:52] Kelly Murtaugh: council member brox yes councilmember folch yes council member fox yes council member life held yes councilmember vaughn yes mayor fassbender yes [4:52] Mayor Mary Fasbender: and that motion prevails today we have a public hearing for the establishment of tiff district number nine the njs development the stencil stencil flats on the third and tonight with us we have john hinsman development coordinator welcome john [4:52] John Hinzman: thank you mayor i'm just going to put my presentation back up here mayor we've got a couple of actions before you tonight one of which is a public hearing i'm going to give a little bit of an introduction then we have jessica green [5:38] from northland securities they're a financial consultant for the city in hedra jess is an expert at what i am going to be going over briefly here but and be able to answer any questions that you may have so we're looking at a public hearing tonight to consider a couple of actions related to tax increment finance district number nine first of all i just want to go through a quick recap here of tax increment financing what is it it's local property tax revenue generated by a new development it's captured from specific parcels used to facilitate private development that achieves a public purpose that wouldn't occur without tiff and according to state law this is from professor feifield if you uh put this together a couple of years ago tiff can be a little bit confusing uh [6:25] tiff could has involved a what for test in which development would not occur but for the use of tiff and i'll go through a little bit of specifics of what's involved within it before tiff this is what we have we've got the land we've got the property taxes that occur that are paid out to city county school district and others those still get paid out after tiff what happens with tiff is this something is built new property taxes are generated on the site which is called the increment the base value taxes as you can see on the bottom here to the city county and school district at their pre-development level still get paid the property taxes that are generated from the development this increment between present property value [7:10] taxes and former property value taxes that is used to help develop the district itself that is the the key to what tax increment financing would be there's a number of different methodologies and reasons why we do it but that is the general of it what we're looking at tonight is this we're looking at doing a development district amendment project area i'll go over to this development districts are kind of the are the area in which tif districts can be created when we're looking at a development district we're looking at where future tip districts can occur these are based upon plans that we have done we've had this district one here since i think the 1970s [7:56] that was based upon earlier plans we did within the downtown and most recently the heart of hastings plan we did about 20 years ago now the black line here represents where the district will be as proposed the red line are the additions to it essentially it goes west to spring street by hudson and down to 5th street east to the railroad tracks there's areas here in red or where it kind of jumps back up and down between 4th and 5th street our proposal is to include those in this includes the area in which we are presently redeveloping which is block 28 where we're purchasing property as well as some properties directly across the street there and then other areas to the to the east here that may occur in the future it [8:42] also includes an area up here which is the wastewater treatment plant now with the development district this is not a tif district this is where tif districts can be created in the future we're not committed to anything here other than the possibility that this is where they can be created so that is one amendment we're looking at at tonight whoops wrong keyboard and then we have our tif district itself tiff district itself looks like this tift district is created within the development area itself the tif district involves what we commonly refer to as the ubc site which is down here between third and fourth street as well as the red rock corridor park the parking lot area between second and third street [9:28] and then jumping north here to art space property and then the land that we own north of art space is heddra north to the river now this is the tiff district that would be created with we look at the tif district we're authorizing the location the use of tiff here that we're also having a tif plan which is within your packets that sets the parameters an estimated tif generation what we're looking at here is the pre-development value of this property and what post development might be the tif district and in this case can be larger than a development site we may have a specific site that is right for development right now the tif district may be larger than that it accommodates areas that we see are in close uh proximity from a time frame for development there and where tiff might [10:14] be able to be used in the future via a tif agreement the tif agreement's an important thing the tif agreement is when we're going to allocate specific amounts of tif for a certain project that is not what we're doing tonight what we're doing tonight is creating the tif district and adopting the tif plan what would happen is we would negotiate with a specific developer and in this case stencil development to determine what specifically is needed for his development and how much of that tif that we would pledge back to him by pledging what we mean is the full taxes would be paid on the property and then the increment between the pre-development value and the post development value would be rebated back to the developer for a specific period of time that is an agreement that will [11:01] come before you in the future so we'll be creating a tif district tonight but the actual allocation of that to any particular developer would come at a different point so that that's kind of the nuts and bolts of tiff generation i'm going to turn it over to jessica green here can talk a little bit more about the proposal that we're looking at here for stencil development and let me see if i can get it in the right place here and there she is can you hear me jessica [11:46] Jessica Green: i can can everyone hear me nodding yes great well good evening everyone mayor council thank you john for that introduction i think those are all really great comments as we're kind of working towards getting through this public hearing tonight [11:46] as john mentioned you do have a tif plan that's in front of you or in your packet you also have a resolution to consider after the close of the public hearing and then also included in your packet tonight is a memo that northland has prepared as sort of a high level overview of the district itself the proposed project and then sort of a guide through that tif plan because it can get um somewhat complex um and and just generally quite long so um if it if it's okay with mayor council what i would plan to do is really just start with that um tiff overview kind of walk through some of the development specifics and then of course open it up for questions and then the public hearing [12:32] does that sound okay i see some nodding so we'll go forward and the other thing that i want to mention i really appreciate everyone allowing me to join you um remotely tonight given um the weather it's nice to be able to dial in rather than get on the road so thank you very much for that um okay so getting in to this overview memo um first and foremost it should be mentioned that the tif plan was reviewed by hedra at their meeting on february 10th and that also hedra did take action on a resolution providing for the establishment of the district for tax increment financing district number nine that resolution of course is subject to council consideration this evening um in terms of the proposed development and [13:18] sort of the impetus for the creation of this district and the modification of the project area um for this project the city received an application from njs development llc and what njs is looking to do is to construct an 89 unit apartment facility um at approximately uh 404 third street east now that's um that property address may not be the actual address of the apartment project once it's completed being that this is a redevelopment site and we are anticipating some clearance of buildings some lock combinations that address may change but it's included here for some context in terms of the location now the um the project itself includes a [14:06] mix of units so we've got studios we've got one bedrooms and two bedrooms um additionally the developer has stated that they are planning for some amenities here so dog park sky lounge some fitness facilities and then also looking at doing some enclosed parking to allow for the density of these 89 units on this particular site the request to the city was for the full duration of the um district what's allowed by law so 25 years um we will say that as john mentioned we are not looking to the council to determine what that level of support is at this time or what the term is i'm really just working through the mechanics of establishing that district so that we're creating the authority to [14:52] use tiff that that tiff and what is provided to the developer assuming of course that the council is supportive of establishing the district would be determined at a later date we would be hoping to have a development agreement back before the city in march if agreeable terms can be met between the city and the developer may stretch into april but we'll certainly try to get that moving forward as soon as possible now in terms of the review so northland of course has the application that was received the financial information in terms of the project performa we've reviewed the construction cost estimates and based on our review we do find that the assumptions for revenues and expenditures are found to be reasonable and within [15:38] general industry standards now as we kind of dig further into the layers of that performa we do look at different metrics in terms of debt service coverage and return for the project and it is our opinion that but for the tif assistants that the project would not move forward as proposed and furthermore in the application itself and then from conversations that have been ongoing with the developer they continue to maintain that without the project assistance the tif assistance that they will not be able to move forward with the project so in terms of the but four tests that john mentioned we are comfortable and again it is our opinion that the project would not move forward but for tiff assistance again [16:25] that level um needs to be determined based on those ongoing conversations between northland the developer of the city but we are working through that process as we go along here going on to the the second page of that tiff memo really what we're trying to sort of drive home here is that the need for the assistance comes from one the cost of the redevelopment of the site again there's a lot of combinations here there's um some clearance of buildings but it also comes from the construction of that enclosed parking so essentially that building has to go up so that there's a density allowed here for that site for that those 89 units that are proposed [17:10] in terms of process with any tif district what you'd be looking at doing is of course the city would need to hold a public hearing that's um one of the reasons that we're here tonight of course um assuming that the city council is supportive of the establishment of the district at following the close of the hearing a resolution would be considered for that establishment it is proposed that hedra would act as the authority for the district hedre has acted as the authority for administering the district for other previously approved tif districts so we're assuming that that would be the case here as well with all on new tip districts there's a certain level of uh notification that has to occur so [17:56] notifications were sent out to the school district and the county and with redevelopment and housing districts there's another level of notification that needs to occur to specifically to the county commissioner that represents that area all of those notifications were sent out uh here in early january and with those notifications we do request that um written comments are received so that it can be entered into the record for the public hearing uh unless staff is aware of comments that have been received by the city northland has not received any comments to date um not from the school district the county the county commissioner or from you know members of the public at this point [18:43] following the adoption of the plan or excuse me following the hearing the city may consider a resolution establishing the district and um and modifying that project area and then the adoption of the tif plan as well so sort of the second piece of this overview again provides that road map through the tif district itself um i i believe our tiff plan is roughly 30 pages or so on so this is kind of a nice synopsis of what's included there the first three sections one two and three relate to that project area so that's the area that john was mentioning related to development district number one development district number one was established back in [19:29] 1974 and there have been a number of modifications to that district over time and those modifications are included in your plan um one of the things that we're attempting to do here aside from modifying the boundaries of that district is we're also looking to restate the development plan for the area reason being is that throughout time again going back numerous years here and numerous modifications the development district has been referred to as development district number one but it's also been referred to as the hastings downtown redevelopment area so by restating it and sort of titling it just as development district number one it just sort of cleans that up a little bit um and then the other piece here is that we are looking to [20:16] combine the uh the plan for the project area and development district number one into the tif plan as well this is more of a housekeeping item and just allows for just some easier record keeping for staff essentially by including those in terms of one specific plan i'm going further into that tif plan uh you've got the boundaries of the tif district and the type of district um starting out in section four um tif district number nine is proposed to consist of ten parcels now as john had mentioned previously the district can be larger than just the proposed project that's in front of the city at this point and that's what we've [21:01] elected to do here in consulting with staff being that um these 10 parcels would qualify as a redevelopment district at this time and allow for hedra to maintain and move forward with other redevelopment activities within the area section 4.04 gets into the actual tif revenue flow and that can be found on page i believe it's 18 of the tif plan and the figures that are referenced there come from the estimates based on what we would imagine the resulting market value to be following the completion of construction so with those 10 parcels in mind and [21:47] assuming that the project is built what we've assumed is that in the first year of the district where the district is producing increment is that we would start out with an estimated market value of approximately 25.1 million based on that and of course taking out any of the tax capacity related to the basic value that exists today we would anticipate that that initial increment would be around 218 000 that's after deducting the state fee um and then it would um obviously go on from there we've assumed a bit of an inflationary factor within the plan conservative at one percent that just means that that estimated market value will grow over time and the the tif revenue would grow as well [22:33] um a note here within the overview of course is that the amounts that are listed in the tif plan are estimates at this point the actual market value based on the assessor's review of the project following the completion of construction along with tax rates at the time of certification etc will impact those estimates but based on the information that we have today that is what is included in the plan and then project cost sources and uses etc can be found further into section 4. it's point 4.04.2 through four point zero four point four um and really what this is getting to is that um the tif plan authorizes the use of increment up to three million nine hundred and [23:19] twenty six thousand dollars to cover um eligible project costs including those administrative costs um that may be incurred by hedra so currently project cost of three million eight fifty one and that allows for around seventy five thousand an administrative class due to tiff reporting etc um final two things here on the overview memo is that we've got a section here related to bonded indebtedness we like to highlight this just being that oftentimes we'll have people reviewing the plan and you know think that perhaps the city is contemplating issuing bonds to support the project and that is not the case here that has not been discussed in any sense at all for this project bonded [24:04] indebtedness for the purposes of state statute related to tiff is related to any type of obligation that would be paid through that tif stream and in this case what's being considered assuming again that the council is supportive of establishing a district and that a development agreement can be reached that the developer would be paid 90 of the available tif revenue based on eligible project costs on a pay-as-you-go basis so as those property taxes are paid that increment is collected within the district that essentially that would be reimbursed to the developer again on a pay-as-you-go basis so not anticipating any sort of general obligation bonds being issued by the city and then final point here is that the [24:50] plan has been drafted to allow for the maximum duration now when you read through state statute it talks about development excuse me redevelopment districts allowed for up to 25 years um technically they what it allows for is 25 years from the receipt of the first increment so technically you get 26 years in total we have drafted the plan for that maximum duration that being said based on our review of the project performer we do anticipate that this particular project would be supported at a lower term than that now we've again drafted this plan with the maximum to allow for hendra to work on development activities or [25:35] support other development projects that may come forward in the future so that brings us to the end of the overview memo like i said i won't go through the tif plan in itself just as it is quite lengthy but i am certainly happy to stand for any questions that the council may have or answer any questions that may come from the community as well thank you [25:35] John Hinzman: yeah so mayor at this time we've got two actions before you we've got the public hearing that you may open at any time and then we've got the action which is the resolution within your packet itself [25:35] Mayor Mary Fasbender: okay at this time i'll open the public hearing and if there is any attendees on [26:20] zoom please reuse the raised hand feature okay and no one in the audience so one more time no one wishing to speak during the public hearing unzoom please use the raised hand feature seeing none i will close the public hearing at this time and open the discussion for council council discussion council member brooks [Brox] [26:20] Councilmember Brox: my question is about the tif district application to a piece of property does the tiff run with the land so my question is really if a developer build builds on a property [27:07] and then later sells that property because it's in the tif district does it apply to the land in the building it doesn't go with a developer so it's applying to the land specifically correct [27:07] John Hinzman: sure and jessica i'm assuming that that runs with the land but i'm looking at the expert here [27:07] Jessica Green: yes i am happy to answer that so the development agreement would be with the developer um so oftentimes when we see a project being sold where tiff is related to that specific property that's going to be worked out in that sale process so what the city and the developer would need to agree to if the developer were going to sell the property with that tiff revenue stream associated with it is that both parties would need to agree [27:54] to an assignment of that tif um because as it relates to the initial development agreement it is between the city and that developer so it's not specific to that land it's due to the developer um based on that project but as i mentioned typically when these types of things happen there is an assignment of that tif stream um and the city would need to agree to that [27:54] Councilmember Brox: so can i follow up follow a question to that if if that's true then our creation of the tif district is a separate action that's what we're doing tonight and the legal agreement to use tiff is handled in the development agreement if i'm understanding you correctly [27:54] Jessica Green: correct okay [27:54] Councilmember Brox: thank you [28:39] thank you councilmember brax [Brox] any other questions console [28:39] Mayor Mary Fasbender: council member brock's [Brox] [28:39] Councilmember Brox: so under this model it assumes a certain level of growth of property value and land and assuming that you're putting a building on a property it's automatically going to be valued at more what happens in a market where the market crashes and although we all hope that doesn't happen what if it does happen and then how do we recoup what we you know who who covers the loss basically in that situation where there isn't growth i can't imagine a situation where [29:25] a 90 apartment building on a piece of land wouldn't be worth more than originally it was with nothing on it but has that ever happened and what happens in those situations [29:25] Jessica Green: that's a really good question i have not seen a situation where um in a case like this where the the base value would have gone below um kind of what exists today um in the event that the property does not reach sort of the level that we're estimating what that means is effectively the available increment would be less than what's estimated in the plan so when we're looking at the plan and we're saying you know based on the construction of 89 units and what we [30:10] would anticipate for the resulting market value and given the base value that exists today overall we're looking at a taxable market value of roughly 25 million now if the project um sort of doesn't produce that level of estimated market value and we're looking at say 20 million overall that increment is going to be less that means that the um overall the developer is paying less in property taxes and then receiving less on a reimbursement basis so that's kind of the beauty of these pay-as-you-go arrangements is that if that increment does not is not produced in the way that we're estimating essentially that means the developer is getting less over time [30:58] does that help answer your question [30:58] Councilmember Brox: yes that helps thank you and i do have one more question if you would allow me mayor um so there i've heard it referred to um just having a citywide policy as to how tiff is used i've heard people say things like well this city tiffs this and tiffs that and that's why they have all this development because they use it like crazy i know that hasn't been our policy in hastings historically and is this something that once we establish it we can expect more people to ask for if so do we need to talk about having a policy around how we use tiff as a council so that we have a guiding principle in the future because otherwise i feel like we're [31:44] handling these on a case-by-case basis is it wise to have a strategy on how you're going to use tiff and how you're going to apply it to the requests that come in for the city of hastings [31:44] Mayor Mary Fasbender: jessica what have you seen in other cities you've worked for on that [31:44] Jessica Green: sure so i think it is rather common for um tiff to be considered on a case-by-case basis because each project is going to have different levels of assistance need whether assistance is needed at all and different project details in this case with the flats on third project for njs um you know it's it's the redevelopment costs that are sort of driving the construction costs [32:30] to be higher than if the developer would have located a site that was already assembled that had the proper utilities that didn't require clearance and then given the sort of constraints of the project as well in terms of the site and having to raise that building and create that enclosed parking um that's what's driving the need for assistance and again kind of keeping in mind the the necessary um returns to attract investment and also the debt service coverage that's going to be required by a bank um so to to get to your your point about does this sort of create a precedent that um you know tiff is always going to be provided for any type of project i would [33:17] say that the answer to that is no um being that one staff is reviewing those applications as they come in they're working with their advisor northland to take a look at that determine whether or not that level of assistance is necessary um so i do think that it's it's quite commonplace that again you're seeing these on a case-by-case basis from a policy perspective um we certainly do see communities that if they've identified that they really only want to support housing projects with tiff you know perhaps they have a tif policy related to that or if they're only looking to support industrial development maybe they're only looking at it um economic development tip districts so it really depends on [34:03] that particular community what the city is willing to support and incentivize it really is on a case-by-case basis and i do think that the city has done a nice job of looking at these projects as they come in for individual levels of assistance if they are needed [34:03] John Hinzman: and i could follow up on that at the couple uh points locally here so what we're looking at tonight is tax increment finance district number nine which means in the history of tiff which is about 40 or so years in hastings we've had this is the ninth one that we've had within that period and i and i believe when i looked at the history one or two of those numbers were skipped so we're actually lower than that uh so we we haven't used it that much some [34:49] cities do use it more from a policy standpoint we don't have anything specific to tiff but in the use of a public subsidy hedger has adopted certain goals related to when a public subsidy should be should be considered and so we could use that potentially as a mechanism for this [34:49] Mayor Mary Fasbender: thank you john uh councilmember fultz [Folch] online [34:49] Councilmember Folch: thank you your honor um jessica i had a quick question about the information that was in our packet and i'm looking at uh it's like exhibit 4 on page 20. [35:28] there's a detailed uh table there and so just to understand what it is that that's denoting um it's showing what the city's tiff would be but then also the county and then the school and so that all together those three components that is what we would be forgoing and it would 90 of that total then would be possibly going back to the developer for for reimbursement correct is is that how we're supposed to be reading that table [35:28] Jessica Green: council member could you point me again to um which table that you're looking at [35:28] Councilmember Folch: sure on page 20 exhibit four [35:28] Jessica Green: oh yes yep um so what we're looking at here again so you're seeing that taxable market [36:14] value so that's that's um what we're assuming based on that first year of the district so looking at approximately 25 million dollars in total valuation now that does include the total valuation for those 10 parcels so it's not specific to this particular on this particular project related to njs um so based on that what you'll see is the tax capacity which is based on in minnesota tax base gets a little bit complicated but it takes the type of development that is within the district currently multiplies that by the tax rate for that type of development so whether it's apartment commercial et cetera it'll be different but we've got a total tax capacity value [37:00] there of 313 960. from there you're going to remove the base tax capacity so that's what exists today and then you've got the captured tax capacity for the district and then so you're exactly right so the tif share that you're seeing there related to the city the county the school district the other is typically related to watershed districts and those types of things so it would be related to 90 of that is what is proposed to go back to the developer for a certain period of time based on those conversations that are ongoing but yes you are right when you're when you're looking through that um that is sort of the tiff portion that would be captured during the life of the district [37:47] thank you for that clarification sometimes those tables get a little overly detailed so i appreciate it thanks [37:47] Mayor Mary Fasbender: thank you councilmember fulch [Folch] any other discussion council okay if none counselor would accept a motion to approve a resolution approving modifications of development district number one hastings downtown redevelopment area the project area the establishment of tax increment financing district number nine the tif district within the project area the adoption of the modified redevelopment plan for the project area and the adoption of tax increment financing plan relating to the tif district [38:33] council member of brock's [Brox] and council member vaughn additional discussion council clerk murder child [Murtaugh] please call the rule [38:33] Kelly Murtaugh: council member brox yes councilmember folch yes councilmember fox yes councilmember liefeld yes councilmember lund yes councilmember vaughn yes mayor fassbender yes [38:33] Mayor Mary Fasbender: and that motion prevails right thank you council and thank you jessica thank you john thank you jessica we also have a public hearing tonight for the cip bonds planned for public works facility for this we will have our city administrator dan watica [Wietecha] [39:19] followed by a public hearing and council action [39:19] Dan Wietecha: thank you mayor um i can briefly introduce this and and i'll turn more the technical side over to jessica green from from northland at least in the recent past when we've done bond issues they typically have had some sort of dedicated revenue stream to them whether that's a matter of assessments or utility revenues but this one really would be strictly on the general taxes or general fund dollars which which may be taxes or other sources because of that there's some different procedural aspects to it than what we've seen in the past such as the the hearing we have tonight um and [40:06] and and that technical side over to jessica the project we're anticipating with this is the construction of a new cold storage building primarily for the public works department but it'll also service parks and a little bit with the police department this is on existing city property at the public works site and this really is the result of some other land sales and losing our existing storage and needing to make sure that we do keep expensive equipment properly housed and maintained the cost of the project construction all uses is about two million dollars [40:54] recognizing that the economy is is certainly uncertain these days whether it's a matter of inflation or supply chain or labor issues so we're working with a contingency of another quarter million so what the bond issue is proposing up to the potential full cost of that project at two and a quarter million dollars recognize we have from a budgetary standpoint uh cash on hand for about a million dollars of that will actually potentially issue a lesser amount for the bond recognizing that there's cash there but at this point this sets up the framework so we have some flexibility if [41:41] potentially that cash might be allocated differently such as to the the city hall dome project or something else that may be a need this gives us the greatest flexibility with this storage building project the other piece with the storage building is that the bid opening at least for the the construction itself there's a couple smaller pieces with utilities to serve it but the bid opening for the construction is next week so pretty soon here we'll be able to work with actual dollars rather than these estimates and large contingencies but with that i can certainly take any questions i'd be happy to turn this over to jessica green from northland to to give [42:26] more of a technical side to the bond issue and as stated earlier we do have a public hearing this evening for it and and if council is so inclined a a resolution to move forward thank you [42:26] Mayor Mary Fasbender: thank you dan jessica anything to add [42:26] Jessica Green: um mayor council hello again i would um i would propose that we just simply um walk through that um capital improvement plan i think dan did a great job of sort of highlighting the reason for the public hearing tonight as was mentioned the city often is issuing bonds related to street improvement projects or utility projects when we tend to see these types of projects [43:12] related to essential service facilities so public works public safety city halls etc oftentimes the most efficient use of bonding or the lowest cost option here is something called capital improvement plan bonds and with that statute requires that the city essentially prepare a five-year capital improvement plan hold a public hearing because there is a reverse referendum component that goes along with capital improvement plan bonds so that's certainly different than the types of bonds that the city issues more regularly um so just very quickly i'll kind of skim through that that plan that is in your packet so it's a five-year plan so [43:58] it spans from 2022 through 2026. there's a very brief introduction that just references the statutory authority here for borrowing it's 475.521 purpose here really describes again essential service facilities and the ability to bond for those projects got a couple of notes on that before the issuance of cip bonds the city must hold a public hearing and that related to the reverse referendum if a petition is received within 30 days of the close of the hearing and that petition would need to be signed by at least five percent of those that voted in the last general uh city election if the city were to receive a petition such as that then in order to issue the [44:44] bonds you would need to go to an election to seek approval from the voters um doesn't happen often but it certainly is something to be aware of and that's why we're starting this process a little bit earlier on than when the city would typically be issuing bonds sort of later in the spring or early summer months um statute requires eight separate areas are contemplated within that plan condition of the existing infrastructure demand for the improvement etc um so those have all been outlined in that plan this evening the plan summary that's noted here this is a five-year plan but oftentimes when we're dealing with these types of bonds it's for a specific issuance we've got this noted under 2022 the plan does allow for you to move that project around so for example if the council [45:30] said you know what we're not going to do this project in 22 we'd prefer to hold off until 25. now obviously there's some other things happening where it sounds like this is more of a priority project but you do have the ability um to move that project within any of the years of the plan and also issue bonds within any year of the plan assuming that you don't go over that maximum now as dan mentioned we have drafted the plan with maximum flexibility here so estimated costs are currently 2 million 250 that does include that contingency amount um we do anticipate based on our conversations with staff that that amount that city would actually bond for would be far less than that 250. but just to provide again flexibility [46:17] as the council and staff have those continued conversations over the next couple of months about what the right mix is of issuance and then cash contribution um just going into those eight areas that are required in the plan of course on the site that's known as ubc north has been sold for redevelopment purposes with that in mind looking at constructing a new public work storage facility this would allow the public works department and the parks department secure storage space for storage of materials various equipment et cetera touched on of course the estimated cost of the project being roughly 2.25 million cash reserves here under available [47:02] public resources looking um approximately a million dollars or so being contributed for the project which would lower the borrowing amount but again you have the authority to go up to that 2.25 million we've got the overlapping debt and that just looks at the other taxing jurisdictions and provides you a snapshot of the level of debt that they have outstanding um under number six alternative uses of funds really what we're looking at here is that the other option for issuance is something called lease revenue bonds um generally speaking lease revenue bonds of course don't carry the general obligation pledge so you're going to see higher interest rates so that's why we're looking at sort of the first option for issuance here being the general obligation [47:48] capital improvement plan bonds just being that they are the most sort of cost efficient way for the city to finance the project at this time operating costs of the proposed project are expected to be minimal um there's no heating involved with this project minimal lighting etc so while the costs are not known of this new building of course i'm not expected to be much greater than what the city is currently dealing with with the current site um and then last but not least the plan um has the city looking at whether or not some shared facilities would be an option for the city with other municipalities given the type of use here on storage of course for public works and the parks department locating outside of the city limits um would not be feasible for the city and [48:34] also it would reduce levels of service here and then a couple of calculations based on state statute and some limitations that we're looking at really in the top part of the page what's noted here is that in terms of what the city has that is subject to the debt limit and that does not include any improvement bonds or on utility debt but what this is showing is that the city has the ability to issue up to about 67 million based on your market value um and debt that is applicable to the debt limit currently outstanding the city has about 4 million so lots and lots of room there and then the other test that we're mindful of is that the maximum principal and interest doesn't exceed roughly 3.5 million on an annual basis [49:20] when we are looking at roughly a million dollars of issuance for this particular project we're right at about 115 000 so again lots and lots of room that brings us to the end of the plan um happy to answer any questions or of course the council can open the public hearing prior to consideration of that resolution thank you [49:20] Mayor Mary Fasbender: jessica at this time council will open the public hearing and we have attendees either with the raised hand feature on zoom which we see none at this time no one in the audience one more time anyone on zoom that would like to speak to the public hearing this time i will close the public [50:07] hearing open the discussion for the council council discussion [50:20] okay no console discussion okay then i would look for a resolution council to approve a resolution adopting a capital improvement plan and providing preliminary approval for the issuance of bonds there under so moved your honor [50:20] Councilmember Folch: council member fulch [50:20] Councilmember Leifeld: and council member leiffeld [50:20] Mayor Mary Fasbender: additional discussion council no additional discussion clerk murtaugh please call the roll [50:20] Kelly Murtaugh: council member brox yes councilmember falch yes council member fox yes council member life held yes council member lund yes councilmember vaughn yes [51:07] mayor fassbender yes [51:07] Mayor Mary Fasbender: and that motion prevails thank you jessica thank you everyone enjoy your meeting and tonight we also have a resolution for awards of contract for west 4th street water tower reconditioning and with us we have by zoom ryan stemski [Stempski] welcome ryan [51:07] Ryan Stempski: thank you mayor can everybody hear me yes all right good um yes so tonight we are here to talk about the award recommendation for our west 4th street water tower reconditioning project and just a reminder on this item i've done this before but reconditioning is a little more than just painting our towers um [51:53] it includes that that interior wet recoating interior dry area recoating structural improvements the tower exterior coating of the tower obviously and then just kind of a fun fact we didn't currently have a mixer in the top of our tower so this also includes an improvement adding a mixer that we can control remotely with our scada system the mixer is necessary to improve water quality in the tower and also help prevent icing that formulates this time of year up in the top of the tower it can cause some damage in the tower and whatnot so some modern features some nice structural improvements etc in addition to the pretty paint job that we all see at the end [52:39] on february 9th the city did receive five bids on our project from contractors across the country um the low bid came from g l tank sand blasting and coatings they're out of shelby built shelbyville tennessee so um shows you kind of the the wide interest across country uh that that that low bid did come in at 722 500 with the alternate bid coming in at 3 500 so extremely competitive bids um just a reminder the alternate bid is for the school district to add lettering on the side of the tower facing the high school [53:26] specifically it would stay at home of the raiders that'd be a piece that they would pay for um and and so tonight we're at that competitive price recommending award of that in addition to the contract to allow the school to proceed with with that lettering um the low bid um if if you recall our engineer's estimate was at 1.4 million dollars so when i say significantly low um you know what i'm talking about um we we talked to some of the bidders and and we kind of asked you know why why are we so low with with the with the bids and whatnot and i really think we hit one element we hit the nail on the head when [54:12] we positioned our tower after all the aggressive early season water tower reconditionings across the state so we were one of the first in in that later end of july early august time frame um and we're willing to take our water tower offline during that time to get these aggressive bids so i think that played out really well that's what the bidding market told us um in their busy schedules there was a time slot and this project came in nicely um to fill those time slots so that that was one reason and then also if the council recalls we we did determine this project as a unique project it wasn't um required to have prevailing wages on the project so the competitive market also [54:58] was able to determine the the wages paid on these unique projects um on from these contractors across the country so um a couple things that really work to our advantage in the bidding market i can guarantee you i will not bring you bids this competitive in the future so um this one's this one's a good one uh the other piece on that little bit i do want to comfort the council as well our our consulting tape engineer klm did rigorously review the references they reviewed the financial history the project history of gnl talked with several different states in which they performed work over the last couple [55:44] years including minnesota though the reviews were excellent um there's some folks that are rehiring gnl um which which shows a lot there projects came in on time on budget klm did spend a long conference call with gnl going over the scope of the work making sure nothing was missed all components were addressed in the specifications and and the contractor did meet all the pre-qualifications to bid on the project so what that brings us to oh one other thing with klm i did want to remind folks that we have hired their services for full-time inspection of the contractor's work so that includes all [56:29] welds on the structural components it includes all coding thicknesses and types and processes of of the project so whenever the contractor is working there will be a third party inspector documenting all elements of the work with all that uh staff is recommending uh award in the amount of 726 726 thousand dollars to g l tank sandblasting encodings um and with that um i'll stand for any questions the council may have thank you ryan [56:29] Mayor Mary Fasbender: uh councilmember vaughn [57:16] Councilmember Vaughn: thank you honor brian the only thing i get a little nervous about with the bid which is favorable for us but how about change orders did this company [57:16] get to see what we have and what product there is because we all know what's going to happen if there's a change order then we're making decisions to increase this backup granted we have the budget for it um but but who did klm engineering take will they take any of the responsibility of what is going to be shown that they were bidding on or is it going to come back to the city if with a bunch of change orders or or change orders not very common in water tower reconditioning [57:16] Ryan Stempski: right um the level of detail and inclusion and the details plans and specifications that we hired klm to prepare um [58:01] i believe is this thorough enough to cover all of the anticipated concerns keep in mind before this planned preparation a couple years ago klm did do a detailed 75 page inspection report so we know what's up in that tower we know the elements we've got photos and documentation that built these plans and specifications so um it's not like they did it sort of blindly or templated they built the specifications according to specific observations and inspections of our tower and so no i don't believe that we will have um many or or any change orders um [58:47] i think they've got the scope nailed down and yes it's fairly uh uncommon for a reconditioning project of this magnitude to have change orders so that combined with klm did sit down and go through the deliverables of these specifications with gnl um that would be the time for gnl to say oh we didn't know a mixer was included or whatnot and that was not the case they owned up and docked our own they supported the bid amounts as they provided and and as associated with the specifications so through klm's work um we're pretty confident that this this will be delivered as at that total base bid amount [59:34] okay thank you [59:34] Mayor Mary Fasbender: thank you councilmember vaughn any other discussion council councilmember fox [59:34] Councilmember Fox: um ryan i appreciate hearing about the specific references and the specified scope conversation that klm had with gnl so thank you for sharing that and i am happy to move the the attached resolution to award the contract of the fourth street water tower reconditioning [59:34] Mayor Mary Fasbender: thank you councilmember fox second by council member lifevelt additional discussion council clerk merchant [Murtaugh] please call the rule [59:34] Kelly Murtaugh: council member brox yes council [1:00:20] member falch yes council member fox yes council member life held yes council member lund yes councilmember vaughn yes mayor fassbender yes [1:00:20] Mayor Mary Fasbender: and that motion prevails thank you again ryan thank you tonight under community development we have a resolution for a special use permit for auto repair global at 2550 millard avenue and we welcome back john hinsman [1:01:10] John Hinzman: yeah thank you mayor i'm looking to see if my presentation will come back up but try one more time here as i'm speaking here we've got a special use permit request before you and let's see [1:01:10] all right [1:01:17] okay 2550 millard avenue formerly greenlawn's lawn care here melard avenue is this location veteran park up here proposal is a special use permit to reuse the existing facility for an auto repair facility within the i-1 district their auto repair facilities along with retail facilities are allowed via a special use permit so no building construction at least exterior presented no site plan just the use of the facility itself planning commission did review this at their february 14th meeting held a public hearing there was no one that addressed it and very little discussion by the planning commission and a recommendation for approval on this so within your packet there is a resolution with five conditions pertaining to the operation of the [1:02:04] facility for your consideration just as a reminder with special use permits it is required that six of seven council members vote affirmative to approve a special use permit so i can stand for any questions thank you [1:02:04] Mayor Mary Fasbender: thank you john any questions for john at this time council council member vaughan [1:02:04] Councilmember Vaughn: thank you honor john i notice number five it says there's no outdoor storage of inoperable unlicensed or damaged vehicles it is a body shop correct [1:02:04] John Hinzman: right so anything they take in has to be has to go inside yep they can't they can't have unscreened materials that are that are out there there's no outside storage of an operable license so we're looking at a situation in which you're in an automobile [1:02:51] repair facility they need to be actively working on it there may be a situation in which they're outside and screen there's a requirement for the screening to occur but if they're unlicensed and inoperable over time that would not be allowed [1:02:51] Councilmember Vaughn: is the property screen now [1:02:51] John Hinzman: i believe it is they would need to do that as part of any storage they'd have out there okay thank you [1:02:51] Mayor Mary Fasbender: thank you councilmember vaughn any other questions council okay then i accept the most emotion approving a resolution of the city council of the city of hastings granting special use permit approval to operate a retail and service facility within the i1 industrial park zoning district [1:03:41] [1:03:41] Councilmember Lund: council member lund [1:03:41] Councilmember Fox: and council member fox [1:03:41] Mayor Mary Fasbender: additional discussion council clerk murray child [Murtaugh] please call the role [1:03:41] Kelly Murtaugh: council member brox yes council member forge [Folch] yes council member fox yes council member life held yes council member lund yes councilmember vaughn yes mayor fassbender yes [1:03:41] Mayor Mary Fasbender: and that motion prevails thank you john thank you council members do you have any announcements i know i think councilmember fulch did you [1:04:28] Councilmember Folch: yes mayor thank you um hi i just wanted to give everyone a quick update from the dakota broadband board i'm the city's representative and [1:04:28] the vice chair of the group this year and so um a few months ago i had uh sent an email to the council to give them a heads up that the uh the dakota broadband board was going to be uh taking on a project we're hiring a consultant to uh create a strategic plan for the group and so that is moving forward and a consultant has been brought on by the name of design9 and so what they're going to do is conduct business analysis of the current broadband environment within our entire county and they're going to pride provide future recommendations on operations and policies for the dakota broadband board to take on and so a part of this work is actually conducting stakeholder interviews with [1:05:15] various entities you know throughout our county and so that's going to be employers healthcare our school districts the local government agencies obviously but what's really key here is that they'd also like to identify those within the business community uh part of the work will be identifying opportunities to support economic development in the county as well and so i'm asking you that our council members and members of the public if anyone knows of good stakeholders that we should be involving in those uh interviews that will be conducted i think they're probably going to be conducted via you know video conferencing to make it easy for folks um to please let me know and uh they're [1:06:00] hoping uh that we provide names of folks who would be interested in participating uh yep uh later this week and so if you have any ideas please feel free to shoot me an email or uh send me a text message i'd appreciate that thanks [1:06:00] Mayor Mary Fasbender: thank you councilmember fulch and i have a couple announcements uh congratulations to the hastings area hastings area of commerce award winners in tech plastics katie lindbergh mike johnson emily bakery's in delhi and regina hospital and that event is this thursday snowshoe guided hike on sunday february 27th at jc park registration is required snowshoes poles and instruction will be [1:06:47] provided the event is free and offered in partnership with dakota county parks meetings coming forward are wednesday february 23rd the charter commission meets at 7 pm monday february 28th the planning commission meets at 7 pm wednesday march 1st the arts task force meets at 6 p.m and monday march 7th 5 30 city council has a workshop with county road 46 47 and 7 pm we have a city council meeting at that point if i could have a motion to adjourn [1:06:47] Councilmember Brox: council member brock's [Brox] [1:06:47] Councilmember Lund: and councilmember land [Lund] [1:06:47] Mayor Mary Fasbender: clerk merchant [Murtaugh] please call the roll [1:07:34] [1:07:34] Kelly Murtaugh: council member brock's yes council member falch yes councilmember fox yes council member life held yes council member lund yes council member vaughn yes mayor fassbender yes [1:07:34] Mayor Mary Fasbender: and that motion prevails and we are adjourned