City of Bigfork

Special Meeting March 22nd, 2004

Except for Motions made by the Council this is not a verbatim record of every statement made during the Council meeting. Discussions have been paraphrased to give general direction and understanding.

Members Present: Mayor Lonnie Kacon, Jean Lexvold, Steve Grover and Amy Tendrup Absent: Bob Zimmer Also Present: Kathy & Melvin Root, George Eilertson, Dick Grabko, Mark Maki, Denny Reagan, Julie Kennedy, Andy Shaw, Tarry Edington, Diane Larson, Jef Fisher and Steve Gilbertson

The purpose of the special meeting was to discuss water main repair costs, concerns regarding the hospital expansion, and TIF district financing.

Mayor Kacon called the meeting to order at 1:00 p.m.

Storlie administered the Oath of Office to newly appointed Councilor Steve Grover.

The first item on the agenda was the cost of repairs to the water main at Logger’s Restaurant. Storlie has discussed this issue with City Attorney Andy Shaw. Shaw advised that the request by Logger’s for the City to pay these repair costs constitutes a claim against the City that should be turned over to the City’s insurance company for determination of liability and payment. Storlie has sent a letter to the owners of Logger’s explaining this and requesting that they submit a formal written claim to the City. Once this is received, it will be forwarded to the League of Minnesota Cities Insurance Trust for their review.

City Engineer Julie Kennedy lead the discussion regarding concerns associated with the hospital’s expansion plans. Earlier in the day, she, Mayor Kacon, and Public Works Superintendent Mark Maki met with Dan Odegaard and Bill Loosbrock from the hospital to discuss these concerns. The primary concern was whether or not the current hospital building sits over a City force main. Kennedy received updated plans showing that it does not. She will forward a copy of these plans to the City. There was some concern about what direction the hospital is planning to expand. The City needs to ensure that expansion will not hinder our ability to access water and sewer lines in that area of the City. In addition, we need to ensure access to the City’s sewer ponds, which are located behind the hospital property. Kennedy stated that the hospital would likely be applying for a building permit soon. She suggested a few things that the City should ensure are included in the building plans before granting a building permit, one of which was a bar screen or basket system manhole to help with the problem of solid waste such as rubber gloves and towels entering the sewer system and causing problems. There was also some discussion regarding the city-owned lot that the hospital had expressed interest in obtaining. Kennedy explained that this particular piece of property would be expensive to develop due to the fact that it has the main drainage from the school and the ball fields crossing it to the river, which needs to be maintained. In addition it has gravity sanitary sewer line, a force main sanitary sewer line, and a water main running through it. Kennedy does not recommend selling or donating this property and then trying to maintain easements through it. Due to these issues, it was determined that this property was not a possible area of expansion for the hospital.

George Eilertson of Northland Securities was next on the agenda to discuss TIF district financing for the Steve Gilbertson project and possibly for the WilderNest project. Nick Skarich of Northland Securities participated in this portion of the meeting via speakerphone. Eilertson explained that both projects are eligible under the same type of TIF district. A timeline was distributed that lays out the steps necessary to adopt a TIF district, mostly pertaining to Steve Gilbertson’s project. This timeline included providing notification to the County Commissioner, County Auditor, and the School Board, adopting a resolution calling for a public hearing, review and approval of TIF documents, notice to newspaper, holding a public hearing, adopting a resolution creating the TIF district and approving the TIF plan, filing documents with the Commissioner of Revenue, and requesting district certification from County Auditor. We will begin with these tasks on Monday, March 29 and should be completed with everything by May 31. Eilertson explained that the City will need a formal request from Steve Gilbertson explaining his project and requesting TIF assistance before any work can be started. Gilbertson will work with Kennedy and Eilertson to get this accomplished. Once this is done, Northland Securities will advise the City on the length and other terms of the TIF. It was clarified that this will be a pay-as-you-go type of TIF, meaning that Gilbertson would provide for all of the upfront costs and would be reimbursed over the course of a set number of years with TIF revenue. There was some discussion as to whether or not tax abatement would be a better option than a TIF district. When the City sets up a TIF district, the tax revenue from the City, the County and the school district are all captured, and the County and school districts do not have any veto power. When tax abatement is requested, each entity makes their own decision as to whether or not they will participate. It was felt that the County and school district would probably not be interested in participating in tax abatement for this type of project. Furthermore, trying to secure tax abatement could put the project behind schedule. Kacon questioned whether or not the infrastructure put in for Gilbertson’s project could be used to service adjacent properties as well. Skarich stated that they could, however only that portion of the infrastructure within the TIF district boundary could be paid for using TIF revenue. Tarry Edington of the Itasca County Housing and Redevelopment Authority discussed the proposed WilderNest housing project. He explained that they are looking for approximately $115,000 worth of TIF assistance. Shaw questioned if the HRA would want the City to bond or if they would do a pay-as-you-go. Edington stated that the HRA is open to whichever is the better option for all involved. It was determined that since the HRA would need the money up front to install the infrastructure, someone, either the City or the HRA, would need to bond for that money and then be reimbursed through TIF revenue. The next step for the HRA is to meet with Northland Securities and come up with a recommendation to the City regarding their TIF district.

There being no further business, Mayor Kacon adjourned the meeting at 2:35 p.m.

Angie Storlie City Clerk

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