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02/18/97 City Council Minutes979 979 A REGULAR MEETING OF THE KALISPELL CITY COUNCIL WAS HELD AT 7:00 P.M. TUESDAY, FEBRUARY 18, 1997, IN THE COUNCIL CHAMBERS AT CITY HALL IN KALISPELL, MONTANA. MAYOR DOUG RAUTHE PRESIDED. COUNCIL MEMBERS JIM ATKINSON, CLIFF COLLINS, NORBERT DONAHUE, LAUREN GRANMO, DALE HAARR, PAM KENNEDY, DUANE LARSON, GARY NYSTUL, CITY ATTORNEY GLEN NEIER AND CITY MANAGER CLARENCE KREPPS WERE PRESENT. Mayor Rauthe called the meeting to order and led the Pledge of Allegiance. AGENDA APPROVAL Rauthe requested the addition of items F., an announcement of a commendation and G., a Montana Rural Water Systems Recognition Award on the consent agenda. Haarr moved to approve the agenda with the inclusion of F. and G. The motion was seconded. The motion carried upon vote. CONSENT AGENDA APPROVAL A. Council Minutes -Regular Meeting -February 3, 1997 B. Approval of Claims per Payables Register-$182,162.39 C. Authority to Bid Tax Increment Sidewalk Replacement Project D. Authority to Advertise for Engineer for Cleaning and Repairs on Primary Digester for Wastewater Treatment Plant E. Authority to Advertise for RFQ for Engineering for Center Street Pedestrian Crosswalk F. Commendation -Prudential Spirit of Community Award G. Montana Rural Water Systems Recognition Award Collins moved to approve the consent agenda. The motion was seconded. Nystul moved to modify E. on the consent agenda by having the traffic signal at 5`h Avenue West and Center Street as Phase I and the crosswalk as Phase II. The motion was seconded. There was discussion. Larson, Kennedy and Rauthe spoke against the amendment and Donahue, Grano and Haarr spoke in favor of the amendment. Grano called for the question. The amendment carried with Granmo, Haarr, Nystul, Donahue and Collins voting in favor and Kennedy, Larson, Atkinson and Rauthe voting against. Rauthe read a commendation for Aaron Bouscher for the Prudential Spirit of Community Award. He also presented acting Public Works Director John Wilson with the Montana Rural Water System Award for the Wastewater Treatment Plant. Upon vote the amended motion carried. HEARING THE PUBLIC zone Change and Annexation Re9uest Jim Lynch, 430 Lake Hills Lane, explained that he owns property north of Kalispell and recently requested a city zone change and annexation to the city and would assume the cost of sewer and water extension. 980 980 The Planning Board recommended denial of the request along with the FRDO office and the Planning, Economic and Community Development Director. He asked when this issue comes before the City Council that he be given the opportunity to have his planners present his case to the Council. Haven Field Sale Scott Hanson, Outlaw Inn employee, 4051 3rd Avenue West, spoke in support of the Outlaw Inn offer for Haven Field. PUBLIC HEARING Abandon "A" Street Knoll's Addition Proponents None • • • • - 1 •1= Rauthe closed the public hearing. Resolution 4315-Abandon "A" Street in Knoll's Addition Kennedy moved Resolution 4315, a resolution to abandon and discontinue the dedicated public street known as "A Street" running along the north side of Lot 9, Block 5, Knoll's Addition, Kalispell, Montana. The motion was seconded. With a roll call vote the motion carried with Atkinson, Collins, Donahue, Granmo, Haarr, Kennedy, Larson, Nystul and Rauthe voting in favor. Haven Field Offers Two bids were received and opened on January 30, 1997 as follows: Purchase Price Earnest Money Regency Inn $725,000 $37,000 Outlaw Inn $738,700 $37,000 See attached Comparative Analysis of Haven Field Purchase Proposals. Haarr moved to direct the city manager and staff to proceed with compiling a development agreement that will lock down construction schedules and that agreement be reached in a maximum of 30 days with the Outlaw Inn. The motion was seconded. Nystul-The offer submitted by the Outlaw Inn and their time frame clearly is the better financial revenue stream for the City of Kalispell. I think that this is a good start of a new addition to the south entrance to the City and I think that the other proposal clearly would be nice but in the interest of the economic conditions we are experiencing that the probabilities are not there. that the second phase of their project would come on line in a sufficiently current time frame to allow us to maximize the use of the proceeds from the property so I think the Outlaw is clearly the overall favorite project. Donahue -I'm in favor of this sale and to(the Outlaw if we sell it to anybody, I think we should sell it to them, they have been good citizens of the community, they have paid their own way, they have done an outstanding job of being good citizens that draw citizens to Kalispell, however, having said that I don't think that I can agree at this point, but it won't affect my vote. I don't think I can agree at this point with the comments of the city manager relative to what will be done after this is done and that it will lock down the revenue streams for bonding purposes for funding ballfield improvements. I don't think that we have ever discussed what is going to be the total amount that the City is going to expend in the ballfields. 1 77 I • 981 I don't think we have ever come to a conclusion on that, but the estimated cost has been produced and that cost is about 21 times what the original estimate was upon which we based our original approval of that project and the sale of this property is not going to be nearly enough to handle the ballfields. Before we commit ourselves to a bonding procedure I think that this thing has to go back to the Council for discussion with that in mind. I am not prepared to give my imprimatur to the bonding intention of this but I do vote in favor of the sale to the Outlaw. Rauthe-I guess I cannot let the record end with that comment because this Council has discussed the strategy of the sale of Haven Field going toward the development of the alternate ballfield sites and the sale of Daley Field going toward the improvements on the airport. That has been the subject of probably dozens of hours of discussion and so I would like the record to show that we have indeed given direction to staff and this implication was carried forward by Council not by staff, that Haven Field would be the source of revenue for moving the fields and developing a new site. Donahue -I'm referring to this work that was given to us back in January of last year entitled the Kalispell City Airport Athletic Complex Redevelopment Plan and Analysis. In that it does not say anything at all about bonding to finance the ballfields. It says in there that the estimated price of the sale of Haven Field will be roughly $850,000 and then it goes on to say the expense of improving Haven Field will be approximately $850,000 but nothing further was said about financing anything over and above that. We have not made that decision that I know of in a Council meeting. Now, it may be that we should go quite a ways further, but we haven't discussed that the estimates of the costs come in, as I recall, a million nine hundred some odd thousand. Which is about 2} times what we originally were told we were going to realize for the sale of Haven Field. I'm in favor of selling Haven Field but I don't know yet if we have committed to how much money we want to spend on the ballfields. We may spend a lot and we may spend a little, but it is going to be a burden on the City if we spend a lot more than we are going to be getting from Haven Field. And that is what I would like this Council to make up it's mind as to what it is going to do. We have probably talked about it from time to time but we never made an actual decision. So maybe the time has come to look at Plan B, I don't know. I think we should talk about that. That is the only thing that would temper my vote on this measure tonight. I can refer you to this, if you want to pick it up and read it, it is there, in black and white. Rauthe-Precluding anything that has been said since then? Donahue -It hasn't been amended. Kennedy -I would agree with Councilman Donahue that we probably have not had an actual motion saying that we will be offering bonds in order to get the project on line however this Council has in many, many, many public hearings and at many times in long discussions, talked about the ballfield, talked about the movement of all of the ballfields to a new facility, talked about and know full well that the sale of Haven Field was not going to pay for those improvements. It has been the underlying intent of this Council during all of our discussions to the best of my knowledge that we would be funding the improvements for the ballfield and have been shown that it is close to a two million dollar facility. This bond analysis that we have before us this evening shows that it can come really close in line with the sale of the Haven Field to the Outlaw Inn over a period of time by the sale of bonds that the Tax Increment District that we created there, will be able to fund this improvement. That tax increment district was included to, include Haven Field so that we could include the ballfield in this. It was done intentionally by this Council. 982 982 Yes, it will come back before this Council and come back before this Council when we go to bond sale. It always does. All of these issues will continue to come back before the Council. This is the first in the process. Sell Haven, get some money, then let's go forward from that point. I also, at this point would like to urge the City of Kalispell, our city staff to go forward with this as quickly as we can, signing of that lease for the State lands property. I would also hope that we would go forward immediately with preparing our engineer, that has been working on the project, to prepare the construction documents. If we do not get an engineer working on those construction documents for this season, we will miss the 1997 season. We are already going to have one of the fields for ball playing not utilized this season and if we don't get going with this we will not have it on board for next year for the ball players either. And what we guaranteed them, we told them one year without the Haven Field, and I'm afraid if we don't get going, and take the length of time that this Council has taken, we will miss this season, so please let's move forward, let's show good faith we have given to this community and to all the people who have worked so hard on it and let's get those construction documents done and the lease signed. At this point could someone update us from staff where we are with signing that lease? Rauthe-We have a motion to enter into negotiations and that is really what we should be continuing our discussion on, we can revisit that after the vote. Kennedy -Very good, as long as we will hit it. Collins -I have a little question with regard to the clarification of the wording of the motion. Your wording might of stopped short. On the other hand maybe it will work. I can understand if it stopped short because you become faced with the possibility of having so many things in a motion. Most of our motions are usually not that long. But your motion as I understood it was to direct the city manager and staff to proceed with compiling a development agreement and then you specified with the Outlaw Inn and then you mentioned the 30 day maximum time frame. We all have in front of us wording here, notes from the city manager, and we have an understanding of what else is involved in that motion but after Donahue mentioned what he did, your motion does not indeed and infers in my mind, if I understand it alright, but it indeed does not spell out construction schedules, legal minimum tax payment etc. with regard to bond payment wording. Can we just infer that is in there? Rauthe-We need to move to amend unless you want to insert it and have the second agree with that? Haarr-That is fine to insert the terminology. Nystul (the second) agreed. Rauthe-So basically quoting the recommended motion -to direct the city manager and staff to proceed with compiling a development agreement that will lock down construction schedules and a legal minimum tax payment that will insure a revenue stream that can support bond payments based upon the projection submitted in their offering documents suggested requiring a 30 day maximum time frame for reaching such an agreement and to accept the offer with the Outlaw Inn. Collins spoke in favor of the motion and thanked the individuals who submitted offers. The motion carried unanimously with a vote. 983 Granmo-With the legislature contemplating passing a sales tax bill, which is proposed by MACO, if that passes, isn't that going to have a tremendous effect on the TIF, because the differential taxes are going to be so much lower, is this going to under sale the bonds for this or any other projects that, I'm sure the uncertainty, until such time as it is enacted or completely dead, the bonding companies are going to look very sideways at Tax Increment bonds. Rauthe-It is not going unnoticed, the bond counsel is encouraging that the legislature look at the terrible impacts that it will have Statewide on Tax Increment Districts and to devise a formula for making them well for the duration of the Tax Increment District. It is a complicated issue and it hasn't passed yet either so there is no damage done yet, it is just simply in the talking phase and by the time anything could be contemplated toward preparing a bond issue, it will be fully decided and the legislature will be adjourned and bond counsel was here last week. Krepps-We did have the meeting with the bond counsel and had that particular discussion and it is certainly a potential problem for all the TIFS, not just Kalispell but all the cities using TIF financing. Granmo-the reason I bring this up is because the speed we are prepared to move on this will anticipate spending what we get, the assurance that we are going to be able to sell bonds to complete and if we are not able to do that, we are in real trouble until the legislature says no or the election is held. Krepps-The target date we were talking about the other day was mid April, we will know one way or the other, whether TIFs are up or down. Rauthe-This process is a 30 day process before we can even come to a resolution. Granmo-I understand that, this does not have anything to do with the bonds, it has to do with selling the property. Krepps-Back to the discussion that Pam touched on awhile ago, that is the reason we have to be very certain of our legal document at least with the Outlaw Inn, we may not be able to tie anything down until that April date, whenever the legislature is done. We may not know what we do or don't have. Kennedy -We won't be able to tie down what, I'm not understanding what you are indicating Clarence. Krepps-In terms for actual leases for the ballfields and or the engineering, whether it should move ahead or not move ahead. Kennedy -Why would we not be able to prepare construction documents when we have indicated all along that we are going to get this done. Maybe it would be a longer time frame or maybe more community dollars coming into play but I don't understand why we couldn't go forward so that we don't waste time, if it takes 60, 90, 120 days to prepare the documents, we will miss the season if we don't get going. Krepps-That's correct and that is a concern, but the concern would be if, at this point you would have a net of somewhere in the area of $650,000. You have a project of a million nine proposed, do we want to move ahead with the construction design, take away another, if I remember correctly, one hundred some thousand odd dollars for design. You are down to four hundred some thousand, maybe five hundred some thousand dollars to deal with, in terms of construction. Are we willing to do that process if we don't have enough funds to do the rest of the project? That is the question and that would be the question the youth complex supporters will have to answer for us also, in terms of what can they raise. 984 984 Will it be a million two, will it be a half a million, that's going to be some of the questions that has to be answered. Kennedy -Right, I agree with you that those questions will have to be answered but yet going forward with construction documents, still, I believe instead of Phase I being as large as what we had hoped, maybe Phase I would be considerably smaller but yet I think that the cost will be the same no matter what, we will be incurring those construction documents. Krepps-My point is that within this 30 day maximum time frame, we are going to know after we get the document put together what we can plan on in the long term or the short term because if we get into the part about the minimum tax payment that will be a key, or a fee in lieu of. Kennedy -Well as a City let's just not be holding the project back, let's be forward and try to get going as quickly as we can, so we are not putting the ball players out of their home without replacement. Rauthe-I don't want to make them nervous that that's going to happen. I don't think we ought to do that because that is not what is being suggested here. There are a thousand bills at the legislature and only a few are going to pass and this is just one of them, so I don't think we need to worry them to death now at this point in time or cause undue concern. It might prompt people to let the legislature know that they ought not mess around with local governments and their ability to operate Tax Increment Districts as was authorized by the legislature previously. So if there are people that are concerned.about those issues, it is time to let the legislature know. Krepps-Just as a for instance, there are about 4 other cities in the same situation we are in which will all be discussing with the legislature. Rauthe-But bond counsel did apprize us, was very aware of that potential. Kennedy -The question that I had asked was to have staff address the issue of the lease, where we are with the lease. Krepps-Currently we basically have an agreement to bring to you in terms of concept. Both Glen, Larry and I have reviewed the form, we didn't have any particular problem with it, I think what we will do now is go back and start plugging in the numbers and bring that back for your review. So that should be hopefully at the next workshop. Kennedy -Thank you. Resolution 4316-Adopt West Valley Neighborhood Plan The West Valley Neighborhood Plan is a culmination of 23 meetings over a year. Krepps received the transmittal letter from FRDO. Based upon the minutes, public participation, and time previously invested in the plan, Krepps recommended approval of the West Valley Neighborhood Plan. Atkinson moved Resolution 4316, a resolution of intention to adopt, revise or reject a recommended Neighborhood Plan amendment to the Kalispell City -County Master Plan. The motion was seconded. The motion carried upon roll call vote with Atkinson, Collins, Donahue, Granmo, Haarr, Kennedy, Larson, Nystul and Rauthe voting in favor. 1 1 • 985 Resolution 4317-Purchaseof Lot 39-cV.LLt 1Meadows Last summer, Mr. Al Sylling of Arico Inc. bought several lots in the Northwest Section of South Meadows. He installed infrastructure and proceeded with home building and selling. Since South Meadows subdivision was platted in the 80's without infrastructure improvements, the City was not able to require the dedication of Lot 39 as a public right-of-way. This lot was intended as a future roadway and will be needed as a second access when the land to the west is developed. A discussion was held with Glen Neier and Al Thelen and indicated that Council authorization was given to purchase the lot. John Wilson negotiated with Mr. Sylling and arrived at an $8,000 purchase price. This purchase was not anticipated in the budget and will be charged 1/3 each to Sewer, Water, and Street Departments. Krepps recommended approval to ensure future access in the appropriate location. Larson moved Resolution 4317, a resolution relating to the acquisition of Lot 39,South Meadows subdivision, Kalispell, Flathead County, Montana, setting a fair market value, identifying the interest to be acquired, and declaring an effective date. The motion was seconded. It was consensus to suggest to future Councils that if at some future date the property to the west is developed that this street be sold to the developer at a reasonable price to recover the costs from the developer for his road at that time. With a roll call vote the motion carried with Atkinson, Collins, Donahue, Granmo, Haarr, Kennedy, Larson, Nystul and Rauthe voting in favor. Resolution 4318-Private Fire Suppression System Retort In response to developer's concerns, Krepps initiated an Internal Study Committee on November 26, 1996. A review of findings revealed that: 1. Kalispell is very expensive in terms of fire service connection fees. 2. Due to cost of connection fees related to fire suppression, the City is indirectly encouraging developers/owners to forego the installation of sprinkler systems by building to different code standards that are not as effective in controlling fires but are much less expensive due to our high costs of connection fees. 3. In actual fire situations, a sprinkling system with 5 heads activated for 20 minutes will result in 2,000 gallons of water usage that immediately begins suppression effectiveness. This is in comparison to a 20 minute response lag -time for the Fire Department that could use over 1,000,000 gallons of water and create more fire/water damage results. 4. Response time for sprinkling systems insure a reduction of the potential loss of life and/or property. 5. By increasing sprinkler systems, the entire hydrant system may be reduced in numbers and/or costs. 6. Some businesses, by installing fire sprinkling systems, may experience a lower insurance premium. 986 986 Based upon the Committee's findings; the unanimous concern about the disincentive that has been created; the unanimous recommendation to reduce, discount, or waive fees for sprinkler system connections; and the unanimous concern that the City is not competitive with other cities that are not charging this type of fee or are giving governmental monetary assistance to encourage fire sprinkling systems, Krepps highly recommended that the City eliminate the additional charges for fire sprinkling connections to the water system. The City should set a standard that creates a long-term benefit directly to all businesses and indirectly to the safety of citizens of Kalispell. Kennedy moved Resolution 4318, a resolution to amend the fees, schedules, rates, charges and classification imposed on the customers of the City of Kalispell Water Utility. The motion was seconded. The motion carried upon roll call vote with Atkinson, Collins, Donahue, Granmo, Haarr, Kennedy, Larson, Nystul and Rauthe voting in favor. Kennedy moved to authorize the refund for the connection fee to Loren's Auto Repair. The motion was seconded. Kennedy spoke in favor of the motion. Upon vote the motion carried unanimously. FOR YOUR INFORMATION Blood Drawing Downtown Rauthe informed anyone interested in giving blood, the Red Cross would be at Northwest Montana Human Resources on Friday, call for an appointment. Next Work Session February 24, 1997 7:00 p.m. Next Regular Meeting March 3, 1997 7:00 p.m. ADJOURN The meeting was adjourned at 8:15 p.m. Z),a- Fcv�t�,,, Dougla D. Rauthe, Mayor ATTEST: Debbie Gifford, CMC Clerk of Council Approved 3/3/97 1 1 1