Loading...
09-06-2023 Work SessionSeptember 6, 2023 A work session meeting of the Scandia City Council was held on the above date. The meeting was conducted in the Council Chambers at the Scandia Community Center and over an electronic platform. All participants who joined the meeting remotely could hear each other and contribute to discussions. Mayor Christine Maefsky called the meeting to order at 6:30 p.m. The following were present: Council members Heather Benson, Steve Kronmiller, Mike Lubke and Mayor Christine Maefsky. Council member Jerry Cusick joined the meeting later. Staff present: City Administrator Kyle Morell, Public Works Director Charles Fischer, Fire Chief Mike Hinz, and City Treasurer Colleen Firkus. APPROVAL OF THE AGENDA Lubke, second by Kronmiller, moved to approve the agenda as amended. Motion carried 4- 0. Scandia Heritage Alliance Water Tower Barn Project Update Susan Rodjso 21450 Pomroy Ave., and John Herman, 23355 Quentin Ave., updated the City Council on the status of the SHA Water Tower Barn Project, and asked for Council direction on two issues. State funds of $2.2 million has been approved. Coming from the General Fund, rather than bonding, no financial match is required, there is more flexibility on use of funds and the nature of entity that can be the operator of the cultural center. The DEED project manager confirmed the flexibility to use Historic Tax Credits (approximate value $300,000) or Legacy Grants (estimated $150-$200,000) through the MN Historical Society, which will require registration on the National Historic Register. However, there has to be a historical structure to meet the requirement for the National Register. The Water Tower Barn is unique in Minnesota and two similar ones in California have been put on the National Register. SHA is asked the Council’s permission to approve reconstruction of the original East Section ahead of the project to meet the “structure” requirement. Such a structure will also generate more interest, and be a gatekeeper for legacy grants and tax credits. Two pathways for additional funding are: Option A – applying for state & federal tax credits after putting up the building. Or Option B - quality for a legacy grant. Secondly, SHA is requesting Council approval to create a for-profit entity subordinate to the SHA non-profit entity. Federal Historic Tax Credits require formation of a non-profit entity that with a bank can benefit from the credits and provide 80% of the value back to the project. This is also allowed under the state funded DEED grants. SHA would be the managing partner for both entities and manage operations. Tax credits are likely more valuable than a Legacy grant. After 5-years the Tax Credit Investor will normally exit the entity and be wholly owned by the nonprofit SHA. Next steps are to meet with the City Administrator and iron out the steps to proceed, and to review the development agreement to accommodate the for-profit entity. Herman verified that the tax credits and grants are mutually exclusive as one requires a nonprofit entity and the other a Scandia City Council Work Session September 6, 2023 Page 3 of 3 for-profit entity. Council requested input on the proposed mural on the side of Water Tower Barn, whose purpose is to cover the side of the building with no siding. It was confirmed the reconstruction would be taken down as the project proceeds. Kronmiller, seconded by Benson, moved to approve the reconstruction of the original East Section of the Water Tower Barn to meet the requirements for the National Register. Passed 4 – 0. Lubke, seconded by Benson moved to allow SHA to credit a legal for-profit subordinate entity to allow application for Federal Historic Tax Credits. Motion passed 4 – 0. Approve Special Event Permit for the Grillium Kronmiller, seconded by Lubke, moved to approve a Special Event Permit for September 9, 2023 with the conditions outlined in the staff report. Motion passed 4 – 0. Hockey Rink Board Replacement Public Works Director Fischer requested the Council utilize excess fund balance to replace hockey rink boards this year as the boards are very deteriorated. The market for used rink boards across the state and country is volatile and an opportunity exists now to obtain used boards. Fischer presented 3 options: 1) New installation, most expensive at $293,750; 2) Used system, modifying the boards to allow Zamboni access utilizing Public Works staff. Refaced fiberglass dasher boards, aluminum frame, and old system removed by contractor. Cost $149,620, and 3) Used system, includes a maintenance door to allow Zamboni access with no modification needed. Includes refaced fiberglass dasher boards and aluminum frame. A seamless glass system creates better visibility and a more pleasing aesthetic view. Old system to be removed by the contractor. Cost $146,620. Councilmember Benson asked if using fund balance will affect the city’s bond rating to acquire large bonds next year. Administrator Morell did not know, but could inquire with the city’s financial advisor. The current boards will not last this season. The plan is to have the installation done by Thanksgiving. Kronmiller, seconded by Benson, moved to support Option 3. Motion passed 5-0. Benson, seconded by Kronmiller, moved to transfer $146,620 from the General Fund to the Parks Capital Fund for the purchase of a new rink system. Motion passed 5 – 0. Waste Management Negotiation Extension Administrator Morell reported he is waiting to hear back from WM on the proposed contract and required the Council extend the negotiation period 30 days. An Ordinance draft will be available for their review at the next meeting. Councilmember Benson questioned that all businesses have to have the service as two businesses in town bring their trash home and put in their own trash. Councilmember Kronmiller also took issue with requiring to use the city’s hauler if there is a reasonable alternative. Benson suggested an opt out with city approval provision. Morell will bring the change the draft with the new language included. Scandia City Council Work Session September 6, 2023 Page 3 of 3 Benson, seconded by Lubke, moved to extend the negotiation period with Waste Management 30 days with an option for more extensions. Motion passed 5 – 0. 2024 Draft Preliminary Budget Administrator Morell presented the draft 2024 budget with a changed Capital Improvement Fund to reduce the tax rate to match the 2023 rate based on the estimated tax capacity from Washington County. Councilmembers discussed cutting the Broadband budget from $250,000 to $150,000 to reduce the tax rate. The Internet Action Committee (IAC) wants to make sure they have matching funds available. The budget can be adjusted accordingly if there is a meeting with Midco to get a final expansion price tag prior to the final levy deadline in December. Councilmember Kronmiller pointed out they could set a preliminary levy at the higher tax rate in September and can reduce it in December. There is sufficient fund balance to cover matching needs with time to review project expenses and funding/levies before the fund runs out of money in 2027. Bob Wilmers, IAC, 23219 St. Croix Tr., said the federal funding managed by the state will use the same criteria as in the past, and an important part is the local match to give us enough points to get some of the $650,000,000 grant money. Additional funds could accelerate the build-out finishing within 16 months. There are 400 households left in city to be served by broadband, which includes more expensive areas to reach households which requires more money. It was pointed out May Township used all County money with no match and perhaps Scandia could go back to County request funding to assist this final build-out. There was some discussion on the dramatic impact of bonding and any state road funding being available. With a population under 5,000, Scandia is eligible for small cities funding approved by the legislature but the amount is unknown. Cinnamon Bun Day Funding Gammelgarden, the Scandia-Marine Lions and the City contributed funds in the past. Mayor Maefsky believes it is good public relations for the city and businesses. Kronmiller, seconded by Benson, moved to contribute $300 towards Cinnamon Bun Day. Motion p assed 5-0. ADJOURNMENT Benson, seconded by Kronmiller, moved to adjourn the meeting. Motion carried 4-0. The meeting adjourned at 7:00 p.m. Respectfully submitted, Colleen Firkus City Treasurer