May 29, 2018

REGULAR COUNCIL MEETING
CITY COUNCIL CHAMBERS, CITY OF ALBERT LEA
Monday, May 29, 2018, 7:00 P.M.

PRESENT: Mayor Vern Rasmussen, Jr., Councilors Rich Murray, Larry Baker, Jason Howland, Robert Rasmussen, Reid Olson, and Al Brooks. Also present were City Manager Chad Adams, City Attorney Kelly Martinez, and City Clerk Daphney Maras.

CEREMONIAL ITEMS

A. Appointment to Library Board – Mayor Rasmussen asked council for a motion to appoint Rebecca Tennis Hanson to the Library Board.

MOTION: Move to approve Rebecca Tennis Hanson to the Library Board.
Motion made by Councilor Baker, seconded by Councilor Rasmussen. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.

PUBLIC FORUM

Kimberly Jameson spoke of the proposed agreement between the City of Hartland and the Albert Lea Police Department. She asked that this agreement not be approved tonight. She stated, in her opinion, this agreement will cause greater conflicts in the City of Hartland.

Mayor Rasmussen noted no one else is present to speak and closed the Public forum.

Adams reviewed each item on the agenda.

CONSENT AND APPROVAL OF AGENDA

A. Approve Minutes Of The May 14, 2018 Regular Council Meeting
B. Approve Minutes Of The May 14, 2018 Work Session
C. Licenses & Permits (See Attached List)
D. Resolution Accepting Donations Presented To The City Of Albert Lea
E. Resolution Declaring ‘Wind Down Wednesdays’ As Community Festivals Within The City Of Albert Lea
F. Resolution Granting A Variance To Structure Setback – 1452 Nicklaus Drive
G. Resolution Approving A Lot Reconfiguration Through A Certificate Of Survey For Property Described As Lot 2, Blk. 14, Wedgewood Cove Estates
H. Resolution Amending Lease Agreement With State Of Minnesota For The Use Of City Arena Parking Lot
I. Resolution Amending 2018 Fee Schedule Regarding Weed/Grass Mowing by Parks Department
J. Resolution Supporting Economic Development Grant Application

MOTION: Move to approve the consent agenda.

Motion made by Councilor Baker, seconded by Councilor Brooks. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-84 thru 18-90
included with these minutes)

PETITIONS, REQUESTS, AND COMMUNICATIONS

Shellrock River Watershed Restoration & Dredging Update – Andy Henschel, District Administrator provided an update on the Fountain Lake Restoration project. He invited council, staff, and the community to an open house on June 6th at Edgewater Pavilion from 3-6 p.m. He mentioned there will be staff available to discuss and answer questions regarding the dredging project.

He reported preparations for dredging Edgewater Bay are well underway and the dredging contractor, J.F. Brennan Company, Inc. anticipates the project will take two full dredging seasons – 2018 and 2019. Lake bottom depths will increase by 2-5 feet. Dredging is expected to result in better water quality. Henschel presented a map of the project on Edgewater Bay along with the anticipated schedule. To Baker’s question, he answered the setback from the shoreline will vary depending on where the work is being done at any given time.

Howland thanked Henschel for his efforts in continuing communication with the council and the community. Howland asked if this project would interfere with the Governors’ Fishing opener in 2019. Henschel responded that he does not see this project interfering. Howland asked where the original dredge is that was purchased several years ago. Henschel said the company that was awarded the project chose not to use the dredge. He explained the SRRWD staff and Board are in the process of deciding what the best process is moving forward with the dredge. He said one option is to sell the dredge. If it is sold, the money will be put back into the dredging project. Further discussion continued between council and Henschel.

Henchel continued with a presentation of the SRRWD 2018 budget. Noting the income for 2018 is just over $14 million. He provided an overview of the expenditures listing the costs involved with the following programs and projects:

• District Cost Share Program
• Bouser Targeted Watershed Program
• Stormwater Management Project
• Sub watershed Projects
• Dredging Elements
• Water Monitoring

Henchel discussed projects and grants in collaboration with the City of Albert Lea that include:

• Shoreline restoration
• Green-core representative, who will be housed at SRRWD office but will be available to assist City staff on surveys of trees.
• One Watershed One Plan project.

Baker asked if the City may obtain a copy of the SRRWD budget to which Henchel said he would provide a copy of that information.

UNFINISHED BUSINESS

Ordinance 214,8d Regarding Off-Sale Liquor Increase (2nd Reading)

Adams explained the first reading of this ordinance was held at the May 14th City Council meeting. State law mandates that off-sale liquor license fees be decreased by $100 if the licensees follow certain procedures to discourage illegal use of alcohol. An amendment to section 6-107(i) will reflect the mandate and ensure that the cost reduction be memorialized, for the benefit of both the licensees and city staff. It is hoped that the procedures will be encouraged through the city’s “Best Practices” program.

Motion made by Councilor Baker, seconded by Councilor Brooks. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Ordinance 214,8d
included with these minutes)

Ordinance 215,8d Amending Floodplain “F-2 Flood Fringe” (2nd Reading)

The first reading of this ordinance was held at the May 14th City Council meeting. The Planning Commission recommended amending the Ordinance to allow for development within the “Flood Fringe/Zone AE,” outside of the determined floodway. This change would allow developers or owners to develop structures within the fringe area, outside of the floodway if flood zone rules and building codes are followed. Within certain limitations and exceptions, building lowest floor levels would be required to be one foot above the Zone AE determined elevation. This would allow for some additional flood safe development to occur within several areas of the City.

Motion made by Councilor Brooks, seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Ordinance 215,8d
included with these minutes)

Resolution 18-91 Permitting Publication of Ordinance Summary for an Ordinance Amending the Floodplain “F-2 Flood Fringe”
Summaries of ordinances may be published if they reasonably inform the public of the effect and intent of the Ordinance. Summaries fulfill all legal requirements as if the entire summarized matter had been published and also directs the public how to obtain the complete Ordinance. This must pass by a four-fifths vote by Council.

Motion made by Councilor Brooks, seconded by Councilor Murray. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-91
included with these minutes)

Resolution 18-92 Authorizing Agreement with City Of Hartland for Enforcement of Certain Ordinances

At the May 14th Council meeting, a motion was made to move this item from the Consent agenda to the New Business agenda to allow for discussion of the proposed agreement with the City of Hartland. The agreement would authorize the City of Albert Lea to perform certain services in the City of Hartland. After additional conversation, it was agreed that postponing the vote would allow Albert Lea Police staff to further review investigations and enforcement to ensure compliance with Hartland’s ordinances. The motion to approve was rescinded and this item was tabled to the May 29th meeting. Additional information has since been provided and a representative from the AHS (Animal Humane Society) will also be at the May 29th meeting.

Baker asked the representative from the Humane Society, Keith Streff, Senior Humane Agent of the Animal Humane Society in Golden Valley to provide the process of removing the animals if necessary. Streff explained his staff will work with local law enforcement to bring individuals into compliance. If animals need to be removed, the AHS would bring a team of professionals to remove animals and transport them to the AHS in Golden Valley pending the investigation. This process allows the owner due process as it would give the owner 10 days to resolve the issue or seek legal counsel.

Howland said his opinion has not changed since the last meeting and will be voting no. Although he understands the City of Hartland is in a bind, he does not think it is in the City of Albert Lea’s best interest to provide enforcement for other communities as it sets a precedence. Baker said he voted to table this issue at the last meeting due to the lack of data. However after receiving additional information, he believes this is a situation where the City of Albert Lea can help a smaller surrounding community in need of services.

Mayor Rasmussen spoke of the significance of supporting the regional areas of this county. He noted there is no cost to the City of Albert Lea for these services and reiterated the importance of continuing to look for ways to help.

Motion made by Councilor Olson, seconded by Councilor Rasmussen. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Olson, Rasmussen, and Mayor Rasmussen. Howland and Brooks voted Nay. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-92
included with these minutes)

NEW BUSINESS

Resolution 18-93 and Public Hearing Approving Tax Abatement for Certain Property Pursuant To Minn Stat. 469.1813

A Public Hearing is being held to consider abatement of property taxes levied by the City on the following properties identified as tax parcel number:
Address Parcel Number
1452 Nicklaus Drive 34.443.0090
2170 Palmer Circle 34.431.1180

Council adopted the Tax Abatement Policy to provide incentives to encourage construction of new owner occupied and rental residential housing units within the City. Persons constructing a single family home, duplex, or multi-family complex that file an application and obtain formal approval from the appropriate local jurisdictions between January 1, 2017 and December 31, 2019 shall be eligible to receive 100% tax abatement of the City’s share of the increased real estate taxes resulting from the newly constructed housing unit for a period of five (5) years.

Mayor Rasmussen opened the public hearing. He called three times. No one spoke. Mayor Rasmussen closed the public hearing.

Motion made by Councilor Baker, seconded by Councilor Rasmussen. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-93
included with these minutes)

Resolution 18-94 Providing for the Sale of $2,505,000 General Obligation Improvement Bonds, Series 2018A

Adams explained per the City Charter, the City of Albert Lea has the authority to issue General Obligation Improvement Bonds to provide financing for assessable public improvement projects undertaken by the City. Staff recommends the sizing of the bond to be $2,505,000 to finance City improvement projects, including the 2018 Neighborhood Improvement Project, the 2018 State Aid Street Project, the Downtown Sidewalk Project, the Johnson Street Reconstruction Project, the Downtown Parking Project and the Bay Oaks Drive & Sundance Lane Project. The proposed bond would have a term of 10 years and be sold competitively. Rebecca Kurtz of Ehlers & Associates will be in attendance to review the bond sale.

Rebecca Kurtz of Ehlers and Associates was present and provided fine points of the sale of the General Obligation Improvement Bonds in the amount of $2,505,000. She explained that the proposed financing is for the 2018 street and utility improvement projects as noted by Adams. The principal would be paid in 2020 through 2029 with a call date on any bonds maturing in 2027 and eligible for prepayment or refinancing. She is recommending these Bonds be rated as they have in the past noting the City of Albert Lea currently has an AA-rating through Standard & Poor’s. Ehlers & Associates will continue to look for refunding opportunities. Kurtz said the June 11th council meeting is the anticipated date to award the bonds and funds would be available on June 28, 2018. She compared rates to past years.

To Mayor Rasmussen’s question, Kurtz reported that the Series Bond 2018A would fund 6 – 2018 street projects noting 45% of the bond will be repaid with assessments to property owners of the benefitting properties.

Motion made by Councilor Howland, seconded by Councilor Baker. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-94
included with these minutes)

Resolution 18-95 and Public Hearing Permitting an Agreement for Loan Of City of Albert Lea Economic Development Fund and Revolving Loan Fund With Mortarr, LLC a/k/a Vault Properties LLC.

Murray announced he will abstain from the discussion and voting due to his relationship with one of the owners.

Adams stated the proposal before council is to sell a portion of the Freeborn Bank Building to Mortarr, LLC aka Vault Properties, LLC. The sale is subject to approval by council of the sale agreement which also includes either a registered land or common interest community survey. The City owns this real estate located at 201 Broadway Avenue South in Albert Lea and the building is known as the Freeborn Bank Building. The City seeks to sell, for $100,000, a portion of the bank building to include the main floor mezzanine, second floor, and a portion of the basement and roof for utilities to Mortarr, LLC aka Vault Properties, LLC. They would provide a down payment of $10,000 with the remaining balance financed via a City Economic Development Fund and a Revolving Loan Fund Agreement with Mortarr, LLC which is the subject of the second public hearing being held tonight. The sale of this portion of the building would assist Mortar, LLC aka Vault Properties, LLC to create working capital and hire additional employees with great paying full time jobs within Albert Lea. Mortarr also intends to renovate these portions of the building and make necessary utility improvements sized appropriately to compliment future utility needs for their expected growth in the Freeborn Bank Building and also the Jacobson Building. All improvements would maintain historical integrity of the building while abiding by or exceeding all codes and safety requirements.

Adams displayed a photo of the bank building defining the areas of the building in the proposed sale. He clarified for Howland, how it is that the City of Albert Lea will continue to own the facade. He said improvements need to be made to the facade before it can be sold. The City will be responsible for maintaining the outside of the building without interfering with Mortarr obtaining a sign permit.

Baker asked if the windows in the building are up to code. Adams explained the architect, ZRT, is currently working on defining the finishing areas of the windows. This will be resolved once the loan is complete.

Steve Pulley, co-founder of Mortarr, LLC aka Vault Properties, LLC was present to answer Baker’s question regarding the projected staff increase. Pulley explained since April 9, 2018, Mortarr has hired six full time employees and two summer interns. He said by June, 2018 they will have 22 full time employees and two interns. Pulley further stated they plan to fill one more full time position in June. They also plan to hire seven more people in the third quarter.

Baker asked what the anticipated timeline is for Mortarr to be moved into the Freeborn Bank Building. Pulley explained they hope to be in the building by the end of October, 2018. Pulley added, since April 9, 2018 after working with DEED, City staff, and ALEDA they have received approval for a job training incentive program through the Employment of Economic Development of Minnesota and have also been approved as a Minnesota Job Creation Fund Business. In addition, Mortarr went live on May 9, 2018.

Baker asked for a brief depiction of what Mortarr is. Pulley explained they are an imaging based software platform for the commercial construction design space. Mortarr’s goal is to assist the user in locating a construction company, electrician, plumber, etc. to partner with in building plans.

Howland asked the status of the parking lot at this building. Adams responded, based on the terms that were negotiated with Mortarr LLC, aka Vault Properties, LLC, the lot will be leased to them based on the number of spaces they need to get started. Ultimately, the lot will be turned over to them as part of the sale of the final assets so they have full control and ownership of the parking lot. Adams said improvements will be done as part of this sale. Howland asked if any of the parking lot would remain open to the public for use. Adams explained it depends on the number of spaces Mortarr will require for their employees. However, in the future it is expected it will not be public as Mortarr, LLC aka Vault Properties, LLC plans to purchase the lot.

Mayor Rasmussen opened up Public Hearing. He called three times. No one spoke. He closed the Public Hearing.

Howland commented; this is a project long time coming. He exclaimed how fantastic it is to have a local company ready to invest in our downtown.

Mayor Rasmussen reminded council this resolution is contingent on receiving the proper legal documents for the property.

Motion made by Councilor Baker, seconded by Councilor Rasmussen. On roll call vote, the following councilors voted in favor of said motion: Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Councilor Murray abstained. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-95
included with these minutes)

Resolution 18-96 Approving the Sale of Real Estate from the City Of Albert Lea to Mortarr, LLC a/k/a Vault Properties, LLC

Murray announced he will abstain from discussion or voting due to his relationship with one of the owners.

Adams said often times the City of Albert Lea considers loans on a 10-year term based on a case by case basis. The criteria may include the creation and retention of permanent private sector jobs to fuel above average economic growth to increase the tax base and improve the employment and economic opportunities within the community. Staff believes this project far exceeds the criteria. Adams provided an overview of the terms of the loan agreement utilizing a PowerPoint. He reminded council this agreement is contingent upon the final purchase agreement and legal description as outlined in the resolution.

He described the loan is for $740,000 and is broken down into two different segments. The first loan for $370,000 is from the City’s Revolving Loan Fund. Adams defined the conditions listed. The second source of funding is also $370,000 and will come from the City’s Economic Development Fund. Adams provided the terms on this loan as well. Adams said the City does not traditionally loan out this amount of money as it is more traditional to provide GAP Financing or Job Based Goals. He provided context stating the job requirements for this particular loan are higher than the current medium household income.
Howland and Baker had questions, to which Adams provided detailed answers.

Mayor opened the Public Hearing. He called three times. No one spoke. He closed the Public Hearing.

Mayor Rasmussen reminded council, once again, this is contingent on receiving the final documents.

Brooks said he is looking forward to the use of this building, as well as the use of the Economic Development Fund for this project.

Baker requested a flag be added to the top of this building where one was once displayed as a welcome to the new company.

Motion made by Councilor Baker, seconded by Councilor Brooks. On roll call vote, the following councilors voted in favor of said motion: Baker, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen. Councilor Murray abstained. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-96
included with these minutes)

MAYOR AND COUNCIL REPORTS

First Ward, Councilor Murray reported:
• Ward Items – None
• Committee Update – None

Second Ward, Councilor Baker reported:
• Ward Items – None
• Committee Update – Attended the Heritage Preservation Committee meeting. Reminded the community that the first Wind Down Wednesday is on June 20th.

Third Ward, Councilor Howland reported:
• Ward Items – None
• Committee – Attended the Park & Recreation Commission meeting. Mentioned the Lake Chapeau neighborhood is interested in getting a park in that area.

Fourth Ward, Councilor Olson reported:
• Ward Items – None
• Committee Update – Attended an HRA Board meeting.

Fifth Ward, Councilor Rasmussen reported:
• Ward Items – Reported he is working on a Ward item.
• Committee Update – Attended an Airport and Library Board. He reported the arrival and departure building should be complete in June.

Sixth Ward, Councilor Brooks reported:
• Ward Items – None
• Committee Update – Thanked the people who participated in Shinefest last week.

Mayor’s Report:
• Commended the Shinefest program and encouraged the community to volunteer.
• Attended the Nation of Patriots Day where he proclaimed that day Our Nations of Patriots Day.
• Announced the Charter Commission is taking applications for a board member. Applications are on the City website or can be picked up at the Mayor’s office.
• Announced the special event taking place on Saturday June 9th – Heartland Series Marathon running/walking 5k; 10k and 50k marathons. Race starts at 4 a.m. at the Brookside Boathouse parking lot.

CITY MANAGER REPORT

A. Sibley 2nd Grade Class Vote Results

The Sibley 2nd Grade ‘Government Day’ Field Trip included a visit to the Fire Department and Library and also an opportunity to hold a mock council meeting and vote on three proposed projects. City Manager Adams displayed the results of their vote. He revealed an Ice Skating Trail was one of the options which received two or three votes out of 60. The Indoor Playground was the most popular option receiving the overwhelming votes.

He mentioned City Staff is helping ALEDA and HRA with their Executive Director hiring process.

APPROVAL OF CLAIMS

Resolution 18-97 Approving Contract with Councilmember Brooks

The attached resolution directs the Mayor and City Clerk to make payment in the amount of $785.00 on behalf of the City for a claim from Brooks Safety Equipment and to issue payment for filing the affidavit of official interest by the interested official, Councilor Brooks.

Motion made by Councilor Howland, seconded by Councilor Olson. On roll call vote, the following councilors voted in favor of said motion: Murray, Baker, Howland, Olson, Rasmussen, and Mayor Rasmussen. Brooks abstained. Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-97
included with these minutes)

Resolution 18-98 Approving Claims

Adams explained that the attached resolution directs the Mayor and City Clerk to issue the payment of claims as presented in the Detail of Claims report.

Motion made by Councilor Brooks, to approve payment of claims as presented for checks #67893 through #68047 in the amount of $919,245.89 seconded by Councilor Howland. On roll call vote, the following councilors voted in favor of said motion: Murray, Howland, Olson, Rasmussen, Brooks and Mayor Rasmussen.
Mayor Rasmussen declared the motion passed.
(See Secretary’s Original Resolution 18-98
Included with these minutes)

ADJOURNMENT – 8:36 PM

Motion made by Councilor Murray, seconded by Councilor Brooks, that there being no further business, the Council meeting adjourn until the next regular meeting of the Albert Lea City Council at 7:00 p.m., on Monday, June 11, 2018. On roll call vote, all councilors voted in favor of said motion.

Mayor Rasmussen declared the motion passed and the meeting adjourned.

__/s/__________________________
Mayor Vern Rasmussen, Jr.

__/s/__________________________
Daphney Maras
Secretary of the Council