HomeMy WebLinkAboutCCMinutes_2008_10_28 223
Brookings City Council
October 28, 2008
The Brookings Ciry Council held a meeting on Tuesday, October 28, 2008 at 5:00 p.m., at City Hall
with the following members present: Mayor Scott Munsterman, Council Members Julie Whaley (left
at 6:00 pm), Mike Bardey,Ryan Brunner (arrived at 5:09 pm),Tim Reed,Mike McClemans, and
Tom Bezdichek (arrived at 5:14 pm). City Managex Jeff Weldon, City Attorney Steve Britzman,and
City Clerk Shari Thornes were also present.
5:00 P.M. WORK SESSION
Economic Develo�ment land discussion. Jeff Weldon, City Manager, said the purpose of this
agenda item is to have.a philosopl�ical discussion to revisit the policies on the city's acquisition and
sale of land for economic development purposes to private entities.
A1 Heuton,Brookings Economic Development Director,reviewed the BEDC's processes related to
development and land transactions. Heuton said the State of South Dakota allows economic
development organizations to receive public property through land transactions for economic
development purposes.
Heuton reviewed the following policy process in detail:
Kequert.c to purcha.re czty awnedp�npery in Bmoking.r industrial and commen�ralpark.r arepv»ce.r.red thmugh
Brooking.r Economic Development Corporation (BEDC). The City mu.rt either tran.rf'er land through BEDC or
conduct a.realed bid pmce.r.r open and adverti.red lo the general public. The request pmce.rs generally follolv.r the.rte�i.r
de.rcribed below:
1. Bu.nne.r.r appmache.r BEDC with intere.rt in acquiring land.
2. BEDC will a.rrz.rt the indu.rtry/burznes.r ivith collection of information required to pre�are a land reque.rt
propo.cal and to complete an incentive.rcorecard, if a land incentive i.r reque.rted.
o The reque.rt propo.cal outline.r the ca.re for.rale of land to the burine.r.r.
o The.rcor�card prnvide.r information that alloav.r BEDC to complete a benefit/co.rt analy�i.r of the
project.r economic impact on the community.
o The benefit/co.rt analy�i,r and the r�gue.rt pmpo.ral as.ri.rt the crty council in determining the value of
land incentive, if any, that may be provided.
3. The completed land reque.rt propo.ra!i.r revierved tvith the bu.rine.c.r to ensu�no�iroprietary information i.r
pre.rented in a public forum. Company name.r and/or detail.r that might allow the com�iany to be recogniZed
�vill be removed finm the pre.rentation to the city council upon reque.rt of the bu�ines.r.
4. W/hen the request pmpo.ral is completed BEDC wil!contact the city clerk arrd city manager to place the
reque.rt on the next available city council agenda.
S. The land reque.rt i.r a reque.rt frnm BEDC, not the burinesf The�fore,BEDC will pr�.rent the r�que.rt to
the city council. The bu.rine.r.r i.r rvelcome to participate in the r�que.rt pr�.rentation if de.rir�d.
6. Upon approval of the reque.rt, or amended reque.rt, the city attorney will prepare the nece.c.rary land cloring
and tran.rfer doctrment.r and conduct the,rale. BEDC avill pr�are a Memorandum of Underrtanding
bet�veen BEDC and the burine,r,r r�garding detail.r of the.rale. (BEDCgenerally require.r the bu�ine.cr to
cover applicable clo.ring co.rt.r. If de.ri�d by the bu.rine.cr, the bu.cines.r maypurcha.re title in.rurance at the
bu�ine.r.re,r expen,re.
7. After aj�p�nval of the land tran.rfer resolution fmm the City to BEDC the�i.r a 20-day refe�ndum rvaiting
�ieriod that mu.rt be ob.rerved before the land clo�ing can occur.
Z.and Aeque.ct—General Outline
Following i.c ageneral narrative outline BEDC avill u.re to make the land reque.rt to the City Council.
1. Project Reque.rt.• Brief.rxmmary of the�zque.rt.• location and number of acre.r of land,purpose of thepmject
and reque,rted land price.
2. Pmject Hi.rtory: Summary of company hi.rtory in the community—facility type, headquarterr location,
pmduct/servfce type,yearr in community, current employment, wage.cummary, occxpations, employee place of
re�idence, etc.
3. Prnpo.red Pmject.•Genera!de.rcription of bu.rine.r.r/indu.ctryg�nzvth pn�jection, number ofjob.r to be
cr�ated/retained, timetable, caj�ital inve.rt�nent, etc.
4. Economic Impact.•A chart�imilar to the follo�ving i.r u.red to prnvide a general benefit/cost analy.ri.r.
Information reque.rted tn complete the incentive.rcorecard i.r ured to determine the economic impact.
S. Incentive.rcorecard
Information needed to complete the.rco�card include.r.•
• Total nsrmber of full-time employee equivalent.r(FTE'.r)and totallbayroll.
• Number of Non-management FI'E'.r and average wage.
• Number of Management FTE'.r and average lvage.
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• De.rcription of the ben�tpackage pmvide—health care, retirement, other.
• Value of new con.rtruction.
• Value of taxable equipment to be purcha.red.
• U.re of SDSU.rtudent.r orgraduate.r in the labor force.
• Supply or value-added relation.rhipr urith other community bu.rines.r or indu.rtry.
It would ad.ro be helpful to have.rome information depicting the company'r involvement in the community.
A.r pr�viou.rly mentioned,BEDC.rta�are available to a.r.ri.rt the burzne.r.r urith pr�aration of thi.r information and
pvill pr�par�the narrative for j�resentation to the city council."
Heuton further noted that every project the BEDC has done has created a positive economic
development unpact which was worth much more than the uutial land cost. He said this leads back
to the question, "is this a real estate deal or economic development transaction?"
Another part of the transaction is a series of`claw backs'. That involves the following three tivngs:
1) If the applicant doesn't build on property within 3 yeaxs,BEDC has the right to buy back at
sale price.
2) If the applicant develops on the properry but don't develop all the land, the BEDC has the
option to buy the remaining acres at the sale price or ask the applicant to repay an additional
amount which would be the difference in the subsidized value of the land.
3) If the applicant develops the business, occupies the building,and then sells that business,go
out of business or move within a five year period of time, they'd owe all difference in
valuati.on back and graduated down to zero.
Heuton said this process was implemented within the last four years. He noted that the BEDC
takes a subordinate position with banks on the loan and the BEDC doesn't make any money. The
business owner covers the closing costs.
Council Discussion
Munstexman referxed to Resolution No. 79-04,passed in 2004,which states that"...the estimated
market value of said properry be determined from time to time to aid in considering the sale price
thereof...". He asked if the City has been more of a real estate valuation driven philosophy or has
it been on both sides of the fence?
Heuton said he didn't know that Resolution existed until a few months ago. Everything he had been
told was that the City wanted$1.00/squaze foot but that was negotiable. Those are the parameters
he's been operating under. Every deal the BEDC has brought to the City is a negouation process.
Munsterrnan agreed that ulrimately it's been this Council that made the decision on how much to
sell land for and has given that ditection. He said here in lies the philosophical discussion of
economic development vexses real estate ttansaction.
Heuton said the real estate discussion is pretty simple. If the Council just wants to consider it real
estate, then every piece of property would need to be appraised because they're all different, citing
examples in various industrial additions. Parcels also differ due to varying stages of development
and improvements. A dollas value per acte across the board wouldn't work in a straight real estate
philo�ophy.
He said the other issue on real estate is that it's not stricdy real estate based on value. We operate in
a competitive environment. There are nearby communities that provide free land and utilities.
Brookings competes for businesses recruited for the region and Brookings business expansions.
(Brunner arrived at S:OS p.m.)
Reed asked is there is a step within the BEDC when they review the request. Heuton said the
Incentive Committee evaluates all requests.
Bartley said he served on the site development committee fox a number of years and one of things
they discussed was value of land and Resolution No. 79-04 was an outcome of that discussion. The
train of thought at that time was more real estate based value. The $1.00 figure was discussed and
eventually was adopted by the City. But it wasn't meant to be permanent, but rather a starting value.
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Apparendy,we haven't done any appraisals or significant changes to that policy and it is obviously
something that needs to be accomplished. He suggested the following two methods: 1) through an
appraisal process using assessed value, or 2) call it"negotiable" and leave it up to the BEDC to make
the deal. He expressed concern that appxaisal processes take too long in a real estate dea1.
Heuton agreed, stating all the steps in the current process can take upwards of 6 to 8 weeks and our
competitors can write same day deals.
Bardey asked if we need to restructure our process and make that negotiation happen without
coming back to the Council every time. He expressed concern about tying BEDC's hands in the
process and deals fall through. T'here are good pxocesses in place with the site development
committee using the incentive scorecard and every deal that comes along is different. He'd like to
see the City get rid of the$1.00 per square foot xefetence and it be negotiable and the BEDC be
authorized to make those determinations based on scorecard ratings.
(Be�dichek arrived at S.•>4 pm)
Heuton asked if the $1.00 per square foot was passed in the resolution. It was clarified that the
resolution states "ma,rket value."
Ryan Krogman,BEDC Member, said they did some research for comparables,but the city owned
property sales aren't"arms"length transactions because there are incentives involved. He said the
comtnittee reviewed costs of similar property in Watertown and Sioux Falls. Sioux Falls was at
$1.25/sq. foot and Watertown was $1.00, so the committee recommended$1.00 for Brookings.
'I'his number was the baseline for someone wanting to buy property that didn't ask for an incentive
and was not cxeating more economic development. That was the benchmark and when economic
development (jobs, etc.) became involved, that number was negotiable. He's not sute if that number
is relevant now. Some towns are giving land away. He's not suxe if the price for that land has gone
up,but is sure the cost to acquite it has.
Bardey thanked Krogman for providing history on the $1.00 figure and said the Council needs to
establish a policy that says the cost is negotiable. He recommended getting rid of the$1.00 pez
squaxe foot reference.
McClemans saia the$1.00 figure came from a transaction that occurred in 03 and 04. A party
purchased property at$10,000 per acre which was approved by the Council. However,the party
moved a building onto the propexty, didn't hook up utilities and then sold the property at retail value
and the propexty changed hands again at retail value. After that the Council analyzed how to treat
an applicant who is not pxoviding additional economic development value to make sure citizens and
tax payer dollars aren't taken advantage of. That is how the $1.00 per square foot was developed.
He doesn't know if that's a locked in number and thinks it comes down to the type of business
coming in. For approximately 20 years,the City charged$10,000 per acre fox industrial land. He
feels it comes down to a value based on what business it is (i.e.job creation). He cited several past
land transactions that trouble him due to the low selling price, the amount or la.ck of jobs,the type
of business, and the City's investment into the property. He doesn't have a problem selling small
paxcels because there's not commercial property available. He noted that the$1.00 price per square
foot is actually a very good buy. He said the city's taxable value on these properties is $25,000 to
$30,000 per acxe and the city's cost to replace the land is $41,000 per acre. He feels this sets a
texrible precedence unless we do this for everyone,whether they have two or twenty employees.
There needs to be a number that is realistic so certain individuals axen't getting an extremely good
deal at the taxpayer's expense. He is supportive of the $10,000/acre p:rice. Brookings has a limited
labor force and he feels Brookings isn't doing much to enhance itself by giving property away. He
also pointed out the cost of streets in these areas. He hopes the Council can come up with a policy
that makes sense, but doesn't feel the current one is good business and doesn't benefit Brookings.
Heuton agreed that Brookings isn't in the business of giving land away without an economic impact.
He does believe there's been economic unpact from the various transactions. He noted that he and
McClemans disagree on how much the city has invested in pariicular pieces of pxopexty. He noted
that one of the parcels was small and it won't get a large business. Also, that there isn't any heavy
commexcial land available anywhere in Brookings and businesses need somewhere to go.
Heuton illustrated a comparison of the percentage of total employment for Brookings Countp verses
the State of South Dakota. He said part of an economic pxogram is to diversify the economic base.
Brookings has many excellent manufacturing industries but it has too many manufacturing jobs
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which present some long term problems for Brookings and we need to diversify. Other types of
businesses should be considered beyond the traditional manufacturing that Brookings has sought in
the past.
He noted that there's a difference in what land is valued at and what it would be valued at`shovel
ready'. If the City of Brookings doesn't want to do those kinds of deals, the BEDC needs to know
and won't do them in the future.
McClemans refe�ed back to a small two acre parcel stating that no manufacturer would build on it.
A person purchases it because there's no other land available at a price of$80,000,which he feels
isn't excessive. However,the Ciry's cost on that lot is $105,000 for the stxeets and other
improvements. He feels that is a good example of a property that should be been sold in that price
range. He has a problem with an individual getting a commercial rate and then renting out part of
the building. He has no problem with the citizen owning the building or renting it,but feels the
citizens of Brookings should get their money back.
Heuton said that's the discussion that needs to occur. Does that monep come back in the form of
real estate transaction or economic development impact? The estimated direct economic impact the
BEDC had on that particular paxcel over a five year period was $345,000 in the fortn of wages and
taxes with no multiplier effect attached. That's the question for the Council to address—is it a real
estate transaction ox an economic development transaction to help guide the sales.
Munsterman said looking back over seven years of watching this issue;the Council has had a
blended mu�of the economic development impact making up for real estate value. In looking at
scorecard and economic impact summary, those axe the things the BEDC has come to the Council
with. Here's the score and here's what the business is willing to pap and those are the types of
discussions held in the past in executive session. We're dealing with a pariy that can't be naxned for
confidentialiry and that's the scenario that's played out. Maybe what the City Council needs to tivnk
about is a process that it's comfortable with? Should it be more formal as in the resolution ox
should the Council get out of the business and just set aside a certain amount of money every year
for economic development purposes? Should the City just give the money to the economic
development organizations and direct them to find the land for economic development purposes
and the city stay out of the la.nd transactions? He'd like for the City Council to be happy when it
makes decisions so it's fair and clear what the economic development unpact is and that is does
makeup for the real estate value.
Reed said he's always wished that the Council could look at the whole development and understa.nd
the total costs to the City and discuss what we're willing to lose on it towards economic
development and what the overall goal was to the whole area.
Heuton said in the three industrial parks there were some deals the City didn't make the money
back. However, on economic development transactions overall the City is still money ahead. He
cited an example of a parcel with city investment of$920,000 and$1.1 million on the xeal esta.te deal.
However,when the five year economic development impact is factored in with a 2.5 multipliet, the
city received a significant impact with a$1 nvllion investxnent. In economic development, the Ciry
recoups its investment in a different manner.
Baxtley expressed concern about the City's ability to buy additional land in the future. Grants,
bonding authority and other instruments wi11 be needed. He felt just giving the BEDC a certain
number of dollars per year ties the City's hands quickly on the amount of land it may be able to
acquire.
Heuton provided a current inventory of available land (30 aczes in Svennes, 15 acres in Telkamp, 30
acres in Wiese, 125 acres in Innovation Campus). He said there have been projects in the past that
the City couldn't consider because the number of acres required exceeded the inventory or the use
wasn't compatible with a particular atea. There's no commercial land anywhere.
Bartley said the comprehensive plan shows industrial land east of 34`�to the landfill,but acquisition
costs will be high. He asked if Heuton had recommendations on how to go about purchases.
Heuton noted that eminent domain is no longex an option, so the City will eithex need to deal with
those property owners or look somewhere else in the County. However,utility service and fiber
optics becomes an issue with land farther out into the County.
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Bardey questioned how to fund the purchase of additional land. The City is heavy in manufacturing
and can't support many more,but it's short in other ancillary businesses and would welcome them.
It's part of a whole picture and whole plan that needs to be done in the future, but can start here.
Munsterman asked Weldon if he could try to draft a policy based on the discussions.
Weldon said before he can write a policy the fundaxnental question of teal estate transaction verses
economic development transaction must be answered. His advice was if the City was going to
consider these real estate transactions, then why is it even bothering. If the City considers these
economic development transactions, that's what helps move the community forwaxd, and then make
the investment. At that point an appraisal maybe doesn't make a lot of sense. But he does think
there's some value in setting a price that is negotiable so when he or Heuton get cold calls they can
provide an answer and start discussions. He strongly uxged the Council to think of these as
economic development transactions because that's why we'xe in this business. As nice as it would
be, the reality is that private businesses independendy coming to a community just doesn't happen
often. They look to the city. While acquixuig land may be the easy part,utilities are the real
challenge because that's whexe the bigger share of the cost is. In terms of direction,Weldon asked
the Council to consider these as economic development transactions. He believes there's some
wisdom to place a value on land to get the discnssion process started and work together to
determine whexe and how the City can acquire land for future development and deal with the utility
issue as it comes around. We need to keep the economic impact issue in front and look at what it
will bring and what the spin-off will be to answer the fuli value.
Munsterman suggested Weldon and Heuton draft a policy geared towards economic development
with competitive advantages for the Brookings area when it comes to xeal estate valuation using
tools from the BEDC in that analysis and then to bring it back to the Council for fuxther
philosophical discussions.
Heuton suggested_the BEDC committee could hoki this discussion and include a couple of Council
membexs to help.
McClemans said there is a difference between economic development and real estate transaction.
People can purchase property,put up a building, do a business and create jobs. It can vary fxom 10
jobs to 100 jobs and the unfortunate part of this discussion is that the BEDC Director didn't realize
there was a policy that existed related to industrialland sales. It gives some people a terribly great
financial advantage to sell property at that value. How does the BEDC turn down similax
transactions that come and what property do you have available? The BEDC is selling at 25 cents
per square foot when infrastructure and land costs are figured in. There's no xeason not to do both
—the economic development side and the dollar per square foot.
Heuton clarified that the BEDC sells the land after the city decides to sell at a particulat price. He
will apologize if he's overselling a project to the City Council. He feels the City and BEDC and
come to terms on this process and determine what types of deals the City wants to do. He feels he's
obligated to notify the city about anyone inquiring on city land and the City decide whether oz not to
sell it. The City has negotiated the price up with potential businesses and has won some and lost
others. Thexe are many economic development issues to investing and gxowing a business over a
period of years and letting someone come in and take away them away from Brookings because
we've asked too much (in their mind).
Reed said he would like to see a blended model between the two. There are tirnes that we need to
move some land to someone in town but can't find what they need. It's still economic development
about keeping a business in town,but it's more of a real estate txansaction. Somehow also show the
total cost should be in front of the City Council or BEDC agreed upon cost so not arguing about
those numbers.
Whaley refexred to the economic development scoxe sheets that are done on potential businesses
and she noted that Heuton said he hopes they keep their end of the bargain. She is concerned that
land has been given away and the City doesn't know if the business met their summaxies and
standards to come here. She said she's undecided on the issue,but feels the City needs to set a
price. She noted there axe many things the City needs to look at with a project and was in favor of a
blended approach. She feels there needs to be follow-up and accountability,particularly pointing
out the estimated annual payroll.
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Heuton thought that was a valid question and is not sure how to solve it yet. The BEDC can
monitox if the building is built. Paytoll and employment can be monitored with loan programs,
where it's a bit easier to follow. The BEDC could include something in the `claw back'related to
employment,but noted that even states with loan programs take a soft line on going back on a
business recruitment. Particularly what is happening in the economy today,businesses need some
level of flexibility. One of the problems they run into in trying to close a land deal is the business
wants hard and fast rules and doesn't want to rely on the City Council's subjectivity when the
membership turns over. The BEDC can require payxoll reports and verifications. Howevex,when
Brookings is in a competitive position with other communities that give land away and we start
requiring things,we'll have difficulties and maybe the City wants to let that business go. The
Council needs to determine that level it is will to get involved in the economic development process
to grow the community.
Brunner leans more to economic development rather than real estate citing the long term impact of
jobs, sales tax and property tax. It would be nice to streamline the process so it could be completed
faster and the BEDC has more fle�cibility with city staff.
Bezdichek said he can see both sides of the issue and recommended a case-by-case basis. He would
look differently at an existing industry or business that has been here for 25 years and looking at
expanding than a new business.
ACTION: A motion was made by Munsterman, seconded by McClemans, to direct the City
Manager to coordinate with A1 Heuton, BEDC Executive Director, and his Board to
develop a policy that would address the economic development and real estate land process,
and in conjunction with that policy development Council Members Bartley and McClemans
volunteered to participate in the policy development. Discussion: Other council members
with comments are encouraged to share their comments with the City Manager. All present
voted yes; motion carried.
(fYfhaley 1�at 6.�00 p.m.)
6:00 P.M. CITY COUNCIL MEETING
�onsent Agenda: A motion was made by Brunner, seconded by Bartley, to approve the agenda,
which included:
A Action to approve the agenda.
B. Action on Resolution No. 93-08, authorizing the City Manager to sign a Liquor
Operating Agreement Renewal for the Safari Lounge.
Resolution No.93-08
Safari Lounge Operating Agreement Renewal
BE IT RESOLVED by the City o£Brookings,South Dakota,that the City Council hexeby approves a
I.ease Renewal rlgreement for the Operating Liquor Management rlgreement between the City of
Brookings and Safari Lounge for the purpose of a liquor manager to operate the on-sale establishment
or business foi and on behalf of the City of Brookings at 421 Main r�ve.,also known as the Safari
Lounge.
BE IT F[JRTHER RESOLVED that the City Manager be authorized to execute the rlgreement on
behalf of the City,which shall be for a period of five(5)years.
On the motion, all present voted yes; motion carried.
1"Reading—Ordinance No. 41-08 A fixst xeading was held on Ordinance No. 41-08,budget
amendment. Public Hearing: November 18�'
1"Reading—Ordinance No. 42-08. A first reading was held on Ordinance No. 42-08,an
ordinance amending the zoning ordinance pertauung to hotels and extended stay hotels. Public
Hearing: Novembet 18�'
City of Brooking�uarterly Financial Re orts. Shawna Costello,Assistant Finance Ditector,
presented the quarterly reports. No action was taken. '
Storm Water Plan Process. A motion was made by Bartley, seconded by McClemans,to approve
the timeline and process for the Storm Water Plan as stated below and set a special meeting date.
Jeff Weldon, City Manager,introduced the item stating it was to identify a date and schedule for the
City of Brookings Master Dxainage Plan was adopted by the City Council at their Septembez 23`�,
229
2008 meeting. At that the Council asked staff to come back with a calendax and schedule fox
milestones fox the process,which is included.
Jackie Lanning, City Engineer,recapped that the Master Drainage Plan includes thitteen specific
study areas, SWMM model data for the City of Bxookings and fizture growth areas, and cost
estimates for projects. The Master Drainage Plan is not intended for maintenance and nuisance
issues. The Master Drainage Plan addresses two genexal issues,which axe improvement of existing
drainage conditions throughout the City of Brookings and £uture growth axeas and technical SWMM
model data which may be used by consultants fox dtainage analysis of e�cisting and £uture
developments. Staff has been reviewing the Storm Water Master Plan in detail,which will require a
significant amount of time due to the voluminous amount of information in the report.
The Ciry currently has a good framework for stormwater planning in place for new developments.
Curtent City Ordinance requites new developments and redevelopments to submit a dtainage plan
as specified by the Brookings Storm Drainage Design and Technical Criteria Manual that was
adopted in 2006. City Ordinance requires detention ox retention facilities for development,which
will help assure that the drainage problems will not continue to get worse. The Criteria Manual is
working well, and consultants are familias with the engineering and hydxaulic requizements of the
manual.
Over the past numbex of years, the engineering staff has received calls and citizen input about
drainage concerns for different locations in and axound Brookings. Staff has documented these,
many of which were included in the Master Drainage Plan in the thirteen specific sti�dy axeas. It is
our intent to hold public meetings with the Bxookings Ciry Council instead of individual meetings
with engineering staff. As we continue to work through the study and prioritization pxocess,
individual meetings with engineering staff may be added to the schedule if they are needed.
Lannin ro osed the followin schedule and rocess:
No. Task Date Description
1. Internal Staff Review November 2008 Engineering Dept. staff to review the
master lan document
2. City Conncil Work December 2008 Discussion& Council input on study
Session with City areas
Engineering Staff Discussion&Council input on storm
event sizing philosophy
Discussion&Council input on
rankin criteria s stem for ro'ects
3. City Council Work Discussion or�preliminary ranking
January 2009
Session with City (public Invite for results for projects
Engineering Staff and � ut Public Input
Tro 'Thom son, ERC p �
4. City Council Woxk Discussion on proposed prioritized
Session City Engineering February 2009 list
Staff(and Troy (Public Invite for Discussion on project funding
Thompson, ERC if input) Public Input
needed
5. City Council Woxk Adoption of prioritized pxoject list
Session with City March 2009 Discussion of next steps for project
Engineering Staff design and land acquisition
6. City Council Work Discussion on Priority#1 project
Session with City Apri12009 timeline and funding
Engineering Staff Budget discussion on prioritized list
for cuxrent and future ear's fundin
She noted that this calendar is proposed as a dtaft, and the dates and goals may be modified as we
continue the prioritization process. The overall goal is to adopt a prioritized list of projects/goals
which will give guidance to the engineering staff for future projects and land acquisition. The March
2009 deadline will also allow the oppoxtunity to budget for the future pxojects in the City's typical
budget process.
Council Di.rcu.rrion: Mun.rterman noted when reuieuring the timeline that it i.c very comprehensive with a lot of detai!
that ha.r to get done. He.raid the City and.rtaff rvil!need to.rpend the S or 6 month.r doing the work becau.re it'r
important. L.anning.raid.rome item.r could be conden.red if the Counci!�vould like it ta be a.rhorter pmce.r.r. Their
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overall goal i.r March 2009. It'r important to get project.r de.rigned and going by March in order to achieve bid letting.r
and con.rtruction. Weldon noted that two months i.r needed forpublic input and i.r one area that the City doe.rn't svant
to.rhortchange timing. We'!l lvork to.rhorten it up a.r much a.r po.r�ible, but in order to do it right and get thi.r in place
and.rtart svorking during the 2009 conrtruction period. He think.r January and Febritary rvidl be crucial forpublic
input. He noted that'.r not the only opportunity forpublic input. Cititien,r are.rtill encouraged to contact czty o�icial.r
urith informaZion, input and que.rtion.r. McClemans,raid the timeline i.r fine but noted it took three yearr to get the
.rtudy f�m Augu,rt of Z005.ro u�hatever�ve can do to,rpeed up the prnce.cr u�ould be appreciated. It'r been a long
drarvn out process and he ex��.cred concern about time.
Public Comment. Ro.rey Frit�, 1741 8`b Str�et, noted that none of the City Council rva.r on the Council ivhen the
Garden Square drainage i.r.rue rva.r bmught up. She and neighbor.r have been calling the Mayor.nnce 1992 and many
have died since then. She que.rtioned why the ir.rue wa.r taking.ro long and noted ho�v much additional concrete and
hard.rurface.r have been added in that area and what run.r through the drainage ditch. She get.r svater in hergarage
when it rains and ha.r come clo.re to coming in�ide the kitchen. She urged the City Councid to addre.r.r thi.r i.r.rue and
anything they could do to help ivould be appr�ciated.
On the motion,all present voted yes;motion carried.
Consideration of acchitectucal review for vacant building, Jeff Weldon,City Managex, said this
item is consideration of getting a proposal from an architectural firm to look at the First Bank and
Trust building as a possible site for a future City Hall. What this does is it represents the next step
in our space needs study analysis discussion which is part of the City Council's sttategic plan. We've
already completed the space needs analysis for the facility and if the City is seriously looking at
acting upon that and making some moves on space needs options and the Council wants to look at
this building and consider this,the next prudent step would seem to be that we take a look at the
building from an architectural perspective and basically look at two things: 1) Take the information
from the completed space needs analysis and determine if those needs fit in the space provided in
this potential building, and 2) Determine what the cost would be to do the modifications taking a
critical look at the structural integrity and various systems. His xecommendation is while he would
like to look at local architectural firms,he would have a preference fox TSP Architects of Sioux
Falls. They conducted the space needs analysis for the Ciry and,in his opinion,is in the best
pxofessional position to translate that information into a building analysis. If the City selects a
different architect,it may have to back-track to bring them up to speed on our space needs analysis
thus far.
Weldon announced that since the Council packet came out on Friday thexe are two new
developments that have occurred on this issue. He's been contacted by Banner Associa.tes Inc.
asking for the opportunity to bid. If the City opens up the process, there's another architectural
firm in town—DesignArc. Then he'd recommend a RFP ptocess.
The second development that has occurxed is that the Brookings County Commission has secured
TSP for a similar study on this building. It turns out that the County is still interested in this
building.
� Therefore,Weldon recommended the City hold on this issue. It makes no sense for two
governmental units to go after the same report on the same building. He spoke with Commissionex
Dennis Falken this morning and the County indicated they'd be willing to partner with the City also
wanted to use the study. He recommended to dela.y this issue at this time and will continue to work
with the County and if there is an opportunity to work together on this issue.
Bartley.raid there�va.r a.rtatement in the analy�i.r that if thi.r�ver�to tran.rpir�and move to that building or any other
buildin� that thi.r current building could be u.red ar a L.a�v Enforcement Center in it.r entirety? A joint la�v
enforcement facility seems to him to be the number one priority. He czted a variety of.rcenario.c, but.rugge.rted a
di.rcut.rion.rhould occur�vith the Cosrnty about a joint la�v enforcement facility concept.
W/eldon.raid the Caunty'.r number one priority is a County administratiue building and law enforcement is the next set
of prioritier. Thi.r building rvould allo�v the police department to have improved facilitier by.rtaying in City Hall.
Whether the Sheri�'and County facilities could move into thi.r building i.r another gue.rtion. He has deamed it f.r
po.rrible to have separate facilitie.r for detention and county.rheriff operation. It'r certainly worth taking a look at a
good adaptive reu.re of thi.r building for a combined law enforcement facility.
T�Increment Financing District Policr Discussion. Jeff Weldon, City Manager,presented a
dxaft of a policy rela.ted to governing the use of tax increment finance as an economic development
tool. The policy is written stricdy within the statutory parameters of South Dakota Codified Laws.
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Where SDCL provides latitude for local government discretion, he has attempted to provide
guidelines for its use within that level of discretionary local authority. This document is the result of
policy guidelines from other communities as we11 as guidelines that have goverrted our experiences
with our e�sting four districts. As a policy,it is intended to provide guidance and direction in using
tax increment but still leaves latitude and flexibility for the Council to deviate from the document if
it determ.ines particular condirions exist that merit the modificarion.
Weldon reviewed the draft policy in detail. A copy of the document is available at the City Clerk's
Office.
Council Di.rcu.r.rion. Mun.rterman.rugge,rted a `high level di.rcu.r.rion'on d�er�nt sectionr be held at tavo or three work
.re.r.cion.r.
McCleman.r said a TIF i.r a good too, but ha.r concern.r in,reveral area,r of fairne.r.r to developerc and the return on
inve.rtment to the City. He agreed that a detailed review during�vork.res�ion,r wa.r a good idea. What i.r a�'ordable
hou�ing� D�erent prn�ram.r have d�erent price points. It could be unfair to other people in develo1bment bu�ine.rs af
they are at a di.radvantage. The City need.r to di.rcu.r.r what i.r fair to ad!developerr and what the city i.rgetting back for
their inve.rtment. He noted that development har.rlowed and he doesn't want to.ree the City pu.rhing TIFr wher�it
hurt.r other developer.r. Further di.rcus.rion on the a�'ordable housing price range i.r needed. Thatpnint hczrgrown to
,�'160,000 which get.r into direct competition urith tho.re not receiving a TIF.
Weldon.raid the j�urj�o.re of the policy i.r to prnvide the Council urith overarchingguideline.c but it doe.rn'l r�lace the
Council'r deci.rion making authority. A�ordable hou.ring i.r a moving target. SDHA change.r the number.r everyyear.
The City svill need to decide ivhat the level.rhould be on each apj�lication. This policy uril!not be a.rub.rtitute to
mak,ing tho.re tough deci�ion.r. The City Council�vill need to look at each application and a.rk tho.re types of que.rtions.
He noted that Section 3 of the draft policy li.rt.r those very que.rtion.r that need to be a.rked a.r�iart of thi,r proce.r.r. Only
when an applicant i.r able to an.ru�er all of tho.re, rvill the City decide if it will move fonvard or not.
McCleman.r.raid one of thing.r that u�ill be decided over the next.rix to eight month.r i.r how the TIFr that ar�already
done 1vill a�'ect older hou.ring that'r in competition. He ag�zed that TIFr can do good thing.r, but he dve.rn't rvant them
to hurt cztitiens who o�vn hou.res in the Ea.rtAcre.rAdditian. He doe.rn't want to.ree hou.re price.r droj� becau.ce the
older home,r are in competition�vith TIF.r. In the current economic develoj�ment condition he'r.reeing hou.re.rale.r start
to.rtruggle and price.r are dmpping.
Betidichek agreed�vith McC'leman.r.rtating there'r a degr�e of ri.rk zvith thi.r and�vith lvhat the City Manager talked
about in the content.r of thi.c policy. The policy.rtate.r "city re.rerve.r to n,ject their pmject." The City almo.rt ha.r to
micromanage the unit.r in the pri�ject, the value of the hou.re. He e.xj�n.r.red concern about defining�vhat i.r affordable.
He a1.ro exj�re.r.red concern about current and future 2vage.r and u�hat would happen i.r ther��va.r a lorvering wage
ad u.rtment and the TIF unit.r were no longer affordable. He agreed urith McClemans that he's concerned�rith
fairne.c.r,particulardy that of other ne�v development.r that aren't T7F and the a�'ect on.relling older home.r. He ag�ed
that the Council would have to look at each p��ject individually, but would al,ro have to follosv all the definition and
que.rtion.r. Are each of the unit.r being built for the benefzt of tho.re people'r wager in that public hou�ing pr�ject�
Keed.caid the policy ha.r to be flexible and the deci.rion making be up the City Council.reated at the time or either we
don't u.re it for per.ronad hou�ing That may be the deczsion it come.r down to becau,re he's not.rure horv much the City
can contml.
No action wa.r taken.
A 'ourn. A motion was made by Reed, seconded by Bartley,to adjourn. All present voted yes;
motion carried. Meeting adjourned at 6:58 p.m.
OF BR N S
a .Q.� ott D. sterman,Mayor
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