HomeMy WebLinkAboutCCMinutes_2008_11_18 23 �
Brookings City Council
November 18,2008
The I�xookings City Council held a meeting on Tuesdap,November 18,2008 at 5:00 p.m., at City
Hall with the following membexs present: Mayor Scott Munsterman, Counc.il Members Julie
Whaley,Ryan Brunner,Tim Reed,and Mike McClemans. Council Members Tom Bezdichek and
Mike Bardey were absent. City Manager Jeff Weldon, City Attorney Steve Britzman, and City Clexk
Shari Thornes were also pxesent.
5:00 P.M. WORK SESSION
Consultant Revort on Swiftel Center Feasibility Validation Study.
Jeff Weldon, City Manager, said after reviewing the feasibility report for the possible expansion of
the Swiftel Center which was conducted by VenuWoxks Consulting,the City Council decided to
have a validation study by having another firm analyze the market data for a second opinion. This
was enumerated in Goal Number 8 of the Strategic Plan. Requests for Proposals were issued for
consulting services to conduct the validation study. Three respondents were evaluated and HVS
Consulting fxom Chicago,IL was selected. They were here a few months ago for a field visit and
conducted extensive research before, during, and after their visit.
The Council was provided with HVS's final report and the lead consultant for the project,Tom
Hazinski,presented the findings of the report. Weldon noted that this report was also presented to
the Swiftel Center Advisory Boaxd. With the results of two independent studies on issue of a
possible expansion of the Swiftel Center, the Ciry Council will need to decide in the coming months
what course of action to take,if any, on this issue.
Mx. Hazinki reviewed the report in its entirety. The following is only the Executive Summary
without the chart refexences. A full copy of the report is on file with the City Clexk or on the City
website.
"I-IVS Executive Summary: Overview. The City of Bmoking.r, South Dakota engaged HVS
Convention, Sport.r e�'Entertainment Facilitie.r Con.rudting(`2IVS')to r�view the `TublicA.r.rembly Facility
Fea.ribility Study: Option.r for Expan�ion of the S�viftel Center"(the "VenuW/ork.r Study')by VenuW/ork.r. The
City of Bmoking.r, a.r well a.r the County of Brooking.r, o�vn.r the Swiftel Center and contracts with VenuWork.r to
o�ierate the venue. The Suaftel Center i.r an event.r center with a S,S00-.reat arena, a mstlti j�urpoae banquet room, and
meeting,rpace.
Methodology. To retriew the TVenuWork„r Study,HVS con.rultant.r travekd to Bmoking.r in the tveek ofAs�grt.rt
21, 2008 during which�veperformed a.rite in.rpection, r�viewedplan.r for thepmposed expan.rion, met with key
industry participant.r, ui.rited competitive venues and lodging facilitie.r, and gathered relevant data. HVS analy�ed and
interpreted event planner.curvey data that wa.r p�uiou,r collected in the courre of the T�enuWork.r Study. HVS al,ro
gathend and analytied event and financial data fmm com�iarable facilitze,r, and corr�ared them tvith the Stviftel
Center'.r hi.rtorical operation.r. Additionally, HVS developed an alternative facility e.x�an.rion recommendation and
independently foreca.rted event demand and financial operation.r�vith and zvithoxt an e.xpan.rion.
Key Findings. Anady�ing VenuWork.r.rurve,y re.rult.r, data fmm comparable facilitie.c and hi.rtorical demand of
the Suriftel Center,�irovided HVS svith a.rtmng bari.r from which�ve could pmvide independent facility
recommendation.r and demand and financial projection.r.
Aspart of the.rtudy, VenuT�Y/ork.r conducted a.ruruey of South Dakota convention and meetingplanncrf HVS
analytied rectron.r of the.rurr�y re.rult.r to determine event planner need.r Surve,y re,ponse.r r�garding exhibit, banquet
and meeting.rpace requirement.r, a.r zvell a.r demand fnrprnximate hotel.r,pmvided HVS rvith intight into the need.r of
event plannerr rvho have previoxsly and would potentially u.re the Swifte!Center. Figu� 1-1 i!lu.rtrate.r the.rpace
reguir�ment.r of.rurvey re.rpondent.r.
An ovenvhedming majority, almo.rt 70 percent, of event planner.r r�corded that they requir�a ballrnom urith ca�hacity for
betiveen 101 and 300 perron.c Only 11 of the.rurvey r�.+-pondent.r indicated the need a ballmom large to accommodate
S01 to 700 attendee.r and no re.rpondent.r�quire banquet,rpace for betaveen 701 and 1,000. Rnughly 60 percent of
meetingplanner.r require meeting.rpace with no gr�ater than a 200 perron capacity, while almo.rt 80�iercent of
r�.rpondent.r need only one meeting mom.
The VenuWork.c ruryey al,ro que.rtioned event�ilanner a.r to their pr�ference.r in the prn.acimity of hotel�: Figure 1-2
.rhou�.r the re,rult.r.
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For current u.rers of the Swiftel Center, over 90 percent prefer attached accommodation.r, while.rixty percent of potential
S2viftel Center client.r prefer an attached hotel, demon.rtrating the demand for an attached hotel to the Swiftel Center.
Venul�ork.r prouided HVS zvith hi.rtorical demand for event.r held at the Saviftel Center frnm January 2001 until
June 2008. HVS removed all interna!event.r frnm the databa,re and recla.c.rified event.r to allow for comparison to
other comj�arable venue.r. Figure 1-3.rummari�e,r event data for 2001 through 2007.
Between 2001 and 2007, the number of event.r held at the Saviftel Centergrew significantly, ho�vever demand peaked
in 2006 with 366 event.r. Much af the increa,re in event.r between 2005 and 2006�va.r due to the ure of the facility by
Daktmnic.r for training and meetings. In 2007, the company opened a meeting room and training facility on it.r
propery and moved.rome.reminarr out of Brooking.r.
Since 2003, the number of.+port.r event.r held at the Slviftel Center remained relatively.rtable at 20 to 28 event.r;
however, through the firrt.rix month.r of 2008, the Suaftel Center ha.r already ho.rted 22.rport.r event.c. The number of
banquet.r and concert.r and entertainment event.r have al.ro remained.rtable,proportionally to the total number of event.r.
The number of event,r categori�ed a.r "other"has.rignificantly increa.red from 2004 to 2007.
H VS compar�d S�vifted Center's 2007 event data to the 2007 hi.rtorical event demand of the.reven comparable
facilitie.r that HVS de.ccribe.r and analytie.r in thi.r report. Figure 1-4 .rhorur the 2007 event hi.rtorie.c of the seven
facilitie.r in compari.ron zvith the S2viftel Center.
In 2007 the S2vifted Center ho.rted 284 event.r, the median of all comparable facilitie.r;however tota!attendance of
mughly 94,000,fall.r.rhort of total attendance at all comparable facilitie.r, urith the exception of the Clay County
I�egional Event.r Center.
The low total attendance figure fall�a.r a dir�ct r�.rult of low average attendance at concert.r and entertainment event.r
and con.rumer show. While, the Siviviftel Center ho.rts a comparable number of the.re type.r of event.r, it dra�v.r
significantly loiver attendance for tho.re event.r than it.r peerr, due to it.r location and po�iulation.
Facility Recommendations. I-Y>hile the VenulYlork.r.rtudy call.r for the addition of a 12,000.cquar�foot
badlroom and a modification of the 11,000 square feet of ineeting.rpace at the Suriftel Center, HVS�commends an
alternative appmach to b�nadening the appeal of t,be Swiftel Center and attracting additional convention bu.cine.r.r to the
City of Brooking.r. The original T�enuWork.r.rtudy did nat df.rcu.rs a hotel ad acent to the facility, but in intervierur
with key informant.c it wa.r noted that di.rcu.r.rion.r about an e.xpan�aon of the Suriftel Centergeneradly a.rsumed the
development of a hotel in addition to building a ballroom and meeting.rpace.
HVS recommend.r that Bmoking.r con.rider the development of a hotel pmpery immediately adjacent and phy�ically
connected to the Swiftel Center. Ne�v meeting and ballmom.rpace could be developed a.r part of the hotel development.
lY>hide furtber hotel market re.rearch�vould be required to recommend a,rpeczfic room count for the facility, the.riZe of
the hotel cauld range from 100 to 1 SO mom.r.
Indu.rtry r�.rearch, analy.ri.r of comparable facilitie.r and revierv of the VenuWlork.r.rurvey of event j�lannerr, in addition
to interrriew,r zvith local indu.rtry particzpant.r, demon.rtrate.r that the.rucce.cr of an e.xpanded Swiftel Center depend.r on
the addition of new and proximate hotel mom.r. W>ithout the appmpriate hotel mom.rupply an expanded center uril!
not be able to attract nezv convention events Furthermore, mo.rt.rtate-a.crociation event.r that the Saviftel Certter woudd
like to attract are meeting.r, �vhich are mo.rt likely to be ba.red in hote�r rather than in a.rtand-alone convention center.
Suruey data indicate.r that mo.rt event.r con.ridering Brookingr could be accommodnted urith romervhat.rmaller amount.r
of ineeting and ballroom,rpace than the amount.r recommended in the Venui�nrk.r Study. HVS alfo�commend.r
that Brooking.rgive.reriou.r consideration to making the certain im�imvement.r to the.rtorage and kitchen area.r of the
Swiftel Cerrter, a.r well a.r to the.rta�'o�'zce ar�a.r, a.r r�commended in the TlenuW/ork.r Study.
Demand Projections. HVS pmjected demand and financial�ir»jection,r for two.rcenario.r.• if Bmnking.r decide.r
not to e.�cfiand the Suriftel Center, and if Brooking.r doe.c e.x�5and the Swiftel Center. Table 1-1 .rhmv.r demand
pri�jection,r for both.rcenario,r in a.rtabili�edyear. Without an e.xj�an.rion, HVS project.r the Surlftel Center will ho.rt
appmximately 255 event.r annually in a.rtabili�edyear, relatively clo.re to the 284 event.r ho.rted in 2007. Total
attendance, befor�the la.r.r of SDSU'.r u,re of the arena for athletic practice.r, .rhould al.ro remain.rteady at
approxzmately SS,350 people annually. If, a.r i.r curr�ntly pmpo.red, SDSU.rucce.c�-fully.recure.r the funding nece.rsary
to build an indoor fiedd hou.re, event demand for "other"event.r, like athletic.r practice during incdement sveather are
e.x�ected to decrea.re.rub.rtantially.
The pmpo.red expan,rion of the Su�iftel Center pmvide.r an opportunity to cornct.rome of the functionad pmblem.r of the
curnnt Center in addition to potentially attracting a number of state a.r.rociation confer�nce.r and conventron.r. The
community and univerrzty adro have mode.rt demand for additional banquet and meeting.rpace. The projected event.r
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and attendance for 2013 repre.rent.r.rtabilitied demand. The.re projections a.r.rume a decr�a.re in overall demand from
the openingyear in 2011 due to the expected reduction in u.re of the Suriftel Center by SDSU.r�ort.r team.r for
practice.r. Convention and trade show demand i.r ea pected to.rtabilitie in it.r firstyear. HVS expect.r increased
demand for banquet.r, meeting.r, and convention.r and trade.rhow.r at the Siviftel Center. lY/hile improvement.r to the
ar�na configuration are planned, urithout a.rignificant expan�ion in.iztie, it i.r unlikely that additional concert.r or
.rporting event.r rvill increa.re sub.rtantially.
Finar�cial Projections. I�hile HVS recnmmend.r the addition of an adjacent hotel with meeting room.rpace
adjacent to the S�vifte!Center property, the financial projections included in thi.r n�ort refZect only the co.rt and revenue.r
a.r.roczated tvith the pmpo.red e.xpanded ballroom and meeting mom.+pace di.rcus.red in the VenuWork.r fea.ribility.rtudy.
The financial projection,r for both.rcenario.r,pre.rented below in Table 1-2, do not take into con,rideration the co.rt of
building or operating a hotel nearby.
Under the tu�o.rcenario.r analy�ed, an expan�ion of the Suriftel Center based on the VenuWorks e.xf�an,rion or no
e.xpansion or renovation of the facility, the S�viftel Center'.r operating deficit i.r projected to grow. During the firrtyear
of.rtabili�ed demand at the e.x�anded Swiftel Center, HVS�imject.r an operating lo.rs of appmximately$494,000.
Thi.r projected deficit actually decrea.re.r initially, between 2011 and 2013, but then increa.res urith inflation. If the
Suriftel Center i.r not exj�anded,HTIS pmject.r the facility uall realitie a net deficit of appmximately,$SS0,000."
U�date on City Council's 2008 Strategic Goals. Jeff Weldon provided a progress report on the
City's 2008 Strategic Plan. T'he key projects included as follows: 1)Airport Dua1-Track Analysis, 2)
Railtoad Cxossing Safety Improvements, 3) Innovation Campus Infrastructure, 4) 34�'Avenue&20�'
Street Overpass Transportation Project, 5) South Trunk Utility Extension, 6) Storm Water Drainage,
7) Space Needs Analysis,and 8) Swiftel Center Expansion. He noted that since these projects span
more than just the current year, the action steps were intended to identify steps that wexe to be
addressed for just 2008 even though there is some forecasting of steps into future years. The
progress analysis is intended to measure the project against thi.ryear'.r action steps only. To properly
use this as an effective measurement,it is important to use the metrics for this year only. For
example, the airport project had only certain steps for this yeax;it was not to complete the entire
project of building a new airport or having a runway re-aligned. The progress report measures only
current yeax's activity with current year's action steps.
During the course of the year, some of the action steps and scheduling has been adjusted in light of
changing circumstances so the outcome may not be exactly as we envisioned it when it was adopted.
Weldon noted that he felt the City had made great progress and completed or are very near
completion on these items.
6:00 P.M. CITY COUNCIL MEETING
Consent Agenda: Resolution No. 107-08,a resolution of intent to lease real property to a private
entity with notice of hearing was added to tlie consent agenda and the Library Coffee Shop
Agreement was xemoved for action on December 9�`. A motion was made by Brunner, seconded by
McClemans to approve the agenda as amended,which included:
A. Action to approve the agenda, as amended.
B. Action on Resolution No. 94-08, for 2009 Medical Insurance Contribution Rates.
Resolution No. 94-08
Establishing 2009 Medical Insurance Monthly Contribution Rates for the City of Bxookings
Health Insurance Program
WHEREAS,Resolution No. 109-96 established a self-funded program for the provision of
health insurance for City employees;and
WHEREAS,establishing a corridor fund for sharing of savings and risk for a specified
claimant allows savings to the Health Plan;and
WHEREAS,the Brookings City Council intends to establish the levels of employee and
employer contribution to fund the program;
NOW,THEREFORE,BE IT RESOLVED,that the 2009 employee and employex
contributions to the self-funded health insurance program be established as follows:
235
City General Public Safety Employees
Employer s Employee's &Non-Represented PS Employees
Employei s Employee's
Share(75°/a) Share(25%) TOTr1L Share(85%) Share(15%)
Single $404.90 $134.96 $539.86 $458.88 $80.98
Employee/Minor $695.02 5231.67 j926.69 �787.69 ;139.00
Dependents
Employee/Spouse �865.75 �288.58 $1,154.33 �981.18 $173.15
Family $1,074.52 $358.17 $1,432.69 $1,217.79 $2�4.90
C. Action on Resolution No. 95-08, for 2009 Dental Insurance Contribution Rates.
Resolution No. 95-08
Establishing Dental Insutance Monthly Contribution Rates
for the City of Brookings Dental Insurance Plan
WHEREAS,BE IT RESOLVED, that the 2009 employee and employer contributions for
the dental insurance pla,n be established as follows:
CITY GENER�I.&PUBLIC S11FE'T'Y EMPLOYEES
Employer's Emplopee's
Shaxe(75%)
of Single Rate 2009 Shaie TOTi1L
Employee Only $25.38 $8.46 $33.84
Employee/Spouse $25.38 $39.52 �64.90
Employee/Child(xen) �25.38 ;41.32 $66.70
Family $25.38 $65.04 �90.42
D. Action on Resolution No. 104-08, for 2009 Vision Insurance Contribution Rates.
Resolution No. 104-08
Establishing Vision Insurance Monthly Contribution Rates �
fox the City of Brookings Vision Insurance Plan
WHEREAS,BE IT RESOLVED, that the 2009 employee and emploqer contributions fox
the vision insurance plan be established as follows:
City General&Public Safery Employees
Employer's Employee's
Shaze(75%)
of single iate 2009 Share TOTr�I,
Employee Only �7.13 $2.38 s9.51
Employee/Spouse $7.13 $9.51 Z16.64
Employee/Children �7.13 $12.84 $19.97
Family $7.13 $17.61 �624.74
E. Action on Resolution No. 96-08, authorizing the City Manager to sign a Liquor
Operating Agreement renewal for Pheasant Restaurant&Lounge.
Resolution No. 96-08
Pheasant Restaurant&Lounge Operating Agreement Renewal
BE IT RESOLVED by the City of Brookings, South Dakota, that the City Council hereby
approves a Lease Renewal Agreement for the Operating Liquox Management Agreement
between the City of Brookings and the Pheasant Restaurant&Lounge for the purpose of a
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liquor manager to operate the on-sale establishment or business for and on behalf of the
City of Bxookings at 726 Main Ave. So.,also known as the Pheasant Restaurant&Lounge.
BE IT FURTHER RESOLVED that the City Managex be authorized to execute the
Agreement on behalf of the City,which shall be for a period of five (5) yeaxs.
F. Action on Resolution No. 97-08, awarding bids for City of Brookings Custodial
Services.
Resolution No. 97-08
Resolution Awarding Bids for City of Brookings Custodial Services
Whereas, the City of Bxookings opened bids for City of Brookings Custodial Services on
Monday,November 10,2008 at 1:30 pm at Brookings Ciry Hall;and
Whereas,the City of Brookings has received the following bids for City of Brookings
Custodial Services: Ciry Hall: John.ron Pm Clean, Volga, SD,$14,400.00 annually;Top Notch
Cleanin�Bmoking.r, SD, �'17,880.00 annually, and J d�'T Cleanin�Bmoking.r, SD, ,�18,000.00
annually. Public Libxary:J�'T Cleanin�Brnoking.r, SD, ,j19,440.00 annually.Research &
Technology Center:John.ron Pm Clean, Volga, SD, ,�7,200.00 annually,J dr T Cleanin�Brooking.r,
SD, ,�7,800.00 annually.
Now Therefore,Be It Resolved that the low bid of Johnson Pxo Clean for City Hall fox
$14,400.00 annually,and J &T Cleaning fox the Public Library for$19,440.00 annually and
Johnson Pxo Clean for the Resea�ch and Technology Center for$7,200.00 annually be
accepted.
G. Action on Resolution No. 98-08,awarding bids for a front end loader for the landfill.
� Resolution No. 98-08
Resolution Awaxding Bids -Landfill Front End Loader
Whereas,the City of Brookings has received the following bid for one (1) 2009 Front End
Loader:RDO Equipment Co. Base Bid, $325,480.00. Trade-In John Deeze 724J Loader,
$126,490.00. Net Price $198,990.00
Now Therefore,Be it Resolved that the bid from RDO Equipment Co.,in the amount of
$198,990.00 lus the trade-in for the above-mentioned 2009 Fxont End Loader be acce ted.
City of Brookings Buder Equipment Co. RDO Equipment Co. Sheehan Mack Sales&
Landfill Front Siouz Falls,SD Sioux Falls,SD Equipment Sioux Falls,SD
End Loader
November 10,2008
Bid Bond 10% 10% 10%
Price of New
Loader ��3,978.00 �325,480.00 ;350,761.00
Trade In �100,000.00 ;126,490.00 j88,000.00
Net Price ;303,978.00 j198,990.00 �262,761.00
Delivery Date 30 da afrer awazd date January of 2009 60-120 days
H. ITEM REMOVED FOR ACTION ON Dec. 9�': Action to approve a conuact for the
Library Coffee Shop between the City of Brookings and Harsha Mistry.
I. Action on Resolution No. 99-08, authorizing the City Manager to sign a Liquor
Operating Agreement renewal for Applebee's Neighborhood Grill& Bar.
Resolution No. 99-08
Applebee's Neighborhood Grill&Ba.r Operating Agreement Renewal
BE IT RESOLVED by the Ciry of Bxookings, South Dakota, that the City Council hereby
approves a Lease Renewal Agreement for the Operating Liquor Management Agreement
between the City of Brookings and Applebee's Neighborhood Grill&Bar for the purpose
of a liquor manager to operate the on-sale establishment or business for and on behalf of the
City of Brookings at 3001 LeFevre Dr., also known as the Applebee's Neighborhood Grill&
Bax.
BE IT FURTHER RESOLVED that the Ciry Manager be authorized to execute the
Agreement on behalf of the City,which shall be fox a period of five (5) years.
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J. Action on Resolution No. 100-08, establishing effective date of new fee schedules for che
City of Brooldngs.
Resolution No. 100-08
Establishing Effective Date of Enforcement for City Fees and Fines
WHEREAS, On October 14, 2008, the Ciry Council adopted the following resolutions
setting forth fees and fine schedules: Resolution No. 85-08: A Resolution Revising Fees of
the City of Brookings, South Dakota and Resolution No. 86-08: A Resolution Setting Forth
a Schedule of Proposed Fines, Fees and Procedures Pertainuig to the Keeping and Control
of Animals in the City of Brookings, South Dakota.
WHEREAS, BE IT RESOLVED that said resolutions effective date is January 1,2009.
K, Action on Resolution No. 105-08,Authorizing Uncollectible Accounts to be removed
from Liquor Records.
Resolution No. 105-08
Authorizing Uncollectible Accounts to be removed from Liquor Records
WHEREAS,The Brookings Liquor has received a total amount of$7,388.27 fxom Citgo-
Mart-Inp in uncollectible accounts;and
WHEREAS, this accounts have been considered uncollectible;
NOW,THEREFORE,BE IT RESOLVED that the accounts totaling$7388.27 be
determined as uncollectible and removed from the records.
L. ADDITION: Action on Resolution No. 10?-08,A Resolution Of Intent To Lease
Real Property To Private Entity.
Resolution No. 107-08
BE IT RESOLVED by the governing body of the City of Brookings, South Dakota that the
City of Brookings intends to enter into a Concessionaixe Agreement with Harsha Mistry, for
a period of one (1) year and pertaining to the following described property:Approximately
500 square feet of space located in the Brookings Public Library for the purpose of
conducting food and beverage concessions.
BE IT FURTHER NOTED, that a Public Hearing and action will be held on the 9�'day of
December,2008 at 6:00 o'clock P.M., or as soon thereafter as this matter can be heard,at the
City Council Chambers and that all persons will be given an opportunity to be heard on the
pxoposed Concessiona.ire Agreement.
NOTICE OF PUBLIC HEARING OF INTENT TO LEASE
RF A T•PROPERTY TO PRNATE PERSON
NOTICE IS HEREBY GIVEN that on December 9, 2008 at 6:00 o'clock P.M.,or as soon
as this matter can be hea.rd, the Brookings Ciry Council will hold a Public Hearing at the
Council Chambers on a proposed Concessionaire Agreement of the City of Brookings which
provides for a lease to Harsha Mistry of the following described property:
Approximately 500 square feet of space located in the Brookings Public Library for
the purpose of conducting food and bevetage concessions.
At the time and place set for this Public Hearing,all who appear will be given an opportunity
to express their views for or against the proposal to enter into a Concessionaixe Agreement
concerning the above-described property with Harsha Mistry.
On the motion, all present voted yes;motion carried.
2"d Reading—Ordinance No 41-08• Budget Amendment A motion was made by McClemans,
seconded by Whaley, to approve Ordinance No. 41-08, an Ordinance Authorizing A Supplemental
Appxopriation To The 2008 Budget Fox The Purpose Of Providing For Additional Funds For The
Operation Of The City. All present voted yes;motion carried.
20K into bike lanes...
Public Hearing- Ordinance No 42-08• Zonin� A public hearing was held on Ordinance No.
42-08, an ordinance amending the zoning oxdinance of the City of Brookings and pe**a;n;ng to
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Extended Stay Hotels for the purposes of administration of the zoning ordinance. No public
comments were made. A motion was made by Reed, seconded by Whaley,to approve Otdinance
No. 42-08. All present voted yes;motion carried.
Public Hearing—Resolution No. 101-08: SRF Loan. A public hearing was held on Resolution
No. 101-08, SRF loan application for Innovation Campus infrastructure. No public comments were
made. A motion was made by Brunner, seconded by Reed, to approve Resolution No. 101-08. All
present voted yes;motion carried.
Resolution No. 101-08
WHEREAS,the City of Brookings has identified the need to upgrade the SDSU Innovation
Campus Infrastructuxe (Phases II-I�;and
WHERERAS,the City of Brookings proposes to undertake improvements to the SDSU Innovation
Campus Infrastructure (Phases II-I�;and
WHEREAS, the City of Brookings is eligible to apply for Clean Water State Revolving Fund (SRF�
Program assistance for the proposed project;and
WHEREAS,with the submission of the SRF application, the City of Brookings assures and certifies
that all SRF program requirements will be fulfilled.
THEREFORE BE IT RESOLVED, that the Ciry of Brookings duly authorizes the City Manager of
Brookings to execute and submit an SRF loan application requesting loan funds not to exceed$3.8
million funds for the proposed project to be borrowed at an interest rate of 3.25% for a term of 20
years and to be secured by TIF district xevenues and city sales tax.
FURTHER BE IT RESOLVED, that the City Manager of Brookings be hereby designated as the
certifying officer for any loan agreement,contracts,pay requests,correspondence,and other
required documents as a result of this application.
This resolution is effective immediately upon passage.
Resolution No. 102-08: Downtown Streetsca�e Change Order. A motion was made by
Brunner, seconded by Whaley, to approve Resolution No. 102-08,a resolution authorizing Change
Order (CCO#� for 2008-03STI Downtown Streetscape Pxoject. All present voted yes;motion
carried.
Resolution No. 102-08 '
A Resolution Authorizing Change Order#7 (CCO#� For
2008-03STI Downtown Streetscape Project
Winter Brothers Underground, Inc., Sioux Falls, South Dakota
BE IT RESOLVED by the City Council that the following change order be allowed for 2008-03SSI,
Downtown Streetscape Project: Construction Change Otder Number 7:Adjust estimated the bid
contract for the following bid items at the appxopriate bid pxices for a total increase of$14,398.20 to
the contract: Receptacle Post Extra Conduit,Coxe dtill storm sewer manhole at Station 5+06,Core
drill dxop inlet at Station 5+06,Saw and remove the top 30" of the steam tunnel on 4�'Street,and
Irrigation hookups,hose bib valve boxes,isolation valves and conduit.
Resolution No. 103-08: On-Sale Restaurant Licenses. Jeff Weldon,City Manager, stated that
Resolution No. 103-08 would set the fee for our Senate Bill 126 licenses. Just shoxt of 90 days ago
the City Council approved an Ordinance allowing this type of on-sale liquox license for full service
resta.urants and pursuant to state law;the City needs to adopt a fee for that. He noted that enclosed
in the City Council's packet was some background information from the City Attorney and a couple
of options (resolutions) relative to that issue for the Council's consideration.
City Attomey Steven Britzman said there are two options submitted to the Council,noting that
would limit the range of choices that the Council has. Why would there be two options presented?
Because it's the most difficult issue with respect to Senate Bill 126 from the very beguuiing has been
the determination of the procedure to establish the license fee.That license fee,he thinks,was
incorporated into the legislation without regard to the differences in which licenses are held. And of
course Brookings,being a local option community,which is the license holder by definition and
verified in several different places. Since the City is the license holder we had formed an opinion
early on as to whether or not we would be considering the transactions that have occurred in the
five year time period prior to January 1s`of 2008 to set the license fee,which is what the group of
statutes that are involved in Senate Bill 126 contemplate. He submitted two proposed resolutions
to the Council because that particulate issue of setting the license fee really depends on an
23 �
interpretation of the law which at this point in time we don't have any guidance. All we can do is,
and this is what we've done thus far, and that is to research it from the ground up and try to analyze
and determine how Senate Bill 126 fits into the alcoholic beverage license rules that pertain to a local
option community.
Britzman said the two options represent: One,with a proposed fee of$18,504,which would be the
$1.00 per person residing in City of Bxookings,which is the minimum fee. That parricular
xesolution contemplates that there were no transfers of the license by a license holder or qualifying
transfers during the five year time period prior to January 1S`of 2008. Certainly we recognize that
there have been transfers of businesses that hold operating agreements during that time period and
we did receive a very complete submission from the most recent transfer of an operating agreement
prior to January 1, 2008, submitted by Gus Theodosopoulus and that was complete in all respects.
The second alternative resolution contemplates taking that information that Gus Theodosopoulus
submitted to us and considering that transfer of that operating agreement to qualify as a transfer
under Senate Bill 126. In order to do that,you would have to conclude that that particular business
was a license holder of a retail on-sale license and that it transferred that license for considetation
here in the City of Brookings. We formed some opinions he thinks from the very beginning that we
felt that there is only one license holder in a local option community and that one license holder
would be the City and that's verified in a couple different places. Attorney General Opinion that he
came upon, he quoted one sentence, "as the license holder of the on-sale liquor license, the
municipality has the legal ability to condition the operation of a business under that license in any
legal manner authorized or empowered under South Dakota Codified Law 35-4...". So,it does
define the City as the license holder in a local option community setting of an on-sale license.
The recent declaratory ruling that the Department of Revenue issued also makes Yeference to the
fact that the Senate Bill 126 statutes contemplate transfers by license holders. In response to one of
the questions pertaining to the fee setting procedure, he quoted part of the n�ling,it says "...yes,
both SDCL 35-4-1.17 and SDCL 35-4-2.10 require the on sale license holder as of January 1,2008
who acquired the license within the last five yeaxs of that date, to report the price paid for the on-
sale license to the municipality that issued the license...". That aga�n,is from the recent declaratory
ruling uses the term"license holder." So we can kind of see that when we try to analyze where the
City of Brookings fits into this scheme we know that we'xe eligible for licenses under Senate Bill 126,
but as far as considering whether the xeported transfer that Mr. Theodosopoulus submitted to us
qualifies as a transfer of a license,that is the point that is subject to pxetty intense debate. He would
say that thexe axe two sides to the coin, there axe two sides to this argument. So submitting the two
resolutions,he thinks we have to make a choice and it's not an easy choice to make,in terms of
either giving credence to transfers of an operating agreement as a ttansfer of a license. That's
difficult to make that decision and it is for him to make a recommendation actually because he's
done the best he can looking at this Senate Bill 126 and trying to sort that out. The rest of Senate
Bill 126 is not that difficult to deal with. We can understand that. But fitting this particular piece
into the picture has been more difficult.
Other factoYS to consider probably with respect to setting the price of the license would be the fact
that the transfexs that occuxred and they may have very significant economic value when a successful
business changes hands, even in Brookings that has an operating agreement. 'There's no doubt that
there's a lot of economic transfer between the seller and the buyer. So we're not saying that that
doesn't have value. What we're looking at is,in terms of setting this fee and using that transfex as a
guide,we've got to follow the statute. When we look at that we also look at what was transferred
then, even though there may have been a substantial amount of economic transfex between the two
paxties,with respect to the liquox license,that fundamentally does not transfer. The liquor license
does not transfer. What was transferxed between the parties was an operating agreement subject to
approval by the Ciry. The operating agreement is within the discretion of the City to set the terms.
We do have to follow state law. One of the state laws that spells out some of the basic te�ns of an
operating agreement indicates that it's terminable upon 90 days notice by eithex party. Also,it has a
ma�num duration of 10 years, or five years with five year renewal. So it doesn't have the ongoing
longevity that a liquor license would have. That is pxobably observed in communities where that
liquor license is operated autonomously and it not xeally the subject of an opexating agreement.
We've oftentimes informally referred to an operating agxeement as a lease and you certainly can't
walk into a leased premises and say that the tenant has no rights. 'I'he tenant has rights, altnost like
an owner, for the duration of that lease and once that lease expires, then the owner has the
prerogative to lease it to someone else or to use the facility in some other way. He thinks ouY
operating agreements in terms of duration are tantamount to that.
24 �
The other point he would make is that when we enter into an operating agreement or issue a new
operating agreement, (correct me if I'm wron� but the fee that we're collecting is not what happens
when a liquor license in Sioux Falls is issued. He just read the Sioux Falls Ordinance setting the fee
for their on-sale licenses and their most recent fee was $155,000,which is a$1.00 per person which
is what the statute says when you issue an on-sale license -- $1.00 per pexson. That statute does not
apply to us or at least on a$1.00 per person, so that is a fundamental distinction between us and
Sio�Falls.
All of this he guessed is perhaps our side of the picture and in terms of trying to detexmine or
support oux rationale,which is that from early on we felt that the operating agreements were not
held by and wexe not the same as a liquor license and therefore, considering the transfers that have
occurred in the last five years,it's difficult to do because those transfers were not transfers of
licenses as contemplated in the statute. It's entirely and perhaps overly thorough. Thexe are
remedies if a license holder disagrees with this and he thinks that's pretty apparent with this statute.
If Council decided to set the fee at the minimum fee,which is $18,504, there would be remedies and
the Circuit Court is the place to go to if one objected to the price. The price that we're setting and
he's outlined that in the memo would be something that we have to live with for 10 yeaxs unless it is
changed by a Court order or something to that effect ox the Legislature changes the rules.
Mayor Munsterman asked under Option 1 the Ciry would continue to be the license holder but we
would be charging a license fee of$18,500 initially and$1,500 annually aftex that and they would be
under an operating agreement just like our establishments then? Britzman said that would be what
the Department of Revenue has indicated to us;that it would be handled in the same way. He
doesn't think the statutes provide us guidance in that regards,in all honestq. He thinks there
probably will be some changes to outline how that's handled in our community. But fxankly, that's
what the Department of Revenue has told him that they would treat them just li.ke operating
agreements.
Munsterman asked—the override applies, correct? Britzman xesponded correct,and that would be
entixely sepaxate issue because local option community, the override would apply as a matter of law
because statutes provides that you have to buy from municipal off-sale establishments.
ACTION: A motion was made by Munsterman, seconded by McClemans, to approve
OPTION One (1) of Resolution No. 103-08, setting the fee for (Ordinance No. 30-08) on-
sale licenses for full-service restaurants.
Discu.r.rion:
Don McCarly, attorney, stated he rvould object to option one for all the same r�a.ron,r that he'c articulated toyort for
the 6 month.r�ve've been talking about thi.r. He r�alitie.r Steve ju.rt went thmugh the one ride of the argument. He
u�on't belabor the point that he°r made befor�except he think.r has made abstndantly clear. He gue.cred the only thing
that he�vould point out avith regard to that is.rue i.r that the one.rentence in Steve'r memorandum dated November 13,
2008, in the second paragraph it.ray.r, `Yhe Department of Bevenue ha.r indicated that they do not bedieve ther�i.r a
df.rtinction between an operating agreement and an on-.rale licen.re for the purpo.re.r of.retting the fee. And that.rimple
.rtatement i.r the, he believe.r, an indication by Steve and he believe.r is correct that the Department of 13evenue.r ag�e.r
with him with regard to that i.r.rue. He would certainly object to thi.r Council ailopting option one ba.red on that and he
could have more public comment if�ve move on to option two but will ivait until that come.r up.
Council Member Keed a.rked Brit�rnan if he feelr if we we�to adopt option two that ive would be giving credence to
the fact that orgiving credence to that thert's actually a purcha.re of a licen.re verre.c being lea.red� Is that�vhatyou ar�
.raying� Brit�rnan.raid Option 2 i.r ba.red on analyZing the tranrfer information and u.ring that to.ret the price. That
i.r correct. So there wa.c a tran.rfer of a license.
Reed a.rked if ive went down thatpath, that licen,re then could be r�sold� Brittiman re.rponded corr�ct. Read re,rtated,
the holder of it could re.rell it if u�hatyou'r�.raying� Brittirnan.raid right, and he think.r that we have to�.re�ve the
po.r�ibilaty that the.re licen.res could be interj�reted a.r bein� �vell, the Legi.rlature may add.rub.rtantial addilional
prnvi�ion.r and guidance ar to whether or not the.re can be.rold or not, even in thi.r community with a local option rule of
law her�. He think.r that that i.r a di.rtinct po.r.ribility that that Jvill be clarified.
Mun.rterman.raid he think.r the ba,ric p�mi.re i.r that he tva.r at and Steve i.r at too looking at thi.r i.r that the City i.r
the licen.re holder—we hold the licen.re. He gue.r.re.r if.romebody could give him p�nof othenvi.re a.r in a bill of.rale that
the City actually.rold a license, which there i.r none. So it reverts back to that we are a local option community and
zve'r�going to interpret thit law the be.rt that�ve can and apply it. But like Steve said, the�'r probably going to need
to be.rome di�ction and clean up on the Legi.rlature'r end of thing.r and he'.r.rure the Department of Revenue�vidd look
at that come thi.r next.re.c.rion. He really think.r thir i.r nally ayhere we need to move ahead bared on rvhat the Senate
241
Bill 126 i.r put in front of u.r and give u.r a good opportunity to thi.r community to e.xpand that area, which svould be
good. That'.r avhere he'.r coming from. The fundamental is that sve are the licen.re holderr and option one really, unle.r.r
we�vant to really deviate aavay from that, and he doe.rn't.ree any rea.ron ave.rhould unle.r.c.romebody can argue that
otherrvi.re.
Council Member McCleman.r.raid he'c going to sr�port the,B'18,504 population dollar value and he al�o e,xpecting
the.re liquor operating agreement.r to operate ju.rt the lvay our other licen.re.r do, �vith a d�erent fee.retup, but they'll
operate through the city u�hich hold.r the licen.re. He doe.rn't,ree a rea.ron for the City to vary from.ramething they've
done for 41 year.r. It'.r negligent for u.r to break o�'and.rtart i.r.ruing licen.re.r in a manner a.r other communitie.r do.
The City of Brooking.r.rince 1967 ha.r i.c.rued operating agreement.r and there are.rome.rtatement.r here he'd like to read
out of the actual operating agreement. `Thi.r agreement wa.r made and entered into by the City of Brooking.r, hereunto
referred to a.r the City, and the bar owner or re.rtaurateur, de.rcribed a.r the Manager. The City de�ire.r to enter into an
operating agreement on a limited ba.ri.r svith the manager for purposes of operating an on-.rale e.rtabli.rhment or bu.rine.r.r
on behalf of the City. Wherea.r, the Manager i.c authori�ed to have facilitfe.r to operate the on-.ra1e e.rtabli.rhment.rolely
upon the premi.re.r a.r de.rcribed." McCleman.r.raid we a.crign this licen.ce to an addre.r.r, a legal de.rcription, that'r all
part of the operating agreement and the agreement, again, is made and entered into in a limited ba.ri.r bet2veen the
partie,r to alloiv the manager to operate a retail on-.rale premi.re in accordance�vith all the term.r and condition.r of the
City. Thi.c agreement i.r in accordance with all.rtate law.r and ordinance.r nosv in�ect. The thing that really make.r
him feel the�'r a d�erence in the svay Brooking.r does things i.r either the Manager of the bar, re.rtaurant, or ivhatever,
or the City may terminate thi.r agreement avithout cau.re upon 90 days zvrztten notice serued by eitherparty upon the
other. He find,r it very hard to feel at.romethin&.romeone can terminate without cau.re of 90 day.r notice. Apparently,
that party doe.c not own what sve're di.rcu.rsing. The licen.re i.r o2vned by the City. The operating agnement i.r hosv the
City ha.r chosen under.rtate lau�to operate thi.r liquor indu.rtry and they'll all have to operate under the rame 11%,
10%purcha.re.r they make at the Liquor Store.All theirpmduct ha.r to be bought fmm the MunicipalLiquor Stor�.
The way thi.r ha.r worked ha.r done very rvell for the City of Brooking.r and he think.r to vary from it ivould be a
mi.rtake.
On the motion, all present voted yes;motion carried.
Resolution No. 103-08
Resolution Establishing the Fee for the Issuance of Additional On-Sale Licenses for Full-Service
� Restaurants in the City of Brookings
BE IT RESOLVED by the City Council of the City of Brookings, South Dakota as follows:
WHEREAS, the State of South Dakota has authorized municipalities to issue additional on-sale
licenses fox full-service restautants pursuant to Senate Bill 126,and
WHEREAS,as required by Sta.te law, the license fee charged for a full-service restauzant on-sale
license shall be set at or above the current fa.ir market value for such license. However, any fair
market value so established shall be a minimum of one dollax for each person residing within the
City as measured by the last preceding decennial federal census, and
WHEREAS, the City Council has determined that 18,504 persons resided in the City of Brookings
as measured by the last preceding decennial federal census,and that the minimum license fee for the
initial issuance of on-sale licenses for full-service restaurants shall be Eighteen Thousand Five
Hundred Four pollars ($18,504.00),
NOW THEREFORE,BE IT RESOLUED that the minimum fee for the initial issuance of on-sale
licenses for full-service restaurants shall be Eighteen Thousand Five Hundred Four pollars
($18,504.00), and the fee fo=each annual renewal shall be in accordance with SDCL 35-4-2(4),which
is curxendy Fifteen Hundred Dollars ($1,500.00), and
BE IT FURTHER RESOLVED that the license fee chaxged for a full-service restaurant license as
pxovided herein shall not be modified unless it is determined that the City of Bxookings is required
to recognize transfets of its operating agteements during the period between�anuary 1,2003 and
January 1, 2008,in which case an amended Resolution shall be required which addresses the
provisions provided in Ordinance No. 30-08 g (3) shall be utilized to determine the license fee.
U�date on Railroad Safety Projects (crossing arms�whistle free zones�. Jeff Weldon said the
purpose of the update was to provide information regaxding the eligibility of funding for intersection
crossing upgrades. The sale of the DM&E Railroad to the Canaciian Pacific appears to be finalized
saon. DM&E staff has indicated that once the sale is finalized,Canadia.n Pacific will proceed with a
project to upgrade the rail system. However,we do not know a timeline for the upgrade project.
24Z
Ciry Engineer Jackie Lanning has visited with South Dakota Department of Transportation
(SDDO'I� staff about safety funding. The SDDOT does have federal safety funds available for
railroad safety improvements. The City would need to xequest funding for a project, and the
SDDOT will prioritize the projects and add them to thei�S'I'IP. State funding has akeady been
allocated for 2009;however requests can be made fot 2010. T'he federal safety funds have a 10%
City match requirement.
The funding available by SDDOT is stricdy for safety unprovements, such as crossing arms with
center media.ns. T'he funds may not be used for whisde free zones,which would involve four
quadrant ga.tes. SDDOT staff indicated there are safety issues with four quadrant gates,as a vehicle
may be stranded within the gates. The City would be required to pay the full cost for any
improvements for whisde free zones.
This topic may be put on an upcoming work session,and staff could invite Susan Tracy fxom the
SDDOT depending on the Council's next step regarding this issue. Council membexs agteed that
moxe discussion at work session outlining the action steps and goais would be appropriate.
Resolution No. 106-08: ICAP. A motion was made by Reed, seconded by McClemans,to approve
Resolution No. 106-08,a Resolution providing for the Development and Transfer of Lot 3,Nelson
Eighth Addition for Purposes of Constructing Homes to Eligible Clients of the Inter-Lakes
Community Action Partnership. All present voted yes;motion carried.
Resolution No. 106-08
A Resolution providing for the Development and Transfer
of Lot 3,Nelson Eighth Addition for Purposes of Constructing Homes
to Eligible Clients of the Inter-Lakes Community Action Parrmership
WHEREAS, ICAP has utilized USDA-Ru�al Development funds for a self-help program to pxovide
housing to eligible pexsons,and
WHEREAS, ICAP continues to experience ha.tdship in finding and acquiring developed lots within '
a price range that allows eligible petsons to continue to afford their homes, and
WHEREt1S, the City of Brookings has a parcel of property ideally-suited to accommodate eight
residential lots suita.ble for ICAP housing,and
WHEREAS, the City of Brookings has adopted a housing plan that describes the need for additional
affordable housing,and this project meets that need.
NOW,THEREFORE BE IT RESOLVED THAT the City of Btookings undertake the
development of the parcel into eight residential lots on behalf of ICAP, and
BE IT FURTHER RESOLVED THAT The City transfer the deneloped parcel to Brookings
Economic Development Corporation for$1G0,000 who shall,in tizrn, transfer the paxcel to ICAP
for the same amount.
Executive Session. A motion was made by Whaley,seconded by Reed, to enter executive session
at 6:53 p.m. for purposes of discussing matketing or pricing strategies and pending contractual
matters with the City Council, City Manager,City Clerk and City Attorney present. A motion was
made by Reed, seconded by Brunner, to e�cit executive session at 7:16 p.m.
Adjourn• A motion was made by McClemans, seconded by Reed,to adjoum. All present voted
yes;motion carried. Meeting adjourned at 7:16 p.m.
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