SUNFISH LAKE SPECIAL COUNCIL STUDY MEETING – May 3, 2011

5:00 P.M. - ST. ANNE’S EPISCOPAL CHURCH

Attendants:

      Councilmembers: Judy MacManus, Roger Conant, Paul Burke and Mike Hovey.

      City Attorney: Tim Kuntz
      City Engineer:  Tim Hanson
      Interim Building Inspector: David Neameyer

      City Clerk: Cathy Iago

            Mayor Richard Williams arrived at 5:20 p.m.
     

1.   CALL TO ORDER:            Acting Mayor MacManus opened the meeting at 5:10 p.m.

2.   DISCUSSION ITEMS:  a.  Discussion of Establishing an Assessment Policy for Public Improvements:   Attorney Kuntz explained that at the last regular meeting, Council raised the question as to whether or not the City should treat the Angell Road culvert improvement project as a Chapter 429 assessment project versus a road maintenance improvement project. He stated that if Council chooses to assess for this project, it would be appropriate to determine an assessment policy for the project. He explained that the City Engineer had compiled assessment policies from other cities and noted that some of the cities are not exactly comparable based on their size. He further explained that he had prepared information on assessments for previous public improvement projects within the City where special assessment were levied.

The Attorney suggested that Council determine whether or not it would be best to spend time discussing the various options for establishing an assessment policy or if it would be better to focus on establishing an assessment policy for the Angell Road project.

Acting Mayor MacManus stated that she would prefer to have an assessment policy in place and pointed out that the City had shown no consistency in the percentages of shared costs in the previous public improvement project assessments. She indicated that the percentages for assessing road repairs appear to be consistent. Councilmember Burke agreed with her statements.

Councilmember Conant commented that it appears the percentages were determined on a case by case basis and that the City had never established a consistent policy.

Attorney Kuntz recalled that in the past the elected officials generally agreed that a street repair or reconstruction project for a neighborhood street was assessed with a higher percentage to the property owner and a lesser amount to the City since the majority of the benefit would be to the adjacent property owner. He indicated that the assessment was charged on a “per unit” basis for useable lots rather than by “lot area”, due to the fact that lot sizes vary substantially within the City. He explained that the time period for amortization of the assessment was normally 5-years. He further explained that if the roadway was considered a collector or arterial street that was more widely used by residents, the City normally paid the higher percentage of the assessment and the abutting properties or tributaries to the street paid the lesser percentage of the total costs.

The Attorney pointed out that all previous improvements assessed by the City were street improvements and the Angell Road project is a drainage/culvert improvement. He raised the question as to whether or not this should be considered as a street improvement project or a storm water improvement project; he noted that a storm water improvement project serves a larger area and would include more properties in the assessment roll.

Mayor Williams arrived at 5:20 p.m.       
 

Engineer Hanson presented the information he compiled from other cities relating to their assessment policies. He explained that assessments must meet two tests; 1) they must be fair to all properties assessed, and 2) the City must show benefit to the properties assessed.

Mayor Williams commented that the City cannot assess more than the benefit. The Engineer agreed and explained that appraisers have a tough time showing benefit for storm water projects and therefore the project is usually combined with a street repair project.

Councilmember Burke suggested that it may be better to discuss a general policy for assessments first and then determine which policy would be appropriate for the Angell Road project.

There was discussion relating to the difference between a storm water improvement and a road repair improvement project.

Councilmember Burke indicated that if the Angell Road project did not fall within the established assessment policy guidelines, it may have to be considered separately. He suggested that the assessment policy be drafted with language that explains if a project does not fall with the categories outlined, it would be considered on a different basis.

Councilmember Conant pointed out that Sunfish Lake is unique in that many residents live on private roads and pay 100% of the costs for road repairs. He indicated that this should be considered in the policy.

Councilmember Hovey noted that the City does not have any liability for private road improvements. He questioned if the City could view the Angell Road project as two separate projects.

Mayor Williams asked if the City could separate the road repair and culvert repair portions of the project. The Engineer responded yes. 

Attorney Kuntz pointed out that the City has no municipal sewer and water and therefore the model policy would include only street improvement projects and storm water projects. He indicated that the policy could identify two types of projects;

1) Street Improvements, with costs to specially benefitted properties on a per unit basis – The streets deemed as neighborhood streets could be split as with 70% of the costs to the benefitted properties and 30% of the costs paid by the City. The streets deemed as collector or arterial streets could be split with a 30 to 40% cost to the benefitted properties and a 60 to 70% cost to the City.

2) Storm Water Improvements – The costs would be calculated on a per acre basis and would be separate from the street. Improvement costs.

The Attorney noted that most cities have the capability to figure storm water improvement costs on a per acre basis and can determine the amount of runoff generated by each lot; he noted that Sunfish Lake does not have this capability and it is difficult to determine benefit to the properties.   

The questioned was raised regarding whether or not the larger properties gain more benefit from an improvement. Mayor Williams indicated that the increased value for improvement projects may not be proportionate to the value of the home, however, the improvement may attract buyers.

Engineer Hanson stated that technically the benefit should be proportionate to the increased value of the home after the project; however, the project costs are used when calculating the benefit to properties.

Councilmember Conant suggested that the policy included a 50-50 cost share for storm water improvements and a greater percentage, as outlined by the City Attorney, for road improvements. He questioned if it is necessary to have appraisals done for improvement projects.
Attorney Kuntz explained that appraisals are not necessary for all projects, but if the City anticipates an appeal of the proposed assessment, it would be wise to have an appraisal.

Mayor Williams asked who bears the burden to prove the benefit if someone challenges the assessment. Mr. Kuntz commented that the landowner must provide the evidence; however, if would be wise for the City to obtain an appraisal for court purposes and to defend the costs.

Councilmember Conant pointed out that there are other items to discuss and suggested they determine how to proceed. He pointed out that the Angell Road project was presented on a risk assessment basis and not as a storm water project. 

Councilmember Burke suggested that Council ask staff to draft a policy based on the discussion this evening. He indicated that he would have found it beneficial to have a comparison of the other cities policies by project and type on a separate sheet.

After a brief discussion, Council determined that the draft assessment policy should include the two categories, Street Improvements and Storm Water Improvements. They further determined that the percentages should be as follows:  neighborhood streets a 50-50 cost share; collector/arterial streets a 30-resident-70/City cost share and storm water improvements a 50-50 cost share.

Mayor Williams noted that the Angell Road project is unique and suggested that the City could allocate what portion would be assessment for the storm water portion of the project and also the assessment for the street improvement portion of the project.

Attorney Kuntz noted that Council cannot take formal action at this meeting and should direct staff to draft the policy at their regular meeting.

Councilmember Hovey noted that some cities policies include a senior citizen discount and a legal deferment procedure for assessments. Attorney Kuntz indicated that senior citizens must show hardship related to age, military service or a disability and that this could be included in the policy.

Councilmember Hovey asked if Council would still have an opportunity to deviate from the policy once it is adopted.

Attorney Kuntz explained that the policy is a guideline and that Council could retain the option to deviate from the policy and make adjustments. He noted that the draft policy will provide a basis for further discussion before its adoption.

Engineer Hanson pointed out that the categories for streets are relative to the amount of traffic and that he could list the City streets within the policy based on the amount of traffic they carry.    

Council thanked the Engineer and Attorney for their presentation.

b.  Discussion of Establishment of Procedures to be Adopted by the City to Exercise Powers Granted to it

Pursuant to Minnesota Statutes Chapter 463:   Mayor Williams explained that there is a property within the City that may be considered as hazardous and may constitute a fire hazard or public health threat.

Attorney Kuntz explained that Chapter 463 of the State Statutes grants the City certain powers to abate the nuisance posed by the property. He advised that the City received a complaint relating to a hazardous building structure when the police were called to the property to deal with a death. He explained that there are a number of structural issues with the home on this property and also issues with the outside area of the residence.

The Attorney suggested that the City may conduct an inspection of the property to determine if it meets the definition of a hazardous building. He stated that once the inspection is complete and the building official determines it is a hazardous structure; Council may adopt an order requesting the property owner fix the structure, or if it is not fixable, raze the structure. He noted that the order is filed with District Court and if the property owner does not contest the order or does not comply within the time period identified in the order, the City has the authority to fix or raze the structure and impose a lien on the property to recover the costs.

Attorney Kuntz explained that the City has not used this option previously and commented that he suspects there is only one property within the City that has deteriorated to this condition. He further noted that in his opinion it does not appear that the landowner would be cooperative when the building official attempts to conduct the inspection

There was discussion relating to whether or not the police should accompany the building official when he attempts to inspect the premises and if it would be appropriate to obtain an administrative order to access the building.

Interim Building Inspector Neameyer stated he would ask the police to accompany him for the inspection. Attorney Kuntz indicated that if permission to access the property is denied, the City could pursue obtaining an administrative order to access the property.

Council discussed whether or not they are prepared to raze the property and pointed out the persons living at this location are long-time residents. Attorney Kuntz explained that prior to razing the home, the persons currently living at this location must be escorted out of the residence. He noted that the Police Chief had contacted Dakota County Social Services regarding checking on the occupants, however, Dakota County declined taking any action prior to the City taking action.

Interim Building Inspector Neameyer explained that the State Building Code requires him to take action on this matter because it has been brought to his attention; he stated that under the State Building Code he would be liable if someone is hurt on the premises because he has now has “reasonable cause” to believe that the structure is hazardous.  

Attorney Kuntz explained that an on-site inspection is needed and indicated that this issue may cause some publicity for the City.

Council discussed the fact that the value of the property may help the occupants relocate if the structure is razed and discussed whether or not any other family members could assist with the process.

Attorney Kuntz commented that he had been involved with an attorney the family had hired a few years ago to resolve a dispute and suggested he may be able to make contact with the attorney to assist with this matter.

Councilmember Conant commented that it appears that the process is already underway since the building official must take action; he suggested that the City be informed of the inspection outcome and be sensitive to avoid publicity by noting that the City is attempting to help the residents before something tragic occurs.

Mayor Williams pointed out that the City focus should be on eliminating the hazardous structure and then the County may step in to assist with helping the family.

Attorney Kuntz suggested that it would be appropriate for Council to take action at the regular meeting to authorize the building official to conduct an inspection and that it would show the City has taken the first steps to eliminate the hazardous conditions on this property. Council concurred. 

c.  Review of City Oversight Procedures and Financial Processes:   Councilmember Conant explained that in his opinion the financial statements provided by the Treasurer could be improved. He noted that the City finances have never been audited and it would be a good practice to have an outside party review the financials to determine if everything is in order. He explained that he had contacted the State Auditor’s Office and they indicated they would provide a review of the financials to determine if they are in order and meet State guidelines for financial reporting. He noted that the auditor’s office would provide a cost estimate in advance of conducting the review and also provide outline of what the review would entail. He noted that he is not displeased with the Treasurer’s reporting nor does he believe that anything has been done inappropriately; he stated this is merely a review of the current practices and to confirm that the financial records are in order.

Mayor Williams agreed that it would be appropriate to have the financial records reviewed and questioned if it should be done annually. Attorney Kuntz pointed out that it is a good practice to have the financial records reviewed, however, he indicated that small cities are not required to have an annual audit or review.   

Council suggested that the matter could be placed on the June agenda for consideration and asked the Clerk to contact the State Auditor’s office to obtain information on the review process.

Mayor Williams noted that he now compares the bills with the list of checks he signs. Councilmember Conant commented that the current financial procedures are a substantial improvement over previous procedures.      

Councilmember Burke supported the review and indicated that there may be additional internal controls suggested by the State Auditor’s Office.

d.  Discussion of Joint Powers Agreements:  Clerk Iago presented information relating to Joint Powers

Agreements (JPA) and contracts the City with other agencies or neighboring communities.  She stated that the City Attorney had also found additional contracts and JPA’s and presented copies for Council review.

Councilmember Conant recalled there was a Joint Powers Agreement or some type of agreement which allowed the City to allow the overflow from Sunfish Lake to drain into the City of Mendota Heights. 

Engineer Hanson indicated that he could check his records and contact Mendota Heights to determine if such an agreement exists. Attorney Kuntz recalled that there was some type of agreement between Sunfish Lake and the City of Mendota Heights and also offered to check into this matter.

Mayor Williams stated there was no further business for discussion.

3.         ADJOURN:   Councilmember Hovey moved, to adjourn the Study Meeting at 7:00 p.m., seconded by Councilmember MacManus and carried. (5-0)

__________________________                                            ___________________________

Richard A. Williams, Jr., Mayor                                              Catherine Iago, City Clerk