City Council Minutes February 8, 2011

MINUTES
North Liberty City Council
February 8, 2011
Regular Session

Call to order.  At 7:00 p.m., Mayor Pro Tem Kuhl called the February 8, 2011 Regular Session of the North Liberty City Council to order. Council members present: Chipman, Donahue, Hoffman, Kuhl,
Wayson; absent – Mayor Salm.

Others present: Scott Peterson, Tracey Mulcahey, Kevin Trom, Dean Wheatley, Dick Noble, Mike Bails, Carter Kurdlre, Josh Covert, Don Colony, Karla Davis, Scott Akers, Karen Fesler, Dave Fesler, Steve McCoy, Robert Downer, Erek Sittig, Rick David, Erika Harper, Maynard Parker and other interested parties.

Approval of the Agenda.  Chipman moved, Wayson seconded to approve the agenda. The vote was: ayes – Kuhl, Donahue, Hoffman, Wayson, Chipman; nays – none. Motion carried.

Consent Agenda.   Hoffman moved, Wayson seconded to approve the consent agenda including City Council Minutes from the Regular Meeting on January 24, 2011;  the attached list of Claims; payment for the Cherry Street Signalization Project to Advanced Electrical Services, Inc. for the Retainage Release in the amount of  $11,562.84; payment for the Forevergreen Road Reconstruction Project to Metro Pavers, Inc. for  Pay Application Number 6 in the amount of  $53,314.85; and payment for the Highway 965, Phase 1 Project to Metro Pavers, Inc. for Pay Application Number 14 in the amount of $160,612.53.  The vote was: ayes – Donahue, Chipman, Wayson, Hoffman, Kuhl; nays – none. Motion carried.

Public Comment.    Don Colony, Streets Superintendent, provided an update on blizzard snow removal. He thanked everyone for their patience. The six streets employees worked 156 hours on Tuesday night and through Wednesday. 614 gallons of fuel were used at a cost of about $2,000.00. Colony estimated 100 tons of sand and salt mix was used.  He thanked all who helped through this event. He gave examples as to why the day took longer including clearing Penn Street took four hours which usually takes about half an hour. He hopes that citizens and people in region have better understanding of what it means when travel is not advised. Streets staff continues to work on streets to improve conditions before melting and any additional snow might arrive. Councilor Donahue complimented the crew on an extraordinary effort for an extraordinary storm. He asked how supplies of salt and sand were. Colony responded that we are right on track. Colony reported that Johnson County is not qualifying as a federal disaster area. Two plow trucks were out of commission during the event. Mayor Pro Tem Kuhl thanked all involved in snow removal.

Steve McCoy complimented Colony on the nice job he has done.

City Attorney Report.  City Attorney Peterson stated that he had nothing special to report and offered to answer questions.

City Engineer Report.  City Engineer Trom stated that he had nothing special to report and offered to answer any questions.

City Administrator Report.   Assistant City Administrator Mulcahey provided information on the Alliant Energy Hometown Rewards planning process.  The city’s housing rehabilitation project is underway with two houses being bid. The City received notification today that we will be receiving REDL&G funds in the form of a $300,000 zero interest loan for the Library Expansion project via Linn County REC from the USDA.

Mayor Report. Mayor Pro Tem Kuhl thanked city staff and sponsors for the 7th Annual Super Bowl Party. He reported that it was a fun event and was well attended.  The next free City sponsored event is Blues and BBQ on May 29.  Kuhl reported that Council is trying an experiment tonight. Councilors Wayson and Hoffman are using their laptops instead of paper packets.

Economic Development Agreements.  At 7:20 p.m., Mayor Pro Tem Kuhl opened the Public Hearing regarding the proposed Development Agreement with the University of Iowa Community Credit Union and authorization of Tax Increment Payments.   

City Attorney Peterson provided a summary of the agreements on the agenda.  The UICCU will be purchasing three lots. A & M Development, LLC will be purchasing the remaining seven lots. The agreements being considered are the product of extensive communication and negotiation.  The agreements seek to address the concerns brought forward in the lawsuit filed against the City.  Late Friday, Peterson received an email threatening that if the agreements go forward, the plaintiffs will file a rule to show cause to find the city in contempt of the injunction. He is asking Council to move forward on the agreements with the agreements being taken in front of a Judge for an opinion before the property purchase is closed. Peterson reviewed the claims in the lawsuit and the updates made to the agreements to remedy those claims.

Peterson reported that the City is not involved in the purchase of the land. The agreements are for the rebate of incremental taxes paid by the UICCU in an amount not to exceed $5.4 million with a time limit of eight years.  A & M Development’s agreement limits the amount to be rebated to a $5 million maximum over a twenty year maximum. The rebates will be only of the amount of incremental taxes paid by the property owner, no additional money will be rebated to the parties of the agreements. The sooner construction occurs on these parcels, the sooner the entities will see a higher return on their TIF payments.  Peterson highlighted the amendments to the agreements per the request of the UICCU and A & M Development, LLC.

Dick Noble representing the UICCU expressed excitement about increasing their presence in North Liberty.  He said that they have some issues to still work through. He thanked the City staff for their work.  He has received encouragement and excitement from business owners and residents. The facility is expected to open in 2013. They would like to move dirt this next fall. Noble thanked Council for their efforts. Councilor Donahue asked what the outstanding issues are.  Noble responded that the issues reported by City Attorney Peterson are the outstanding issues he was referring to.

Karen Fesler of 1524 Forest Road in Coralville commented on the condition of the City of North Liberty’s streets.  She appreciates the Fact Sheet relating to the project.  She stated that the group she is a member of has obviously saved the city money. She stated that typically a development goes vertical before rebates start. She stated that there is no requirement to construct anything in the agreement and that there is not a guarantee of what will be built.  She stated that A & M Development does not have to build anything to receive rebates and can receive rebates on bare ground. She cited the Plaza on 5th project in Coralville as a project that the City received plans for development.  She stated that the City could be in violation of the temporary injunction. She asked how the commercial property tax reassessment would affect the loan.  She asked what precedent the city is setting here. She asked how this affects the 380 Development Group agreements.

The public hearing was closed at 7:39 p.m.

Chipman moved, Wayson seconded to approve Resolution Number 11-11, A Resolution approving the Development Agreement with the University of Iowa Community Credit Union, Authorizing Tax Increment Payments and Pledging Certain Tax Increment Revenues to the Payment of the Agreement with the amendments proposed by City Attorney Peterson. In discussion relating to this item, Council discussed how commercial rollback would affect the tax payments. The City will only be rebating what the property owners pay in incremental taxes. If the rollback on commercial property is implemented, the amount paid and amount rebated would simply be less and will reduce the total amount paid in the end to a lesser amount than in the agreements. The 380 Development Group would be released from the purchase agreement if the UICCU executes a purchase agreement. The 380 Development Group agreements would be reviewed. The 380 Development Group would be dissolved. With regards to the earnest money contributed by the City, if the deal is completed, the earnest money will be refunded. With regards to school funding, the PPEL and Debt Service levies are not included in the increment rebated to the owner.  The length of the agreement is shorter, eight years, than the original agreement of twenty years.  The incremental taxes will be returned to the general tax funding sooner.  Councilor Donahue stated that he disagreed with how the potential commercial rollback may work. He also stated that other commercial ventures have come to council for far less and Council has turned them down. After discussion, the vote was: ayes – Wayson, Chipman, Kuhl; nays – Donahue; abstain – Hoffman. Motion carried.

At 7:49 p.m., Mayor Pro Tem Kuhl opened the Public Hearing regarding the proposed Development Agreement with A & M Development LLC and authorization of Tax Increment Payments.

City Attorney Peterson provided information regarding the A & M Development LLC agreement that has three parts. The initial period payments are refunding all incremental taxes paid to the City for all uses including the additional assessed valuation on the land, Commercial development and Office Premium development. The second period rebates incremental taxes on the additional assessed valuation of the land and Office Premium development. The third period, after ten years, only rebates incremental taxes paid for Office Premium development.

Robert Downer representing A & M Development LLC spoke regarding the Plaza on 5th project. Downer stated that Mr. Noble’s comments summarized the reasons why A & M Development wants to participate in this project. This area will be attractive for office and research park uses.

Rick David spoke regarding the debate on the role of government. It is not the government’s job to bring jobs in, rather should just fund public safety. The City should not pick winners or losers. He spoke regarding the daycare owner that spoke at a previous meeting. He stated that only public safety should be funded and nothing else. He stated that if the City keeps taxes low, businesses will come without incentives.  

Steve McCoy stated that the Concerned Taxpayers of North Liberty have tried to communicate with council and voice their concerns. He does not see this project as necessary. He does not put the blame on the UICCU rather on the City Administrator. He expressed doubt about the 450 good paying jobs because tellers are not paid much. He stated that there will be a major impact on the taxpayers.   If they would have come forward with this project this way, he would still be against it. He commented on the obstacles he has faced in obtaining information.  He stated that the role of the City is to provide only police, fire and streets.  He stated that only Councilor Donahue represents the people and the remainder of council represents staff.

Dennis Tallman, 1999 Blue Heron Rd., and owner of Alphagraphics stated this process has been going on since June with the third set of agreements in front of Council tonight. He stated it is time sit down with other business leaders and draft a City economic development plan with cost/benefit ratios so that businesses know what to expect.

The public hearing was closed at 8:03 p.m.

Hoffman moved, Chipman seconded to approve Resolution Number 11-12, A Resolution approving the Development Agreement with A&M Development, LLC, Authorizing Tax Increment Payments and Pledging Certain Tax Increment Revenues to the Payment of the Agreement with the amendment proposed by City Attorney Peterson. The discussion included that the City Council is including new snow plows and police officers in the budget for the next fiscal year. Council is striving to keep taxes low through increasing the tax base. Wayson stated that the City should work on something locally relating to economic development to incorporate into a regional policy. It was stated that a viable city attracts new businesses. Councilor Hoffman stated that an economic development plan does need to be in place. After discussion, the vote was: ayes – Hoffman, Kuhl, Chipman, Wayson; nays – Donahue. Motion carried.

The Villas at Liberty Executive Park Hoffman moved, Wayson seconded to approve the third consideration and adoption of Ordinance Number 11-01, An Ordinance amending the Zoning Ordinance to change the use regulations on property owned by North Liberty LLC located in North Liberty, Iowa to those set forth in the North Liberty Municipal Code for the ORP – Office Research Park District. The vote was: ayes – Chipman, Wayson, Kuhl, Hoffman; nays – Donahue.  

Chipman moved, Wayson seconded to approve the third consideration and adoption of Ordinance Number 11-02, An Ordinance amending the Zoning Ordinance to change the use regulations on property owned by North Liberty LLC located in North Liberty, Iowa to those set forth in the North Liberty Municipal Code for the C-3 Commercial District. The vote was: ayes –Hoffman, Kuhl, Wayson, Chipman nays – Donahue. Motion carried.

City Release of Restrictive Covenants relating to The Villas.  Chipman moved, Wayson seconded to approve Resolution Number 11-13, A Resolution authorizing the Mayor and City Clerk to execute a Release and Termination of Certain Covenants related to City-owned Property. City Attorney Peterson explained the release.  This action will complete the mutual release of all property owners that contemplated high density multi-family housing. After discussion, the vote was: ayes – Hoffman, Wayson, Chipman, Kuhl, Donahue; nay – none. Motion carried.

Jones Boulevard Project.  At 8:21 p.m., Mayor Pro Tem Kuhl opened the Public hearing regarding the Jones Boulevard Improvements Project. No oral or written comments were received. The public hearing was closed at 8:22 p.m.  

Hoffman moved, Wayson seconded to approve Resolution Number 11-14, A Resolution approving Plans, Specifications, Form of Contract and Estimate of Cost for the 2011 Jones Boulevard Project. Councilor Donahue asked if this was to be funded with TIF bond proceeds. Staff later provided the response that this was indeed a TIF funded project. After discussion, the vote was: ayes – Kuhl, Donahue Wayson, Chipman, Hoffman; nays – none. Motion carried.

Metropolitan Planning Organization of Johnson County Long Range Transportation Plan.  Donahue moved, Hoffman seconded to approve Resolution Number 11-15, A Resolution authorizing staff to submit the following capital transportation projects and cost estimates to the Metropolitan Planning Organization of Johnson County for inclusion in the revised long range transportation plan to be adopted May of 2012.  After discussion, the vote was: ayes – Wayson, Chipman, Hoffman, Donahue, Kuhl; nays – none. Motion carried.

Hertz Farm Management Agreement.  Chipman moved, Wayson seconded to approve Resolution Number 11-16, A Resolution Authorizing the City Administrator to execute Agreements related to the Management of Certain City Property.  Assistant City Attorney Erek Sittig explained the proposed agreement with Hertz Farm Management. Council discussed the proposed agreement and options.  Chipman moved, Donahue seconded to table the Hertz Farm Management Agreement. The vote was: ayes – Chipman, Hoffman, Donahue, Wayson; nays – Kuhl. Motion carried. After the vote, City Attorney Peterson encouraged Council to connect with Ryan Heiar to make their concerns known.

Assessment Resolution.  Chipman moved, Donahue seconded to approve Resolution Number 11-17, A Resolution Authorizing the Assessment of Delinquent Amounts Owed to the City of North Liberty, Iowa, to Individual Property Taxes.   The vote was: ayes – Donahue, Hoffman, Kuhl, Wayson, Chipman; nays – none. Motion carried.

Old Business.  No old business was brought forward.

New Business.  City Planner Wheatley reported that the Planning &Zoning meeting was held successfully during the blizzard.  

Closed Session.  At 8:36 p.m., Hoffman moved, Wayson seconded to move into Closed Session under Iowa Code Section 21.5.1(c), to discuss strategy with counsel in matters that are presently in litigation is imminent where its disclosure would be likely to prejudice or disadvantage the position of the governmental body in litigation. The vote was: ayes – Hoffman, Kuhl, Wayson, Chipman, Donahue; nays – none. Motion carried.  

At 8:55 p.m., Donahue moved, Hoffman seconded to return to open session. Ayes – Kuhl, Wayson, Chipman, Donahue, Hoffman; nays – none. Motion carried.

Adjournment.  At 8:55 p.m., Wayson moved, Chipman seconded to adjourn. All ayes. Meeting adjourned.