Albert Lea , MN                                                                                               September 19, 2005

A special meeting of the Albert Lea City Council was called to order at 4:30 P.M. in the City Center Council Chambers by Mayor Aaron Summers.

ROLL CALL

Present were Councilors Vern Rasmussen, Randy Erdman, George Marin, Jeff Fjelstad, John Severtson, Al Brooks and Mayor Aaron Summers.   Also present were City Manager Victoria Simonsen , City Attorney Steve Schwab , City Engineer Steve Jahnke, Council Secretary Sandi Behrens and a representative from the Albert Lea Tribune.

RESOLUTION 05-187 ADOPTED – APPROVING TIGER HILLS DEVELOPMENT AGREEMENT

Mayor Summers announced that this meeting was called to consider the approval of the Tiger Hills Development Agreement.  Notice of this meeting was published on September 16, 2005.

City Manager Victoria Simonsen explained that at the last meeting, the Council approved changes to the proposed development agreement but didn’t take action to approve it.  The agreement has been changed to reflect the Council’s directions from the last meeting including a change to Section 4.3 which says that between now and the time the Council adopts a new policy, the current policy will remain in effect for any lots that they sell.  As soon as the agreement is adopted, Section 4.1 Item No. 7 will go away and the cost will be paid as a part of the building permit.  Another item that has been changed is in Section 4.2 which states that the interest on the assessments will accrue as soon as the assessment roll is adopted.  She noted that this change has occurred at the recommendation of the City’s bond counsel.

Ms. Simonsen reported that an addition has been made to the Recitals to include a reference to the Council’s minutes from September 12 and September 19, 2005 and a change in the dollar amounts for the lift station and force main (Item 1) and the turn lanes (Item 2).

Councilor Marin moved to approve the Tiger Hills Development Agreement as proposed.  Councilor Severtson seconded the motion.

Greg Moen, representing Tiger Hills Development, told the Council that when they got the first draft of the agreement it stated that interest would not accrue until October 1, 2006.  The new agreement states that the interest starts 30 days from the date the agreement is signed.

Ms. Simonsen explained that this change occurred as a result of discussions with the bond counsel.  The City is paying interest on the money as soon as the bond was sold.  This interest should be passed on to the people assessed as well. 

Mr. Moen asked if this change will continue as City policy.  Ms. Simonsen replied in the affirmative.

Mr. Moen then stated that their second concern is the fact that the City is doing the construction and surveying work in the amount of $24,000 with Jones Haugh doing some work for $4,000.  Jones Haugh has told the developers that it will do the entire project for $31,000.  As long as they will be paying the cost, they are requesting permission to allow Jones Haugh to do the entire project.  The developers feel that Jones Haugh is more than qualified to oversee the project.

At the request of Mayor Summers, City Engineer Jahnke commented that he prefers to do the construction staking and oversight because this will be a City project and the City will be responsible for the infrastructure.  It is the City’s responsibility to insure that the project be done correctly. 

Mr. Jahnke noted that if anything goes wrong with the project, the City is responsible from the day the contract was awarded to Sorensen Bros.  In response to a Council question relating to Bolton Menk oversight on the Hatch Bridge project, Mr. Jahnke stated that Bolton Menk was employed by the City and in the Tiger Hills case, Jones Haugh and Smith is working for the developer.

Council discussion included a question of whether the City would still be required to oversee if Jones Haugh is hired, a question of whether the City has had problems with Jones Haugh & Smith in the past and a question of why the developer is willing to pay more to have JHS do the oversight.

Mr. Moen noted that they are already committed to pay the City $24,000 and JHS $4000 and that this would only increase the cost by $3000.  Mr. Jahnke noted that the City put JHS in the contract for $4000 but if they didn’t use the money it would be taken out of the payment.

Councilor Marin asked whether the City is going after this project simply to make money.  Ms. Simonsen replied that we are not, that we will pay people either way.  The City employs engineers to oversee jobs, this will be paying another engineer to do the work that our staff could do.  This development will be dedicated to the City and if we will inherit the construction, it would be nice to have the oversight of it.    She cited the problem with the sag on Blake Avenue asking who is responsible for it.

When asked what his concern with the City is, Mr. Moen explained that the developers have not had a good working relationship with the Engineering Department.  They are very comfortable working with Jones Haugh and Smith.    Mr. Moen also reported a problem that Hugh O’Byrne had with a Chapeau Shores project.  He noted that when the City errs, the taxpayers pay for the correction.  Mr. Jahnke responded that the soils in that area are unstable and that soil borings were inadequate.  If Mr. O’Byrne puts in another subdivision in the area he will be required to put in 18 inches of sub-base and a drain tile.

In response to a Council question, Ms. Simonsen told the Council that if the City pays for a project and it has to be redone that the taxpayer would ultimately pay.  If Jones and Haugh does it and the same thing occurs who is responsible to correct it.  She also told the Council that bond counsel told her that if we are going to spend City funds on a project a public hearing must be held.  She asked Mr. Moen if he could agree to Jones Haugh and Smith doing the engineering and surveying with the City doing oversight.  He agreed.  Ms. Simonsen suggested that if we agree to do that that JHS would have to give the City a warranty of their work for a certain length of time and a second public hearing would be required.

After additional discussion, Greg Moen told the Council that the developers can’t wait another three weeks for a new public hearing and that they would proceed with the agreement as written but that they want their requests to go on the record.

On roll call vote, all Councilors voted in favor of the motion to approve the development agreement with Tiger Hills Development, LLC.  Mayor Summers declared the motion carried and the resolution adopted.

RESOLUTION 05-188 ADOPTED – CALLING A PUBLIC HEARING TO ADOPT ASSESSMENTS FOR THE TIGER HILLS PROJECT – JOB 0510

City Manager Simonsen explained that a public hearing is required to adopt the assessments for Job 9510, the Tiger Hills Project.   She is recommending a hearing be called for October 10, 2005.

Councilor Rasmussen moved, Councilor Severtson seconded, that Resolution 05-188, calling a public hearing for October 10, 2005 to adopt assessments for the Tiger Hills Project, be adopted.  On roll call vote, all Councilors voted in favor of the motion.  Mayor Summers declared the motion carried and the resolution adopted.

ADJOURNMENT – 5:02 P.M.

Councilor Severtson moved, Councilor Brooks seconded, that there being no further business, the council meeting be adjourned until the next regular meeting of the Albert Lea City Council on Monday, September 26, 2005.  On roll call vote, all councilors voted in favor of said motion.  Mayor Summers declared the motion carried and the meeting adjourned.

Filed and attested September 19, 2005 .

/s/ Sandi Behrens                         /s/ Aaron Summers