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HomeMy WebLinkAbout08-23-2011 Mechanical Committee Minutes MECHANICAL COMMITTEE OF CANTON CITY COUNCIL Tuesday, August 23, 2011 Donald E. Edwards Way Historic Depot 50 N. 4t" Avenue Canton I161520 Aldermen in attendance: Aldermen Schenck, Pasley, Fritz, West, Nelson, Ellis, Pickel, Hartford Aldermen Absent: Staff in attendance: Mayor Kevin Meade, City Clerk Diana Tucker, City Attorney Chrissie Peterson , City Administrator Jim Snider, Comptroller Caty Campbell, Fire Chief Keith Frank, Deputy Police Chief Rick Nichols Others in attendance: Dan Oaks, Tommy Bohler Media in attendance: The Daily Ledger John Froehling Video Services by: Joe Ginger Mayor Meade called the meeting to order at 6:30 p.m. Public Safety & Traffic Alderman Jim Hartford, Chairman POLICE REPORT Chief Taylor reported: Kid's Day on the Square was held and the police department was asked to participate. During the event the police department conducted a bicycle rodeo and a K-9 demonstration. Over 100 people participated in the rodeo. The event was very successful and the department has received positive feedback. FIRE REPORT No further discussion took place regarding the fire report. FIRE DEPARTMENT LADDER REPAIR FOR ENGINE 2 Mayor Meade explained that an emergency repair took place on fire engine 2 and the expenses will need council approval. Motion and second were made by Aldermen Hartford/Nelson to send to council for consideration. The motion carried by voice vote. FIRE DEPARTMENT REPAIR FOR ENGINE 1 Fire engine # 1 had a small fuel leak and a quote was received in the amount of $2,000.00. A report will be brought to council for further review. Motion and second were made by Aldermen Hartford/Nelson to send to council for consideration. The motion carried by voice vote. FIRE SAFETY HOUSE Chief Frank explained that the Canton High School Trade class is going to be doing some repair work to the fire safety house that is used in the schools. Alexander Lumber will provide a discount on the cost of the material. The estimated cost is approximately $1500.00 RESOLUTION FOR AUCTION TO BE HELD SEPTEMBER 25. 2011 Deputy Chief Nichols explained that the police department has several bicycles along with some computer monitors that the City will auction off on September 25, 2011. Motion and second were made by Aldermen Hartford/Nelson to send to council for consideration. The motion carried by voice vote. CANTON POLICE DEPARTMENT SERVICES SURVEY At the beginning of this year Chief Taylor wanted everyone in the department to come up with an idea for quality of life issues. The idea of a survey came forward. Lansing Michigan did a similar survey that was successful. The survey is easy to complete and will be sent randomly in the water bills. The surveys will go to various citizens in Canton. The results of the survey will be used to evaluate the department and look at ways to move the department forward. The surveys can be sent back to the water department or dropped off directly at the police department. RESCINDING OF RESPONSIBLE BIDDER ORDINANCE No discussion took place. The Public Safety & Traffic Committee adjourned at 6:40 p.m. Streets & Garbage Alderman Justin Nelson, Chairman DISCUSSION ON REMOVAL OF TRAFFIC SIGNAL AT LOCUST AND AVENUE A Keith Plavec explained that a few weeks ago discussion took place regarding the construction currently taking place by IDOT on Locust Street. During the road construction the traffic lights were removed and many citizens have commented that they like the street better without the traffic lights in place. Keith contacted IDOT to see if the traffic lights could be removed. tDOT informed Keith that the lights can be removed. Motion and second were made by Aldermen Nelson/Hartford to remove the traffic signal at Locust and Avenue A and send to council for consideration. The motion carried by voice vote. BIDS FOR PAVEMENT REPLACEMENT ON ENTERPRISE DRIVE Keith Plavec explained that due to a recent project at the enterprise drive the roadway surface was not put in. The roadway is now ready to have four inches of pavement placed on top. A bid opening took place for the pavement replacement. R.A. Cullinan provided a quote in the amount of $19,922.08 which would be paid from the TIF account. The current TIF account balance is approximately $70,000.00. If this project is approved the TIF balance would be approximately $50,000.00 which must be spent by the end of this year. This will be placed under new business at the next council meeting. The Streets & Garbage Committee adjourned at 6:45p.m. Lake, Buiidings & Grounds Alderman Eric Schenck, Chairman 61 EAST SIDE SQUARE UPDATE- MARK ROTHERT Mark Rothert discussed the following memo: The goal of this memo is to help identify development options for 61 East Side Square in light of new information and to facilitate discussion about what ultimately should be done with the property On August 10, 2011, I met with Rick Regnier, County Assessor, Steve DeRenzy, Canton Township Assessor, and Mike Hays, County Administrator, to discuss the property and what it might be assessed at should it go on the tax rolls. With this information, I was able to calculate the estimated tax increment to be created by the property, as it lies in the IH TIF. Estimated taxes are around $200,000 for the remaining life of the IH TIF. By having the estimated TIF revenues, I could then calculate an estimated sale price for the building that allows the City to break-even on the project at around $370,000. Knowing these numbers, it may be difficult to find an outright buyer willing to pay the break even sale price. Moreover, the break-even sale price is one that not too many investors can afford without borrowing capital. In today's economic times, a borrower would have to put down up to 20%, or $74,000, for a commercial loan. This large down payment would disqualify most who are interested in the building. A second option that may be more viable to both an interested party and the City requires leasing the property for the remaining life of the IH TIF (17 years). At the end of 17 years, the property and title would be transferred over to the lessee. The following breakdown shows how this scenario might work: Prolect Expenditures Project Costs $561,000 Remaining Project Costs (estimate for parking lot, alley, services to bldg.) $ 50,000 Less SRPED Grant ~S 40 000 Total Project Costs $571,000 Proiect Revenue NNN* Lease rents for 17 years (starting at $2,000/mo. and increasing by 3% each year) $522,000 TIF revenues 200 000 Total Project Revenue $722,000 Net Gain/(Loss) $151,000 *NNN = tenant pays property taxes, insurance, utilities and maintenance costs in addition to the lease rent. Build-out of the interior space of the building will be left to the purchaser of the property and is largely why a low lease rate would be offered for the property. A$2,000 per month lease rate on this building equates to a$3/sq. ft./year. This rent compares very favorably to other rents of newly constructed or renovated spaces in the downtown that are going anywhere from $7- $10/sq. ft./year. Under this lease scenario there is also greater security for the City because it retains ownership of the building until the end of the 17 year lease. If the business fails, then the City can lease out the property again. There is also a possibility that additional sales tax will be generated from the property if a retail operation goes into the building. A third scenario involves keeping the property in public use as a business incubator. A business incubator is a common location that offers support to a variety of startup companies. Incubators often provide office space as well as assistance with company development. Other features that many incubators provide include mentoring, networking services, and programs to help start a business. Under this scenario, 61 East Side Square would be designed to house several office spaces as well as other ancillary operations. See the attached site map of how 61 East Side Square could be designed to accommodate multiple office spaces, meeting rooms, retail space, a commercial kitchen, cannery and a tourism and visitor center. I also envision putting the SREPD and Chamber offices on the first floor. Building-out a business incubator will also take more capital, either from the City or through a US EDA or USDA grant. The return on investment, however, could be substantial in the way of new business creation, job growth, and increased property and sales taxes as businesses incubate out of the facility. The following breakdown shows how a business incubator could allow the City to break-even on this project: Proiect Expenditures Project Costs $561,000 Remaining Project Costs (build out of incubator) $200,000 Less SRPED Grant 40 000 Total Project Costs $721,000 Proiect Revenues USDA or US EDA Grant $200,000 Lease Rents ($18,000 for 17 years) $306,000 TIF revenues $200,000 Sales tax revenues from space within incubator (ie. retail space) 15 000 Total Project Revenue $721,000 Net Gain/(Loss) $ 0 Additionally, lease rents could go into the City's General Fund and not its TIF account, tourist to Canton would have a visitor center to access information about the area, and the SRPED and Chamber would be on the first floor for greater visibility. I have also ran a quick income statement for the incubator, based on tenant rent and it can be a sustainable operation, given certain assumptions (full occupancy, retail sales, etc.) RECOMMENDATION My hope is to gain your feedback at the 8/23/11 committee meeting on what direction or option you would like the SRPED to pursue. I would recommend pursuing a strategy to either lease the building to an interested party or move forward in creating a business incubator. Sale of the building to a private party, due to the break-even sale price, does not seem likely. Further discussion took place regarding the options explained. During the discussion it was determined that if the 2"d floor of the building would be used the City would be required to pay and have an elevator put in the building. Mark Rothert explained that he would try to get grant funding to help with the costs associated with installing an elevator. Alderman Schenck discussed the possibility of placing the property for sell as commercial property with incentive options to make it more attractive for a potential buyer. If a buyer does not come forward to purchase the property the leasing option or the business incubator option could be a secondary plan. Mark Rothert explained that leasing the property could create a low lease price that would be favorable for potential lease holders. The business incubator option would be the most time consuming, however grants may be available to offer this type of building. The incubator option could help people wanting to start a new business as a startup plan. It was determined that this would be the most favorable option for the City and potential business owners. Motion and second were made by Aldermen Hartford/Ellis to have the incubator option sent to council for consideration. The motion carried by voice vote and was unanimous. FARM LEASE A farm lease exists at the Canton Lake and a time frame exists to have the City serve notice to the lease holder before a new lease can be created. Attorney Peterson explained that in 2007- 2008 the City entered into a written agreement. The current tenant farmer is Mike Krulac. Approximately 40 acres is tillable. Mike currently does mowing and other services along the property as explained in the agreement. The work performed was agreed upon by previous council instead of a cash payment. Motion and second were made by Aldermen Hartford/Ellis to direct Attorney Peterson to notify the tenant that the lease is being terminated for the purpose of offering a new lease proposal and he would have an opportunity to re-bid. The motion carried by voice vote. City Attorney Peterson received an email from Wastewater Superintendent Joe Carruthers explaining that he is concerned about the City not retaining ownership of the property. Further discussion took place regarding the need to issue a new lease. Alderman Schenck explained that it would be better to lease the land used for farming and then in a separate agreement determine if the work that needs to be performed (mowing etc.) should be done by City personnel or have someone else do the work. The second issue with the lease is the fact that the City owns other crop land around the lake. The lease should include all of the crop land around the lake not just the land currently in the lease. The other land (approximately 10 acres) has people farming it with no lease and no money coming back to the City. Attorney Peterson explained that if the council does not want to continue to offer an agreement for work performed in exchange of using the land to farm they have every right to change the agreement to whatever type of agreement they would prefer. NORTH SHORE SUBDIVISION UPDATE Keith Plavec explained that a meeting took place with lease lot owners, engineers, road commissioners the county planning/zoning, and the county administrator regarding a plat survey. The City will be back in the future to plat the subdivision and look at variances and potential rezoning. A request for proposals was sent out for surveyors. Keith further explained that he would review the qualifications and the negotiations with the firm would begin. The item is on the September 6t" meeting with the County and additional information will be brought back for further discussion. Alderman Schenck explained that the goal is to have the lots platted and a private subdivision with a legal description of each of the lots. ANNEXATION OF CANTON LAKE PROPERTY The property the City owns at the lake is technically outside the boundaries of the City which raised questions about being able to legally enforce ordinances put into place for areas outside of the City limits. City Attorney Chrissie Peterson explained that if the City owns the property at the lake the ordinances can be legally enforced. Alderman Schenck further discussed annexing a portion of the Canton lake property to clear up any issues about enforcing ordinances and future development plans. Attorney Peterson explained that the City would need to look at the map regarding the annexation process. LAKE SWIMMING ORDINANCE Alderman Schenck explained that some problems exist with the swimming ordinance and a policy may need to be set for swimming at the lake to better explain what is allowed. The City currently has ordinances that are difficult to enforce. Aldermen Schenck will work with City Attorney Peterson to see what clear options could be brought back for the council to consider. HIRING LAKE GUARDIANS Alderman Schenck explained that the ability to hire lake guardians is in the current ordinance. One policy the City needs to consider is to hire a lake guardian that would work part time to provide a presence at the lake to deal with some of the recreational uses at the lake and assist in getting boat permits etc. Alderman Ellis explained that he thinks the City should have a lake superintendent or a lake department to staff the Canton lake area. Chief Nichols explained that the City would want to make sure they do not violate the police department contract and the City would want to make sure they follow the guidelines set by the state regarding auxiliary officers. Discussion is currently taking place regarding the code enforcement officer enforcing the lake area. The Lake, Buildings & Grounds Committee adjourned at 7:50 pm Public Works, Water & Sewer Alderman Gerald Ellis, Chairman INVOICE # 4390 FROM CHUCK KINSEL TRUCKING & EXCAVATING FOR DEMOLITION OF STRUCTURE AT 204 W OAK IN THE AMOUNT OF $10,500.00 Keith Plavec explained that the demolition for the project was paid from the general fund. During the demolition of the house the sidewalk and the curb was damaged and repair is currently being discussed. Motion and second were made by Aldermen Ellis/Nelson to send to Council for consideration. The motion carried. INVOICE # 4391 FROM CHUCK KINSEL TRUCKING & EXCAVATING FOR DEMOLITION OF STRUCTURE AT 408 JOHNSON COURT IN THE AMOUNT OF $7,000.00 Keith Plavec explained that the property at 408 Johnson Court was demolished and the work is complete and will be paid from the general fund. Motion and second were made by Aldermen Ellis/Nelson to send to Council for consideration. The motion carried. APPLICATION FOR PAYMENT NO 10 & FINAL FOR THE SECONDARY CLARIFIERS PROJECT FROM LEANDER CONSTRUCTION INC. IN THE AMOUNT OF $34,672.49 Keith explained that the project was completed on time and will be paid from the bond funds. Motion and second were made by Aldermen Ellis/Hartford to send to Council for consideration. The motion carried. APPLICATION FOR PAYMENT NO 1& FINAL FOR WALNUT STREET STORM SEWER RELOCATION PROJECT FROM LAVERDIERE CONSTRUCTION INC IN THE AMOUNT OF $57,200.00 Keith explained that the work is complete and will be submitted to the DCEO grant. Motion and second were made by Aldermen Ellis/Nelson to send to Council for consideration. The motion carried CHANGE ORDER NO 1 FOR 3RD AVENUE EXTENSION CONTRACT B-2 Keith explained that the project is for the 3rd and Maple Street project. The contract for B1 was previously approved. The final change order total is $298,302.75. Motion and second were made by Aldermen Ellis/Hartford to send to Council for consideration for a net increase of $13,155.37 The motion carried APPLICATION FOR PAYMENT FOR CHESTNUT STREET EXTENSION PROJECT FROM OTTO BAUM INC IN THE AMOUNT OF $20,004.30 Keith explained the cost is $ 20,004.30. Next month should be the final pay request. This will be paid from the TIF Fund Motion and second were made by Aldermen Ellis/Hartford to send to Council for consideration. The motion carried APPLICATION FOR PAYMENT FOR 2011 MFT OIL & CHIP WORK FROM IRC IN THE AMOUNT OF 9 984.70 Keith explained that this will be paid from the MFT fund as part of the annual MFT maintenance program. Motion and second were made by Aldermen Ellis/Nelson to send to Council for consideration The motion carried 2011 MFT SIDEWALK RESOLUTION Keith explained that the City has been working with the State for a sidewalk along 16th Avenue from Ash Street to the entrance to the school. IDOT wants a new section number and a new resolution for improvement and a request for expenditure for the sidewalk improvements. The City informed IDOT that this is tied into the Ash street project and wanted to run this to the school. Two items need to be approved. The first item to approve is a resolution for improvement appropriating $30,000.00 from the MFT account for the sidewalk work. Motion and second were made by Aldermen Ellis /Nelson to direct Attorney Peterson to prepare a resolution for the MFT sidewalk resolution in the amount of $30,000.00 and send to council for consideration. The motion carried by voice vote The second is the request for expenditures from the MFT account in the amount of $30,000.00 Motion and second were made by Aldermen Ellis/Nelson to approve the request for expenditures from the MFT account in the amount of $30,000.00 and send to council for consideration. The motion carried by voice vote. IMPROVEMENTS AT INDUSTRIAL PARK LIFT STATION 1oe Carruthers discussed the need for improvements at the industrial park lift station. Joe explained that the top of the concrete has settled and needs to be raised. Seward Construction gave a quote in the amount of $12,165.40. This will be TIF eligible for the improvements. The balance is approximately $38,000.00 after the cost for the improvement. Motion and second were made by Aldermen Ellis/Hartford to place under new business at the next Council meeting. The motion carried by voice vote. ADJOURNMENT Motion and second was made by Aldermen Hartford/Pickel to adjourn to executive session for the purpose of personnel and pending litigation The motion carried. Th ical Committee adjourned at 8:20pm Diana City Clerk