HomeMy WebLinkAboutCity Council Packet 03-28-1994 SpecialCITY COUNCIL STUDY SESSION
MONDAY, MARCH 28, 1994
5:45 P.M.
Public Safety Training Room
I. Discuss Conflict of Interest Policy - Carlson
Companies Applications
U. Discuss Subcommittees
formation
membership
by subject area or standing committees
M. Prioritize Topics for Discussion
IV. Goals and Objectives
CHARTER COMNIISSION -- 7:00 P.M.
DATE: March 24, 1994
TO: Mayor and City Council
FROM: Kathy Lueckert, Assistant City Manager AM/
SUBJECT: Conflict of Interest Policy
Councilmember Helliwell has requested that the City Council spend some time on
March 28 reviewing the City's Conflict of Interest Policy. This policy is attached for
your perusal prior to Monday evening.
1 _NO I _ hY M 515351
As a general rule, if you have any question that you may have a conflict of interest on a
matter that is before the City Council, it is advisable to confer with the City Attorney.
In the past, when a potential conflict has been determined, Councihnembers have
abstained from discussion and voting, or removed themselves from the Council
Chambers.
With certain exceptions, Minnesota laws forbid any mayor or councilmember to have a
personal financial interest in or to benefit from the making of any sale, lease, or
contract with the City. If, however, a mayor or councilmember is simply an employee
of a fum and receives no commission, bonuses, or other remuneration directly from its
contracts, and is not a stockholder, the council may enter into a contract with the
organization for. which the officer works regardless of the amount of the contract.
The City of Plymouth has adopted the attached policy establishing a code of ethics for
councihnembers, board and commission members. The Code of Ethics Disclosure
Form is completed annually by each member and kept on file as public information.
There is an additional disclosure requirement imposed by the State Ethics in
Government Act (Minnesota Statutes Chapter 10A). This requires local officials in
cities in the metropolitan area with a population over 50,000 to file economic interest
disclosures and conflict of interest disclosure statements. The City Council adopted the
attached policy to direct which City officials shall file disclosure statements. These
forms are completed annually and kept on file as public information.
I
POLICY ESTABLISHING CODE Or ETHICS FOR
PLYMOUTH CITY .COUNCIL, BOARD AND COMMISSION MEMBERS
Resolution No. 85-968
December 2, 1985 ( Supersedes Res. 82-343, July 12, 1982)
The City Council of the City of Plymouth confirms its
determination that ethical' standards among its members and
members of the various city boards and commissions are essential
to the proper conduct of municipal public affairs. By
eliminating conflicts of interest and providing a guide for
conduct in city matters, the City Council strives to promote the
faith and confidence of the citizens of Plymouth in their
government. The! following standards of conduct are intended to
serve as guidelines for members of the City Council, boards and
commissions in carrying out their public responsibilities. This
policy is in addition to any statutory requirements, attorney
general opinions or court rulings which prescribe allowable
actions for City Council, board and commission members.
Standards of Conduct
1. Councilmembers or members of any board or commission, shall
not use their positions to secure special privileges or
exemptions for themselves or others or to intentionally
jeopardize the position or employment of others.
2. Councilmembers or members of a board or commission may not
participate in deliberations in any matter before the
Council, board or commission which affects that member's
financial interests directly or indirectly or those of a
business with which the member is associated. Whenever such
conflict is recognized, the affected members shall disclose
for the record such interest prior to any discussion or vote
and disqualify themselves from any further official activity
on the issue.
3. Councilmembers or members of a board or commission shall not
act as an agent or attorney for another in any matter before
the City Council or any board or commission or before any
court, administrative board or tribunal in any matter in
which the City is a party.
4. Councilmembers or members of a board or commission shall not
directly or indirectly receive, or agree to receive, any
compensation, gift or reward or gratuity as an inducement to
support or influence any matter or proceeding connected
with, or related to, the duties of the office.
20-
I
5. Councilmembers or members of a board or commission shall not
enter into any contract with the City of Plymouth. Any
Councilmember or member of a board or commission who is an
officer director, partner, agent, proprietor or employee of
any firm or has a proprietary interest of 10 percent or more
in any company, business, enterpriseor corporation,
partnership, labor union or association doing business with
the City shall make known that interest in writing as
provided in the Disclosure Section of.this policy.
No later than (30)' thirty days after the date of the adoption of
this policy existing Council, board and commission members shall
receive a copy of this policy and the disclosure form and return
the completed form to the City Clerk. Council, Board and
Commission members, elected or appointed, shall no later than
30) thirty days following election or appointment to office and
each year thereafter by December 1, complete the disclosure form
and return it to the City Clerk. All subsequent applicants for
membership on City boards and commissions shall file a completed
disclosure form together with the application form for
Board/Commission membership. Within thirty (30) days after the
acquisition or sale of any property, each Councilmember or member
of a board or commission shall file as a public record with the
City Clerk, a list of all real property in the City of Plymouth
owned by such person, that person's spouse, or child, or in which
the member has a beneficial interest, disclosing each individual
item held, and by whom. Homestead shall be excluded from the
above disclosure. Each Councilmember and member of a board or
commission shall disclose all positions as officer, director,
partner, agent, proprietor or employee of any firm in which such
member has a proprietary interest of 10% or more in any company,
business, enterprise, corporation, partnership, labor union or
association doing business with the City of Plymouth, and
indicate with respect to each such relationship whether services
are gratuitous or for compensation..
The disclosure information required by this policy shall be set
forth on a form which shall be made available by the City Clerk.
DisciRline
upon the signed written complaint of any person questioning
adherence to this policy or on the Council's own volition, the
Council shall refer the matter to the City Attorney for
investigation and the City Attorney shall report the results of
his investigation to the City Council within 45 days thereafter.
A copy of such report shall be furnished to the person complained
against. Such person may request a hearing on this matter before
the Council which request shall be filed with the City Clerk not
later than 10 days following receipt by such person of the City
Attorney's report.
20-
Upon receipt of the City Attorney's report and at the conclusion
of any hearing on the matter, the Council by majority vote may
dismiss the complaint as having no merit, may adopt a resolution
of censure, or with respect to members of advisory boards and
commissions, the Council may remove a member from such board or
commission. In the event the complaint is against a member of
the City Council, such member shall not participate in the
Council's deliberations or vote with respect thereto.
20-
ROBERT L. CROSBY
LEONARD M.ADDINGTON
ROBERT R. BARTH
N. WALTER GRAFF
ALLEN D. BARNARD
RICHARD A.PETERSON
ROBERT J. CHRISTIANSON, JR
FRANK J. WALz
FRANK VOGL
MARINUS W. VAN PUTTEN, JR
DAVID B -MORSE
JOHN A. BURTON, JR.
JAMES C.DIRACLEB
ROBERT L.MELLER,JR.
JUDITH A.R000SHESKE
BEST & F LANAGAN
ATTORNEYS AT LAW
SCOTT D•ELLER
CHARLES C. BERQUIST
GEORGE O.LUDCKE
E.JosEPH LAFAVE
GREGORY D.SOULE
CATHY E. GOBLIN
PATRICK B-HENNESSY
TIMOTHY A. SULLIVAN
BRIAN F. RICE
DANIEL R.W. NELSON
TRACY J. VAN STEENBURGH
DAVID J.ZUBKE
STEVEN R.KRUGER
JAMES P. MICHELS
PAUL E.KAMINSKI
4000 FIRST BANK PLACE
601 SECOND AVENUE SOUTH
MINNEAPOLIS, NIN 55402-4331
TELEPHONE 16121 330-7121
TELECOPIER 16121 339-5897
February 10, 1994
Mr. Dwight Johnson
City Manager
City of Plymouth
3400 Plymouth Boulevard
Plymouth, MN 55447
RE: Conflict of Interest Issue
Dear Mr. Johnson:
CINDY J. LARSON OF COUNSEL
JOHN P. BOYLE JOHN R.CARROLL
ROSS C.FORMELL JAMES D. OLSON
CARYN SCHERB GLOVER ROBERT M. SNARE
MARY E.SHEAREN ARCHIBALD SPENCER
CATHERINE J. COURTNEY WARD B.LEWIS
KEITH J. NELSEN
r
BARBARA M. Ross
TRACY F. KOCHENDORFER
JEANNICE M.REDING
SARAH CRIPPEN MADISON JAMES 1. BEST
ROBERT D. MAHER 1802 -Igoe
DAVID H. JOHNSON ROBERT J. FLANAGAN
WILLIAM J. MORRIS 1888-1974
MICHAEL L.DIGos
MICHAEL H. PINK
Enclosed is a copy of the letter that Robert Meller has
forwarded to Sheryl Morrison regarding her conflict of interest
question. Also enclosed are additional copies of the letter for
distribution to the members of the City Council.
Enclosures
kjd\JohnsonA tr
Very truly yours,
K thryn J. ahl
Legal Secretary
r
ROBERT L.CRosaY
LEONARD M.ADDINGTON
ROBERT R.BARTH
N. WALTER GRAFF
ALLEN D. BARNARD
RICHARD A.PETERSON
ROBERT J. CHRISTIANSON, JR.
FRANK J. WALz
FRANK VOGL
MARINUS W. VAN PUTTEN,JR.
DAVID B. MORSE
JoaN A.B URToN, JR.
JAMES C.DIRACLES
ROBERT L.MELLER, JR.
JUDITH A.R000SHESKE
BF -ST & F LANAGAN
ATTORNEYS AT LAW
SCOTT D•ELLER
CHARLES C. BEROUIST
GEORGE 0•LUDCKE
E.JOsEPH LAFAVE
GREoORY D. SOULE
CATHY E.GORLIN
PATRICK B.HENNESSY
TIMOTHY A. SULLIVAN
BRIAN F. RICE
DANIEL R.W. NELSON
TRACY J. VAN STEENBUROH
DAVID J. ZUBKE
STEVEN R.KRUGER
JAMES P. MICHELS
PAUL E.KAMINSKI
4000 FIRST BArK PLACE
301 SECOND AVENUE SOUTH
MINNEAPOLIS, 211N 55402-4331
TELEPHONE ( 6121 339-7121
TELECOPIER (612) 339-5897
February 10, 1994
Ms. Sheryl Morrison
Mackall, Crounse & Moore
1600 TO Tower
Minneapolis, MN 55402
Dear Sheryl:
CINDY J. LARSON
JOHN P. BOYLE
Ross C.FoRMELL
CARYN SCHERB GLOVER
MARY E.SHEAREN
CATHERINE J. COURTNEY
KEITH J. NELSEN
BARBARA M.Ross
TRACY F. KocHENDORFER
JEANNICE M.REDING
SARAH CRIPPEN MADISON
ROBERT D. MAHER
DAVID H.JOHNsON
WILLIAM J. MORRIS
MICHAEL L.DIoos
MICHAEL H. PINE
OF COUNSEL
JOHN R.CARROLL -
JAMES D. OLSON
ROBERT M.SEARE
ARCHIBALD SPENCER
WARD B.LEWIS
JAMES I.BEST
1000-1088
ROBERT J. FLANAoAN
1888-1074
You have asked this office to research whether a conflict of
interest issue is presented by the fact that your law firm has
represented Carlson Companies. This issue arises because of
Carlson Companies' application for reguiding and rezoning for a
Sam's Club.
The statutes dealing with public offers and conflict of
interest speak to any interest a public officer has in a
contract. For example, the general statute applying to all
municipalities is Minnesota Statute § 471.87, which reads:
Except as authorized in § 471.88, a public officer who
is authorized to take part in any manner in making any
sale, lease or contract in his official capacity shall
not voluntarily have a personal financial interest in
that sale, lease, or contract or personally benefit
financially therefrom. Every public officer who
violates this provision is guilty of a gross
misdemeanor."
A similar prohibition is contained in the City Charter, Chapter
12, Section 12.03 which states:
Except as otherwise permitted by law, an officer of
the city who is authorized to take part in any manner
in a contract with the city in an official capacity,
may not voluntarily have a personal financial interest
or personally benefit from the contract."
Ms. Morrison
February 10, 1994
Page 2
The City Policy Handbook, on page 20, contains a Policy
Establishing Code of Ethics for Plymouth City Council, Board and
Commission Members. That policy notes that the "City Council
strives to promote the faith and confidence of the citizens of
Plymouth in their government." The policy lists a number of
Standards of Conduct" including:
Council members or members of a Board or Commission
may not participate in deliberations in any matter
before the Council, Board or Commission which affects
that member's financial interests directly or
indirectly.or those of a business with which the member
is associated. Whenever such conflict is recognized,
the affected members shall disclose for the record such
interest prior to any discussion or vote and disqualify
themselves from any further official activity on the
issue."
Keeping the above broad principles in mind, we conclude that
you are not required to abstain from deliberations on Carlson
Companies' application for reguiding and rezoning for the Sam's
Club project. This opinion is based on the assumption that your
firm is not working with Carlson Companies in any way on this
particular development project. This opinion is also based upon
the assumption that you will not receive any direct or indirect
compensation or benefit as a result of a granting of Carlson
Companies' request. Our opinion is bolstered by Attorney General
Opinion 90a-1, October 7, 1976 which concluded that a council may
contract with a council member's employer where the member:
1) has no ownership interest in the firm;
2) is neither an officer or a director;
3) is compensated on a salary or hourly wage basis and
receives no commissions, bonus or other remuneration;
and
4) is not involved in supervising the performance of the
contract for the employer and has no other interest in
the contract.
While the situation you present is not one of the city
contracting with your firm, nonetheless, this Attorney General
Opinion indicates that conflicts arise when there is the
potential for direct benefit. From what you have told us, that
is not the case here.
Ms. Morrison
February 10, 1994
Page 3
You should, of course, feel free to seek independent counsel
on this question. In addition, you certainly have the right to
abstain from voting on this matter if you feel that an appearance
of impropriety is raised. To reiterate,'however, based on our
understanding of the facts, you do not have a conflict and can
vote on the Carlson Companies application. It would also be
appropriate when.the issue comes forward to explain your firm's
representation of the applicant in unrelated matters, that you
have reviewed this issued with this office, and we have opined
that you can vote on the issue.
Please ddnft hesitate to contact us if we can be of any
further assistance.
Y very truly,
ber L.WMeler,lr.
City Attorney
PEK:kjd
cc Dwight Johnson, City Manager
City Council
PEK\Morrison.ltr
DATE: February 10, 1994
TO: Mayor Joy Tierney nt r
Councilmember Carole Helliwell ;` , 'G>'
h
Councilmember John Edson
Councilmember Nicholas Granath
Councilmember Chuck Lymangood
Councilmember David Anderson cl
FROM: Councilmember Sheryl G. Morrison ` '1<`
I ,
SUBJECT: Sam's Club Conflict of Interest
I have attempted to inform most of you with whom I have spoken
over the last weeks about the above matter, however, I know I
have missed informing a couple of you. I, therefore, wanted to
formally inform all Councilmembers of the above issue. This
history of this matter to date is as follows:
On January 31, 1994, I had my staff check my computer conflicts
system for any potential conflicts regarding upcoming issues I
might be reviewing and determining in my duties as a City Council
member. I was informed that Carlson Companies and its
subsidiaries, Country Kitchens, Country Hospitality and Country
Lodging, all registered as clients of the law firm.
I then met with Larry Commers, a partner who joined our firm in
September of 1993, who has been the principal attorney in the
firm involved with this client. I was informed that our
representation has been limited to franchising for the above-
named subsidiaries, miscellaneous litigation for some of the
hotels, and one real estate litigation in another state where
Carlson Real Estate was a party. Mr. Commers has not
represented, and doesn't anticipate representing this client in
any real estate transactions or municipal involvement in
Minnesota or elsewhere. I have never been involved in any of
these matters or with this client. I was then informed by our
professional responsibility advisor at the law firm that this
does not pose an impermissible conflict of interest in my duties
as an attorney.
I then contact Bob Meller of Best & Flanagan on February 3, 1994
to ask for his opinion about whether this posed a conflict in my
duties as a City Council member. He indicated he did not think
an impermissible conflict existed, however, he would check a bit
further. I then received a telephone call from Paul Kaminski at
Best & Flanagan on February 7. He informed me that their further
discussions and research indicated that no conflict existed. He
also indicated that they would issue an opinion letter and copy
all Councilmembers.
I am awaiting an opinion letter from Best & Flanagan which
disposes of this issue. However, pending receipt of that letter,
I wanted to formally disclose this issue 'to the Mayor and
Councilmembers. Assuming the letter will opine along the same
lines as we verbally discussed, I beleive that no conflict of
interest exists and I am legally capable of voting on this issue
when it arises.
My last concern would be whether any Councilmember believes there
is any appearance of impropriety in these circumstances. If so,
I would like to -discuss this issue further.
Also, if anyone has any questions regarding this matter, please
call me.
cc: Mr. Dwight Johnson
Mr. Robert Meller
11187450_1
DATE: March 24, 1994
TO: Mayor and City Council
FROM: Dwight Johnson, City Manager
SUBJECT: COUNCIL SCHEDULE OPTIONS
1. BACKGROUND: The Council is considering how best to organize and schedule
itself to effectively meet a challenging list of issues. Specifically, we are
preparing to discuss the creation of subcommittees to accomplish this work.
2. STATEMENT OF PROBLEM: Staff has a major concern about the
subcommittee proposal and its impact on our ability to serve you and the City.
We respectfully request that you reconsider and discuss other options.
3. DISCUSSION OF PROBLEM: The current workload for the Council is
undeniably high at this time. The current study session schedule is not working
well to meet this workload, primarily due to the effective time limit of one hour
or less. New ideas for meeting our workload are certainly in order.
However, the staff has major concerns about extensive use of a council
subcommittee system primarily due to its impact on staff. We believe it is
inevitable that staff will be involved in several extra meetings each week with
these new subcommittees. We will need to organize these meetings, prepare
reports, agendas and minutes, but most of all we will need to take the time to
attend them. These subcommittees will also require us to considerably compress
our staff schedules for many important items, since we will now need to be ready
with information, costs, options, etc. days or weeks sooner than a normal agenda
process would require.
Since preparation time for a meeting often exceeds the time the meeting actually
takes, we expect extensive use of a subcommittee system could add 4-8 hours per
week to the schedules of the top staff members. While this may not seem
intolerable, please refer to the attached time profile I have developed for myself
based upon last week's activities. (I decided to do this for myself well before I
learned of the subcommittee proposal and had not necessarily planned to share it
COUNCIL SCHEDULE OPTIONS
March 24, 1994
Page 2
with anyone). While the time profile shows my activities for last week, it is
presented because it is typical of most department directors as well. The profile
indicates that I actively participated in 23 major issues that week. There are some
very important issues and problems that received only a few minutes of my
attention last week. How many of these 5, 10, or 15 minute meetings will be
lost, meetings where some of our best ideas emerge?
This week I am meeting with all employees in chat sessions. These meetings
have been very positive so far. But Kathy and I definitely feel stretched two ways
to spend enough time with both the employees and the Council. The importance
of spending enough time with the employees should not be underestimated in the
long run. Please remember that we are running the daily operations of a $20
million business.
Your top staff is very reluctant to tell you when we are in trouble. We have pride
and believe we can handle almost any challenge. But we would be remiss not to
tell you of our serious concerns that could very noticeably detract from the quality
of our work. Please consider some alternatives.
4. ALTERNATIVES: The alternatives that seem to exist to meet a period of high
Council workload include:
1. Create a subcommittee system.
2. Continue the status quo of short study sessions of about an hour every
Monday evening.
3. Meet on several Saturdays to catch up.
4. Meet in study session every off Monday night at 7:00 p.m. for about 2-1/2
to 3 hours until about Memorial Day.
5. CONCLUSION: Staff prefers the alternatives in inverse order. We believe the
best solution is alternative 4, with one or two Saturday meetings included if
necessary. We do not believe that this Council workload will continue all year.
Several of us have served new Councils before and have observed that there is a
high tide" of activity in the first six months. Alternative 2 is not working well
while alternative 1 creates side effects that will make it too difficult for staff to
meet all of its responsibilities to you, the organization, and the citizens.
While the major concern of this memorandum is staff effectiveness in serving
you, most top staff members have served in other jurisdictions which have used
subcommittees. Plymouth has also tried subcommittees with the budget process a
few years ago. Staff considers all of these attempts, both here and elsewhere, to
y
COUNCIL SCHEDULE OPTIONS
March 24, 1994
Page 3
be unsuccessful because both staff work and meetings ultimately had to be
duplicated.
The 1994 Plymouth Council is learning fast, but is still in a mode where all
members need a broader understanding of City finances, capital improvement
plans, and overall City comprehensive plans. This can best be accomplished by
continuing to meet and work together as a group to face our common challenges.
But even if the Council disagrees with staff's interpretation of past experiences,
please consider staff effectiveness in your deliberations about our future working
relationship with you. Thank you.
DJ:keb
IF
MONDAY, MARCH 14, 1994
08:00-08:15 Talk to Dan Faulkner about engineering
candidates; discuss "midnight bowling."
08:15-08:30 Receive two phone messages from
councilmembers
08:30-08:45 Talk with Kathy on City Attorney issue
See Anne about Carlson Financing meeting
Meet Civil Engineering candidate
08:45-09:00 Talk to Councilmember on phone
09:00-10:00 Meet with Carlson Company on bond
refinancing
10:00-10:15 Meet with Craig
10:15-10:45 Meet with Kathy on council agenda items
10:45-11:00 Receive six phone messages: one outside,
two department heads, three councilmembers
11:00-11:30 See Eric
11:30-12:15 See Dan Faulkner on engineering candidate
Go to District 284 to see Supt. Landswerk
with Eric
12:15-1:10 Lunch
1:10-1:15 Receive call from Supt. Landswerk
Call Eric
1:15-1:30 Brief conversations with to Craig, Eric,
Kathy, and Laurie
1:30-1:40 Listen to phone message
1:40-1:55 Called Mayor
1:55-2:15 Phone call wih council member
2:15-2:30 See Fred on RR Crossings and misc items
2:30-2:50 Call councilmember and leave message
Call Mayor
Call councilmember and leave message
Call councilmember
Receive one phone message
2:50-3:05 Talk to Kathy
3:05-3:15 Talk to Anne on HRA memo
3:15-3:20 Talk to Kathy on City Center memo
3:20-3:25 Set up meeting to review personnel matter
3:25-3:30 Arrange letter to Sen. Limmer
3:30-3:35 Call industrial prospect representative
3:35-3:45 Work on schedule for rest of week
3:45-4:30 Talk to Kathy; reschedule a meeting;
prepare for employee chat sessions;
discuss personnel matters
4:30-5:00 Review in -box and read council reports
5:00-5:15 Talk to Kathy
5:15-6:00 Review staff reports
6:00-6:10 Meet with Eric on land acquisition
6:10-6:20 Review Capital Improvement Program map
9:00-9:45 Review CIP program summaries
TUESDAY, MARCH 15, 1994
8:00-8:15 Receive one phone message; Talk with Kathy
about Capital Improvements Program (CIP)
8:15-9:20 Prepare evaluation form
9:20-9:40 Talk to Anne about Hunt development
9:40-11:30 Talk with Fred about CIP
11:30-12:50 Staff Meeting
12:50-1:00 Receive four phone messages
1:00-1:55 Lunch
1:55-2:10 Verify MSA fund cash flow in CIP
2:10-2:30 Read and review HUD workout plan
2:30-2:45 Phone messages from Mayor and one council
member
2:45-3:10 Meet with Kathy, Jeanette
3:10-3:30 Return two outside phone calls
3:30-5:00 Attend wetland regulations meeting for
developers
5:00-5:45 Work on CIP; meet with Fred and Kathy
5:45-6:00 Receive two phone calls: Anne, councilmember
6:00-6:10 Talk with Fred
6:10-6:15 Leave phone message with council member
6:45-7:05 Read reports and memos
WEDNESDAY, MARCH 16, 1994
7:55-8:00 Talk to John Keho about wetland meeting
8:00-8:25 Prepare personnel evaluation
8:25-9:00 Talk to Jeanette
9:00-10:15 Conduct employee evaluation; brief discussion
with council member
10:15-10:30 Meet with Helen on Plymouth News policy
10:30-10:45 Review council reports; talk to Fred
10:45-11:15 Talk to Eric about house acquisitions, CIP
11:15-11:30 Talk to Dan Faulkner about stop sign report
11:30-11:45 Receive and respond to four phone messages:
3 staff, 1 councilmember
11:45-12:00 Council reports; phone message to all council
members on state auditor report
12:00-1:00 Lunch
1:00-1:10 Receive phone message from council member
1:10-2:20 Talk to Kathy about personnel matters
2:20-3:00 Read Council reports
3:00-3:15 Talk to Anne about outdoor storage council
report
3:15-3:25 Return phone call
3:25-3:45 Talk to Jeanette
3:45-4:05 Talk with Joe Ryan: Parkers Lake home issues
4:05-4:30 Return phone call; talk to Anne.
4:30-5:45 Meet with industrial prospect, Mayor and
councilmember
5:45-6:00 Talk with councilmember
6:00-6:30 Review State Auditor's Report
10:00-10:15 Further review State Auditor's Report
THURSDAY, MARCH 17, 1994
7:50-8:50 Attend wetland regulation meeting for
developers
08:50-09:00 Talk to Kathy about State Auditor's report
09:00-11:00 Staff Meeting
11:00-11:30 Review council reports
11:30-11:45 Prepare for employee evaluation
11:45-12:30 Lunch
12:30-2:00 Employee evaluation
2:00-2:50 Meet with all supervisors about State
Auditor's Report
2:50-03:30 Finalize agenda; process agenda request
from a councilmember
3:30-3:50 Phone call with councilmember
3:50-4:30 Time off for charitable work
7:00-9:45 Attend HRA meeting
FRIDAY, MARCH 18, 1994
8:00-8:30 Get phone messages
8:30-8:55 Talk to Kathy about chat sessions, HRA
8:55-1:40 Participate in symposium in Brooklyn
Park on City Attorney services, especially
in-house vs. contract attorney issue
1:40-2:00 Receive 11 phone messages
2:00-3:00 Meet with Kathy and Jeanette
3:00-4:10 Employee evaluation
4:10-5:20 Meet with Mayor
SATURDAY, MARCH 19 and SUNDAY, MARCH 20
Review City Center Plans 30 minutes
Type and analyze time report 90 minutes
LIST OF ISSUES ADDRESSED DURING WEEK OF MARCH 14
From Work Diary of City Manager)
In-house engineering candidates
City Attorney issue
Carlson Company bond refunding request
Drive-by shooting incident
New High School/land acquisition/meeting with 284
school board
Acquisition of homes/W. Medicine Lake Park Project
Railroad crossings
Staffing for Community Development Department
City Center expansion
Personnel evaluations (3)
Legislation
Industrial prospect
Prepare for employee chat sessions
Review Capital Improvements Program
Daniel Hunt development issues
Letter to HUD on non-compliance finding regarding timely
expenditure of funds
Wetland regulations proposals/public meetings
Plymouth News policy
Speeding complaints/stop sign requests
State Auditor's Report
Outdoor Storage application -Planning Commission
Parker's Lake homeowners complaints
Future council meeting schedule
03-24-1994 14:49 612 339 5897 BEST&FLANAGAN P.02
ROBERT I.AA108RY
LEONARC M.ADDINOTON
ROBERT R.BABTH
N•WALrER GRArr
ALLEN D. BARNARD
RIOHAnD A.PETERRON
ROBERT J. CHRISTIANSON, JR
FRANK J. WALZ
FRANK VOOL
MARINUB W. VAN PUTTEN,JR.
DAVID B.MORpIE
JOHN A.BuRToN,.JR.
JAMES C. DIRACLES
ROBERT L.MELLER,.JR.
JUDITH A.R0009HEORE
SCOTT D. ELLER
BEST & FLANAOAN
ATTORNEYS AT LAW
CHARLEa VAIEROMBY
GEonoE 0.LuDc9E
E.JonxPH LAFAVE
GRZOORT D.SOULN
CATHY E.0oRI.IN
PATRIOx B. HENNEBBY
TIMOTHY A.$OLLIVAN
BRIAN F. RIcE
DANIEL R.W. NLLBON
TRACY J.VAN STEENDUROH
DAvIII J. Zunxr
STEVEN R.KRIJOER
IAMEB P. MIOHELB
Pmm E. MINSEI
4000 FIRST BANK PLACE
001 SECOND AVENUE SOUTH
MINNUAPOLIB, MN 175402-43 31
TELEPHONE 10ISV 000 - 71$1
TELECOPIER 10121 1300-0967
JOHN OYLE
Rosa <.%.FORMELL Writer's Direct Dial No.
612) 341-9715
March 24, 1994
BY FACSIMILE
Mr. Dwight Johnson
City Manager
City of Plymouth
3400 Plymouth Boulevard
Plymouth, Minnesota 55447
RE: Subcommittee proposal
Dear Dwight:
CINDY J. LARaox Or COUNOML
CARYN SCNERB GLOVER JOHN R.CARROLI.
MARY E. SHEAREN JAMER II. OLAON
CATHERINE J. COURTNEY RonERT M.SRARz
Kr.ITH J. NZLREN ARCNInALD ?rENOER
BARnARA M.Roaa EWARDB.LwIH
TxACY F. KocHCNDONr_R
JEANNIcE M.RsnINn
SARAH GBIPPLx MADIaON
ROBERT D. MAxER
D"m H.JoHN9oN JAMES I. HEST
WILLIAM J. MORRIS 1909-1906
MIcHAEL L.DIOOa ROBERT J. FLANAOAN
MICHAEL H. PINK 160a-1974
You have raised certain questions relating to the proposal
of the council to create subcommittees to deal with specific
topics or areas of import. z have attempted to address your
questions in the paragraphs below.
1. Subggmmittees. City councils may establish special and
standing subcommittees to review various areas of the council's
business. Special committees deal with single transactions or
projects. standing committees concentrate on work which is
continuous or repeated from time to time during the year. For
example, some cities establish a standing committee on finance.
Because the Minnesota Statutes do not specifically provide
for specific committees, council action is necessary to establish
them by motion or resolution. Committees may conduct
investigations and make recommendations to the council. However,
committees may not make decisions on behalf of the council.
Committees are subject to the same rules as the full council
under the Open Meeting Law.
2. Ops} Meeting Law. Since the council subcommittees will
be established to discuss public business, they are subject to
the Open Meeting Law and must be open meetings and noticed as
required by the Open Meeting Law. The only time a meeting would
03-24-1994 14:50 612 339 5897 BEST&:FLANAGAN P.03
Mr. Dwight Johnson
March 24, 1994
Page 2
not be open to the public would be if one of the exceptions to
the Open Meeting Law applied and a closed meeting was
specifically authorized.
Note that since the Open Meeting Law applies, a quorum of a
subcommittee (say, two members of a three member.committee, for
example) cannot meet and discuss city business without giving
public notice and conducting an open meeting. This presents a
potential danger for councilmembers because the possibility of
inadvertent violation of the Open Meeting Law increases when the
council creates several subcommittees that have small
memberships. In other words, a chance meeting of two
councilmembers who constituted a quorum of a three member
committee could be construed a violation of the Open Meeting Law.
3. u es. Since these meetings of subcommittees are
conducting business for the council, it is necessary that minutes
be taken of each meeting.
I hope this is sufficient for your purposes. Do not
hesitate to call with any further questions.
Very tru yours,
Allen D. Barnard
ADB:rys
adb\plycoun.ltr
STUDY SESSION TOPICS
A = HIGH PRIORITY B = MEDIUM PRIORITY C = LOW PRIORITY
TOPIC RATING
Capital Improvement Program A
Review Conflict of Interest Policy A
City Attorney A
Parkland Acquisition - High School A
Joint Meeting with District 284 A
Parkland Acquisition - West Med. Park B
City Center Expansion - Review Final Plans B
Utility Rates/Bills B
Northwest Clubs B
Program Budgets B
Economic Development Strategy B
Joint Meeting with Planning Commission B
Springsted Seminar C
OTHER ITEMS
Therapeutic Massage Ordinance Agenda - April 18
Community Improvement Fund Procedures Upcoming Agenda
Goals and Objectives Schedule on Saturday
April 15 - May 15
Ward Meetings Late May or Sept.
Travel Policy July - State Auditor
Subcommittee
PLYMOUTH BOULEVARD, PLYMOUTH, W
DATE: March 24, 1994
TO: Kathy Lueckert, Acting City Manager
FROM: Dale Hahn, Finance Director
SUBJECT: Request for Tax Increment expenditure plans
Council member Granath requested information on the proposed Tax
Increment plans for all of the City's Districts. Attached are the plans
originally adopted with each of the Districts. Some of these have had
modifications, because the costs for construction changed when the final
plans were approved. We are hoping to have an informational session with
Springsted representatives to further explain Tax Increment financing.
G. Bond Issue Determination
TAX INCREMENT FINANCING DISTRICT NO. 1 (PHASE I)
DEVELOPMENT DISTRICT NO. 1
z ESTIMATED PROJECT COSTS FOR I-494
INTERCHANGE WITH COUNTY ROAD 15, COUNTY ROAD 61 PROJECT
ACQUISITION, RIGHT OF WAY
PUBLIC IMPROVEMENTS
SUBTOTAL
LESS: GRANT HENNEPIN COUNTY
SPECIAL ASSESSMENTS
PROFESSIONAL SERVICES
DESIGN AND INSPECTION
LEGAL AND FISCAL
CONTINGENCY OF CONSTRUCTION
ADMINISTRATION OF TOTAL
TOTAL
REVENUE FROM INVESTMENT INCOME
NET
INTEREST ON BONDS PRIOR TO
RECEIPT OF TAX INCREMENT TO
FULLY FUND PRINCIPAL AND INTEREST
DISCOUNT
200,000
176,000
TOTAL AMOUNT OF BONDS TO BE SOLD
REVENUE FROM PROPERTY SALES
BONDS PAYABLE FROM TAX INCREMENT
H. Estimate of Costs
625,090
4,200,000
4,825,000
376,000)
630,000
70,000
8,991
315,000
5,472,991
361,439)
5,111,552
1,785,000
103,448
7,000,000
0
7,000,000
The total cost of improvements (see Development Program Implementation page 8) is
presently estimated to be $11,352,450 to be financed with one or more bond
issues. The initial issue of $7,000,000 for phase I is described in section G.
The completion of the entire project (Phase II) is dependent on future tax
increment revenues and other financial resources.
13
EXHIBIT A
Estimated costs of Improvements -- Tag Increment Financing District Nos. 1-2,
1-2A, 1-3, 1-4, and 1-5
Year Project Description Project Cost Total
1988-90 Interchange with County Road 6 and I-494
Acquisition of property 1,800,000
Construction cost, engineer & contingency 5,700,000
Net project cost 7,500,000
Less: Available TIF revenues 1987 360,030
Available TIF revenues 1988 802,225
Amount to finance 6,337,745
Plus: Discount allowance, finance
1,900,000
related fees and less interest
Total
earnings 162,255
Bond Issue 6,500,000
Less: 1988 $1,025,000 G.O. Tag Increment
Amount to Finance
Bond Issue Proceeds 1,014,600
G.O. TAX INCREMENT TAX-EXEMPT BONDS $5.485.400
1990 Improvement of County Road 61 from Xenium
Lane to County Road 9
Construction costs 600,000
Signal lights 150,000
Right of way acquisition 1,900,000
Total 2,650,000
Less: County funds 400,000
Amount to Finance 2,250,000
Plus: . Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 300,000
G.O. TAX INCREMENT TAR -EXERT BONDS 2.550.000
Estimated costs of Improvements — Tag Increment Financing District Nos. 1-2,
1-2A, 1-3, 1-4, and 1-5 (continued)
Year Project Description Project Cost Total
1989/90 Upgrading County Road 6 from County
Road 101 easterly to Fernbrook Lane
including right of way) $3,800,000
Less: County Funds -1,800,000
Amount to Finance $2,000,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 275,000
G.O. TAX INCREMENT TAR -EXEMPT BONDS $2.275.000
1991 Fernbrook Lane from Gleason Lake Road
to County Rd. 6 $1,100,000
Less: Special assessments 400,000
Amount to Finance 700,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 100,000
G.O. TAX INCREMENT TAR -EXEMPT BONDS 800.000
In addition to the above identified projects, the City reserves the right to
use tax increment revenues if they become available for any project that is a
part of the Development Program for Development District No. 7. Following is
a list of additional projects that currently are identified within the
Development District Program.
Estimgted Costs of Improvements — TIF Districts No. 2 and 2-1
Year Project Description Project Cost Total
1989 County Road 61 from County Road 6 to
HighwAy 55
Land Acquisition (right-of-way) $ 235,000
Engineering and Inspection 330,000
Construction 2,085,000
Administrative 145,000
Contingency 205,000
Total Project Costs $3,000,000
Plus: Discount allowance, finance related
expenses, capitalized interest 900.000
G.O. TAX INCREMENT TAX-EXEMPT BONDS $3.900.000
1990 West Medicine Lake Road relocation from 13th
Avenue to 23rd Avenue and trail construction
from T.H. 55 north to 26th Avenue $2,000,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 275.000
G.O. TAX INCREMENT TAX-EXEMPT BONDS $2.275.000
1993 Extension of Xeniun_Lane from 38th Ave. to
amity Road 61 including right-of-way
acquisition) and ext. of Vinewood Lane
from.Cottofiwood Plaza south to Xenium Lane 1,125,000
Less: Special Assessments - 100.000
Amount to Finance $1,025,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 150,000
G.O. TAX INCREMENT TAX-EXEMPT BONDS $1.175.000
Estimated Costs of Improvements -- TIF Districts No. 2 and 2-1 (continued)
Year Project Description Project Cost Total
1994 Extension of 18th Avenue to County Road 6
at T.H. 55 and extension of Industrial
Park Boulevard from County Road 6 to Trunk
Highway 55 900,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 125,000
G.O. TAX INCREMENT TAR -EXEMPT BONDS 11.025.000
Cost of Improvements -- TIF Districts 3-1
Year Project Description Project Cost Total
Public Improvements
1986 Improvements Segment A (10th Ave. - Bassett
Creek to South Shore) $921,813
1987 Improvements Segment C (Highway 55 Frontage
Road from Quaker Lane to 8th Avenue) 279,813
1986 Improvements Segment E (Improvements 13th
Avenue and C.S.A.H. 18) 590,106
Total public improvements $1,791,732
Administration/Organization 15,000
Amount to Finance $1,806,732
Plus: Discount allowance, finance
related fees, capitalized interest 386,268
G.O. TAR INCREMENT TAR -EXEMPT BONDS $2.175.000
Land Writedown
1986 Net Land Acquisition (Devac/Freeman) $674,000
Administration/Organization 15,000
Amount to Finance $689,000
Plus: Discount allowance, finance
related fees, capitalized interest 136,000
G.O. TAX INCREMENT TAX-EXEMPT BONDS 025,000
Two bond issues were sold totaling $3,000,000.
Estimated Cost of Improvements -- TIF Districts 3-2 and 3-3
Year
1989
Project Description Project Cost Total
Improvements to the Highway 55-& Revere
Lane Intersection
TID 3-3 $230,000
Frontage Road — Trunk Highway 169
Frontage Road from 8th Avenue
to 13th Avenue
TID 3-3 $505,000
TID 3-2 0
Total 505,000
Highway 55 & South Shore Drive Intersection
TID 3-3 $210,000
TID 3-2 205,000
Total - 415,000
Highway 55 Frontage Road from South
Shore Drive to Valley Forge Lane
Ryan — TID 3-3 $100,000
Prime -- TID 3-2 100,000
Total 200,000
Right of Wav Accuition
TID 3-3 $750,000
TID 3-2 750,000
Total 1,500,000
Amount to Finance $2,850,000
Plus: Administration/organization of TID,
discount allowance, finance related fees,
capitalized interest 550,000
G.O. TAR INCREMENT TAR -EXEMPT BOND ISSUE $3,400,000
1988 Land Writedown - TID No. 3-3
Land Acquisition
Voline Property $565,000
Borden/Carlson Property 527,000
Total Land Acquisition 1,092,000
Less: Ryan Share of Voline Property -282,500
Net Land Acquisition $ 809,500
Plus: Administration/organization of TID,
discount allowance, finance related fees,
capitalized interest 240,500
G.O. TAXABLE TAR -EXEMPT BOND ISSUE $1.050.000
I
Estimated Cost of Improvements -- TIF Districts 4-1, 4-2 and 4-3
Year Project Description Project Cost Total
1989 Schmidt Lake Road Construction from Zachary
Lane to Saratoga Lane. The City of Plymouth
will be responsible for the construction of the improvement.
Total estimated project cost including
professional services, construction,
right of way acquisition, contingency $1,500,000
Less: Special Assessments - 300,000
Amount to Finance 1,200,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 175,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS $1.375,000
1991 County Road 10 Upgrading from Trunk Highway 169
to I-494. Hennepin County will be responsible
for the construction of the improvements.
Estimated City share for all project costs including
professional services, construction, right
of way acquisition, contingency $ 500,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 75,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS $ 575.000
1991 Other Necessary Improvements. The City of Plymouth will
need to upgrade other elements of the overall roadway
system included but not limited to Zachary Lane from 34th
Avenue to County Road 10.
Total estimated project cost including
professional services, construction,
right of way acquisition, contingency $2,370,000
Less: Special Assessments - 300,000
Amount to Finance 2,070,000
Plus:' Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 305,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS J2,375,000
I
Estimated Cost of Improvements -- TIF Districts 4-1, 4-2 and 4-3 (continued)
Year Project Description Project Cost Total
1995 County Road 61 from County Road 9
to 54th Avenue R.R. crossing 3,500,000
Less: Special Assessments - 500,000
Amount to Finance 3,000,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 450,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS $3.450.000
Estimated Cost of Improvements -- TIF Districts 5-1
Year Project Description Project Cost Total
1989
1990
1992
County Road 61 from County Road 47
to 54th Avenue 1,000,000
Less: Special Assessments - 400,000
Amount to Finance $600,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 100,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS 1700,000
Upgrading of County Road 9 west of
I-494 for approximately one mile $1,300,000
Fernbrook Lane from Harbor Lane to
34th Avenue (street widening &
traffic controls) 400,000
Fernbrook Lane from T.H. 55 to 27th Ave.
street widening & traffic signals 200,000
Amount to Finance $1,900,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 275,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS $2.175.000
Schmidt Lake Road from West Medicine
Lake Drive to Fernbrook Lane $900,000
Less: Special Assessments - 300,000
Amount to Finance $600,000
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings 100,000
G.O. TAR INCREMENT TAR -EXEMPT BONDS 4700,000
Estimated Cost of Improvements -- TIF Districts 6-1
Year Project Description
1989 Highway 55 and West Medicine Lake Drive
Intersection Improvements including
right-of-way acquisition
1990
1990
1992
1994
1994
Signal and intersection improvements at
Betty Crocker Drive, Nathan Lane & Ford Road
Extension of County Rd. 73 from Old
County Road 15 to Highway 55
Amount to Finance
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings
G.O. TAX INCREMENT TAX-EXEMPT BONDS
Extension of 6th Avenue from Pineview
Lane to County Road 73
Less: Special assessments
Amount to Finance
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings
G.O. TAX INCREMENT TAX-EXEMPT BONDS
Improvement of County Rd. 73 from south
City limits north to Old County Rd. 15
Extension of West Medicine Lake Drive
from Highway 55 to Sixth Avenue
Amount to Finance
Plus: Discount allowance, project
administration, finance related
fees, capitalized interest and
less interest earnings
G.O. TAX INCREMENT TAR -EXEMPT BONDS
Project Cost Total
300,000
150,000
1,000,000
1,450,000
200,000
1.650.000
2,500,000
500,000
2,000,000
300,000
2.300.000
250,000
1,000,000
1,250,000
175,000
1.425.000
Estimated Costs of Projects - TIF District 7-1
1990 County Road 61 (est.) $2,630,000
Bridge (Soo Line Railroad) 700,000
Right of Way (9 acres @ $30,000/acre,)
3/4 mile, 100' wide) 270,000
Contingency 400,000
Signals (C.S.H. 9 & Vinewood Lane) 150.000
Subtotal 4,150,000
Discount allowance 74,625
Finance related expenses 36,000
Capitalized interest 870.000
Subtotal 5,130,625
Less: Interest earnings - 155.625
G.O. Tax -Exempt Tax Increment Bonds 34.975.000
1990 Soil Corrections/Site Improvements/Developer Assistance $1,000,000
Discount allowance 25,000
Finance related expenses 27,000
Capitalized interest 355.000
Subtotal
Less: Interest earnings
G.O. Taxable Tax Increment Bonds
1998 I-494 Schmidt Lake Road Interchange -
Acquisition of property
Construction costs, engineering & contingency
Discount allowance
Finance related expenses
Subtotal
Less: Interest earnings
G.O. Tax -Exempt Tax Increment Bonds
1,407,000
32.000
111
600,000
7,500,000
90,000
60.000
8,250,000
250.000
MTE: The City reserves the right to modify various project estimates as
further project costs are defined.
The City reserves the right to enter into a "pay as you go" contract with
the developer for these related costs. The final form of financing will be
determined after further review by the City.
E
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DATE: March 25, 1994
TO: Mayor and City Council
FROM: Kathy Lueckert, Acting City Manager
SUBJECT: Carlson Companies Bonds
Attached is a transcript of Assistant City Attorney Dan Nelson's message on the
Carlson Companies bonds. Because of the importance and complexity of the subject, I
felt that a transcript of the voice mail message would be helpful.
It is very likely that Mr. Nelson will be at the meeting Monday evening to discuss this
with you, given the April 1. deadline for any action on the bonds. We have made
certain that this subject is properly noticed.
Please feel free to call Mr. Nelson or me should you have questions. My home
number is 476-9711.
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: March 25, 1994
TO: Kathy Lueckert, Assistant City Manager
FROM: Laurie Rauenhorst, City Clerk
SUBJECT: Transcribed Voice Mail Message from Attorney Dan Nelson to
Assistant City Manager Kathy Lueckert - Carlson Center Project
CONFIDENTIAL
Following is the transcribed voice mail message from Attorney Dan Nelson that you
requested relating to the Carlson Center Project. Due to the references of potential
litigation, I believe it is CONFIDENTIAL under Attorney -Client Privilege provisions
of the statutes.
Kathy, please convey this message to Dwight Johnson and to the members of the City
Council as you see necessary in connection with the Carlson Center project. I had a
telephone conference call earlier today with representatives of Carlson Companies,
Miller and Schroeder, and the bond trustee with respect to the remarketing of the bonds
in the 1992 Bond Indenture.
The 1992 documents which were agreed upon by the City provide for a remarketing of
the 1992 bonds with the interest rates and maturities as the remarketing agent, Miller
and Schroeder, deems appropriate and necessary based on the security pledged by the
company to the bonds after the April 1, 1994, remarketing date. Miller and Schroeder
has presented a maturity schedule and an interest rate to the trustee, but the bond
documents require in Section 3.2e that the remarketing agent, with the consent of the
City Manager, shall determine the schedule of prepayment dates and prepayment prices
for the bonds after the mandatory tender date. That consent of the City Manager is an
element of the 1992 Indenture which the City signed off on and which in my opinion,
can be approved as a simple administrative act by the City Manager and does not need
any formal City Council approval.
Voice Mail Message - CONFIDENTIAL
Page 2
The fact that the City Council has rejected a refunding bond issue for this project at the
last meeting on Monday, March 21, is entirely appropriate and in the discretion of the
City Councilmembers because that would be a legislative act which they can do, which
they can make their decision on in their best judgment of what's in the best interest of
the City. The requirement under the 1992 Indenture, however, that a City consent be
given to the prepayment provisions of the 1992 bonds after the April 1, 1994,
remarketing date, is a requirement from the approval given by the prior City Council.
I understand that the political sensitivity of this project requires that the City Council be
informed of what's going on and that the City is reluctant to give any affirmative
approvals to the Carlson project in light of Carlson's failure to perform, to complete
the improvements that they originally intended. However, I believe that the City can
avoid making any affirmative action in favor of Carlson by simply waiving the consent
right given in the bond indenture and allowing the company, the remarketing agent,
and the trustee to carry out the 1992 bonds as they choose, recognizing that the City by
waiving the required approval makes no statement affirmatively approving any actions
by Carlson.
If the City were to choose to do nothing in connection with the request of Carlson to
grant either a waiver or a consent to the terms of the refunding bonds, the City faces a
potentially significant liability for failing to perform a reasonable administrative
procedure on the basis of an arbitrary and capricious decision-making by the City, or a
failure by the City to deal with good faith and fair dealing in connection with the 1992
obligations already approved and undertaken by the City.
If Carlson were to make this request to the City and the City simply says, 'No, we
don't want to have anything to do with this," and refuses to give any consents, then the
bond financing could not be remarketed on April 1 and Carlson would lose the benefit
of tax exempt financing for the next 18 years on $17.2 million some dollars. With a
difference of perhaps 1 1/2 to 2 percent between the equivalent tax exempt rates and
taxable market financing that Carlson would face, the damages that Carlson could claim
against the City would be significant, particularly where the City has no increased
exposure or liability in its rejection of Carlson's request.
While Carlson has a significant down -side if the request is not granted or waived,
Carlson would probably claim that the City is extracting a pound of flesh from Carlson
on this issue because of the recent controversies over real estate planning and
development issues, which are certainly valid issues that the City should be concerned
about but are unrelated to the obligations that the City undertook in 1992 when these
bonds were issued.
For these reasons, I think that the City would be best served by agreeing to waive its
consent and approval rights under the 1992 Bond Indenture, thereby not giving any
Voice Mail Message - CONFIDENTIAL
Page 3
affirmative approval to the Carlson project, but still allowing the project to be
remarketed to avoid any potential liability to the City.
After you have had a chance to review these comments, I'd be happy to talk to you at
your earliest convenience. My direct line is 349-5649. If you need to reach me at
home this weekend, I'm at 449-0730. " --- End of Message.
DATE: March 25, 1994
TO: Mayor and City Council
FROM: Kathy Lueckert, Acting City Manager
SUBJECT: Article on State Auditor's Report in City Business
Attached is an article from this morning's City Business on the State Auditor's report.
Thought you might want to see it.
6 MARCH 25, 1994 CityBusiness
Report comes down on the perks in Plymouth
By JENNIFER WATERS
Imagine this: You're a supervisor in a large public company.
The employee base:is predominantly union -run, dictating
pay scales, hours, overtime and benefits packages. You're
not a part of the union, but you must adhere to some pretty
strict employment policies.
You've got a board of directors that meets frequently to
set policy for the company. While they wield a lot of power,
they don't necessarily know what's going on day to day.
Your boss is generous with the perks. You and your co-
workers talk openly about how bountiful the compensation
packages area But still you are uneasy, because you have a
vague suspicion that the perks are not in line with employee
policy;
Let's shift gears a bit. Imagine that the -company is actu-
ally a unit of government, the board of directors is a city
council and the boss is the city manager. Now you have
what happened at the city of Plymouth, particularly from
1989 to 1992.
At least 25. people, mostly supervisors, who worked for
the city of Plymouth received extra vacation time, a clothing
budget, free eye care, orthodontia, health club member-
ships, even generous mileage allowances. All this and a sal-
ary in the $50,000 -and -above range. Sometimes one-time
bonuses were even thrown in.
In other words, city employees were receiving perks and
benefits that the city council did not approve. The financial
perks and reimbursements totaled more than $200,000 over
a four-year period. The perks were finally severed in late
1992.
A state auditor's report on the perks, released this week,
found that the questionable employee compensation pack-
ages were in fact unlawful. But the report did riot find
grounds for criminal action. Rather, it administered a slap
on the wrist: It urged the city of Plymouth to enforce poli-
cies of authority for granting and changing employee bene -
Elected officials and city administrators and other gov-
ernment officials do not have the same wide discretion in
providing benefits and other in-kind [perks] as the private
sector," said Paul Almirall in an interview. Almirall is deputy
state auditor who led the investigation.
The abuses were discovered last year by new City Man-
ager Dwight Johnson, who requested the state investigation
after he found what he thought were discrepancies with the
law.
The biggest benefactor was the previous city manager,
Jim Willis. Not only did he receive a salary in excess of
86,000, but he allegedly took in the same kinds of perks
and benefits that he was doling out.
Plus, he got more: a Chrysler New Yorker, one valued as
much as $20,198, and paid trips from Hawaii to Minneapolis
and back again. The auditor's report called these extra extras
questionable."
The investigation found that Willis had a "company car"
written into his employment contract, but there were no re-
strictions placed on it. So he bought all used cars, he says
an '87 New Yorker, valued at $15,968; an '89 New York-
er, valuedat $20,000; and a '91 Chrysler Imperial valued at
16,312..(He was able to turn them in every 45,000 miles.)
The city paid for all gas and maintenance on the car, ac-
cording to the auditor's report. Apparently that. inclujed
trips to a college attended by a family member'th t port
I
aid.
And there are the Hawaii trips. Willis — who was re-
quired to attend two council meetings a month — planned a
trip to his. Hawaii -based condo during the week of a city
council meeting in January 1991. Because he felt "this was a
round-trip ticket from Hawaii to Minneapolis at $1,534.04.
Before he left Honolulu remember, this was his vaca-
tion spot — he upgraded the ticket to first class, adding
125 on to the bill..Why? Because he needed more rest, he
told the auditors. Plus, he had a $40 parking charge at the
airport to boot.
In retrospect, Willis said he probably didn't need to be at
that meeting, but didn't know, that at the time. He's sure,
however, that he will not have to reimburse the city for the
trip.
Nor, he said, should he be required to reimburse the city
for a $775 ticket, again from Hawaii, in August 1989. The
red flag on this ticket was that he submitted it three years
after the fact. No explanations were offered, according to
the report.
At one point in time, all the council members were
aware" of all the perks, he said, conceding that that might
have been only when he was hired in 1971. "We made no
attempt to hide or conceal those benefits. I don't apologize
for that. I was just trying to run the best organization I
could."
So what will the city council do now? If this incident took
place at a business, the culprit would be fired without sever-
ance, the payments reimbursed and the rest of the staff se-
verely reprimanded.
But in, Plymouth, things are different. Yes, Willis did get
fired, but he was given a hefty severance package. (He's
now city manager in Inver Grove Heights, although sources
said he was trying to get back his job in Plymouth.) And yes,
he was required to,reimburse the city $25,800 for a life in-
surance policy on himself and his family. But solar he has
not been called on to pay another cent.
And_ the city council has taken the governmental ap-
proach to scandals: It has formed a committee. At its March
20 meeting, the council said it would further study the audi-
tor's report before taking any further action.
Biz Et Al. appears the fourth week of each month in City-
HAA -26-1994 21:06 BOR. REHHER'=; OFFICE E.12 48 '+^4 P.01 N
Facsimile Cover Sheet
To: MLC OPERATING
COMMITTEE
CITY MANAGERS
From: Bob Renner, Jr.
Company: Messerli & Kramer PA
Phone: 612-228-9757
Fax: 228-9787 Home 483-9347
Date: 03/26/94
Pages including this
cover page: 9
This amendment will be offered this coming week in the Senate
Metropolitan and Local Government Commiittee. Please contact
your legislator and ask them to oppose this initiative.
1: G r, BOB REI It 1ER' '_. i=iFF I i=E
MUNICIPAL
LECISLARVE
COMMISSION
MEMO
TO: MLC OPERATING COMMITTEE
FROM: BOB R.ENNER, JR.
612 4871 9347 R.=r
1800 Fifth Street Towers
150 South Fifth Street
Minneapolis, MN 55402-4218
Telephone: (612) 672-3600
Facsimile: (612) 672-3777
RE: SENATOR MONDALE FISCAL DISPARITIES PROPOSAL TO CAPTURE
40% OF THE NEW VALUE OF HOMES IN EXCESS OF $200,000
DATE: MARCH 26, 1994
Please find attached a copy of a delete everything amendment that Senator Mondale will
offer in the Senate Metropolitan and Local Government Committee this week. It has not
been scheduled but must be adopted by the Committee before March 31st in order to meet
the committee deadlines. The House Companion bill, authored by Representative Orfield,
met the House deadline last week.
This bill differs from Representative Orfield's bill as amended by capturing 40% of new
home values over $200,000 and using the revenues generated from this value to assist
cities in meeting their comprehensive choice housing goals. The Orfield bill as amended
captures 100% of all value over $150,000 and places it in the metropolitan fiscal
disparities pool.
Only one-half of the revenues generated will he used for housing. The other one-half will
be deposited in the general fund and be. used statewide for contaminated site cleanups.
Page 5, lines 16 - 25.)
It. must be pointed out that only cities that are losers udder fiscal disparities will
contribute their excess tax capacity. Cities whose distributions are greater than these
contributions will not have to shard tax base. (Page 3, lines 33 - 36 and page 4, lines I -
2.)
This will create odd results such as exempting the value in cities such as North Oaks
while homes in Brooklyn Center will share base -
This bill will also cause property tax rates to increase on all Montes in Hennepin County
due to the large base that the County will have to share with the entire Metropolitan
area.
DATE: March 25, 1994
TO: Mayor and City Council
FROM: Kathy Lueckert, Acting City Manager
SUBJECT: Carlson Companies Bonds
Attached is a transcript of Assistant City Attorney Dan Nelson's message on the
Carlson Companies bonds. Because of the importance and complexity of the subject, I
felt that a transcript of the voice mail message would be helpful.
It is very likely that Mr. Nelson will be at the meeting Monday evening to discuss this
with you, given the April 1- deadline for any action on the bonds. We have made
certain that this subject is properly noticed.
Please feel free to call Mr. Nelson or me should you have questions. My home
number is 476-9711.
1 1,
CITY OF PLYMOUTH
3400 PLYMOUTH BOULEVARD, PLYMOUTH, MN 55447
DATE: March 25, 1994
TO: Kathy Lueckert, Assistant City Manager
FROM: Laurie Rauenhorst, City Clerk
SUBJECT: Transcribed Voice Mail Message from Attorney Dan Nelson to
Assistant City Manager Kathy Lueckert - Carlson Center Project
CONFIDENTIAL
Following is the transcribed voice mail message from Attorney Dan Nelson that you
requested relating to the Carlson Center Project. Due to the references of potential
litigation, I believe it is CONFIDENTIAL under Attorney -Client Privilege provisions
of the statutes.
Kathy, please convey this message to Dwight Johnson and to the members of the City
Council as you see necessary in connection with the Carlson Center project. I had a
telephone conference call earlier today with representatives of Carlson Companies,
Miller and Schroeder, and the bond trustee with respect to the remarketing of the bonds
in the 1992 Bond Indenture.
The 1992 documents which were agreed upon by the City provide for a remarketing of
the 1992 bonds with the interest rates and maturities as the remarketing agent, Miller
and Schroeder, deems appropriate and necessary based on the security pledged by the
company to the bonds after the April 1, 1994, remarketing date. Miller and Schroeder
has presented a maturity schedule and an interest rate to the trustee, but the bond
documents require in Section 3.2e that the remarketing agent, with the consent of the
City Manager, shall determine the schedule of prepayment dates and prepayment prices
for the bonds after the mandatory tender date. That consent of the City Manager is an
element of the 1992 Indenture which the City signed off on and which in my opinion,
can be approved as a simple administrative act by the City Manager and does not need
any formal City Council approval.