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HomeMy WebLinkAboutCity Council Minutes 08-15-1995 SpecialMINUTES SPECIAL COUNCIL MEETING AUGUST 15, 1995 A special meeting of the Plymouth City Council was called to order by Deputy Mayor Edson at 5:30 p.m. in the Public Safety Training Room, 3400 Plymouth Blvd., on August 15, 1995. COUNCIL PRESENT: Deputy Mayor Edson; Councilmembers Helliwell, Anderson, Wold, and Lymangood. ABSENT: Mayor Tierney; Councilmember Granath. STAFF PRESENT: City Manager Johnson, Assistant Manager Lueckert, Community Development Director Hurlburt, Public Works Director Moore, Public Safety Director Gerdes, Finance Director Hahn, Park Director Blank, City Forester Buck, and City Clerk Ahrens. HENNEPIN COUNTY REPRESENTATIVES PRESENT: Commissioner Mary Tambornino, Commissioner Penny Steele; Transportation Director Jim Grube, Director of Public Works Vern Genzlinger, and Assistant County Administrator Hutka. JOINT MEETING WITH HENNEPIN COUNTY COMMISSIONERS Manager Johnson suggested that discussion be held on the funding of county roads, particularly the use of tax increment financing (TIF). Hennepin County adopted a policy in 1993 which provides that if a city is going to use TIF for its matching share of a county road project, then the cost sharing increases for the city. This policy could affect the proposed County Road 9 Project. This project is estimated to cost about $3.3 million, of which the City's share would be about $500,000. If TIF funds are used for the project and the alternative formula is applied, then the City would have to pay about $1.7 million. This amount would not include the additional right-of-way costs. Manager Johnson explained that the City believes a policy that penalizes cities for use of TIF funding for county roadway construction is unfair. He stated that Plymouth has paid a lot of attention to the "but for" test on tax increment financing projects. The City Council has approved the use of TIF only in situations where a project would not have occurred "but for" the use of TIF. Tax increment funds have been traditionally used in Plymouth to help fund county road projects. He cited several examples including County Road 61 and the County Road 6/I-494 interchange, where the County's cost for constructing the project would have been several million dollars had the City not funded the projects with TIF funds. Special Council Meeting August 15, 1995 Page 2 Manager Johnson stated the policy assumes that there is a specific County levy for road construction. However, that is not the case because road construction is funded largely through other sources. He stated the construction of County Road 9 has been included in the City's plan for many years and the project is needed. He requested that Hennepin County either eliminate the policy, or waive projects that were planned prior to the policy adoption. He noted that the County Road 9 project would be the first situation where the policy would be implemented. Councilmember Anderson stated that County Road 9 goes through the heart of Plymouth. County Road 9 is estimated to handle 23,000 vehicles per day by the year 2000, and the roadway needs to be upgraded. The construction has been planned for at least ten years, and the City Council has recently conducted a series of public hearings on the proposed plans. Commissioner Steele asked if it is possible for the City to use Municipal State Aid funds for the County Road 9 project. Public Works Director Moore stated that this could be done; however, the City does not collect money for constructing county roads. The County Road 9 construction should be a financial responsibility of the County. Hennepin County Public Works Director Genzlinger stated that the City of Bloomington uses Municipal State Aid money to fund their matching share of county road projects. Director Moore responded that in communities that are fairly well developed this is easier to do. Some communities actually need to find places to spend their state aid funds. Cities like Plymouth have new roadway construction costs that exceed the amount of state aid money received. Councilmember Edson stated that he favors exempting projects that were planned prior to the adoption of the policy. He noted that Plymouth's TIF districts are quite old and were established prior to the County's adoption of this policy. He stated that the funds raised from those TIF districts have been earmarked for projects contained in the City's Capital Improvement Plan. The City is not "taking money away" from the County that the County would have received "but for" the use of tax increment financing to build the project. Director Genzlinger explained that prior to the 1993 policy, the County negotiated the cost-sharing funding of each county road project with the affected city. He said the County Road 10 reconstruction in 1993 brought this issue forward. The Hennepin County Board has taken the position that the tax base is being reduced by the use of tax increment financing. Councilmember Edson noted that most of the TIF funds have been used for roadway construction projects. Many of these projects were county roads that the County would Special Council Meeting August 15, 1995 Page 3 have had to pay had the City not used TIF funds. He stated that some communities have used TIF increments for the specific benefit of an industry, while Plymouth has used the increments for city-wide benefit such as construction of county roads. Commissioner Tambornino asked if the County Road 9 reconstruction is on the County's priority list. Director Genzlinger answered yes. Commissioner Tambornino stated that exempting the County Road 9 project from the TIF funding policy would benefit Plymouth, but she asked how Hennepin County would benefit. Councilmember Anderson stated that the County Road 9 reconstruction would allow for more development in the area, provide for better access to and from the City of Plymouth, increase the residential and commercial tax base, and address public safety issues. Commissioner Tambornino suggested that the City needs to provide finite numbers indicating the benefit to Hennepin County of waiving the policy. Manager Johnson stated that the project is needed for the benefit of all residents of Plymouth and of Hennepin County. Councilmember Edson added that the council members and commissioners represent the same constituents, and the issue should be how to get the project done in an efficient manner and to utilize funds in the best way possible. Manager Johnson stated that the City's cost share for the County Road 9 project under the TIF policy would be equivalent to about 18 percent of Plymouth's General Fund budget. He stated that the City also has obligations to construct roadways for the new School District 284 high school. Those costs are estimated at about $4 million, and the City cannot shift TIF funds to that project and state aid funds to the County Road 9 project because of the way the City's TIF districts were established. Commissioner Tambornino stated that she would like estimates on the amount of increased taxes with the County Road 9 reconstruction. Finance Director Hahn said that historic data on the TIF districts could be shared. He noted that every Plymouth TIF District but one has exceeded the estimates of taxes generated. Councilmember Lymangood stated that because this TIF district was created some time ago, the net effect to the County would be lower than if the district were newly created. He suggested that the City provide the County with financial information on the net effect to the County if the City does or does not use tax increment financing as its cost share for the County Road 9 project. Special Council Meeting August 15, 1995 Page 4 Public Works Director Moore described some of the construction projects that were funded through the use of TIF. He said the City built County Road 61 from Highway 55 to County Road 9 with TIF funds. This is a county road and should have been a County obligation. This roadway provided access to the Northwest Business Campus which has created millions of dollars of value in the community. Commissioner Tambornino asked if the County Road 9 project will move forward irrespective of whether the City participates. Hennepin Public Works Director Genzlinger said the County has certain participation requirements. He asked if the City will use other funds to pay its participation requirement if the County Board does not alter the tax increment funding policy. Manager Johnson stated that with the other obligations of the City for roadway construction, he did not know whether the City could build it for the next several years. Commissioner Steele asked why the City paid for the County Road 61 project, rather than the County. Public Works Director Genzlinger said this project was not programmed as a priority by the County. Councilmember Edson stated that if the City is unable to use TIF funding for this project, then the County will pay a greater share for this project. Councilmember Lymangood suggested that staff provide Hennepin County with information on the economic benefits from prior investments of TIF funds for county roads, projections of the increase in county tax base with the County Road 9 project, the history of the planning of the County Road 9 project, and the prior success stories of the City's TIF districts. The staff should provide suggested alternative language to Hennepin County relating to the TIF policy, as well as justification on the exemption issue. He suggested that this information be presented to Commissioners Tambornino and Steele by Councilmember Edson and Manager Johnson. MOTION was by Councilmember Anderson, seconded by Councilmember Wold, to direct staff to prepare information and present it to Hennepin County, as outlined by Councilmember Lymangood. Motion carried, five ayes. Public Works Director Moore described plans for a beautification project on County Road 9 from I-494 to Highway 169. He stated that Hennepin County has recently adopted guidelines for landscaping within the County right-of-way. The plan must be prepared by a qualified engineer, and the City must accept liability for everything planted therein. Under the policy, trees need to be ten feet from the edge of the roadway. He noted that the medians in this area are not over 20 -feet wide. He stated that the Hennepin County Special Council Meeting August 15, 1995 Page 5 Transportation staff has indicated that they would consider approving a six-foot setback from the edge of the roadway for the landscaping. He stated it would be helpful to know if Commissioners concurred with this proposal. Public Works Director Genzlinger stated that criteria such as the speed limit and snowplowing requirements would be considered in establishing a setback. Councilmember Lymangood described the landscaping plan for County Road 9 west of I- 494. He said that 330 trees are proposed to be planted in this area, and the City would like to beautify the County Road 9 segment east of I-494 as well. Public Works Director Genzlinger said that the County's policy is a guideline so there is some flexibility in interpretation. One important factor is the type of tree proposed to be planted in the median. Hennepin County Transportation Director Grube said the policy is intended to provide direction for landscaping in areas where new development is occurring and the 20 -median widths are attainable. In areas that are already developed, the County tries to be flexible in allowing landscaping, yet making sure that the roadway is safe. Councilmember Lymangood stated that City Forester Buck wrote a letter to the County in December, 1994 that specified proposed species of trees which could be used on the County Road 9 beautification project. The County response to that letter did not discuss allowable species of trees. Transportation Director Grube said the County would favor ornamental trees and small shrubbery. He said that three communities have requested a deviation from the guidelines in the past, and all three requests have been approved by the County Board. He said that he will provide City staff with the three situations that were approved. Discussion was held on the need for a pedestrian signal at County Road 61 and Bass Lake Playfield. Public Works Director Moore stated that Transportation Director Grube indicated in a letter that the installation of the pedestrian signal will be approved, and the City is trying to get it installed yet this year. Manager Johnson thanked Hennepin County for cooperation on that issue. Councilmember Lymangood also thanked the County for their cooperation in working on the Community Planting project at the Hennepin County Correctional Facility. The meeting was adjourned at 6:47 p.m. r La rie F. Ahrens City Clerk