LEGAL AND FINANCE COMMITTEE MINUTES Rapid City, South Dakota January 11, 2006

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1 MINUTES Rapid City, South Dakota January 11, 2006 A Legal and Finance Committee meeting was held at the City/School Administration Center in Rapid City, South Dakota, on Wednesday, January 11, 2006, at 12:30 p.m. A quorum was determined with the following members answering the roll call: Malcom Chapman, Tom Johnson, Ray Hadley, Deb Hadcock, and Bill Okrepkie. Absent: None. (NOTE: For sake of continuity, the following minutes are not necessarily in chronological order. Also, all referenced documents are on file with the Master Agenda.) Approve Minutes of December 28, 2005 Motion was made by Okrepkie, seconded by Johnson, and carried to approve the minutes of the December 28, 2005, Legal and Finance Committee. Adoption of the Agenda Motion was made by Hadley, seconded by Okrepkie, and carried to adopt the agenda with the following additions: 5a) BankWest appraisal of city owned property; 8a) Appointment of Pow Wow Gardens Board; 9a) Approve Travel Request for Bill Knight, Tim Behlings, and Jack Tomac to attend International Code Training in Denver, Colorado, March 5-10, 2006, in an approximate amount of $2,500; 26a) Request to amend agenda for January 18, 2006, Information Meeting; 37) Introduction and First Reading of Ordinance No Creating the Opportunity Capture Fund Oversight Board by Adding Chapter 3.32 to the Rapid City Municipal Code; and 38) Skyline Drive Preservation Group Agreement report. General Public Comment A time for members of the public to discuss or express concerns to the Committee on any issue, not limited to items on the agenda. Action will not be taken at the meeting on any issue not on the agenda, except by placement on the agenda by unanimous vote of the Aldermen present. SPECIAL ITEMS FROM THE PUBLIC (citizen requested to be placed on agenda) No. LF Marcia Elkins said she received some revised information from Mr. O Meara this morning regarding Curtis McDonald/Dream Design International - request for additional funding for Rushmore Crossing. Mr. McDonald told the Committee that the property in question is on Interstate 90 between Highway 16 and LaCrosse Street. They have been working on the financial plan for this project for approximately two and a half years. The proposal that is in front of the Committee is a good and fair approach. It places the majority of the burden on the developer. Over time the overall cost of the public infrastructure items increased to approximately $9.2 million. There were a fair number of items that had not been put in that 1

2 needed to be put in. This is now a good opportunity to get those items of infrastructure taken care of, i.e., a high pressure water main and a sewer line which runs a considerable distance to the east. The amounts that they are suggesting that the City pay for are items of infrastructure that the City would have to face eventually. These costs can be recouped in part from the development because there will be tap fees. Elkins said this is a proposed revision to the funding. Mr. McDonald is proposing to shift some different costs to the tax increment district project plan and then he is identifying some dollar amounts for the City to upfront and those would be repaid with hookup fees. There is a shift in some of the costs to the TIF, including the detention dam. She said this is more consistent with the way the City has funded other projects. It would require that the City come up with the $1.586 million out of utility funds of some sort. Dirk Jablonski, Public Works Director, said there is no money in the sewer fund available for this kind of development at this time. Hadcock moved to send this item back to the $0.16 Development Committee for discussion and recommendation. Second by Johnson. Motion carried. Place item on consent calendar Jim Wefso, Treasurer of the Rapid City Arts Council, introduced himself and David Cameron, a member of the Rapid City Arts Council, and Richard Wahlstrom, a member of the Performing Arts Committee. He said the Council has previously approved $6.5 million for an arts facility. They reported on the meetings that the two boards have held over the last couple of months working towards an agreement regarding that funding. He said they are here to request from the Committee approval for the City to negotiate a contract amendment with the Thurston Group who has been retained to do the initial designs for the Dahl expansion. The Performing Arts Coalition is seeking approval to move forward with a feasibility study to pursue the project with Central High School and the School District. Mr. Wefso said the initial expansion project on the Dahl was not funded through the 2012 process. The renovation of the Dahl will be scaled back from the original project that was designed. He said that the use of the MDU building will have to be determined in the design process. Hadcock said she would like to see a business plan between the two groups before any decisions are made by the City. Johnson said he would like to have a discussion at some point regarding ongoing costs for operation and maintenance. He would also like to have more information regarding the Dahl request. Malcom Chapman asked for information regarding the donated funds that have already been raised and how that money will be split up or how the donors are re-engaged in this process to talk about the money they donated and where it should go and which project. He said this discussion needs to be held at some point. Richard Wahlstrom told the Committee they are appreciative of the money that the Council placed in the 2012 for these projects. He said the organizations are working together and have come to a consensus and agreement that the theatre s needs are best served offsite at another location. They are looking forward to exploring a joint use facility between the community and school district to be located at or adjacent to or connected with Central High School. A joint use agreement would have to be worked out. Dr. Wharton with the school district said they are very supportive of the joint use theatre at Central High School. After further discussion, Johnson moved to direct the Finance Office and Council leadership to work with the theatre group and bring forward a proposal for the preliminary design and conception at the Central High School location. Second by Hadley. Motion carried. Place item on consent calendar Johnson moved to request the Dahl to present to the Legal and Finance Committee their vision for the Dahl expansion and upgrades regarding additional space and addressing the MDU site. Second by Hadley. Motion carried. Place item on consent calendar 2

3 Clayton Hieb and Dr. Kevin Weiland came before the Committee and requested that the Council prohibit smoking at the entrances of city-owned facilities. Dr. Weiland said everything he sees in adult diseases is preventable, one of which is smoking. This is a great opportunity for the City to show that it cares about its employees and the citizens that don t smoke. He said you can save health care dollars, save lives, and safe illness by having a smoke-free campus. After further discussion, Johnson moved to request the City Attorney s office to draft a resolution prohibiting smoking within 50 feet of the public entrances in city-owned facilities and bring it to the February 1, 2006, Legal and Finance Committee meeting. Second by Okrepkie. Motion carried. Jason Green told the Committee that several meetings ago the Council agreed to grant an easement to BankWest to access some property that they purchased off of Highway 44. The approval was contingent upon the sale of a small piece of city-owned property that is being cut off as a result of the easement. He is asking the Council for direction regarding what the City should be getting appraised for sale. Jack Lynass, regional president of BankWest, presented two alternatives for the Committee to consider. At a minimum, a half acre piece of property should be appraised. Another option the staff has come up with would include a 1.5 acre tract. After further discussion, Johnson moved to request staff to obtain an appraisal on the ½ acre proposal, the 1 and ½ acre proposal, and the entire parcel of the city-owned property on Highway 44 adjacent to the BankWest property (Wally Byum property) and to request the appraiser to set forth how each of these divisions of property would affect the overall value. Second by Hadley. Motion carried. Place item on consent calendar ITEMS FROM MAYOR No. LF Johnson moved to approve appointment of Jim Mann and James Morris and to renew the appointment of Tim Madsen to the Trenching Board each for a two-year term, effective January 1, Second by Okrepkie. Motion carried. Place item on consent calendar No. LF Okrepkie moved to approve Travel Request for Mayor Shaw, Jim Preston, Jason Green, Tracy Davis, Greta Chapman, Connie Ewing, Sam Kooiker, and Mike Schumacher to attend Municipal Government Day at the Legislature on January 31-February 1, 2006, in an approximate amount of $1,558. Second by Johnson. Motion carried. Place item on consent calendar ITEMS FROM ALDERMEN AND COMMITTEE REPORTS Johnson moved to continue discussion of the Economic Development and Civic Improvements Fund Ordinance Amendment and deal with it in conjunction with item No. 37 on the agenda. Second by Hadcock. Motion carried. Malcom Chapman, on behalf of the Safe Streets Committee, told the Committee that Captain Allender and he met with marketing people from town last week who were very interested in helping the City come up with a comprehensive plan to the Safe Streets Task Force. The Safe Streets Task Force applied for the comprehensive plan to be done as a free plan by the AdFed and were not successful in that application. As a result, some of the members on behalf of the AdFed, but not acting as the AdFed, feel that this is important enough to move forward. There 3

4 is a list of approximately 20 marketing entities from around town who are interested in helping and they are moving forward with the process. Tom Johnson told the Committee that the Council approved the Pow Wow Gardens as part of the 2012 project. As with the museum and many other facilities, he believes the Council needs to make certain that there is a board consisting of both the artistic side as well as the financial side to make certain that this is a success. Johnson moved to request the Mayor to bring forward names for a board regarding the Pow Wow Gardens project. Second by Okrepkie. Motion carried. Place item on consent calendar FIRE DEPARTMENT No. LF Hadcock moved to authorize Mayor and Finance Officer to sign Medical Director s Agreement with Dr. Manning. Second by Johnson. Motion carried. Place item on consent calendar Okrepkie moved to approve Travel Request for Bill Knight, Tim Behlings, and Jack Tomac to attend International Code Training in Denver, Colorado, March 5-10, 2006, in an approximate amount of $2,500. Second by Hadcock. Motion carried. Place item on consent calendar LIBRARY No. LF Hadcock moved to approve Travel Request for Terri Davis and Greta Chapman to attend Public Library Association Bi-Annual Conference in Boston, MA, from March 18-25, 2006, in an approximate amount of $3, Second by Johnson. Motion carried. Place item on consent calendar GROWTH MANAGEMENT No. 05TI014A - Rushmore Crossing Marcia Elkins said this is related to the previous item regarding Curtis McDonald/Dream Design International s request for additional funding for Rushmore Crossing. There would be some revisions necessary. She recommended that staff be authorized to make the revisions to the plan and continue this item to the next committee meeting. If there are changes that the Committee would want to see in the project plan, she asked that those revisions be given to her at this time. Hadcock said there are concerns with some TIF s where improvements are being put in with no developer s agreement in place and there is no time limit on the developer s part. This affects other developers. She also believes there needs to be updates on the utilities. Elkins said there was an interest in bringing forth developer s agreements at the same time as the project plan if there was a desire to tie the time frames for the improvements to be done to that project plan so that they could go forward together. If that is the desire of this Committee, then the motion should include requesting staff to draft the developer s agreement so it could be considered at the same time. Chapman reminded the Committee that there is no motion on the floor. He suggested that this item could be continued out far enough to ensure that the developer s agreement is completed, give the Council the opportunity to have the information meeting with the $0.16 committee, consider what is happening with utilities, and bring it all together at that time. Jason Green said an integral part of a developer s agreement is the base land valuation that we get from the State. It often takes more than two months to get that. Before the developer s agreement can be 4

5 finalized, we would need that information from the State. If there is a project with a time critical component, that could be added into the developer s agreement and that could be brought to the attention of staff at the time the project plan is approved. The developer s financing is tied up by the lack of a developer s agreement so for the most part, the developer is anxious to get that completed. Hadcock moved to continue a request by Dream Design International, Inc. to consider an application for a Tax Increment District No Project Plan on that portion of the Interstate 90 right-of-way lying in the SE1/4 NE1/4 and in the NE1/4 SE1/4 of Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Entire Interstate 90 rightof-way located in Section 29, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Entire Interstate 90 right-of-way located in the SW1/4 of Section 28, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Tract F, Marshall Heights Subdivision No. 2 and the Interstate 90 right-of-way lying south of and adjacent to Tract F, Marshall Heights Subdivision No. 2, all located in Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, That portion of the East Disk Drive right-of-way lying east of North LaCrosse Street located in Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Lot K-4 less Lot H-1, Marshall Heights Tract, Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Lots 1 and 2 and the south ½ of the vacated alley and Pine Street right-of-way adjacent to said lots, Block 2, Rapps Addition, Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Lot M of the NW1/4 SE1/4 of Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Entire Farnwood Avenue right-of-way, entire Spruce Street right-of-way, and entire Rapp Street right-of-way all located in Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, That portion of the North LaCrosse Street right-of-way lying adjacent to Lot K-4 of Marshall Heights Tract and Lot 1 of Bedco Subdivision and including the entire intersection of North LaCrosse Street and Rapp Street, all located in Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Lot H1 and Lot H2 located in N1/2 SE1/4 of Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Unplatted portion of the N1/2 SE1/4 lying south of Interstate 90, Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, Lots 1 and 2, Bedco Subdivision, Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, SE1/4 SE1/4 lying north of the railroad right-of-way and the unplatted portion of the SW1/4 SE1/4 all located in Section 30, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, That portion of the S1/2 lying south of Interstate 90 and north of the railroad right-of-way, Section 29, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, That portion of the NE1/4 NW1/4 and N1/2 NE1/4 lying north of the railroad right-of-way, Section 32, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota; and, That portion of the Dyess Avenue right-of-way lying in the S1/2 SW1/4 and the entire intersection of Dyess Avenue and Eglin Street all located in Section 28, T2N, R8E, BHM, Rapid City, Pennington County, South Dakota, more generally described as being located east of LaCrosse Street and west of East Boulevard and south of Interstate 90 to the February 1, 2006, Legal and Finance Committee meeting and authorize staff to make the proposed revisions to the project plan. Second by Johnson. Johnson said he believes the developer plan and the project plan are distinctly different. He said if you tie these two together, you will slow down development. Hadcock said they go together in her opinion. A vote was taken on the motion and the motion carried. Hadcock moved to table possible solutions for Planned Residential Development for Lots 1, 2 and 3, Block 5, Schamber Addition, SW1/4 NW1/4, Section 9, T1N, R7E, BHM, Rapid City, 5

6 Pennington County, South Dakota, more generally described as being located at 4114 Sunset Drive. Second by Okrepkie. Motion carried. No. LF Hadcock moved to continue discussion on proposed revisions to the Tax Increment Finance Policy to the February 1, 2006, Legal and Finance Committee meeting and request the Planning Commission to discuss developer agreement timing issues. Second by Okrepkie. Johnson said he agrees with performance; he does not agree with timing of two separate items. The developer cannot get reimbursed unless there is an agreement between the City and the plan. Your performance mechanism is the plan. A vote was taken and the motion carried. Place item on consent calendar No. 05TI016 Plum Creek Subdivision a request by Centerline to consider an application for a Tax Increment District No Project Plan on the W1/2 SW1/4, less Plum Creek Subdivision and including Elk Vale Road right-of-way, Section 16, T1N, R8E, BHM, Rapid City, Pennington County, South Dakota, more generally described as being located at the southern terminus of South Valley Drive. Chapman said he was not in favor of the creation of this district. He understands the importance of opening up some other areas for development, and he fully supports that. His objection to this was in terms of where the dollars came from to support this. He understands that we are now talking about the project plan which is different than the creation. He will focus his efforts on the project plan and hopefully come out with some sort of solid project plan that the City and the applicant can work with. Hadcock moved to take this item to the January 16, 2006, Council meeting without recommendation. Second by Okrepkie. Johnson said he would like to have the information on what is included in the plan. Marcia Elkins said they reviewed whether or not some additional costs could be added for oversizing. For Phase I, the additional dollar amount for oversizing Minnesota Street would be approximately $400,000 and for Phase II, it would be approximately $500,000. Staff ran the numbers on this and it would pay off in year 20 so that those costs could be included if it is the Council s wish. They projected Phase II to occur in the fifth year so that in terms of the timing of those costs being incurred, staff would anticipate that happening in essentially Jerry Cole, on behalf of the Parks and Recreation Board, said they would like to request the Council place $100,000 into this plan so that at some time they might look at and possibly build a pedestrian bicycle access along or over/under the Southeast Connector in order to get to the residential areas. This project would be approximately $42,000 short of cash flowing it with the additional $900,000 and the additional $100,000. Johnson said he would encourage the Committee members to add the additional $100,000. An amendment to the motion was made by Johnson to approve the project plan with amendments. Second by Okrepkie. Motion carried. A vote was taken on the original motion as amended and the motion carried. No. LF Okrepkie moved to set a special Council meeting for February 2, 2006, at 7:00 p.m. regarding a briefing from the Safe Drinking Water Committee and to invite the County Commissioners to attend this meeting. Second by Hadcock. Motion carried. Place item on consent calendar FINANCE DEPARTMENT No. LF Hadcock moved to continue Resolution to Establish Additional Staffing for the Solid Waste Division to the March 1, 2006, Legal and Finance Committee meeting. Second by Okrepkie. Motion carried. 6

7 Doug Aldrich reported to the Committee that in the first six months of streaming audio, it cost approximately $2,300 which is significantly less than was estimated. There are 125 hours of recorded audio on the website and to date, only 124 hours have been listened to. The cost and the usage is low. Okrepkie moved to acknowledge the streaming audio report by Doug Aldrich. Second by Hadcock. Motion carried. Place item on consent calendar Rodell Grosz told the Committee that the problem reported at the last meeting regarding the audio/video system related only to a couple of meetings. Grosz talked to Black Hills Fibercom, and they said those problems have been taken care of. Hadcock moved to acknowledge the report on audio problems with meeting recordings by Rodell Grosz. Second by Johnson. Motion carried. Place item on consent calendar No. LF Jim Preston handed out to the Committee members an individual sign up sheet for the Local Board of Equalization 2006 hearings. This will be held March 20-24, He said they would need six elected officials from the City Council at each session. No. LF Johnson moved to authorize Mayor and Finance Officer to sign Agreement for the State to provide $28,425 to the City to match Federal Transit Administration Grant Funds to operate the bus system. Second by Okrepkie. Motion carried. Place item on consent calendar No. LF Johnson moved to approve Resolution Establishing Encumbrances. Second by Okrepkie. Motion carried. Place item on consent calendar No. LF Johnson moved to approve Introduction and First Reading of Ordinance No Regarding Supplemental Appropriation No. 2 for Second by Okrepkie. Motion carried. No. LF Okrepkie moved to authorize Mayor and Finance Officer to sign Service Provider Agreement (Weed and Seed Funding) with Volunteers of America, Dakota. Second by Johnson. Motion carried. Place item on consent calendar No. LF Okrepkie moved to authorize Mayor and Finance Officer to sign Professional Services Agreement with Occupational Health Network, Inc. Second by Johnson. Motion carried. Place item on consent calendar No. LF Okrepkie moved to approve Resolution Declaring Property Surplus for Fire & Emergency Services. Second by Johnson. Motion carried. Place item on consent calendar PUBLIC WORKS DEPARTMENT Dirk Jablonski, Public Works Director, said the Rapid Valley Sanitary District will be meeting with staff on January 17, There will be discussion at that time regarding the water rates with Copperfield. He asked that this item be continued until after that meeting. Okrepkie moved to continue to the February 1, 2006, Legal and Finance Committee meeting Copperfield Subdivision water rates. Second by Hadcock. Motion carried. 7

8 Johnson moved to continue discussion of the landfill issues currently on the January Information meeting agenda to the February Information meeting. Second by Okrepkie. Motion carried. DEPARTMENT OF PARKS AND RECREATION No. LF Johnson moved to authorize staff to apply for community tree planting funds. Second by Hadcock. Motion carried. Place item on consent calendar CITY ATTORNEY S OFFICE No. LF Johnson moved to request the Mayor to bring forward appointments for the expired seats on the DARB board. Second by Okrepkie. Motion carried. Place item on consent calendar No. LF Johnson moved to continue Second Reading and Recommendation of Ordinance No Increasing the Landfill Tipping Fee by Amending Section of the Rapid City Municipal Code to the March 1, 2006, Legal and Finance Committee meeting. Second by Hadcock. Motion carried. No. LF A2 Johnson moved to continue Second Reading and Recommendation of Ordinance No Regulating On-Site Wastewater Disposal and Treatment by Adding Chapter to the Rapid City Municipal Code to the February 15, 2006, Legal and Finance Committee meeting. Second by Hadcock. Motion carried. No. LF Wes Shelton, representing Riddle s property, spoke in favor of the creation of the Business Improvement District. He said there was a concern about the chance at some future time of the Council taking the quarter percentage BBB tax and using it for something else. The downside of this would leave the members of this Business Improvement District solely to support tourism and convention marketing in Rapid City. He said they had drafted some language to add to the ordinance, and they are asking the Committee for their comments on including that language. Tamara Pier, legal counsel for the Convention & Visitors Bureau, reviewed the proposed language with the Committee. She said this language sets up a mechanism for allowing the members of the Business Improvement District to dissolve it because it is not serving the intended functions any longer. If the Council chose not to fund the Convention & Visitors Bureau in the future, then it would be set for hearing on abolishing the district and if a majority of the members supported that abolition, the Council would then be required to abolish the district. This is just a safety measure. Johnson said he is opposed to the amendment. He thinks there should be a matter of trust that goes along with this. He would hate to put an ordinance into effect that has reversionary language for certain things. He thinks the City is moving forward in good faith to build the visitor industry. Jason Green said he could support including the first paragraph proposed by Ms. Pier but not the second paragraph. Hadcock moved to approve Introduction and First Reading of Ordinance No with the proposed amendments suggested by Ms. Pier. Motion died for lack of a second. Chapman said he supports the establishment of this Business Improvement District. He does not support the proposed amendments. He thinks it would be unfair to bind future Councils to do something. He thinks the trust in the relationship should continue. Johnson moved to approve Introduction and First Reading of Ordinance No Establishing Business Improvement District No. 1 by Adding Chapter 3.24 to the Rapid City Municipal Code with the deletion of 8

9 Section Second by Okrepkie. Mr. Shelton said he would not want to harm this process. If the Council votes not to include the amendments, that s a good thing. It needs to move forward. At the same time, if there was a way to forestall calamity, then that would be great. A vote was taken and the motion carried. No. LF Okrepkie moved to authorize Mayor and Finance Officer to sign Lease Agreement between Rapid City Arts Council, Inc. and the City of Rapid City. Second by Hadcock. Motion carried. Place item on consent calendar No. LF Johnson moved to acknowledge raffle request from Crazy Horse Memorial. Second by Hadcock. Motion carried. Place item on consent calendar Johnson moved to take Introduction and First Reading of Ordinance No Creating the Opportunity Capture Fund Oversight Board by Adding Chapter 3.32 to the Rapid City Municipal Code to the January 16, 2006, Council meeting without recommendation. Second by Hadcock. Bob DeMersseman of the Rapid City Economic Development told the Committee that the ordinance may require some clarification. He said they also made recommendations with regard to the composition of the board, and he would hope those would be considered. A vote was taken, and the motion carried. Johnson moved to continue Skyline Drive Preservation Group Agreement to the February 1, 2006, Legal and Finance Committee meeting. Second by Okrepkie. Motion carried. REFUNDS AND ABATEMENTS No. LF Johnson moved to approve the following abatements: Big D Oil Co. - $1,126.60; Maia S. Borscheid - $739.24; Betty M. Iverson - $417.62; Kids Kastle West - $3,756.66; Jerry Lahr, Trustees - $363.02; Legacy Land Co. - $5,219.48; Wesley Scholl - $392.98; Emily C. Sims - $1,017.32; Teton Coalition Inc. - $221.86; Gary Van Zee - $ Second by Hadcock. Motion carried. Place item on consent calendar LICENSES Johnson moved to approve the following licenses: Second Hand: Furniture Mart, Susan R Sorbel; Game Exchange, Jacaline K Sales; Scheel s All Sports, Karen Jones; Sound Bytes Music, Thomas Anderson; Willy s Saw Shop, Douglas Williams; Security Business: Aramark Facility Services, Michael D Gebeke; Black Watch, Inc, Ryan R Schuler; Mountain States Security, Inc., Karen Kierstead; S & K Security Specialists, Inc, Steven L. Dary. Second by Okrepkie. Motion carried. Place item on consent calendar There being no further business, moved, second by and carried to adjourn the meeting at 3:25 p.m. 9