08-09-21 City Council MinutesOTSEGO CITY COUNCIL MEETING
MONDAY, AUGUST 9, 2021
7:00 PM
OTSEGO PRAIRIE CENTER
Call to Order.
Mayor Stockamp called the meeting to order at 7:00 PM.
Roll Call:
Mayor Jessica Stockamp; Councilmembers: Tom Darkenwald, Tina Goede, Jeff Dahl, and Brittany
Moores. City Staff: City Administrator/Finance Director Adam Flaherty; Human Resources/Assistant City
Administrator Sabrina Hille; Streets Department Manager Kevin Lamson; City Attorney Dave Kendall; City
Engineer Ron Wagner; City Planner Daniel Licht; and City Clerk Audra Etzel.
Pledge of Allegiance: Mayor Stockamp led in the Pledge of Allegiance.
1. Open Forum:
Mayor Stockamp opened the Open Forum at 7:01 PM.
Michael Steiner of 10605 74th Lane NE said he was last at a City Council meeting one year ago regarding
transportation outside of Kittridge Crossings. He was pleased to learn about the trails project, allowing
safety and access for all including Kaleidoscope School. Since the project has been approved, he has
waiting for the project to start. Mr. Steiner has been told four different start dates and as of August 2"d,
the project has not started, he was given another start date that has also passed. Mr. Steiner is
concerned about the project getting completed, he has spoken with the contractor and was told the
project would be done in time for school. Mr. Steiner understands this is a new construction company
that was vetted to verify they could meet the contract deadlines. Mr. Steiner asked if the contractor
does not meet the deadlines, will they be held accountable? Mr. Steiner would like to get feedback on
where the project stands.
Engineer Wagner said the contract for the project was awarded on June 15th. It is the contractor's
responsibility to order supplies and to meet the timeline. Engineer Wagner did reach out to the
contractor to find out when supplies were ordered and suggested they start work on the other end of
the project. The contractor did start on August 2nd and is currently compliant, they would not default
until the project deadline. The storm sewer portion will be about 4-5 weeks late. Engineer Wagner is
hoping the contractor can work with the concrete facility, again it is up to the contactor to administer the
project. If the contractor falls out of compliance, staff and the City Council would need to review the
next steps. Mr. Wagner said the deadline for substantial completion is August 27tH
Mr. Steiner asked about contacting the consultant directly and the City Clerk stated staff usually contacts
the consultants on behalf of the city, he wants to know if this is a policy? Mayor Stockamp said in the
past staff has taken the information and sometimes the phone numbers are given to consultants. Mr.
Wagner said after speaking to City Administrator/Finance Director Flaherty, he did reach out to the
contractor about the status of ordering piping and was told the date was July 28tH. Mr. Wagner added
the project has been staked and the work is proposed to start on August 11th with putting in concrete
and ADA ramps at Page and Odean. Mr. Wagner is unaware when the contractor will be by Mr. Steiner's
property.
CM Darkenwald asked Engineer Wanger to contact the contractor and let them know this delay has been
brought to City Council's attention. Mr. Wagner has spoken with City Attorney Kendall and the
contractor is aware of the concerns.
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Mayor Stockamp closed the Open Forum at 7:20 PM.
2 Consider Agenda Approval.
CM Moores motioned to approve the agenda as written, seconded by CM Dahl. Roll Call:
Voted in favor; Darkenwald, Goede, Stockamp, Moores and Dahl. Voted against; none.
Motion carried 5-0.
3. Consent Agenda.
3.1 Approve Claims List.
3.2 Approve City Council Meeting Minutes.
A. July 26 2021 Meeting.
3.3 Approve City Council Special Compensation for July 2021.
3.4 Adopt Resolution 2021-56 imposing a Civil Penalty and Other Sanctions — Kwik Trip #162.
3.5 Adopt Resolution 2021-56 imposing_a Civil Penalty and Other Sanctions — Vintage Golf Course.
3.6 Approve Issuance of Temporary On -Sale Liquor License to the Otsego Lions Club, Inc.
3.7 Adopt Resolution 2021-58 Approving an Updated to the Firearms No Discharge Map.
3.8 Adopt Resolution 2021-59 To Seat a Hearing on Proposed Assessment— Heritage Hills.
3.9 Approve Invoice for Emergency Repair of Municipal Well #3.
CM Moores motioned to approve the consent agenda as presented, seconded by CM
Darkenwald. Roll Call: Voted in favor; Darkenwald, Goede, Stockamp, Moores, and Dahl.
Voted against; none. Motion carried 5-0.
4. Administration:
4.1 Series 2021 Bond Issuance.
A Presentation by Administrator/ Finance Director Flaherty.
B Consider Approval of Municipal Advisory Service Agreements with Northland
Securities, Inc.
C Consider Resolution 2021-60 Competitive Negotiated Sale of Series 2021A
Bond.
D Consider Resolution 2021-61 Competitive Negotiated Sale of Series 2021B
Bond.
City Administrator/Finance Director Flaherty said City Staff is here to recommend the City Council
proceed with the debt issuance process. There are three separate motions to consider. First to accept
proposal from Northland Securities, the City's Municipal Advisor for the debt issuance. Second is the
Water Revenue Bond 2021A, proceeds from the bond would go towards financing the construction of
Water Tower #4. And the third items is the 2021B Bonds a refinancing of existing debt to achieve
interest rate savings.
Jessica Greene with Northland Securities included two advisory agreements and two resolutions
providing for the issuance of the bonds. Ms. Greene reviewed the details of the finance plans.
The first finance plan is related to the Series 2021A Bond, the par amount of $4,575,000 in General
Obligation Water Revenue Bonds and the proceeds would be used to finance Water Tower #4 which is
under construction. They would be looking to get proceeds next month to help finish up this project. In
terms of the security, they are looking at a general obligation pledge and net water revenues would be
used to support the payment, if there are not sufficient funds the City would rely on the GO pledge.
This is a 15 -year structure with final maturity on 2037 and looking at an average coupon of 1.25 with
true interest cost estimated at 1.34. The optional call feature is February 1, 2029. They did seek rating
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for the bonds. Ms. Greene and City Administrator/Finance Director Flaherty participated in a rating call
with S&P and the call went well. The results of the call should be back on Monday and then go to sale on
August 23rd. They would come back for City Council consideration that evening with the bid results. If
all goes as planned, the closing would be September 23rd
CM Darkenwald asked if there was a prepayment penalty on the optional redemption on the 2021A
Bonds. Ms. Greene said beginning February 1, 2029 there is no prepayment penalty. CM Darkenwald
asked why 15 years vs. 20 years on the bond? City Administrator/Finance Director Flaherty said 15
years was used to remain consistent with the 2020 utility rate study. CM Darkenwald further asked what
if 20 years was used, what would change? Ms. Greene estimated the difference of about 30-35 points,
the payment would be lower of a longer period, and there would be more interest over time.
CM Darkenwald asked if any additional capital costs in water from the utility rate study that have not
been discussed? City Administrator/Finance Director Flaherty said for water in 2023 there is a project to
connect the east and west systems with the water main along CSAH 38; this is a multi -million -dollar
project projected in the rate study. The Capital Improvement Plan includes additional wells and modify
the pump houses to accommodate water treatment. There is significant capital on the water side and
sewer is probably more in the short term with the expansion of the west facility scheduled to start next
year.
CM Darkenwald thought a 20 -year bond with the callable features would give the City more flexibility
with funds and asked what is involved to go from 15 to 20 years. Ms. Greene said it would not be
difficult. They would move back one City Council cycle and make changes to the official statement. Ms.
Greene would also need to contact S&P to let them know the amortization would change, but doesn't
think it would greatly change the outcome. CM Darkenwald thought with all the projects in the
foreseeable future, $62,000 a year over 15 years is close to a million dollars. Ms. Greene said in the
market conditions, they are seeing optimism out into the future. They are seeing the yield curb kick off
with a difference of 30-35 basis points higher. The shorter the maturity the easier the bond are selling
and the more investors are interested in purchasing. The City will start to lose some investors out into
the future. The sooner the bonds are paid off the better interest, this is what investors are looking for.
The City's credit rating is really good and there will be interest. There will be two issues in the market
that day which will draw good interest. Ms. Greene said they can make changes and still be good at the
market either way. CM Darkenwald ask if going to a 20 year would screw up the process if pushed off a
cycle? City Administrator/Finance Director Flaherty explained the costs of 15 years vs. 20 years and his
recommendation is to go with the 15 -year bond. Mayor Stockamp said the rate study showed the rates
are based on 15 years.
Ms. Greene said the next finance plan is the Series 2021B Bond. The par amount is $7,595,000 and
these are General Obligation Water and Sewer Revenue Refunding Bonds Series 2021B. The proceeds
would be used to refund Series 2010C Bonds that are currently outstanding. The final maturity is 2026
for a gross savings of $446,720, the net present value is $439,809. The present value percentage is
5.06%, looking to meeting the minimum threshold of 3%, which is a nice savings and it upwards of 5%.
The average coupon they are showing is 4%, with a true interest cost. This is where the they wants to
pay attention is .59, anticipating a decent sized premium on the bonds meaning investors are looking for
a higher stated interest rate on the bond and don't need cash up front to get there. The current
principal outstanding of just shy of $8.2 million with that premium, this is why they are reducing the par
amount of the bond to $7,595,000. The did also seek out a rating for this series, looking for a rating of
AAplus on the bonds. The bonds will be considered for possible sale August 23rd at 10am and would
come back to City Council for consideration. The premium and interest rates will not be known until the
date of the sale, so they have based the figures on similar bonds. There are some restrictions with the
2010C Bond with the weighted average to remain bank qualified. Overall a lower payment in each year
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of the bond issue. The finance plan showed 2022, 2023, and 2024 averaging around $49,000 total
savings and a larger savings in the last two years from the manipulation of the principal to maintain the
weighted average and have the maturity where it needs to be. The estimated savings is $446,719, with
the gross present value $438,571.
CM Darkenwald asked about the true interest difference between the percentage and the coupon. Ms.
Greene explained the difference in the calculation.
CM Darkenwald motioned to approve the Municipal Advisory Service Agreements between
the City of Otsego and Northland Securities, Inc., seconded by Mayor Stockamp. Roll Call:
Voted in favor; Darkenwald, Goede, Stockamp, Moores, and Dahl. Voted against; none.
Motion carried 5-0.
CM Moores motioned to approve Resolution 2021-60 Providing for the Competitive
Negotiated Sale of General Obligation Water Revenue Bonds, Series 2021A, seconded by CM
Goede. Roll Call: Voted in favor; Goede, Stockamp, Moores, and Dahl. Voted against;
Darkenwald. Motion carried 4-1
CM Moores motioned to approve Resolution 2021-61 Providing for the Competitive
Negotiated Sale of General Obligation Water and Sewer Revenue Refunding Bonds, Series
2021B, seconded by CM Goede. Roll Call: Voted in favor; Darkenwald, Goede, Stockamp,
Moores, and Dahl. Voted against; none. Motion carried 5-0.
5. Planning:
5.1 Parrish Meadow Addition:
A. Presentation by City Planner Licht.
B Consider Approval of Site and Building Plans and Conditional Use Permit.
C Consider Resolution 2021-62 Approving a Site Improvement Performance
Agreement.
D Consider Resolution 2021-63 Approving a Development Contract.
City Planner Licht presented the staff report.
Dan Willenbring, 400 Tanglewood Lane, Marina on St. Croix, MN a partner with Tamarack Land
Development was present to answer any questions. Mr. Willenbring said they have dropped of the
executive development agreement at City Hall and will be providing financial obligations on Wednesday.
Mayor Stockamp asked about the outlot south of the commercial building closest to the barn. City
Planner Licht said there was a cattle shed that was removed. CM Darkenwald asked which roads are
being built and will there be any temporarily cul-de-sac? City Planner Licht said the developer is building
all streets within the final plat and there will be no temporary cud -de -sacs. Engineer Wagner said the lot
to the north by the single family lot will be a temporary cul-de-sac. CM Darkenwald asked about Park
Avenue NE? Planner Licht said they do not require a cud -de -sac if the road does not extend beyond one
lot, this will be a dead end. The development will have access to County Ridge. Mayor Stockamp asked
about emergency services. City Planner Licht stated the private drives are 28' wide, there is enough
room for vehicles to access. CM Darkenwald asked if there would be signage stating the road will be
extended in the future. City Planner Licht say yes, signs will be placed with the language noting future
roads.
Mayor Stockamp asked about the trails. City Planner Licht said 87th Street all the way up to 88th Street
and Coborns completed 391h down to 88th, connect the trail system. Interior sidewalks are also included.
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Mr. Willenbring said Northwater and Hunter Hills will be moving forward in the next month.
CM Darkenwald motioned to adopt Resolution 2021-62 vacating existing drainage and
utility easements; approve the final plat of Parrish Meadows subject to the conditions
stated by the Findings of Fact and Decision as presented; and, adopt Resolution 2021-63
approving a Development Contract, seconded by CM Moores. Roll Call: Voted in favor;
Darkenwald, Goede, Stockamp, Moores, and Dahl. Motion carried 5-0.
6. City Council Reports and Updates.
CM Darkenwald said there was no Planning Commission Meeting on August 2nd
7. Staff Reports and Updates.
City Administrator/Finance Director Flaherty said the City has receive the first half of the ARPA funds and
staff will be exploring guidance from the treasury on how to use the funds. This will come back at a
future meeting.
Engineer Wagner said Heritage Hills curbing starting this week and will take two days. The trail project
staring on Wednesday with ADA ramps. Engineer Wagner and City Administrator/Finance Director
Flaherty met with MnDOT to review the LPP Grant for the left flashing lights; funds could be repaid if
work was completed in advance.
Planner Licht said the next Planning Commission meeting is August 16th. The main application, Hanson
Heights is back with DB Horton as the builder. The remaining Ashwood Plat has been received.
Sergeant Oltmans updated the City Council on Packard Avenue. The deputies over a a 12 hour time
period found the fastest speed was 61 MPH and 63 MPH from machine readings. Mayor Stockamp asked
if people are avoiding the area? Sergeant Oltmans said it is unknown if this has impacted the
documented speeds. Their department will continue to monitor. CM Darkenwald had a family member
that used to live on the street and the speeding was minimal. He also added there are blind spots on
the road way. Crime started rising about two weeks ago during the night, it is believed the criminals are
from outside the area. Their department is working to catch the criminals. Recently two people were
arrested in Delano. Hopefully this helps slow down the crime. Last, several emergency vehicles
responded to a car that ran into a house near Marlow and County Road 34 in the middle of the night.
7. Adjournment.
CM Darkenwald motioned to adjourn at 8:13 PM, seconded by CM Goede. Roll Call: Voted in
favor; Darkenwald, Goede, Stockamp, Moores and Dahl. Voted against; none. Motion carried
5-0.
aUC03
ATTEST:
Audra Etzel, City Clerk
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ayor Jessica Stockamp