Wright County Board Minutes

SEPTEMBER 5, 2006

The Wright County Board met in regular session at 9:00 A.M. with Heeter, Sawatzke, Mattson, Russek and Eichelberg present.

Russek moved to approve the minutes of 8-29-06, seconded by Eichelberg, carried 5-0.

Petitions were accepted to the Agenda as follows: Chief Deputy Atty. #2, “Authorization To Sign Closing Documents, Albertville Property” (Norman); Item For Consid. #2, “Deferred Compensation Committee Report” (Norman). Eichelberg moved to approve the Agenda as amended, seconded by Russek, carried 5-0.

On a motion by Russek, second by Eichelberg, all voted to approve the Consent Agenda:

A. ADMINISTRATION

1. Performance Appraisals: L. Thingvold, Assr.; T. Janikula, P&Z.

2. Jail Inspection Report.

B. AUDITOR/TREASURER

1. Accept Payment Of $44,926.65 As Payment In Full For The Historical Society Building Addition & Waive SAC/WAC & Excel Charges.

C. HIGHWAY

1. Refer To Personnel Committee Meeting of 9-27-06 “Take Home County Vehicle Policy”.

1. Set Bid Opening Date For Silver Creek Town Bridge Project For 10-10-06 @ 9:30 A.M.

Bob Hiivala, Auditor/Treasurer, requested a transfer of $1,042,917.76 from the Capital Projects Fund to Road & Bridge. The purpose is to cover costs associated with the Otsego Shop and road overlays. Eichelberg moved to approve the transfer, seconded by Sawatzke. Mattson questioned whether this transfer should be approved prior to approval of the 2007 budget. Hiivala indicated the expenditures will be incurred in 2006 and were removed from the 2007 budget. The motion carried 5-0.

Russek moved to approve the claims as listed in the abstract, subject to audit. Mattson seconded the motion. Mattson noted that the County continues to fund dental and health care for inmates. Russek said this issue is part of the AMC Annual Conference Agenda. Sawatzke referenced a claim on Page 3, Excel Systems LLC ($1,139.00) for Planning & Zoning voice/data cabling and questioned whether this is the vendor that went out of business a few years ago. Richard Norman, County Coordinator, stated this was a different vendor. The motion carried 5-0.

Marc Mattice, Parks Administrator, brought forth discussion on the CSAH 12 archaeological survey laid over from the last meeting. Mattice distributed a summary sheet outlining the quotes received from three firms: HDR ($7,740); Summit ($16,850); and 106 Group ($17,220), as well as staff and Mn/DOT comments. The quote from HDR was received after the last County Board Meeting. As the quote was significantly lower than the others received, Mn/DOT had concern whether the scope of the project was known by the firm. Mattice and Wayne Fingalson, Highway Engineer, held a conference call with Laura Kennedy, HDR, and checked references. Mattice said Kennedy made a site visit. He was unsure whether the other two firms had. Kennedy felt in the worst case scenario, one more day could be required if they find a significant site (cost of appx. $1,250/day). Staff recommendation was to proceed with HDR. Eichelberg moved to approve the low bid from HDR, $7,740 for the archaeological survey. Mattice noted that this was for Phase I of the survey and an additional $1,250/day cost may be incurred if a significant site is found. The expenditure was approved on 7-15-06 to be funded from the Professional Services line item. The motion was seconded by Russek and carried 5-0.

On a motion by Russek, second by Eichelberg, all voted to reappoint Glen Litfin as Public Sector Representative on the Wright County Community Action Board. Heeter said Litfin is a great participant and attends meetings regularly.

Norman provided a Deferred Compensation Committee report. A Committee Meeting was held today to discuss a request from an employee to withdraw funds under the unforeseeable emergency section of the Deferred Compensation Plan. The Committee determined the request met the definition so the recommendation was to allow the employee to withdraw funds from the Deferred Compensation Plan. The minutes will be presented for approval at the next County Board Meeting. Sawatzke moved to approve the recommendation, seconded by Russek, carried 5-0.

The meeting recessed at 9:15 A.M. and reconvened at 9:30 A.M.

At 9:30 A.M., Heeter closed the bid process for Contract #0609, CHSP Street Lighting Improvement Project. Wayne Fingalson, Highway Engineer, opened and read the bids for the nine intersections which will be affected including: CSAH 2 @ CR 136; CSAH 3 @ CSAH 35; CSAH 3 @ CSAH 38; CSAH 3 @ CR 100; CSAH 8 @ US 12 (N Jct); CSAH 8 @ CSAH 9; CSAH 12 @ CR 107; CR 106 @ TH 25; and CR 137 @ US 12. The original Engineer’s estimate was $100,000. Fingalson reduced the Engineer’s estimate to $64,000 as the poles and electric boxes were purchased by the County ahead of time. The County Board previously passed an agreement allowing the State to fund their share of the three trunk highways involved. At Fingalson’s request, the bids were laid over to later in today’s meeting for award. The bids are as follows:

Bidder; Bid Bond; Total Bid

Electrical Installation & Maintenance Co. (Maple Plain); Yes; $96,200

Egan (Brooklyn Park); Yes; $136,550

Design Electric ; Yes; $78,677

Honda Electric (Loretto); Yes; $149,200

The meeting recessed at 9:35 A.M. and reconvened at 9:40 A.M.

Brian Asleson, Chief Deputy Attorney, requested the Board set a public hearing relating to the Park Terrace Project, adjacent to the Park View Care Center. The Board will hold a Public Hearing today at 10:00 A.M. for the same project to take comment on the issuance of Health Care Facility Revenue Bonds, Series 2006. Asleson was contacted by bond counsel for Elim Care requesting that the Board hold another public hearing and adopt a Program for Multifamily Housing Development under Chapter 462C. Sawatzke moved to schedule the Public Hearing for 9-26-06 at 9:30 A.M. The motion was seconded by Russek and carried 5-0. Russek moved to adopt Resolution #06-52 giving preliminary approval to certain Health Care Facilities Revenue Bonds and a project under MN Statutes, Chapter 462C & MN Statutes, 469.152 through 469.1651. The motion was seconded by Mattson and carried 5-0 on a roll call vote.

Asleson requested that the Board authorize him to sign closing documents relating to the Albertville property. At their last meeting, the Board authorized Heeter and Norman to sign the deed for the Albertville Truck Station property. As with other real estate transactions, there will be additional documents requiring signatures. Asleson has signed these types of documents in the past on behalf of the County. However, the closing agent on this transaction has asked for authorization by the County Board. The closing is scheduled for 9-06-06 at 1:00 P.M. The Highway Department has hired Veit Companies to remove the Highway Building from the Albertville property. Russek moved to authorize Asleson to sign closing documents, seconded by Eichelberg, carried 5-0.

Asleson and Greg Kramber, Assessor, requested consideration of the abatement of payable 2004 Real Property Taxes for the Honeywell Property, PID #103-089-002014. A history of the property was provided. Honeywell filed a tax appeal for taxes payable 2000-2002. The property value at that time was $4.2 million. By the time the tax court issued their decision (May 2003) the taxes payable for 2003 and 2004 were on the books at $4.2 million. Sometime after the payable 2003 appeal by Honeywell and the receipt of the Tax Court decision to lower the value to $3.4 million, Asleson and Kramber made an offer to Honeywell to lower the value to $3.44 million through equalization. The taxes payable for 2003, 2005 and 2006 are before the Tax Court at this time. Honeywell did not file a tax appeal for 2004. Asleson provided information on a proposed agreement with Honeywell on the tax appeal:

Taxes Payable Year; EMV; Proposed EMV

2003; $4,203,900; $3,000,000

2004; $4,203,900; $3,000,000

2005; $3,440,000; $2,750,000

2006; $3,440,000; $2,500,000

2007; $3,440,000; $2,000,000

he County Board previously authorized the hire of Paul Bakken, Commercial Appraiser from the Twin Cities, to assist with negotiations. The property has been vacant since 2002. Kramber said the property, at one time, was for sale for around $6 million, then reduced to $5.3 million, and is now not listed. Based upon information from Springsted Financial Advisors and Bakken, the offer was made to Honeywell to avoid potential costs associated with a trial. Asleson and Kramber toured the property in June. In order for someone to purchase the property and make it useable, improvements would be required. Notice of today’s Public Hearing was provided to the School District and the City of Buffalo with no response. Asleson provided information on the following 2004 tax abatement (approximate amounts) reflecting a potential refund of $39,696.27 of which $5,682.25 is Wright County’s portion:

Taxing District; Before; After; Refund

State of MN; $ 70,846.49; $50,382.45; $20,464.04

City of Buffalo; $17,883.58; $12,717.90; $5,165.68

ISD #877; $29,026.43; $20,642.13; $8,384.30

Wright County; $19,671.94; $13,989.69; $5,682.25

TOTAL : $137,428.44, $97,732.17, $39,696.27

Staff recommendation was for the Board to approve the 2004 tax abatement for the Honeywell property, resulting in a refund of $39,696.27 for all parties involved. Honeywell has agreed to waive interest on the refund as part of the proposed settlement. In response to Sawatzke, Asleson said the remainder of the agreement would probably not be upheld if the Board did not approve the 2004 tax abatement as proposed. The case was scheduled for trial the last week of August but this abatement was negotiated with Honeywell. The difficulty with valuation is the property size (114,000 sq. ft.). Wright County does not have sales of industrial property to use for comparison. Large industry properties closer to the metro and along I-94 were used for valuation purposes. When the trial was held in 2002, the main argument was location. Honeywell tried to make the case that Buffalo was out state and compared properties in such cities as Willmar. The Tax Court determined the value at $3.44 million. It was felt this amount has eroded some with equalization problems with sales ratios and building disrepair. One of the issues all along has been the asking price for the property. It was felt the owner was asking too much for the property and there have not been many serious offers. As there are not comparable commercial properties in the County, Norman questioned whether the estimated market value would increase if the property were sold (based on a recent sale of a property of similar size). Kramber said they typically do not spear a sales price when assessing. In this instance, they look at the valuation process as the property has been vacant for years. If this vacant building sells, the best indication of value would be the selling price and improvements made as there is no other real estate to base it upon. The commercial and industrial market has come back dramatically and there are not many empty buildings as compared to ten years ago. However, this property is competing against others which may have TIF incentives. Russek stated that if Honeywell had sold this property five years ago and invested, they would have gotten their money out of it. Russek questioned whether the County could recapture abatements if the property sells for more than the EMV. Asleson said this would not be possible once an agreement has been reached. This property was in a City TIF District but was decertified by the City when Honeywell did not meet their part of the agreement. Asleson complimented Kramber’s efforts working with attorneys and appraisers on this case and all tax appeals. Asleson does have a letter from the attorney representing Honeywell indicating that this is a negotiated settlement and that all parts must fit together in order for it to happen. Kramber said the land value without the building is estimated at $2.50-$3.00 per foot. For payable 2006, the land value is assessed at $518,000. However, the value placed by the Assessor is most generally lower than that of actual land value. When the County previously considered purchasing the property, the City sent a letter requesting the County not do so to keep the property on the tax roles. The total refund for all years is estimated at $125,000-$130,000. Sawatzke moved to approve the 2004 tax abatement by reducing the EMV from $4,203,900 to $3,000,000. Sawatzke said he didn’t like doing so but staff has expended a lot of effort to reach an agreement. Russek seconded the motion, stating he did not like the cost implications but it would cost even more to go to tax court. He felt Honeywell should have sold the property early on for a reduced cost, resulting in them being further ahead today. In response to Mattson, Asleson said the Tax Court will sign the negotiated agreement. If Honeywell would proceed in any other fashion, the agreement would be void. The motion carried 5-0.

Discussion resumed on the bids which were opened for Contract #0609, CHSP Street Lighting Improvement Project. Fingalson said the bids were accurate as presented. The recommendation was to award the bid to Design Electric, $78,677. That cost, combined with the cost of pre-purchased materials for $35,924.58 brings the total to $114,601.58. The cost split, based on the low bid, would be: Mn/DOT ($19,107.93); Wright County ($20,493.65) and CHSP Grant ($75,000.00). Mattson moved to award the bid to Design Electric at $78,677, seconded by Russek, carried 5-0.

At 10:17 A.M., Heeter closed the regular meeting and opened the Public Hearing for the Notice of Intent to Issue Health Care Facility Revenue Bonds (Park Terrace Project), Series 2006. Asleson said the bonding amount is $7.56 million for the Park Terrace Project, which is a 46-unit assisted living facility and adult daycare facility. The City of Buffalo will pass a resolution this month authorizing financing to be issued through the County. The City did not have bonding available that could be qualified under the $10 million limit. Groundbreaking is scheduled for 9-07-06. As no public comment was received, the Public Hearing was closed at 10:19 A.M.

The regular Board meeting was reconvened at 10:19 A.M. Asleson stated that the County will not take action on the Park Terrace Project until after the Public Hearing scheduled for 9-26-06.

Bills Approved

A&S Training LLC. $750.00

American Bio Medica Corp. 419.40

Ameripride Linen/Apparel 246.22

Ancom Technical Center 259.35

Conrad Anderson 246.53

Aramark Correctional Serv. 10,839.83

Auto Glass Center Inc. 345.01

B & D Plumbing & Heating 581.00

Black Box Resale Services 165.00

Blaine Lock & Safe Inc. 170.00

BP Amoco 2,182.83

Brock White Co. LLC 400.00

Buffalo Hospital 2,083.90

Building Fasteners 854.34

Centra Sota Lake Region 4,626.16

Chamberlain Oil Co. 3,043.78

Climate Air 1,073.93

Comm. of Transportation 3,609.55

CPS Technology Solutions 3,039.00

Crow River Tools 290.71

Dental Care Assoc. of Buffalo 526.00

Susan Dilley 197.77

Elmer Eichelberg 541.13

Embarq 155.05

Emergency Physicians PA 301.50

Excel Systems LLC 1,139.00

Gateway Companies Inc. 1,315.29

Janet Gholson 215.38

Gould Bros. Chev.-Olds 266.26

Granite City Iron Works 198.91

Hillyard Floor Care Supply 152.30

Hirshfields Dec Center 182.06

JMD Manufacturing Inc. 2,005.91

Cheryl Klinger 100.00

Greg Kramber 218.18

Michael Laurent 171.99

Loberg Electric 178.37

Marco 141.61

MN Corrections Association 145.00

MN Counties Computer Coop. 200.00

MN Counties Ins. Trust 130.00

MN CVSO Secretaries Assoc. 158.00

MN Dept. of Labor & Indus. 140.00

Nextel Communications 2,874.99

No. Suburban Towing Inc. 145.63

Office Depot 2,732.27

Prosource One 438.46

Savance 125.00

Software House Int’l Inc. 247.08

SRF Consulting Group Inc. 16,780.04

St. Joseph Equipment-Mpls. 187.14

State Supply Co. 627.82

Synergy Graphics 5,908.52

Trophies Plus 323.16

Trueman Welters Eng. 363.61

Unlimited Electric Inc. 347.38

Janelle Webb 105.91

Western Container Co. 782.19

Wright Co. Hwy. Dept. 36,809.08

Xcel Energy 1,639.01

Zep Manufacturing Co. 194.13

25 Payments less than $100 1,301.69

Final total $115,939.36

The meeting adjourned at 10:20 A.M

Published in the Herald Journal Oct. 2, 2006.