Minutes of the Special Meeting of the Hallock City Council

MINUTES OF THE SPECIAL MEETING
OF THE HALLOCK CITY COUNCIL
THURSDAY, AUGUST 15, 2019
CALL TO ORDER:
Mayor Dave Treumer called the Regular Meeting of the Hallock City Council to order at 5:31 p.m. on August 15, 2019. Those Present: Mayor Dave Treumer, Naomi Larson, Jennifer Peterson, and Mike Totleben.
Absent: Kevin Waller
Also, Present: City Administrator Angela Grafstrom, Margie Holmgren of the Kittson County Enterprise, City employees Kendra Johnson and Robert Bridges, Tim Gustafson, Daniel Carriere, Eldon and Eileen Johnson, Robert Carr, Rodney Bakken, Shirley Sugden, Pauline Olson, Jodi Johnson, Jay Freidt, Diane Younggren, David Kaul, Robert Cameron, Jan Klein, Jan Younggren, Tom Lanctot, Bob Jaszczak, Loren Younggren, Terry Labarre, Diana Carriere, Deb and Kerry Costin, Kathy Wiese, Dianne Younggren, Ben Urie.
Mayor Treumer announced that no decisions are being made, this is an informational meeting.
APPROVE AGENDA:
Councilor Totleben moved to approve the agenda as presented. The motion was seconded by Councilor Larson and carried unanimously.
APPROVAL OF MINUTES:
Councilor Totleben moved to approve the Minutes of the Regular Hallock City Council Meeting of August 5, 2019 as written. The motion was seconded by Councilor Larson and carried unanimously.
FISCAL/ADMINISTRATIVE ISSUES:
Personnel Committee Recommendations:
The personnel committee recommends that Robert Bridges’ position be reclassified because he is able to operate heavy machinery, he can work longer into the year than students, and he is able to perform more odd jobs due to his age and experience. As part of the reclassification, they recommend raising his pay from $10.20/hour to $12.25/hour effective 8/5/19.
Motion by Councilor Totleben to approve the reclassification of Robert Bridges job and raise his pay to $12.25/hour effective 8/5/19. Motion seconded by Councilor Peterson and carried unanimously.
Grafstrom Resignation:
Mayor Treumer thanked Grafstrom for her time in Hallock and they appreciate everything she’s done for the city. He wished her well and asked if she wanted to tell everyone where she was going.  Grafstrom stated she took a position with the City of Braham. It’s a city of about 1,800 near the Cities and about an hour and a half away from Duluth.
Motion by Councilor Larson to approve the resignation of Angela Grafstrom effective August 30, 2019. Motion seconded by Councilor Totleben and carried unanimously.
OTHER BUSINESS:
Road into the Bakken Property (old school site)
Treumer invited Rodney Bakken to talk about his project. Bakken wants a cul-de-sac to create a community feel. If it is a city street the cost and maintenance will fall to the city.  The people Bakken is talking to say this is what they want. He would like to put in a gazebo or screened porch for the people to gather. He has different scenarios and theories on paper. In the past, the city has traditionally charged 60% to adjacent properties and they have the option of paying the assessments over time or paying up front. Bakken added that 40% has historically been charged to the tax base. Totleben stated he feels the council should concentrate on repairing the streets the city has. Bakken stated people have left the community because they cannot do stairs. Diane Younggren suggested he flip the houses and make the backyards in the middle. She said if you have 2 streets, the property will be assessed on both sides. She understands he wants something different, but normally cul-de-sacs look out on green areas in the backyard, not other streets. She feels there is no need for the street. Bakken stated the north end of the property is in the flood plain and would require flood insurance. David Kaul asked what kind of purchase prices is Bakken looking at?  Bakken stated the prices would be $165,000 to $190,000. He added if people move it will create more turnover of other properties. Treumer stated there is a shortage of 3-bedroom ranch style homes in Hallock. Bakken stated in his scenario, the center units on the 4 plex will be 2 stories with 3 bedrooms upstairs.  Totleben asked about getting more comps from the sales. They need to show more sales for $150,000. Bakken said he has a waiting list for his 8 plex. He could build another and have it rented but rent would be outrageous. He stated selling is easier than renting the units. Councilor Larson stated people have fixed incomes. Other concerns were why not build on the edge instead of putting a road in. Bakken stated the city would own the street, anyone can buy a lot and build on it. He does not want to do affordable housing. He has had income based and the city currently has income based that is not full. He rented to some shady characters in income-based housing and these are not the kind of people Hallock wants. Jodi Johnson stated some places sell so many houses with a certain look, maybe 6 designs to choose from. She was wondering how Bakken is starting to market. Bakken stated he would like continuity in the development. He would build a unit, sell it at 75% complete and start another unit. Johnson asked which comes first the house or the road?  Bakken added the property has an overabundance of water, but would like the city to put in a 10” sewer main with 4” connections off the main. The sewer line should be in the street, with water, sewer and gas off the street. Treumer stated some cities guarantee the lines to the curb, others do the street and infrastructure. David Kaul asked if there was enough sewer now to handle the development. Treumer discussed how much the city can bond itself based on the city’s net worth. He stated they can only bond a certain percentage. He discussed when street work had last been done in various areas of the city and where there are issues in the different parts of town. Bakken asked the crowd, what does come first, the house or the street. Eldon Johnson and his neighbors stated when they built, the houses came first. Then they had dirt roads for a long time. He stated when he built, they had to be 3-bedroom homes with a double garage. He also stated it was 4-5 years before the street was put in. This was confirmed by his neighbor, Pauline Olson. Treumer asked what people think of Bakken’s road. Treumer stated Robert Carr was also at the meeting to discuss his project. Tom Lanctot stated the project is important for future growth. He came from Crookston and employed people are important for growth and development. Treumer stated the average age of people in Hallock is 52. Jodi Johnson stated a lot of single people are living in large houses and the houses will need updates. Discussion continued with someone asking, if someone has a family of 5 kids, what accommodates?  There are 7 or 8 homes for sale here. You know what’s happening is that people go to college, move out of the area for higher salaries. Does a community accept industry or kick it out?  David Kaul asked if the city allocated street repairs every year. Treumer stated it is allocated yearly, but he did not know off the top of his head what was in the budget for this year, but he is sure we went over with the issues we had this spring. David Kaul stated he is on a fixed income and is wondering how the city will justify a tax increase for the new road.  Bakken stated that no matter what street, everyone pays. Ben Urie stated he lives near the proposed development and he does not want to face someone’s backyard. He said instead of putting in a road, just punch in some driveway openings. He said with the proposed project, some of the people will have a double, or triple whammy as they will have 2 or 3 roads to be assessed on. He feels this is excessive. Lanctot stated at this point that you have to spend money to make money. Councilor Larson stated Bakken is not putting in a business, he is building houses. Lanctot stated he understands and he has lived. Peterson asked if Bakken is charging association fees to mow and move snow. Bakken said yes, but he would not do this project in Hallock if he wanted to make money. The city should not be turning down business. Peterson stated they just did at the last EDA meeting. Jodi Johnson asked Bakken at this point, what is the take-away on this project?  Curb appeal to make more money?  Treumer stated the problem with the property is that the north side is in a flood plain. Johnson stated Bakken will need to take all this into consideration and figure out the proper way to do it: a house first. Crowd discussed previous development in Hallock. Jan Klein want to thank both Robert Carr and Rodney Bakken for making the proposals. Everybody knows we want to go forward. Treumer asked if there were any other comments on what he will call Project 1. Then on to Project 2, Mr. Carr and his 4-plex plans.
Carr stated he needs one unit sold to proceed. He is trying to meet the needs of different income levels. All units would potentially be for sale. They would be all one level with attached garage. Low maintenance with easy accessibility to address aging concerns and needs. He has already spoken to Attorney Hanson about setting up an HOA (housing association) to do lawn care and snow removal. Someone asked what is the number of garage stalls, Carr stated 2 per unit. The exterior units would have a little bit larger garages with room for storage, but the interior unit garages would be more just for the cars. Someone asked Bakken and he stated his would be the same. Plus, Bakken would build extra free-standing garages that he would rent or sell. Carr stated as of now, his project will proceed north of the Catholic Church. There are added costs to that location because of the basement that was there before. He considered the south end of town as well, which would be cheaper. The lot north of the Catholic Church is nicer with mature trees. Jodi Johnson added and it has better walkability. Jodi Johnson asked the council at this point if they have incentives to free up bad houses. How can the city proceed with cleaning them up?  Treumer stated they have to be health or safety hazards and currently the city has no program for the city to take these or abate the issues. Totleben stated the council should tear down houses. Councilor Larson stated the city needs to have the house first. Discussion turned they need to owe 3 years of back taxes before it can be purchased. Bakken stated this is how he got the elementary school. He stated it had special assessments and the city lost those when it was purchased. Jan stated the county could have still assessed them to Bakken. The group discussed the loss of assessments. Treumer asked Jaszczak if he had any comments. Bob Jaszczak stated the biggest thing is the gumption to look at this, it affects everything. A small inventory of move in ready properties would be nice for people who want to downsize. He was ready to move to purchase a lot in the SE addition when the house he did buy suddenly opened up. He was able to move and sell his house to new people. Jaszczak added, this has been a topic of discussion for 9 years, if there is a way to get units it benefits the whole community. Treumer briefly discussed TIF, but he will invite the specialists on the topic to address the public. Grafstrom briefly touched on TIF, the SE addition, DEED and USDA money. She commented that some of the trouble she has run into with working with groups like NWCA on development is the lack of local contractors to do the work. She also asked Jay Freidt of American Federal, if someone purchased a lot in the SE Addition, if the land counts toward their down payment. Freidt confirmed for the crowd that it would. Jodi Johnson asked about remodeling. Grafstrom spoke briefly on programs that could help with this. Jay Freidt added that each situation is unique and if someone is considering building, buying or remodeling, they should stope into their local bank and discuss it. There are a lot of factors that play into each person’s situation and they should discuss it with the local bank. Jaszczak added location is attractive. Jodi Johnson asked Bakken the price of a starter home. Bakken stated he did price a 1,400 sq ft, 2 bed, 2 bath all included for about $129,000. Someone stated more activity will create more comps. Bakken stated he and Carr want to stay here. He said a group like the Dynamic Homes tried to come into the area or a developer out of Fargo, but they can’t do it here. Treumer stated he appreciated the public coming out for the meeting and was ready to adjourn. He told the crowd to go ahead and hang out and look at the illustrations Carr and Bakken brought with them.
Peterson and Grafstrom stated there is still another agenda item.
New EDA Rules for Deferred Loans
Peterson asked about why Vigorous Living only received a $3,500 deferred loan when it has historically been a $5,000 loan. Treumer said they are out of money and because of another person. Grafstrom commented they had allocated $25,000 in the budget for 2019. Peterson asked what other person?
Treumer opted to table the discussion until the September 9 meeting as was hard for the council, staff and newspaper to hear the conversation with the others in the room. He called for adjournment.
ADJOURNMENT:
There being no further business, Councilor Totleben moved to adjourn the Special Meeting of the Hallock City Council of August 15, 2019.  The motion was seconded by Councilor Larson and carried unanimously. The meeting adjourned at 7:01 p.m.
Dave Treumer, Mayor
Kendra Johnson, Deputy-City Clerk
(October 2, 2019)
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