Faced with cuts, Alexandria holds off on hiring police officers

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Alexandria won’t be adding the two police officers it planned to hire this year.

City department heads will also hold off making any major equipment purchases until at least July.

The Alexandria City Council took the budget-cutting measures at Monday’s meeting to deal with an unexpected $226,000 cut in local government aid (LGA).

Governor Tim Pawlenty decided to “unallot” already-budgeted 2008 LGA payment to cities and counties last month in order to balance the state’s budget, which was $426 million in the red.

Because of possible further cuts in LGA, the city decided to put off making any new major purchases until it has a better understanding of how deep those cuts will be.

The $226,000 cut in LGA amounts to 4.3 percent of the city’s revenues.

The salaries and benefits of hiring the new officers would have cost the city between $120,000 and $130,000, according to City Administrator Jim Taddei.

The aid cut is frustrating, Taddei noted, because it involves money the city had already put in its 2008 budget.

"We can't go back to our employees or our suppliers and ask for our money back," Taddei said. "It doesn't leave us with many alternatives."

Council member Sara Carlson said she hopes the Legislature can let the city know quickly – as early as February or March – about its 2009 LGA so it will have time to make adjustments. "But I'm guessing that won't happen," she added.

Another big decision at Monday’s meeting concerned tax increment financing (TIF).

Last month, the council did not approve a TIF application for a $5.2 million, 32-unit apartment project, Lakewood Terrace, on South Broadway, south of 34th Avenue (near the Minnesota Eye Institute).

At that time, concerns were raised about the proposed rents, which ranged from $900 to $1,450 a month, being too high for low-income families to afford.

One of the requirements for receiving TIF housing assistance is for the developer to rent at least 20 percent of the units to those making 50 percent or less of the county’s median income.

The developers are now revising their plan and voluntarily adjusting the rents, using stricter federal Housing and Urban Development (HUD) income guidelines based on bedroom size, according to Jason Murray, director of the Alexandria Area Economic Development Commission.

The new rental rate for the four one-bedroom units is $533 and the rent for the four two-bedroom units is $640. Other rents will range from $1,000 to $1,450.

The floor plan has also been changed to include 36 units instead of 32.

City Attorney John Lervick said that according to Robert's Rules of Order, the city could reconsider its decision from the last meeting and immediately act on the TIF request without requiring the developer to submit a new application, which would require more time and expense.

The council passed a motion to reconsider it on a 3-1 vote. Cindy Bigger voted against it. She said that TIF is a privilege, not a right. New council member Owen Miller, who was not involved in the initial decision, followed Lervick's advice and abstained.

The council then voted 4-1 to schedule another public hearing on the revised TIF plan. Bigger again voted no. The hearing will take place on Monday, March 9 at 7:15 p.m. at City Hall.

With TIF, property taxes are frozen at the current amount for a specified period of time – in this instance, 13 years. The difference between the existing tax and the tax once property is developed, known as the “increment,” is used to help pay for some of the cost of the project.

The city also retains 10 percent of the increment for administrative fees.

The Lakewood Terrace project is expected to increase the estimated market value of the property from $172,700 to $3.2 million, generating an increment of roughly $34,233 per year. The amount of taxes paid is projected to increase from $2,159 to $39,496.

To receive TIF, developers must show that the project can't be done without tax assistance. In its application, the Lakewood Terrace developers said that TIF is needed to offset the high costs of developing the land, which include buying the property, preparing the site, installing sewer and water, and paying connection fees.

The first phase of the project was originally scheduled to start in March of 2009.

In other TIF-related decisions, the council decertified two TIF districts – Sunrise Apartments, an affordable housing district, and Woodsmen Power Products, a redevelopment district that removed several blighted and substandard buildings. Both projects have been receiving TIF since 1997 and their terms have expired.

The city will now be able to collect the full amount of taxes on the properties.

In other action, the council:

--Called for proposals from architectural firms to plan and design a new park department facility at the city’s street department site.

The existing park department building along 3rd Avenue West is being moved to make way for a new joint law enforcement center and county jail.

No cost estimates of the park building have been determined yet. The city will have to issue bonds to pay for the project, which it is allowed to do without going to a voter-approved referendum, Taddei told the council.

Council members Carlson and Dave Benson agreed to serve on the committee to interview the architectural firms.

--Approved two separate requests to annex land in Lake Mary Township adjacent to Cross County Lane.

One of the parcels is 198.76 acres owned by the Nadeau family and is located east of County Road 21.

It will be zoned as B-1 or general business.

The other piece of land, consisting of three parcels, amounts to 184.2 acres and is owned entirely by Zavadil Development. It’s located south of Cross Country Lane near Lake Andrew.

It will be zoned as R-1 or single family residential.

The township’s share of the property taxes on both pieces of land, currently at $883 and $557, will gradually be transferred to the city. The city will receive the full tax amounts in 2015.

In both instances, Lake Mary Township waived its right to object to the annexation requests.

--Deemed seven houses or buildings in the city as hazardous properties and ordered them to be razed and removed within 20 days unless the owners make repairs to bring the buildings into compliance with city code.

The properties are located at 315 5th Avenue East, 716 Douglas Street, 423 Jefferson Street, 1610 Broadway, 1001 and 1003 North Nokomis, and 1023 3rd Avenue East.

All the structures were inspected and determined to be dilapidated, damaged, unsanitary and a hazard to public safety and health.

The city attorney’s office recommended the council to take the action.

"The owners simply haven't cleaned up their act and haven't got the repairs done," said Lervick.

--Approved an agreement with the Minnesota Department of Transportation to split the costs of re-aligning the traffic lights at the intersection of Highway 29 and Dakota Street (near Target).

The busy road will be reconstructed this spring.

In related action about Dakota Street, the city amended its right-of-way plat that indicates who owns property along the road. The revised plat includes more detailed descriptions obtained from the county surveyor's office.

This will help the city negotiate with the property owners for acquiring easements and land for utilities, draining and construction that are part of the Dakota Street project, according to Lervick.

The council also passed a resolution authorizing the city attorney's office to obtain property through eminent domain if negotiations are unsuccessful.

The city is under a time crunch to start the project this April in order to receive federal funding.

The road has taken a heavy beating over the years because of added activity in that area, according to city leaders. The area is expected to get even busier if Target follows through on its plans for a Super Target and two more restaurants are built on nearby backlots.

--Designated the Echo Press as the official newspaper for publishing the city’s legal notices and other required information in 2009.

--Designated 20 financial institutions as the city’s official depositories for 2009.

--Changed two meeting dates for 2009 because of holidays: The council’s May 25 meeting will take place May 26 and the October 12 meeting was changed to October 13.

The council regularly meets on the second and fourth Mondays of the month at City Hall at 7 p.m.

--Formally adopted salaries and position classifications for city employee

These amounts were already included in the 2009 budget the council approved last month. Salaries increased an average of 3 percent in most departments. Park department employees received a higher amount, about 9 percent, to match salaries of those given in comparable-sized cities.

--Updated the personnel policies manual for city employees. A hearing test program was added to a list of available programs and the substance abuse/drug alcohol testing policy was updated.

--Designated the elected and appointed officials who will be covered under Minnesota’s workers’ compensation law. The long list includes the mayor, council members and those serving on city committees and boards.

--Continued working on its board and commission appointments for 2009. (A complete list will be printed when all positions are final.)

--Approved several 2009 license renewals including: charitable gambling – Viking Sportsmen, Inc., and Alexandria Figure Skating Club (for a raffle fundraiser on April 18); temporary liquor – Eagles Club for a Sunday, February 15 event; garbage hauling – Theis Excavating; heating contractor – Alex Plumbing and Heating, Alexandria Refrigeration, CenterPoint Energy, Chappell Central, Climate Control Heating and Plumbing, Magnuson Sheet Metal and Heating, Miltona Plumbing and Heating and Cooling; massage – Garden of Grace; massage therapist – Shannon Schueller at 418 3rd Avenue East; peddler’s permit – B-Pop Kettle Korn; sign hanger’s permit – Indigo Sign Works; tattoo – Dragon’s Lair; and tobacco – Thrifty White and Walgreen’s.

--Proclaimed January 25-31 as "Random Acts of Kindness" in Alexandria. The annual communitywide effort is organized by the Alexandria Kiwanis Club.

--Was informed that Miller was named as the city's representative on the West Central Initiative's regional economic development board.

Miller also attended a League of Minnesota Cities workshop for newly elected officials. He said that one of the lessons he gleaned from the event was that the city can be proud of the organized and cooperative way city staff works with the council – a marked contrast from some other cities.

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