On tap: a bigger, better water treatment plant

Talk about it

A sign of Alexandria’s growth flowed out of Monday’s city council meeting.

The council called for bids to expand Alexandria Light and Power’s (ALP) water treatment plant and to make renovations to the facility.

The total cost of the project is $4.95 million.

Built in 1996, the plant has been running up against its capacity in the peak summer demand periods, according to Scott Deitz, ALP operations manager.

By going ahead with the project, the city will have adequate water capacity until 2025, Deitz said.

ALP plans to complete construction of the expansion by next summer and complete the renovation work by the fall of 2011.

Bids are scheduled to be opened on April 23.

Another big item on Monday’s agenda was a tax increment financing (TIF) hearing for Lakewood Terrace – a $5 million apartment project.

The developers – Scott Kluver, Randy Roers and Harold Gesh – are proposing to build a 36-unit, multi-family and general occupancy apartment complex on the east side of South Broadway, south of 34th Avenue.

During the public hearing, Kluver and Gesh talked about the project. No one else from the public spoke.

The council tabled making a decision about the TIF application until it hears back from the city's planning commission, which is scheduled to consider the project next Monday night.

To make room for the new facility, the plan calls to remove several buildings from the three-acre site, including a home, a detached double garage, an old shop, a metal building, several trailers, old cars, fencing and rubbish.

The developers plan to do the project in phases, first building two, four-story, 18-unit buildings and then adding a third building of similar size in the future.

The project is described as an affordable rental housing project.

Monthly rent, including garbage, water and sewer, would start at $533 for a one-bedroom unit. The rate for a three-bedroom, two-bathroom unit would be $1,450.

As required under the city’s TIF guidelines, at least 20 percent of the units must be occupied by tenants whose income is 50 percent or less of the area median income, in this case, eight units.

Amenities would include elevator access, central air, in-unit laundry, window coverings, refrigerator, range, dishwasher and microwave.

TIF is a tool cities use to encourage economic development. Taxes on property to be developed are frozen at the existing level for a certain length of time – in this case 13 years.

Cities benefit because the property ends up generating more tax dollars.

Right now, the Lakewood Terrace property is valued at $167,900 and generates $1,542 in taxes. After the TIF period ends, the value is projected to increase to $3.6 million and generate $44,432 in taxes.

The city would also retain 10 percent of the average annual increment of $38,757.

One part of the project that is still undetermined is who will pay to extend the sanitary sewer to the complex – the developer or the city.

If the city builds it, it could recover some of the costs through sewer connection charges for this project and others in the future. If the developer pays for the sewer line, the city would maintain it but the developer could be reimbursed through future connection charges as property develops in the area.

In other action, the council:

--Accepted the resignation of Craig McMillan from the city’s economic development board (EDB).

In his resignation letter, McMillan wrote that he joined the board with the hopes of making Alexandria better. He said he was led to believe the board was part of a democratic process but said he was mistaken.

McMillan was referring to a change that was made to the city’s tax increment financing policy after the policy was approved at an EDB meeting last month.

Under the original language approved by the EDB, section 4a stated that all TIF housing district applications were to be reviewed by the Alexandria HRA for “compliance” with the city’s housing study.

After the meeting, Alexandria HRA director Jeff Hess, who was attending the meeting but is not on the board, spoke informally with council members Owen Miller and Sara Carlson, who were also in the audience. He asked them for their opinion of section 4a, specifically if the word “compliance” was too strong, according to Carlson.

Miller and Carlson agreed that it wasn’t a good idea to intermingle the functions of two city boards, the EDB and the HRA.

At the next council meeting to consider the change, Miller made a motion to delete section 4a and replace it with language stating that all TIF housing district applications “may be available for review and comments in relationship with the goals of the city’s housing study.” The motion passed.

McMillan objected to the process of how the policy was changed. His March 3 letter stated, “Due to the fact that two people’s opinions, these people who are not on the board, can change the board’s decision after it has been brought to a vote, makes this not a democratic process but a dictatorship. This, I cannot be a part of. Therefore, please accept my resignation, effective immediately.”

The council accepted McMillan's letter "with regret" and asked staff to draft a letter thanking him for his service.

Bigger, who represents Ward 1, will search for a replacement.

--Approved Zion Lutheran Church’s request to shut down three city blocks for its Passion Drama. The area includes the 300 block of Lake Street, the 600 block of 4th Avenue East and the 300 block of Maple Street.

The street closing will take place on April 5 from 1 to 6 p.m. and on April 7 from 4 to 9 p.m.

--Approved a request from the Alexandria Bike and Ski Club for a two-day race, which will use some roads inside the city limits.

“The Great Alexandria Bike Race” is set for June 20-21.

It will begin with a road race using the same course as last year. Participants will gather at Big Ole Central Park and leave and return from Alexandria Extrusion, pedaling along County Roads 22, 12, 58, 7 and 5.

A time trial race is planned for June 21. Participants will race on County Roads 4 and 17, then back on 4 (in Forada). A circuit race is set for that afternoon. The course follows County Road 4 to Highway 114 to County Roads 26 and 83 and then back to County Road 4 (in Holmes City).

Organizer George Odio said they have held similar races in the past and this year, because it is a sanctioned competition, they are hoping to draw more racers from a wider area, including Wisconsin, Iowa, North Dakota, Nebraska and Canada.

--Approved the second and final readings of two amended annexation requests for the Nadeau and Zavadil properties in Lake Mary Township.

After the council had previously approved the requests, the state recommended the city change the way property taxes are disbursed on the properties.

The city will reimburse Lake Mary Township in equal installments instead of a graduated payment method. The total reimbursement will remain the same.

--Approved an agreement with the Minnesota Department of Transportation for the landscaping work around the new “welcome to Alexandria” sign near Highway 29 South.

The state agreed to cover the $20,000 costs of the work. The city will be responsible for maintenance.

--Approved an agreement with Douglas County to help pay for the waterline work that will be done when County Road 42 is widened and resurfaced.

The city agreed to share in the cost years ago but the project was delayed by a lawsuit.

The estimated cost of the city’s share in the project, including the waterline work and engineering, is $498,300. Douglas County accepted the low bid from Central Specialties to do the project.

--Scheduled a public hearing to discuss the costs of extending city water to the phase-three annexation area in Alexandria Township.

The cost was estimated at $1.76 million, which would be assessed to property owners.

Landowners in the area are invited to attend the meeting on Monday, March 30 at 7 p.m. at city hall.

--Was informed that the League of Minnesota Cities will hold its annual conference on June 24-26 in St. Paul.

--Was informed that Runestone Electric Association will hold its annual meeting on Saturday, March 28 in the Jefferson High School auditorium. Registration is at 10:30 a.m., followed by lunch at 11:30 a.m. and the meeting at 1 p.m.

--Was informed that the council will meet as the board of equalization on Wednesday, April 22 at 10 a.m. at city hall.

--Support a plan that would allow cities to establish Municipal Street Improvement Districts.

If approved by the Legislature, this would let cities pay for local street improvement projects through a general levy or special assessment, spreading the costs over a longer period of time.

The League of Minnesota Cities is lobbying the Legislature to enact the measure to give cities more flexibility in maintaining streets.

Mayor Dan Ness said that according to a city engineer study several years ago, Alexandria should be setting aside about $300,000 per year to maintain its streets but because of state cuts, the city has been spending only about $100,000.

A street improvement district would not be subject to state-imposed levy limits, the mayor noted.

During the public comment portion of the meeting, Alexandria resident Virgil Batesole expressed concerns about the idea and the discussion turned heated.

Batesole, who ran for mayor last election and lost, said the street improvement district would be another way for the city to "play games" with its books by not indicating where funds are actually spent.

Batesole said the city's bookkeeping, while legal, is getting too confusing for ordinary citizens to track. He said moving expenditures into other categories may make the city "look good" but is not an accurate depiction of its spending.

Mayor Ness responded by saying the city is simply obeying state mandates. The state requires all cities to follow the same accounting procedures so it has a way of comparing them, he said.

"There are no games being played here," said Ness.

--Approved a final plat for the Dakota Street right-of-way. The busy street is scheduled to be reconstructed this spring.

The process of acquiring easements along the street is moving along nicely, according to Tom Jacobson, assistant city attorney.

He said the city has negotiated letters of intent for 18 of the 22 parcels involved in the right of way.

--Issued the following licenses: Excavating contractor – Perc Plus (new), Breitbach Construction (new); massage – Sara Hanson, doing business as Certain Serenity Massage at 309 Final Drive; garbage hauler – Haabala Rolloffs (new); charitable gambling – American Legion to conduct bingo on March 26.

--Approved a proclamation for the Kiwanis Club, which is hosting an event featuring a former international president of the organization who is from Fergus Falls.

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