City Of Morris Manager Brief

I’ve had a number of people ask me what will happen with the old elementary school property and my answer is that the City will sell the property.  The City is not a developer in the sense that we have money to invest in different ventures and we always look to those that are developers.

Recently the City Council took action to advertise the old elementary school for sale through a “Request for Proposals” process.  What this means is individuals and firms interested in the property can submit proposals to the City for consideration.  The proposals will include what the individuals or firms want to do with the property and what they will pay for it.  There are a couple of twists and quirks to this process that need to be clarified to fully understand what will happen.

First, the City is in this case is actually the City Economic Development Authority (EDA).  Cities exist to provide specific services to their Citizens and in cases where development is concerned, the State and Federal Governments ask that a different authority is established to handle this development.  In some cases, the EDA could act as the developer buying and developing property, but in most cases the EDA acts as a conduit to provide State and Federal funds for private developers.  The City has two loan pools that were set up with this type of activity in mind.  The Morris EDA is governed by the same individuals as the City Council, but they follow different rules, regulations and requirements.

Second, the 17.75 acres of the old elementary school land has been placed in a Tax Increment Financing District (TIF).  This is an economic development tool that is allowed by the State of Minnesota to capture the new taxes generated by new development in the District to help with the costs of the new development.  Things like buying the land, clearing it of buildings, putting in things that will be used for the new building like water, sewer, drainage, roads and parking spaces.  Also, in the case of the old elementary school, we took action to capture new taxes on two other TIF Districts in Morris that will help pay for almost all of the cost of removing the old elementary school building.

Finally, the process of receiving and reviewing proposals is slightly different than the normal City Council process.  When looking at potential building development projects, there may be a need to negotiate and discuss agreements, assistance, prices, and other aspects of the project.  The EDA is not required to take the highest bidder for the land sale.  There may be other things that are more important like the value of the building project.  This process of reviewing and possibly negotiating is even more important when looking at a TIF District.

From time to time the question is asked about public input into the development of the old elementary school property.  There will be a time to present potential development proposals, but this property has been studied for a number of years now.  The property is zoned RM – Multiple Family Residence which will guide the uses of the property.  Single and two-family homes, townhouses, duplexes, apartment buildings and assisted living facilities will all be allowable uses, as long as the current rules are followed.

The EDA will receive and review proposals.  They will then bring them forward to the public for a hearing to review them publicly.  Then the EDA will make a decision what to do with the property.

I can say I was somewhat excited as a City Manager when control of the House and Senate went to the Democrats.  Not for political reasons, but simply because I figured Local Government Aid would get a fairer shake in the upcoming legislative session.  The Governor said that he favored more LGA and we depend on it for our existence out here on the prairie.  What I didn’t realize was that a major change is being proposed that could pose a very big problem for us.

The question at hand always seemed to be how much money would be given to communities that needed help providing basic services.  Yes, there were those that didn’t understand LGA and why some cities got it and others didn’t, and there were underlying debates about what it should be used for, but it always seemed to come back to money.  The compromise position over the last four years was to freeze the amount of money we received.  We have been frozen at the 2009 level ever since.

Now, for the first time that I can remember, it appears the end result of both sides being proposed is a loss of aid for the City of Morris.  Current law that froze LGA for us for 2013 included language that allowed the LGA formula to kick back in.  The formula is what determines how much aid we get.  Not only was the aid level frozen since 2009, but apparently the formula was frozen too.  If the formula kicks back in, the City of Morris will lose approximately $53,000 in LGA next year.

The Governor’s proposal includes approximately $80 million more for LGA, but it also proposes a new formula.  A formula based upon a few basic services like public safety and roads.  Everyone thought it would mean more money for cities like Morris, and in 2014 it does, a lot more, almost $160,000.  However, the extra money is short-lived and over the course of the next four years, the new formula will transfer most of the additional aid to the metro cities.  In the end, we will be at the same level—$53,000 less—that we would see under current law.  The only difference is that the cut would be put off until 2018.  It appears the extra money is used to ease the pain of what is really being proposed.

Any good City Manager knows you can’t spend that new money for on-going service increases.  It is basically one-time money, even though it is over the course of four years.  It starts shrinking immediately in 2015.  It won’t do anything to stabilize our budget and help us to provide basic services now and into the future.

There will be a very big debate over aid to cities and we need to make sure everyone understands what we are doing out here on the prairie.  Our property taxes are low because City leaders used the Local Government Aid to pay for the basic services we provide.  Losing it will result in either higher property taxes or fewer basic services.  Either one of those will be bad for our future.

Recently there were several Letters to the Editor questioning the actions of the City of Morris.  While nobody has talked with me personally about these issues, I was encouraged by several people to respond.  This is not typically the philosophy I have with regards to rumors and other pieces of information that seem to be fact-based and aren’t, but I see this as opportunity to provide some insight into economic development and the City.

The good news is that the City is very interested in economic development and does everything it can to make it happen.  The bad news is that we have very little power or influence in the outcome, either way, businesses coming or businesses leaving.  The writers suggest that the City of Morris kept business from coming here, to include Walmart.  I can tell you personally that is not the truth.  Walmart is a $trillion company and they will go where they want.  They operate on a business model that establishes stores near their customer bases in strategic areas.  Their whole model assumes people will travel to their stores from various distances.  All you have to do is look at where they are located.

When Walmart decided to locate in the Wahpeton-Breckenridge area, one of the driving forces, no pun intended, was the number of people traveling to Fergus Falls to shop.  Yes, they track where you come from to include license plate surveys in parking lots and written check addresses.  They saw a tremendous number of people from the west heading to and through Wahpeton-Breckenridge and then on to Fergus Falls.  They decided that a store located in the Wahpeton-Breckenridge area would be a good fit for them and draw even more people west.  They also decided to build a new smaller, scaled-down store.  The only issue in Wahpeton was North Dakota’s rule that pharmacies have to be at least 51% owned by a Pharmacist.

The next step for them, and the first time we had any indication of their desire to locate in the area (I was the City Clerk-Treasurer in Breckenridge at the time), was when a land acquisition company came out to survey potential store sites for Walmart.  The primary site in Breckenridge was big enough, but had a major gas line running right through it.  A secondary site next to it could work in conjunction with the primary site, but the owner of the secondary site also owned a much bigger primary site in Wahpeton.  The store is located there today.  We never talked to Walmart officials because they didn’t get involved until the right site was found.

There were no incentives to offer, and quite frankly, they tend not to ask for anything anyway.  They certainly don’t need money and receiving incentives to bring them in tends to make the local business owners angry.  You can imagine if the City of Morris offered incentives to bring in Walmart and local businesses were forced to close their doors.  It would be a public relations nightmare for Walmart.  However, there are cities that do pursue that route, but again you have to be in an area picked by them.

If Walmart wants to come here, they will.  There is nothing we can do to stop them.  There is no decision for the City Council to make.  Our Zoning Ordinances don’t prohibit businesses like Walmart.  There is also nothing to do to “lure” them in in my mind.  It is a corporate business decision that they make.  Maybe someday they will expand out into smaller cities.  Right now they don’t have to because people will drive to them.

It was a corporate decision that resulted in Coborn’s packing up and leaving too.  No, we didn’t own the building they were in or tell them they couldn’t build their own.  They actually purchased land to build on, but decided not to and sold it.  We didn’t deny them a liquor license because they never requested one.

Holiday owns the building and when Coborn’s lease came up, they didn’t want to stay in the same building.  The building sits empty now and Holiday still wants a considerable amount for it.  Potential new purchasers will look at the building and realize why Coborn’s left it.  It needs updating.  Coborn’s wanted to be the one stop shop for groceries and other things in Morris, but could not make that happen and decided to pull out.  They were making money at the time they left.

As for Morris being too far gone to save, last time I checked we still have UMM, Superior, the USDA Soils Lab, and a U of M Research farm.  We also have a wonder school system, all kinds of other jobs, and a lot more things we can be proud of in this economy.  We have a great way of life and I think too many times we look at what is wrong and not at what is right.  I’m still amazed that I can find almost everything I need here in Morris.  You just have to look for it or ask for it.  If you can’t find it, then maybe the question is whether or not you need it.

What is TIF? Recently I presented information to the City Council about using TIF for the old elementary school demolition project and the follow on development.  The acronym TIF stands for Tax Increment Financing.  TIF is an economic development tool that was put in place by the State to give local governments assistance in developing business and housing.

The concept is pretty simple.  You use the taxes off the new businesses and houses to help pay for the things needed to build the new businesses and houses.  Without doing this, they wouldn’t be built.  This can be done in two ways.  The City can borrow the money and repay the debt when the new taxes come in, or the owner of the new business or house can pay the costs and then is reimbursed by the City from the money they pay in taxes.  This leads to the first misconception.  The property owners do pay taxes.  The taxes get paid in to the County and then get passed back to the City and then the City reimburses the business owner for eligible expenses.  But not all of it goes back to them, in some cases.  That is where the term Increment comes in.

The value of the increment is actually determined by the amount of taxes that are levied by the City, County and School District.  Their tax rates are used to calculate the overall taxes on the property and the original amount of taxes prior to the new development is subtracted to get the Increment.

In some cases, properties are expanded.  In some cases, the property is cleared of the old things and then room is made for the new things.  A good example would be the property that Willie’s Supervalu sits on.  Anyone who grew up in Morris knows there used to be some old businesses on that property.  They were purchased, cleared and then the new building was put up.  The value and taxes generated by the old property is then compared to the value and taxes on the new property and an Increment is determined.  The owner gets to use the Increment to pay for things needed to make the new project possible.  Typically, they are reimbursed for those eligible costs.

Types of things that are eligible for reimbursement include things like land/property acquisition, site clearing, site preparation, new utilities, parking lots, and sidewalks.  The new building itself is not an eligible use of Increment.  The old school property needs over $1 million to clear the site.  However, any new developments on the property may want to use their own Increment to pay for the things mentioned above.  Where will the Increment come to pay for the school demolition then?

Well, the Minnesota Legislature has determined that the use of Increment from projects outside the current project area may be a very good use as a tool to help cities grow.  They have authorized this use in State Statute.  In the case of Morris, we have several projects that have reimbursed the required costs, but are still generating Increments.  Why, because the life of a TIF District is about 15-25 years depending upon the rules and regulations that are set up locally and not all of that time is needed to meet the reimbursement requirements.  We are going to ask that these Increments get shifted to the elementary school project for the rest of the District’s life.

The City has taken the position to reimburse the property owner for their investment instead of borrowing the money for them.  This is much cleaner and does not put us at risk in case something happens to the Increment.  A few years back the State took over funding for the schools and all the Increments generated by the School tax rate were lost.  That money was paid to the State instead of being returned to the City.  A number of cities had to use taxpayer money to pay back the bonds that were now under funded.

Once the Increment isn’t needed any more, then the City, County and School District will get them for their use.  The split is based upon the tax rate for each entity because that is how the Increment was generated in the first place.

Again, keep in mind, the basis for use of TIF is that the development won’t take place without TIF, so nobody is losing something they were already getting

As we prepare our budget for the upcoming year and look at our public improvement project for 2013, it is very clear that we need to review how we fund public infrastructure.  I will be making recommendations to the City Council in several areas to include storm sewers, streets, sanitary sewer and water.  The future of our City requires us to consider the proper allocation of resources, yet at the same time limit the amount of resources we take from our residents.

The first public infrastructure that needs to be addressed is streets.  This is the most costly part of a reconstruction project, but we don’t charge anything to the adjacent property owners.  This is almost unheard of in cities in Minnesota.  Most cities allocate a fairly large portion of reconstruction costs to the property owners.  Most do it based upon the front feet you have adjacent to the road.

In some cases, cities also charge for maintenance like patching roads, overlays and seal-coating.  We accomplish this in Morris with franchise money that is obtained through the utility and telecommunication companies.  But even this resource ultimately comes from the customers, not the companies themselves.  You will see the franchise fee on the utility, phone or cable bill you pay.

The City of Morris pays for the reconstruction of streets through a tax levy on the property tax payers of the City.  At first glance, that may seem like a fair way of doing things, but remember that Morris has an extremely high portion of its property that is tax exempt.  Those properties do not pay for the street improvement.  A higher burden is then placed on those properties that do pay taxes.  The other parts of the reconstruction projects are assessed to the property owners that derive a benefit from the project.  We are allowed to assess all property including tax exempt.  In some cases, like sidewalk, curb and gutter, the property owners pay 100%.  In some cases, like water and sewer, the amount assessed is based upon the number of connections to the system and the number of living units in the project area.  We call this a per-unit cost.

My recommendation to the City Council for future projects will be a more realistic approach for streets.  There needs to be an assessment for the adjacent users based upon the front footage like sidewalks, curb and gutter.  In the calculations, special consideration will be given to corner lots.  We do this now for sidewalks, curb and gutter.  This new assessment policy will result in the City’s ability to keep streets updated as they need it.  General maintenance through patching, overlays and seal-coating will still be paid for through the franchise fees.

The only area that will need some discussion is the properties that have a house with several empty lots adjacent to it.  The cost to run roads by these empty lots is not a cost the general city should pay.  Property owners may want to consider freeing these lots up for construction to help share the costs.  Also, individuals with much larger front footage will have to pay for the added cost of the road across that front.  This again is an added cost that the general city should not pay.

Water and sewer will continue to be paid for as we do now.  The per-unit or user process seems to take care of the costs in a reasonable manner, although it is still dependent to some extent on the number of users in a particular area.  The actual cost to place pipe for water and sewer has nothing to do with the number of users.  The length of the road is the driving factor for this cost, just like with streets, sidewalk, curb and gutter.  This is a major factor we are considering for getting water and sewer out to the recently annexed properties that are not close to the nearest connection.

The final utility is the storm sewer utility.  We assess for reconstruction based upon 50% of the cost spread to the properties that drain into that area based upon their square feet of property.  Why 50%?  I don’t know.  There doesn’t appear to be a rhyme or reason for this allocation of cost.  The other 50% is picked up by….yes, the general city.  This again doesn’t include all the property, since not all the property owners pay taxes.

I recently looked at the possibility of having a storm sewer utility, but my problem with it as it started to shake out, is that it takes money for future projects.  I have a real hard time taking money now for a future project.  I would much rather do a larger assessment project that takes into consideration the property that benefits from the project, even if it is a large area.  At least you know what you are getting.  However, I also believe the allocation of the cost has to be at a higher percentage.  Again, we can assess tax exempt property.

The bottom line is that the “General City” property tax payer doesn’t exist.  When we say we won’t have the “Actual” property tax payer pay for the improvements that benefit their property, in lieu of having the “General City” pay for it, we are fooling ourselves.  The assessment process allocates the costs to those property owners that benefit and that is the standard we should enforce.  By doing that, the City can maintain its infrastructure at the appropriate level.  Property owners have to understand that there is a cost to owning a home or business that has water, sewer, curb, gutter, sidewalks, storm sewer and streets.  Somebody has to pay for them.

Recently I attended a speech class presentation at the University of Minnesota Morris.  The topic of the presentation was bicycle safety in Morris.  I think the students did a great job, and as a City Manager, I went away from the speech with a few good ideas about things we could do differently.

I won’t get into the details of their presentation, but I will share some of my thoughts on the topic.  The most important thing is education.  It might be a simple statement to make, but it does require some effort on everyone’s part.  We need to do a better job in city government of putting out the right information.  The public then needs to do a better job of using that information.

Some of the questions the students raised included things like riding on sidewalks, running stop signs and needing a light at night.  I didn’t have the answers then, and I don’t right now, but I will get them and find a way to share them with you.  The point is that everyone riding a bicycle should know the rules.  The students didn’t.

Recently, the City of Morris had its annual bike rodeo for kids.  This is put on to specifically explain biking rules to young people.  I must admit that it has been a while since I was a kid and I didn’t attend this event, but if we can educate kids, we can educate adults too.  Everyone has to take the time to learn.

Education also pertains to vehicle drivers.  You have to know the rules of the road because of the operation of your vehicle, but you also have to be aware of others on the road to include pedestrians and bicycle riders.  Everyone is in a hurry, but safety requires that everyone should pay attention.  And be patient!  Sometimes we just need to wait.

Do I think it is safe to ride a bicycle in Morris?  Absolutely.  When I was little, just about every kid got around on bicycles in town.  Today is no different.  You can ride your bike anywhere if you take the time to learn how to do it safely.

I ride motorcycle and anyone who does knows that you have to assume that others don’t see you.  Because of the things I do while riding, I feel safe.  The same holds true for riding bikes.  Don’t assume the other person knows the rules.  And don’t expect the police officers to be around to watch out for you either.  They can’t be everywhere.

One suggestion the college students talked about was bike routes.  Their conclusion, and I agree, was that routes probably weren’t practical.  There are too many things to consider when trying to designate them and set them up so they can be used.  My argument is that riders, for the most part, probably won’t use them anyway.  People go where they want to go.  You just need to be careful wherever you go.  A route won’t protect you.

If you want to ride a bike in Morris, do it.  Just be smart about.

The time is getting close for the 2012 road projects to start.  The City will again try to do a number of improvements to include a major underground project on Pacific Avenue from County Road 22 to West 5^th Street/Highway 28 by Lake Crystal.  You may have noticed the uneven road surface as you drive down Pacific Avenue.

Next week, the City will have a pre-construction meeting for the Pacific Avenue Project.  The meeting is held so that all the key players in the project have a chance to sit down and talk about the way the project is going to be done.  Typically, the contractor, representatives from all the utility companies, the City’s engineer and the City’s engineer-inspector all discuss the project.  A schedule will be discussed and then everyone will agree on what is going to happen.  The City will then give notice to the property owners about the project.  We have also included a weekly meeting on site as a way property owners can bring up their concerns and learn about what will happen each week.

The City will also be completing the East 8^th, 9^th and Arizona Avenue Project that was started last year.  The final grading and planting of the boulevards has to be done and the last lift of blacktop will be put on.  The City’s engineer-inspector will also check the work from last year and give notice to the contractor to fix anything that failed.  It is common to see some cracks in the curb, gutter and sidewalks over the winter freeze/thaw cycle.

The City will be opening bids on May 3^rd for the 2012 Road Improvement Project.  This project is basically the major maintenance of roads in Morris.  The maintenance includes milling, overlaying, mud-jacking of curbs to align them, seal-coating, and in the case of State Aid Highway roads in Morris, the placement of handicapped sidewalk crossings.  The streets included in this project are:  South Street from Columbia Avenue to Atlantic Avenue, California Avenue from South Street to Elm Street, Meadow Lane, Ridge Road, Glendale Avenue, Wyoming Avenue from West 5^th Street to West 8^th Street, Iowa Avenue from East 7^th Street to MN Hwy 28, and the Fire Hall parking lot.

The City will also be doing the engineering study on the West 9^th, 10^th and 11^th Street Project.  This will be a complete rebuild and will also include all the avenues in that area, one block on Nevada Avenue between West 8^th and West 9^th, and one block of Pacific Avenue from West 5^th Street to West 6^th Street.  This street had the same problem as Pacific Avenue by Lake Crystal.  There will be a special assessment hearing on this project later this fall.         

The City of Morris is in the process of surveying its Citizens on the quality of service it provides.  The surveys are part of a Performance Measure Program the State of Minnesota implemented last year to determine how satisfied Citizens are with the services their City provides.

The surveys in Morris are being distributed through the utility billing system.  The surveys for the east side of town went out this week and the west side of town will be next month.  If you don’t get one and would like one, just stop in City Hall and pick one up.  All of the surveys will be returned to City Hall.

The survey looks at key areas of service in city government.  Most of the areas are prescribed by the Performance Measurer Program, but a couple of extra areas were added at the local level.  The areas of service include: appearance of the city, feeling of safety, quality of fire protection, condition of city streets, quality of snowplowing, dependability of city sanitary sewer, dependability and overall quality of city water, dependability and overall quality of city recreational programs and facilities, quality of City Hall administrative services, quality of transit services, overall quality of all services provided.

The results will be tabulated and reported back to the City Council and the State of Minnesota.  The overall goal is to determine what areas need additional attention and to determine how best to distribute limited resources.  The State of Minnesota will collect the data from all of the cities participating in this program and will report back to the Legislature.

The information should be tabulated just in time to use during the budget preparation process for the 2013 City Budget.  The City Council may also decide to do follow on surveys in an effort to refine the information to help make informed decisions about services and resources.

The 2012 Legislature is now in session, and despite the recent discussions about a Vikings Stadium, there is a lot more at stake.  I’m particularly concerned about the continued battle between the Democrats and Republicans and what now appears to be an effort to use constitutional amendments to run state government.  I don’t think it will end well.

As a student of political science, I believe the job of the Governor, Senators and Representatives is to conduct the business of the State.  They do this through many different means and using many different resources, but the most important thing they need to do is work together.  When it comes to having two different parties controlling one or more of the parts of the system, this means compromise.  Don’t draw a line in the sand.  Don’t threaten to take your ball home, if you don’t get your way.  Don’t circumvent the system by passing constitutional amendments that put the decision making process in the hands of voters.

Don’t get me wrong, I have no problems with the voters making decisions, but they should be the most important ones.  This isn’t the case right now in the legislature.  The new Supermajority Amendment will hurt us out here in Morris, Minnesota.  The idea that we will, according to the Coalition of Greater Minnesota Cities, “start budgeting through the popular vote system instead of a thoughtful, studied legislative process that balances revenues with expenditures”, worries me.

The biggest reason is that the majority of voters in Minnesota aren’t here in rural Minnesota, but in the suburbs of Metro Minnesota.  They don’t have our needs, don’t share our concerns, and in many cases don’t need any help from the State.  Local Government Aid isn’t an issue for them.

I think we will lose Local Government Aid, tuition at the University of Minnesota Morris will go up, aid to nursing homes will be cut, and education funding for K-12 education will be cut.  This means local property tax payers will be required to pay a bigger share of the costs of services, or the services themselves will be cut.

Every Citizen in Minnesota should pay particular attention to the activities at the Capitol this year.  Ask your legislators to do their job and work together to come to good, common sense solutions to our problems.  Do their homework and understand the issues and compromise when the time comes.  Don’t shift decisions to the ballot box.

Recently I was approached by a local resident and questioned  about parking in front of her house.  Does the City require people to park in front of their own house and what happens with rental units full of college students?

She was very nice about our discussion, but I don’t think my response was exactly what she wanted.  We do regulate some of the things you can park on city streets, but the fact is
that the City doesn’t regulate parking spots for residential property.  Neighbors need to be aware of each other, and hopefully common courtesy and Minnesota nice will take care of things.  I know that doesn’t happen all the time, but as a general rule, I think most people are good to their neighbors.

Here is my idea about how it should work.  Everyone in a neighborhood should realize that there is a generally understood expectation that you can park in front of your house.  This may include overnight parking, day parking, stopping in for your lunch break, or maybe even the occasional visitors or family members returning home.  I try to stay away from my neighbors parking spots (no, they are not marked or designated) unless it is absolutely necessary and then only for a short period of time.

There are exceptions to my generally understood expectations.  Garage sales come to the
top.  Everyone knows that a garage sale in the neighborhood will pretty much disrupt parking for a numbers of hours, but the times for garage sales tend to be somewhat consistent and everyone knows they are temporary.  Occasional birthday and other parties also fall into the exceptions.  And of course holidays always mean additional parking issues.  Again these are all temporary.

I encourage people to talk to their neighbors.  College students don’t bite and probably aren’t aware they are causing you problems.  This is particularly true if you have health issues and are handicapped.  I’ve never had issues talking with my neighbors and certainly not college students.

In the winter, snow removal dictates some changes to parking in residential neighborhoods to include many people parking on their yards.  This is acceptable and usually only happens in the winter.

The City tries its best to limit the amount of time people are restricted from parking on streets.   A good rule of thumb is to stay off the road until maintenance is done,
but sometimes the plows come back to clean the streets again if it is still snowing during the first cleaning.  This year has been surprisingly free from snow and snow removal.  I think the plows have only been out once.

I hope we can learn to live with each other and understand that everyone probably needs some parking in front of their house.  If you try to stay in front of your house as best as you can, everyone should be happy.  Oh, and if you have an aunt and uncle that you visit, stay out of the driveway in front of their garage.  Then he doesn’t have to have a chat with you.