April 16, 2018 Commission Minutes
GOODLAND CITY COMMISSION
April 16, 2018 5:00 P.M.
Mayor Brian Linin called the meeting to order with Vice-Mayor Jay Dee Brumbaugh, Commissioner Annette Fairbanks, Commissioner John Garcia, and Commissioner Schields responding to roll call.
Also present were Rich Simon – Director of Public Works, Dustin Bedore – Director of Electric Utilities, Joni Showalter-Police Chief, Suzanne McClure – Economic Development Director, Alex Weis – Code Enforcement, Sami Philbrick – Museum Director, Mary Volk – City Clerk, and Andrew Finzen – City Manager.
Mayor Linin led Pledge of Allegiance
- Unfit Structure: 322 W. 7th – Mayor Linin opened public hearing for 322 W. 7th at 5:00 p.m. With no public comment, Mayor Linin closed public hearing at 5:01 p.m.
- Unfit Structure: 823 Cattletrail – Mayor Linin opened public hearing for 823 Cattletrail at 5:01 p.m. With no public comment, Mayor Linin closed public hearing at 5:02 p.m.
- Unfit Structure: 1405 College – Mayor Linin opened public hearing for 1405 College at 5:02 p.m. Bobby Smith, property owner stated, I am not sure why property is on the list. I have plans to tear off front porch; asked for bids on metal roofing a few months ago. Once complete, property will again be available to rent. Alex stated, this property is on list because of a neighbor complaint. The porch needs torn off, roof needs replaced and property painted. I have not inspected inside of structure. Mayor Linin asked, what is your time frame to complete? Bobby stated, I cannot give a time frame. Mayor Linin stated, this is the time you work on what you are going to do to get structure off list. Commissioner Garcia stated, we will address resolution later in meeting. Typically the Commission allows property owner thirty days to make improvements. Bobby stated, it has been two years since property has had tenants but I am taking care of property and there are no mice. Commissioner Fairbanks stated, I would ask that you work with Alex and come up with contract and time line for improvements. Bobby stated, I work long hours so cannot give you a time line. I have seen property in worse shape. Vice-Mayor Brumbaugh stated, the goal of the Commission is to be consistent in dealing with nuisance properties and hold to time lines. Mayor Linin stated, you need to work with Alex to develop plan when you come back before Commission. Mayor Linin closed public hearing at 5:08 p.m.
- Unfit Structure: 516 W. 15th – Mayor Linin opened public hearing for 516 W. 15th at 5:08 p.m.
Mayor contacted Becky Rubio, property owner, via telephone. Mayor Linin asked, what are plans for property? Becky stated, we boarded up windows and fixed skirting today. Alex confirmed items were complete. Becky stated, plan is to sell property and remove trailer. It is my parents property and house is in probate until July, then we can get rid of it. Mayor Linin stated, your situation is not typical since involves probate. Becky asked, what would Commission like me to do? Mayor Linin stated, need to get property cleaned up to be presentable, whether it be remove or improve structure. Alex stated, since property is in probate we cannot do anything. Commissioner Fairbanks stated, that is correct, legally they cannot do anything. Becky stated, we have been told July. Andrew stated, I recommend Commission approve resolution and in thirty days reevaluate property. Becky asked, can Commission provide information to show unfit and see if attorney will approve us to demolish trailer? Andrew stated, that will be possible. Mayor Linin closed public hearing at 5:14 p.m.
- Issuance of Industrial Revenue Bonds for Prairiesky Capital Project – Mayor Linin opened public hearing for Industrial Revenue Bonds (IRB) for Prairiesky Capital Project at 5:14 p.m.
Mayor Linin stated, if anyone plans to speak they need to sign in and will be given a time limit of three minutes to keep order. Doug Irvin, owner Prairiesky Capital and Sarah Steele, Gilmore and Bell Council are present to discuss project. Sarah stated, I represent the City for this IRB issue. IRB’s are available to City’s or County’s to assist financing a project in the early years. The bonds allow for sales tax exemption on material used to construct and furnishings in the structure. The issue gives the City discretion to give property tax exemptions for up to ten years to the developer across the board, except for school districts capital improvement levy. City or County has to be issuer of bonds but are not obligor or responsible for bond issue. Doug will set up his financing with his bank, then set up bond to cover financing. In event of default, it goes back on bank and company. The City only has a leased structure for the project. A public hearing is required for the property tax exemption. Doug stated, this is the same financing I did about eleven years ago to build Holiday Inn Express. It worked well and the bond paid off early. Commissioner Fairbanks stated, it is a great tool to finance large projects. Doug stated, I will lose franchise agreement with Holiday Inn Express on existing facility so have to lose it or go somewhere else. I would like to build a new one in Goodland but I do not like the destructive criticism. I would like to introduce managers of current businesses, Chris and Crystal. I hear time and again there is nothing in Goodland for young people, both are less than 35 years old. It is nonsense saying other people are shouldering the property tax; they need to see what I pay for my current properties. In addition to property taxes, I pay about $280,000 a year in sales tax for my properties. If I do not continue with existing Holiday Inn, City will lose revenue from sales and property taxes. Mayor Linin stated, I appreciate you building the business here, both what you have done and for looking for more opportunities to help our community grow. I appreciate you are willing to do projects like this. Vice-Mayor Brumbaugh stated, our goal is to buildup interstate, if you do not give them a reason to stop here, we do not get their money. The cost benefit analysis shows it is beneficial. Doug stated, I am not utilizing the NRP. I had success with IRB eleven years ago and the financing is available for anyone with a new project. Ken Klemm, Sherman County resident asked, was there a market survey done? Does Goodland need a new hotel? Doug stated, a market survey for the project is my choice, but yes I had one completed. For the project, Goodland is viewed as a more risky area than neighboring communities. Ken stated, the City approved a resolution that has option of payment of lieu of taxes but City chose 100% exempt for ten years plus 100% sales tax exemption. According to the State, this will give them 2.5 % better interest. Doug stated, that is not correct Ken, I do not get a better interest rate. Ken stated, that is how I understood it on the State website. Sarah stated, that is an incorrect statement. Andrew stated, the resolution has not been approved, it is on agenda for tonight. Ken stated, the approved NRP is 90% property tax exemption for five years, this gives him ten years. On page 6 of cost benefit analysis, Kansas is winner with benefits of $3,617,630, then the County and School recognize benefits along with the City. As I have talked to County Commission, they do not feel this is a great deal and many present do not support. Page 5 shows 25 new employees with average salary of less than $14,000, which is a substandard job. Doug stated, those are part time jobs; we will have four full time employees. Ken stated, the State receives almost $3,500,000 benefit and we receive no property taxes; he probably will not purchase construction supplies locally. This is one more case of someone that can afford to build the project on their own and tell the rest of us we need it. Vice-Mayor Brumbaugh asked, so you think we are better off with people not stopping in Goodland and not staying in our hotels? Ken stated, I think people should use their own money to build a new business. Doug stated, I am using my own money to build the hotel. Vice-Mayor Brumbaugh stated, if people spend the night in Goodland they tend to spend other money in our community for food and fuel, it is a good thing. They may shop at other outlets we have. We have to have incentive for people to build here. Ken stated, I feel it is your duty as a citizen to pay for your own project and pay own taxes. Vice-Mayor Brumbaugh stated, Goodland is not going to compete unless we have incentives to attract people here. We have to offer what other communities offer in order to compete. Chris stated, we did not appreciate your post saying Doug’s other businesses are tax free. That is not correct and you just want to paint negative light on Doug. Bill Stoick, citizen asked, who is owner of franchise? Doug stated, Prairiesky. Commissioner Garcia stated, I understand concern from both spectrums but you have to understand everyone’s concerns. At the end of the day we are elected to make tough decisions and solve problems. Doug’s last project turned out great even with tax breaks. To facilitate economic development in community we have to provide incentives. With our sales tax, the major portion is going to the state. We do not want this project to go to Burlington, Oakley or Colby. The goal is to get people to stay in our community. You cannot dictate what a man does with his money, he has every right to buy and sell his property as he wishes. There comes a point when Doug does not have the final say on his franchise, it is up to Holiday Inn and they will take the project to another community. Doug is putting up his own land to build another hotel. I would rather have people stay, buy fuel and eat here then somewhere else. This hotel is going to generate income after ten years. On his seventeen acres, taxes are about $3,000, he is only using three of the acres to build the facility. I constantly hear people ask why no one is building here, we are giving them a chance and this is what they receive. Bill stated, I am here to get educated, I am speaking on behalf of myself, not CVB. I disagree with Doug when he says the project is less risky in Colby and Burlington then here as we have many older structures that will need to be demolished. This came forth very quick and feel you could have gotten information out to the public. The opportunity is out there for anyone who wants to tackle it. Doug is successful and I feel this is a great project, but need to give education to public. That would have solved any negativity from project. Mayor Linin stated, I appreciate you being constructive and wish we could inject knowledge into everyone but unfortunately that is not how these things work. You are a competitor and not sure if I was Doug I would want that information out. When economic development goes after prospects we have to guarantee some confidentiality. Bill asked, will any of IRB money be spent on existing properties? Doug stated, no, the money is tied to the project. Vice-Mayor Brumbaugh asked, can IRB’s be used for renovation as well as new construction? Sarah stated, yes, with restrictions but cannot use for retail. They are not beneficial unless project is $1,000,000 or more for a renovation. Commissioner Garcia stated, when Stan Weilert built Comfort Inn and asked for CID to get Arby’s, he turned around and sold hotel to Doug. That did not negate the sales tax liability. Doug stated, what is disappointing is my employees did not know Comfort Inn was for sale until the information came out on Facebook. Commissioner Fairbanks stated, with regards to the negativity, we have tried to educate public, not only is it our responsibility but as citizens it is your responsibility to get educated before you get behind the keyboard. Negativity spreads quickly. If you do not understand something ask and get information. I have extended an invitation to call me, stop by or come to the meetings. That is how the community comes together. Ken asked, can the City produce the lease they are going to sign for property? Sarah stated, K.S.A. requires City to have interest in the real estate then to pass obligation back to Prairiesky. We draft the lease as mechanism for bond to finance property back to Prairiesky, not the city. Paige Harper, citizen stated, I commend the Irvin’s for what you do for community. You produce sales tax for community but do not pay property tax on Holiday Inn. Doug stated, I do pay property taxes on the Holiday Inn. Paige stated, so you paid property tax on Holiday Inn after ten year period for IRB. Doug stated, no, I also paid 10% payment in lieu of taxes the first ten years with Holiday Inn which you would not have had if I had not built it. Paige stated, I would appreciate commitment from you to help increase wages in community, it is hard for people to make a living on what Walmart pays. I worked there and it was hard to make it. Is the Commission going to vote on a lease you have not yet seen? Sarah stated, we will have an Ordinance in the future with documentation required and bond information. Paige stated, I feel it is City responsibility to educate the public. How many other franchisees have lost franchise in past years? Bill stated, you lose your franchise because the business does not perform. Doug stated, I have not lost franchise. With current Holiday Inn, I had a ten year commitment then to keep franchise they require improvements that will cost more than $2,000,000. I do not want to make improvements because the hotel is still nice so I am building a new Holiday Inn Express and changing the Holiday Inn to a Comfort Inn. The current Holiday Inn is not an express because I did not want to make improvements but with this hotel we are receiving an award for being in the top 3% in North America. So you can see I did not lose franchise because of non-performance. Andrew stated, from a staff level I would like to thank Suzanne and Sarah for their work on project. I would like to thank Doug for being an incredible developer for Goodland and Sherman County. This project is more a labor of love for the county, school and state than the City. This benefits our community even when we are not assessing property taxes. After the abatement the City will reap the benefit. We are always compared to Colby, who has Woofter, we have an Irvin who has invested in this community. In 2016 Colby issued an IRB and is currently issuing another one. Garden City cannot issue IRB’s fast enough and Liberal is in the process of issuing an IRB. This is what people do. Every concept of economic development is to forego the short-term benefit to reap the long-term reward. We do not need to look at other communities to see how successful IRB financing can be, we are right now reaping the rewards on the previous Holiday Inn Express IRB. It is not the business of anyone to tell another how to spend their own money. This is growth in Goodland to push our community forward. I support the project and ask the Commission to also fully support project. Mayor Linin closed public hearing at 6:14 p.m.
PRESENTATIONS & PROCLAMATIONS
- Arbor Day Proclamation 2018 – Mayor Linin proclaimed May 7, 2018 as Arbor Day in the City of Goodland.
- 04/02/18 Commission Meeting Minutes
- Appropriation Ordinances, 2018-08, 2018-08A, and 2018-P08
ON A MOTION by Commissioner Garcia to approve Consent Agenda seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
ORDINANCES AND RESOLUTIONS
- Ordinance 1712: Regulating Alarm Systems – Andrew stated, ordinance was discussed at our April 2nd The intention is to cut down on calls for false alarms. In 2017 the police responded to 100 alarm calls, of which 100% were false alarms. The trend is continuing in 2018. If approved, the ordinance will not go into effect till June 1st to prepare for owners to become educated on the process. ON A MOTION by Vice-Mayor Brumbaugh to approve Ordinance 1712: Regulating Alarm Systems seconded by Commissioner Fairbanks. MOTION carried on a VOTE of 4-1 with Commissioner Garcia casting the dissenting vote.
- Resolution 1522: Unfit Structure 1619 Kansas – Andrew stated, we received clearance from County Attorney to proceed with unfit structure process. Resolutions 1522 through 1526 deem structures as unfit and give property owner thirty days to rectify situation with property. ON A MOTION by Commissioner Fairbanks to approve Resolution 1522: Unfit Structure 1619 Kansas seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
- Resolution 1523: Unfit Structure 322 W. 7th – ON A MOTION by Commissioner Fairbanks to approve Resolution 1523: Unfit Structure 322 W. 7th seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
- Resolution 1524: Unfit Structure 823 Cattletrail – ON A MOTION by Commissioner Fairbanks to approve Resolution 1524: Unfit Structure 823 Cattletrail seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
- Resolution 1525: Unfit Structure 1405 College – ON A MOTION by Commissioner Fairbanks to approve Resolution 1525: Unfit Structure 1405 College seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
- Resolution 1526: Unfit Structure 516 W. 15th – ON A MOTION by Commissioner Fairbanks to approve Resolution 1526: Unfit Structure 516 W. 15th seconded by Commissioner Schields. MOTION carried on a VOTE of 5-0.
- Resolution 1527: Determining the Advisability of Issuing Industrial Revenue Bonds to Prairiesky Capital – ON A MOTION by Commissioner Brumbaugh to approve Resolution 1527: Determining the Advisability of Issuing Industrial Revenue Bonds to Prairiesky Capital seconded by Commissioner Fairbanks. MOTION carried on a VOTE of 5-0.
- Museum Board Appointments – Andrew stated, applications from Mary Porterfield, Marty Melia and Heather Evert to fill openings on the Museum Board were discussed at your last meeting. ON A MOTION by Commissioner Garcia to approve the appointment of Mary Porterfield, Marty Melia and Heather Evert to the Museum Board for a three-year term seconded by Commissioner Fairbanks. MOTION carried on a VOTE of 5-0.
- Review of Board Applicants – Andrew stated, Ying Huang currently serves on the Cemetery Board and is seeking reappointment for another three-year term. David Branda is seeking reappointment and Craig Boggio is seeking new appointment to the Library Board. The applications are in your packet.
- City Managers Report- 1. Cleanup last week was very successful. We had thirty employees collecting from curb and support staff maintaining operations. A total of 74,180 pounds of waste was hauled to landfill during the week. We collected seventy-six bikes, twelve scooters, a walker and wheelchair that we will send to Norton Correctional Facility to refurbish and distribute to non-profit organizations. Fantastic event and a lot of cleanup done throughout the City. 2. Budget calendar and input sheet for Commission is in your packet. Please complete by May 21st 3. There is a program guide on City Connecting Link Improvement Program in packet for the Commission to review. The grant is available for City’s where State Highways run through, this would apply to Highways 24 and 27. With our population, City share of a project is 5%, State will pay 95%. 4. Open house for weather service and police department is rescheduled for April 28th, same time. 5. They are moving the American Implement building tomorrow at 7:30 a.m. Highway 27 and parts of Highway 24 will be closed for a short time. 6. The Museum is conducting World War II tours of cemetery May 3rd through 5th. School tours for grades 3 through 5 are May 3rd and 4th while public tours are May 5th. 7. I would like to thank the police department for their work during the storm with the roads. 8. The fire chief sustained a deep cut injury to his arm last week and had surgery today. Ask that you keep him in your thoughts and prayers.
Vice-Mayor Brumbaugh – 1. It disturbs me that we beat up our own citizens when they try to help with progress in community. It is going to be hard to get others volunteering to continue building up community. There has been a lot of untrue information going around, going forward I would like to reinforce the need to get ahead with information to accomplish our goals. We need to get information out to public as soon as we can to allow people time to process information. We need to let citizens know what Commission goals are to move ahead.
Commissioner Fairbanks – 1. Echo Andrew’s comments on cleanup week. It takes a lot of work with the large piles but worth offering service to public. Appreciate the County Commission waiving fees for all Sherman County residents during the week.
Commissioner Garcia – 1. Thank City crews for job well done on cleanup, pot holes and storm patrol.
Commissioner Schields – 1. Thank City crews for their hard work. 2. The IRB was a learning experience. I googled to become familiar with process and discussed it with staff to make sure I understood. The benefit outreaches any loss of taxes for ten year period.
- Mayors Report – Agree with the Commission, we need to be transparent when we can but we also have to keep some confidentiality with economic development projects. Citizens need to take time to get educated also and come to our meetings. I am thankful we have people willing to take the risk to build a business. Commissioner Garcia stated, Doug realizes it may be risky but still willing to take risk with his own money.
- Executive Session Under authority of KSA 75-4319 (b)(6) for preliminary discussions relating to the acquisition of real property – Commissioner Garcia made a motion at 6:40 p.m. to recess into executive session under authority of S.A.75-4319 (b)(6) for preliminary discussion relating to the acquisition of real property not to exceed twenty minutes. I request Commission, Airport Board, Mary and City Manager be present. Commissioner Schields seconded the motion. MOTION carried by a VOTE of 5-0. Meeting resumed at 7:00 p.m.
ADJOURNMENT WAS HAD ON A MOTION Commissioner Fairbanks seconded by Commissioner Garcia. Motion carried by unanimous VOTE, meeting adjourned at 7:00 p.m. Next meeting is scheduled for May 7, 2018.
ATTEST: Brian Linin, Mayor
Mary P. Volk, City Clerk