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CITY OF MUSKEGON
CITY COMMISSION MEETING
JANUARY 24, 2012
CITY COMMISSION CHAMBERS @ 5:30 P.M.
MINUTES
The Regular Commission Meeting of the City of Muskegon was held at City Hall,
933 Terrace Street, Muskegon, MI at 5:30 p.m., Tuesday, January 24, 2012.
Mayor Warmington opened the meeting with a prayer from Pastor Tim Cross
from the Living Word Church of Muskegon after which the Commission and
public recited the Pledge of Allegiance to the Flag.
ROLL CALL FOR THE REGULAR COMMISSION MEETING:
Present: Mayor Stephen Warmington, Vice Mayor Stephen Gawron,
Commissioners Eric Hood, Lawrence Spataro, Willie German, Sue Wierengo, and
Byron Turnquist, City Manager Bryon Mazade, City Attorney John Schrier, and
City Clerk Ann Marie Cummings.
2012-05 CONSENT AGENDA:
A. Approval of Minutes. CITY CLERK
SUMMARY OF REQUEST: To approve minutes of the January 3rd Organizational
Meeting, the January 9th Worksession Meeting and the January 10th City
Commission Meeting.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the minutes
B. North Bank Trail Acquisition Funding Request – Resolution of Support.
CITY MANAGER
SUMMARY OF REQUEST: To adopt a resolution in support of an application from
Crockery Township to the Michigan Natural Resources Trust Fund for acquisition
funds for Phase 2 of the North Bank Trail.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the resolution.
E. Municipal Vehicle Purchase. PUBLIC WORKS
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SUMMARY OF REQUEST: Authorize staff to purchase new municipal vehicle and
snow blower from Fredrickson Equipment who was the lowest responsible bidder.
This machine will replace unit #50233.
FINANCIAL IMPACT: $95,740.
BUDGET ACTION REQUIRED: None, this price is within what the Equipment
Division has budgeted.
STAFF RECOMMENDATION: Authorize staff to purchase new municipal vehicle
and snow blower from Fredrickson Equipment.
Motion by Vice Mayor Gawron, second by Commissioner German to approve
the Consent Agenda as presented minus items C and D.
ROLL VOTE: Ayes: Spataro, German, Gawron, Wierengo, Turnquist, Warmington,
and Hood
Nays: None
MOTION PASSES
2012-06 ITEMS REMOVED FROM THE CONSENT AGENDA:
C. PILOT Request – Bayview Towers – Ordinance. PLANNING &
ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: Carl Skrzynski is Vice President of American Community
Developers, Inc., which has purchased Bayview Towers in Muskegon. There is
currently a PILOT for Bayview Towers which was approved in January 1980. Mr.
Skrzynski intends to keep the existing Section 8 status of the housing
development and is requesting an extension of the PILOT from the City. Since
an alternative form of financing is being sought for this project, not currently
included in the PILOT Ordinance, an amendment is necessary to the Ordinance.
In addition, the owner is requesting the PILOT for a maximum of 40 years and the
current Ordinance only allows for 25 years.
FINANCIAL IMPACT: The Ordinance amendment would allow for a greater
number of years, which would increase the number of years that the City would
not receive full taxes for the property.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: If the City Commission agrees that the PILOT is
necessary for this property, staff recommends that the Ordinance amendment
be approved and the Clerk be authorized to sign the necessary documents.
Motion by Commissioner Turnquist, second by Commissioner Spataro to approve
the PILOT request for Bayview Towers Ordinance.
ROLL VOTE: Ayes: German, Warmington, Hood, and Spataro
Nays: Gawron, Wierengo, and Turnquist
MOTION PASSES (REQUIRES SECOND READING)
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D. PILOT Request – Bayview Towers – Agreement. PLANNING &
ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: Carl Skrzynski is Vice President of American Community
Developers, Inc., which has purchased Bayview Towers in Muskegon. There is
currently a PILOT for Bayview Towers which was approved in January 1980. Mr.
Skrzynski intends to keep the existing Section 8 status of the housing
development and is seeking Low Income Housing Tax Credits through MSHDA.
He is requesting an extension of the PILOT from the City.
FINANCIAL IMPACT: With the current PILOT, the owner of Bayview Towers pays
approximately $91,000 a year (Shelter Rent Payment of $34,000 and City
Services Charge Payment of $57,000). If this property were to return to
traditional property taxes, the owner would pay approximately $282,902 for a
year. Therefore, there is a difference of approximately $191,902 a year.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: If the City Commission is favorable to continuing the
PILOT for this property, staff recommends that the Contract be approved and
the Mayor and Clerk be authorized to sign the necessary documents.
Motion by Commissioner Spataro second by Commissioner Hood to approve the
PILOT request for Bayview Towers as described subject to approval of the
ordinance at the next meeting.
ROLL VOTE: Ayes: Wierengo, Warmington, Hood, Spataro, and German
Nays: Gawron and Turnquist
MOTION PASSES
2012-07 PUBLIC HEARINGS:
A. Issuance of a Commercial Rehabilitation Certificate – Lake Welding
Supply. PLANNING & ECONOMIC DEVELOPMENT
SUMMARY OF REQUEST: Pursuant to Public Act 210 of 2005, as amended, Lake
Welding Supply has requested the issuance of a Commercial Rehabilitation
Certificate. The Certificate will freeze the taxable value of the building and
exempt the new real property investment from local taxes. The school
operating tax and the State Education Tax (SET) are still levied on the new
investment. Land and personal property cannot be abated under this act. The
City Commission approved the creation of the Commercial Rehabilitation
District at its November 22, 2011 meeting. The company is planning on investing
$1.4 million in real property improvements to expand their operations. This would
qualify the applicant for an abatement of 10 years.
FINANCIAL IMPACT: The real property taxes would be frozen at their pre-
rehabilitated rate for the duration of the certificate.
BUDGET ACTION REQUIRED: None.
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STAFF RECOMMENDATION: Staff recommends approval of the Commercial
Rehabilitation Certificate.
Motion by Vice Mayor Gawron, second by Commissioner Spataro to close the
Public Hearing and approve the issuance of a Commercial Rehabilitation
Certificate for Lake Welding Supply.
ROLL VOTE: Ayes: Wierengo, Turnquist, Warmington, Hood, Spataro, German,
and Gawron
Nays: None
MOTION PASSES
2012-08 NEW BUSINESS:
A. Advance Refunding of 2002 LDFA Bonds. FINANCE
SUMMARY OF REQUEST: In 2002 the LDFA issued bonds in the amount of
$4,725,000 to finance construction of the MAREC building. Repayment of the
bonds was to come from tax increment revenues generated by anticipated
development on the Smart Zone site. The City’s full faith and credit was
pledged and the Community Foundation for Muskegon County also pledged
an annual contribution of up to $75,000 (through 2016) to be used in the event
tax increment revenues fell short.
The bonds were intentionally structured with no/low principal payments during
the first ten years to provide time for development and tax increments to grow.
Unfortunately, this has not occurred to the extent hoped for. In recent years, the
City has contributed $100,000 annually and the full $75,000 CFFMC pledge has
been needed to meet debt service requirements. Starting with FY 2012-13, the
City’s annual contribution will at least double and remain at high levels until
significant, taxable development occurs.
The bonds were issued with a ten year call provision and 2012 is the first
opportunity to exercise this call. Fortunately, refunding the bonds under current
market conditions makes economic sense.
FINANCIAL IMPACT: Refunding the LDFA bonds is expected to save $361,045
over the remaining life (about $25,000/year). Present value savings are
estimated at $304,165, or about 7% of the outstanding bond principal.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: Approval of the advance refunding of LDFA bonds.
Motion by Commissioner Spataro, second by Vice Mayor Gawron to approve
the advance refunding of LDFA bonds.
ROLL VOTE: Ayes: Turnquist, Warmington, Hood, Spataro, German, Gawron, and
Wierengo
Nays: None
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MOTION PASSES
B. Concurrence with the Housing Board of Appeals Notice and Order to
Demolish the Following: PUBLIC SAFETY
1467 Terrace Street (Area 11)
2226 Continental Street
167 Mason Avenue – Home and Garage (Area 10)
SUMMARY OF REQUEST: This is to request that the City Commission concur with
the findings of the Housing Board of Appeals that the structures are unsafe,
substandard, a public nuisance and that they be demolished within 30 days. It
is further requested that administration be directed to obtain bids for the
demolition of the structure and that the Mayor and City Clerk be authorized and
directed to execute a contract for demolition with the lowest responsible
bidder.
FINANCIAL IMPACT: CDBG Funds.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To concur with the Housing Board of Appeals
decision to demolish.
Motion by Commissioner Spataro, second by Commissioner Wierengo to concur
with the Housing Board of Appeals notice and order to demolish 1467 Terrace,
2226 Continental, and 167 Mason-home and garage.
ROLL VOTE: Ayes: Warmington, Hood, Spataro, German, Gawron, Wierengo,
and Turnquist
Nays: None
MOTION PASSES
C. Ward and Precinct Redistricting. CITY CLERK
SUMMARY OF REQUEST: Due to the 2010 Census, the County district lines have
changed, so we are requesting permission to change the City precinct/ward
lines. This will allow us to balance the number of registered voters in the
precincts and to reduce the number of split precincts. We also request to
change the numbers of the precincts from 1 through 14.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To authorize the Mayor and Clerk to sign a
resolution.
COMMITTEE RECOMMENDATION: This has been approved by the Election
Commission.
Motion by Commissioner Spataro, second by Vice Mayor Gawron to approve
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the Ward and Precinct redistricting as proposed.
ROLL VOTE: Ayes: Hood, Spataro, German, Gawron, Wierengo, Turnquist, and
Warmington
Nays: None
MOTION PASSES
D. Use of Explosives for Demolition on Former Sappi Property. CITY
MANAGER
SUMMARY OF REQUEST: To give permission to demolish the large stick (280’) and
the bleach plant by use of explosives on the former Sappi property contingent
upon review and approval of the demolition plan by all appropriate City staff.
City approval for use of explosives is necessary pursuant to City Ordinance 10-
136.
FINANCIAL IMPACT: None.
BUDGET ACTION REQUIRED: None.
STAFF RECOMMENDATION: To approve the use of explosives for demolition as
described above, contingent upon review and approval of the demolition plan
by all appropriate City staff.
Motion by Vice Mayor Gawron, second by Commissioner Wierengo to approve
the use of explosives for demolition as described contingent upon review and
approval of the demolition plan by appropriate City staff.
ROLL VOTE: Ayes: Spataro, Gawron, Wierengo, Turnquist, Warmington, and
Hood
Nays: German
MOTION PASSES
PUBLIC PARTICIPATION: Public comments were received.
ADJOURNMENT: The City Commission Meeting adjourned at 6:45 p.m.
Respectfully submitted,
Ann Marie Cummings, MMC
City Clerk
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