Minutes - Council - 07/11/1995 - Laserfiche WebLink

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City Administrator Schroeder explained that the agenda packet includes any and all letters and memorandums regarding issues of conflict generated from his file, and he noted that the Council also received this evening a memorandum from Terry Hendriksen pertaining to this case (attached to these minutes as Exhibit A). He informed that City Attorney Goodrich previously stated he would research this case. Mr. Schroeder also noted he had previously mentioned he would contact financial auditors regarding auditing the City's investment procedures, and he submitted a letter from Malloy, Montague, Karnowski, Radosevich & Co. P.A. in response to such (attached as Exhibit B). He advised that most recently it has been asserted that Mayor Hardin has a conflict of interest regarding the investment decisions and the designating of the Northeast State Bank in 1992 as a depository for City funds. Mr. Schroeder stated his intent in supplying all these documents is to bring closure to this issue by either completing the discussion or generating direction from Council as to how to resolve this. Attorney Goodrich stated that there are two related but somewhat different issues. He reiterated that there are allegations regarding conflict of interest concerning Glen Hardin, and there needs to be discussion and direction on the general issue of conflict, and when and who should be investigated. There have been two allegations made by Terry Hendriksen regarding the approval of Amber Ridge in 1993, Mr. Goodrich's memorandum referencing the same, dated April 15, 1994 (attached as Exhibit C), and the discussion of same in 1995. Mr. Goodrich stated he stands by his memorandum, adding that it speaks for itself. He stated that the other area of conflict is dealing with an officer in city government having an interest in a particular project. There was a question of personal interest regarding the Amber Ridge subdivision; this is a non-contract issue. Mr. Goodrich explained that he considered this by case law, citing a 1967 Coon Rapids case, Lenz vs. Coon Creek Watershed District decided by the Minnesota Supreme Court. He defined conflict of interest as "if the outcome benefits own selfish interest." In drafting his opinion, Mr. Goodrich analyzed the five criteria outlined in Lenz vs. Coon Creek, and he concluded that Glen Hardin had no conflict of interest. He noted that Glen Hardin voted only on the preliminary plat, not the final plat which was approved by a Council vote of 4- 0. There was no opposition to this plat. He also advised that the preliminary plat approval does not contain financing, the final plat approval, from which Hardin abstained, does. He also commented that the law states that if the developer complies with the criteria set out in the City Code, the City is bound to grant approval. He added that there was a public hearing held on Amber Ridge. Mr. Goodrich also explained the grievance procedures, stating that nothing occurred regarding this plat. Councilmember Zimmerman stated that one of the conditions of approving plats is that the developer provide a financial guarantee of 150% of the estimated cost of the improvements. Zoning Administrator Frolik interjected that it is 125%. Councilmember Zimmerman continued that Mr. Hendriksen's memorandum states that this amount was reduced. Ms. Frolik advised that a portion was taken in financial guarantee (letter of credit) and a portion in personal guarantee by Gary Gorham. She explained that the financial guarantee formula is a percentage of the estimated cost of the improvements. A public improvement project requires a financial guarantee of 20% letter of credit or 15% cash, and a private improvement project requires a financial guarantee of 125% cash or letter of credit. Mr. Schroeder advised that the City received a pledge and payment agreement. The developer had a subdivision of 129 lots, and he approached the City with a request to City Council/July 11, 1995 Page 8 of 13