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2017-06-20 Council MinutesCITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, June 20, 2017 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 7:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Garlock called the meeting to order at 7:00 p.m. Councilmembers Duggan, Miller, Paper, and Petschel were also present. PLEDGE OF ALLEGIANCE Council, the audience, and staff recited the Pledge of Allegiance. AGENDA ADOPTION Mayor Garlock presented the agenda for adoption. Councilmember Duggan moved adoption of the agenda. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 CONSENT CALENDAR Mayor Garlock presented the consent calendar and explained the procedure for discussion and approval. Councilmember Petschel moved approval of the consent calendar as presented and authorization for execution of any necessary documents contained therein, pulling items � Authorize Early Payment for Ice Arena Improvements and 1) Approval of Revised Resolution 2017-45 Concerning Support for State Bonding Assistance for Reconstruction of MnDOT Legacy Frontage Roads. a. Approve June 6, 2017 City Council Minutes b. Approve June 6, 2017 Council Workshop Minutes c. Approve Resolution 2017-46, Renew Contract For Service and a Memorandum of Understanding For School Resource Officer d. Approve Appointments to Traffic Safety Committee e. Approve Ordinance 512 Fire Code Amendment £ Authorize Early Payment to City Of West St. Paul for Ice Arena Improvements g. Approve Resolution 2017-47, Providing For The First Amendment To Educational Facility Revenue Note (St. Thomas Academy Project), Series 2012 h. Acknowledge May 2017 Building Activity Report i. Acknowledge May 2017 Fire Synopsis j. Approval of May 2017 Treasurer's Report k. Approval of Claims List 1. Approval of Revised Resolution 2017-45 Concerning Support for State Bonding Assistance for Reconstruction of MnDOT Legacy Frontage Roads Councilmember Miller seconded the motion. Ayes: 5 Nays: 0 PULLED CONSENT AGENDA ITEM F) AUTHORIZE EARLY PAYMENT TO CITY OF WEST ST. PAUL FOR ICE ARENA IMPROVEMENTS City Administrator Mark McNeill explained this is a request from the City of West St. Paul to authorize the early payment for the ice arena improvements. The City of Mendota Heights has been levying approximately $65,000 annually for what would be a lump sum payment of approximately $277,000 in 2019 to the City of West St. Paul. The agreement is that the City would accumulate the funds and make the payment in 2019. However, there are roof issues at the arena that need to be addressed soon. West St. Paul has asked if Mendota Heights could release the funds collected so far so the roof can be repaired. Mendota Heights has accumulated one year's worth of allocations ($65,000), and in July, will receive its first half property tax payment for another $32,000. Staff also requested that every six months, as the City receives the tax collection from Dakota County, they be allowed to make the payment to the City of West St. Paul. Councilmember Duggan stated that this is a reasonable request. Councilmember Duggan moved to AUTHORIZE THE PAYNIENT OF $97,818 TO THE CITY OF WEST ST. PAUL UPON THE RECEIPT OF FIRST HALF 2017 TAXES PAYABLE, AND FURTHER AUTHORIZE THE RELEASE OF FUTURE LEVIES BEING MADE FOR ICE ARENA IMPROVEMENTS, AS SOON AS THEY ARE RECEIVED FROM DAKOTA COUNTY. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 L) APPROVAL OF REVISED RESOLUTION 2017-45 CONCERNING SUPPORT FOR STATE BONDING ASSISTANCE FOR RECONSTRUCTION OF MNDOT LEGACY FRONTAGE ROADS Councilmember Duggan asked if it is possible that the state might only grant assistance to one city and not the other. City Administrator Mark McNeill replied that it was his understanding that the portion which is located in the City of Mendota would be the responsibility of the City of Mendota Heights. Councilmember Duggan moved to adopt RESOLUTION 2017-45 SUPPORT OF SUBMITTAL TO STATE OF MINNESOTA FOR CAPITAL BONDING REQUEST FOR FUNDING THE RECONTRUCTION OF PORTIONS OF FORMER MNDOT ROADWAYS 1N MENDOTA HEIGHTS. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 June 20, 2017 Mendota Heights City Counci�l Page 2 of 10 There were no public comments. PUBLIC COMMENTS PRESENTATIONS A) PRESENTATION OF 2016 AUDIT — MATT MAYER, BERGAN KDV Mr. Matt Mayer, CPA representing Bergan KDV, presented the results of the 2016 Financial Audit. He explained that the City has the responsibility to prepare financial statements for the public to show the financial position of the City at the end of each year. It is Bergan KDV's job, as auditors, to examine and give an opinion on those statements so a correct picture of the City's financial position is presented. He said that the auditor is required by the state to do compliance testing to make sure various state statutes are being followed. There were no iindings found during the compliance testing. They also do a review of the internal controls; policies and procedures that safeguard the City's assets. There was one small finding which was the lack of segregation of accounting duties. The city has mitigating controls in place for a smaller office, which Bergan KDV is comfortable with. It was noted by Councilmember Petschel that this has been the finding each year, and in a city this size, it is common. Mr. Mayer agreed. Mr. Mayer shared that revenue was up from 2015 from $7.SM to $7.8M, due to the increase in the tax levy and a small increase in intergovernmental revenue (police aid and fire aid from the state). Spending went from $7.1M in 2015 to $7.2M in 2016, a 2.8% increase. These trends show the auditors that the Council has a budget that is consistent and they know where their spending priorities are. Mr. Mayer encouraged the Council to focus on the general fund balance at the end of each year. He noted that this year the general fund balance was the highest it has been in the last five years, both from a dollar standpoint and as a percentage of spending. Upon the request by Councilmember Petschel, Mr. Mayer explained the relationship between the fund balance and the City's bond rating. He stated that it is one of the many factors that come into play as the bond raters look at the financial health of the City. Par 3 Golf Course Fund - The Par 3 Golf Course had a small loss this year of approximately $9,600, due to poor weather conditions. Depreciation is also a signiiicant expense. This fund has a balance of approximately $43,000; one-third of the year's spending. This is a comfortable financial position. Sewer Fund The Sewer Fund had a positive operating income of $9,600. This fund had a balance of approximately $600,000 at the end of the year, which is a comfortable place; however, there are not a lot of dollars for future renewal and replacement. Building this fund balance up or having a plan in place for future renewal and replacement is something to be conscience of going forward. Storm Water Fund The Storm Water Fund has performed well for each of the last five years. This fund had approximately $250,000 in fund balance; a positive position and enough to cover current operating expenses but not a lot for renewal and replacement. June 20, 2017 Mendota Heights Cit�� Council Page 3 of 10 Councilmember Petschel asked what the emerging issues are that were in the report in regards to `post retirement payments and benefits.' Mr. Mayer replied that when the numbers in the general fund are reviewed, they look only at things from a budgetary standpoint. There are long-term liabilities and long- term assets that are not factored into the mix. There are obligations relating to pensions and post retirement employment benefits that were not on the financial statements. That is a liability that is not factored in and it is significant. Mr. Mayer replied that there is a new standard that is actualizing that liability. That amount is recognized as a liability and would be reflected in the City's financial statements in future years, under new accounting standards. Councilmember Duggan recognized Finance Director Kristen Schabacker as one of the City's unsung heroes and is their rock when it comes to finances and numbers. The remainder of the Council shared their thoughts and appreciation to Ms. Schabacker as well. Councilmember Petschel moved to accept the auditor's report as presented. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 PUBLIC HEARING A) ACTIONS FOR THE ESTABLISHMENT OF TAX 1NCREMENT FINANCING DISTRICT Mr. James Lehnhoff, Municipal Advisor from Ehlers, provided the Council with a review of TIF and provided the financial aspects of the proposed apartment project from Michael Development for the 69 unit project on the soon-to-be-former motel site. Mr. Lehnhoff clarified that the creation of the TIF District creates the ability to provide TIF assistance; however, it does not obligate the City to provide TIF. The development agreement would also include a number of performance requirements, the timeline, and it must be in conformance with the City Plans, Comprehensive Plans, and Building Permits. This agreement would also include a`look-back' provision; just to make sure that the developer did not receive any funds from other sources and they actually needed all of the TIF funds. There is a Phase II planned in this project and that phase will have a separate pro forma review to determine if any assistance is justified and a separate development agreement. Councilmember Petschel asked for an explanation of the difference between a standard TIF and a blighted TIF. Mr. Lehnhoff replied that there are many different types of TIF. This TIF district is a `redevelopment' TIF district. A certain amount of the lot must be covered or improved and any buildings on the site must be sub-standard. There are other types of TIF as well that could be pursued but would not fit for this particular project. Councilmember Petschel clarified that this type of TIF under consideration is different than the TIF that was done for The Village. Mr. Lehnhoff stated that Resolution 2017-48 is to approve a modification to the development program for municipal development district No. 1 and to establish tax increment finance district No. 2. This June 20, 2017 Mendota Heights Ciry Council Page 4 of IO actually creates this redevelopment TIF district for the site and establishes this TIF plan as being in effect. It sets out that budget and the term is laid out in the plan, which is different than the actual amount of assistance being provided that will come forth in the development agreement. Resolution 2017-49 is to authorize an Interfund Loan for Advance of Certain Costs in Connection with the Tax Increment Financing District No. 2. Ehlers does expect that the developer will reimburse the City for any costs incurred in creating this TIF district. In fact, they have deposited funds with the City to cover those costs. This second action is more of a procedural step to make sure that the City is made whole. Councilmember Duggan, in reference to item 1.03 in Resolution 2017-48, asked if the Metropolitan Council (MetCouncil) needed to be notified. Mr. Lehnhoff replied that the Met Council was not involved. He then asked, in reference to item 1.04 in Resolution 2017-48, that reads "...but is modifying the Development Program therefor", if the word `therefor' should be `thereof . City Attorney Tom Lehmann stated that he could see either word being used and did not have an opinion. However, this may be a vernacular that has been used in other agreements. Councilmember Petschel stated if this is the boilerplate that has been used in other municipalities then she does not have a problem with it. She believes that this edit would have little effect on the document. Councilmember Duggan asked for an explanation of the meaning of item 3.OL Mr. Lehnhoff stated that he believed this to refer to the state statute that authorizes the creation of a redevelopment TIF district. City Attorney Tom Lehmann noted that State Statute 469 requires that the Council make that finding, and this is substantiating that it is in the public interest as a redevelopment district. Councilmember Duggan, referencing item 5.02, asked if `further plan' should be `future plans'. City Attorney Tom Lehmann replied that he believes it reads `further plan' because the City is aware that there will be further plans. He would take `future' as meaning that there may or may not be other plans. Councilmember Petschel moved to open the public hearing. Mayor Garlock seconded the motion. Ayes: 5 Nays: 0 Seeing no one coming forward to speak, Councilmember Duggan moved to close the public hearing. Councilmember Petschel seconded the motion. Ayes: 5 Nays: 0 Councilmember Duggan moved to adopt RESOLUTION 2017-48 ADOPTING A MODIFICATION TO THE DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO. 1; ESTABLISHING TAX 1NCREMENT FINANCING DISTRICT NO. 2 THEREIN; AND ADOPTING A TAX 1NCREMENT FINANCING PLAN THEREFOR. Councilmember Paper seconded the motion. Ayes: 5 Nays: 0 June 20, 2017 Mendota Heiglzts City Council Page S of IO Councilmember Petschel moved to adopt RESOLUTION 2017-49 AUTHORIZING AN INTERFITND LOAN FOR ADVANCE OF CERTAIN COSTS iN CONNECTION WITH TAX 1NCREMENT FINANCING DISTRICT NO. 2. Mayor Garlock seconded the motion. Councilmember Duggan, referencing a portion of section 2.01 of Resolution No. 2017-49 where it reads "The interest rate shall be 4.00% and will not fluctuate," asked for an explanation. Mr. Lehnhoff replied that the interest rate is set by State Statutes. Mayor Garlock called for the vote. Ayes: 5 Nays: 0 B) RESOLUTION 2017-50, APPROVING MUNICIPAL CONSENT FOR THE MNDOT HIGHWAY 149 (DODD ROAD) REHABILITATION PROJECT Public Works Director Ryan Ruzek introduced Ms. Molly Kline and Mr. Dale Gade from the Minnesota Department of Transportation (MnDOT), who were requesting municipal consent for right-of-way and easement acquisitions for the 2018 Dodd Road (Trunk Highway 149) project. Ms. Kline explained that the location of this project is on Highway 149 from George Street to I-494 and also on Highway 13 to Cherokee Heights Blvd. The estimated cost for the project is $7.8M, including a city trail segment that is being wrapped into this project. The construction is anticipated to begin in 2018. The project elements include pavement resurfacing, ADA improvements, drainage improvements, signal replacement, turn lane construction, and removal of ash trees within the MnDOT right-of-way along this corridor. There will be lane and sidewalk closures intermittently during the summer of 2018 to replace drainage infrastructure and make any necessary sidewalk repairs. MnDOT is working with the City and the Chamber of Commerce on timing of this project. There are 13 parcels MnDOT needs to purchase right-of-way from within Mendota Heights; one is on Highway 13 and the other 12 parcels are along Highway 149. There are two types of acquisitions proposed; permanent drainage easement and underlying fee. Councilmember Duggan asked if the affected property owners had been notified. Ms. Kline replied that the MnDOT right-of-way office has contacted a few of the property owners, but she did not believe they had all been contacted. This is part of the title search still underway and the right-of-way office will contact them to verify the information that is on the title. Councilmember Duggan proposed that the Council table this item until all of the property owners have been notified. Councilmember Petschel suggested the Council open the public hearing tonight, hear from the public that is available, and to not close the public hearing but to extend it to a later date until those residents whose property is affected are notified. June 20, 2017 Alendota Heigl�ts Crty Council Page 6 of IO Councilmember Duggan moved to open the public hearing. No one from the public wished to be heard on this item. Councilmember Petschel moved to extend the public hearing until such time as the residents, who are affected by the project, are notified. City Administrator Mark McNeill noted that city staff would make the notifications. He suggested the hearing be extended to the July 18, 2017 City Council Meeting. Mayor Garlock seconded the motion. Councilmember Duggan asked if the notifications should be the duty of MnDOT. Mr. Ruzek replied that MnDOT would be having a right-of-way acquisition process where they would be having conversations with the homeowners. However, this is a Mendota Heights public hearing. Mr. Dale Gade, Senior Project Management Engineer with MnDOT, replied that the state statute is very clear that MnDOT has to request Municipal Consent from the City. The City holds the public hearing and extends the invite to the affected property owners. If the City did decide to decline municipal consent, MnDOT would not seek to overturn that decision. City Attorney Tom Lehmann added that the statute is clear that the City would have to take action within 90 days from today's date, otherwise it is deemed accepted. Mayor Garlock called the vote on extending the public hearing to July 18, 2017. Ayes: 5 Nays: 0 Councilmember Duggan asked if MnDOT has completed a traffic study of Dodd Road. Ms. Kline replied that she did not believe so; they know the current count and the 30-year projection but did not do an official traffic study. Councilmember Duggan asked if those numbers could be forwarded to city staff. NEW AND UNFINISHED BUSINESS A) ORDINANCE 511 AMENDING CITY CODE TITLE 3, CHAPTER 1 ALCOHOLIC BEVERAGES City Clerk Lorri Smith explained that the Council was being asked to adopt an Ordinance which amends the Alcoholic Beverages part of the City Code. She said that the current code language is very outdated, is inconsistent in areas, and needs to be brought up-to-date with current standards. The current license holders have all been notified of this code amendment and they were made aware of the major changes being recommended. If approved, the ordinance would take affect on July 1, 2017 and after its publication. The major changes to the code are: • Bringing the Alcoholic Beverages Code more in line with state statutes regulating liquor • Adding language to allow Off Sale intoxicating liquor sales on Sundays [effective July 2, 2017] June 20, 2017 Me�adota Heights City Cou�acil Page 7 of IO • Deleting the requirement that a certain percentage of sales must come from food/nonalcoholic beverages, eliminating the CPA verification of total sales with the renewal application • Deleting the limits on the total number of licenses allowed in the City for On Sale licenses • Deleting the requirement of an official public hearing for new licenses and for renewals • Deleting the requirement of a surety bond • Amending the amounts and conditions of liquor liability insurance requirements so it is consistent with state statutes � Deleting the requirement of verifying political contributions made to candidates for an elected city office • Adding a requirement for server training of all employees serving or selling alcohol Councilmember Miller asked about the hours of the liquor store sales. Ms. Smith replied that the current code sets the closing time for off-sales at 9:00 p.m. Monday through Friday. State Statute is set at 10:00 p.m. and the City could make that change also if the Council desires. Councilmember Miller suggested that this be included in the amendment. Councilmember Petschel stated that she would support that change. She also noted that the Council held a work session to discuss these amendments and they are eager to make the City's liquor ordinance more user friendly and in line with state statutes. Councilmember Petschel moved to adopt ORDINANCE NO. 511 AMENDING TITLE 3, CHAPTER 1, OF THE CITY CODE REGARDING ALCOHOLIC BEVERAGES, WITH THE CHANGE THAT OFF-SALE ESTABLISHMENTS CAN BE OPEN UNTIL 10:00 P.M. MONDAY THROUGH SATURDAY. Councilmember Duggan seconded the motion. Councilmember Duggan referenced Section 3-1-6 (A) 2, and asked if `exclusive' meant that they only sell liquor as opposed to some other exclusivity. City Attorney Tom Lehmann replied in the affirmative and noted that there are establishments that are exclusively liquor stores. He then asked, in reference to Section 3-1-2 that reads "by reference as if set out at length in this chapter." if it should read "by reference as is set out at length in this chapter." Ms. Smith replied in the affirmative. Referencing Section 3-1-6 (D) 5, Councilmember Duggan asked wholesaler of "what"? Attorney Tom Lehmann replied that it would be wholesaler of alcohol and that should be added to the ordinance. Councilmember Duggan, referencing Section 3-1-10 (F) 2, asked if this could be clarified. Ms. Smith replied that this language comes from state statutes. Counsel Lehmann stated that this section is an opportunity for off-sale liquor licensees to reduce their license fee if they complete certain criteria. Sellers of liquor are always under an obligation to do a verification of a buyer's age by checking their ID. This language specifically comes from the statute allowing the City to reduce the annual license fee. Mayor Garlock called the vote. Ayes: 5 Nays: 0 Ju�ze 20, 2017 Mendota Heigl�ts City Coztncil Page 8 of IO Councilmember Petschel moved to APPROVE THE SUMMARY PUBLICATION of Ordinance 511. Councilmember Duggan seconded the motion Ayes: 5 Nays: 0 B) SET DATE AND TIME FOR PLANNING COMMISSIONER INTERVIEWS City Administrator Mark McNeill noted that the City had received seven applications for the Planning Commission vacancy that was created when Mr. Howard Roston resigned. In the past, the City Council has interviewed candidates for the commissions. Mr. McNeill suggested Monday, July 17, following the Facilities meeting at 6:00 p.m. The Councilmembers agreed. Councilmember Petschel moved to hold the Planning Commissioner interviews on Monday, July 17 at 6:00 p.m. Mayor Garlock seconded the motion Ayes: 5 Nays: 0 C) REPORT ON CLOSED SESSION - CITY ADMINISTRATOR PERFORMANCE EVALUATION Mayor Garlock noted that the Council held a closed session meeting prior to this Council meeting and reviewed the performance of City Administrator Mark McNeill. Comments received were positive and his hard work, vast knowledge, and ability to meet the needs of the City were recognized. Councilmember Duggan moved to accept the performance evaluation of the City Administrator. Councilmember Paper seconded the motion. Ayes: 5 Nays: 0 COMMLTNITY ANNOUNCEMENTS City Administrator Mark McNeill reminded the public that a jointly sponsored fireworks display with Mendakota Country Club will be held at dusk on July 4, 2017. COUNCIL COMMENTS Councilmember Petschel recognized Ms. Anni Heck from Visitation, who is the 3A State golf champion. Ms. Petschel encouraged the residents to visit City Hall to look at the landscaping the master gardeners have completed. The plants are pollinator friendly, sustainable, and include a water garden. Councilmember Duggan echoed the sentiments expressed about the work the master gardeners have done. June 20, 2017 Dlendota Heiglzts City Couizcil Page 9 of IO Councilmember Paper expressed congratulations to outgoing District 197 Superintendent Dr. Nancy Allen-Mastro on her retirement. He also welcomed the new incoming District 197 Superintendent Mr. Peter Olson-Skog. It was suggested that he be invited to a future Council meeting. Councilmember Miller wished a happy mid-summer to everyone and wished everyone safe travels on July 4tn ►e��a7�lil'.��I Mayor Garlock moved to adjourn. Councilmember Paper seconded the motion. Ayes: 5 Nays: 0 Mayor Garlock adjourned the meeting at 8:12 p.m. ^ r lsz..x l� ,� � Neil Garlock Z� Mayor ATTEST• � •. Lorri Smith City Clerk June 20, 2017 Mendota Heights City Council Page 10 of IO