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2021-03-16 Council MinutesCITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, March 16, 2021 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 6:00 p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota, CALL TO ORDER Mayor Levine called the meeting to order at 6:00 p.m. Councilors Duggan, Paper, Mazzitello, and Miller, were also present via Webex. PLEDGE OF ALLEGIANCE Council, the audience, and staff recited the Pledge of Allegiance. Mayor Levine noted that the City Council met in closed session tonight at 5:00 p.m. with the City Attorney to pending litigation in the case of Lawrence J. Culligan and Mary Culligan, Trustees of Lawrence J. Culligan Revocable Trust under Agreement dated June 21, 2001, as amended vs City of Mendota Heights, Court File No. 19-11A-CV-21-527. The Council did not take any action at the meeting. AGENDA ADOPTION Mayor Levine presented the agenda for adoption. Councilor Duggan moved adoption of the agenda. Councilor Mazzitello seconded the motion. A roll call vote was performed: Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye CONSENT CALENDAR Mayor Levine presented the consent calendar and explained the procedure for discussion and approval. Councilor Duggan moved approval of the consent calendar as presented. a. Approval of March 2, 2021 City Council Minutes b. Approval of March 8, 2021 Council Worlc Session Minutes C. Authorize 2020 Auditing Services with BerganKDV d. Approve Purchase Order for 4 Column Jacks for the Public Works Garage e. Approve Purchase Order for Tire Changer and Wheel Balancer f. Approve Bids for 2021 Street Sweeping g. Approve Treasurer's Report It. Approval of Claims List i. Approve Building Activity Report j. Acknowledge February 9, 2021 Park and Rec Minutes Councilor Paper seconded the motion. A roll call vote was performed: Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye Councilor Duggan aye PUBLIC COMMENTS No one from the public wished to be heard. PUBLIC HEARING A) RESOLUTION 2021-25 ESTABLISH A TAX INCREMENT FINANCING DISTRICT NO. 3 (ENDEAVOR), A BUSINESS SUBSIDY POLICY, AND A TIF AGREEMENT WITH ENDEAVOR DEVELOPMENT LLC Councilor Miller moved to open the public hearing. Councilor Duggan seconded the motion. A roll call vote was performed: Councilor Miller aye Councilor Paper aye Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Community Development Director Tim Benetti noted that Ehlers is not yet present at the meeting and requested that this item be delayed until the representative is present later in this meeting. Councilor Duggan moved to postpone the public hearing. Councilor Mazzitello seconded the motion. A roll call vote was performed: Councilor Paper aye Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye March 16, 2021 Mendota Fleights Ciry Coa�nc#7 Page 2 of12 NEW AND UNFINISHED BUSINESS A) RESOLUTION 2021-23 APPOINT JEFFREY HAMIEL TO AIRPORTS RELATIONS COMMISSION Councilor Miller provided background information and stated that the Council is asked to appoint Jeffrey Hamiel to the Airport Relations Commission (ARC). Councilor Paper commented that Mr. Hamiel was recognized in the Minnesota Business Hall of Fame for his work. He commented that the City is extraordinarily lucky to have him step into this position. Councilor Miller moved to adopt RESOLUTION 2021-23 APPOINTING JEFFREY W. HAMIEL TO FILL AN UNEXPIRED TERM ON THE AIRPORT RELATIONS COMMISSION. Councilor Duggan seconded the motion. A roll call vote was performed: Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine welcomed Mr. Hamiel to ARC. B) REQUEST TURNBACK OF STATE RIGHT-OF-WAY OVER CITY STREETS Public Works Director Ryan Ruzek stated the Council was being asked to authorize the Public Works Director to formally request a turnback of State right-of-way over certain City streets, including Acacia Boulevard, Condon Court, Mendota Heights Road, Pilot Knob Road, Wagon Wheel Trail, Waters Drive, and Valencour Circle, Councilor Duggan asked the estimated costs to maintain these streets going forward. Mr. Ruzek reviewed the prior roadwork that was completed on the roads in question. He explained the MnDOT policies related to turnbacks and noted that the roadways are in relatively good condition and could be repaired within the City's CIP. He stated that he has not yet calculated the total miles of these roadway sections. Councilor Mazzitello commented in 2008 the City accepted a number of rights -of --way which were highway frontage roads where no upgrade or improvement had been made and no compensation was received for those improvements. He noted that the City is still struggling to determine how to finance those improvements. He stated that he would have no objection to accepting the roads that have already been repaired recently, but he would have objection to Waters Drive. He tasked City staff to return to MnDOT to determine if there could be an exception to the policy. Mr. Ruzek commented that MnDOT has expressed urgency in wanting to turnback these roadways. He stated that if the direction came from the Council, it would provide more weight in the request. He noted that he could ask a representative from MnDOT to attend a future meeting to discuss that. March 16, 2021 d�wxdota Heights City Counetl Page 3 of 12 Councilor Mazzitello moved to authorize the PUBLIC WORKS DIRECTOR TO REQUEST A TURNBACK OF EXCESS RIGHT-OF-WAY WITH A FURTHER REQUEST THAT MNDOT EXPLORE ALL OPPORTUNITIES TO PROVIDE AN UPGRADE PROJECT OR COMPENSATION FOR WATERS DRIVE, Councilor Miller seconded the motion. Further discussion: Councilor Paper commented that it is his understanding that when the City makes these improvements, we cannot assess the State for that work. Mr. Ruzek confirmed that, noting that the City policy relies on assessments for a portion of the costs for road work and that becomes difficult when we cannot assess the related properties. Councilor Paper commented that the City would have to pay for the improvement of Valencour Circle regardless of who owns the right-of-way. He asked if the City gains anything for accepting these rights - of -way. Mr. Ruzek replied that, on Valencour, the City owns land in addition to right-of-way. The City has rebuilt these rights -of -way in the local roadway manner without meeting additional State standards. If the rights -of -way are City owned, we would have control and could construct trails on the property. Councilor Paper asked if Councilor Mazzitello's comments are related to the past turnback experience which left the City looking for a way to fund needed improvements. Councilor Mazzitello agreed and commented that the City already maintains the roadways within these rights -of -ways, it simply required an additional step to work within the right-of-way. He stated that if the City could find a funding method to reduce dependency on assessments, it could better address these repairs. A roll call vote was performed: Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye PUBLIC HEARING (CONTINUED) A) RESOLUTION 2021-25 ESTABLISH A TAX INCREMENT FINANCING DISTRICT NO (ENDEAVOR), A BUSINESS SUBSIDY POLICY, AND A TIE AGREEMENT WITH ENDEAVOR DEVELOPMENT LLC Councilor Duggan moved to reopen the public hearing. Councilor Miller seconded the motion. A roll call vote was performed: Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye Councilor Duggan aye March 16, 2021 Me�adoto Heights Ciry Counczl Page 4 oj12 Community Development Director Tim Benetti explained that the Council was being asked to conduct a public hearing and adopt the following items for the creation of Tax Increment Financing (TIF) District No. 3: (1)Mendota Heights Business Subsidy Plan; (2)plan for the modifications to the Development Program for Municipal Development District No. 1 and establishment of Tax Increment Financing District No. 3; and (3)Development Agreement between City of Mendota Heights and Pilot Knob BC, LLC. Stacie Kvilvang, representing Ehlers, reviewed background information on the proposed Endeavor development and the actions before the Council tonight. She provided additional details on the proposed Business Subsidy Policy, TIF District, and TIF Agreement. Councilor Miller asked why this would be called TIE District No. 3. Ms. Kvilvang replied that the City already has Districts 1 and 2 and therefore this would be District 3. Councilor Miller asked the impact on the public school system. Ms. Kvilvang replied that a TIE District does not impact a School District. She stated that schools are funded by number of pupils through the State. Councilor Paper commented that TIE District No. 2 is the old Mendota Motel site and asked where District No. I is. Ms. Kvilvang replied that is the Town Center development. Councilor Paper asked when that district expires. Ms. Kvilvang replied that she is unsure but would look up that information. Councilor Paper referenced the proposed term for this district noting that it does not seem very long. Ms. Kvilvang confirmed that the proposed length of the term is not as long as the typical term because it is to be used for economic development purposes. Councilor Duggan referenced the relationship to the office and warehouse spaces and asked for additional details. Ms. Kvilvang replied that about 15 percent would be for office and the remaining 85 percent would be for warehouse uses and that would be taken into account for the related values. Councilor Duggan commented that it is his understanding that the City would be providing funds to Endeavor as an advance of funds that would help the business to get established. Ms. Kvilvang explained that this would be a developer risk proposition and provided additional details on the payments that would be made using the taxes proposed to be generated through the project. Councilor Duggan asked the difference in property taxes paid to the City. Ms. Kvilvang commented that the future taxes that would be paid on this development would be approximately $155,000 and the City would receive its share of that. She stated that currently the property is generating about $18,000 in taxes, with the City receiving the appropriate share of that amount. Councilor Duggan asked the cost to the City to provide services to this property. Ms. Kvilvang commented that a fiscal impacts analysis was completed and it did not anticipate an increase in services for staff, police, or public works. Councilor Paper commented that it appears that Perron Road will become a private road and asked if the City would then not be responsible for plowing or maintenance. Public Works Director Ryan Ruzek replied that is correct and this would be addressed through the next agenda item. March 16, 2021 Mendota Heights City Council Page 5 of 12 Mayor Levine commented that it appears that the City would generate additional funds through taxes collected by this development, and the additional tax collected would be returned to the property owner in the short term, but the City would still appear to gain in the long-term. Ms. Kvilvang commented that the existing value in taxes would continue to be collected and received by the City, but the additional taxes generated would be returned to the property owner for the duration of the agreement. She noted that when the term of the agreement expires, the City would be able to collect its share of property taxes against the full valuation. She stated this would also allow the City to use the County dollars to support the development it would like to see in its community. She confirmed that it is a short-term investment. Mayor Levine referenced the School District noting that there are outstanding levies and bonds and asked how that would be impacted. Ms. Kvilvang replied that any referendums are outside of tax increment and would not be impacted. Mayor Levine stated that the developer is obligated to report annually and asked for clarification on what would occur if the developer does not complete that report. Ms. Kvilvang stated that each year the developer must report back the information specified and if the requirements are not met, the developer would not receive the payment. She stated that if the development were to fail during the length of the agreement, there is language included which would require the developer to payback the assistance received to that time. There being no one from the public coming forward to speak, Councilor Duggan moved to close the public hearing. Councilor Mazzitello seconded the motion. A roll call vote was performed: Councilor Miller aye Councilor Paper aye Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Councilor Duggan noted that there is a relationship between this item and the following item and suggested that that presentation be made for the following item, before taking action on this item. City Attorney Elliot Knetsch confirmed that the Council could move to the next agenda item to consider that information and still take action separately on the two. B) RESOLUTION 2021-22 APPROVE RIGHT-OF-WAY LICENSE AGREEMENT — PERRON ROAD City Administrator Mark McNeill noted that a public hearing is not required for this item. March 16, 2021 Mendota Heights City Caaznci! Page 6 of 12 Public Works Director Ryan Ruzek explained that the Council was being asked to approve a license agreement for Southview Design and Pilot Knob Business Park. Councilor Mazzitello stated that he spoke with staff earlier today noting that a third -parry accesses Perron Road but is not mentioned within the agreement. Public Works Director Ryan Ruzek replied that he copied the original Southview Design Agreement which includes a statement providing access rights to the third property owner. He noted that they would not be part of the agreement but would have the right to access the private road for their property. Councilor Mazzitello commented that the third parry is located at 2401 Pilot Knob Road. Councilor Paper asked if this private road would be built to the City design standards. Mr. Ruzek replied that the road would be designed to support the movements needed by the vehicles accessing the sites from this roadway. He noted that the street width will not meet the requirement of 33 feet because of the available right-of-way but noted that it has been City policy to not require that width in circumstances where impervious surface calculations or drainage support a lesser width. Councilor Paper commented that there would be heavy vehicles with trailers accessing this private road. He noted his concern being if this roadway were turned back to the City in the future, it could possibly not be constructed to the minimum requirements of the City. Mr. Ruzek replied that City water and sewer services will be constructed and therefore the City will inspect those services. He stated that he would be able to verify that the minimum pavement section would be met and noted that curb, gutter, and storm sewer would also be constructed. Councilor Duggan noted that it was mentioned that the right -of --way would need to be acquired and asked who would be responsible for that cost. Mr. Ruzek noted that the City would need to acquire that if a cul- de-sac were to be constructed and if Perron Road were to be a public road. He stated that if the City chose to construct Perron Road as a public road, those costs would be the responsibility of the City. Councilor Duggan asked if there have been any comments from the other two businesses. Mr. Ruzek commented that he is not aware of any comments from 2401 Pilot Knob Road. He stated that Southview Design has been an active partner in the discussions with Endeavor. Councilor Duggan asked if the Attorney has reviewed the original agreement with Southview Design and the proposed changes to the agreement. Mr. Ruzek stated that all parties were provided the original agreement which was used as a template in creating the new document. He noted that all parties and their legal counsel have reviewed the language as proposed. Councilor Duggan asked about the road width. Mr. Ruzek replied that a 33-foot roadway would be excessive for the amount of traffic this roadway will receive. He stated that due diligence has been completed as to the width necessary to service the tractor trailer trucks. Councilor Duggan asked the number of tenants anticipated. Mr. Ruzek replied that he believed three tenants would be located here. March 76, 2021 Mendota Heights Ciry Council Page � of 12 Councilor Duggan asked how common it is to have a private road constructed on a public right-of-way. Mr. Ruzek noted that most of the City's private roadways service multi -residential homes. He noted that this would be more of a shared driveway than a private road. Councilor Miller stated that, in respect to the TIF, he believes this is an excellent project that he endorses, but he cannot support TIF in this area. He stated that through his research, TIF is allowed in blighted areas or areas that need to be protected from blight. He stated that he does not consider this area to be blighted or at risk of becoming blighted. He stated that TIF is also used when the developer cannot afford to develop a project on their own. He stated that it would appear that the developer does a fair amount of business and has been successful, therefore he is unsure that the developer would need this assistance. He stated that he would see TIF as being useful when it provides a benefit to the community. He does not see that this project would provide a benefit to the community on a large scale. He stated that this request would provide assistance to create a private road that would serve three businesses and provide 12 new jobs; therefore, he struggles to find answers to support the request for TIF. Councilor Mazzitello commented that the 12 jobs mentioned is the minimum number of jobs that have to meet the set wage, not the maximum number of jobs to be created. He stated that he would anticipate that additional jobs would be provided, along with the ancillary jobs and benefit that would be provided. He stated that this is a very small amount of assistance in that $300,000 in assistance would be provided towards a development of $3,000,000 to $4,000,000. He stated that this would not put the City at risk, it would create additional jobs, and it would increase the tax base. He stated that he believes that this project would meet the qualifying factors for TIF. Councilor Paper commented that he found the clarification on jobs helpful along with the ancillary benefits. He stated that he struggles with the fact that the City would be helping to pay for this. He commented that he does see a benefit of TIF in certain applications but was unsure this was that situation. Community Development Director Tim Benetti explained that TIF is not always used for assistance in blighted areas. He stated that when the Mendota Motel and the garden center areas were redeveloped, a Redevelopment TIF District was used. He noted with this current TIF request, an Economic Development District would be used to provide minimal assistance because this site was found to be an odd site for development. He noted that the property currently does not have utilities or legal access. He noted that the incentive would be that the jobs would be provided for and agreed that the business would most likely have more than the minimum number of jobs required. He stated that one of the tenants secured thus far is a local resident/business owner as well. Councilor Duggan provided background information on the challenges associated with this parcel. He stated that this process would indirectly help establish the businesses, but the City would not be losing anything through this request. Mayor Levine opened the floor to allow the applicant to speak. Josh Budish, Endeavor Development, commented that staff provided a good presentation of the project and stated that he is available for questions. March 16, 2021 Mendota Heights City Council Page 8 of 12 Mayor Levine recognized that this as a long-term investment. She stated that Perron Road looks more like a driveway with a gate and therefore feels this is the correct action to take. She stated that the applicant would need to extend the road and utilities and therefore this seems like a fair request related to infrastructure. Councilor Duggan moved to adopt RESOLUTION 2021-25 APPROVING THE MODIFICATION TO THE DEVELOPMENT PROGRAM FOR MUNICIPAL DEVELOPMENT DISTRICT NO, 1 AND ESTABLISHING TAX INCREMENT FINANCING DISTRICT NO. 3 (ENDEAVOR) WITHIN MUNICIPAL DEVELOPMENT DISTRICT NO. 1 AND APPROVING THE TAX INCREMENT FINANCING PLAN THEREFORE; APPROVING A BUSINESS SUBSIDY POLICY; AUTHORIZING AN INTERFUND LOAN; AND AUTHORIZING EXECUTION OF A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF MENDOTA HEIGHTS AND PILOT KNOB BC, LLC. Councilor Paper seconded the motion. A roll call vote was performed: Councilor Paper aye Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Councilor Miller nay Councilor Mazzitello moved to adopt RESOLUTION 2021-22 APPROVING RIGHT-OF-WAY LICENSE AGREEMENT AND AUTHORIZE THE MAYOR AND CLERK TO EXECUTE THE AGREEMENT. Councilor Duggan seconded the motion. A roll call vote was performed: Mayor Levine aye Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye NEW AND UNFINISHED BUSINESS (CONTINUED) C) RESOLUTION 2021-24 APPROVE PLANS AND AUTHORIZE ADVERTISEMENT FOR BIDS FOR THE SOMERSET SEWER REALIGNMENT Public Works Director Ryan Ruzek stated the Council is being asked to approve the plans and specifications and authorize an advertisement for bid for the Somerset Elementary Sewer Alignment. Councilor Paper asked what would happen to the existing line that would be exposed. Mr. Ruzek replied that the pipe would be bulkheaded and abandoned rather than disturbing the creek. He noted that if a stream project is undertaken in the future, the City could remove the pipe at that time. He explained that bulkheading would fill the first six feet of the pipe from the manhole with concrete. March 16, 2021 Mendota Heights City Cotneeil Page 9 °f �� Councilor Duggan asked if the City would be able to recoup the costs. Mr. Ruzek stated that this is a City project since the failure is not caused by the landowner. He stated that the City has worked with representatives from the School District throughout this process and they would continue to be involved. Councilor Duggan asked if there would be a risk of damming for the creek or ancillary risks. Mr. Ruzek commented that this improvement project would eliminate any sanitary waste from the pipe and there have not been documented spills. Councilor Mazzitello commented that this would serve as the service line to the school "Ald asked if the School District would be responsible for the line once installed. Mr. Ruzek replied that this would fall under the City's policy that the service line would be the responsibility of the property owner. Mayor Levine asked if there would be any risk as the line goes under the playground and ball field. She asked if the playground and ball field would be out of service during the project. Mr. Ruzek replied that the only excavation would be at the start and stop points, which are the manholes. He provided additional details on the directional drilling process. Councilor Mazzitello moved to adopt RESOLUTION 2021-24 APPROVING FINAL PLANS AND SPECIFICATIONS AND AUTHORIZING ADVERTISEMENT FOR BIDS FOR THE SOMERSET SEWER REALIGNMENT. Councilor Miller seconded the motion. A roll call vote was performed: Councilor Duggan aye Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye D) DISCUSSION OF ORGANICS WASTE COLLECTION SITE AT MENDAKOTA PARK Public Works Director Ryan Ruzek provided background information on the request and stated that the Council is asked to consider adding an organic drop site at en ma Park for the residents. Councilor Mazzitello asked if this action would count towards any of the steps for GreenStep Cities. Mr. Ruzek commented that he was unsure noting that staff has not yet delved into the details of the steps. Councilor Paper asked if the placement of the dumpsters in the parking lot would allow for the movement of the truck used to collect the organic materials. He asked if the dumpsters would be on wheels and whether there would be an issue with the slope of the parking lot. Mr. Ruzek commented that the dumpsters would be on wheels to not interfere with movement to the collection truck. He stated that staff would need to look further into the issue of sloping. March 16, 2021 Mendota Heights City Council Page 10 oj12 Councilor Paper asked if the dumpsters could be set on the curb, which would allow for easy dumping and collection and would not take up two parking stalls. Mr. Ruzek commented that the County would like to have curbside organic collection within the next five to ten years, therefore this would be a temporary site. He stated that staff would be open to other locations to make this a better drop site. Councilor Paper as when a hauler would pick up the materials. He noted that during busy events every parking stall is used. He noted that perhaps a concrete pad could be installed at the curb. Public Works Director Ryan Ruzek commented that dumpsters should be within a trash enclosure, per the City regulations. He noted that they are looking to start this on a trial basis and if it is successful, they could look to make improvements to the site or relocate it. Mayor Levine asked if the dumpsters could be rotated 90 degrees as that would prevent rolling and would also allow for the collection truck to back up to the containers. She stated that she participates in organics recycling and noted that when a user signs up through Dakota County, they are sent a welcome kit. She stated that her garbage has been reduced by half through recycling and organics collection. She stated that 273 residents currently collect and drop off their organics. She challenged the citizens to participate. She hoped that the City would also advertise for the drop off location to increase participation. City Administrator Mark McNeill confirmed consensus of the Council to direct staff to move forward and work with Dakota County on this matter. COMMUNITY ANNOUNCEMENTS City Administrator Mark McNeill announced that the Par 3 has opened for the season, but is currently closed due to the snow. He stated that registration is open for summer recreation, noting that available programs can be found on the City's website. COUNCIL COMMENTS Councilor Paper commented that the Scott Patrick Memorial SK Race registration is open. Councilor Mazzitello extended compliments to City staff for a thorough Council packet and presentations. Councilor Miller wished everyone a happy Saint Urho's Day. He commented that the ice is no longer safe with the warmer temperatures and asked residents to stay off the ice. Councilor Duggan read a blessing from John O'Donohue. I:1_aZ�1il ��l Councilor Duggan moved to adjourn. Councilor Mazzitello seconded the motion. March 76, 2021 Mendota HeighXs City Council Page 11 of 12 A roll call vote was performed: Councilor Mazzitello aye Councilor Miller aye Councilor Paper aye Mayor Levine aye Councilor Duggan aye Mayor Levine adjourned the meeting at 7:50 p.m. Stephanie Levine Mayor ATTEST: Loiri Smith City Clerk March 76, 2021 Mendoza Heights City Council Page 12 oJ'll