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2004-01-06 City Council minutesPage No. 1 January 6, 2004 • Kul 09 1 -6 1 01 �-3W,A111W*jWUy 110901 • Minutes of the Regular Meeting Held Tuesday, January 6, 2004 Pursuant to due call and notice thereof, the regular meeting of the City Council, City of Mendota Heights, Minnesota was held at 7:30 o'clock p.m. at City Hall, 1101 Victoria Curve, Mendota Heights, Minnesota. CALL TO ORDER Mayor Huber called the meeting to order at 7:30 p.m. The following members were present: Mayor Huber, Councilmembers Duggan, Krebsbach, Schneeman and Vitelli. PLEDGE OF ALLEGIANCE Cub Scout Pack 198, from St. Joseph's School, presented the colors and led Council, the audience and staff in reciting the Pledge of Allegiance. AGENDA ADOPTION Councilmember Vitelli moved adoption of the revised agenda for the meeting. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 APPROVAL OF MINUTES Councilmember Duggan moved approval of the minutes of the regular meeting held on December 16, 2003. Councilmember Vitelli seconded the motion. Ayes: 5 Nays: 0 CONSENT CALENDAR Councilmember Duggan moved approval of the consent calendar for the meeting, revised to move items 6b, park rules and rental fees, 6d, zoning ordinance determination, and 6f, fee revisions, to the regular agenda, along with authorization for execution of any necessary documents contained therein. a. Acknowledgment of the Building Activity Report for December, 2003. b. Authorization for the issuance of a purchase order to Prairie Restorations, Inc., with a not to exceed budget of $5,000 for removal of Buckthorn plants in Hagstrom-King Park and Copperfield pond areas. Page No. 2 - January 6, 2004 c. Adoption of Resolution N• 04-01 • • ACCEPTING •• APPROVING 1 FOR BUROW •• ND (IMPROVEMENT N• 2003, PROJECT • d. Adoption of Resolution No. 04 -02, "RESOLUTION ACCEPTING PLEDGED SECURITIES FOR 2004." e. Adoption of Resolution No. 04 -03, "RESOLUTION ESTABLISHING 2004 CITY DEPOSITORIES OF FUNDS." f. Approval of the list of contractor licenses dated January 20, 2004. g. Approval of the List of Claims dated January 20, 2004 and totaling $101,953.54. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 PARK FEES Council acknowledged a memo from Parks Project Manager Kullander regarding possible changes to the rules and rental fees for use of city parks. Mayor Huber stated that the recommendation is that the Parks and Recreation Commission discuss revised rules and rental fees. This is just an acknowledgment by Council that the commission will be talking about the recommendation and it should not be construed as a Council endorsement. Councilmember Vitelli stated that he would ask that the current president of MHAA be invited to attend the commission meeting. Councilmember Duggan stated that last year he had reason to reserve part of a park for a family gathering and it is important for the residents to understand that they can reserve the park facilities and that the fee is refundable if there is no mess left behind. Park rental is a way of controlling and keeping the parks clean and free for the city's residents. ZONING INTERPRETATION Council acknowledged a memo and proposed resolution from Assistant Hollister regarding an interpretation that the proposed "Wellness Center" for 2520 Pilot Knob Road is a permitted use within the "I" District. Page No. 3 January 6, 2004 Councilmember Duggan stated that he had contacted staff to recommend two changes in the language of the resolution. Councilmember Krebsbach pointed out that she voted against supporting the determination at the December 16 meeting and will vote against an approval motion this evening. Councilmember Duggan moved adoption of Resolution No. 04 -04, "A RESOLUTION MAKING THE DETERMINATION THAT THE PROPOSED "WELLNESS CENTER" FOR 2520 PILOT KNOB ROAD IS A PERMITTED USE WITHIN THE "I" ZONE," as revised. Councilmember Vitelli seconded the motion. Ayes: 4 Nays: 1 Krebsbach FEE REVISIONS Council acknowledged a memo and proposed ordinance amendment and resolution from the City Clerk recommending revisions to the fees the city charges for building, development and routing fees. Councilmember Vitelli stated that the proposal is not a program of increasing fees to cover costs, but rather that the fees are very much in line with what other cities charge and most of the increases are minor. While the increase in permit fees is more significant, he pointed out that the city has not increased building permit fees since 1979. Councilmember Vitelli moved adoption of Ordinance No. 388, "AN ORDINANCE ESTABLISHING FEES AND ESCROW ACCOUNT REQUIREMENTS," and Resolution No. 04 -05, "A RESOLUTION REVISING SCHEDULE OF FEES FOR ADMINISTRATIVE, ENGINEERING AND POLICE SERVICES." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 ACTING MAYOR Mayor Huber stated that several actions are required of Council at its organizational meeting each year. One of those actions is to appoint a Councilmember to serve as Acting Mayor in any absences of the Mayor during the year. He recommended that Councilmember Schneeman be appointed as Acting Mayor for 2004 and expressed appreciation to Councilmember Krebsbach for her service as Acting Mayor in 2003. Page No. 4 January 6, 2004 Councilmember Krebsbach moved that Councilmember Schneeman be appointed as Acting Mayor for 2004. Councilmember Vitelli seconded the motion. Ayes: 5 Nays: 0 OFFICIAL NEWSPAPER Council acknowledged a memo from the City Clerk regarding appointment of an official city newspaper for 2004. Councilmember Krebsbach stated that both the South -West Review and the Sun Current have done an excellent job of providing coverage of the city. Councilmember Vitelli moved that the South -West Review be appointed as the official city newspaper for 2004. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 NPDES ANNUAL MEETING Council acknowledged a memo from Engineer Mogan regarding this evening's required annual meeting for the NPDES Phase II storm water permit for municipal separate storm sewer system (MS4). Engineer Mogan stated that in May, 2003 the MPCA issued the city a Phase II NPDES permit to issue storm water runoff permits. The MPCA permit requires that the city hold an annual public meeting. Engineer Mogan reviewed the legislation regarding storm water protection throughout the United States and stated that the NPDES program regulates storm sewer systems. The city has adopted 48 BMPs (Best Management Practices) to address the storm water pollution prevention ( SWPPP) program and the city is in compliance with its permit. The NPDES permit runs for five years and the city is in the first year of it. He reviewed what must be done under the program, including holding the annual meeting this evening. He stated that the S WPPP is available for anyone who wishes to review it, and there is also information on the MPCA website. He then responded to Council questions. Mayor Huber stated that this is starting to get after the next layer of the pollution that gets into streams and rivers. He asked if the SWPPP needs to be reviewed by the MPCA. Engineer Mogan responded that when the PCA approved the NPDES permit, the Center for Environmental Advocacy challenged it and the MPCA must sign off on every SWPPP. The city submitted its C Page No. 5 January 6, 2004 SWPPP in May, 2003, and was in compliance with the permit program. As the result of the lawsuit and the ruling, the PCA must schedule a public hearing on each individual SWPPP. Councilmember Duggan suggested that there be an article in the next issue of the city newsletter that addresses things that should not be dumped into the water and gives some advice to the residents. Mayor Huber asked what the plan is to educate the city's residents. Engineer Mogan responded that he wants to get information out to the residents about the program and what best practices are. He invited anyone interested to submit comments and questions to him. BUSINESS SUBSIDY HEARING/ Mayor Huber opened the meeting for the purpose of a public hearing TOWN CENTER on the proposed business subsidy for Town Center. Council acknowledged a memo from Administrator Danielson, along with a proposed resolution to amend the business subsidies criteria, a proposed business subsidy agreement, a proposed escrow agreement, and a proposed amendment to the contract for private development for Town Center. Mr. Ross Feffercom, from Mendota Heights Town Center, LLC (the developer) was present for the discussion. Administrator Danielson stated that staff hopes to close on the first lot sales to the developer tomorrow. He will be purchasing the three lots for townhouse development and will begin construction on the townhouses as son as weather permits. He will also be purchasing Lot 1, Block 1 of the commercial area for construction of the new bank. Construction on the bank will begin in April. He stated that he and City Attorney Schleck have been reviewing all of the items that need to be taken care of before the closing tomorrow. Because the city is subsidizing the development to a certain extent, a business subsidy hearing must be conducted and an escrow account must be set up with the title company. From that account the city will draw funds to assist in the cost of structured parking. Attorney Schleck stated that, with respect to the business subsidy, staff is asking Council to adopt amended business subsidy criteria. The city adopted business subsidy criteria in 1999 and the proposed resolution will adopt those criteria. The resolution is required pursuant to state statutes and provides the criteria under which the city provides subsidies to developers and the criteria for jobs and the criteria on how business subsidies will be provided.. The escrow agreement is an agreement with a title company (that will hold all the money) so that company knows how to hold the money, when to Page No. 6 January 6, 2004 hold it, who gets paid and when, etc. The issues are all identified in the development contract. With respect to the contract for private development, he stated that there are some revisions proposed that affect both the developer and the city. He then gave Council a detailed review on the amendment to the contract for private development. Councilmember Krebsbach asked who decides what "best efforts" is (Paragraph 4 of the amendment) and she also asked about Paragraph 6 with respect to maintenance of the outlots. Attorney Schleck responded that the city will. The city owns the land and has a level of control. With respect to maintenance, he stated that the commercial condominium association will be responsible for the maintenance of Outlot F. The associations have also been given the option, in the amendment, to maintain the other outlots so long as the unit owners agree to maintain the outlots to a standard and a manner reasonable acceptable to the city. Councilmember Vitelli stated that with respect to the Metropolitan Council Grant (Section 18), a plan should be formulated to make sure that the city does not need to request an extension of the grant agreement. The Metropolitan Council has changed, and some voices on the Metropolitan Council have emerged to the point of putting .. extensions at risk. The city and the developer had better start working on a plan so that an extension request never has to happen. He stated that he believes the city is at risk of not getting an extension from the Metropolitan Council. He also stated that he is bothered by Paragraph 14 also. He asked if the 2% buyer escrow is the historical figure that is needed. If the answer is yes, it should not be encumbered, and if the answer is no, what should the escrow be. Councilmember Krebsbach asked what the subsidy is under the business subsidy agreement. Attorney Schleck responded that the subsidy is $3.1 million, subject to the subsidy leveling. Councilmember Duggan stated that he totaled it to $3.204,345, using Exhibit J, and suggested that it should be revised to say approximately $3.2 million. Attorney Schleck agreed, and stated that he will make the correction. Page No. 7 January 6, 2004 Councilmember Duggan asked about the five year commitment in the subsidy agreement. His question was whether the five year lease with the Gateway Bank begins with the temporary structure or when the bank building is completed. As he reads the agreement, the lease is to start when the tenant first occupies a structure. Mr. Feffercorn responded that the bank will have employees in the temporary facility, and it could be what first constitutes having an employee on site. Responding to a question from Councilmember Krebsbach, Attorney Schleck stated that the business subsidy will be used for the parking structures, and whatever is left of the grant would be used to cover the city costs for green space, etc. Mr. Feffercorn stated that his legal counsel and Attorney Schleck have worked closely on the document and Attorney Schleck has represented the city very well. He stated that he and his legal counsel are present to answer any questions regarding the amendment or the subsidy agreement. Mayor Huber stated that there are several questions about Paragraph 14 of the Amendment to the Contract for Private Development. Mr. Feffercorn responded that he originally proposed in the January, 2002 document that a 2% contingency reserve be included. The industry standard can range from .25% to 2 %. He stated that he wants to be sure he has an adequate self - insurance reserve. In his career, he has seen anywhere from .5% to 1.5% as a reserve needed to take care of warranty issues. It is very important to have adequate self-insurance. He stated that he can come back to the city in the future and release that, once he has achieved a reasonable profit. The reserve would be released 50150 to him and the city. He stated that he just wants to be sure there are no contingencies he has to take care of and that he will work to release the reserve earlier. Councilmember Vitelli asked who has responsibility for problems that arise for which this fund is in reserve. Mr. Feffercorn responded that he will be responsible. He stated, as an example, that he has all 75 units built and there is a liability such as mold. He does not try to point fingers, and instead fixes the problems. He stated that he takes care of the homeowners and does not point fingers at subcontractors. Page No. 8 January 6, 2004 Councilmember Krebsbach stated that the paragraph gives Mr. Feffercorn access to 50% of the buyer escrow funds as security for any redevelopment loan. Mr. Feffercorn stated that it is specific to this project only. If one looks at the market value of the houses, the 2% could push $750,000. When he is half way through the development, there could be $350,000 in that fund and he could pledge that towards development costs for this development. Councilmember Krebsbach stated that there should be an identified minimum amount for the fund. Attorney Schleck suggested simply stating that it would be 1% (rather than 2 %) of the purchase price and it would be unencumbered. That way I% is always in the fund. Mr. Feffercorn agreed. He stated that he intends to close on the first phase of the townhouse lots and the bank site tomorrow. Under Paragraph 12 of the Amendment, the next date is May, 2004 for the first loft condominium. April of 2005 is the date for the first commercial building. He stated that he is negotiating with a restaurant tenant that would need Lots 1 and 2, Block 7, and that may be well under construction this summer. He is also negotiating with a restaurant tenant that would take significant space in the commercial building on Lot 3, Block 6. that would be a perfect space where he could build the structured parking and not build the shell structure on top of it. That could easily be done next year. He stated that he is thinking of how he could use the business subsidy funds, given the sunset provision on the grant. Councilmember Vitelli stated that fact that the city has not drawn on the initial grant funds has drawn attention from the Metropolitan Council. Mr. Feffercorn responded that when he sat on the Metropolitan Council grant committee, there were a number of projects that received grants and have not been able to use the money yet. Councilmember Vitelli stated that he is pleased with the proposal as put together with the change to Paragraph 14. Mayor Huber asked for questions and comments from the audience. C, Page No. 9 January 6, 2004 There being no questions or comments, Councilmember Schneeman moved that the hearing be closed. Ayes: 5 Councilmember Vitelli seconded the motion. Nays: 0 Mr. Feffercorn informed Council that he met with his landscape architect, Damon Farber, this afternoon and Damon informed him that the Mendakota Country Club had contacted him with their interest in adding landscaping at their corner. At the same time, he discussed with Mr. Farber how the $400,000 could be best spent on a landscaping plan. Damon Farber is going through the plan and feels there should be a fountain feature in the water feature at Dodd and T.H. 110. He stated that he does not think that the bank should be looked at as the entry feature. Prior to March 1, he will have some plans for Council to look at, preferably at a workshop. Also, the original plan did not discuss much signage for Outlot F, and he is recommending some addition. He stated that he wants to be respectful of the residential associations so that they do not bear too much of the maintenance costs. A commercial landlord passes on those costs to the tenants, so he wants to be respectful not to overburden people with rental costs. Councilmember Vitelli moved adoption of Resolution No. 04 -06, "A property to the redeveloper pursuant to the terms of the contract for private redevelopment and to empower city staff to execute miscellaneous documents at the land sale closing for the sale of Lots 1 -3, Block 5 and Lot 1, Block 1, Mendota Heights Town Center to Mendota Heights Town Center, LLC. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 RESOLUTION AMENDING THE BUSINESS SUBSIDIES CRITERIA PURSUANT TO MINNESOTA STATUTE 116J.994." Ayes: 5 Councilmember Schneeman seconded the motion. Nays: 0 Councilmember Vitelli moved approval of the Escrow Agreement between the city and Mendota Heights Town Center, LLC. Ayes: 5 Councilmember Krebsbach seconded the motion. Nays: 0 Councilmember Vitelli moved approval of the Amendment to Contract for Private Development between the city and Mendota Heights Town Center, LLC, as amended to reduce the Buyer Escrow to 1%. Ayes: 5 Councilmember Schneeman seconded the motion. Nays: 0 Councilmember Vitelli moved to authorize the sale of the subject property to the redeveloper pursuant to the terms of the contract for private redevelopment and to empower city staff to execute miscellaneous documents at the land sale closing for the sale of Lots 1 -3, Block 5 and Lot 1, Block 1, Mendota Heights Town Center to Mendota Heights Town Center, LLC. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 Page No. 10 January 6, 2004 GOAL SETTING Council acknowledged a memo from Administrator Danielson regarding scheduling a goal setting/teambuilding session. Councilmember Vitelli stated that Council works well as a team and he feels that Council should save the time and not hold a session. Councilmember Krebsbach stated that she thinks it is good to hold goal setting sessions. Councilmember Schneeman agreed with Councilmember Vitelli, stating that she is not thrilled with having a goal setting session. If Council feels one should be conducted, she would like to have it held early in the morning rather than in the evening. Councilmember Duggan agreed. Councilmember Krebsbach recommended that Council conduct a goal setting session on a week day from 8:00 to 10:00 a.m. COUNCIL COMMENTS Councilmember Krebsbach again expressed concern over the timing of the signal light at T.H. 110 and T.H. 13. Administrator Danielson stated that the police chief has been working on the issue and staff hopes to have a response at the next meeting. CLOSED SESSION Council acknowledged a memo from Administrator Danielson recommending that Council adjourn the meeting to closed session for discussion on the Par 3 litigation with legal counsel. ADJOURN There being no further business to come before Council, Councilmember Schneeman moved that the meeting be adjourned to closed session for discussion on the Par 3 litigation. Councilmember Vitelli seconded the motion. Ayes: 5 Nays: 0 11 • ��• I 1 •�1. so City Clerk IT,r,V &_ ,M:isW,jvl