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2003-04-01 City Council minutesPage No. 1 April 1, 2003 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, April 1, 2003 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 AGENDA ADOPTION j Ayes:5 Nays: 0 Ayes: 5 Nays: 0 The City Council, audience and staff recited the Pledge of Allegiance. Councilmember Duggan moved adoption of the revised agenda for the meeting, revised to move item 7f, authorization to televise sewer main, to 8c. Councilmember Vitelli seconded the motion. After considerable discussion on what should be included within meeting minutes, Councilmember Duggan moved approval of the amended minutes of the regular meeting held on March 18, 2003. Councilmember Vitelli seconded the motion. CONSENT CALENDAR Councilmember Vitelli moved approval of the consent calendar for the meeting, revised to move item 6f, sewer line televising, to the regular agenda, along with authorization for execution of any necessary documents contained therein. a. Acknowledgment of the minutes of the March 12, 2003 Airport Relations Commission meeting. b. Acknowledgment of the minutes of the March 25, 2003 Planning Commission meeting. c. Acknowledgment of the Fire Department monthly report for February. Page No. 2 April 1, 2003 d. Acknowledgment of the Building Activity Report for March. e. Approval of the plans for the Mendota Heights Road lift station replacement along with authorization to advertise for bids. f. Authorization for the Fire Department to apply for a 2003 FEMA Grant for replacement of a breathing air compressor and SCBA upgrades. g. Approval of the appointment of Michael Aschenbrener as Police Chief, effective May 12, 2003. h. Adoption of Ordinance No. 377, "AN ORDINANCE AMENDING ORDINANCE NO. 504." (Fire Suppression Ordinance) i. Adoption of Ordinance No. 378, "AN ORDINANCE AMENDING ORDINANCE NO. 603," with respect to licensing and regulating solicitors and wagon vendors. j. Approval of the list of contractor licenses dated April 1, 2003. k. Approval of the List of Claims dated April 1, 2003 and totaling $75,010.76. Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 HEARING — STREET Mayor Huber opened the meeting for the purpose of a continued VACATION hearing on an application from Mr. Tim Kolberg for the vacation of a portion of the Summerset Boulevard right -of -way. Council acknowledged a memo from Public Works Director Danielson and a letter from Ms. Marjorie Minea, 772 Ridge Place in objection to the requested vacation. Mr. Kolberg showed photos of the homes in the neighborhood, stating that one of the concerns at the last meeting was how a new house would fit into this older neighborhood and what was the idea behind it. Vacating the right -of -way would be a trade for an easement o his land. There is a manhole on his property and the easement would allow the city to get to it without crossing the street. He felt that the strip of right -of -way is of no good use to the city. At the last meeting it was noted by one Councilmember that the city Page No. 3 April 1, 2003 does not vacate land. He stated that he should have been told that before spending the money to pursue the vacation. Another concern was the view of the neighbors. He stated that there is a very nice view now and he bought the property because it is a nice lot. He bought the house because he wanted the lot. Subdividing the lot is not his first choice, but life has thrown him a curve. Other people seeing the view go does not compare to his seeing the lot go. He described each of the homes in the neighborhood and stated that there is a great variety of styles. The new lot would still be % of an acre and his lot would be 38,000 square feet. Councilmember Krebsbach asked how much square footage there is without the vacation area. Mr. Kolberg responded that he has 192 feet of frontage and the property is 289 feet deep at an angle. He needs 200 feet of frontage to divide the property. Councilmember Krebsbach stated that if the city were to vacate the street, Mr. Kolberg could create a buildable lot. She asked whether Mr. Kolberg or the city initiated the vacation proceedings. Mr. Kolberg responded that he approached the city. When he bought the house he was nervous about having a road come through so he talked to city staff and was told that the right -of -way is a liability. Councilmember Krebsbach asked if Mr. Kolberg talked about the street being vacated before he bought the property. Mr. Kolberg responded that he had not. A house came up for sale in Mendota Heights and he wanted to live here. The property is actually larger than he thought it was when he bought it. With respect to density, he stated that there will be 135 apartments and condominiums going across Dodd Road. That is very dense, and he cannot see why 100 feet away from that dividing a lot would be too dense. He stated that he respects the idea that people are concerned they are not going to have the yard to look at, but they have the option to buy the new lot. Right now he is paying taxes on the view. Councilmember Krebsbach pointed out that there can only be a new lot if the right -of -way is vacated. She asked if Mr. Kolberg is saying that Council should approve the vacation and his neighbors should buy the lot. She stated that she is not in favor of vacating the right - of -way. Page No. 4 April 1, 2003 Mayor Huber asked for questions and comments from the audience. Mr. Tim Minea, 772 Ridge Place was present on behalf of his mother who lives next door to Mr. Kolberg. He asked if it is the position of the city that only a total vacation would be acceptable. He stated that he understood there was discussion at the last meeting about partial vacation. Mayor Huber asked whether Mr. Mina's interest would be in partial vacation in order to keep as much of a buffer as possible between his mother's house and a new house. Mr. Minea responded that Mr. Kolberg had requested vacation of half of the right -of -way and now it is no longer the plan to only vacate half. Councilmember Vitelli stated that Mr. Kolberg's request is for his half of the street. Public Works Director Danielson stated that at the last meeting staff suggested vacating the entire right -of -way. Then Mrs. Minea would get 30 feet of the right -of -way and the city would maintain a 10 foot easement. Mr. Minea stated that he thought he heard that if the 30 feet of Summerset was maintained any home would have to be set back 30 feet from the right -of -way. He thought Mr. Kolberg desired to vacate the entire right -of -way so that a future home could be set back ten feet from the property line or easement. Responding to a question from Councilmember Vitelli, Mr. Danielson stated that if only half the right -of -way is vacated, a new house would have to be set back 30 feet from the remaining right -of- way. Mr. Minea stated that a 30 foot setback would really limit what a buyer could do with the lot. Apparently the city does not require the consent of the adjoining property owner. He stated that he understood that the city takes the views of the other property owners into consideration. He asked if the land is vacated if the property becomes part of the adjoining property and if the property owner then has to pay tax on the vacated area. Page No. 5 April 1, 2003 Councilmember Duggan responded that it would become part of the adjoining properties. Mr. Minea could request information from the County on what the value and tax impact would be. Attorney Schleck stated that when one talks about vacating right -of- way, the idea is that at some point it was not a right -of -way and it was owned by the owners of the properties on each side of it. The city would really just be returning the land to the property owners. Theoretically, they still own it. A vacation just reestablishes the original lot lines. If the city were to only vacate half of the street, the remaining portion would not be suitable right -of -way for the city to construct a street in the future. It is staff's recommendation that the entire right -of -way should be vacated. Mr. Minea informed Council that he spoke to Councilmember Duggan and he was responding to his mother's letter that she was sorry to see her sideyard lost. She does not favor the vacation. She has no desire to engineer a home for a potential buyer. Many of the homes in the area were built in the 1950's for moderate money and someone who buys this lot would probably build a $300,.000 home on it. His mother's objection is that she does not want to see a home there. Councilmember Duggan stated that his discussion with Mr. Minea was that he would want it to be a condition of granting this that only a rambler style home or one and one -half story home could be built, if the city can make that condition. The second part is the possibility of a park contribution at the time of sale. There should also be a condition that there would be no variances granted for this site. He stated that he spoke to Mrs. Wilke, and she felt a rambler style home would be acceptable. Mr. Minea stated that his father bought some lots to the south of his property. One of those lots appears to adjoin the right -of -way. He asked how their ownership of that little panhandle affects the right - of -way. Public Works Director Danielson responded that there is no proposal to vacate the horizontal portion of the right -of -way because that is where the creek runs through. Attorney Schleck recommended that it may not be appropriate to restrict the style of a new home in any resolution that is adopted. The city can certainly require that the building plans come through Ayes: 5 Nays: 0 Page No. 6 April 1, 2003 Council, and that is how he would like to suggest that a resolution be phrased. Ms. Maureen Wilke, 781 Ridge Place, stated that she really is not in favor of the vacation but if it comes to the point that something is going to be done and she can do nothing about it, she would like to see a house similar to the neighborhood. Her concerns also is that if the property gets divided, other people in the neighborhood will come in and want to subdivide. There being no further questions or comments, Councilmember Duggan moved to close the hearing. Councilmember Krebsbach seconded the motion. Councilmember Schneeman asked Mr. Kolberg if he plans to sell his house if the right -of -way is vacated. Mr. Kolberg responded that he cannot answer that question at this point because it is a nebulous time in his life right now. He may have a job three months from now and he may not. His wife already lost her job. Councilmember Duggan asked if the conditions he mentioned, park dedication fee of 10% of the land value, and no future variances are acceptable. He stated that Mr. Kolberg stands to gain by the vacation and a park dedication is required for subdivisions. The normal fee is $1,500 for each new lot and there is also the possibility of 10% of the value. Councilmember Krebsbach stated that she does not think the city should vacate its right -of -way for the purpose of giving a resident the ability to create a buildable lot. There are other unused rights -of -way in the city and a considerable number of large lots. She does not support vacation of streets. Councilmember Vitelli stated that he finds this a very difficult decision. The unfortunate thing is that Mr. Kolberg has a large piece of land and someday a house will probably be built there. The land possible should be used, but Council needs to listen to the neighbors' concerns. When there is neighborhood support, he could approve a vacation. Councilmember Krebsbach moved to deny the request for vacation of a portion of the Sum.merset Road right -of -way. Page No. 7 April 1, 2003 Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 FREEWAY ROAD WATER Mayor Huber opened the meeting for the purpose of a public hearing ST. PAUL WATER UTILITY on entering into a Memorandum of Understanding with St. Paul MEMO OF UNDERSTANDING Regional Water Services (SPRWS) whereby the city's water facilities would be turned over to the SPRWS in exchange for SPRWS maintenance and upgrades to the water system and removal of the SPRWS 20% surcharge on Mendota Heights water billings. Council acknowledged memos from Public Works Director Danielson and Administrator Lindberg. Mr. Bernie Bullert, SPRWS General Manager, was present for the discussion. Council acknowledged a letter from Mr. James Losleben, 815 Hazel Court. Council also acknowledged the annual fmancial report for the SPRWS for 2001 and information from Moody's Investors Service regarding the methodology for rating bonds. Public Works Director Danielson stated that SPRWS has offered to Mendota Heights to remove the 20% surcharge to customers and to maintain and construct further capital improvements to the water system in exchange for the city turning over the water system to them. There are over 77 miles of main in the city's system. It is an aging system and will require maintenance and repair in the future. If the system is turned over to St. Paul, they will do the maintenance and replacement at their cost. Mendota Heights residents currently pay a 20% surcharge on their water bills, and that will be removed. The city water tower is also aging and needs maintenance. If the system is turned over to St. Paul, they will maintain and replace it. Water towers have a life of between 100 and 120 years, and the city's water tower is 24 years old. Councihnember Duggan stated that he understands that if the agreement were to be approved, when the tower needs repainting in seven or so years, there is a split charge, but if there are contaminants, the city will have to pay for their removal. Mayor Huber stated that at the last painting, the city started to take the contaminants off but was stopped about one -third of the way through. In the next painting, to the extent that it is removed, the city would be 100% responsible for those costs and St. Paul would pay half the cost of repainting. Responding to a question, Public Works Director Danielson stated that there are four other cities who have entered into an agreement Page No. 8 April 1, 2003 with St. Paul: Maplewood, Lauderdale, Falcon Heights and West St. Paul. Staff has contacted the administrators from each of those cities as well as some of the mayors. All of them think it is a good idea. One of the questions that came up at the last discussion is what would happen to the city bond rating if system ownership was transferred to SPRWS. The representatives of all four of those cities was asked what happened to their bond ratings and none of them had any reduction in bond rating. Councilmember Krebsbach stated that in the statement that lead into the bond rating information there was no definitive statement that the bond raters did not consider the water system as an asset. Mayor Huber responded that the review of the bond rating process was not saying they don't consider it, just that they did not bring it up in the review. Responding to a question from Councilmember Krebsbach, Finance Director Schabacker stated that the city is required to implement GASB 34 next year and that will require the city to record its infrastructure on its financial statement. The city currently has buildings, land and equipment on the books but not the watermains. Councilmember Krebsbach stated that in a year the water system will be on the books and that is at least an $8 million asset. Ms. Schabacker responded that the depreciated value of the infrastructure would be on the books. Councilmember Krebsbach stated that Public Works Director Danielson's report indicated that the oldest cast iron mains were installed in 1963 and the newest in 1971, so they are 30 to 40 years old and there is a 100 year life on the cast iron. The majority of the pipe is the ductile pipe, and those were installed from 1972 on. Cast iron has a 100 year life and ductile has a 200 year life, so the aging system isn't really that old. At a minimum the system has a life of 60 more years and 44 miles of the 77 miles has a life of almost 200 years. Councilmember Duggan stated that in Finance Director Schabacker's report she estimated 100 years as the life of the system. SPRWS uses 70 years in their agreement with the city in 1999. The city began constructing the water system in 1962, so at most it is only 40 years old and there is a minimum of 30 years of life left technically, or on a depreciated level 60 years. He has heard some people say Page No. 9 April 1, 2003 that the life is 150 years. He noted that the aqueducts in Rome are still working 2000 years later. He felt that the city should be careful about using the term "aging system." Public Works Director Danielson stated that there are cellular antennas on the tower, and the city receives revenue from them. Responding to a question from Councilmember Duggan, Administrator Lindberg stated that the best current deal is West St. Paul, which receives all of its antenna revenue during the phase in period and then will receive half of the annual revenue. Public Works Director Danielson stated that the city receives $67,000 per year in cell revenue and that would mean that after the six year phase in period, Mendota Heights and SPRWS would split that revenue 50150. Another question that was raised was whether SPRWS could change its rates once the agreement is signed. They can raise the rates, but Mendota Heights would be a member of the St. Paul "club ", so whatever St. Paul charges its residents and the other cities that are part of the agreement it would charge Mendota Heights residents. On a nationwide basis, St. Paul's rates compare favorably to the rates charged by other water utilities. Councilmember Duggan stated that at best Mendota Heights will at best have one representative on the Board and would have minimal control over rates. St. Paul City Council makes the final decision on the recommendation of the Water Board and Mendota Heights residents do not vote for St. Paul Council members. He was skeptical about a single vote. Public Works Director responded that Mendota Heights has no representation right now. The next question was what the system is worth and if that value could be used for mortgage revenue bonds. He estimated the value of the system at $5 million. The tank cost about $3 million. If the city had to replace all the pipe, ductile iron would be used and it would be much more expensive to retrofit. The replacement cost would be about $20.8 million. The water tower is insured at $2.2 million and the hydrants are estimated at $2.6 million. The value of the appurtenances was included in the cost of main replacement. Councilmember Duggan stated that he calculates about $6 million in depreciation as an asset and $26 million for replacement of the water system. This is definitely a substantial asset to the city. Page No. 10 April 1, 2003 Mr. Danielson stated that mortgage revenue bonds are not issued in Minnesota. When bonds are issued, they exclude the value of assets held. Another question that was raised was what if the city wants to get out of the agreement. If the city signs the agreement and wants to withdraw, it can do so by paying St. Paul $1 plus the depreciated cost for any capital improvements. Responding to a question from Councilmember Duggan, he stated that if the agreement is signed and St. Paul replaces the Freeway Road watermain, Mendota Heights would not have to account for that capitol improvement because it is in the phase in period. Mr. Danielson stated that financial. impact to the city was another question that has been raised. At the year 2009, when the phase -in ends and the 20% surcharge has been eliminated, Mendota Heights customers will save an estimated $226,000. On the other hand, the city will lose $34,000 a year in cellular antenna rental. The net savings to the city, city -wide is $192,000. The average savings for residents is $32 per year. The system has a life and at some point it will have to be replaced. He estimated that, based on a 120 year life for cast iron and 200 years for ductile, the city should be setting aside $72,500 each year to fund the estimated $20.8 future replacement cost for cast iron and $60,500 per year to replace the ductile. If St. Paul Water replaces the pipe, it would be replaced at no cost to Mendota Heights. Mayor Huber stated that would be on a normalized basis. The city replaced some of the Friendly Hills watermain a few years ago and Freeway road needs to be replaced this year. The city will continue to have to replace mains. There will be ups and downs, and $133,000 per year is the kind of money that the city will need to save on a normalized basis in terms of long term future funding. Councilmember Vitelli stated that he was in business for many years and if he were still in business and saw those figures, he would be putting aside $133,000 each year to cover the accrual. The city should be raising an additional $133,000 each year. Mayor Huber responded that the reason this is being discussed is that Council must think through long term funding needs for maintaining and replacing the water system as it ages. Councilmember Krebsbach stated that it is not unlike financing a fire truck — the city plans for that. The city has an infrastructure fund of $200,000 and a water fund of $139,000 and gets $67,000 each year from antenna rental. The city could start to put that $67,000 away Page No. 11 April 1, 2003 each year for the water system. This is a young water system, and the city should begin to accrue savings for replacement when it is 50 years old. Councilmember Vitelli stated that according to the information presented, the residents of Mendota Heights will save about $203,000 each year. Mayor Huber stated that it depends on how the city chooses to fund replacement and maintenance. What Council must think about is how to fund replacement. Will it be funded on a house -house basis? Freeway Road should be done now, and perhaps replacement of lines could be approached in the same manner as street reconstruction, where the half of the cost is assessed against the property owners and the other half is paid for by the entire city. The MOU offers one approach on how to deal with the long term financing issue. Councilmember Duggan stated that the break frequency factor is determined by the number of breaks that happen in a fixed 600 feet of pipe over a ten year period. This issue came up because the Freeway Road residents had some breaks. One of those streets had a .6 BFF and the other was a BFF of 1.2. That is well below the threshold for replacement. He asked whether ductile breaks. Public Works Director Danielson responded that it can. He stated that he has a map of the show that shows where breaks have occurred, and it is crystal clear where the ductile is. Councilmember Duggan stated that St. Paul keeps track of what causes the breaks. One of his concerns is the $226,000 per year that is paid to St. Paul on top of the water charges. St. Paul residents get repairs and replacement for their water charge, but Mendota Heights only gets repairs for the $226,000 surcharge. He stated that the under the terms of the existing agreement, the city can negotiate a new agreement and should negotiate a change in the agreement to keep the 20% surcharge. After 15 years of continuously working with St. Paul, the city can look at getting water at a wholesale rate rather than the retail rate under the existing contract. He understands that breaks usually happen at joints, whether it is a new pipe or an old pipe, because of frost, etc. there can be a break in any pipe. There isn't a meeting of the BFF standard in the Freeway Road neighborhood, although there is a BFF for Callahan and Marie that is greater than North/South Freeway Road. Page No. 12 April 1, 2003 Public Works Director Danielson stated that replacing watermain is very expensive. It would be much less expensive when streets are being reconstructed. Mayor Huber asked for questions and comments from the audience. Mr. Greg Hudala, 952 Stratford Road, stated that he heard about this transfer and was flabbergasted. He asked if it is really the best agreement the city can get. St. Paul only gives Mendota Heights half of the painting of the water tower. When Mr. Danielson talked about the other cities transferring their systems, what does Mendota Heights know about their circumstances. Did they have water a water department and staff they could cut. What was the age of their system and why was transferring their systems to St. Paul to their benefit. Has Mendota Heights pursued transferring its system to other communities, like Eagan or Inver Grove Heights. St. Paul is not looking out for Mendota Heights' best interest. Why would they want our system if it wasn't a good deal for them. If it was going to cost Mendota Heights so much to replace the system, how will St. Paul replace it. They would not be against putting a surcharge on Mendota Heights bills when they replace it. A five year phase in from the relief of the 20% surcharge is unacceptable. Mendota Heights should immediately receive the full relief. The cost savings projections do not show what it is costing Mendota Heights over the five year phase in. His calculation is that it will cost Mendota Heights $666,000 just to replace the Freeway Road watermain. What assurance is there from St. Paul that it will not sell the water system. St. Paul can have creative accounting when they sell the system back to the city. He asked why the city isn't approaching private industry to provide water. Perhaps Dakota County would establish a regional water system. He asked if Council has pursued talking to neighboring cities to pursue a regional water system. Eagan provides water for its residents. He asked whether amortization is based on what something can be sold for or replaced. The water system will not depreciate to the point it does not have sale value. Mendota Heights has no control over St. Paul. Mendota Heights residents care where they live and elect their Council members and have a say on issues. If the water system is transferred to St. Paul, the residents lose that say. He asked what St. Paul has spent on maintenance and repairs over the past five years and what the city is getting for the 20% surcharge. What will come in the future for telecommunications. Will there be an escalation in the cellular rental clause? That is a good deal for St. Paul, and if it wasn't a good deal, St. Paul would not send an employee here over time to come and talk to the city. Removal of 100% of the Page No. 13 April 1, 2003 contaminates from the tower is not a good deal for the city. Also, the city owns the property the water tower stands on and that has value. Mr. Jim Losleben, 815 Hazel Court, stated that he served on Council for twelve years and has experience in the utility industry. When he was on Council, he went through one contract negotiation. He read in the paper that Council is considering selling an asset worth $20 million for $1. When he was on the Council, he learned a good lesson from former Mayor Don Huber when the water agreement was discussed. He said that the city would lose all of its rights to negotiate water rates, repairs on the system or sources of water if it does not own the water mains. As he understands the MOU, Mendota Heights will still have significant expenses beyond what St. Paul will spend. He was not worried about saving $31 a year on his water bill five years from now. He felt it is important that the water system assets be placed on the books. He stated that he makes his living in the utility business and sees millions of dollars being spent by cities building municipal systems or private enterprise buying municipal systems. He asked Council to please not give the system away. Mendota Heights would lose its negotiating ability for anything it wants from St. Paul Water. Mr. Art Werthauser, 1020 Sibley Memorial Highway, stated that he moved to Mendota Heights from St. Paul and thinks it is a wonderful community. He also worked for St. Paul for 34 years and is a retired bridge engineer. When some of the bridges were constructed, some of the watermains were disturbed. St. Paul has thousands of miles of water pipes that are at least 80 to 90 years old and they are not replacing them. Water pipes need minimum coverage of 8 feet. Every time he took off cover, and ran into an old main St. Paul wanted them to replace the mains. He asked if the pipes had a life and they said 2000 years. He suggested that Mendota Heights eliminate the surcharge. There are cities that buy water wholesale really cheap. He asked why the city doesn't get a contractor on retainer to have watermains fixed when there is a break. Mr. John Hartmann, 812 Deer Trail, stated that he also spent 12 years on the Council, from 1979 to 1990. Prior to that he was a member of the municipal facilities task force that actually determined where the water tower and public works garage would be built. He stated that he could not believe what he was reading when he saw the article about giving the water system to St. Paul. He could not believe Council wants to sell a facility worth millions for $1. He felt there are better ways of paying for repairs and that Council should at least wait until there is a value for the system next Page No. 14 April 1, 2003 year. He urged Council not to transfer the system and to look at alternatives, including wholesale water, doing our own maintenance, etc. and get information on what it would cost to maintain and operate the system and get water from another city. If the city owns the system, it needs a water source. There are many alternatives and he did not think this is a good option. Mr. Tom Norman, South Freeway Road, stated that there have been big discussions on this issue and talk about lots of millions of dollars. This system will cost the city money — he was told it would cost $250,000 to replace the watermain in his neighborhood. If there is not money now, when will there be money. As he can see, letting St. Paul do all this work and save money is a very good business deal. Mr. Dan Wills, South Freeway Road, stated that it seems as though a Pandora's box has been opened. It needs to be clear that he really doesn't care whether Mendota Heights joins with St. Paul Water or if the city keeps the system. It is a very big decision to turn it over to St. Paul. The reason his watermain replacement was considered before Callahan is because his road is going to be reconstructed. He would invite anyone to drive down South Freeway Road to see the patches St. Paul Water makes after it fixes watermains. He asked Council to consider the amount of money that must be paid to replace the road and then have someone come in and patch it. His concern is that he does not want a bunch of patches in a new street that he will be paying for. Many of the residents in his neighborhood are the original property owners from when the first road and utilities were put in. The first contractor who worked on the project went bankrupt and someone else came in to finish the project. That speaks to the quality of the original work. He asked St. Paul whether the Freeway Road watermain breaks meet the standards St. Paul has for replacement and was told that they did. Councilmember Duggan stated that the 61 homes Mr. Wills represents is 1 /70th of all of the homes in Mendota Heights. A public hearing to do something for 1 /70th of the homes is very important. He can only work with the information staff has provided. The BFF staff gave Council is that if there are two breaks in ten years in 600 feet of pipe you are at the threshold. One of the mains in the Freeway Road area is at .6 BFF and one is at 1.2. Some other locations in the city have higher numbers. That is why he raised the issue. He agrees that the main in South Freeway needs to be replaced, and Council's challenge is not to give it away but to find financing, like keeping the 20% surcharge and wholesale water. He Ayes: 5 Nays: 0 Page No. 15 April 1, 2003 stated that he wants to keep Mendota Heights as independent as possible. Once St. Paul controls this asset, Mendota Heights will have no say on the Board. Their Board makes the decisions and Mendota Heights may not even have one vote. He is not comfortable with that. There are other avenues to address this. For the city to sacrifice a major part of its total assets because of 1 /70th of the community is a concern. He is not sure there are other ways to take care of it, but stated that Mendota Heights should save its assets and give the Freeway Road residents what they want. Mr. Wills stated that he is not here to propose that the city join with St. Paul. His concern is that three of the Council members were on this Council in August and after he and his neighbors voiced their concerns in August, Council let the contract for the street improvement. Councilmember Krebsbach stated that Mendota Heights has never shied away from complex questions. Mr. Wills' concern is that his streets and watermain get fixed. Council must do the most prudent thing. Mr. Losleben stated that Mr. Wills makes a very good point. When streets are replaced, it is a good time to replace aging infrastructure, but the city shouldn't sell the water system because of it. He liked the comment about the patching by St. Paul. There being no further questions or comments, Councilmember Vitelli moved that the hearing be closed. Councilmember Schneeman seconded the motion. Councilmember Krebsbach recommended that Council thank St. Paul for offering the MOU but decline at this time and put effort into how to fund watermain replacement, beginning with Freeway Road, and what combination of resources there are to bring that about. Council should look at several different funding alternatives, including using the street reconstruction formula where the city would fund half the cost. The 20% surcharge is a pool of resources at $225,000 per year. Councilmember Vitelli stated that while some of his colleagues view this as a glass half empty, he tends to look at this situation as a glass that is half full. There has not been much discussion about the immediate and long term benefits to the residents. A number of $20 million thrown out, but that certainly not the value of this asset. Page No. 16 April 1, 2003 There has but not enough discussion about the immediate and long term benefits the residents would see. It is time for Council to stand up and make a decision that benefits Mendota Heights. He was also ` bothered by the mistrust towards St. Paul. They provide a good water system and water at a competitive rate. They fix the problems with Mendota Heights system. He cannot believe SPRS and its staff are cowboys waiting to ambush Mendota Heights at the pass. They have been very good suppliers of water. He is more apt to trust someone as long as they have been providing a good service. He fully supports the concept of entering into an agreement with St. Paul in which Mendota Heights would transfer its water system assets to that body in exchange for the following. That St. Paul accept fully the fiscal and operational maintenance responsibility for the full Mendota Heights water system. The asset value is really about $5 million. Every resident in Mendota Heights will see the elimination of 20% of their water bill. He felt this is a tremendous financial opportunity for Mendota Heights. The financial benefit to the residents is impressive both in the reduced cost for water and the future cost of maintaining the water system water tower, fire hydrants, etc. With respect to the asset transfer, Mendota Heights would simply transfer a $5 million asset, the water system infrastructure, to St. Paul. The city's bond rating would not be affected. The bond ratings of the other communities has not changed. The asset has not been carried as an asset on the city's balance sheet, which further argues no change in the bond rating. The asset is also a liability. The city must maintain the $5 million asset. It's like owning a house and a car — they depreciate, need maintenance, wear out and must sometimes be replaced. The liabilities are not being adequately accrued on the city books. Councilmember Vitelli stated that Council has not made a plan to finance watermain replacement. If this Council decides not to enter into this agreement, it better have a workshop to determine how to start to build funds for maintenance and replacement. Council is not adequately preparing this city for maintenance of the water system in the coming years. The only way to do that is to raise taxes. He stated that a 20% surcharge has been added to all water bills for the past 20 years. Last year he paid $385 for water and will save $77 a year in surcharge. If a lot of people saw their taxes go up $100 a year for Mendota Heights there would be some complaining. The 20% elimination should not be minimized. He listed the savings that several of the city's institutional and commercial users would save. On average, Mendota Heights tax payers will save a quarter of million dollars each year just by eliminating the surcharge. With respect to the water tower maintenance, he stated that the tower Page No. 17 April 1, 2003 needs to be painted every 15 years and the city should be saving $40,000 a year to repaint the water tower. Under the agreement, St. Paul would pay 50% of the cost of the painting that is due in about seven years. If the city does not enter into the MOU, the full $600,000 cost would be the responsibility of the city. Under the MOU, St. Paul would pay the full cost for painting. If the city does not enter into the agreement, Council better start accruing the cost of painting and that would result in an immediate increase in taxes. Councilmember Vitelli stated that Town Center/Freeway Road issue illustrates the long term tax avoidance and assessment avoidance for the residents of the city. The question is whether the watermain in Freeway Road next to Town Center should be replaced. The cost for replacement is $250,000, and the watermain should be replaced. The city has not accrued, nor is it accruing, the funds to pay for those improvements. Should those residents pay $3,500 per residence for watermain replacement. If the city as a whole pays for it, Council will have to raise taxes. If the city enters into the MOU, St. Paul will pay for the upgrade. This scenario will occur again and again in the future as the city needs to replace cast iron pipe. Forty-three percent of the pipe in the city is case iron and will need to be replaced. There is currently no way to pay for that. There have been comments made about no free lunch. He believes St. Paul is willing to do this. St. Paul has a base rate for water that everyone gets charged. The base rate is established not only to provide the water but also the anticipated cost for replacement of all of the mains. The base rates pay for maintenance and replacement for all the cities that are in the agreement. Mendota Heights residents pay that base rate plus a surcharge. They are already paying for the cost of maintaining the system in the base rate. That is how St. Paul can afford to do this. Mendota Heights is paying twice for maintenance and replacement. His conclusion about savings under the MOU is that 1) Mendota Heights residents will see a $260,000 annual savings in the cost of water. 2) There will be a $40,000 annual savings in water tower maintenance. 3)$250,000 will be immediately saved in the Freeway Road watermain replacement. 4) $8,700,000 will be saved over the next 50 years for cast iron pipe replacement -- $174,000 per year. He stated that what is being proposed is to transfer this asset to SPRWS. The city of Mendota Heights would save $474,000 per year. In him opinion, anyone who looks carefully at the benefits to the Mendota Heights residents from entering into this agreement must conclude this is a good proposal. Councilmember Schneeman stated that this issue is a difficult burden each member of Council faces. Council is elected to make decisions Page No. 18 April 1, 2003 based on information submitted at the time. She has carefully reviewed all of the materials and comments that have been presented. After doing that, she asked herself if Mendota Heights is providing a service another city could provide at a lower cost. She has determined that entering into the MOU with SPRWS is the best solution in obtaining water at the best rates. She believes it will enhance the city's water delivery and free up staff time. Attorney Schleck has carefully reviewed the MOU as well. She supported entering into the MOU. Mayor Huber applauded Council and the city staff on this matter and the residents. He stated that there has been a very good debate on this and a great deal of brainstorming on how to approach this. He complimented staff, stating that they have had many questions fired at them and have done a very good job of bringing factual information to Council. He has spoken with the Mayor of Maplewood and he is very pleased with their agreement. He talked to St. Paul's Mayor today about whether they plan to privatize, and he said they have no interest in doing that. St. Paul actually passed an ordinance some time ago that makes it very difficult to outsource work done by city employees. In the past several weeks, residents have asked about fear of St. Paul raising rates. Their rate increases over the past six years have averaged 2.7% for the other cities in the agreement. The issue Council also needs to address and the biggest concern of the residents is whether Mendota Heights would be cutting its life line by entering into this agreement. Mendota Heights can buy the asset back for $1 and all upgrades, except if Freeway Road watermain is replaced Mendota Heights would have to pay that back. Mendota Heights can get out of the agreement in a year if it wants to for $1. Lilydale last night approved entering into a MOU with St. Paul. This is a difficult question and a difficult topic. He felt it is the right thing to do. The MOU addresses the long term funding needs of what is both an asset and a liability. Mendota Heights is currently paying a percentage of maintenance of the St. Paul watermains and those of other cities who are in the agreement. Councilmember Krebsbach stated that she does not support the transfer of the asset. Councilmember Duggan agreed with Councilmember Vitelli that this body and staff should be planning for replacement of the assets the city has. Councilmember Vitelli mentioned that there wasn't enough discussion in the last ten years on this issue. Tonight there has been an additional two and one half hours of discussion on this issue. It is a tremendous asset. Councilmember Vitelli said that as it ages it Page No. 19 April 1, 2003 becomes a liability.. Are City Hall, the fire station and public works garage becoming liabilities? They have resources set aside for repair. Councilmember Vitelli said that the base rate for water has included within it the anticipated cost of replacement of mains. Why is Mendota Heights then paying the additional surcharge. What has Mendota Heights received from St. Paul for that 20% over the past many years. Mendota Heights has paid St. Paul $7 million over the past 40 years in surcharge. Councilmember Vitelli stated that the anticipated cost of replacement is in that 20 %, then why is Mendota Heights paying for replacement. If Mendota Heights is already paying for it and is supposed to be getting it, then why would the city give St. Paul the asset. Mendota Heights gets the same water as everyone else but pays 20% more. If St. Paul has all future improvements and maintenance factored into the cost, then Mendota Heights has been duped. Mendota Heights should keep the surcharge and renegotiate. He stated that he has to believe that whatever it costs St. Paul to do what it has to do, it will have to charge everybody 3% more, or whatever. Mendota Heights cannot assess the Freeway Road owners for replacing watermains, and Council has to figure out another way to do it. 60% of St. Paul's watermains have not been replaced. For Mendota Heights to transfer one of its most valuable assets without trying to find $250,000 for the Freeway Road watermain is foolhardy. Council is being pushed by 61 home owners to get their watermain replaced. He stated that the current MOU is incomplete. He asked why Council should sign an agreement that requires future agreements when Council has no control over future agreements. He stated that he has spoken to many business people and they asked Council not to give the asset away but to fmd another way to finance replacement. If Council is so foolhardy as to go forward with this, he would urge that the city immediately stop paying the 20% surcharge and start banking that for future upgrades of the city's infrastructure. Councilmember Krebsbach stated that the city has been very fiscally responsible, and the implication is that the city does not have the resources to maintain the system. Council has not spent time to determine potential resources. Mayor Huber stated that he would really like to get a motion on the MOU. If that passes, he would like to ask Council whether to move forward with Freeway Road. Council can enter into the MOU and not do the Freeway Road watermain. The reverse would be more challenging. Page No. 20 April 1, 2003 Councilmember Vitelli moved to enter into the MOU with the St. Paul Regional Water Services and ask staff to proceed to negotiate the final contract. Councilmember Schneeman seconded the motion. Councilmember Duggan stated that this is an agreement that is currently incomplete and he could not support that. It calls for an agreement within the agreement, and is an imprecise document that no business would sign that he knows of Councilmember Vitelli disagreed. He has a run a $2 billion business with 10,000 employees and he has no problem with approving the MOU and asking staff to negotiate the final agreement. There has to be a contract that follows the MOU. Councilmember Duggan asked Mayor Huber if he thinks the MOU is a complete document that is unassailable. Mayor Huber stated that he would agree with Councilmember Vitelli to direct staff to begin negotiating the final agreement. Councilmember Duggan stated that he believes the MOU is incomplete in areas. It is an agreement within an agreement and Council does not know about the cell revenue outcome. He asked . Attorney Schleck if Council should be signing the MOU with those uncertainties. Attorney Schleck responded that is not a legal question. Councilmember Duggan is asking if this MOU is incomplete. He stated that he spoke to staff about this and tried to come up with an example. This is like a letter of intent to come to an agreement. It is not the final agreement. The purpose of the MOU is to give the city a framework to identify questions in the agreement. The purpose of this document was to accommodate Mendota Heights in terms of its need to move forward quickly with St. Paul and give the attorneys something to work with to form the final document in the future. Mayor Huber stated that he does not think the MOU is a complete agreement but that is not its intent. The MOU does not represent the transfer of assets to St. Paul. Councilmember Duggan asked Mayor Huber what the difference is between the MOU and the one he moved against in 1998. Council received a memo from staff that talked about working with St. Paul and Mayor Huber (a Council member at the time) made a motion to �„ VOTE ON MOTION: Ayes: 3 Huber, Schneeman, Vitelli Nays: 2 Duggan, Krebsbach Ayes: 4 Nays: 1 Krebsbach Page No. 21 April 1, 2003 deny the agreement because he felt the MOU was incomplete. He cannot see how different this is to justify the change in moving towards the other side Mayor Huber responded that he has spent many hours researching this over the past six weeks and that is probably eight to ten times more than he spent on it in 1998. Mayor Huber stated that if Freeway Road watermain is done, there is a concern as to the negotiation strategy the city has with St. Paul. If the watermain is replaced and for some reason the city does not come to an agreement with St. Paul, Mendota Heights has a $250,000 bill to pay. Council has to think about its negotiating leverage. He stated that he is very concerned about the condition of the pipe in Freeway Road and feels it is highly preferable to replace that main now. After considerable discussion, Councilmember Vitelli moved to authorize the Freeway Road watermain replacement. Councilmember Schneeman seconded the motion. Councilmember Krebsbach stated that she voted against the motion because Council has not determined how to fund the cost. SEWER TELEVISING Council acknowledged a memo from Engineer Marc Mogan requesting authorization to televise the sanitary sewer main and sewer services in the Freeway Road neighborhood. Public Works Director Danielson informed Council that there is a tree root problem in this ar3ea and there have been back -ups. Staff would like to televise the lines to see where the roots are and to replace any lines where there are roots under where the new streets will go. Councilmember Krebsbach moved to enter into a contract with Infratech to perform an inspection of the sanitary sewer main and service laterals in the Freeway Road neighborhood for a cost not toe exceed $11,400 to determine if repairs should be made to the sanitary sewer system in conjunction with street reconstruction work in the Freeway Road neighborhood, the expense for televising to be included within the cost of the improvement project. Councilmember Schneeman seconded the motion. Page No. 22 April 1, 2003 Ayes: 5 Nays: 0 RECESS Mayor Huber called a recess at 10:23 p.m. The meeting was reconvened at 10:30 p.m. ORDINANCE VIOLATION Council acknowledged a memo from Code Enforcement Officer Berg regarding a request from Charles and Barbara Elliott, 543 John Street, for consideration of granting grandfather status for their travel trailer. Mr. Elliott was present for the discussion. Councilmember Vitelli stated that the request is to grandfather the positioning of a fish house /trailer. What he sees against the request is that whatever new ordinance Council passes, like the RV ordinance, it would have to grandfather everything. He stated that he cannot support the request. Councilmember Duggan stated that he is not sure about grandfathering. Mr. Elliott has a 70 foot lot, which is substandard and he has made the case that the code enforcement officers have been to his house twice and never brought it up and there has only been one complaint. The only reason Council adopted the RV ordinance was because of complaints from three or four people. The " city has only received one complaint about the Elliott trailer, and that appears to be retribution. The trailer can barely be seen from the other sides of the lot, and if the Elliott lot were 30 feet wider he would not have any trouble getting the trailer into the back yard. Until Council is more able to more reasonably look at what is the right thing to do other than grandfathering, he would suggest leaving it as it is until Council figures out what is appropriate. The trailer has been in its location since 1987. He is not sure Council could legally enforce an action and does not think Council would want to take that route. Mr. Elliott stated that the trailer is on a parking area that existed before he bought his home. It is too close to the property line, but he has used it since 1987 to park the trailer on. He showed Council pictures of his property. He stated that he talked to the three neighbors across the street and they said they are not bothered by the trailer being parked there, and they are the three neighbors who can see it. Councilmember Vitelli stated that there is an ordinance on the books and a resident has asked the city to enforce it. There was debate on the Planning Commission on how the ordinance was structured, but �` Page No. 23 April 1, 2003 he did not know how Council can set this aside without doing the same for others who will ask, and that defeats the purpose of having the ordinance. The city must enforce its laws. Mr. Elliott responded that he is not asking for the asphalt spot to be there. It was there since 1987 and he has used it that way in the past. The city now has an ordinance that says he cannot put a driveway within five feet of the lot line. Mayor Huber stated that Council is not talking about the driveway, it is the trailer that is being discussed. The way the ordinance reads, Mr. Elliott is in violation. He cannot come up with a reason to approve the request, because it is contrary to the ordinance. Councilmember Vitelli agreed, stating that Council has little choice. Mr. Elliott has stated that staff had seen the trailer and never told him to move it, but Mr. Elliott must realize that the city does not seek out residents who violate ordinances. The key event is that a complaint was filed that Mr. Elliott is violating the law. Councilmember Duggan stated that this has a degree of retribution and it is sad that in this city retribution is happening. It is a substandard lot. The ordinance as it was crafted took into mind 100 foot and larger lots. There was no discussion on smaller lots. Council has to live with the law, but he hopes the ordinance does not come back to haunt the city in other ways. Councilmember Schneeman stated that one of the reasons the ordinance was changed was because in the north part of the city there was a proliferation of small trailers that were parked in driveways and it was becoming a problem for people. The city received many complaints, and that was why the ordinance was crafted and adopted. Councilmember Duggan moved to approve grandfather status for the trailer. The motion died for lack of a second. Mayor Huber informed Mr. Elliott that Council must direct staff to enforce the ordinance. CASE NO. 03 -07, ETTINGER Council acknowledged an application from Ronald Ettinger for a conditional use permit for an addition to the Children's Country Day School at 1588 South Victoria Road. Council also acknowledged associated staff reports. Page No. 24 April 1, 2003 Mr. Ettinger stated that he is requesting approval for a 220 square foot addition to the 8,000 square foot school building. He reviewed the site plan and stated that the addition is to the rear of the building would will not be seen from I -35E or Victoria Road. The use will be limited to increasing the lunch room, meeting space and work space for his staff. It will not generate any additional students or staff or car traffic. Mrs. Phyllis Ettinger informed Council that the school does not have space where teachers can go to meet with parents to conference, and the addition will also be used for that purpose. Councilmember Krebsbach stated that Children's Country Day School is a very reputable business in Mendota Heights and she supports the conditional use permit. Councilmember Krebsbach moved adoption of Resolution No. 03- 14, "A RESOLUTION APPROVING A CONDITIONAL USE PERMIT FOR AN ADDITION FOR CHILDREN'S COUNTRY DAY SCHOOL AT 1588 SOUTH VICTORIA ROAD." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 CASE NO. 03 -10, WILTON Council acknowledged an application from Mr. Peter Wilton for a critical area permit to allow construction of a single family home at 1069 Douglas Road. Council also acknowledged associated staff reports. Mr. Wilton stated that the Planning Commission recommended that he convert the proposed retaining wall. He originally proposed a six foot wall, and the commission recommended a tiered wall no higher than 4 feet tall. He submitted a revised site plan reflecting the new wall proposal. Responding to a question from Councilmember Duggan, Public Works Director Danielson stated that Mr. Wilton's proposal as amended complies with the critical area ordinance, so it is not necessary to request input from the DNR. Councilmember Vitelli moved adoption of Resolution No. 03 -15, "A RESOLUTION APPROVING A CRITICAL AREA PERMIT FOR NEW HOME CONSTRUCTION AT 1069 DOUGLAS ROAD," based on the revised plan complying with the Planning Commission recommendation. Page No. 25 April 1, 2003 Councilmember Duggan seconded the motion. Ayes: 5 Nays: 0 CASE NO. 03 -11, BARRY Council acknowledged an application from Mr. Stephen Barry for a sideyard setback variance for an 8 by 12 foot storage shed that is currently located on the southerly lot line at 1733 Vicki Lane. Council also acknowledged associated staff reports. Mr. Barry stated that he appeared before the Planning Commission last week and they voted against a variance for his shed. The proposed resolution of denial says that giving this variance would have an adverse impact on the health, safety and welfare of the community and he finds that hard to believe. Mr. Barry showed photos of his property and shed. He stated that when he originally put the shed in its location, all of his neighbors said it was not a problem. The neighbor with direct view said he likes Mr. Barry's yard. He stated that he matched the shed siding and roof to his house and it is fairly well hidden from the front. In the summer when there is foliage it cannot be seen at all. He put it in its location for convenience. He does not have a hardship, but his backyard is full of trees and gardens. If he moved the shed ten feet it would comply, but he would have to remove his fence to do that. The only other location it could go would be against the back fence and more people would see it there. The shed has been there for two years before he received a letter from the city. His neighbor had the same situation in the past, and the Planning Commission approved that but not his, and there are bushes and trees around his. He stated that when he talked to the Administrative Assistant, he said there was a precedent because one had already been approved. Councilmember Duggan stated that Mr. Barry is referring to the Dzik garden shed. Councilmember Krebsbach stated that if Mr. Barry complied with the ordinance, the shed would be in the back yard. She stated that she believes the Dzik shed was smaller. She felt that Council should enforce the ordinance. Mayor Huber stated that sometimes Council looks at what the surrounding neighborhood is. In the Dzik case, there was common agreement among all the neighbors that the garden shed was in the best possible location. In this case, there are two neighbors who are opposed to it. Page No. 26 April 1, 2003 Councilmember Schneeman stated that she went by the property today and really thinks the shed can be moved somewhere else. It could be placed in the trees in the back of the lot and does not fit in with the house in its present location. It is right on the street and does not look proportionately right. Attorney Schleck stated that it is important regardless of the individual case to remember what the ordinance and the law says. A variance should only be granted in the case of undue hardship or a condition that restricts the use of the property. Councilmember Krebsbach moved adoption of Resolution No. 03- 16, "A RESOLUTION DENYING A SETBACK VARIANCE FOR A SHED AT 1733 VICKI LANE." Councilmember Schneeman seconded the motion. Councilmember Duggan stated that during his many years on the Planning Commission, planning applicants were required to submit their neighbors' signatures indicating they were comfortable with what was requested. The city has regulations and the question is, how does Council enforce them. The primary part of the law is if a property can be used, there is no problem — the shed can be moved. He stated that he has tried to get the ordinance changed to make it more reasonable if all neighbors agree with a request. \ Responding to a question from Mr. Barry about when the shed would have to be moved, Mayor Huber suggested a June 30 deadline. VOTE ON MOTION: Ayes: 5 Nays: 0 CASE NO. 03 -12, KIM Council acknowledged an application from Ms. Irina Kim, International Gymnastics, for a conditional use permit for participative athletics in the I zone, at 2425 Enterprise Drive, Suite 800. Council also acknowledged associated staff reports. Ms. Terri Marshik, International Gymnastics Program Director, reviewed the application for Council. Councilmember Vitelli stated that the indication is that the program is primarily for young ladies. He asked if there will ultimately be males in the future programs and if there is space for lockers. Ms. Marshik responded that they have discussed including males in the program in the future, but it is not on the agenda fmancially. Page No. 27 April 1, 2003 There will be cubicles for the children to put their things in, and the facility will be opened up for recreational purposes. International Gymnastics cannot offer its programs to boys on a competition level. There are currently 25 young ladies on their competition team and they range in age from ten to sixteen years old. Councilmember Vitelli asked about lighting in the parking lot. Ms. Marshik stated that lighting is in accordance with city ordinances, and parents will be there to pick their children up. She pointed out that none of the students is older than 16. They have not addressed lighting because it meets code and no children leave without a parent. Once they get into the facility, they will let the police know what their hours are and hopefully they can drive by when people leave. Councilmember Vitelli moved adoption of Resolution No. 03 -17, "A RESOLUTION APPROVING A CONDITIONAL USE PERMIT FOR PARTICIPATIVE ATHLETICS IN THE "I" ZONE AT 2425 ENTERPRISE DIRVE, SUITE 800." Councilmember Schneeman seconded the motion. Ayes: 5 l } Nays: 0 CASE NO. 03 -14, PASTER Council acknowledged an application from Paster Enterprises for ENTERPRISES consideration of a concept plan for a planned unit development for retail expansion east of the Mendota Plaza shopping center. Council also acknowledged associated staff reports. Mr. Ed Paster, Mr. Howard Paster and Mr. Ken Hank were present on behalf of Paster Enterprises, along with Ms. Cathy Anderson from KKA Architects. Mr. Hank stated that the three parcels Paster Enterprises wishes to develop are still in MnDOT control. Paster has been working with MnDOT over the last couple of years to purchase the properties. Paster has underlying fee rights to Parcels 35 and 36. The Dodge Nature Center has underlying fee rights to Parcel 38. Parcels 35 and 36 comprise 9.74 acres. It is a challenging site to develop because of its topography and the drainage ditch and sanitary sewer trunk lines that run through the property. The concept plan evolved based on those constraints. Two of the five proposed single -story structures will be sit -down restaurants positioned along the drainage ditch, which is treated as an amenity, and a water feature will be added. Paster is proposing to add a 12,000 to 15,000 square foot single or multi -tenant building in the northeast corner of the site. Access would be from the existing shopping center entrance on Dodd Road Page No. 28 April 1, 2003 and an extension of South Plaza Drive. South Plaza now ends at a cul -de -sac in front of the senior housing facility. He is proposing that it be extended out to T.H. 110 and looks for approval from MnDot for a right -in -right out access on T.H. 110. He has had discussions with the Dakota County CDA about the proposal. The residents of the senior facility are shopping center customers that now use the dirt and gravel path to get to the center. Paster proposes to improve that pathway. He informed Council that he spoke to Mr. Dave Napier from the nature center. The nature center would prefer to purchase Parcel 38 and Paster Enterprises is proposing that the city acquire it and extend South Plaza as part of this development. Paster is not asking for any city contribution to extend the Mendota Plaza. Paster Enterprises feels that the extension of South Plaza servers more than this shopping center. He stated that he believes the nature center would like to purchase the land and leave it in its natural state but he thinks they are open to this proposal. Ms. Anderson informed Council that she heads the commercial division of KKE and has worked on renovation and new retail centers for her entire career. Redeveloping shopping centers gets very complicated, but turning around a shopping center like Southdale is an example of what can be done. The concept for Paster Enterprises is to create a village affect. She has analyzed Town Center across the street and a lot can be done to tie the proposed shopping center expansion in with it. She also knows several tricks of tying in new development with what already exists. This would be a mixed use project. There is great potential for making pedway expansions, water features, etc. The plan envisions shared parking for the buildings, a high level of landscaping, walkways, etc. Councilmember Krebsbach felt that Parcel 38 should be part of the Dodge Nature Center. She also stated that the community has asked for a grocery store but she does not see any in the plan. She asked if there is enough retail space for a store like Kowalski's and suggested that would probably need about 25,000 square feet. Mr. Hank responded that one of the buildings is proposed to be 15,000 to 16,000, but that is not enough space for a grocery store. If there were a retailer interested, the size of one of the restaurants could be reduced, or a restaurant could be eliminated. Ms. Anderson stated that the key that needs to be stressed is flexibility. Not knowing the specific uses, if a certain demand like a grocer comes forward, the plan will have to be more flexible. Page No. 29 April 1, 2003 Access is a critical issue. MnDOT has very specific criteria on where the road can be placed. In dealing with the nature center, she thinks there are some negotiations on how that land gets used. There are many retail centers that border preserves. Councilmember Krebsbach asked if Ms. Anderson is saying that the entire concept plan is conditional upon Parcel 38. She stated that she would want to see as much green space as possible. Mr. Hank stated that Parcel 38 is about three acres and is much wider than what would be needed for right -of -way. There would be green space around the street. Councilmember Schneeman stated that one of the major problems is getting onto T.H. 110. Getting access from MnDOT will be crucial. Mr. Hank stated that is why Paster Enterprises would like to get the city involved. Parcels 35 and 36 are just under 10 acres. The square footage proposed in the concept plan could be done on five or six acres, but because the drainage areas and other constraints, the project will be about 40% green space. Responding to a question from Councilmember Schneeman about plans for the existing shopping center, Mr. Hank stated that the proposal is to develop the new area to the east and design a face lift to the center at the same time. The center is 100% leased and he thinks the money would be better spent on the new buildings. Paster would like to get the new development done before upgrading the existing. Councilmember Schneeman stated that the new development should be tied in with doing the facelift to the existing center. Ms. Anderson stated that often times redevelopment like this is a phased approach. She will come in with drawings and designs that show a cohesive master plan and architectural guidelines for all buildings, but cannot make a commitment to what gets done when. Mr. Hank stated that if Paster Enterprises were able to, it would do everything at once. Councilmember Vitelli stated that the Mendota Plaza needs a redesign. The existing center seems a bit fragmented and this proposal seems to continue that. It seems like there could be a more creative idea to make the whole corner be a grand success. He did not think there is enough benefit to the city in general for the city to buy Parcel 38 and put the street in and pay for the road. He was Page No. 30 April 1, 2003 concerned about traffic flow from Dodd Road and people using South Plaza Drive to the proposed access to T.H. 110 as a shortcut. The other thing that came up when Council approved the Tai Kwan Do on South Plaza was an issue of getting onto southbound Dodd Road. This would increase the traffic making left turns from South Plaza. He asked about traffic studies. Mr. Hank responded that Paster Enterprises would need to have a traffic study done. Mayor Huber stated that he has a similar concern about the traffic routing onto T.H. 110. With regard to the city contribution to buying the land, if that were to be done, the facelift to the existing center would need to be done concurrently. Also, the rear of the existing building is what it is, but the proposed development would have lots of buildings with the rear view towards T.H. 110 and the nature center. He would like to see some sort of concept that would show that the rear of those buildings will not look like the back side of buildings. It was Council's intent as Town Center was planned that if that spurred something at the Mendota Plaza it would be a good thing. He feels that a very good look has been created for Town Center and he would be looking for the same kind of quality look in the Mendota Plaza development. Councilmember Krebsbach stated that she would want Parcel 38 to remain green space and the road moved over. Councilmember Duggan complimented Paster Enterprises for coming up with a plan that has potential. The key is getting an entrance and exit on T.H. 110. He would like to see a back up plan if that failed. Regarding the traffic study, he thinks traffic is heavier on Dodd south of T.H. 110 than it is on the north. A right turn onto T.H. 110 from South Plaza would help. There is a possibility that the furniture store area could be used for a grocery store. He stated that he did not think Paster Enterprises would come up with a plan that costs thousands of dollars if they did not think it would be successful. He had several questions that need to be answered, including the cost of the road and how water can be ponded. Keeping the area open and green, with the road in the middle would be great. Planting islands might break up the blacktop area. He stated that he knows there is enough strength in the area for retail and there are lots of things people would be interested in. Mr. Paster is willing to risk quite a bit of money to expand and beautify the shopping center in conjunction with Town Center, and he would urge working on getting the access to T.H. 110. Also, where the Page No. 31 April 1, 2003 water will be retained is a big question. He felt this is an excellent beginning concept, but the key is getting an entrance to T.H. 110. WORKSHOP Council acknowledged a memo from Administrator Lindberg regarding conducting a Council workshop to discuss the Garron/Acacia site. Administrator Lindberg stated that Mr. Ron Clark has requested an additional workshop to further discussed the issues that Council raised at the last workshop to see if it is worthwhile for him to pursue his project. The question is whether it would be better cut his losses. He would like to discuss the project generally with Council, and she informed him that no action can be taken at a workshop. Councilmember Schneeman stated that she thinks Council needs more information and she did not know what else Council can tell him at this point. Councilmember Duggan stated that Council should give Mr. Clark the courtesy to sit down and visit with him. Mayor Huber stated that he would not have a problem with meeting but is reluctant about meeting without having both sides present. Council would either need to have a separate interactive meeting with the other side or hold in a forum like a Council meeting. Councilmember Vitelli agreed, stating that he feels the proper forum, if Mr. Clark wants to discuss how Council feels on the park and open space issue, would be at a Council meeting. As an alternative, Mr. Clark could call each of the Council members individually. He agreed that if Council has a workshop each of the parties should be present. He suggested that Mr. Clark could be invited to the next Council meeting. Councilmember Krebsbach stated that it seems to her that the next workshop that Council holds should be on the EAW. At some point Council must go to a workshop to discuss the findings and then Council could meet with Mr. Clark. Councilmember Duggan stated that if Council conducts a workshop on the EAW, notes should be taken. Administrator Lindberg responded that nothing binding is done at a workshop and it has been policy not to take minutes. Page No. 32 April 1, 2003 Councilmember Duggan was concerned that people may claim something was said or there are half statements made and it should be recorded. Administrator Lindberg responded that the developer has submitted a second draft of the EAW to the city but it does not include the questions on the historical issues. Mr. Clark has hired the 106 Group to do that. Once that is done, staff will submit the draft EAW to Barr Engineering for review. Councilmember Krebsbach stated that, to her, the next step is the EAW. She felt Council should have a workshop on the EAW, and stated that general comments would not be accepted at the workshop. Attorney Schleck stated that with respect to whether to discuss this at a Council meeting or workshop, part of what the developer owes Council is a clear definition about what he wants to talk about. His concern is that this would not be a focused discussion, and he did not know what would be gained. With respect to the EAW, he feels the idea of a workshop is not a bad idea once there is a determination by Barr that it is complete. It was his opinion that at the meeting where Council proposes to accept the EAW there will be considerable public discussion on both sides. Council must at some time decide to accept the EAW and publish it. The EAW is not at the point where Barr has said it is in good shape — that must be done before Council considers it. Councilmember Schneeman stated that it is to soon for Council to meet with Mr. Clark. Councilmember Duggan stated that Mr. Clark's concern was the discussion Council had at the last workshop about park contributions. Mr. Clark can certainly raise that question at a Council meeting. He wants to know Council's feeling about the land dedication versus monetary contribution. Councilmember Krebsbach pointed out that was just discussion and there is nothing to report. Attorney Schleck informed Council that he reminded Mr. Clark that the city cannot make any decision until the EAW process is complete. Mayor Huber stated that to the extent that John Uban attended the workshop and heard various comments on various issues, Council Page No. 33 April 1, 2003 was brainstorming and that indicates there is still a fair amount of discussion Council needs to have on this issue. COUNCIL COMMENTS Councilmember Krebsbach stated that she is a member of the MnDOT Hiawatha Avenue speed task force and would like a resolution from Council recommending increasing the speed limit to 40 miles per hour. Councilmember Schneeman asked if that is the task force recommendation. Councilmember Krebsbach responded that there were presentations that the road is built to a higher speed, so people are driving it faster than the posted limit. She felt the city should weigh in on the issue and will prepare something for the next Council meeting. ADJOURN There being no further business to come before Council, Councilmember Vitelli moved that the meeting be adjourned. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 TIME OF ADJOURNMENT: 12:09 a.m. 4 KafWeen M. Swanson City Clerk