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2000-01-18 City Council minutesPage No. 1 January 18, 2000 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, January 18, 2000 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. Mayor Mertensotto called the meeting to order at 7:30 o'clock P.M. The following members were present: Mayor Mertensotto, Councilmembers Dwyer, Huber, Krebsbach and Schneeman. AGENDA ADOPTION Councilmember Schneeman moved adoption of the revised agenda for the meeting. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 APPROVAL OF MINUTES Councilmember Huber moved approval of the minutes of the regular meeting held on December 7, 1999 as amended. Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 Councilmember Schneeman moved approval of the minutes of the regular meeting held on December 21, 1999 as amended. Councilmember Huber seconded the motion. Ayes: 5 Nays: 0 Councilmember Huber moved approval of the minutes of the regular meeting held on January 4, 2000 as amended. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 CONSENT CALENDAR Councilmember Krebsbach moved approval of the consent calendar for the meeting, revised to move items g, Resolution No. 99 -79A, and h, Modified Site Plan Review, to the regular agenda, along with authorization for execution of any necessary documents contained therein. a. Acknowledgment of the Treasurer's Report for December. Page No. 2 January 18, 2000 b. Acknowledgment of the Fire Department monthly report for December. c. Acknowledgment of a cash donation of $4,000.00 from Mr. Clifford Timm towards improvements to promote sport fishing at Rogers Lake along with direction to staff to send a letter to Mr. Timm acknowledging and expressing appreciation for the donation. d. Acknowledgment of a cash donation of $4,334.00 from the Mendota Heights Athletic Association for park improvements, along with direction to staff to send a letter to MHAA acknowledging and expressing appreciation for the donation. e. Acknowledgment of information regarding the League of Minnesota Cities Legislative Conference. f. Authorization for the retention of a recording service for preparation of Planning Commission meeting minutes at a rate not to exceed $21.50 per hour and $9.50 per page of minutes. g. Approval of the payment of $485.27 to Miles Snyder for costs associated with a sewer blockage at 1900 Victoria, #A. h. Approval of recommended changes to the Infrastructure Chapter of the Cable Franchise Renewal Ordinance and authorization for staff to forward the changes to NDC4. i. Approval of the County Assessor's request to schedule the annual Board of Review for 7:00 p.m. on April 4, 2000. j. Approval of the list of contractor licenses dated January 18, 2000. k. Approval of the List of Claims dated January 18, 2000 and totaling $847,521.71. Councilmember Huber seconded the motion. Ayes: 5 Nays: 0 CASE NO. 99 -38, KOBRIN Council acknowledged a memo from Assistant Hollister regarding adoption of a proposed resolution formally approving a five foot side yard setback variance for a garage addition at 1718 Sutton Lane. Page No. 3 January 18, 2000 Assistant Hollister explained that the City Council granted the variance by motion on November 2, 1999 and placed certain conditions on the approval, however the revised formal resolution was not adopted. He stated that the matter was placed on the agenda this evening to verify that it was Council's intent to adopt the resolution. Mayor Mertensotto stated that staff was also directed to review and approve the drainage plans for the addition. He directed Assistant Hollister to alert the Code Enforcement Officer that a drainage plan must be submitted to the city for approval before a building permit can be issued. Councilmember Huber moved adoption of Resolution No. 99 -79A, "A RESOLUTION APPROVING A FIVE FOOT SIDE YARD SETBACK VARIANCE FOR A GARAGE EXPANSION AT 1718 SUTTON LANE." Councilmember Schneeman seconded the motion. Ayes: 5 Nays: 0 SITE PLAN APPROVAL Council acknowledged an application for modified site plan approval from MW Johnson Construction to allow construction of a home at 1117 Orchard Place. Mr. Johnson was present for the discussion and responded to Council questions. Responding to a question about why the lot comes under the critical area ordinance, Public Works Director Danielson stated that there is a large area of the city, including this lot, that fall within the critical area district but are no where near the bluffs. Councilmember Dwyer moved to approve the modified area site plan, authorize refund of the $100 application fee, and authorize staff to issue the requested building permit. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 DONATION Councilmember Schneeman stated that Mr. Clifford Timm's contribution to the city was very generous and the letter he sent with the contribution was extremely nice. She stated that she would like his generosity publicly acknowledged through the city's newsletter or some other source. Page No. 4 January 18, 2000 INTRODUCTIONS Police Chief Johnson introduced newly appointed Patrol Officers Eric Petersen, Tanner Spicer and Todd Rosse to Council and the audience. MENDOTA HOMES Council acknowledged a memo from Public Works Director Danielson regarding Mendota Meadows landscaping issues. Council also acknowledged a letter from Mendota Meadows homeowners, a copy of the District Court findings and conclusions with respect to Schanno v. Mendota Homes, and a letter from David Hellmuth, legal counsel for Mendota Homes. Mr. Hellmuth stated that he is present to ask Council to release the Mendota Homes landscaping letter of credit. He stated that the letter of credit was specifically issued as surety for performance of landscaping within the Mendota Meadows project. In August, he came before Council with Mr. Mathern and there was a list of homeowner complaints on landscaping items. Mendota Meadows disputed many of the items, and despite that agreed to do all of the items within 60 days. There were numerous city and homeowner reviewed, and he believes it was agreed that everything on the landscaping check list was done. He came before Council on October 19 with Mr. Mathern to say that said everything was completed and ask for return of the letter of credit. Council did not release the letter of credit because the association was a named defendant in the Schanno litigation. Several homeowners submitted a letter that had nothing to do with landscaping but were related to the Schanno litigation. The association has been was dismissed with prejudice, so no claims can be brought against it. He stated that it is clear that the letter of credit was for landscaping and that the landscaping items have been completed, and he asked that the letter of credit be released. He informed Council that he received a letter from the home owners by fax today that raises a number of issues relating to the transfer of the association and none relating to landscaping issues. There are some disputes, but none of them involve the letter of credit. He did not feel that those disputes are properly before the Council, stating that the Council meeting is not a forum for resolution of the disputes that are outside of the contract between Mendota Homes and the city. Mayor Mertensotto stated that he and Mr. Hellmuth had a detailed conversation today, in which Mr. Hellmuth mentioned that Mr. Mathern charged the homeowners association for the arbitration fee and $21,000 was expended. The arbitrator's fees were $12,000 and $6,000 was to be paid by each of the two parties. Page No. 5 January 18, 2000 Mr. Hellmuth responded that there were $21,000 in legal fees and the arbitrator's fees were about $6,000, which were divided between Ms. Schanno and Mendota Homes. Mayor Mertensotto stated that the other thing he has a problem with is that Mr. Hellmuth said that because the homeowners' association was named a defendant it had to pay part of the legal fees. He asked Mr. Helhnuth if he has a conflict representing Mr. Mathern since he is the only director of the association. Any funds he pays from the association is a benefit to him. Mr. Hellmuth responded that the two clients involved in the landscaping were the homeowners' association and Mendota Homes. Because during the entire time the association has been under Mr. Mathern's control, he was asked to take representation of both parties. He stated that the issue was also discussed at the annual meeting of the association as well and he has dealt with the conflict. Mendota Homes acknowledged that if there is anything that is an original construction detail they will deal with it. If it is a maintenance issue, the association will have to deal with it. Mendota Homes has offered to pay $2,000 for a sign and has designed a sign and provided the plan to the homeowners. Ultimately, the owners rejected the sign, so Mr. Mathern met with the owners who represent the group and offered to pay $2,000 for a sign. There was also a question about irrigation. Mr. Mathern offered $5,000 to pay for irrigation issues even though that is a maintenance issue. The homeowners rejected the offer saying they do not know what the cost will be. He stated that Mr. Mathern got a bid for $1,100 for the work and is saying that the cost is part of the maintenance of a five year old irrigation system. Irrigation systems need maintenance every year, which is one of the items owners pay monthly association fees for. Mayor Mertensotto responded that the Mendota Homes set up the irrigation system. He stated that Council gave Mr. Mathern 60 days to complete all of the items or the city would have the work completed and charge the cost against the letter of credit. At that time Council did not know the on -going items that are outside of the arbitration, such as the sign. The only reason the irrigation system is five years old is the length of time the issue has dragged out. He asked where Mr. Hellmuth got the information that it is maintenance rather than a badly installed system originally. Mr. Hellmuth stated that Mendota Homes hired a contractor who said it was installed properly and that perhaps some of the points in Page No. 6 January 18, 2000 the system needed to be adjusted for better water distribution. Mr. Mathern is offering $2,000 for the sign and $1,100 for maintenance. Mayor Mertensotto responded that the homeowners are saying there was an agreement for $2,000 for signage and $5,000 for irrigation. He stated that this project has cost the city considerable money because of the failure of the developer to complete the project in a timely manner. The arbitrator did find that Ms. Schanno was entitled to damages because Mr. Mathern did not do what he was supposed to do and gave her a judgment in excess of $8,000. Mr. Hellmuth responded that he does not think the arbitrator found anything wrong with the landscaping Mayor Mertensotto stated that there was evidence that there was a problem with the stability of the slope. Mr. Hellmuth responded that Ms. Schanno asked for $80,000 and was awarded $8,000. Mendota Homes brought in two experts who said there was nothing wrong with the slopes. Councilmember Dwyer stated that Council agrees that this is not a forum for dispute resolution and city tax dollars should not be spent hashing them out, but there are residents making complaints that Mr. Mathern is dragging his feet in getting things done. That should not happen, but it has happened. He stated that the hammer that the city has is the $65,000 letter of credit, and that he would be willing to bet that Mr. Mathern would not have performed if Council did not have that hammer. He asked Public Works Director Danielson how much it will cost to correct outstanding landscaping problems or if he feels Council should accept Mr. Hellmuth's representation that they have been resolved. Public Works Director Danielson responded that the question is extremely tough. Whenever someone goes back to try to correct something done improperly originally, the solution is never as good as if it had been done right in the first place. This was done incorrectly to begin with, Mr. Mathern hired a landscaper to make corrections, and the landscaper did the corrections as best he can to solve a poorly done landscaping job. There are some outstanding issues, including irrigation, which is one of the main reasons the sod is spongy and wet all of the time. Too much water is being delivered at several locations. He stated that he did not get an estimate for solution of the irrigation system. A number of trees were planted at the end of the past year to replace defective trees, and it takes a year Page No. 7 January 18, 2000 to determine whether trees are growing properly. The trees do not have a one year guarantee. Councilmember Krebsbach asked the key issues are in terms of the transfer of the association. Mr. Al Mayer, 813 Monet, representing the homeowners, stated that the homeowners have held a meeting and agreed that the offer of $2,000 for the sign and the $5,000 for irrigation were acceptable, but that was before the owners saw the annual report for expenditures for the year. If everything in the report can be justified and all the expenditures were needed, Mr. Mathern's offer is understood to still be standing. There are a number of things that will ever be right with the development. Very basically, it starts with the topsoil. There was supposed to be 4" of top soil, but it is all clay and there is always standing water. There is no way that anyone can pay for that, because it cannot be corrected and it will be a legacy that the homeowners will always have to live with. The owners would like to have some of the letter of credit withheld because it is now known yet whether the adjustments that were made to the irrigation system will help. Before the system was shut off, there were areas that had puddling all the time, and some homes were in three irrigation zones. Mr. Phil Sirisi confirmed that at the November 17 meeting, the residents did agree that the $2,000 for the sign would be acceptable. The second issue related to the sprinkler system. It was his opinion that the irrigation issue is due to the fact that the topsoil was never put down. There is hard packed clay under much of the sod, and when it is watered, the water will sit on the clay. If the city included the requirement for 4 inches of topsoil, Mr. Mathern did not comply with that requirement. He did not think there is anything that can be done at this time because of the excessive cost, but that the residents did agree to accept the $5,000 for irrigation system corrections in the hope that the problem will be improved. Mayor Mertensotto asked whether the homeowners would agree to the city releasing the letter of credit if the association's balance sheet shows assets of $8,308.79 and if Mr. Mathern pays the association from his funds the $7,000 for signage and irrigation system corrections. Mr. Sirisi stated that the residents expected that all of the problems : that have been going on for four years would be corrected. When the homeowners agreed to the $7,000, they did not understand that all of -- the corrections that Mendota Homes finally worked on would be Page No. 8 January 18, 2000 charged back to the association. His opinion was that Mr. Mathern was told that the corrections that are being discussed were his responsibility and not the responsibility of the association. Responding to a question from Councilmember Schneeman, Public Works Director Danielson stated that the homeowners are correct that there is no topsoil and that where corrections have been made, topsoil was brought in. Mayor Mertensotto continued the matter to later in the agenda to allow the homeowners time to discuss whether they would accept the $7,000 from Mendota Homes and to allow Mr. Hellmuth an opportunity to contact Mr. Mathern. CASE NO. 99 -99, SKD Council acknowledged a memo from Public Works Director Danielson regarding continued discussion on an application from SKD Architects, on behalf of Mr. & Mrs. Steve Baldinger, for a critical area permit to allow construction of a new home at 1147 Orchard Circle. Council also acknowledged the following correspondence: letter from John Linc Stine, from the DNR, letter from Barr Engineering dated January 4, 2000, letters to the city attorney and to Mayor Mertensotto from Peter Coyle, on behalf of the Baldingers, dated January 6 and January 12, 2000, letters from Mr. Coyle to the DNR dated January 12 and January 14, 2000, and a letter from Jeffrey Olson, on behalf of Mr. Najarian dated January 6, 2000. Mayor Mertensotto stated that the letter from the DNR indicates that Plan B as modified meets with their approval. He felt that Mr. Stine is relying on the conditions that were set out in Mr. Johnson's (DNR) letter, including silt fence and tree replacement. He stated that a change has been made in the north facing wail and the lower elevation. The city ordinance states that if more than half of the basement elevation is exposed it is a full floor, if it is less than half exposed it is considered a cellar and is not considered as a level. Plan B Councilmember Krebsbach asked if the city has the full representation of Plan B in terms of the dimensions of the home and the appearance of the home. Mr. Coyle responded that all of those details were submitted to the city. The measurement of the face of the house is 115 feet approximately. Page No. 9 January 18, 2000 Councilmember Schneeman stated that she spoke to the DNR today and was told it is 135 feet. Mr. Coyle responded that it could be 135 feet if the measurement is triangulated, but as the house faces south face of the lot it is 115 feet. As one measures across from the west end of the house to the east end of the house, which is how it faces the slope, it is 115 feet. Mr. Steve Kleinman, from SKD Architects, showed a plan depicting how the contours have been changed. He informed Council that the plan has been modified so that the grade has been raised to the under side of the windows on the north facing elevation with the exception of the walkout area. The structure is about 14 feet back from where it was originally. Councilmember Dwyer stated that the city has received an independent opinion and drawings from Barr Engineering confirming the location of the 18% slopes and the city is satisfied with that determination. The consultant was up front in his letter that there are different methods of determining the slopes but that the methodology he used has been used for many years and is acceptable in courts of law. Responding to a question from Councilmember Huber, Public Works Director stated that staff has confirmed that the structure is a two story house based on the definition in the ordinance. City Attorney Tom Hart pointed out that Mr. Coyle made representations in his January 6 letter that the basement will meet the definition of cellar in the ordinance. Mr. Coyle confirmed that it will comply with the cellar definition. Mayor Mertensotto stated that there is a problem with regard to the because the uniform building code says one thing and the critical area ordinance says another, and Council must unify the definition. Mr. Coyle showed elevations of the north face of the proposed structure. He stated that under the code as long as the percentage exposure requirement is satisfied, the lower level is defined as a cellar. Under the agreement with the DNR, the owners have agreed to minimize the back yard area and confine it to the area adjacent to the walkout portion. He also confirmed that they will not grade anything that comes near the 18% slope. Page No. 10 January 18, 2000 Mayor Mertensotto stated that the applicants must follow the requirements set forth in Mr. Johnson's letter regarding slope disturbance. Disturbance of the 18% slope must be minimized during construction and is recommended to be limited to 10 feet during construction. Mr. Kleinman responded that he will be as careful as possible and, but must have room to use a bobcat and needs room for scaffolding, but the area will be stabilized and work in that area will be minimized as much as possible during construction. Responding to a question from Mayor Mertensotto regarding saving three basswood trees on the west side of the house, Mr. Kleinman stated that one of them is already broken down and as the ground is cut for the foundation, the root structure of the trees could be damaged. Mr. Coyle stated that if the trees must come out they will be replaced with trees that are acceptable to the city. He stated that he spoke to the DNR last week and they understand that it is likely that the trees cannot be saved. Councilmember Schneeman stated that she spent considerable time on the phone with Mr. Johnson and Mr. Palmer today and she did not get the impression that they understood the trees may be lost. Responding to questions from Mayor Mertensotto regarding the remaining DNR concerns, Mr. Coyle stated that he has worked with city staff on the runoff management issues. As many trees as possible on slopes greater than 18 percent will be preserved and a view of the corridor will not be cut. In response to the sixth condition, Mr. Kleinman informed Council that six new trees will be planted between the home and the neighboring property to the south. Conditions seven and eight regarding revegetation with native species will be complied with. Councilmember Krebsbach stated that Council should be sure that the applicants understand that a landscaping plan be submitted at some point in the process. She noted that Council historically requires landscaping plans for properties in the critical area. Councilmember Dwyer asked if Council has authority to require a landscaping plan. Page No. 11 January 18, 2000 Mayor Mertensotto responded that erosion control is required the and landscaping is a permanent part of erosion control. Mr. Najarian stated that after the December 21 meeting there were two main questions — did the plan need a variance and where is the 18% slope line. He spoke to Mr. Stine of the DNR today to see if they changed their position regarding the need for a variance and was told that they had not. Mr. Stine told him that he said that the slope plan was acceptable but did not say that it did not need a variance. Mr. Stine referred to Mr. Johnson's letter and told him that it clearly states a variance is needed along with evidence of a hardship. Mr. Najarian stated that council would need to make a finding of hardship under state law. Mayor Mertensotto responded that Council has never granted a variance in the critical area before and has made that clear from the start of the discussions. He pointed out that the DNR does not enforce the city ordinances, Council does. There area so many areas in the city where there are slopes and elevations that it would be impossible to grant variances in the critical area. Each application must be treated on a cases by case basis. Mr. Najarian stated that the 18% slope calculation by Barr puts the line at the lip of the property but as Barr stated they did not use a horizontal distance to calculate the slope. He stated that two separate sources have told him that a horizontal distance should be used. Ordinance No. 403 clearly states to use a 100 foot horizontal distance to calculate the slope. This is also the same ordinance that defines the bluff line at 40 %. If Council holds fast to that definition, the city must also hold fast to the 100 foot horizontal distance for calculation of slopes, which would place the 18% slope 20 feet back from where Barr placed it. Also, there is a 20 foot perimeter that is disturbed around a new home. He felt that the city should require that the home be pushed back 20 feet more to give room for bobcat work, etc., during construction, and if that were done protection of the bluff would be ensured. Mayor Mertensotto responded that one of the problems with this lot is that at one time it had access to Highway 13 and that was changed during the course of development. The property was replatted with access, and at that time the city determined that the lot was buildable and installed utilities and assessed for them. The city is bound by its determination that the lot is buildable. In all of the interpretation of the critical area ordinance, Council must determine what is reasonable. This is an irregular lot with varying slopes. Council Page No. 12 January 18, 2000 retained Barr Engineering in the hope that parties could arrive at a reasonable compromise. He felt that incorporating the items in Mr. Johnson's memorandum of December 20, except for item 1, there would be adequate protection of the slope area, particularly if a landscaping plan is required. He stated that if Council approves the permit, the landscaping plan be submitted to City Engineering for approval by March 1. He further stated the Code Enforcement Officers will be advised not to issue a certificate of occupancy for the home until the landscaping plan is submitted and approved. Councilmember Krebsbach stated that a 40 foot setback from the bluff line is the standard by which other homes in the critical area have been judged, and the plan is well within that standard. Council is sensitive to the 18% slope, and at all points, the structure is off the 18% slope. Mr. Kleinman stated that with the general flow of the land, the bluff is off to the northwest. Two corners of the structure on the northeast that are within the setback, where there is a gully that runs alongside the property. Mayor Mertensotto asked if the gully is stable enough. Public Works Director Danielson informed Council that the stability of the gully is a concern but that it is believed to be stable as it exists. There are already gabions in the creek. Mayor Mertensotto stated that Council certainly wants to be cognizant of how drainage will run through the gully. Councilmember Krebsbach stated that when her home was constructed, a large burr oak tree that was ten feet from the home was saved. She encouraged the applicants to do whatever possible to save the existing basswood trees. She stated that she could approve the critical area permit with the conditions stated along with a condition for submission of a landscaping plan that would restore and enhance the bluff. She noted that Council has traditionally asked for landscaping plans for homes in the critical area. City Attorney Hart sated that Council has the specific authority to require a landscaping plan under Section 2.50 of the Critical Area Ordinance. Mr. Coyle informed Council that the applicant will be in compliance with Section 2.5 of the code. Page No. 13 January 18, 2000 Councilmember Schneeman stated that Section 2.5A of the ordinance mentions a reasonable preservation of the view of the river corridor and of other properties. She stated that has been a very difficult situation for Council as well as the applicant and Mr. Najarian. Councilmember Huber moved to approve a critical area permit, embodying conditions 2 through 8 of the December 20, 1999 DNR memo from Steve Johnson and that Council make a finding that all of the conditions of the critical area ordinance have been reasonably met by the proposed project (Plan B), with the condition that a landscaping plan must be submitted on or before March 1 and instruction to the Code Enforcement Officers not to issue a certificate of occupancy until on the landscape plan is filed by the applicant and approved by city engineering staff. Councilmember Krebsbach seconded the motion. Councilmember Krebsbach stated that the dimensions of the home must be duly recorded and that is must be very clear what the dimensions of the house are. She commended the Najarians on their concerns for the bluff. She stated that property owners in the district have traditionally made accommodations for one another, and hopefully that tradition will continue. Councilmember Dwyer recognized that this has been a difficult process for Mr. Najarian. He stated that because of Mr. Najarian's efforts in getting the DNR involved and compromises by the Baldingers there has been a better result. Ayes: 5 Nays: 0 Staff was directed to prepare a formal resolution of approval for Council adoption. MENDOTA HOMES Mr. Hellmuth informed Council that he has spoken to Mr. Mathern (CONTINUED) and has been given the authority to agree to payment of $7,000 by Mendota Homes to the association $7,000 and ask for release of the entire letter of credit. Mayor Mertensotto asked about the balance sheet from the homeowners association to December 22. Mr. Helhnuth responded that under law the books and records of the association are open for any member to inspect. It is their right as members of the association to look through the record. He stated Page No. 14 January 18, 2000 that he has looked at some of the expenditures noted in the residents' letter. One of the issues was the law can care expenses. The monthly fee is $15,600. $19,000 was paid and in addition to that Mendota Homes spent $15,000 to $20,000 to correct things that they determined were original construction defect issues. There are many other issues, but those issues are outside of the letter of credit. Mayor Mertensotto stated that he wants to know what the balance is. He did not want to find that Mr. Mathern agrees to pay $7,000 and then takes it out of the association balance. Mr. Hellmuth responded that the $7,000 will be a payment from Mendota Homes, Inc. to the association. Mr. Sirisi informed Council that the homeowners have caucused. Their concerns are that there are a number of problems that still exist. There is a major problem because the city requirement for 4" of topsoil was not met and it is not known what it will cost to have the sprinkler system maintain the problem. Mr. Mathern has agreed to give the association $7,000 and the association would like to have that $7,000. The association would like $15,000 held back in the letter of credit to have things done that have not been effectively completely yet. Some of the things were done but the association was charged for them. He stated that the letter of credit is the only crutch the owners have to make the developer do that he has not done for years. Mayor Mertensotto stated that Mr. Hellmuth has been authorized to commit the $7,000. The association wants to challenge some of the expenses paid by the association. He stated that Council must set a date by which Mr. Mathern submits the $7,000. If the homeowners do not want to agree, their issues must be left as an open question. Mr. Hellmuth stated that there is a contract between the city and Mendota Homes and that relates to landscaping. The $7,000 payment came up as a result of the owners raising issues over the sprinkler system and sign. Mendota Homes believes it has fulfilled the terms of the contract with the city, and feels that the letter of credit should be released. If there are still issues between the owners and Mendota Homes, Mendota Homes wants to get them resolved. Mr. Sirisi stated that the big problem is the lack of topsoil, and that can create a lot of problems that can cost a lot of money in the future. Page No. 15 January 18, 2000 Mr. Hellmuth responded that Mendota Homes is not going out of business and has many projects going on. This is not the last chance the association will have to resolve a private dispute. Resolution of those disputes is outside of the Council's right. Mayor Mertensotto stated that he does not want any mis- understanding. The $7,000 would cover $2,000 for the sign and $5,000 for the sprinkler system. He asked if the residents agree. Mr. Sirisi responded that the residents have additional concerns over the sprinkler system. Mr. Mathern agreed to pay $5,000 to try to correct the system and the residents are willing to give that a try and hope that it will correct the sprinkler problems. If it does not, there will be other problems to address in the future. Mayor Mertensotto stated that Mendota Homes would have to bring in a cashiers check for $7,000 to the city before the City Clerk can issue a statement to the bank that the city releases the letter of credit. The money must be delivered in the name of the homeowners association. The city cannot get into the issues the residents have about charges made against the association. One of the residents stated that Mr. Mathern will not let the home owners look at the books until the association is turned over to the homeowners. City Attorney Hart stated that Mr. Hellmuth is correct in that there was a contract and the city must adhere to the terms of the contract. The question is whether the landscaping requirements under the developers agreement have been corrected to the satisfaction of the city. If they are completed, the city is bound to release the letter of credit. The homeowners may have concerns with regard to inappropriate payments out of the association's checking account but those are not city issues. He stated that there has been a question raised this evening on whether landscaping issues have been corrected. Whether the irrigation system concerns are maintenance or relate to improper installation are a factual matter that the city has the right to determine. If it has never worked for a significant amount of time, that is an installation issue. If it worked for several years without puddling, etc., that is maintenance. These are factual issues remaining that need to be determined. Mayor Mertensotto stated that Public Works Director Danielson prepared a 60 item list for Council gave Mendota Homes sixty days to complete the list. If the residents have claims that were not on the Page No. 16 January 18, 2000 list, they are not a part of the agreement. If Mr. Mathern submits a $7,000 check, which could be made payable to the city, when the homeowners take over the association, they will know that the funds are available and the City Clerk can issue the letter to the bank. He stated that the city cannot ask for a substitute letter of credit or withhold part of the letter of credit. Use of the $7,000 would be at the discretion of the homeowners. Councilmember Huber stated that some of the issues outstanding in mid- October cannot be addressed and some are addressed with the $5,000. He pointed out that the black dirt issue will never get completely resolved. Public Works Director Danielson responded that the bottom line is that the landscaping was not done correctly to begin with and to go back now will not result in a perfect job. The homeowners will be stuck with a less than perfect job no matter what the city does. The punch list has been completed with some exceptions that have not been proved yet, such as the trees. Councilmember Huber stated that the punch list has been resolved with a few exceptions and to hold onto the letter of credit will not resolve those issues. He further stated that there is nothing else the city can do. Councilmember Dwyer stated that there has been a great deal of time spent on the matter. In his experience, he believes the city has gotten as much as it can for the homeowners. Tonight Mendota Homes has agreed to put $7,000 at the disposal of the homeowners and has made other corrections. He stated that the letter of credit was a good tool but Council has used it as much as it can. Mr. Sirisi stated that it appears that Mr. Mathern has charged the association for a lot of the work that he should have paid for himself. Mayor Mertensotto responded that Council cannot get involved in that type of dispute. Councilmember Krebsbach asked what the city accomplished by holding the letter of credit. Councilmember Huber responded that the lengthy punch list has been resolved and while there is some dispute as to who paid for it, that is a matter between the homeowners and Mr. Mathern. Page No. 17 January 18, 2000 Councilmember Krebsbach asked for verification that the fundamental items have been addressed. She stated that it appears that some of them have not been addressed. Public Works Director Danielson responded that one thing that was not discussed is that the lawn care contractor did not correctly apply fertilizer and weed killing was not done correctly. That is a large part of the problem. Councilmember Krebsbach was more concerned about the original installation of the landscaping. She felt that the purpose of the letter of credit was for fundamental things such as the installation of topsoil. Mr. Jack Barber stated that the homeowners know that they have a legacy they have to live with but that the homeowners appreciate what the city has done. The homeowners know there are problems and that they have to live with them. He stated that the owners understand that once the $7,000 is received and the letter of credit is released, the issues will be between Mendota Homes and the residents. Responding to Councilmember Krebsbach's question, Public Works Director Danielson stated that city staff made a list of deficiencies and Council approved it. Staff did numerous inspections, with representatives of the homeowners, and the list of items was corrected. Topsoil was not on that punch list. He stated that it would be impossible to remove the sod and install topsoil. One of the homeowners asked why there is no penalty to Mr. Mathern for not installing the proper topsoil to begin with. Mayor Mertensotto that the penalty comes if the city does the corrective work and charges the letter of credit, and that would end up in another round of litigation. City Attorney Hart stated that the letter of credit is not intended as a penalty but is there only to the extent that there has been a default under the developers agreement with respect to the landscaping and soils issues and the city expends funds to correct those issues. In that circumstance the city could make a draw on the letter of credit to capture its costs. The letter of credit is only to secure the performance and the completion of the items. Page No. 18 January 18, 2000 Councilmember Huber pointed out that if the city could start a project and never complete it because it is obvious that $65,000 would not be enough to cover the topsoil. Mayor Mertensotto stated that Mr. Mathern has agreed to submit a certified check to the city for $7,000. When the homeowners are ready to take over the association, they can pick up the check. He pointed out that the city has had expense in retaining John Uban to assist in preparing the punch list. Councilmember Huber moved that the developer submit certified funds in the amount of $7,000 to the city and upon receipt of those funds the City Clerk will be authorized to issue a letter to the appropriate bank to release of the letter of credit in the amount of $65,000, with the understanding that $2,000 is to be used for signage and $5,000 is to be used for the irrigation system based on a prior agreement between the homeowners and the developer. Councilmember Dwyer seconded the motion. Ayes: 5 Nays: 0 Mayor Mertensotto stated that it must be understood that any other 1 claim the homeowners have with the developer or in regards to expenditures from association funds is outside of the prerogative of the city. SIGNAL BANK Council acknowledged a memo from Assistant Hollister in response to a letter from Signal Bank parking lot expansion at 1395 Commerce Drive. Mr. John LeMay was present on behalf of Signal Bank. Mr. LeMay informed Council that Signal Bank is in the process of purchasing the former VGC building and is requesting a building permit to remodel it for use as the bank's operations center. Because some of the interior space will be converted from warehouse and storage space to office space, the city's ordinance requires additional parking spaces. He stated that Signal Bank has submitted a proof of parking. The first stage of parking will be built out immediately and the second phase will be built at a later time to handle parking for an additional 7,000 square feet of office space. Mayor Mertensotto asked how the city would control implementation of the parking plan, so that the city knows that the second phase will be done at the same time as the second phase of remodeling. Page No. 19 January 18, 2000 City Attorney Hart stated that if the city can establish from the site plan that there is adequate space available for the required parking, Council can condition the issuance of the building permit for remodeling on the addition of the required parking spaces. City Administrator Batchelder stated that this is an existing office /warehouse and parking spaces will be added with each stage of remodeling. In order to get a building permit for the second stage, Signal Bank would have to add the required parking. Mayor Mertensotto stated that Council can approve phase one of the parking for phase one of the building with the condition that when they complete phase two of the building they must also do phase two of the parking. The Code Enforcement Officers will be notified that when the bank applies for a permit for phase two of the building remodeling it must also complete phase two of the parking. Councilmember Huber moved to approve phase one construction and phase one parking expansion conditioned that when Signal Bank does phase two building construction it must also complete phase two of the parking lot construction. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 LEXINGTON -TRAIL Council acknowledged and discussed a memo from Parks Project Manager Kullander regarding the proposed Lexington Avenue trail. Councilmember Dwyer stated that the city is confronted with some very difficult engineering for a trail north of Wagon Wheel Trail and has discussed the option for routing the trail along Lexington from Mendota Heights Road to Wagon Wheel Trail and then along Wagon Wheel Trail to the I -35E bridge. Councilmember Krebsbach stated that the advantage of completing this portion of the trail is that people who move into the new townhouses and people who live in the apartments will at least be able to get to the trail and park systems. Also, this section provides a full link to the trail system. Councilmember Schneeman moved to authorize staff to prepare plans and specifications for a proposed paved trail along the east side of Lexington Avenue and along Wagon Wheel Trail to the I -35E bridge. Page No. 20 January 18, 2000 Councilmember Huber seconded the motion. Ayes: 5 Nays: 0 MEETING SCHEDULE Council acknowledged a memo from the City Clerk recommending the rescheduling of meetings that fall on holidays or conflict with election related activities. Councilmember Schneeman moved to reschedule the March 7 meeting to Wednesday, March 8 so as not to conflict with precinct caucuses, to reschedule the regular meetings scheduled for July 4 to Thursday, July 6, and to reschedule the starting time for the November 7 meeting to 8:00 p.m. so as not to conflict with the hours of the General and City Election. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 COUNCIL COMMENTS Mayor Mertensotto informed Council on the status of the Beckman and Sampson lawsuits. Councilmember Huber informed Council that the Cable Commission will recommend that the franchise fees to be paid to the cities be adjusted from 15% in the existing franchise agreement to 25% in the proposed agreement. He stated that based on this adjustment, West St. Paul will agree to rescind its withdrawal. Councilmember Schneeman informed Council that she has received a call from a resident about a problem and referred the problem to Public Works Director Danielson. She subsequently received a nice letter from the resident to inform her that Mr. Danielson had resolved the problem. Administrator Batchelder informed Council that the city has received a letter of incompleteness from the Metropolitan Council with regard to the city's comprehensive plan. Staff will approach Council about continuing the consultant's services to respond to the Metropolitan Council. ADJOURN There being no further business to come before Council, Councilmember Huber moved that the meeting be adjourned to the Goal Setting workshop scheduled for 8:00 a.m. on January 22. Councilmember Krebsbach seconded the motion. Ayes: 5 Nays: 0 Page No. 21 January 18, 2000 TIME OF ADJOURNMENT: 10:25 p.m. Ka een M. Swanson City Clerk ATTEST: IN W-1 Charles E. Mertensotto Mayor