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1999-02-16 Council minutesPage No. I February 16, 1999 CITY OF MENDOTA HEIGHTS DAKOTA COUNTY STATE OF MINNESOTA Minutes of the Regular Meeting Held Tuesday, February 16, 1999 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 turned the Chair over to Councilmember Krebsbach. Councilmember Krebsbach called the meeting to order at 7:30 o'clock P.M. The following members were present: Mayor Mertensotto, Councilmembers Dwyer, Krebsbach and Schneeman. Councilmember Huber had notified Council that he would be absent. AGENDA ADOPTION Councilmember Dwyer moved adoption of the revised agenda for the meeting. Councilmember Schneeman seconded the motion. Ayes: 4 Nays: 0 APPROVAL OF MINUTES Councilmember Schneeman moved approval of the minutes of the regular meeting held on February 2, 1999, as amended. Councilmember Dwyer seconded the motion. Ayes: 4 Nays: 0 CONSENT CALENDAR Councilmember Dwyer moved approval of the consent calendar for the meeting, along with authorization for execution of any necessary documents contained therein. a. Acknowledgement of the Treasurer's monthly report for January. b. Acknowledgment of the Fire Department monthly report for January. c. Acknowledgment of the unapproved minutes of the January 6, 1999 NDC-4 Commission meeting. d. Acknowledgement of an AMM Bill Tracking Report. Page No. 2 February 16, 1999 e. Approval to appoint U.S. Bank Trust as Successor Custodian for a Letter of Credit for Centre Pointe One Associates. f. Acknowledgment of receipt the MAMA Labor Relations Committee 1999-2000 Subscription Service request and authorization to staff to notify MAMA-LMC that the city does not desire to subscribe in 1999. g. Approval of the appointment of Mary Hapka to the part time position of Recreation Programmer for a probationary period of twelve months, at the pay rate of $12,495, effective March 3, 1999. h. Adoption of Resolution No. 99-07, "RESOLUTION APPROVING FINAL PLANS AND SPECIFICATIONS AND AUTHORIZING ADVERTISEMENT FOR BIDS FOR STREET IMPROVEMENTS TO SERVE THE AREA REFERRED TO AS CHERRY HILL ADDITION AND PARCEL NO. 27-8 13100-043-00 OF VANDALLS OUTLOTS (JOB NO. 9714, IMPROVEMENT NO. 99, PROJECT NO. 1)." i. Acknowledgment of a report from Police Chief Johnson regarding the status of the radio communications study and other communications and technology issues. Approval of the issuance of cigarette licenses to Mendota Liquor, Tom Thumb Stores, Inc., Twin Cities Stores/Oasis Market, Somerset Country Club, Tempco Mfg.Co. Employee Party Club, Speedway SuperAmerica LLC #4516, Speedway SuperAmerica LLC #4521, and Snyders Drug Stores, Inc. k. Approval of the list of contractor licenses dated February 16, 1999 and attached hereto. 1. Approval of the List of Claims dated February 16, 1999 and totaling $322,500.41. Councilmember Schneeman seconded the motion. Ayes: 4 Nays: 0 CASE NO. 99-02, Council acknowledged revised plans for a proposed maintenance MENDAKOTA facility for the Mendakota Country Club along with an associated report from Administrative Assistant Hollister. Mr. Robert Page No. 3 February 16, 1999 McKinney was present, on behalf of Mendakota, for discussion continued from February 2. Mr. McKinney expressed appreciation to Mayor Mertensotto and Councilmember Schneeman for meeting (as a Council subcommittee) with Mendakota representatives to find a solution to his dilemma about the maintenance facility. He informed Council that the plan has been revised to create two different jogs in the building to break up the look of the 180 foot long structure. Also, spruce trees have been added and the parking area has been moved from the east side of the building to the south side. He explained that many ten foot tall spruce trees have been added between Dodd Road and the building and some of the windows have been taken out of the structure. There will be two different colors of concrete block used on the exterior of the building. Responding to a question from Councilmember Krebsbach, Mr. McKinney stated that the cold storage needs will be met in the new design. The first 75 foot section of the structure is the heated area and the other two sections will be cold storage area. The square footage of the building remains the same as in the February 2 proposal. Mr. McKinney informed Council that there will be no blacktop on the east side of the structure and there will be no activity on that side of the building. Mr. Ron Ryan, from RJ Ryan Construction Company, informed Council that the earlier drawing showed intermittent scuppers (piers) around the building to hide the downspouts and break up the building. The scuppers have no purpose now and have been taken out. Also, Mendakota may wish to square off the northwest corner of the building. He pointed out that this area would not be visible to traffic. Mayor Mertensotto informed Mr. McKinney that he must file a complete revised plan. Mr. Ryan informed Council that there is an error on the current plan. It shows the blacktop ending at the northwest side of the building, which is not correct because there will be a bituminous pad for the washer for mowers on the north end of the building. He informed Council that landscaping will be added to hid the washer. Councilmember Krebsbach asked if there is adequate turn space. Page No. 4 February 16, 1999 Mr. McKinney responded that he would like to add another garage door but has not decided yet. He stated that he had concerns about trucks being able to get in and out with the "Ushape design discussed last meetinc, but with the new design there is a large courtyard to work with and there should not be any problems. Councilmember Schneeman stated that she likes the redesign very much. Mayor Mertensotto stated that the proposed resolution approving the conditional use permit will need to be amended so that there is no question that the parking lot along the south boundary line must be set back at least to the depth of the Fire Station. Also, a condition must be added stating that there cannot be any storage of trucks or other equipment or any materials on the east side of the structure. He informed Mr. McKinney that the building must be finished on all four sides and pointed out that there will be berming around the building 7 as well. - Mr. Ryan stated that Mendakota agrees wholeheartedly to finishing on all four sides. He informed Council that prefinished masonry materials will be incorporated on all four sides. The flashing will either be pre-colored or will be painted to match the darker color on the building as closely as possible. Mr. Ryan stated that at some time Mr. McKinney may wish to separate some of the earthen materials that are used on the course. He stated that they would be positioned in an area where they cannot be seen. Mayor Mertensotto responded if there must be exterior storage of materials, the storage cannot be to the north, south or east of the building except for the pad for the mower washer which will be used on a temporary basis and will be screened. Councilmember Dwyer stated that the Council subcommittee recognizes that the jogging of the wall and the added landscaping increase the cost of the project. He reviewed the costs itemized in Assistant Hollister's memo and stated that the subcommittee recommends that the city contribute $70,000 in TIF towards construction of the building. Councilmember Dwyer stated that at first he felt that $70,000 is a lot of money for the city to spend on a private golfing facility, noting that perhaps one-third of the members are Mendota Heights residents. He felt that the city must carefully examine contributing $70,000 towards the project, stating that under TIF, if a city contributes money to a project and the project has an incremental increase in taxes, the city recaptures its money. Page ;e No. 5 February 16, 1999 Mayor Mertensotto responded that there are two existing buildings, the pro shop and cart storage, for which there will be no need if the maintenance facility is constructed. Demolition of those buildings is appropriate under TIF. Also, Mendakota is a tax paying enterprise and would qualify for TIF and that it is also located within a TIF District. He explained that half of the TIF would go towards demolition of the existing structures and there is no question that the city's requirements to break up the building and add landscaping are not functional for Mendakota but would add considerable cost to the project. He stated that any increment in tax resulting from the improvement would come back to the city. He informed Council that the subcommittee has discussed the issue with Treasurer Shaughnessy and he indicated that it is acceptable under the Dodd Road program. Councilmember Krebsbach stated that she likes the revised plan. She stated that she and Councilmember Huber worked on a committee on tax increment for the Dodd Road Tax Increment District and it was always agreed that tax increment funding could be used for Mendakota. upgrading. Mayor Mertensotto stated that the main part of the issue is that as a land owner Mendakota could not develop the property with tax increment and then sell the property for profit. He further stated that the understanding is that Mendakota will enter into a TIF agreement with the city and that the maximum amount of TIF assistance will be $70,000. He stated that Mendakota could receive the money when its architect certifies that the work is completed on the project and the certification is brought to the city. City Attorney Hart stated that there are two forms of tax increment benefits. One is a lump sum payment and the other is pay as you go. He explained the two types of benefits and stated that the Mendakota TIF would be a lump sum benefit. He stated that the city has required applicants to provide an opinion of legal counsel certifying that the costs for which tax increment funding would be used would qualify under state statute. T a! Mr. Ryan responded that Mendakota's expenditures are running more than he projected at the meeting with the Council subcommittee. Mayor Mertensotto stated that tax increment funding would be Z� strictly based on the negotiations with the subcommittee based on Page No. 6 February 16, 1999 the cost projection Ryan Construction gave to the committee as added expenses caused by the city. He also stated did not think a legal opinion is needed from Mendakota's legal counsel and did not want to add the expense of legal counsel to the project cost. Attorney Hart responded that it is not so much that actual dollars have been spent but rather whether the particular expenses qualify for tax increment benefits. He stated that his office could prepare an opinion if Council wishes. It was the consensus to direct City Attorney to prepare a legal opinion and to prepare a draft tax increment and to submit the draft agreement to the Chair of the Mendakota Board. Councilmember Dwyer moved adoption of Resolution No. 99 -08, "A. RESOLUTION APPROVING A BUILDING PERMIT AUTHORIZATION AND A CONDITIONAL USE PERMIT FOR A MAINTENANCE FACILITY FOR MENDAKOTA COUNTRY CLUB," amended to add the following conditions: a. parking will only be allowed on the south side of the structure b. the parking setback will be at the same setback as the fire station c. parking will be limited to 19 stalls d. no storage will be allowed outside except to the west of the structure in a bermed area e. the building will be finished on all four sides f. the color of the flashing will match the darkest color on the building g. tax increment assistance from the city will not exceed $70,000 h. the applicant may square off the northwest corner and extend the pavement for equipment washing conditioned upon installation of additional screening. Councilmember Schneeman seconded the motion. Ayes: 4 Nays: 0 Mr. McKinney informed Council that he hopes to break ground on March 15, with completion of construction by the middle of June, and then demolish the other buildings and realign the third green. NEWSPAPER DISPENSERS Council acknowledged a memo from Public Works Director Danielson with regard to regulation of newspaper dispensers along with a City of Woodbury ordinance regulating dispensers.. Page No. 7 February 16, 1999 Councilmember Schneeman stated that she observed a box on the corner of Dodd and Marie and it was right next to a fire hydrant. She stated that she did not feel that the situation was safe and called staff to see what was allowed by ordinance. Councilmember Krebsbach stated that the Woodbury model ordinance gives the city a means by which to regulate the location of newspaper dispensers. Mayor Mertensotto felt that the definition should be expanded to include vending machines, news boxes and like structures and other types of containers. Councilmember Dwyer stated that Council can regulate the location of the boxes for public safety purposes to be sure they will not interfere with hydrants, crosswalks, etc. He stated that this is not a First Amendment issue. City Attorney Hart stated that the city can impose, time, place and manner requirements. It was the consensus that Council is willing to entertain a proposed ordinance using the Woodbury ordinance as a model. WENTWORTH PARK Council acknowledged a memo from Parks Project Manager Guy IMPROVEMENTS Kullander regarding Wentworth Park improvements recommended by the Parks and Recreation Commission. Mr. Kullander informed Council that the Commission has been discussing a new warming house at Wentworth for the last several years. The paving of the Friendly Hills hockey rink last years was very successful, providing a roller blading area and excellent ice. The Commission wants to pave another rink and chose Wentworth because they want to replace the warming house there and did not want to do part of the work this year and part next year. The hockey boards in Wentworth are relatively new, and they would be removed and reinstalled after the rink is paved. Mayor Mertensotto stated that he has a philosophical difference with the Planning Commission comments. He did not think the proposed dual purpose warming house and community building uses mesh because they serve two different purposes. He stated that he would hope a community facility is treated much better than warming houses are. Page No. 8 February 16, 1999 Mr. Kullander responded that the warming house structures are probably only used three months in a year and the Commission felt that the building could be used for summer recreation programs, like "art in the park," etc. but not as a community meeting place. Mayor Mertensotto stated that his disagreement is that a warming house facility, used by people wearing skates, is treated much differently from a community facility. Mr. Kullander responded that 1/2 to 3/4 inch rubber mats are placed on the warming house floors now and they could be picked up so that the concrete floors would be in use in the summer. Mayor Mertensotto stated that he would have no problem with making a larger structure with one half of it being used for a warming house and the other, unheated, half used for summer activities. He felt that the design used in Mendakota Park is a very expensive design and he did not think it is functional. Mr. Kullander stated that warming houses are modified garages without windows, and the Commission wants to work in elements like stone on the corners to make the structure more aesthetically pleasing. Mayor Mertensotto stated that in addition, there is no money in the city's capital improvement program for the proposed project and wondered where the encroachment would stop if the expenditure were approved without prior budget planning. He stated that if the Commission wants to propose an overall capitol improvement plan and come up with financing for the year 2000 CIP, they should do so at budget time. He noted that the Commission does not want to spend Special Park funds. Councilmember Dwyer pointed out that the Commission proposes to fund the project on a 50150 basis between the Special Park Fund and General Fund. Councilmember Schneeman stated that Wentworth Park definitely needs a bigger building and that she does not object to having some type of building that can be used in the summer as well. She noted that the recreation department could do more things in the park for the children and she would definitely be in favor of a building. Councilmember Dwyer pointed out that the Special Park Fund has a $415,000 balance. He stated that the Commission is asking for Page No. 9 February 16, 1999 approval of $40,000 to pave the rink and another $40,000 for a building. Mr. Kullander stated that the commission proposes to fund half of the total cost from the Special Park Fund and half from the General Fund. The commission had planned to pave the Marie Park rink this year and decided to defer that and do Wentworth this year. Councilmember Schneeman stated that what has happened is that many people have called because the warming house is not adequate for the number of children who use it. Also, paving the rink keeps people from roller biading on the tennis courts. Councilmember Krebsbach asked if the warming house would have windows. Mr. Kullander responded that there would at a minimum be exhaust fans because windows are subject to much vandalism. Windows will be installed if they can be protected adequately with screening. There would be three doors to provide ventilation and the structure would only be open in the summer when there are supervised activities scheduled. Mayor Mertensotto asked where the money will come from. He stated that there is a contingency fund in the budget and Council has already encroached on it. He stated that funding an $80,000 unbudgeted expenditure is not the type of precedent he wants to set and the commission should prepare a capitol improvement project during the budgeting process. Councilmember Dwyer suggested returning the matter to the Parks and Recreation Commission and informing them that Council has not budgeted from the General Fund in 1999 and if the commission really feels this is a good use of city money, the financing should come from the Special Park Fund. If that is the recommendation of the commission, Council will take a hard look at it. He stated that the majority of Council appear to be in favor of both projects but the question is how to pay for them. He felt that Council should ask the commission how strongly they feel about the need for the improvements and if they are necessary enough to come out of the Special Park Fund. He stated that if the commission really feels the projects are important, the cost should be funded by the Special Park Fund. Page No. 10 February 16, 1999 Mayor Mertensotto stated that he does not want to jeopardize the General Fund budget. Councilmember Schneeman asked why the entire cost cannot be funded by the Special Park Fund. She pointed out that annual interest is sufficient to fund the projects. It was the consensus of Council to refer the matter back to the Parks and Recreation Commission with the understanding that at this point there will be no contribution from the General Fund and if the commission wishes to finance the expenditure through the Special Park Fund Council will reconsider the matter. Mayor Mertensotto stated that the commission should develop a capitol improvement plan whereby the city would budget money each year for park improvements. Councilmember Dwyer stated that it is important to point out that the city just spent $70,000 to benefit a golf course but the difference that the funding was by TIF. He recognized that more children will benefit from the improvements at Wentworth Park. Councilmember Krebsbach stated that if the commission wishes to spend the total amount from the Special Park Fund this year Council could certainly do that. Administrator Batchelder stated that $12,000 has been budgeted for hockey board replacements in 1999 at Marie Park and it is the idea of the commission to move that funding over to the Wentworth Park rink improvements. That $12,000 could be transferred if the commission wants to use it towards the paving of the hockey rink at Wentworth. The commission must look at their priorities, because that would defer Marie Park hockey rink work. SUPER AMERICA TIF Council acknowledged a memo from Administrator Batchelder regarding the SuperAmerica ownership transfer related to the TIF Development Contract. Council also acknowledged associated letters from City Attorney Hart and Mr. Michael Cronin. Mayor Mertensotto stated that SuperAmerica undertook a merger with Marathon Oil and all of a sudden discovered that they have a TIF agreement. He stated that there is no question when you do a percentage merger you take what you have at face value. He stated that the TIF for SuperAmerica is on a pay -as- you -go basis and he did not think it is significant to SuperAmerica. Page No. 11 February 16, 1999 Attorney Hart stated that the parent company for SuperAmerica has gone into a joint venture with Marathon Oil, and Ashland Oil now owns 38 %. Attorney Hart felt that the merger does constitute a transfer and the issue before Council is the kind of circumstance under which Council would want to exercise the remedy of cutting off future TIF benefits. The history of transfers the city has put into its agreements is that Council has expressed a desire to prohibit a developer from obtaining benefits from the city and transferring them for the value the city has created. The city has provided in the TIF agreements that if a developer retains less than 50 %, the city could cut off benefits. On an annual basis, as the city receives tax increment from the SuperAmerica property, a portion of the increment is given to the developer. He stated that there are 650 SuperAmerica stores involved in the venture versus a single, stand -alone facility. Councilmember Dwyer stated that his concern is that if this was a default and the city elects not to seek a remedy, his initial concern was whether the city would be precluded in the future from seeking a remedy. He pointed out that the document has a non- waiver clause. It was the consensus that Council does not waive the forfeiture provisions of the agreement because Council regards the merger as being a transfer and in conflict with the terms of the agreement. Attorney Hart asked whether it is the recommendation of Council that benefits cease under the pay as you go note or to continue benefits notwithstanding the transfer. Mayor Mertensotto stated that his recommendation is that the note be discontinued. He suggested that Council acknowledge that the transfer has occurred and that under the agreement, the city has an option as a remedy to stop the pay -as- you -go TIF contributions. Councilmember Dwyer stated that Council could acknowledge the transfer and say that this was one of 650 stores and it does not appear that this is an effort by Ashland to profit from the tax increment benefit. He further stated that Council could agree to not act on the remedy and continue to make tax increment payments. Mayor Mertensotto responded that his problem with that approach is that the question is what constitutes a transfer and does the city regard this as a transfer. Otherwise, Council must get into the intent. SuperAmerica made the transfer 62% f its interest to another entity Ayes: 4 Nays: 0 Page No. 12 February 16, 1999 and the agreement says they must maintain at least 50% ownership. He felt that Council should not get involved in the intent and that Council is not required under the agreement to analyze intent. He stated that if SuperAmerica disagrees, they can appear before Council at the next meeting. Councilmember Dwyer asked what kind of money is involved. Attorney Hart responded that the original TIF, dated in 1996, was $140,000 and he does not know what the actual current amount is. He stated that this matter is in the discretion of Council, that it clearly constitutes a transfer, and that the city has the right to cut off benefits. He further stated that he does not think it would be inappropriate for Council to try to determine whether this is the kind of transfer Council was trying to guard against and that it is a discretionary matter. Councilmember Krebsbach asked if the other provisions of the contract would be affected if Council invokes that option. Attorney Hart responded that from the city perspective, the building has been built and the regulation of the facility is controlled by the city's land use regulations and the developer's agreement for the project. Mayor Mertensotto pointed out that the project included both SuperAmerica and the bank, with a 60/40% TIF distribution. He stated that he is concerned that there are many pay -as- you -go agreements in effect in the city's industrial area and not exercising the remedy in this instance would set a precedent. Councilmember Dwyer responded that if there are transfers or other triggering events that cause Council to look at the stream of payments, perhaps Council should set a rule that when there is a transfer Council considers it an event under the agreement and this is the remedy. Mayor Mertensotto moved that Council finds this to be a transfer under the terms of the agreement and terminates future payments. Councilmember Schneeman seconded the motion. Administrator Batchelder informed Council that Mr. Michael Cronin had intended to be present this evening but could not attend. Mr. Cronin asked if he could have an opportunity to appear before Page No. 13 February 16, 1999 Council at another meeting if Council considers taking negative action Mayor Mertensotto responded that Mr. Cronin does not work for SuperAmerica but that he could appear before Council. Attorney Hart informed Council that Council's action could be reconsidered at the next Council meeting, however a member voting on the prevailing side must make a motion to reconsider this evening's motion. WMO APPOINTMENT Mayor Mertensotto informed Council that Councilmember Dwyer has expressed an interest in being appointed to represent the city on the Lower Mississippi River Watershed Management Organization, and recommended his appointment. Mayor Mertensotto moved to appoint Councilmember Dwyer as Council's representative on the Lower Mississippi River WMO. Councilmember Schneeman seconded the motion. Ayes: 4 Nays: 0 COUNCIL COMMENTS Mayor Mertensotto informed Council about a notice he had received from the Metropolitan Council regarding a public comment/infor- mational meeting to receive input on the proposed draft 1999 Project Solicitation for federal and regional transportation funding. Councilmember Dwyer stated that Planning Commissioner Tilsen has an interest in transportation issues and suggested that copy of the letter be forwarded to him. Staff was directed to forward a copy of the letter to Commissioner Tilsen and ask him if he has any interest. COUNCIL COMMENTS Mayor Mertensotto informed Council that he recently met with representatives of Paster Enterprises, who would like to know what Council expects for the south side of the Dodd/T.H. 110 intersection. Paster Enterprises indicated that they would appreciate a concept plan or vision statement for the area and that they are looking at strictly retail uses. Mayor Mertensotto stated that he would like to see what Ross Feffercorn could come up with and that he feels Council needs to give Paster some design concept to work with. Councilmember Dwyer stated that he though Council was going to look at the north and south independently. Page No. 14 February 16, 1999 Mayor Mertensotto responded that Council knows there are not the same comprehensive plan issues with the south side of the intersection. Councilmember Krebsbach stated that if Paster Enterprises is looking for some kind of guidelines from Council, Council first needs to know what will be done with the north side. WORKSHOP Council discussed tentative dates for a Council workshop on the Comprehensive Plan. Mayor Mertensotto asked that the consultant get the draft document to Council in time for Council's review prior to the workshop. It was the consensus to conduct the workshop on Tuesday, March 30. ADJOURN There being no further business to come before Council, Councilmember Schneeman moved that the meeting be adjourned. Councilmember Dwyer seconded the motion. Ayes: 4 Nays: 0 TIME OF ADJOURNMENT: 9:08 p.m. K een M. Swanson City Clerk I. "Y *81 Charles E. Mertensotto Mayor LIST OF CONTRACTORS TO BE APPROVED BY CITY COUNCIL February 16, 1999 Concrete /Masonry Contractor License Simon Bros. Cement Co. Valley Cement Co., Inc. Excavating Contractor License DSM Excavating Co Inc. Gas Piping Contractor License ARI Mechanical Services Inc. Kelly Plumbing & Heating Little Igloo Owens Services Corporation Suburban Air Conditioning Co, Inc. HVAC Contractor License Allan Mechanical, Inc. Little Igloo Owens Services Corporation Seasonal Control Inc. Suburban Air Conditioning Co, Inc. Thermex Corporation General Contractor License Top-All Roofing, Inc.