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10-10-2022 City Council Regular Meeting MinutesCHANHASSEN CITY COUNCIL REGULAR MEETING MINUTES OCTOBER 10, 2022 Mayor Ryan called the meeting to order at 7:00 p.m. The meeting was opened with the Pledge of Allegiance. COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman Campion, Councilwoman Rehm, and Councilman McDonald. COUNCIL MEMBERS ABSENT: Councilwoman Schubert. STAFF PRESENT: Laurie Hokkanen, City Manager; Matt Unmacht, Assistant City Manager; Charlie Howley, City Engineer/Public Works Director; Kate Aanenson, Community Development Director; Jerry Ruegemer, Park & Recreation Director; Ari Lyksett, Communications Manager; Andrea McDowell Poehler, City Attorney; and Kim Meuwissen, City Clerk. PUBLIC PRESENT: Tom Madden 19260 Lake Avenue, Deephaven, MN 55391 PUBLIC ANNOUNCEMENTS: None. CONSENT AGENDA: Councilman McDonald moved, Councilman Campion seconded that the City Council approve the following consent agenda items pursuant to the City Manager’s recommendations: 1. Approve City Council Minutes dated September 26, 2022 2. Receive Park & Recreation Commission Minutes dated August 23, 2022 3. Approve Claims Paid dated October 10, 2022 4. Resolution 2022-73: Support Carver County Southwest Regional Trail Master Plan 5. Approve Professional Services Agreement with Ehlers, Inc. for a Utility Rate Study Update 6. Approve Agreement with Dakota Retail LLC for Lot 1, Block 1, Dakota Retail (southwest corner of Highway 5 and Dakota Avenue) All voted in favor and the motion carried unanimously with a vote of 4 to 0. City Council Minutes – October 10, 2022 2 VISITOR PRESENTATIONS. Tom Madden is a vape store owner in Chanhassen. He has been in Minnetonka for nine years and has spent that time helping the City of Minnetonka learn the products that have changed through vaping, he sat down with the City Council and helped with the e-liquid process, CBD, gummies, and he presented a packet for the City of Chanhassen. The packet outlines how the State got where it is, that one must be 21 to enter his store, he has a machine that can read over 100,000 fake ID’s, and he has worked closely with Minnetonka and Chaska police. Mr. Madden stated it all started with the 2018 Hemp Farm Act on a federal level; in 2020 all 50 states copied that bill which allowed them to sell hemp-derived products with .3 THC or less. In Minnesota, it was described as a clerical error which left off the .3 THC, and he noted a woman in Brainerd was pulled over, tested positive for a THC gummy she had just purchased at a vape store, the Sheriff said it was illegal, and the case went to the Supreme Court of Minnesota. The Court told Minnesota to update their law to reflect the rest of the nation which is what they did the past July. He spoke about the Hemp Farm Bill, noting he started his company in 2013 because his wife was a smoker and he purchased an e-cigarette to help her quit smoking which worked great. He stated the mission of the company is helping people live healthier lives. PUBLIC HEARINGS 1. Resolution 2022-74: Approve Vacation of a Portion of Public Right-of-Way (Alley) Abutting 7701 Frontier Trail Assistant City Manager Howley gave a presentation showing the project on screen and noting the public right-of-way was dedicated on the recorded plat for the St. Hubertus subdivision from 1887. Originally intended for an alley, the City has never required alleys and they have never been used. He noted the City will retain a public drainage and utility easement but there are no underground utilities such as water or sewer. Staff recommends approval of the request. Mayor Ryan opened the public hearing. There were no public comments. Mayor Ryan closed the public hearing. Councilman McDonald moved, Councilwoman Rehm seconded that the Chanhassen City Council adopt a Resolution approving the vacation of portions of the public right-of-way or alley abutting Lot 10 and the west 10 feet of Lot 9, Block 4, St. Hubertus, according to the recorded plat thereof, Carver County, Minnesota. All voted in favor and the motion carried unanimously with a vote of 4 to 0. GENERAL BUSINESS 1. ITEM POSTPONED: 581 Fox Hill Drive: Request for Approval of Preliminary Plat with Variances City Council Minutes – October 10, 2022 3 2. Ordinance 698: Amend City Code Chapter 1, General Provisions, and Chapter 20 Zoning, Concerning Short-Term Rentals Community Development Director Aanenson gave a presentation noting a public hearing was held at the Planning Commission on September 6, 2022 and went back for a second meeting on September 20, 2022. The City has looked at this issue several times over the last four years and with a recent increase in complaints the City has revisited the issue. The most common concerns are properties used as party houses causing parking and noise complaints for surrounding homes. She explained the Ordinance as proposed and shared about the license requirement including 24/7 contact information, maximum occupancy, and maximum parking which could be requested higher on larger lots with greater capacity. Ms. Aanenson spoke about a Good Neighbor brochure, adequate waste receptacles, as well as violations and enforcements on the rental properties. She noted at the first public hearing at the Planning Commission, residents discussed standards they thought were too rigid and did not take into account unique circumstances. Residents also expressed concerns about dogs, daytime parking, and property upkeep. The Commissioners directed Staff to amend the Ordinance to allow exceptions, remove daytime guest limits, clarify how children are treated, and clarify intent of the right to inspect provision. At the second Planning Commission meeting, there were still concerns regarding proposed fence and dog leashing requirements, daytime parking limits, and how neighbors would become aware of permits, the appeal process, and complaint number. Ms. Aanenson clarified major changes from the original proposal including children not counting towards the occupancy limit, allowing Staff to approve higher occupancy or parking limits, clarifying inspection permission is only for exterior property areas, removing repetition of nuisance provisions, removing daytime visitor limits, clarifying hours for overnight parking, and providing an appeal mechanism. Ms. Aanenson noted a request for exempting A-2 properties which Staff cannot support because large properties do not necessarily equal low impact. She noted at the end of the year when they work on the fee schedule Staff will recommend a fee for the license itself and the outside vendor the City will utilize to help with complaints. Staff recommends adoption of the ordinance. Councilman McDonald’s concern is on the lack of numbers for daytime parking. How does the City handle that with neighbors unable to get in and out of their driveways? He does not believe nuisance ordinances will work because they have not worked in the past. Ms. Aanenson noted the attributes are unique for each property and the City will look at each one individually, for example if it is a 2.5-acre lot with a 200-foot driveway they can have more capacity, which would be established when they come in for their license. If it is a private drive with shared parking, they would be limited even in daytime capacity which would be part of the licensing requirement. Mayor Ryan noted page 2B says “a property own may request” and she thinks it should say “a property owner may request.” Regarding allowing Staff to look at things and make a City Council Minutes – October 10, 2022 4 determination, she noted a concern by a resident about how that is applied and consistency as City Council, Commissions, and Staff changes. She asked how they can keep the licensing fair. Ms. Aanenson replied the intent of the ordinance is to have a one-year cycle and report back to the City Council on how it is working. If there is concern about the interpretation or how Staff is addressing it, they usually go to the City Attorney to look at fine tuning things. It is Staff’s intent to treat everyone equally; however, there is a bit of nuance in each property. They do want to make sure they are consistent in how one gets a license, how enforcement works, and compliance. Mayor Ryan agrees with coming back after a year and evaluating the process, as well as the outcomes for some properties with consistent challenges. City Manager Hokkanen clarified daytime parking, noting a requirement that at no time may a vehicle be parked in a way that would obstruct access to neighboring residents, the public right- of-way, or emergency vehicle access. If the Council’s intention is to regulate the number of vehicles during the day, that was in the initial draft and the Planning Commission asked that it be removed. Councilman McDonald asked if the City can enforce this. Ms. Hokkanen replied in the affirmative, violating that particular point in the ordinance would constitute a strike in terms of the rental license. Councilman McDonald asked if they can give out tickets based on violation of the ordinance if someone calls the Sheriff. Ms. Aanenson replied in the negative, and noted that would be a strike against the operator. If one gets three strikes, they could lose their license to rent the property. She noted it would go to the operator that people are blocking the street. Councilman McDonald noted it is the neighbors and the fact that people do not respect other peoples’ property and what they do for a living. He has read emails where one calls VRBO or Airbnb and the owners are in California and nothing gets done. He wants to make sure within the ordinance there is a way to take immediate action for the neighbors. He noted the example of a on-call nurse who could not get out of her driveway to get to work. He asked what has been done to address those situations. Attorney McDowell Poehler believes the City must have ordinances (most cities do) that would provide for removal of a vehicle if it is blocking a driveway. Ms. Hokkanen clarified the specific complaint Councilman McDonald is referencing comes from a shared private driveway where the City’s ability to provide enforcement is unique and limited. City Council Minutes – October 10, 2022 5 She noted the idea behind short-term rental licensing is to motivate the property owner to be more involved and receptive to complaints. She does not know that this ordinance gives an immediate resolution to that issue but if a serious strike is incurred, the City could revoke the license. The owner should have an interest in eliminating those situations as quickly as possible due to the three-strike system. Councilman McDonald is willing to give it a try but agrees with bringing it back to the Council after one year for review of complaints, and looking at improvements. Mayor Ryan asked if anything is egregious can it be addressed immediately versus waiting for three strikes. Ms. Hokkanen shared Item E of the ordinance where the language says the license may be revoked after a single violation if the violation is not immediately corrected pursuant to a notice of violation. It does provide for an appeal process that comes before the City Council. Councilman Campion moved, Councilwoman Rehm seconded that the Chanhassen City Council adopt an Ordinance amending Chapter 1, General Provisions, and Chapter 20 Zoning, concerning short-term rentals, and establishing licensing and regulations for operating short-term rentals; and approve the Summary Ordinance for Publication. All voted in favor and the motion carried unanimously with a vote of 4 to 0. 3. Ordinance 699: Temporarily Prohibiting Medical Cannabis Manufacturing and Distribution Facilities; and Ordinance 700: Temporarily Prohibiting the Manufacture, Testing, Distribution, and Sale of Cannabinoids Community Development Director Aanenson stated Staff wants to look at zoning and regulation for the uses of medical cannabis manufacturing and distribution facilities and the sale of cannabinoids. They want to take their time to look at these things and are looking for the Council’s approval for a moratorium on both issues while studying the issue. Mayor Ryan noted the City has discussed the item in Work Sessions. Councilman McDonald stated he is opposed to this. As he understands it, there is nothing this ordinance allows that they cannot currently do. He is not in favor of prohibiting legal businesses and thinks current zoning laws would handle any problems they may have. The City can continue to do the studies without this ordinance and he feels it is not necessary. Councilman Campion asked how this would affect existing businesses that may be selling cannabinoids. City Council Minutes – October 10, 2022 6 Ms. Aanenson stated if someone is currently operating those in the City of Chanhassen legally, they may continue to do that and would not be included in the moratorium because they are existing. Mayor Ryan asked how many stores currently sell cannabinoids. Ms. Aanenson replied potentially three that the City is aware of. Mayor Ryan asked for a summary of what other cities are doing. Ms. Aanenson replied regarding medical marijuana some cities are requesting those be in office/industrial districts. Regarding other cannabinoids the City does not have business license requirements so they want to make sure the businesses are following all the rules and guaranteeing people are 21 and older. She stated part of the issue is if other cities do have rules and Chanhassen does not, the City may be an easier place for these businesses to come in. Staff wants to make sure they have standards in place on how to regulate, how products are stored, and access to the products. Councilwoman Rehm is in favor of the moratorium, they are being given up to a year to study how this will affect the City and other cities, noting many other cities have adopted a similar moratorium. Edina recently completed a study and they are implementing an ordinance that would reinforce the State law prohibiting THC sales to people under age 21, no vending machine sales, no sales out of a movable business, and more. She thinks it would be very prudent for the City to do this wisely. Mayor Ryan will vote in favor of the ordinance and appreciates Mr. Madden coming to the Work Session and Council Meeting tonight. She thinks there is still work to be done including working with the Sheriff, looking at zoning and locations, and understanding regulations. They only have one chance to get it right and she wants to make sure it is right. Councilman Campion moved, Councilwoman Rehm seconded that the Chanhassen City Council adopt the following Ordinances: An interim Ordinance temporarily prohibiting medical cannabis manufacturing and distribution facilities; and an interim Ordinance temporarily prohibiting the manufacture, testing, distribution, and sale of Cannabinoids. All voted in favor and the motion carried with a vote of 3 to 1, with Councilman McDonald voting against. COUNCIL PRESENTATIONS Mayor Ryan spent time at Bluff Creek Elementary in a third-grade classroom who asked if the City Council wants to have pajama day. She asked the Councilmembers to let Ms. Hokkanen know. She noted it was a great class and they were learning about Student Council elections and government. City Council Minutes – October 10, 2022 7 ADMINISTRATIVE PRESENTATIONS 1. Traffic Control Improvements at Great Plains Boulevard and West 79th Street Ms. Hokkanen noted included in the packet is the sign and striping plan that will be put in place at the above intersection. Mayor Ryan thanked the Engineering Department and Traffic Safety Committee, noting it is an intersection the Council hears a lot about from residents. CORRESPONDENCE DISCUSSION 1. Minnesota Pollution Control Agency Memo dated September 23, 2022 - Environmental Review for Wastewater Treatment Plant Improvements 2. 2022 Building Permit Activity Councilman McDonald moved, Councilman Campion seconded to adjourn the meeting. All voted in favor and the motion carried unanimously with a vote of 4 to 0. The City Council meeting was adjourned at 7:53 p.m. Submitted by Laurie Hokkanen City Manager Prepared by Kim Meuwissen City Clerk