WS 2001 03 12CHANHASSEN CITY COUNCIL
WORK SESSION MEETING
MARCH 12, 2001
Mayor Jansen called the work session meeting to order at 5:40 p.m.
COUNCIL MEMBERS PRESENT: Mayor Jansen, Councilman Ayotte, Councilman Peterson,
Councilman Kroskin and Councilman Labatt
STAFF PRESENT: Scott Botcher, Roger Knutson, Todd Hoffman, Todd Gerhardt, Kate Aanenson, and
Bob Generous
A. DISCUSSION OF PUD AMENDMENT, FAIRVIEW HEALTH SERVICES.
Mayor Jansen asked the staff, city council members and representatives from Fairview Health Services and
Steiner Development to introduce themselves.
Robin Gaustad with Fairview Health Services clarified items of concern after reading the staff report, such
as how land acquisition would be accomplished and short and long term capital available to fund the
project. She explained the moratorium on the construction of new hospital beds in the Twin Cities metro
area and how that moratorium affected development and property taxes on this property. Fairview Health
Services asked that the City Council direct staff to negotiate a "payment in lieu of taxes" arrangement so
that they could move towards a closing date on the property.
Scott Botcher explained the City's position of extreme concern with regard to the tax free status of a
hospital being placed on this parcel, and how this request impacted the stipulation in the PUD. The City
Manager recommended that due to the financial situation of the city at this point, he could not recommend
approval of a tax exempt entity in this PUD.
Todd Gerhardt stated that one of the big questions surrounding this proposal was when the State would lift
the moratorium on hospital beds and how that would affect when the hospital portion of the project would
be built, and how it related to taxes generated on the parcel.
Mayor Jansen brought the issue back to council members for discussion, and thanked the applicants for
their hard work with staff over the past 6 months in trying to resolve the tax issues related with this project.
She stated the main issue for consideration by the City Council was changing the PUD to remove the tax
exempt status from the property.
Councilman Ayotte stated he would not be in favor of changing the PUD condition. Councilman Kroskin
expressed concerns over the financial health of Fairview and their ability to complete the project. A
representative from Fairview Health Services explained the Moody's rating and explained that the financial
health of Fairview was one of the best in the Twin Cities. Mayor Jansen stated she was in favor of a
hospital coming into the city, but had concerns with placing one on this parcel due to the tax burden that is
already being placed on the citizens of Chanhassen by the school districts and county. Councilman
Peterson stated that the issue of parity hadn't been discussed yet and that he would be in favor of the staff
and applicant discussing how parity might be achieved.
Todd Gerhardt asked for clarification from Fred Richter of Steiner Development on the tax implications.
Councilman Ayotte stated his concerns with this proposal had nothing to do with Fairview Health Services,
City Council Work Session- March 12, 2001
but with the debt situation of the city at the present time. Councilman Labatt stated he agreed with
Councilman Ayotte and Scott Botcher and that he would defer to the opinion of the professional staff in this
case. He would not be in favor of amending the PUD.
Mayor Jansen summarized that the City Council would not be in favor of a PUD amendment due to the
financial situation of the City, and that it had nothing to do with Fairview Health Services. It would not be
appropriate to place a tax exempt entity in this industrial park.
Howard Dahlgren, an owner of the property, stated that Fairview and the city were not that far apart on the
value issue and explained the positive economic solution this project would bring to this comer and the city
as a whole. He asked if this item should be brought before the public for input. Mayor Jansen stated this
was a policy decision by the City Council in relation to the tax burden being placed on it's citizens. Scott
Botcher asked that the City Council think about what the City's obligation is to the school district and
county.
B. EMPLOYEE INCENTIVE PROGRAM.
Scott Botcher asked that the City Council provide guidance on if what he had proposed is in line with what
they wanted to see and asked for clarification on specifics.
Councilman Ayotte asked about setting targets for staff to meet. Councilman Kroskin explained IBM's
employee incentive program. Todd Gerhardt asked about job description versus incentives. Mayor Jansen
asked how the city could get sustainable savings from an employee incentive program, and asked
Councilman Peterson for his input since he has been involved with creating incentive programs.
Councilman Peterson stated it was better to create individual incentives rather than having departments
competing against each other. He suggested trying the proposed program and tweaking it if problems are
found with no cap on an award offered. Mayor Jansen stated she would be in favor of setting a cap on an
award. Roger Knutson explained the legalities of the City Council approving money spent and exceeding
salary caps of employees. The public sector versus private sector.
Councilman Peterson and Councilman Kroskin stated they were in favor of moving forward with this
program. Scott Botcher stated this item would be discussed at the staff meeting with department heads.
C. SIMPLIFICATION OF DEVELOPMENT NOTICES TO RESIDENTS.
Scott Botcher asked for council's input on a single notification process as opposed to the current notices
being handled by the different departments, i.e. planning and park and rec. Mayor Jansen explained that
the more citizens are informed of the process, the better the process will be. Councilman Ayotte stated
there should be a consistent process and asked about having a point of contact in affected neighborhoods.
Kate Aanenson stated that most projects tend to get a point person who staff can provide the information
to.
Mayor Jansen stated that she was trying to streamline the process by informing citizens that public hearings
would be held at the Planning Commission or Park and Recreation Commission, and not necessarily at the
City Council level. Councilman Labatt felt that the City Council members are elected by the citizens and
should allow them to speak at the City Council level.
City Council Work Session- March 12, 2001
Roger Knutson stated that in other cities he works with they prepare inserts for each process, i.e. variance,
rezoning, PUD's, etc. and those are enclosed with public notifications. Councilman Labatt asked if the city
still places signs on properties. Kate Aanenson stated it is still done at the developer's cost, but due to the
snow levels, some signs may not be visible.
Mayor Jansen adjourned the work session meeting at 6:50 p.m.
Submitted by Scott Botcher
City Manager
Prepared by Nann Opheim