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CC 2007 07 23CHANHASSEN CITY COUNCIL REGULAR MEETING JULY 23, 2007 Mayor Furlong called the meeting to order at 7:15 p.m. The meeting was opened with the Pledge to the Flag. COUNCIL MEMBERS PRESENT: Mayor Furlong, Councilman Litsey, Councilwoman Ernst, Councilwoman Tjornhom, and Councilman Peterson STAFF PRESENT: Todd Gerhardt, Roger Knutson, Laurie Hokkanen, Paul Oehme, Kelley Janes, Todd Hoffman, Greg Sticha, and Danielle Washburn PUBLIC PRESENT FOR ALL ITEMS: Forrest Adams Chanhassen Villager Glenn Stolar Park and Recreation Commission Debbie Lloyd 7302 Laredo Drive George St. Martin 9231 Audubon Road Duncan Schwensohn, HTPO 7510 Market Place Drive, Eden Prairie Steve Fenlon 665 Woodridge Drive, St. Paul PUBLIC ANNOUNCEMENTS: Mayor Furlong: Thank you and welcome to everybody that's joined us here this evening. Both in the council chambers and at home. I'd like to start out by making a couple modifications to the agenda that was published. First of all item number 4, at the request of the applicant will be tabled and not addressed this evening so if you're here for that item, we will not be discussing it this evening. That request came in this afternoon. Also staff prepared a request for an addition to our consent agenda regarding some emergency repairs required for our Well #6. I'd like to add that to our consent agenda as item number (i) if there's no objection. And then also staff has prepared a request relating to, authorizing an emergency sprinkler and irrigation ban. I'd like to bring that on under new business as item number 5. Again without objection. Are there any other requested changes or modifications to the agenda? Great, we'll move forward with it as we discussed. INVITATION TO NATIONAL NIGHT OUT, AUGUST 7. Mayor Furlong: I'd like to start under public announcements by extending a broad invitation for the City of Chanhassen's National Night Out celebration which will be held on Tuesday, August th 7. National Night Out is an event that's designed to encourage citizens to get out, get to know their neighbors, promote crime prevention awareness and to provide an opportunity for public safety officials and other representatives to visit with our citizens. The City of Chanhassen takes great pride in continuing to be a safe place to live and work. Keeping Chanhassen safe is a partnership between citizens and those who serve the city. National Night Out supports this effort by reminding citizens that their involvement is vital to maintaining our safety within the City Council Meeting - July 23, 2007 City of Chanhassen. Citizen participation is key. We can make an impact on crime. On August th 7 representatives from the Carver County Sheriff's Office, Chanhassen Fire Department and others will be visiting Chanhassen block parties. Currently we have about, almost 39, just under 40 block parties that will be taking place that evening. There is room for more if you're interested in your neighborhood, either coordinating a party for your neighborhood, please contact the City Hall at 952-227-1610. This is a great event. It's one that I enjoy every year and I know that if you get out and get involved, whether in an existing party that's going to take place in your neighborhood or create a new one, you'll certainly enjoy it. CONSENT AGENDA: Mayor Furlong: So at this time I would ask if there's any members of the council or others present in the council chambers that would like to separately discuss any of the items under our consent agenda this evening. Councilman Litsey: I just had a question of staff for item number (i) which is the newly added item under the consent agenda and number 6. I think I could do that quickly so. Mayor Furlong: Alright. We'll pull that off and just go with, okay. That's fine. We'll just do that immediately after the item there, consent agenda. Any other items? Yes, Ms. Lloyd. Debbie Lloyd: Yes, I'd like to request item (e) be pulled off the consent agenda. I'd like to understand what's happening here. Is this a new fee? I didn't see lateral connections in the code. I could have missed it. Where would it apply? That type of thing. Thank you. Mayor Furlong: Okay. We'll pick that up immediately following. Your question Ms. Lloyd is just one of understanding? Debbie Lloyd: Right. Mayor Furlong: Okay. Debbie Lloyd: What situations would it apply and… Mayor Furlong: Okay. We can give a quick update to that, that's fine. Any other items? Councilwoman Ernst moved, Councilwoman Tjornhom seconded to approve the following consent agenda items pursuant to the City Manager's recommendations: a. Approval of Minutes: -City Council Work Session Minutes dated July 9, 2007 -City Council Summary and Verbatim Minutes dated July 9, 2007 Receive Commission Minutes: -Park and Recreation Commission Summary and Verbatim Minutes dated June 26, 2007 2 City Council Meeting - July 23, 2007 b. Award of Bids, Lake Ann Park Picnic Shelter & Ballfield Lighting. c. Expansion of Liquor License Premises to Include an Outdoor Patio, Na's Thai Café, 566 th West 78 Street. d. Approval of Debt Policy. Resolution #2007-46: f. Approval of 2007 Transfer of Excess Fund Balance in the General Fund. Resolution #2007-47: g. Lift Station No. 3 Project 07-03: Approve Plans & Specifications; Authorize Advertisement of Bids. Resolution #2007-48: h. Approval of Well No. 2 Emergency Repairs, PW034. All voted in favor and the motion carried unanimously with a vote of 5 to 0. 1(i). APPROVAL OF WELL NO. 6 EMERGENCY REPAIRS. Councilman Litsey: I had a quick question. My understanding from this memorandum is that the failure was due to an inadequate water draw, therefore the pump basically burned out. Paul Oehme: Yeah, our aquifer, the drift aquifer did draw down significantly over the past 2 weeks and we had been monitoring it, the well did fail on Saturday. There was no staff available at that time and we don't know exactly what the extent is. It could be that the pump had some sand or some gravel get into the pump and it caused some minor damage. We don't know until we pull the pump. We just wanted to get in front of the council at this time just to make them aware of the situation and authorize some expenditure of funds right now. Councilman Litsey: It has to be fixed, I understand that. Is there a way that, is there some pre- emptive device that could shut down the pump when it gets to a dangerous level to avoid having to repair it in the future for that reason or? Paul Oehme: Right now it's monitored by our supervisory computer system. Maybe the Utility Superintendent is here tonight, Kelley Janes can address that issue. I'm not aware of any settings that the computer had. Typically when you shut off those wells, it's more of a manual is my understanding. Kelley Janes: Yeah. What we think might have happened is, as the pumps draw the shaft is down into the aquifer. It forms a cone and we think that it started to suck air at the same time it's trying to draw water during the peak demand periods. There's more than one well in that particular aquifer and the shallow aquifers, the primarily draft aquifer. And to the best of our knowledge we saw that two of the wells were getting relatively close to that point and with our current demands we noticed you know we'd have to keep an eye on that and by the time we hit the weekend, we think one of them started to cavitate and that's where you get a mixture of the water comes out kind of a milky color because you get the small bubbles of air missed in with 3 City Council Meeting - July 23, 2007 the water and then we knew we had a problem. And when we were able to get the well taken off line, it would not restart so at that point we knew there was something mechanically going on there so. Councilman Litsey: I'm not an expert on any of this obviously but, and I understand, I mean I understand what took place. It just seems to me in this day and age there'd be some device that could monitor. I mean water softeners have water flow before they regenerate to tell them when to do that. It would seem to me that there would be something on the market that could protect, maybe not full proof but at least sense that something is going on here and shut it down. Kelley Janes: Yeah, we were getting trending information on the aquifer, I do have a copy of that here. What we noticed these spikes during heavy demand period which tend to not be during the middle of the day. Typically they can be in the middle of the night and on the weekends we really get hit pretty hard and we noticed that trend as the aquifer was pulling down further and further with the heavier pumping and I think it started to cavitate and may have caused some mechanical damage so. Councilman Litsey: So to cut to the chase here, is there a device on the market that can… Kelley Janes: There is, we do have that in place. It's a draw down sensor or probe that senses the level of the water and it can get a little erratic when the water level in the well itself gets down towards the bottom because of the turbulence and we can monitor it with that but we were doing what we could to keep the thing going so. Councilman Litsey: Does that have an automatic shut off? Kelley Janes: It sends off a low level alarm which is what our treatment plant operator responded to and came in, he could look at the SCADA from, he was also on call at that time. He looked at the SCADA and he saw that that was a problem. He got the thing shut down. He responded to the site from home and could not restart it so it sent off that low level alarm so. Councilwoman Ernst: So in hindsight had we had stricter water bans put in place, would this have helped to prevent this issue? Kelley Janes: I think it can only help. It's, when we can control the usage we have a better idea of what kind of usage you know, what kind of demand we're going to deal with so I think it can help. Councilwoman Ernst: So based on Bryan's comments then, if say for example the water, if we were monitoring it as we were, is there something that tells us okay now we need to enforce more strict water bans at a certain level? Kelley Janes: Yeah, yeah. We saw these levels going on last week and we started to step up you know information to the residents on the ordinance that they need to segregate their usage into the odd/even and be pretty strict with that and that just gives us the ability to knock it down into smaller pieces that we can handle in a daily pumping rate so. 4 City Council Meeting - July 23, 2007 Paul Oehme: We did have our community service officers out at 2:30 in the morning patrolling certain neighborhoods that we knew were a problem area. We did issue some citations for those areas but we only had one person on at a time which is not enough man power, person power out in the field to really do the city, really look at the city and patrol the city effectively. Kelley Janes: Most of the irrigation does occur, we tend to see that in trending, does occur between about 1:00 a.m. and probably 4:00 or 5:00 a.m.. And then there's heavy usage of course in the mornings where everyone's up and using water and then we have to try to catch up during the day and refill the tanks and try to push everything back up to higher levels. Paul Oehme: And our ordinance does not require us or, sprinkling bans during the day. Other cities have gone to that say from 10:00 to 5:00 in the day, that's kind of a critical period for the utility and for our water department to catch up and get those tanks filled back up. We do see a pretty strong demand during the day. That really limits the amount of water that recharge those systems that goes back out on the system so those are the kind of things that I think you know, from my perspective we need to talk with the council about here soon and to see what makes sense. Councilwoman Ernst: Is it fair to say that this is a lesson learned and moving forward, when it gets to a certain level we. Paul Oehme: Definitely. I mean from our standpoint too, we were you know in hindsight again, we were trying to put as much good water out in the system as we can so we may have over tax our aquifers on the east side. You know obviously we learned a significant lesson there but also the demands that we experienced here in the last month, if not more. You know we've seen 8 million gallons per day go out to the system over regularly. I mean average over the month was about 7 1/2 million or so. We've never pumped that much water out in the system since Kelley's been here for 10 years and we've had peaks and valleys before where we were hitting those peak demand periods but never that sustained amount of pressure. Kelley Janes: Most of the wells were not shutting off. They were running 24 hours a day and I guess you can look at it like a car engine. Eventually you want to give it a break and we weren't able to do that effectively because those, we were always trying to catch up and there was usage going on during that catch up period which kept the tanks down which leaves the wells on which keeps everything going and we were drawing down the aquifer levels noticeably so. Councilman Litsey: Yeah, I'm not trying to be critical of what happened. Hind sight is always 20/20 but I would like…learn from this if perhaps you could come back with some recommendations to council. Paul Oehme: Absolutely. Mayor Furlong: We've moved a little bit beyond the item of well number 6 and I think we started to approach our item number 5 so I guess at this point I would ask are there any other 5 City Council Meeting - July 23, 2007 questions or issues relating to item number 1(i)? The well number 6 emergency repairs. If not, is there a motion? Councilman Litsey: I'll make the motion to approve item (i). Councilwoman Ernst: Second. Mayor Furlong: Thank you. Made and seconded. Any discussion on the motion? Resolution #2007-49: Councilman Litsey moved, Councilwoman Ernst seconded to approve Well No. 6 Emergency Repairs. All voted in favor and the motion carried unanimously with a vote of 5 to 0. 1(e). APPROVAL OF AMENDMENT TO CITY CODE CHAPTER 4 RE: ESTABLISHING A HOOK-UP FEE AND AMENDING THE CONNECTION FEE. Mayor Furlong: Mrs. Lloyd, you had asked just for clarification, whether this was a new fee or not. This was an item that we discussed at our work session but I'll ask staff to summarize the issue before us. th Greg Sticha: Good evening Mayor and council members. At our June 25 work session meeting we discussed establishing a connection and amending our hook-up fee for hook-up's to what's called trunk area. Now I'm not an expert in the difference between a trunk fee and a lateral connection charge. Paul can probably give you a little more information on the difference between the two but the lateral connection charge from my understanding is less frequent in nature and does not occur quite as often so to answer that question we are not recommending an increase in the lateral connection fee. This fee is also not a new fee. We are splitting the current fee into two separate fees. At that work session council gave direction to staff to look into the possibility of splitting the residential fee and leaving the commercial industrial fee as is, and that's what is in the proposal tonight. So the residential fee is split and again stress we did split the fee but we did not increase the fee in total. We simply took a percentage of the current fee. Applied it to be made earlier in the development process at final plat time, so 30% of the fee basically will be collected earlier in the development process. The remainder of the fee will be collected at the same time as it's currently collected which is when the building permit is pulled. The two fees are separate of each other and each year will be voted on separate of each other for increases so again it's not a new fee. It's just a timing of the collection of the fees. Mayor Furlong: And again one of the primary reasons for this is that, is the timing of the city's commitment in terms of cash outlays is closer to the time of plat than necessarily at the time of building permit. Greg Sticha: That's correct. A lot of our. Mayor Furlong: Managing cash flow. 6 City Council Meeting - July 23, 2007 Greg Sticha: Stuff going into the ground is much closer to the time of final plat versus when they actually would be pulling a permit so we're trying to cash flow these things a little better. Collect that money up front to help pay for those improvements and infrastructure that we need to put in the ground. That's kind of the whole reason for splitting the fee. Mayor Furlong: Okay, thank you. Any follow-up questions or additional questions? Debbie Lloyd: That's residential development. What about commercial and industrial development? How is that different? Mayor Furlong: Is there any change to the. Greg Sticha: There's no change for the commercial industrial fee structure. The reason behind that is the commercial industrial fee structure, and if Kate was here she could answer this question a little better than I can but I'll try to answer this. The commercial industrial platting process I think is much more different than the residential platting process, and it's much more difficult to track how many units a commercial industrial developer will be bringing into a community than it is a residential development. Therefore if you lock into so many units at platting time versus the time when you would be pulling a permit for that particular piece of property, you could lock yourself into a number of fewer or more units that we'd be charging for that particular development so we decided, staff directed staff to, or council directed staff to go ahead and leave the residential industrial, or the commercial industrial fee alone at this point. That wouldn't preclude them from changing it in the future unless they wanted to do that sometime down the road, they certainly could. Mayor Furlong: Any other questions for staff on this? If not, is there a motion to approve? Councilwoman Ernst: So moved. Mayor Furlong: Thank you. Is there a second? Councilman Litsey: Second. Mayor Furlong: Made and seconded. Any discussion on the motion? Councilwoman Ernst moved, Councilman Litsey seconded that the City Council approve the Amendment to City Code Chapter 4 Re: Establishing a Hook-Up Fee and Amending the Connection Fee. All voted in favor and the motion carried unanimously with a vote of 5 to 0. VISITOR PRESENTATIONS: None. LAW ENFORCEMENT/FIRE DEPARTMENT UPDATE. Sgt. Pete Anderly: Good evening Mayor and council members. Kind of touch on last month's numbers a little bit. We have 132 criminal calls last month compared to 124 in the month of 7 City Council Meeting - July 23, 2007 June last year. Some of the highlights, 28 thefts were reported last month compared to 50 last year in the month of June, so we're down a little bit there. Some of the other numbers, we had 60 property damage reports compared to 30 last year was up. The reason, one of the reasons is one a night, in the city of Chanhassen, we had 38 victims of property damage. As a result 3 juveniles were identified and responsible for the 38 at this point. And so that kind of made our numbers jump up off of one night total I guess running out there. The total calls, we had 1,146 non- criminal calls compared to 1,099 last year so we're comparable to our stats for last year in June. th Not up or down. Touched on Safety Camp on July 19. Chanhassen sponsored a safety camp th for the 11 year in Chanhassen. We had 109 kids registered and 108 of them showed up to participate. It was a good day. The kids had fun. We covered topics such as water safety, animal safety, bike safety and numerous other topics. The state patrol helicopter flew in. Did a talk with the kids. Had lunch with the kids and again Crime Prevention Specialist Beth Hoiseth did a great job organizing the event between fire, the sheriff's office and other safety personnel. I'd also like to touch back again on National Night Out. We have 39 neighborhoods registered th currently for the August 7 National Night Out. It's a great program. We do have some extra time slots for the sheriff's office and personnel to get out and meet and greet the neighbors. It's a good way to meet with the deputies that are working the area and along with you know law enforcement and fire personnel, city officials that will be out that night. On a different note, many of you guys and gals may remember Deputy Mike Felt who worked in Chanhassen for a few years. He was deployed with the Army National Guard. He's been gone for the last 22 months. I'm happy to report that he's currently in demobilization in Wisconsin and is expected to be home with his family this Saturday so we look forward to getting Mike back on the street as soon as we can. That's all I have for you. Mayor Furlong: Good news. Any questions of Sergeant Anderly? Councilman Litsey: Just to welcome you on. Appreciate your service here. Sgt. Pete Anderly: Look forward to working with you. Mayor Furlong: Good. Thank you very much. I don't see any representative from the fire department here this evening. I hope that's not a bad sign. But I would ask, we did have a report in our council packet. Would ask if there's any questions that council has we can relay to Mr. Gerhardt. Todd Gerhardt: I know they're working on some special training this evening that may have taken them away. But if you have any questions, let me know and I'll get ahold of Greg. Mayor Furlong: Okay. Thank you. PUBLIC HEARING: CONSIDER ISSUANCE OF CONDUIT DEBT, ST. HUBERT CATHOLIC COMMUNITY; RESOLUTION APPROVING THE ALLOWANCE FOR THE ISSUANCE. Greg Sticha: Good evening again. In late spring of this year the city was approached by St. Hubert's Catholic Community to issue some conduit debt or what in this case are educational 8 City Council Meeting - July 23, 2007 revenue notes for some debt that St. Hubert's had issued for it's school back in 1997. At the time they approached the city we were also going through a process of approving our debt policy and one of the items that we did take into consideration of the debt policy is conduit debt and in particular whether or not to issue a fee if we do issue conduit debt in the future, and I'll get to that in just a minute. I just kind of want to give a real simple explanation, and this is real simple and if you have more detailed questions about what conduit debt is, Steve will be happy to answer your questions but in the simplest terms conduit debt is basically what we're doing is borrowing our bonding authority or our name for this organization to then use to get a lower interest rate on a refinanced loan, which is what they're attempting to do here. This in no way puts the city into any debt for this loan. It's the complete sole responsibility of the organization that's undertaking the new debt. There's no risk to the city for future payment on any of this debt. The only potential risk to the city that would have been involved is, has to do with our bank qualification status, and that in real simple terms is each year the city can issue up to $10 million dollars in debt at a lower interest rate than if they issued debt over $10 million dollars. Because the city has no plans to, or is not intending to use or issue bonds in 2007, we will not be using any of our bank qualification status. Therefore, by allowing St. Hubert's to go ahead with issuing conduit debt we would not be using up our bank qualification status which means we would not be, if we did issue debt we would not be having to take our loan out at a higher interest rate. That kind of explains our bank qualification status and what conduit debt is. One thing that staff pursued in relation to this issuance was, I had been in contact with some other finance directors across the metro and a number of other communities were issuing fees for conduit debt at the time. In the policy that we approved just earlier this evening, on the consent agenda, we did allow for the issuance of a fee in these circumstances up to 1%. I surveyed a number of the finance directors around the metro and outstate and found particularly in the metro area that we are on the under side of communities that are not issuing a fee for conduit debt in our past issuances. Overwhelmingly the majority of them are issuing a fee. I then also asked them to respond with what type of fee are they typically asking upon issuance and they ranged all over the board anywhere from 1/4 of 1% on the original principle up to 1% on the original principle. Some cities have taken a stance to go the higher route and actually use this as a revenue generating source. Staff is recommending in this particular case, our policy allows for up to a 1% fee to be charged if council wished. Staff is recommending in this case a 1/4 of 1% fee to be charged in regards to this issuance. That will approximate to about $15,000 to the city. Now in addition to the fee, St. Hubert's will be also paying all the attorneys fees and any other financial advisor fees so there will be no cost to the city at all with any issuance of this debt. In addition we'll be receiving the $15,000. That will go to offset a number of things such as my time or Todd's time in dealing with the issuance of this debt. On an annual basis we do have some reporting requirements to take care of with this and we feel that the $15,000 is more than enough to take care of any costs to the city now and in the future. With all that being said I guess I will turn it back to you council if they have any questions or if they would like to have Steve come to the podium, he could also talk a little bit more in detail about the issuance and what it's exactly for. I'll turn it back to you guys. Mayor Furlong: Okay. Thank you. Any questions? Councilman Peterson: Just a couple. Have we done this before? 9 City Council Meeting - July 23, 2007 Greg Sticha: Yes. We issued conduit debt in 2005 for Chapel Hill Academy and we issued conduit debt in 2002 for Ridgeview Medical Center so we do have a history of doing this in the past. Councilman Peterson: Did we charge them 1/4 of a percent too or not? Do you remember? Greg Sticha: We did not have it in place at the time and did not charge them. Councilman Peterson: If this was just a straight non-profit and not used for educational, what, is it just the non-profit status 403B or what's the. Greg Sticha: Steve can probably correct me if I'm wrong but I believe by statute we can only issue conduit debt to non-profit entities and Ridgeview and Chapel Hill and St. Hubert's would qualify. As far as the fee goes relating to them, typically a lot of the response I heard is that they will charge a higher fee for maybe a hospital or an organization like that versus say a school, just because I suppose you could say the hospitals may have deeper pockets or be willing to pay more for the use of that debt. Mayor Furlong: Okay. Any other questions? Councilwoman Ernst: I just had a question. Say for example hypothetically if something comes up and they're not able to make payment on the note. Does that do anything to our financial standing? I mean I know that you said that it didn't obligate us in any debt but does it do anything to our financial standing? Greg Sticha: No, it does not. It does nothing to our bond rating. It does nothing to us having to pay the debt. It's pretty much a zero impact on our organization. Councilwoman Ernst: So there is no financial obligation at all? Greg Sticha: No. Councilwoman Ernst: I just… Steve Fenlon: I'd be happy to comment on that. My answer might be a little bit difference. My name's Steve Fenlon. I'm with Midwest Health Care Capital and for the past 20 years I've traveled Minnesota, Wisconsin and Iowa doing tax exempt financings for non-profit corporations. To answer your question, it's 501C3. There is many ways to organize non-profits. 501C3 is one of those many ways and those are the only non-profits that can qualify for tax exempt lending. In terms of a city's concern, everything Greg said is exactly right. The State of Minnesota does not authorize, does not give cities the authority to guarantee the indebtedness for private corporations. These are non-profit corporations. They're non-stock corporations. You can't, my alma mater the University of St. Thomas doesn't even have a single share of stock. It's a corporation without ownership and it really exists at the pleasure of the IRS on a federal level and State of Minnesota on the local level. But nonetheless they're private corporations and the city doesn't have the authority. It's a little bit like selling the Brooklyn Bridge when you don't 10 City Council Meeting - July 23, 2007 own it. Can somebody come back and cause you to have either a moral or a legal obligation to repay and the answer is no because you never had the authority in the first place to give that kind of guarantee, even if someone could persuade you to do it. I think, but nonetheless it's a note that says the City of Chanhassen Series 2007 and then a parenthetical that says project, in this case St. Hubert's Catholic Community or it's school. I think if I were sitting on the City Council I'd want to know where the bond's going to be held. How sophisticated is the lender and how capable are they of understanding what it says so eloquently throughout the documents and throughout the placement material and that is in no event can the city be held responsible for repayment of the note. So on the other hand, here's a note. Imagine if it had been sold to 300, 400 senior citizens who just read far enough to see City of Chanhassen. Well good heavens, that's where Prince is from. Of course I'll buy those bonds. You know you worry about that from a PR perspective but, so in our case Klein Bank, the commercial lending department is the people who hang a shutter out over their business front that says they're experts at examining financial statements and making credit decisions who I have negotiated the placement of this note with on a very clearly understanding that it's, they're looking right through the City of Chanhassen in this case and to the school and to the parish for the source of repayment. They've looked very closely at the financial statements of this organization in making that finding. I also had the pleasure of doing the financing for Chapel Hill Academy through the City a few years ago. Same thing in that case. I think in that case M&I was the lender. So if I were sitting on the city council I'd want to know a little bit about, and I know we're held harmless. I know we have no obligation but do we have any PR concerns out of maybe hundreds of senior citizens who own these notes who didn't have a business background. Who didn't understand how to look at a balance sheet and make a credible decision about the likelihood that this thing was going to ever repay. The good news is that the school, the parish has paid it's debt service at a high taxable interest rate since 1997. The interest rate's going to drop about a third so the payment's going to fall quite a bit and if they've been able to make that payment since 1997, 10 years without missing a beat, are they going to be able to continue to service this debt at a much lower interest rate and the answer is yes. Are there any other questions for the council? Mayor Furlong: Any other questions at this time? Steve Fenlon: If I may on the matter of fees. I make my livelihood going from city to city processing these financings and there are about 725 cities in the state of Minnesota. About 90% of those cities do not charge a fee. As you get closer to the metro area, to Duluth, to Rochester and to St. Cloud, that changes and certainly every month I hear about more cities deciding to charge a fee for this. I think your policy is the best I have ever heard about because it gives staff the opportunity to take a look at the assets, the resources of this non-profit because a 1% issuance fee would kill many of my clients. It would really be a hardship. I mean it's not like you have a business where you have shareholders and they're taking home big dividends every year and big salaries. That's certainly not the case with either Chapel Hill or St. Hubert's so I applaud the discretion you give your staff. And I know Greg you know took a hard line with this. He negotiated hard on behalf of the city and really needed to be persuaded on what our resources were so I'm grateful for the foresight you have in this policy, thank you. And I hope it's infectious. …for those that do, I hope they have some discretion for staff. 11 City Council Meeting - July 23, 2007 Councilwoman Ernst: And this is probably just for my information. Can you tell me how long you expect this, what the term of this is? Steve Fenlon: Sure. The term in the note's going to be 20 years but I will tell you that the average, and this is you know Fenlon study. If you ask for the statistical data I couldn't provide it. But it's not unlike how often do we change homes? Well it's about 8 years. I once, I've done quite a bit of work for hospitals and the American Hospital Association said that the average 20 year bond issue is outstanding about 8 years. And I wouldn't be shocked if I were you to find that this note ends up being redeemed before that time. Either through a capital campaign. Through St. Hubert's being remembered in somebody's will. These non-profits are debt adverse. They dislike strongly having debt. And thank you, thank you, thank you for letting us issue this note. I know you haven't voted yet but it means the world to St. Hubert's. It allows them to pay more of a, I used to sit on the Board of St. Joe's Elementary School which is another catholic school in West St. Paul and the struggle there for the board members is to pay a livable wage to their staff. Our goal at that time, this was 5 years ago, was to pay our staff 60% of what the public school teachers got and we could not do that. We tried desperately to do that and we couldn't, so I cannot tell you how important it is to organizations like Chanhassen to take a line item in their budget and plummet it without having to change the services that they offer. Their program quality. This is just doing business in a smarter way and it's because of your involvement that it's possible for Chanhassen to do that. Chanhassen educates a whole bunch of kids that otherwise might be in public schools and I think in that sense a benefit to the community regardless of your religious affiliation or your educational goals for your family. Thank you. Mayor Furlong: Okay. Any other questions for staff? Councilman Litsey: I just had one question on the bank qualification status. It only affects us for 2007, is that correct? 2008 a clean slate in terms of bonding. Todd Gerhardt: Each calendar year basically it's the slate gets wiped cleaned so. Councilman Litsey: And you're comfortable that we can handle this this year? Greg Sticha: Yes, the $6.3 is $4 million, or just under $4 million under our $10 million status. We, I'm not aware of any debt that we'll be issuing this year or any projects that need immediate debt issuance so I think we're pretty safe as far as that goes. Councilman Litsey: Okay. That's all I have. Mayor Furlong: That's a lot of wells. Very good. This is an item that we'll, for which we will have a public hearing so at this time, if there are no other questions for staff at this point I'll open the public hearing and invite all interested parties to come forward. Please state your name and address and address the council on this matter? Seeing nobody, without objection we'll close the public hearing and bring it back to council for discussion. Any discussion on this item? 12 City Council Meeting - July 23, 2007 Councilwoman Tjornhom: There is one thing. I called in earlier today and asked many questions and he was very patient and answered them all very well so I felt comfortable coming tonight and knowing what was going on and thank you for that. Councilwoman Ernst: And I want to thank Todd for talking to me. Todd Gerhardt: We trade off. Mayor Furlong: Any other? Councilman Peterson: I don't have anybody to thank. Mayor Furlong: I'll thank you Craig. I think overall as was explained, I think this is, it's a tool that we have available to help non-profits in our city and we've done it before on a selective basis. I think certainly it makes sense to move forward here and would certainly endorse moving forward. Councilwoman Ernst was very repetitively redundant in making sure that there was no risk to the city or taxpayers and that's obviously a concern for all of us and I know I received some inquiries from residents about this when it was first published and that was the main concern. Is there any risk to the city or to the taxpayers and the answer is there is not. And I think that gives all of us comfort to move forward because we can see the benefits from overall in the city without putting the taxpayers at risk. Any other thoughts or comments? If not, is there a motion? Councilman Peterson: I'd move that we adopt the resolution allowing the issuance of the revenue note. Mayor Furlong: Thank you. Is there a second? Councilwoman Ernst: Second. Mayor Furlong: Made and seconded. Any discussion? Resolution #2007-50: Councilman Peterson moved, Councilwoman Ernst seconded that the City Council adopt the resolution for the issuance of a Revenue Note for St. Hubert's Catholic Community. All voted in favor and the motion carried unanimously with a vote of 5 to 0. DISCUSSION TO AUTHORIZE AN EMERGENCY SPRINKLING AND IRRIGATION BAN. Mayor Furlong: As I said at the beginning of the meeting item number 4 at the request of the applicant has been tabled. It will be tabled this evening and we'll bring it up at a future council meeting. We'll now move to item number 5 which is, we started our discussion a little bit earlier tonight but it is a request of staff and City Council to authorize an emergency sprinkling and irrigation ban. So let's go quickly to staff, whoever wants to jump in here. Is that Mr. Oehme? 13 City Council Meeting - July 23, 2007 Paul Oehme: Sure. Mayor Furlong: Summarize in case some people are just tuning in, summarize what was discussed before and make sure that people are aware of what's going on. Paul Oehme: Absolutely. Thank you Mr. Mayor, City Council members. We did have problems with our wells last week. We had experienced significant draw downs in 2 of our aquifers which had contributed to 2 of our wells that had been, that have, are not working anymore so we're, as fast as we can we're trying to get those wells back up and running but in the meantime we do not, we're down about 30% of our capacity for where we should be at this time of year so what staff has requested the council to consider is banning sprinkling and irrigation of especially lawns at this time on a temporary basis until staff has, is comfortable with the capacity and the output of our wells in the future. So what we are requesting is that no irrigation of lawns be taking place at this time. We are, we have issued permits for new sod here in the city. Those we are still honoring on a case by case basis. No new ones but the existing ones that we have issued we will, for 21 days we are allowing them to sprinkle. Residents will have the opportunity to water, hand water out of their hose any shrubs, trees, any vegetation that they so choose on a limited basis. We do not, we are not allowing any mechanical sprinkling to be going on at this time so, by residents working with staff on this issue I think we can get through this hump and get back to our normal sprinkling odd/even scenario so we just request that the property owners and residents be patient. Business owners as we work through this problem. Mayor Furlong: Thank you. Any questions for staff? Councilwoman Ernst: Paul, do we have any idea what the time on this is? I mean 2 weeks? Paul Oehme: We're working right now with a contractor on getting Well 2 back up and running and all indications are now that by Thursday we could have one of the wells up and running. The issue still is the aquifers are down so low, especially the higher drift wells where we had 3 wells in that system that we just do not feel comfortable pumping any water out of that aquifer at this time until our levels are at a safer condition. Higher condition where we can actually pump without drawing down air and wrecking our wells and potentially impacting future draws from those aquifers so. Councilwoman Ernst: But you're actually saying Thursday we'll be back? Paul Oehme: No. No, I'm not saying at all that irrigation or the sprinkling ban would be back up on Thursday. All I'm saying is we'll potentially have 1 well up and running. We'll look at the situation. We're looking at it on an ongoing basis, on a daily basis but by Thursday I would not anticipate the sprinkling ban to be lifted. I'm thinking it's going to be a couple weeks down the road until we know exactly what's going on with our aquifers. Councilwoman Tjornhom: And I think the real question is, who knows a good rain dance. Councilman Litsey: What, I had a quick question. What enforcement strategies are we going to be using during this ban? I mean you hope people. 14 City Council Meeting - July 23, 2007 Paul Oehme: We're trying to get the word out as much as we can. Laurie's been great in helping us out getting the word out to residents. We're using our CSO's and our volunteer fire department are fantastic. They're out there right now knocking on people's doors and going around neighborhoods and getting the word out. We are planning to put signs up on a temporary basis like a no parking sign on entrances to specific neighborhoods just notifying people that hey we are in a critical situation here. We request that all sprinkling of your lawns be stopped at this time until further notice, so we do have a web site. It's up on the web site right now. We are on Channel 8, we have a notice going out right now on that and then also in the newspapers will have an article and then some information for property owners. Laurie Hokkanen: The Fire Marshal and I contacted our…business users today… All the homeowners associations that we have phone numbers for and then we sent out emails to our crime alert network and… Councilwoman Ernst: So do we have our fines posted too as to what that is if they're not. Laurie Hokkanen: It was included in the press release so a great majority of people will have that. That's on our web site. We also have some private businesses have volunteered their marquee signs… We really appreciate them… The temporary signs that we use to promote park and community events, they'll either set one up at Powers and Great Plains and one at TH 5 and Galpin… The citation fee is $50 per occurrence. Mayor Furlong: And just from a reaction, if somebody's watering on the wrong day, obviously that's 2 strikes. You know if somebody in the next day or two is watering on the appropriate day, that clearly…if it's 2 or 3 weeks from now and somebody's watering, as you know often it's judgment but I know we've been issuing warnings and citations over the last months and some of those citations have been to people that have received warnings so to me those are certainly appropriate at that point but getting the word out. This is not something that anyone would like to see but certainly it seems to be prudent at this time. The only thing I would suggest is that if we vote to authorize it, that we also grant staff the authority in their judgment to lift it and not wait for a future council meeting to lift it as well. I'm sure if it's still in place 3 weeks from now, you know we'll be getting an update as a council but I wouldn't want to sit around and wait for us to have to take action to lift it, if that's in the recommend, is that in the? Todd Gerhardt: Lawn sprinkling bans until conditions are improved. We'd like to add the word lawn in front of sprinkling ban. It just gets it a little more specific what we're talking about. We still are allowing residents to water their flowers and perennials that might be out around the house so as long as you're hand watering or have it in a container, you can still do that so. So if you could add lawn sprinkling ban, you know I think that's real specific to help Roger defend these things if we ever get… Councilman Litsey: I like the idea of allowing, something in here that allows staff the discretion to make that call. 15 City Council Meeting - July 23, 2007 Todd Gerhardt: Well we say the ban is until conditions improve so that's going to be based on Paul's judgment on that. Councilman Litsey: I'm okay with that language. Mayor Furlong: You're comfortable with that? Councilwoman Ernst: Do we need to add anything in here about sod or just let people call the city? Todd Gerhardt: Sod is permitted under the current ban. Mayor Furlong: I think the, it's a tough time to be laying new sod with conditions. The notice that went out that I saw, the press release specifically mentioned that that would be allowed but that's true right now. You need a permit to water new sod under odd off day so that would still be, that would be there. So if the press release I think provides more information and I assume that's up on the web site, is that correct? Laurie Hokkanen: Yes it is. Mayor Furlong: Okay. So, and I assume is there a contact information there? Laurie Hokkanen: There is. Mayor Furlong: In fact I think I saw your's on there so. Laurie Hokkanen: Any number of people you can contact. Mayor Furlong: Right. Councilman Peterson: You'll probably be getting a few calls. Mayor Furlong: I think in terms of the resolution, simpler is better but I think to your point, if somebody does put a new lawn in at this point in time, given the opportunity, and that's right. It gives them an opportunity to do it but to make sure, the key is to get the permit so that those enforcing the ordinance know and so that you don't start getting warnings and citations inappropriately because you did have the permit. Councilman Litsey: But the way I understood, you will not be issuing any permits at this time. You'll be honoring the permits that have been issued. Paul Oehme: That's correct. Councilman Litsey: This isn't a. Paul Oehme: We're not going to be issuing any permits right now. 16 City Council Meeting - July 23, 2007 Mayor Furlong: And I guess at that point I would ask some discretion because if somebody is, puts a lawn in today or last weekend, you know if they're in that early stage there should be some discretion and I'm anticipating that that's few in number. Councilman Litsey: Not to be picky on the language but could the top part then also say resolution approving a lawn sprinkling ban. Todd Gerhardt: Yes. I would add lawn to wherever sprinkling is. Councilman Litsey: Okay, very good. Councilman Peterson: Do we need to clarify in here or at least with the newspaper that are we allowing people on lakes to pull water out of the lake? Who have their own wells to sprinkle. I mean what are we doing? I know everybody on the lake, a lot of them pull it out of the lake to sprinkle. Mayor Furlong: That's kind of, you know a person with their own private well can sprinkle as much as they want and drawing out of the lake I think is a DNR condition. Councilman Peterson: To my point, I think the newspaper should address that to prevent 2 dozen calls that you're going to get from the sprinkling ban. Does that mean me? Todd Gerhardt: Yep. We'll address that. Mayor Furlong: Given lake levels, I can certainly encourage to avoid that activity. Paul Oehme: One other note Mayor. We did set up a hot line too so all the notifications that have gone out, there is a number that property owners can call and they give them all this relevant information so we'll add that to the list too. Mayor Furlong: And what, do you know that number? Laurie Hokkanen: 227-1317. Mayor Furlong: 227-1317. Any other questions or discussion? Thoughts. Todd Gerhardt: No, we'd just appreciate the public's patience with us on this. I've received one email from…President of their association and he's already sent an email out to all the members and asked for their compliance with our request and that he also stated you know, the City's losing out on revenue on this so it's not something they want to go through so I appreciate his comments to the residents in defending us on this request and it's not something we want to do and we're doing everything in our power to try to get these wells up and operational. We're not the only city that's kind of going through this. I know Woodbury is another community that's lost one well. That was last week so, and trying to get well companies to come and service is 17 City Council Meeting - July 23, 2007 also another issue. There's a lot of people going through these problems right now so we appreciate everybody's patience as we kind of go through these problems. Mayor Furlong: Very good. Any other comments? If not, is there a motion? Councilman Litsey: I'll make the motion for the emergency lawn sprinkling and irrigation ban as proposed in the resolution with the wording changes that we discussed here tonight. Mayor Furlong: Thank you. Is there a second? Councilman Peterson: Second. Mayor Furlong: It's been moved and seconded. Any discussion on the motion? Resolution #2007-51: Councilman Litsey moved, Councilman Peterson seconded that the City Council approve the resolution for an emergency lawn sprinkling and irrigation ban. All voted in favor and the motion carried unanimously with a vote of 5 to 0. COUNCIL PRESENTATIONS: None. ADMINISTRATIVE PRESENTATIONS: Todd Gerhardt: Nothing really to add. The 41 river crossing, the Mayor and I attended a meeting last week with Shakopee, Carver County, Scott County, City of Carver and Chaska so we'll be talking about that meeting at our work session and also go through our audit and the findings on that after our regular council meeting. Mayor Furlong: Thank you. Any questions for Mr. Gerhardt or our staff? Anything else to come before council tonight? We will continuing our work session immediately following in the Fountain Conference room. If there's nothing else to come before the council this evening, is there a motion to adjourn? Councilwoman Ernst moved, Councilman Litsey seconded to adjourn the meeting. All voted in favor and the motion carried unanimously with a vote of 5 to 0. The City Council meeting was adjourned at 8:10 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 18