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CC Minutes 2002 12 09CHANHASSEN CITY COUNCIL REGULAR MEETING DECEMBER 9, 2002 Mayor Jansen called the meeting to order at 7:05 p.m. The meeting was opened with the Pledge to the Flag. COUNCIL MEMBERS PRESENT: Mayor Jansen, Councilman Labatt, Councilman Boyle, Councilman Ayotte, and Councilman Peterson STAFF PRESENT: Todd Gerhardt, Roger Knutson, Justin Miller, Kate Aanenson, Bruce DeJong, Todd Hoffman, Teresa Burgess, Kelley Janes, and Dale Gregory PUBLIC PRESENT FOR ALL ITEMS: Linda Landsman Bruce Feik Tom Furlong Brian Lundquist Jerry & Janet Paulsen Winston Wells Melissa Gilbert Tom Kelly 7329 Frontier Trail Planning Commission 1841 Ringneck Drive 7281 Conestoga Court 7305 Laredo Drive Chanhassen Villager Chanhassen Villager Park and Recreation Commission PUBLIC ANNOUNCEMENTS: PRESENTATION OF MAPLE LEAF AWARDS TO LINDA JANSEN AND GARY BOYLE. Mayor Jansen: Good evening and thank you for joining us this evening. First thing on our agenda under public announcements it the presentation of maple leaf awards. Who am I turning that over to? Councilman Labatt: I suppose Todd for right now. Todd Gerhardt: I think we all want to come down front here and get a photo op here. Councilman Labatt: On behalf of the City Council, Gary Boyle, Gary D. Boyle, we'd like to present you with the City of Chanhassen Maple Leaf Award, and let me read it to you. It says presented to Gary D. Boyle, City Council members from 2001-2002 and Economic Development Authority member 1993-2002. In recognition of outstanding service and dedication to the community the Chanhassen City Council, Mayor Linda Jansen, Bob Ayotte, Craig Peterson and myself. Thank you for your service. And a final maple leaf award to, will be presented to Linda Kazere Jansen and it reads, presented to Linda Kazere Jansen, Mayor 2001-2002, City Council member 1999-2000, Economic Development Authority 1999-2002. In recognition for outstanding service and dedication to the community from the Chanhassen City Council, Bob Ayotte, Gary Boyle, Craig Peterson and myself, thank you. Mayor Jansen: Thank you. Todd Gerhardt: Any words of wisdom that you want to share with the public on your last day here? City Council Meeting - December 9, 2002 Mayor Jansen: I actually have something I'd like to read so I'll wait until we sit down. Thank you. Well with 2002 coming to a close, and with it being the end of my term as mayor, I just wanted to take this opportunity to just reflect a little bit back on the accomplishments that we've made over the last 2 years. And I would like to begin by thanking the community for this opportunity. It has been a real pleasure, a real growing experience. I have appreciated being able to serve this community. It has been my honor and so I do want to thank everyone that has given me this opportunity over these last 4 years. And I also, before I start with our accomplishments I want to express my sincerest thanks and appreciation to our city staff. They do a tremendous job here for our residents, and I have to compliment them on their professionalism, their perseverance, their community dedication that just doesn't end, and also considering all of the stress and strain that we go through with all of the decisions and tasks that we face, I have to thank them for the occasional chuckles that have helped with some of the tension. We've shared some good times and come through some situations that because of their professionalism, we've come through them with our heads up and I've appreciated that from all of them. This council and staff have demonstrated that a group with diverse perspectives and interests can work together respectfully, openly, impartially, and productively to serve the community. The last 2 years, as I said, they've been richly rewarding and enormously beneficial for the future of the community. I'm going to encourage all of you that have been a part of this to reflect and take pride in the many accomplishments that we've made in the last 2 years, and also in respect to our commissioners who are a big part of what we accomplish. Though we have achieved several major goals, our most significant legacy will be the many foundation blocks that we have put into place that are crucial to the future success of Chanhassen. We've demonstrated the vision to look into the future and provide for the long term needs of our constituents. We have initiated or implemented plans that will be used for many years to come by future councils to ensure that Chanhassen is the best community that it can possibly be. The primary responsibility of the city is to provide for the infrastructure needs of our community. These aren't very highly visible, not real glamorous, and certainly not popular projects, but the fact is that they are things that provide for the future of this community and they do have to be very high on our priority list. So just to mention a few of the infrastructure plans that we've put into place, and again I think will be this council's legacy, along with city staff as a team working on these things. The pavement management plan to ensure the cost effective maintenance of the city streets. The water treatment plant study, which is a comprehensive review of our water supply and needs. The key financial strategy plan that will guide the city's finances, budget, capital improvements, and yes, the TIF deficit. A complete review and update of the city's codes and ordinances that have not been done since 1986. Again, not real glamorous but a big, key, crucial part of what guides the city. The housing maintenance and rental licensing ordinance to ensure the continued quality of life and safety standards in the community, and the design standard ordinance to guide development in the community to be consistent with our existing development and current community expectations. Our more visible and popular projects have been the planning and construction of the new community library. Heaven knows driving by that in years to come we'll certainly feel a tremendous sense of pride in that project. The City Center Commons park, next to the new library, is scheduled for construction the spring or summer of 2003, which will truly make this a landmark gathering place for our community. The new Highway 101 north trail, which wasn't without it's controversies, a need identified over 10 years ago, will be completed next spring. Long anticipated and a long awaited for. The highway south trail to connect the entire community to Bandimere Community Park. Another key location in the community for gathering. We also initiated the first ever community survey of Chanhassen residents so we could make the community's priorities our priorities along with staff. We created over 70 new volunteer positions over the last 2 years. There were more residents than ever before involved with the City Council to help make key, crucial decisions for this community. And we initiated City Council Meeting - December 9, 2002 discussions about development of a full service fitness center with private and non-profit organizations. So what didn't we do? We didn't lower your taxes. The state of the city taxes when we inherited them, needless to say you've heard us talk about the troubles, and I'm not going to belabor what those problems have been. You've heard us talk about those issues. We'll talk about them again when we get to talking about our budget later this evening, but instead what we focused on was balancing the budget. We had a million dollar reduction in revenues from the State that we worked with and addressed and did what we could to again balance the budget, and we corrected creative accounting practices. Had we lowered the city's taxes, we felt that we would be adding to the problem, acting only to be quote, popular. Unfortunately there are situations that we and staff have been monitoring now for the last 4 years that we thought were paramount to planning and making sure that in the long term interest of the community, that we were helping to minimize what will be a rather significant impact on all of us in the year 2004, so we practiced policies that would help us prepare for a 2004 situation that hopefully we've helped to minimize as far as the pain we will all feel. So ultimately our actions have eased the tax burden on the residents, just not during our term. As a community, and now I want to reflect on this as a positive and more so that we can have a positive transition. We're faced with yet another change in leadership in 2003. We in fact have a similar split of support to what we faced 2 years ago. 55% of the voters did not support the next mayor elect, and I'm not saying that as a negative. I strongly encourage all of Chanhassen's residents to set aside their differences and their disappointments, from the elections and work with the incoming leadership to achieve goals that are in the best interest of the community. The time and effort that we have all put into serving this community suffers when our community is divided by individuals that choose to create controversy and harbor animosity towards a change of leadership. And I'm not suggesting that you give up your dreams. Share your hopes and dreams and your goals for our community with the new leadership and work constructively with them to achieve all of our goals together. Chanhassen is blessed to have an abundance of residents who care about our community and have a desire to be involved. A change in leadership is a challenge, but I encourage you to view it as an opportunity versus a problem. Don't stick your head in the sand because either you lost or your candidate lost, and don't attempt to sabotage the efforts of the newly elected officials. It's already been demonstrated over the last couple of years that that's not constructive and it's not in the community's best interest. So it's also a poor reflection on either yourself or the candidate that you supported. So I'm encouraging you and I would encourage the mayor elect and the council elect to look at the needs of all of our residents and work to mend, not perpetuate divisions that might form in the community. It's my hope that the 2003 council will make unifying our community a priority, and move forward all of us together. And I'll add that before we came down, and why we were a little late from our work session, is we talked as a group, the current council with the mayor and the council elect, and we're talking about having a joint strategic planning session so the leadership of the community is trying already to communicate a smooth, unifying transition. Let's all work together in the best interest of the community. Let's all start by working to stop the political division that's currently playing itself out in the editorial page of our local paper, and can only serve to alienate residents from public service. This activity serves no public good, and if we can be a part of bringing all individuals into the public service realm in a positive manner with constructive comments, I think it's only going to help move Chanhassen forward more quickly. In closing I'd like to share one of my favorite quotes that was actually shared with us by one of our financial consultants. Cities are forever. We should leave them better than we found them. Councilmen, to all of you, with our accomplishments over the last 2 years I say with great confidence and pride, that we have certainly done that and it has been my extreme pleasure to work with all of you, and to work with staff and I wish only the greatest success to the 2003 council. So thank you. I appreciate having worked with you the last 2 years. Thank you. City Council Meeting - December 9, 2002 CONSENT AGENDA: Councilman Peterson moved, Councilman Boyle seconded to approve the following consent agenda items pursuant to the City Manager's recommendations: Resolution #2002-99: Approval of transferring the off-premise gambling permit and temporary permit to fill the gap; and Resolution #2002-100: to approve the transfer of on-sale intoxicating liquor license, including Sunday sales, from 7995 Great Plains Boulevard to 290 Lake Drive East. c. Approve City Policy Concerning Spraying for Adult Mosquitoes in City Parks. Approval of Modifying Declaration of Covenants for Lots 2 & 4, Block 1, Crossroads Plaza 3rd Addition. Resolution #2002-101: Approve State Aid Variance Request for Century Boulevard, Project No. 97-1C. h. Approval of Bills. Approval of City Council Minutes: - City Council Work Session Minutes dated November 25, 2002. - City Council Minutes dated November 25, 2002. Receive Commission Minutes: - Planning Commission Minutes dated November 19, 2002 j. Resolution #2002-102: Approval of Change Order No. 4, Chanhassen Library Project. Approval of Request for a One Day Beer License, February Festival, Chanhassen Lions Club. All voted in favor and the motion carried unanimously with a vote of 5 to 0. VISITOR PRESENTATIONS: Tom O'Brien: Hi, Tom O'Brien, 449 Summerfield Drive. I did send some background information and hopefully all of you received that. I would just ask Mr. Gerhardt to introduce that into the record. Todd Gerhardt: Can do that. Tom O'Brien: My situation on October 12th, we had a sewer back-up in our home and Corey Wallace eventually with the utility department, eventually came out and took care of that. Jetted out the lines. At that time he gave us a business card and told us to submit all the bills to the City Manager because it was a city issue. Mayor Jansen, I'm happy to hear that you'd like the city infrastructure to be part of this council's legacy because this is an issue I had with the infrastructure. We apparently Mr. Gerhardt submitted those bills to St. Paul Companies. That was denied and now we're looking at bills in excess of $17,000 for our clean-up, as well as contents damage for about $6,000. And what I've been told is that the city was not negligent and my point would be that the city was negligent. There's been a significant amount of construction City Council Meeting - December 9, 2002 that's been completed in our neighborhood over the period of time that the city has taken over the lines and according to the only person from the city who was on the scene who did clear that out, and that was Corey Wallace, that this was a city issue and so I'm asking for our bills to be paid in full, as I was led to believe from a city representative. I'm also asking that we be reimbursed for our damaged contents, and that the problem be rectified. We're at the end of a sewer line and there's nothing to say that this wouldn't happen again. I'm not asking for diminished value in our home as a result, but I am saying that on the assumption that the problem could be rectified. Mayor Jansen: Okay, appreciate your bringing this to our attention. As you and I had discussed earlier today, it obviously is not an issue that we will address on the spot, but we will refer this to staff and they are preparing a staff report and have looked into and done some follow-up on your situation. So we will wait until they're able to present all of the information to us prior to this being addressed by the council, but we certainly empathize with the situation that you and your family have been in, and can appreciate your concern over getting this addressed and certainly avoiding having it happen in the future. But to date, Mr. Gerhardt I don't know if you want to add something briefly. Todd Gerhardt: Yeah, we're working with our agent of record, Dallup Insurance who has been in contact with St. Paul Companies to review the denial. Mayor Jansen: Which is our insurance company. Todd Gerhardt: Yes, our general liability company is St. Paul Companies, and reviewing the denial on the claim to see what other avenues there may be. And the reason it's not on the agenda is we have not gone through all those hoops yet. I would hope to have it settled in the next couple of weeks and have it back to the council, unfortunately you don't meet until January 13th, SO it may be a timing issue with you Mr. O'Brien but we can have that discussion in the weeks to come. See what we can do. Mayor Jansen: Okay, thank you. Thanks for bringing it to our attention. Tom O'Brien: Thank you. Mayor Jansen: Is there anyone else under visitor presentations that has an issue that you'd like to bring to the council's attention? Brian Lundquist: My name is Brian Lundquist. I live at 7281 Conestoga Court. Mayor Jansen and council. I have some discussion on the library coffee shop. Would you like me to do that now or wait til that item comes up on the agenda? Mayor Jansen: If you'll wait until it comes up on the agenda, that would be appreciated. Thank you. Brian Lundquist: Okay. Mayor Jansen: Is there anyone else? Okay. Seeing no one, I'll close visitor presentations. FIRE DEPARTMENT UPDATE. Mayor Jansen: Is John Wolff here this evening? I don't see him. City Council Meeting - December 9, 2002 Todd Gerhardt: Mayor, council members. I talked with John. He did not have anything new to add this evening. Had one fire call and that was at his house, and it was a small fire. He handled it and things are all okay there. Councilman Labatt: Anything about the response? Todd Gerhardt: No. Response time was best ever. Mayor Jansen: Alright, thank you. PUBLIC HEARING: CONSIDER A REQUEST FROM BLAZIN WINGS, INC., DBA BUFFALO WILD WINGS GRILL & BAR FOR AN ON-SALE INTOXICATING LIQUOR LICENSE LOCATED ON WEST 79TM STREET, JUST EAST OF APPLEBEE'S. Todd Gerhardt: Mayor, Council members. Blazin Wings Inc. has requested a liquor license at their new location on West 79th Street. Background check showed no negative comments when we did that. Staff would recommend that the council open up the public hearing for resident comment and staff is recommending approval of the liquor license. Mayor Jansen: Okay, thank you. Council, any questions for staff before the public hearing? Okay, seeing none. This is a public hearing. If there is anyone present who would like to address the council on this item, please step forward. Seeing no one, I'll bring this back to council. Council, any discussion? I'll call for a vote. Councilman Peterson: Motion to approve. Mayor Jansen: And a second? Councilman Labatt: Second. Councilman Peterson moved, Councilman Labatt seconded to approve the request from Blazin Wings, lnc., dba Buffalo Wild Wings for an On-Sale Intoxicating Liquor License. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: And obviously as you've heard us approving this, we do have a new restaurant that hopefully will be opening up next spring I believe are the plans. Spring 2003? Todd Gerhardt: Yes. Buffalo Wild Wings and Chipolte are going to be located directly east of Applebee's on the vacant lot, about 1.8 acres. And the city owns that property and we have entered into a purchase agreement with Affinity Financial Group and we're hoping to close on that property December 20th. Mayor Jansen: Great. We are always hearing how the community wants more restaurants so we've got a couple that are coming in now. City Council Meeting - December 9, 2002 REOUEST FOR A SIGN HEIGHT VARIANCE AND CONDITIONAL USE PERMIT FOR A MONUMENT LED DISPLAY SIGN, 290 LAKE DRIVE EAST, AMERICAN LEGION POST 580. Public Present: Name Address Mike Cummings Bob Meuwissen Gene Borg Tom P. 8025 Autumn Ridge Way 201 West 77th Street 15455 1 l0th Street, NYA 7740 Frontier Trail Kate Aanenson: Thank you. The Legion is requesting a variance and a conditional use for a sign permit. The Legion located on Highway 5, just off of Great Plains, approximate location here. This property is zoned Neighborhood Business. The Legion will be opening up here in hopefully next week. This is the approximate location of the building and the monument sign again adjacent to Highway 5. The two variance requests. One for the height. Again, because this is Neighborhood Business, it does have a height restriction of 5 feet. I'm going to go through and make a little bit more comparison along Highway 5, but this is the approximate scale of the sign itself. At the 8 foot height. And the material would have the punch out letters, back lit. And then the reader broad would be along the bottom. The reader board is a conditional use. You don't deny conditional use. You can add conditions to mitigate it. The staff did recommend approval but if there are concerns with the conditional use, the appropriate response is to make conditions to mitigate the impact if there's concerns that you may have. Again the ordinance does allow for those. The one we have is on the Chan Bank. Typically we've asked that they do provide, which they do community service opportunities. Again, the location or the layout of the sign. There was a question brought up about Neighborhood Business. Can you back that out a little bit Nann. This is the Legion site. This is Highway 5, kind of the core of the community. The Legion site is approximately right here. That is a Neighborhood Business District. We don't have a lot of Neighborhood Business along Highway 5, although it's encoded in the PUD's. The two PUD's that we've done recently. One, where Kwik Trip is. We actually put in that PUD. While it's guided commercial PUD, it does have the same design standards as the Neighborhood Business, because it was supposed to be lower in profile, architecturally compatible with the neighborhood, and that is also the same design standards that will be with the Pulte or the Arboretum Village at Century Boulevard. That same kind of low profile. And I did include for the council kind of a summary of what those two districts, or those, all the districts along Highway 5. When we went back and we did the sign ordinance, we allowed for taller pylon signs. For example on Target there's one pylon sign 20 feet in height that advertises for all those in that PUD, Planned Unit Development. But then each individual tenant can get a monument sign. And in looking at the request for the variance, the Planning Commission made some sound judgment in stating the fact that really the sign is facing Highway 5. It's not impacting the neighborhood and it was really to really to mitigate there so they didn't feel in granting the variance, based on the fact that it's facing Highway 5, it's not going to negatively detract from the neighborhood. That they felt comfortable giving the variance on the sign. And they did recommend approval of the conditional use with the conditions in the staff report. So if you have any questions, I'd be happy to answer those. Mayor Jansen: Okay. Any questions for staff'? City Council Meeting - December 9, 2002 Councilman Peterson: Kate, one of the questions that I had that I talked to the City Manager with this afternoon was, I was somewhat surprised that we would allow a LED sign, motion sign along an example Highway 5. Wherever it would be, but along a highly traffic, high speed area. It induces you to look away from the highway to a sign for more than few seconds. And I don't know whether or not we've asked public safety if that's an issue or not, but it seems, it speaks directly to people on the cell phones these days. That's the hot topic about being distracted, and now potentially we're adding something that is going to pull your eye away from the drive. And I don't know whether I'm way off base or whether or not it's something you guys have ever talked about. Kate Aanenson: Well I'm aware of other reader, not in Chanhassen but along major corridors or other ones. I'm not sure if the city attorney wants to comment on that one. Roger Knutson: Just a short comment. The comment you made I've heard reflected in many communities and I'm sure a debate that goes on, back and forth in various communities make various decisions on that. But your ordinance made the decision that it was okay. Again, it's a good point and other communities because of that issue said no to them, but you have not. Kate Aanenson: I think if your concern is a change in copy and some of that, we can work with the Legion on that. I'm sure, you know they're going to advertise their steak fry and that sort of thing. I'm not sure how fast it can be changed but if that's a concern we can look at that as one of the conditions if you want to add or look at how often the copy's changing or, so it's not moving as quickly. Isn't that? If you look at Chan Bank, which has the reader one, that is a scrolling and I'm not sure how fast this one will be scrolling but it's... Gene Borg: The reader board can stop. It can be slow or quickly. It's programmable... Kate Aanenson: ... so I think that'd be appropriate to put as a condition of the conditional use permit. Councilman Peterson: Yeah, and the Chan bank being an example, again that's in a 30 mile per hour zone, next to some stop lights, etc, etc, where this is not. So again, maybe I'm the only person that feels as though it's an issue but I just, at least of note. That's it. Mayor Jansen: Okay. Any other questions for staff at this time? Councilman Boyle: Just one clarification please Kate. On the north side of Highway 5, if I read this correctly, that's zoned as general, or highway and business district? Kate Aanenson: Business Highway, that's correct. Councilman Boyle: And if a sign under that ordinance could be 10 feet high, is that correct? And it's directly across from Highway 5. Kate Aanenson: And I think that's where the Planning Commission went with that recommendation. Todd Gerhardt: Mayor, Council, I just wanted to add one point. Kate, this is a conditional use permit for the LED? City Council Meeting - December 9, 2002 Kate Aanenson: Right, and I made that clear. Todd Gerhardt: Okay. And the only way we can, we cannot deny it. All we can do is add conditions to it, correct? Kate Aanenson: That's correct. Mayor Jansen: Okay. Any other questions for staff? Okay. If the applicant has anything new that you'd like to add, you certainly can do that this evening. Otherwise we of course have the minutes from the Planning Commission that we have referred to. Is there anything that you would like to add? Gene Borg: Right now we don't have anything new. Mayor Jansen: Okay, thank you. So I'll bring this back to council. Comments? Councilman Ayotte: We've gone ahead with the Chanhassen Bank variance. Given as to who is requesting this, I'll make a comment. America's warriors. Two, I don't see a big deviation in what we've done in the past. I want to approve it as is. Mayor Jansen: Okay. Additional comments? Councilman Boyle: If the sign was on the south side of the building I definitely would not agree, but being on the north side and being on Highway 5, I tend to lean with the Legion for approval. Mayor Jansen: Okay. Or whoever would be requesting the sign. Councilman Boyle: Whoever would be requesting, that's true. Mayor Jansen: Though we appreciate the Legion and what they do for the community. Councilman Labatt: Well for the sake of getting to the budget sooner, I'll just echo Boyle and Ayotte and let's go on with it and approve it. Mayor Jansen: And all I would maybe suggest is because of the rationale that we're using around this particular variance request, it might make sense, since you are doing an ordinance review, to add that particular condition to the ordinance making it so it isn't in fact a variance that these signs are not adjacent to neighborhoods, that they can certainly be the same as some of our other business. Kate Aanenson: I think that'd be appropriate. As we said, this is the BN. The other ones are encumbered in the PUD so they're covered so we can do that. Mayor Jansen: Sure. Okay. With that ifI could have a motion please. Councilman Boyle: I make a motion to approve. Roger Knutson: The CUP and variance? Councilman Boyle: Both. Should that be two separate? City Council Meeting - December 9, 2002 Kate Aanenson: Actually there's two motions. If we can turn to that page. The first one is for the variance. And then. Mayor Jansen: Page 8. Kate Aanenson: If you want to grant the variance, then you want to go to the bold on page 8. Where it states, should the City Council approve the height variance, on page 8, where it's bold. Councilman Boyle: Okay, we'll start with, move that the City Council approve the request for a 3 foot variance//02-16 for the construction of an 8 foot monument sign based on the following. The sign will face Highway 5 and will not directly impact the residential neighborhood. Two. Properties within close proximity of the subject site have signs that exceed 5 feet in height. Mayor Jansen: And ifI could have a second please. Councilman Labatt: Second. Councilman Boyle moved, Councilman Labatt seconded that the City Council approve the request for a 3 foot variance #02-16 for the construction of an 8 foot monument sign based on the following: 1. The sign will face Highway 5 and will not directly impact the residential neighborhood. Properties within close proximity of the subject site have signs that exceed 5 feet in height. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: And the second motion please. Councilman Boyle: Motion that the City Council recommends, or that the City Council approve the Conditional Use Permit//02-07 for the LED display within a monument, ground low profile sign. Mayor Jansen: And a second. Councilman Labatt: Second. Councilman Boyle moved, Councilman Labatt seconded that the City Council approve the Conditional Use Permit #02-07 for the LED display within a monument ground low profile sign. All voted in favor and the motion carried unanimously with a vote of 5 to 0. INTOXICATING LIQUOR LICENSE VIOLATION, AXEL'S RESTAURANT, 560 WEST 78TM STREET. Todd Gerhardt: Mayor, Council members. Axel's Restaurant and Bar violated the city's compliance check by serving liquor to a minor. A representative of Axel's is here this evening to give you any information you need on how they're going to correct the situation. Staff is recommending that a $1,000 fine be assessed and would have Axel's representative come to the podium at this time. 10 City Council Meeting - December 9, 2002 Mayor Jansen: Okay, thank you. Good evening. Linda Young: Mayor Jansen and Council members. My name is Linda Young. Mayor Jansen: If you could pull the microphone over in from of you so, thank you. Linda Young: I am the owner of Axel's, and this is Tonya Swenson who is our general manager at Axel's and we are here, obviously this is one of the most embarrassing and humiliating things that we have ever had to go through as a company. We pride ourselves on training our staff on a regular basis and on a daily and nightly basis. Obviously there was an assumption made on the part of my bartender, who is here also. She insisted on being here so she can carry the message back to our staff on the severity of what has happened there. She did serve a minor. She assumed that she had carded her before, and made the assumption and was wrong. So therefore we are standing before you tonight on behalf of the rest of our staff in hopes that the 3 day suspension will be waived. We do have, what this has done to heighten our, and all of our restaurants, it has brought us all back to really, really preaching every day and night to our staff. We have put signs on all of our restaurants, don't forget to ID. We're just 3 months ago had a sting in Eagan and we passed that and it was a congratulatory letter that we got and I wish I was standing here tonight with that same letter. We understand the severity. We know, most of my servers have minors in their homes. They're older and they worry about that all the time, and I did have a liquor awareness that we do twice a year. We just had one on June, it was June of this year, the 15th, which I have documentation of that. We also have another one scheduled this Friday by a Debra Zybrowsky who is coming in at 4:30 and talking to our entire staff again. We have in both of our bartender and server manuals, from day one, anybody new that does start as a server or anybody that is serving intoxicating beverages, we do have a liquor awareness program that we have set up since we opened. We have tried very, very hard to not have this happen. Axel's is not a restaurant that is conducive to younger people. They don't tend to hang out there. It is not a late night supper club or people come in there as a family. They come in there to dine. I am more than willing and open to any suggestions that you may have if, whatever you can do to help us prevent this from happening again that we haven't done already, I'm open to suggestions. Mayor Jansen: Well thank you, and we certainly appreciate your being here this evening to speak with us about this. This is of course one of our more difficult issues is having one of our establishments having to come in and address an issue like this with us. We typically would prefer that this be more of a positive note that we have you here in the council chambers, so I appreciate your having emphasized your concern around this incident and what's occurred. I know that you're aware as our ordinance reads, the council may deviate in an individual case where the council finds that there exists reasons making it more appropriate to deviate, meaning from the 3 day suspension. Such as, but not limited to a licensee's efforts in combination with the State or City to prevent the sale of alcohol to minor's, and of course now your having addressed with us that you have had current conversations with all of your staff and your training this Friday as you mentioned, you again will be having all of your bartenders and waitresses or waiters also involved in that? All of your serving staff. Linda Young: Yes. Mayor Jansen: Okay. Linda Young: And we do do a daily, what we call a pre-shift is done daily, both a.m. and p.m. by all of our staff, and there isn't one of my staff that does not know we are here tonight and 11 City Council Meeting - December 9, 2002 understands the severity. This affects their job as well. I mean they have families and obviously they're very aware of it. We have, we've never hid this from them. We did put up the letter when we got it. It has been posted with Jessica's name on it. Ironically Jessica, the bartender, has been one of the people that always has carded and it's humiliating and embarrassment for her. She has suffered immensely over this and is still not finished. She has to go in front of a court on Friday personally and it, you know the termination aspect of it as she has gone through a lot already with her co-workers and I only believe that this is a positive because she has definitely spoken in pre-shifts about what has happened to her. And the awareness level is definitely heighten in all of our restaurants and we're happy to be here and we want to do the right thing and that's why we're here. Mayor Jansen: Well thank you and I realize it's a difficult situation for Jessica, but I have to compliment her on being willing to step forward and express what has happened to her to your staff so that they can be personally aware and I'm sure there's a camaraderie that exists within the restaurant that everyone is somewhat feeling her pain so thank you. Linda Young: Absolutely. Mayor Jansen: Council, any questions for the applicant? Councilman Ayotte: Yes, and I would ask that Roger chime in. I made some calls today to see whether or not a certificate of compliance that's used in my particular area, if you would be willing, if it would be appropriate that once an individual receives training, that they sign a certificate of compliance realizing the consequences of not adhering to carding. Would you be responsive to that approach and is that, Roger, would that be appropriate? Roger Knutson: Yes, that would be appropriate if the council desires that. Linda Young: I, whatever. You know we're here to please. This does not help us, believe me. It really hurts us a lot. It hurts our whole company. When we, we just applied for a liquor license in Woodbury and we had no, one of their, one of the reasons that we got accepted is because we had had none at that time, and this is going to affect us going forward and we definitely will do whatever it takes to not have it happen again. Councilman Ayotte: But point of clarification. It's not, at least not to please this councilman. What my concern is, as I've shared with you before when we've had a discussion it's, I'm more concerned and I understand your moment of embarrassment but for the young person who has a drink or two at any establishment and goes out and hurts themselves or someone else, so that's my biggest concern. And I would like to consider the idea of a certificate of compliance by each employee once they complete the training, maintain value to ensure that they understand completely and have accepted that understanding through that certificate of compliance. Linda Young: That's totally fine. We keep, we have on file from the certification practice when they go through this training, they do sign it and they do take a test on it. It is on file at our restaurant. We certainly can send them to you if you'd like. Councilman Ayotte: No, I'm talking about them signing a certificate of compliance, understanding the consequences. That just talks about the training. But if they were to understand the consequences, then I think the point would be sent home a little bit clearer. 12 City Council Meeting - December 9, 2002 Linda Young: Okay. Mayor Jansen: And so Councilman Ayotte, just so I understand this certificate that you're referring to of compliance, is that something that exists or are we creating it as far as what the consequences are? Councilman Ayotte: It exists in the federal environment where folks have to sign that. I would suspect we could borrow it if this council elects to enforce it, and what that basically says is that the individual understands the consequences of not adhering to the rule... Mayor Jansen: So I think what I'm hearing is that this is probably in addition to our overall policy that we would have in place so that it's in fact impacting all of our establishments in town, not just Axel's because they're here this evening but you'd like to see it added as a policy. Councilman Ayotte: I would like to see it added and I think it would help everyone. It'd be an education. It'd be a positive thing rather than simply punitive thing. Linda Young: On this particular awareness that they go through does have the penalties that they will have to adhere to if they were to serve a minor. Would you care to see this? Is this, I mean I just want to make sure that I'm understanding what you're looking for. Councilman Ayotte: Do they sign that? Linda Young: Yes. Councilman Ayotte: So they sign that they understand the consequences? Linda Young: Yes. Councilman Ayotte: Well then you do it. Linda Young: Yes we do. Mayor Jansen: Okay. That does have the penalties. Councilman Labatt: That doesn't have the penalty for you as an establishment? Linda Young: Yes it does. Councilman Labatt: It shows you'll be suspended for 3 days? Linda Young: Absolutely. Councilman Labatt: Okay. Mayor Jansen: Okay. Thank you for clarifying that for us. Appreciate it. Council, any other comments or questions for the applicant? Councilman Labatt: You did receive the letter from Carver County Sheriff's office announcing this during this certain time frame, correct? 13 City Council Meeting - December 9, 2002 Linda Young: Yes. Councilman Labatt: So you knew it was coming. And did you advise your staff that. Mayor Jansen: The actual sting was occurring? Councilman Labatt: Yeah. Linda Young: No. Councilman Labatt: They send a letter out. Linda Young: No. Councilman Labatt: Sometimes they do, just to put you on notice. Mayor Jansen: Anything else? Councilman Labatt: No. I mean just you know, it's one my pet peeves but. Mayor Jansen: I know. Okay, thank you. I'll bring this back to council then. Appreciate your being here this evening and for your action that you have taken to raise the awareness within your staff of what has occurred as a result of this. So thank you. Linda Young: Thank you. Mayor Jansen: And we do appreciate you as a contributor to our community and you've been a significant, I would say crown in our jewel so. Jewel in our crown so. Linda Young: We love Chanhassen too so. Mayor Jansen: Well thank you. We'll look forward to not seeing you here again, under these circumstances. Council, I'll bring this back then for comments or a motion please. Councilman Ayotte: I like the idea, you know I'd like to get a copy of what they have. That might be shared around the block, and the fact that they do have a certificate of compliance showing the consequences will get it now out... Mayor Jansen: Staff, if you could follow up on that for us we would appreciate it. Councilman Ayotte: Maybe we could both break that across the board. Mayor Jansen: Okay. Anything else? Otherwise I'll call for a motion. Councilman Peterson: I'd make a motion that we take staff recommendation and waive the 3 day removal of the license and just do simply pay $1,000 fine. Councilman Boyle: I would second that. 14 City Council Meeting - December 9, 2002 Councilman Peterson moved, Councilman Boyle seconded that the City Council waive the 3 day suspension of the liquor license for Axel's and impose a $1,000 fine. All voted in favor, except Councilman Labatt who opposed, and the motion carried with a vote of 4 to 1. REQUEST FOR SITE PLAN APPROVAL FOR A THREE STORY, 70,873 SQ. FT. COMMERCIAL BUILDING CONSISTING OF A 76 UNIT HOTEL, A RESTAURANT, AND MULTI-TENANT RETAIL SPACES WITH VARIANCES FOR SIGNAGE AND BUILDING MATERIALS, BRUCE BISSONNETTE, NORTHCOTT INN AND SUITES. Kate Aanenson: Thank you. The applicant is requesting approval for a 70,000, approximately 70,000 square foot building located in Villages on the Ponds. It's highlighted here. See approximate location. Bokoo Bikes here. It's across from Houlihan's and Americlnn on that same comer. There is 14,300 square feet of retail and that hotel lobby, meeting room area on the first floor. And 76 total rooms. And conference facilities. The access, the majority of the parking will be underground. There is on-site parking that will be shared, but the majority of the parking will be underground. This is the site plan of the building as it sits. Main Street and Lake Drive, so there is access via those two for the retail. One of the issues that the Planning Commission had was access to the site. Access to the site via another sidewalk. Again, I'm sorry the scale's different on this one too. One of the concerns that the Planning Commission had was regarding the sidewalk. The staff had not recommended an additional sidewalk in this area. There is landscaping. We wanted to increase the landscaping. Could parking be removed and move the landscaping over for an additional sidewalk? That's a possibility. Parking again is at a premium here. There will be some peak times that that will be a premium. Staff's concern is that we believe the sidewalk that runs along the other side, Bokoo Bikes coming across or the internal sidewalk that we've put in place, will get you to the terminus, whether you're staying at this building, going over to Houlihan's or to Americlnn, coming back across. That the sidewalk on this location and this location is adequate. Again, taking the path of least resistance. Getting to the closest point. Their site plan does show a sidewalk, which we need clarification .... landscaping but the continuation of this sidewalk to tie in across over here. Councilman Boyle: Kate, excuse me. Can you slide that a little bit so we can, kind of center that. Kate Aanenson: That helps. Councilman Boyle: Yeah, thank you. Kate Aanenson: There we go. So the concern was, if you're on the, coming from the American Inn hotel, you could meander through, or if you're at Houlihan's and catch this sidewalk or stay on that sidewalk. The Planning Commission wanted an additional sidewalk here. That was their recommendation. Staff does not concur with that recommendation. I just want to make that understanding. So the way to solve that was to reduce parking or reduce the landscaping, and the staff didn't concur with either of those proposals, so there's the difference on those and those are reflected in your conditions of approval. The other issue was. Councilman Ayotte: Kate, can I ask a quick question on that point? Kate Aanenson: Sure. Councilman Ayotte: It makes sense you don't want to reduce parking nor do you want to affect 15 City Council Meeting - December 9, 2002 the vegetation so why did the Planning Commission hold to that position? What was their reason for? Kate Aanenson: Their reason was that this was to be walkable, but we felt there is enough sidewalk in convenient locations. Councilman Ayotte: So it's the definition of what was walkable... Kate Aanenson: And what's convenient, right. Councilman Ayotte: Alright, I just wanted to. Kate Aanenson: And we felt, and that's why we, when we originally met with the developer, we felt this was the adequate one. Again, you have people staying at this hotel. More than likely there's going to be a restaurant here. So there will be people going back and forth is what we want, but we believe there's adequate sidewalk and safety to get back and forth through there. So the other outstanding issues were EIFS and the sign. They're requesting a sign variance for the height, and the amount of EIFS. The staff had recommended some architectural changes. This drawing is different than what was approved in your packet. They have made some changes through awnings and added the additional windows so, we met with the applicant last week regarding that and the staff is satisfied with those changes so the approval date would have to reflect the date of these plans. Again ongoing, the sign. We end up with these nice architectural embellishments to create a sign but that is again their request. I did put in, there is sign variances that you recently granted on the bank, and I included that language. For the bank you had recommended above the 20 feet, and if they could pick either the higher point or the lower. There were two actual places for that to go, and they could pick one or the other. And again, based on the fact that the logo was pretty subdued, you felt comfortable with that. Pretty low key. And then you also agreed to put signage on the bank side on the canopy. There was two components to that. Mayor Jansen: Kate as a part of that I recall our mentioning tonal as far as the color because it was going to blend rather than contrast. Kate Aanenson: Right. The logo was kind of more of a brass color and it was more subdued. Just the lettering, right. Mayor Jansen: Okay. And that was the one on the tower. Did we put a similar condition then on the bank signage? Kate Aanenson: No, that was channel lettering and I don't believe that that language was put into the condition of approval regarding the other, over the canopy. It just says signage over the bank canopy as shown on the site plan, and maybe Vernelle could speak to specific color on that, but I'm not sure we called that out. Mayor Jansen: Okay. Kate Aanenson: But it is represented on the site plan that you saw. Mayor Jansen: Okay. Thank you for clarifying that for us. 16 City Council Meeting - December 9, 2002 Kate Aanenson: So they did make the architectural changes that the staff had, so those can be modified, but then again there's the signage issue and the amount of EIFS. So again the sign exceeds the 20 feet in height, and the EIFS on this is 26%. The ordinance now says 15. Again for your edification we put in here the recently approved other projects, specifically Bokoo Bikes, which has 56%. And Bell Mortgage has 33%. And I believe the other building, Building C which we recently approved was just over 15 percent. Somewhere between 15 and 20, so this does exceed that. So with that, I'd be happy to answer any questions you have but we have put the conditions of approval in. Again, if you are satisfied with these changes, the awnings and again the windows, then we need to reflect that in the date of the, today's date in the site plan agreement. Mayor Jansen: Okay. If you wouldn't mind, since the EIFS part of the building has changed somewhat. That's where you've added the awnings. Could you have Nann maybe focus in on that part of that building. It's a little hard to see from here. Kate Aanenson: Maybe we can go back, let's see. This is the original one. Councilman Boyle: Which one's in our packet Kate? Is that the original one right there? Kate Aanenson: This is the original one here.., materials that we'll be using. The coloring that came out in the packet, I think didn't represent the true colors and so instead of trying to copying it, we actually just asked them to get one photo composite and then bring the material board in. You can see he's added an awning, and then we wanted more detail on the windows. And those are reflected here again, if you look at these, just the plain glass windows. We added much more detail. And we believe that that met the intent that we had to make any changes. Grading up the architecture. Mayor Jansen: Okay. That was probably one of my concerns, as far as granting the variance on the EIFS. It just seemed as though this part of the building was flat. Kate Aanenson: Yeah, that was our concern too. Mayor Jansen: Okay. So now you're satisfied with those additions? Kate Aanenson: Correct. Correct. Mayor Jansen: Okay. Kate Aanenson: And it just still requires a variance for the EIFS so, but as far as the changes... Mayor Jansen: Okay. Any questions for staff at this time? Councilman Peterson: Just to clarify the EIFS is not, it's high enough where nobody's going to be bumping into it, knocking it. Kate Aanenson: That's correct. Yes. And this goes back to another issue that I think we're going to look at if the council, whichever way the council's willing to kind of go back and examine the rule based on what we've been approving, depending on which direction you go tonight. They said 15%, the right percentage and. 17 City Council Meeting - December 9, 2002 Mayor Jansen: Right, but to your point in the staff report, this is a PUD and so the original development that happened within the PUD meets those requirements and this is an additional ordinance that was drafted after the initial development occurred. Kate Aanenson: That's correct. Mayor Jansen: So it would be holding it to a higher standard than the rest of the PUD, whereas the ordinance that changed it was to the entire city. Kate Aanenson: That's correct. Mayor Jansen: Okay. It wasn't specifically targeted to just impact this PUD. Kate Aanenson: no, city wide, right. So they got caught in that change. Mayor Jansen: Okay. Any other questions for staff at this time? If the applicant has anything new that you'd like to add to the discussion, you're certainly welcome to step forward to the podium. We of course have the notes, minutes from the Planning Commission meeting but if there's anything new, you're welcome to step forward. Mark Clarey: Good evening. I'm Mark Clarey. I'm with Northcott Company and just briefly, we've been involved in the project out here since the first inception with Americlnn and Houlihan's. Our goal is to continue to mm over good projects here in the community. We like our involvement in it. We have tried to work with staff on all the issues that they've come up with, and at the point of working relationship with everyone, come out with a project that's viable for all people of the community and for us. I think we've gotten to that point and look forward to working with you some more. Mayor Jansen: Thank you. Appreciate that. Vernelle, you can't attend my last council meeting and not get up and say something. Not to put you on the spot. Vernelle Clayton: You won't believe this but I actually thought I'm going to have to figure out some way of talking. Not to bore the rest of you, but they give me a bad time about talking too much. Mayor Jansen: At least you have your voice this evening, which you didn't at the Planning Commission. Vernelle Clayton: Let me validate my presence by just adding one other little thing about the EIFS and that is, the bank building is the one that had to get the variance because of the.., because it's classified residential, so that's kind of quirky thing that happened for two buildings just across the street from each other. With that I just would like to say that I have truly enjoyed working with these folks. I've appreciated your patience with all of my verbiage and congratulations on a job well done. Mayor Jansen: Well thank you. Okay, I will bring this back to council. Comments. Councilman Peterson: The only comments I have is about the sign. I'm worried that it's going to stand out more than we want it to and other than that I think it's a great project. Nice 18 City Council Meeting - December 9, 2002 architectural design. Good feel. Fits into the concept and it's just the signage so I look towards other comments. Mayor Jansen: If we might have a conversation on the signage, and we of course have two issues. One, the sign in the tower and then the other that's actually on the building that's more at the 22 to 28 foot. Kate, did you get a height for me on the tower sign by chance? I had emailed Kate earlier. Kate Aanenson: Yes. The AmericInn was 47. Mayor Jansen: Okay. And this one will be at, I looked. I couldn't find what it's actually at. Mark Clarey: I believe 52 foot. Mayor Jansen: 52, okay. Mark Clarey: The story height in this three story building is taller than a 15 foot retail...makes up for quite a difference .... 7 feet higher than the traditional motel.., retail usage and you need all that room on the first floor which again... Mayor Jansen: Okay. I had brought the bank building tower I believe was at 40 feet, so this one's at 52. The bank tower sign was limited to the logo, and I know our comments had to do with it being an additional architectural detail, and that was really what the two locations where shown to represent and as we were talking to the applicant, of course it was noted that the lettering of the sign in the tower would probably end up being so small that it wouldn't necessarily be visible, which is where we went to a logo. Now in the Planning Commission minutes it was not determined yet as to what the name would be that would appear in that tower. And I'm, at this point feeling more compelled to put the same sort of condition on this tower as we had on the previous one, and that it be more of a logo or some type of an architectural detail versus trying to put a, you know verbiage at that size. That was also specifically what we had noted needed to be tonal so that it would not be standing out and contrasting to the building at that height, and this one being at 52 feet. So I'm looking at the tower sign as being one that I would like to maybe be more specific about if we're going to allow that to stand as a sign per se, compared to the other two locations which are at the 22 to 28 foot height at the ends of the two buildings. Councilman Ayotte: What would be the constraint that specifically, how would you ford that to? Mayor Jansen: I'd like to hear council discuss the same condition that we had had on the previous tower, and that it be of a logo or architectural type of a detail that might depict the businesses that are in the building, if that's possible. And that it be tonal versus having it be a contrasting color that would stand out in the tower. Councilman Boyle: And leave the height as is? Mayor Jansen: Yes. But just to throw those out as council is continuing to comment. Councilman Peterson: I didn't vote for the last one, as you recall so I'm reticent to, I won't vote for the height or the presence of this one either just because I believe that the ordinance in the 19 City Council Meeting - December 9, 2002 PUD in this case should be adhered to so, but I think which particulated, if the rest of you feel that way, at a minimum that's what you should do. Councilman Ayotte: The one thing that I would like to bring up, and Linda I agree with you that that would be an approach, but what seems to be consistently coming up all the time is signage, so I have an issue with, not an issue but I have a request that we figure out how we can come up to some mechanism where we don't keep on re-visiting signage all the time. But in terms of this event, yeah. I think what you're suggesting would work. Leave the height as it is and go, I hate to say the term tonal because it sounds so touchy feely. Mayor Jansen: Okay. Well, and the previous sign issue of course was also within this same PUD so that has a great deal to do with it. Councilman Ayotte: I'm not saying all the time. We always seem to be re-visiting discussions with signage more than I think. Councilman Peterson: It's the sign of the times Bob. Mayor Jansen: Okay, moving on to more comments please. Councilman Labatt: I think that we would just, why wouldn't we apply the same conditions to this building as we did to the Community Bank building of Chan? Mayor Jansen: So you're comfortable with that? Councilman Labatt: Yeah. Let's just, I mean let's make sure that we're treating everybody fairly. If we're going to give Community Bank of Chanhassen conditions 4 weeks ago and we get another applicant today, let's just apply the same conditions so we're all on the same playing field. Mayor Jansen: Great. That was why I asked Kate to get more specific so we'd know how we had worded that one. Councilman Labatt: Yeah. Mayor Jansen: And so as far as the signs on the end of the two buildings, you're okay with that height, the 22 to 28. Councilman Labatt: It's a different elevation. It's got retail. What's a couple feet? Mayor Jansen: One will be for the restaurant and one will be for the hotel. Okay, any other comments? Councilman Labatt: No. Mayor Jansen: Okay. I'm not hearing any discussion on EIFS so I'm assuming we don't need discussion. Okay. Then if I could call for a motion please. 20 City Council Meeting - December 9, 2002 Councilman Labatt: I would move that we approve Site Plan #2002-9, plans prepared by Truman Howell Architects and Associates dated October 18, 2002, subject to the following conditions, 1 through 44, but let's talk about 43 quick. The sidewalk. Do we want to omit that? Mayor Jansen: I'm okay with omitting that for the reason of having more of the green space. Councilman Labatt: I have it deleted from mine so, so my motion would be for subject to the following conditions 1 through 42, omitting 43, and including 44. Kate Aanenson: Okay, can we have a clarification then on B, because I'm assuming that you're going to. Councilman Labatt: I was going to make that a separate one. Kate Aanenson: Oh, okay. Councilman Labatt: Unless I can do it all on one shot, and I'll be glad to. And we approve a variance to use more than 15 percent EIFS, item or letter B. Mayor Jansen: Why don't, if you wouldn't mind, shall we make them separate motions? Councilman Labatt: Okay. Mayor Jansen: I think we're going to get a 5 on at least the first one. Councilman Labatt: Okay, we'll give Craig his shot here. So that's my motion, 1 through 42, omitting 43, and 44. Mayor Jansen: Could I have a second please. Councilman Boyle: Second. Mayor Jansen: Any discussion of the motion? Councilman Labatt moved, Councilman Boyle seconded that the City Council approve Site Plan #2002-9, plans prepared by Truman Howell Architects and Associates, Inc. dated October 18, 2002 for a 70,873 square foot, three story building consisting of street level commercial and upper level hotel rooms, subject to the following conditions: 1. The applicant shall enter into a site plan agreement with the City and provide the necessary security to guarantee erosion control, site restoration and landscaping. 2. Site plan approval is contingent on final platting of Outlot A, Villages on the Ponds 2nd Addition to a block and lot designation. 3. Lighting shall comply with the Villages on the Ponds design standards and city code. 4. Signage shall comply with the Villages on the Ponds Design Standards and city code. 5. The exterior building lighting shall be revised to shine downward only. 21 City Council Meeting - December 9, 2002 10. 11 12. 13. 14. 15. 16. 17. 18. 19. The overhead doors at both the garage entrance and trash storage shall be painted a similar color to the surrounding material. Each of the windows located below the shake dormers on the second and third floors shall be replaced with six-panel windows on both the Lake Drive and Main Street building elevations for the second and third level. Additional differentiation shall be provided around the windows in the flat roofed sections of the building on all three sides on both ends of the building. This could be done through the use of window accents, such as plant boxes, shutters, balconies, decks, grates, canopies, awnings, recesses, embrasures, arches, lunettes, and different types of windows such as bay, multi-paned, angular, square, rectangular, half-round, round, Italianate. The developer shall be required to install the streetscape in compliance with the streetscape plan approved for Villages on the Ponds. The applicant shall revise all plan sheets to incorporate the landscape islands within the parking lot a minimum of 10 feet wide and evergreens shall be outside the sight triangle in the northwest comer of the parking lot. The building must be protected with automatic fire sprinkler systems. The building plans must be prepared and signed by design professionals licensed in the State of Minnesota. The building must be constructed in accordance with the Minnesota State Building Code. (Note: The International Building Code will probably be adopted by the State at the time the building is constructed.) An accessible route must be provided to the building, parking facilities, public transportation stops and all common use facilities. Seven accessible parking spaces must be provided on the site. Accessible guestrooms must be provided in accordance with Minnesota State Building Code Chapter 1341. The building owner and/or their representatives should meet with the Inspections Division to discuss plan review and permit procedures. In particular, type of construction and allowable area issues need to be reviewed and discussed. A 10 foot clear space must be maintained around fire hydrants, i.e. street lamps, trees, shrubs, bushes, Qwest, Xcel Energy, Cable TV, and transformer boxes. This is to ensure that fire hydrants can be quickly located and safely operated by firefighters. Pursuant to Chanhassen City Ordinance #9-1. All radius tums shall be designed to accommodate the turning of Chanhassen Fire Department's largest apparatus. Submit radius tums and dimensions to the Chanhassen 22 City Council Meeting - December 9, 2002 City Engineer and Chanhassen Fire Marshall for review and approval. Pursuant to 1997 Uniform Fire Code Section 902.2.2.3. 20. Additional fire hydrants will be required. Contact Chanhassen Fire Marshal for exact location. 21 A PIV (Post Indicator Valve) will be required on the fire water line coming into the building. Contact the Fire Marshal for exact location. 22. ~No Parking Fire Lane" signs will be required as well as curbing to be painted yellow. Contact Chanhassen Fire Marshal for exact location of signs and curbing to be painted yellow. Pursuant to 1997 Uniform Fire Code Section 904.1. 23. The builder must comply with water service installation policy for commercial and industrial buildings. Pursuant to Inspection Division Water Service Installation Policy #34-1993. 24. The builder must comply with the Chanhassen Fire Department/Fire Prevention Division regarding maximum allowable size of a domestic water line on a combination water sprinkler supply line. Pursuant to Chanhassen Fire Department/Fire Prevention Division Policy #36-1994. 25. The builder must comply with the Chanhassen Fire Department/Fire Prevention Division regarding premise identification. Pursuant to Chanhassen Fire Department/Fire Prevention Division Policy #29-1992. 26. With referencing proposed restaurant, the builder must comply with the Chanhassen Fire Department/Fire Prevention Division policy referencing cooking equipment exhaust hood requirements. Pursuant to Chanhassen Fire Department/Fire Prevention Division Policy #35-1994. 27. A private easement will be required for the storm sewer which runs off site to the west. 28. A cross-access agreement between parcels must be recorded. 29. Submit storm sewer design calculations for a 10 year, 24 hour storm event with drainage flow map. 30. Add the current version of the City of Chanhassen Detail Plate Nos. 3101, 3102, 3104, 3107, 3108, 5203, 5300, 5301, and 5302. 31 The applicant is responsible to obtain and comply with all regulatory agency permits, including but not limited to Watershed District, MPCA, etc. 32. Retaining walls over 4 feet in height must be designed by a registered engineer and requires an approved fence at the top of the wall. 33. All plan sheets must be signed by a registered engineer. 23 City Council Meeting - December 9, 2002 34. Add a minimum 75 foot long rock construction entrance and revise the note from 50 feet to 75 feet. 35. Add a storm sewer schedule to the plans. 36. Type II silt fence shall be used around the grading area. Also, existing catch basins around the site perimeter must be protected from construction-related sediment through the use of filter barriers, (see City Detail Pate No. 5302). 37. Revised the legends to match the plan drawings. 38. On the site plan, revise the dimension of the north access entrance width to 26 feet. 39. Any off-site grading will require easements from the appropriate property owners. 40. On the grading plan: · Show all existing and proposed easements. · Add a benchmark. · Differentiate between existing and proposed storm sewer lines. · Show Type II silt fence around the perimeter of the grading area and Type III adjacent to the pond. · Show the construction rock entrance minimum of 75 feet. · Show the building basement elevation and how it will drain. · CBMH # 101 must be with sump. · Show the existing and proposed storm sewer flow direction. · Show the proposed storm sewer class. · Show all existing pipe information including pipe type, slope, class and size. · Designate which parking stalls are meant to be handicap accessible. 41 On the utility plan: · Differentiate between existing and proposed utility lines. · Add note ~Any connection to existing structures must be core drilled". · Show all existing and proposed utilities sewer type, class, size, length, flow direction, slope. · The existing water and sanitary stubs off of Lake Drive are shown incorrectly. Verify locations with as-builts. · Show the location of existing ate valves on the water service lines. 42. The applicant shall include a design pavement section. 43. To be consistent with Building C, the applicant shall incorporate enhanced pavers with the sidewalk on Main Street and Lake Drive. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: If I could have a second motion please. 24 City Council Meeting - December 9, 2002 Councilman Labatt: Okay. I move that we approve the variance to use more than 15 percent EIFS on the building based upon the findings in the staff report for the same project. Mayor Jansen: Actually we're going to be creating our own finding. Kate Aanenson: That'd be correct. So my understanding that your findings were, it's consistent with the other buildings that we approved in the area. And the rules changed after, I think you phrased it better. After this project was approved. So for example Bokoo Bikes and the Building #4 were approved... Mayor Jansen: So we're basically grandfathering this one in, correct? Kate Aanenson: Or applying the same standards that. Mayor Jansen: Applying the same standards. Councilman Labatt: Okay. So be it. Mayor Jansen: Yeah, what she said. Okay, ifI could have a second please. Councilman Ayotte: I'll second that. Councilman Labatt moved, Councilman Ayotte seconded that the City Council approve the variance for the use of more than 15 percent EIFS on the building based upon the finding that it's consistent with other buildings approved in the area. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: And the third motion please. Councilman Labatt: Okay. Move that we approve the variance for the signage in excess of 20 feet in height on the buildings based upon the findings we came up with tonight that it is consistent with the Community Bank of Chanhassen under the same conditions. Mayor Jansen: So we're adding the same conditions that we had in the Chanhassen Bank approval. Is that acceptable? Kate Aanenson: Yeah, let me make sure. My understanding is that it's tonal and that it be more logo type sign. Mayor Jansen: In the tower. Kate Aanenson: In the tower, correct. Councilman Labatt: That's it. Mayor Jansen: Okay. A second please. Councilman Ayotte: Second. 25 City Council Meeting - December 9, 2002 Councilman Labatt moved, Councilman Ayotte seconded that the City Council approve the variance for signage in excess of 20 feet in height on the building based on the fact that it's consistent with the approval given to the Community Bank of Chanhassen building. All voted in favor, except Councilman Peterson who opposed, and the motion carried with a vote of 4 to 1. Mayor Jansen: It is really exciting to see this project moving forward and we certainly appreciate all the good efforts and addressing the issues that staff has had. So thank you. CONSIDER REQUEST FOR PROPOSALS FOR BANKING SERVICES. Todd Gerhardt: Mayor, Council members. If we could have this item tabled. We were trying to contact representatives from M&I Bank today and they were not available so we'd ask that this item be tabled to our next council meeting. Councilman Boyle: I make a motion we table it. Mayor Jansen: And a second? Councilman Ayotte: Second. Councilman Boyle moved, Councilman Ayotte seconded to table the request for proposals for banking services to the next City Council meeting. All voted in favor and the motion carried unanimously with a vote of 5 to 0. DISCUSSION OF COFFEE SHOP IN NEW LIBRARY. Public Present: Name Address Lois Fiskness Jill Shipley Laura Holmes Thomas Bader Cindy Schallock Beth Larson Cathy Burd 8033 Cheyenne Avenue 261 Eastwood Court 8596 Drake Court 8571 Drake Court 7501 Canyon Curve 7590 Canyon Curve 515 Laredo Lane Todd Gerhardt: Mayor, Council members. This past May staff was directed to put out a request for proposal to. Mayor Jansen: Pull your microphone a little closer. Todd Gerhardt: To put out a request for proposal for a coffee shop to be placed in the new library. As a part of that request we did not receive any applications from private individuals, however we did receive a proposal from the Friends of the Library. My report outlines their proposal and has asked that they pay a pro-rated amount based on sales and a base rent, at a minimum of $540 per month and staff is recommending that we not accept that proposal Staff is making the condition that any coffee shop that would be located in this facility would pay a base 26 City Council Meeting - December 9, 2002 rent of a minimum of $1,092.72 based on $80,000 worth of tenant improvements, to a maximum of $1,362.58 based on $120,000 worth of tenant improvements. And also that any tenant in that space would guarantee those tenant improvements, personally guarantee them. That means putting them, a letter of credit or personal guarantee. If for some reason the coffee shop is not successful, that they would reimburse us for those tenant improvements. I've also laid out monthly sales and base rent comparison in the report showing you what the rent would be based on the Friends of the Library's proposal. I know Jill Shipley's here this evening. If you have any questions of her as a part of the Friends of the Library, and staff is ready to answer any questions that you have. Mayor Jansen: Okay. I have one question. I know that in the process of our reviewing different coffee shops you had done quite a bit of research for us as far as some of the existing coffee shops in the other libraries throughout the area. Did you find in those instances any city operated or owned or what was the city contribution to those coffee shops? Todd Gerhardt: Very minimal. I think Chaska's the only one that provided assistance. They bought a gentleman a coffee cart in that case and I think they're not charging him rent for the space as it sits in the lobby area. I think there is percentage of the sales, Justin am I correct on that? That they would get a percentage of the sales from the coffee cart. Mayor Jansen: The city would? Todd Gerhardt: Yes. Mayor Jansen: Okay. Todd Gerhardt: The other city that has one is in Prior Lake. That individual had to make all the tenant improvements himself and I think at a minimum that was $80,000. It was a little more of an elaborate coffee cart. They did have a comer in, just outside the lobby area, in the entrance to the library book space. Another library coffee shop proposal was in Roseville. They provided basically space within their library. That was Dunn Brothers. They made over $300,000 worth of improvements to that facility. It had a second story to it for people to go up a set of steps to have coffee and overlook the library space. Councilman Peterson: Dunn Brothers did that or who? Todd Gerhardt: Dunn Brothers made those tenant improvements. And they pay approximately $55,000 a year. You know that's the best example of a successful coffee shop in the Twin Cities area. There's also one over in the Ridgedale library service. I did not do a lot of research on that to find out what they were paying in rent. Mayor Jansen: Okay. Thank you for sharing that with us. At this point, with the RFP, were we to receive a proposal that was consistent with the RFP that you put together, are you still favorable towards looking at an application of that type? Todd Gerhardt: I think we have the space that can accommodate that. As we put out the Request for Proposal, I think we were a little light on our rent amount. As you go through and amortize interest and the timeframe associated with those tenant improvements, I think that's something we should have probably looked at a little closer when we put out that request. I think we were under $1,000 for rent on that one. So if we were to negotiate with a private group right 27 City Council Meeting - December 9, 2002 now it would be one thing I'd adjust to it. And if we're going to make those tenant improvements, I could support a coffee shop going in there. Mayor Jansen: Okay. And at this point as the construction has proceeded since we've been unsure of the proposal that would actually come in in that space, we did do the rough in to allow for the future possibility of there being a coffee shop in that location, correct? As far as the plumbing and electrical needs. Todd Gerhardt: Yeah. There is a bathroom just to the south of this area so there is water in the wall. We are asking that the contractor, when he paves the concrete floor, that he allow for a knock out to occur without disruption of the entire area or the footings in the walls. So that would be a minimal improvement, so we are accommodating for that as a part of the current construction at a minimal cost. Mayor Jansen: Okay. Alright. So just so we're all clear on all of the conversation that's occurred, and there's been a great deal of conversation around coffee shop and how we accomplish this. It of course is one of the amenities that as we came through the public hearings, we obviously were hearing that we would like to see some sort of a coffee shop facility in this building. That it would in fact be an amenity as far as our residents are concerned so as we proceeded with the plans for the building, we did approach numerous of the private businesses in town wanting to give them the first opportunity to be able to bid for this project, and in fact we found that there was no interest. As we proceeded with the plans for the library and the building committee was working on that, as it was designated by the architect, that space was shown to have not just plain vending machines, and I don't know how to describe this but you can't call them designer vending machines but definitely a step up from what we all think of when you think of a vending operation. So that was his suggestion when we were unable to come up with a private entity to come in and actually run this coffee shop, so that at least we'd have an alternative in place. It was after that that we proceeded with a formal RFP to see what organizations outside of the community, if we could maybe find some other interests to actually come in and run this privately and that was the RFP that Mr. Gerhardt referred to that we did not receive any interest from a private company to actually come in and run the coffee shop. So at this point the only proposal that we have before us is from the Friends of the Library and we certainly appreciate all the effort that's gone into putting the plan together and at this time, if I could invite Jill Shipley to come forward, I know that she's put a tremendous amount of effort into pursuing this and if there's detail on the project that you'd like to share with us specifically, certainly do so at this time. And what we'll do is have some conversation as a council and make sure that we're giving proper direction as to how we foresee this project going forward, and the question is, how much public money would in fact go into an endeavor like this, because that wasn't something that we've addressed at this point is actually the city funding. So come on up and let's have a conversation. Good evening. I haven't seen you in a while. Jill Shipley: Thank you. It's a pleasure for me to be here at your last meeting as well. Where do we start here? Councilman Ayotte: Name and address. Jill Shipley: I'm Jill Shipley at 261 Eastwood Court. I think what this all boils down to is that we went to referendum in September of 2000 specifying a coffee shop in the library plans. We heard from people that they wanted a coffee shop and it's listed, and if anybody needs to see the needs assessment, I have copies right here that I can pass out that show. 28 City Council Meeting - December 9, 2002 Mayor Jansen: Okay, what we don't want to do this evening though is give an impression that we've communicated that we're doing a coffee shop because the information that went out to the public in both the city documents as well as the vote yes, don't mention specifics and that was intentional on the entire facility because from the needs assessment, and the feasibility study, that then led to the further discussions and refinement of the plan. And it of course doesn't say anything about whether the city's going to, it doesn't say the city is going to fund a coffee shop, and I know we're getting caught in terminology but what we don't want to have there be an impression of is that the city at all said to the voters for this referendum, specifics about what would be in the building and this was the information that was related to the public and nowhere in there does it mention anything about a coffee shop or a fire place or any of the specifics because the feasibility study in fact even says, you know these are guidelines that we're working with. So again, so there isn't any misunderstanding, that is strictly a document that guides the city and Roger, you know maybe you can speak more specifically to the legalities of what the city's actually locked into as far as the referendum and the language and feasibility studies and. Roger Knutson: Mayor, the city is locked into the ballot language. That is what the voters approved and you gave them information, general information, but you're not bound by, bound legally by anything specific like fireplaces or coffee shops or so many books or so many anything. You just said in your ballot question, shall the City Council of the City of Chanhassen authorize issuance of general obligation bonds not to exceed $6 million for the purpose of the acquisition and betterment of the building to be used for a public library and ancillary related purposes. That's what you're legally committed to. Mayor Jansen: Okay. I know that at the time that we were pulling the ballot question together, and again the Friends worked with us on this as well, there was some concern as to the ballot language not allowing us to spend library dollars on something other than the library. So if I'm not mistaken, we're at least within this language committed to whatever goes into this library but we can't do anything but something associated to the library. Roger Knutson: Yes that's correct, and that was a lengthy and good discussion on what the language in this ballot should be and that's why it is what it is. If we want to use anywhere else for anything else, just for this. Mayor Jansen: Okay. Alright. Jill Shipley: So then as I understand it, as long as it's for a library related purpose or ancillary purpose you can use the funding from the referendum to do a project like this. Roger Knutson: Again I don't know what your budgets are and I don't know whether you can afford it or whether it's a good idea or bad idea but if you find that it's an integral part of a library, could you use this money for it? Yes. That doesn't mean you have to. That's obviously your tough decision. Mayor Jansen: Okay, thank you. Jill Shipley: I'm glad to know that it's available and I'd like to explain how the Friends would like to use their supposed allocation of 1,200 square feet in the new library. I realize that we're not going to accept the needs assessment as fact but the Friends are allocated some space there. And we would like, for purposes of this discussion, to call this the Friends space, rather than a 29 City Council Meeting - December 9, 2002 coffee shop because you're misleading the public when you talk about a full service coffee shop in this. This is by no means a full service coffee shop. Mayor Jansen: What you're proposing? Jill Shipley: No. Well yeah, what's available. If you wanted a full service coffee shop, and if you decided the city was in the business of making profit and should go into a retail venture, certainly you would have allocated more space than currently exists for this. This cannot be a full service coffee shop, and we have no intentions of trying to promote it as one, but we'd like to use the Friends space as a means of promoting the library. Promoting reading and literacy. Promoting community, which as I understand it is the major thrust of this whole development. The reason for allocating the $800,000 to build the park, because we're building a wonderful, friendly, dynamic community gathering place that's going to bring everyone together in this community. And it's our contention that it would be better to be able to provide some type of friendly light beverage and snack service administered by a friendly person who smiled, rather than just have vending machines. We are proposing that this Friends space be equipped to service light food and beverage needs, but also have the capability of supporting the programs that we do for the library. Now I think we should maybe just step back a minute and talk about what value friends organizations are to their communities. For your information, the ST. Paul Friends Group gave $98,725 from their operating funds to the St. Paul Library in 1999. That was the annual report I had. With their grants that they applied for, the total value of their contributions to their library was $1.8 million. Hennepin County last year gave $80,000 through their foundation to their library. People, we're not talking about insignificant chunks of change here, and in this economy where budgets are being cut at every level of government from the State to the County to the City I understand, I think it's in your best interest since your voters have wanted a $6 million library, for you to work to support and strengthen the Friends organization that exists to support your library and to build community in this city. And this is one means of us doing that, is by having the Friends space. Have the capability of generating revenue. Last year, or this year in 2002, we contributed to $6,000 to the Chanhassen Library. That's double what we contributed in 2001. I would love for it to be more, but we're a growing organization. We're focused on building our assets at the same time on saving for something for the new library as well, so we didn't donate every penny we made. We're trying to build some value and create some investments that will generate some income as well. But you know when we presented the strategic plan, which every one of you liked and complimented us on, that obtaining revenues from the coffee shop was a component of our third strategy, which was increasing the value and increasing the solidarity, strength and ability of... So in this space we would like to promote reading by creating reading cards for children that we pass out or that are handed out in the library. And when they come back in and their reading card is filled out, we can say hey, good job Tony. We're going to give you this Cow Jumped Over the Moon cookie. Councilman Ayotte: How come he gets it? We're going to vote on this. Councilman Labatt: Because you can't accept it. Jill Shipley: And when somebody walks in with a box of books to donate to our book sale we want to say, thank you very much. Have a complimentary latte on us. We appreciate that. So that was the concept which kind of drove the way we configured our approach and our contract with the vendor that we found to work with. Now the city has tried twice to find a vendor to come into this spot. Believe me, raising the rent as you just talked about doing, isn't going to make it any easier for you. Lowering it may. It's not ideal configuration and there's a good 30 City Council Meeting - December 9, 2002 enough return on investment for your Starbuck's or your Caribou or any of those companies to come in here. But finding a small independent who's willing to partner with us in creating wonderful programs for the library is a doable option. That does work. We have found the person. We've interviewed lots and lots of people for this project. We've talked to turnkey operations like Viking Food Service. We've talked to some of the people who run the kiosks out at the airport. We've talked to coffee shop owners in the community. We found someone that we think is just fabulous, that's very altruistic, very community oriented, who has a proven track record of building a, or working a coffee shop as a means of building community. That was precisely what their charge was in Elliott Park, the neighborhood that they're currently in. They use their coffee shop, they put computers in it so that all the ethnic people living in the area who don't have access to computers and can't get to the library, can get to the coffee shop and use them there. They've just done a wonderful job. They are so excited about coming into a library and working with our programming here. When we have an event like Vince Splin, like we had a couple weeks ago, we had to have a way of tracking membership, or tracking who was coming. This would provide a vehicle for us to give out tickets to those who are entitled to them. It also provides a way of supporting our Project Happy Birthday, which is one of our signature programs in the southwest metro area, really in the state. There's no other library system that has anything like that, and we've done a fabulous job with that and that program of course is getting children into the library at the age of 1 and every year thereafter promoting reading and library usage at an early age. Referendum dollars are there to do this build-out. The voters approved it. We would like you, we would like to ask you to spend the money to continue the build-out. We understand that the pipes are being sludged in or whatever the word is that you said, but what are we waiting for? The money's there now. Why would you want to wait a couple years to do this? It doesn't make sense. There is an excitement and enthusiasm about this new library, and the new park that's about to come. There's no reason to wait to do it. Do you have any questions for me? Mayor Jansen: Any questions council? Councilman Ayotte: I have a bunch of questions but I don't know who to ask, whether you because I'm getting so damn confused now because what I thought was the issue at the front end is different than what I'm hearing now. Mayor Jansen: Okay. Councilman Ayotte: Should we ask now or should we? Mayor Jansen: Why don't we get it clarified to you as to what we're doing this evening. The question, do you want to take a shot at it or do you want me to? Todd Gerhardt: Well the question is, is do you want to fund the development of a coffee shop in the new library. From when we prepared the request for proposal, I thought I heard the council say they wanted to see a fully self-supporting is probably a better term. A self-supporting coffee shop in this facility and one that would not receive assistance from the city. And I understand the Friends of the Library would like to develop a coffee shop, use the revenues from that to fund their operation and providing the many wonderful services that they provide to the kids and adults in getting them to read and to use the library facilities. Councilman Ayotte: Is that self supporting? First off, if we use referendum dollars, I'm hearing that the baseline amount of referendum dollars needed to construct, I don't want to say coffee shop because you said something else. 31 City Council Meeting - December 9, 2002 Jill Shipley: The Friends space. Councilman Ayotte: Say again? Jill Shipley: Build out the Friends space. Councilman Ayotte: Build out Friends space. Not coffee shop. But it's 80K. So there's a basis of estimate that says there's 80K that we would use for referendum dollars, of referendum dollars to build, what'd you call it? Jill Shipley: The Friends space. Councilman Ayotte: I like that now. Friends space. Which is different than a coffee shop. Is that different than a coffee shop? Jill Shipley: Correct. Councilman Ayotte: Okay, Friends space. So first off, what I'm hearing that she's talking about is different than a coffee shop. Number two, the idea of using referendum dollars, if there was 80K available of referendum dollars to do something for Friends space, what would not get done? And could we impose the requirement that it would be self-supporting and what would be the return to the community for the Friends space to have space provided to them. We get services. There's valuation of those services, and it's self-supporting. Last part of that. I understood once upon a time that there was space not called for as yet in the library that we weren't going to have a full up library. That we had holes in it in terms of not having all floor space account for. Is that a true, I thought there was a point where we weren't completely. Mayor Jansen: Opening at full capacity? Is that what you're referring to? Councilman Ayotte: Yeah. Yeah. Mayor Jansen: That involves the County budget. Todd Gerhardt: Yeah, and that's just the book area. Councilman Ayotte: Just the book, but I'm saying is there a trade-off option for more floor space, and is there a correlation between more floor space and the generation of more revenue? Todd Gerhardt: Not in the area we're talking about. Councilman Ayotte: Okay. So if there was an allocation of referendum dollars, what's the basis of estimate for the 80K? Councilman Boyle: 80 to 120. Councilman Ayotte: 80 to 120, which is a significant range. What's that basis of estimate again? Todd Gerhardt: Where did we get the estimate from? For developing the Friends space was from Barry Pettit the architect. 32 City Council Meeting - December 9, 2002 Councilman Ayotte: Okay. That was to build something. Todd Gerhardt: It was to build counters, roll down cage, stainless steel sinks, refrigerators, oven. No refrigerator? Jill Shipley: No. We're providing the refrigerator. Todd Gerhardt: Okay. No refrigerator. And cabinets and then the plumbing for all those. Councilman Ayotte: And would the, whatever would be generated in terms of revenue, where I was confused is, that money would come in and it would, it was the intention of the Friends of the Library to put it back into the library in what fashion? What constraints? What parameters? What targets are associated with it going back to the library? Buy books? Buy what? You know. Mayor Jansen: I think that's part of what we need to understand as a part of the policy decision that the council is being faced with. This would involve, and again going back to the original conversations about the potential of putting a coffee shop in this building, it was never the city's intent to build a coffee shop and that's where the city was looking to private organizations to do that. So when that didn't come through, now we're having a conversation about whether or not the city will commit funds, 80 to 120,000, in order to be able to create right now this coffee shop concept. And what Mr. Gerhardt has shared with all of us all along is the viability of the coffee shop. If we take public funds and put it into this space, 80 to 120,000, and it isn't successful, how do we then recoup the 80 to 120,000 that right now he's skeptical as to the viability, and how do you then re-use that space now that it's fixtured with all of this equipment. Councilman Ayotte: So it's the insurance issue, but then again what I'm hearing as the baseline, the Friends space discussion that Jill is pointing out seemed to be different than the, and has evolved different from what the coffee shop portion of it. Mayor Jansen: It is different. Councilman Ayotte: I'm just feeling too uncomfortable. First off, I don't feel comfortable at all about allocating 80 or 100K or 5 cents of referendum dollars until I have a very clear understanding of what, what this is, and I don't. I don't understand it because there's disparity between staff and Friends of the Library on that definition, as I view it. As I view it. I see some disconnect. Jill Shipley: The Friends space would serve coffee. And do a multitude of other things that support... Councilman Ayotte: No, it's the multitude of other things that I'm having this, the part I'm a little confused on. Mayor Jansen: Right. Councilman Ayotte: Which won't be the first time. Councilman Peterson: They need to 120K is dedicated to selling coffee and other cookies and stuff like that primarily. That's not a point of question, right? 33 City Council Meeting - December 9, 2002 Jill Shipley: Well there are, there is a certain amount of equipment that needs to be installed permanently into the library. It's unrealistic for the city to expect someone else to pay for that. Someone else will pay for blenders, refrigerators, ice machines, anything that you can walk in, plug into a receptacle, also remove again. Councilman Peterson: Agreed. Jill Shipley: The 80,000 would cover the cost of doing the counters, providing the triple sink that's required and the hand washing sink and the food prep sink, or whatever the, all the regulations are that the Health Department has and mandates. Councilman Peterson: Going back to your question, the 80K is dedicated to the coffee shop aspect and what the Friends is going to do. Councilman Ayotte: Not recurring costs. But the thing is, I'm still hearing a certain disparity because your name...that this renter would bring in that would be a good deal for the city, and Todd's naming off counters and so forth that would be a cost that would be employing referendum dollars. And I'd like to see what that bill of materials consist of. Personally I'd like to look at it a little bit, in a little bit more detail. I see the cost here but I don't see a concept drawing. I don't see a strong enough feel for me for the basis of estimate. Of course as a boiler point and I'm more anal than most, but that's a problem for me. Mayor Jansen: And I think part of the discrepancy between what you're saying and what we're trying to accomplish tonight. Tonight we're trying to set a policy as to whether or not, and give some direction. If more information is needed, there needs to be some direction from council if we're going to change our strategy from looking for a private entity. And if there isn't a private entity, the strategy was you know providing the vending facilities because the city had not committed to providing these kinds of dollars for a set-up without then getting them reimbursed and that was the whole point of having the rent and the lease schedule that you had put together. There had been some conversation around that just recouping to the city the dollars that were being put into fixturing this space, correct? Todd Gerhardt: We used, you've got two scenarios. We used the request for proposal in our justification for the 80 to 120,000 dollars worth of a tenant improvements to make the city whole on our investment and also see a 10% return on that just as you would in any private venture. What Jill is asking the City Council to do is to invest 80 to 120,000 dollars into the Friends space so they can use that as a revenue generator to fund the Friends of the Library activities. So what you're doing is you're adding a new service level to this community. You're providing a revenue generation machine in this Friends space to fund the Friends of the Library activities. So you've added a new service level to the community, investing 80 to 120,000 dollars into the Friends space so that they can generate revenue by selling coffee, cookies, ice drinks and sandwiches to any of the people that may attend the library. Councilman Ayotte: And what I'm saying is, in order for me to, for me to feel comfortable in floating a loan using city referendum dollars to provide a level of service. Todd Gerhardt: It's not a loan. Mayor Jansen: But you're not understanding what Todd's saying. It's not a loan. 34 City Council Meeting - December 9, 2002 Todd Gerhardt: Jill's not asking for a loan. Jill Shipley: I'm asking for a one time investment to the Friends, much like building out a senior center for the seniors. Councilman Ayotte: But I don't have enough information to know what that pay back is. Mayor Jansen: There is none. There is none to the city. Councilman Ayotte: There is. There's some sort of measurable payback in terms of projecting the community in terms of, you know there's some sort of valuation there. Jill Shipley: Yes there is. Mayor Jansen: Not meaning financial. Councilman Ayotte: But there's valuation. Mayor Jansen: Right, okay. Got you. Councilman Ayotte: But how do you equate that 80K to that valuation, and I want to know more about that before I say yes to anything. I don't feel comfortable in saying yes to using referendum dollars until I understand more what that valuation is, especially in this climate. Jill Shipley: You can establish a valuation. Councilman Ayotte: Well we need to do that before I say yes. Mayor Jansen: Understood. Okay. So, I mean just so we're clear. Todd, has the city spent money on a facility for another organization in the community to be able to generate their own revenue from? Todd Gerhardt: Not that I'm aware of. Jill Shipley: Is it a negative to be generating revenue? That goes back to your community and your library. Todd Gerhardt: What you're looking at is using referendum, city taxpayers money to invest in a Friends of the Library space/coffee shop for them to use that revenue that you use, to generate money to fund the Friends of the Library. It would be no different than the seniors coming in and asking you that they want to generate money and they want to run a coffee shop in the library, and would you be willing to give them 80 to 120,000 dollars to invest in a coffee shop so they can fund their activities. Wood working or whatever it might be. It's a new level. You are providing revenue to the Friends of the Library to generate money. We are not funding the Friends of the Library currently. In one or two items we're going to be talking about a budget and we're talking about service cuts there and. Councilman Ayotte: That's my very point. That's why I'm not comfortable in doing it. Todd Gerhardt: Well I would hope not. 35 City Council Meeting - December 9, 2002 Mayor Jansen: Right, understood. Todd Gerhardt: You know for what we went through the last 3 months, and what we're doing to our city budget as a part of that, to expand services, I can't believe that you would consider that at this time. Mayor Jansen: Okay, and just so we're all clear, and the example that Todd just gave as to if the senior organization came in. Where the seniors have an organization that the city does have control of. I mean it's the senior commission. We're talking about an entity that for all intents and purposes is independent of the city. The city would have no control technically over what was happening with this organization. Similar to the Chamber of Commerce. Chamber of Commerce has an executive director that is in charge of all of their activities and what they do and they have a Board of Directors. Friends of the Library has an executive director and a board who's in charge of everything that they do as far as activities, revenue generation, the whole 9 yards. So again we would be taking referendum dollars and city dollars, even if it isn't referendum. City taxpayer dollars is what we're talking about, to create a space for an organization to generate revenues. In this situation it's going back into the library. So what those activities are in general would be for the library, but it is a separate organization from the city. So that's where you're establishing a policy or a precedent in what we decide is appropriate to do this evening. We're also assuming that the dollars will be there, which hopefully they will be because right now we're well under what the voters approved. There will be some additional cost as the landscaping is taken care of because that's not in the dollars that we're seeing currently, correct? As far as once the plaza and the estimated. Todd Gerhardt: As a part of the city commons development, the plaza area between the east parking lot and the entrance has changed. And as a part of that we would ask the council to change order number 9 or something like that, we'll ask the council to delete the landscaping plan as a part of the library and reintroduce that landscaping plan into the city center commons, and that's estimated at about $125,000. Mayor Jansen: That's with the original plans, correct? Todd Gerhardt: Correct. Mayor Jansen: That's not with the revised plans as we've put them together for the city center commons. Todd Gerhardt: Right. The $125,000 comes from the landscape plan for the library and that would just be a delete. And then you would transfer that $125,000 over into the city center commons construction budget because they would then build the plaza area inbetween. Mayor Jansen: And still considered part of the library since it is servicing the entrance to the library, and was part of the original library plan. Todd Gerhardt: Correct. Mayor Jansen: Okay. Jill Shipley: Does this proposal in any way diminish your goal of building community? 36 City Council Meeting - December 9, 2002 Mayor Jansen: Oh absolutely not. That's not something that this council has ever questioned. In fact from the very beginning we have so much wanted to see this mm into more of a full service center in the library. That was by far the number one goal and we too were disappointed when all we could achieve were the vending opportunities, so it's not to diminish what you're trying to accomplish and we all, like you said, we heard your strategic plan. It's phenomenal. What we're doing, what we're having to evaluate now is the policy that would have to be put into place, that the city would now be providing space for an organization separate from the city to provide this retail space, as it would be. We would be using city funds, 80 to 120,000 dollars worth of public dollars, taxpayer dollars, to put this facility in place when our original intent was to provide a private organization the space to be able to come in and do this. Not the city, and that was the same concept that we looked at from the other cities. One of the proposals that we brought forward in the building committee as we were looking at potentially staging this. If there isn't going to be the traffic initially, and that was also within your own projections as far as the retail generation from out of this spot. This location. If it's going to take time to build up to the revenues that could support it, can we stage this concept. Provide the space. Have it roughed in, but maybe it starts as a coffee cart. Maybe it needs to be something that right now is more realistic and eventually then works up to more of a coffee shop space and maybe there ends up being a donor that wants to come in and actually see this space expanded. Maybe it's, I don't know. Go ahead Craig. Jill Shipley: We would be very willing to have a coffee cart, excuse me Mayor, but do you understand that if you have a coffee cart, the Health Department will require you to have built-in sinks, and storage areas... Mayor Jansen: Understood. That was part of the whole conversation. Jill Shipley: So if you wanted to take this plan, which has been created, and the blue on this plan shows what we would consider the city's part to be, and the gold is what we would consider the Friends, along with their coffee vendor's part to be, you could very easily make this part a coffee cart, if that's what you wanted. That would work. But there will still have to be these built-in's done, so since the money is available and since we are projecting a customer stream through the library the day the doors open that will support the proposal that we've done, I think we should be moving forward with it and I don't think that it requires the new policy because I think Roger has already said that it's legal to do it. And you could, and to address Bob's concern about not knowing exactly what you're going to get, you could authorize that MS&R work with the Friends to develop the most cost efficient plan and authorize expenditures of not more than $80,000 to achieve the plan, which is a benefit to the community and we could make this all happen tonight. Mayor Jansen: Okay council, do you have any additional questions for Ms Shipley while we have her at the podium. Councilman Peterson: No more questions. Comments. Mayor Jansen: Okay. I'm going to bring this back to council so thank you. I appreciate your comments and I'm going to bring this back to council now and we'll have a conversation around the proposal that we have in front of us. Appreciate it. But I do want it to be understood that it is a policy question. Whether the dollars are there or not, it's whether the city is going to provide this type of facility for an organization to run, and that is the question. Jill Shipley: May I make one other comment? 37 City Council Meeting - December 9, 2002 Mayor Jansen: Certainly. Jill Shipley: Thank you. Your residents have voted 6 million dollars for this library. I certainly hope that you have the foresight to be watching what is happening with this library. I think the Friends of the Library have already proven themselves and have already positioned themselves to be a connector with the city in overseeing the library. We are the ones that put the advocacy plan together this summer. We spent lots of hours working to make sure that the County Commissioners approved the funding for this new library. I think you could very easily establish that connection that you have with the seniors where they are enabled to ask you for money and you're able to give them money, even if they don't generate revenue that goes back to the community. You're able to give them money and do things for them. I think you're able to establish that connection with the Friends, and I think it would be a wise move on your part to do that so that you ensure that the library is open 60 hours a week. Or that it does have enough computer to serves our needs, or does have enough materials. So I just want to make you aware that maybe that's a need that needs to be addressed, and needs to be discussed and maybe that is the clinching deal that makes us more worthy of your support or whatever it is you're trying to say. I mean I'm not understanding how, how the people in Roundhouse Park, you can allocate $40,000 off the top of your heads for those people when we have passed a referendum that has stated a coffee shop in it and we have the dollars available and your community has approved this. Mayor Jansen: Okay, you're stretching now but appreciate that. And again, I'm going to emphasize because myself and of course Steve Labatt have been with this issue for 4 years now. This council has certainly supported it emphatically for the last 2. There is no doubt in anyone's mind that the Friends does a significant service to the library. And whatever this coffee shop has become as far as a means by which the Friends would like to generate revenue, we're not saying that that's a bad thing. You do wonderful things. The question is to the council whether it's appropriate to use 80 to 120,000 dollars of public taxpayer dollars to provide this facility to an organization that quite frankly isn't that different from you know let's say a Chamber of Commerce, with an executive director, a board and is also acting in the best interest of the community for our businesses. We set a precedent. Where do you draw the line on organizations that are coming in looking for city funding of projects to enable them to do wonderful things for the community? We are blessed with numerous service organizations that do a tremendous fund raising and donations actually to the city. Again, we can't play favorites. We have to distinguish what it is we're accomplishing here this evening. No one on this council has ever voiced an opposition to a coffee shop. That's the concept that we pursued. We tried to accomplish. We appreciate the fact that the Friends have come forward with a proposal. I'm going to voice my own opinion at this point. I would emphatically encourage the Friends... so where you are establishing your own location, your own space, you want it to be the Friends space. We've allocated the space for the Friends or for a coffee shop. We have juggled things around to try to make it the size necessary for the concept that was proposed, but we are, what I am philosophically opposed to is using taxpayer dollars, though they approved a 6 million dollar referendum, that doesn't mean we have to spend it. We are charged with spending it as efficiently and effectively in their best interest as possible. And to me that means we've got a location in the library where we would prefer to have a private organization come in and provide a service to our community, and it will be in competition to other private coffee shops within the community. Should we as a public organization be putting a location in our library that's competing with our private sector? I don't know again that that's the proper use of taxpayer dollars, but I would encourage the Friends to continue on your mission. You've grown and continued to pursue your strategic plan as an organization so dramatically, just since the approval 38 City Council Meeting - December 9, 2002 of the new library. I mean your executive director is just working like crazy. You've got tons of opportunity out there as far as your strategic plan initiatives. You're going to be and are already a significant part of the organization and of the success of the library for the community. But my opinion, and I'm just one vote, is that it would not be appropriate for the city to use taxpayer dollars to put this kind of facility in place, and if we end up not fully using the referendum funds, I would love to be the first one to be able to say to the taxpayers, we did this as cost effectively as possible. And we looked for the opportunity to be able to put this private entity into the library but we were unable to fund it. But we left the space. We had the vision to say potentially in the future this might be feasible, a private organization might look at it and say yep, we can make a buck in here so we're going to come in. The space is allocated and they do it. So that's why we did go ahead and do the rough in and try to provide at least the space for the future so those are my two cents council, and at this point if we could, we're an hour into this, if we could maybe hear further comment because what we're looking for is some direction to staff at this point as to where we go with this, and I don't mean Brian, I know that you had gotten up in visitor presentations, if there's more that you'd like to add to this. I don't know if you've had an opportunity as a council elect to spend some time with Mr. Gerhardt to get more of the specifics, but this is certainly an issue that you'd be able to address then in January, if you'd like. Brian Lundquist: Mayor Jansen, if I could just make a couple quick comments. Mayor Jansen: Certainly. Brian Lundquist: My name is Brian Lundquist. I live at 7281 Conestoga Court. Mayor, I'm going to echo your sentiments about the two issues that I have and that several of my neighbors also share, who did vote for the library referendum as well. That two big issues, concerns are, one. That the city would be investing tax dollars to aid a private for profit organization. It's one thing if it's the Friends in a space generating profit, revenue to help their cause, but this is a for profit organization making money as well. Mayor Jansen: Just so I'm clear on what you just said Brian, and not to interrupt. The Friends is a non-profit. Brian Lundquist: Right. Mayor Jansen: So you're okay with a non-profit, is that what I'm hearing you say, but if we did have a private entity that was coming in, are you thinking like a Starbucks or a Caribou or something like that? Brian Lundquist: No matter what it is. If we're going to invest taxpayer dollars, it shouldn't be a private organization that's going to profit from those dollars, unless there's a guarantee similar to what Mr. Gerhardt talked about and so that the city isn't on the hook for any dollars on that. Mayor Jansen: Okay. Brian Lundquist: And the second is, the precedent that we'd be setting if we were to take the profits, the revenue generated from this and donated solely to the operating budget for the Friends. Not that they're going to spend their money unwisely but again, it's taxpayer dollars that are going to fund an organization that's not controlled by the council and don't have any effect over that. That it would be a dangerous precedent to set and we could have organizations lining up down the block to do similar things so I think the Friends space is a great concept, but we just 39 City Council Meeting - December 9, 2002 need to do a little bit more work and study on this issue so that we can come up with something that's a little less risk and impact to all the taxpayers. Mayor Jansen: Okay. Thank you for your comments. Okay, council. If we could go to comments please. Councilman Peterson: Mine will be very brief. I think my only issue always has been, and the reason why we gave staff direction to go out and find a for profit entity to take on this, is that it would be in direct competition with the current businesses. That for us to use public dollars for that is just, it, I've never seen it done. It certainly hasn't been done in Chanhassen and I certainly wouldn't be supportive of doing it now. So my position hasn't changed for months. Mayor Jansen: Okay. Councilman Ayotte: Well first off, coincidentally Jill said Roundhouse. I wrote down Roundhouse. That we did provide money to that organization to project the community. To build community so I believe strongly in the objective, the goal that Jill has targeted. I also see the point of city staff, and this councilman is not going to vote to expend referendum dollars at this point. However there is a pony in the pile, and I really think that we have to come to some means of seeing where we can get to where we both want to be, and that is a self-supporting program. The direction that Hoffman's beginning to work towards in Parks and Rec where we're been beating him up left and right to get there. So since we've beaten him up left and right, let's beat up the Friends of the Library along the same approach. So what I'd like to do is table this and tweak the objectives to a point and see how we can come to a conclusion where we can have a self, a program that pays for itself, possibly generate some revenue not only to support activities within the library but maybe in a couple of other areas, and build on what Hoffman has started in Parks and Rec because when we started in the parks and rec area we had the $8,000 for softballs as a cost reduction. Now he's talking 100K, so I know it can be done and so I would ask the rest of the council to consider tabling this so we can work it more, because there is a win/win opportunity here. So I don't want to just kill it. I want to see where we can get to a win/win. Have it support itself. Maybe generate some revenue, and where there is little or no risk to the community, and I agree with what Mr. Lundquist has said in large part, but I think there is a pony in the pile. That's a Boyle term incidentally. Councilman Boyle: I've never heard that. Mayor Jansen: I don't understand it but, if tonight what we could do, to your point Mr. Ayotte, I don't know that we necessarily need to table as much as give direction. And what I just heard you give was very specific direction on self-supporting program and when you're saying self- supporting program, are you also then saying that they're providing the fixturing for their space? Councilman Ayotte: What I'm saying is that we start doing some valuation of what Jill is proposing. See what that is, and compare cost to benefit. That's what I'd like to see in this whole thing. Mayor Jansen: Okay, thank you. Additional comments? Councilman Labatt: I'd be curious as to what the arrangement with Chaska has done at their community center with their little snack bar, caf~ type thing. Right up on the main level. 40 City Council Meeting - December 9, 2002 Mayor Jansen: Todd, didn't you look into that one? Todd Gerhardt: The city took taxpayers dollars and invested a caf~ into their community center and have gone out and hired a catering, vending company to operate that facility. So they expanded their service level in that community center and do get some revenue out of that, but they did not do it as a means to pay for itself. It was not, they just wanted to have the convenience of anybody having kids at swimming lessons to have a place to sit and have a pop or coffee or whatever it is. Mayor Jansen: So similar concept to what this would be if the city were to actually put it in. Todd Gerhardt: Right. Expand the service level. Mayor Jansen: Okay. They are operating at a deficit if I understood right. Correct? I mean you said it's not paying for itself. Todd Gerhardt: Yeah, it was never, I don't think it was ever their intent to reduce the debt that they invested in there so it was never to pay for itself. Mayor Jansen: And so k's not. Todd Gerhardt: Right. And they're not subsidizing the vending company, that I know, to be in that place. To provide that service. So they're not seeing a lot of revenue, if any revenue back from the vending company. Mayor Jansen: Okay. That was my understanding also. Any other questions or comments? Councilman Labatt: Well I'm kind of leaning on Ayotte here and I figure there's a value to this, to our residents. I think that we need to have an agreement here and a deal that's a little bit more massaged and a little more advantageous to the city. All our taxpayers are on the hook as much, SO. Mayor Jansen: To potentially make back some of the upfront investment that would be required or is that where you're going? Councilman Labatt: Yeah that and you know, to look at the potential company, whatever company it is, to make an investment rather than bring in blenders and temporary things. You know put a little capital into it and so that way we know it's not, we're not on the hook so other than I think something can be done. Mayor Jansen: Okay. Councilman Boyle: My turn? Mayor Jansen: k's your turn. Councilman Boyle: I agree. I think there's a horse in the hay. What'd you call it, something? Pony in the. Mayor Jansen: Pony in the pile. 41 City Council Meeting - December 9, 2002 Councilman Boyle: Oh, pony in the pile. Jill, as you know, I really believe in this concept, very much so, but in the current environment, if we were to gather up $80,000 and say here you are, we wouldn't be doing the right thing. Not to the taxpayers at this time. I don't know what the result would be if we do table and bring it back. I think, I normally don't agree with Bob in everything. I think there might be a way that we can do this and still get this service for the community. There must be a way. Mayor Jansen: And again we're giving direction so absolutely appropriate to make the comment that you did. I don't know that we necessarily need to table as much as make a motion that includes your recommendation as to what you would like to have staff looking for. Councilman Boyle: Good question. Councilman Labatt: Well I think Ayotte said it pretty good, not to put him on the spot but. Mayor Jansen: What I think I'm hearing, and correct me if I'm wrong, is that you would like to see a proposal that would include, to use Bob's term, a self-supporting one that would include a concept for a self-supporting program. You two, want to see the cost benefit of the proposal, whether that's financial or you just want to see the warm, fuzzy benefit to the, I had to say that. The warm, fuzzy benefit to the community. So the benefits to the community that aren't necessarily financial. Because I think we've all identified we see a value in it. What were your, I think those were the key points. And any potential analysis of return to the city of it's investment. Councilman Boyle: And that's not going to be in the first year or the first 5 years probably. Mayor Jansen: No, and Gerhardt wasn't proposing that. He did put some suggestions together as to. Councilman Boyle: Just so we all understand that. Mayor Jansen: Yep. So that's what you'd like to see more detail on, is what I'm hearing. Councilman Ayotte: Yeah, and I'll call it valuation of, if there was a way that we could put a valuation on the service to the community against that 80K or 120K. But I really think that there's an opportunity here and I really think we're close. People keep on getting the sense that we're not close. But we are. A lot of work has gone on and we're getting closer and closer to a resolution and an opportunity here and I'd like to go, you know. Hoffman and the boys, I'm usually a little negative but have done so well in such a short time, that gives me a very optimistic view that this can happen again. It really can with Jill's efforts. Mayor Jansen: Pursuing these particular points is what council would like to direct staff to work on because, and I think Todd also has heard the consistent message that we want this type of service provision in the library if it can be done and under these parameters is now what I'm hearing the council say. We definitely want to encourage that development. The ideal would have been to have a private organization come in, but if there's something that we can do with the Friends to accomplish this, and you're willing to look long term but you want to see the return to the taxpayers of the money that's gone into help finance their endeavor up front. 42 City Council Meeting - December 9, 2002 Councilman Ayotte: And it doesn't have to be 80K. I think we can re-visit that too. There may be ways of mitigating that cost in some fashion. Mayor Jansen: Okay. Councilman Peterson: Aren't we essentially saying what Todd's recommending is that he's got two conditions that the city must receive rent that covers the principle.., improvements. Councilman Ayotte: No, I think that's too restrictive. I don't think that at all. I think what I said was, I'd like to see a further discussion, further dialogue to see if we can affix valuation to what Jill has proposed. I'd like to see whether or not there are other ways of getting to where we want to go, that is some sort of Friends space within the library that would be a service to the community, but not at the expense of taxpayers revenue dollars. Mayor Jansen: And just so we're clear, there is designated Friends space. It's not designated for this particular purpose but the square footage is designated. Okay. I'm going to make a motion that the City Council directs staff to, like you haven't put enough effort into this whole project already and I mean that to Jill as well. You both have worked very hard on this. My motion is going to be that we direct staff to work with the applicant to bring back to the council an analysis of proposals that would one, provide a self-supporting program and everything that would be encompassed in that definition. Two, the cost benefit of the proposal including some sort of a valuation on the services that would be provided to the community out of this space as a result of the city's investment. And three, the potential and a plan for the return to the city of some portion, if not all of the upfront investment. That would be my motion. Councilman Ayotte: Friendly amendment? Mayor Jansen: Certainly. Councilman Ayotte: That we include the comment about a pony in the pile versus a horse in the hay because of the size of the horse versus the pony. No? Mayor Jansen: I don't think so. IfI could have a second please. Councilman Ayotte: Second. Mayor Jansen: Any discussion of the motion? Todd Gerhardt: The pony eats more hay, it becomes a horse. Mayor Jansen moved, Councilman Ayotte seconded that the City Council direct staff to work with the applicant to bring back to the council an analysis of proposals for a coffee shop in the library that would one, provide a self-supporting program and everything that would be encompassed in that definition. Two, the cost benefit of the proposal including some sort of a valuation on the services that would be provided to the community out of this space as a result of the city's investment. And three, the potential and a plan for the return to the city of some portion, if not all of the upfront investment. All voted in favor and the motion carried unanimously with a vote of 5 to 0. 43 City Council Meeting - December 9, 2002 Mayor Jansen: And again I want to emphasize to the Friends that we are in concept in agreement with what you're trying to accomplish, and if anything we are you know enthusiastic about the fact that you've put as much effort as you have into trying to get this accomplished. Otherwise it would have simply failed. It's still a discussion. We've roughed in the space based upon the potential of realizing that when you folks put your mind to something, you get it done, and this community is so fortunate to have a group like you that does apply their efforts simply for the betterment of the community and for this library. So keep up the good work. The space is there. The rough in has been put into place. It may just not be your ultimate proposal initially, but you know things can be worked up to and please work with Todd as far as bringing forward this information for the new council so they can take a look at it. But thank you for all your efforts. It's appreciated. Councilman Boyle: Nice job Jill. Mayor Jansen: Do we need a 5 minute break? Okay, 5 minute break. Back by, and started by 9:30 please. ADOPTION OF 2003 BUDGET. Mayor Jansen: Okay thank you. We will start again and now we're on agenda item number 12. A, the adoption of the 2003 budget and B, the adoption of the capital improvement plan, and if we could cover each of them separately and do the A approval and the move onto B, I think that would be appreciated. So staff report please. Todd Gerhardt: Mayor, council members. Bruce DeJong has prepared a power point presentation that we'd like to present to the City Council prior to getting into comments and discussions on the 2003 budget. So at this time I'd like to introduce Bruce DeJong, our Finance Director. Mayor Jansen: Okay, thank you. Bruce DeJong: Thank you Mayor Jansen and Council members. I know you've heard all this before so I'll be very brief running through this. Maybe I won't. Maybe my computer fell asleep here. First thing we need to go through is just why we're here tonight. The process. We're following the Truth in Taxation rules that the State of Minnesota has asked us to follow and those are that last week we presented the 2003 budget, the tax levy as proposed, and any major changes. We've talked about that with the public. We held a public hearing and received input and based on that input we have made some changes and tonight we're here to adopt the levy and the budget for next year. Those cuts that we made to the budget, based on the Truth in Taxation hearing, as Todd outlined in his memo, were $100,000 to street lights, $59,000 worth of park and recreation expenditures, cutting the community survey, and postponing hiring a street employee and other miscellaneous cuts of about $51,000 for a total of $262,000. The revenue enhancement that has been thought through by the Park and Recreation Department, they had a brainstorming session last week. They've come up with $40,000 worth of additional revenues that they believe they can come up with next year in their programs. What factors led to the increase in the levy. Well there's a few major ones. We used $350,000 worth of one time revenues last year to balance the budget, so just to get back to even and maintain the existing programs where they were, we had to increase the levy by $350,000. Next we've got some expenditure items that we've listed that have increased the police contract $76,000. I think Todd had $90,000 in there and I'm not, I 44 City Council Meeting - December 9, 2002 think that's probably just a small math difference based off of the actual amount that we had budgeted. Todd Gerhardt: I'll work on that. And that will show up in my review. Bruce DeJong: If they can remember it next year. Pavement management, we've listed that line item up, $280,000. New finance employee. Salary increases on the current employees, adding the new library operating costs of about $34,000, increases in liability insurance of about $30,000 and the net impact of the housing maintenance inspector program is about $12,000. The part of the budget and the levy that we have left then is the debt service and that is, the big thing is our TIF deficit estimated between 6.1 million and 7.3 million dollars as I distributed last week. We've got identified sources that is made up of cash available. There's some additional revenue enhancements that we can do, but it's staff's feeling that we should not be taking down our other funds without re-paying them so in some way, shape or form the tax levy should be used to refill that remaining $2.9 million deficit. And the 2004 debt levy increase will be mitigated by having the downtown TIF district coming back onto the general property tax rolls. We're estimating that at somewhere around $600,000 worth of tax generating capacity. When you look at the debt service levy projections, you can see that in 2005 and 2006 they start dropping off fairly dramatically going down to, I think it's only a million off of the current debt issues by the time we reach 2009. What we're trying to propose here is a methodology that we can repay ourselves and mitigate future increases in the levy. I've included some assumptions in this tax levy scenario showing you how we can come through here with single digit increases off of our existing programs for the next few years and try to mitigate the amount of increased property tax on the existing properties. What the assumptions are is that if we were to do this, we would have only salaried increases basically in the next 2 year budgets. In the 2004 and 2005, then get onto that roughly approximately 4% increase that we had talked about during our key financial strategies process for 2006 and years after that. What we'd have available is $815,000 to transfer to pay off our TIF debt each year through the cost savings and revenue enhancements that Todd's identified, and through the $515,000 pavement management levy. If we were to actually issue bonds for the pavement management program, and the equipment certificates which is shown under the new debt levy column in this layout. In essence what we're doing then is we are refinancing the TIF deficit by using the general levy to repay inter-fund loans. I think that's a much better process and policy than actually trying to go out and refinance bond issues that we should have paid off in a timely manner and have not done. What this process will do is it will stabilize the debt levy for a number of years and what we're doing is spreading out the burden of these TIF deficits over a 5 year time frame rather than just compressing it into the next 2 years. This keeps tax levy increases from 2004 close to the rate of inflation and to growth in our community. The staff recommendation is to adopt the tax levy and the budget as shown and as we go through this process in future years, continue looking for sources of funds to apply against our TIF deficits. And that is my presentation on the budget. Mayor Jansen: Okay. This was the first that council had seen this new chart that you've put together. This tax levy scenario, and let me start by thanking you for putting this together and trying to project what this is going to look like to us through 2008. I think this is the most comprehensive estimate that we've seen. And obviously it's a moving target and we realize that these are strictly estimates for us at this time, but it's certainly proposing some very real alternatives as to how the future councils will be able to handle this significant debt. I guess just so I'm clear on what I think I'm hearing is you're, you're bonding for other programs that you technically would have used the levy for in a standard practice, and taking that portion of the levy then and applying it to the deficit. So you're taking the revenues, you're applying them to the 45 City Council Meeting - December 9, 2002 deficit, and you're taking some of these programs that we can bond for and you're bonding for them instead of to cover the TIF deficit. Bruce DeJong: That's correct Mayor Jansen. Mayor Jansen: Okay. Bruce DeJong: Well, I'll let you speak to that. Todd Gerhardt: The only thing I was going to add to that, it's better, it's a better story to tell to a bonding agency or Moody's in our case then to try to refinance the current TIF deficit. Trying to tell them, well we don't have enough increment to pay for these so we need to refinance them. So this is a better picture to tell Moody's and then you can show the revenue that's going to go along in paying off those equipment certificates or the road improvements. Mayor Jansen: Okay. So in the short term it's more expensive to us as a community, as you had explained it to us. For us to be using equipment certificates, or to be bonding for the pavement management program rather than levying for it. However, what we're gaining is a way to handle this additional debt that we'll be taking on as we're trying to handle the TIF deficit. So you've come up with a mechanism to try to actually give council a way to be able to handle it and maintain our bond rating. Bruce DeJong: That's correct. We've tried to incorporate comments from Councilor Peterson about refinancing that debt and how we could accomplish that. We've had the discussion, it really is not an attractive thing to say here we are in 2004 with a big deficit and we need to refinance these bonds that should have been paid off. So rather than going out and issue refinancing debt, to go out and issue debt for new projects that are appropriate to a growing city that don't, you know I guess raise eyebrows, and then using general levy dollars to repay those. We're going to have to pay those bonds as they come due, and that's going to be accomplished through inter-fund borrowings, so whatever funds you borrow that from, presumably from the utility funds, you would want to be able to repay that particularly given the amount of utility projects that would already come on line during the course of the next 5 years. Mayor Jansen: So when you're showing us the new debt levy, that is taking into account all of these projects then that you're now saying we could bond for, but you would be levying for an amount that would help you cover the TIF deficit, or the funds that you borrowed from to repay those. Is that what I'm hearing? Am I repeating that correctly? Bruce DeJong: Yes, that's correct. And what that's based off of is, I did just a quick and dirty calculation of approximately what it would cost to repay $850,000 worth of equipment certificates which is about the amount that we've got in our capital improvement program for this year. Over the 5 year life that you can actually issue those for. That's really a maximum length. And that would be about $194,000 per year, and if we were to finance the $868,000 worth of street maintenance issues that we were looking at through the pavement management program, on an 8 year basis, which has been our practice, those special assessment bonds would cost you roughly $132,000 per year. That's where the $334,000 shown in that column comes from. And that assumes that you would continue doing that process and that's why it continues going up through the life of this chart. 46 City Council Meeting - December 9, 2002 Councilman Peterson: While you're talking about that, I'm somewhat still confused on one of your first sheets. We're still saying that the levy is going up in 2003 for a variety of reasons, one of which was the pavement management of $280,000. But on this tax levy scenario we're saying that we're, I thought we were taking that out of the general levy so wouldn't that lower the percentage of levy increase? Bruce DeJong: Well we have to levy it somewhere. When I have to follow the procedures that the State has set forward so when you set the preliminary Truth in Taxation levy September 15th, I have to send into the State of Minnesota a list of what we are levying and for which bond issues we are levying them for. So those debt service levies are set and cannot be raised, except for a referendum. What that means is that the only place that you can levy those dollars, and essentially what we're doing is turning a general fund levy into a debt service levy. Councilman Peterson: Just by reallocating it... Bruce DeJong: By reallocating it. By transferring those funds out of the general fund. Mayor Jansen: So all of the initial staff recommended cuts that you expressed to us, you're suggesting are cuts that occur after we have set the levy so they occur next year as spending cuts or savings that then are applied to again your deficit situation or your debt payments, correct? You're not suggesting that we make the cuts this evening. You're suggesting we pass the levy as it is and these are incremental savings that you can accomplish into next year that will give you more dollars towards your deficit situation, correct? Bruce DeJong: Yes, that's correct. Mayor Jansen: Okay. Todd Gerhardt: Think of a better way to say that but. Councilman Ayotte: Your projected operational reduction is going to be used to buy down the debt. Todd Gerhardt: Yep, you've got it. Mayor Jansen: Thank you. Councilman Ayotte: Boy ifI could figure it out. Councilman Peterson: But nobody heard it because you weren't talking into the microphone. Todd Gerhardt: And that's a big pony in the wood pile. Mayor Jansen: So with that said, I guess I would like to start by coming back to staff's new information that they've given us here this evening as to the staff recommended cuts. And ask for comments and direction here. I know that street lights were thrown out as a concept to look at, but I'm going to start with my comments. Certainly I would not support, in concept, cutting the street lights. Now the only reason why I would even want to see this stay on this sheet is because it says complete feasibility study to justify. And again, back to my opening comments, the city exists to provide some pretty basic services to the community and though we've spoken about 47 City Council Meeting - December 9, 2002 what some of these light savings might consist of as far as what it would be targeting, I would certainly want to see that complete feasibility study before that happens and so I appreciate the fact that that's on here. But my comment is, that's not a place that I would feel comfortable going as far as looking to do a cut. Your point number two is park and rec new revenues, and flipping to the memo that staff has provided for us, here is what is in that $40,000 as far as revenue generation. Increase recreation center punch card fees. Increase all recreational program fees. Charge a gate fee for 4th of July fireworks. Charge more group room rental at recreation center. Initiate a $10 per year membership for senior center. Again, I think all of these proposals should certainly be evaluated before you go forward with these to the community and just implement them. As far as a gate fee for the 4th of July fireworks, I don't see that as a very positive message to be sending to the community as far as charging for a community event like that and how you would manage to encompass everyone when you know they sit all over the place to watch these fireworks in the community. I definitely see that as a negative. And initiating a $10 per year membership for our seniors center, I don't think that's the group you want to target for what I would consider to be an additional tax. Councilman Ayotte: Well you could do it once but then there would be a murder. Mayor Jansen: Yes there would be. I mean those are the two that stood out to me, but of course, though I appreciate and I commend staff for having pulled together a proposal based on council pummeling you to find revenue generating sources. Again we addressed the fact that the park and rec commission has formed a committee to look at specifically that. I understand that, didn't all of staff sit down and do a brainstorming around revenue generation? Was it specifically park and rec? Todd Gerhardt: Pretty much park and rec staff with Justin and I. Mayor Jansen: Okay. Well, appreciate the effort and I do think it's that form of brainstorming that your council's looking for as far as bringing proposals together and certainly don't feel as though it's wasted time if those proposals come to council and they choose not to go forward with them. I think the point is, that you bring forward these types of initiatives so that at least they can see what potentially some of the opportunities might be, and also what some of the problems are with the public services being upped as far as the fees. But I think again council, as you go into next year, we are going to look at this kind of revenue generation, there needs to be some good solid conversation around it. The community survey, it doesn't matter what my opinion is as far as what happens next year but I think as you're looking to give some policy direction to staff on service cuts, you might do a smaller survey potentially less costly, but I think that is one way to communicate to the community what services you're looking at as far as potential cuts and potential impact, and get some feedback on where they might be willing to have some of these service cutbacks. And you might in fact find some good ideas actually coming from the public on some of the specifics but you know the community survey is certainly something that you can always move out. As far as staff having then put together the other three bullet points, other programs that the council discussed. Elimination of the rental licensing program and position. I see that as you know a dollar amount that is only representative of a very small portion of that particular staff position, because the majority of that is then picked up by the rental licensing program. We are already short, and the reason we started talking about this program was code enforcement, and that staff currently doesn't have the time to be able to be going out and doing the level of code enforcement that we need in the community right now. I see that as an initiative that is in fact costing the community little for as much as the community will get back. In that that is just a small portion of that position and salary and you'll be taking some burden off of the 48 City Council Meeting - December 9, 2002 existing staff. I would encourage the finance director to make your case again on your accounting position and the need. This was one circumstance where we were fortunate when we were looking for budget cuts was it 2 years ago, that you lost this position? The department sacrificed the position because it happened to be open at the time, and put it into our budget cuts and now that the department is at a level where it significantly needs this position back, to withhold it I think is penalizing a department that stepped up to the plate when it was needed previously, and now we're at a work load within that department that if I remember our previous conversation, we're still funding these activities that is being funded through the consultant, correct? Todd Gerhardt: Yep, fees for service. Mayor Jansen: It's in fees for service and this would just be shifting it back into a city position. Todd Gerhardt: A portion of it. Bruce DeJong: Yeah. I dramatically cut back my consultant line item this year in anticipation of having some additional help. Quite honestly I think our auditors are uncomfortable because of the level of assistance that they've been providing. They feel like they're auditing their own work in some cases, which you know post Enron is not a good position to be in. Very uncomfortable for the auditors and I think that there's some significant service enhancements that we could provide for our departments if we were able to do additional analysis. Mayor Jansen: Okay. The $30,500 that you've listed here, is that the difference between what this position would be and what you will now need to put back into the consulting line or the fees for service? You just said you took it out of the fees for service. Bruce DeJong: I cut, and I don't remember the exact dollar figure but I cut approximately $25,000 out of my consulting. This is a half year position so on a full year basis it's going to be slightly over $60,000. But there's I guess additional service levels that I'd like to be able to provide. Mayor Jansen: Okay. Bruce DeJong: You know what we're getting you now is patchwork at the end of the year to help us close some things up that we're not able to get accomplished ourselves. Mayor Jansen: Okay. Understood. Alright. Those are my comments, and again I appreciate all the effort that you put into pulling this list together for us, and I'm not meaning to shoot down your efforts to have looked for cuts to be able to propose, but some of these, you know the next council or this evening, someone will have to decide if that is the correct areas for us to be taking some of these cuts. Just to maybe further, why don't we go. Let me check. Does council have questions on the new information that you would like to ask of staff at this time? Councilman Ayotte: The only question I have is on your next effect. You didn't talk about bond rating at all. Do you have a sense of what this is going to do for us? Bruce DeJong: As far as changes to our bond rating? Councilman Ayotte: Improvements. Stabilizing it. 49 City Council Meeting - December 9, 2002 Bruce DeJong: As far as changes to our bond rating? Councilman Ayotte: Improvements, stabilizing it. What would happen if we didn't do what you're proposing? Would bond rating be affected if we didn't do what you're proposing? Would bond rating remain the same or go up? It can't go up much, if we do what you're proposing. Bruce DeJong: I think that our bond rating would probably go back down if we were unable to present a plan for dealing with those TIF deficits. Councilman Ayotte: So there's risk to it and that risk in a bond rating going down could be equated to a value of money, right? Bruce DeJong: Correct. Councilman Ayotte: What would be that value of money if our bond rating goes down? Bruce DeJong: That value would probably be someplace in the neighborhood of 15 to 20 basis points on any bond issue that you go out with thereafter. Mayor Jansen: Which would be on your new debt levy dollars that you have listed on your schedule, correct? Bruce DeJong: Correct. Mayor Jansen: That's all your questions? Okay. Any additional questions for staff? Councilman Peterson: The only one that I had Bruce was on TIF one when we talk about the 600,000. Tonight was the first night that I heard you kind of waffle a little bit. How much waffling is there? Could it be 700? Could it be 500? Could it be 900? Or could it be 6017 I mean I just want to get a sense of, waffling is my technical term. Todd Gerhardt: On new TIF revenue? Is not the deficit, the new TIF revenue coming on? Mayor Jansen: The TIF revenue. Todd Gerhardt: You know we just don't know what the impact of fiscal disparities is going to be on it. We did use 40% as our best guess but it could be 500,000. It could be 600,000. We don't know. Councilman Peterson: But it could be 7 too. Todd Gerhardt: It could be 7, and then we can adjust at that time. Councilman Peterson: I just want to get a sense of how confident you guys are, and I'm not hearing a lot of confidence either high or low so it's, you know 600 is a best guesstimate. Todd Gerhardt: That's our story and we're sticking to it. Bruce DeJong: Plus or minus 20 percent. 50 City Council Meeting - December 9, 2002 Mayor Jansen: Additional questions Councilman Peterson? Okay. Any other questions for staff? Councilman Boyle: I have one Bruce. On the salaries and benefits, the 204,000. Is that 204,000 over and above what it was this year? Bruce DeJong: Yes. Councilman Boyle: Okay. On street lights, feasibility study. What, ballpark, what would a feasibility study cost to justify turning... Bruce DeJong: I think I'll defer to our Public Works Director. Teresa Burgess: To do a feasibility study is going to be a combination of most likely, is mostly going to be staff time. We probably will have to have a little bit of advisement from consultants, so we're looking at probably in the range of $1,000 above and beyond salaries that we're already paying. Most of it will be legwork with city staff. Todd Gerhardt: Well hoping to use Xcel Energy too to assist in that. They're the ones we contract to maintain our lights and they have an energy audit individual over there so hope to work with them in developing a plan. Teresa Burgess: And that would be a consultant fee. Councilman Boyle: Have you ever heard of any city doing something like this to reduce their budget by? Teresa Burgess: Actually several cities are right now, and when it says cuts you need to keep in mind, that doesn't necessarily mean shutting off the lights. That could be trying to find alternative revenue sources. That's why we need to do a feasibility study. Savage has recently announced that they are going to start charging a fee for residential street lights. Now in our case our residential street lights are paid for 100 percent by the residents, but that is an opportunity for us to approach these commercial users and let them know that this is a place that we need to look for an alternative form of revenue. We will also look at if it's something that should be outside of that commercial district. If this is something that's providing benefit to the entire city, we need to evaluate that in that feasibility study and say yes or no, it does or does not. Councilman Boyle: Well my comment again on the street lights, if it's any way, shape or form jeopardizes safety in any way, then obviously I would not recommend it. That's all the questions I have. Mayor Jansen: Okay. Councilman Labatt: Just a couple comments. Not to belabor my points from last week, the last meeting but. Mayor Jansen: Oh, go ahead. Councilman Labatt: Okay. So they're proposing 262,000 in cuts. Okay. And you take that and you divide it out by 8,000, is that right Todd? 8,000 taxable units, and that comes out to 32.75 a 51 City Council Meeting - December 9, 2002 year. Or $2.17 a month. Or about 9 cents a day. So street lights, and the $100,000 is going to save each one of us $12.50 a year, or a $1.04 a month, or about 3 cents a day. And the survey, which we value our residential input from our residents, at least for the last 4 years I valued and used a lot in my decisions, $20,000 savings. That comes out to $2.50 a year for each one of us. 20 cents a month, and I'm not going to break it down into the days. Councilman Ayotte: Thank you. Councilman Labatt: Okay. Councilman Boyle: I think we got your point. Councilman Labatt: Well I'm not done. The other program costs potential. Eliminating the license program position, rental license. $12,000. $1.50 a year, 12 cents a month. You can break it down to days for how much. Eliminate Bruce's finance position. $30,500. That's $3.81 a year, or 31 cents a month. As I said earlier, 2 weeks ago, or last week on the 2nd, there's not a lot of fat in this budget. $202,000 in budget cuts, we're eliminating some valuable things that we need to the city for pennies. For savings so, I'll just leave it at that. Mayor Jansen: Okay. When Steve referred to the community survey, I of course have referred to this frequently as far as what our taxpayers had said to us specifically in the survey as we were asking them numerous tax questions, and one of the questions, the answer came back, and I'm just going to read right from the survey results that were presented to us. By almost 2 to 1, 58% to 30%, residents opposed, opposed a reduction in city services if their property taxes could be reduced. Not surprisingly when asked about the perception of city property taxes, 87% saw them as high, while only 10% felt they were above average. The 59% who labeled their property taxes as very high proved to be the highest level in the metropolitan area. It comes back to the perception and potentially the communication that's needed out to the public as to what percent of taxes are actually city taxes, and we saw during the elections that if it's not properly communicated and properly broken down by jurisdiction, there is a very strong reaction from our community to say that our taxes need to be reduced. Again, reading from the survey, the typical Chanhassen resident estimated that 20.5% of their property taxes went to the City of Chanhassen. This estimate proves to be very accurate. However, 38% placed the percentage as higher, while 26% had no idea of the correct share. What I think we have in our community is a lack of information, and I'm going to put that burden back on the city and the council as to communicating to our residents what is encompassed in the city portion of the property taxes, and I've seen a couple of documents that were drafted and sent out in other communities that very clearly define the city portion of our property taxes compared to the county, compared to the school district. Yes, our tax is high. They will continue to be extremely high with us sitting in the county that is the number one highest county taxes in the metropolitan area. When you look at that number and it's by far more significant as a percentage of the total, it will keep our rank extremely high. District 112 is the school district that's used to rank Chanhassen as a community. It's the fifth highest taxed school district in the State. We're 31st as a city. We've dropped in comparison to other communities in the 109 that are included in the particular study that is frequently quoted as far as a comparison of cities and our taxes. So we have managed to come down in that ranking. We're going the right direction, and unfortunately the highest portion, or a very high portion of our taxes is actually encompassed in the debt service and that's where we've had the most significant increases in our levy over the last several years. I'm looking at the proposal that, or projection that staff has given us and I'm looking out into new debt levy 2008 where it doubles, and again the community won't be looking at service increases over this period 52 City Council Meeting - December 9, 2002 of time. All you're really projecting to us is maintaining the status quo and one of the things that we have consistently heard on this council is a community that wants more services, not less services. At the last hearing, the Truth in Taxation hearing ironically the one gentleman who spoke and started out by saying he has to take his children to the Chaska Community Center. Well, there is a sense in this community that we should have those services provided within our boundaries, and as I look at it, the challenge to this council is how to provide those services either as cost effectively as possible, or through the private sector, which is where we then went with our whole community center conversation. I see that challenge becoming more significant than over the next, what is this...and if that's the case, there is going to be a need, a significant need for council to communicate to the community exactly what's happening. With the debt. With the TIF deficit. It's all a very complicated situation, but you've got a community that does not want their services cut. They want their taxes to come down, and if they don't understand that what you're having to address over the next couple years is a situation that is going to keep their services restricted, you're again going to suffer some backlash from the public. You can't cut taxes when at the same time you've got such a significant deficit facing you with your TIF situation and it's not a situation that anyone caused. It's a result of tax compression within the districts and all of that needs to be communicated. So we're looking at a very complicated situation. I appreciate the fact that again staff has stepped forward with some of these cuts. I'm myself looking to approve the staff recommendation. We over the last 4 years have gotten excellent guidance from staff, from Bruce DeJong, from Todd Gerhardt, from our financial advisors. It's very sound decisions and proposals that you bring forward to us. I appreciate the effort that you put into helping us understand the long term impacts of the decisions that we make today. And it's funny to be sitting in a situation and Councilman Boyle's in the same situation that I'm in right now. The easiest decision that we could make this evening would be to go out cutting the budget and cutting taxes. But it would be so inconsistent with what we have tried to accomplish for the long term best interest of the community that we live in, that we're going to feel those impacts ourselves. It would be totally inconsistent for us to go out doing what might make us feel good, and yes make the taxpayers feel good in the short term, but it's certainly not in the long term best interest of the community, and I quite frankly can't take an action that's totally inconsistent with the best advice that we're getting from our financial experts and has obviously helped us to try to address a problem that we basically could have said, hey. It's not our problem, you know and pass it along and let somebody else deal with it. Fortunately staff can't have that attitude because you're planning on being here long term, and hopefully council also isn't willing to pass along a more difficult situation to the next council. I think that's part of being responsible about the positions that we're in, is making sure that we're passing on the healthiest situation that we can. There is still a great deal of study and information that needs to be garnered through the key financial strategies process. I think that's a process that needs to continue expeditiously as you're looking at doing some of these cuts and working with staff to understand what the different service levels are that you can impact to come up with some of the cost savings. It's a great deal of work, but I think as you dig into the devil in the details, you'll actually maybe be able to find some of those efficiencies if you cut the standard, and again you're talking about a policy that's cutting the standard of service to the community, but that's the direction that needs to come from council. And there needs to be that understanding as you're cutting the budget of exactly what it is, service wise, that you're cutting. One of the proposals that had gotten kicked around at the last council was cutting two park maintenance employees, and I think in the newspaper, and I had one of our residents e-mail me. There was some confusion. We're not talking about adding two new park positions. The discussion is cutting two existing positions, or at least that was what was on the table at the last discussion. Again, I don't think that's the right way for council to go about a policy decision. The policy decision should be what services are you going to give up, and then you find out the results of what that impact is. If it's on the level 53 City Council Meeting - December 9, 2002 of employees, and what in fact the services are within the community and that impact on our residents. All of those things need to be taken into consideration and I'd just encourage that you put more time into those types of studies and really get down into those details and decide the service levels and communicate it to the public. They need to be aware of what you're cutting, or what revenue generation you're going to put into place and those impacts on them, so communicate and get that feedback from the public as you're implementing those things. So I've carried on at length. I'll be quiet. Whoever else wants to make your comments regarding the budget and direction for this evening. Councilman Peterson: One thing I haven't heard from anybody is, if you're, and Steve I don't think you're, I think you already went on record by saying no cut but for those people that are talking about cuts, are you in agreement with leaving the levy at the 12.8% increase or are you saying reduce it by the appropriate amount with the cuts? I'm curious as to what you all think about that. Councilman Ayotte: Here's where I'm coming from. First off, a couple comments. One, I want to be 6 foot 5, blond and blue eyed, okay. It's not going to happen. What I've been hearing from residents is I've had to tighten my belt. City, you tighten your belt too. That's what I've heard. Okay? Staff has done a commendable job in making the attempts to generate revenue and reduce expense. Finance and city management has said, if we take what you want us to do with respect to cutting costs and buy down debt, our bond rating stabilizes. If we don't buy down debt, our bond rating has an adverse affect. What Ayotte is saying is, don't hurt public safety because the safety of our residents is key. What Ayotte said was, we've already caused problems to public works. Let's not commit the sins of the past again. Don't muck with public works. Muck with parks and rec. Parks and rec has made an attempt to reduce cost. Let me put a caveat on it. Don't do anything stupid. So if we go ahead and reduce the cost, and then we have senior citizens not using our senior center, that's stupid. However, we're making the step in the right direction in looking at how to reduce cost. So the target bogey, what I was shooting for was 120 plus K for parks and rec, around that. We're looking at a total cost reduction of 300K, so I'm agreeing with staff in terms of taking that reduction and buying down debt and keeping the tax where it is because what will happen eventually is we'll defer cost down the road. I think that's a positive thing. But I'm going to restate public safety, leave it alone. Public works, leave it alone. Address parks and rec. Generate revenue and reduce the service if need be, but don't, but I'll put the caveat on this time that I didn't put on before, don't do anything stupid, and I'm not being a wise guy when I say that. Because that's the one place, ... services is what we can address. We don't want to hurt the infrastructure. We don't want to hurt public safety. It's not hard. Okay? Let's step out and do it. Mayor Jansen: Thank you. Councilman Boyle: Are you, excuse me. I must have missed it. Are you recommending staying with the current levy? The recommended levy. Councilman Ayotte: I'm saying I have no problem staying with the recommended levy with the understanding that we go after reduction, and I want to see reduction so that we can buy down debt. That's a smarter way of doing it because our bond rating goes up or stabilizes. What Bruce told me, and I believe him because he wears a tie. He said that, if we don't take care of the debt, bond rating will hurt so our taxes will be in worst shape the year after next. And the year after that. So I'm trusting him because he wears a tie, so you'd better be right on that. Okay, so that's the point I'm making there so. 54 City Council Meeting - December 9, 2002 Mayor Jansen: Okay. Appreciate that. And then the other portion of what staff has shared, as well as needing to apply that to the deficit, is that question mark as to the city having to deal with a state reduction in revenue next year which could be, and we don't know how much it will be, but it could be another 300,000. Correct? Todd Gerhardt: Oh, yeah. We calculated $168,000. We received in first payment for market value homestead credit in October. Our next payment is in December, which should be a similar amount. And everything I'm hearing on the streets is that's going to be the first thing hit because that's the suburban communities. They get most of that and they're growing and they have money and I just don't know where it is. Councilman Boyle: So the impact of that Todd means that you would have to go back to each division and say, we've got to make up 300 and some thousand dollars. Cut your budgets by another what, 3%? Todd Gerhardt: 3.4. Mayor Jansen: And the department heads have already been told to be prepared to do that. As far as making those cuts. I mean it's pretty much being assumed that that is in fact going to happen. So, and that's without there being a projection in there and not to be all gloom and doom, but if the economy does slow down, within our budget we have a million plus in revenue that we're counting on coming in from building permits and if construction slows down, building permit revenue decreases, and that too could then be an issue as far as needing to make further budget reductions or come up with more revenue as far as either using your reserves or some other fund. Anyway, so much for gloom and doom. Other comments. Councilman Peterson: I have taken a little different ploy that I talked about I think one of the last work sessions. I'm, I've looked at staff's potential reductions and I agree with all of them. And I am probably taking a different tact in that I've added another almost 200,000 of additional cuts to accomplish two things. Number one, I'd like to get the levy into single digit increase. And allow to pay down some of the debt and use some of that, the delta between what our costs are, the budget, and what the levy is. I'd like to apply some of that to general fund to the debt service. So I'm saying take the reductions now. We know with almost certainty that we're going to lose that 300,000 in sometime next year, so let's start doing it now. So I think we need to take those and do that January 1, and I've got a list of items that if we can incrementally add to reduce those costs that I've already spoke of. I'm at a reduction of closer to 500,000 and I'd like to lower the levy increase down into the single digits, which again I haven't heard a consensus on that tonight so, but that's. It's following my same philosophy. I'm not as aggressive as I have been in the past because I have felt that growth would help us cover some incremental costs, as it has. I'm not as optimistic because the economy now isn't going to carry us, and now I'm looking at costs more than I have in the past so. That's my two cents worth at 10:30. Mayor Jansen: So you would cut that out now, and shift the 500,000 in burden of what would have been used towards paying down the deficit, into these future years. Councilman Peterson: Yes. Yes. So I'm just taking deeper cuts now. Lowering the levy to single digits and still using that incremental dollar savings to pay down debt. I'm just more aggressive. On the number of cuts right now. 55 City Council Meeting - December 9, 2002 Mayor Jansen: I realize that, but what I'm looking for is then where that is made up in the long term and for helping the equation that staff has given us as to what will happen with the future tax levies. You know conceivably then it could push the next levy up into double digits. Councilman Peterson: Depending upon, and if you cut 500,000, that still gives you a $400,000 increase which I think is around, I'm looking at Bruce but I think that's around a 5 or 6 percent levy increase yet, and I'm potentially willing to go higher than that and use that delta to still pay down the debt so it won't be that significantly different. I'm cutting more, lowering the levy a little bit but there's still a positive cash flow to pay down debt service so, I haven't got the, I haven't run the numbers because a lot of, some of these are new tonight. I haven't seen them so. Mayor Jansen: So of the 500 that you just threw out. Councilman Peterson: Some of that would be applied towards the debt service. Not again. Mayor Jansen: What would that be? What would you leave in the levy? So you're not reducing the levy by 500,000? Councilman Peterson: No, I'm thinking the levy needs to be a single digit, maybe as low as, as high as 9. 9 ½. So you've got about a 3 percent difference there that could still be applied towards debt service. Mayor Jansen: Okay. Any other comments council? Councilman Boyle: Bruce, last week when we, you gave us a chart that showed for example a $200,000 house, the value of a $200,000 home. The assessed value. The increase in taxes if the full levy was approved was something like $70 a year? Or something. Bruce DeJong: The dollar increase on a $200,000 house, a house that was valued at $200,000 in 2002, with an 8 ½% increase up to $217,000 for 2003 taxes would be approximately $99 per year. Councilman Boyle: Per year. Okay. Bruce DeJong: That's the increase. Approximately. Councilman Boyle: Approximately. So, when we start taking a little bit here and little bit there, I mean 20,000 there, totals up to 200,000 that's literally coming off the levy. I mean we're. Councilman Labatt: Gary, it's 9 cents a day. Councilman Peterson: Well, but to that point though guys, let's say you round it to 300. Go 300,000 and Steve articulately brought that number down to a per cost, but to the city over 3 years, that's 900,000. 300,000 is serious money. 900,000 is half of our debt problem in 2004. So the nickels and dimes do add up fast when you start taking these cuts and applying them over a 3 year period. So they're big. Councilman Boyle: But they'd probably, it probably wouldn't apply over a 3 year period. 56 City Council Meeting - December 9, 2002 Councilman Peterson: Yeah it would. That's the presentation that they're making tonight is that they're intending to do that. Councilman Boyle: You pull some of these things out now and they'd be back. I mean it's not long term. It can't be long term. I mean park and rec, service level cuts when we have more trails. We have more lawn to mow. I mean that's a one time at best. I mean next year it'd have to go higher. And I picked a bad example because I kind of get Bob. Councilman Peterson: Yeah, you're talking to two guys that disagree with you on that one together but. Mayor Jansen: But again, what staff is asking you to do is make those spending cuts, but apply them to the debt and what Councilman Peterson is suggesting is that we do something of a cut now. Leave the levy at a 9 ½% instead of a 12%, and apply again those spending cuts to the debt. So I'm hearing everyone conceptually saying the same thing. However, it's the amount. Councilman Boyle: It's just the amount. The percent. Mayor Jansen: Right. Councilman Peterson: Yeah but the other thing Linda that I want to just clarify, when you talked about the survey. 59% of the people, I can't quote it exactly but you're talking about didn't want services cut if taxes had to be cut. Just remember, we're not talking about lowering people's taxes tonight. We're talking about lowering the increase in their taxes which directly conflicts with what that survey question said. We're not talking, the question wasn't lowering their increase, or lessening their increase. It was lessening your taxes, and we're not doing that tonight. We're increasing your taxes by X amount so the survey question's irrelevant. Councilman Labatt: You're lessening their increase. Councilman Peterson: Yeah, but so the question's. Councilman Labatt: I don't follow your point there Craig. You know. Mayor Jansen: Well, and basically what you're talking about are reducing services in order to achieve a lower tax increase. Councilman Peterson: Which is very different than lowering taxes. Mayor Jansen: Correct. However, they have said they don't want to see their services reduced. They also don't understand necessarily, and again that's where I think you need to communicate it, is our deficit situation. They're now hearing the State having a deficit, and a tremendous deficit. The city has a deficit that we are also trying to deal with at the same time our revenues are being decreased in order to help the State with their deficit. So we're doing a tremendous amount of juggling with what we have available. I am hearing everyone on this council saying cut spending. However, what I'm hearing is cut spending in order to reduce the amount of tax increase that our community is going to feel if we don't do it and apply it to the deficit and to our debt situation. So they're still not, they're going to have a reduction in services and the taxes are 57 City Council Meeting - December 9, 2002 going to stay at the level that they are, or go up slightly. So it's a big communication issue for the city. Councilman Peterson: It's coming at the right time though because our governor elect got elected because he said he wasn't going to raise taxes, and the voters supported that and they knew what that means. Councilman Labatt: He's going to increase your fees for services and everything else though which is just another tax. He's going to increase your fees for going to the parks, for buying a deer license, it's still a tax. It still hits the same pocket book every year. It's the same thing we've done here. Councilman Ayotte: The only part that's different right now is that we're making money if we attack the debt, through stabilizing the bond rating. We're making money if we attack the debt. So that's the one thing that we really have to do is attack the debt. And I'm a little queasy about the operational expense reductions that you guys are forecasting because I think it's a little Mickey Rooney approach to what you're doing. Just to go in the back yard and have a play, but at least you're making the attempt and that's good, but we have to, we have to reduce the debt. We have to attack the debt. That's consistent. Mayor Jansen: And by saying debt you're also in that lump referring to the whole TIF deficit because. Councilman Ayotte: Correct, the deficit issue. Mayor Jansen: Okay. Okay. Alright. Council, are we at all close to someone being able to make a motion please. Councilman Peterson: Motion to adjourn. Councilman Labatt: I would move that we adopt the resolution provided to us in the staff packet establishing the tax levies for 2002, collectible in 2003 with the addition of the, of putting back the $262,000 in cuts. Putting it back under the general fund. Do we want to do the capital plan or are we going to take that separately? Councilman Ayotte: No, one at a time. Mayor Jansen: One at a time. Councilman Labatt: Okay, so I will, even though this one resolution contains both. Todd Gerhardt: The 262 Steve, what were you? Councilman Labatt: This one here. Todd Gerhardt: Okay. Councilman Ayotte: I didn't follow that 260. Give me. Mayor Jansen: The resolution doesn't include that cut, does it? Mr. Gerhardt? 58 City Council Meeting - December 9, 2002 Councilman Labatt: This resolution here includes. Bruce your resolution, does it include the 262 plus the 40,000 in additional Todd Gerhardt: revenues? Bruce DeJong: Yes. Yes, I'm sorry. I raised the revenue by the $40,000 that was proposed, and I specified that it would be expenditures and transfer amounts so if you did not cut those expenditures, it would simply lower the level of transfer. Councilman Ayotte: Let me try an amendment, friendly amendment. May I? Can we simply say to follow staff's recommendations and that the $300,000 in operational expense reduction will go to service the debt? Would that be a more simple way of presenting it? Councilman Peterson: Didn't Steve, didn't you just take it out? Councilman Labatt: No. Councilman Boyle: Put it in general fund. Councilman Peterson: So you're saying take the reductions? I misunderstood what you said. Councilman Labatt: No. No. The 262, the street lights, park and rec, community survey, street employee, put that back in. Councilman Peterson: You just rejected your friendly amendment I think. Councilman Ayotte: Yeah, I misunderstood you, no. No, I want to see $300,000 in operational expense, I want to see it go down. I want to see it service the debt and I want to make sure there's a sanity check so that we're not doing anything stupid. Mayor Jansen: Okay, and just so you understand what you're communicating is the same thing that Steve is communicating. He's putting it, and let me make sure I've got this right. You're putting it back into the levy, correct? Councilman Labatt: Yep. Mayor Jansen: So you're wanting it levied for because you want it to apply to the deficit. Councilman Ayotte: Okay, I understand. Mayor Jansen: So the two of you can have at it as to what that cut actually encompasses come January. Councilman Ayotte: Yeah, but it should be 300K, not 262. Councilman Labatt: Well I'm just using the number. From here. Todd Gerhardt: The 262 does not include the $40,000 in new revenue from park and rec. Bruce highlighted that on a separate sheet. In my report it talks about 302. 59 City Council Meeting - December 9, 2002 Councilman Ayotte: I still want a friendly amendment to it then. Mayor Jansen: What I'm hearing we're trying to accomplish is a resolution that is attached is Steve is wanting to approve staff's recommendation that we pass the levy as you have proposed it. Correct? Todd Gerhardt: Yeah. Our, the resolution includes the $262,000 worth of cuts plus the $40,000 in additional revenue. Steve's recommendation is to increase that resolution by $262,000 and not include the $40,000 in additional revenue. Councilman Labatt: No, you can. No, I just mainly what I'm mainly worried about the street lights. My god. For 3 cents a day we're going to blacken the city? Mayor Jansen: Okay. And am I incorrect in having heard staff say that what your recommendation was is that we pass the levy amount as you had proposed it and that the $262,000 or 300 would then be subtracted after we've passed the levy. Isn't that what staff recommendation was? Bruce DeJong: Mayor Jansen, maybe I can clear this up a little bit. In the resolution it talks about general fund revenues of $8,908,635 and expenditures and transfers of $8,907,935. What I think Councilor Labatt is proposing is that rather than having a $302,000 transfer, which is Mr. Gerhardt's recommendation, that that transfer would be $40,000 in the budget, and that the expenditures would be increased by $262,000 and that the transfer be reduced by $262,000. Councilman Labatt: Right. Councilman Ayotte: No. Mayor Jansen: So in essence what you just said would eliminate the cuts from being made to the levy amount and apply it to the deficit afterwards, correct? Bruce DeJong: It would mean there would be $262,000 less applied towards our deficits. Mayor Jansen: Oh, okay. Todd Gerhardt: And that's 262,000 over the next 6 years. Mayor Jansen: Okay. Okay. Councilman Ayotte: Can we have more discussion Mayor? Mayor Jansen: Yep we are. Steve, when you're eliminating the cuts, are you eliminating them because you don't like the list of cuts but conceptually would you be comfortable saying to staff, we're going to take, somehow take $302,000 out of the, through revenues or expend, why don't I just be specific. You're going to take $262,000 in spending cuts in the next budget, coming up with it some place but you're not comfortable with this list. Councilman Labatt: Correct. Mayor Jansen: Which is what I'm hearing Bob say. You want $300,000. 60 City Council Meeting - December 9, 2002 Councilman Ayotte: 302. Mayor Jansen: And you don't care if it comes from revenue generation or spending cuts. Councilman Ayotte: As long as it doesn't have an adverse affect on public safety and public works. Mayor Jansen: Gotch ya. Councilman Labatt: Correct. Street lights I consider public safety. Mayor Jansen: Okay. So in essence we're leaving the levy at the amount that staff has requested, but we're not being specific as to what the $300,000 is in spending cuts that they're looking for, but it will be applied to the deficit. So then does that make the resolution accurate? Bruce DeJong: Yes. Mayor Jansen: Okay. Councilman Labatt: So moved. Mayor Jansen: Okay. So we're approving, your motion is to approve the resolution as stated by staff. Councilman Labatt: As presented, right. Yep. Mayor Jansen: As presented by staff. And that accomplishes what you're trying to accomplish also. Did we clear that up? Councilman Ayotte: I still want it on the record that public safety and public works be kept high on the effort and that we target those service areas and generate revenue where it's plausible, and I don't think I can put it in the record to say don't make it stupid but. Councilman Peterson: You just did. Mayor Jansen: You will work with the 2003 council to do exactly that. Okay, so if I could have a second please. Councilman Boyle: Second. Mayor Jansen: All those in favor say aye. Councilman Peterson: Can we have some discussion first? Mayor Jansen: Sure. Councilman Peterson: What you just decided to do on this motion is to give it back to staff saying you find it. For the last 3 months staff has been coming to us and tell us to decide. I'm shocked now we're tossing it back to staff when they've been asking us to make a decision. 61 City Council Meeting - December 9, 2002 Mayor Jansen: That's not what I just heard. I heard that council come January will sit down as a group. You have not agreed to the list that was forwarded from staff. You've got discrepancies on your council, and with your two new members you are going to come up with, as a council, direction to staff of where that $300,000 is going to come from. And it may encompass some additional study that needs to be done on some of the numbers. Councilman Ayotte: And I was very specific in saying parks and rec. And I was very specific in saying public safety has to be, public safety issues have to be watched so we don't do anything that could jeopardize the community. And I also said that public works has to be watched so we don't further degregate the infrastructure that we've already hurt by doing things incorrectly in the past, so no. I'm targeting a very specific area, and that's why I wanted to make that friendly amendment. So no, I think I was pretty specific. And when it comes January, you know if we have an opportunity to do more than 300K, I mean you know. Councilman Peterson: Well I just think that we've spent months on this and now we're coming down to the last minute and we're saying we can't make a decision, let's let the next council do it. Councilman Ayotte: No. Mayor Jansen: I'm not hearing that at all. What I am hearing is. Councilman Peterson: Well it's interesting I am so. Mayor Jansen: Well, and I guess it doesn't surprise me that we're hearing different things again. Your council has items in front of it that no, you have not agreed totally to this. You've got studies to do. Councilman Peterson: I've raised my point. You've got a motion and a second. My discussion is over. If you want to continue it's fine, but... Mayor Jansen: Just so we're clear. Council is not asking staff to come up with any additional information for consideration as far as cuts. You've given council your proposal and after the first of the year council will have to decide, from what I'm hearing, what the reductions are going to be in spending and you're looking for $300,000 specifically from this meeting, and you may be looking for more. Once you get down to it. So I have a motion and a second. Any more discussion? Resolution #2002-103: Councilman Labatt moved, Councilman Boyle seconded that the City Council adopt the resolution establishing tax levies for 2002, collectible in 2003 as presented by staff. All voted in favor, except Councilman Peterson who opposed, and the motion carried with a vote of 4 to 1. ADOPTION OF THE CAPITAL IMPROVEMENT PLAN. Mayor Jansen: The second part of this agenda item is the capital improvement program adoption. Staff report please. Bruce DeJong: Mayor Jansen, council members. I do not have an elaborate staff report. It's just a continuation of the items that we've been discussing, but I did make it explicitly clear here in changing the description of what the proposed funding sources are, as to staff recommendation. 62 City Council Meeting - December 9, 2002 That we recommend that you do bond for your capital items coming out here in the next 5 years for the major equipment and that you also bond for the pavement management program, except where the MSA funds are allocated specifically to a project. That leaves us with a grand total of expenditures out of our capital improvement plan projected over the next 5 years of $34,952,800. And I would recommend approval of this. This does not mean that necessarily all of these projects will be undertaken during the course of the year, but each one of these will be approved by the city manager and any of those items that are over $50,000 will come back to the council specifically for approval under bid, unless it's something we can purchase below that dollar amount off an existing state contract or cooperative agreement. Mayor Jansen: Okay. And again further, just so we're clear, our main focus was really an evaluation of the year 2003. Anything beyond that is basically considered to be up for discussion with each year's conversation around the capital plan. Bruce DeJong: That's certainly correct. There are some things in here that I guess are best described as speculative in nature. In a community that's growing the way our's is, it's difficult to make those 5 year projections as to frankly when something might happen. Some of these items are included merely for notification purposes that at some point in the future we'll probably have to address them. I think most notably, the fire station and equipment that we've included for Fire Station 3 in the southern portion of the city. That's listed at a grand total of about 4 ½ million dollars in 2007, but that's simply to put it on the radar. It's not that that is set in stone. Certainly you'd have to have extensive community discussions and on a project like that, you would have to have a bond referendum in order to fund something of that magnitude. So there are other items in here that are certainly more speculative and the only thing that you can really commit yourself to as a council is something for the next year. Mayor Jansen: Okay, thank you. And then the other point is that there are, and I appreciated the way that you detailed the funding sources for the projects and that you did get very specific about where those are coming from as far as, as a for instance the park dedication fund. So there are other sources in here other than what we would be directly bonding for as far as some of these projects. Bringing this back to council, are there any questions for staff on the capital improvement program? Okay. I only want to make one mention, and this came out of our work session conversation and it has to do with the completion of the City Center Commons park. That park is noted for funding primarily out of the park dedication fund at this point. And part of our work session conversation hinged around, even though the funds are there, is it appropriate in a year where we're trying to cut back and project to the community that we're cutting back, that we would use funds for a significant project like that. A significant dollar amount that we would be putting a project together around that. Again I want to emphasize that the park dedication funds are currently in our reserves. I mean we have the cash on hand. It is dedicated to park projects. The library is such a significant gathering area, and again our residents approved a 6 million dollar referendum to get that passed, and as part of that project we have been in these extensive conversations about putting the City Center Commons park into place at the same time that this library is becoming such a significant destination for our residents, so I would hate to see that project be delayed simply because of perception. The funds are there. The project's in place. One of the very clear requests that we've gotten from the community is for a central gathering area in the downtown. A place where people can come and linger and relax and have a sense of community, and that's what that project was and is intended to accomplish in our downtown to bring more vital activity into the downtown for our residents. So right now it is slated in our plans for 2003, and I certainly would hope that that project would continue as scheduled and as planned to complete that comer with the library, but that's just my two cents. That's one issue 63 City Council Meeting - December 9, 2002 that did come up in our conversations. So with that if I could have a motion for the capital improvement program please. And perhaps what we're doing is completing the resolution. Councilman Labatt: Yep, I would move that we approve the resolution adopting the 2003-2004 capital improvement program as presented by staff. Mayor Jansen: Is that complete enough a motion? Are we set? Okay. If I could have a second please. Councilman Boyle: Second. Resolution #2002-104: Councilman Labatt moved, Councilman Boyle seconded that the City Council adopt the 2003-2007 Capital Improvement Program as presented by staff. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: Great, thank you. Staff for the tremendous amount of time and effort that you put in over the last, what has it been, 4 months. 5 months. Probably even longer for all of you, pulling together the numbers for council. Walking through all of these different scenarios. Again, helping us to better understand the future impact of our deficit situation. Helping us get our arms around that and do some planning and to you and your staff for helping pull together these spending cuts and appreciate all the effort you'll still have to go to to try to get this worked out as you get into the year, but we appreciate your commitment and the effort that you've put forward in coming up with the numbers that you've provided with us, so thank you. DISCUSSION OF PUBLIC SAFETY ISSUES. Mayor Jansen: Council, next agenda item is discussion of public safety issues. Is that something you want to cover still this evening? Councilman Ayotte: Can I throw a thought out? Mayor Jansen: Sure. Councilman Ayotte: With the transition meeting that we discussed with Mayor-elect Furlong and Councilman-elect Lundquist, maybe what we ought to do is move that item to be a part of the transition discussion so that we can bridge information that we have come to with the new council so that it would be something we could bring fresh to the January-February meeting. Mayor Jansen: Okay, and make it a part of the whole strategic planning conversation. Councilman Ayotte: Correct. Mayor Jansen: If you might add that to that agenda, it would be appreciated. Thank you for making that suggestion. Council are you okay with that proposal? Councilman Boyle: Oh, by all means. Mayor Jansen: Okay, so with that do we need to table this this evening or just move along? Roger Knutson: It'd be a good idea to table it. 64 City Council Meeting - December 9, 2002 Mayor Jansen: Okay council, if I could have a motion to table please. Councilman Ayotte: Motion to table. Councilman Peterson: Second. Councilman Ayotte moved, Councilman Peterson seconded to table the discussion on public safety issues. All voted in favor and the motion carried unanimously with a vote of 5 to 0. CONSENT AGENDA: E. APPROVAL OF RESOLUTION CHARGING FOR VEHICLE LOCKOUT CALLS. Councilman Labatt: Setting the fee structure for vehicle lockout services. I just, I wanted it pulled for a quick discussion of, I believe this is a fee that our residents already pay for in their taxes and not in favor of taxing or having our residents pay a $20 fee to get their vehicle locked out. But I am in favor of taxing the non-resident, so two points I want to bring up is, either we look at charging non-residents only, or I'll just vote not. Councilman Ayotte: I like your thought but because of the state of my mind right now, would you mind if we tabled that one also? Councilman Labatt: I don't care. Councilman Ayotte: I like the idea but I'd like to have further discussion but I don't want to talk about it tonight. Councilman Labatt: Okay. So I'll take your motion to table and I'll second it then. Councilman Peterson: I'm comfortable moving ahead with it as it is so. Mayor Jansen: I'm comfortable allowing for there to be more conversation to get council in agreement on this. I don't think there's any hurry to get this taken care of, correct? Todd Gerhardt: No. It was just something that came up as a part of our budget discussion and you know, we're providing the service at no charge right now so. Mayor Jansen: Okay, so someone made the motion to table. Councilman Labatt: Bob did. Councilman Ayotte: Was that me? Okay. Mayor Jansen: And I've got a second. Councilman Ayotte moved, Councilman Labatt seconded to table the resolution charging for vehicle lockout calls. All voted in favor and the motion carried unanimously with a vote of 5 to 0. 65 City Council Meeting - December 9, 2002 Fo APPROVE ACCESS EASEMENT AGREEMENT WITH SUNRISE HILLS HOMEOWNERS ASSOCIATION FOR LIFT STATION No. 1 - PROJECT No. PW055A. Councilman Labatt: I pulled this to get some more information from Teresa. She's answered those questions and I'm ready to proceed. Let's get out of here. Mayor Jansen: Okay, ifI could have a motion for l(f) please. Councilman Ayotte: I was distracted with the Villager. Councilman Labatt: I'll move approval. Mayor Jansen: And a second? Councilman Boyle: Can't. I've got to abstain. Councilman Ayotte: Second. Councilman Labatt moved, Councilman Ayotte seconded to approve the access easement agreement with Sunrise Hills Homeowners Association for Lift Station No. 1, Project No. PW055A as presented. All voted in favor, except Councilman Boyle who abstained, and the motion carried 4-0-1. COUNCIL PRESENTATIONS. Mayor Jansen: Is there anything for council commission liaison updates on meetings? Councilman Peterson: Just a reminder that Thursday, December 12th at 1:00 is the Southwest Metro Transit station open house for the new ramp. Mayor Jansen: Okay, thank you. Councilman Ayotte: I was just wondering if any, I haven't heard of any re-scheduling of the water treatment, has that happened? Teresa Burgess: We are looking at the first Monday of February, and I'm working to make sure that that works with all of the plants that we are looking at visiting. Councilman Ayotte: That's it. Mayor Jansen: Okay. The only meeting update that I have is the Eastern Carver County leadership meeting that occurred on Friday, which of course is all of the District 112 and community leaders. At that meeting there was a conversation about a transitional meeting of community leaders to share the strategic plans of the different communities. Hence, getting all of the newly elected officials throughout the county up to date and familiar with the strategic plans of each of the communities, and that has not been done for about 3 or 4 years. We couldn't remember when the last meeting had been held where all of councils, all members of all councils and the county board were invited to attend this meeting where the cities presented each of their strategic plans, and it was very informative for myself as a council member to learn more about 66 City Council Meeting - December 9, 2002 Chaska's strategic plan and initiatives. Victoria. The school district shared their goals and objectives, so the main conversation that occurred on Friday was a discussion about repeating that particular meeting and inviting all of the councils and mayors to attend so I know they're working on that strategy as well as doing an orientation for the new members that are coming in. Both the boards and the councils. I think that was the main point from the meeting, was it not Todd? Todd Gerhardt: Yeah, and there was just one other thing is that they were going to create their own strategic plan. The Eastern Carver County leaders group was going to establish their own strategic plan of where they're going to go into the future and using information and some of the programs that they might develop into the future. Mayor Jansen: More with a look at the financial sharing between the communities. We had done a shared transportation communication. Some of those types of initiatives as far as conversation, so I think that was everything from that meeting that was of importance so watch for that. So why don't we move on then under Administrative Presentations. ADMINISTRATIVE PRESENTATIONS: PAVEMENT MANAGEMENT PLAN, CITY ENGINEER/PUBLIC WORKS DIRECTOR. Teresa Burgess: Thank you Madam Mayor and council. You should have received in your packet a copy of the cost benefit analysis of pavement management. Rehabilitation versus reconstruction. We will be posting that on our web site for anyone in the public that's interested, but our anticipation is most people will not become interested until this affects their street personally. If the council has any questions I'd be happy to answer it. The gist of the study is that rehabilitation is cost effective in the long run of the life of the project. Looking at a 40 year life for this case, but a long term plan for the streets of our city. Rehabilitation includes the type of project we did in the Pheasant Hills neighborhood this year which included extensive maintenance, mill and overlay project, curb repair and dig out areas, versus full depth reconstruction which would be going down 3, 4 or even 8 feet down and building back up from that level to replace utilities. If there's any questions I'd be happy to answer that, otherwise basically everything's in the report. Councilman Ayotte: Thank you. Mayor Jansen: Any questions for staff'? Councilman Boyle: Nice job. Mayor Jansen: Okay, thank you Teresa. Appreciate it. Okay, I think that's everything that is formally on our agenda. Earlier this evening, and I've now checked with Roger as to the proper protocol to share our information with the public on our evaluation of the city manager. And as I was instructed by the city attorney, we do need to get fairly specific, not only in the review points that we covered, but also in the compensation discussion that we had so that this evening we can make a motion for approval of the compensation package that we discussed, correct Roger? Roger Knutson: That's correct Mayor. Under the open meeting law, after you've had a closed meeting to evaluate the manager's performance, you're required to then follow in a public meeting to announce the results of that evaluation and summarize those findings, whatever you have. And if you want to add on compensation, this is I believe your last meeting of the year. Regular meeting of the year. 67 City Council Meeting - December 9, 2002 Mayor Jansen: Okay, thank you. So I will attempt to properly recap what we discussed as far as our evaluation points, and council once I've tried to reiterate some of what we talked about, if you'd like to jump in and add to the discussion, certainly please do. What we reviewed Mr. Gerhardt was your work plan, and the consensus from council, and it was extremely unanimous, is that you've done a very good job of delivering on all of the issues that we discussed throughout our strategic plan and put on your work plan, and it's an extensive list of projects, as you know, so it's pretty impressive that you have managed to deliver on such a daunting task but you have a council that very unanimously endorses the work that you've done and the job that you've... You got a very positive review from council so I'm going to list your accomplishments over the past year of projects that were within your work plan as far as accomplishments. The library project, as everyone has heard us refer to in the last 2 years has certainly been a significant project within your work plan as far as the execution of the joint powers agreement. You still have that to take care of, but the construction contract. The whole design phase. You have been 100 percent involved in every step of that project and it certainly has gone very smoothly and we've appreciated your efforts in making sure that that project has gotten accomplished successfully and your communication with all of the various parties involved. Next item on your work plan were the key financial strategies, which encompassed the whole budget process, debt service update, TIF deficit options, and you've had several of council mention that as one of your greatest accomplishments as far as everything that you and Bruce have done together as far as tackling our finances and coming forward with proposals and certainly your extensive background on TIF being a plus that we've all identified as something that you bring to the table and is certainly beneficial for all of us. You've noted the bowling center property. You've been very involved in numerous discussions there trying to bring forward a proper development proposal and though we have not accomplished that, I would commend you for having really followed the guidelines that council has placed on what they would like to see happen on that site, so you haven't buckled trying to get something done quickly and compromised on the goals and objectives that were set by the council. You've definitely had the initiative to stick with that and try to come up with the right project. You've noted the Presbyterian Homes project. I know that's still moving forward and it's not fault of your's that we approved that what, back in December 9, 2002. Is that the right date? Todd Gerhardt: 2001. Mayor Jansen: Was it 17 Okay. So I mean it's been approved and it's been more on their plate as to getting that to move forward. You noted the West 79th Street property, getting that sold and those revenues coming into the city and working out the agreements with those companies. You've noted your work on the McGlynn litigation, the Highway 101 turnback and trail project. Certainly that also was noted by a couple of council as an initiative that was very hot politically. You helped us work through that with the community. There was, you know a lot of sensitivity and need for public communication. Your staff also was very helpful in that, and it was noted as an accomplishment for how you managed to help us through that situation and get that accomplished. Maintenance code, rental licensing ordinance. Certainly you've had a great deal to do with that, and over sight. You've got the water treatment facility. I'm just going to hit some of these. So I've called them off as to what your challenges were and basically consider them all having been handled extremely well. The review of the community center options. Review of sit down restaurant opportunities. City Center Commons development. You've been in discussions about establishing a local lodging tax. That of course is a conversation you're having still with the Chamber of Commerce and is ongoing. The review of the potential District 112 high school sites in Chan. The strategic planning process. Certainly you've been instrumental in helping us move forward our initiatives which were the housing, taxation, 68 City Council Meeting - December 9, 2002 economic development, and community center. You also have a long list of other items that you've taken on, so basically based upon all of these projects and how you've handled them, council feels that we certainly want to reward you with a compensation increase, which correct, advise me again Roger. How specific do I need to get this evening? We are giving Mr. Gerhardt a compensation increase to begin January of 2003. We are also awarding a merit increase and we will be awarding a slight increase in the car allowance for Mr. Gerhardt based upon his evaluation results. Am I properly on the record? Councilman Ayotte: In US currency. Mayor Jansen: Or do I need to get more specific? Councilman Labatt: I thought it was Canadian. Mayor Jansen: I need to be more specific? Okay. What we are specifically, and it's not that I don't want to say these things publicly but when you come out of the private sector you figure you've got some privacy in these kinds of conversations so. Roger Knutson: No privacy up here. Mayor Jansen: No privacy up here whatsoever. What we are awarding specifically will be a 3.5% increase to your base salary, and let me begin by saying we have a review that was done of comparable communities and what we took were the key financial strategy cities as well as the Stanton Group comparison communities, and Mr. Gerhardt is in fact well below what is considered average and proper for a city manager in a community of our size in comparison to his constituents, so what we are trying to accomplish is bringing him back to what would be considered more of a fair and equitable level to comparable positions. So in doing that, what we are looking to do is a 3.5% increase to his base salary. Do I need to say approximately what those dollars would be? Roger Knutson: You don't have to. Mayor Jansen: Okay. 3.5% increase to his base salary. We are awarding for immediate payment in December a merit increase of 10%. And his car allowance will increase by $100. Roger Knutson: And Mayor you should vote on those, approving that in public. Mayor Jansen: Okay. Councilman Peterson: Motion to approve. Councilman Labatt: Second. Councilman Peterson moved, Councilman Labatt seconded that the City Council approve the compensation package for the City Manager as follows: 3.5% increase to his base salary, a merit increase of 10% effective immediately in December, and $100 increase to his car allowance. All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Jansen: Mr. Gerhardt, I just want to thank you for what has been a tremendous experience being able to work with you as you came on board as our new city manager. We certainly were 69 City Council Meeting - December 9, 2002 rolling up our sleeves and digging is as to what some of the challenges would be. You have risen to those challenges and tackled the tasks involved. You and your staff have formed a very positive team work environment. I would say the level of support that I've seen your staff bring behind you is, if anything encouraging to me as to what this city can accomplish under your leadership. Your staff is ready and willing to do whatever it is that you send them off to do as far as tasks. So what this council is challenging ourselves with and the incoming council, is to give you as quickly as possible direction on what our key goals and objectives are for the coming year and that's where our joint conversation ended up coming from was a discussion with the incoming council members to have a transitional meeting to talk about strategic planning so that you can have your goals at least initially set for you, and you can be off and running in January so that you can have some same kind of results as you've already produced for us so appreciate it and I know we're in very good hands. Todd Gerhardt: I'd just like to thank the council. I appreciate your support over the last year and a half and tonight with the budget process. I know it can be tedious and frustrating. I'd also like to thank my staff for all their support. I couldn't accomplish really anything on that list without their help so I appreciate it and I thank you. Mayor Jansen: Any additional comments council for Mr. Gerhardt. Councilman Peterson: Ditto. Mayor Jansen: Okay, very good. Thank you. I don't think there was anything else on the agenda. If council has anything else that you would like to add. Councilman Boyle: Well I would like to give my two cents worth. Linda gave her two cents worth 14 times so I hope she's out of change by now. Councilman Peterson: Steve, what does that work out to? Councilman Labatt: Figure it out. I'm too tired. Councilman Boyle: Just real quickly I want to say thanks. It's been a great experience this last year and a half, and a great council. Being HRA and EDA a long time I saw a lot of different councils come through, and I got a little prejudice there but I think we got a lot more accomplished and probably the best council I've seen in a long time so it's very good. Thank you all very much. I've enjoyed working with you. Mayor Jansen: Well thank you. Okay, boy this will be my last call for a motion to adjourn. I'm going to make the motion to adjourn. Councilman Boyle: Make note of the time too. Mayor Jansen: If I could have a second please. Councilman Peterson: Second. Councilman Labatt: Well let Boyle second it man. Councilman Boyle: Okay man. I second. 70 City Council Meeting - December 9, 2002 Mayor Jansen moved, Councilman Boyle seconded to adjourn the meeting. All voted in favor and the motion carried. The City Council meeting was adjourned at 11:15 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 71