CC 2011 09 12
CHANHASSEN CITY COUNCIL
REGULAR MEETING
SEPTEMBER 12, 2011
Mayor Furlong called the meeting to order at 7:10 p.m. The meeting was opened with the Pledge to
the Flag.
COUNCIL MEMBERS PRESENT:
Mayor Furlong, Councilman McDonald, Councilwoman
Tjornhom, Councilwoman Ernst, and Councilman Laufenburger
STAFF PRESENT:
Todd Gerhardt, Laurie Hokkanen, Paul Oehme, Kate Aanenson, Todd Hoffman,
Roger Knutson, and Greg Sticha
PUBLIC PRESENT:
Bennett & Jeff Nowak 581 Big Woods Boulevard
Mark Kronbeck 233 Park Avenue So., Minneapolis
Tom Devine 7640 South Shore Drive
Laurie Susla 7008 Dakota Avenue
John Ferrier 500 Washington Avenue So., Minneapolis
Josh Koller 1027 Northview Park Road, Eagan
Matt Hoffman 931 Saddlebrook Trail
Mayor Furlong: Welcome everybody. We appreciate those here in attendance and those watching at
home. We’re starting a few minutes late tonight because our work session was a little extended but we
appreciate everyone’s patience. At this time I would ask if there are members of the council, if there are
any changes or modifications to the agenda. If not we’ll proceed with the agenda as published.
CONSENT AGENDA: Councilwoman Tjornhom moved, Councilman Laufenburger seconded to
approve the following consent agenda items pursuant to the City Manager’s recommendations:
a. Approval of Minutes:
-City Council Work Session Minutes dated August 22, 2011
-City Council Verbatim and Summary Minutes dated August 22, 2011
Receive Commission Minutes:
-Planning Commission Verbatim and Summary Minutes dated August 16, 2011
b. Approval of Temporary On-Sale Liquor License, St. Hubert’s Catholic Community, 8201 Main
Street, German Dinner, October 22, 2011
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
VISITOR PRESENTATIONS:
Mayor Furlong: Mr. Devine, please come forward. Why don’t you wait just a second. I’ll invite you up
in a minute. Mr. Devine, go ahead.
Tom Devine: Thank you. Mr. Mayor and members of the council, I thank you very much. My name is
Tom Devine. I’m a resident at 7640 South Shore Drive and I’m a member of the Lotus Lake
Homeowners Association. I would first like to start this evening by saying I very much appreciate and
Chanhassen City Council – September 12, 2011
want to thank each and every one of you for the participation and the interest that you’ve shown in the
issues of the aquatic invasive species issue that has now come before the city of Chanhassen. That you’re
going to be taking action on at some point in the future. The issue is complex. There’s many issues.
There’s a lot of emotional issues and I think there’s a total of 9 civic organizations now that are involved
in one aspect of this or another and although many of those organizations are fairly much in line in terms
of what needs to be done, we certainly welcome now the participation of the City of Chanhassen and
Carver County in this discussion. Very quickly, today there have been almost, a little over 700
inspections that have taken part by the volunteers down on Lotus Lake. They’ve trained 78 people to do
those inspections. It is the most of any single lake in Minnesota right now. There are 3 different websites
that are accessible in terms of looking at the issues as it involves invasive species. There is approximately
900 people that are a part of that, those website organizations that are participating in what this issue is all
about and we built a prototype, which we are proud to say that in many instances have been emulated by
the DNR in other parts of the state right now as a prototype that could be used in terms of education and
what needs to be done to prevent the spread of the aquatic species from the 59 lakes that are currently
infested to the 13,000 or whatever it is in Minnesota right now. It is an issue for Chanhassen. We’re very
concerned about it. Chanhassen has 9 lakes. About 5 which really have the boat ramp situations that
need to be looked at quite carefully in terms of what needs to be done. A recommendation to the parks
and rec commission was quite clear. It was very simple. There were 3 primary issues that they looked at.
It was the issue of the City adopting an AIS policy for all of the lakes in Chanhassen so there would be a
uniform delivery in terms of what the information is and so that the media could be responded to in a
uniform manner all the way across relative to what the policy of Chanhassen is. The second thing was
really having the City or asking the City to support the efforts of the volunteers in the educational efforts
and make sure that that’s expanded to whatever degree it could possibly and to other lakes within
Chanhassen so that everybody’s on the same page relative to that support and what volunteers can do.
And then the third issue was very simple. It was about the enforcement of park hours. Currently there are
park hours on the boat ramp. Where the boat ramps where there are parks right now, we’re asking that
those hours be enforced. I recognize that for the most part those ordinances are not enforced but of course
that in the past has not been an issue because the invasive species issue has not really been forthright in
terms of what the issue is now relative to why we need to enforce those park hours. We would hope that
you would look at this issue very carefully. Finally, let me just conclude by saying you know the issues
aren’t framed up. Everybody’s testing a new water. New areas in terms of what the issues are right now
and we need to all keep an open, balanced approach to understanding what the issues are. There’s been a
great deal of concern on the part of all those people, the 9 organizations that are working on this right
now, that the information be disseminated in a fair, very balanced way. We very much would welcome
the opportunity to address all of you in an open forum where many of the people that have been involved
with this for many months could come in and have an open dialogue with you and try to present the
information and their findings. We don’t believe that in all cases the information flows through that you
need to have to make the decisions but we’d certainly welcome the opportunity to do that and the
invitation to have a forum for all of you that we could have people participate. So with that again I thank
you very much for your time. I know it’s been time consuming for each and every one of you. I know
you’ve gotten calls, emails. I asked for specific meetings and I hope you understand the passion that the
people have in the city of Chanhassen in asking you, our elected officials to stand up and be counted and
to move forward with what needs to be on the recommendations of the park commissioners. Thank you
very much.
Mayor Furlong: Thank you Mr. Devine and please extend our thanks and appreciation to the council for
all the volunteers and those that have been involved with organizing the efforts on Lotus Lake and the
work that ‘s been done there clearly has been an example of what can be done when citizens step forward
and want to help and I think, and it’s my expectation that with the discussion that we had this evening,
probably further discussions in the future but clearly some of the steps that we’ll try to take and the staff
will take to try to make that more effective and develop some practices that we can use at other lakes as
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Chanhassen City Council – September 12, 2011
well so thank you very much for that. I think, to my knowledge, the work that’s being done at Lotus Lake
is beyond what’s being done at other lakes around this area. Whether it’s Minnetonka or whether it’s
Christmas or even at Minnewashta and some of the other lakes where there are inspections taking place
periodically, is that correct?
Tom Devine: Yes. The DNR has indicated what we’ve done is cutting edge material in terms of what’s
been happened, and it’s been emulated as a prototype so it is a first of it’s kind in terms of activating
volunteers, not at taxpayer expense to do something on this critical issue and that’s why the motion was
laid out as it was and I also thank you personally for your time because…
Mayor Furlong: Well and I think if I can just extend that. I think because of the efforts Lotus Lake is in a
better position than many other makes in terms of developing awareness. Developing, creating education
opportunities for people that simply are not aware of some of the new rules and statutes that are out there
in terms of trying to prevent the expansion and spread of these invasive species so thank you.
Tom Devine: It’s our opportunity to take the lead here in Chanhassen and do something that’s really a
benchmark that makes us one of the great cities to live in here in Minnesota. Thank you Tom.
Mayor Furlong: Thank you. Anyone else for visitor presentations? I would like to invite Ben Nowak, a
Chanhassen resident who’s working on an Eagle Scout project here in town to come forward at this time.
Mr. Nowak. He’s going to be presenting a project that he intends to work on for his Eagle Scout here in
Carver Beach and Roundhouse Park signs. Good evening.
Ben Nowak: Hi. I’m Ben Nowak from 581 Big Woods Boulevard here in Chanhassen and I’m going to
talk a little bit about my Eagle project that I’m going to do. So my Eagle project is basically consist of
making two elevated gardens and retaining walls around the park entrance signs at two different locations.
One’s in Roundhouse Park on Minnewashta Parkway. The other one is Carver Beach playground on
Carver Beach Road in Chanhassen. That’s the Roundhouse sign. It’s the most level space, it’s the most
level of all the signs that we’re working with and the Carver Beach playground one has a 23 inch slope
and one of the posts is, has been knocked off to the right so we’re going to repair that. Pull those out.
Re-stain them and then put them back in. So both of the entrances will have matching retaining walls
filled with distinctive garden plants. The one at Roundhouse Park is going to be a low shrub garden with
crab apple trees behind it to make it look nice, and the Carver Beach playground one will have a perennial
butterfly garden. So my key goals are to make them look updated, attractive to people around
Chanhassen. I want the plants to be self-sufficient but for the first year I will water them to make sure
that they can get that far and I want the project to have a 30 year plus life span. So here’s the Carver
Beach playground plan. I drew this one up. We’re going to get a better one done by some professionals
but as of now it’s a 14 by 7 foot area. We’re going to put cone flowers in the back, black eyed Susan’s in
the middle and butterfly weed in the front with a retaining wall. The picture on the bottom shows the
retaining wall construction details because we have a sloped surface that we need to work with.
Roundhouse Park is a larger work area that we have. It will have crab apple trees, the 3 in the back. Bush
honey with 3 smaller plants next to the sign. The grow low sumac, which are the 7 plants and gold flame
spirea, which are the 5 in the front. So our budget for the retaining wall, we contacted Timberwall
Masonry in Victoria. They gave us an estimate. Roundhouse Park, the retaining wall will cost $439.98
and Carver Beach will cost $510.29. Our total for that is $950.27. We had two estimates on the trees,
shrubs and plants. We first went to Hartman. They gave us an estimate of $1,302.81. Then we visited
Halla Nursery who would donate all the plants for the whole project. Charlie Eiler, I know he works with
you guys. He was going to sell us the posts for $90.00 per post and the stain for free so our project total
came out to $1,310.27. The labor costs that we have, the total hours for this project are going to be 224
hours. We’re going to remove and refinish signs which will be 80 hours with 15 volunteers. We’re going
to build retaining walls which will take 48 hours with 6 volunteers and we’re going to plant trees and
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Chanhassen City Council – September 12, 2011
shrubs which will be 96 hours with 12 volunteers. You take 224 hours, multiply that by minimum wage
we get $1,624.00. We’re providing that free by Troop 345. The work, we want to begin our work on
st
October 1, replacing and refinishing signs and building the retaining walls. Our second session will be
th
on October 7 planting trees, mulching and watering and establishing plants will be the whole first year of
watering. So tonight I need to ask you guys if you have any questions. We need approval of the project
and we need to have an approval budget.
Mayor Furlong: Very good, thank you. Any questions? Councilwoman Tjornhom.
Councilwoman Tjornhom: What do you think your biggest obstacle is going to be?
Ben Nowak: Probably building the retaining wall. That will take the most time. It’s the most expensive
part of the project and it will take the most work force.
Councilwoman Tjornhom: And so are you supervising this whole project?
Ben Nowak: Yes. I’m supervising this project and I know where the nearest hospital is. And then I need
to get the budget approved and the whole project approved before I can start work.
Councilwoman Tjornhom: I think this is a great project. You know obviously looking at the pictures, it’s
going to look 100% better when you’re done so thank you so much.
Mayor Furlong: Any other questions? Councilwoman Ernst.
Councilwoman Ernst: Well I live right across from Carver Beach Park and I have to tell you it’s been
lacking personality for quite some time so I’m very excited about this project.
Ben Nowak: Thank you.
Councilwoman Ernst: So thank you for your efforts in doing this.
Mayor Furlong: Councilman Laufenburger.
Councilman Laufenburger: Yeah. How old are you Mr. Nowak?
Ben Nowak: I’m 16.
Councilman Laufenburger: Do you have college plans?
Ben Nowak: I’m starting to look at colleges. We’re going to be touring them over spring.
Councilman Laufenburger: What kind of course of study do you think is in your future?
Ben Nowak: Probably engineering.
Councilman Laufenburger: So where are you going to get these volunteers?
Ben Nowak: From the boy scout troop.
Councilman Laufenburger: And my guess is you’ve already contacted them, is that correct?
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Chanhassen City Council – September 12, 2011
Ben Nowak: We have contacted some people. Most of the people for the retaining wall since that will
take the most work.
Councilman Laufenburger: Yeah. Well I just applaud your initiative and I think you’re going to add
great value to the city of Chanhassen.
Ben Nowak: Thank you.
Councilman Laufenburger: Thank you.
Mayor Furlong: Mr. McDonald, any questions at this point?
Councilman McDonald: Well I don’t have any real questions but you know I just applaud you for your
actions and everything and yeah, the plan that you put together I knowI’ve already echoed, I think it will
approve the parks quite a bit so thanks for thinking of that and yeah you have my full support.
Ben Nowak: Thank you.
Mayor Furlong: Mr. Nowak, tell us about your scouting experience. Would you recommend it to others?
Ben Nowak: Well I started in Wisconsin. We moved here 3 years ago so it was tough to catch up at first
because our troop moves a lot faster than the one that I was in in Wisconsin so now I’m pretty caught up
working on my Eagle project and I hope to get that done by this next year.
Mayor Furlong: That’s wonderful. That’s great. And I’ll just echo the comments of the other members
of the council. Thank you for your design and efforts that you’ve put into this and I know a large part of
the Eagle Scout project is the planning and preparation and leadership. It’s not the doing and that’s where
the volunteers come in so thank you for all the efforts you’re putting in and the hours you’re putting in,
that’s great. At this time, while I’m assuming Mr. Hoffman that there’s money in the budget for this, I’d
certainly entertain a motion to approve the project and the budget.
Councilman McDonald: So moved.
Mayor Furlong: Thank you. Is there a second?
Councilwoman Tjornhom: Second.
Mayor Furlong: Motion’s been made and seconded. Any discussion on the motion?
Councilman McDonald moved, Councilwoman Tjornhom seconded to approve the Eagle Scout
project proposed by Ben Nowak for Carver Beach Park and Roundhouse Park and to approve the
total budgeted amount of $1,310.27.All voted in favor and the motion carried unanimously with a
vote of 5 to 0.
Mayor Furlong: Thank you very much.
Ben Nowak: Thank you.
Mayor Furlong: It’s approved. Good luck.
Ben Nowak: Thank you.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Anyone else for visitor presentations this evening? Seeing none, we’ll move on with
other items in our budget.
AWARD OF BID: 2011A GENERAL OBLIGATION BONDS.
Greg Sticha: Good evening Mayor and council members.
Mayor Furlong: Good evening.
Greg Sticha: Could start by giving a little background on what the bond issuance was for and then we’ll
get into the actual awarding of the bid and the resolutions. We’ll also get a report from Ehlers and
Associates, the City’s financial advisory firm here in a little bit. Just kind of to give a brief history to
those in the audience who might not be aware, we decided earlier in August to issue bonds for the
construction of a water tower project in the high zone. Cost of that construction project is approximately
$2.49 million. In addition to that staff had recommended that we do an advance refunding of our 2005B
water general obligation revenue bonds. The total of those is $3.43 million in par amount or principle left
on those bonds. We had been keeping an eye on the advanced refunding of those bonds for quite some
time. We’ve been waiting for interest rates to get to a level that we achieved net present value savings on
the refunded principle of 4%. I’m happy to report that we did achieve that and quite a bit more with the
bond sale that we had today. The successful bond sale that we had today. Before we actually sold the
bonds today we had a bond rating call with Standard and Poor’s. As I have made the council aware via
email and letting the audience know this evening, our AAA bond rating was reaffirmed last week with
Standard and Poor’s and the outlook that they gave us was stable going forward so that was a very
positive reaffirmation of our AAA bond rating. Again for those in the audience who might not be
familiar, a AAA bond rating is the highest rating a city can have in terms of bond rating for issuing debt
and there are a minimal number of communities that, in the state of Minnesota that have a AAA bond
rating. We are one of approximately 15-16 cities in the state that have the luxury of having a AAA bond
rating. Before you you have two resolutions this evening. You actually have one in front of you. You
also have one inside the sale report of the packet on page 9. The first resolution that we’re going to ask
the City Council to pass this evening has to do for awarding the sale of the bonds of which we just talked
about in the total of $5.9 million for the issuance of the $2.5 for the water tower and the advanced
refunding of the $3.4 for the 2005B. In addition to that we also have put a separate resolution separate
from the sale report packet. That resolution is authorizing staff to conduct a negotiated sale for the 2004B
water revenue bonds. At the time we began researching this back in August we weren’t certain if we
were going to get a 4% net present value savings on the 2004B back in earlier in August. Based on the
rates we got today, and the indication we have gotten from the purchaser of our bonds, we do believe now
we can achieve beyond 4% net present value savings. One key note about authorizing that additional
issuance of the negotiated sale bonds, we are only allowed to issue up to $10 million dollars in bonds and
have them be bank qualified. Because we’re issuing $6 million with the 2001A, that would only leave us
room under the bank qualification statuses of 4 additional million dollars. Therefore if we, or when we do
negotiate a sale with the proposed bidder we will only be issuing 4 million of the total par amount of the
2004B bonds that are issued and we are going to take advantage of the last 7 coupons or 7 years of the
bond payments which have the highest interest rates involved with them. So the second resolution is
authorizing staff to negotiate a sale with the purchaser of the bonds from the first issue earlier this evening
so we’ll probably have to take two separate resolutions in discussing those. One awarding the bid and the
secondly authorizing staff to negotiate the sale. That’s about all I want to bring up at this point. I’m
going to let Ehlers and Associates come forward now and kind of tell you about the result of the sale and
answer any of your questions about the sale that we had today.
Mayor Furlong: Thank you.
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Chanhassen City Council – September 12, 2011
Dave Callister: Mayor, Council members, Dave Callister with Ehlers. Mark Ruff is my associate here.
As Greg indicated we were in the market on behalf of the City today to take a look at both the new money
for the water tower and also the refunding also with the water revenue bonds from 2005. With the AAA
rating we were fortunate in the market that there were not many bonds in Minnesota so there were not a
lot of issues that are selling today. That was a good factor. The AAA factor is also working in your favor
and we received 9 bids today in the market. A lot of them from regional or even national bidders because
of the size of the issue which was $5.92 million. The low bidder was United Bankers Bank out of
Bloomington, Minnesota with a true interest cost of about 1.58%. Now this is, these are 10 years in
duration for these bonds to term and so again very fortunate to have that kind of interest in your
community. AAA makes it a very safe investment and the more competition for that with the 9 bids, the
lower the interest rate so very fortunate to get these types of interest rates. As far as the cost themselves,
they’re outlined in the memo that you have in front of you with regards to the discount that the
underwriter took. The interest cost, the cost of issuance. And then you can kind of see the coupon rates
and what those mean as the first year through the tenth year where those interest rates were. Combined
again it was the 1.58%. With regards to the refunding for the 2005 water revenue bonds, we had
projected about $169,000 total savings back a month ago when we had the pre-sale here. The results of
the sale, we were achieved about $264,000 so it is roughly about $30,000-$32,000 a year savings over the
next, not next 8 years but 8 years going out after 2013. So again the savings percentage well in excess of
th
4%, which is the City’s policy. Going forward the closing date we anticipate to be October 6. If the
council approves the resolution tonight we will proceed with that closing date. And with the rates that
have been outlined in your packet here. The other thing I would point in the packet in addition to the 9
different bidders would be the chart. You can kind of see the graph.
Mayor Furlong: Which page are you on?
Dave Callister: It should be, I’m not sure which page.
Mayor Furlong: Just before the resolution?
Dave Callister: Right here, this graph.
Mayor Furlong: Okay, page 4 or right after page 4?
Councilman Laufenburger: Right after page 4.
Dave Callister: And this graph illustrates historically over the last 30 years where the bond buyers index
has been. It gives you a flavor of tax exempt bonds. You can see, we’ve been in a period of lower
interest rates but even looking at this past week, or this last week, the bond buyers index was at a 4.05.
The low point over that 30 year period is 3.82 so again historically pretty much the bottom of the market
and so I think that’s important to point out here as the interest rate and the savings not only on the existing
issue but the new issue going forward, which again is a 10 year term. So I think you did very well in the
market today. Be more than happy to answer any questions. The recommendation would be to adopt the
resolution on the following page behind the graph there that would award the bond sale to United Bankers
Bank of Bloomington at that 1.58% true interest cost.
Mayor Furlong: Okay. Questions for Mr. Callister or Mr. Sticha.
Councilman Laufenburger: I do have a question.
Mayor Furlong: Yes.
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Chanhassen City Council – September 12, 2011
Councilman Laufenburger: Mr. Callister, just for those citizens that are watching today, you used two
numbers and I’d like you to just speak on that a little bit more. You said that we had anticipated a net
present value savings of $169,000. Am I saying that correctly? That was the anticipated savings.
Dave Callister: Total savings, yes.
Councilman Laufenburger: And then as a result of the market and the successful sale today you are going
to achieve $264,000 in savings, is that correct?
Dave Callister: That is correct.
Councilman Laufenburger: So is that good news?
Dave Callister: That’s very good news. You’re saving, beginning in 2014 you’re going to be saving
$30,000 to $32,000 a year on your water fund based on that.
Councilman Laufenburger: Thanks for that clarification Mr. Callister.
Mayor Furlong: Less $30,000 or $32,000 basically that doesn’t have to be collected through water rights,
or other sources correct?
Dave Callister: Or can be used for other projects. It could be a number of different things but savings,
cost savings to your water fund.
Mayor Furlong: Cost savings, thank you. Other questions? The AAA bond rating, and this is a question
for Mr. Sticha as well as Mr. Callister, Mr. Ruff. It was mentioned. Is that really a ho hum, oh we got it
again. No big deal or I’d appreciate your thoughts on.
Greg Sticha: I’ll let Dave and Mark answer that.
Dave Callister: Mark, you want to.
Mark Ruff: Mr. Mayor, members of the council, Mark Ruff with Ehlers. I don’t think a AAA rating is
ever ho hum. The council is well aware, I’m sure many people who are viewing is well aware that
Standard and Poor’s is the same rating agency that downgraded the U.S. government from a AAA to a
AA+ so there was great concern on the part of local governments as to whether there was going to be a
ripple effect to say if the federal government isn’t AAA, then can any local governments be AAA and
Standard and Poor’s actually came out with a report that said that they consider local governments and
those especially that they have rated as AAA as some of the most resilient governing entities in the world,
and that was primarily because number one, you as a city don’t rely heavily on federal payments. You
don’t have a work force that relies heavily on federal employment. You don’t have any reliance on state
aids. You are pretty self contained and self directed, so that’s number one. And number two is, your
rating is not only AAA. You also have the highest management rating possible so they, as a rating
agency feel very comfortable about the fact that you plan well. You follow those plans. You
communicate well with your citizens so I think you as a city ought to feel very good about that and that’s
not to say that couldn’t change in the future if the U.S. government’s rating was downgraded again.
Standard and Poor's has said it’s likely that most local governments then just get pulled down by the
weight of that downgrade but to especially carry a stable rating as opposed to a negative outlook is very,
very positive thing for the community and I think you ought to feel positive about that yourselves.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Very good, thank you.
Councilman McDonald: Excuse me, I’ve got a question for you on that. You say it was the management
rating we were rated stable. What other ratings could you have gotten in there?
Mark Ruff: I didn’t clarify it very well. There’s all sorts of terms we throw around with ratings that I
should be careful about. The AAA rating is the highest rating you can have but then there is also either a
stable outlook or a negative outlook. Okay. That’s just on the rating itself. And you have a stable
outlook so the U.S. government has I believe a negative outlook on their rating. The management rating
is a strong. It’s the highest that you can have out of all of this so.
Councilman McDonald: Okay and then with everybody else in the state that got a AAA, how do we
compare with the outlooks and the management portion?
Mark Ruff: You know I could get you the exact numbers across the state. I’m not aware that Standard
and Poor's has any local governments that are rated AAA on a negative outlook. Moody’s does.
Moody’s has a negative outlook on a variety of places. The City of Maple Grove, City of St. Louis Park,
Hennepin County to name a few, and that again primarily is reflective of the fact that those entities either
have some employment that’s tied more toward what they consider to be more vulnerable areas.
Hospitals, or they receive a lot of federal or state payments. So Moody’s does have those folks on
negative outlook. I’m not aware that Standard and Poor's has any local governments on negative outlook.
Councilman McDonald: Okay but what this is showing is that as a community, again we’re a very safe
risk for buying our bonds. We’re well managed. We’re kind of an oasis out here in the sea of the
financial markets.
Mark Ruff: It’s a little bit like when your high school child comes home and scores a perfect score on
their SAT. You know what else can you do besides just keep it up, right?
Councilman McDonald: Okay so this really is, yeah this really is a big deal then.
Mark Ruff: Yeah, I mean Dave and I are financial consultants. We kind of you know, we tend to
downplay some of these things but it is a big deal and I think that, I think back also, I’ve mentioned this
to the council before. I think you had the fastest ascendency from a lower end rating to a AAA out of any
community probably in the country, and those of you who have been around the community for a while, it
was Moody’s that used to rate Chanhassen and they didn’t really feel good about some of the investments
that Chanhassen had and they had downgraded the City almost to below investment grade at one point in
time so the fact that you’ve moved from that level up to this I think is even more impressive.
Councilwoman Tjornhom: I have one question. When was that exactly?
Mark Ruff: Todd can help me on the year probably but I think, I’m thinking it was probably.
Todd Gerhardt: Yeah, 90.
Councilwoman Tjornhom: The 90’s?
Mark Ruff: 15.
Greg Sticha: I want to say 97-96. Somewhere in there.
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Chanhassen City Council – September 12, 2011
Councilwoman Tjornhom Pre-Furlong.
Mark Ruff: I would say even earlier than that but.
Todd Gerhardt: It doesn’t matter. It’s just good today right.
Councilman Laufenburger: Mr. Ruff, in real dollars if the City was rated for example AA by Standard
and Poor's, then those 9 people that submitted bids today for these bonds, they would have had the
latitude to bid not so aggressively or not so attractively for these bonds, is that correct?
Mark Ruff: That’s correct and you probably wouldn’t have had places like the firms that are listed in the
bid tabulation. J.P. Morgan out of New York.
Councilman Laufenburger: UMB, Kansas City.
Mark Ruff: UMB, that’s right and even Piper Jaffray out of Minneapolis doesn’t bid on every single
bond issuance so the fact that, that they can tell their customers that this is a very safe place to keep their
money. It’s the only reason that when we were talking ahead of time that we can all explain why
somebody’s willing to put money away for 1.5% interest. They just know it’s going to be there when
they’re looking to get repaid.
Councilwoman Ernst: I have a question.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: Did I hear you say the federal government is a AA+?
Mark Ruff: Correct.
Councilwoman Ernst: So I’m glad we got a AAA but not being that far from the federal government, like
how many points is that? Because if the federal government is a AA+, that kind of concerns me. Not to
say that I expect you to answer to that but it just amazes me that they can get that high of a rating right
now.
Mark Ruff: That’s a really long discussion about the rating for the federal government. I mean Warren
Buffet says he thinks that the federal government ought to be a AAAA and you’ve got other people who
say the federal government’s not functional right now so you know I think what I will say is, management
is 25% of your rating and my personal opinion is, is that the reflection on the federal government is not
their ability to pay their debt. I don’t think anybody doubts the ability of the U.S. government to make
good on all their bonds. I think it’s a reflection on the rating agency’s perception of the federal
government’s willingness to pay. I mean that’s really the two factors that rating agencies look at. Is
number one, ability and number two, willingness to pay your debt so management again I think is
something that they feel very good about from the City of Chanhassen and hopefully all your citizens do
as well.
Mayor Furlong: Thank you. Other questions at this point? Do we need to clarify or can we clarify a
little bit the two resolutions. The first resolution, which is in this packet relates to the approximately 6
million. 5.9 million that we had authorized a few weeks ago to go out for bid tonight, correct?
Greg Sticha: Correct.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: And that included the funding of the new water tower and the refinancing of some bonds
related to our water treatment plant.
Greg Sticha: It includes the funding of the new water tower and the refunding of the 2005B water bonds.
Mayor Furlong: And those were related to the water treatment plant.
Greg Sticha: Treatment plant.
Mayor Furlong: Okay. So that’s packet one and that’s what we expected. What I’m also hearing is
because of the strength of the bidding that it’s staff’s recommendation, Ehler’s recommendation, our
consultant’s for us to negotiate an additional refinancing up to our limit, our statutory limit of $10 million
for the year of an additional $4 million dollars to capture the low rates. 1.58 or something. The low rates
that we’re seeing in the market today for people who want to invest in Chanhassen basically.
Greg Sticha: On the 2004B.
Mayor Furlong: On the 2004B, okay. And those are also related then to.
Greg Sticha: The water treatment plant.
Mayor Furlong: The water treatment plant so there were just two issues associated with the treatment
plant at the time. And this additional $4 million is not the entire refinancing but the most expensive
portion of those outstanding bonds that we have currently.
Greg Sticha: The highest interest rates in the last years of the.
Mayor Furlong: Right, so I’m saying the more expensive portion.
Greg Sticha: Yep.
Mayor Furlong: Okay. And the sense there is, our debt policy is to achieve a 4% net present value
savings before we refinance. The expectation is with the current rates that we see, we believe that we’re
going to negotiate a savings on those bonds in excess of that 4%?
Greg Sticha: Yep.
Mayor Furlong: Is that?
Greg Sticha: If for some reason we did not achieve that as a part of the negotiation we would not
authorize the sale.
Mayor Furlong: Of the additional 4?
Greg Sticha: Of the additional 4.
Mayor Furlong: Assuming we approve this resolution tonight, these are locked in correct?
Greg Sticha: Correct.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Okay. So that’s locked in. The additional 4 is something that we’re going to go out and
negotiate and really take advantage of the market and our situation and our strength financially and the
good story we have to tell.
Greg Sticha: Yep.
Mayor Furlong: Okay. Is that understanding? Councilman Laufenburger.
Councilman Laufenburger: Mayor, we will negotiate only with the low bidder for the bonds?
Greg Sticha: Not necessarily.
Mayor Furlong: That’s a good question but I don’t think that’s required.
Councilman Laufenburger: Okay.
Dave Callister: The intent is that we have had discussions with the low bidder, United Bankers Bank and
we have asked them to honor the same rates that we have here. There’s 3 additional maturities on the out
years. That’s the plan that we would, we’ll find out tomorrow morning whether that will happen.
Councilman Laufenburger: So you’ve made that offer, or you’ve made that overture to them and you will
find out tomorrow whether or not they’re going to accept that overture?
Dave Callister: Correct. And I think the resolution tonight would authorize your staff to work with us to
achieve that minimum of a 4% savings. Net present value savings.
Councilman Laufenburger: But if you don’t achieve that with United Bankers Bank of Bloomington, this
approved resolution would give you, working with city staff, the authority to work with others including
people that may not have been on the bid, may not have bid, is that correct?
Dave Callister: Yes it would be open, if that’s the council’s intent, yes. We would accomplish that and
get the lowest interest and the highest savings as we can, yes.
Councilman Laufenburger: So essentially what we would, what we as a council would be approving is
authorizing city staff to look at a net present value gain of greater than 4% on $4 million of the $7.9
million water revenue bonds 2004B.
Mayor Furlong: That’s my understanding. Is that correct? Mr. Gerhardt.
Todd Gerhardt: Mayor, City Council members. Dave, correct me if I’m wrong but what we’ve done here
in the bidding process is basically establish the market as it is today and now that we know the market
we’re going to go back out and go up to our $10 million dollar limit to see if they would be willing to
acquire the rest of the money up to that point. And my guess is they may go up a little bit from that.
Depends on how negotiations go but Dave has ability to talk to more than just the low bidder and you
know the guy that came in, or guy or company that came in second may wish he would have sharpen his
pencil a little bit more so he’ll be talking to probably several companies.
Councilwoman Ernst: But that may be including the low bidder as well.
Todd Gerhardt: Yes.
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Chanhassen City Council – September 12, 2011
Dave Callister: The intent is to work with the low bidder. If it doesn’t work out then we’ll go to Plan B
but whatever, if you authorize this resolution tonight, whatever the staff and ourselves come back, it’ll be
ratified at the next council meeting. If the deal is done.
Mayor Furlong: Okay.
Dave Callister: If not, then it’s going to hold off until we can get that savings.
Mayor Furlong: Okay. Alright. Thank you. Any other questions at this point? Discussion. Thoughts or
comments on either of the two resolutions or the other factors we talked about. No? Do these need to be
moved, resolutions need to be moved separately Mr. Knutson or can they be moved.
Roger Knutson: You can move them in one motion.
Mayor Furlong: Okay. Is there a motion to adopt the two resolutions that have been presented this
evening?
Councilman McDonald: I would move to submit the resolution to adopt both the resolutions that are
before us.
Mayor Furlong: Thank you. Is there a second?
Councilwoman Tjornhom: Second.
Mayor Furlong: Motion’s been made and seconded. Any discussion on the motion? Seeing none, we’ll
proceed with the vote.
Resolution #2011-51: Councilman McDonald moved, Councilwoman Tjornhom seconded that the
City Council award the bids for the General Obligation Bonds Series 2011A to United Bankers
Bank, Bloomington, Minnesota with a true interest cost of 1.58%. All voted in favor and the
motion carried unanimously with a vote of 5 to 0.
Resolution #2011-52: Councilman McDonald moved, Councilwoman Tjornhom seconded to
approve authorizing the issuance of G.O. Water Revenue Refunding Bond Series 2011B. All voted
in favor and the motion carried unanimously with a vote of 5 to 0.
Mayor Furlong: That motion to approve two resolutions prevails, and I will say now thank you to our
staff and to our consultants at Ehlers and Associates for the good work that you do. I know that
throughout the year we’re always looking for opportunities to save money through our financing and to
refinance and some of these have been out there for a while I know that we’ve been watching and when
we were ready to go when the markets got to the point that it made sense, we were prepared and so thank
you for all your efforts in doing that day in and day out throughout the years because we do appreciate it
and the residents appreciate it as well and business so thank you very much. It’s a lot fewer documents
than when you finance your house isn’t it?
Greg Sticha: This is just…there’ll be more.
Mayor Furlong: Oh there’ll be more, okay. Alright. Fair enough. Thank you everybody.
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Chanhassen City Council – September 12, 2011
BURROUGHS VARIANCE: REQUEST FOR VARIANCE TO BUILD A SPORT COURT; 10036
TRAILS END ROAD, STACEY & PHIL BURROUGHS. APPLICANT: JOSH KOLLER,
SOUTHVIEW DESIGN.
Kate Aanenson: Thank you Mayor, members of the City Council. As you indicated the subject property
is at 10036 Trails End Road. This property is located in the southeast portion of the city and the request
is for the hard cover. The applicant’s requesting a 4.3% variance from the hard cover, which is a 25%
th
maximum. This item was heard at the Planning Commission back in July 19 and the Planning
Commission recommended to deny the variance request 6-0. I think there was a little bit of confusion
during the Planning Commission hearing on the applicant’s part in the fact that they were trying to
convey that their material for the Sport Court did not meet the hard surface requirements. It was staff’s
opinion that we made the interpretation that that did not qualify for the hard surface and the applicant
didn’t appeal that so really what we’re here tonight to talk about is whether or not the, because he’s
appealed it, whether or not you concur with the Planning Commission’s recommendation for the hard
surface coverage, which I’ll go through here. So the Settler’s West subdivision, the bluffs are shown in
the red on the perimeter of the property. It has a seasonally high water table. There’s tree preservations
in the area. Clay soils. The reverse swales in the rear of the yard. If you remember this is kind of on that
point of the bluff so it drops off. It’s very steep. Highly erodible so there’s swales along the perimeter
there and there’s stormwater piping in their rear yards and stormwater runoff in this area actually is,
there’s a tributary to the Minnesota River which is an impaired water. So the site itself, here you can see
the table regarding the hard surface coverage so it’s maxed out on the zoning permit right at the 25% as it
sits today. So the applicant would like to put the Sport Court in on the rear of the property and that’s
where it goes over the hard surface coverage. So then we were looking at it because it’s an application
for a variance for the hard surface coverage, does it meet the practical difficulties and that sort of thing so
it was our determination, the staff’s determination and the Planning Commission’s concurrence on that,
that because the applicant had reasonable use of the property, that they felt that there wasn’t a practical
difficulty or hardship involved so that’s what they recommended. So with that the City Council, would
recommend that you also deny the hard surface coverage to support the Sport Court so with that I’d be
happy to answer any questions.
Mayor Furlong: Questions for staff.
Councilman McDonald: Yeah I’ve got a question. I just need some clarification. If you go back to that
chart before, okay the 25%, is that the current hard surface coverage and then it would go up to 29?
Kate Aanenson: Correct. This is at 25% and then this would go, correct. It would take it up, yep.
Councilman McDonald: Okay. Okay, thank you.
Mayor Furlong: Other questions for staff?
Councilman Laufenburger: A couple questions.
Mayor Furlong: Councilman Laufenburger.
Councilman Laufenburger: The building permit square footage allowed 3922 square feet and the final
building was 3964 so first of all why the change there, do you know?
Kate Aanenson: I believe that they moved some of the, or added the proposed stones or some stepping
stones going down to the.
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Chanhassen City Council – September 12, 2011
Councilman Laufenburger: Okay. But as far as we’re concerned they still, what they have in place right
now still complies with the 25%.
Kate Aanenson: That’s correct.
Councilman Laufenburger: Okay. Alright, so they’re not asking for a variance to live with what they
have right now?
Kate Aanenson: No, that’s correct.
Councilman Laufenburger: Okay. Alright. What was the basis of the difference of opinion? I
understand the Planning Commission said the Sport Court is not a pervious surface, or it is hard cover.
Kate Aanenson: It is hard cover, right.
Councilman Laufenburger: And the applicant and the designer said it’s not.
Kate Aanenson: Right.
Councilman Laufenburger: Where’s the difference?
Kate Aanenson: Well I guess this is where, the application was for relief from the practical difficulties of
the ordinance. It wasn’t to interpret whether or not the surface that they were applying was hard cover
because if we’re going to make that interpretation, you’re appealing an administrative decision and then
an ordinance and that would be broad interpretation city wide on what would be considered hard cover. I
think we’ve had a lot of discussion on where we want to move with that. We didn’t think it was
appropriate in this one application to take a look at that and make a broad brush application. So the
applicant filled out a form to ask for relief for hard cover for the practical difficulty.
Councilman Laufenburger: Okay. So this is not a decision about whether or not it’s impervious or
pervious, it’s about practical difficulty?
Kate Aanenson: That’s correct.
Councilman Laufenburger: Okay.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: No, that was my question.
Mayor Furlong: Okay. And Ms. Aanenson, the term practical difficulty. This might be one of the first
variances, maybe the second that’s come forward since the law has changed, or maybe Mr. Knutson.
What is a practical difficulty? What would constitute a practical difficulty? Mr. Knutson.
Roger Knutson: Mayor, practical difficulty means the applicant proposes to use the property in a
reasonable manner and that it’s consistent with the spirit and intent of your ordinance and it’s consistent
with your comprehensive plan. That’s basically it. He proposes to use it in a reasonable manner that
won’t be injurious. You have to determine whether his proposal is to use the property in a reasonable
manner. I think the Planning Commission and staff has concluded it was not because you have real need
for that limitation on impervious coverage because otherwise you’ll have drainage issues and that will
cause problems for not only this property but potentially other properties.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: And did you say that the proposed use is consistent with the spirit of the ordinance and
the land use…
Roger Knutson: Yes.
Mayor Furlong: Okay. And if it is not, then we would determine that there are not practical difficulties.
Roger Knutson: Right. That’s one of the sub-categories. In determining whether the practical
difficulties, those are all things you look at to determine whether there’s a variance. The most key one,
the easiest one to think about is, kind of sums it up is, does the applicant propose to use the property in a
reasonable manner. Do you think it’s reasonable? Now you start out by saying your ordinance has a
standard in it and so why should he be, the applicant be allowed to deviate from the standard because the
standard in your ordinance determines at first blush what is reasonable use. But all property is not the
same and there has to be something unique about this property, among other things. What are the unique
circumstances about this property that justify this variance? If it’s like all the other properties, there’s
nothing unique about it in topography or other ways then they don’t qualify.
Kate Aanenson: If I may, and it’s kind of summed up on page 2 of the staff report. So the staff cited that
the site is currently, it’s currently being used in a reasonable manner and that it contains a single family
home and a 3 car garage and that the request to add the 25% coverage of a construction port did not
constitute kind of that practical difficulty. They’ve got a reasonable use of the property and the Planning
Commission too discussed whether or not you could put a basketball hoop on the driveway so that’s kind
of where the discussion.
Roger Knutson: Just to be perfectly clear, the key difference between, if we can be on this subject, the
key difference between the old standard. Let me back up. That standard lasted a year so the
Krummenacher standard, the Supreme Court, the way the Supreme Court interpreted Krummenacher, the
only way you were entitled to a variance is if without the variance you had no reasonable use of your
property. The new legislative standard takes that out. It’s just fine that you already have reasonable use
of your property. They don’t look at what you already have. They look at what you want and is what you
want a reasonable use of the property and then you have the other factors, you know unique
circumstances, it’s consistent with the spirit and intent of the ordinance and it’s consistent with the
comprehensive plan.
Mayor Furlong: Thank you. Councilman.
Councilman Laufenburger: In fact the issue of practical difficulty would not be before us if the applicant
presented a design for something that did not add hard surface.
Kate Aanenson: Well but then I guess the staff’s position on that is that you’re asking us to make an
interpretation then when we haven’t got a consistent rule on what would be impervious surface. So now
we’re taking it at an ad hoc basis on every application to look at those differently where we have a
requirement that says 25%. So if we’re going to move away from that percentage, then I think that needs
to be a different discussion on making that interpretation on a case by case basis.
Mayor Furlong: Okay and I guess, I’m sorry go ahead.
Councilman McDonald: Well let me ask a question because I’m a little confused by all this. I probably
shouldn’t be but I am. Okay the old standard was reasonable use of the property which means if I can put
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Chanhassen City Council – September 12, 2011
a house on there, that’s reasonable use. Anything else is you know just added on. Now you’re saying
what would be, is it normal use? Acceptable normal use so?
Roger Knutson: No.
Councilman McDonald: Okay.
Roger Knutson: Reasonable use.
Councilman McDonald Reasonable use.
Roger Knutson: For example, we wouldn’t have any issue with this if they had a smaller home for
example or no driveway or whatever and they wanted to put in a sports court in their back yard, go for it
you know. It’s a reasonable thing to do but you have to look in the context here is, under the
circumstances of this application is what they’re proposing reasonable. Is this a reasonable use of the
property? And in considering that you have to start with the fact that you have an ordinance requirement
that sets the standard and so why are, why do they want to deviate, what justification is there for deviating
from your standard?
Councilman McDonald: Okay.
Roger Knutson: Is there something unique? You know often times you get into strangely shaped lots for
example or topography issues or things like that, or bad soils that create some need and that wasn’t
anticipated in your zoning ordinance and you can’t anticipate everything.
Councilman McDonald: Okay, so the 25% hard cover variance is what we’re really kind of bumping up
against and that’s what we need to judge against if that’s worth issuing a variance because they wouldn’t
have reasonable use of the property?
Roger Knutson: What they propose is, you have to determine whether or what they’re proposing is a
reasonable use.
Councilman McDonald: Okay so, let’s say we agree yeah. A basketball court in a residential property
would probably be a reasonable use. Now, to do that though they’ve got to go up against the 25%
number and they’re going to exceed that. Now I have to judge it against the hard cover variance, is that
reasonable for the hard cover variance? That’s where I’m getting confused because the first part.
Roger Knutson: You have to, is the proposal reasonable under the circumstances of this application. For
example if, I’ll make something up. I’m pretty good at making things up. You know let’s say this soil
was incredibly permeable. This is unique soil that you don’t see many places and when the water drops
on this soil it goes, (swoosh) into the ground. That would say well, you know they don’t, the 25% rule
really isn’t needed here because they have so much permeability because of their soil types. That would
be an example, or the reason they need it is because of an odd shaped lot or the reason they need it is,
whatever is unique to it and there’s some setting off, we don’t think it will cause any drainage problems
because you can’t, you wouldn’t issue a variance if you knew someone was going to be or someone else’s
property was going to be inundated with water as a result so you have to look at that and say what are,
what are the real negative consequences of this that it’s going to be injurious to other property, then you
wouldn’t want to say yes.
Councilman McDonald: Okay. Okay then I’ve got a question for Kate then because I think what I heard
you say was that we didn’t look at this upon this as an individual basis. What we’re applying is the 25%
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Chanhassen City Council – September 12, 2011
hard cover ordinance. We’re not looking to see if the soils would mitigate that or if there’s something
else. That’s not part of.
Kate Aanenson: Yes it was part of it.
Councilman McDonald: It was, okay.
Kate Aanenson: What I said is what we didn’t look at was, does the material that they’re using for this
specific court, is that material designed to be pervious. We’re not going to make that interpretation at a
Planning Commission meeting. That takes a lot of science and some information. While they tried to
present it to the Planning Commission, we didn’t have enough data to support that. The application
request was for a hard cover variance. So you go back and say, and I’ll go back to what we said in here,
we believe the home is a reasonable home for that lot at 25% with a 3 car garage, a patio out the back. It
has a reasonable use. But the other mitigating factors that we put into place was that it’s on a sensitive
area for development. Has clay soils. Could cause additional runoff. The sensitivity, we’ve talked about
the swales in the back so we looked, got the soil types and all that sort of thing so we said adding
additional would bump up against that and we believe that those are the reasons in the Findings of Fact
that we would say we would not support additional hard cover.
Councilman McDonald: Okay.
Kate Aanenson: The property has reasonable use of the property.
Councilwoman Ernst: So have they actually proposed using permeable surfaces or not?
Kate Aanenson: Right, that’s what they say that they have. But I’m saying we’re not qualified at a
Planning Commission meeting to make that interpretation. Because once you’ve approved that, then it’s
going to go city wide and I think it takes a much greater study on that then just making that interpretation.
Councilwoman Ernst: Well this is something that comes up quite frequently and now that we have a
different law, maybe it’s something we need to go back and revisit again because it does change what
we’ve talked about in the past.
Kate Aanenson: I’m not sure that that does. I think there’s two separate.
Todd Gerhardt: Only if it’s granted.
Kate Aanenson: Yeah.
Councilwoman Ernst: It’s what?
Todd Gerhardt: Only if you grant it on the basis that it is permeable.
Councilwoman Ernst: Right.
Kate Aanenson: Right.
Councilwoman Ernst: But we talk about reasonable, using it in a reasonable manner today, and I forget
what the term was before. Not difficulty but.
Todd Gerhardt: Hardship.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst: Hardship. So they are two different things.
Roger Knutson: As it stands before you tonight they have, the applicant has asked for a variance from the
hard surface coverage. So that is what’s before you. That assumes that it’s impermeable because he’s
applied from a variance from that. He could have also, or in lieu of could have appealed the decision and
the interpretation of the planning staff through the process as well but that was not done.
Councilwoman Ernst: Does he have any proof that it’s permeable.
Kate Aanenson: Yes. Yeah, he’s submitted lots of documentation but I’m saying we’re not, we’ve not,
we weren’t qualified or the application didn’t include that to say we’re going to make that, nor did the
Planning Commission want to address that because that wasn’t the application to say there’s a hard
surface issue. Otherwise he’d have to make an appeal on the interpretation of what constitutes a pervious
material. Then we’re going to have a much deeper discussion on what constitutes that city wide.
Councilman McDonald: Right, it gets into a policy issue and.
Kate Aanenson: Exactly.
Councilman McDonald: Really what should have happened is stand alone. Is this something that we
could use to mitigate hard surface and then we would look into it and make that determination. What’s
the percentage that we maybe could knock off but tonight we can’t, we don’t have the scientific I guess
evidence as part of this. All we can look at is the hard cover because we didn’t look at anything else.
Kate Aanenson: Let me back up. They tried to present that at the Planning Commission. The Planning
Commission didn’t feel like it met, it was outside of their realm. Didn’t have enough supporting. The
report is in your packet.
Councilman McDonald: Right.
Kate Aanenson: That didn’t.
Councilman McDonald: Well that’s fine. You can submit it but I mean we can’t evaluate it because the
thing that we would look at is, okay what does this mean? We would turn it back to you and say you
know get us some answers here. What’s the percentage? You know if we say 25% and you use this and
you go up to 30%, is that the same as 25 or is it the same as 26? You know we would want those kind of
answers and it’s not in the packet so.
Mayor Furlong: Ms. Aanenson, quick question. With regard to our current ordinances with regard to the
25% limit, standard for impervious surface coverage, does our ordinance provide any relief based upon
permeable materials being used?
Kate Aanenson: No it does not.
Mayor Furlong: Okay.
Kate Aanenson: And I just want to point out too for the record, the Water Resources Coordinator was at
that meeting and.
Mayor Furlong: Was at which meeting?
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Chanhassen City Council – September 12, 2011
Kate Aanenson: The Planning Commission meeting.
Mayor Furlong: Thank you.
Kate Aanenson: I’m sorry.
Mayor Furlong: That’s fine.
Kate Aanenson: And didn’t agree with the science at that time so, the material that was presented in the
study so.
Mayor Furlong: Alright, thank you. Any other questions for staff at this time? If not, what I’d like to do
is invite the applicant to come forward and address the council.
Josh Koller: Thank you Mr. Mayor, City Council members. That was probably as good of discussion
over permeable surface as I’ve had in the industry over the last 15 years so you guys are ahead of the
curve on that. I’ve been working with Angela and Terry quite a bit on this project, back and forth and a
couple things that you guys brought up on this versus you know what we’re trying to do. There wasn’t
really from the beginning, and Angela’s the one that’s really helped me out who’s been fantastic by the
way to work with. There wasn’t a lot of options for us. We initially said we wanted to present this as a
permeable application and she said that was kind of the only way of us going about it to present it because
they can’t make a decision, the city members make a decision to say this is permeable or this is not
considered permeable so we really didn’t have a whole lot of options there. When discussing with,
discussing everything with Angela and Terry, I met with them in the office, again had some really good
conversations. Terry had said if you know try and present some information to us that it’s going to make
this specific site more permeable than versus just doing it you know everywhere or whatever and so we
talked about a few things and we submitted some more information. There’s basically two arguments
here. We can argue, which of course I would like to til I’m blue in the face, that this is a permeable
option. I know that’s not what we’re here to do. We’re here to discuss that we’re trying to get this
approved even though we’ve going over the hard cover. Terry’s exact. I mean if you, I don’t know look
at the tapes or have the conversation with him that him and I have had, he believes that this is permeable.
What he doesn’t believe is that it will help go into the soils better. I mean it’s just a plastic grid that goes
on sand so it’ll definitely go through that but you know it was as far as showing that it’s going to go
through the soils better. That was the thing that we discussed and like I said, he’s been great to work
with. I haven’t, he’s presented a lot of great points and we’ve kind of gone from there. If we’re just
going to move towards the argument, which it sounds like I don’t have a choice. We tried to present
some, we wanted to go again and just show that this is permeable but the engineering that was needed and
the cost that was needed to bring an engineer just to that one site to show this one material for that
specific site was very expensive and the homeowners wasn’t going to do that as an individual. I am going
to be having meetings with Terry over the winter and I know a couple of other landscape firms because
Chanhassen’s very difficult as far as going over the hard cover, and we understand why but you know
trying to get permeable pavers and different sorts of things, they don’t see those type of things as
permeable, or the City of Chanhassen doesn’t see that. We understand it. But this was the route we were
directed to go and told to go based on everything that I presented to you guys right now. With this
specific site I guess you know to exceed the hard cover based on putting in the Sport Court, there’s a few
things to look at if you’re out on sites. If you see, and it’s really small on that plan. I don’t know if you
can zoom in at all but the existing elevations to the proposed elevations, if you go out on this site, it goes
down the hill. There’s an easement for, you know for drainage that goes through the property. It’s very
soggy. The grade isn’t very good. What we’re trying to do is with the Sport Court adjust grade
accordingly. Make it a little flatter. Put some sea walls in. You can see on the other side underneath the
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Chanhassen City Council – September 12, 2011
deck there’s a little patio space with some permeable pavers and things like that that are even exceeding,
that are going to hit the hard cover. We’re right on. The Sport Court’s the only thing that’s going over.
Right now this yard’s not very usable for the two children that they have. The driveway’s very steep in
the front so putting a basketball court on there doesn’t make any sense for them because the basketballs
are going into the street. In the back right now the grade drops putting good so it’s a little soggy. We’re
just trying to create a play area for the children. They’ve got 2 kids. Like to play sports along with their
parents. That’s why we’re looking at the basketball court in this to exceed the hard cover. Again we’re
claiming that it’s not but at the same time this was our options that we had so that’s what we’re trying to
do with this. With this project. You know I guess that’s kind of where we’re at with it.
Mayor Furlong: Okay. Alright, thank you. Any questions for Mr. Koller?
Councilwoman Tjornhom: I have one actually for Kate, and you know you can listen too. Yeah, don’t
leave. Has this been a common problem in this development?
Kate Aanenson: Well there’s been a few up there that, they’re pretty large houses for, if you look at the
square footage, the lot size on there is slightly over 15,000 which is a standard lot and I would say they’re
pretty large homes on that so the home maximizes quite a bit. Then you add on some amenities for their
Sport Court or some other patio areas they can be up there.
Councilwoman Tjornhom: And when I look at this it’s really hard for me to see the driveway being
extremely steep or anything else going on.
Kate Aanenson: We didn’t think it was that steep but, that’s the staff’s opinion that it wasn’t that steep
but.
Josh Koller: …he says he doesn’t want his kids running, I mean it’s steep enough that if you’re playing
basketball a ball’s going to go in the street quite a bit and he just doesn’t want his kids running out in the
street.
Kate Aanenson: Yeah.
Todd Gerhardt: We’ll have maybe 2 or 3 of these a year.
Councilwoman Tjornhom: In this development?
Todd Gerhardt: Not just this development. Throughout town.
Councilwoman Tjornhom: Throughout town, right.
Todd Gerhardt: Yeah.
Councilwoman Tjornhom: But sometimes there are those developments where there is just some quirky
planning, not quirky planning. Some planning going on where a larger home has been built on the
property and so now we do bump into these hard surface coverage issues.
Kate Aanenson: I would think in this neighborhood they’re executive homes with 3 car garages and.
Councilwoman Tjornhom: Okay.
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Chanhassen City Council – September 12, 2011
Todd Gerhardt: Yeah and this lot Mayor, council is just barely above our minimum lot size too and with
about 15.8 so, lot size plays a factor and how large a home and patio you add to it and driveway.
Josh Koller: Yeah, my homeowners bought this house. It was a spec home, or a model house that they
bought and you know with the intention of doing things in the back yard. I mean they didn’t even know
they had an easement you know which is their, should have looked into that I guess a little bit but you
know with the intention of doing a patio and things like that in the back yard and you know now they’re
running up against it and you know the, the problem is eventually, personally in my opinion and
obviously being in the industry that I’m in, I mean you’re going to get to a point where there isn’t a whole
lot of lots I mean in whether it’s Chanhassen or Eagan or Minnetonka or Edina, whatever you move to
and you know if you want to live in that specific town, I mean one you have to go and buy a ginormous
lot but you don’t have the funds to do it or you buy you know what you can find and then want to do
some things. I understand definitely the runoff, that’s an issue in Minnesota and Minnesota’s starting to
take a harder stance on it and I get that. I think we need to. On this particular lot with the grading that we
would be doing and with the fact that the Sport Court does allow water to penetrate, the problem is the
holes, and like Terry mentioned at the last meeting, this whole lot is completely clay. I mean that’s the
soils are, they don’t penetrate the soil. The water doesn’t penetrate the soil at all so it’s very difficult to
do that. In fact flattening the lot a little bit more like we’re doing is going to actually, in my opinion
would help that. I mean if you have a steep lot obviously with the harder soil for water to go down, it’s
going to run off faster. If you have it flat and it’s able to sit there a little bit longer, water will generally
percolate into the water table. I mean that’s a goal which is actually in a sense what we’re doing. Then
like I said Terry, the engineer for the water piece, he did agree that the water will go through the Sport
Court material. His concern was once it goes through there and into the sand bed, how’s it going to
penetrate the clay and so regardless if it’s grass or if it’s you know this material, how’s it going to
penetrate the clay if we don’t, there’s not a lot of options there. I mean it’s not going to unless you do a
lot of soil you know amendments but with this like I said, we’re just, my homeowner’s really adamant.
He wants to make sure his kids have a place to play and wants to have all the neighborhood kids at his
house instead of you know his kids going somewhere else.
Mayor Furlong: What is the topography across this lot? Is it really steep or?
Kate Aanenson: No.
Josh Koller: The elevation.
Todd Gerhardt: It slopes down to the trail.
Kate Aanenson: Yeah.
Todd Gerhardt: The LRT trail’s in the back yard.
Mayor Furlong: Okay. I’m just looking at the GIS site at the County and it looks like it’s, and I hate to
throw numbers out, that’s why I’m asking. What do you know in terms of the topography from the front
to the back of the lot?
Kate Aanenson: It does slope. It has a slope to it but it’s not you know, yeah.
Josh Koller: They have a swale, if I can answer that. There’s a swale in the middle of the yard where the
drainage is supposed to go. Obviously for the neighbor to the left’s supposed to go through and there’s
just a.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Okay. And there’s a pond to the north.
Kate Aanenson: Correct.
Mayor Furlong: So it runs through this lot to the north up to the pond.
Kate Aanenson: Yep.
Josh Koller: Correct.
Mayor Furlong: Okay.
Kate Aanenson: But everything up there’s on the bluff and it, the greatest slope is on the edge.
Mayor Furlong: And then to the west is where it falls off down to the regional trail.
Kate Aanenson: Correct.
Mayor Furlong: Okay.
Councilwoman Ernst: I have a question Mayor.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: Did you say that you were using pervious pavers in addition to this pervious grid?
Josh Koller: I should have backed up a little bit on that. We’re using a standard paver patio underneath
the deck area. The City of Chanhassen obviously a deck they don’t count as permeable so underneath we
were doing a small paver area. Actually we cut out some of their existing pavers because they didn’t go
to plan and they did exceed the 25% actually once we found out. When I had measured it. But then on
the side of it we were doing some, we made the patio a little smaller and then we were doing some large
stepping stone pieces in a rock bed with fabric underneath it which was not considered hardscape and that
will allow water to penetrate through it and just have a few steppers so that you just basically the same
thing as if you put it in grass. If you put some stepping stones in grass, you know you have to count the
square footage of the stepping stone itself but not the, you know the pieces inbetween it and so in a sense
again this is the same type of thing. We’re just putting a plastic grid on top of sand which you know,
again I could argue that point all day.
Councilwoman Ernst: But they’re not really what you would called certified pervious pavers?
Josh Koller: No. I would have loved to have done that on this project but again Chanhassen doesn’t
agree with permeable pavers because their thought, or the thought process, and I went over this with
Terry quite a bit, is that over time if you don’t maintain them, they clog up. Again ICPI certification
shows that that’s not the case. A lot of towns do approve permeable pavers but Chanhassen does not.
Councilwoman Ernst: I like the idea where you’re talking about you and some of the other developers
coming in and talking to staff and I think council could learn some things as well from permeable surfaces
because we’ve had many discussions about you know we’re running out of land and what are we going to
do is property owners want to improve their property you know or even new residents coming into town,
how do we manage that so I like that idea.
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Chanhassen City Council – September 12, 2011
Josh Koller: And like Terry’s been great. I mean he has a lot of, he’s hesitant. I think his concern is you
know without him being here is just that if you approve one thing then you know it’s going to, you know
everyone’s going to want to do it and I can definitely understand that.
Kate Aanenson: Well I think the issue there is we didn’t have the science or the technology to back up
that application so we stayed back to what the application was, was for a variance and whether or not
there was reasonable you know, I’m not going to use any word. Whether or not there was a reasonable
manner of the property and that was the interpretation the Planning Commission felt like there was a
porch off the back. A patio off the back and a 3 car garage.
Mayor Furlong: I guess what I’m hearing Mr. Koller mention and I think it calls up on my question,
currently if they came forward with an application that said these are pervious material our current
ordinance doesn’t provide an exception for pervious materials.
Kate Aanenson: That’s correct.
Mayor Furlong: With regard to the 25% hard surface coverage.
Kate Aanenson: That’s correct.
Josh Koller: This is what we were told to do. We presented this and they said well, we don’t know
enough about it. I was told that this specific material, this new application which was just installed in a
town right, you know in Eden Prairie actually, I was told we didn’t know enough about it so we’re going
to consider it hard cover. We don’t have a choice and then I was told to present it the way that we did and
so that’s kind of what happened there. We presented all the engineered documents that show that it
penetrates through the grid material. We eliminated the base, which was going to be a Class V base
underneath there and just had it sand and then to the soil so it’s just a grid on sand. We eliminated that to
show that you know the engineered drawing showed that it penetrates better than just what the existing
soil would do but again that’s, it was a different meeting you know and we don’t have, I couldn’t sit down
and Terry said I’d love to just say yeah, if this is it we’ll approve it but we just, I can’t do that so this is
the approach we took.
Mayor Furlong: But I think there was also information in the staff report that if you have, you have
different layers obviously. You have the surface and then you have the sand underneath and such, that
were was concern expressed in the staff report that the underneath the surface was the compaction
required.
Kate Aanenson: That’s correct.
Josh Koller: Which is what we eliminated though. That’s what we had said we were doing any of that.
We were just going to do the sand. We were going to eliminate all the sub-base so that water could
penetrate that.
Councilwoman Ernst: And that was the Class V that you were referring to.
Josh Koller: That’s the same, we weren’t doing any of the Class V or anything and that’s the same issue
with permeable pavers. I mean you have to have, when you’re doing a basketball court application,
you’re talking the weight of people running around on it. You know movement of that isn’t going to be
such a big deal. Personally I don’t know that if I would put just a grid on sand in my own property. I
would be a little concerned that it’s going to be dull you know but it does tend to, you know it does work
on an application for like permeable pavers for a driveway for instance, you have a lot of surcharge with
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Chanhassen City Council – September 12, 2011
cars and everything else so I mean you have to have a base under there and that’s water penetrates the
permeable part of the paver but it doesn’t penetrate the basing as much. That’s what we were eliminating
on this and trying to get across that this will penetrate faster than sod will but.
Todd Gerhardt: How much sand base were you thinking?
Josh Koller: We were going to go with 8 inches of sand. All we were going to do is, same thing. We do
a lot of French drain systems in people’s yards. We do a lot of grading projects let’s say in Minneapolis
where it’s a flat lot so the same application applies. You put in you know your perforated drain tile with a
sock wrapped in either rock or sand so that water as it goes through that will slowly be able to penetrate
into the existing soil, and then at the end of that you dig like a sump base filled with rock so that when
you get that 100 year flood, you know water can fill that sump base up and you know then go over but
then the water that fills that base can slowly, you know sit there a little bit and percolate down into the
water table. Same thing with a Sport Court. I mean we’re just going to dig a square hole, fill it up with
sand. Put a grid on top of it. It will fill up with water as you know we get a heavy rain and slowly
penetrate down but it’s not going to increase the, I mean it’s not going to increase the, you know the
overall goal is to stop water from you know leaving the site. This isn’t going to increase that. You know
we’re not, again we’re not putting in concrete but you know it’s just, it depends on what this argument is.
If we’re arguing whether or not this is permeable or if we’re arguing that we’re trying to exceed the 25%.
Kate Aanenson: Mayor, if I may. I think herein lies the problem. We’re trying to engineer something
where we don’t have the engineering and I think the Planning Commission felt reluctant because really
you need the engineering to back it up and there wasn’t enough and as the applicant has stated, that they
didn’t want to spend that much money just for the one case. Understood so it’s kind of give a step back.
Go back and study it over the winter, if that’s what the direction is, but I think everybody felt
uncomfortable saying well this is going to be the case and then what do you do when the next case comes
in when we really don’t have, maybe it’s not 100% impervious or there’s some percentage and what that
range is and how that would apply in this specific case so we said we didn’t have enough information.
The technology, the engineering behind it to make that decision so we had to go by what our ordinance
says. This is a non pervious so whether or not you feel like there was a practical or reasonable use of the
property is what we went before us.
Councilwoman Ernst: Just so I understand if Kate you’re talking about doing more study on this over the
winter?
Kate Aanenson: No I’m not saying that. I’m saying I think it would have to be done outside of this
meeting but you don’t have enough information and that’s what the Planning Commission said too.
Engineering in front of us but they didn’t want to spend that money for this specific application. The
recommendation from the Water Resources Coordinator said that he didn’t have enough information,
enough engineering to make a favorable recommendation that this didn’t court towards and was reluctant
to do that in this specific case.
Councilwoman Ernst: But we could in fact table this to see if there is enough information out there. Is
that something that they’re willing to wait on?
Josh Koller: Yeah, I mean yes. I mean the homeowner definitely wants to do this basketball court in
their back yard. I mean we presented plenty of information as far as this material will allow water to
percolate into the water table. Again the concern was, once it gets to the existing soil is it, how’s it going
to go through that existing soil. That’s the concern that they’ve had. I mean the, you should have in your
packet all the engineering that we’ve sent in as far as this specific grid material allowing water to
percolate through it. That you should have in your packet. It’s, the problem is, in my opinion it’s just a
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Chanhassen City Council – September 12, 2011
tricky situation. I mean how you go about it, you’re going to have individuals continuously come up and
try and present we want to build this but we’re at the hard cover and 25% is very tight compared to a lot
of the other cities. Again that’s just the way it is here, which is great. I understand it but to spend
thousands and thousands and thousands of dollars for one individual to do that, it’s going to be difficult.
How do you go about that? I mean and again common sense on this project shows that we’re, if anything
if you really read the plan, we’re stopping the water from just completely flowing off of it because of
grade. You know we’re fixing the grade which is going to help it out but it’s, I don’t know. I just don’t
know how to go about it. This is again how we were told to do it and how we were told to present our
information.
Mayor Furlong: Okay.
Todd Gerhardt: So Mayor, council members. So when Terry explained the situation, the engineering
report was one where we couldn’t interpret the information. Was that?
Kate Aanenson: No, there wasn’t enough soils engineering in there.
Josh Koller: It was the soils for the specific site.
Kate Aanenson: It’s the soils, there wasn’t enough soil information for this site so.
Todd Gerhardt: Okay. So it was the, and the homeowner wasn’t willing to do additional soil borings and
have an engineering report to give you.
Josh Koller: For that site, yeah.
Kate Aanenson: Correct.
Josh Koller: Yeah I mean, yes. I mean we can, we’ll entertain that a little bit more and again that’s
where Terry and I, and I’ve explained to my homeowner that Terry and I have talked about us sitting
down and looking at permeable options because he said somehow we have to come up with something for
pieces, you know because like you said, we’re running out of lots. We’re running out of size lots, I mean
how do we do it but.
Todd Gerhardt: So to the, for the mayor and council I think you’re going to have to deny the application
based on the application but direct staff to continue to work with the homeowner, the applicant to research
this and look at potentially an ordinance modification as an alternative if the soil engineering report
comes back that says that it can percolate down with a 100 year rain event.
Josh Koller: Can I ask a question? Actually we, Southview Design, the company that I work for, we
presented a hard cover issue with the City of Chanhassen on a couple projects a few years back now for
retaining walls. I don’t know if anyone was around for that but we applied, we showed that retaining
walls, yes they aren’t, you can’t have water penetrate the top of them but sometimes they’re needed to fix
the grade you know so to allow water to sit on the lots, you know slow it down so water can percolate.
That was eventually approved and overturned so now the City of Chanhassen doesn’t count retaining
walls. When I talked to the designer that did that, it was the same type of process that I’m going through
now so I guess I’m asking how, you know what more needs to be done? I mean do I need to spend a lot
of hours you know, I don’t know.
Kate Aanenson: Can I just talk about retaining walls for a second. We felt it was punitive when we
required a retaining wall to go in to make a lot as opposed to is a Sport Court necessary for a back yard.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Well and it’s my understanding that when, under our current ordinance when staff is
calculating impervious surface coverages, that they do not count the area, the area of the retaining wall
itself.
Kate Aanenson: Right.
Mayor Furlong: Is that correct?
Kate Aanenson: And specifically because often retaining walls need to go in for those lots so it was
punitive.
Mayor Furlong: And the effect is one, which she’s describing here, retaining wall effectively terraces the
lot and therefore slows the runoff rate from what it was originally.
Kate Aanenson: Right.
Mayor Furlong: Which is another factor to consider that.
Kate Aanenson: Right. Right, right.
Josh Koller: And you could take that with every lot. I mean if you just have a standard 25% for every lot
but you have a house that sits up high and the lot drops off really fast, the runoff is going to be 3 times as
much as if you have a house on a flat lot so the 25% thing is difficult.
Mayor Furlong: But what I think I’m hearing here is that, is that that’s a question of whether the
ordinance then is reasonable for the community at large.
Kate Aanenson: Thank you, yes. Exactly.
Mayor Furlong: As opposed to.
Kate Aanenson: So you have to take that as an important factor too.
Mayor Furlong: Right. And I know, I don’t know if this council has this year but previous councils that
I’ve been involved with has discussed this issue at length at various times with regard to how do we, you
know whether or not our current ordinance is reasonable and whether or not any relief from the
requirements because of permeable materials being incorporated, should be used or not and today with the
discussions I’ve been in, we have not made that change now. You know the discussion can always
continue but, and Ms. Aanenson is that?
Kate Aanenson: Right, and that’s what the Planning Commission said. Yep, exactly. That that
discussion needs to be held at a policy level, and I think that’s what Councilman McDonald said too. It
can come back and then decide if that’s the new policy.
Mayor Furlong: Right. Okay.
Councilwoman Ernst: Excuse me, I agree with that but I think we need to do it because we’ve said that
several times and we don’t have that discussion and we did have it as a part of our strategic plan. We did
talk about it. We didn’t spend a lot of time on it but because this keeps coming up I think we need to
really put some focus on it.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Well I think we’ve had multiple discussions over the years at work sessions and.
Councilwoman Ernst: Well in the 5 years I’ve been in we probably discussed it twice. We’ve had
variances come in. Well during my time I can remember that we’ve done it twice so.
Councilwoman Tjornhom: And I think it doesn’t ever, I mean we do, we do make a list of our strategic
initiatives for the year and whatever gets ranked the highest is what we focus on and so you know if we
want to put it on again this year and if this council, the members would decide to rank them high enough
so where it would be a priority, then I think that it’s doable to look at.
Councilman Laufenburger: Mr. Mayor?
Mayor Furlong: Yes.
Councilman Laufenburger: I think it’s reasonable to expect that over time surfaces like Sport Court or
Volleybase or whatever, technology will be such that people will figure out how to make those so that
they are fully certifiable as pervious as grass. I fully expect that that will take place but at the present
time the council is asked to make a decision, are we prepared to allow this homeowner to put 4.3% more
hard surface coverage on their lot, which would be a variance from the ordinance. The discussion about
whether it’s pervious or permeable or not, that’s kind of, that doesn’t matter to us right now.
Councilwoman Ernst: Well except it sometimes has to deal with the water runoff. I mean that’s what
permeable’s all about. Is minimizing water runoff.
Councilman Laufenburger: Well are you saying that we could solve this problem if Southview Design
would be willing to re-grade the property and make it fully level? That would reduce the runoff.
Mayor Furlong: I mean that would also be.
Councilman Laufenburger: That would what?
Josh Koller: You have to have some runoff. You don’t want to.
Councilman Laufenburger: Well it will come down the driveway.
Todd Gerhardt: You know with the tight clay soils, you know it’s a little different than a sand base in
your percolation you know because Carver County clay is, it gets hard. You know it’s tough to penetrate,
especially if you get a little bit of rain that soaks it up. What is interesting about this application is he’s
proposing to dig down 6 to 8 inches and put a sand bed down and then just place this Sport Court on top
of it so that sand base would act like a septic drainage field and hold the water in hope that it would
percolate down into that wet clay soil. I would be careful, the homeowner, you know how long will it
take for that really to percolate down and that’s the question for the engineer. Is how long will it take for
that soil to percolate, and you don’t know unless you do soil borings on that site and do a perc test like
they do when they put septic systems in.
Councilman Laufenburger: You’re essentially building a clay pool, is that correct?
Mayor Furlong: A holding pool.
Councilman Laufenburger: A holding pool.
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Chanhassen City Council – September 12, 2011
Josh Koller: Just like their, yeah. Just like their swale does now in their back yard. Yeah, I guess the
thing that I would ask on this side, just as you know, would be that we would like to exceed the hard
cover based on, because you’re considering this hard cover, we’d like to do it because right now they’ve
got a swale in their back yard. It’s kind of a soggy area. They’d like to put something in where it’s dry.
Kids can play basketball and not put it on their driveway so the basketball goes into the street all the time.
Mayor Furlong: Is that swale and designed as part of the stormwater management across the lots and over
to the pond?
Todd Gerhardt: Yeah, there’s catch basins in the back.
Mayor Furlong: So if that is, if that were leveled out and would that affect the overall storm, is that part
of the easement?
Josh Koller: It still does, yep. The basketball court would be level. It would have a slight pitch to it to
allow water to drain off the back end, and then you’ll see that that goes right to the easement, and then the
easement is just getting feathered a little bit better than it is right now. So we’re actually not, if anything
we’re fixing the swale a little bit better just so that the water still runs from one neighbor to the next. You
can see that on the grading plan. Yep, and so we’re not, we’re not going into the easement at all. We’re
stopping at the edge of the Sport Court right at the easement there and then, in the red you’ll see the
proposed elevations where water still continues to go down into the pond.
Mayor Furlong: Did you say the water would be running off the court and that’s why you’re going to
slant it?
Josh Koller: Well I’ve got to slant it so the base of it. You still don’t want all the water to sit there and
slowly, slowly drain because it is clay soils. I mean so you are going to have water slowly percolate but I
do want it to pitch just a little bit at the base so that water can eventually go forward if you have that 100
year flood, that’s correct.
Mayor Furlong: Alright. Any other questions for the applicant? Thank you very much. Appreciate it.
Josh Koller: Yep.
Mayor Furlong: Any follow-up questions for staff? Otherwise discussion. No discussion.
Councilman McDonald: Well no questions for staff.
Mayor Furlong: Okay. Discussion, comments on the application or the appeal of the, is this right the
appeal of the Planning Commission’s.
Kate Aanenson: That’s correct.
Mayor Furlong: Denial of the application.
Councilman McDonald: I mean I guess from what all I’ve heard I’m in favor of looking at this because
I’ve been in favor of looking at this for a number of years because even when I was on the Planning
Commission this thing comes up but the problem has been that it’s unique to each kind of individual
house and stuff. If the homeowner’s willing to you know take some time here and maybe allow us to go
in and look at the size of this and figure something out, I’m all for that but to vote on it tonight based
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Chanhassen City Council – September 12, 2011
upon you know what I’ve heard, I couldn’t support it because I don’t know the science. That’s what I
would depend upon, as you said. You need to do a percolation test. You need to look at is 6 inches going
to be deep enough because you’re building a retaining pond and what you’re saying is that it’s going, it’s
got a storage capacity of so much water. Is 6 inches enough water or is the soil going to say no, you need
to go deeper? I don’t have the answers to that and I really don’t know enough to even suggest what it
should be but that’s what’s always held us up before was because what good does it do the City to go out
and look at this because we don’t have an application to put it on and we can’t just say across the board
it’s going to be this or this. I think the best we can is put together a procedure and a policy to come up
with an answer and say yeah, we’ll allow this much of a hard surface variance on this particular piece of
property because these procedures were followed and we now know that we could do it. We don’t have
those answers and you know that’s what’s always been missing on this and I guess yeah, if the
homeowner’s willing to you know do some of this stuff and as you said the soil drillings and those things
so we can begin to look at what the percolation is on this site, I’d be willing to reconsider it at some point
but tonight all I can go on is we have 25% hard cover variance and to me this is hard cover and based
upon that I couldn’t support the variance so. I mean I’m willing to work with you but it’s going to take
some time and it’s just I don’t have enough tonight to grant you a variance.
Mayor Furlong: Other thoughts, comments.
Councilwoman Tjornhom: I agree with Jerry that we don’t have, you know if we’re looking strictly at
what’s in front of us, which is granting a variance for surface coverage that’s exceeding what as our
ordinance has adopted, I’d have to deny it. If this council decides that at some point we should re-visit
our ordinance and re-write our policy about hard surface coverage, impermeable surfaces, you know then
that’s the time to have that discussion but for right now, with what’s in front of me I would have to go
upon the Planning Commission’s recommendation in denying.
Mayor Furlong: Thank you. Other comments. Councilwoman Ernst.
Councilwoman Ernst: Just a question. So if we deny this tonight and we learn more about permeable
surfaces in this particular area that we’re talking about tonight, it can come back for a variance again,
right?
Kate Aanenson: Of course. Of course.
Councilwoman Ernst: Just because it’s denied tonight doesn’t mean that it can’t come back.
Josh Koller: How do we do that? That would be my question. I mean where do I go and what do I do?
Kate Aanenson: We can talk to him about that.
Councilwoman Ernst: So with that in mind, I agree. I think we could use some more education on this.
Learn more about what it can do and what it can’t do so. And we’ll depend on you to help us out with
that.
John Koller: Alright, sounds good.
Mayor Furlong: Councilman Laufenburger, comments?
Councilman Laufenburger: Councilmember Ernst just asked the question that was in my mind so that’s
clear.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Okay. I also, based on everything I’ve heard here tonight could not see supporting the
variance request based upon the information in the staff report and other things tonight so. While this is
an issue, I think the dealing with the permeable materials is something that has come up. We’ve spent
over the years at a number of meetings and discussions, work sessions looking at this and it’s a, there are
a lot of questions out there still and if there’s some other alternatives. I know last time we looked at it we
looked at other cities and it was across the board but there were a lot of cities that, like us that just have
challenges getting by there because of all the other parts of it and it’s a tough situation but appreciate the
time and the effort here and I guess at this point I would ask for a motion from someone from the council
relating to this request of this appeal.
Councilwoman Tjornhom: Mr. Mayor, I’ll make the motion.
Mayor Furlong: Councilwoman Tjornhom.
Councilwoman Tjornhom: I make the motion the City Council denies Planning Case 11-07 for hard
surface coverage variance to construct a Sport Court and adopts the Findings of Fact and Decision.
Mayor Furlong: Thank you. Is there a second?
Councilman McDonald: I’ll second.
Mayor Furlong: Motion’s been made and seconded. Any discussion on the motion?
Councilwoman Ernst: Just a quick comment.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: So you’re going to be working with Kate?
Kate Aanenson: Terry.
Councilwoman Ernst: Terry. On how to bring that back.
Josh Koller: Okay. Great.
Kate Aanenson: Oh, in how to bring it back, sure. Yeah. And maybe if you come up with a different
policy they don’t need the variance.
Mayor Furlong: Right.
Kate Aanenson: So we’ll just have to see how that shakes out.
Todd Gerhardt: Mayor, council. What we would do is not look at the variance procedure but an
ordinance modification if you can follow these specifics then you can be granted a Sport Court as long as
it has the appropriate percolation for the amount of rain that be generated.
Mayor Furlong: Any other discussion on the motion? Hearing none we’ll proceed with the vote.
Councilwoman Tjornhom moved, Councilman McDonald seconded that the City Council denies
Planning Case 11-07 for hard surface coverage variance to construct a Sport Court and adopts the
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Findings of Fact and Decision. All voted in favor and the motion carried unanimously with a vote
of 5 to 0.
Josh Koller: Thanks for your time.
Mayor Furlong: Yep, thank you. Move now to the next item on our agenda which is the Lake Drive
Business Center, a request for a site plan review of 155 stall parking lot expansion at 950 Lake Drive.
Staff report.
LAKE DRIVE BUSINESS CENTER: REQUEST FOR SITE PLAN REVIEW FOR A 155-STALL
PARKING LOT EXPANSION, 950 LAKE DRIVE. APPLICANT: CSM CORPORATION.
Kate Aanenson: Thank you Mayor. As you stated this request is for a parking stall expansion for the
Lake Drive Business Center. It’s located just at the Highway 5 and the current zoning on that is industrial
office park. To the east you’ve got Robert’s Automotive. You’ve got the Lake Susan Business Park. To
the west it’s vacant industrial land. We did receive one comment from, off of the Powers Boulevard
property just immediately to the west. They had some concerns about the visibility of grading. Although
that property isn’t developed, the grades on that are such that I’m not sure they would see a lot of it so, we
did send them back our comment that it did meet ordinance. There’s no variances requested with this. It
does meet ordinance so the parking lot expansion’s really to accommodate some additional parking on the
southwest, 48 additional stalls. On the southeast, 41 additional spaces and then on the east 66. So this
could be done in phases. The real goal here is to accommodate the ability for the property owner to sell
this property and make sure that the user needs additional parking, the plan’s been approved so they can
say that there’s already entitlement to the property and they could go ahead and proceed with the parking
lot so it provides them the flexibility to a potential buyer. So the grading plan itself does have some
retaining walls with it. On the southwest side it’s about 2 1/2 feet. On the southeast side it’s about,
almost 7 feet. And the east side’s the tallest. The 8 feet and there’s a tall one on the north side which
would be about 17 feet so there is one issue on the drainage and utility easement on this side. There’s the
drainage, excuse me the retaining wall goes into the drainage utility easement. That needs to be moved.
That may reduce some of the parking stalls there but I think we can accommodate that. Or the applicant
can so when they come in for a final plans then they would have to accommodate that. And then there’s
also an existing stairwell that they need to accommodate through that retaining wall. They’ve also
submitted a landscape plan and there’s a few deficiencies in that but again we believe that can all be
accommodated. Again this plan may not go forward immediately. It just depends on the currently they
want to maximize the lease space in there so it does provide them the flexibility. The Planning
Commission at their meeting did recommend approval of this plan when they had their meeting on
th
August 16 they voted 6 for, none against recommending the parking lot expansion and with that the
motion we have for you would then also to approve the site plan for the parking lot expansion. With the
condition in the staff report and with that I’d answer any questions that you have.
Mayor Furlong: Thank you. Any questions for staff? Any concerns from the property to the east?
Kate Aanenson: Yeah we did talk, we did talk to them.
Mayor Furlong: Okay.
Kate Aanenson: They live out of state. We did let them know that all the requests did meet code. There
is additional landscaping that would be put in there and I think that was some of the concern that they
would look and see a lot of landscaping. I mean it was a lot of parking but actually the landscape would
buffer that so I think we’ve accomplished that and we.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Is this, I’m sorry, is this the property to the west across Powers that you’re talking about
or to the Robert’s Automotive to the east?
Kate Aanenson: Yeah, it’s actually the piece across on Powers Boulevard.
Mayor Furlong: Right. They expressed some concerns.
Kate Aanenson: Yep, nobody else commented on it.
Mayor Furlong: Okay.
Kate Aanenson: Yes, I’m sorry.
Mayor Furlong: Alright, thank you. Any other questions for staff? Comments, thoughts. I mean it’s
within, it meets ordinance. It’s, there’s no variances required. People are looking to improve the
property.
Kate Aanenson: It gives them the flexibility to maximize the building which is what we would like, yes.
Mayor Furlong: Absolutely.
Councilman Laufenburger: Is the building vacant right now Kate?
John Ferrier: It’s largely vacant.
Kate Aanenson: Yes.
Mayor Furlong: Okay. Any comments from the applicant they’d like to share with the council this
evening?
John Ferrier: Good evening Mayor and council members. I’m John Ferrier with CSM Corporation. I
represent the owner. Also here with me tonight is Mark Kronbeck. He is the engineer that worked on the
plans and first I’d like to thank staff for working with us on this request. Essentially you said it, we just
want to make the building more marketable. Not necessarily for a sale but we like our buildings to have
tenants and so this one’s been largely vacant for some time so we’re looking at ways, creative ways to
bring in more tenants so. We’ve read the staff report and agree with it’s findings so we’re here to answer
any questions. Thank you.
Mayor Furlong: Thank you, any questions for the applicant? Thank you.
Councilman Laufenburger: Yeah I do have, John.
John Ferrier: Yes.
Councilman Laufenburger: Mr. Ferrier. Is it, is the inside of the building designed for industrial or office
or what?
John Ferrier: It is, it’s one part of the property which is the property to the west was largely office so if
you see in the lower left hand corner of the plan where that black paving area is.
Councilman Laufenburger: Okay.
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Chanhassen City Council – September 12, 2011
John Ferrier: That’s where a lot of the parking we’re bringing in. That’s probably what we would do first
because with, to the west with that large office component, there just isn’t enough parking for the office
component. The two areas more to the east are more of your standard office or standard warehouse with a
little bit of office component.
Councilman Laufenburger: Is there access to the buildings? Are there doors on the southeast and the east
side?
John Ferrier: Yes.
Councilman Laufenburger: Okay. Yeah, I like it Mr. Mayor.
Mayor Furlong: Okay, thank you. Any other comments? Discussion. If not, would somebody like to
make a motion?
Councilwoman Ernst: I will.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: I make a motion we approve the site plan for parking lot expansion located at 950
Lake Drive, plans prepared by Alliant Engineering, Incorporated dated July 19, 2011, subject to the
conditions of the staff report, and adoption of the Findings of Fact.
Mayor Furlong: Thank you. Is there a second?
Councilman Laufenburger: Second.
Mayor Furlong: Thank you. Is there any discussion on the motion? Sometimes the easy ones are hard to
get the second on. If there is no discussion, we’ll proceed with the vote.
Councilwoman Ernst moved, Councilman Laufenburger seconded that the City Council approve
the site plan for parking lot expansion located at 950 Lake Drive, plans prepared by Alliant
Engineering, Inc., dated July 19, 2011, subject to the following conditions, and adoption of the
Findings of Fact and Recommendation:
Planning Department Conditions
1. The applicant shall enter into a site plan agreement and provide the security required by it.
2. This relocated sign shall require a separate building permit and sign permit.
3. The landscape island on the north end of the parking adjacent to the east side of the building shall be
extended further out to provide full protection of the parking stall.
Environmental Resource Specialist Conditions
1. The applicant shall submit a revised landscape plan showing the minimum number of landscape
islands/peninsulas (16) and trees (50).
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Chanhassen City Council – September 12, 2011
2. The applicant shall provide adequate screening for the new parking areas along Lake Drive. Shrubs
shall reach a mature height of at least two feet. A revised landscape plan shall be submitted to the
city for approval.
Water Resources Coordinator Conditions
1. Rates of surface water runoff must not be increased from existing conditions. Where practicable to
do so, rates should be decreased.
2. The applicant and city shall work together on future phases to look for potential cooperative surface
water management opportunities.
3. These approvals for future phases are contingent upon City code and other jurisdictional agency rules
remaining the same. In the event that any of these changes, the applicant will need to resubmit to
assure that the plans meet any new rules germane to this project.
4. Include a note on the Grading and Erosion Control plan indicating that the proposed best management
practices is the minimum controls anticipated, but that as unanticipated site and climatic conditions
present themselves, it will be to modify the best management practices to meet these new conditions.
5. All 3:1 slopes shall be covered with erosion control blanket or sod. This needs to be indicated within
the plan set on sheet C-2: Grading and Erosion Control.
6. An escrow or letter of credit in the amount of $2,450.00 shall be provided to the City before
commencement of the first phase. This escrow is only for the first phase. Subsequent phases will
require additional assurance funds.
7. Applicant must apply for and receive approvals from other jurisdictional agencies as necessary.
8. The applicant must show that the total disturbed area for all phases is less than one acre or they must
apply for and receive an NPDES Construction Stormwater Permit from the MPCA. If this is the case,
a full Surface Water Pollution Prevention Plan must be prepared and submitted to the City for review
and comment.
9. All exposed soils must be stabilized within 14 days of cessation of earth work activities.
10. Lake Drive must be swept clean of soils and debris tracked onto it from the site as needed but no less
than once per week until final stabilization is achieved.
11. The applicant or their designee must maintain the best management practices in good working order
until final stabilization is achieved.
Engineering Department Conditions
1. Grass area maximum slope must not exceed 3:1.
2. The applicant must submit revised plans (redlines) which meet the requirements of the City.
3. Drainage plans must be revised so that the plans match the drainage calculations. The applicant must
also follow City standards for water quality volume. Also, the proposed drainage rates must be
maintained for the 2-, 10-, and 100-year rain events.
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Chanhassen City Council – September 12, 2011
4. The storm sewer provided for treatment will be privately owned and maintained.
5. If importing or exporting material for development of the site is necessary, the applicant will be
required to supply the City with detailed haul routes.
6. Building permits are required for all retaining walls four feet tall or higher and must be designed by a
Structural Engineer registered in the State of Minnesota. A fence must be placed at the top of the
wall for safety.
7. The exits in front of Wall 2 may be inadequate for some uses of the building under the proposed
parking scenario. Exterior exit discharge must accommodate exits served. The parking stalls in this
area should be constructed at the time when a final end user is determined so that the exits will not
limit the occupancy.
8. The wall and wall supports (not including soil) in drainage area three on the east side of the site must
be removed from the drainage and utility easement.
9. Details must be provided for all proposed storm sewer, sanitary sewer, and watermain crossings.
Actual elevations of existing utilities shall be verified for accuracy. A minimum vertical separation
of 18” is required at all storm, sanitary, and watermain crossings.
10. All of the utility improvements are required to be constructed in accordance with the City's latest
edition of Standard Specifications and Detail Plates. The applicant is also required to provide the
City with the necessary financial security in the form of a letter of credit or cash escrow to guarantee
the installation of the storm sewer, erosion control, and seeding. This amount will be determined
prior to start of construction due to the possible phasing of the project and not knowing the amount to
be installed and disturbed.
11. The applicant must also notify the City after installation of the erosion control and 48 hours prior to
the commencement of grading. Permits from the appropriate regulatory agencies will be required.
12. The plans and drainage calculations must be signed by a professional engineer registered in the State
of Minnesota.
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
Mayor Furlong: Thank you everyone. We have one more item on our new business tonight but it’s about
10 to 9:00. I’d like to take just a quick 5 minute break because this discussion might go for a little bit so
we’ll make it a quick 5 minutes as opposed to a long 5 minutes, without objection. We’ll just recess.
The City Council took a short recess at this point in the meeting.
COUNCIL PRESENTATIONS: SENATOR JULIANNE ORTMAN.
Mayor Furlong: Good evening Senator, thanks for coming.
Senator Julianne Ortman: Well Mr. Mayor and members, thank you for having me tonight. It’s good to
be home. Truly I was in Norwood-Young America and then Waconia and then Victoria tonight. Seems
like everybody meets on Monday and Tuesday nights right so my schedule gets kind of tight and so I
apologize for coming late in the evening but I’m on my way home so that’s good. And let me start by
congratulating you on your recent recognition for being an outstanding city. The residents knew it. We
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Chanhassen City Council – September 12, 2011
didn’t need a magazine to come in and tell us that we are represented so well by the officials that work in
this city and by our elected officials and I’m not including myself even in that. I just think we know that
we’re well represented here in the city and truly blessed to live in this city. It’s a great place and I think
one of the reasons is we have residents that care and are engaged and know what they want and express
themselves so well in election and so we’re very lucky to have neighbors and a community that is this
strong so I congratulate you for your successes here in the city. The residents are so proud and the rest of
the state is so jealous. That’s kind of nice. I wanted to tell you just a little bit about what happened at the
State Capitol. I know that you’re working on your preliminary levy and so I’ve been trying to get around
to the cities here and even some outside of my district to talk a little bit about what happened at the
Capitol and what’s up ahead. I’d like to start first with just a little bit about property tax aids and credits
and I know that’s a really big part of your conversation. This year for the first time in 9 that I’ve been at
the Capitol I served as the Tax Chair and what a great honor and a great challenge given our $5 billion
deficit, and let me tell you when we started, let me take you back to 2010 at the end of the last legislative
session. If you remember the Governor had made reductions on allotments in the budget and the
legislature adopted them for the 2010-2011 biennium but they didn’t make them permanent so the
reductions were only for one biennium with a great big proposed increase and a whole bunch of promises
for 2012 and 13 and we knew we could never fund at the level that they had promised a $39 billion
budget for the out years 2012 and 2013. And so I was one of few that voted no and I was so frustrated to
think that we had adopted a budget that was a $30 billion dollars for 2011, 2010 and 2011 only to promise
$39 billion in the next biennium and it seemed horribly political at the time and seemed like people had a
much bigger agenda that they were focusing on rather than what was realistic for a budget. So we came
back to the Capitol. The economy got a little better and what a strange thing and I just want to tell you a
little bit about that. We had a $6.2 billion dollar deficit projected in November of 2010 if you remember.
The federal legislature, the Congress and President Obama passed the extension of the Bush tax cuts and
with that one action there were more projected transactions that were taxable so all of a sudden we went
from a $6.2 deficit in November to a $5 billion dollar deficit in February based almost entirely on the
projection based on the Bush tax cuts and what was expected with the capital gains taxes. It was a very
strange set of events. So then in February we get our forecast. It’s a $5 billion dollar deficit and being
the Tax Chair it was my job to go back and look at my budget. The tax aids and credits budget for the
State of Minnesota is 10% of our budget. We raised income and sales taxes across the state to provide
10% back to local elected officials, to their cities, to the counties, to offset school property taxes. It’s all
property tax aids and credits. $3.4 billion dollars and my job was to go back and look and see if there are
some ways to simplify. To make the needed reductions and also to accomplish some other things that I
had in my mind which was number one, strengthen the relationship between the property tax payers and
the elected officials who they elect to make the local decisions about how much they should spend and
what those property tax levels should be, and that was very important to me. And secondly was to
minimize any impact to the residents in their property taxes because with the market valuations going
down, people are having a hard enough time. We’ve got folks that are clearly you know high levels of
unemployment. We have businesses that are at risk so it was to minimize the impacts to taxpayers to the
extent possible. So we looked at LGA, local government aid and the, our goal was to maintain the 2010
and 2011 reduction. Remember I said we made temporary and then there were these huge projected
increases. My goal, and the goal of the legislature, we adopted a plan that maintained at 2010 and 2011,
and despite some politics and some other things going on in there we ended up fulfilling that goal and
maintaining local government aid at 2010 and 2011 levels. There was no reduction. I’ve heard that a lot.
There was absolutely no reduction but there was a certification. Good city administrators knew not to
expect more LGA and that’s what we’re hearing from all across the state. That takes us to the next
biggest item on the budget, my $3.4 billion budget in the tax committee and that was the market value
credit and to a person that testified in the tax committee, they testified in favor of the elimination of the
market value credit. That idea did not come from policy makers. It came from experts that we all work
with. It came from the League of Minnesota Cities. It came from the Metropolitan Municipal Cities
Association. I believe Chanhassen is a member. It came from the Association of the Minnesota Counties.
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Chanhassen City Council – September 12, 2011
The Metro Innercounties Association. Every one of those associations participated in the development of
the plan to eliminate the market value credit and they all came and testified in the Senate Tax Committee
and said if you’re going to make reductions in property tax aids and credits, as we were required to do to
meet our deficit, they said that was the one to do. And here’s the reason why, and maybe you know the
history. Maybe you don’t. But the market value credit was created in 2001. LGA was created many,
many years ago and we kept adding to the formula on local government aid. We kept adding more and
more aid into the mix. Regional credit aid. Jobs based aid. The aid package just continued to grow and
on top of that in 2001 you added this market value credit and it was intended to provide property tax relief
to the property taxpayers but it never really accomplished that because we put a credit on the property tax
statement and then the legislature’s plan prior to this year was to give some of that money, or all of the
money, to the cities that were extending the property tax credit. Problem was, out of the 10 years that we
had the market value credit it was funded exactly one time in 10 years. It’s been abysmal. It’s been a
failure. And what’s been happening with the reductions, so it hasn’t been a zero or a 100% in all those 10
years, it’s been whatever the legislature could come up with in it’s budget. So in the years where
reductions were made, the reductions came first against non-LGA cities. So if we had to reduce by half,
the first 50% came against cities like Chanhassen that don’t get any LGA anyway and so we made this
promise to the residents that we would give them a property tax credit but we never funded it. It was just
an entirely empty promise. There were cities in the middle and there were some that always got it
because they were LGA cities, but there’s no transparency there. How could a reasonable taxpayer
paying income or sales tax into the State have any idea what they’re paying for through this market value
credit program? So we knew that it was a program that was targeted as one that was unsuccessful. Truly
unsuccessful so I worked at this one along with the members of the House and the Senate Tax
Committees. We looked at it and we realized that there was going to be this problem for the property tax
payers with the credit that no longer exists and the best advice we had was to shift it to an exclusion of
value, and I don’t mean to talk too long about this but I know you’re dealing with these issues so stop me
at any time if I’ve gone too deep into the tax policy here because I can do this a long time. But the
market value credit, when we took the exclusion. Let me just go back to the credit. The credit maxed out
for any Minnesotan at $304. Maybe $306, I can’t remember. I believe it was $304. For a house value of
$76,000. That was the maximum. So if you thought about the chart that we had, it showed that it
climbed all the way real fast from a home value at zero all the way to $76,000 and there was a cliff all the
way to $404,000 in value that was the maximum valuation, house valuation that could qualify for a credit,
and remember that maximum credit was $304. So by the time you got to a home valued at 250 of 350 or
400, that credit was very small. So when we eliminated the credit and replaced it with an exclusion of
market value, so instead of my house being worth you know $300,000, it would be that much less. When
we replaced it we found that it would have a very minimal impact on the property tax liability of the
residents. We found that there was a much as a $20 to $80 shift for the property taxpayer. I know it’s
different for the city. Remember our goal was to minimize the impact to the property tax, the
homeowners and their property taxes. So we saw that there was a little bit of a shift there. Slightly across
the state so we put $30 million dollars into the direct property tax relief program, and hopefully you all
know about the PTR program. Residents can apply for direct property tax relief depending upon their
income. So we put more money there to buffer any impact that there might have been to the
homeowners. Now I know that that left some cities thinking they were going to get some money to offset
the rebate or the refund to the residents. Some cities spent it. Some cities didn’t and we know that there
were some impacts there. We know that there’s some shifting with other property tax classifications
there. There’s bound to be and we’ve done our best to minimize that as well but that is one of the realities
of having eliminated what was a $568 million dollar program for 2012 and 13 that came out of our
budget. And so we met our targets. We’ve made some significant reductions in the property tax aids and
credits budget. 17% reduction so the legislature in some communities got criticized for not making real
reductions. I would say we made some very significant reductions that had some real impacts across the
state and so it was not an easy thing to do but we did our best to reach our goal of reducing the property
tax aids and credits budget. So with that said we adopted our $35.2 billion dollar deficit, our budget after
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Chanhassen City Council – September 12, 2011
what was a very painful session and very difficult negotiating with the Governor. And from my personal
seat in the room working with the Governor, the biggest challenge, the shutdown really did, was
unavoidable. Or was avoidable and it was something we all worked very hard to avoid. There was
nobody that thought that that was good for the State. I really believe that that $34.1 billion dollar budget
that we adopted met all of the needs and some of the wants for the State. I would say that to this day.
And I would think that it would have been better to have passed that then it would have been to force the
State into a shutdown and I tried to convince the Governor of that but that was not his goal, so the
alternative to that was to try and ask the Governor what he wanted to spend more money on. If our
budget met the needs and some of the wants, what do you need Governor? And he would not, or could
not articulate what he wanted to spend any more money on, and would not until we ultimately agreed to
the $34, $35.2 billion dollars and so we never knew what his priorities were. And I’m just going to tell
you from my own experience with 4 teenagers at home, I wouldn’t give any one of them 20 bucks if they
didn’t tell me what it was for, and so I really feel that the money that we have at the State Capitol, and I
know you all feel this, it’s not my money and I’m accountable for making sure that I am a good steward
of the taxpayer’s dollar. It is my job to make sure that every dollar is well spent and that folks get what
they expect from government, and so I felt that very seriously and that is why I committed to the $34.1
billion dollar deficit and agreed to push that issue forward because I think people have good questions in
the State of Minnesota and in our community about whether their money is being well spent and I’m not
talking about your budget Mr. Mayor and members. I’m talking about their very legitimate questions
about whether we have more government in water planning. The city does it. The county does it. The
watersheds do it. The soil and water boards do it. The state does it. The Met Council does it. The
federal government does it. Could we have any more water planning, and it’s just one example. There’s
so much duplication in that and the residents are right to expect us to go find it and eliminate it. They’re
right to ask us to say can some of these cities or counties consolidate some of their services. They’re right
to expect it because they are making those same kind of drastic reductions in their homes, for their
families and in their businesses and we have to accept the fact that that’s happening there and we are
accountable to do the exact same thing and so these are tough choices we all have to make. I know that
you all are faced with the same ones. Two more very quick pieces. Three more quick pieces of
information. I know you have a long night but.
Mayor Furlong: That’s fine.
Senator Julianne Ortman: Three things and then I would come back anytime to work in a work session
with you. If you have questions tonight I’m available to ask them or if you’d like me to come back for
them, that works for me too. Three very quick things. First of all, there is a working group underway
right now looking at property taxes at the State Capitol. It’s made up of representatives of organizations
like the League of Minnesota Cities or the Metropolitan Municipalities, residents. It’s being staffed by
the Department of Revenue and by staff. Non-partisan staff at the Senate and House. They’re going to be
making recommendations in January of 2013 and I really think the City, I urge you to more than monitor
this. Please weigh in to these conversations because when those recommendations come out, they are
more likely than not to be adopted so what goes into that set of recommendations should include the City
of Chanhassen’s interests and concerns. We want to have you involved in that. It relates to fiscal
disparities. We’ve broaden it to include a review of fiscal disparities and how should we change that. I
know you would all agree with me that that is long overdue. Fiscal disparities. Property tax aids and
credits like LGA and the 22, craziness. 22 property tax classifications that we have in the State of
Minnesota. There’s no good way to explain to anybody why we have 22 different classes and what they
all mean and I’ve tried. Believe me I’ve tried to understand and I don’t. The last thing is that there’s an
amendment that I would ask you to look at and consider supporting. It’s a Constitutional Amendment
that I’ve prepared that has 33 other members of the Senate that support it. It is a Constitutional
Amendment to restrict spending to 98% of our revenues so that 2% would go into reserve. We don’t have
a taxing problem in this State. We have a spending problem. We somehow find a way to spend more
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Chanhassen City Council – September 12, 2011
than we have and leave ourselves structural deficits as we’ve done for the next biennium. You know we
went from a $5 billion dollar structural deficit to a $2.2 billion dollar structural deficit, meaning we
already know we’re in the hole in the next biennium. It’s better but it’s not a lot better. We can do better
than that and I think we have to. Then the last final piece is the economic forecast. Dr. Stinson, Dr. Tom
Stinson is the State’s Economist. Our last budget was based on a projected growth factor of 3% increases
in 2011, 12 and 13 based on a global insights projection. That was our last economic forecast. Dr.
Stinson has already said there’s no way to expect that and so I believe in November we will be revising
the economic forecast downward and Dr. Stinson has used these numbers. He has said instead of 3%
growth in 2011, it will be more likely 1.6. Rather than 3% in 2012, 1.9% and only 2.2% in 2013. So
that’s already a reduction in the national economy by 4% just since our last economic forecast so we are
going to have to go back to work at the Capitol. We’re going to have we have a deficit. We’re going to
probably pass a supplemental budget that is not likely to spend any more money. It’s likely to find more
reduction so it doesn’t sound like good news but we’ll know more in November. As I said I believe these
are really tough times for Minnesotans, for residents of Chanhassen and we all have to be truly aware of
that and ask ourselves a question, how much can they afford in terms of government and then I know you
all agree with me that we have a collective responsibility to make sure that every dollar they do spend is
spent very wisely so with that Mr. Mayor and members, any questions you have I welcome them and I
also happy to come back at a time more convenient for you all.
Mayor Furlong: Senator, thank you. Any questions for the Senator this evening?
Councilwoman Ernst: I have a question.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: Senator, good to see you again. I’m sure that it does feel good to have a little bit
of time where you can have some down time. A question that I have and I’ll probably find out more on
Thursday night at the Metro Cities Board meeting but are the cities that are getting LGA now, are they
continuing to get the same dollar amount of LGA or has that been reduced?
Senator Julianne Ortman: Thank you for the question. It has not been reduced. I think the
miscommunication comes from the fact that when we adopted that, the temporary reductions but we left
those permanent increases, that meant that the State certified an increased amount for LGA for cities that
received it for 2011. So there was this misunderstanding between, the fact that we were never going to
have that money and the fact that it was actually certified and as I said I believe the cities knew, and they
came and testified and said they knew they were not going to get more money and they asked us to at
least hold them harmless and we did that. We accomplished it and I think it will be a challenge next year
to hold the cities harmless but I think we have to look at that LGA formula because you have cities like
New Germany that absolutely need that money to survive and you have cities like Minneapolis on the
opposite end of the spectrum and I would ask you all to look at your per capita spending in light of all the
other cities in the state. I don’t know what benchmarks you use but in 2009 the State Auditor did a report
on per capita spending for cities over 2,500. Now I would guess that the 2010 report is out now. I would
guess that the City does very well. Statewide average is about $772. The City of Minneapolis, $1,542.
The City of Minneapolis is just slightly under. Or St. Paul, just slightly under that and these are cities that
are big takers on LGA and so I think we have to go back and look at this LGA formula and say okay, this
is how much money we have for LGA. Are we spending it in the right communities for the right reasons
and so there is a big conversation that we have to have about LGA but I would invite you to look at how
you compare. I would believe that it’s very favorable.
Mayor Furlong: Just for clarification and I believe our per capita spending was $424 for 2011.
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Chanhassen City Council – September 12, 2011
Senator Julianne Ortman: As I said residents are very proud of the City of Chanhassen so.
Mayor Furlong: Other questions for the senator.
Councilman Laufenburger: Just a comment.
Mayor Furlong: Please.
Councilman Laufenburger: For you and your fellow legislators and senators to eliminate a $570 million
dollar program, I just congratulate you on that. I think that less government only comes when we take
away that government which has been in place for far too long, especially if it’s a failed program like the
market value homestead credit program apparently seemed to be so senator I just, keep looking for those
things that just are not working and get rid of them.
Senator Julianne Ortman: Thank you for that. We will and as I said this working group you are invited to
attend. There are no gold plated invitations for anybody at the Capitol and you know that the world wants
those people that show up and so we really do need participation from smart people like residents and our
elected folks and our officials here in the city. We need them to participate. It’s a good example what’s
happening here in the city.
Mayor Furlong: Thank you. Thank you Senator, we appreciate your service and for coming here tonight
and sharing your thoughts with us. That’s been very helpful and educational so thank you.
Senator Julianne Ortman: Thank you for having me and again if you’d like a work session or something
and residents also are very, I’m very happy to take calls from them. I know that I serve the residents and
elected officials and anything I can do, I’m very willing.
Mayor Furlong: Thank you very much.
Senator Julianne Ortman: Thank you. Have a good evening.
Mayor Furlong: Thank you. At this time we’ll move to item 5 under new business which is
consideration establishing the preliminary 2012 levy.
SET PRELIMINARY 2012 LEVY.
Greg Sticha: Thanks again Mayor and City Council members. I’m going to go through a power point
presentation this evening that highlights a number of the things that we’ve been talking about the last
month and a half or so in regards to the budget and setting a preliminary levy. I’m going to first start with
the budget calendar that we have left for the remaining of this year. This evening we need to set a
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preliminary levy and it will be certified to the County actually on the 15, which is Thursday I believe so
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between now and the 15 we will need to set a preliminary levy and then get that onto the County. On
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September 26 we will be reviewing PTO versus a sick/vacation benefit program and we’ll also be
reviewing compensated absences and what actually compensated absences are and the impacts or the lack
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of impacts that they may have on the budget. On October 10 we will be reviewing enterprise and special
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revenue fund budgets as well as reviewing the 2012 to 2016 CIP. On October 24 we will have the third
quarter review of revenue and expense data for 2011 and Ehlers will be here to present our 2012 utility
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rate study. On November 14 and 28 we have kind of open spots left to discuss any remaining work
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session items that we haven’t gotten to related to the budget, the CIP or utility rates. On December 5
we’ll be holding a public budget meeting where the residents will be allowed to come and give public
comments as to the preliminary levy that was set. The residents will be getting Truth in Taxation
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Chanhassen City Council – September 12, 2011
statements from the County in the middle to late part of November. On those statements will be the
meeting date and time for our public budget meeting. At that point in time the Truth in Taxation
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statements will be based on the preliminary levy you set this evening. Then on December 12 we will
pass a final levy, and as all of you are aware, that levy can go only down from the number that we set this
evening. We’ll also be passing budget for 2012 to 2016 CIP and we’ll also be setting utility rates for the
upcoming. Budget assumptions we used for preparing the 2012 budget. We have 1 1/2% wage increase
in the budget for 2012 for employees which equates to about $52,000 of an increase to the general fund.
We have projecting a 15% increase in health care costs. We will know more about that number here in
the upcoming weeks but to the best of our knowledge at this point we are projecting a 15% increase for
our health care costs for 2012. The County has let us know that our new construction for taxes payable in
2012 is 1.16% which equates to $119,000 in potential new levy dollars from that number. We’ve set the
building permit revenue number the same as the 2011 budget for the 2012 budget. And in all three
scenarios that you’ll see presented this evening, service levels will remain the same for each of the
scenarios. We did, throughout the power point here we’re going to have a number of comparison
documents that compare ourselves to our key financial strategy cities. The first one we took a look at, at
least to the ones that responded to us, what were they planning for cost of living increases for staff for
2012 and attached is the schedule of the responses that we did get for the cities that are at this point
planning on wage increases for employees for 2012. And what they had for increases in 2010 and 11.
Under Scenario 1 of the power point in the packet in front of you this evening, the levy for Scenario 1
would be a total levy of $10,273,890 which is actually $6,500 more than the 2011 levy after adjusting for
the market value homestead credit program change. Senator Ortman took the time this evening to explain
the change in the program from a credit to an exemption. Because the City of Chanhassen in the early
2000’s decided to levy up for that dollar amount, because we were not receiving the credit from the State,
in order to achieve the same tax amount to the property we will have to now levy back that same amount
of that $150,000. Scenario 1, again all these Scenarios will offer the same service levels either under 1, 2
or 3. The impact of the $10,273,000 for a resident would result in an average property tax bill of
approximately $3 to $4 higher than the previous year, assuming your home is an average home in the city
of Chanhassen and saw a decrease in value close to the average of all properties in the city of about 4%.
This is without projecting any impact to change in the market value homestead credit program will have.
The one thing that the exemption program differs from in terms of the credit program is, it does vary and
depend on the amount of properties that you have in your community that are under $413,800 and
Chanhassen has a number of properties that are over that amount versus some communities have a
number that are less than that amount so all depending on the number of homes you have in each of the
value ranges will depend on the exact impact that will have on your property tax bill. Staff is projecting
that if your home is less than the $413,800 and depending on how much less than that you are, you will
have some type of positive impact from the market value homestead credit change. If your home is over
that amount you’ll probably have some type of negative impact from that. The exact dollar amount is
hard to determine. Neither the League of Minnesota Cities nor the County has really gone out on a limb
and say this is exactly how you would calculate it. It’s a very difficult formula and as you’ve heard we
have 22 different class rates to take into account so, but staff believes that there would be a negative
impact for those homes above and a positive for those below that amount. Under Scenario 2, this will be
a total levy of $10,236,390 which is $31,000 less than the 2011 levy after adjusting for the market value
homestead credit program change. The impact to the residents under Scenario 2 would be essentially the
same property tax bill from the City of Chanhassen as the previous year. Again same assumptions would
be here in terms of the market value homestead credit program change. Below the 413 you’d probably
see some type of positive impact maybe meaning your property tax bill would be less. Above it you’d
probably see some type of negative impact, meaning your property tax bill may be slightly higher. Under
Scenario 3, total levy of $10,146,390 which is $121,000 less than the 2011 levy after adjusting for the
$150,000 change for market value homestead credit. Approximately resident impact under Scenario 3
would be about a $7 to $8 decrease in their city portion of their property tax bill, and again the same
assumption here as the previous two Scenarios in terms of the market value homestead credit program
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Chanhassen City Council – September 12, 2011
change and the impact on a property. This slide has been included to show the budgeted expenditures.
Senator Ortman talked about them this evening. The State Auditor put together a report that showed the
budgeted expenditures for all the communities. Up here you can see our KFS cities that we compare
ourselves to. For 2010 to 2011 the City of Chanhassen had a 1.14% increase in budgeted expenditures
with the average being 1.1% of all of our KFS cities. We also looked at Carver County cities and where
we compared to Carver County cities and so those are included as well. Then we took those numbers and
based on our population we took a look at per capita spending in 2011. How do we compare to our KFS
cities? Chanhassen’s $424, we talked about that number just a little earlier this evening. The only
communities with a lower per capita spending are Oakdale and Chaska and they’re very, very close to our
number. The average being $451 of our KFS cities. And we also looked at Carver County cities, how we
compare on per capita spending. The number for Chanhassen was almost identical again to Chaska and
Waconia with Carver and Victoria a little higher with the average being $441 per capita spending. We
also wanted to give the City Council an idea of the tax rates in Carver County and where they’re currently
at for 2011. Chanhassen is the second lowest, only behind Chaska. I guess one thing I get to point out in
terms of the Chaska tax rate is that they do have a $2.5 million dollar franchise fee for their electric utility
that they charge to all their residents who pay electricity in the community. If they were to levy that tax
versus have a franchise fee, it’s my estimation that their tax rate would be almost identical to our tax rate.
The average tax rate in the county is 50.37. Debt per capita. We also took a look at where each of our
KFS community cities compare in terms of the debt load they’re carrying. Our debt per capita is $1,550.
We also put on this slide the bond rating that each of the communities has in our KFS cities. The average
debt per capita is $1,876 and again we’re at $1,555. Some other important factors to consider as you’re,
we went over this evening. We sold bonds earlier today. One of the things that the rating agencies
certainly follow very closely is how close management is in communicating with the City Council on all
of their long range financial plans and again for the second, the third time now Standard and Poor's has
cited that the City’s financial management assessment is considered strong. We have well embedded
financial practices that are likely sustainable. They also had commented on some other things including
our proximity to the Twin Cities and our strong income base in the community. Recommendation. Staff
is recommending that the City Council set a preliminary levy under Scenario 1. Scenario 1 would allow
the most flexibility between now and setting a final levy in December. It gives us the opportunity to find
out about any more numbers that may impact the budget the rest of the year, including what increase there
may be for health care costs and any other variables that might impact the budget the rest of the year
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before setting that final levy on December 12. That’s all I have.
Mayor Furlong: Thank you. Alright, thank you. Questions for staff.
Councilwoman Ernst: Yeah.
Mayor Furlong: Councilwoman Ernst.
Councilwoman Ernst: So as I was reviewing all these numbers and going through what we had listed
under tax capacity base tax levy and under the different three scenarios, it would have been good if we
could have seen it apples to apples. For example there were some public, the public works facility and
debt of other agencies, from what I can see were included in the three scenarios but they’re not included,
I’m sorry. They’re included under tax capacity base levy but not the three scenarios.
Greg Sticha: All of the levies are included in the, under all three scenarios for the public works facility
and the fire station. They’re all included.
Councilwoman Ernst: Well the potential fire station is but where are these other listed? Where is the
debt of other agencies listed under the three?
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Chanhassen City Council – September 12, 2011
Greg Sticha: That is combined under total. All bond funds. That would be included in the bond fund
number.
Todd Gerhardt: The 1.28.
Greg Sticha: The 1.28. It’s the same for all three scenarios.
Councilwoman Ernst: But it’s just not listed the same. I mean.
Greg Sticha: It’s not broken out into detail.
Councilwoman Ernst: And that’s what I’m saying, if we could have, if I could have seen it to where it
made sense and the capacity tax levy compared to what’s listed at the bottom, it would have made more
sense.
Greg Sticha: I can have those broken out next time you see them.
Councilwoman Ernst: And then the public works facility, where is that listed in there? Under the
scenarios.
Greg Sticha: That would be on the bond funds as well. I’ll have a break-out of all of the details.
Councilwoman Ernst: Okay.
Greg Sticha: Just as above.
Councilwoman Ernst: And then there were others and I don’t know if this would be the same type of
situation but there were some that were included in the three scenarios that were not included in under the
tax capacity.
Greg Sticha: The tax generation capacity listed below is simply, is really not a number that is, can be
compared to the levy. All we have been doing there is tracking our tax capacity based on our levies from
previous years and any properties that are coming off the books in terms of tax increment financing so
really that number is not related to or intended to be related to the actual levy. It’s more used for a
percentage calculation to help calculate the impact on the average property owner. So it’s not really, it’s
not intended to be a levy dollar amount.
Councilwoman Ernst: So I think if we can just get those labels corrected that will help identify what
we’re looking at for the levy versus the three scenarios.
Greg Sticha: Okay. I can change the labeling on those as well, yeah.
Councilwoman Ernst: And then we had, in your format Greg you have listed that we, there’s an increase
of $6,500 a person. Just on the side of the percentage increase.
Greg Sticha: Yep. If you go back up to, yeah at the top. The increase in the levy is $6,500. Go back to
that spread sheet Paul. To the top. The increase is $6,500 once we factor in eliminating the $150,000
from the market value homestead credit change for next year. So if that program had remained
unchanged, if they had kept the market value homestead credit program in place for 2012, that levy would
be $150,000 higher than you’re seeing in front of you.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst: Well as I went through everything I came up with roughly $400,000 additional in
spending, and just to give you some of these for example there’s $126,000 with the decrease in the library
referendum and that would be additional monies, right?
Greg Sticha: Well our total bond levies are the same.
Councilwoman Ernst: Right but that is additional money. It’s money that we had before that was 420
some thousand.
Greg Sticha: We also had.
Todd Gerhardt: You have to look up the entire debt schedule like we referenced in the.
Councilwoman Ernst: Yep and I, yep. But there’s still a gap there, and I know what you’re trying to do
with that is make it flat.
Todd Gerhardt: Balance.
Councilwoman Ernst: Right.
Todd Gerhardt: Yeah, so some are going to go up. Some are going to go down each year but the total is
going to stay the same. So library may go down. 212 bonds may go up but they balance at the right. So
if you’ve got your debt schedule.
Greg Sticha: I can pull it up.
Mayor Furlong: You did fine Paul. Just apparently not good enough.
Greg Sticha: If you look to the far right of this spread sheet.
Mayor Furlong: Why don’t you, for the people watching at home why don’t you explain what this spread
sheet is.
Greg Sticha: This spread sheet is our bond tax levy spread sheet which projects and plans our debt that is
sponsored by or planned to be paid for by property tax dollars. So this spread sheet monitors all of the
debt that we have that is intended to be paid for by property tax dollars. The City Council has taken a
policy decision a number of years ago to attempt to keep that total levy flat going forward and what I
think Councilmember Ernst is referring to is, we did have a change in the library bonds that went from
495 down to 351 and offset by that is for example Audubon. And this council passed a levy to help fund
for the debt that we issued to the EDA for the construction of Audubon. So that still gives us the same
total debt levies of $1,809,190. So our total debt tax levies are the same for, from the previous year. It’s
just which debt levies are, all the debt levies are not the exact same dollar amount. Some of them have
shifted between the various types of debt levies, but the total, in total it is the same debt levy from the
previous year.
Councilwoman Ernst: But isn’t there still the additional money that is considered to be expense, even
though we’ve got it listed out here to keep the levy flat? It’s still additional, it’s still additional money.
I’m sorry, not additional expense. Additional, is it.
Greg Sticha: Had the City Council.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst: I’m looking at it as a decrease.
Greg Sticha: Had the City Council not decided to do Audubon then you could have potentially had a
decrease in this number.
Councilwoman Ernst: Interesting. Okay. Well and then I came up with.
Todd Gerhardt: So just to show you, go back to that again Greg. Go down to the right. So 2016 is a year
where you see the $1,377,000. That would be a $431,000 decrease that isn’t accounted for as of yet but
you know that would be a year where you would see a substantial decrease, or an excess levy.
Mayor Furlong: With regard to.
Todd Gerhardt: Over the 100.
Mayor Furlong: Over the levy associated with the bonds from the prior year.
Greg Sticha: Correct.
Todd Gerhardt: But I think if we go back to pavement management we may be taking that dollar amount
and putting it towards street reconstruction, but again it’s up to the council at that time to decide.
Councilman Laufenburger: But what you’re, Mr. Gerhardt and Mr. Sticha what you’re doing here is
you’re really managing to that consistent levy level of $1,809,190 which was the direction that the council
gave you at some point in time, is that correct?
Todd Gerhardt: Correct. We’re managing our debt to that level.
Councilman Laufenburger: Right.
Councilwoman Ernst: There were a couple other ones. So there was also additional expense that we had
that’s $119,000 with new construction and then this $150,000 that you’re talking about. Are you saying
that we have to levy that back in now?
Greg Sticha: No, we’re eliminating that from the levy because we had put it into the levy back in either
2002 or 2003. It was before my time here.
Councilwoman Ernst: But we never used it right?
Greg Sticha: Well no.
Todd Gerhardt: Got it.
Councilwoman Ernst: Or okay, never got it.
Todd Gerhardt: The County takes it out.
Greg Sticha: Under the old market value homestead credit program what the County did was essentially
take away your first $150,000 and in order for us to get $10 million dollars in true levy dollars we had to
levy $10,150,000. The County essentially gave the credit to the property tax owners but the State never
gave us the $150,000 in the past and so that’s why back in early 2000’s the City Council decided to pay
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Chanhassen City Council – September 12, 2011
for, a City Council decided to levy up to ensure that we were going to get our full $10 million dollars.
Now that the program is being eliminated, it’s allowing us to lower the levy by that $150,000 that we had
built into the levy to make sure that we got our full $10 million dollars.
Councilwoman Ernst: Okay.
Greg Sticha: If we did not eliminate that $150,000 it would result in a property tax increase to our
residents.
Todd Gerhardt: To the tune of the $156,500.
Councilwoman Ernst: Right.
Todd Gerhardt: Instead of $6,500.
Councilwoman Ernst: Right.
Greg Sticha: Yep.
Councilwoman Ernst: And then with the calculations that I’ve done, and I’m trying to figure out where
this money is allocated too. So we had an increase in wages of 1.5% that are built into the budget, right?
And 15% health care insurance.
Greg Sticha: Correct.
Councilwoman Ernst: So from my estimation from what I’ve gotten is 1.5% in wages comes to roughly
$74,000-$75,000. At a 1.5% increase. That doesn’t include compensated absences of course.
Greg Sticha: Okay. The 1 1/2 percent is based on the actual gross wages and we have a very detailed
spread sheet that breaks that out and that comes up with that $52,500 and we put into the budget the exact
amount per employee of the City of Chanhassen into the budget for that 1.5% increase so.
Councilwoman Ernst: Well and I should clarify. This includes the 1.5% of wages coming out of the
enterprise funds as well.
Greg Sticha: Right.
Councilwoman Ernst: Not just the general budget.
Greg Sticha: Yes, there would be an additional amount for the enterprise funds on top of the amount you
see listed for the general fund, correct.
Councilwoman Ernst: Right.
Councilman Laufenburger: But those are not levied, is that correct?
Greg Sticha: Correct. Those are paid for by utility rates.
Councilwoman Ernst: But it’s still additional expense.
Greg Sticha: We’ll be discussing the utility rate here in a month or whatever the calendar said.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst: Right. And then health care insurance, again across the board for the general fund
and enterprise funds came to roughly $64,000-$65,000.
Greg Sticha: There would be an additional amount for the enterprise funds as well, that is correct.
Laurie Hokkanen: Let me just clarify. The 15%, it’s not a true total 15% increase, if you remember the
two spread sheets we looked at. It’s 15% of the premium cost. By participating in a health savings plan
we were able to hold a certain portion of our expenses.
Councilwoman Ernst: Right, and that is taking that into consideration.
Laurie Hokkanen: Okay.
Mayor Furlong: If I could Ms. Hokkanen, is there a ratio between the total cost that’s related to the
premium versus the health care, do you know that or Mr. Sticha?
Laurie Hokkanen: I think off the top of my head it’s about 20%. 80% premium cost, 20%. Does that
sound about right?
Greg Sticha: That sounds about right.
Laurie Hokkanen: 20% is held constant in the deductible, about 80% in premium. It’d be 25-75.
Councilwoman Ernst: So where is that money in here? In any of these scenarios.
Todd Gerhardt: General fund.
Councilwoman Ernst: It’s in the general fund.
Greg Sticha: It’s within the general fund levy. The $50,000 that is under bullet number 2 listed here is
within the general fund levy.
Councilwoman Ernst: And the health care in there?
Todd Gerhardt: General fund. The $7,514,700.
Greg Sticha: It’s in the general fund.
Todd Gerhardt: With the exception of the enterprise and that would be broken out into each of the
enterprise funds.
Councilwoman Ernst: Right. So roughly, I mean we’re looking at some additional expenses here that
quite honestly I’m not comfortable with what we’ve talked about here and what my findings have been in
really supporting any of these scenarios because I need more information as to what is our budget going
to look like? It feels like we’re putting the cart before the horse and until we know what our budget is
going to look like, how can we actually determine even making a decision on the preliminary levy. We
need to know what we’re dealing with before we can really figure out what are going to do for taxing our
taxpayers? Are we going to give them, are we going to give them money back? Are we going to ask
them for more? We don’t know what that looks like. And is there a way to do that? I mean we talk
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Chanhassen City Council – September 12, 2011
about budgets. We’re talking about budgets now and we’ll end up talking, discussing budgets, what is it
the end of December?
Todd Gerhardt: First part of December. The next 3 months.
Councilwoman Ernst: So, and that’s what I’m struggling with with this. It’s like we don’t really even
know what we’re up against. What we’re looking at. There’s too many gaps in this.
Mayor Furlong: Are there other questions for staff?
Councilman Laufenburger: I have a couple.
Mayor Furlong: Councilman Laufenburger.
Councilman Laufenburger: Mr. Sticha, you toiled with explanation behind the market value homestead
credit and what was going to happen and how that would affect individual property owners. What entity,
government entity actually has a responsibility of calculating the impact on the individual property
taxpayer, do you know?
Greg Sticha: Well Carver, the County will eventually send out a Truth in Taxation statement that will be
best based on the new changes.
Councilman Laufenburger: It would be this is your estimated property tax bill for next year, right?
Greg Sticha: Correct. And at this point they’ve hesitated to give an exact calculation. I think they’re still
working on the legislative changes that happened just in July so, and the League of Minnesota Cities has
also been very cautious as to come up with an exact calculation. As Senator Ortman pointed out, the
entire credit program was a maximum of $300 so if you kind of back into some of the numbers just based
on percentages and percentage of the value of homes, one could make a guesstimate that maybe the
impact on a home approximately of $320,000 in value might be a couple dollars, 2, 4, 5 dollars
somewhere in there but I really can’t give you an exact number. I don’t think anybody could give you an
exact number at this point.
Councilman Laufenburger: Yeah, no. I wasn’t asking for an exact number. I was trying to understand
where that calculations would come from and it sounds like what you’re saying is Carver County, the
people who distribute the property tax statement, both the preliminary and then the final based on our
final levy and the school district, etc.
Greg Sticha: Correct.
Councilman Laufenburger: So all of the fog regarding the Minnesota, excuse me, the market value
homestead credit, that will all clear when we get our final property tax bill.
Greg Sticha: Your final property tax bill.
Mayor Furlong: In March of next year.
Greg Sticha: Right, in March of next year. There’s one other thing to keep in mind. The Truth in
Taxation statements that you get now also can change even if all the entities levied the exact same dollars
that they said that they were going to in their preliminary levies, because of home value adjustments the
numbers could change slightly after the final levies have been set.
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Chanhassen City Council – September 12, 2011
Councilman Laufenburger: So that’s right. That preliminary tax bill, which is not a bill.
Greg Sticha: Right.
Councilman Laufenburger: Has a preliminary market valuation on it as well, is that correct?
Greg Sticha: Right, and so there are things within there that can change that could not probably
significantly change the tax bill but certainly could between that and the final tax bill.
Councilman Laufenburger: Okay, thank you. You showed us a chart comparing budget dollars for 2010
and 2011. I wonder if you have at your disposal actual dollars spent in 2009 and 2010 as compared to
budget dollars. That’s a little bit of a surprise. I’m sorry I didn’t ask you that earlier.
Greg Sticha: I wouldn’t have those numbers available. I would have to probably scour each of the KFS
cities financial statements and.
Councilman Laufenburger: Well I wasn’t, I’m not, I don’t care about the KFS cities. I’m thinking about
just the City of Chanhassen.
Greg Sticha: Oh yes.
Councilman Laufenburger: My question is, what was the actual change in, what was the percentage
change in actual dollars spent by Chanhassen in 2009 and then in 2010.
Greg Sticha: I’ve got to see if I can get that number for you.
Councilman Laufenburger: While I appreciate budget is a good predictor, the precision comes from what
we actually spent.
Todd Gerhardt: It was roughly $188,000 less in 2010.
Greg Sticha: I can give you the number for 2010. That’s the only CAFR I have in front of me this
evening.
Councilman Laufenburger: Alright.
Greg Sticha: And are you wondering about expenditures or revenues?
Councilman Laufenburger: I’m just wondering about expenditures. General fund expenditures, yeah.
Greg Sticha: For 2010 we had budgeted general fund expenditures of $9,507,400. We had actual
expenditures of $9,319,006.
Councilwoman Ernst: I’m sorry Greg, what was that number?
Councilman Laufenburger: 319.
Greg Sticha: $9,319,006.
Councilman Laufenburger: That’s $188,000 less okay. That was 2010. Do you have 2009 perhaps?
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Chanhassen City Council – September 12, 2011
Greg Sticha: I have the actual number. Actual expenditures for 2009 were $9,088,527.
Councilman Laufenburger: Okay. Can you do a quick calculation. What was the change in actual
spending from 2010 over 2009?
Greg Sticha: Yep, I can tell you that.
Todd Gerhardt: Planner’s dream.
Kate Aanenson: I know. It’s all planned out.
Todd Gerhardt: Well that’s good he’s using a calculator. You don’t want to use administrative math here
though I think we hit it right on the nose here.
Greg Sticha: 2.5%.
Councilman Laufenburger: And if, I should ask first. Do you anticipate the 2011 general fund spending
will be $9,727,800? Or do you think it will be less?
Greg Sticha: Is that what we have in the budget document?
Councilman Laufenburger: Yeah. Yeah.
Todd Gerhardt: Typically we run about 1% less each year and, from an expenditure side. Revenue is you
know dependent on building permit revenue and other revenues but typically it’s been running around
1%.
Greg Sticha: The number has slowly shrinked over the last couple years.
Councilman Laufenburger: Actual versus budget has shrinked?
Greg Sticha: Yeah. Yeah the actual expenditures versus budget, the amount of the variance between the
two at the end of the year has slowly begin to shrink because we have looked in for areas to tighten the
budget wherever possible so we are getting closer to a very, very identical number between what we
actually spend and what we budget. The other thing to keep in mind is, each of the last couple years we
have directed staff to, because of the economy, only make needed expenditures and any discretionary
spending has been indicated to staff that they should avoid anything that would be.
Councilman Laufenburger: Or at least defer it until you have a greater indication of revenue from.
Greg Sticha: And there’s a number of line items within the budget where we have done that. Where we
have directed staff to do just that.
Councilman Laufenburger: Okay.
Greg Sticha: Which would certainly have an impact on why we would have been under budget in 2010
and/or 09.
Todd Gerhardt: And you know we try to encourage departments to be good managers and stewards of
their money. Not to spend up to what they have budgeted so you know every intern that comes into city
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Chanhassen City Council – September 12, 2011
hall I’ve tried to explain to them no, we don’t spend up to our budget and you know we only make
purchases that we need. We get estimates and whatever is left over at the end of the year the council
decides what happens to that money. It’s a message that we’re trying to continue to instill in the
organization.
Councilman Laufenburger: Okay. My last question Mr. Mayor. Greg, you showed, you compared
Carver County tax rates, or Chanhassen with other tax rates in Carver County for the 2011 tax rate. Tax
year, excuse me. Do you have a sheet that shows the tax rate within Chanhassen over the last 5 to 7
years?
Greg Sticha: I do. It might take me some time to find it but I do and I can certainly email that to you at
some point but I can go look and see if I can find it.
Councilman Laufenburger: If you can find it I’d appreciate it.
Todd Gerhardt: The only thing I would preference on that is that it will fluctuate based on market values
so.
Councilman Laufenburger: Higher market value, lower mil rate.
Todd Gerhardt: Lower market value, higher mil rate. Higher market value, lower mil rate. And so when
you compare yourself to the other cities is the best way to do that. And then you know so our’s will show
an incrementally increase but our market values have gone down.
Mayor Furlong: Just within the last recent few years.
Todd Gerhardt: Correct.
Mayor Furlong: Yeah, prior to that it was a steady decline as the levy grew at a rate slower than the
market values.
Councilman Laufenburger: So if I’m not mistaken I think back in ’01 and ’02 I think our mil rate was up
around 35, 36, 37, is that right?
Todd Gerhardt: Yeah.
Greg Sticha: Our rate was at a low of the previous year of 20.
Todd Gerhardt: Tax rate.
Councilman Laufenburger: Tax rate. Mil rate.
Greg Sticha: 23.03? Okay. And then because of the changes in home values, we’ve seen that rate since
go up slightly.
Mayor Furlong: But the actual dollars paid are not necessarily.
Councilman Laufenburger: And my last question is for you Mr. Mayor. That is, this is my first budget
cycle as a City Council member and I certainly appreciate not only the dialogue but the multitude of
information that I’ve been given but the decision we are making tonight is not a decision on what’s in the
budget. The decision we’re making tonight is the, essentially the frame of the window that we are going
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Chanhassen City Council – September 12, 2011
to give to the city staff on how much money we’re going to allow them to spend. Am I saying that
correct?
Mayor Furlong: At the most.
Councilman Laufenburger: At the most. At the most.
Mayor Furlong: Well it’s how much, what’s the maximum amount that we would levy in terms of
property taxes.
Councilman Laufenburger: Right.
Mayor Furlong: For all purposes related to property tax.
Councilman Laufenburger: But if we say this is the amount, then we will take the next 3 months to help
the staff decide where within that levy, where and how they will spend that money, and it may mean less
here. Little bit more there. You know substantially less here and substantially less there so.
Mayor Furlong: That’s correct.
Councilman Laufenburger: So there are no, we’re not making any budget decisions tonight. We’re not
deciding tonight that yes, staff will get a 1.5% pay increase, is that correct?
Mayor Furlong: That’s correct.
Councilman Laufenburger: Alright, thank you for that clarification Mr. Mayor.
Mayor Furlong: Other questions for staff. Mr. Sticha, with regard to the overall projected, or the
preliminary budget that corresponds to the scenario 1, and here I’m looking back at the 2012 budget
expenditures sheet. If I’m looking at this correctly what staff is currently proposing is under scenario 1
about a 0.82% increase in total spending being proposed in preliminary 2012 relative to approved 2011, is
that correct?
Greg Sticha: That’s correct.
Mayor Furlong: So the council last year approved a budget of, if I’m looking at this correctly,
approximately $9.6 million dollars in spending and corresponding spending this year, or in 2012 that’s
being proposed, even though to Councilman Laufenburger’s point, we’re not adopting any of these
assumptions but what’s being proposed currently is just under $9.7 or basically less than 1% increase over
the prior year.
Greg Sticha: Correct.
Mayor Furlong: Did I get that correctly? So when included in those were the assumptions that you had,
which again while we’re not adopting anything. 1.5% increase in compensation, 15% increase in the
premium on the health insurance which is probably still more than a 10% increase on a weighted average
basis for health case. Both of those which are significant expenditures, those are both higher than the
0.8% overall increase so that tells me that in some areas we’re reducing projected spending in some of the
categories, is that a reasonable assumption?
Greg Sticha: Yep, that’s correct.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Are there any, the other assumption was that the level of services would be able to be
maintained. Current level of services will be able to be maintained so how are we reducing expenditures,
still maintaining services in all these other areas? What’s generating those reductions in spending in
different categories?
Greg Sticha: Well the most significant one, and changes from the 2011 budget to 2012 is the contract for
policing services with Carver County. I believe that accounts for $40,000 of a change between the
previous years. That’s the most significant. Others would.
Mayor Furlong: And with that reduction of spending that’s not a reduction of any service level.
Greg Sticha: No.
Mayor Furlong: In fact it’s a revision to the management structure under the contract policing in which
they expect to provide better service.
Greg Sticha: Yep, that’s my understanding of the contract.
Mayor Furlong: Okay. Okay. So that’s one of them, but there are other areas obviously.
Greg Sticha: There were other less significant line items that were adjusted along the way either to be
more in line with some of our historical actual spending or areas that we felt we could make minor
adjustments downward. None of them nearly as significant as that dollar amount but there were other
adjustments to other budgets that were other line items within the budget that were downward, yes.
Mayor Furlong: Okay. And the next result of all those was then the proposed under scenario 1 of less
than 1% increase in spending. If scenario 2, 3, scenario 14, if any other scenario for, or preliminary
budget was approved that was less than scenario 1, that would suggest an adjustment to the overall
general fund spending would also go down, unless we make adjustments to other levy amounts.
Greg Sticha: Correct.
Mayor Furlong: But there, correspondingly if the other levy amounts were held the same, then there’d be
a reduction in the total spending the general fund would have to absorb that.
Greg Sticha: Correct.
Mayor Furlong: Correct, okay. Which would result in some sort of spending growth less than even the
0.8% that’s currently being proposed.
Greg Sticha: Yep.
Mayor Furlong: Okay. Thank you.
Councilwoman Ernst: Can I just make a comment for clarification?
Mayor Furlong: Question, sure.
Councilwoman Ernst: When Councilman Laufenburger was talking about we’re not voting on the 1.5%
increase or 15% increase in health care. You are voting, you are voting on that tonight as a preliminary
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Chanhassen City Council – September 12, 2011
levy because it’s included in the general fund but not as the final levy. Right? Because it’s included in
the general fund or at least that’s what you had indicated. ..implied earlier.
Mayor Furlong: It was an assumption used in generating the preliminary budget.
Councilwoman Ernst: Right. Right.
Mayor Furlong: But that, but I think Councilman Laufenburger’s question, as I understood it was are we
approving that change and the answer was no.
Councilwoman Ernst: And that’s true but I’m just saying the preliminary levy tonight you are approving
that as a preliminary levy. Not as a final.
Councilman Laufenburger: I disagree. I disagree. I don’t think we’re, I don’t think I’m putting my
stamp of approval of any departmental budget expense tonight. I think all I’m doing, all I am doing is I
am, I will be expressing my opinion on what’s the amount of the levy that I am prepared to ask the
citizens of Chanhassen to be a high levy point and then after tonight I will work diligently with city staff
and other council members to make sure that whatever dollars we end up levying the citizens of
Chanhassen, we spend those in the most effective and most efficient way.
Councilwoman Ernst: And you are correct from the way I understand it as well but I’m just saying
tonight, when you approve the levy tonight, whichever one of these scenarios you approve, it is included
in the general fund number. Right? Isn’t that what you said earlier?
Greg Sticha: It’s included in the assumption of creating the general fund budget.
Councilwoman Ernst: Right.
Greg Sticha: But to Councilman Laufenburger’s and Mayor Furlong’s point, you can change that
number.
Councilwoman Ernst: And that’s true and I believe that. I’m just saying tonight, if they vote on any one
of these scenarios they are approving as part of the preliminary levy.
Mayor Furlong: Approving what? I don’t think there’s any approval of any spending.
Councilwoman Ernst: If you approve the levy tonight, the budget, the general budget includes those
numbers to get to these levy numbers.
Mayor Furlong: Well they’re.
Councilman Laufenburger: It was a number that was included for planning purposes but we’re not.
Councilwoman Ernst: And that’s what it is.
Councilman Laufenburger: Yeah, but we are not, the plan is still moveable from my standpoint, yeah.
Councilwoman Ernst: And it is.
Councilman Laufenburger: What will not be moveable though is the maximum amount of levy that we
can present to the citizens of Chanhassen.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst: Correct.
Mayor Furlong: And that’s what is being…before us tonight.
Councilwoman Ernst: Right. I understand that.
Councilman Laufenburger: When I say to my son, or when I did say to my son you know you’ve got
$200 to spend for clothes for school, I don’t tell him that he can $20 for the jeans or $50 for jeans. It’s
$200.
Councilwoman Ernst: That’s true.
Councilman Laufenburger: So I feel like that’s.
Councilwoman Ernst: Or jeans and a t-shirt is included. It’s included in the $200.
Councilman Laufenburger: That will be negotiated after the fact, yeah.
Councilwoman Ernst: Yes.
Mayor Furlong: Any other questions for staff at this point? There may be some others as we get into
discussions but if there are no other questions of staff, I’d like to hear discussions and comments with
regard to establishing a preliminary levy. Thoughts, comments?
Councilman McDonald: Well I’ll go ahead.
Mayor Furlong: Councilman McDonald.
Councilman McDonald: I’ll go first. You know I guess first of all to Commissioner Ernst, you know I do
want to say thanks because you know we have gone through this in great detail. Learned more about how
the city spends the money this year than I think in the past but what it all kind of comes down to for me is
that, it’s imperative that we maintain services where they’re at. I mean that’s the first thing I’m looking at
because again what the residents are saying is, they want the services. We’ve been over this 100 times.
No one is willing to give up the services because they are very important to them, and it’s not as though
it’s 100% across the board but I mean it is important to the residents in general that we provide the
services that we do, and I just don’t see any way to cut any of those back so the big thing I’m looking for
is we have to be able to maintain services, and that’s going to cost a certain dollar amount. As far as the
1.5% and all like that, yeah all we’re doing is setting a number. We could say that 1.5% goes to roads if
we want to. I mean that’s the whole thing between now and December, that’s the details of where do we
want to spend our money so all I would say to the council is, I think we need to give ourselves enough
latitude so that we can make those kind of decisions. Yeah, every budget year there’s always the
unknown. Health care has been always unknown until I think about October or something when they get
the final numbers so, we never really know. So that’s the perspective that I’m coming from is that I just
want to make sure that whatever we do, we end up maintaining services because that, as I understand it
from the residents is number one. We need to be efficient in doing that and that’s our job in setting the
budget between now and December and as we get into it in more detail in certain areas I’m sure we’ll
change numbers around but that’s the perspective that I’ve got tonight is that you know to me it’s
services. The only thing I’d like to add to that, and again I tried to get it out when Ehlers was here. You
know we’ve managed to do a very unique thing in getting the AAA bond rating, and I think that my hats
off to staff. It’s off to council because we’re the ones that set the policy but they implement the policy. I
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Chanhassen City Council – September 12, 2011
mean that, you know we just kind of mentioned that but that’s a really big deal and we’re already seeing
benefit from that in the fact we’re able to retire bonds early and you know save a lot of money over the
long term. That’s very important and one of the things that they hit us up on was the management of the
way we do things. The communication. The fact that we take care of infrastructure. I mean I know no
one likes to get their road targeted for you know being redone or anything but that’s part of what makes
the City work is the fact that we keep all of that up and that’s very important so, again what it comes
down to is everybody likes the City the way it is. I sit around and talk to a lot of people and it’s like what
would you change? No one could come up with anything that they really, really want to change. When
they think about it they like the way the city is. You know it’s a small town atmosphere you know
th
surrounded by the big city. We’ve got the 4 of July parade. We’ve got a lot of amenities for residents.
We keep getting picked on these best places to live and again it’s because of what we offer. Services.
Amenities. You know it’s not as though you just move here and then you go back and forth to work.
th
You’ve got activities. You know from the 4 of July, Feb Fest, the dance contest. There’s always
something going on and that’s what makes this a livable community so I don’t see how we can jeopardize
that and the way I intend to vote is to make sure that we continue with those policies and that you know
all of that stays in place. So that’s kind of where I’m at on all this.
Mayor Furlong: Thank you. Other comments? Councilwoman Tjornhom.
Councilwoman Tjornhom: Sure. I first of all want to thank staff and council. We’ve been working on
ththnd
this since July. I have notes going back to July 11 and August 8 and August 22 and we’ve had all that
time to gather data. There have been several emails, several phone calls made. I make phone calls to
staff asking questions and so we’ve had a lot of time to you know get our questions answered and to kind
of figure out where we as individuals want to kind of land tonight on this levy. One thing I guess about
me, I can’t say about everyone else but I’ve just always never really been into comparing myself or this
town to other communities and you know what they’re doing in trying to maintain their standards. I think
we always kind of break the mold with that and exceed expectations of everybody and I think we are the
leaders in how to you know make things work and so while the world is full of naysayers, I believe that
we are a good place. We are a good town and we’re on the right track and tonight’s not talking about
that. It’s not talking about the numerous awards that we’ve been nominated for and won. It’s not about
our AAA bond rating. It’s not about our citizen survey where 98% of the people said they would
recommend other people to live here and raise their families. We’ve had celebrations and we’ve
discussed that and now tonight though it’s about the work that we have ahead of us. You know this
community was built and is maintained by hard work and dedication. One of the hardest, most difficult
jobs of being on the council I believe is the budget process and it is creating a budget that works. Every
family has felt the impact of a wounded economy and is trying to somehow recover from it. My only
priority for this budget cycle is to maintain the service levels that we have already maintained and you
know some people, there was an article in the paper last week that a constituent didn’t like the fact that
we spent so much time talking about plowing roads and maintaining trails. Some people may think that
we spend too much on public safety or CSO officers and I’m not here tonight to try to argue those points
or try to change their mind on their priorities. You know tonight I’m here to talk about what my priorities
are for this budget cycle and my priorities as a council member and my first priority is that we maintain
our services to Chanhassen in a responsible and respectful manner of taxpayer’s money. And my second
priority is to be supportive of our financial, or our city manager and the financial policies that he and his
staff have created. We don’t get a AAA bond rating overnight or without strategically planning how to
manage our funds so that’s really important I feel as a council member. And the third thing is, is just to
represent the hard working people of Chanhassen and so tonight I will be supporting scenario 2 and my
reasons for that, as I’ve explained, that it’s a fiscally sound start to an ongoing budget discussion that will
be resolved in December. With scenario 2 we are starting at a zero tax impact and our discussions will
only be then to go down from that, this levy and to make the right decisions for everyone that lives in this
town. Everyone needs their roads plowed. We discussed how children need to have their trails
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Chanhassen City Council – September 12, 2011
maintained to get to the bus stop. We had discussed numerous things that the City paid for. Public safety
and those are all important and I plan on fighting to make sure that those policies remain in place and that
we remain the community that we are.
Mayor Furlong: Thank you. Other comments. Councilwoman Ernst? No comments? Councilman
Laufenburger.
Councilman Laufenburger: I do. I could echo the same things that council members McDonald and
Tjornhom did, and those thoughts run through my mind about the enjoyment that the citizens have of the
city of Chanhassen, but I tend to be a simple thinker and I looked at last year’s levy and then modified by
two events, new construction adding $119,000 in taxable tax levy. Am I saying that correct Mr. Sticha?
Greg Sticha: Yes.
Councilman Laufenburger: $119,000 roughly. And then the other event is the market value homestead
credit which takes, which allows us to reduce the levy by 150 and that nets us out to scenario 2 which is
$10,236,390 and that’s the scenario that I’m going to be supporting principally because we were able to
do it last year. I think it’s reasonable for us to, excuse me. We were able to do it this year. It’s
reasonable for us to ask staff to maintain the level of services using the same general fund tax levy we had
in place last year supplemented by new building and the change in the market value homestead credit so I
too will be supporting scenario number 2. Thank you Mr. Mayor.
Mayor Furlong: Thank you. You know I appreciate the comments made by council members. I think the
reason we’re looking at this tonight is simply because we have to. We have to establish a preliminary
th
levy by the 15, which is Thursday. This is our last meeting before that or if I’m not mistaken, if we
don’t establish a preliminary levy this evening of any amount, then the prior year’s levy would become
effectively the preliminary levy. We could do no more than last year’s levy. In many years that might be
lower and not incorporate the real growth that had occurred during the year but in this case, if I’m not
mistaken Mr. Sticha, if we don’t pass a preliminary levy this evening, whatever that amount is, because of
this change in market value homestead credit exclusion we’d actually see a tax increase on the
preliminary statements.
Greg Sticha: Yeah. If you set the same levy as the previous year, yes you would. A small increase, yes.
Mayor Furlong: Or if we don’t take action to establish a preliminary levy this evening and the default
levy of last year’s levy goes through, that would show a tax increase on the preliminary property tax
statements, is that?
Greg Sticha: Correct.
Mayor Furlong: Concerning that correctly. So I think it certainly behooves us to pass a preliminary levy
this evening in large part because I don’t believe, and I think I’m hearing from other members of the
council and I know in all our work sessions and discussions that we’ve had, that there isn’t a desire on
members of the council to be increasing taxes in this environment and this economy and in this statement
so I think we do need to move forward. Is maintaining service levels, continuing the same service levels
is important. I’ve heard that. Multiple comments from the council members and I echo those thoughts as
well. And to do that in the most cost effective and efficient manner and I think that’s where we rely on
Mr. Gerhardt and his staff day in and day out to deliver the services that our residents and businesses look
for and expect in the most cost effective and efficient manner. That’s what we’ve been doing and I think
as I asked questions about the proposed change here, and that was under scenario 1 where the total
spending would increase less than 1%. 0.8% when we know that some of the areas, whether or not they
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Chanhassen City Council – September 12, 2011
ever get approved at this level but the current estimates are higher than that, means that we’re saving
money in other areas and that’s ultimately how a comprehensive budget process works. To me I think
that as we establish a no more than preliminary levy today, we should do it with the idea of you know
what is the, this is a tax policy decision. What is the most that we believe should be levied? Councilman
Laufenburger’s concept of including real growth in the tax base and making the adjustment for market
value homestead credit, while this is first budget, that’s also very consistent with the practices that we’ve
had over the past many years in terms of establishing a preliminary levy. Sometimes we stay at that
amount for the final levy. Other times we’ve gone down from that and when we’re establishing this levy
I think to make sure that we have the flexibility to address the needs of the City. One of the things that I
look at with the various budget discussions we’ve had and the other information provided, and I think
we’ve had as much or more information received this year at this point in the process as I’ve seen. You
know where are the possibilities? Do we think that the assumptions or the projected spending is low? Do
we think, or do we think there are opportunities to improve that? Whether it’s some of the outstanding
issues that we’ve asked for more information on or will be discussing. We saw the schedule earlier this
evening. Whether it’s employee benefits, the fire station, fire training, various other service levels, it’s
my sense that indeed if anything there’s a tendency to find more opportunities for efficiencies and policies
that would reduce the required level of spending of the general fund rather than increase it and so I am
certainly comfortable with scenario 2 for the reasons stated. I think it meets our, it meets the needs. It
doesn’t necessarily expand wants. We haven’t been doing that for years. We’ve been providing those
services that are expected and is one that maintains services, service levels. It results in, scenario 2 results
in less, if my math is correct, less than 1/2 of 1% increase in the overall general fund spending. It’s
possible and I think that we may make further adjustments there as well. So we’re going to be continuing
our budget discussions during the next 3 months and look for opportunities to reduce those spending
amounts but clearly to me for tonight, based on the information we have, scenario 2 seems to be the
responsible and reasonable level of a preliminary levy for this council to pass. If there are no more
discussions is there someone that would like to make a motion?
Councilman McDonald: Ah yes Mr. Mayor, I’ll make the motion.
Mayor Furlong: Do we know the amounts that we need for scenario 2 in the resolution?
Greg Sticha: Yep, I just got those numbers for you right now. Under scenario 2 you would need to pass a
general fund expenditure budget of $9,659,500 and a levy of $10,236,390.
Mayor Furlong: Please listen as he makes his motion to make sure it’s consistent.
Councilman McDonald: Okay you’re going to have to help me with the 9 million because what I’m
looking at, all I see is the general fund and then the total levy. So what I would do is make the motion
that we adopt scenario 2 which would require us to, I’m looking for help.
Mayor Furlong: Is there a resolution in the?
Greg Sticha: There is.
Councilman Laufenburger: There’s a resolution on 301 of your packet.
Councilman McDonald: But isn’t that.
Todd Gerhardt: Greg, take your’s, fill in the number and hand it to Jerry.
Greg Sticha: Sure, I can do that. Give me a second.
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Councilman McDonald: Okay I make a resolution adopting the preliminary 2012 general fund budget of
$9,659,500 and establish a total preliminary levy of $10,236,390 for the year 2012 and establishing Truth
in Taxation public hearing dates for 2011 collectible in 2012.
Mayor Furlong: Thank you. Is there a second?
Councilman Laufenburger: Second.
Mayor Furlong: Motion has been made and seconded. Any discussion on the motion? Hearing none
we’ll proceed with the vote.
Resolution #2011-53: Councilman McDonald moved, Councilman Laufenburger seconded that the
City Council approve a resolution adopting the preliminary 2012 general fund budget of
$9,659,500, establish a total preliminary levy of $10,236,390 for the year 2012 and establishing
Truth in Taxation public hearing dates for 2011 collectible in 2012. All voted in favor, except
Councilwoman Ernst who opposed, and the motion carried with a vote of 4 to 1.
Mayor Furlong: Thank you everybody and thank you to staff for all your efforts up to this point and
thank you in advance for all your efforts coming up. There’s a lot more work to be done so we appreciate
everybody’s efforts day to day throughout this process. That completes our items of business this
evening. Scheduled items.
COUNCIL PRESENTATIONS:
Councilwoman Tjornhom: Mayor I have one.
Mayor Furlong: Councilwoman Tjornhom.
Councilwoman Tjornhom: And this is a rarity for me. I’d like to address a letter that was in the
newspaper last week, and I think it was written by Mr. Leonard and it was discussing and kind of almost
criticizing this council on the actions that it took at our last work session and I just, I really feel I need to
clear the air on this specifically because I just feel that the accusations were not true. I believe that when
you are discussing something extremely important like employee compensation, which is one of the
largest parts of the budget, you need to do it with a fresh mind and you come ready with ideas and ready
for a discussion. That particular day, that last session that we had the council started at 5:00 and we had
listened diligently and discussed, which was criticized, snowplowing I guess too long and other issues
like that and then we came into council chambers and had our council meeting and then we came back
and went back right into discussions about our budgets. At 11:30 it was determined that, or before that
even perhaps, I don’t remember, that you know it was probably getting late and so getting into perhaps
what could take a 2 to 2 1/2 hour discussion, it probably wasn’t prudent for us to be doing that at that
time. I believe in the letter it said that the mayor didn’t have the ability to manage an agenda or that the
lack of time management or whatever it was, and as a council member I think I probably am one that is
always suggesting that nothing really ever gets done past 10:00, especially if we’ve all been working and
up since 6:00 and so it has always been my prerogative and my wish as this council, and I’m just a
council member but that we always approach these issues with a fresh mind and so in my mind, as groggy
as it was at 11:30 at night, it made more sense to take a work session and address this issue at that time
and so that’s my two cents on what actually happened that night and it was not about irresponsibility or
not taking seriously the issues that we need to deal with. It was strictly that it was more responsible in my
mind to do it at a time when we were more ready and willing to really think clearly and make good
decisions for the taxpayers.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: Thank you. Other council presentations?
Councilman McDonald: Well yes Mr. Mayor, if I could because since my name was mentioned in that
article and we’re going to bring it up. Yeah, I was wanting to get some more information about the
employee I guess vacations and compensation and we had kind of the same discussion we had tonight
about the big purpose of the budget and what we were doing. I really don’t need that information to set a
preliminary budget number and that’s what I agreed upon after talking about this. So I guess I’m not sure
if the article completely portrayed you know my feelings because when I left I felt as though all my issues
had really been addressed and that you know this would be taken up as part of the details going forward.
So I too would just echo, yeah it was a long night. We did the best we could. Yeah we could have stayed
until 1:00 or 2:00 in the morning and talked about all this but I don’t know what good it would have done
at that point but it wasn’t necessary to get the information that I needed and it looks like some of the other
members of council needed to get to this point tonight so why waste everybody’s time. It’s not that we’re
not going to get to it because we certainly are. It’s already on the work session agenda going forward so I
would just echo that you know I don’t understand the tenure of the attack upon the mayor. I don’t think it
was correct and again I mean Dr. Leonard’s a good friend of mine and everything but in all truthfulness
he wasn’t there so he missed the details of I think what actually happened and it wasn’t televised so he
wasn’t watching it on TV so, this is a difficult enough job and I just want to say that you know the
comments and the criticism of the mayor I felt were undeserved.
Mayor Furlong: Other council presentations. Councilwoman Ernst.
Councilwoman Ernst: Well I know you need to make a council presentation yet as a reminder.
Mayor Furlong: Yes.
Councilwoman Ernst: You told me to remind you.
Mayor Furlong: Yep.
Councilwoman Ernst: But before we get to that, I know my name was mentioned in that article as well
and I think the point that I got out of the whole thing was more that Councilman McDonald and I had
suggested to have an additional meeting to discuss this and it was decided at that point in time that there
really wasn’t a need to have an additional meeting. In addition to that I think one of the other things that
was mentioned was, that it, the item on the agenda had been moved and I believe that people came to hear
what was going on and so the agenda, if I remember correctly, it was originally scheduled to be on the
first part of the agenda and then it was decided that we weren’t going to talk about it. That we would talk
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about it on September 26 and I think that that was the whole crux of what escalated into what it did.
Based on what I had heard. And I believe that there were other people, even though this wasn’t televised,
people talk and I don’t know if, I know that the work session wasn’t televised so I assume that the
information came from somewhere else.
Mayor Furlong: Any other council presentations?
Councilman Laufenburger: Well I, first of all I want to defend Dr. Leonard’s right to write whatever he
wants to. I’m going to have to talk with him though because I was not mentioned in his letter and I’ll
have to see about that. But I also want to defend the Chanhassen Villager. They have the right to print
whatever letters they want. Councilmember Ernst is correct. It was listed on the agenda for the work
session 5:30 to 6:00 so I can appreciate that there might have been some disappointment but I think one of
the things that we have to understand is council members, we are representing the citizens and we have a
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responsibility to use our best minds to discuss the most important topics and I was not in my best mind at
11:45 at night, as evidenced by some of the twitter or some of the Facebook comments that our diligent
reporter Mr. Adams was sharing at 11:30 at night so, that’s my comment. Thank you Mr. Mayor.
Mayor Furlong: Thank you. I’d like to just share a couple of meetings that I’ve been at here. No
particular order. Metro Cities. I was at a meeting last week. We were discussing or serving on a task
force that was considering some proposed suggestions relating to the Met Council and how there might be
some recommendations for changes. The, as many of you recall back in last year the legislative auditor
did an analysis on transit services. The results or their recommendation out of that analysis was really for
the legislature to review and possibly make changes with regard to Met Council governance and the
structure of governance with regard to how members are appointed and the tasks involved. There’s been
a lot of discussion at the legislature with regard to the possibilities there and the Metro Cities is involved
in looking at it’s policies with regard to the recommendations on how best to serve metro cities or how
the Met Council from a structure standpoint or scope of focus standpoint can best serve the cities. So
certainly if anybody has any thoughts or ideas on that let me know so I can share them. They’ve got a
cross section of city council members, mayors, and administrators and staff on that group and it’s one of
the many policy discussions that Metro Cities is involved with and they represent us as well as all the
other cities within the metropolitan area. So that was one thing. The other meeting I was at, and Ms.
Hokkanen was there and other members as well, the American Legion is organizing the Beyond the
Yellow Ribbon group for our city and some of you may or may not have heard Beyond the Yellow
Ribbon. It is a program that’s done in conjunction with the National Guard and with the Department of
Defense to, within a city to connect services, volunteers, and others to returning veterans and their
families who are in need, or to veterans who are currently deployed, and so it’s an interesting program. I
commend the American Legion for taking a lead on this and I know that there will be other activities
coming forward, probably within the next several months to over the year to really organize and establish
this Beyond the Yellow Ribbon committee but, Ms. Hokkanen if there’s anything you wanted to add to
that in terms of future events or things that they might be looking at.
Laurie Hokkanen: Yeah, we’re not ready to announce a date right now but we’re kind of looking at
November for a kick off meeting and that would be where we’d be hoping to get all people that are
interested in being involved. Whether it’s a boy scout leader that would organize a boy scout troop to
maybe mow the lawn of a family that’s gone. It’s really a campaign. We’ve found out, especially
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through the 4 of July parades that our community wants to help. It’s just that you don’t usually know
who to help or how to help and so the Beyond the Yellow Ribbon campaign sets that up so that once we
identify a soldier that’s getting ready to deploy, that’s getting back or is gone, we can say what are those
little things that we can do to make you know their life and their family’s life easier because people want
to help. They just don’t know how. We’re going to be starting a Facebook page for the Beyond the
Yellow Ribbon campaign. That’s not quite up and running but if you’re interested in volunteering, email
me. Call city hall or call the American Legion, either one. Gary Boyle and Ron Schlangen.
Mayor Furlong: Yes.
Laurie Hokkanen: They’re kind of heading it up from the Legion’s perspective and what we really need
right now is to identify who those soldiers are that are deployed. That are you know at any stage in
deployment or need any form of support. We’re really finding that that’s the biggest challenge because
it’s not public information and our servicemen and women are kind of reluctant to say you know hey,
look at me or I need help so we want to do that for them. We want you to call us and tell us that you
know somebody so that we can kind of show up and do those things without them asking because they
won’t ask.
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Chanhassen City Council – September 12, 2011
Mayor Furlong: And clearly this is, and thank you Ms. Hokkanen. This would be for anybody watching
at home, especially if they want to be involved or if they know somebody that might need some help,
either immediately or a family that’s deployed, and it’s not just before they’re deployed, while they’re
deployed but also it’s after they return. Everything that I have heard and understand is the nature of the
deployment before, during and after really makes a change on the family life and creates a lot of stress for
that family and when these are men and women that are over there, wherever they happened to be serving
our country, if there are opportunities for those of us to your point who want to help if we just know how
and who. This is a program that will allow us to do that so I commend the Legion again for taking the
lead on this and thank everybody that’s involved, both on the steering committee as well as others that
will be involved ahead of time. Mr. Laufenburger.
Councilman Laufenburger: Just a comment Laurie. I think that the churches in the community likely
have identified people in their parish, in their community that have sons and daughters or you know
husbands and wives that are there so that could be a source, if you’re interested in finding at least a
beginning court of who these people are so.
Laurie Hokkanen: Top on our list is getting in touch with churches and churches are probably the number
one…of support that’s coordinated right now. Getting in touch with them. If I can add one more thing.
If you’re at home thinking I’d like to help but not big on mowing lawns, the other area that we’ll really be
addressing is jobs and if you’re a business member that you’d be interested in just meeting with a soldier
and doing some career coaching or helping them with their interview skills or if you have jobs that you’d
be willing to kind of focus on hiring a soldier that has recently returned from deployment, that’s another
aspect that hasn’t gotten as much attention that we will be looking for.
Mayor Furlong: Very good, thank you.
ADMINISTRATIVE PRESENTATIONS:
Todd Gerhardt: We wrapped up all our summer projects with the exception of the parking lot. You may
have noticed as you came in and wanted to park in the lower lot and couldn’t get in so, you know that’s
going to probably be a month long process to finish that but they’ve got a good start on it. They’re about
2 weeks into it so hopefully by the end of September we’ll have that completed and additional parking for
our seniors and library users and the rest of the road projects look good. We’ve got blacktop down and
curb is set and landscaping is in place so it was a good summer. And that’s all I have.
Mayor Furlong: Thank you. Any questions for Mr. Gerhardt or his staff? No? Very good.
CORRESPONDENCE DISCUSSION.
Mayor Furlong: Any comments or discussion on the correspondence packet?
Councilwoman Ernst: No, but it’s getting close to 11:00 and our minds are going to quit functioning here
so I think it’s time to adjourn.
Mayor Furlong: Is that a motion to adjourn?
Councilwoman Ernst: I make, so move.
Mayor Furlong: Thank you. Is there a second?
Councilman McDonald: I’ll second.
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Chanhassen City Council – September 12, 2011
Councilwoman Ernst moved, Councilman McDonald seconded to adjourn the meeting. All voted in
favor and the motion carried unanimously with a vote of 5 to 0. The City Council meeting was
adjourned at 10:40 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
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