5. Establish a Restoration Escrow Fund for the Moon Valley Gravel Operation7-
CITY OF 5
CHANHASSEN
690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317
(612) 937 -1900 • FAX (612) 937 -5739 Action by City Adi In
I TO: Don Ashworth, City Manager
Endo rsMi Low rt
Modifie _._.�.
Dat
Bate Submitted to CommiWIN
FROM: Paul Krauss, Planning Director --
- Date Submitted to COUnC1(
' DATE: December 8, 1993
' SUBJ: Adoption of Motion Establishing a Restoration Escrow Fund For the Moon Valley
Gravel Operation
As the Council is aware, the City's interaction Y^ the Moon Valley operation began a number
of years ago. For the past three years we have ` ` in involved with protracted litigation as they
first tried to prevent the City from regulating The judge ultimately confirmed that we
could, and since that time, they have engaged viii legaf :maneuvering attempting to limit the City's
oversight authority while minimizing their ob igatio4
Through all of this it is easy to lose sight 6f what the inderl,
greatly expanded their operations since�`he 1970's and, has
oversight. There have been several complaints regarding the
developed nearby it is reasonable to *''lieve that this will inc
of environmental problems including large amounts of eroso
169 /212 into Rice Lake and the- 1Innesota River. There is nn
the site will be restored once `the gravel mining is completer`;
to expand the mine
head this past sumi
Wildlife Refuge N
serious enough &I
engineered erosion
g land he has acquired.
a permit with
ing issues are. Moon Valley has
operated without City permit or
operation and as more housing is
ease. There have been a number
i and runoff over and under Hwy
mechanism in place to insure that
The operator has also attempted
environmental issues came to a
aterial into the adjacent National
involved vyho th,ought the matter
ag of runoff arirj maintenance of
Between our slow but steady progress in cour and'the `MOCA involvement, we have resolved
§-k S.
many of these issues. The one remaining is to put a mechanism in place to insure that the site
will be restored as the mining is completed tis far we have been unable to reach agreement
on an amount that needs to be set aside by the operator. Judge Kanning has asked that the City
' Council revise the issue and establish a restoration fund amount. We have thus scheduled this
item for your review.
MEMORANDUM
Mr. Don Ashworth
December 8, 1993
Page 2
Based upon information developed by the attorney and engineering department, a fund of $0.20
per cubic yard is proposed. It is further proposed that this would be effective as of January 1,
1991, when the original ordinance you approved came into effect. Thus it would start the fund
with a surplus.
The history of the action and recommendations are more fully explained in the attached memos
from the City Attorney and Assistant City Engineer
STAFF RECOMMENDATION
Staff recommends that the City Council establish a restoration fund in the amount of $0.20 per
cubic yard retroactive to January 1, 1991, to be used to insure the restoration of the Moon Valley
gravel pit.
phn\pk\restore
/Zttt, L " 2
CAMPBELL, KNUTSON, SCOTT & FUCHS, P.A.
Attorneys at Law
Thomas J. Campbell
Roger N. Knutson
Thomas .%4. Scott
Gary G. Fuchs
James R. Walston .
Elliott B. Knetsch
Elizabeth A. Lunzer
Andrea McDowell Poehler
December 7, 1993
Mr. Paul Krauss
City of Chanhassen
690 Coulter Drive
Box 147
Chanhassen, MN 55317
Re: Moon Valley Aggregate, Inc.
vs. City of Chanhassen
Court File No. 90 -27099
Our File No. 12668/201
Dear Paul:
(612)452.5000
Fax(612)452.5550
This matter is on the Council's December 13, 1993 Agenda.
We are requesting the Council to approve the revised Earthwork
Permit Agreement which provides for the establishment of a
restoration escrow fund in the amount of .20(� per cubic yard of
material mined, in lieu of a bond and letter of credit in
accordance with Judge Phillip Kanning's most recent Order filed
August 30, 1993.
I am enclosing herein the following:
1. A copy of Judge Kanning's August 30, 1993 Order;
2. The revised Earthwork Permit Agreement; and
3. Proposed Findings of Fact and Decision.
BACKGROUND
In May of 1990 the City adopted.its revised mining ordinance
requiring persons engaging in mining activities to obtain an
Earthwork Permit. Ongoing operations such as Moon Valley had six
months until November 24, 1990 to either obtain the permit or
cease operations.
10195
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Z00
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Mr. Paul Krauss
December 7, 1993
Page 2
In late September of 1990, Moon Valley started this lawsuit
' claiming that the City did not have the legal authority to
require it to obtain this permit. Moon Valley's basic contention
was that its mining activities were not subject to this type of
' regulation because it was a nonconforming use in existence prior
to the City's adoption of its 1972 Zoning ordinance.
' In April of 1991, Judge Kanning entered an order determining
that the City could in fact require Moon Valley to obtain this
permit and directing the company to make application for the
permit or face the prospect of having its operations shut down
' until it obtained a permit.
After numerous delays, Moon Valley in September of 1991
finally filed the permit application. It contained two entirely
different plans and was substantially deficient in a number of
areas. City staff subsequently advised Moon Valley of these
deficiencies. Moon Valley never responded to your request for
additional information and clarifications.
In November of 1991, a two -day hearing took place before
' Judge Nanning. It was the City's position that the application
filed by Moon Valley was insufficient and that its operation
should be shut down until it obtained its permit. An additional
issue involved Moon Valley's right to expand its mining
activities on to the north section of its property above the
bluff line. This property was in separate ownership and had not
been mined prior to the 1972 Zoning Ordinance.
After submitting various written arguments to Judge Nanning
in December of 1991, the Judge issued his Order in April of 1992.
' Judge Nanning determined that Moon Valley did not have any
nonconforming use rights to mine on the north parcel. He also
determined that Moon Valley as part of its application must
submit certain information relating to groundwater, slopes, tree
types and truck usage to the City within thirty days.
Moon Valley subsequently submitted the required information,
' and the Council on June 22, 1992 adopted its Findings of Fact and
Decision approving an Earthwork Permit for Moon Valley's
operation subject to various conditions, including an erosion
control plan and phased plan for site restoration for approval by
the City Engineer, and the posting of a $51,000.00 Letter of
Credit to secure compliance with permit conditions.
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t
Mr. Paul Krauss
December 7, 1993
Page 3
1
Moon Valley subsequently submitted certain erosion control '
plans. Moon Valley objected to any sort of mandatory phased
restoration of the site. Staff then prepared a Permit Agreement
giving Moon Valley the option of either agreeing to a phased '
restoration of the site or posting a $1.5 million dollar bond to
insure restoration of the site upon completion of their mining
activities. Dave Hempel estimated that restoration costs,
assuming the site was completely mined as Moon Valley proposed, '
could be a high as $2.5 million.
Moon Valley subsequently went back to court before Judge
Kanning challenging the bond requirement, the $51,000.00 Letter
'
of Credit requirement, a limitation on mining to a grade of one
and one -half to one slopes within 100 feet of any property line,
and- certain aspects of the erosion control requirements.
Another hearing was held before Judge Kanning in February of
1993, resulting in his most recent Order dated August 30, 1993.
In this Order, Judge Kanning upheld the 100 -foot setback
'
requirement, but struck down the $1.5 million restoration bond
and $51,000.00 Letter of Credit as being an unreasonable
condition in light of Moon Valley's status as a nonconforming
'
use. The court, however, approved the concept of a cash
restoration fund and directed Moon Valley to provide the City and
the court with such information necessary to determine the amount
'
of a restoration fund within sixty days. Moon Valley has not
submitted any additional information.
Since the Judge's Order, I have had numerous conversations
'
with Jerry Brill, the attorney for Moon Valley, in an effort to
reach an agreement on a restoration fund. We have proposed,
subject to Council approval, a restoration fund which would
'
provide for the payment of .204 per cubic yard of material mined
from the site. There are also provisions for a partial payout of
funds to Moon Valley if portions of the site are restored prior
to the cessation of all mining activities. Moon Valley responded
'
by proposing .054 per cubic yard deposit into the fund.
In October of this year, Jerry Brill, the attorney for Moon
Valley, and myself met informally with Judge Kanning to obtain
his input on the restoration fund in hopes of facilitating
settlement of the issue. In a nut shell, Judge Kanning advised
Mr. Brill and myself that based on the information submitted at
previous hearings that it would be within the City's discretion
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NOSS,IIUx 'I'IHgd�O .g,
Mr. Paul Krauss
December 7, 1993
Page 4
1 to require a .200 per cubic yard deposit into the restoration
fund.
' The amount of the quarterly deposit into the restoration
fund would be based upon the amount of cubic yards which Moon
Valley reports to Carver County for purposes of the County's
' aggregate material tax. Based on these reports, a .20(,' per cubic
yard restoration fund would have generated the following amounts
for 1988 - 1992:
' YEAR CUBIC YARDS REPORTED FUND DEPOSIT AT .20G PER CUBIC YARD
1988 114,000 $22,800.00
1989 91,150 $18,230.00
1990 76,863 $15,372.00
1991 182,340 $36,468.00
1992 206,867 $41,373.00
Based upon the limited amount of information we have been
able to obtain from Moon Valley, there are substantial amounts of
' material still to be mined on the site. The amount of material
mined in any given year is obviously driven by market conditions.
Based on the materials mined from 1988 through 1992, there would
' be an average annual deposit of approximately $27;000.00. The
restoration fund we are recommending would be effective as of
January 1, 1991, reflecting the fact that the ordinance went into
effect in November of 1990.
While the monies in this fund would certainly not cover the
total cost of restoring the property to two and one -half to one
slopes should Moon Valley walk away from the site after its
mining activities are no longer profitable, we feel that this
amount is fully supportable in court in light of the legal
constraints that are involved in regulating this nonconforming
' use. Additionally, having this money on deposit, which Moon
Valley will forfeit if it does not restore the site, will
hopefully mean that Moon Valley will incorporate plans for an
' appropriate end use of its property in connection with the
conduct of its mining operation over the coming years.
' After approval of the restoration fund by the Council, if
Moon Valley continues to object to the .204 per cubic yard
amount, the matter will then again go back to Judge Kanning for
hopefully the final time.
1C195
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Mr. Paul Krauss
December 7, 1993
Page 5
Please call if you have any questions.
Best regards, '
CAMPkCH, UTSON, SCOTT
& .A.
By: ' Thomas M. Scott
TMS:rlt
Enclosures
10195
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d J.E. Brill, Jr.
Attorney at -Law
� . 100 - Washington Square, Suite 1350
?Minneapolis, MN 55401
Thomas M. Scott-
Attorney at Law
o' •1380.Corporate Center Curve. #317
Eagan,'MN 55121
STATE OF MINNESOTA
COUNTY OF CARVER
NOTICE OF:
• FILING
X ENTRY OF JUDGMENT
DOCKETING OF JUDGMENT
COURT FILE NO. 90 27099
'. Moon Valley Aggregate., Inc. vs. City of Chanhassen
Ybu are hereby notified that - in the above entitled'matter on 10- 12. --93
FiAdings and Ord
rder was'duly filed.
Order was duly filed.
Findings of Fact, Conclusions of
Law and Order for Judgment was
duly
X Judgment was duly
entered.
Judgment wa's duly docketed in the amount of $ • at
time )
on in favor of and
' against
Other '
Dated: 10- 12 --93'
pies attached.
• GREGORY M. ESS, ourt Administrator -
s • C'
e.
• Pho a (612) 448 -1201. P
Carver County Courthouse,. Box 4.
•600 East 4th St.
Chaska, MN 55318
A true and cor =ect copy of this Notice has been
ton the parties herein served by m,
Minnesota Rules of Civil a proceduret Rule ,�add - of each, pursuant to
1 NoslaNx 11HUNVO 0855 zst ZT04 90:9T 96 /LO /ZT
FILED
STATE OF MINNESOTA AUG 3 01993 DISTRICT COURT
COUNTY OF CARVER CARVER COUNTY COURTS FIRST JUDICIAL DISTRICT
Moon Valley Aggregate, ourt File No. 90 -27099
Inc., ,
a Minnesota corporation,
Plaintiff, FINDINGS OF FACT
CONCLUSIONS OF LAW
VS. ORDER AND MEMORANDUM '
City of Chanhassen, JUDGMENT.
Entered 10 -12 -93
Defendant, ,
The above- entitled matter came before the Honorable Philip T. ,
Kanning, Judge of District Court, on February 23, 1993, at Carver
County Courthouse, Chaska, Minnesota. Thereafter the Court made an '
on cite visit, and received supplemental documents from the
parties.
Appearing on behalf of Defendant is Thomas M. Scott, Campbell, ,
Knutson, Scott & Fuchs, P.A., 1380 Corporate Center Curve, Suite
317,.Eagan, Minnesota 55121. Appearing on behalf of Plaintiff is '
J. E. Brill, Jr., Seigel, Brill, Greupner & Duffy, P.A., 100
Washington Square, Suite 1350, Minneapolis, Minnesota 55401. ,
Based upon the pleadings, papers on file herein and having
heard the arguments of counsel and being fully advised in the '
premises, the Court makes the following:
FINDINGS OF FACT
1. Defendant, City of Chanhassen, is a Minnesota municipal '
.corporation.
2. Plaintiff, Moon Valley Aggregate, Inc., operates a mine on '
property located at 100 Flying Cloud Drive, between Highway 212 and '
Pioneer Trail, which is within the City of Chanhassen.
1
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J ;�;
3. On May 14, 1990, Defendant, City of Chanhassen (hereafter
City) adopted Ordinance No. 128. The effective date of the
Ordinance was May 24, 1990, the date of publication..
4. Ordinance No. 128 required Plaintiff to obtain an
earthwork permit from the City or to cease mining operations on or
before November 24 1990.
5. Following the Court's Findings of Fact, - Conclusions of Law
and Order for Judgment of April 2, 1992 the Chanhassen City Council
approved an Earth Work Permit on June 22, 1992 for the Plaintiff,
subject to Plaintiff's compliance with fifteen (15) separate
conditions set forth in the Council's "Findings of Fact and
Decision" (Exhibit 1).
6. Plaintiff notified the City (Exhibit 6) that it would
comply with all of the permit conditions with the exception of the
following six specific conditions (Exhibit 5), to which -it
objected:
1. Paragraph 1(A). Certification of a professional
engineer.
2. Paragraph 1(A)(ii). Erosion control practices.
3. Paragraph . 1(B). Site restoration - sequential
mining..
4. Paragraph 8. Setback of 100 feet with slopes not-to
exceed a 1..5:1 grade.
5. Paragraph 10. Inspections upon notice.
6. Paragraph 15. Letter of credit in the amount of
$51,000.
7. Plaintiff also took exception to the proposal to require
Plaintiff to post a $1.5- million bond in lieu of a phased
_restoration plan.
S. The City provided factual findings that the north boundary
of the property could not practically be mined with a slope steeper
2
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than 1.5:5 within 100 ft. of the property line.
9. The City did not provide a factual basis for its findings
that a professional engineer make annual certification of Moon
Valley's drainage system.
10. The City did not provide a factual basis for its findings
that Moon Valley need follow the best management practices or the
Carver County Soil and Water Conservation District Standards.
11. The $51,000 letter of credit goes to the restoration of
the site.
12. The City provided factual findings that periodic mining
inspections were reasonable to insure that Moon Valley was in
compliance with the Permit Agreement and other applicable
regulations.
13. The City's did not provide factual findings that the
sequential mining and restoration was a valid restriction in light
of Moon Valley's "material brokering" and general nature of their
mining operation and their status as a legal nonconforming use.
14. The City provided factual findings, as found in case law,
that a restoration fund was reasonable to insure the restoration of
the Moon Valley site.
15. The City did.not provide adequate factual basis for the
imposition of a performance bond in the amount of $1.5 million.
16. The Memoranda is incorporated herein as additional
Findings of Fact.
CONCLUSIONS OF LAW
1. The condition which requires annual certification by a
3
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I i
irrevocable letter of credit in the amount of $51,000 is arbitrary
' and capricious..
6. The, proposal to require Plaintiff to post a performance
bond in the amount of $1.5 million is arbitrary and capricious.
ORDER
1. The City will reissue a Permit Agreement to Moon Valley
' excluding the conditions of Permit Agreement para, 1.A.i.,ii.;
I.B.I.; 15, (Exhibit 10), and amending Permit Agreement 1.B.iii.,
o 'on
(Exhibit 10), to conform with the proper restoration amount
' determined under Order No. 5 (see infra).
2. Moon Valley will comply with setback requirement of a
4
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professional engineer is not related to health or
safety issues.
2. The condition which requires Plaintiff to sequentially
mine and restore defined areas of its property in
accordance with
a predetermined plan is not in congruity with Plaintiff's
vested
'
rights as a preexisting legal nonconforming use,
is an onerous
'
restriction, invalidly confiscatory, and patently
unreasonable in
light the less restrictive measure of a restoration fund and,
therefore, violative of the April 2, 1992 order.
3. The condition which prohibits Plaintiff
from mining its
'
property within 100 feet of its property line at
grades of less
'
than 1.5:1 is related to health or safety issues.
4. The condition which requires Plaintiff to
permit periodic
inspections of its property is related to health and safety issues
and is not arbitrary or capricious.
i S.
The condition which requires Plaintiff
to provide an
irrevocable letter of credit in the amount of $51,000 is arbitrary
' and capricious..
6. The, proposal to require Plaintiff to post a performance
bond in the amount of $1.5 million is arbitrary and capricious.
ORDER
1. The City will reissue a Permit Agreement to Moon Valley
' excluding the conditions of Permit Agreement para, 1.A.i.,ii.;
I.B.I.; 15, (Exhibit 10), and amending Permit Agreement 1.B.iii.,
o 'on
(Exhibit 10), to conform with the proper restoration amount
' determined under Order No. 5 (see infra).
2. Moon Valley will comply with setback requirement of a
4
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1.5:1- slope within 100 feet a property line, as stated in Permit
Agreement para. 8 (Exhibit 10).
3. If Moon Valley is currently in violation of the setback
condition, Moon Valley will restore the property to comply with
this condition, as stated in the Permit Agreement para. 8 (Exhibit '
10). Restoration must take place within 120 days of the filing of ,
this order.
4. Within 60 days of the filing.of this order, Moon Valley
will provide the City and the Court with such information necessary
to determine a restoration fund amount which is not unduly
burdensome to Moon Valley.
5 . Upon determination of a proper restoration fund, Moon ,
Valley will make payments to the restoration fund forthwith.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Date . 3.0. /45 3 BY THE COURT:
PhL p T. anning, udge.
JUDGMENT
I hereby certify that the foregoing Order constitutes the
Judgment in this matter. -
Dated: 10 -12 -93 GREGORY M. ESS, COURT ADM.
y :
By
Dep.
ILED
5 OCT 12 9993
CARVEH COUNTY COIF I
Rrs
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MEMORANDUM
on June 22, 1992, the Chanhassen City Council, in its Findings
and Decision approved an earthwork permit for the operation of Moon
Valley's mining operation subject to certain conditions. Moon
Valley has taken exception with six ( 6 ) of these conditions as well
as a subsequent condition that they post a bond for $1.5 million,
in lieu of sequential mining and restoration, to guarantee site
restoration. The issue before the Court is. whether the City
Council clearly identified health .or safety issues for the six (6)
conditions and whether their decisions were arbitrary or
capricious.
The defendant's, by order of the Court, April 2, 1992, were
prevented from issuing "an Earth Work Permit relating to the South
Parcel of the Plaintiff's property that has the effect of:"
(a) limiting the quantity of material mined from the
plaintiff's property;
(b) prohibiting mining on any portion of the property,
such as slopes or wooded areas;
(c) limiting the depth to which the property may be
mined, so long as. plaintiff has indicated its
willingness to bring the property to the grades (as
revised) shown on an end use plan designated Plan B
in its application;
' (d) limiting the time within which the mining operation
must be completed; and
(e) preventing the plaintiff from continuing and
maintaining its ongoing mining operation to the
extent and scope to which it presently exists;
unless related to health or safety issues clearly identified by
the City. Moon Valley v. City of Chanhassen No. 90 -27099 at 9
(April.2, 1992); (emphasis in bold added).
The effect of the April 2, order is to place the burden of
proof on the City to r'clearly identify" how the permit requirements
apply to health or safety issues. Because'the permit will limit
the ability of Moon Valley to mine to the extent*of its property,
and, therefore, restrict Moon Valley's vested rights as a legal
nonconforming use, the City has the affirmative duty to show,
specifically, that a permit condition relates to health or safety
issues as applied to Moon Valley. ,
If reasons for the decision are given,-the court examines the
record to see if the reasons are legally sufficient and have a
factual basis. VanLandschoot v. City of Mendota Heights 336
N.W.2d 503 (Minn. 1983); Odell v. City of Eagan 348 N.W.2d 792,
796 (Minn. App. 1984). When variances and other special uses are
6
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.lr '7Y
y
,
considered, a city council functions in a quasi - judicial capacity,
and is subject to more extensive judicial oversight. Honn v. City
of Coon Rapids 313 N.W.2d 409, 417 (Minn. 1981); Odell 348 N.W.2d
at 796. Once the ordinances are enacted, less weight is given to
'
the municipality's legal interpretations of its ordinances than on
questions of fact. Frank's Nursery Sales, Inc. v. City of
Roseville 295 N.W. 2d 604 (Minn. 1980); Odell 348 N.W.2d at 796.
As the case law clearly mandates; the courts are not to take
a rubber stamp approach -' to "findings of fact" which state
conclusions only. The City forewarns that the Court may not look
'
"to substitute its judgement as to how the public health and safety
,
issues should be balanced against the amount of profit Mr. Zwiers
should derive from this mining operation." To prevent this, the
City must provide clear and identifiable factual findings which
'
will allow the Court meaningful review. The courts are not
clairvoyant. It is this Court's duty to see that the health and
safety issues' are clearly identified, and not arbitrary or
capricious in their application to Moon Valley. In the broadest
'
definition, the issues presented in the permit can all be
attributed to health and safety issues. This does not give the
Chanhassen City Council authority to set its regulations
arbitrarily or without proper factual basis.
'
SETBACK REQUIREMENT
,
The City notes the testimony of Rick Sathre (hereafter
Sathre), Moon Valley's consulting engineer, who stated that as a
practical matter, granular material cannot be excavated to a slope
steeper than 1.5:1. However, Sathre also testified that mining
'
could take place within.20 - 30 feet of the.north property line.
Moon. Valley claims that there is an over - burden of clay on the
north property line which gives more stability to the bluff than
would sand. The test of reasonableness of the City's regulation is
whether the City's determination was cogent and not based on whim
or caprice. "We examine the City's action to see if it does not
'
have "the slightest validitylt or bearing on the general welfare of
the immediate area, or whether the reasons given by the body were
sufficient and had a factual basis." VanLandschoot v. City of
Mendota Heights 336 N.W.2 503, 508 (Minn. 1983). Since the
'
evidence here is conflicting, and it may support a finding for
either party, the Court must .defer to the City's determination.
Moon Valley claims it will be precluded from mining substantial
amounts of clay material. The amount of Moon Valley's loss is
irrelevant. If the City has clearly identified health and safety
reasons for the 1.5:1' slope, and its determination is not arbitrary
of capricious,'the-City may regulate. If the City has not clearly
identified health and safety reasons for the 1.5:1 slope, it may
not regulate. The City has-reasoned from the testimony that a'
slope steeper than 1.5:1 within 100 feet of the adjoining property,
'
may endanger the. adjoining property. Therefore, the regulation
stipulating a slope of 1.5:1 within 100 feet of the property line
is properly based on health and safety issues. The setback and
7
iT®e K09JANX '1121adwo Osss Zst ZT9 60 :9T 96 /LO /ZT
slope regulation, as stated in Permit Agreement para. 8. is a
valid condition (Exhibit 10).
EROSION CONTROL AND DRAINAGE
The issue of proper drainage and ponding is certainly related
to health and safety. Requirements for adequate facilities to
contain flood events are undeniably necessary. But, because of
Moon Valley's status as a nonconforming use, the City must
establish that there are health and safety issues as applied to
Moon Valley. If Moon Valley currently has adequate ponding and
drainage facilities, and those facilities are maintained in proper
condition, then there is not an identifiable health and safety
issue concerning Moon Valley.
' The City requires that Moon Valley have ponding basins that
are sized to contain the runoff from a 100 -year storm event of 24-
hour duration, and that a professional engineer annually certify
that Moon Valley has the requisite 100 -year pond storage and
' follows the overall erosion control practices of the City and
County. The City also requires that Moon Valley abide by the
applicable best management practices (as defined in the City of
' Chanhassen Construction Site Erosion and Sediment Control Best
Management Practice Handbook) and the Carver County Soil and Water
Conservation District Standards.
Sathre testified that Moon Valley's Erosion Control Plan is
better equipped for handling erosion control in a mining operation.
Sathre testified that the City's Standards dealt mostly with
Development of subdivisions and commercial /industrial properties.
The City gave no comment on Moon Valley's Erosion Control Plan and
gave no findings that the plan required by the City was necessary
in lieu of the Moon Valley Plan. The City's requirement that Moon
Valley comply with the city and county erosion control standards
would prevent Moon Valley from continuing and maintaining its
ongoing mining operation to the extent and scope to which it
presently exists. The City has not clearly identified that its
erosion control standards, as applied to Moon Valley, are related
to health and safety issues. The City has presented no factual
basis for the drainage and erosion requirement, as stated in Permit
Agreement para. 1-.A.ii., and the requirement is, therefore,
arbitrary and capricious (Exhibit 10).
The City has also presented no evidence that an engineer
certification is a necessary means of regulating drainage and
erosion control during mining operations. Sathre testified that
the annual certification by a professional engineer was both
unnecessary and an economic burden to Moon Valley. He further'
testified that the City Engineer could ascertain whether the
drainage system was functioning properly by visual assessment. The
City has brought no evidence to contest Sathre's testimony,,
' therefore, the City has not shown that annual certification by a
professional engineer is clearly tied to health and safety issues.
As there- was no factual basis for the requirement of an annual
certification by a professional engineer, as stated in Permit
8
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Agreement para. 1.A., the condition is arbitrary and capricious
(Exhibit 10).
RESTORATION FUND
'
On the issue of the restoration fund, the City Council cites
Doc Watch Hollow ouarry Pit v Township o Warren 361 A.2d 12
(N.J. 1976). In Dock Watch, the New Jersey Supreme Court approved
a performance bond that was "in no event to exceed 1% of the
highest annual gross sales of the quarry over the preceding six -
year period," *and that such a bond was not "unreasonable,
22. The
arbitrary, or unduly burdensome." Id. at principle
amount of the bond in Dock Watch was $10,000. Id.
Dock Watch contrary to the City's interpretation, does not
give carte blanche power to set the amount of restoration funding.
,
Instead, a city must; 1) make a reasonable assessment, 2) which is
not arbitrary, and 3) which is not unduly burdensome. The City has
failed in two of these requirements. The City has shown that a
$1.5 restoration fund is reasonable in relation to the total cost
,
of restoration. However, the City must also show that the
restoration fund will not impose an undue financial burden on the
mine-operator; there is no evidence that this is the case.
,
The City admits that there will 'be a cost involved in
acquiring a bond, but claims that there is no clear and convincing
evidence that the cost would in any way be prohibitive or that the
bond would be unobtainable. This misstates the burden of proof.
it is the responsibility of the City, in this case, to prove
affirmatively, through clear and convincing evidence, and not the
lack of it, that -the restoration fund is not unduly burdensome. In
its
'
order to do this, the City must provide a factual basis for
demands. Zwiers has testified that the bond will create a
financial hardship for Moon Valley. The City speculates that
Zwiers, "the owner of the corporate Plaintiff, is a very credit
worthy, bondable man of substantial means." What is lacking in
these statements is any factual accounting of Zwiers Valley's
finances. That it is possible for Zwiers to obtain a bond does not
equate to the bond not being an unreasonable financial burden. In
order for the City to determine a reasonable amount for. a
restoration fund, it must have an adequate understanding of Moon
Valley's finances.
The City has also, in demanding a performance bond, asked Moon
.
Valley to instantly procure restoration funding for its 40 years of'
mining operations. As stated in the Dock Watch dissent;
Here, however, the land was, not in a virgin state when
the regulation was adopted. The beauty of the quarry was long
since destroyed on the effective date of the ordinance. No
further quarrying will render the property more unsightly
it already is. ' The effect of this regulation is, therefore, '
to require the Quarry at its on expense to remedy a condition
which when created was entirely-lawful Id, at 28 -29.
9
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The law supports the City's prerogative to require restoration.
However, the City's desire to.require.a lump sum restoration bond
for a condition preceded 40 yearns of legal mining is
unreasonable and unduly burdensome. Furthermore, the City has
provided no evidence that such a bond is timely. - There is no
indication that Moon Valley has any intention of halting operations
in-the near future. To the contrary, there is good reason to
believe that Moon Valley will continue its operation for many years
to come. The City's approach, therefore, is also arbitrary. Had
the City's Findings of Fact provided such information as to the
approximate date of Moon Valley's completion of mining on the site,
the City could set up a payment schedule into an escrow account for
ultimate restoration. This would adequately assure the City of
restoration.
The arbitrary nature of the restoration fund is emphasized by
the imposition of the letter of credit for re- vegetation (see
infra). The re- vegetation is clearly part of the overall
restoration, and yet, is imposed as an additional condition to Moon
Valley. No cogent reason has been cited for this condition.
The requirement of a restoration fund, as stated 'in Permit
Agreement para. l.B.iii., is not a valid condition (Exhibit 10).
The amount of the restoration fund, in this case, is arbitrary and
unduly burdensome, based on the facts. Id. The City should attain
from Moon Valley such information that will allow the City to
ascertain a reasonable restoration fund program.
LETTER OF CREDIT
The City Council wishes to impose a $51,000 letter of-credit
for the cost of re- vegetating the post - restoration plan site.
Here, the City has. found that the expense in obtaining a letter of
credit, standing alone, is not unduly burdensome, and would
probably cost Moon Valley approximately one percent (1%) of the
amount of the letter of credit, or $500.00 annually. Independently
this condition appears valid. However, when looked at in
conjunction with the restoration fund, this condition is arbitrary
and unreasonable. The re- vegetating of the site is simply a
component of the overall restoration. The City may break down the
restoration plan into as many components as it likes, but the City
may not demand a letter of credit for each component while
maintaining an umbrella fund which contains each of these
1 components. The City is attempting to collect twice for the same
health and safety issue. Thus, the requirement of a letter of
credit, as stated in Permit Agreement para. 15., is arbitrary and
capricious (Exhibit 10).
PERIODIC INSPECTIONS
It is clear that inspection of the mine site is related to
health and safety concerns. The Court will not legislate to the
' City how it is to carry out the inspection process absent proof
10
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that the inspection regulation is unlawful. Moon Valley does not
oppose periodic inspections. Moon Valley only wishes to dictate
the nature of how those inspections are administered. The City has
clearly identified the health and safety concerns requiring
periodic inspections. Moon Valley has provided no evidence to the
contrary and does not oppose the inspections. Therefore, the
requirement of periodic inspections, as stated in Pe it Ag reement,
para. lo., is a valid condition (Exhibit 10).
CONCLUSION
Municipalities are given great discretion in pas � '
enforcing zoning regulations. The term for the health an y
has, in many jurisdictions, has been determined to mean everything
from truly dangerous hazards to aesthetically unpleasing
conditions. This power is curbed, however, when Municipalities
attempt to regulate legal preexisting nonconforming uses. And Moon.
Valley's status as a legal nonconforming use provides it with
certain privileges.
The case law is divided as to whom the burden falls prove
the status of an entity as a legal nonconforming use. It is
further divided as to how much a Municipality may regulate a legal '
nonconforming use. In this matter, Moon Valley's position as a
nonconforming use was settled. This Court then determined that it
was the City's responsibility to clearly identify health and safety
issues. Inherent in that determination was to place the
responsibility on the City to prove up by a clear factual record
what the health and safety issues related to and how the
regulations would address those specific issues. The City did not
challenge the Court's ruling placing the onus of proof on the City.
Therefore, the City is charged with fulfilling this duty to the
satisfaction of the law.
The Court's ruling in this matter reflects both the status of
Moon Valley and the City's power to regulate for the public health
and safety; the unmovable object versus the unstoppable force. As
both can not exist in harmony together, the law, by its letter and
in fairness, demands concessions from each. The rights of the
parties and the concessions necessary to -maintain the greatest
extent of those rights are inextricable from each other, and from
this ruling.
11
STO E kTOSIDNN 'PIdSdKVO OS55 ZSfi ZT44 tT :9T £6 /LO /ZT
CITY OF CHANHASSEN
CARVER.COUNTY,•MINNESOTA
1 1 IN RE:
Application of THOMAS ZWIERS and EARTHWORK
MOON VALLEY AGGREGATE, INC. PERMIT AGREEMENT
for an Earthwork Permit
WHEREAS, Thomas W. Zweirs and Beatrice I. Zweirs are the
owners of property located at 100 Flying Cloud Drive, Chanhassen,
Carver County, Minnesota consisting of an approximately 40 -acre
parcel described as follows:
All that part of Gov't Lot 1, Section 36, Township 116,
' Range 23, Carver County, Minnesota, which lies
Northerly of Trunk Highway No. 212 ( "subject
property"); and
WHEREAS, Moon Valley Aggregate, Inc. and Thomas Zwiers
(hereinafter collectively referred to as "Applicant ") operate a
gravel mining business on the subject property; and
WHEREAS, on June 22, 1992, the Chanhassen City Council
considered the Applicant's request for a earthwork permit
pertaining to the subject property and issued its Finding of Fact
and Decision; and
WHEREAS, on December 13, 1993, the City Council further
considered the application in light of an Order entered by the
Carver County District Court on August 30, 1993 relating to the
establishment of a restoration fund.
NOW, THEREFORE, the City and Applicant agree as follows:
site restoration plan
't Condition No. 1 i p
1. As to Permit , the s
shall be as follows:
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A. The final grade of all slopes shall be no steeper then
a 2.5 foot horizontal to one foot vertical slope;
B. The finished slope shall be covered with four to six
inches of topsoil;
C. The topsoil shall be seeded with S.C.S. Mixture No. 6,
consisting of 38% Brome grass, 29% bluegrass, 9%
Timothy, 12% Perennial rye, applied at the rate of 52
pounds per acre, covered with straw mulch at the rate
of 4000 pounds per acre and disc anchored. The slopes
shall be monitored for erosion and repaired as
'
necessary.
D. Restoration Escrow Fund A restoration escrow fund
shall be established as follows:
(1) A savings account shall be established in the
joint names of the parties hereto in a bank of
Applicant's choosing into which the funds
hereinafter provided shall be deposited from time
to time. Withdrawals from said account shall be
'
upon the signature of an authorized representative
or representatives of each party.
(2) Applicant shall deposit in said account twenty
cents (.20G) per cubic yard for all materials
mined by it as reported to Carver County quarterly
for purposes of calculating the aggregate removal
tax or as reported to the City directly if such
reporting to the County should not be required in
the future. The deposit by Applicant shall be
within thirty (30) days following the end of the
previous quarter and shall be based upon the
number of cubic yards removed in said previous
quarter. The quarterly reporting periods are
January 1 to March 31, April 1 to June 30, July 1
to September 30, and October 1 to December 31.
(3) As portions of the Applicant's property are
restored from time to time in accordance with this
Permit Agreement, Applicant shall be entitled to
withdraw a percentage of the money then in the
account. The amount to be paid out to Applicant
shall be determined by first multiplying the
amount of money then in the fund by a fraction,
the denominator of which is the City's total
estimated site restoration cost and the numerator
is the City's estimated restoration cost for the
portion of the site then being restored. This
,
'
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amount, less twenty percent (20 %) retainage to be
paid out when,-all restoration is completed, shall
then be paid to Applicant.
(4) The amount of funds to be paid out of the account
for partial restoration shall be determined on an
annual basis upon the request of Applicant. The
City shall not be obligated to authorize payment
until September 30 of the year following
restoration to ensure stabilization of restored
slopes and that ground cover has been adequately
established.
(5) Commencing in the year following any partial
restoration of the site, the original amount to be
deposited by Applicant shall be reduced to any
amount equal to the percentage of the overall site
restored as determined under subparagraph (3)
above, subject to the twenty percent (20 %)
retainage.
(6) By January 31, 1994, Applicant shall make the
initial deposit into the account, which deposit
shall include materials mined as reported to
Carver County for the period from January 1, 1991
through December 31, 1993.
2. Applicant shall keep drainage and erosion systems
current and operational and obtain approval from the City Engi-
neer prior to the relocation of the pond(s) and /or alterations to
erosion control measures (Condition No. 2).
' 3. Applicant shall comply with all Minnesota Pollution
Control Agency (MPCA) requirements.relating to a National Pollut-
ant Discharge Elimination system (NPDES) /State Disposal System
(SDS) permit and obtain such permit if required (condition No.
3) .
4. Applicant shall install a construction access area
consisting of crushed rock designed to minimize the tracking of
mud and debris onto the highway. The access area shall be moni-
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TZO [n NOSLIU 11agaNva 0999 Z9b ZT90 LT :9T £6 /LO /ZT
tored by the Applicant and maintained as necessary to minimize
tracking. The design and construction of this rock consists of
approximately six inch thickness over an area approximately
fourteen feet wide by forty feet long. The rock installed was
1.5" to .75" clear washed crushed rock (Condition No. 4).
5. During the course of mining operations any material or
debris tracked onto the highway shall be promptly removed by the
operator to eliminate a potential traffic hazard (Condition No.
5) .
6. Brush located around the access point shall be cut back
to improve sight distance (Condition No. 6).
7. Condition No. 7 relating to the installation of a
deceleration /acceleration lane is eliminated.
8. As to Condition No. 8, the City Engineer has approved a
modified grading plan prepared by Sathre- Bergquist, Inc., dated
October 2, 1992 and entitled "End Use Grading ". In order to
avoid under - cutting of off -site slopes, excavated slopes shall
not exceed a 1.5 to 1 grade within 100 feet of a property line at
any time. When excavations exceed 2.5 to 1 slopes, temporary
snow fencing and signage acceptable to the City is required at
the top of the grade to make individuals aware of hazardous
conditions in the area (Condition No. 8). "Property line"
includes the north boundary of the subject property.
9. No mining below the ground water table shall be al-
lowed. Applicant shall protect existing on -site wells and
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17. This Permit Agreement shall be recorded with the Carver
County Recorder's Office.
CITY OF CHANHASSEN
By:
Donald J. Chmiel, Mayor
(SEAL)
By:
Don Ashworth, City Manager
MOON VALLEY AGGREGATE, INC.
By:
Its
THOMAS ZWIERS
BEATRICE I. ZWIERS
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12/07/93
£ZOIn NoslaNX 11agaNvo 0292 Z6V ZT90 6T:9T £6 /LO /ZT
MINNESOTA I
STATE OF MI )
) ss.
COUNTY OF CARVER )
The foregoing instrument was acknowledged before me this
day of , 1993, by Donald J. Chmiel and by Don
Ashworth, respectively the Mayor and City Manager of the CITY OF
CHANHASSEN, a Minnesota municipal corporation, on behalf of the
corporation and pursuant to the authority granted by its City ,
Council.
Notary Public
STATE OF MINNESOTA )
) ss.,
COUNTY OF )
The foregoing instrument was acknowledged before me this the ,
day of , 1993, by
of MOON VALLEY AGGREGATE, INC., a Minnesota
corporation, on behalf of said corporation.
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this
day of 1993, by THOMAS ZWIERS and BEATRICE I.
ZWIERS.
Notary Public
THIS INSTRUMENT WAS DRAFTED BY:
CAMPBELL, KNUTSON, SCOTT & FUCHS, P.A.
317 Eagandale Office Center
1380 Corporate Center Curve
Eagan, MN 55121
Telephone: (612) 452 -5000
TMS
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CITY OF CHANHASSEN
CARVER COUNTY, MINNESOTA
' IN RE:
Application of THOMAS ZWIERS and FINDINGS OF FACT
MOON VALLEY AGGREGATE, INC. AND DECISION
for an Earthwork Permit
On December 13, 1993, the Chanhassen City Council met at its
regularly scheduled meeting to consider the revision of certain
provisions of the Earthwork Permit previously approved on June
22, 1992 and adoption of the Earthwork Permit Agreement
incorporating these revisions. The City Council heard testimony
from all interested persons wishing to speak and now makes the
following:
' FINDINGS OF FACT
1. The property is located at 1200 Flying Cloud Drive,
Chanhassen, Minnesota, consisting of an approximately 40 -acre
' parcel described as follows:
All that part of Gov't Lot 1, Section 36, township 116,
Range 23, Carver County, Minnesota, which lies Northerly of
Trunk Highway No. 212. ( "Subject Property ")
2. Applicant operates a gravel mining business on the
Subject Property.
3. The gravel mining operation is a nonconforming use in
existence prior to the City's adoption of its 1972 zoning
Ordinance.
4. The continuation of the gravel mining operation
' requires an Earthwork Permit pursuant to Chanhassen City Code
§ 7 -30, et se q .
1 10650
I SZO
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5. The City Council has previously reviewed the
application in the context of the goals, purposes and standards
in the ordinance, the Applicant's status as a nonconforming use
and applicable Court orders.
6. The Planning Report and all attachments thereto, dated
May 27, 1992 previously reviewed by the Council and the Planning
Report dated December 8, 1993, and attachments thereto, are
incorporated herein by reference.
7. The City Council finds the proposed restoration fund
condition in the Earthwork Permit Agreement is a reasonable and
necessary requirement to insure compliance with the site
restoration conditions to the permit.
DECISION
1. The City Council hereby approves the Earthwork Permit
Agreement attached hereto as Exhibit "A ", including specifically
the twenty cent (.204,) per cubic yard restoration fund provision
contained therein.
2. The Mayor and City Manager are hereby authorized to
enter into the Earthwork Permit Agreement.
ATTEST:
Don Ashworth, City Manager
10650
9 Z 0 l] Noss Nx 11H9dKV0
Dated:
1993.
CHANHASSEN CITY COUNCIL
By:
2
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F
r
permanently cap the wells in accordance with the Minnesota
Department of Health regulation when they are no longer in use
(Condition No. 9).
10. Applicant shall permit persons authorized by the City
to enter the property, upon reasonable notice to Applicant, for
periodic inspections to ensure compliance with permit conditions
and take any remedial actions to correct permit violations
(Condition No. 10).
15. Applicants' obligations hereunder are personal
obligations of Applicants, their heirs and assigns and shall
continue after the cessation of mining activities on the subject
property, unless the City approves an assignment of this Permit
1 or issues a new permit to a subsequent operator.
16. This Permit shall not be assigned without the written
approval of the City, which approval shall not be unreasonably
withheld.
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11.
The annual permit fee for 1992 has been paid
(Condition
No. 11) .
12.
The end -use plan is as
set forth in Paragraph
1 and 8
herein (Condition No. 12).
13.
Upon completion of its
mining operations on the site,
Applicant
shall restore the site
in accordance with the
End Use
Plan approved
by the City herein
(Condition No. 13).
14.
Applicant shall comply
with all conditions of
permit
approval
as incorporated into this Agreement (Condition
No. 14).
15. Applicants' obligations hereunder are personal
obligations of Applicants, their heirs and assigns and shall
continue after the cessation of mining activities on the subject
property, unless the City approves an assignment of this Permit
1 or issues a new permit to a subsequent operator.
16. This Permit shall not be assigned without the written
approval of the City, which approval shall not be unreasonably
withheld.
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