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1981 08 31 I I I SPECIAL CHANHASSEN CITY COUNCIL MEETING AUGUST 31~ 1981 Acting Mayor Neveaux called the meeting to order with the following members present: Councilwoman Swenson, Councilmen Geving and Horn. The meeting was opened with the Pledge to the Flag. APPROVAL OF AGENDA: Councilwoman Swenson moved to approve the agenda as presented with the addition of Audobon Road and Menten]Ri1ey. Motion seconded by Councilman Horn. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. CONTINUATION OF PUBLIC HEARING HELD AUGUST 24, 1981 KERBER BLVD. STREET IMPROVEMENT The following interested persons were present. Theresa Kerber, 600 Lyman Place, Excelsior Bernard and Helen Kerber Dale Campbell, Schoe11 and Madson Jim Orr, Schoe11 and Madson Richard Brose, Waconia Acting Mayor Neveaux - I have, in my packet, four 1etters~ one being the Harold Kerber letter of August 28, 1981, the Thomas Connelly letter of August 24, 1981, Bernard Kerber letter of August 20, 1981, and a note from Richard Brose that was undated. Additionally, during this part of the discussion, I would like to get some comment from the members of the Council in regard to the minutes of the August 24th meeting. I would like to go through each of those letters and I have picked out some pertinent questions in parts of the letter I would like to be able to address them to staff for specific answers and responses. Item number one is the Harold Kerber letter of August 28, 1981, and the first point that Mr. Kerber brings up is that a claim that the road was built because of the availability of state aid monies and the city's needs rather than the individual property owners needs. The first question being, if $359,000 of state aid money were available why were only $281,000 proposed to be used for the project? Bill Monk - The $281,392 represents the oversizing costs between the roadway that was actually constructed and what I took to be a typical roadway section. I did not agree with the breakdown as shown in the feasibility and wanted to point that out that as I wrote my original report there are more monies than the $281,000 available through state aid but the $281,000 represents only the oversizing or the costs of extra work required because it was a state aid road. An example would be the extra right-of-way that was acquired above the 50 foot width. Acting Mayor Neveaux - So you are saying there is the possibility of additional funds in our state aid account beyond the $281,000. Bill Monk - That is correct. Acting Mayor Neveaux - The second point that is brought up is that the benefit of the road would affect only the Carver Beach neighborhood and the New Horizon construction. Don Ashworth - That road system was shown prior to the time that I took the position here and was seen as an overall part of the city's road system. It serves a much larger area. It does benefit the adjacent parcels but to single out anyone or two groups would not be correct either. Acting Mayor Neveaux - You are saying the benefit was in fact not only to the people on the end of the road but along the sides of the road as it passes through the property. Council Meeting August 31, 1981 -2- The 1977 public hearing was based on 1978 construction costs and at the time of last weeks hearing those costs had nearly doubled. The question that Harold raised was why no notice on this increased dollar cost? Don Ashworth - You review contracts as they are coming forth during the course of any project. There is no requirement under the law to go back and hold a new hearing. Acting Mayor Neveaux - That's not unusual that a feasibility study and the actual construction costs may vary. The other point that he raises is a two year delay due to New Horizon in the construction. Don Ashworth - I think it is fair to state that it was delayed as a result of New Horizon. Not solely, the first year grading was carried out. I think you should remember that that was a significant amount of grading and disruption of existing grades. It is not unusual, in fact it's recommended and we try to do it wherever possible, allow roads to sit over a first year before the asphalt. The third year portion is attributable to New Horizon and that is a result of the fact that they were still carrying out major construction with bulldozers, graders, putting in water lines and sewer and it really made no sense to put in a road and then literally dig it up while they finished putting in trunk water, sewer, and grading. Acting Mayor Neveaux - The next point raised is there is no benefit to the John Kerber farm. The two specific points that he raises are, approximately 1700 feet of frontage on the east side is unbuildable or proposed to be dedicated for park purposes in the future. Bill Monk - The 1700 feet does slope quickly down to a pond. There is an existing park around a portion of the pond. Future plans do show park, it's kind of sketchy, the scales are not accurate to see the intent. The city is looking towards acquisition of park land around the pond. When making up the assessment roll I did look at this land. This land is low but it does stabilize around the pond and flattens out some before it actually gets down to the water level. It is staffs contention that this is usable land and therefore there is benefit to the land as it goes around the pond and that is how the assessment roll was made up. Acting Mayor Neveaux - Don Ashworth - The second part of that benefit question is a concern that there would be $11,000 worth of interest due annually and the current usage of the farm would not justify that $11,000 interest expense. I think Mr. Kerber is correct the first year interest would be approximately the $11,000 figure. It should be remembered that that would be first year interest on principal balance and the last year would literally be zero. The second part of the question in terms of farm land sustaining an interest charge of that amount appears to be begging the question or at least asking the question in terms of the deferment for farm property. It appears to be in support of a position that they feel it should have a farm deferment. Acting Mayor Neveaux - The second letter is from Thomas Connelly. He raised four points that we would like to discuss. Point one is that the John Kerber property was assessed $137,000 for the street improvement and that is more than the market value of the property. Don Ashworth - I have looked at the calculations just based on the figures. It would appear. as though that there is 80 to 90 acres or a total value of somewhere around $500,000. It is the staffs position that the increase in value can be sustained. I I I I I I Council Meeting August 31, 1981 -3- Acting Mayor Neveaux - Assessment exceeds the special benefit to the property and specifically takes private property for public use without just compensation. Russell Larson - That's the general statement of the law that a special assessment levied which exceeds the special benefit to the particular property would constitute a taking of private property in violation of the federal and state constitutions. It's a typical issue raised in all special assessment proceedings.It's a determination~again~of whether the property actually specially benefits to the extent of the assessment. Acting Mayor Neveaux - Essentially a determination that's made bv the assessing authority. The thi.rd point he raises is the protection of farmers from urban sprawl, specifically the provisions of the Metropolitan Agriculture Preserves Act of 1980. Russell Larson - I have not looked at that act but I don't believe that it applies to matters of special assessments in urban areas. Craig Mertz - We have looked at that and it doesn't apply. The municipality elects into the program and Chanhassen has not elected into the program. Chanhassen has to designate areas of the city to which that would apply. Acting Mayor Neveaux - The last point raised requests that the theory of special benefit be applied in this case. Russell Larson - That's the crux of the whole proceeding whether or not the proposed assessment against the Kerber property constitutes a special benefit to that extent. Acting Mayor Neveaux - He is begging the question of the actual decision made by the assessing body. Letter three is the letter from Bernard Kerber. Several points raised there. One is asking to defer assessments or it talks about the potential of deferring assessments except for the acquisition costs and I guess we have never really talked about that. He makes a plea for all assessments and interest to be deferred and the interest be a 8%. I guess we need to look at that new law. The Anderson versus Bemidji, a 1980 decision, said that you must either defer it all or assess it all and as far as the 8% interest goes, I think we talked about that too, that we probably when we go from temporary funding to permanent funding are not going to be able to get 8% money so you more than likely will not get that interest rate. The second point that he raised is, no concrete curb or gutters on their portion of the street. Yes, that is true. There was an urban section and a rural section construction. He further asks that the 1981 assessment being contemplated include future costs and that the properties affected in the rural section have no future assessments for road purposes. I guess I would be uncomfortable in essence locking a future Council to further improvements on that road if in fact that does develop as we expect to urban standards. Concrete curbs and gutters would probably go in and an improvement project to recover those costs. Russell Larson - It's our position that this Council cannot bind future Council's on a matter such as this. Don Ashworth - I totally agree with Russ. It is being assessed as rural and urban. and at some point in time a decision is made to or a necessity exists to increase that from a rural section to an urban section your previous practices have been to assess that additional cost. Acting Mayor Neveaux - The original estimate was $520,000 and the total cost for it is now $846,000, why? Bill Monk - The large difference between the cost projected in the feasibility report and the actual construction costs were discussed last week. The difference results from the fact that many of the items actually constructed were not Council Meeting August 31, 1981 -4- included in portions of the feasibility time unit prices have increased over the significantly enough to have had a large costs. Those two factors added together cost estimate and at the same three year construction period impact on the construction end up to a much larger number. I Acting Mayor Neveaux - The last letter from Richard Brose which in fact was nothing more than a request for deferment and no specific questions were raised. The last thing before we get into a discussion would be, the Council has had over the week end an opportunity to look at the minutes of the meeting of last Monday night and I am wondering if there are an unresolved issues or questions that Council members have to ask staff at this time. I had one in regard to the escrow monies with New Horizon, can someone give me an idea of what amount that letter of credit is? Don Ashworth - The amount is guaranteeing all of the improvements in the area and is far in excess of the amount required to pay special assessments for this particular project. I can't remember the specific amount that was reviewed in terms of work that has yet to be completed. Councilman Geving - I would like to preface me comments with a statement. As you know when we initiated this project some time ago it was probably the most difficult deliberation and decision that I persona1lv had to make because it meant forcing the Kerbers out of the family farming business. It was not a project that they had requested. Normally that is how we react as a Council. Someone comes in and asks to have their road tarred or paved and we respond to that. In this case that did not happen. Now more specifically I am really very much concerned about costs that ~vere incurred. We did have a substantial over-run or so it seemed but we also must remember that this project took several years longer than we anticipated. The road did settle for over a year. Kids were using it for bike paths. We could only run it up to Chaparral until they finished their end of the pro1ect. We did ask, as a Council, that we add the sidewalk onto the improved portion so there were some things that the Council did do to delay the completion of the proiect. I am concerned about the costs. I am concerned about what happened when we went in with easements on these, how those charges were made. You must understand there was a time when we would ask people to give us easements and they willingly did so for little or no cost. In this project we decided not to do that. In fact this may have been the very first time that we changed our entire policy in this City and we paid for the easement acquisition. We paid these landowners for the land that we took and now we are asking for some of it to be returned in the form of assessments. I would like to start with Harold's letter. I think that there were some substantial increases in costs. The procedure generally is not to inform the people who subsequently might be assessed that these project costs are higher than anticipated in the feasibility study but I must ask if the items in the feasibility study that were omitted had been in that study would the project have proceeded? I am asking you Bill Monk to tell me what items are not in there that you feel I were omitted purposely or otherwise and whether or not they had a substantial bearing on the project. Bill Monk - No costs were included in the feasibility for such things as what I call restabilize the area once construction went through. There was a large expense approximately $45,000 that was spent right off the top that is not an~vhere in the feasibility that was for taking out the fences that ran across the agricultural land and replacing portions of the fence¡ I I I I Council Meeting August 31, 1981 -5- installing a cattle pass underneath the road that was $18,000 and a lot of other miscellaneous items that you don't always catch as you go through on a feasibility. There were additions that were made by the Council. The bikeway along the entire length. There were significant increases in blacktop from 1978 through 1980. All those different items added up to just make the feasibility look inadequate and not represent exactly what was ordered by the City Council. Councilman Geving - To answer my question, do you think that the feasibility study would have been more properly presented if those items had been forthought or do you think this was oversight and was purposeful to proceed with the project. Acting Mayor Neveaux - I don't think that's an appropriate question to ask of Bill. Bill wasn't even here. Councilman Geving - I am asking about the kinds of things that were omitted, would they normally have been included in a proiect. Bill Monk - The feasibility as presented was a series of options with different street sections. Whether the Council would have gone along with the project if the project costs would have shown up at $700,000 and the rest of it would have been cost increases over a three year period is very difficult for me to try and project exactly what the City Council would have done. Councilman Geving - You indicated that the low land to tne south of the pond was a benefitted or useful area. I don't understand what your statement, that is a very low level area and water is held there most of the year. There is a steep bank on three sides. How could that be useful property? Bill Monk - I would not have proposed to assess that frontage if I did not think that that was usable and benefitted property. There are two levels down in there. There is the water level, very low lands. It rises up from there and kind of plateaus out and then rises steeply again at the edge of the road. Councilman Geving - I would like to then turn to the area that you indicated might be park. Harold said in his letter, "we were once told that this property around the lake and all banks might some day be designated as park land. Is that showing on our maps? Bill Monk - Yes it is. All the way around the lake. The exact designation of how much land would be taken is very very difficult to tell because the maps are extremely small. Councilman Geving - Could you accurately describe or identify the number of lineal feet on the roadway that could be potential for park? Bill Monk - There are a couple problems with doing something like that. I don't know as to whether the City would acquire land all the way out to the roadway is point number one. Just because the land may someday be designated as park land does not necessarily mean it has no benefit because land can be donated in place of park dedication fees. So to say just because it's going to be park land someday does not necessarily mean that the land has no benefit. I just want to throw that in for what it is worth. I can't answer the question on whether the City would want to acquire all the way up to the roadway or just an easement or right-of-way for possible road down to the park. There is enough land in between there that the City might not have to go all the way up to the road so to give an exact footage is difficult. Councilman Geving - Bernard and Helen Kerber specifically asked that all assessments at an interest rate of 8% be deferred, was there a time frame mentioned? Acting Mayor Neveaux - No we did not consider the actual deferral issue. There were no decisions made at all. We realize a deferral is a viable option for us for those rural areas and if we get this public hearing closed we might get into a more specific discussion of what the options might be. Council Meeting August 31, 1981 -6- Councilman Horn - I think that I had asked a question last week very similar to what Dale asked about a breakdown of the differences in costs based on the inflation rate versus the items that were omitted and I see no record of that discussion in the minutes. You (Bill) gave some estimates on a per foot basis on those two sections. Bill Monk - I did go back after that discussion and take out the grading, the drainage, and the restabilization costs, which I specified before, out of the estimate as they were not included in the feasibility study. I did come up with a new cost figure for the rural section of $18.91. That was an effort, Councilman Horn, to kind of address your concerns about what were the differences, what numbers were we talking about. The costs are not that far out of whack it's just that the numbers as they were presented in the feasibility just didn't seem to represent exactly what it ~vas that the Council had ordered and it was just an attempt to sho~v what the report included in a typical section and that was one of the most important parts that I thought would have to be discussed is exactly what is included in a typical section because that's where a lot of the cost differences come in. Acting Mayor Neveaux - I think the issue is that we have costs and now we need to decide how we are going to spread them and whether we spread them at $53.00 a foot for the urban and $32.00 a foot for the rural or $19.00 on a rural and $38.00 on the urban I guess is what we will get into when we make a decision on adopting the final assessment roll. Councilman Horn - There seems to be an issue on this benefit of whether property benefits by an improvement and as I read this people are asking will this road benefit agricultural property. I guess if you look at it in terms of in its current condition will it benefit it for agricultural purposes you might get one answer, whereas if you look at the location of the property and what the ultimate use of it will be you will get a different answer. I think that explains to some extent why there is this question of benefit. Russell Larson - The question of special benefit is not limited to the benefit that a property derives from a public improvement as of this date, of its current zoning or its current use, and the Council in its discretion must anticipate what the highest and best use of that property will be in the near future and I don't mean immediate future but the reasonable distant future and it's on that concept that special benefit can be supported. Councilwoman Swenson - Actually then, Russ, if we consider benefit on the basis of our proposed Comprehensive Plan we are permitted to take this into account as we consider the benefit. Russell Larson - That would be one of the factors that you could take into account in assessing special benefit. Councilwoman Swenson - The City has purchased the easement for this road, is that correct? Russell Larson - Yes. Councilwoman Swenson - Was this easement paid for Bill Monk - It was on an area basis. Councilwoman Swenson - Is there any way that that Bill Monk - It could be, yes. I do not have that overall breakdown, how much different $134,000. on a footage basis? could be computed? number tonight. I owners were paid. do know the The total was Thomas Connelly - I do have written objections that it was my understanding that we had up until the public hearing was over to file them and I just wanted to file these with the Secretary. I I I I I I Council Meeting August 31, 1981 -7- Councilman Horn moved to close the public hearing. Motion seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Hearing closed at 8:10 p.m. KERBER BLVD. STREET IMPROVEMENT, SPECIAL ASSESSMENTS: RESOLUTION #81-32: Councilwoman Swenson moved the adoption of a resolution accepting option #4 incorporating the City Manager's recommendations with the application of $435,767.85 to State Aid reducing the rural assessment to $21.02 and the urban assessment to $42.35. In addition approval of deferments for the agricultural properties for a maximum of five years. To be rescinded if development, sale of property or change of usage occurs. The assessments would be placed over a ten year period at 8% interest, with the understanding that when permanent improvement bonds are sold in 1982, that the 1983 interest rate, and remaining years will be adjusted to a level equal to approximately 1% higher than the net interest rate paid by the City. The City reserves the right to periodically adjust by resolution the rate of interest paid on unpaid installments of the special assessments within the limits imposed by law. Resolution seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. PUBLIC HEARING NORTH SERVICE AREA REASSESSMENT Acting Mayor Neveaux called the hearing to order with the following interested persons present: Roy Leach, 3900 Red Cedar Point Drive Jeremy Cone, 3735 Hickory Richard Comer, 3800 Red Cedar Point Drive Helmut Mauer, 5810 Ridge Road Gary Larson, 264 Water Street, Excelsior Stephen M. McCormick, 1540 Fulham, St. Paul, MN 55108 Nancy Osgood, 745 Pleasant View Road Robert M. Bowen, 6275 Powers Blvd. James Larkin John Schumacher Craig Mertz Russell Larson Craig Mertz - In 1980 the City attempted to reassess the North Area Project because of unfunded liabilities in the bond issue that had been issued to pay for construction of the North Area Project. In February of this year the City received an adverse court decision involving 13 parcels of land that were in the reassessment. In that court order the judge indicated that the municipality was not authorized to assess the project initially on a unit basis when this unit bases was compined with a system of deferring some of the units and putting some of the units on for immediate collection. The judge, however, left the door open for a reassessment of the project as to the 13 parcels on the theory that the City must correct the erroneous deferments that were granted in 1973 and that is the purpose of the proposed assessment roll. The City Council considered the court decision last February and at that time the City Attorney's office explained that there were three options that the municipality had with respect to the judges order. The first option was to do nothing, meaning the general revenue fund would absorb those assessments that were abated or cancelled as a result of the court order. The second option was to take a direct appeal to the Supreme Court of the District Court decision. The third option was to reassess the 13 parcels and vacate the 1973 assessment as to those parcels giving full credit for previous payments. We characterized that third option as being an indirect appeal because we recognize that it was highly certain we would again be faced with Council Meeting August 31, 1981 -8- legal challenges. The Court Order of last February is interesting in two respects. The first point that we should make is that the Court never did get to the issue of special benefit. There has been I no Court finding that there is or is not special benefit attributable to the parcels in question as a result of the project. The second point is the judge never addressed the point of what happens to an erroneously deferred assessment. It's our position that if an assessment is erroneously deferred without authority of law that the deferment ends and that the assessment becomes collectible. Obviously the appellants will attempt to develop the point that the erroneously deferred assessment has to be absorbed by the general revenue fund as some sort of penalty against the municipality. Since the assessment roll was adopted in 1980 there was a decision in a Minnesota Supreme Court case entitled Anderson v City of Bemidji. That case was decided last July approximately two months too late to be of any value in the Councils deliberations on the 1980 assessment roll and several years too late to be any value in the Councils deliberations on the 1973 assessment roll. In the Anderson case the Court stated that municipalities do not have the option of granting partial deferments. The only option a municipality has is to defer the total assessment or defer nothing. That was the item that was at issue in the Bemidji case and the court stated that this particular issue had not been before them before but they were going to end the deferments that were granted to Mr. Anderson in that particular instance. Acting Mayor Neveaux - Bill Monk can you explain the assessment roll. Bill Monk - Given the job of reassessing the 13 parcels involved because of the court case decided in 1980, I came up with the following assessment I schedule. The proposed reassessment includes the voiding of the project assessments that were levied in 1973 and the assessment of special benefit as determined by appraisal. At that point I compared the benefit as shown in appraisals against the sum of the 1973 levied assessments plus the 1980 proposed assessment. The lower of those two numbers was then put in column 1 of the assessment roll, to attempt to be equitable in the amount that was assessed. Column 2 represents interest on that principal calculated at 7% per annum as calculated from October 1, 1973 to August 31, 1981 to establish the present day benefit that is shown in column 3. Column 4 represents the payments that have been made through 1981 on the 1973 assessments, both the principal and interest amounts are shown in column 4. Principal was then applied to principal as shown in column 1 and interest to interest as shown in column 2 to arrive at the final numbers in column 5. Every method available was taken to apply these in an equitable fashion and as I said, principal to principal and interest to interest. Column 5 represents the present day amounts remaining outstanding against the 13 parcels being discussed tonight. Acting Mayor Neveaux - The issues that we are essentially addressing are perhaps objections to procedure or perhaps objections to appraisal reports that formed the basis for this 1981 projection. I will open the floor to comments from the public. James Larkin - Pursuant to the advice of the City I have prepared a notice of objection to assessments which I would like to read into the record and deliver to the presiding officer. Notice of Objection of Assessments in Regard to Lot 17 and parts of Lots 16 and 18, Block 1 Pleasant Acres, City of Chanhassen, Parcel #25-57-500-0016-000 and The South 96.62 feet of Lot 3 and the North 49.53 feet of Lot 4, Block 7, Pleasant Acres, Parcel #25-57-500-0070-000. The undersigned owners of the above described parcels herewith object to the assessment I I I I Council Meeting August 31, 1981 -9- levied or sought to be levied pursuant to the notice given bv the City of Chanhassen, Public Hearing on Assessments, North Area Sewer and Water Project 71-1 for Hearing on Monday, August 31, 1981. The objections are made upon the following grounds: 1. The assessments are contrary to the order of Carver County District Court in the matter of the City of Chanhassen v Joseph Massee and Marcia Massee et.al. filed on February 2, 1981. 2. Said assessments are in violation of due process rights of objectors under United States Code Section 1983, et seq. 3. Said assessment exceeds the special benefits to the property, measured by the difference in market value of the property before and after the improvements, and is therefore a taking of property without fair compensation, in violation of the Fourteenth Amendment to the United States Constitution. 4. Said assessment involves a disproportionate distribution among property owners of the total costs of the improvement. 5. Said assessment utilizes an improper determination of the area actually benefited by the Sewer and Water Lateral Assessment, Area Assessment, and Trunk Sewer and Water Assessments. 6. Said assessment is not properly based upon special benefits actually received at the present time by Appellants' property. 7. Said assessment was not calculated in accord with customary and accepted methods of determining the relationship between cost and benefit. 8. That the City of Chanhassen did not comply with the procedural and due process provisions of Minnesota Statutes, Chapter 429 relating to Local Improvements. You are further notified that objectors will seek to recover costs and attorney's fees incurred bv them in contesting said assessments on the grounds, among others, that said attempted assessments have previously been determined to be invalid and tne present attempted assessments are an attempt to do indirectly what the Carver County District Court in the matter of City of Chanhassen v. Joseph Massee etal, has previously determined could not be legally done. Gary Larson - I am an attorney in Excelsior. I am representing eight property owners. Massee, Howard, Leach, Comer, Bonthius, Windsor, McCormick, and Osgood. Our objections are similar to those as outlined by Mr. Larkin. I want to assure you that if this assessment is adopted, I have already been authorized to file an appeal so you are looking at that just as a matter of fact. We will appeal if this assessment is imposed. My objections, procedural we think it is illegal, we think it is improper, we think it's contrary to the judges order. To the best of my knowledge there has not been filed with this Council a letter from your City Attorney determining that the 1971 assessment is invalid which is my understanding is the basis for which this reassessment is to proceed. The 1971 assessment is still on the rolls. I hate being rushed like this, John, that hardly affords somebody due process. It is a very serious matter for some of these people. My clients, for instance, the Leachs, this means $8,000 a year to them. That's a lot of money all of a sudden. Acting Mayor Neveaux - I was not attempting to rush you at all Gary, I just wanted you to get to the point and not start threatening us with lawsuits. Gary Larson - It was a mere explanation of where we are going. We think you would be wiser in this position to adopt an equalization charge and charge each one of these people an equalization charge when they develop their property. You are not going to win again. It's just a matter of charging these people with a bunch of attorney's fees again and charging yourself a bunch of attorney's fees again. Our statement also indicates that on this go round we intend to ask for attorney's fees something that we did not do last time. Council Meeting August 31, 1981 -10- Nancy Osgood - To the Chanhassen City Council. We are greatly distressed to be faced again with the ordeal of having to protect our property and its value. This has been brought about by the North Sewer and I Water Project 71-1. To clarify our position we would like you to be aware once again that we were not assessed any units in September of 1973. In fact we had no correspondence with or from the City on this project from May of 1973 until a letter from the City Council February 7, 1980. In May of 1973 we had been given the then Councils ok to be a part of the future East Sewer and Water Project. We subsequently were assessed and hooked up to the east in 1979. The explanation of the deferred assessments for the North Chanhassen Sewer and Water Improvements dated February 7, 1980, from the City Council states, and I quote;"that every property even if undeveloped was charged at least one unit of assessment if adjacent to sewer and water.'! We were not assessed. The reason being we were not a part of that project. That is obvious. As citizens of Chanhassen we should not be penalized for an error of omission, miscalculation or an honest mistake on the part of the City. Dividing our property to provide two additional homesites in the northwest would greatly devalue our home. Placing homes between our home that was built in 1869 and Pleasant View Road would absolutely ruin our lovely home and setting. This must be apparent to anyone familiar with our property. Is it right that in providing increased services and value to new and undeveloped areas you destroy the property values of existing ones. For us to be forced to borrow money at 1981 interest rates or forego our 5~% interest mortgage on our home and have to move to compensate for the City's 1973 error is totally unreasonable. However, we feel this assessment is absolutely I ligitimate if and when the potential for our property's development is realized. That is the time when the connection charge is made for the equalization to be levied in past interest due and collected. We were frankly quite surprised to read that Mr. Myron Dixon, the appraiser for the City of Chanhassen, had made four field inspections of our property. All without the courtesy of letting us know he was on our property or had been there. We support the City of Chanhassen sewer and water projects. We appreciate the motives~ to clean up our area lakes and wetlands and increase the services to the present and future residents of the area. But when a citizen is penalized severely for old administrative errors that is unfair and unjust. Bruce Malkerson - I represent Helmut and Jane Mauer. I have filed with you previously tonight a letter objecting to the proposed assessment. I have the original letter that I would like to leave with the hearing officer to comply with the requirements of Minnesota Statute 429. I adopt as our objections, the objections raised by Mr. Larkin and Mr. Larson earlier tonight but I think we have yet another specialized situation here that's different from theirs. As I noted to the City Council in 1980 and I do again in my letter to you, the property owned by the Mauer's is undeveloped presently. They purchased the property in 1979. The seller of the property, Dr. Meyer, imposed upon them a restriction in the deed that said I that this property can only be developed in the future for one home. This was a deed restriction that was imposed upon my clients, not what they wanted but this was a condition of sale. I believe Dr. Meyer is well known in the City as being somebody that promotes large lots, environmentally sound development, these sort of things and he was trying to do the same thing with the sale I I I Council Meeting August 31, 1981 -11- of this property. In 1980 I provided to the City Council a copy of the deed of January 10, 1979, which is still a part of the City record and I would just note to you again that the covenant in that deed states specifically that said premises shall not be divided and only one single family residence with garage in the attached thereto and integrated with the architecture of the house shall be erected on said premises. The appraisal that was done by the appraiser for the City, this time around, stated specifically in his appraisal, on page 1 of the full appraisal report on the bottom paragraph,"with this parcel developed into three lots with about 26,000 square feet in each parcel we believe will conform to the general construction practice in the area," and he goes on to say that with the development potential of three lots and in fact he includes a plat map showing how you could divide this property into three lots, there is therefore benefit of three units or $19,500. Unfortunately, the appraisal did not take into account the fact that there was this restrictive covenant of record that my clients can't do anything about. It's possible that sometime in the future my clients could go to Dr. Meyer or his successor in title and say I will pay you x dollars to release that covenant and then instead of one house there could be two or three houses but I believe that your ordinances provide that in such a situation you can charge a connection charge and thereby recoup any assessments that may not have been assessed initially. So what we are asking this Council to do is to recognize this special situation where my clients came in, bought property, didn't know of any special assessments of 1973 or anything that may have been pending, I don't think anything was even pending at the time, and they said fine, that's the way we have to buy the property, that's alright but then for them to be assessed for three units when they can't get the benefit for three units, we believe, is not fair and it's not legal. My clients are willing to say, we will pay for one unit and we will file in the chain of title a declaration of some sort that in the event that we are ever able to get a release on that restrictive covenant that you could charge us for the other two units that have been deferred but as I noted you already have that authority under your ordinance. My client has also noted to me before and he did tonight that before he bought the property he walked the property with the City Engineer and the City Engineer stated to him that because of the drainage patterns in that area, that's a pretty steep slope going down into the wetland area, that only one house could or should go on the property anyway. From your own engineering perspective there should only be one home on this property and not three. Robert M. Bowen - You have my objections on file and I would adopt the much better written objections that have already been filed as a petition of Mrs. Bowen and myself. I don't expect to get any relief from this Council. I have been here before. I agreed in 1971, without objection, to pay for the first assessment. That was followed by another one which is under litigation, which was followed by still another one which is under litigation and this third one was under litigation and thanks to Council here I was saved from having to try it. Our feeling is that this Council wants us to divide up all of our lands. You want to do to all of us what you are doing to Mr. Kerber. You will notice the nature of my objection. We are claiming negligence on the part of this Council, its predecessors, its officers, and its engineer and my question to the engineer's tonight is, how can we trust his figures tonight? One other thing, there was talk about attorney's fees. We are studying a 1983 action if these things continue. We have been in litigation since Council Meeting August 31, 1981 -12- 1973. I don't know how a person who isn't a lawyer can afford to protect himself. John Schumacher - I have got two questions. I was wondering if the engineer has some numbers reversed. I had one assessment in 1973 and I am being reassessed to which I have objected and I hope the Council has it in their hands. I am being reassessed for two more. Apparently you people are going ahead with this assessment on the thought that you are going to cancel all the deferments, does this cancellation pertain to the north area or will it pertain to all deferments in the City of Chanhassen? Craig Mertz - It would pertain only to the 13 parcels of land affected by the decision in the Massee case. John Schumacher - I would say that's discrimination. Steve McCormick - I am not a developer for this property. It has been in my family for 50 years and it was passed along to me with the intent of a long term nest egg if you will or security. It is not my intent to develop this property. I would like to point out that the hardship which the previous action imposed on me, the amount of money that I had to spend last year on legal fees to protect my rights, which the judge clearly and unequivocally upheld, is money that could much better have been spent on my family and on my needs. I have a modest salaried income. I want to be sure that you all understand that. I have no alternative but to continue to attempt to protect my legal rights and to spend more of my hard earned money doing so because the alternative is to sacrifice the property. I hope each Council member read the judge's decision, rather than relying entirely on the advice of legal counsel, in the face of what he said about the law and about the validity of this assessment. Itls beyond me how you can take this action again. Richard Comer - When Mr. Mertz used the phrase that we have heard on occasion, this will be a supplemental assessment to correct omissions, errors or mistakes relative to the original assessment, well when the original assessment came through these figures are as close as you are going to get, on the water laterals there were 798 units and on the sewer laterals there is something like 734 and of those 202 water laterals were deferred and 198 sewer laterals were deferred. In the light of the relationship between these figures being around 700 more total units and 200 units being deferred, I wonder if you might not find it a little embarrassing to call that omissions, errors or mistakes. It looks like it was a poorly drawn design. Craig Mertz - The purpose of todays proposed action is not to correct errors or omissions. The purpose of the action is to end the deferments that the court, in its order, stated were erroneously given in 1973. I I Gary Larson - Has the City Attorney delivered a letter declaring the 1973 assessment invalid as to these 13 parcels? Craig Mertz - Yes. I Gary Larson - Could we be provided with a copy of that? Craig Mertz - Yes. Gary Larson - Have the 1973 assessments been voided off the assessment roll? Craig Mertz - Not as of yet. That would be in one resolution. John Schumacher - How do you get a copy of that letter? Craig Mertz - I will get one to him. I I I Council Meeting August 31, 1981 -13- Councilwoman Swenson moved to close the public hearing. Motion seconded by Councilman Horn. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. Hearing closed at 9:00 p.m. NORTH SERVICE AREA SEWER AND WATER REASSESSMENT: Councilman Geving moved to set a special Council meeting for September 8, 1981, at 7:30 p.m. and direct staff to provide whatever answers are needed to the questions asked in the correspondence received tonight. Motion seconded by Acting Mayor Neveaux. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. NEW HORIZON HOMES: Frank Kurvers asked why the disturbed lands in Chaparral have not been seeded. The Engineer will check into this and take appropriate steps, if needed. NORTHWEST LOTUS LAKE ROAD SYSTEMS: Homeowners in the area were present to discuss connecting various roads within those areas presently being considered for development. No action was taken. FRONT YARD VARIANCE REQUEST, 7616 FRONTIER TRAIL: Mr. Coulter is requesting an eight foot front yard variance in order to construct a detached double garage. The Board of Adjustments and Appeals recommends approved. Councilwoman Swenson moved to approve the front yard setback variance request, Planning Case 81-6. Motion seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. CONDITIONAL USE PERMIT AMENDMENT REQUEST, LOTUS LAKE ESTATES BEACH LOT: The Lotus Lake Estates Homeowners Association is requesting an amendment to their conditional use permit for the following changes: 1. Five, 50 foot seasonal docks. Each dock to contain eight boat slips. 2. Two additional canoe/small sailboat racks storing six watercraft each. 3. Ten sailboat mooring buoys for sailboats. 4. One 10' x la' swimming raft of wood construction with flotation. 5. Conversation pit - fire hole, three feet in diameter with a six foot apron of brick or masonary construction. Many residents of Lotus Lake Estates as well as residents around Lotus Lake were present. The Planning Commission held a public hearing on August 12, 1981, as recommended approval of the amendment to be modified as by the recommendation of the Lake Study Committee in memo of June 24, 1981 as follows: 1. Only one dock should be permitted (not to exceed fifty feet in length, unless necessary to reach a water depth of four feet). 2. Two additional canoe racks should be permitted allowing a maximum of four racks. 3. No sailboat mooring buoys or overnight docking of boats should be permitted (including on-land boat storage). 4. A 10' x 10' swimming raft should be permitted if it is located in water having a minimum depth of seven feet, is not more than one-hundred feet from the nearest lake shoreline, and projects a minimum of one foot but not more than five feet above the lake surface. 5. The proposed conversation pit should not be so constructed as to be of a permanent nature (i.e. using brick or masonry material). Councilman Geving moved to deny the Lotus Lake Estates Homeowner's Association application for an amendment to their present conditional use permit as applied for in their June 10, 1981, unsigned letter and referencing all illustrations and all materials relating to the ecology of Lotus Lake as presented in the Council Agenda. Motion seconded by Councilwoman Swenson. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. Council Meeting August 31, 1981 -14- Councilwoman Swenson moved to accept the Planning Commission recommendations of August 12, 1981, page 8, with modifications as follows: 1. One dock should be permitted (not to exceed 50 feet in length, unless necessary I to reach a water depth of four feet). Said dock may have the configuration of 40 feet with a ten foot platform at the end. Said dock to be located in the position of the southerly most shown dock. 2. Two additional canoe/small sailboat racks should be permitted allowing a maximum of four racks. 3. No sailboat mooring buoys or over night docking of boats should be permitted (including on-land boat storage except as in #2 above). 4. A 10' X 10' swimming raft should be permitted if it is located in water having a minimum depth of seven feet, is not more than 100 feet from the nearest lake shoreline, and projects a minimum of one foot but not more than five feet above the lake surface. The corners to be reflectorized. 5. A conversation pit - fire hole, three feet in diameter with a six foot apron erected of brick or masonry material placed on the landward side of the walkway and no further north than the northerly lot line of Lot 32. Motion seconded by Councilman Geving. The following voted in favor: Councilwoman Swenson, Councilmen Geving and Horn. Acting Mayor Neveaux voted no. Motion failed. Councilwoman Swenson moved to accept the Planning Commission recommendations of August 12, 1981, page 8, with modifications as follows: 1. One dock should be permitted (not to exceed 50 feet in length, unless necessary to reach a water depth of four feet). Said dock may have the configuration of 40 feet with a ten foot platform at the end. Said dock to be located in the position of the southerly most shown dock. The overnight docking of four 16' non-motorized rowboats will be allowed. I 2. Two additional canoe/small sailboat racks should be permitted allowing a maximum of four racks. 3. No sailboat mooring buoys or overnight docking of boats should be permitted (including on-land boat storage except as in #2 above). 4. A 10' x 10' swimming raft should be permitted if it is located in water having a minimum depth of seven feet, is not more than 100 feet from the nearest lake shoreline, and projects a minimum of one foot but not more than five feet above the lake surface. The corners to be reflectorized. 5. A conversation pit - fire hole, three feet in diameter with a six foot apron erected of brick or masonry material placed on the landward side of the walkway and no further north than the northerly lot line of Lot 32. Motion seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. Acting Mayor Neveaux noted that the Council considered a moratorium for the consideration of motorized boat usage on homeowners and beach lot proposals for this application and future applications but that no official decision was taken. A review of the matter will be prepared by the City Attorney and submitted to the Council by September 14 at which time consideration of scheduling a public hearing \vil1 be held. FINAL DEVELOPMENT PLAN REVIEW, PARK II, INSTANT WEB: Frank Beddor was present. The City Planner presented the Planning Report. Since the Planning Commission meeting the applicant has agreed to delete the lot line between Lots 1 and 2, Block 2 as the Planning Commission did not recommend for a direct egress from proposed Lot 2 onto County Road 17. The Planning Commission has recommended approval of the request for C-2 zoning for Lots 1, 2, 3, Block 1 and Lots 1 and 2, Block 2 and Lot 2, Block 3. Hmvever, a new public hearing will have to be held to approve this zoning as the initial hearing was held for P-3 zoning. I I I I Council Meeting August 31, 1981 -15- The primary reason for the C-2 request was the desire to accommodate an automobile service station and an off-sale liquor establishment both of which are permitted, by conditional use permits. The applicant has agreed that Lot 4, Block 2 shall be deemed unbui1dable until such time as it may be combined with the adjoining property in Chanhassen Lakes Business Park. This restriction will be placed in the development contract and/or platting agreement which will be filed with the final plat of Park II. Councilman Geving moved to table action and refer this item Motion seconded by Councilman Horn. The following voted in Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. carried. to the Planning Commission. favor: Acting Mayor No negative votes. Motion CONSENT AGENDA: Acting Mayor Neveaux asked if council members wished to discuss any item on the consent agenda. There being no further comments, Councilman Horn moved to approve the following items pursuant to the City Manager's recommendations: a. Christmas Acres Public Improvements. Accept as meeting city standards. b. Comprehensive Plan. Response to Metropolitan Council regarding clarification of minor Comprehensive Plan issues. Motion seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Motion carried. Councilman Geving moved to adjourn. Motion seconded by Councilman Horn. The following voted in favor: Acting Mayor Neveaux, Councilwoman Swenson, Councilmen Geving and Horn. No negative votes. Meeting adjourned at 1:05 a.m. Don Ashworth City Manager