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1981 09 08 I I I SPECIAL CHANHASSEN CITY COUNCIL MEETING SEPTEMBER 8, 1981 Acting Mayor Neveaux called the meeting to order at 7:30 p.m. with the following members present: Councilwoman Swenson, Councilmen Horn and Geving. Mayor Hamilton was absent. 1981 NORTH SERVICE AREA REASSESSMENT: The following interested persons were present: Mr. and Mrs. John Schumacher, Roy Leach, Gary Larson, Mr. and Mrs. Sewall Osgood, and Helmut Mauer. Acting Mayor Neveaux - This is not a public hearing but is a discussion of this matter by the City Council and staff. Essentially, last week we did have the public hearing. We listened to comments from the audience. We accepted written statements from the affected parties and then closed the public hearing but indicated that we would be meeting this evening to make a decision to discuss perhaps the individual comments that had been made in person or in writing and to allow some time for staff to respond to said comments. Given that, we do have a report from the City Engineer in regard to some specific points that were raised by several of the written statements. Bill, would you like to discuss your memo? Bill Monk - After comments were received from many of the people involved with the assessment, the Assistant City Attorney Craig Mertz and myself met and came up with the response you see before you. The wording is basically mine but the thoughts deal with many legal matters and are not just my imput but include comments from legal counsel. Most of the points are dealt with in the James and Barbara Larkin letter. They have eight points and we will go through them one by one. Gary Larson - Are there extra copies available? Craig Mertz - We can get you one tomorrow. Bill Monk - Point no. 1. The assessments are contrary to the Order of the Carver County District Court in the matter of City of Chanhassen v. Joseph Massee and Marsha Massee, et al, filed on February 2, 1981. My response was very short in that this matter is detailed in a letter from the City Attorney dated August 23, 1981, and has been made available to persons requesting it. Point no. 2. Said assessments are in violation of the due process rights of objectors under United States Code Section 1983, et seq. Our response was, if improperly deferred assessments are collectible, as believed by legal counsel, in the amount determined by appraisal, there is no violation of U. S. Code Section 1983, et seq. Point no. 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. Response to point 3 is that special benefit was determined by appraisal which does measure the difference in market value before and after the improvements. Point no. 4. Said assessment involves a disproportionate distribution among property owners of the total costs of the improvement. Again, this reassessment is distributed as benefit determined by appraisal. A side point in this issue, it should be noted that in 1973 and 1980 the City Council employed a policy that did not assess off-line units. Point no. 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. The City Council has spent considerable time in determining the benefit and attempted to employ an equitable and consistent policy in determining the area of properties benefitted. Point no. 6. Said assessment is not properly based upon special benefits actually received at the present time by Appellants' property. Appraisals Council Meeting September 8, 1981 -2- were used exclusively in the determination of benefit. Point no. 7. Said assessment was not calculated in accord with customary and accepted methods of determining the relationship between cost and benefit. Again, appraisals were used. Details of the I assessment calculations are included in my previous report dated August 21, 1981, and every effort was taken in the calculation of that roll to be equitable and consistent. Point no. 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. The City is attempting to levy an improperly deferred assessments and is in compliance with provisions of Minnesota Statutes, Chapter 429 and I would defer to legal counsel on that if the Council wished for a more lengthy or detailed description. Objections and comments received from the following individuals were also answered in the above responses. They were written in a standard form and were answered in the eight points above. They were from the Massee's, Howard's, Leach's, Comer's, Bonthius's, Windsor's~ McCormick's, and Bowen's. The comments received from Jane and Helmut Mauer were different in that they were asking the Council to take into account a private covenant. Staff's response is that past City Council policy has been to disregard private covenants restricting development when determining special benefit. These covenants are a private agreement between the buyer and seller of an individual property and the City is not in a position to enforce the provisions or interpret the intent of such an agreement. The comments received from Mr. and Mrs. Osgood again were different in one respect. The answer to their comments was, the Osgood property was originally proposed to be assessed in 1973 as a part of the North Service Area project. During the assessment procedure, the Osgood's requested tOI be deleted from this assessment and included in the future East Lotus Lake Sewer and Water project as hook up to their house would be easier in that direction. Their request was granted and they were assessed $24,760 under Project 75-10. When the servicable properties were re-evaluated in the 1980 North Area Reassessment, the Osgood property was again included as benefitted property. Their inclusion seemed justified by the amount of benefit as determined by appraisal ($32,500). That is the only reason they were included in the reassessment was the amount of the appraisal. That answers a lot of the comments. The Council may wish for further clarification on some of the points. I do have the reassessment. I could put it on the overhead. I distributed this evening the final assessment roll. There was an error found when I went back through the 1973 assessments on the Bonthius property. It was to their benefit. We have corrected the roll and the roll is now final as requested by the Council. Acting Mayor Neveaux - Before we get into individual comments from the Council I would ask the City Attorney to make some comments about the Engineer's memo of September 8, 1981, which he has just read. Craig Mertz - If the Chair would bear with me, I know that the public hearing is closed but I would like permission to ask the parties here in attendance whether they have an specific objection or criticism of the appraisal reports which are before the Council regarding the amount of special benefit. May I do that? Acting Mayor Neveaux - Yes. I Craig Mertz - Gary Larson is present and I believe that Mr. Larson indicated that he is representing the Bonthius parcel, the McCormick parcel, the Comer parcel, the Leach parcel, the Osgood parcel, the Howard parcel, the Massee parcel and the Windsor parcel and I know Mr. Larson has had an opportunity to review those appraisal reports and I would like to ask him at this time if he has some objection or critique of those appraisal reports. I I I Council Meeting September 8, 1981 -3- Gary Larson - We have not had a sufficient amount of time nor have we expended any funds to have a professional appraiser review those. We hope that we could convince the City Council not to follow through with this assessment. We did not feel it was appropriate to expend clients money on special appraisal reports until they were; yet follow this process through hoping to convince the Council not to adopt these assessments so at this point I am not prepared to respond to Mr. Mertz's question. Craig Mertz - The Schumacher's are also present and I would like to put the same question to them. Do you have some particular objection or critique that you wish to make known to the Council regarding the appraisal report that was obtained on the amount of special benefit in this project? John Schumacher - I have no comments. Craig Mertz - Moving on to the Engineer's report. The only thing that I wish to mention is Bill's report talks about U. S. Code Section 1983 and what he is refering to there is a statute which is a part of the Federal Civil Rights Act, more specifically it's entitled 42 U. S. Code Section 1983. That's a statute that says that no person under the color of state law can deprive another person of their constitutional rights and privileges and if a party so acts they are liable in civil suit for damages to the injured party. In order for someone to recover against the municipality for a Section 1983 claim, what the plaintiff or citizen would have to show would be two things. One would be unconstitutional conduct on the part of city officials. The second element would be bad faith. Unconstitutional conduct in this context would be the taking or the lack of special benefit and we have attempted to deal with that element by means of the appraisal reports that were submitted to the Council for its review. The bad faith element would be that the Council was motivated by malice in adopting the assessment roll. If the only reason why the Council would want to adopt this roll, just as a hypothetical, would be for the purpose of punishing those parties who filed court appeals last time around, that is not a proper motivation for adopting the assessment roll. If, however, you are adopting the assessment roll because you feel this would be consistent with past city policy or that this would result in equitable treatment of these properties, vis-a-vis the other 300 and some properties in the North Service Area, I think we have dealt there with this bad faith claim. I have nothing further on Mr. Monk's report. Acting Mayor Neveaux - Russ (Larson) do you have any comments? Russell Larson - No. I share Craig's view. Actually the action which is proposed to be talken here is authorized by state law, particularly Section 429.071 which deals with supplemental assessments, reassessments and matters such as that. We feel that you are merely following the dictates of that state law and quite frankly the court order. Acting Mayor Neveaux - I think we should discuss this now at the Council level. We have had numerable comments and accusations thrown around the room during the past several weeks and several months, I am sure there are some questions and comments that individual council members would like to make in this regard and/or questions of staff to firm up in own mind before we even consider what type of action we should take and I see five or six options. Councilman Horn - I have a question about Bill's report on the Osgood section. I guess I am a little unclear, they were previously assessed 24,700 under the East Lotus Lake project, is that correct? Bill Monk - Yes. Councilman Horn - I guess what you are saying is they are justified in also being included under the North Service Area project because of the difference between the $38,500 and the $24,760. Craig Mertz - I think what you are leading up to Clark, is this discussion about what service area is this property properly included within and there have been Council Meeting September 8, 1981 -4- statements made about determinations by previous City Manager's and City Engineer's. From our standpoint the only important consideration is, can this property be phyiscally served by a pipe that was constructed as a part of the North Service Area project and the answer to that questions is yes, there is the capacity there or the possibility of physical service. You as the same question about the East Lotus Lake project and the answer again is yes, a portion of the Osgood property can be physically served by that East Lotus Lake pipe. Since we answer both of those questions yes, there is special benefit to the property, the question then becomes, what is the amount of the special benefit and your appraiser is recommending the number that he finds that being $32,500. Councilman Horn - But if I look at the amount of the assessment it's $12,000 and that coupled with the $24,700 already assessed exceeds the appraisal of $32,500. Councilwoman Swenson - They have already reduced it. Councilman Horn - Isn't the assessment the $12,000? Craig Mertz - That is the interest that we are running from completion of the project to date and we have excluded that interest from the computation of special benefit. Councilman Horn - The numbers I should be looking at are $24,760 and the 7,740. Acting Mayor Neveaux - Right. What I am hearing is that the appraiser has said that the Osgood property in total is improved by the two projects. All sewer and water available regardless of whether it's 71-1 or 75-10 in the amount of $32,500. $24,760 is on the property now from 75-10 so that figure $7,740 reflects the balance. Councilman Horn - I see the total comes up to the total appraisal value in this case where in other cases the assessment does not come up to the total benefit of the property. Bill Monk - The Osgood property is unique on the chart is because they were not assessed in 1973. All the other properties received some assessment in 1973 and therefore you see some reduction from column 4. The Osgoods were not assessed in 1973 therefore get no reduction, principal or interest, to the total that is shown in column 3 and that's why theirs carries from 3 directly over to 5. Councilman Horn - What year was the East Lotus Lake sewer? Bill Monk - 75-10 is the number of the project and I would assume is was in 1975. Craig Mertz - In the fall of 1976. Clark is correct is observing that certain of these parcels, the proposed assessment is lower than the appraisal and the reason why that is so is that in those cases where the appraisal indicated that we should come in with a higher number we none the less gave the property the benefit of the doubt in that we capped off the proposed assessment at the total of past assessments so that you could then validly say that these properties were treated no differently than the other properties for which no appeals were filed. Councilwoman Swenson - ìwen that $24,760 assessment was placed on the Osgood property that was apparently the appraised benefit at that particular time. Craig Mertz - That was the Engineer's recommendation. The Schoell and Madson recommendation as to the amount of special benefit attributable to the property. There was no formal appraisal report before the Council as there is this time. It was a figure that was assessed and it was the Engineer's recommendation as to the amount of benefit and the Osgoods took no appeal from that number as I recall. Councilwoman Swenson - Because it is a unique situation, we are talking about five years of rapid acceleration of property values and I can't help but wonder on today's market value basing an appraisal that was not factual. I am having a lot of problems because I I I I I I Council Meeting September 8, 1981 -5- I think that once somebody like this has been assessed for all practical purposes completed, that we are in fact going back and saying, hay, you didn't get charged enough therefore we are going to have to add you on this side in order make up. Craig Mertz - On the inflation question, the appraiser says that he is basing his opinion of special benefit as of November 1973 so there is not eight years of inflationary factor alone. He is saying that the benefit from the sewer is $32,000 measured from November 1973. These are not benefit figures today. W~ did not reproduce the entire report. Each report was six or seven pages long and the conclusion page was put in the Council packet. Councilwoman Swenson - On the Mauer property Craig, I have a feeling here that we have a situation that puts the taxpayer in a very awkward position because by assessing them for lots or for sewer assessments on the property even though, granted the City per se is not involved in any private contracts, it seems to me that we ',' really put him in a very difficult position because in order to release himself from the previous commitment he is going to have go to court which is going to cost a g~eat deal more money and the understanding at the time he bought the property was that this was not going to happen. What alternative do we have here? Here is a man who is caught between two big rocks and I have difficulty because I think we have an extenuating circumstance here that is not reflected. Craig Mertz - If an appeal is filed on the Mauer property it would seem to me that to overcome that appeal the municipality would have to convince the judge of one of two things. The first tactic would be to take the position that the restriction against land development imposed by Dr. Meyer is nothing more than a sham entered into by Mr. Mauer and Dr. Meyer in that it is removable at will by those two parties and it was imposed for the express purpose of avoiding assessments. I think you could argue that Dr. Meyer's conduct in imposing this development restriction is consistent with the politics that he has espoused at various meetings. I am posing a hypothetical on a way that you could attack an assessment appeal by Dr. Meyer I am not attributing that characterization to this. The other way to attack the assessment appeal would be to argue to the court that this type of private development restriction should be disregarded as a matter of public policy because if every property owner followed this same strategy, municipalities would never be able to collect more than the benefit for one potential home site on a large piece of property hence the large parcels would be subsidizing all of the small parcels. I was not attempting to attribute to Dr. Meyer or Mr. Mauer any reprehensible conduct there. I was constructing a hypothetical for a possible attack of the assessment appeal. As far as Council options on the Mauer assessment, the first option would be to delete the parcel from the roll on account of this private development restriction. The second option would be a variant of the first, delete it from the roll and by motion direct the city engineer to impose a availability charge or a connection charge on this property when and if it is further subdivided. The third option would be to adopt the assessment roll and litigate it as best as we can. Acting Mayor Neveaux - There are a few situations similar to this where in fact additional assessment amount was placed against the lot of record that was divisible by our minimum size standards of our zoning ordinance but in fact were in private covenant restraints. I am refering to the Joe Boyer lot in Sterling Estates that we considered in July. The covenants in Sterling Estates say that none of the lots can be subdivided regardless of size. We held to the position that it was a large enough piece of property that could Council Meeting September 8, 1981 -6- sustain the benefit of more than one unit. Councilwoman Swenson - That's true. I had forgotten that. Councilman Geving - I believe the Mauer situation is as you just described. it is a private covenant between two people and that we in the past disregarded those types of covenants. I do that there is a great deal of similarity between the Schumacher's case before us and the case of the Osgoods. Both with fairly substantial amount of land fronted on several different sides of which lots could be split into several and in each case we would be forcing those people into development of their properties with homes in front of their present homes. The assessment, special benefit that I want to be more familiar aboutis the Osgoods. I have driven by that place three times in the last several days and each time I am very confused as to how lots could be split. Maybe we shouldn't even be thinking about that. It that a correct statement? Craig Mertz - The benefit to the property comes from two sources. One is just the market forces that are operative on an existing dwelling. The appraiser will tell you that an existing house with public sewer is worth more than a similar existing house on a septic system so there is a portion of special benefit attributable to the existing house. The balance of the benefit is by virtue of the appraiser's assumption that additional homesites could be carved out of this parcel and it would require subdivision of the property to utilize that benefit. Councilman Geving - The road that we placed to the east of the Osgood's property, in fact right in the middle of the property, we apparently deferred two assessments and made one assessment on the East Lotus Lake project, were any of the proposed lots and I am looking at the Dixon and Associates Appraisers memo of July 10, were any of those lots that are supposedly drawn on this schmatic 1-5, particularly 4 and 5 I suspect, a part of that earlier assessment? Were they at all considered in this 24,760 that was assessed earlier? Bill Monk - I believe three units were discussed on the East Lotus Craig Mertz - There is a pipe in that little road on the south end Acting Mayor Neveaux - That's where the Osgoods are hooked up to. 75-10 project run up Pleasant View Road? Bill Monk - It would just service 4 and 5. The other three are on 71-1. Acting Mayor Neveaux - So the 24,600 are for Lots 4 and 5. Councilman Geving - I think that's important because if that line were to go up to the corner or to the conjunction of what we no~v have someone describe here as a lot and could service Lot 3 then that in effect in my mind would have been one of the deferred lots. Would that be possible? You assessed one and you deferred two. Was the assessment placed against what is shown here as Lot 4 for example and were Lots 3 and 5 deferred and if so, was this property previously assessed? Bill Monk - They were assessed close to 25,000. It was not just for one unit. I believe they were assessed for three units in the East Lotus Lake. Councilman Geving - Don't you believe there is some merit to my question that in order for us to get a firm handle on the question before us tonight we have to first understand what took place in the 75-10 project and what has been assessed already under that project. Acting Mayor Neveaux - You can't lay the lines over the property in two different configurations with 75-10 configuration with so many units and then come back and lay them out again and look back at 1973. Councilman Geving - I just feel John that I have so many questions about this particular piece and it's the only one that I have problems with. That have feel I I Lake. of the property. How far does the I I I I Council Meeting September 8, 1981 -7- Craig Mertz - Do you want to see the asbuilt for Pleasant View Road. Councilman Geving - I am afraid we have to. If it means that we are not going to do it tonight, we have to understand what's in those two projects. Specifically the first project because when we deferred two and assessed one I want to know which one you assessed and which you deferred and are they the same as we are talking about tonight for this new project for the reassessment of special benefit. Councilwoman Swenson - I concur with Dale regarding the placement of houses in front of the existing houses. Acting Mayor Neveaux - I also concur that the amount of benefit is not "benefit" in my estimation at all in both Schumacher and Osgood cases. Councilwoman Swenson - I think the placement of these houses actually depreciates as opposed to appreciate. Acting Mayor Neveaux - As you remember when we went through this reassessment in 1980, the Fisher property on County Road 15. The Engineer had a extra lot plotted in there in front of their house and we said no way is that a reasonable way that that property could be developed. It might be appropriate right now to consider some possible actions to take. I have outlined four. I heard another one this evening which would make five. We might want to be thinking about about this as we discuss some of these individual cases further. Obviously one course of action for us this evening is to take no action at all on this reassessment roll in essence let stand the 1973 assessments. Obviously by doing that, from what I see, the project is going to be about $170,000 short of full assessment which may have some bearing upon the City's financial rating. Option number two might be to adopt the resolution and the assessment roll as presented at the August 31, 1981, meeting and as published. Option three might be to adopt a resolution and a roll as modified and we have talked about some potential changes that we might consider in a resolution. Then under other actions, perhaps Russ or Craig could mention, I heard you mention something about connection charges. Russell Larson - Your option number one speaks of that actually state law allows for the levying a connection charge upon the subdivision or further subdivision of property. Craig Mertz - Connection charge, I hesitate to use that wording for fear of creating further confusion. There is a statute that allows the municipality to impose "charge for availability of sewer and water service" so I'll call this an availability charge and it is something that we could impose upon further subdivision of the property and the charge is supposed to reflect the costs of establishing the system and maintaining the system and I take that to mean that we could assess an amount equivalent to assessments or we could impose an availability charge in an amount equal to the assessments per home site that were imposed against other properties, so that's your other option. Acting Mayor Neveaux - These would be municipal SAC charges. Craig Mertz - In effect, yes. Acting Mayor Neveaux - In addition to the Metropolitan Council SAC charge. Russell Larson - When the property is further improved. Acting Mayor Neveaux - And does further improvement need to be defined. Craig Mertz - It should be indicated what you mean by that. Is this something that you wish to impose upon a mere sale of the property or upon a subdivision of the property or at some specific date in the future. Acting Mayor Neveaux - It's not clear in the statute? Craig Mertz - No. All it says is that the municipality may impose these charges for availability and it would seem that if you are going to follow that route you should treat the various parties or parcels in some uniform fashion rather than telling one party their availability charge is due five years Council Meeting September 8, 1981 -8- from now and the next party that their availability charge will be imposed whenever the property is subdivided. I would like to see sort of uniform treatment. I Gary Larson - This is what we are urging upon you and we would enter into a specific contract with you as to when those availability charges would come due and we would develop a formula with you as to what the charges are, when the interest would be paid, that's the alternative we have been trying to talk to you about. Acting Mayor Neveaux - I haven't seen any of that. I don't think anybody on the Council here has seen that. What I would like to do and I think most of the council members agree, is to get this damn thing settled. This is the 1971 project that's still has these loose ends. It's easy to say, hay the council in 1973 screwed up. That may be correct, however, we have the problem still in 1981 and if we don't come to some kind of reasonable solution that is yet equitable, given the other 300 folks, some of them paying more than one residential equivalency unit charge, I can see this going into the courts adnauseam and everybody getting poorer except attorney's on both sides. Not that I have anything against attorneys. Does anyone on the council have any other suggestions as to resolution of the problem. Councilman Geving - I don't have any other resolutions but I am open to suggestions and further pursuance to many other alternatives whatever they might be. I am interested in a letter which we received from William F. Kelly and Associates representing Schumacher's and the statements that were made in that letter, I would like to have the attorney respond to. The second paragraph; "We must advise I you that in our opinion the letter as such provides that the City and the members of the City Council with no authority to proceed with a special assessment. Consequently, should the Council approve the assessment they currently have under consideration we will appeal the same and in addition will commence a separate lawsuit for damages against the City and against the individual members of the Council for the intentional violation of my client's rights and vigorously pursue the case to the full extent authorized under the law." I would like to have you respond to that Russ. Russell Larson - I think that what he is refering to is to that U.S. Code 1983 that is referred to in the Engineer's report and Mr. Larkin's objection. I think we have satisfactorily answered that. We feel that whatever action you do take tonight is action that is authorized under Chapter 429 of Minnesota State Law. Councilman Geving - You stand on your statement that the case that you did cite was germane to this situation. Russell Larson - Yes. Craig Mertz - There is no Minnesota case law that we can find that answers the question, what happens to an improperly deferred assessment. We believe that the most reasonable interpretation is that a improperly deferred assessment becomes collectible. The property owners will argue just the opposite that an improperly deferred assessment continues to be deferred perpetually. If that's the penalty, it's not much of a penalty. I There is one case that somewhat bears on this topic and that is that City of Bemidji case and in that particular instance the court in dealing with the topic of deferment said that the City of Bemidji did not have the authority to defer one-half of Mr. Anderson's assessments and in talking to the City Attorney in Bemidji, we called the City Attorney's office up there, Bemidji's response was to recompute the assessment roll with respect to Mr. Anderson's parcel back to day and they imposed the full charge. Bemidji did not forgive I I I Council Meeting September 8, 1981 -9- the one-half that had been erroneously deferred as per the court decision and that leads me to believe that if we went to Supreme Court on this that the Supreme Court would agree that an improperly deferred assessment becomes collectible rather than forfeit. Acting Mayor Neveaux - I think that the law clearly states that the city councilor the taxing authority does have the right to reassess an improperly assessed piece of property given advice of legal counsel. Craig Mertz - That's right. The August 25 letter is our response to the points raised by Mr. Kelly. Acting Mayor Neveaux - I feel comfortable doing that I guess what I am trying to come up with is some sort of compromise position that will not make the Council look as if we treated this group differently than other folks and it will not be a hardship essentially to the folks that are receiving the assessments. We need to look at talking about not assessments but the levying of a sewer availability charge in the event that these 15 parcels are developed. Councilman Horn - Wouldn't that in fact, John, accomplish the same thing as if you deferred assessments. Acting Mayor Neveaux - That's what bothers me. To me, not being an attorney, it flies in the face of the Supreme Court ruling of the City of Bemidji and Anderson but again if you are not calling them assessments you are calling them an availability charge. Russell Larson - It's authorized by that particular statute. Councilman Horn - I am not looking it so much in legal terms but in terms of what other people given equal benefit to all peoples involved. It appears to me that the City got themselves in this type of jam by in effect trying to be a nice guy and it appears to me because they may have tried to reach some kind of an equitable solution in the past that not we are coming back with a probability that because we tried to do that we don't have an obligation to recoup money that was spent to improve property in areas where other people, neighbors, have agreed and have paid this amount and I don't like to pay assessments myself and I understand how you feel, but it seems to me that all the City can do is try to be equitable amongst all the people who have "benefitted" by this particular improvement. My concern is more not being equitable than it would be our need to set some kind of a precedent by going in some other kind method trying to recoup this. I think it would encourage more people to challenge assessment rolls. I don't think that should be our purpose. Obviously it costs us money to have to try to defend these and I think a lot of people end up paying a lot of service fees to try to recoup these things. Acting Mayor Neveaux - Are not these costs to defend all of this action since 1973 billed back into the project? Craig Mertz - Yes. Acting Mayor Neveaux - The project is still open ended. Craig Mertz - It's still going on. Acting Mayor Neveaux - All these bills from attorney's, etc. are going back, essentially everyone up there is paying for it. I hear exactly what you are saying. Gary Larson - I don't think what we are suggesting is totally unprecedented. This would be similar to the agreement that you made with Pat Cunningham when he ghost platted his property. He signed an agreement with you whereby he agreed to pay future assessments when his property was further subdivided. Councilman Geving - That was a subdivision proposal. That was a little different. Mary Schumacher - We live in an area, Minnewashta Manor is a subdivision developed in about 1940 and it was interesting to me when the Boyer property was brought up, I don't know which property you are talking about, Council Meeting September 8, 1981 -10- Acting Mayor Sterling Estates now or the adjacent piece which is along the channel but the thought that comes into my mind is that we own a lot in a subdivision now called Minnewashta Manor and it would be interesting to read back in the Minnewashta Manor original covenant whether a new subdivision can evolve out of existing lots. Putting another house in our front lawn would just be bad. Neveaux - The Boyer situation was one of the originally platted lots that is right on the corner and it's a large enough lot that in fact it could be subdivided into two buildable parcels by our city ordinances. In your particular area we in 1980 put an additional assessment on Dick Brown's property. Mary Schumacher - He is not in Minnewashta Manor. He is in Minne~i7ashta Park. Acting Mayor Neveaux - About a block and a half away from you. Mary Schumacher - Minnewashta Park is kind of a loose knit area with lots of open land and so on. Minnewashta Manor is a compact neighborhood. Acting Mayor Neveaux - Except for one large lot. John Schumacher - I have one suggestion, this gentleman over here I believe is an attorney representing several families, is trying to suggest that we could make an agreement with the Council where we would pay these deferred assessments when we developed it, I would like to point out to the gentleman and to the Council perhaps this exists now. The thought was when they gave us the deferment in 1973 it was agreed that they would be deferred until the property is developed and I would be more than happy to go along with those lines. Acting Mayor Neveaux - The intent was in 1973 was that the assessments were not all complete that the project was not fully assessed but there were assessible units that would come on line by themselves and in fact they didn't and the resolution inaugurating the project itself said that the Council reserves the right to place future assessments upon it in the event it is necessary to do so and that's what happened in 1980. Councilwoman Swenson - On this availability approach, I seem to recall that one of horrendous problems we were confronted with had to do with the fact that this option of assessing deferments, continuing assessments or if you didn't reassess it and they weren't deferred we had a tremendous problem with semantics in that respect. Secondly people purchased property between the time that that 1973 assessment was levied and checked in and found there were no assessments against the property and suddenly were then assessed and finding out about this resolution at the time that the reassessment was made. What provisions could be made, if in fact the Council were to opt for this availablity charge. Where would this show in a legal description of the property so as to permit a possible buyer from knowing that this in fact that this is an eventuality. Russell Larson - In this particular case, since there are only 12 properties involved, if that is your course of action, I am sure that Gary Larson and our office would work toward a common end which would place a notation on the title to the property that in the event that the property is subdivided that availability charges pursuant to State Law and City ordinance would be levied. This would be a notice to the public that if you are going to subdivide that parcel of land you will have the liability of paying a availability charge. Councilwoman Swenson - Would we then specifically state that this would include not only construction, etc. but the interest. I I I I I I Council Meeting September 8, 1981 -11- Russell Larson - It could but commonly it would not. That would put them on the alert that they had better check with City Hall to find out what those costs might be. Councilwoman Swenson - Those costs should Russell Larson - They should be available Councilwoman Swenson - So that this would stung buyer. Russell Larson - I'll ask Mr. Larson whether he accepts that in concept. Gary Larson - That's exactly what I had in contemplation is something that would put a buyer on notice. Councilwoman Swenson - How does this affect our status as far as, obviously we are going to be $170,000 short on our bonds, will the fact that this notation be put on there act as a levy? Russell Larson - No, it would not. Councilwoman Swenson - It would work against us. would be in favor. Russell Larson - It's affect will be to tell the bonding people that while at one point you had $4 million assessed, now you have $4 million less $170,000. It's impact on the bond rating is very difficult to assess. You might also, taking a look at the positive side, that should some of these parcels or any of those parcels up there in the North Area start to be subdivided you are going to pick up units by reason of these assessments and by reason of availability charges. An example would be, it's not pertinent to this project but it would be in East Lotus Lake project, is Fox Chase development. Councilman Geving - I notice that Mr. Larson represents about ten of these 13. Gary Larson - Eight. Councilman Geving - There is two with Larkin. Schumacher is separate, Bowen and Mauer. One of the things that you don't want to do is force development. You know that a lot of these are never going to develop. I can see the Osgoods living there as long as I live in Chanhassen and probably never wanting their, unless it is an absolutely last ditch effort, to sell off one of those lots to build a home. In the case of the Schumachers I am sure that would be the last thing they would do is divide their property into four lots and others. I do feel that we are going to pick up some of these others which will substantially off-set $170,000. Acting Mayor Neveaux - A year ago we were $1.4 million short. We were really in serious financial problems of what happened in 1973. Councilwoman Swenson - That was an expensive lesson, that's for sure. Acting Mayor Neveaux - As I understand it now, the other 300 or 285 that were assessed in 1980 but did not file a timely appeal, essentially have no recourse. Russell Larson - That is the way we look at it. They have no recourse. Acting Mayor Neveaux - Unless they appeal directly to the Council for review. Russell Larson - The statute by our Supreme Court has been very strictly construed and there are several cases interpreting that statute which tells us that they are forclosed from further legal action. Councilman Horn - It would be my guess that if we treated this group of people differently we would soon be seeing some of those 285 people. Councilman Geving - I would be more concerned about the next assessment that we would have more people challenging this. Councilman Horn - I have another question of Russ as far as the availability charge, would that be under the definition of pending assessment? Russell Larson - It would not show up on an assessment search as a pending assessment. It would come into being, the availability charge, if on a particular tract of land they came in for subdivision approval or building permit to erect another residential structure on the tax parcel. The City would then be authorized to charge the availability charge. be available at City at City Hall. completely eradicate Hall? the possibility of a Whereas the levy of an assessment Council Meeting September 8, 1981 -12- Councilman Horn - Would it become due on Acting Mayor Neveaux - If in fact thatrs In essence we are City and these 15 of their title. Russell Larson - It would depend upon what we would negotiate. Acting Mayor Neveaux - And whether we negotiate subdivision or the addition of another principal structure or whatever we decide are the conditions that would be a contract then between those people and the City. the sale. I would have to put that in there. If we don't say sale then we say these conditions would have to run with the assigned owner. - Until subdivision. They sell their home, are you saying that the next person that comes in would have to payoff those assessments and could now divide it into three or four lots? Councilwoman Swenson - What I am saying is that I want them to know when they buy the property that if in fact they subdivide it, those availability charges are going to be due and payable. Acting Mayor Neveaux - That occurs with anybody that subdivides. Councilwoman Swenson I want this information available at the time that they make a title search on it. Acting Mayor Neveaux - There is a cloud on the title. Councilwoman Swenson - Right. I think there should be something there so that the bank calling in somebody would say, there is a contingency here so that they would know that this is a red flag. I don't want to submit any future Council to having some irate and really ill people coming in and saying, I just paid 40,000 50,000, 60,000 for this property and the title search went through, the bank has gone through and all of a sudden now here we are hit with another cost. Councilman Geving - We can't make this in perpetuity. Once that land is sold I believe they should be called. It could go another 50 years under the terms of the contract and I don't think that is what we intend at all. Acting Mayor Neveaux - We did ask Bill to give us some more information on the Osgood property. Councilman Geving - When we do that let's refer to the map on the back of the Dixon report. Bill Monk - Looking at the map, Lots 1 and 2 would be serviceable under the North Area reassessment project and East Lotus Lake runs up Pleasant View from the south as you can see it on the map and would service Lots 3 and 5. There were three assessments given under the East Lotus Lake Project for three lots along Pleasant View where three and five are shown. So in total five assessments were put on the property. They are of a different alignment than shown on the appraisal but five units were actually to be assessed. Two under 71-1 which were dropped and three under the East Lotus Lake which were actually assessed. Acting Mayor Neveaux - At that time we were betting on the come that this area would develop. Councilman Geving - So four was assessed. Bill Monk - A lot equivalent to 4 was assessed but it's placement was not the same as shown on the appraisers map. Acting Mayor Neveaux - One and 2 are the same. Bill Monk - Yes, There are services run in for two lots under that project. Acting Mayor Neveaux - How far down does that sewer line run? Bill Monk - Where that black heavy line is coming down, thatrs where the sewer takes a turn to the north. the sale of the property? what we specify in the contract. going to develop a contract between lot owners thatrs going to become a the part I Councilman Geving - Or Acting Mayor Neveaux - Councilwoman Swenson Councilman Geving - I I I I I Council Meeting September 8, 1981 -13- Councilwoman Swenson - In essence though, the entire piece of property was talken into consideration when the East Lotus Lake assessment was put on. Bill Monk - Three units were. It is my understanding two showed originally on the North Area assessment but were deleted from the assessment roll when the Osgoods asked to connect to the East Lotus Lake. They were then assessed three units on the East Lotus Lake and that represents the 24,760. Councilman Geving - So for our purposes tonight we are really still only talking about what's showing here at Lots 1 and 2. Acting Mayor Neveaux - Any further questions of Mr. Monk. Councilman Horn - I guess I would like to discuss the philosophy of assessing based on existing structures, the validity of that. I guess I would like to know the philosophy of assuming that the existing structure will be continuing in perpetuity even though you would have a possible development. Acting Mayor Neveaux - I think our philosophy has been if the structure is on a piece of property that abuts a public street and is served and has access to the improvement, whether it be a water line or sewer line, then it is an assessable piece of property. Councilman Horn - The question I was refering to was eliminating certain assessable units because of the location of a dwelling. Acting Mayor Neveaux - Where the improvement did not abut the property line, there were some out in Red Cedar Point. Councilwoman Swenson - You can't anticipate somebody going to build a house in their own front yard. Acting Mayor Neveaux - I think this whole issue of benefit certainly is grounded in reasonableness and this body's determination to the best of their ability that there is a benefit to the piece of property. Now in the event of multiple units, more than just one, typically we had certain standards of what a unit was and you apply that to a piece of property. Those with unusual configurations you may come to a consensus that because of topography or the placement of these lots, it's not a reasonable resolution and to place this Fisher, for instance, unit in front of the existing house it would not be reasonable. That was directly in front of the house. There was not room on the side. Councilman Horn - Was there any consideration given to age or life expectancy of a particular structure. Councilwoman Swenson - We didn't get that detailed. Councilman Geving - We just used good common sense. Acting Mayor Neveaux - Life structure has a bearing on non-conforming use when the use reaches the point at which it needs to fall into whatever the overlying zoning is for that. If you have got a manufacturing plant out there made of wood and it's in a residential area it becomes a non-conforming use but it could be amortized over 20 years. It depends upon the nature of the structure and that's the only time that I have ever seen age of structure used. Councilman Geving - If that were the case here tonight we would say that the Osgood's house should have not lasted 50 years ago. Councilman Horn - I guess I am considering a hypothetical case where you would have an obvious conflict and say that the home was destroyed for some reason and later a developer came in requesting additional lots because now the house isn't there, do we have a way to go back to collect the original. Bill Monk - That would be where the availability charge would be used. If he paid one assessment and the house burned down and he came in for two, we would look at the assessment record to find out he had only been originally assessed for one, we would invoke the availability ordinance or law. That is when it's usually invoked. Councilman Horn - These are not excused in perpetuity then. council Meeting September 8, 1981 -14- Bill Monk - If they change that is the purpose of that availability charge. Acting Mayor Neveaux - That would be that definition of change that, I guess, is left up to this body to make a determination as to when it it administered. Councilman Horn - I think that clears up most of my concerns. Acting Mayor Neveaux - We have, as I see it, four options before us in view of the fact that nothing else has surfaced that might be a resolution to the problem. Again, we have a take no action on this assessment roll. To adopt the resolution and the roll as presented. To adopt a resolution and roll as modified. Option four would be to let stand the 1973 assessments on these 15 parcels and enter into an agreement with the individuals that would be a covenant running with the land that would spell out that in the event of sale, development, etc. that the City has the right to end the individuals agreed to the acceptance of a levy for sewer availability charges in an amount equal to the assessments. Councilman Geving - How would the interest be determined. Russell Larson - It would have to be a part of that contract. Councilwoman Swenson - This is the same thing that we use for senior citizen deferments. Russell Larson - It's part of the overall debt service. If the last option recited by the Acting Mayor is undertaken we would then recommend that formal action on the North Area reassessment be tabled pending resolution of the contract language between our office and the appellants. You would have to setforth the conditions that would attach to such action. Councilman Geving - I kno~y you asked this before but I would like to hear it one more time from those that are present tonight if they would enter into that kind of agreement or are we just blowing smoke. Gary Larson - I can speak on behalf of eight people that we would enter into such an agreement that you are talking about. Payment of the assessment upon future subdivision of the property. Russell Larson - Or sale. Gary Larson - No. That has been discussed. Or sale causes me a little problem. Future subdivision I can go with. Or sale I have to discuss with my clients. Helmut Mauer - I would go along with the fact that if I want to sell my land or want to subdivide. Of course, I go along with the assessment of each individual unit on my land but I would also like to point the fact that when I bought my land and I was out there with Mr. Waibel and Mr. Brezinsky that they point out very strongly to me that only one unit can be put on that property for the simple fact there is a huge drainage problem on that land and that I can only put on my driveway onto Ridge Road because I cannot go out with my driveway on Pleasant View Road because if that is happening they have to put in tiles and drainage pipes. I do have that documented and I have witnesses to the affect that they made these statements and under those conditions I went along and bought the land which has absolutely nothing to do with Meyer's agreement I have between him and me. Acting Mayor Neveaux - However, the fact that Mr. Waibel or Mr. Brezinsky made a statement to you does not bind this City Council. John Schumacher - I think I would me more than happy to enter into such an agreement. I thought the sale would be contingent on the development. Councilman Geving - We have not finalized that. John Schumacher - I think I am opposed to the sale of it because that would add a burden to the property that might not exist if the person who bought it subsequent to my ownership if he knew there was a I I I I I I Council Meeting September 8, 1981 -15- subsequent 13,000 assessment in addition to what you now plus the interest, that would devalue my property further. If I divided it, which I don't think I would ever do, but if I did, I would be glad to pay the availability charge. I don't think I would agree with the Council if they put it on automatically when the property is sold. Councilman Geving - Then we are just perpetuating the problem just like they did in 1971 and I don't think we would have gained anything. Acting Mayor Neveaux - In essence what we are saying, hay, as long as you folks have the property we will hold back this assessment procedure but if you sell it. In essence we would be binding other Council's into that. Mary Schumacher - But if we sold it and that person just wanted to retain it as we have then it goes on to them too? Helmut Mauer - I haven't quite cleared that myself. I don't understand it. John Schumacher - I thought the discussion was that if the property was developed further like we have one lot, we have got 2~ acres, somebody could come along and put six houses on it and we have to have five additional sewer assessments, maybe not two like the Council wants to impose on us. Acting Mayor Neveaux - In essence we have a roll here of dollar amounts of benefit to these 15 pieces of property. We are saying that in the event that you sell the property these assessments would have to be paid. If you live on the property for the next 15 years that project is going to be paid for and there is going to be nothing left to put it into. Councilman Geving - The appraiser says to us that they have appraised your property and you can get that money out of that property is you did sell it. John Schumacher - I think I would be hard put to get as much money to replace. Say I burned my house down tonight, I would have a hard time getting what you people have got me assessed for for my lot. Councilwoman Swenson - The only way that I can see that we can possibly do it, it would have to handled as an assessment. If the assessment was levied and you sold your property they would run with the property. What we are really doing is saying to you that as long as you continue to live in your property and maintain it the way it is this will run with your property but you don't have to pay for it until you sell your property or until you want to redevelop it. If you should want to redevelop it yourselves then, of course, it would become payable but if you choose to sell it then the new buyer is going to have to be responsible for paying this assessment. John Schumacher - Why couldn't you make in your motion put in there to the effect that when the property is developed the assessment would be due and payable whether it's me or a subsequent owner. Councilwoman Swenson - That would be grossly unfair to the people who have already been assessed. If we do that we are running right back and making the same mistake that they made in 1973 which is why we are at it now. The problem that we would have is that here you have x number of people making the payments and going ahead with this' and that's going to stay with their property when it is sold I mean whoever is buying it is going to have to pay that assessment just as would be the case with you. The only difference would be that we are treating this like a "senior citizen deferment". John Schumacher - It's the same thing, in other words somebody has say if you give a person a senior citizen deferment somebody eventually has to pay that. Acting Mayor Neveaux - There is $170,000 out there that has been spent to put that water and sewer in front of your property. Somebody has got to pay for it at some point in time. Council Meeting September 8, 1981 -16- John Schumacher My argument has been with the Council that I use one sewer pipe, one water pipe, that's all I need. All of my kids have gone away from home now. I Acting Mayor Neveaux - I can see that if we go this route that we need to have some time to spell out exactly how it's going to be handled. I don't want to have this thing go to court in two years and have a judge say, hay, that was not the way you should have done it, that was a reassessment and I told you in 1981 that that wasn't the way to do it. We honestly believe, in the letter from our attorney of March 1981 and subsequently in August of 1981 that in fact this procedure in essence agrees with what the judge told us to do in 1981. That is still another viable option to us. It is indicated tonight and last week that this direct kind of action would put us back into the courts and I am hearing not only district but Supreme Court and I can see a great deal of time and effort and aggravation on your part and on the City's part and I think what we want to do is to resolve this issue once and for all but we want to do it correct. Councilman Geving - We want to do it in an amiable way. We don't want these people to go away feeling like we have stuck it to them. We need two things. Timing is all important. I would say that we could give the attorney until the end of this month to develop such an agreement. No more and that's because the timing is very important. If the timing does not work out and we don't get the agreements we can still go to levying these with the county. Acting Mayor Neveaux - Not this year. I Gary Larson - I would say on behalf of my clients that we will let you adopt this assessment roll if we can't reach an agreement up to October 10 or whatever the date is down at the county. Acting Mayor Neveaux - Waive the 30 day prepayment period. Gary Larson - Yes. If any of my clients are going to prepay they will come in the day after. Russell Larson - If this is the direction that the Council is taking. Acting Mayor Neveaux - ì~e are leaning. Russell Larson - We would feel comfortable to the 28th of September. Possibly we would have it before then. Acting Mayor Neveaux - We have to deal with Mr. Bowen, Mr. Larkin, Mr. Kelly and Mr. Malkerson. Councilman Horn - It appears to me that if we would adopt option 1 we would be in effect saying because we don't want to have these property owners go to the problem of going to the Supreme Court and hearing what we feel they would hear based on our attorney's opinion, we are willing to, in effect, compromise with them. I hear that as option 1. I guess I have a little problem with that. If indeed our position is clear as stated it would seem to me after hearing some of the discussion as to the type of things that you go through, I would be more amenable to a modified assessment roll based on individual circumstances of lot placement and that type of thing. It would appear to me, being a amateur at this,as being the most equitable to the existing property owners who have I already paid their assessment and who have accepted this roll. Acting Mayor Neveaux - So you are saying that we should negotiate with the 15 owners on an equitable basis for them. Councilman Horn - That's what I hear option 1 being which is to adopt this availability charge. Acting Mayor Neveaux - I had that as option 4. The appraisal method is our best guess against their best guess. Certainly the appraisers I II I Council Meeting September 8, 1981 -17- are just like attorneys, Mr. Larson's and Mr. Mertz~s opinion is as good as the other Mr. Larson's opinion although they may not be the same and more than likely won't be. So if we say well you folks get some appraisals and come back and tell us how Mr. Dixon's appraisals affect your property, you know damn well what they are going to be. So we are going to end up with some of them coming in with no benefit at all to the property. You can't divide that, Mr. Mauer has already said that his property can't be divided at all so his appraisal is going to come back zero. Councilman Horn - We are giving the downtown people that option in a very similar appraisal situation of getting an independent appraisal and comparing it with our appraisal. It doesn't seem to me that if we have certified appraisals that they could vary that much. Russell Larson - This is distinguishable from the downtown project. These appraisals that were used or are being used in the North Area as projecting future development of parcels of land. As has ,been pointed out in the Mauer case you could come in with an appraisal for that property owner could come in with a zero benefit. The downtown appraisals are appraisals of specific parcels of land and are related to a taking of that property as a part of the downtown development project. In other words we are going to acquire that entire parcel as it appears today. Councilman Horn - Whereas these are based on what could be there in the future. Russell Larson - What our appraiser says could be there in the future as opposed to what their appraiser might say could be there in the future. Councilman Horn - The appraisals should somehow tie in with the existing zoning ordinances, isn't that correct? Russell Larson - I think they do. I don't think we are going to see in the North Area any demonstrable change in the zoning. It's going to remain one way or another single family. Councilman Horn - Which these are based on. Craig Mertz - In the case of the downtown project the State Law on condemnation says that we have to pay a appraiser anyway. It's a mandatory situation. We have to give them $300 for preparing their own appraisal report if they don't like ours. Mary Schumacher - In the existing Planning Commission now can you place a home in front of another home on the front lawn when you don't have enough on the side? Acting Mayor Neveaux - If both of them have access to a public street. Councilman Geving - If you didn't own the lot on the west side of your present lot and someone else came in for a building permit on that we could give them a building permit. Mary Schumacher - I am talking about the south one now. Councilman Geving - I don't know about the south one. Mary Schumacher - I don't have any dispute with the west one. Councilman Horn - I think these are the types of things that we would be considering under option no. 3 which is the modified assessment roll. Acting Mayor Neveaux - That's what we used in 1973 and in 1980. Councilwoman Swenson - Minimum lot size. Frontage on a public street. We were very conscientious about seeing that we were consistent. Mary Schumacher - Do you have the same Planning Commission now as you had then? Councilman Geving - We don't even have the same council. Acting Mayor Neveaux - No. All new people. All new people on the Council. I was on the Planning Commission in 1973 but none of the people that were on the Planning Commission then are on the Planning Commission now. However, the ordinances have stayed the same. The Subdivision Ordinance, the Zoning Ordinances are the same since December 1972. From those laws, in essence of what they are, the guidance rules Council Meeting September 8, 1981 -18- that city government operates under and the Planning Commission is charged with regulating land use through recommendations to the Council based upon those laws which are the same. You do get into some gray areas of individual interpretation where a recommendation may come to us with differences based upon individual perceptions of interpretation of those rules. The Council then, that's in power at that particular time, makes their best determination of what's fair and unfortunately we are suffering this year and last year from what the Council in 1973 thought was fair and I am sure if they had to do it allover again in today's market they wouldn't have done it the way they did in 1973. Russell Larson - The old Council in 1973 was well motivated and intentioned based on numbers that were spewed out by computers then and unfortunately it didn't work out. Acting Mayor Neveaux - Do you have a specific motion in mind or some specific changes to some of these properties on the assessment roll? Councilman Horn - I guess I don't have any specific changes but my inclination at this point would be your option number 3 which would be a modified roll as being the most consistent. Councilman Geving - How would you modify it? Councilman Horn - Based on things that we have talked about such as not buildable because of a house in a front yard or that type of thing that you have used in the past. Acting Mayor Neveaux - As an example then on the Schumacher property which is delineated in the appraisers assessment at holding four units, one of them being the one unit right in front of your house, using your approach that would be three units only. Councilman Horn - Yes. Councilman Geving - Are you proposing to delete Lot l? Acting Mayor Neveaux - We are referring to the schematic that the appraiser came up with as a suggestion of how Lot 8 could hold more than one building lot. Councilman Geving - Your modification Clark would be to do what with this schematic? Councilman Horn - I was going along with your recommendation in which you suggested after reviewing the property that you felt that it was inappropriate to place a building in anyone of these proposed, I am not putting a specific lot here. Councilman Geving - If these is any it would be 3. I say it's the south lot. If they have got a view towards the lake and I assume they have and what we are talking about in the modification that would eliminate what is shown here as Lot 3. So they would have Lots 1, 2, and 4. Acting Mayor Neveaux - That's what I am saying, using Clark's approach we are suggesting 3. The benefit due to the potential for three homesites on the property not 4 which would lower the additional 13,184 by approximately 4,000. Councilman Geving - I like your proposal Clark because after looking at that lot if you were to put a house in there, which I doubt if you would ever do, it would completely destroy anybodys benefit who owned the Schumacher's present house and their view towards the lake. Councilman Horn - And if you did at that point develop it then it would go back to the connection charge if that were to develop into four lots. Acting Mayor Neveaux - Any other parcels, Mr. Mauer. Councilman Horn - This looks like it would be either one or three depending on whether we would give access onto Pleasant View. Helmut Mauer - Access is the big question because if you put three homes on there, one home the access would be to Ridge Road and the other two the access would be to Pleasant View. One home would be up, I would say, 30 feet and the other one maybe 15 feet. I I I I I I Council Meeting September 8, 1981 -19- Acting Mayor Neveaux - Quite a bit of fill would have to be brought in but throughout the North Service Area fill has not been a consideration. Any lot can be filled. Councilman Geving - There is quite a swampy area and it drops down very quickly toward the east. I would say the only potential lot that could be deleted would be the lot on the east but that's only for discussion because I know throughout the North Service Area we placed lots in areas that someone would say, that's highly unbuildable and yet we found we are having things built in areas that just surprised the heck out of me. Acting Mayor Neveaux - We need to bear in mind what we have done before. Helmut Mauer - Also, another thing I would like to point out, all the water from Pleasant View comes Acting Mayor Neveaux - Drainage and that kind of thing can be corrected with proper engineering. That's not the issue we are talking about now. Bill Monk - I will use the Schumacher property as an example, not to pick on anybody but the City Council has discussed it. In 1980 when you proposed the reassessment, it is my understanding from reading the minutes of what went on at that meeting, the Council went through almost exactly the Council is going through here tonight. Determining how many units could be placed on a property. How many had been placed in 1973. On the Schumacher parcel 5,600 was assessed in 1973 and 7,500 was proposed to be assessed in 1980. Those totals add up to what you see on your assessment sheet. That's 13,184. We did not, in those cases, up that number to the appraisal value which was stated at 16,800. Appraisals are the best method for assessing a parcel. You have it appraised and you use that value. We have used those values where they have proved to be less than what was determined in 1980 by the unit method in an effort to be equitable. If the Council wishes I can do more research on what was proposed to be assessed in 1980 and give you the benefit of that information. Councilman Geving - Let me ask you this, on the back side of Mr. Dixon's report did he draw these proposed lot lines. Bill Monk - Yes. Councilman Geving - So he was thinking when he was drawing these appraisals that when he appraised that lot, in his mind he says, I think we can get four lots out of this land and my appraisal is 16,000. I think that went through his mind. Bill Monk - I am just saying that we didn't just up all these assessments, abandon the unit theory entirely. Councilman Geving - If the City Council in its wisdom says that we think that Mr. Dixon's assessment was wrong. His appraisal should have been based on two lots and that we could correspondingly reduce his appraisal of 16,800 by an amount. Councilman Horn - I think that is what Bill is saying has happened in arriving at 13. Bill Monk - That's the part that I can't answer. I just wanted to point out exactly how we did come up with these numbers. I don't know how many units that 13,100 represents. Acting Mayor Neveaux - An assessment figure that was figured by units that we talked about in 1980. When the appraisal values came in,if they were more than that figure the lower figure was kept so staff is saying to us the appraisal figure came in at 16,800 could perhaps be defended given the tenuousness of appraisals, however, the original assessment in 1980 was only 13,000, we recommend the lower. So you are giving the benefit of the doubt. Bill Monk - I just wanted to clarify that point. Councilman Horn - It mayor may not have been three or four units, we don't know that. Bill Monk - That I don't know at this point. The Mauer property is in the same category. It was appraised at 19,500. The assessment that we are proposing is in the amount of 12,178. Again it the lesser of the two amounts. Council Meeting September 8, 1981 -20- Councilwoman Swenson - When we consider these isn't it necessary to look at the, wiping off the interest charges, not considering that this has anything to do with the overall assessment. Acting Mayor Neveaux - The benefit was established in 1973. It was determined that properties within the boundary of the North Service Area were benefitted by the pipes being put in the ground. The interest clock started running then and those that formulated some $100,000 bill accrued a certain amount of interest each year that has to be paid by somebody. By the people that are in the North Service Area, and, again, based upon whatever a assessment charge "benefit". Councilman Horn - Correct me if I am wrong but what I hear Bill telling us is the exercise of special cases and whatever has previously been done and was used to arrive at these numbers by the previous Council. Bill Monk - I would rely on Council member's memory who were here in 1980, but I am sure that they did go through them. Councilman Geving - Everyone of these that we are looking at tonight has been discussed at great length. That's why I tend to think that in the Mauer's case, for example, I still feel there are three buildable units. That there were three assessments there. That there is benefit for three potential sites. Acting Mayor Neveaux - Even though the appraiser comes up with a benefit to the property because of the sewer and water of 19,500, Dale in essence, you are saying our figure of 12,178 is more accurate or is our view of what the benefit was. Councilman Geving - Yes sir and I think there are benefits even to the east most lot. I still think that could be built upon. Councilman Horn - I guess then what I am hearing then that the modifications were previously done and the option would be number 2 or the number 4 which is the connection charge philosophy. Acting Mayor Neveaux - My first option was to take no action. The second option was to adopt the resolution as presented. Option three was to adopt a resolution and roll as modified. Option four was to essentially take no action but to enter into a contractual agreement running with the property with the 15 property owners in regard to the agreement to accept the levy of SAC charges when development and/or other conditions placed within that agreement. Councilman Geving - I would like to make a motion that we table until September 28, at a time to be determined by staff,any further discussion on the 1981 North Service Area Reassessment and direct Counsel and Staff to pursue an agreement with the owners of the 13 parcels in question on the basis of a condition like the Senior Citizens deferment option that the City has and if this agreement is not reached on September 28 that the Council would pursue the assessment next year. The City would waive the 30 day prepayment period if the agreements are accepted. Acting Mayor Neveaux - We have a motion on the floor, do we have a second. Councilwoman Swenson - I'll second the motion. Craig Mertz - By Senior Citizen type deferment you are referring to the sewer availability charge option? Councilman Geving - Yes, the sewer availability type option but some of the conditionl of the Senior Citizen type deferment involve the due on sale provision. I want to stress that very thoroughly. . Acting Mayor Neveaux - It should be clear that this is not a deferment but in fact a contract to levy a SAC charge. Russell Larson - Pursuant to Minnesota Statute 444.075. Acting Mayor Neveaux - Any further discussion. I I I I I Council Meeting September 8, 1981 -21- Councilman Horn - I guess as I see it this is being somewhat inconsistent with all the other people who have paid this and on what basis would you justify treating these folks differently than the other folks who have already paid? Councilman Geving - I am looking at the project in total from a large perspective and I feel that we haven't hurt the project by opting for some kind of negotiation or agreement between the City and these owners for the SAC charge. That we will in fact and already have received a substantial number of new units in the North Area enough to substantially cover the $170,000 with the Ken Waldrip type of development and others. I don't feel that we are taking a well, maybe a different approach I think our intent is absolutely the same. We have not altered any of the original ground rules which this assessment was based upon and that was frontage on a public street, 100' x 150', these are on-line assessments. I think all the ground rules are still being met. I don't feel that we are one way or another detracting from the ground rules. Councilman Horn - Let me ask you a hypothetical question. Say half of the people who were assessed had appealed such as these 13, would you feel the same way? Councilman Geving - I suspect that we could have had and maybe from the very beginning we did have more than just these that were obviously potential. I would say tonight after ten years this project has dragged through several administrations and we would be jùst passing on the problem to another Council to another Planning Commission ten years from now and I don't feel that the action we are taking here is not positive because it is very positive and we are dealing with the problem. That property, some day will be sold. I guarantee it. Some day it will be subdivided and the City is not loosing as long as that interest keeps piling up. Acting Mayor Neveaux - Any further questions? All in favor of the motion signify by saying aye. Councilwoman Swenson - Aye. Councilman Geving - Aye. Acting Mayor Neveaux - Aye. Opposed, same sign. Councilman Horn - No. Acting Mayor Neveaux - Thank you all for coming. APPLE VALLEY RED-E-MIX: The City Attorney discussed the pending court proceedings against Apple Valley for the erection of an additional fly ash silo. Trial is set for September 22. The attorney's for Apple Valley have stated that the silo will be removed this week and requested that the City dismiss the pending action and have agreed to execute a document which will prevent Apple Valley from erecting any further structures on the property without the consent of the City. The City Attorney recommended that the Council enter into the agreement. Council members generally agreed and instructed the Attorney to proceed with the agreement. COMPREHENSIVE PLAN: Representatives from the Metropolitan Council, Minnetonka, Inc. and City Staff will be meeting on September 9 at 3:00 p.m. to discuss the comprehensive plan and its status. COUNCIL MEETING: The September 14 Council meeting was cancelled. The City Engineer asked the Council to set a special meeting for next week to discuss the 1982 Budget. No date was set. Councilman Horn moved to adjourn. Motion was seconded by Councilman Geving. The following voted in favor: Acting Mayor Neveaux, Councilwoman 'Swenson, Councilmen Geving and Horn. No negative votes. Meeting adjourned at 10:05 p.m. Don Ashworth City Manager