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CC 2015 09 14 CHANHASSEN CITY COUNCIL REGULAR MEETING SEPTEMBER 14, 2015 Mayor Laufenburger called the meeting to order at 7:00 p.m. The meeting was opened with the Pledge to the Flag. COUNCIL MEMBERS PRESENT: Mayor Laufenburger, Councilman McDonald, Councilwoman Tjornhom, and Councilman Campion COUNCIL MEMBERS ABSENT: Councilwoman Ryan STAFF PRESENT: Todd Gerhardt, Kate Aanenson, Paul Oehme, and Greg Sticha Mayor Laufenburger: For the record all members of the council with the exception of Councilwoman Ryan are present tonight. Welcome to this council meeting to those of you present in the chamber as well as those that are watching on Mediacom Channel 8 or Channel 107.2 at home. Our first action tonight is the agenda. Council members are there any modifications to the agenda? If not we will proceed with the agenda as printed. PUBLIC ANNOUNCEMENTS: None. CONSENT AGENDA: Councilman McDonald moved, Councilwoman Tjornhom seconded to approve the following consent agenda items pursuant to the City Manager’s recommendations: 1.Approve City Council Minutes dated August 24, 2015 2.Receive Planning Commission Minutes dated August 18, 2015 3.Approve Amendment to Joint Powers Agreement to Allow Chaska to Serve the Bee and nd Pollinator Discovery Center at the Arboretum on West 82 Street with Sewer and Water 4.Glaccum Highlands, Located in the Northeast Corner of Lake Lucy Road and Yosemite Avenue, Applicant: Estate Development Corp: Approval of Final Plat, Development Contract and Plans and Specifications. th 5.Amendment to Cell Tower Lease Agreement, Downtown Water Tower at 500 West 76 Street, Verizon Wireless 6.Receive Park and Recreation Commission Minutes dated August 25, 2015 All voted in favor and the motion carried unanimously with a vote of 4 to 0. VISITOR PRESENTATIONS: None. PUBLIC HEARING: VACATION OF RIGHT-OF-WAY ON BLOCK 4, ST. HUBERTUS, APPLICANTS: DAN & JEANNE BURKE. Chanhassen City Council – September 14, 2015 Paul Oehme: Yes Mayor, thank you. Mayor Laufenburger: Mr. Oehme, good evening. Paul Oehme: Good evening Mayor, City Council members. Give a brief background on this th proposed vacation. This is proposed by the applicant who lives at 225 West 77 Street which is th more or less in the downtown area just north of 78 Street and just east of Frontier Trail. The original plat for this area was originally, from our records recorded back in 1897. This is a very old part of the town. Probably the oldest area that we have. The original plat did include an alley way in the back yards of these lots and over time these lots have combined and as the area developed the alley really didn’t come to fruition. Most of the driveways and the garages are off the front lots. The City does not have any need for the alley way. There are some private utilities that are currently along the back alley way. The City is proposing if this vacation to go forward that the drainage and utility easement be dedicated for in perpetuity for the existing utilities that are out there and potentially new private utilities that potentially could use that, those power poles that are out there too so this is a survey of the property in question. Again there is an alley way that’s shown here. It’s 16 feet wide. 8 feet of the alley way would be vacated for right-of-way purposes and dedicated to the property at 225 and so the property line would switch to the bottom line here and again the 8 foot area that would be vacated for right-of- way would, staff is requesting that the 8 foot drainage utility easement be in it’s place. With that if there’s any questions by the council I’d be more than happy to try to answer them. Here’s our recommendation and the staff would request that a public hearing be opened for this item. Mayor Laufenburger: Okay, thank you Mr. Oehme. Before we open this for public hearing is there any question or comment from the council? There being none, at this time I would open a public hearing. Any members of the audience present that would like to speak to this item, either for or against the vacation of the right-of-way, you’re welcome to do so. I ask that you come to the podium. State your name and address for the record. Okay, there being no need for public comment I will close the public hearing and bring it back to the council. Any question or comment from the council? Councilwoman Tjornhom: No but I’ll make a motion. Mayor Laufenburger: May I just raise a question please. Mr. Oehme, did you hear any feedback from any neighbors on this at all? Paul Oehme: I believe a staff member did hear from another neighbor that is potentially going to go through the same process so we are intending to send out a letter to these neighbors if additional property owners want to vacate the alley way it would be our recommendation that they come together just for cost and for, just for ease of working through the process so we’re going to try to work with the property owners and see who else is interested in vacating this area as well. 2 Chanhassen City Council – September 14, 2015 Mayor Laufenburger: Okay, is that acceptable for neighbors to work together to do so? Todd Gerhardt: Yeah. Instead of dealing with each neighbor individually on this, trying to do a cost sharing on survey work and I think it’s also giving neighbors an understanding of how the vacation process works and what, you know how they might benefit from it. Mayor Laufenburger: Okay, wonderful. Thank you. Thank you Mr. Oehme. Okay. Now any comment or motion? Councilwoman Tjornhom: I’d like to make a motion Mr. Mayor. Mayor Laufenburger: Alright Councilwoman Tjornhom. Councilwoman Tjornhom: I would like to make the motion that the City Council adopts a resolution approving the vacation of a portion of the public right-of-way dedicated as alley south of St. Hubertus, Block 4, Lot 8, Lot 9, exempting the west 10 feet of Lot 9 according to the recorded plat thereof. Mayor Laufenburger: Thank you. Is there a second? Councilman Campion: Second. Mayor Laufenburger: Thank you Mr. Campion. We have a motion and a second. Is there any further discussion? Resolution #2015-56: Councilwoman Tjornhom moved, Councilman Campion seconded that the City Council adopts a resolution approving the vacation of a portion of the public right-of-way dedicated as alley south of St. Hubertus, Block 4, Lot 8, Lot 9, exempting the west 10 feet of Lot 9 according to the recorded plat thereof. All voted in favor and the motion carried unanimously with a vote of 4 to 0. CONSIDER APPROVAL CERTIFICATION OF MAXIMUM PROPOSED PRELIMINARY LEVY TO CARVER COUNTY AUDITOR. Mayor Laufenburger: Under new business we did have an item deleted but the remaining piece of business we have for tonight is consider the approval or certification of maximum proposed preliminary levy to the Carver County Auditor. Can we have a staff report this evening. Mr. Sticha, good evening and welcome. Greg Sticha: Good evening Mayor and council. Going to go through a brief power point presentation on some of getting our audience caught up with where we’ve been so far with the 3 Chanhassen City Council – September 14, 2015 budget and then kind of where we’ll be going forward with the budget through the rest of the budget calendar. Mayor Laufenburger: Are you going to move that to a slide? Greg Sticha: Yeah I’m working, there we go. There we go. Mayor Laufenburger: Thank you. Greg Sticha: So first talking about the budget calendar, this evening we are staged for City th Council to set a preliminary levy and have it certified to the County by September 30. If for some reason the City Council could not set the levy this evening we certainly would still have one more meeting to do so in September. In October we will be reviewing the City’s enterprise and special revenue funds which are not tax levy based or fee based as well as reviewing the capital purchases for years 2016 through 2020. Second meeting in October we have planned to discuss the utility rate study with the City Council. In November we will have a couple of opportunities to discuss any remaining budget, CIP or utility rate items that haven’t been answered to the satisfaction of the City Council at that point. First meeting in December we will be holding a public budget meeting which was formerly called the Truth in Taxation hearing. This evening’s levy will in part be used to create or generate tax statements, proposed tax statements that will go out to all the residents. On those statements all the taxing jurisdictions within Carver County, depending based on where you live and which school district you live in, each home and business will receive a proposed tax statement with the opportunity to come and comment on the proposed levy by each jurisdiction. The City of Chanhassen’s will be December th 7. The school districts and the counties are other evenings either that week or the week before. th On December 14 the City Council will set a final 2016 tax levy and budget, adopt a capital improvement program for the years 2016 through 2020 and set the utility rates for 2016. Previous to this evening the City Council has with staff in work session format reviewed some of the preliminary numbers that make up the budget as well as a detailed department by department budget breakdown of the proposed budget for 2016 so council has already been in a number of meetings in regards to the 2016 budget so this evening was not the first time the council has been working on budget for 2016. So what are some of the things that make up the budget for 2016? And these will be based for those at home, based on scenario 1 which we’ll go through shortly here but budgeted for 2016 we currently $60,000 dollar increase for the police contract. We have 2.7 percent wage increases included for 2016. A ceiling of a 13 percent health care cost increase with more information to be found out about that number here in a few weeks. New growth in the city was roughly $165,000. In addition the City, at it’s next meeting will be actually decertifying TIF District number 4. That would be an additional $30,000 in tax levy dollars available to the City Council or a total of $195,000 in new growth. 1.87 percent. Staff did leave building permit revenue the same as the 2015 budget. Under scenario 1 all city service levels remain the same. There’s a typo there. That should not be included for scenario 3. And the average home in Chanhassen grew in taxable market value by 1.5 percent. Now that number is really important for those that are listening at home that when they get their tax statements it’s 4 Chanhassen City Council – September 14, 2015 important to look at the market value change in your home as compared to the previous year when analyzing your property tax bill. If your home is roughly about the average home in Chanhassen, which is right around $330,000 or $340,000 and it increased in value by 1.5 percent, each of the scenarios that I will go through later will kind of break out what the impact would be to that home assuming it increased in value by that 1 and a half percent. So under scenario 1, this scenario is requesting an increase in the levy of $275,000 to a total of $10,759,621. This scenario would allow for all service levels to remain the same as the previous year and included all of those items we saw on the previous slide. The residential impact on this particular levy would be approximately a $7 to $10 dollar increase in their city portion of their property tax bill, again assuming that your home changed in value about on average of the 1 and a half percent. Under scenario 2, this particular scenario would include an increase in the total levy of $195,000 or 1.87 percent. Roughly the new growth that we signified in the previous 2 slides for a total levy of $10,679,621. This scenario would allow for no noticeable change in service levels but we would need to find $80,000 in various levy reduction ideas between now and setting a final levy in December, and we’ll go over those shortly here as some potential possibilities for those. The impact on an average home in Chanhassen would be essentially zero, again assuming that your home changed in value by the average. And lastly we’re proposing a third scenario of a levy of $10,599,621 which is an increase of $115,000 or 1.1 percent. This levy would need to be adjusted by $160,000 as compared to scenario 1. Under this scenario there most likely would be some form of impact on service levels. Finding an additional $160,000 in levy dollars could be a bit challenging if for no other reason it would probably wouldn’t impact service levels to a certain extent. And the impact on the resident with this levy would be roughly a $7 to $9 dollar decrease in your city portion of your property tax bill again on the average home in Chanhassen. So how do, every year one of the things staff provides for council to look at is how do we compare in terms of budgeted expenditures to some of our key financial strategy cities as well as to some of our other cities in the county and we’ve done so again here with this slide representation. You’ll see Chanhassen for budget year 2015 saw roughly a 2 ½ percent increase in budgeted expenditures. Our other KFS cities are listed. One of the things that City Council has been pretty consistent with in years past is keeping the budgeted expenditures change from year to year roughly small increases from year to year as opposed to fluctuating decreases and then a subsequent year of a large increase. Keeping the increases from year to year relatively small can make the entire budget and levy process much more less challenging. And how do we compare in terms of budget expenditures to our Carver County cities? Very well again here. You’ll notice again some cities having larger, more significant increases and in the previous years a couple of these cities had small decreases and again you’ll see kind of that up and down effect from various cities from year to year. There are a number of factors that can change any city’s budgeted expenditures from year to year. We’ve been fortunate in that we haven’t had many impacts on new services that have been added or a significant increase in a service cost so our change in budgeted expenditures from year to year has been very consistent. On a per capita spending comparison, how does the City of Chanhassen compare to again it’s key comparable cities? Very well with the average per capita spending in Chanhassen at $422 dollars per resident. Only one other city with a lower per capita spending with the average being right around $500. And how does the City compare in per 5 Chanhassen City Council – September 14, 2015 capita spending to Carver County cities? Again very well. The lowest of the cities within Carver County at the $422 as compared to the $478 within Carver County. And how about the City’s tax rate? City of Chanhassen’s tax rate is the lowest in Carver County. Certainly something the council and staff should all be proud of. The tax rate has been on the decrease again lately with market values starting to go up a little bit. One of the major impacts on your tax rate are market value so if something were to change in market values like we saw in 2008 and 2009 regardless of kind of what you do with the levy it will impact your tax rate so with the market values not changing significantly for 2016 I would anticipate the tax rate should be relatively close to this number for 2016 assuming a levy of right around new growth or so. One of the things staff thought would be a good idea is also to take a look at how our tax rate compares to Hennepin County cities of the at least the cities our size or larger and here again the city compares very well in terms of tax rate among Hennepin County cities with the average being right around 44 and Chanhassen’s 24 and really only one other city that has a lower tax rate than the City of Chanhassen within Carver County that would be considered a comparable city to the City of Chanhassen. So the next slide is going to show that staff’s going to be recommending that we can recommend a scenario number 2 in terms of a preliminary tax levy so one of the things we wanted to provide was council some comfort in that if we did, if the City Council did pass a tax levy of scenario number 2 that we would be able to get there between now and setting the final levy in December. Staff reviewed a number of levy reduction ideas that we discussed with the City Council in previous work sessions. We kind of came up with this list as our recommended list if we were to go to scenario 2 to get from 1 to 2. There’s still a number of factors that still could change between now and setting the preliminary levy and this by no means would be an all-encompassing list. These would just be some possible ideas to get us from 1 to 2. The other thing to keep in mind is that we have some information that might change some of these numbers, either positive or negative but we also don’t have to make any decisions on any of these numbers this evening. That will be done between now and setting the final levy and setting the final budget in December so while we’ve targeted or pointed out some options, council this evening does not have to act on any of these ideas and certainly there could be more ideas that come between now and setting the final budget and levy in December. So the recommendation from staff this evening is that City Council set a preliminary levy using scenario 2. A total levy of $10,679,621. This will allow for the flexibility in planning before we set a final levy in December. With that I’ll take any questions from council. Mayor Laufenburger: Thank you Mr. Sticha. Well done. Any questions or comments from council? Anybody? Councilwoman Tjornhom. Councilwoman Tjornhom: I’ll certainly make a comment Mr. Mayor. Mayor Laufenburger: Sure. Councilwoman Tjornhom: I just want to thank staff for their time and effort that they’ve put in again this year for the budget because we have been talking about this for a while and numbers are always interesting every year. There’s always a new challenge it seems like to face when it 6 Chanhassen City Council – September 14, 2015 comes to budget and balancing growth with real growth and trying to figure out where the priorities are going to be for the following year and I believe that my priority is to remain services at the level that they are. I think that we have a great town. Obviously Money Magazine thinks we’re a great town and I think that most of our residents do also so I will certainly be supporting this preliminary level for the budget starting out and I look forward to the next couple months to see what happens with health insurance and other issues that are still pending out. Mayor Laufenburger: Thank you Councilwoman Tjornhom. Any other question or comment? Councilman Campion: I’ll comment. Mayor Laufenburger: Mr. Campion. Councilman Campion: Yeah I also support scenario 2 where we keep our taxes and our budget in line with projected new growth. I think it’s a responsible approach. Mayor Laufenburger: Good, okay. I’m just going to correct one word. Mr. Sticha this is, the growth that you reflected is not a projected growth for next year. It’s a report from the County that shows new growth that will be on the tax rolls for next year so it’s not a projection is it? Or is it a projection? Greg Sticha: No it is the new growth. The only thing that could change is there are some small tax court settlements that sometimes take place in terms of valuations. Some challenges by either businesses or residents so that could impact the number one way or another slightly. Usually those have a very minimal to no impact on the total assessed values but. Mayor Laufenburger: So it’s not so much a projection. It’s a reasonable expectation of tax, new tax revenues payable in 2016 that we did not have in 2015. Greg Sticha: That is correct. Mayor Laufenburger: Okay so just wanted to correct that. Todd Gerhardt: Mayor, council, one other thing to add to that. That is any new value that was added as of December 31, 2014. There’s always kind of a one year delay so if you see construction going on now, that’s not what we’re projecting as new growth. That will be probably going on for next year. Mayor Laufenburger: Gotch ya. Okay. Anyway thank you for those comments Mr. Campion. Did you have any questions Mr. McDonald or comment? Councilman McDonald: No you ready to entertain a motion? 7 Chanhassen City Council – September 14, 2015 Mayor Laufenburger: Well I do want to clarify just a couple things with Mr. Sticha. Mr. Sticha you mentioned that this has been the subject of several discussions. Actually Councilwoman Tjornhom mentioned that as well. It’s important for the citizens to know that yes, we have talked about this preliminary levy and the budget for 2016 and I think our first meeting was back in June if I’m not mistaken when it first began and all of those discussions took place primarily at work sessions. All of those work sessions are summarized in meeting notes and they’re available on the Chanhassen website at, and you can access that through a website or a portion of the City website that’s called the Transparency Section so anybody who’s watching at home that would like to see the review of or the subject of discussions that took place leading up to this preliminary levy, you can get at it through that Transparency Section on the website. Also I thought about this as you were relaying the 3 scenarios Mr. Sticha. It was actually the City Council that directed staff to come back with these 3 scenarios. One based on new growth, which is scenario 2. Another one based on an increase in levy of $80,000 which is scenario 1 and another one which is a decrease in levy by $80,000 so staff essentially came back with a recommendation consistent with that which the council had directed staff to do and it’s a result of those 3 scenarios that were on the table that staff is now coming with a recommendation to support scenario number 2 which is a levy consistent with the new growth as Mr. Campion had mentioned. There was one more question that I wanted to add too. There was a slide that you showed which was per capita spending Mr. Sticha. Is that per capita spending on the general fund or is that everything? Greg Sticha: That would be any budgeted funds per the State Auditor’s office so that would include special revenue funds or any other budgeted funds that each of the cities presented would have. Mayor Laufenburger: But it does not include enterprise as in water or sewer utility rates or anything like that? Greg Sticha: It would not, no. Mayor Laufenburger: Okay. Alright. And just to repeat tonight, though you showed recommendation of potential levy reduction ideas to get us to that $80,000 below scenario 1, we are not putting any kind of approval or disapproval on that tonight. The only thing we’re approving potentially is the preliminary levy which the final levy cannot be greater than. Greg Sticha: That’s correct. I did forget to mention that. When setting the preliminary levy, as you stated, it’s a maximum number. Mayor Laufenburger: Right. Greg Sticha: Between now and setting the final you can only go down from the number that you’ll be setting this evening. 8 Chanhassen City Council – September 14, 2015 Mayor Laufenburger: So one thing we do know for sure is that the budget assumptions that you put in place to produce scenario 1, we know that the City Council is going to have to take some action to cut money out of, or to cut expense out of that scenario 1 to get us to scenario 2 and that number is roughly $80,000 depending upon, as Councilwoman Tjornhom said, how the health care expenses come in and a few other things as well, correct? Greg Sticha: That is correct. Mayor Laufenburger: Okay. Alright. Thank you Mr. Sticha. Now Mr. McDonald, did you have a comment or a motion? Councilman McDonald: I’ve got a motion. Mayor Laufenburger: Okay. Councilman McDonald: I would propose that the City Council approves the resolution adopting the preliminary levy of $10,679,621 for 2016 and establishing the Truth in Taxation hearing date th for 2015 as December the 14 for taxes collectable in 2016. Mayor Laufenburger: Hearing a valid motion. Is there a second? Councilwoman Tjornhom: Second. Mayor Laufenburger: Thank you Councilwoman Tjornhom. Any further discussion on the motion? Resolution #2015-57: Councilman McDonald moved, Councilwoman Tjornhom seconded that the City Council approves the resolution adopting the preliminary levy of $10,679,621 th for 2016 and establishing the Truth in Taxation hearing date for 2015 as December the 14 for taxes collectable in 2016. All voted in favor and the motion carried unanimously with a vote of 4 to 0. Mayor Laufenburger: And that concludes our official business for tonight. ADMINISTRATIVE PRESENTATIONS. Mayor Laufenburger: Mr. Gerhardt do you have any administrative presentations? th Todd Gerhardt: I do have a couple. We have our 8 Annual Public Safety Seminar this coming th Wednesday, September 16 from 6:30 to 8:00 p.m. at the Chanhassen Rec Center. This is a free event. The subject this year is drug abuse awareness and we have a panel of experts from various disciplines on substance and drug use issues that people may be coming across so. 9 Chanhassen City Council – September 14, 2015 Mayor Laufenburger: And that’s open to the general public, is that right? Todd Gerhardt: Yes, anybody can attend and free of charge. Again 6:30 to 8:00 p.m. this th coming Wednesday at the Chan Rec Center and again this is our 8 Annual Public Safety Seminar. Each year we put on a public safety seminar and pick a subject and this year it’s drug awareness. Mayor Laufenburger: Okay, anything else Mr. Gerhardt? rd Todd Gerhardt: I’d also like to let the public know that Saturday, October 3 we are putting on the Cemetery Walk again that will be held at the Chanhassen Pioneer Cemetery and St. Hubert’s rd Cemetery. Again October 3. That’s a Saturday and thanks to the actors from the Chaska Valley Family Theater for portraying some of Chanhassen’s citizens. Teach our residents and people about Chanhassen history and pioneer life and the enactment will start at 10:00 a.m. in the senior center for those people that don’t feel as if they can meander through the cemeteries and depending on weather, that might be a nice venue and that’s in our senior center here at City Hall. And then we have a 1:00 show, walking performance in the historic St. Hubert’s plaza and also a 4:00 walking performance at, in the plaza so two times there. 1:00 p.m. and 4:00 p.m. And that’s all I have. Mayor Laufenburger: And is it correct to say that the citizens actually come to life or is it the former citizens? Are they still citizens if they’re in our cemeteries Mr. Gerhardt? Todd Gerhardt: I would say they are. Councilwoman Tjornhom: Do they pay taxes? Mayor Laufenburger: Yeah do they pay taxes? Todd Gerhardt: Well they paid a fee to buy their plot which has reoccurring expenses that was included in that so you could say that. It’s a stretch but. Mayor Laufenburger: The cemetery walk is, I think it’s a very interesting and my wife and I will be attending this year to learn more about these citizens who once, who today though they may patrol the city in their spiritual realm, at one time they actually walked in the city so. Todd Gerhardt: Yes. Mayor Laufenburger: So we’re looking forward to hearing about that. It should be a fun time. Thank you Mr. Gerhardt. Todd Gerhardt: You’re welcome. 10 Chanhassen City Council – September 14, 2015 COUNCIL PRESENTATIONS. None. CORRESPONDECE DISCUSSION. None. Councilwoman Tjornhom moved, Councilman McDonald seconded to adjourn the meeting. All voted in favor and the motion carried unanimously with a vote of 4 to 0. The City Council meeting was adjourned at 7:35 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 11