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CC 2015 10 12 CHANHASSEN CITY COUNCIL REGULAR MEETING OCTOBER 12, 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, and Councilwoman Ryan COUNCIL MEMBERS ABSENT: Councilwoman Tjornhom, and Councilman Campion STAFF PRESENT: Todd Gerhardt, Chelsea Petersen, Paul Oehme, Kate Aanenson, Todd Hoffman, Greg Sticha, and Roger Knutson PUBLIC PRESENT: M.P. Knight 3605 Red Cedar Point Road Dave Bishop 3605 Red Cedar Point Road Darin Perry Noodles and Company Katie Connelly Minnetonka Schools Mary Penny Minnetonka Schools Brad Solheim 121 West Main, Waconia Mayor Laufenburger: Thank you and welcome to this council meeting to those of you that are present in the chamber as well as those of you that are watching on cable channel 8 or 107-2 Mediacom at home. Our first agenda item this evening, or let me first speak to the agenda. We have had one tabling. Agenda item G(1) has been tabled from the agenda for tonight and if there are any modifications other than that to the agenda council members. If not then we will proceed with the agenda as printed. PUBLIC ANNOUNCEMENT: Mayor Laufenburger: I do have a public announcement to make tonight. This is October. This is the season of Halloween as we approach it with pumpkins starting to festoon our stoops and our front porches. The City of Chanhassen with the support of our local community event sponsors, many businesses in town is proud to announce the fourth and the final community event in 2015. This is our stth 31 Annual Halloween Party. Join us on Saturday, October 24 for an evening of fun. Children 13 and under are invited to participate. Bring along your parents of course, in a wide variety of activities including trick or treating, hayrides, weather permitting, carnival games and optional spooky room. That sounds scary. Refreshments and a family entertainment magic show featuring Treasure Beyond Measure. I invite all area residents, their families and friends to join me at the Chanhassen Rec Center thrd from 5:30 to 7:30 on Saturday, October 24. Pre-registration is required by Friday the 23 at either City Hall or the Chanhassen Rec Center. The fee is $5 per child. Adults are free and that $5 covers all Chanhassen City Council – October 12, 2015 th activities so come out on Saturday, October 24. That’s a week before the actual Halloween date. That th will get you ready for the holiday. For the Halloween season. Saturday night October 24. 5:30 to 7:30 at the Chanhassen Rec Center. Come one come all. CONSENT AGENDA: Councilman McDonald moved, Councilwoman Ryan seconded to approve the following consent agenda items pursuant to the City Manager’s recommendation: 1. Approve City Council Minutes dated September 28, 2015 2. Item Deleted. th 3. Fretham 19 Addition, Located at the Intersection of Bretton Way and Teton Lane: Request for Preliminary Plat Extension, Applicant: Lake West Development, LLC Resolution #2015-62: 4. Resolution Decertifying Tax Increment Financing District #4 All voted in favor and the motion carried unanimously with a vote of 3 to 0. Mayor Laufenburger: By the way ladies and gentlemen, we are a quorum tonight. We have 2 members who are, have excused absences tonight. Councilman Campion and Councilwoman Tjornhom are both unable to be with us tonight so, but we are a quorum so we can conduct business in accordance with State Statute. VISITOR PRESENTATIONS: Mayor Laufenburger: We have one, for sure one scheduled visitor presentation. Dr. Peterson. Just state your name and we’re happy to have you with us Dr. Peterson. Dr. Dennis Peterson: Mr. Mayor, members of the council. Mr. Gerhardt, Mr. Knutson. I’m Dennis Peterson. I’m the Superintendent of Schools in Minnetonka School District and a resident of Chanhassen. Mayor Laufenburger: Happy to have you as a resident of Chanhassen. Dr. Dennis Peterson: So I would like to do a presentation that I had sent over earlier today and share with you regarding the referendum that the Minnetonka School District is running in November. rd November 3 actually and so with your permission I’d like to share that power point and talk through it a little bit. Mayor Laufenburger: Absolutely and just for citizens who may not be aware of this, Minnetonka School District 276 comprises about the northern one-third of our city and whereas the southern two- thirds is part of Eastern Carver County School District 112 and you’re District 276 so with that you have our permission to continue. Thank you. 2 Chanhassen City Council – October 12, 2015 Dr. Dennis Peterson: Thank you Mayor. We are proud to have a large number of our student body made up of Chanhassen residents. (There was technical difficulties at this point in the meeting and a short recess taken.) Mayor Laufenburger: There you go. Dr. Dennis Peterson: Mr. Mayor, members of the council. Mayor Laufenburger: Thanks for your patience. Dr. Dennis Peterson: Thank you for your indulgence. As I said we are running a referendum in rd Minnetonka for both a operating fund and technology referendum in, on November 3 and both of those issues were last passed by voters in 2007 so they would expire in 2017 and the board decided that rather than wait until the last minute they would put them on the ballot this fall so both of them are on the rd ballot for November 3 and would be for a 10 year period going forward. So we thank the council. We thank the members of the Minnetonka School District for their great support over the years. Our goal in Minnetonka is to develop well rounded students and to have that happen through a strong academic program. Have, and have opportunities in the fine arts and sports. We want them to have opportunities for service to others. We want them to be of good character and be kind and cooperative with other students. We have what we call a formula for success in Minnetonka which is kind of cyclical. It’s based upon great programs that we put together over the years that are pretty unique to Minnetonka. They serve the needs of all of our students. Great teachers and we’ve hired very carefully over the years. Outstanding administrators in our schools and throughout the district and welcoming and responsive school staff. All of that of course brings in a large number of students. Minnetonka was projected to have about 6,000 students at this time 10 years ago and we actually have about 10,000 students so it’s been a district of destination for a lot of families over the whole metro. So we’ve also had a very effective enrollment plan over the years so we know exactly how many kids we’ll have in every grade at every school for the next 5 years so we’ve done that planning very carefully over the years. We’ve also had a solid financial plan and so I mention that it’s cyclical because the solid financial plan provides us with an opportunity to continue to have great teachers. Great programs and the more revenue we get the more we are able to offer to our students. The more we’ve able to offer to our students the more we generate in terms of revenue so it’s worked very well for the taxpayers and for our children. We’ve also been a district that’s innovated a lot over the years. A couple innovations shown here is the Vantage program which has our juniors and seniors who select that program to be in the high school for about half of their day and about half of the day in a business setting or hospital setting. Also taking high level courses during that time. Tonka Online now has 600 high school students from our district in the program. We eventually expect Tonka Online to be offered perhaps nationwide as we get approval for that and it could be a resource for us to raise funds in the future. We also have enhanced our music program in the last 5 years. We have one of the nation’s largest language immersion programs. Both Chinese and Spanish. We have what’s called the Minnetonka Navigator program at both Excelsior Elementary and Scenic Heights Elementary for high ability kids and that 3 Chanhassen City Council – October 12, 2015 really draws students from all over the metro. Actually from all over the country. We’ve had families move here just for that program. We also have what’s called Tonka Codes. I was reading an article as I do quite frequently advising more school districts to have coding programs believing that all of us will need to be able to code in the future whether actual computer programmers or not but right now clearly Minnetonka is the national leader in having coding for our students across the board. The International Baccalaureate program was put in place about 10 years ago and the Advanced Placement program has been expanded recently so all of those innovations are some of the larger things we have going. We have a number of smaller innovations. We actually have what we call a pipeline for innovation that’s been in place about 6 years which generates new ideas every year and gives our school board a chance to kind of sort through those and decide which ones truly meet the needs of our students. We’ve also been a national leader in technology, especially using technology to meet the needs of students. We’ve hosted 2 national school board conferences on technology and we’ve also had an annual Upper Midwest conference for technology. We also have done a survey of our parents. This one here shows that 76.54 percent of our parents believe our schools are excellent. 22.14 percent believe we’re good and we’ve done a Gallup type survey of our community where you have a random sample of the residents and then project that to the total population. About one-third of those respondents have children in our schools. The other two-thirds don’t have children in our schools but either have had. Maybe never did but have lived in the community for a while or maybe they have preschool children but they also rated the district 97 percent excellent or good. These are some of the reactions from that same survey to some of our great programs. The Advanced Placement. The Vantage program. Tonka Online. Language Immersion. International Baccalaureate. Tonka Cares. Our world class fine arts program and our iPad initiative and the Tonka Codes program so you can see the very positive in pink. The somewhat positive in purple so all of them very highly regarded by our, the respondents in our community. They also were asked to rate the job performance of our school board. 71 percent rated the school board’s performance positively. I tell people Congress and legislators would just love to have those numbers but as you know it’s hard for a public governing body to have high marks from the public and I know you have those same high marks. 82 percent rated the superintendent and administration as positive. That’s the highest in the metro area and 94 percent rated our teachers as positive. Our rating for teachers is up 17 percentage points actually from 2007 when we last did the surveys so they’re really highly regarded. They were asked, also asked if they believe the board and administration are accountable for educational quality. 90 percent agree with that. 93 percent trust the board and administration to do what’s right. These are the scores from our spring testing of elementary and middle school children on the NWA test which is a national exam and you can see that all of the students on the right hand column rate very well thth according to national standards so our 4 graders for example, the average 4 grader in Minnetonka is at ththththth the early 8 grade level. And all of 5 grade, 6 grade, 7 and 8 grade are at the top of the test. The average student at those grades for us. So outstanding job that’s going on up and down the line in our middle school and elementary schools. ACT is kind of the exit exam for all of the schools in Minnesota. In 2001 the state average was 22.1. Our average is 23.1 at that point and it’s now climbed to 26.9 which is the highest ever for Minnetonka and as far as I can tell it’s the highest for any Minnesota public school at 26.9 and it’s clearly nationally competitive. We’ve also used the top 100 on the ACT test over the years to compare with the top private schools in the region and we have had higher scores than their top 100 over the years. We’ve also used our top 200 to compare their top 100 and our top 200 are also above their scores and the top 400 has been used over the years because we had about 400 kids take the 4 Chanhassen City Council – October 12, 2015 exam in 2001. We wanted to kind of see how that group of kids over the years did and so you can see they’ve gone from 23.1 to 29.6 over that time. And interestingly now the 29.6 for our top 400 is higher than the top 100 of the elite private schools. This is our Advanced Placement scholars. Advanced Placement has been a strong program for us over the years and of course more and more of our students are taking advanced placement courses. You can see the honors that are given by the Advanced Placement organization. We’ve gone from 8 national scholars in 2007 to 43 national scholars just this year. We also believe that in the high school I showed you earlier the elementary and middle school average. In the high school many of our average learners are found in our advanced courses. We’ve made it a goal of our’s to get more of our students to realize that they are not to be ranked or rated compared to their high school colleagues but really what they can perform and what they can do in the outside college or outside world and so 70 percent of them now are taking either an IB or an AP course. So in just the last 10 years our International Baccalaureate students have gone from 48 tests to 968 so pretty much an exponential increase. The AP exams have gone from 917 to 2,565 during that same period of time and we now have some comparisons between Minnetonka students, excuse me, and the world. So the PISA test is what’s been given worldwide over the years when you hear where the United States is rated compared to other countries and so the OECD organization was able to, which correlates with the PISA test. That organization was able to hand pick a sample of Minnetonka students. Not the top students but a cross section of Minnetonka students and so compared to the world, if Minnetonka were a country we’d be second in the world to Shanghai in reading. We’d be second in the world to Shanghai in math. We’ve be second in the world to Shanghai in science and above many of the other high performing countries around the world. You can see well above the United States average. Mayor Laufenburger: No plans for succession are there? Dr. Dennis Peterson: Excuse me. Mayor Laufenburger: You have no plans for succession from the U.S. do you? Dr. Dennis Peterson: No. Mayor Laufenburger: Okay, good. Alright. Dr. Dennis Peterson: No. We’re going to stay right where we are. Mayor Laufenburger: Good. Dr. Dennis Peterson: We’re proud of that. So we also think the best is yet to come because when you look at the performance of last year’s seniors, they did not perform nearly that well when they were in elementary and middle school as our current students are doing so we think our strongest performance is still ahead of us as today’s elementary and middle school students come on through the system. These are some perceptions from the survey of our community. Really basically about financial kinds of matters. 75 percent believe we spend our money effectively and efficiently. 94 percent believe Minnetonka schools are a good value for the investment. 71 percent realize that we go to the taxpayers 5 Chanhassen City Council – October 12, 2015 as a last resort which is really true. We’ve brought in open enrollment. We bring in about $19 million dollars a year in open enrollment revenue. We’ve done a lot of things to reduce non-instructional cost. We built a number of facilities without going to taxpayers but have those voluntarily built by organizations and individuals in our community. Just a number of ways that we’ve avoided going to the taxpayer. 68 percent believe that a tax increase would be a good investment. As I said earlier 93 percent trust us to do the right thing. And importantly for us as we’re running 2 referendums now is that 75 percent on both issues believe we spent the last money they gave us responsibly. So as I just said 94 percent of our community Minnetonka schools are a good value for the investment. And they were asked an open ended question of what do they like most about the district. 22 percent of them responded variety of programs. 13 percent said broad curriculum so about 35 percent responded something about our program. 19 percent responded the good teachers we have. And then the high test scores 12 percent and on down on other variables. They were also asked what is the most serious issue facing the Minnetonka School District. 25 percent couldn’t think of anything. Another 12 percent said they were unsure so basically 37 percent said they could not come up with anything as a major issue facing the district. The reality is lack of funding is part of the issue facing us and 12 percent identified that. 11 percent identified high taxes and 10 percent identified poor spending but quickly told the pollster, the person taking the poll that they did not mean today’s superintendent and today’s board but many years ago so all I could say about that is they have a long memory. So there is a little story about Minnetonka that is important for our residents to understand and that, what we call the tale of 2 Minnetonka’s. The Minnetonka that would have been and the Minnetonka that is. So most of us don’t live in what might have been in our lives but it’s important for our residents to know that we were projected to go from 7,500 students this year, or excuse me 10 years ago to 6,000 this year. If that had happened we would have had a lot of loss of revenue at the same time. We would have closed 2 or 3 schools. We would have certainly closed either Middle School East or Middle School West. Our high school would be much smaller. We would have had fewer offerings. Lower quality education. Instead we’ve used the strategy of attracting students both internally and from the outside to our district. That’s made a difference in not only justifying all of our buildings but it’s brought in a lot of revenue during that time to help us sustain the district so during open enrollment we’ve brought in over $100 million dollars now and about $19 million dollars a year going forward so we’ve brought kids back from private schools who were living in the district. We’ve brought in a lot of new residents so in general we’ve gone from being a district that would have been 6,000 students. Very cantankerous situation to a district with over 10,000 students and having a lot of support and a lot of attractiveness for families throughout the community. So a little bit on the financial picture. Our schools in Minnetonka are financed with 2 percent federal money, 75 percent state money, 23 percent local money and of that 13 percent of our total revenue comes from the voter approved referendum. 10 percent of the other local revenue, food service meals, gate receipts, that sort of thing. Minnetonka also is a relatively low spending district. We spent $10,015 per student which is actually $451 below the state average. I think a lot of people believe Minnetonka must spend a lot of money with the great results we’re getting and the facilities we have and so forth but the reality is we spend $451 below a lot of outstate districts and most metro districts. And also $900 below the regional, kind of the west metro group of districts. We do that as I said earlier by, through a number of means but we spend more of our money on instruction than most districts. We spend 80.4 percent of our money on instruction. The state average is 77.1 percent. That may not seem like a lot of difference but if you take that 3.3 percentage point difference times our budget that’s over 6 Chanhassen City Council – October 12, 2015 $3 million dollars if we were just a usual district we’d be spending more money on non-instructional areas and less on instruction. Some of the ways we’ve saved our taxpayer dollars. We have our energy cost locked in for the next 25 years. We’ll save about $11 million dollars during that time. We have our own self insurance program for health insurance. We save about $6 million dollars a year over what the going rate is out in the market. As I said we’ve brought in about $19 million dollars in open enrollment revenue alone. We’ve negotiated the lowest transportation costs in the region and we’ve refinanced debt repeatedly during this low interest time to get the lowest possible rates for taxpayers in our community. A little bit on school taxes. As I said earlier one of the survey responses was high taxes. I think that’s always in the eye of the perceiver if you will. So the average value of home in Minnetonka School District is $350,000. So if you see on the right hand side here the school taxes are on a $350,000 house in Minnetonka or $1,798. You can see that the 2014 taxes for other districts in our neighborhood. However to give a little more perspective to these other districts, Eden Prairie has already passed a major referendum a year ago that will show up on the 2015 report. Edina also passed over a $100 million dollar bond issue that’s not showing up here yet. Eastern Carver County is running an operating levy and a bond issue which we hope will pass. And also Wayzata passed $100 million dollar bond issue so you see that after all of those are added together for ’15, Minnetonka taxes will be relatively really pretty low. We found the state legislature to be an unreliable partner. Over the last 10 years the average rate of inflation has been 2½ percent and the rate of increase in state aid has been 1.45 percent so they’ve fallen short about a percentage point every year. If you look at that 10 year period of time and what we would have gotten if we, if they had just given us 2 ½ percent over that time we’d have probably another $75 million dollars and would not be asking taxpayers for any increase. These are the fiscal projections since this is a finance issue on the ballot. The left hand column and each pair of columns is revenue and the gray area is expenses. Last year’s budget was balanced. This year’s budget is balanced. Next year’s budget will have a little more expenses than revenue. And each year it gets more unbalanced towards the expense side up through ’21-22 when it would be about $13 million dollars out of balance. Part of that’s happening because of the lack of state aid that I just described but part of it’s happening because we’re running out of room to take students in our district so we’re going to top out at about 10,550. We just don’t have any more capacity in our schools and that’s coming very quickly so that slowing down of revenue from enrollment is really going to affect us as well and so that will remain flat over the years. The green on the slide shows the disappearance of our fund balance if the board chooses to use fund balance to balance the budget over the next 4 years. And the red shows the going into deficit which is not legal of course in Minnesota so the board would have to make adjustments to all of this if they don’t pass the tax increases that are proposed. So the board had an option to go after the full amount of tax increase at $657 per student. That’s what most districts in the state have done over the years. They identify the amount they want and go after the full amount. Our board said you know we really don’t need all of that the first 3 years so let’s break it up and ask for a ballot issue that has $340 per student increase this year. 3 years later and at the $340 so that’s how they’ve set it up on the ballot and they’ve not gone after that full amount. People will quickly say well $340 plus $340 is not $657 which is true and what happens is you get $340 and then 3 inflationary bumps which are on the ballot and then another $340 which then equals the same as where we would have been had we had the $657 but in the meantime there’s 3 years where taxpayers keep more of that in their pocket. So this shows the projection with the additional revenue from the referendum. The green area on top of the blue. You can see it’s not very much additional money but it’s enough to balance 7 Chanhassen City Council – October 12, 2015 most of those budgets and to keep our fund balance so that we can use that against some of the out years where we go back to deficits. So again 75 percent of our respondents think we spend our money effectively, efficiently and responsibly. They know that 100 percent of the technology funding pays for all of our technology and so that’s an important issue to pass. That rate will not go up so that’s going to be just a flat amount going forward. It will be for another 10 years. 71 percent of our residents support increasing that levy to another 10 years and keep the rate flat. And 70 percent support a tax increase to protect the investment of the district. So that’s what I wanted to share tonight and know that a lot of your residents, which are also our residents will appreciate seeing this information. Be happy to answer any questions if you have them. Mayor Laufenburger: Alright. Dr. Peterson, thank you for taking time to come before this committee, or this council. I know that there are many people watching at home and others will be able to read the minutes of this meeting and get this perception that you’re trying to convey. Now you’re also conducting community meetings are you not? Is that correct? Dr. Dennis Peterson: Yes we are. Mayor Laufenburger: And they’re, my guess is you are perhaps having meetings at the various school district schools is that correct? Dr. Dennis Peterson: Well not only at schools but in private homes throughout the district as they invite us in. Mayor Laufenburger: And if somebody was watching at home and they wanted to get more details about this is there a website that they can visit too? Dr. Dennis Peterson: There’s a website and also I brought along copies for you to have of the publication. Mayor Laufenburger: And will you leave them with us so that people who come to city hall. Dr. Dennis Peterson: I’ll leave them with you. Mayor Laufenburger: So they can get this information. Dr. Dennis Peterson: Absolutely and we can provide more if you run out of them. Mayor Laufenburger: Okay. Alright. Dr. Dennis Peterson: But they should have started receiving these in their homes yesterday. Mayor Laufenburger: Okay. 8 Chanhassen City Council – October 12, 2015 Dr. Dennis Peterson: Or excuse me on Saturday. Mayor Laufenburger: So this would be information that would be, explain the, essentially what you’ve told us tonight. Dr. Dennis Peterson: Pretty much what I’ve gone over, yes. Thank you. Mayor Laufenburger: Alright. Well I, any questions from council? I just have one comment that I’d like to make. Clearly Dr. Peterson you, you and your team, school board, the administration have demonstrated leadership not only in the region, in the state but around the nation. Minnetonka schools often identified by various measuring agencies as a top producer of quality education outcomes which is really good and from my point of view clearly the, in a community like Chanhassen when we get high marks we get high marks because of the institutions in the community. Civic organizations. Churches. Volunteer organizations. Businesses and our schools. Dr. Dennis Peterson: I appreciate that. Mayor Laufenburger: So you’ve demonstrated that very, very well so I commend you on that. Dr. Dennis Peterson: Thank you. Thank you. Mayor Laufenburger: Any comment or from council? Councilwoman Ryan: Yes Mayor. Mayor Laufenburger: Councilwoman Ryan. Councilwoman Ryan: I would also like to thank you Dr. Peterson for being here tonight. I know you’re probably triple booked as you have been many of the nights from being involved with you at some of the different events. But I wanted to share my thoughts with you Dr. Peterson but with the folks at home and anyone else in the chambers is my husband and I have 2 young children in the Minnetonka School District which we’re proud to say and so the referendum directly effects our family. I know Dr. Peterson, the district staff and the elected Minnetonka school board have carefully and diligently reviewed where the district is at today and what resources the district will need going forward to maintain the high quality of education that we have come to expect. Referendums are very serious business as they do impact us financially but they also impact the future of our schools. The Minnetonka School District wants to continue it’s tradition of excellence in education and I believe the approval of this referendum supports that effort. I am a firm believer that strong schools make for strong communities and that is why we in our home are supporting both questions on the proposed referendum and I encourage the folks at home and anyone in the district to make sure that you do your research. Go to the district website. Ask questions but most importantly make sure you vote on rd November 3. 9 Chanhassen City Council – October 12, 2015 Dr. Dennis Peterson: Thank you. Councilwoman Ryan: So if there are no other questions I would like to propose a motion. Mayor Laufenburger: Please do so. Councilwoman Ryan: The City Council approves the attached resolution encouraging the residents of Chanhassen to research the proposed school district 276 referendum and to participate in the process by voting on November 3, 2015. Mayor Laufenburger: We have a motion. Is there a second? Councilman McDonald: I’ll second. Mayor Laufenburger: Any discussion? Let me just add to that if I may, I believe the civic responsibility that all of us have as citizens is to be first and foremost educated voters so I would echo the sentiments that Councilwoman Ryan has offered that please, take time. Understand what it is that both school districts, both 276 and 112 are asking for and make sure that you learn about what is important for not only your children but the children of your neighbors if you don’t happen to have any children in school. Resolution #2015-63: Councilwoman Ryan moved, Councilman McDonald seconded that the City Council approves the attached resolution encouraging the residents of Chanhassen to research the proposed School District 276 referendum and to participate in the process by voting on November 3, 2015. All voted in favor and the motion carried unanimously with a vote of 3 to 0. Mayor Laufenburger: Dr. Peterson, thank you very much not only for your service to the community but for being here tonight and you’re doing a great job with our kids and we love our kids and we know you do as well. Thank you very much. Dr. Dennis Peterson: Thank you. First of all I again appreciate the time on your agenda and the motion you just passed. Appreciate it very much. Thank you. Mayor Laufenburger: Good, let’s keep it going. Tonka Strong. Dr. Dennis Peterson: Thank you. Mayor Laufenburger: Thank you Dr. Peterson. 10 Chanhassen City Council – October 12, 2015 PUBLIC HEARING: REQUEST FOR AN ON-SALE BEER & WINE LICENSE, THE TH NOODLE SHOP, CO – COLORADO, INC., DBA NOODLES & COMPANY, 945 WEST 78 STREET, SUITE 100. Chelsea Petersen: Mr. Mayor and council, Noodles & Company has requested an on-sale beer and wine license. As you know they’re going in the west end of the Target parking lot kind of back behind Perkins. We have done a background investigation of the 2 officers that have been listed so far. The President and the Secretary. No negative comments have been found at this time. An operating manager has not yet been named but a background investigation will also be run on that person when they are named prior to opening. So with that I guess I can stand for questions or open it for public comment. Mayor Laufenburger: Okay, any questions of Ms. Peterson regarding this? Alright, this request does require a public hearing so at this time I would like to open a public hearing. If there’s anybody present that would like to speak in favor or in opposition to this request for an on-sale beer and wine license at the Noodle shop I ask that you please step up to the podium. State your name and address for the record. There being none I will close the public hearing. Bring it back to the council for comment or motion. Anybody? Councilman McDonald: Mr. Mayor if you want I’ll propose a motion. Mayor Laufenburger: That would be great Councilman McDonald. I’m sure the Noodles Company would like to hear the motion. Councilman McDonald: I’m sure they would too. The motion is, I would propose that the City Council approves the request for an on-sale beer and wine license from the Noodle shop company, Colorado Incorporated doing business as Noodles & Company. Mayor Laufenburger: Alright, we have a motion. Is there a second? Councilwoman Ryan: Second. Mayor Laufenburger: Alright, we have a motion and a second. Just a reminder folks this requires a simple majority of the council so that would be 3 votes of 5. So any further discussion? Councilman McDonald moved, Councilwoman Ryan seconded that the City Council approves the request for an on-sale beer and wine license from The Noodle Shop, Co., Colorado, Inc. dba Noodles & Company. All voted in favor and the motion carried unanimously with a vote of 3 to 0. Mayor Laufenburger: Thank you very much. Congratulations Noodles Company. Ms. Peterson do we have any indication of when this establishment will be open for business? Chelsea Petersen: Not that I’m aware of. 11 Chanhassen City Council – October 12, 2015 th Darin Perry: We are shooting for November 16. th Mayor Laufenburger: Write it down folks, November 16. Pre-holiday. Pre-Thanksgiving. For all of th you marathon runners who are going to run on the 17 stop by Noodles Company and carb up, is that right? Darin Perry: Noodle up. Mayor Laufenburger: Noodle up, exactly. Darin Perry: Thank you guys very much. Appreciate it. Mayor Laufenburger: Thank you Darin. Item G(1) under New Business was tabled. We have next item 2 under new business. 3603 RED CEDAR POINT ROAD; LOT 1, BLOCK 4, RED CEDAR POINT LAKE MINNEWASHTA; APPLICANT/OWNER: MACKEY MALIN ARCHITECTS/GREGG & KELLIE GEIGER: REQUEST FOR VARIANCE TO THE SHORELAND PROTECTION SETBACK AND THE 30 FOOT FRONT YARD SETBACK TO CONSTRUCT A DETACHED GARAGE ON PROPERTY ZONED SINGLE FAMILY RESIDENTIAL. Kate Aanenson: Yes Mayor, members of the council. This is actually an appeal of a decision that was made by the Planning Commission so that’s a quasi judicial and then the appeal comes before you as part of the legal process. I also just want to note that a majority would be required on this decision too since there’s only 3 of you here, all 3 would have to vote in the affirmative so you may want to take that into consideration if you wanted to proceed or not. But I’ll begin then with just giving you the th background. This did go to the Planning Commission on September 15. The public hearing was held at that time and I’ll give more detail of that but it was tabled at the request of the applicant to get some additional information that the Planning Commission had directed and some of the comments that were thth raised so it then reappeared on the 15 of, the 15. While the public hearing was held some additional comments were added and I’ll go through those as we move along too. Mayor Laufenburger: Ms. Aanenson can I just. Kate Aanenson: Yes. Mayor Laufenburger: Before you proceed can I just clarify a couple of things? You said that this appeared before the Planning Commission and the Planning Commission gave a decision on September th 15, is that correct? Kate Aanenson: That’s correct. 12 Chanhassen City Council – October 12, 2015 Mayor Laufenburger: Okay, and what was their decision? Kate Aanenson: I’ll go through that. Mayor Laufenburger: Okay. Kate Aanenson: Yep. Mayor Laufenburger: But their decision, their decision essentially granted the variance, is that correct? Kate Aanenson: That’s correct. They granted the variance with conditions, that’s correct. Mayor Laufenburger: Okay. And so under normal circumstances this would not be in front of the City Council. Kate Aanenson: There’s a couple ways it would come before you. If they didn’t have a super majority vote or if any person aggrieved of the decision, whether it was the applicant or somebody else aggrieved of the decision that was made can appeal that decision and because this is quasi judicial then the process would be, it would appear before the City Council. Mayor Laufenburger: Okay, so if it were not for this appeal this decision would be a final decision from the Planning Commission? Kate Aanenson: That’s correct. Mayor Laufenburger: Okay, alright. That’s what I needed clarification. Okay, proceed. Thank you Ms. Aanenson. Kate Aanenson: Okay so the subject site is 3603 Red Cedar Point. You can see it’s surrounded on water on both sides so that is some of the factors coming into play on the variance request. So a little bit st more detail then. The July 21 meeting there was a number of applications, or locations proposed by the applicant of where to put a garage and that’s what the purpose of the variance was to request was for a garage. The staff had always kind of steered towards one. What they believe was the best location as far as the least amount of impact and the applicant originally wanted something a little bit larger and as it moved along it became smaller and moved to the direction that staff had always recommended. So the stth public hearing was held on July 21. On September 15 additional comments were taken but it wasn’t th opened as a public hearing so that decision was made on September 15 to approve it with conditions and here we are with the appeal. So this is the view of the subject site from the east. And from the west. There was an older home that was located on the site and they applicants bought it so the request for the order again is to construct a 2 story attached garage on the property. There is an existing legal non, the structure’s existing non-conformity because of it’s proximity to the lakeshore setback and I’ll go show that a little bit more detail. So the legal non-conformities are, try to show this here. So there’s a 75 foot 13 Chanhassen City Council – October 12, 2015 setback would be on both sides because it’s adjacent to a lake so the Shoreland District says 75 feet. The house is already non-conforming because it sits within that 75 feet. Mayor Laufenburger: But it was built prior to, it was built and in place prior to these setback requirements. Kate Aanenson: Correct. Mayor Laufenburger: Okay. Kate Aanenson: Well it was built with non-complying. Mayor Laufenburger: Okay. Kate Aanenson: So it’s 31 feet setback from this side so instead of putting something on this side of the street staff was always trying to reduce that non-conformity by keeping it on the existing structure so there were some factors that led into the location that staff had recommended which I’ll go through in a little bit. So the other issue is that its 9.8 feet away on the side structure here so the principle structure encroaches 44 feet into the 75 foot setback. This is this area here and then it also encroaches into the front yard setback and that was the other thing that had changed from the original. Back in, the original setback, interpretation of a side yard setback was when, this was all serviced by a private street, was that this was considered the front. That interpretation changed so that was a factor in why this also needed to be the 30 feet because now this is considered the front, not this so that was when the other, some of the surrounding properties came in they only had to meet this side yard and I think that led to some frustration on some of the owners in the area. One of the other factors effecting where you could locate the garage was the fact that there’s an existing sewer and water main in the subject area of locating some additional garage on the side here to stay away from the water line. So in tucking the proposal in here which was the staff’s recommendation you avoid that. So again the application, again the Planning Commission, working with the applicant trying to reduce the size of the garage, the original application, reducing it and tucking it in close to the house itself. The Planning Commission felt like closing in the gap between the existing house and then the garage itself made most sense to tuck into the existing building because you’re still avoiding the 75 foot variance on this side. So you meet all that. You can see this dashed line, it runs flush with that so they meet that 75 so there’s no variance on the other side. I think one of the points that the staff had brought out too, when you live on a lakeshore like this your view shed isn’t the entire peninsula. It’s kind of out your front door and I think that also causes, caused a little bit of frustration for some of the surrounding properties of what exactly the view shed was. So as a regular shaped attached garage a variance needed again from the south and from this side yard. The garage on the neighboring property is on this side also so it’s garage to garage. The hard cover can’t exceed 25 percent. Another reason why the staff supported this so it meets the hard cover, reducing that and no mature trees would be removed which on the other side there was some mature trees so all in all least amount of impact from the staff’s perspective and no vegetation removed. So the applicant did revise their architectural plans to show how they could meet the direction that the Planning Commission had directed and these are those plans so the garage being on the front of the house, kind of mirroring 14 Chanhassen City Council – October 12, 2015 the house on the other side, garage to garage as I stated earlier. So this would be the location for the existing, for the proposed garage. And then you can see the garage on the other side here. The neighboring, the closest neighboring. Mayor Laufenburger: So blue is the neighboring to the west? Kate Aanenson: Yes. Yep. So there you can see the perspective from the other, from the neighboring property. Seeing the garage tucked in here so the view shed again, stating that would be the view shed be 360 degrees? Anybody living on lakeshore, when you’ve got, if you have a water orientated structure, which our ordinance does permit, you would still have some blockage of view shed so that was an issue from some of the neighboring properties with the view shed. So. Mayor Laufenburger: Can you go back just a second while you’re on it? Kate Aanenson: Yep. Mayor Laufenburger: The white marks on the cement, is that anything? Kate Aanenson: I think that was just to represent locations of the garage. Mayor Laufenburger: Okay. Kate Aanenson: So this is the view shed so by not putting a structure across the street, which some of the other properties do have structures across, excuse me across the private drive. So these properties are all serviced by the private drive which is the interpretation when it’s a private drive that the interpretation was made that this does become the front yard setback was, that’s how these are all served. So some of the concerns that were raised at the meeting was the ability to get structures in there. I was just going to read some of the issues that were raised again at the second meeting. These are in your cover memo that went to the, on your cover memo of executive summary. So besides the Findings of Fact these are some of the issues. Maintain the access along Red Cedar Point for safety reasons. Fire. Chief did drive out there and maintaining it. There are some folks that have put boulders out there that those would probably be a bigger impediment than the garage on this. They felt that that would be fine to access the property. Public water viewscapes and I’ve addressed that. Again there are garages across the street on some of these properties so if the viewscape intended to be 180 degrees or is it to be in front and back because again people on the peninsula have views in front and back and the staff’s opinion was that the viewscape here where we add the additional garage is minor as opposed to the rest of the viewscape that was preserved by moving the garage to this location. Again we talked about the encroachment in the front yard, side yard interpretation. That interpretation came up when we had some other private streets and how the setback should be given and we had a legal opinion made by our city attorney that that now is considered that front yard on that setback and that’s how it’s been interpreted since the 1990’s. Originally when the shoreland regs were adopted by the DNR in 1977 that was the setback on the side yard so being held to a different standard here. That’s again why the staff supported because as you can see the other properties have been able to allow that 10 foot setback to come into 15 Chanhassen City Council – October 12, 2015 play. The other one was concerns of the hard surface. Inaccuracy in the survey. Again we believe the survey. Signed by a registered engineer does, or meet those requirements of the under the 25 percent. So taking all those things into consideration and looking at properties within 500 feet with a garage, again there’s some additional testimony. You have the verbatim minutes regarding there was a garage existing already. A new garage shouldn’t be permitted. The applicant giving the information that that garage has sunk. It’s no longer viable as a garage and wanted the opportunity to have the garage. Again staff did, and the Planning Commission did concur with those findings so just showing properties within 500 feet and then showing you the variances that were out here on these properties so a lot of the properties have had variances of different types. You can see them all here. Some of them are shoreland. Some of them are side yard setbacks. Front yard setbacks. But there has been variances out there so with that the Planning Commission did, sorry I left the slide out. Just showing the, which ones are the, do not meet the rear side yards. So I would say pretty much all of them have received variances. So with that information, and the fact that the applicant reduced the size of the garage. Tucked it in tight. Met all the setbacks. The Planning Commission did recommend unanimously to approve the variances subject to the 4 conditions and adopting of the Findings of Fact. So with that you have the complete record in front of you. I’d be happy to answer any questions that you have. Mayor Laufenburger: Alright, thank you Ms. Aanenson. And you stated it very clearly in our electronic packet each of the council members received verbatim minutes from the Planning Commission meeting. All of the documents that were submitted reflecting the actions that took place in July as well as September and obviously we’ve done a lot of reading about this so we’ve heard a lot of the. We’ve read the comments that were made both in favor of and opposed to it. At this time, is there any questions from the council to Ms. Aanenson? Mr. McDonald do you have any questions? Councilman McDonald: Yeah I’ve got a question. Mayor Laufenburger: Okay. Councilman McDonald: And you have to excuse me because I think you already answered this but I’m not clear. Why are we voting on this? It went 5-0 before the Planning Commission. It’s here on appeal. Who’s appealing? Kate Aanenson: Anybody aggrieved of the decision of the Planning Commission has a right to appeal. Whether it’s the applicant or someone else that’s aggrieved of the decision so one of the neighbors is appealing that. Councilman McDonald: Oh okay. Kate Aanenson: Yep. Councilman McDonald: Okay, thank you. 16 Chanhassen City Council – October 12, 2015 Mayor Laufenburger: And just to clarify, if I may Mr. Knutson, City Attorney, I may ask you for your counsel on this but I believe that we as a City Council at this time have 3 options. Number one, we can affirm the Planning Commission by approving the variance as recommended by the staff. That’s number one option. Number two, we can deny the variance. We have that within our power. Is that correct? Roger Knutson: That’s correct. Mayor Laufenburger: Okay. And then thirdly we can modify the recommendation in some form. Roger Knutson: That’s correct as well. Mayor Laufenburger: Alright so those are 3 things that we as a council can do. Either approve it. Deny it or modify it so that’s really our focus at this time. The fact that it’s, the basis by which it’s brought forward for appeal doesn’t really matter. The fact is it was appealed and therefore it’s not our decision. Roger Knutson: That’s correct. Mayor Laufenburger: Okay, thank you Mr. Knutson. Did you have any questions Councilwoman Ryan? Councilwoman Ryan: Just for clarification, and I know it was on some of our packet but I think it’d be helpful to review again because I know the plan went through a number of iterations. On one of the slides, could you just show I think there was like suggestions A through E on the different proposals. Maybe just highlight all the different places it was proposed and how you ended up with, and then I know the Planning Commission also wanted it tucked in closely. Is that something you can do easily? Kate Aanenson: Sure. It’s not on my slides. Councilwoman Ryan: I know you wanted to limit the points of view. Kate Aanenson: So this is the one that went, the second one but this was some of the areas over here so the other side of the house would be, and potentially across the street but this was, so you can see it was significantly larger when it was over here so when they originally proposed that we hadn’t done the, engineering hadn’t done the investigation yet to realize that it was actually over a sewer and water line in that area. Relocating a fire hydrant and the like and engineering had recommended against those locations. And I think the other concern that the Planning Commission had was the size and trying to keep it tucked into the house because now you’re also creating another physical barrier view shed so. Councilwoman Ryan: And so when, and I know that there were those, the Mayor had pointed out those white marks on that one page. So when the, for this final plan for letter E, garage E or plan E, it was after the concern of the view and the proximity to the neighbors that it then got tucked in, is that correct? 17 Chanhassen City Council – October 12, 2015 Kate Aanenson: Correct. Correct. Councilwoman Ryan: Okay. Kate Aanenson: So the Planning Commission directed it to be pulled in as tight as possible and then also take advantage of some of this additional space. There’s some HVAC equipment over there that they would incorporate that all into the structure itself. Councilwoman Ryan: Okay. Mayor Laufenburger: And with that in place Ms. Aanenson, so E was the final agreed upon location. The applicant has agreed to this obviously, right? Kate Aanenson: Correct. Mayor Laufenburger: Okay. And one more thing, is the surface above the water and the sewer main protected? Kate Aanenson: Yes. Mayor Laufenburger: It is. So we’re not going to have a garage on top of either of those? Kate Aanenson: That’s correct. Mayor Laufenburger: Okay. We will have a private drive on top of those. Kate Aanenson: Correct, which is very common. Yeah. Mayor Laufenburger: Alright. Kate Aanenson: I just, if I could. Just to Councilwoman Ryan’s question regarding the garage itself. I want to just make sure that on this drawing here. So again from what the Planning Commission recommended, these are the final drawings based on what they had recommended so those weren’t, the Planning Commission directed them so this would be the ultimate location and size. So what I was showing up there was at that meeting, but they directed further modifications. I just want to make sure that was clear. Councilwoman Ryan: Right, that’s what I remember reading is that they wanted it to be as close to the house as possible. Kate Aanenson: Yes. Councilwoman Ryan: And so these are the final drawings? 18 Chanhassen City Council – October 12, 2015 Kate Aanenson: That’s correct. Councilwoman Ryan: Okay, thank you. Mayor Laufenburger: Ms. Aanenson would you mind advancing the slide to, you had, there were 4 conditions. There. Can you just explain these 4 conditions? Kate Aanenson: Sure. The applicant expand the driveway to maintain at least a 10 foot wide. Again that was the issue that was brought up by some of the neighboring properties, even the one at the very end that would have to drive by. There’s existing narrow road and obviously they have some other service, whether it’s FedEx or something like that that would come, they want to make sure that that 10 foot pavement is maintained. Mayor Laufenburger: So where the garage may encroach into that, where the new garage might encroach into that private drive, they will actually expand the private drive so it’s the full 10 feet, is that correct? Kate Aanenson: That’s correct. That’s correct. And even slightly more than that on the radius coming around so but it would still be under the, the lot would still be under the 25 percent and then the driveway grade also be .5 and not exceed 10 percent. Mayor Laufenburger: And what’s what grade for? Kate Aanenson: Just to make sure that, to get into the driveway. So just so you don’t have too steep a slope and it shouldn’t, it’s relatively flat so it shouldn’t be a problem. Mayor Laufenburger: Okay. Alright. Kate Aanenson: And the proposed structure maintain the existing drainage patterns. Again that should not be an issue. And again the applicant has to apply for a building permit. Again that’s standard. Mayor Laufenburger: And each of these 4 conditions of approval as a result of the Planning Commission approving it, the applicant has agreed to all of this, is that correct? Kate Aanenson: (Yes). Mayor Laufenburger: Okay. Alright. This matter did receive substantial discussion at the Planning Commission and is not subject to a public, a public hearing. However I would ask if the applicant, is the applicant present this evening? Would you like to speak at the podium? Anything you’d like to say. Not required. I’m just making that offer. Gregg Geiger: Good evening. 19 Chanhassen City Council – October 12, 2015 Mayor Laufenburger: State your name and address. Gregg Geiger: My name is Gregg Geiger. I reside at 3603 Red Cedar Point Road. Mayor Laufenburger: Okay. Gregg Geiger: Given this opportunity I’d just like to say we have tried our very best to accommodate the various concerns of our neighbors and the City. The City rules. Your City woman Ryan you ask about the number of proposals that we looked at and we did, we did letter them A through F to kind of keep that numbering alive and to understand that we have looked at a variety. We have done our very best to kind of tuck this into an area that will accommodate and preserve the look and feel of the neighborhood. That’s all I can say I guess. Mayor Laufenburger: Alright, thank you very much Mr. Geiger. Appreciate your comments. And just in the interest of, I’m not sure if it’s fairness or whatever but the, somebody who actually appealed this decision and I would like to give that party, if they’re present this evening an opportunity for a brief statement if you’d like. Approach and identify yourself. Brad Solheim: Good morning, or evening Mr. Mayor and council members. Staff. Everyone. I’m Brad Solheim. I’m an attorney representing the property owners. Mayor Laufenburger: Which property? Nelleke Knight: I’m Nelleke Knight and I live at 3605 Red Cedar Point and I bought a house in 1974. Mayor Laufenburger: Okay so your home is immediately west of the applicant? Nelleke Knight: Yes. Mayor Laufenburger: Is that correct? Nelleke Knight: Yes. Mayor Laufenburger: Alright. Brad Solheim: I would like to start, I’m not positive I’ve been informed by my client that they, Ms. Knight provided an Affidavit to the Planning Commission. Is that in your packet? An Affidavit with photos and stuff like that. I didn’t go through what you got or not. Mayor Laufenburger: I don’t know if it was or not. 20 Chanhassen City Council – October 12, 2015 Brad Solheim: Okay. Well what I’ll do is I’ll submit it on the record and make sure that’s clear. There’s a couple points that I want to make from the Affidavit. One, as Ms. Knight’s indicated she’s lived there for 41 years so she knows more about everything in the neighborhood than everybody else put together. But the, there’s a couple reasons but the main one is that the home was abandoned for a 20 month period of time and I’ll talk about some of that. Mayor Laufenburger: Her home? Her home was abandoned? Brad Solheim: The home next door. Mayor Laufenburger: Okay, so the applicant. Brad Solheim: Unoccupied, right. So what is being asked for you as a City Council is you have an abandoned use for more than 12 months pursuant to the statutes. That you are expanding a non- conforming use. Not just permitting and repairing but you’re expanding the non-conforming use and you have to give a whole series of variances in order to be able to make that accomplished. So you think about that and you just say, why don’t we just blow up the whole zoning ordinance because none of that really, the whole zoning ordinance doesn’t matter? The abandoned use. The non-conforming. The variances. If I can specifically talk about the, oh before I get to that. Something that was not, at least from what I saw wasn’t in the findings or anything like that but the home contained a 2 car garage and the Affidavit contains a photo and is that available for showing? Mayor Laufenburger: When did it contain a 2 car garage? Nelleke Knight: Forever. And it was closed. Mayor Laufenburger: Does it contain a 2 car garage right now? Nelleke Knight. It, yeah the garage is still there but 10 years ago sort of the owners at that time decided they wanted more space in the basement and they closed off the garage and they really didn’t mind parking outside. Kate Aanenson: Mayor if I may? Mayor Laufenburger: Let me stop you just for a second. This discussion was part of our packet. Kate Aanenson: Correct. Mayor Laufenburger: So we’ve already heard this argument. Brad Solheim: Okay, good. Mayor Laufenburger: Okay, yep. 21 Chanhassen City Council – October 12, 2015 Brad Solheim: I wanted to make sure that that was really fair in the record and this photo shows clearly a 2 stall garage that was already there and it certainly isn’t this property owner but I’m sure counsel will indicate that the law does not say you inherit whatever prior owners have done. That’s not an issue that you can’t just say well somebody else changed it so I’m entitled to a, either an expansion of a non- conforming use or a variance. It just, you have to live with whatever anybody else did. It’s not, it’s not fair to keep adding on and changing and those kinds of things so I wanted to make sure that was a major point of what we wanted to do. The second part, to make sure I’m hitting high points is, the variance particularly in the side yard setback is being asked to change, they’ve got, I don’t know what the footage is. 100 feet on the one side. There certainly wouldn’t be any side yard variance or any problem. The whole area is a variance from the lake and we understand that. Mayor Laufenburger: Now just for clarification, you’re referring to the area onto the east of the house, is that correct? Brad Solheim: Yes. Thank you. Mayor Laufenburger: The area where the septic tank was and where the fire hydrant is, is that correct? Brad Solheim: Yes. Mayor Laufenburger: Okay, alright. We also heard that argument Mr. Solheim so the council has that information in that packet so we’re aware of that situation. Okay? Brad Solheim: Okay I wasn’t that part of the Planning Commission. I’ve gone through the findings. Mayor Laufenburger: Yeah, well just as a reminder not only for you but to anybody who’s watching, anything that comes before the council in our packet, it is available for public viewing as soon as that packet is published and that packet is available and it’s accessible through our transparency page on the website so just, not so much for you Mr. Solheim but for anybody who would like to know what it is that we talk about and the information that gets made available to us, it is made available to the public so continue. Brad Solheim: Okay. The net result of the proposed series of variances and approvals from the City is that we’re going to end up with a 2 story wall 15 feet from the edge of our property that violates the setbacks when you’ve got a whole large area on the other side. On the. Mayor Laufenburger: The east side. Brad Solheim: The house that would have no problem or any issue like that. The only difference is that it impacts our view. Our use of the property. All of that as compared to what the property owner’s doing and so it’s our position that it’s their obligation, it’s their property to build their property, build 22 Chanhassen City Council – October 12, 2015 whatever they’re going on the property and make sure they don’t need variances in putting those kind of walls right outside our windows. Mayor Laufenburger: Okay, very good. Is there anything else you’d like to say? Brad Solheim: No. Mayor Laufenburger: Okay. Brad Solheim: Oh the, I did want to make sure it’s clear of record also that the, we have a property owner dispute between the 2 property owners. Where the property lines are. I do not have a survey for everybody here today to show that no, the property lines are actually in a different location. That is an avenue that is being pursued and that actually, counsel can offer, there’s additional option that you have is you can table this for further information or something like that so if that was an issue for you, letting you know that there’s, this property owner has been in the property for a relatively short period of time. Did commission a survey that is in the packet and it is the basis for the applications here but we dispute the judgment calls that the surveyor makes in where he’s drawing the lines and those kinds of things. Mayor Laufenburger: I appreciate that comment. I think that falls clearly outside of our purview, Mr. Knutson is that correct? Roger Knutson: That’s correct Mayor. We can’t decide that issue. Mayor Laufenburger: Okay. But I appreciate that. Was there anything else? Brad Solheim: Is there anything else you wanted? Nelleke Knight: I don’t think so. Brad Solheim: Okay. I just want to make sure that this gets of record. Mayor Laufenburger: You’re welcome to provide that to us. I’d just like to make a comment to Ms. Knight. I appreciate that you’ve been in this community for 41 years and I hope that your time in this community has been worthwhile and that you continue to enjoy Chanhassen. You’re in a very, you are living in a character laden part of Chanhassen, meaning there is lots of strong character in the lake. In that Red Cedar Point. It has a great deal of history and I hope that you treasure your time in that area because it is. Nelleke Knight: Yeah I do and I surely hope that I’m able to keep it that way instead of having these walls to look at. Mayor Laufenburger: Yeah, I can appreciate that Ms. Knight but we also recognize, at least this council has a responsibility to protect all people’s property rights. 23 Chanhassen City Council – October 12, 2015 Nelleke Knight: Except mine apparently. Mayor Laufenburger: Everybody’s property rights. Thank you Ms. Knight. Thank you Mr. Solheim. Brad Solheim: Thank you. Councilman McDonald: Mr. Mayor? Mayor Laufenburger: Mr. McDonald. Councilman McDonald: Mr. Solheim. Can you explain the significance of the claim of abandonment and what that does as far as the non-conforming? I mean as I read through the Affidavit it seems you’re claiming at that point that any rights they may have as far as non-conforming property are erased. Brad Solheim: Yes. You’re absolutely right. That’s the legal claim that we’re making. It’s a very harsh part of municipal law but when you have a non-conforming use that is abandoned for a period of 12 months or longer, you’re no longer able to do it. What’s going to happen when you approve this, or if you approve this, is that anybody who has some reason to say that they have an excuse why a non- conforming non-continuous use is in place, they’re going to be abandoning. You’re going to say, when you tell them that they abandoned their rights, you’re going to have a hard time. Councilman McDonald: Okay, thank you for that. Mayor Laufenburger: So your argument would be that any structure that stands, let’s just say uninhabited. In other words there’s nobody inside a building for a period of 12 months, then that building by definition loses its legal non-conformity? Brad Solheim: Yes. Mayor Laufenburger: Okay. Brad Solheim: And it’s a harsh, harsh situation. I’ve seen it half a dozen times over the years. Some cities erroneously talk about use. Like you have a non-conforming use as being, you’ve changed the use and you lose your right to do it. That’s not the case. The statute is real clear about, I suppose I should pull out the specific statute. The statute says, if the non-conformity or occupancy is discontinued for a period of more than one year. And there’s no issue before… Mayor Laufenburger: So using your argument Mr. Solheim, somebody who lives in Chanhassen. If they chose to move to Europe for 16 months and leave their house for 16 months essentially and if that house was legally non-conforming, just the fact of time, even though nothing changed on that property, your argument is that it would become legally, it would become non-conforming. Not legally non- conforming, is that correct? 24 Chanhassen City Council – October 12, 2015 Brad Solheim: No. Mayor Laufenburger: So where’s the judgment? Brad Solheim: You’re talking about a little distinction there. Mayor Laufenburger: Where’s the judgment involved? I mean where’s the qualitative judgment that you’re implying to this? Brad Solheim: There’s nobody in the property. The person left. It was abandoned. I can give you an example in a neighboring city where somebody had a residence in a downtown business district that was non-conforming. The person died. Person died and the personal representative just didn’t get around to doing anything on it because that was just the way the guy was. So a year and a half later he tries to sell the property and the city said sorry, you were a non-conforming residential use in a business district. You know you no longer can use it as a residence. In that case it was doubly severe because the building was within the right-of-way, as many old cities are. The footprint of the building was encroaching and so the, the city said not only do you have to do it but if you’re going to make any changes whatsoever you’ve got to move it off the city street so they basically took the guy’s whole house away. Mayor Laufenburger: Okay, thank you Mr. Solheim. Appreciate your comments. Brad Solheim: Thank you. Mayor Laufenburger: Mr. Knutson, may I have your legal opinion on this please. Is this, in your legal opinion knowing our statutes, did the period of time that, from, as was discussed in the, whatever the period was, did that automatically move this property from legally non-conforming to now non- conforming Mr. Knutson? Roger Knutson: The answer is no. Let me explain. Mayor Laufenburger: Please do. Roger Knutson: The property is zoned RSF. Residential Single Family. The use of the property is conforming. So it doesn’t matter whether it was, no one lived there for 20 months or 20 years. The use is conforming. The use was not, doesn’t matter whether it wasn’t used for a while because the statute doesn’t apply because the use is conforming. It’s not non-conforming. What is non-conforming is the structure. The structure was not discontinued. The structure remains the way it is. It’s there today. Mayor Laufenburger: So there was no change to the structure during that period? Roger Knutson: No. 25 Chanhassen City Council – October 12, 2015 Mayor Laufenburger: Okay. So when the, when the current owners purchased that they essentially purchased a legally non-conforming structure. Roger Knutson: Correct. Mayor Laufenburger: And they now live in or now you have it, is that correct? They now live in a legally non-conforming structure. Roger Knutson: The only issue before you is whether or not you agree with the Planning Commission and staff that the criteria for a variance have been met. Or have not been met. If the criteria for a variance have been met then you obviously should approve the variance and adopt the findings. If you find that the criteria has not been met, on the other hand you would not approve it and you’d direct preparation of findings. Mayor Laufenburger: Alright and just one further question Mr. Knutson. Can you clarify what’s included in the criteria for acceptable variance? Roger Knutson: They’re set forth in, there are 5 or 6 criteria and only permitted within harmony with the general purposes of the zoning ordinance. When there are practical difficulties in complying with the zoning ordinance. And that means as used in conjunction with the granting of a variance. The property owners propose to use the property in a reasonable manner. The purpose of the variation is not based upon economic considerations alone. That the plight of the landowner is due to circumstances unique to the property not created by that landowner. And the variance if granted will not alter the essential character of the locality. Those are the criteria. Mayor Laufenburger: Okay, alright. Thank you Mr. Knutson. Does council have any questions, comment or motion? Or before I do that. Kate Aanenson: Sure. Mayor Laufenburger: Ms. Aanenson anything you want. Kate Aanenson: I just want to point out for the record. All those same points were brought up at the Planning Commission. If you read through the minutes they were addressed in detail because the city attorney gave us that same opinion that we did present at the Planning Commission. Obviously there’s not concurrence on that but that same issue was raised as were some of the other ones so there’s detailed, I won’t answer them all but there’s detail that they needed specific questions… Mayor Laufenburger: And I, my questions are not only for clarification for the council but also for there are many people that may be watching this or observing that may not have had the opportunity to review all of the details that we did. 26 Chanhassen City Council – October 12, 2015 Kate Aanenson: Sure. To that point the applicant did demonstrate at the second meeting the fact that, that while there was an existing garage there, it’s too low. The house has sunk and it can’t be used as a garage at this time. Mayor Laufenburger: Thank you very much for that clarification. Council any further comment or motion? Councilwoman Ryan: Mayor I’ll make a motion. Mayor Laufenburger: Please do. Councilwoman Ryan: The Chanhassen City Council approves a 17 foot shoreland setback variance and a 20.2 foot front yard setback variance to construct a two story attached garage subject to the conditions of the staff report and adopts the attached Findings of Fact and Decision. Mayor Laufenburger: Thank you Councilwoman Ryan. Is there a second? Councilman McDonald: I’ll second it but I want to make a comment. Mayor Laufenburger: You’ll have an opportunity to do so. Thank you for the second Mr. McDonald. Is there any further discussion? Mr. McDonald. Councilman McDonald: Mr. Mayor. Yeah I asked the question about the non-conformity because I feel that that’s the big legal question here and I just needed to get that straight in my mind especially since the whole law about us granting things has changed so much recently as to when we can and cannot grant variances. I do see that as a legal issue but that’s not an issue for this council and I think Mr. Knutson for saying what our options really are as far as what we can and cannot vote on and then from that point I think it’s up to the homeowner if you want to appeal based upon a legal reasoning, then by all means you have the right to do so. But this is not a court of law that would interpret basically what statute is. That’s not our job. We try to apply it and that’s why we have legal counsel here so based upon what we can do and the history of all of this, I mean what I see is a lot of compromises have gone on both with the homeowner in trying to effect the neighborhood itself. I think based upon that, that’s why I decided to go ahead and second this because there has been a lot of work. As Ms. Aanenson said, yeah there may have been a garage but if it sunk for who knows whatever reason over time because things settled or whatever, it doesn’t have a garage and we’ve had cases come through before where we say that’s one of the things you should be able to have upon your property. In fact even in Red Cedar I can remember cases that have come through there where we did grant variances based upon the fact a homeowner wanted to have a garage and we found a way to fit it in and yes we had to give I think some variances there too but Red Cedar as the Mayor said is very unusual part of town and the fact that I think it’s very hard for us to apply some of these ordinances or no one could live there just because of the way the lots are shaped and your closeness to the water and all of these things. We did the roads there a few years ago and we had problems because we couldn’t widen them out to the length, to the widths that they should be because to do that you start to eat up people’s property and that was something no one 27 Chanhassen City Council – October 12, 2015 wanted. So this is an area where compromise and I think a little bit of common sense has to come into play so that all the property owners you know have good use of their property. I applaud the compromise from the standpoint of I believe ma’am your view of the lake and everything is very minimally effected and I applaud staff for working to get that because there were a lot of things that we were trying to bring into play at that point and while with any compromise it’s no ideal for anyone. It will work for everyone and I think this compromise works and that’s why I decided that yes, we need to go forward with this so that’s just a comment I wanted to put on the record as to at least why I decided to go through this based upon the fact that you did bring up a legal issue. Mayor Laufenburger: Okay, thank you Mr. McDonald. Did you want, make any other comment Councilwoman Ryan? Councilwoman Ryan: No thank you. Mayor Laufenburger: No further discussion. Councilwoman Ryan moved, Councilman McDonald seconded that the Chanhassen City Council approves a 17 foot shoreland setback variance and a 20.2 foot front yard setback variance to construct a two-story attached garage subject to the following conditions and adopts the attached Findings of Fact and Decision: 1. The applicant shall expand the private drive to maintain at least a 10 foot wide drive, not to exceed 24 feet wide. 2. The driveway grade must not be less than 0.5 percent and must not exceed 10 percent. 3. The proposed structure shall maintain the existing drainage patterns. 4. The applicant must apply for and receive a building permit from the City. All voted in favor and the motion carried unanimously with a vote of 3 to 0. Mayor Laufenburger: Thank you very much. CONSIDER AWARD OF BID FOR BANKING SERVICES. Greg Sticha: Good evening Mayor and council. Let me get my information in front of me here real quick. The City awards a banking services contract based upon a RFP process every 3 years and has done so for many years going by. The City went out for award or RFP on the banking services contract which is set to expire here shortly. We had 4 banks that replied to providing the City’s banking services. Americana Community Bank which the City currently banks with. BMO Bank, KleinBank and US Bank. I’ve attached a spreadsheet that kind of breaks down the proposals by 8 criteria which staff reviewed each of the proposals by. After evaluating the RFP’s that were submitted there were 4 areas or 4 of the criteria that staff felt were of the largest significance in terms of separation between the 4 28 Chanhassen City Council – October 12, 2015 proposals between the banks. First was cost. Americana Community Bank’s proposal was the only proposal that resulted in a net financial gain to the City and by that I mean the interest earned on the account exceeded all of the fees that would be paid on the account for all the services provided. The amount of this is approximately $7,000. The other 3 proposals in terms of fees versus interest earned on the account based on the proposals were relatively real close to zero. There were one that was almost exactly zero. One that was a couple hundred dollars as an expense and then one that was just a slight gain to the City. So in terms of cost most certainly Americana’s proposal was the leader in terms of financial gain to the City. Three other areas that were really important to City staff were, one of which was collateral. For those at home that don’t exactly understand what collateral is, the City’s deposits at a bank per statute need to be collateralized I believe 110 percent of the balances need to be collateralized every day at the end of business banking day. Either through FDIC insurance or other federal government investments that are provided as securance to the City that in case of a bank failure the City’s deposits are guaranteed. This is a very important statute and very high priority for many cities in terms of having their deposits guaranteed at any banking institution and the proposals varied in that Americana Community Bank’s proposal had components that were I guess the best way to qualify them were less sophisticated than some of the bigger bank’s proposals. The larger banks have typically massive pools of unpledged collateral that they can take and pledge to an account at the end of the business day if need be. Typically your smaller banks it’s a little more difficult to gain that collateral. It’s a little more time consuming in terms of the paperwork involved and if for instance the City were to receive a wire in at 2:00 p.m. on a Friday afternoon and there was no way to respond to cover those balances, technically the City’s account would be uncollateralized and if by chance the bank were to fail on that afternoon, those uncollateralized deposits would not be regained by the City. So collateral is a very important issue. With the big banks having, bigger banks having typically that unpledged collateral pool it’s much easier for them to shift those collateral instruments into accounts that might need those at the end of the business day. In addition their systems are typically automated more so than a local or smaller bank tends to be. Another area that City staff felt was very important in terms of separating the evaluation or the criteria from bank to bank was ACH cut off. For those at home who don’t understand what ACH cutoff is, ACH stands for automatic clearinghouse. Automated clearinghouse which is essentially how funds get transferred from bank to bank in a couple of different situations. Either when the City is depositing funds in another entity’s bank or when people are depositing funds into the City’s bank basically electronically. This process can be time consuming at times. The current proposal that the City is operating under and which was proposed again by Americana has an ACH cutoff time of 2:00 p.m. 2 days before the funds are to be credited to either the depositing or the outgoing accounts. Where this can be significant in particular is when the City is preparing payroll and making direct deposits into employees’ accounts. The payroll in the current instance needs to be prepared by 2:00 p.m. on Tuesday in order for it to hit the accounts of the employees by Thursday at midnight. Whereas the proposal submitted in particular by BMO bank, the cutoff time is 7:00 p.m. the night of. So in other words staff would have until 7:00 p.m. Thursday evening to prepare the payroll and submit the file so that the funds can be transferred electronically. That can be of significant help in particular when the City has a Monday holiday and staff is not in the office. A lot of times we are scrambling to get time sheets approved and it really is a significant time savings if we had that extra day and a half of time to process those payrolls. The other side of the equation on ACH is we also take money from people’s accounts in terms of utility billing for our residents. So we will take and automatically, if authorized by the resident, 29 Chanhassen City Council – October 12, 2015 funds from their accounts and deposit them directly into the City’s accounts to pay for their utility bill for that money or quarter. Again we have the same cutoff times and whereas we need an extra day and a half of lead time to process those transactions. On the utility billing side it’s less important in terms of timing when it comes to staff preparing the transactions. However what tends to happen on occasion is residents sometimes forget that they’ve signed up for ACH and in the interim mail a payment to the City and if the file has not been processed it will not show on our accounts so we will have essentially accepted double payment on account. Mayor Laufenburger: Meaning you have to calculate, reconcile that and send them money. Greg Sticha: Send their money back in that instance. It does not happen often but it does happen on occasion. Having a 7:00 p.m. cutoff the night before would eliminate any possibility of that happening as well. So for those reasons having an extended or longer ACH cutoff time would be very significant in terms of efficiency for the staff in processing payroll and other areas that makes it a very valuable service that could be provided. And then lastly the City received bill pay checks from it’s residents to pay their utility bills and for those that aren’t quite aware how that process works, those of you that might bank with a bank that offers a bill pay service, you can go onto your account electronically and submit a request that payment be made to a myriad of vendors including the City to pay your utility bill. What happens then if that bank sends the processing file to a company that cuts a check? An actual paper check to the City to be processed for payment. Over the years with more residents taking advantage of their bill pay services offered by their individual banks we’ve started to have more and more bill pay checks come to the City each month. The amount of time it takes to process those bill pay checks is more significant than a regular check because it typically does not have, well it does not have our paystub with it and a lot of times doesn’t have all the account information associated with it. So it becomes a little bit more cumbersome in processing the payment. Less time efficient and takes staff more time to process the payment. Some of the larger banks have developed products or services where they have developed relationships with the bill pay, I guess you call them institutions. Mayor Laufenburger: The check writers. Greg Sticha: The check writers and they’ve developed systems where the file can be sent electronically directly from the check writer, for lack of a better term, to the City with all the pertinent account information that the staff would need then to provide credit to their account on the City’s utility billing system. So after staff reviewed all of the proposals we narrowed it down to the 4 criteria that are presented within my memo and we’ve had relationships with both BMO Bank and we’ve had a relationship with Americana over the last 9 to 10 years. Both banks have served us well in terms of a number of factors and there’s absolutely nothing that I could even begin to say bad about the service that we’ve been provided by Americana Community Bank. They’ve done pretty much everything that we’ve asked over the years. However staff feels that the $7,000 in additional revenue that could be gained by maintaining our relationship with Americana is exceeded by the other evaluations I just mentioned in terms of protecting either the City’s assets. Giving City staff time to be more efficient, whether it is with processing a payroll at a later time or processing utility bill payments quicker. Over time those items can make a world of difference within our department even if it is 2 to 4 hours a month that I 30 Chanhassen City Council – October 12, 2015 might be saving one of our staff members time over the years and as accounts, the number of accounts increase at the city it can become substantial. It’s hard to put a dollar value on you know what is it worth to assure collateral is always guaranteed on the account? What is it worth to get that extra day and a half of staff time in order to process a payroll? People are out of the office sometimes and it becomes difficult to process it under a tight time crunch. So therefore staff is recommending award a 3 year banking service contract to BMO Bank starting December 1, 2015 and we ask that City Council authorize staff to execute a 3 year contract with BMO Bank based on the submitted RFP. Mayor Laufenburger: Alright, thank you Mr. Sticha. Any questions for Mr. Sticha of the council? One question Mr. McDonald or comment? Councilman McDonald: One comment. Mayor Laufenburger: Okay. Councilman McDonald: Okay I thank you for your presentation. You were very clear because you know in the beginning it looks like we generally go with, we would have gone with the $7,000 so I appreciate you going through each of the other criteria and being able to give me a sense of what weight to apply to it which makes the decision a lot easier than just saying why don’t we take the money and go with it so I want to thank you for your presentation and making this, this simple act I guess that’s really quite complex and complicated as to how the City handles their money a little bit clearer at least to this one councilmember so thank you. Mayor Laufenburger: Let me echo that too Mr. Sticha. There’s certainly more to this banking relationship than just put money in the bank and take it out when you want to. I appreciate that. Can you, I’d like you to clarify a couple questions. You said that we put this out on RFP every 3 years. That’s the pattern we’ve done for the last several years is that correct? Greg Sticha: Since my tenure here and I believe before that as well. Mayor Laufenburger: Does State Statute require that we issue an RFP for this or this just a decision that we’re doing? Greg Sticha: It’s a recommended best practice. I do not believe it’s a requirement that you go out for banking services contract but it is a recommended best practice and we do. Mayor Laufenburger: Okay, alright very well. Todd Gerhardt: Mayor and council. Mayor Laufenburger: Mr. Gerhardt. 31 Chanhassen City Council – October 12, 2015 Todd Gerhardt: I’ve got to tell you that there’s not too many municipalities that go into this much detail in reviewing their banking service so I just want to thank Greg. He’s really taken this item on and has really dig deep to find all the information he can find to make a good decision here and we’re in the fortunate situation of having some great banking institutions here in Chanhassen and I think Greg just did a fantastic job of analyzing those proposal and not just taking the one that put the most money in our pocket but one that made us more efficient. Mayor Laufenburger: Thank you. Mr. Sticha is a representative from BMO with us tonight? Greg Sticha: He is. Mayor Laufenburger: Would you like to make a comment sir? Just on supporting your RFP preparation. State your name please. Pat Harris: Thank you Mayor, council members. My name is Pat Harris with BMO Harris Bank and we appreciate the opportunity to be able to respond to the RFP and appreciate the opportunity to do business with the City of Chanhassen. We have a deep background in government banking. We have a branch here in the city of Chanhassen and we have a deep government team here in Minnesota as well and we would just look forward to working together. I for one served 12 years on the St. Paul City Council so I enjoy working with city councils across the state and would look forward to working with this City Council and the community in Chanhassen. Mayor Laufenburger: Alright, thank you Mr. Harris. Appreciate your comments. Unless there’s any further comment would anybody like to make a motion? Mr. McDonald, your turn. Councilman McDonald: I would propose that the City Council awards a 3 year banking services contract to BMO Bank starting December 1, 2015 and authorizes staff to execute a contract with BMO Bank based upon the submitted RFP. Mayor Laufenburger: Alright. We have a motion. Is there a second? Councilwoman Ryan: Second. Mayor Laufenburger: Thank you Councilwoman Ryan. Any further discussion? Councilman McDonald moved, Councilwoman Ryan seconded that the City Council awards a three-year banking services contract to BMO Bank starting December 1, 2015 and authorizes staff to execute a contract with BMO Bank based on the submitted RFP. All voted in favor and the motion carried unanimously with a vote of 3 to 0. Mayor Laufenburger: Thank you very much Mr. Sticha. Nice job. 32 Chanhassen City Council – October 12, 2015 ADMINISTRATIVE PRESENTATIONS. Todd Gerhardt: Just a couple things. We’re finishing up our road projects. We’re hoping by the end of the week, weather permitting as Paul always likes to say, that Carver Beach will be all black. That means first lift will be down throughout the neighborhood and also finishing up the Rice Marsh mill and overlay in that area on the north side of Rice Marsh Lake trail. That’s all I have. COUNCIL PRESENTATIONS. Mayor Laufenburger: Any council presentations? Mr. McDonald. Councilman McDonald: Well if I could Mr. Mayor I’d like to just say that yesterday we had the fire department put on their open house that they do on an annual basis and as I had talked to the Chief, I’m not sure who they have for their weather man but we should probably get the guy more often, especially for some of the Red Bird games. Mayor Laufenburger: And maybe that same weather man can start doing some of Paul, Mr. Oehme’s street improvement work. Councilman McDonald: Right, street improvement work yeah because it was just, it was beautiful. Todd Gerhardt: Same him for the weekend. Councilman McDonald: Yeah it was just a perfect day so, and the open house went quite well. It was well attended. As always the kids love the fire trucks and they love to take rides on them so I really, again when I talked with the Chief I’m glad we do this. It opens it up to the community so you can actually see one of the resources that’s really the face of the city. You know a lot of people will interact with the fire department and I just think we have one of the best fire departments around so I really appreciate whenever they can do that but it was, the food was good and again the rides were fun so thank you. Mayor Laufenburger: Great. Councilwoman Ryan did you have anything? Councilwoman Ryan: I did not. Mayor Laufenburger: Okay. I, just to kind of the countdown. I think we are within 6 weeks of opening 101, is that correct Mr. Oehme? Paul Oehme: That’s correct. th Mayor Laufenburger: We are tentatively scheduling November 24, is that right? As the date that the ribbon will be cut somewhere along that 101 bridge. The roundabout will be fully functional for both 101 north/south. Also CSAH 61 east and west. Looks like Bluff Creek Boulevard round about is 33 Chanhassen City Council – October 12, 2015 functioning now so we’re, ladies and gentlemen we’re approaching the end of that you know under construction season in what it’s called here and we’re looking forward to a great, a great winter season and maybe the weather will cooperate for our winter as well. Any comments on the correspondent packet? CORRESPONDENCE DISCUSSION. None. Todd Gerhardt: Mayor just one comment on the bridge. The Stillwater people are very envious of our bridge in Chanhassen. Mayor Laufenburger: Because we’re getting close to being done right? Todd Gerhardt: Yes and so I just wanted to share that with the council. Mayor Laufenburger: Alrighty. And we want to welcome back Mr. Gerhardt and our Assistant City Manager who spent some time in Seattle at the International City Managers Association meeting. Just for the record Nann if you can just make note that tonight’s meeting was substantially longer than 2 weeks ago when they were not present so with that this meeting is adjourned. Mayor Laufenburger adjourned the City Council meeting at 8:50 p.m. Submitted by Todd Gerhardt City Manager Prepared by Nann Opheim 34