CC WS 2018 09 10CHANHASSEN CITY COUNCIL
WORK SESSION
SEPTEMBER 10, 2018
Mayor Laufenburger called the work session to order at 5:30 p.m.
COUNCIL MEMBERS PRESENT: Mayor Laufenburger, Councilwoman Tjornhom,
Councilman McDonald, Councilwoman Ryan, and Councilman Campion
STAFF PRESENT: Todd Gerhardt, Chelsea Petersen, Kate Aanenson, Paul Oehme, Todd
Hoffman and Greg Sticha
PUBLIC PRESENT:
Bob Ayotte 6213 Cascade Pass
PAVEMENT MANAGEMENT PROGRAM FUNDING DISCUSSION AND 8/20/18
MEETING FOLLOW UP.
Greg Sticha introduced Jim Strommen with Kennedy and Graven who discussed how franchise
fee agreements can work with CenterPoint Energy, Xcel Energy and Minnesota Valley. He
noted that under state statute a public hearing is not required but would be suggested. Greg
Sticha reviewed highlights of how the levy, franchise fees and assessments affect the revolving
assessment fund, and the assumptions used before asking for guidance on continuation of the
assessment practice and if the city council wants to keep the current levy of $384,000 in place.
Mayor Laufenburger asked council members to addressed continuing with the 70 PCI,
assessment practice moving forward, strategy on how long to have a franchise fee, how to fund
the 60 percent.
1. Regarding the 70 PCI, council members were comfortable with staying at the 70 PCI
number. Councilman Campion asked for clarification of what happens with having a 65
PCI but felt comfortable with staying with 70 PCI.
2. Assessment practice of keeping the 40 percent assessment moving forward. After
hearing public comment council was comfortable with continuing with the 40 percent
assessment practice. Councilwoman Tjornhom asked staff to continue to look at possibly
changing the 40 percent number in the future.
3. Timing for funding the pavement management program in the 12 to 14 year range.
Councilman McDonald stated he would fund the program as far out as needed.
Councilwoman Ryan asked if franchise fees could be assessed solely on commercial
properties. Jim Strommen stated that to his knowledge it has never happened and
discussed how the energy companies look at commercial businesses. Councilman
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Campion asked about the possibility of ramping up street projects in the early years to
take advantage of a smaller increase in material and wages. Council members discussed
different ways to make adjustments in the future to the fund balance. After discussion it
was the consensus to fund the program in the 12-14 year timeframe.
4. Clearly state how assessment franchise fees will be used for street projects. Jim
Strommen explained that the current council cannot dictate what future councils will do
and would suggest putting the intention of how franchise fees will be used. After
discussion it was decided that it is this council’s intent to use the franchise fee for
pavement management program but cannot bind future council’s actions. A resolution
can be approved for the franchise fee intent but should not be put in the franchise
agreement.
5. How to fund 60 percent city portion of assessments. Councilwoman Ryan expressed
concern with the current use of $384,000 in the levy for the pavement management
program and would be interested in reducing taxes by eliminating the $384,000 from the
levy and just use franchise fees. Mayor Laufenburger explained the impact
Councilwoman Ryan’s suggestion would have on commercial users so he would favor to
continue with the current use of $384,000 in the levy. Councilman Campion discussed
the impact of eliminating the $384,000 versus the 50/50 split between residential and
commercial. Mayor Laufenburger discussed how property tax money is used by the City
to provide services including street repairs.
The work session was recessed at 6:55 p.m. The work session was reconvened at 8:45 p.m.
CONTINUE DISCUSSION OF PAVEMENT MANAGEMENT PROGRAM FUNDING
DISCUSSION AND 8/20/18 MEETING FOLLOW UP.
Councilman McDonald discussed the downside of Councilwoman Ryan’s suggestion of deleting
the $384,000 from the general levy and the use of only franchise fees. Councilman Campion
asked about possible uses of surplus money in the future. Mayor Laufenburger asked if it’s
important to the council to keep the levy level versus changing the levy up and down each year.
Councilman Campion stated he wished funding of this program had been addressed sooner.
Councilwoman Tjornhom stated her belief that the council has been addressing this issue for
some time but have addressed it with surplus money from the budget. Council agreed that it
would have been better to do it sooner but it needs to be addressed now. Councilwoman
Tjornhom favored keeping the levy as it is today, use of franchise fees and reexamine the issue in
3-4 years to see how it’s working. She also favored the 50/50 split. Councilman McDonald
stated he would like to keep the levy where the council can have flexibility to change funding as
needed in the future, use of franchise fees and the 50/50 split. Mayor Laufenburger asked about
the impact franchise fees will have on city owned property, franchise fees collected from tax
exempt properties, and the suggestion of increasing the levy amount and lower the franchise fee
amount. He noted that the council is not voting on this item now but directing staff to put this
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item on a regular City Council agenda. Greg Sticha clarified that the franchise fees are a fixed
rate, the use of the 50/50 split and direction on how staff should move forward with utility
company discussions. After discussion council was undecided on how to fund the 60 percent
but directed staff to prepare a motion on funding and discussion on whether or not to hold a
public hearing when that motion is brought forward. Greg Sticha suggested asking Jim
Strommen back at the next work session to clarify the process.
2019 BUDGET DISCUSSION FOLLOW UP.
Greg Sticha reviewed the 3 scenarios being presented for the 2019 budget using revised numbers
that have come in since the last discussion. He stated staff will be recommending Scenario 2.
DISCUSS CHANHASSEN RETAIL CENTER PUD AMENDMENT TO ALLOW
ADDITIONAL SIGNAGE.
Kate Aanenson provided background information of the sign ordinance and action taken at the
Planning Commission’s review of this item at their September 4, 2018 meeting. Mayor
Laufenburger asked why this item was coming to a City Council work session and clarified
options for council action. Councilman Campion stated he would not favor approving a sign.
Councilwoman Ryan favored seeing additional signage on the monument sign. Councilwoman
Tjornhom agreed that signage is not needed. Councilman McDonald agreed that signage is not
needed. Mayor Laufenburger outlined the options City Council will have when this item comes
before the City Council for review.
Mayor Laufenburger adjourned the work session at 9:45 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim