CC 2018 11 26
CHANHASSEN CITY COUNCIL
REGULAR MEETING
NOVEMBER 26, 2018
Mayor Laufenburger called the meeting to order at 7:00 p.m. The meeting was started
with the Pledge to the Flag.
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, Greg Sticha, and Roger Knutson
PUBLIC PRESENT:
Norma May 2050 Clover Court
Nicole Nejezchleba 4150 Red Oak Lane
Judy Wollan 7972 Autumn Ridge Way
Suzanne Flake 7973 Autumn Ridge Way
Chad Herman 4150 Red Oak Lane
Jim Cradit 8469 Powers Place
Tim Crain 1956 Andrew Court
Sue Pekarna 2090 Clover Court
T. Kroells 1071 Chaparral Court
Joel Nybeck 7404 Frontier Trail
Mack Titus 2747 Century Trail
Steven Brown 6330 Elm Tree Avenue
Julia Coleman 434 Mission Hills Way East
Bob Heise 8591 Flamingo Drive
Joel & Sharon Dudziak 8557 Powers Place
Gloria Leone 8584 Powers Place
Carole Fandrey 8186 Powers Place
Dick Brown 263 Orchard Lane
Mary Ann Carr 8547 Powers Place
Julie Skoog 2400 Harvest Way
Cheryl Yoes 7861 Autumn Ridge Avenue
Carrie Barclay 6545 Gray Fox Curve
Kauthar Al-Mottahar 9570 Jefferson Drive #2
Barb Youngburg 2035 Chicory Way
Charles Johnson 6970 Nez Perce Drive
Gerald Schmitz 6360 Forest Circle
Charlie Pickard 1215 Lilac Lane
Bill Coldwell 350 Shore Drive
Chanhassen City Council November 26, 2018
George Prieditis 7401 Frontier Trail
Craig Mertz P. O. Box 261, Chanhassen
Dave Nickolai 552 Mission Hills Drive
Randy Raddatz 6340 Elm Tree Drive
Steve Stamy 491 Bighorn Drive
Larry Kerber 6420 Powers Boulevard
Charles Littfin 7609 Laredo Drive
Mayor Laufenburger: Well welcome to this council meeting this evening. To those that are
present in the council chambers as well as those of you that may be observing at Mediacom cable
TV from your home or through the world wide web at the Chanhassen website livestreaming this
meeting. Just for the record all council members are present this evening along with Mr.
Gerhardt, City Manager, our attorney Mr. Knutson and several staff. Also you may not be able
black uniforms in honor of recognizing one of our firefighter
printed this evening? Very well then we will proceed with the agenda as printed.
PUBLIC ANNOUNCEMENT:
Mayor Laufenburger: First I have an announcement or an invitation to make. This Friday,
st
December 1 the official tree lighting ceremony will take place at Chanhassen City Center Park.
hanhassen
tradition the 2018 tree lighting ceremony presented by the City of Chanhassen, Buy Chanhassen,
Southwest Metro Chamber of Commerce and the Mustard Seed Landscaping and Garden Center.
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I invite all residents, area residents, their families and friends to join me Saturday, December 1
starting at 5:00 p.m. on the plaza at City Center Park. People of all ages will enjoy activities
including the official lighting of City Center Park, refreshments, caroling, gingerbread house
displays, live reindeer and a special visit from Santa Claus. The entire event is free. Registration
is not required and for more information feel free to contact City Hall at 952-227-1100. And I
Center
Park. We have a Santa Workshop out there so I would encourage you, especially any of you kids
under the age of 12, bring your parents. It should be a fun, fun evening alright. Thank you.
CONSENT AGENDA:
Mayor Laufenburger: This evening we have consent agenda items 1 through 6. Consent agenda
items are usually, are considered to be routine. Will be considered in a single motion based on
staff recommendation unless anyone on the council or visitors present would like to have a
discussion. If discussion is desired
there any item E 1 through 6 that the council would like to have considered separately?
Councilwoman Ryan: Mr. Mayor?
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Chanhassen City Council November 26, 2018
Mayor Laufenburger: Councilmember Ryan.
Councilwoman Ryan: E(4) please.
Mayor Laufenburger: E(4). Is staff prepared to address that?
Paul Oehme: Yes.
immediately following visitor presentations. Is that okay Councilmember Ryan?
Councilwoman Ryan: Sure.
Mayor Laufenburger: Okay. Alright is there a motion to approve items E 1 through 4 and 6.
Councilman McDonald: So moved.
Mayor Laufenburger: Thank you Mr. McDonald. Is there a second?
Councilwoman Ryan: Second.
Mayor Laufenburger: Thank you.
Councilman McDonald moved, Councilwoman Ryan seconded to approve the following
1. Approve City Council Minutes dated November 13, 2018
2. Receive Park and Recreation Commission Minutes dated October 23, 2018
3. Resolution #2018-56: Certify Water Hook-Up Charges
4. Pulled by Councilwoman Ryan for discussion.
5. Tort Liability Limits
6. Approve Geotechnical Consultant Contract for TH 101 Improvements, Pioneer Trail to
Flying Cloud Drive
All voted in favor and the motion carried unanimously with a vote of 5 to 0.
VISITOR PRESENTATIONS.
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Chanhassen City Council November 26, 2018
Mayor Laufenburger: Is somebody getting
wishing to address the council on a matter that is not on the agenda this evening, they may step
to the podium stating their name and their address for the record. We do have a scheduled visitor
Chief Don Johnson: It is Mayor.
Mayor Laufenburger: Please.
Chief Don Johnson: Thank you Mayor. Good evening Mayor and council.
we
Brennan, or as we affectionately call him Joker. Joining Joe tonight is his wife Rochelle and his
two boys Andy and Sam. Would you like to join me up here tonight please? First off Rochelle,
Sam, Andy, thanks for sharing Joe with us over these past many, many years. We know that this
is as much a part of what you do and being part of what we do is very important in that your
support has been key to Joe staying on so we truly appreciate that and thank you for the service.
We do have a gift for you as well. Joe said he joined the fire department back in 1997. However
went
Joe.
Mayor Laufenburger: Well maybe he was working free of charge.
Chief Don Johnson: But Assistant John Murphy is listed as his personal reference on his
application so that does probably explain some things. Joe had two thank you letters in his file.
quite sure what that has to do with the fire service but he still had it in his file. So if you start
oe did take some off several years but then
but doing 20 years on a paid on call fire department is quite an accomplishment and very hard to
pull off. Much less taking significant time off to come back to finish it so kudos to you Joe for
coming back and finishing 20 years. During his career Joe was a great firefighter and several
people have commented that they looked up to him during their career. Joe spent time as a
Lieutenant and participated with a group of firefighters that traveled nationally to compete in the
Firefighter Challenge. During that timeframe Joe was both a body builder and the fire
ties early on and attempted to entice
I also tried diligently to keep Joe on the department as he is very well respected and serves as a
great mentor to the younger firefighters. Again Joe declined stating it was his time. We have to
respect and accept that 20 years is a long time. On behalf of the Chanhassen Fire Department
thank you Joker for 20 years of dedicated service to the citizens of Chanhassen and Chief
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Chanhassen City Council November 26, 2018
each of have taken some time to, and hopefully you can cherish that somewhere in the house and
not just leave it in the garage to gather dust. And Mayor with your permission tradition starts
somewhere so I would ask that in starting a new tradition for the Chanhassen Fire Department as
we recognize 20 year retirees I would like to invite the Chanhassen Fire Relief President Matt
Kutz up for a brief presentation.
Mayor Laufenburger: Very well.
Chanhassen Fire Relief President Matt Kutz: Council, Joe. We as a membership want to thank
been to us ove
Rochelle and family. So on behalf of the membership please accept this gift as a token of our
service and a little bit of an inscription on the handle there. Thanks buddy.
Joe Brennan: Thanks man.
Mayor Laufenburger: Did you have anything else?
Chief Don Johnson: No.
Mayor Laufenburger: Joe did you want to say a couple words?
Joe Brennan: Sure.
Mayor Laufenburger: Do I have to limit you?
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give it up for the world so appreciate it.
Mayor Laufenburger: Well Joe before you go, council anybody who would like to say anything?
Mr. McDonald, sure.
Councilman McDonald: Thanks for 20 years of service and good luck in retirement. I hope
Joe Brennan: Thank you.
Mayor Laufenburger: Joe I would just say that what you have done in your perseverance and
your dedication to this, to your craft. Albeit a volunteer craft is a great model for not only your
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Chanhassen City Council November 26, 2018
fellow firefighters but also for other young people in this community and in other communities
Okay. Are you going to take any of these folks with you?
ons and then if you will
presentation this evening? Mr. Titus.
Mack Titus: Mack Titus, 2747 Century Trail in Chanhassen.
Mayor Laufenburger: Good evening Mr. Titus.
Mack Titus: I have 3 very quick items. In light of recent events I came across a newspaper
article in the Washington Post entitled police encounter many people with mental health crisis
advocating any position at all.
make sure we receive it.
Mack Titus: Secondly I want to compliment council on the publication of the Chanhassen
vibrancy I think of, for Chanhassen and is very much appreciated and I found another number of
in.
Mack Titus: And the third thing is I want to compliment Mayor Laufenburger on his
professional handling of the meetings. His innate ability to sum up issues and point out the
Mayor Laufenburger: Thank you Mr. Titus. Thank you. Any other visitor presentation this
evening? Please. State your name and address please.
Robert Heise: Robert Heise, 8591 Flamingo Drive.
Mayor Laufenburger: Okay. Welcome.
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Chanhassen City Council November 26, 2018
Mayor Laufenburger: Okay.
here for 20 years and
with an Illinois license plate. I thought that was kind of odd. Nuisance violations. Noise. At
late hours of the night. Parties and when you have 4 cars in the driveway you have 8 to 10
people walking out at different times of the day. Maybe enjoying Chanhassen. Maybe not.
Property m
room for the trash because of maybe 10 occupants in a house that particular weekend. Driveway.
summer in the back yard up to the knee. I think when you have absentee landlords people from
want
that keeps hotels out of residential neighborhoods. The short term rentals really ignore I think a
little bit of the zoning restrictions and make virtually any residence into a hotel so you can tell
except one. Both houses are
home on Flamingo Drive. The house on the right of it and the house on the left of the short term
the Planning Commission did a good job in January, and thank you Mr. Mayor for sharing that
report with me earlier, I guess it was earlier this month. Thank you very much. I read that report
and they did a good job I think outlining the problem of the short term rentals but I think the
report fell a little short in two areas. One area was it only said there was 50 to 100 short term
said 605 vacation rentals. N
but
It was a good report. And then the second problem I had, the staff recommended no action as
their first recommendation and their second recommendation was number 4 in the report, and I
recommends alternative number 4 and number 4 was allow short term rentals regardless of
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Chanhassen City Council November 26, 2018
Mayor Laufenburger: Well Mr. Heise just to be sure and I want to give you your time but that
it was current and also it was a preliminary report so that report has not,
Robert He
correct me but just in summary, I know you have a busy agenda here. I would just encourage
council. I will certainly talk to my council member. I would encourage you all to take a closer
look at this. Other cities have placed some enforceable regulations on short term rentals and I
think Chanhassen being a desirable destination now for a lot of people, I think we have to look a
be a little tough to bite off.
Mayor Laufenburger: There certainly is a spectrum of thought on that process.
ome decent
regulations and enforceable regulations. Thank you for your time.
Mayor Laufenburger: Alright, thank you Mr. Heise. Appreciate it. Any other visitor this
evening? Alright with that I will close visitor presentation. Thank you to those of you that came
forward this evening and visitor presentations are a part of all of our regularly scheduled council
just about 3 minutes and allow those of you, are they headed to training this evening?
Chief Don Johnson: Go celebrate with cake.
thank you all you firefighters for coming this evening. Appreciate your diligent work. Joe, best
of luck to you and to your boys and you wife as well.
There was a short recess at this point in the meeting.
Mayor Laufenburger: Alright I had originally said that we would deal with item E(5)
ment
update.
FIRE DEPARTMENT/LAW ENFORCEMENT UPDATE.
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Chanhassen City Council November 26, 2018
Chief Don Johnson: Thank you Mayor, council. The fire department report for this month
including statistics for
2 firefighters currently on leave. With the assistance of the Chanhassen Relief Association this
year we added a help wanted letter to the Annual Relief fundraiser and that has yielded some
hire in February and the actual Southwest Academy will start in March this year. Our current 4
that we have in the academy did pass their Firefigh
been going to school since the end of July and they just got their first certification out of the way
left but at least they can get on the apparatus. The fire department responded to 85 calls in
October. Year to date calls total 735 which represents a 15 percent increase overall of 2017. On
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November 8
Significant calls included in the month were 44 rescue calls with 9 motor vehicle accidents. We
responded to 6 structure fires. 2 in Chanhassen. One at the Bluff Creek Golf Course where a
minor outside fire at the clubhouse and a small electrical fire at the Chanhassen Apartments. We
also assisted Victoria, Excelsior and Chaska. Officers training was hose loads on our new truck
and EMS hypothermia training. As many of you were there, and we appreciated your presence
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on October 29, we dedicated our new ladder truck, Truck 1 into service. That vehicle has
served us well to date.
continue to move forward in the future with use of that vehicle. We continue to support the
Chanhassen High School this year with homecoming games, or with the homecoming game.
ways been a good partnership for
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us. Luckily no injuries this year of any substantial nature. November 15 we provided a
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firefighter EMT for Paisley special event and on November 26 we tonight are honoring Joe for
his 20 years of service. With that I can stand for questions.
Mayor Laufenburger: Alright thank you Chief. Any questions from council of the Chief?
Chief Don Johnson: Thank you Mayor.
Mayor Laufenburger: Alright, thanks Chief. Next is our monthly law enforcement update.
Lieutenant Kittelson, welcome.
Lt. Eric Kittelson: Good evening Mr. Mayor, council members. I have the monthly law
enforcement update for you this evening from the month of September and September the calls
for service summary, we had 43 Group A crimes. 16 Group B crimes. 448 miscellaneous and
non-criminal calls for service. 332 traffic incidents. 37 administrative functions for a total of
876 calls for service in the month of September. Arrests, citations and verbal warnings
summary, we had 40 individuals who were arrested and charged with 51 crimes in 38 separate
incidents. 6 of those were for DUI or liquor law violations, 11 for drug violations and 6 for
shoplifting. We had 39 traffic citations with a majority of those being for speed. Training
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Chanhassen City Council November 26, 2018
update, all of our staff attended range training and went through various scenario based decision
making simulations at our joint training facility with Scott County down in Jordan named Scale.
Community relations update. I attended the Steiner Kelting Mental Health facility advisory
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committee meeting on November 20. This facility is in Chaska and will provide short term
residential stabilization services to people in mental health crisis before returning home and that
workshop tomorrow. This workshop will examine infrastructure safety strategies to help
crashes on our local roads. And a
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Chanhassen was yesterday, November 25 and Mike accepted a position as a police officer with
Mounds View Police Department. A
Mayor Laufenburger: Alright thank you Lieutenant. Any questions or comments for Lieutenant
Kittelson? Councilmember Ryan go ahead.
Councilwoman Ryan: Thank you. Lieutenant earlier at our work session Rod Franks came to
talk about the Carver County mental health crisis group and one of, and we were just generally
talking about the mental health issues facing the area and you mentioned that the 40 hours of
training, mental health training that your officers get, is it a one time training or is it an annual
training? What is that the mental health training look like?
Lt. Eric Kittelson: So this year all licensed personnel attended Minnesota CIT which is Crisis
Intervention Training and that is
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1 of this year the Minnesota POST Board which is the Police Officers Standardized Training
passed through legislation increased the mandatory minimum number of training hours to
recertify for your licensure every 3 years and they added an additional 16 hours of training.
Within that 16 hours of training it needs to be on mental health crisis intervention, implicit bias
st
enforcement so that went into effect July 1 but it will be added beginning next year to your, so
re period it will start at the beginning of your next
licensure period. So in essence the State required 16 hours of additional training with part of that
being a crisis intervention and Sheriff Olson wanted to exceed that so we did 40 hours of
additional
standard minimum training so all new officers hired from here on out will receive that 40 hours
cense is renewed and I
Councilwoman Ryan: Great, thank you.
Lt. Eric Kittelson: Yep.
Mayor Laufenburger: Any other comment or question from council? Thank you Lieutenant.
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Chanhassen City Council November 26, 2018
Lt. Eric Kittelson: Thank you.
CONSENT AGENDA: 4. LAKE DRIVE EAST STREET IMPROVEMENT PROJECT
NO. 18-02: ACCEPT FEASIBILITY STUDYL; CALL PUBLIC HEARING.
Mayor Laufenburger: Next item is our, we have an item of old business. This is a review of the
thing I have you all
2018-57. This was related to Lake Drive East Improvement Project. Accept the feasibility study
Mayor Laufenburger: Alright before you begin, was there a specific question you had
Councilmember Ryan?
can give his report.
Mayor Laufenburger: Okay, go ahead Mr. Oehme.
Paul Oehme: Sure. So thank you Mayor, City Council members. So this item is consideration
of moving forward with improvements on Lake Drive and Dakota Avenue just south of Highway
5. This is mainly a mill and overlay project. It also includes a pedestrian safety items.
Sidewalks. Curb and gutter. ADA ramps. Those type of things. It is MSA, it is an MSA
collector roadway so the City had anticipated using state aid funds on this project. I think Ms.
Aanenson your question relates to maybe.
Mayor Laufenburger: Member Ryan.
Lake, is that correct?
Councilwoman Ryan: Yes.
Councilwoman Ryan: I support the feasibility report.
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Chanhassen City Council November 26, 2018
Paul Oehme: Okay.
Councilwoman Ryan: My question was about the portion or the segment of the road, the Lake
Drive East so from McDonalds to, all the way to Dell. I know the road right now the PCI or OCI
sits I think what you said was at
request was that if we could get a report that breaks out that portion of road. Basically broken
out in 3 ways. To have one, the Dakota Avenue and the intersection improvements which I
know that there is a need there for sure. Two, the watermain and sewer improvements and then
three, the Lake Drive East, the street improvements east of the McDonalds.
Paul Oehme: Okay yep. We can break those costs out very simply.
Councilwoman Ryan: Okay.
Paul Oehme: Get an updated feasibility study to you before the public hearing.
Paul Oehme: Sure.
Mayor Laufenburger: Councilmember Ryan are you prepared to make a motion here?
Councilwoman Ryan: Yes.
Mayor Laufenburger: Or not yet.
Councilwoman Ryan: Yes.
Mayor Laufenburger: Okay go ahead.
reports, report adding the alternative bids for the project for the Lake Drive East Street
Improvement Project 18-02 and calls for the public hearing to be held on December 10, 2018.
is you want this improvement project number 18-02 to be broken up into 3 separate projects, is
that correct?
Councilwoman Ryan: Yes.
Mayor Laufenburger: Okay. So rather than dealing with it as a single project 18-02 you would
ing to come up with some nomenclature. 18-02-A, B and C. Mr.
Oehme does that make sense?
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Chanhassen City Council November 26, 2018
Paul Oehme: That does.
Mayor Laufenburger: Okay. And you want, your action here is to accept the report with the
Paul Oehme: Correct assuming stand alone projects or alternate bids for each of those items.
Mayor Laufenburger: Okay. Including the breakdown of the costs of those.
Paul Oehme: Correct.
Mayor Laufenburger: Alright. Is that acceptable for your?
Councilwoman Ryan: Perfect, thank you.
Mayor Laufenburger: Okay, alright. Mr. Knutson do we have a valid motion?
Roger Knutson: Yes.
Mayor Laufenburger: Okay alright. Okay may we have a second?
Councilman Campion: Second.
Mayor Laufenburger: Alright, thank you Mr. Campion. Any discussion on the motion?
Todd Gerhardt: Mayor I would ask that the resolution reflect those changes also.
Mayor Laufenburger: Okay. So the motion is to accept the feasibility report for the Lake Street
Improvement Project Number 18-02. Modify the resolution to reflect the project in three
segments 18-02 A, B and C. Okay. Is there any further discussion? Mr. Oehme will we see that
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on the 10?
Paul Oehme: Yes. We should be able to put those numbers together and those breakdowns.
Mayor Laufenburger: Adequately enough so that the public can, are we going to have a public
hearing at that time as well?
Paul Oehme: I think so. We have all the numbers. We just need to split them out.
Mayor Laufenburger: Okay, alright. Thank you.
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Chanhassen City Council November 26, 2018
Resolution #2018-57: Councilwoman Ryan moved, Councilman Campion seconded that
the City Council accepts the feasibility report adding alternative bids for the Lake Drive
East Street Improvement Project 18-02 A, B, and C, and calls for the public hearing to be
held on December 10, 2018. All voted in favor and the motion carried unanimously with a
vote of 5 to 0.
Mayor Laufenburger: That motion carries 5-0. Thank you Mr. Oehme and thank you
Councilmember Ryan for preparing him for that too. Alright now can I proceed? Alright.
REVIEW FINAL DRAFT OF 2040 COMPREHENSIVE PLAN.
Mayor
Kate Aanenson: Yes it is.
Mayor Laufenburger: Alright.
Kate Aanenson: Thank you Mayor, members of the council. Before you tonight is just to review
and summary the changes that have been made to the Compre
st
We had our kick off meeting if you recall back on April 21 of 2016. We actually had a
visioning with the Planning Commission, City Council, Senior Commission, and Park and Rec
Commission so then we started with all the draft elements and then we had a work session with
the City Council. We had to agree to what the population projections were. Employment
projections and the like and then we started drafting the different elements. The Planning
Commission acted as the kind of the review committee. Holding the open houses and the public
hearings so we worked through all of the different elements and then in, we had open houses in
September on the Comprehensive Plan at two different locations. And then also we then started
working on the surface water management plan. We did send it out for jurisdictional review
with your approval. We came back to the City Council and showed them what the issues that
were raised at the meetings and then went out for jurisdictional review. So that 6 month period
we shared with you all the comments that we got back not only from the Metropolitan Council
but from our neighboring cities. Comments that they had. For the most part the comments were
with the developer. That took the longest time and actually the Minnehaha Watershed District
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.
During that time we also were tracking some requests from 2 property owners that wanted to do
land use changes. For the most part because we did a significant amount of land use change on
the 61 corridor when we did a very comprehensive study, looking at whether or not the City
could you know in a responsible way provide municipal services down in the area so in this go
around looking at what we had for housing. How much availability. The different types. How
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Chanhassen City Council November 26, 2018
were 2 requests to come in and those kind of then slowed down the process a little bit more so
we were ready to resubmit to the Met Council so we did some further analysis of that and the
changes in the Comprehensive Plan that you have before you that was put online reflect the
changes to the Erhart would added 3 additional office institutional zoning and then the other 50
acre request including 3 parcels on the Halla was withdrawn so that would be something that
could be studied in the future. So with that the changes that you have before you now then are
I think the biggest change
that we talked about before that the staff had, give compliments to Bob Generous on the planning
staff who does a good job on the projections was the employment projections we felt they were a
little bit low. We use our own floor area ratio based on office industrial and then commercial
also so we wanted to make sure we were in alignment what we believe were some of the
population, or excuse me, employment projections so with that they did agree to make some of
those changes. But otherwise the minor changes you have before you tonight then are very small
ng through
resolution for you to send this back up to the Metropolitan Council so when that goes back up it
will be the resolution for you. Approved by you to review all the changes that says we made the
communities concerns and so they have 15
we would in our process and then they have another 120 days to review that. So it goes through
their community development, just like we would through our city. They would have a public
hearing the
formally adopt it. And once we do that then we start the work on making some of the changes.
g regard
I just want to share with you and then
take any questions that you may have regarding the Comprehensive Plan
addressed all the issues that had been brought before you and are going to put it on your next
agenda for consent for recommending of sending it up to the council.
comments but Ms. Aanenson I think what I heard you say is that this will come before the
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council December 10 in the form of a resolution and we will adopt the resolution
recommending the presentation of our comp plan to the Met Council, is that correct?
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Mayor Laufenburger: Okay so on December 10
oh my, 2 ½ years of machinations we essentially are presenting it to the Metropolitan Council by
requirement our Comprehensive Plan. Our vision for the next 22 years right? 2040. Okay. And
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Chanhassen City Council November 26, 2018
via email or phone call or
personal visit to make any other comments is that correct?
Mayor Laufenburger: Okay, alright. Council members any questions or comments on what Ms.
Aanenson has talked about and what was included in the packet this evening?
Councilwoman Ryan: Mr. Mayor?
Mayor Laufenburger: Councilmember Ryan go ahead.
Councilwoman Ryan: Thank you. The letter from Chief Johnson talking about his concern with
the increase in density. Could you just explain that please?
Kate Aanenson: Yeah and I apologize, that was a little bit confusing. That was kind of wrapped
in w
requested any additional increase. That was related to the request for the Halla request.
Councilwoman Ryan: Okay.
Kate Aanenson: For additional because that was another 700-800 high density and so that was
related to that.
Councilwoman Ryan: Okay. So is that, is a report from the Fire Chief part of the
Comprehensive Plan.
Kate Aanenson: That will not go forward.
Councilwoman Ryan: Nothing, okay.
Kate Aanenson: That was really for your edification and that was part of the request tied to the
Halla request.
housing in the community?
Kate Aanenson: No you know, we talked about that. If we go back to the housing section and
that was one of our concerns of doing the additional, adding additional housing. Senior housing.
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housing section is that we have buckets. So we have how much housing do we need? How
much do we need in rental? How much do we need in owner occupied? Then within the rental
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Chanhassen City Council November 26, 2018
we need through the 2040 and we already have t
Avienda. Some of the stuff that may still potentially happen on Village on the Pond, we believe
Councilwoman Ryan: Perfect and that you touched on two other points. Has the request for the
Avienda, their housing increased at all to date or no?
Kate Aanenson: No that has to come back to you.
Councilwoman Ryan: Okay that still has to come back.
Kate Aanenson: Yep, yeah.
Councilwoman Ryan: And then the last question and you just touched on it a little bit. When
you look at employment and you do the employment estimates.
Kate Aanenson: Yes.
Councilwoman Ryan: Is there a correlation to the type of housing then based on what you
anticipate the employment needs being?
Kate Aanenson: A lot of what we do is we call, they call it a traffic analysis and so we look at
trip generation and some of that stuff. Road capacity. Some of those sort of issues. I think
anecdotally what we do know when we have
much that supports commercial. People go to lunch on their, run errands on their lunch hour so.
Councilwoman Ryan: Right but in terms of employees being able to work and live in the same
community, do you do that? Make that correlation when you.
Come to the city a
some of that too.
Councilwoman Ryan: Okay perfect. Thank you.
Mayor Laufenburger: Thank you Member Ryan. Any other council comments? Alright. Thank
you Ms. Aanenson and thanks to your team for getting us to this point and I would just invite any
council members to do a final review of the comp plan because when it comes before us as a
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resolution on December 10 now
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Chanhassen City Council November 26, 2018
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,
okay. Thank you Ms. Aanenson.
PUBLIC HEARING: CONSIDER FRANCHISE AGREEMENT ORDINANCES AND
FRANCHISE FEE ORDINANCES.
Mayor Laufenburger: We have one public hearing tonight. This is to consider franchise
agreement ordinances and franchise fee ordinances. This also has been a long and arduous
process. Mister, w
saying he reason this is on the agenda tonight, for those of you that I expect many of you are here
tonight because of this item. This is on the agenda tonight because at our last work session on
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November 12.
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Todd Gerhardt: 13.
thth
Mayor Laufenburger: 13. Thank you to
th
all you veterans for serving. On November 13 the work session agreed that as a result of all of
was that we wanted to get a public hearing on a proposed franchise fee ordinance and a fee
Greg
Paul Oehme: Yeah.
Greg Sticha: Yep.
So this power
point is similar to some of the information that was presented back in the work sessions and
through a couple points here. Explain the purpose and the need for additional funding for the
Review the proposed franchise fee and the rate classes and then again consider opening a public
hearing and then considering the franchise fee agreement and ordinance. So what is pavement
management program. Our goal again is to implement changes in the funding of the pavement
management program to maintain and sustain the consistent funding source for the pavement
management of streets and trails within our community. So just a little background. The
community has about 112 miles of streets that we currently own and maintain. If you break that
18
Chanhassen City Council November 26, 2018
which is by far the largest asset the City currently owns and maintains. And likewise for trails
we have 16 miles of asphalt trails within our community. About 37 of those trails are within our
th
street right-of-way such as trails along Kerber and 78 Street out to Lake Ann and we also have
about 23 miles within our community parks and open spaces and if you take all the trails, if we
currently own and maintain. So our goal here again is to try to prolong the pavement as long as
about in the past and then have a cost effective program where we look at doing overlays and
reconstructions at the needed timeframes. So pavement management program was originally
started in 1991. Really kicked into high gear in about 2004 where we started to evaluate streets
and trails and survey each of those trail segments or blocks every 3 years. You know we
identified potholes, the cracks, the rutting, the alligatoring, depressions, those type of things. We
can break that information down to a quantitative rating system so for example a new street
would be 100 where a very poor street in disrepair street is basically a gravel would be a zero.
So basically over the last 10 years the City has maintained an average PCI rating of about 70
which can be considered in fairly good condition overall for our city network. Obviously there
around a 70. So the impetus for the franchise fee and the needed funding is
basically a bubble here. A lot of the community streets, developments, neighborhoods were built
streets built in those decades which you add them
up about 60 percent of our total street networks so a large volume of our streets built in those two
decades are now coming due for maintenance. So pavement management, the program we can
look out, project out what our estimate is for pavement condition over the next 20 years or 5
years or whatever. But if you look at our currently funding levels when we get, when these
to get to
those streets and make the improvements necessary to keep our pavement PCI level up at our
tation what pavement condition streets
are. So for example you know very new streets would be in the 90-95 range. Again our PCI
range right now on average is at about a 70 so that can be considered a pretty good street. Very
little cracking. No alligatoring. No block cracking. Those type of things but as you move down
keep the
requests. Try to keep the maintenance, preventive maintenance type of items down as low as we
can. So again using our current funding estimates. If we continue on with our current level of
funding, you know if we were say going to invest $1.1 million dollars worth of money into our
streets annually this is kind of the projection that the pavement condition has indicated. And
again this is based upon th
19
Chanhassen City Council November 26, 2018
Todd Gerhardt: Paul sorry to interrupt but that would be answering the question that came up
last week. If we do nothing scenario.
Paul Oehme: Yes. I mean basically if we take the current levy dollars. Reinvest those in our
streets. Taking the assessment amounts that we gather on an annual basis. Reinvesting that in
t our current estimate for funding would be.
Under this
scenario the revolving assessment construction fund would also be out of money in 2032 so you
would still have to find some revenue stream by 2032 going forward so this would keep the
revolving assessment construction fund positive and spending $1.1 million per year until then.
ur
it is currently today. So with the current proposal that we
our estimate is for pavement condition over the next say 20 years or so. And again these are
a plan for our local streets. If the franchise fee were to be implemented over the next 10 years
these are the neighborhoods that are projected that would be reconstructed or overlaid or made
improvements to these neighborhoods. And likewise for our collector roadways, you know most
of these roads are funded through our state aid or our gas tax that we get from the State annually.
However based upon our current assessment practice a portion of these projects would be
assessed back to the benefiting property owners so a portion of the franchise fee dollars would
actually help support and pay for these projects.
Mayor Laufenburger: Paul can you go back one slide to where it says 10 year local street plan.
Okay so those of you that are in the council chambers and Nann are you showing this map online
at this time? Okay. So you can look for your neighborhood and you can see if you can see it
there. If your neighborhood has a colored street on it, that means according to our current plan
times within the next 10 years.
Todd Gerhardt: Mayor, council.
Mayor Laufenburger: Go ahead.
the Chanhassen streets but it shows those streets that are you called them MSA. What does that
stand for?
Paul Oehme: Municipal state aid streets. Collector roads.
20
Chanhassen City Council November 26, 2018
Mayor Laufenburger: So that means we get money from the federal, or excuse me, from State
government to repair these roads.
Mayor Laufenburger: Okay, alright. So just hold that there. Again if you see your
Looks lik
the Legion, that area.
Paul Oehme: Correct.
Mayor Laufenburger: Okay. Alright, okay. Continue. Thank you Mr. Oehme.
g now to talk about funding.
Greg Sticha: So before we get into some of the details on the numbers because they can be a
little confusing and I want to give just a brief overview of how we got to this point this evening.
Earlier in the year the City Council directed staff to hold some public meetings with the public
and ask a few questions and get input from the public. Number one being their thought on what
their opinion was on a franchise fee versus a property tax levy in paying for the additional road
needs that the City has coming forward in the future. And the second was what people thought
meetings I think in terms of the assessment practice I think by far the opinion was to continue the
assessment practice as is. In large part because of equity based on those that have been recently
assessed. In terms of whether a franchise fee or levy was preferred, the majority by far preferred
a franchise fee simply from the standpoint of it was a little less costly to residential properties as
compared to a property tax levy which would be slightly more costly to residential properties.
So after all that discussion we brought forward some potential proposed franchise fee to the City
Council this fall. During that process we were also negotiating with the utility companies to
come up with extensions on our two electrical franchise agreements as well as putting together
franchise fee ordinances together with each of the utility companies in town. All of that brought
that the assessment practice will continue as is and there are no changes in any of the numbers
I think the funding issue comes in when it comes to finding the
ents that are repaid to the
City and then put back into the revolving assessment construction fund. The funding issue
over the last decade is running out of money and we have the additional need of the additional
roads that Paul mentioned and so we brought this to the council well over a year ago to start
21
Chanhassen City Council November 26, 2018
Mayor Laufenburger: Mr. Sticha just for a second. When you say the City portion of the 60
the businesses in this community.
Greg Sticha: Yep.
Mayor Laufenbu
Greg Sticha: Correct.
Mayor Laufenburger: The only thing we can use to fund that 60 percent is revenue claimed from
the citizens and the businesses in this community.
Greg Sticha: Right.
Mayor Laufenburger: The property owners.
Greg Sticha: Yep. So one of the things that we did look into along the way as well is what are
our options for funding these roads and the answer became pretty clear quickly. You really only
have two options. A property tax levy or a franchise fee that can then be used for roads. A
franchise fee could be used for any purpose. A large amount of cities do use it for the purpose of
road reconstruction. Other cities use it for other purposes but those quickly became the only two
million dollars a year prior to right now on roads during an average of 2.6 miles, and as Paul
pavement management program is estimating based on the additional roads that are going to
need funding that we really need to start spending $3.3 million a year if we want to maintain a
PCI at or near that 70. That means 4.1 miles of roads per year instead of 2.6. So how have we
2006 the City Council started a revolving assessment construction fund and into that fund was
transferred $6.7 million in reserves or surpluses that came from either decertified TIF districts or
other funds that had reserves identified in them. The assessed portion, the 40 percent had always
been planned to been repaid to this fund for the improvements to the streets so whenever a
assessment is
is assessed over, all of those funds are returned immediately into this fund for use on future road
improvement projects. million a year. So the City
roughly $800,000 a year to benefiting properties. So what has happened over time with the
initial $6.7 million dollar transfer into the fund is the City has slowly spent those funds down.
22
Chanhassen City Council November 26, 2018
We have made other investments into that fund along the way. When possible previous city
councils have transferred in
balance in that fund.
interest on the fund balance reserves in that fund so over time all of those things have been
helpful in keeping the fund balance growing or at least maintaining some type of reasonable
balance along the way. And then in 2015 the City Council that year saw an opportunity to take a
debt levy that was coming off the books and use that levy to be a permanent or at least at this
point in time a permanent revenue stream into the revolving assessment construction fund so that
$384,000 a year has also been going into that fund since 2015. So as we discussed earlier the
real need is the $3.3 and not the $2 million if it is the goal of the council to maintain that PCI at
or near the 70. Increasing the spending without increasing a revenue stream was going to have
this fund in a deficit by, well actually next year would be the last year that you would be able to
do any projects without an increased revenue stream into this fund. So as we talked about with
the public in the previous meetings what is a franchise fee. Cities have a statutory authority to
have franchise agreements with each of the utility companies, gas and electric for maintaining
the city owned right-of-way. Within those agreements cities may charge the utility companies a
fee for the use of that right-of-way. To this point in time the City of Chanhassen has not done so.
various number of things. Largely, mostly roads. So who in the 7 county metro area has
additional communities that have just recently added a franchise, two of which are in Carver
County and I believe Minnetonka just increased their franchise fee and Chaska is looking to do
so as well. But this is a map of the communities and listed to the right are what they are using
their franchise fees for. So why a franchise fee versus a property tax levy? I guess the simplest
way to answer that question is to look at it in the terms of these two pies that I have on the graph.
With a property tax levy based on the property tax, total taxable market value of the city of
Chanh
values from residential properties and 17 percent are from commercial properties. Therefore 83
cents out of every property tax levy dollar issued is paid for by a home and 17 cents out of every
property tax dollar issued is paid for by a business.
Mayor Laufenburger: Mr. Sticha just to clarify. A business that is not property tax exempt.
Greg Sticha: That is correct. Yep. ittle more flexibility in
given the option of setting up rates that do differ slightly between each of the class categories.
Therefore you could collect differing amounts from each of the two differing types of property
tax. In addition a franchise fee would allow you to collect a revenue from those that are
currently not paying property taxes in the city of Chanhassen but still use the roads in
Chanhassen. So based on the last set of options that we reviewed with City Council and based
on our negotiations with utility companies we came up with a rate structure and that rate
structure roughly breaks out the $1.76 million that is being requested into a 63/37 split. In other
words 63 cents of every franchise fee dollar would come from a residential or home and 37 cents
23
Chanhassen City Council November 26, 2018
out of every dollar would come from a business. As the Mayor said, a non-profit or other billing
type of classification versus 83/17 which would be the break out of a property tax levy. This just
kinds of goes over the impact of if you were to levy $1.76 million versus if you were to collect
$1.76 million on a franchise fee based on the proposed franchise fee that we put forth to council
this evening, the average home in Chanhassen, a $360,000 dollar home would probably pay
about $170 to $180 a year if a property tax levy of $1.76 million was issued. With a franchise
erage home in
Chanhassen if a franchise fee was issued over a property tax levy.
Mayor Laufenburger: Just to be clear, the levy only, the green bar on the left shows the annual
property tax for an average home and there are many homes above average and many homes
below average in terms of property tax value. Whereas the blue picture on the right shows every
home regardless of the property tax value would be paying a franchise fee of $120.
here the break even point would
home is about where the break even point would be and that would be regardless of how much
you levied. That would be regardless of issue, if you issued a levy for $1.76 million. $500,000.
A million. The break even point in terms of a franchise fee structured the way this franchise fee
Mayor Laufenburger: Okay, appreciate that clarification. Thank you Mr. Sticha.
Greg Sticha: So after a myriad of discussions with City Council, taking public input and
discussions with the utility companies we came up with this proposed franchise fee rate
schedule. As you can see this option would have a proposed residential fee per utility of $5 so
assuming most homes have two utilities, an electric and a gas utility, they would pay $10 a
you saw earlier and
depending on the type of meter, a commercial or non-profit or school or city building would
have, you would pay the listed below franchise fees for each of the electric and gas commercial
types. We attempted to accommodate the billing rates within each of these classifications to
make it as least painful to a number of the large commercial customers as we possibly could.
We put in a lot of effort to try to come up with something that we felt that the utility companies
would be in agreement with as well as based on the direction we receive from City Council so
that was the long and short and the end of how we came up with the proposed rate structure that
Mayor Laufenburger: Okay, Mr. Sticha before you move to the next slide. How many gas and
electric utilities serve Chanhassen, either residential or commercial?
Greg Sticha: Oh utility companies?
Mayor Laufenburger: Yeah.
24
Chanhassen City Council November 26, 2018
Greg Sticha: Three utility companies.
Mayor Laufenburger: Okay so gas is CenterPoint.
Greg Sticha: Yes.
Mayor Laufenburger: They serve all of Chanhassen.
Greg Sticha: Correct.
Mayor Laufenburger: Residence and commercial. What are the two electric utilities?
Greg Sticha: Minnesota Valley Electric and Xcel Energy.
Mayor Laufenburger: Okay. And generally Minnesota Valley Electric is in the southern portion
of Chanhassen is that correct?
Greg Sticha: That is correct.
Mayor Laufenburger: Okay.
Mayor Laufenburger: Yep we understand that. So those of you that are here in the chambers as
well as those of you that are watching at home you know who your electric utility provider is and
is it easy looking at this chart, is it possible to discern, are the small electric, medium electric and
large electric, do those apply to both Xcel and to Minnesota Valley?
Greg Sticha: Yes they would.
Mayor Laufenburger: Okay. And the gas commercial through gas small volume, that relates to
CenterPoint customers.
Greg Sticha: That would be correct.
Mayor Laufenburger: Commercial CenterPoint customers.
Greg Sticha: Commercial CenterPoint customers.
Mayor Laufenburger: Alright. Sorry for that, thank you Mr. Sticha. Next.
25
Chanhassen City Council November 26, 2018
l to
discuss funding of our roads over the last year, year and a half so these are just the public
a public hearing and consider an adoption of a franchise agreement ordinance and franchise fee
ordinances. Currently as for clarification the City does have expired franchise agreements with
the two electric utilities in town and we have one franchise agreement with CenterPoint Energy
that does not expire until 2022 so we would not need to adopt a new franchise agreement
agreement ordinance with CenterPoint.
he public hearing and
Oehme before we open the public hearing? Anybody? Mr. Campion go ahead.
Councilman Campion: Mr. Sticha can you explain earlier in the presentation you were saying
the gap between the need, the funding need per year was about $1.3 million you know where
for the franchise fee is $1.76. Can you explain the difference between those two?
Greg Sticha: Sure. So initially when we began some of these negotiations and discussions with
City Council the pavement management program has always consistently said in order to
maintain at or near a 70 we need to spend $3.3 million. But as we got along through discussions
would
mean we would need to collect $2. or excuse me, $1.9 million a year. Not $1.76 in order to keep
the fund funded for 13 years. Those were the initial discussions we had back in July and August.
As we involved the utility companies into the discussion it became clear that the amount we were
asking from their commercial customers was larger than what they felt comfortable with so we
made an adjustment to lower the request from $1.9 to $1.76 and in order to accomplish still
having the fund maintain a positive fund balance for 11 years we had to cut $700,000 in
spending out of the revolving assessment construction fund in the first 3 years in order to
accomplish still maintaining a positive fund balance in that fund for 11 years. So we had to cut
some spending in order to accomplish the lower funding request.
Councilman Campion: Okay.
predicated on the council putting any form
of adopting a franchise fee tonight it takes time for those franchise fees to be incorporated into
Greg Sticha: Correct.
26
Chanhassen City Council November 26, 2018
count on a
fee is that correct?
Greg Sticha: There would be a minimum of a 90 day period where the utility companies will
have to go to the utility commission and prepare their billing records so the soonest we would
even if it was adopted this evening, the soonest the City would receive any funding probably
Mayor Laufenburger: Alright. Okay. Council any other comments or questions?
-July.
when
council on this issue, thank you for having that on the screen. Simply come to the podium. State
your name and your address and there are many people here that I think would like to make
first? State your name and address please.
doing that for more than 40 years. I have gone, I have represented this city in the past on
litigation concerning the spreading of the costs of replacing streets. Maintaining the streets.
theme is that it is impossible for the public to expect that the City is going to come up with a
formula for spreading these costs that going to be fair to every property owner in the city. It is
ought to be based on square footage in the property. That developed properties ought to pay
with development potential to be further subdivided ought to pay more, pay a bigger share of
this. That people with longer street
argument. That they ought to pay less. That corner lots ought to pay more or corner lots have to
pay less. That through streets ought to pay more than non-through streets. That properties that
are occupied by non-profits ought to pay less. That commercial properties occupying the
frontage ought to pay more than non-commercial properties fronting on these streets. That cul-
de-sacs ought to pay more than non-cul-de-sacs. That townhouse projects with privately owned
less. That townhouse projects with publicly owned internal street projects, street ownership
27
Chanhassen City Council November 26, 2018
arguments
should pay a bigger
he opposite
percent fair to everyone in town and I would ask the other people in the audience to take that into
account when they speak to the council so thank you.
Mayor Laufenburger: Thank you Mr. Mertz. Appreciate your comments. Anybody else?
Dick Brown: My name is Dick Brown. I live at 2630 Orchard Lane.
everybody. My question or do I get to ask a question rather than a comment?
Mayor Laufenburger: Is it Mr. Brown?
Dick Brown: Brown like the color. Dick like Richard and Brown like the color.
council to hear your comments and your thoughts. If you have a question I may wait until we get
a few people asking the same question.
Dick Brown: It will be real simple though. And I agree with a franchise fee first.
Mayor Laufenburger: Okay.
Dick Brown: I agree with that and I think that.
Dick Brown: Well the question would be for these gentlemen. I received an assessment for this
coming year on Orchard Lane which includes sewer and water upgrade I presume but also the
streets so do I get to pay the assessment plus the franchise fee?
Mayor Laufenburger: Well Mr. Brown the assessment is on the street improvement. Not on the
sewer and water. The sewer and water is paid for out of the city general fund okay.
Dick Brown: So that assessment I got is just for the street?
28
Chanhassen City Council November 26, 2018
Dick Brown: Okay, thank you.
Mayor Laufenburger: Thank you Mr. Brown.
representing the Mission Hills Garden Home Association tonight. We are a homeowners
th
association of 56 homes. We previously submitted a letter to the council dated August 16
stating that we are not opposed to a franchise fee but we believe a compromise needs to be
worked out with those of us that already are maintaining our own streets. And so we are willing
to share our cost information with you and to come up with a, what we feel it would be a
compromised approach to the franchise fee versus the blanketing and us being included in the
total of the same fee that all others pay. study to
that study and over the next 12 years our 56 homeowners are going to pay $342,754 to fix our
o pay for this. This is a cost that our
association will generate through our dues to make sure that we have those funds available at the
time that those streets need and those curbs need to be repaired.
Mayor Laufenburger: So these are the streets within the Mission Hills neighborhood that are
private streets is that correct?
Dave Nickolai: That is correct yeah. And again we fully support the franchise fee and us paying
want to be exempt
Mayor Laufenburger: Okay.
Dave Nickolai: Alright.
Mayor Laufenburger: Thank you Mr. Nickolai.
Dave Nickolai: Thank you.
Mayor Laufenburger: You said that was 56 homes is that correct?
Dave Nickolai: 56 homes.
Mayor Laufenburger: Alright thank you. Good evening.
Tim Crain: Good evening. Tim Crain, 1956 Andrew Court, Chanhassen. Mayor and City
Council members. Thank you for the opportunity to address you. I also live in a townhome
association. We have 25 homes on Andrew Court and we are cul-de-sac. This past 2 years we
29
Chanhassen City Council November 26, 2018
spent $102,000 replacing all of our concrete curbing and the sewer, the storm sewer accesses to
the street. The City does not plow our streets. You do not maintain our streets. You do not
sweep our streets. We have to do that all ourselves and so again I also ask as the other
gentleman said that we get a fair share of the franchise fee. Not pay the full amount that other
people do on the streets that they live on that belong to the Chanhassen. We agree that we
should pay some fair share because we do drive on the streets and we do live in Chanhassen and
get the benefits of being able to get around and the improvements on the streets. I drive Park
anyway please consider the fact that our street is 20 years old. In the
probably going to have to spend another $100,000, which is about $4,000 per resident, to
completely redo our street also so please consider that there should be some leeway for those.
There are 18 townhome and condominium associations in Chanhassen. They represent well over
1,000 units. Thank you.
Mayor Laufenburger: Thank you Mr. Crain. Is there anyone else who would like to address the
Charles Littfin: Beat ya.
Mayor Laufenburger: Stay close. Your name please.
Charles Littfin: Good evening. My name is Charles Littfin. I live at 7609 Laredo Drive,
Chanhassen. Have you taken any consideration to people who have already been assessed for
street projects? That they might be excluded from this franchise fee. Because frankly as far as
o pay twice. I have the right to pay
Here we go. Whether they like
this another reason to leave this town. Thank you very much for listening.
Mayor Laufenburger: Thank you Mr. Littfin.
Randy Raddatz: Good evening. My name is Randy Raddatz. We live at 6340 Elm Tree
need funding for street improvements. The issue is how are we going to pay for it and the
works. This new proposed franchise fee opens up all kinds of issues and all kinds of concerns.
none of them ever get brought up here. When we have the next listening session or we have a
council meeting, I think I attended 3 of the listening sessions. None of the concerns get brought
30
Chanhassen City Council November 26, 2018
up. We bring them up again and again and then the next time around only the positives are
shown and I think, I think the agenda shows very c
what people have to say as you want people to agree with the franchise fee and that really
concerns me. Mr. Mayor you mentioned that you know people think the City pays for 60 percent
the residents who pay for that.
Mayor Laufenburger: It is.
Randy Raddatz: Or the businesses I should say. The homeowners and, or property owners.
Randy Raddatz: Yes. The same holds true, we tal
Mayor Laufenburger: Wait a second.
no way of getting around it.
not going to be paying.
Randy Raddatz: And I agree.
Mayor Laufenburger: Yeah.
the tax
31
Chanhassen City Council November 26, 2018
tly tax exempt organizations a
Mayor Laufenburger: I do not disagree with that.
Randy Raddatz: Okay.
are in Chanhassen for the
school district. I think the high school, Chan Elementary and Bluff Creek. Is that correct?
Yeah.
Todd Gerhardt: We can assess schools.
Mayor Laufenburger: Oh in fact we do assess schools when they are the benefiting property
owner.
Todd Gerhardt: Yeah.
Mayor Laufenburger: Alright.
Todd Gerhardt: But they would pay into the franchise fee if the franchise fee was adopted.
Randy Raddatz: Correct. We would pay into the franchise fee if the franchise fee was adopted
because we are the taxpayers for the schools.
Todd Gerhardt: Correct.
Todd Gerhardt: Right.
Randy Raddatz: Right. Two more quick points.
Mayor Laufenburger: Sure.
trust me.
32
Chanhassen City Council November 26, 2018
end it on this item because I want to hear somebody tell me
for street improvements in the future. Zero. Can city staff address that?
Mayor Laufenburger: Well I can address that.
Randy Raddatz: Okay.
Randy Raddatz: Okay.
Mayor Laufenburger: This council, this council has made a decision that we, that the intent for
funding the 60 percent which is the City responsibility in the pavement management program,
this council has gone on record to say that it will be used for the pavement management program.
Randy Raddatz: Right.
ncil cannot bind a future council.
bro
40 years. Whatever.
Mayor Laufenburger: Well I would.
Randy Raddatz: And you need to look no further, farther than some of the cities you mentioned.
.
33
Chanhassen City Council November 26, 2018
Mayor Laufe
Randy Raddatz: I guess those are my main points and thank you.
Mayor Laufenburger: Okay well Mr. Raddatz let me just say that I would, I believe that the
elected to serve with honesty and with
going to spend this money any way we want to because I think that there would be a hue and cry
against that position at some point in time. Only my thoughts.
Randy Raddatz: And whether we agree or disagree the money, how did we arrive at the point
where we had excess funds to use for street improvements? Because the City over collected on
revenue and made the decision to use it so my point is we can agree that that was a good thing or
bad thing to do but the City when it has money to use will use it for whatever purpose the City
determines it to be.
Mayor Laufenburger: Well there are guidelines on how we use money Mr. Raddatz.
Randy Raddatz: I agree there are.
Mayor Laufenburger: The Statute gives us guidelines for example.
Randy Raddatz: But this, there are not guidelines on this as to whether or not you have to use it
for street improvements.
Mayor Laufenburger: Needs to be used for general fund.
Randy Raddatz: Yes, thank you.
Mayor Laufenburger: Thank you Mr. Raddatz.
Nicole Nejezchleba: Good evening Mr. Mayor, council. My name is Nicole Nejezchleba and I
live on 4150 Red Oak Lane in Chanhassen.
Mayor Laufenburger: Welcome Nicole.
Nicole Nejezchleba: Thank you. Thank you Mr. Sticha for your presentation. I was a little bit
confused about the franchise fee. I now understand. I looked at it as a substitution to the
We were assessed with our old home $8,000 so people will still keep getting assessed so this is
34
Chanhassen City Council November 26, 2018
an additional fund. I also appreciate the power point on how it will be split up in terms of
percentage contribution between residential and commercial which is the screen you have up
here and looking at that screen it is apparent that the lowest contribution is for large electric
it appears that homeowners that are residential pay the biggest chunk of 5.2 percent. I also heard
you say Mr. Sticha that t
Mayor Lau
Nicole Nejezchleba: It is a question.
Nicole Nejezchleba: It is a question. I understand that the pie chart was helpful about how the
not paying their fair share because it ends up being the residen
percentages, percentages are fair and clearly we pay the highest percentage. I also agree with the
previous speaker. Our schools frequently ask us for additional funds in the forms of levies, all
kinds of things when their operating costs increase so the schools will clearly pass these costs
even pay the 1.9 percent. But at the outset I think when you have a 4.6 percent imbalance
would be fair. 10 percent is 10 percent. If you make a dollar or a million. It hurts the same. So
Mayor Laufenburger: Thank you Nicole.
Cheryl Yoes: Good evening my name is Cheryl Yoes. I live at 7861 Autumn Ridge Avenue.
Thank you for this opportunity.
Mayor Laufenburger: Could you spell your last name Cheryl?
Cheryl Yoes: Y-o-e-s like in Sam. Just think of toes but with a Y. Yoes.
Mayor Laufenburger: How many times have you been asked that question?
Cheryl Yoes: A lot. Especially when my maiden name was Johnson.
Todd Gerhardt: Son or sen?
35
Chanhassen City Council November 26, 2018
Cheryl Yoes: Good point.
Mayor Laufenburger: Ms. Yoes go ahead. Nice to have you here.
Cheryl Yoes: I agree with everything that everybody has said and I am very appreciative of our
city. I think we have a fine city. I represent, not as the President of the association but the
really tight financial budget. We were able at one point to replace roofs without doing an
our own roads so I just wanted to piggyback on the other homeowners from condominium
associations. Townhome living. I agree with their statements and I just hope that it can be
resolved in an equitable manner and thank you for this opportunity.
Mayor Laufenburger: Thank you Ms. Yoes. Good evening.
Charlie Pickard: Hi
low income housing and we have apartments. I assume that apartment renters will be paying the
an apartment dweller gets their utility included then the fee would be assessed to the apartment,
the property owner which would likely be a commercial property, is that right Mr. Sticha?
Greg Sticha: We can say most likely yes. Not in all cases.
Mayor Laufenburger: But your assumption is correct. If you have a meter and you get a bill,
ve.
Mayor Laufenburger: Okay thank you Mr. Pickard. Good evening.
Steve Brown: Good evening. Steve Brown, 6330 Elm Tree Avenue. I have the privilege of
living next door to Randy Raddatz and one thing that came to mind was the way our society
chang
be using our roads the same way in 20 or 30 years. Will we be seeing the same levels of traffic?
Will we start seeing driverless cars and will we start getting from A to B in different ways? And
for that matter will we continue to receive electricity through the power company or the gas
company? If those kind of things change, society will change and the city will be looking for
new funding again one way or the other and rather than slipping one more thing into our electric
36
Chanhassen City Council November 26, 2018
we go as property owners? I think people that are fortunate enough to own property in this city
take that pretty seriously. They enjoy living in the city and all the benefits of it. The amenities
in the electric bill. Things like that have a way of getting away from people and pretty soon
Mayor Laufenburger: Thank you Mr. Brown.
Sue Pekarna: Hi.
Mayor Laufenburger: Hi.
in.
Mayor Laufenburger: Is that off Prairie Flower?
Sue Pekarna: Yep. Yeah.
Mayor Laufenburger: Could you spell your last name?
Sue Pekarna: P-e-k-a-r-n-a.
Mayor Laufenburger: Okay.
Sue Pekarna: So I just want to reiterate the concern about living on a private road within an
as well
about having to pay for the, maintain the road out of our funds and budget it and paying for
assessment on the percentages between residential and commercial so I just want to have you to
reconsider that and reconsider private road. The owners that are on private roads. Thank you.
Mayor Laufenburger: Thank you Ms. Pekarna. Good evening.
ell. I guess I
fee to me is like a big giant tornado. I went to quite a few of what the other gentlemen called
listening sessions. I think I was at 2 of the 3 where a lot of the comments the residents gave city
staff kind of gave deer in headlight looks regarding assessments versus franchise fee versus
levies and a lot of the answers that I was hearing was well it depends on what City Council has to
decide. So coming to this meeting tonight I was coming in with the notion that this was going to
37
Chanhassen City Council November 26, 2018
honor of being charge an assessment in the past few years, like I did to the amount of $8,500,
this would just be one more thing the City would tack on. But sitting here listening to city staff
talk and City Council members talk and Mr. Mayor yourself talking I got really confused and
really confused on how this franchise fee i
heard and make sure I heard the right thing.
Mayor Laufenburger: Okay.
Chad Herman: So from what I heard from Mr. Sticha the assessments, the 60/40 percent with
the 40 percent being assessments, special assessments are staying. The 60 percent that used to be
a property tax levy that you paid on your property taxes to the County. That the County broke
off and gave to the City will be stopped and will be replaced by this franchise fee. Is that a fair
statement?
Let me restate it as I can.
Chad Herman: Okay.
my opening comments the council directed staff to conduct a public hearing using franchise fee.
Explaining that assessments will continue and I think what Mr. Sticha may not have stated
clearly is that the $384,000 property tax levy which has been part of the city budget for how
many years Mr. Sticha?
Greg Sticha: Since 2015.
Mayor Laufenburger: Since 2015. That that $384,000 is a property tax levy would continue and
that would continue to move into the pavement management fund that funds the 60 percent not
paid for by the prop
the property owners who live on the streets that are being fixed. The other $60 dollars come
from the rest of the city taxpayers including the people who are benefiting from the, the people
who are paying the assessment so that $60 dollars of $100 dollars now needs to go from $100 to
percent of $330 will be paid for by the
benefiting property owners but the other 60 percent of the $330 has to come from everybody in
the city. And the City Council is considering that that remaining 60 percent of a higher number
to keep our property or our pavement condition index high, that higher number will come from
$384,000 property tax levy plus a higher franchise fee or a franchise fee collecting $1,760,000.
Chad Herman: In addition.
38
Chanhassen City Council November 26, 2018
pavement condition index will continue to go down through 2032 and the fund will run out.
Chad Herman: I get that. So that leads me to my next point then.
stening to everything. So first off that information about
Mayor Laufenburger: Is it clear now?
Chad Herman: It is clear now.
Mayor Laufenburger: Okay.
Chad
deal because the property tax levy especially the slide that talks about the green bar and the red
bar.
Mayor Laufenburger: $200 for resident versus $120.
mansion you go from thousands of dollars for property tax levy to $12
of adding
a little bit more insult to injury especially for people that are already getting paying through the
nose right now with levies and assessments. But I guess my other concern is that these values
and numbers that the city staff came up with to propose to City Council is self inflicted.
Mayor Laufenburger: How so?
need to be 70. It could be 60. It could be 50. It could be 44. Our road that was reconstructed
last, supposed to be 3 years ago but it took 3 years to do due to all kinds of issues so completed
last year. Had a PCI rating of I think 44 and that was that way for the 14 years I lived there so I
could be much lower and I think the revenue numbers
are based on a PCI of 70 which is totally self inflicted. If the City would propose a lower
number they could do with a lower gap. They could do with a less franchise fee or maybe no
franchise fee. I think th
many of those at all. I see a lot of whole cities with potholes galore that you have to kind of beg
39
Chanhassen City Council November 26, 2018
if you move the PCI number down a little bit you can stretch out the dollars. Work within the
means of the budget of the city like all of us residents have to do when times are tough and you
having tough times here. Can you give me a raise so I can pay for the road? They would say go
concerned and kind of disappointed with the City because like I said I feel these are completely
self inflicted. I mean how did the City come up with a 5.2 percent for residents while big
a great job negotiating fo
Mayor Laufenburger: Okay Mr. Herman, and everybody else. Let me clarify. That percentage
utility bill so.
Chad Herman: Okay, well we can agree to disagree.
Mayor Laufenburger: Okay.
with that. I guess my other question is, with this franchise fee I think I
know the answer but the franchise fee would also be imposed on the City of Chanhassen
facilities correct?
Mayor Laufenburger: Mr. Sticha we talked about that and actually it would not be imposed on
the City of Chanhassen, is that correct?
Greg Sticha: On some facilities it still would be. User based facilities like the water treatment
plant and those I think we would still, I think we have language in for some facilities where it
would still be paid by the City. We could certainly discuss with council at a later point in time of
Mayor Laufenburger: I think what was, do you recall what was the total amount of franchise
fees that the City would be responsible for if they
Greg Sticha: I think of the total, at the time we were discussing $1.9 and I think at that point in
time it was about $40,000 of the $1.9 so it would be less than that
the $1.76.
40
Chanhassen City Council November 26, 2018
Chad Herman: But then at the end of the day that cost will be passed right to the residents of
Chanhassen.
Mayor Laufenburger: Absolutely. Absolutely because.
Mayor Laufenburger: Not again but plus.
people in the room here I think, I think the franchise fee might be a good idea but I think in this
an extra thing that I believe the City does not need to ask the residents to do. I
Mayor Laufenburger: Thank you Mr. Herman.
Mayor Laufenburger: And you are?
Bill Coldwell: My name is Bill Coldwell. I live at 3501 Shore Drive. How many have a better
understanding tonight now after this what the franchise fee is all about then they did before they
came in?
Mayor Laufenburger: Mr. Coldwell.
Bill Coldwell: Sorry. I want to commend you for explaining it first of all.
Mayor Laufenburger: Okay.
agree with Mr. Picking. Pickering.
Mayor Laufenburger: Pickard.
to thank you guys. I manage commercial properties for a corporation for a living. I know what
PCI indexes are all about. You do not want your PCI index to go too low because it will cost
you a lot more to fix than what eventually the residents scream and shout than it does by taking
this $5 or $10 bucks a month out of it so I just wanted people to understand that. We pay these
they can. T
41
Chanhassen City Council November 26, 2018
from the front that the franchise fee is a pretty simple cost effective collection methodology
versus an assessment. Little bit better.
Greg Sticha: Tax.
support of it. Thank you.
Mayor Laufenburger: Thank you Mr. Coldwell.
Steve Stamy: Good evening Mayor.
Mayor Laufenburger: Good evening.
Steve Stamy: Council. I did a lot of research on the franchise fee when I first heard about it.
Mayor Laufenburger: Your name.
Mayor Laufenburger: Slammy your name and address please.
Steve Stamy: Steve Stamy, 491 Bighorn Drive. So I understood the franchise fee and Mr. Sticha
set me straight on a couple things on emails that I was questioned but he gave some very good
answers and very prompt answers for a government official. My questions are, and Mr. Pickard
addressed a lot of the things that I had written down but the one thing, a couple things. One, the
deviate from the road and trail maintenance, is that correct?
Mayor Laufenburger: Everything that the City Council does with minor exception Steve is a
chooses to adopt a franchise fee, if some council in the future changes the way in which the
be a subject of budget. For example in you know 3 or 4 years Mr. Oehme comes forward with a
recommendation to repair streets X, X, X, X. One of the questions a council member will ask is
Steve Stamy: I get that but under State law there is no obligation for the council to notify the
city. If they make a decision.
42
Chanhassen City Council November 26, 2018
Mayor Laufenburger: Mr. Knutson do you want to speak to that? You understand the question?
Roger Knutson: When you say notify the city you mean
they decide to avert those funds to other things other than trail and road maintenance they could
do so without notifying the citizens of the city.
Steve Stamy: Okay. And then the other thing is on the levy for new streets or street repair, will
that assessment be changed at all? The formula for making that levy or is it going to be the same
now that the franchise fees will probably be in effect.
which those funds are earmarked for the pavement management program. That that levy will
continue.
mentioned it.
Steve Stamy: Oh assessment. So will the assessment be changed in terms of the formula used
on that?
Mayor Laufenburger: The council has not voted finally on that but in general the consensus
from this council is that the 40 percent assessment to the benefiting property owners will
continue. That that practice will continue.
Steve Stamy: Then the final thing is, is that I believe also State law says that the city can
increase their franchise fee if they deem to do so. Does that need public approval or public
notification also?
Todd Gerhardt: Anythi
e
having a public hearing so I would keep checking our website. Our agendas for ordinance
changes because it could change, yes.
Steve Stamy: Alright thank you.
43
Chanhassen City Council November 26, 2018
Mayor Laufenburger: Thank you Steve. Good evening.
Larry Kerber: My name is Larry Kerber. I live at 6420 Powers Boulevard which is a county
road peo
The utilities
road. I think this is a big question
that has to be answered. Why should I contribute when I will never have any value added out of
this franchise fee.
Ma
that street?
Paul Oehme: Not regular maintenance.
Mayor Laufenburger: Alright. So the City does not, the citizens do not contribute to the county.
You would not be assessed, wait a minute. Would he be assessed by the County Mr. Oehme?
Paul Oehme: No. The County does not assess.
Mayor Laufenburger: Okay so Powers Boulevard would not be, if repairs are made to Powers
Boulevard you would not be assessed as a benefiting property owner. But as a taxpayer, as a
property owner in the city you would pay for the 60 percent that is the responsibility of the City
for city streets.
Larry Kerber: I understand that.
Mayor Laufenburger: Yep.
Mayor Laufenburger: Right.
contribute to a fund that repairs my
Mayor Laufenburger: So you will never have the benefit of repairs on any city streets?
44
Chanhassen City Council November 26, 2018
Larry Kerber: It will not be a value added to my property for my neighbors to have their street
repairs. I think we use a lot of terms here. How this is going to increase property values and
on a county road.
Todd Gerhardt: Mr. Mayor the 60 percent goes more than to the benefiting properties. It goes to
the overall road which I think you probably use Lake Lucy. Any of the collector streets. Kerber.
Larry Kerber: Say again.
Todd Gerhardt: You use Lake Lucy and Kerber?
Larry Kerber: Occasionally.
Larry Kerber: Yeah. I take Powers Boulevard to Highway 5 or Highway 7.
Todd Gerhardt: Okay.
Larry Kerber: But who
grandmother from Rochester when she comes up to visit. So should they all be assessed?
to defer
for the city streets, the repair of city streets based on usage then one consideration would be to
pay based on.
Mayor Laufenburger: No, you pay based on, you know if you want to go on Highway 5 you pay
a Highway 5 coin. If you want to go on Highway 7 you pay a Highway 7. The City of
Chanhassen is granted
e way we are
have toll roads in our community so we spread the cost of community services as best we can to
the users of those community services. For example has your house ever been on fire?
Larry Kerber: No.
Mayor Laufenburger: Okay.
45
Chanhassen City Council November 26, 2018
Larry Kerber: I understand.
M
you.
Mayor Laufenburger: I would agree and I would put city streets in the same category of a
Larry Kerber: Well in this case if we were collecting a franchise fee for keeping up the parks or
problem. I do
consider it.
Mayor Laufenburger: Thank you Mr. Kerber.
Larry Kerber: Yeah.
Nicole Nejezchleba: Hello.
Mayor Laufenburger: Just a moment. I want to, is there anybody else that would like to address
the council? Go ahead.
Nicole Nejezchleba: I just had one quick comment.
Mayor Laufenburger: Just state your name so.
Nicole Nejezchleba: Okay Nicole Nejezchleba, 4150 Red Oak Lane, Chanhassen.
Mayor Laufenburger: Thank you Nicole.
Nicole Nejezchleba: Thank you. Rolls right off the tongue. I actually had a quick question or
comment based on the gentleman that just talked previously. We keep talking about the
company because the City is maintaining the city owned right-of-
-of-way technically he d
the statute, correct?
46
Chanhassen City Council November 26, 2018
Mayor Laufenburger: We collect from the utilities for their usage of the right-of-way.
Nicole Nejezchleba: Correct. Correct.
ipating
Nicole Nejezchleba: Correct, right.
the right-of-
funds specifically for the pavement management program.
e city owned right-of-
charging the utility companies for that so my argument with the gentleman previously that was
saying he has utilities in a county owned right-of-way and he lives on a county street, he would
not fall within that sta
Just want to make sure that you understand that.
Mayor Laufenburger: Okay Nicole just let me stop you a second.
Nicole Nejezchleba: Yes.
Mayor Laufenburger: Mr. Knutson.
Nicole Nejezchleba: Go for it.
Mayor Laufenburger: Does the franchise fee open the City up for any liability?
Roger Knutson: No.
Mayor Laufenburger: Not
statutory basis is so cities have statutory authority to have franchise agreements with each utility
company for maintaining owned right-of-
maintaining the city right-of-way.
Mayor Laufenburger: Right.
47
Chanhassen City Council November 26, 2018
Nicole Nejezchleba: In reality the residents maintain the city right-of-way also. Right?
Mayor Laufenburger: Well the city, I suppose you could say the city residents up until now any
cost that the City has incurred in maintaining the right-of-way the citizens have been incurring
that cost because the utilities have not been paying that.
Nicole Nejezchleba: So then when we implement the franchise fee are residents then no longer
required to maintain the city right-of-way?
Mayor Laufenburger: Well I suppose you could say that the money we are now collecting from
the utility companies will not go towards paying the right-of-way. They will instead be going
maintain the right-of-way so the citizens will maintain the right-of-way and the utility companies
will help us maintain the streets.
Nicole Nejezchleba: I understand that the franchise fee will be used for that.
Nicole Nejezchleba:
Nicole Nejezchleba: Is the citizens.
Mayor Laufenburger: That we have for city services are the citizens.
and me looking at this I could see many openings for my fellow resident here. He has a very
good case where he does not fall within that statute and I can also see a very good case for a
citizen saying we no longer need to maintain our right-of-way. In terms of mowing. Debris
e council aware.
Mayor Laufenburger: Thank you Nicole.
48
Chanhassen City Council November 26, 2018
Nicole Nejezchleba: Alright thank you.
Greg Sticha: Mr. Mayor maybe in regards to that particular question we could have Mr.
Strommen weigh in on our legal expert on.
Mayor Laufenburger: Mr. Strommen do you wan to introduce yourself so we know who you are
tonight?
Jim Strommen: Thank you Mr. Mayor, members of the council and staff. My name is Jim
staff in the franchise and franchise fee process.
Mayor Laufenburger: Okay.
add clarity because I
will add an important stage agency here that has not been mentioned that drives many of the
Commission which regulates the utilities. There has been precedent for how the franchise fees
that are properly required by the city from the utility are collected and that is why we have the
Public Utilitie
direction and that may have been implied here. It is what the utilities are allowed to do by the
Public Utilities Commission. It is collected and then paid over to the city. The utility, as has
been mentioned, is paying the franchise fee because of the valuable right given by the city to the
utilities to use the right-of-way without condemning the land. Buying private property to lay
their facilities and serving the public within the city and so that is the quid pro quo of that
process and as been pointed out yes, ultimately it comes back to the city residents or businesses
and the fee structure on the overhead there reflects the negotiation between the city and the
utilities and I guess the last point I will make is that franchises are regarded under law as
respect to their customers and this was a very lengthy process. I think the staff did a very good
job and I think we may have utility representatives here but that is the structure. The final
comment is, as Mr. Knutson pointed out, the City is well within the law. Well within well settled
law in Minnesota in what it is considering and there would not be I can say categorically a
have policy decisions to make and good points have been made but legally this is on a very firm
ground under Minnesota law.
Mayor Laufenburger: Alright, thank you Mr. Strommen. Appreciate that. Is there anyone else
going to close the public hearing and bring it back to the council. And as is our practice we have
49
Chanhassen City Council November 26, 2018
going to ask for, first of all are there any questions that the council has of staff at this time?
Campion.
Councilman Campion: So we have discussed this topic of franchise fees for quite a while. The
past several months at a minimum here and it does sound like a relatively easy solution to a
complicated problem but I do believe that it sets a dangerous precedent with enacting the
franchise fees. Alluding to Mr. Raddatz said, had mentioned as a can of worms. The projections
are based on estimates and models and we all know that models are, you know models are all
flawed and I believe that there are some wrinkles to the implementation of franchise fees that
you know could require more thought and more consideration whether the amount that we have
estimated to start collecting year after year is in fact the right amount. This is a problem that has
been building over time and I fear that this moves the problem or the challenge of dealing with
the roads and the repairs that have to be made over the next several years off of our desk
nth after month
and it will become somewhat out of sight and out of mind for residents once it is passed. Instead
I do believe that the most straight forward and best stewardship way of dealing with this
challenge would be to use the current model. The current practice of using the levy and the
assessments and taking it more or less you know at least a couple more years at a time to look at
you know as we repair the outliers. The lowest OCI or PCI streets, what effect does that have on
the overall average OCI or PCI? We did see a pretty big spike in 2016 with some road
improvements that were completed then that shot our OCI up nearly 8 points year over year from
2015 to 2016 so certain improvements resolving certain outlier streets can make a big difference
and so my opinion is that, at least for the next year or couple years I would favor dealing with it
through the current practice of using the levy and assessments.
Mayor Laufenburger: Thank you Mr. Campion. Ms. Ryan.
Councilwoman Ryan: Thank you Mayor.
about this for well over a year and I put together a pros and cons list to help me arrive at some
sort of a conclusion in addition to the feedback which was in alignment with some of my cons
that we heard today. So some of the pros I think for budgeting purposes, having a flat fee for
residents and businesses to plan around is helpful. I like the idea that a franchise fee does target
a specific funding goal so you can set out what that number is again helping in the budgeting
process. It takes some of the burden, not all of it as we saw in the slide that was referenced
throughout this evening and disperses it a little bit more between residents and commercial. Not
fully but it does take some of the burden off the residents so those are what I could come up with
the pros. But the cons tend to outweigh that a little bit more at this point for me and I, so first of
ing the
residents four ways for the same program. We are taxing them first with the general fund.
levy for $384,000. We then assess for people that are getting their roads done that year for 40
50
Chanhassen City Council November 26, 2018
for the same program or, for th
comment was asked about did the City negotiate with their utility company and another comment
that stuck in my head when we first found out that the utility company sometimes present
councils or cities with their, what their plan would be. It had always been what the city staff had
brought forward to City Council and then we then realized that utility companies can also put
programs together for cities to reach their funding. And a couple of the utility companies were
represented at one of our work sessions and at the first one before we arrived at this current
number and this has really stuck out in my head is we were told by one of the utility companies
that they were a little bit taken aback because between the relationship between the customer
concerned about, about how much we were asking to help fund our pavement management
project and asking for what
a significant amount of money. We also reviewed a chart that talked about, when we make
decisions a lot of times we compare what we call key financial strategies or key financial cities
that are like, similar in population and so we did that analysis for some of our neighboring cities
as well as some of our KFS cities and we are one of the highest of what this percentage of this
franchise fee would be as it relates to our overall general fund budget. It ends up being 16.67
percent. That was something else that concerned me. Thank you for your patience while I
continue to read through your notes. Or my notes and some of your feedback. A couple other
concerns tonight we, while we did receive emails from some of the homeowners associations
that were representative of townhomes and we received an answer about you know maintaining
city streets and the responsibility of what we as a council I still feel should be addressing the
equity. We talk a lot about equity when we make decisions and the equity to charge this
franchise fee or what amount of franchise fee to townhomes or people that live on private streets.
And then the other point that Mr. Raddatz made I believe, or maybe it was Nicole who talked
about the, sorry call you by your first name. The, have we looked at changing the percentage of
the assessment. I think it was Mr. Raddatz. Changing the percentage of the assessments so we
to achieve because I think that there are some other information that we should analyze. In the
whole picture we also are proposing in the next meetings an increase in you know with our
comfortable moving forward at this time. Thank you.
Mayor Laufenburger: Thank you Member Ryan. Councilmember Tjornhom, do you want to
make any comments at this time? Please.
Councilwoman Tjornhom: Well thank you everyone for coming tonight. I think that we have
had other opportunities to go to public meetings and express your thoughts and hear comments
51
Chanhassen City Council November 26, 2018
and sometimes you walk away and then you come back here and you get more information and
going on and I have those same comments, questions and concerns about this issue. Tonight
a rock and a hard place
options were proposed I asked staff to bring back tonight the option of just simply doing nothing
and just sustaining what we have righ
know that a fee to me, or a franchise fee to me is very, very risky because tonight this council we
franchise fee because our intentions are good. We want to keep our roads at the 70 percent and
we want to maintain our consistency with our pavement management program and with all good
intentions we could say that and we could pass it and someone said next year we have a new
council. That new council could come in and
would really like to do something else and they could take that revenue stream, which is
g about increasing the levy and so I am not comfortable in giving that option
that this money would always go to roads and for that reason I will not be supporting that.
Mayor Laufenburger: Thank you Ms. Tjornhom. Mr. McDonald would you like to make a
comment?
Councilman McDonald: Thank you Mr. Mayor. This has been a very difficult decision because
we started out with all this and to me seemed pretty straight forward and it was an easy decision
you know what evWe have a
problem. I mean I know everybody talks about are the models good or you know is the
Staf
Maintaining accounts and letting council know exactly where we stand as far as money so I
we do nothing, I believe
town were a rollercoaster. They were up and down and all over the place. Utilities, sewer fund,
that Tom Furlong as Mayor did he came in and we started to level out all of those numbers and
we made things consistent so that at least year to year you know what your taxes were going to
52
Chanhassen City Council November 26, 2018
well yeah, future council may decide to undue all this. Hide the ball. Do whatever they want.
future council.
can do about it is to make sure that when you vote for people for council you understand what
problems down the road. There is no other solution. I have not heard anything tonight. I have
not heard anything from any of my members on council as to what a solution to this problem
The
problem becomes more than that. You talk about paying on taxes. One of the reasons we have a
AAA bond rating is because we take care of the infrastructure. Because we do things. That has
lowered our interest rate for whenever we want to borrow money. We lose that bond rating and
rates go up significantly so okay we do n
favor of generally kicking the problem down the road to someone else and I would never do this
before but tonight I think that the future council should probably deal with this problem and I
with the PCI
a street. Most of you have been assessed except for I believe you all were assessed for a brand
new street so you know what the cost of that is but a mill and overlay is a fairly cheap approach
to fixing a street and it buys you another 10-12 years on that road before it finally gets to the
point where it does need to be reconstructed. But if that is the will of what everybody wants then
again I am perfectly willing to kick this problem down the road and a future council can deal
with it so tonight I will not support a franchise fee either.
Mayor
citizens that are present in the chamber as well as those of you that are watching online I think
tried to make part of my time as mayor is to allow the council to make the decisions and I do my
very best to let other council members speak first before I do but I do have some things that I
know how I feel. To Mr. Herman you are exactly correct. The 70 PCI is absolutely arbitrary.
But it represents, at least in my mind, it represents a policy that drives our actions. This is,
tonight is all about what do we do to help Mr. Oehme, give Mr. Oehme a target that he can
it 50. We could
make it 40. We could make it anything we want. In my view, and in fact this was the consensus
of the council at, within the last 3 months that though 70 is not a perfect index it is a target. So if
we were to stick with a target of 70 we would essentially say Mr. Oehme we, your job is to
maintain an average PCI or approach a PCI of 70. And if we ask him to do that then we also
essentially hamstr
53
Chanhassen City Council November 26, 2018
ve currently been doing and if he were a wise man he would come back and say take
spent on street repair in the coming 10-
with absolute precision but using the models that Mr. Oehme ha
that we believe needs to be spent and if we choose not to do that through current sources we have
to figure out how to put money into the street repair mode. And by the way I do support the
continuation of the 40 percent assessment to benefiting property owners. I will tell you early on
of the listening sessions that people were saying okay, well I was just assessed. What are you
going to do for my rebate? Well I realize that there is absolutely no fair way to get rid of the
assessments without doing
and rebate those that have been assessed within the last 3 years? 5 years? 10 years? We had
somebody come to a public meeting and said I had my street repaired 12 years ago. I want some
money back. So that contributed to my reasoning that the 40 percent assessment to the
benefiting property owner, whoever tha
continue the more validity it has so I would hope that future councils continue with that. Ladies
and gentlemen there are only two ways that we can collect money to pay for streets. Property tax
and franchise fee. Now there are other means. The assessment practice that Councilmember
Ryan spoke to. That is one way of doing it and I believe in that practice and I think the rest of
two ways, and y
because the County has authority to do that and we will likely see some of those dollars that you
pay into the County over time so the only two things we have is property tax levy and franchise
fee.
you take $5, if you take $10 a month from everybody in this city, $10 from a property owner
who has a property value of say $200,000 that $10 a month is a much greater percentage of their
that we can get funding from the property tax exempt properties of the 60 percent paid for by the
a franchise fee. Yes I
recognize that those fees will roll down to you. Yes the schools will have to increase their
operating expense. They will apportion that operating expense not over just the people in
as well.
the property tax levy alone because it ignores the tax exempt properties and that, those tax
exempt properties would bring in, I think the number I heard from you Mr. Sticha was between
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Chanhassen City Council November 26, 2018
or $60,000 needs to come from the rest of the city through a property tax. I believe the franchise
fee is fair for the citiz
question. Was there a unanimous consensus in all of your findings and one of the things you
said that was not unanimous by the way, but people said continue the assessment practice. That
a bigger burden on them than it is on the people who have the 5,000 square feet, 4 car garages,
probably 3 or 4 teens that are driving and using the streets more than that 80 year old couple.
Now the franchise fee can be modulated. Yes these are the fees that are in place but, to Mr.
more money than we need? Yes we can modulate down. We could also modulate down the
$384,000 levy that we make a decision on every year. And I do prefer a designated funding
repairs you want to do in 2019?
Paul Oehme: Well the Orchard Lane project is like $1.3 million dollars for the streets and then
for Lake Drive I think it was $800,000 or so.
Mayor Laufenburger: Okay so figure $2.8-$2.9 million dollars. So today, today we do not have
funds, if we do not do a franchise fee we do not have funds so that means we will dip into the
Steve Slammer, we cannot bind future councils and the future council could change any decision
that we make tonight. And then what it really comes down to for me is, I believe that Mr.
Raddatz I think you might have made this comment. The make-up of this council will change in,
thth
on January 12. Or 13. Whatever it is. But this council, this council has been in place since
1967 so we have acted as a council. Different people and some people in here may have been on
that council but this council generally makes decisions based on information we have today and
like Mr. McDonald has said, I think we have a responsibility to make a decision when we have
the information that we can use to make that decision. I believe that we have that information
and yes, it is not fair to everybody. But it does spread the cost of street repair across everybody
in the community including Mr. Kerber who lives on Powers Boulevard because he does use the
going to speak to the private, the homeowners associations. The private roads are private not
because the City said they had to be private. The private roads are private because the developer
chose to make them private. In developments some developments have city streets. Those
streets are built to city standards. The private roads are not. The private roads are private
because they are not built to city standards and yes the private road, the people who live on
private roads, I live in a homeowners association. My street happens to be a public road but I
use the other roads as well and the people who come out of the private road right across the street
fee, that
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Chanhassen City Council November 26, 2018
tonight, let me remind you. The property tax levy is imposed on the citizens with the percentage
of 83 percent going to the residences, and 17 percent going to commercial businesses. If we
implement the franchise fee the way Mr. Sticha has presented this tonight, the balance of
payments for all city services, including city streets, moves residence from 83 percent of the load
to 80.25 percent of the load and it moves commercial properties from 17 percent to 19.75 percent
of the load. A very small shift. Nevertheless it is a shift that takes the burden off of the
ee the
but I would like to see a franchise fee adopted and the ordinances adopted so Mr. Campion did
you want to make a comment?
Councilman Campion: When you
Mayor Laufenburger: Thank you. I would like to see the work of the council up til now, the
work of the citizens in sharing your views, many of whom are not with us tonight and the work
Campion go ahead.
his
from 2008 it was 73 and it fell at a steady rate from 73 down to approximately 66 by 2014 you
know so there was a pretty evident problem that was happening for a period of 6 years with that
steady decline.
Councilman Campion: And with projects that were performed over 2014 and 2015 it grew from
66 up to 78 in the course of 2 years with a handful of projects and so with all due respect that is
closely to see what affect addressing those outlier roads has. You can get a pretty big bounce in
a couple years from addressing a few big projects and the problem could look quite different.
Mayor Laufenburger: Thank you Mr. Campion. Any other comment?
Councilman Campion: No thank you.
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Chanhassen City Council November 26, 2018
Mayor Laufenburger: Is there any action the council would like to take tonight on this matter?
There being no action Mr. Oehme, Mr. Sticha, Mr. Gerhardt, thank you for your work and no
action at this time. That concludes our business tonight.
COUNCIL PRESENTATIONS. None.
ADMINISTRATIVE PRESENTATIONS. None.
Mayor Laufenburger: Okay I just have one comment that I want to make. Our Truth in Taxation
rd
meeting is on Monday, December 3 and this is an opportunity for any citizens to come in and
address the council based on the preliminary tax levy statements that were distributed to all
citizens I think within the last 2 weeks.
CORRESPONDENCE DISCUSSION. None.
Councilwoman Tjornhom moved, Councilman Campion seconded to adjourn the meeting.
All voted in favor and the motion carried unanimously with a vote of 5 to 0. The City
Council meeting was adjourned at 9:50 p.m.
Submitted by Todd Gerhardt
City Manager
Prepared by Nann Opheim
57