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CC VER 2021 01 25CHANHASSEN CITY COUNCIL REGULAR MEETING JANUARY 25, 2021 Mayor Ryan called the meeting to order at 7:00 p.m. The meeting was opened with the Pledge to the Flag. COUNCIL MEMBERS PRESENT: Mayor Ryan, Councilman Campion, Councilman McDonald, Councilwoman Rehm and Councilwoman Schubert. COUNCIL MEMBERS ABSENT: None STAFF PRESENT: Heather Johnston, Kate Aanenson, Charlie Howley, George Bender, Don Johnson, Lance Pearce, Matt Kerr, Kim Meuwissen, and City Attorney Andrea McDowell Poehler. PUBLIC PRESENT: Katie Schaumann Minnesota Valley Alliance (via Zoom) Chadd Larson Kimley Horn (via Zoom) Richard Hamblin 340 Sinnen Circle (via phone call) Nick Anhut Ehlers & Associates (via Zoom) Todd Simning 2166 Paisley Path (via Zoom) Brian & Keri Colvin 14870 Maple Trail SE, Prior Lake (via Zoom) Mayor Ryan: Good evening again, everybody. Thank you for joining us tonight. For the record, we have all of our council members present tonight. I do want to reiterate that we are still operating under emergency order which allows us to have members attend remotely and we will have one Council member joining us via Zoom tonight. Our first action is our agenda approval. Council members, are there any modifications to the agenda as printed? Please respond with a yay or nay. Councilman McDonald? McDonald: Nay. Mayor Ryan: Councilwoman Rehm? Rehm: Nay. Mayor Ryan: Councilwoman Schubert? Schubert: Do we need to move the Golf Zone out of the consent agenda and into new business? Mayor Ryan: It’s already been moved. You may need to refresh. Chanhassen City Council – January 25, 2020 2 Schubert: Nay. Mayor Ryan: Councilman Campion? Campion: Nay. Mayor Ryan: And nay for me as well, so we will proceed with the published agenda. PUBLIC ANNOUNCEMENTS: INVITATION TO FEBRUARY FESTIVAL Mayor Ryan: The City of Chanhassen is proud to announce the first community event of 2021, the 28th annual February Festival presented virtually and sponsored by T-Mobile. February Festival, I’m going to refer to it as Feb Fest because that’s what we do around here, will be held from Monday, February 1 through Saturday, February 6 and I invite residents and their families and friends to join us by participating in the virtual ice fishing contest and in-person medallion hunt. Over $4,500 worth of prizes have been donated by local businesses and will be awarded as part of the fishing contest and submissions will occur via email. Participants are invited to fish any of the lakes in Carver County for Northern, Sunfish, Crappies, Walleye and Perch. The annual medallion hunt which is sponsored by Charter Bank in Chanhassen will also be held beginning February 1. Clues will be posted on the City’s web page and on Charter Bank’s front door at 9:00 am each day. For more information or to register for the fishing contest, please visit the City’s website and I look forward to seeing everyone’s virtual submission. This is another one of those events that has to be altered because of COVID. Obviously, one of the favorite events here in Chanhassen is Feb Fest when we can all gather on Lake Ann. Unfortunately; with COVID we can’t do this this year so this is a great alternative. Thanks to the Parks crew and team for making an alternative option for everybody to participate. Go to our website for more information. PUBLIC ANNOUNCEMENTS: PRESENTATION OF MAPLE LEAF AWARD TO BETHANY TJORNHOM Mayor Ryan: We were planning on awarding the Maple Leaf Award to former Council member Bethany Tjornhom but tonight did not work out for her so we are planning on having that little ceremony for her at our next Council meeting which is February 8. We look forward to celebrating her at that time. ORGANIZATIONAL ITEMS: APPOINTMENTS Mayor Ryan: This again is something that we do at the beginning of all of our meetings. These are appointments done by the Mayor and so we have a number of appointments that need to be made so I am going to go ahead and make the proposed motion for the following appointments: Chanhassen City Council – January 25, 2020 3 Mayor Ryan moved, Councilman Campion seconded that the Chanhassen City Council make the following appointments: • Council member Jerry McDonald appointed as Acting Mayor; • Council member Haley Schubert and the Finance Director be appointed to the Fire Relief Association Board of trustees; • Council member Jerry McDonald to Seat A for a two-year term and Mayor Elise Ryan to Seat B for a three-year term on the SouthWest Transit Commission; • Council member Jerry McDonald as liaison to the Planning Commission; • Council member Haley Schubert as liaison to the Park & Recreation Commission; • Mayor Elise Ryan as liaison to the Economic Development Commission; • Council member Lucy Rehm as the liaison to the Environmental Commission; and • Council member Lucy Rehm as the liaison to the Senior Commission. All voted in the favor and the motion carried unanimously with a vote of 5-0. Mayor Ryan: Thank you, everyone for picking up your extra duties as a Council member. I appreciate it. Thank you. CONSENT AGENDA Mayor Ryan: Next up we have Consent Agenda. Tonight we have Consent Agenda Items 1-5. All items listed on the Consent Agenda are considered to be routine by the City Council and will be recorded as a single motion based on staff recommendation. There will be no separate discussion of these items. Are there any items that the Council would like to consider separately, please let me know by saying yes or no. Councilman McDonald? McDonald: No. Mayor Ryan: Councilwoman Rehm? Rehm: No. Mayor Ryan: Councilwoman Schubert? Schubert: No. Mayor Ryan: Councilman Campion? Campion: No. Mayor Ryan: Nor do I so may I get a motion to approve Consent Agenda Items 1-5? Chanhassen City Council – January 25, 2020 4 McDonald: So moved. CONSENT AGENDA: Councilman McDonald moved and Councilman Campion seconded to approve the following consent agenda items pursuant to the City Manager’s recommendations: 1. Approve City Council Minutes dated January 11, 2021 2. Approve City Council Special Meeting Minutes dated January 7, 2021 (City Council Interviews) 3. Receive Planning Commission Minutes dated January 5, 2021 4. Approve a Request for an Interim Use Permit for Excavation of Existing Wetland Along with Excavated Borrow Being Placed on a Location within the Parcel 5. Award Contract for Installation of Influent Flow Meter at East Water Treatment Plant (EWTP) All voted in favor and the motion carried unanimously with a vote of 5 to 0. Mayor Ryan: Thank you, everyone. VISITOR PRESENTATIONS: SOUTHERN VALLEY ALLIANCE Mayor Ryan: Visitor Presentations are included with each of our regularly scheduled Council meetings. Anyone wishing to address the Council on a matter that is not specifically on the agenda may step to the podium. Please provide your name and address for the record and then please address the Council. You will have five minutes to present your item. If your request includes an action item from staff or Council, please complete a Citizen Action Request Form so that we may appropriately follow up with your request. However, if you are simply making a comment with no required action, a form does not need to be completed. We have one scheduled tonight from Southern Valley Alliance. Are they joining us via Zoom? Katie Schaumann: Yes, I am here via Zoom. Can you hear me? Mayor Ryan: Yes, we can. Welcome! Schaumann: Thank you. I am just wondering do you want me to put my video on? Can you see me? I also have a presentation I could share my screen. Mayor Ryan: If you want to share your screen that would be great. We can’t see you but we would love to see your presentation. We would love to see both, but… Chanhassen City Council – January 25, 2020 5 Schaumann: All right. Are you able to see my screen? Mayor Ryan: Yes, we are. Schaumann: Okay, perfect. Thank you again for having me this evening. My name is Katie Schaumann. I am with Southern Valley Alliance. We are a non-profit organization that provides services and support for victims of domestic violence and we serve all of Scott and Carver Counties. I do want to give a quick warning as the topic I’m going to discuss may be triggering depending on your lived experienced so feel free to mute or step away for a moment while I discuss this. So Southern Valley Alliance is prevention and solution-focused organization and we partner with local law enforcement, county legal systems, social services, and healthcare providers to make the communities of Scott and Carver Counties a better, safer place to live. Our mission is to assist victim survivors and end domestic violence in our local community. I’ve been part of this wonderful organization for about six months, but Southern Valley Alliance has been serving your community for the past 39 years. Maxine Kruschke founded Southern Valley Alliance for Battered Women in 1982 after leaving a 32-year marriage where she herself was a survivor of domestic violence. Since then, we have been able to serve over 21,000 men, women, and children as they try to live a healthy, violence-free life. Last year we changed our name to Southern Valley Alliance to reflect a more-inclusive and progressive approach as domestic abuse can affect anyone, not just women. I am honored to meet with you tonight to share about the importance of recognizing and standing up for victim survivors within our community and share about the critical works Southern Valley Alliance is doing in the community. Did you know that one in three women and one in four men in the United States have experienced some form of domestic violence or abuse in their lifetime? In the State of Minnesota alone, more than 65,000 adults received domestic violence services from programs every year. We would like to think that it doesn’t happen in our community, but the truth is domestic violence happens everywhere. Southern Valley Alliance is the sole provider of domestic violence services in Carver and Scott Counties and we assist over 1,500 victim survivors every year. In Carver County alone, we provided services for 255 individuals last year and in Chanhassen alone, since the organization began, we have assisted over 1,000 victim survivors. Our programs and services include a 24/7 confidential crisis line, crisis intervention and advocacy, safe housing partnerships. Unfortunately, there is no domestic violence shelter in Scott or Carver County, but we partner with Minnesota Day One to find emergency shelter services nearby, and can also provide emergency hotel stays provided by local hotels. We offer support groups currently being held online. We have a children’s visitation center which provides supervised visits for children and their non-custodial parents, and we offer community engagement and education. Here’s a quick snapshot of our 2020 fiscal report. We were able to serve over 1,500 victim survivors; over 500 in Scott County and over 200 in Carver County, with 913 Crisis Line calls answered, over 500 volunteer hours, and almost 200 children’s visitation center visits. While Southern Valley Alliance assists all victims of domestic abuse, it’s important to highlight the prevalence and impact of dating violence on teens, especially during the month of February. Nationally, February is acknowledged as teen dating violence awareness month to help shed light on the Chanhassen City Council – January 25, 2020 6 issue of dating violence. Did you know one in ten high school students has experienced physical violence from a dating partner in the past year? Through increasing awareness, training, and building relationships, we can empower victims, educate our youth, inform our neighbors, and partner with agencies invested in the safety and wellbeing of our community. I want to thank you again so much for having me as a guest tonight and for partnering with us and ending the cycle of violence in Carver and Scott Counties. We can’t do this without you. Thank you. Mayor Ryan: Wonderful. Thank you, Ms. Schumann. Can we see you now on the screen? Schaumann: Yes! Let’s see here. Hello! Mayor Ryan: Hello, there. Thank you again for your presentation. Let me thank you and your organization for the amazing work that you’re doing in this area. It’s so important. The numbers are always so shocking to see I think for all of us. We get monthly reports from our Sheriff’s office and that is a statistic that is always included but when you look at the County as a whole and what you’ve done and the number of people that you’ve served in Chanhassen, it’s always a tough number to see. So thank you for the incredible work that you and your entire organization and all of your volunteers do for this community. It is greatly appreciated so thank you very much. Schaumann: You’re welcome. Thank you. Mayor Ryan: Council, does anyone have any questions? Nope. Lucy, I can’t see you so I can’t see a head shake. Do you have any questions? You’re on mute. Rehm: Thank you. I’m curious if there has been an uptick in domestic violence over the past year? I know with the pandemic and all I’ve heard that mental health crises have escalated. Just curious if there has been a noticeable increase? Schaumann: Yes, domestic violence and our services have been just an unpredictable as the virus itself. Towards the beginning of the virus last year it was seemingly not just in the state of Minnesota but across the country. Crisis line calls were down and we can only assume that’s because victim survivors were trapped at home with their abuser and they didn’t have that safe space of work or school to be able to reach out and seek the help that they were in need of. Throughout the year as things started opening up again and people were able to leave their homes, we did see nationally from the national domestic violence hotline. They saw a 10% increase in calls throughout the year and we have also seen that with our partnerships from our local police officers and sheriff’s departments. It has been definitely an interesting year. I’m very glad that we can have these services that we can offer for the community so it’s kind of a double- edged sword but we have this great resource but unfortunately we have to use it, too. Rehm: Thank you. Thank you for your work. I really appreciate it. Chanhassen City Council – January 25, 2020 7 Mayor Ryan: Ms. Schaumann, I have one question for you. I know you mentioned that there is no facility in Scott or Carver County. Is that something that you’re working towards? Schaumann: We are trying. We keep running into difficulties with both counties in getting permissions and funding and the ability to do that. So, hopefully sometime in the near future, but we keep running into some road blocks. Mayor Ryan: Okay. I’ll follow up with you on that. I’m curious a little bit about those road blocks but thank you for sharing that. I don’t think we have any other questions but again, I really appreciate and value the work that you are doing. Thank you for being a presenter tonight. I’m sure you go to schools as well to share this information in the school districts and high school, which obviously is extremely important. Thank you for your work. Thank you for being here tonight and what you provide our community is invaluable. So thank you very much. Schaumann: Yes, thank you all again so much for having me this evening. I really appreciate your support and partnership. Mayor Ryan: Thank you. Have a good night. Schaumann: Thanks. You, too. Mayor Ryan: I don’t see any other visitors here tonight so we will move forward with our Fire Department and Law Enforcement Updates. FIRE DEPARTMENT UPDATE Johnson: Good evening, Mayor and welcome new council members. This is the Fire Department update for the end of the year as well as December. Staffing is strong at 42 paid on-call firefighters. We have the luxury and the honor to do a little ceremony for an icon in the Fire Department as well as probably the City of Chanhassen with Jack Atkins on January 10 working his last shift. He worked his last four-your shift on duty crew and they did some things around the City but then we did a little surprise at his home. We had most of our stuff lined up on West 78th and a sendoff on the radio. Hopefully I’ll have some recordings to share with you later on. It was Jack’s request that we hold off until later on in the year when COVID restrictions let up, where we can actually bring Jack in and honor him here with the Council so that will be our plan. We don’t normally do that the day of anyway so… I’ll bring Jack in to let the Council thank him for his 30 years of service. The Fire Department responded to 83 calls of service in December. Call breakdowns for our newer members. The 13 day-only and 41 duty crew only are scheduled shift calls which require only a small percentage of our population of our Fire Department to show up. Day only is covered by three of us that are full time during the day, as well as a handful of folks that, Jack being one of the main folks that were doing that during the day for us. Duty Crew is obviously for the calls that we handle just when duty crew is on… The nice thing about that is if you look at 29 general alarms with our Fire Department, that’s 29 alarms that go out to Chanhassen City Council – January 25, 2020 8 all of us. For instance, back in 2019 we ran 640 general alarms. In 2020 we ran 200… A huge retention in recruitment model for us. Just a tremendous work down with the firefighters. It certainly is nice when the… Out of those 83 calls, 44… Matt Kerr: Don? Don? Can you hear us, Don? Mayor Ryan: Chief, could you hold on one second? Kerr: Don, I think the mic, I think it got turned off there maybe? There’s just a power button right up top there. Sorry, we are having a hard time catching you on Zoom. I know they can hear you but sorry to interrupt. Johnson: Here we go. Can you hear me now? That’ the first time I ever really needed a microphone to carry. Firefighter responses which were two car fires, one deck fire which we were happy and lucky to be at Lake Susan Hills Apartments on a medical when the crews on scene noticed there was a deck fire on the exterior of the building, as well as two mutual aid responses to Carver and Excelsior. Just some quick numbers for 2020. We ran 917 total calls which represented about a 8.5% decrease in reduction from 2019, although our five-year average remains at 856. Five-hundred thirty-five (535) of those which represented 58% of the overall calls…responses. Those are actually down 6.2%... I am happy to report that working with Carver County Public Health over three different dates, 95% of the Fire Department was able to get their first dose of vaccine. In talking with some of my cohorts both regionally and here in Carver County, most Fire Departments are ranging about 50%. I’m not quite sure why. It is a personal decision and I am extremely proud between Carver County’s offerings to get our crews in as well as several of them are…working full time for other agencies…to get their vaccines there. We are at about 95%... We start this week with the second dose so Thursday, Tuesday and the following Tuesday we finish off with most first responders… So, kudos to Public Heather for that. In summary, several of the department members assisted with painting the upper level of the fire station. As you know, we did a lot of renovations in the early part of 2020 in preparation for the duty crews…leftover items and we still needed time and purchased with the Relief Funds. I did some training for Carver County and we’ve got several meetings that we attended virtually. We’re working with ice rescue tonight. Kare 11 did a very quick spot on that, thanks to our social media blast. I did have a resident call me today wondering if tonight the residents were supposed to show up at Lake Ann for the training in ice rescue, so I did explain that it was for training for us and we were advising them that we were doing it. Social media is reaching the community. The only other thing I would say is if you would go to the graphs and charts that I provided, there’s a graphic near the bottom that illustrates with red dots that has the calls for December, but more so we’ve included the calls for 2020. You can see that the Fire Department over 2020, those 917 calls, has reached most of Chanhassen. We’re probably still in the 35-40 range for going out to mutual aid fires but we have served a lot of this community over the year. With that, I can stand for questions. Mayor Ryan: Wonderful. Thank you, Chief. Council, any questions? Lucy, any questions? Chanhassen City Council – January 25, 2020 9 Rehm: No, I don’t have any questions. Thank you. Johnson: Thank you. Mayor Ryan: Now we can really hear you. Lt. Pearce, welcome. LAW ENFORCEMENT UPDATE Lt. Lance Pearce: Good evening, Madam Mayor and Council. Can you hear me? Mayor Ryan: Yes, we can. Lt. Pearce: Well that’s too bad. Okay. So I’m going to cover November and December for the Sheriff’s Office. In November we had 849 calls for service. December we had 813, there was a typo in the graph that I gave you. I transposed the 31 to 13. Both months calls were dominated with suspicious activities and medicals which is what we want. People need some help or see something, they should call us. A couple of the metrics that I’m following for Council and have been this year. I appreciated it, the lady from domestic violence shelter because that does show in our statistics as well where the number of domestics and the number of domestic assault arrests have both increased by about 10% as we have seen throughout the year. In particular, we had a significant number of arrests in December for domestic assault. I think we had 8 total. The mental healths have been trending in a similar pattern as last year and then the notable crime for the year is, we are significantly increased in the frauds and thefts and that has to do with mostly thefts of packages and mail theft so I have been tracking that for Council as well for 2020. Highlights from the Sheriff’s office for the last couple of months and leading over into January, we had no notable law enforcement issue for the entire County for the November 3 General Election and also for the January 20 inauguration. Calls for service for the entire year. In 2019 we had 10,569 calls for patrol. In 2020, 10,477 which is a decrease of less than 1% in spite of COVID compared to last year for 2019. The only other notable one was, everybody can remember the December 23 blizzard, and we typically have within the City of Chanhassen have between 60-80 calls for a typical weekend. On December 23 we had 83 calls in one day so we were a little busy. With that, I stand for questions. Mayor Ryan: Great. Thank you. Any questions, Council? I have one question. I get, just reading on social media a lot of people are curious and I’m hoping you can reiterate the importance of if a package is stolen off their front porch or there is mail theft of potential fraud, that it is okay to call the Sheriff’s Office or the… Lt. Pearce: Absolutely. There’s a misconception that doesn’t mean anything but your name is on the package, your name is on your mail and that could translate left of your identity which translates into a whole bunch of other potential problems. So absolutely, if you’re missing something, please call us. Chanhassen City Council – January 25, 2020 10 Mayor Ryan: Okay. And I appreciate you clarifying that because a lot of time people think they should only call if it’s an emergency and go about trying to find other ways to deal with it, so thank you for making that clarification. Lt. Pearce: Yes, absolutely. If you think something is missing or you are expecting something we can help you try tracking that down. Mayor Ryan: Thank you. And thank you for following that important trend in terms of domestic violence and mental health and bring that information back to us. It’s very important. PUBLIC HEARING: CITY PAVEMENT REHABILITATION PROJECT NO. 20-05: ORDER IMPROVEMENTS AND AUTHORIZE PREPARATION OF PLANS AND SPECIFICATIONS George Bender: Good evening, Madam Mayor and Council members. Mayor Ryan: Good evening. Bender: This evening I would like to discuss our 2021 City Pavement Rehabilitation Project and on Zoom is our consultant, Chad Larson, as well if he is needed for any questions or any support. This remains Project No. 20-05. These are our project areas in gold here. There’s 6.2 miles proposed street rehabilitation which will include some spot curb and gutter being completed. In addition, we will be doing some rehabilitation of public utilities. For example, that would include some water main gate valve maintenance where we have some valves that were installed in the late 80s early 90s that have mild steel bolts holding the bonnet together and those need to be changed out with stainless steel bolts due to the corrosive soils in Chanhassen. In addition, we will be doing some inflow and infiltration improvements in the sanitary sewer system. Regarding the storm sewer system, we will be rehabbing some structures an adding sump manholes to the system to improve water quality and minimize some maintenance for future pond cleanouts. In addition, throughout the roadways where needed we will be adding and/or replacing drain tile with the project. There is one pond cleanout project in the Trappers Pass area that is proposed to be cleaned out with this project and then, there’s not many but where necessary, we will be doing ADA pedestrian ramp improvements with the project. The need for this project is driven by the City’s goal to maintain a condition index of 70 throughout the network. Currently, we are just below that in this project would raise it to 72.3. That’s an estimate but it would raise it back over our goal and keep us in the range that we want to me. One thing I kind of wanted to go back over is that this project was originally proposed in 2020. It was the same six areas. These areas, the design was completed and it was bid out but ultimately it was not awarded to the contractor to be constructed due to funding challenges of 2020. When we looked at these areas, what we want to do in 2021, we are proposing is, you know we considered that this was already designed. The need has not changed in these areas and the budget is in place in 2021 so that’s why the same six areas are being re-proposed. The scope of the project, essentially there wasn’t a whole lot to Chanhassen City Council – January 25, 2020 11 change. We did notice a few things like a couple of sump manholes that we wanted to add, a couple things that we changed because we are updating our Detail Plates and Specifications, but the most major thing with did was add a pond cleanout in the Trappers Pass area. The reason for that is, in coordination with our Public Works Department, was identified that that should be done. Our Street Utility Superintendent worked with the contractor to see whether they could handle it or whether, because we didn’t feel that it could be self-performed and at that point we decided to add it to the project. The feasibility study for this was updated for the project and that was accepted at the last Council meeting on January 11. At this point, I want to go into a general street project summary here. Any costs related to utilities are covered separately by Utility Enterprise funds so they are not included in the street breakdown costs which I will be going into. The costs related to the street are covered by a revolving assessment fund and that revenue stream is basically from the franchise fee, a tax levy, and from the private special assessments that are part of the street project funding. Franchise fees are charged by the electric and gas utility companies which utilize the right-of-way in Chanhassen to provide their services. Going into the City’s assessment practice, that defines that the City will cover 60% of the costs related to the street and then benefitting properties will cover 40%. Minnesota State Statute 429 regulates the practice of assessments. The franchise fee revenue is being used again to cover a portion of the 60% portion that the City is responsible for. One thing that we wanted to point out that we hear commonly questioned and we want to make sure that we clarify from some members of the community inaccurately feel that the franchise fee revenue is not intended to offset the private property assessments. That is not the case. It is there simply to help cover the City portion. As I mentioned, we had six areas in this project that were highlighted on the bigger map and this will break down. We named the six neighborhoods for simple communication means but this is our Trappers Pass area. This is our largest area that we will be doing. This is the Marsh Drive area south of Highway 5. There’s two other smaller areas; one is the Lake Lucy Road area east of Powers and the Redwing Lane area south of Carver Beach Road. Then there’s the Kurver’s Point Road area and the Choctaw Circle area. The one thing you will notice here is I had some yellow areas and some blue areas. The yellow areas are representing areas that will be full-depth reclamation so essentially we will grind up the entire pavement surface and replace it. The blue areas are mill and overlay areas where we will grind off a portion of the bituminous surface and replace it with the exact amount that we grind off. I did want to review a little bit some of the public engagement that’s already been done just to provide the understanding of how many times the City has reached out. There’s certainly been more and more opportunities for people to call and talk about it and get their questions answered but just a few things that have been done in 2020. Two separate postcard invitations went out to each property and they were invitations to two separate open houses that were hosted. One of those open houses was at the library in the wintertime and one was at Lake Ann Park in the middle of the summer. At these open houses there was the opportunity for residents to provide comments to us, either directly or through comment cards. There were two separate public notification letters that went out indicating the two public hearings that would take place during the process of getting the project to being able to be bid. In addition, we created a project information web page on the city’s website which includes a Notify Me sign-up option so that anybody could be notified every time there’s an update posted to that. One thing I didn’t list here but I did want to mention because the Chanhassen City Council – January 25, 2020 12 project did not move forward. There was a project cancellation letter that went out along with a Q&A regarding why the road projects were cancelled in 2020. In 2021, for this public hearing, another public notification letter went out to each property. We will be hosting another open house before the assessment hearing and a postcard invitation will go out regarding that as well and then one more additional publication letter prior to that assessment hearing and we will continue to update the project web page. At this point I would like to move into the budget real quickly. This is a $5.2 million project so it is significant. The revolving assessment fund as I mentioned earlier covers the City portion which is 60% of the costs related to the street which is essentially the project costs that are not related to utilities. So that’s a little over $2.2 million just for the City’s portion and another $1.5 million for the cost from the private portion that goes to the benefitting properties. That’s 40% of the cost for the street costs per the City’s assessment practice. There’s a little under $.5 million being applied to the storm system and surface water utilities, $360,000 to the sanitary sewer system and $610,000 for the water utilities. This kind of breaks down the cost if you re-add up the numbers a little bit differently but street improvements is just under $3.8 million and that’s just kind of going towards that street portion. Then the little bit of difference in these numbers is kind of related to the indirect costs and how they are broken out. But again, that’s $5.2 million. To break down how the assessments, what the cost will be, the feasibility study included preliminary assessment rolls. In the summary of that for the 40% portion that’s assessed is the Trappers Pass area is a little over $3,000, Redwing Lane is $2,000 about. Choctaw is in the same neighborhood. Marsh Drive is $2,200. Lake Lucy Road area if $3,000, and the Kurvers Point Road area is almost $4,300. One thing that we did want to make sure is clear, the assessments amounts were calculated based on the project-specific areas, not on a project-wide basis so that the cost being charged were representative of the work being done in the neighborhood. Here’s our estimated schedule to bring this project to fruition. Tonight we are here to host the public hearing and order the contract documents moving forward. In a couple of weeks we will be back to approve the plans and specifications which are basically the minor changes that we wanted to make, and authorize the project to go to bid. A little over a month later we would have our bid opening and then following that we would be doing a neighborhood meeting which we are projecting to have virtually. We will do what we can. After that, at the April 26 meeting we would be having another public hearing which will be specific to the assessments and possibly award the construction contract. After road restrictions go off we would be hopefully starting the project early in May with a completion in 2021 before it freezes up in November. With that, staff recommends proceeding with the project and ordering the plans and specifications and approving the preliminary assessment rolls. With that, that will be the motion that we will be looking for tonight after the public hearing and we would be at the portion where I could either take some questions or you can open up the hearing to the public. Mayor Ryan: Thank you, Mr. Bender. For Haley and Lucy this is your first public hearing so I wanted to share with you the process of kind of how we do this. So we get the staff report and then I’ll ask if Council has any questions, just based on the report that you were given of staff. Then open the public hearing to give opportunity for the public to speak. Close the public hearing, and then there’s more opportunity for further questions and discussion so if you don’t have any questions at this time, there’s still more opportunity for questions. I just wanted to Chanhassen City Council – January 25, 2020 13 clarify that. Thank you for the presentation. Council, before I open the public hearing, do you have any questions of staff? Councilman McDonald? McDonald: Yes, Mayor, I do. Mr. Bender, you already held at least one public meeting I believe for this year’s projects, is that correct? Bender: We hosted two in 2020 related to this project but we did not have an open house as of yet in 2021 and of course, this is the first public hearing. McDonald: At this point, notice has gone out that this project is going to be taking place? Bender: Yes. Every property has received a public notification letter about the project which includes notification of this evening’s meeting. McDonald: Have you gotten any feedback from residents about the project, about either the cost or why us type questions? Bender: I have. I have a log in front of me that I intend to share this evening as kind of the public hearing portion of it. If you want me to go through that now, I can. But I’ve received a total of 10 emails and calls to date. McDonald: Okay. I can wait for you to share that as part of the public hearing. That would be fine. I just wanted to know if you have received any comments or feedback yet. Bender: Yep. McDonald: I have no further questions at this time, Madam Mayor. Mayor Ryan: Thank you. Councilwoman Rehm, any questions at this time? Rehm: I have no questions at this time. Thank you. Mayor Ryan: Councilwoman Schubert? Schubert: No. Mayor Ryan: Councilman Campion? Campion: No. Mayor Ryan: Okay. Just a couple of points of clarification. I know you are going to read the comments that you have received. Again, for historical perspective, there are two new council members, these projects were planned for last year and that was kind of at the peak of everything Chanhassen City Council – January 25, 2020 14 with COVID and the concerns of people losing their jobs or potential and there was just a lot of, I guess, fear in the community and the country. So, as a Council we decided to postpone all road projects for last year. That’s why they are coming back this year but it is the same ones that reviewed last year. I just wanted to give a little bit of background on that. A second piece is that’s what you mean when you talk about funding challenges, right? Was from the perspective of residents, not funding challenges for the City? Bender: Yes. Mayor Ryan: Okay. I just wanted to clarify that. Then, the last piece from communication, and we can get into this later, I know there was some feedback last year that some of the postcards. I don’t know if it was the graphics or the names of the streets, but there was feedback that some of the streets weren’t on the postcard and so they didn’t feel like they had been notified correctly. So I remember that it caused a little bit of confusion, specifically in the Trappers Pass area. I don’t think all of the roads that were going to be touched were identified so they kind of came into it at the eleventh hour and didn’t feel that they were part of the process in terms of neighborhood meetings. So when you look at your communications if you wouldn’t mind just double checking that the streets are accurately identified as part of the communication. It would be appreciated. Bender: Yes, no problem. Mayor Ryan: Okay. Thank you. With that, I will go ahead and I hereby open the public hearing. Please step forward and state your name and address for the record. We also have our phone line open for anyone that wants to call in and the number is on the screen but 952-227-1630 and we will wait a couple of minutes to see if anyone calls in. If not, then Mr. Bender if you want to read the comments into the public hearing at that time because we have nobody here in the chambers. Charlie Howley: [answers phone] Good evening. You are live on the Chanhassen City Council meeting. Please state your name and address for the record and provide your comment. Richard Hamblin: This is Richard Hamblin, 340 Sinnen Circle here in Chanhassen. The proposal for the street rehabilitation is unnecessary I think. I think it’s overkill. In fact, if you look at the Marsh Drive area, the streets in that area are no worse than Lake Drive, which is the main artery that feeds these areas, and that street is not part of the project. So, in my opinion, if that’s not needed for repair, neither is the rest of the Marsh Drive project. Howley: Okay, Richard. That’s your comment? We’ll answer it after we get through all the comments, if that’s okay? Hamblin: Okay, fine. Chanhassen City Council – January 25, 2020 15 Howley: Okay. Stay watching the video so we can make sure we answer it. Are you still there? There’s nobody else on there. Mayor Ryan: Is there another call? We’ll leave the number open, or the line open and the number will remain on the screen. At this time we are going to move forward with the comments that were submitted via email to the Engineering Department and then if a call comes in while you are reading it, we will just take a pause in reading them, answer the phone call, and add it to the list. Bender: I received a call from a Pamela Murphy, 8021 Hidden Court in the Marsh Drive area. Essentially, she expressed that she would prefer to see the project put on hold for another year because the pandemic is not under control yet and people are still not working. The assessment would essentially be another hardship and the neighborhood streets are in good enough condition to wait. I received an email from Eric Anderson at 6580 Troendle Circle in the Lake Lucy Road area. Eric expressed support for the project and the proposed assessment. He indicated that neighborhood streets are in poor condition and need to be rehabilitated in order to support the value of the neighboring property. I received a call from Bob Ayotte at 6213 Cascade Pass. We discussed some funding questions but generally he is in support of the street rehabilitation project and feels it is needed. I received a call from Erica Arne at 40 Basswood Circle. She had a question related to drainage and storm pond near their property and I responded to their questions. It was more of a comment related to the improvements. She was not for or against the project or didn’t indicate one way or the other. I received a call from Frank Zimmerman at 6291 Near Mountain Boulevard in the Trappers Pass area. He included an email and an attachment and he gave a multitude of reasons why he believes the special assessment should not be charged to fund the project. He agreed that doing nothing was probably not the best approach but he does not feel that the funding mechanism of utilizing special assessments is the way that the City should be charging for the work. There was follow up after I responded to him and Mr. Zimmerman wanted to hear this evening a rationalization for essentially spending more money than we have and the motivation behind it. I received an email from Diana Davis at 6387 Oxbow Bend in the Trappers Pass area. She supported the project, indicating that the poor conditions of the street devalue their property. She also indicated that she wishes the City paid a larger portion of the improvement because they pay a lot of taxes. In follow up, we talked about the assessment options for repayment and I explained to her that one option was to put it on property taxes and pay it off over a period of 8 years, which she thought was good and hopes that everybody know that before they make their decision. I received an email from Robert Langley at 8134 Dakota Lane in the Marsh Drive area. He does not support the project due to the assessment burden and the financial impacts of COVID-19 on their budget. I received a call from Christine Ostbye at 71 Twin Maple Lane in the Kurvers Point area. This was more of an improvement question related to requesting drain tile along Twin Maple Lane. There was no commentary regarding being for or against the improvements. I let her know that as part of the design there is drain tile planned along Twin Maple Lane to be added and she was happy to hear that. I received an email from Sandy Carlson at 7271 Kurvers Point Road. This was another improvement inquiry that was related to two ponds in the Kurvers Point Road area and requesting that they be cleaned out. I Chanhassen City Council – January 25, 2020 16 received this this afternoon and I forwarded that concern on to our Water Resources to kind of research that and get back to the resident. There was one other call that I received. That was nine that I just had. This was one that did not want to be on the project record but they were supportive of the project. To kind of tally up a little bit, there was four for the project, three were against the project, and three commented or questioned improvements. Mayor Ryan: Great. Thank you, Mr. Bender. Bender: One other piece of information that I kind of wanted to add to that to compare this to 2020. At the same public hearing related to improvements we had 39 calls and emails. Mayor Ryan: Okay. Thank you for that statistic. That’s important information so thank you. Howley: Madam Mayor, maybe an answer Mr. Hamblin, the guy who just called in? His question about Lake Drive East being just as bad as Marsh Drive. We would love to do that as well but that’s a budget decision. We can’t just go and do every road we want to. Lake Drive East is an MSA route so that would be funded by the MSA and that is scheduled for 2023. Mayor Ryan: Thank you, Mr. Howley, I was going to ask you to share that information that it is an MSA route so I appreciate that. No more phone calls? I want to make sure that we are good to go before I close the public hearing and bring it back. If there is, leave it open for. Thank you, with no more phone calls, thank you for reading the other comments into the record and nobody here in the chambers I hereby close the public hearing. I keep hearing beeps? Howley: No, that was. Sorry. [phone rings] Oh, we got someone. Shall we give it a go? Mayor Ryan: Yes, please. Howley: Good evening. You’re live at the Chanhassen City Council meeting. This is the public hearing for the 2021 Street Improvement Project. Please state your name and address for the record and your comment. Hamblin: Yes, this is Richaard Hamblin, 340 Sinnen Circle. I heard the response in regard to Lake Drive. If we’re going to prioritize cost, what I would say is do Lake Drive first. That by far carries the most traffic. The other residential areas don’t have the traffic and so they are not wearing as fast. That’s my comment. Mayor Ryan: Mr. Hamblin, if you wouldn’t mind staying on the call right now. I’m going to have Mr. Howley just explain the difference between Lake Drive East and that road and the cost associated with where that funding comes from versus a residential street and road. So if you wouldn’t mind just staying on the call in case you have a follow-up question you might as well just stay on the line. Mr. Howley, could you answer the question please? Chanhassen City Council – January 25, 2020 17 Howley: Yes, Madam Mayor and Councilmembers. We have a certain number of roads in the City that are collector-type roads, meaning they carry more traffic is the term he used, not the neighborhood roads, and when they are identified as collectors we can identify them as Municipal State Aid routes, MSA for short. By doing that, we are allowed to obtain funding every year from the state which comes from gas tax revenue and things like that and it’s portioned out to all the cities who are over 5,000 people in population and it’s used to maintain and repair and reconstruct those State Aid routes. [phone rings] Is that you, Mr. Hamblin? Hamblin: Yeah, I’m sorry. I dropped the call. Howley: Okay. We have a lot of needs in repairing roads and we want to leverage our MSA dollars to the best of our ability and so we wouldn’t necessarily want to take our revolving assessment fund money to do an MSA road. We want to fund the MSA projects with the MSA funds and we want to fund our local roads with our revolving assessment funds. That’s why even when we prioritize, we don’t prioritize a collector street versus a local street. We want to keep the funding segregated and prioritized within those funds. That answers? Mayor Ryan: Yeah. Hamblin: I understand that portion; however, I do support the person who said the assessment ratio is probably a little skewed heavy toward the residential. I would recommend that that be looked at as well. Howley: What he is referring to there, Madam Mayor and Council, is the 60% city pay, 40% assessed to the benefitting properties. That’ our policy and we uniformly use that policy on assessable projects until the policy changes. Mayor Ryan: Perfect. Hamblin: Who has the authority to change the policy? Mayor Ryan: The City Council does. Hamblin: Okay, so that was the assumption that residents would have to bring before the Council, I assume? Mayor Ryan: Correct. Yes. Hamblin: Okay. All right. I got it. Mayor Ryan: Great. Thank you very much for calling. I appreciate it. Howley: Nothing’s ringing. Chanhassen City Council – January 25, 2020 18 Mayor Ryan: Well, it’s closed but I’m glad he called back because I thought he might have a follow-up question so I appreciate him calling back. I know you’ve been around for a while, Mr. Bender. How far back does the policy go for the 60/40 percent. Any ideas? Bender: I couldn’t tell you how far exactly it goes back. I can tell you the last time it was updated was 2014 and I would have to look back at exactly what those updates were. I don’t believe it changed the split between 60 and 40. I think it was more changing language and improving the frequently asked questions but I know it’s been around a long time. I’m trying to remember off the top of my head whether it says it on it, when it came about. Kate, do you happen to remember that at all? Aanenson: No, I don’t. Mayor Ryan: Okay. It was just, I mean I didn’t know if you knew off the top of your head how long that policy has been in place. Obviously, it was I think 2018, Councilman McDonald? Councilman Campion? 2018 that we approved the franchise fee, right to pay for, to increase the amount we could spend for the 60% to get up to the $3.6 million. Howley: Madam Mayor and Council, I think you considered it in 2018 and finally adopted it in 2019 because we didn’t get the funding until 2020, which was partially your funding. We will certainly find out when the City established the 60/40 split policy and send that out to you just so you are aware. We’ll look that up for you. Mayor Ryan: Okay. I appreciate it. McDonald: If I could, Madam Mayor, I’ve been on Council 2007 and it was 60/40 then and it was 60/40 before I came in so it’s been in place for a number of years. Mayor Ryan: Okay. Perfect. Thank you for that clarification. If you get dates it would just be interesting for us to know that policy. You got it, Mr. Bender? Quick. Bender: It is in the frequently asked questions so if anybody’s really curious about the assessment practice you can go to the City’s website and in the search box in the upper right- hand corner type assessment practice and that will get you to not only the practice itself but also this frequently asked questions document that’s currently on the screen which indicates on the third question that 1993 is the answer. Mayor Ryan: Perfect. Wonderful. Well, thank you. The FAQ, that sheet was developed as part of the franchise fee process that we went through, right? Does it include the discussion on franchise fee? Is it that document? Chanhassen City Council – January 25, 2020 19 Bender: I believe that is incorrect. This was in place when I started and the franchise fee discussion kind of came to the forefront after I started. This document has been in place longer than that. Mayor Ryan: Just for public knowledge I think it’s important. I know we did, this is an important document on assessments but there still seems to be some questions about franchise fees, how those are used, how we arrived at that decision and I believe that document is still out on our website. I would encourage folks to take a look at that as well. Thank you, residents for calling in. Go ahead, Mr. Campion. Do you have a question? Campion: Madam Mayor, I just wanted to make a comment along those lines. When we were contemplating the franchise fee back in 2018, we did talk about changing the assessment practice and potentially assessing less to residents or potentially covering the entire street improvement through a franchise fee. Either of those options got pretty heavy objections from the public because the people’s road who had been repaired in the last few years, or no matter how many years you go back to 1993 and then come forward and say, well I was assessed more. Now you need to compensate me when you’re going to charge these other residents less. Just for the record I thought I would bring that up. Mayor Ryan: Thank you, Councilman Campion. I think that’s an important thing to bring up. We did have a lot of discussion around that, if we should change the policy, and we got a lot of pushback in terms of the assessment and making any changes to the assessment. But if residents want to bring something forward we always encourage you to do so. Feel free to do that but thank you for that clarification. Mr. Bender, I have one other question you had brought up in your presentation when you talked about project need, and maybe this is something we can identify specific to Marsh Drive because I think those were the ones that were in opposition. You made note that our goal is 70 or72 and I’m guessing just the average is 69, but do we know what the OCI rating in Marsh Drive is because I think it’s important for all of us, especially for new Council members, that we don’t typically do road projects when roads are at 69. They are usually considerably lower so I just want to make sure that we clarify that point, that the roads were not 69. Maybe that’s an average but where is Marsh Drive? Howley: Madam Mayor and Council, you’re right. That 69 is city-wide average, not 2020 project. George has on his PowerPoint the exact OCIs of the Marsh Drive area and all six areas if we wanted to look at them. If they want to put the PowerPoint back up. There we go. Basically, it ranges from 27 on the low end to 39 on the high end. So these need repair. Mayor Ryan: Right. And I think that’s important for us when we are making this assessment to understand what those numbers are because we don’t, unless there’s the need when we go through this process of evaluating roads, we really look at those numbers so for clarification, it’s kind of hard to read on the screen but you said the low end was 27 so that, the goal as a city, which again we recently in the last couple of years evaluated is 70 is still the target number of the OCI rating we want to hold as a City standard as kind of our policy and we agreed that 70 Chanhassen City Council – January 25, 2020 20 was an appropriate number meaning 100 is. I want to make your that you and Ms. Rehm are on the understanding that 100 is a perfect newly-constructed perfect road and so 70 is where we have determined as Council as the road kind of our average road. So these roads sit well below 70. I just wanted to make that point of clarification. With that, let me see if there are any other questions. Councilman McDonald, any other questions for staff at this time? McDonald: I guess one of the things that Mr. Bender brought up that I would like to put on record a little bit. You talked about being able to finance this and I think you said the period was 8 years. Would you explain, what are we looking at? What would be the interest rate that the City charges? Typically on a project like this if you add it to your property taxes, do you know what that amount would be on a yearly basis. Bender: In this case I haven’t calculated that specific to this project. Just bringing up quickly what the current prime rate is. The Wall Street Journal has it at 3.25% so the assessment practice states that 2% would be added to that so the interest rate offered to the residents would be 5.25% if this going today. The street costs as they breakdown go to that assessment number that I explained previously and showed. Then that would be broken out at over an 8-year period on their property taxes if they choose not to pay it off up front. The one thing that we work with the Finance Department on to help explain the 5.25% may be a little bit high but it’s calculated at a simple interest, not a compound interest. Usually to get that number, if I get that from a resident, I put then in contact with the Finance Department and they get that question answered correctly for them. They’re the experts at that part. McDonald: Okay. Thank you. At least you’ve given enough detail that kind of lays out what the process is and how we arrive at the numbers that we are going to arrive at. As you say it’s simple interest so it does make it a fairly easy calculation. Thank you. Mayor Ryan: And as follow up on that. So if the project goes this year and they decide to put it on your property taxes then they wouldn’t be paying in until 2022. Howley: I believe that is true. Bender: I believe they have to pay it off by a certain date in 2021. I think they have to pay it off the year that they are doing it, honestly. I think that’s in the assessment practice, too. If they are financing it, correct, then the first payment would go in 2022. Mayor Ryan: I’m sorry. If they put it on their property taxes and they are financing it, they it would come on, I remember talking about this last year when you were talking about delaying it that they wouldn’t have to pay until 2021 so I just want to clarify that if they decide to go that way it would be 2022. Okay, Bender: I misunderstood. Sorry. Chanhassen City Council – January 25, 2020 21 Mayor Ryan: No worries. Councilman McDonald, did you have any further questions? McDonald: No further questions at this time, Mayor. Mayor Ryan: Councilwoman Rehm, any questions? Rehm: No. I just wanted to point out that it was a very helpful PowerPoint to see it all laid out like that. That was very helpful. No comments or questions at this time. Mayor Ryan: Thank you. Councilwoman Schubert. Any questions or comments? Schubert: No other questions. Mayor Ryan: Great. Thank you. Councilman Campion? Campion: No further questions. Thank you. Mayor Ryan: All right. I don’t have any further questions either. Thank you for the presentation and answering the questions and reading the comments that you received into the record. I appreciate that. With that, is there? If you won’t mind putting the motion back up on the screen? Thank you. I would entertain a motion, please. McDonald: Mayor Ryan, I’m trying to remember what we did last year on this. I’m not sure if I can vote on this because I live within the area so I believe that I need to recuse myself from a vote. Ryan: You can vote for the plans and specs but I think you can’t vote on the final… Howley: Mayor Ryan, if I remember correctly, that was the guidance that you’ve got to recuse from the assessment hearing, adoption of those. But to move forward with the plans and specs. Resolution 2021-02: Councilwoman Schubert moved and Councilwoman Rehm seconded that the City Council orders improvements and preparation of plans and specifications for the 2021 City Pavement Rehabilitation Project No. 20-05. All voted in favor and the motion carried unanimously with a vote of 5-0. Mayor Ryan: Again, that’s just to move forward with the plans and specs and it will again come back to the Council for final approval and there will be another public hearing and opportunity for residents to provide feedback. If you do have questions either about the project specifically, please call our Engineering Department. If you have questions specific to the financing, please contact our Finance Department. Thank you for that. Chanhassen City Council – January 25, 2020 22 NEW BUSINESS: CITY MANAGER CONTRACT Mayor Ryan: Next up, we have the City Manager contract. As many of you know, we have former City Manager Todd Gerhardt last summer and we have had an interim city manager for the past many months. During that time we began a process to hire a full-time city manager. We hired a recruiting firm, staffing firm, to walk us through the process, identify candidates to bring back to the Council to review. We’ve been going through this process for the past many months. Just this past week we interviewed for our final four candidates so that is where we are at right now. We had a discussion earlier in the evening at our work session to continue the conversation about the candidates that were recently interviewed. I will wait for a Council member to potentially make a motion here but what was discussed in the work session is that we still needed more time to discuss as a Council. We have four great candidates but there was just some more conversation that needed to be had following our work session. So our intent, unless there was a change which is obviously possible, but the intent was to continue that conversation after our Council meeting back in the work session for further conversation. With that, if there is a Council member that would like to make a motion at this time I would entertain that? McDonald moved and Campion seconded to table the City Manager Contract until after Council has had the opportunity to deliberate further on our selection and our choices. All voted in favor and the motioned carried unanimously 5-0. NEW BUSINESS: OVERVIEW OF USE OF TAX INCREMENT FINANCING Aanenson: The next three items are related, all relating around a project we have been talking about TIF on. To give you a background on the TIF we actually have our financial consultant, Nick with Ehlers is on the line and he is going to screen share and go through a presentation. With that, we will also talk about if we were to proceed with the TIF District, the next steps that we have to do so you can be thinking about that as we go through the project itself and then the final part of that is actually a grant request. With that, if we could put Nick on? There he is. Nick Anhut: Thank you, Mayor and Council. My name is Nick Anhut with Ehlers & Associates and I am going to share my screen with a brief presentation to give you some background on the use of tax increment financing in general. I plan to go over why provide public assistance in the first place. Why cities would choose to implement tools such as tax increment. Talk about how the City of Chanhassen protects it’s local financial resources, and then break out into an overview of what this tool actually is. Some of the nuts and bolts components of tax increment financing. How it can be used and what it’s derived from and then we will wrap up with the public process component. There are statutorial steps that need to be met in order to implement this tool. So fundamentally, a city is going to use it’s financial resources to provide assistance to projects that have financial barriers. Something where the private marketplace is not able to overcome on it’s own. Obviously, it would also be something that is in line with a city’s vision for a piece of property or an area within the city. An example of why this might be the case is fundamentally that a project, when it’s built, it’s rents or it’s projected rents that it can charge to Chanhassen City Council – January 25, 2020 23 either it’s tenants or other users of the facility. Those rents are too low to support the debt and investment that’s necessary up front to pay for the cost of the project. Now this can be for a number of reasons. It could be for contamination on the site, an inordinate amount of costs that you wouldn’t see on other pieces of property or other areas or other communities. It could be due to high development fees, infrastructure that’s necessary to build the site on a certain location and provide access to those potential consumers. Or it could be inclusion of affordability parameters, meaning that we are trying to target an audience of tenants and limit the rent or the price that they pay to live in a certain area. That in and of itself could create a gap, if you will, where the income created from the project does not overcome the overall cost. Communities are going to do this in order to meet various public policy objectives, creating employment and attraction of higher paying consumers, tax base growth, perhaps redeveloping blighted sites or underutilized sites throughout the city that have been ignored for a long period of time. Another key factor for this discussion is to improve housing availability and provide choice and options to the residents of Chanhassen, a place to live that is affordable. In addition, cities utilize these types of tools in order to just improve community quality of life in general and to finance infrastructure needs associated with some of these developments. Any time we are considering the use of public financing we want to protect the resources of the community and with the use of tax increment there is actually a statutory guideline and test associated with the use of this tool. So within the statute there’s what’s called a but for test, or but for the use of tax increment there would not be a reasonable expectation that this development would happen in the private marketplace. So this but for test, it’s first component is a finding by the City Council. It’s a city approval process. The City Council will find that a proposed development would not reasonable be expected to occur solely through private investment without the assistance. A second part of the test for certain types of projects is that the increased market value expected from that new development, net of any public assistance that’s provided, is still going to be higher than a reasonable alternative use of the site. So essentially that is you have a project that’s going to come about but it has a high price tag in terms of local subsidy to make it happen, if the city has a reasonable alternative that provides a greater benefit than it’s not meeting the but for test to provide assistance to the first request. Now this test is actually not applicable to incidents where there is affordable housing and as you can imagine, by keeping rents affordable we are actually lowering the potential value of the project. If it was all market rate pricing we would expect because there is higher income generated from those rents, that the value of that property is going to be higher. So the policymakers at the State, when they wrote the statute, decided not to apply this test in the case of affordable housing. For past projects in Chanhassen, we’ve also not just relied on those findings but we actually performed a gap analysis to substantiate meeting the first component of that but for test. The expectation that the private market would be unable to accommodate this development on it’s own. For that, we require a review of the developer’s tax increment application and financial information in the form of their pro forma for the project. This is a detailed analysis of all the project costs that are anticipated, the expected rents and their comparisons to market rate rents, as well as all the sources of financing. That analysis helps determine A) is there a gap in the private financing, and then B) also ensure that private parties are actually maximizing those private resources we would expect them to generate in terms of a mortgage on the property as well as the type of cash or other investment we would expect up Chanhassen City Council – January 25, 2020 24 front anticipating the future returns from the income stream generated from the project. This process helps right-size the amount of public assistance needed to make that project feasible and defend that but for test. So to get to the point of what we are discussing, what is tax increment financing? Ultimately, TIF, as it is known, is the ability to capture and utilize most, not all, but most of the increased property tax revenue derived from a new development and it is defined to a specific geography defined by parcels. We will draw a map when we create a new TIF district and include a specific amount of parcels and that district is limited to those locations. Now when I said most of the increased property tax revenue, there are some exclusions. For commercial property, both the state property tax as well as fiscal disparities contributions are excluded. In addition, the school has an operating referendum that is also not captured as tax increment, so that funding stream for the school will be increased when a TIF project comes about because it will increase the amount of taxes available for that stream regardless of the capture of the rest of the tax increment revenue. This creating of a revenue stream allows the city to assist in financing a project, or providing the up-front funding necessary to pay for that gap in costs that was mentioned earlier. This is all authorized within the TIF Act, as it’s known, Chapter 469, Sections 174-1794. As a brief overview of the preceding slide, just to give some feel for these taxes and how they are generated, I do have a chart on the screen that show the before, during and after, if you will, for a piece of property that is included within a TIF district. The blue area at the bottom represents the base taxes or those taxes that are being paid the property today before a TIF district is implemented. Those taxes, that value continues to be on the city, the county, and the school districts general tax base, so any time that the city, the county, and the school district are adopting their levies every year and spreading that over their tax base, they will continue to be able to utilize that. It will not be captured within the tax increment financing district. Those revenues will continue to flow to fund operations of all of the local jurisdictions using the property tax. But when the project is constructed and built and that value of the property increases related to that construction, all that value is captured within the TIF district and it is segregated as a separate revenue stream that flows to the city. The property still pays it taxes just like it would for any other like development within the community. Those taxes are set based on the local tax rates in effect for every year so it will continue to change as tax rates increase or decrease over the life of the district. But that revenue derived from that is segregated and it is separately disbursed by the county after they collect it, directly to the city so that the city can utilize it to help in the financing that it was obligated at the onset. Over the life of the district, those taxes will be segregated and collected. They can be collected based on policy and the need for the project for as much as 26 years in the case of an affordable housing TIF district. Other TIF districts have shorter timeframes but the maximum statutory term is 26 years in the case of housing. At the end of the life of the TIF district, either when it meets that statutory maximum or if it is able to be decertified earlier because it’s provided enough revenue to meet the financing obligation, all of that value then reverts to the general tax base for each of the city, county, and school district and it gets included in those calculations for those levies. So during this period, what I would describe it for everyone is you’re not actually pulling revenues away from the city, the county, or the school district and providing them to pay for the development, you are actually deferring the benefit. When the TIF district decertifies, all of a sudden you will have a larger tax base than you started with, and everyone who is paying property taxes will have a lower tax right Chanhassen City Council – January 25, 2020 25 because there is now a new project, a new development that is in the fold once that TIF district decertifies. It will not impact your ability to levy the taxes that you need to maintain your operations from here going forward. To further provide some numbers to color these slides, again the property pays it’s taxes just like any other type of like development within the community at the same rate based on it’s value. It’s just those taxes get distributed differently than a property on the general tax rolls. Just by way of an example for a rental housing development within the city, we expect that this development will generate about $215,927 in annual property taxes. Of that amount, as you see the line that says base value taxes, about just under $9,000 of that amount is what the property is paying today essentially and what will continue to flow to help pay for operations as a vacant site with no buildings on it. But, $31,000 of that total amount will not be captured and held within the TIF district. It will actually provide funding to the school’s operating referendum because that specific revenue stream is protected or excluded from tax increment. The rest of the taxes will be distributed back to the city and help in financing the project. So there are different types of TIF districts and each one has their own qualifying activities, limits, and statutory exemptions involved. They fall into these general categories. One is to essentially re-do substandard or obsolete buildings. A redevelopment or a renewal and renovation TIF district can help in providing financing for those types of project. A housing TIF district can provide financing for affordable housing projects as I will get into in a future slide. There’s also another form of TIF district called an economic development TIF district that can provide certain types of jobs and tax base creation within the community, primarily for manufacturing, industrial, warehousing, and distribution type jobs. That is a tool that the city could utilize to help incentivize the businesses and create some new jobs within the community. Specifically, to a housing tax increment financing district, the maximum term, as I mentioned, is up to 26 years. Again, up to. That is to be decided based on the financial obligation that’s necessary to build a project and it’s exclusively designed to assist affordable housing that can be either rental housing in the form of apartments, townhomes, or it could be owner- occupied housing. It could actually be utilized for single-family homes. In the case of rental projects, the building itself has to meet either of two affordability tests. Either 40% of the units need to be set aside for occupancy to individuals or families that are at or below 60% of the area median income. The second test is a lower percentage, 20% of the units need to be set aside but they need to be limited at 50% of the area median income. As long as the project meets those minimums, it can qualify to be included within an affordable housing TIF district. Now these tests are annual tests that are ongoing for the life of the TIF district and in order to continue to use the property taxes generated from the development, the city will need to prove compliance and it’s typically passed through to the developer to do so on an annual basis. A 100% of the increment that’s created needs to be used for affordable housing needs or it’s administration but the project itself doesn’t have to be exclusively an affordable housing development. There can, there is an allowance so that up to 20% of the assisted development’s value can include commercial or some other mixed use on the property. Lastly, one item that I will mention that is exclusive to a housing TIF district is it has no pooling restrictions. What I mean by pooling is that any uncommitted TIF, so TIF that was not deemed necessary to finance this particular project within the TIF district, can still be collected and utilized to assist other off-site affordable housing needs throughout the community. So there are a potential to use a tool derived from one Chanhassen City Council – January 25, 2020 26 project to assist another. That is exclusive to a housing TIF district. Now, we’ve created a revenue stream by creating the TIF district. How can that revenue actually be utilized to assist in building a project? There’s really two different buckets to think about in terms of that and it relies on who’s providing the up-front funding. The city has utilized a pay-as-you-go TIF note in the past and this is essentially a tool where the developer will provide 100% of the funding up front. All of the costs to build the project will be paid but a portion of those will be reimbursed from the city’s tax increment that is collected over time. It’s called a pay-as-you-go note and a no-risk note in the sense that there is really no risk to the city in that instance as long as the developer builds the project and creates and pays the taxes necessary, the city will then remit the funds to reimburse the developer’s investment. It does not have any obligation to kick in any additional funding from a separate source, and it has no obligation to provide any time that is not actually created if the development were not to get off the ground or if the taxes came in lower than anticipated. All of that risk falls on the developer. A different way of providing the funding is if the city were to incur some of the risk to provide maybe some more economic feasibility or more streamlined approach to provide funding for infrastructure, the city can take some risk and incur some of those costs and repay itself from the future tax increments. You can do so either through and interfund loan where you’ve got funds on hand, maybe in a reserve, that you can utilize to pay for an infrastructure and then repay yourself over time from the increment that’s created, or the city could actually issue debt in the form of general obligation or revenue bonds and pay those bonds off with the future tax increment collections. The last bit that I will get to and then you can be rid of me is just a recap of the public process involved with creating a TIF district. As I mentioned, it is up to the city council. It’s a city process to do that but there are some unique components to it. Ultimately, a public hearing is going to be held at the council level for any TIF district or any modification to a TIF district in the future, and it requires their approval. It requires them to adopt what’s called a tax increment financing plan. The plan is essentially a document internal to the city that establishes the purpose of the TIF district, the public policy objectives, the geography or the boundaries, those parcels that are going to be included within it, and it also establishes a budget for the anticipated tax increment revenues and how they are going to be utilized to pay for the project or projects, if you will. That TIF plan is created and needs to be submitted to the county and the school district, their governing bodies, 30 days prior to the public hearing that’s being held. Both of those entities do not have any say or formal approval of the TIF district itself, but they can provide comments to the city to inform it’s decisions. In addition, the Planning Commission is also tasked to review the tax increment financing plan and confirm whether or not the proposed project within that plan complies with the city’s general plans for development within the community, whether it has obtained the approvals necessary to move forward and doesn’t conflict with any land use regulations for the site. In addition, in the City of Chanhassen the EDA plays a role as well as the administering arm of the tax increment financing. So the EDA does itself actually review and provide a recommendation to the Council in that public hearing whether or not to adopt and move forward with creating the TIF district. That concludes all of my comments. We have also included a proposed schedule of events within the Council’s packet and I am happy to go over any of this or answer any of your questions at this time or after the project discussion. Thank you. Chanhassen City Council – January 25, 2020 27 Mayor Ryan: Thank you, Nick. I appreciate that presentation. Go ahead, Ms. Aanenson. Aanenson: I think if Nick can stay on the line we will go through the project and then kind of explain what we previously talked about in some work sessions regarding TIF and the maybe Nick can then go through the formal timeline if that’s your goal to move forward. Mayor Ryan: Perfect. Before we get to the project specific, I know some of us have gone through TIF before but I just wanted to make sure to see if there is any questions from either Councilwoman Rehm of Councilwoman Schubert for Nick at this time. Campion: Madam Mayor, I actually do have one question. I thought it was a great presentation, Nick and though I seen, been educated on TIF before there was some stuff from that presentation that jumped out at me. So for the TIF classifications, there was housing, the economic development and the redevelopment, right? Those were the three? Do you have similar thresholds as you lay down for the housing on the, is the maximum payback term from an economic development district, is that also 26 years. Anhut: Each one actually has its own limits. Economic development is only, it’s limited to 9 years as a maximum. Redevelopment TIF district, if it meets the qualification of having substandard buildings, can go as long as 26 years, just like a housing TIF district. There is also another, it’s a renewal and renovation sort of a redevelopment like, TIF district and that one can go as long as 16 years. Campion: One follow-up question. So on the economic development district, is there a threshold you know like the 20/60, 40/60, 20/50? Is there something like that for the economic development that has to create a number of jobs of something like that to qualify? Anhut: For economic development, it does have to comply with the city’s business subsidy policy so if you do have a local policy that guides how many jobs need to be created based on the amount of assistance that’s given to a project, it does have to comply with that; however, there are no statutory minimums so it is a local policy driven focus. However, it is limited in the types of development that you can assist so as I mentioned there are specific manufacturing, distribution, industrial jobs that are limited to your typical retail developments will not qualify for that economic development TIF… Aanenson: If I may, Mayor and Council members. For the new people for your edification we have done three different districts here in the last few years so maybe I could summarize kind of what Nick was saying. So if you look at the Emerson project that we did with DEED, they had to provide wages that would meet the qualifications so they were doing some expansions over at Emerson so we participated with the State of Minnesota on that one. Then a blight or redevelopment one would…on part of the Dinner Theatre, so that was a different type. And then so this is the third type that we’re looking a housing which I don’t think we’ve done a housing one for quite a while. Those are three different examples. Chanhassen City Council – January 25, 2020 28 Campion: That’s helpful. Thanks. Aanenson: Yes. It seems like a long time ago that we did the Emerson one. To Nick’s point, you have to audit those all the time and the state does too to make sure what they presented or represented is true. So, with that, I’ll proceed with the… Mayor Ryan: Councilwoman Rehm, did you have any questions? Rehm: No. No, I don’t have any questions at this time. Thank you. NEW BUSINESS: APPROVE A REQUEST FOR A SITE PLAN REVIEW AND VARIANCE FOR A 110-UNIT APARTMENT BUILDING FOR SENIOR LIVING LOCATED AT 1361 LAKE DRIVE WEST (POWERS RIDGE APARTMENTS) Aanenson: I’ll circle back with Nick as we get to, I’ve got a placeholder for a TIF slide here. This is Lake Place, Powers Ridge. As you recall, we talked about this early this summer as this project was to go forward. A public hearing was held at the Planning Commission on January 5 and it is before you now. There are actually three requests with this project. One is for site plan approval. The other is for a variance for the building height and then for the TIF request itself. So the location on Lake Drive West, this is part of, there is existing buildings here. This is the last one of the buildings. The first two were built. This one was the most recent one and this is the infill piece and this is just over three acres in size. So, this was the project, Lake Susan Hills, the entire project was approved in 1987 and had quite a few units in it. Over 400 single family. This is the part that was guided high density. As I mentioned, these three buildings were constructed, then the senior building, and this one was entitled for 88 units. Again, the high density one came back through in the year 2000 so all the buildings were given site plan approval, but the reason that this is before you now, this building did not come back because they met all the original site plan approvals so those stayed in perpetuity. Because this one is changing up they are staying within that footprint but they want the additional density that’s coming back for your review in an amendment to the PUD. The site plan itself as I mentioned is staying within that same footprint. Again, they are asking for the additional units to do that. In looking at that, we went back and looked at what the original approval was and it did allow for more overall units. So looking at that the density allocation under the comprehensive plan says you can do that but then there’s the requirement that you provide affordable housing, which is what we discussed earlier this summer and into the fall, talking about that. So staff, based on additional units and what we were looking at for the expectation for assistance would be to get to the area median income, so it would be 50 units. I know there was some question about the number of units so there will be a total of 110 and 50 of those would have to meet the area median income and we will go into the details of that in a minute. But the building again stays within the same footprint I think which was a little bit of a challenge and that forced the height requirement. I’ll let the developer talk a little bit more about that. A little bit taller ceilings and a little bit more architectural detail than the first two buildings. So again, there was some combined parking with some of the other, all Chanhassen City Council – January 25, 2020 29 the associations would be combined so there is crossover parking with this one. Because it is now senior apartments the parking ratio is slightly less so they can meet all the parking. Actually they do exceed the parking standards. Again, the building material consists of masonry either Black Hills Velour brick. They still are working on those types. The material samples are on the microphone table? I was going to say dais, but that’s up here. He can put the overhead camera on too. There you go. So, I think while it is slightly different, it meets today’s kind of look and so it does have the street presence. Again, highly articulated, and the Planning Commission did recommend approval of those changes. Again, the building elevations and the signage. It does have that presence. That collector street. So the garage floor plans, I’m not sure if you’re looking at all the floor plans but I’ll go to the exterior, some of the issues there. One of the challenges on these pre-existing sites is when those were originally put in place even back into the early 1970s and then early 2000s, the storm water has changed dramatically. Some of the challenge here was the storm water. I know when the Planning Commission was concerned about the separation and the units but we do have minimal separation and it exceeds that so that shouldn’t be the problem. They’re putting the additional storm water here and best practices for the controlling cleaning of the water. In a future item we will be talking about those costs and the grant application for that through the Carver County CDA. So they both drain to public systems downstream and the capacity, they will have to provide that information to Engineering and that’s a condition of approval, that they would have to meet those standards and provide that documentation to the Engineering Department before any permit would be issued. Again, the arrows show the direction that the storm water is moving. Utilities, there’s adequate public utilities that were built out during Phase I and II to service this site. The applicant is proposing to provide new sewer and water laterals and then there’s a monument sign that’s proposed over an existing main so that has to be relocated. I don’t see any problems with that. Access, this came up at the Planning Commission public hearing. There were two calls in. I know you received another letter tonight and I will just go through it briefly and then I will rely on the City Engineer to give a much more detailed nuanced response. Those access points, access to the site is actually via two access points. One servicing this building that is the senior building, and then the drive in three and four are, access three is proposed for underground parking and egress and then points two and four are proposed for the above-ground circulation. One of the concerns that was raised is whether there would be enough visibility coming out of the site and some of the sight lines. I’ll let Mr. Howley answer those, or respond to those comments. Howley, Thank you, Kate. Mayor and Council, so the issue that we’ve heard about is with acess number three which is the access to the underground garage and if you’re coming out of that garage if you can imagine driving easterly and you want to take a left, the inbound traffic you would have to cross but you would have to look kind of behind you at an angle, not at 90 degrees. In the staff report, the Engineering Department recommended that their engineer and architect and planners kind of review site circulation because we feel there might be a better way to do it. Utilize existing point one and three, which is what the original site plan contemplated. Potentially we didn’t like the turning movements all that much at access point number two because those entrances are offset and there is a lot of pavement there. There potentially could be a better way to lay out the access to the underground garage and the parking lot. However, there Chanhassen City Council – January 25, 2020 30 are approved site plans in place that show kind of what they are doing so we didn’t take it to the level of a condition that thou shalt change it because we don’t like it. It didn’t rise to that level. With private streets, the risk is with the owner and they have an engineer who is signing these plans who takes responsibility for things like that. So we left it as a recommendation to look at it and review it but we didn’t put it as a condition that they need to change it. Mayor Ryan: In the comments that are coming in that we received is that from the president of the homeowners association I think it was? And then a couple of comments that came through the Planning Commission, is they would prefer it to have dual access, so on the east and west? Or are they asking just to have it on the west end or is it to line up with the driveway on the other side, or all of them? Aanenson: I think they wanted two access points. Howley: Yeah. I think they wanted, my impression was, they were a little late to the game. They didn’t quite know it was coming. This is the email that I’m talking about from the association president. They literally just want to talk about it and understand it and maybe strategize a little bit what would work better. I didn’t get the impression that they had, these are what we want, make sure you do that. More discussion I think is what they want. Aanenson: So I think when the developer talks, they wanted some other outside amenities there too like community gardens and pickleball and some of those sort of things. I think that was some of the rationale but obviously safety plays into all that too. I’ll let maybe the applicant address that in a little more detail but as Mr. Howley stated, one access point was there already and they felt like the sight lines were adequate. Landscaping, it does not meet the minimum requirements for landscaping. We put those in the conditions of approval, some additional landscaping that needs to be put into place but I am confident that that can be accommodated. Again, that’s covered by that. Again, the variances for the 42-foot height and that’s measured at the midpoint of the roofline, that was some discussion with the Planning Commission. Again, that’s in order to accommodate the additional, they are staying within that footprint because they half to. It’s a tight site. But also that provides for a little bit larger spaces in the floor and also the pitched roof element. The Planning Commission did support that one too. We put the variance findings in there. I’m going to go through all those unless there’s a question on those. Again, the Planning Commission, we had one no vote which we will talk about in a minute. But I do want to spend a little bit of time on, Nick went through the tax increment, what we had talked about with the City Council, kind of the recommendation. So there was a couple, to Dan’s point, Nick had put together a couple of different runs, that the different percentages of 75%, 85% available tax increment up to 95%. What the Council’s recommendation was at that time was to go with a 90% so what we had recommended was, as Nick said at least 40% would have to be put aside, but we had recommended that so it was between 45 and 55 when we recommended based on the density that density bonus that would be 50 units at 60% of AMI and that would also be then for 16 years. That would be a shorter term with their payback. That was a recommendation that came out from you and that’s kind of what we were going forward with then and that’s what we Chanhassen City Council – January 25, 2020 31 presented at the Planning Commission. Again, the Planning Commission doesn’t vote. That’s a City Council decision. There’s a separate process that will be involved in the TIF itself but the recommendation for that. We want them just to be aware of it because they will have to approve the consistency with the comprehensive plan as part of the TIF agreement. Mayor Ryan: And the TIF comes back us at the EDA, right? Aanenson: Correct. We will go through that schedule that I wanted Nick to kind of go through too so you are aware of that. It would go back to Planning Commission just to say it’s consistent with the comprehensive plan, not the exact numbers. But the Planning Commission did recommend approval. They liked the design. The negative vote again I think was maybe not so supportive of the TIF itself. It had some concerns about the overall design based on that. Otherwise, they did recommend approval. So with that, we are recommending approval of the site plan for the 110 units, the three-story apartment building with the variance for the height of 42 feet, subject to the conditions of approval. Again, increase the landscaping and the findings of fact, but all this is kind of predicated on the TIF approval going forward and that’s a whole separate process. That’s our recommendation. I would be happy to answer any questions you have. Mayor Ryan: Thanks. Do you want, before we bring in the developer, answer questions first? Is that what you prefer? Aanenson: Sure. Yeah. Mayor Ryan: Council, any questions for Ms. Aanenson? Councilman McDonald? McDonald: Not at this time. Thank you. Mayor Ryan: Councilwoman Rehm? Rehm: No questions at this time, thank you. Mayor Ryan: Councilwoman Schubert? Schubert: Not at this time. Mayor Ryan: Councilman Campion? Campion: None at this time. Mayor Ryan: I don’t either so if Mr. Simning is on the line and he has anything to add or share? Chanhassen City Council – January 25, 2020 32 Todd Simning: Good evening, Mayor Ryan and City Council members. Thank you Kate for the good introduction and Nick, for your explanation of TIF. I think the first thing that I want to point out is I think this project, what our building is amenity wise, is going to be a really, I’ll say a fantastic addition to Chanhassen. When I look at the projects around the southwest region, Chanhassen, Shakopee, even some of the inner rings. I don’t really think that they have the amenity package that we have. I’m looking at pickleball. We have garden areas. We’ve really taken into account a dog run, bike facilities for both the racking system as well as even a maintenance program for bikes. Having a really nice main floor library, lounge area. Having an area towards the back with a large patio with a kitchen area, walking down to a patio. We have a fire pit. We have a sky lounge. Those are things that you don’t talk about in Chanhassen. It’s things that you talk about maybe in the inner city when you get closer, but what we are trying to do as a development group and as myself being one of the owners, being a resident of Chanhassen, and my other four partners, we are really trying to bring something different to the suburban area that seniors would really want to be a part of. We are looking forward to working with Chanhassen to be able to utilize this, I will say kind of package in a way, to bring it to another community to say we are really trying to bring some affordable housing to a area that typically doesn’t get a lot of development reaction. What we are looking for is a little bit of a participation with the City to help us be able to bring a really high level of amenity and living standard to people that really want both affordable and market rate. So it’s really been a fun process for me as a developer. I’ve been doing this for 34 years. To be able to give something back to my community and I think that’s probably the biggest thing that I want to emphasize to the City and make certain that you guys understand that this is a deep commitment from somebody that’s live here in the area for quite some but, want to use this as kind of a springboard to bring it to other communities. We don’t know whether that’s going to work or not. The City of Chanhassen, so far, City staff has been very proactive to help us be able to develop this so I’m really excited about that. We talk about the height variance. One of the reasons why we need a height variance is because on the main floor when you walk into most apartment buildings, you have and eight of nine-foot ceiling height. In this case, we actually have a 10-foot ceiling height on the main floor because we really want to create and ambience that people want to live in. That’s one of the reasons why our height of the building got a little bit higher. The entrance that people are talking about from the east side to the west side, you know it’s fundamental to us because on the west side again talking about amenities, what we are trying to do is create a garden area and a dog area on the west side of the property. That really is conducive to sunlight and whatnot and actually having gardens flourish. It’s a really great area for people to walk out and take their dogs out. You get on the east side, kind of the north side, its, you’re not able to create that same ambience. When you’re driving out the east side and again when this original plat was approved, they say a entrance, number 3, from the east side and obviously they thought it was okay. Otherwise, the City staff, City Council, everybody wouldn’t have approved it. When you are out there, it’s interesting because you are actually sitting at a high point. I’ve been out there, I took pictures. I encouraged the City Planning Commission to go out there. I encourage you guys to look at it also, is that you actually have a really good visibility. There is a lot of traffic that comes up there obviously that goes into the other building, but you really have good visibility out of there. Our building is going to be 55+. There are some that are 62+ that have Chanhassen City Council – January 25, 2020 33 maybe some older population but when you drive through this area and, particularly between the new building that was built and the second building that was built, there is not that great of visibility coming out of those two garages. That one garage coming out of the second building and we are going to be actually in a really, really good position to have good visibility and when you get up there it isn’t like you have to turn your head completely one way or another. You’re sitting at the top of the building. So I really want to preserve the east side exit. I don’t want to denigrate the west side strictly because on our project and what we are trying to accomplish, we really want to bring more of a benefit to the garden area and dog run and people, I’ll say people of my age, younger, older, we like our pets and we are really trying to create something that is very, very usable to the residents that might live there. So, I really want the east side exit and truly feel as though that would work out well and if you guys went out there and saw that you are at the high point I don’t think that would be an issue. One of the fundamental parts of Chanhassen and for us asking and working with the City staff, City Planners, City Council for TIF, is that Chanhassen consider themselves to be a community for life. What we’re trying to bring to Chanhassen is allowing people that have lived here their entire life to stay here. That’s one of the reasons why Nick actually has been very, very helpful, is that he has helped both Planning Commission and staff and hopefully you guys understand that truly by helping us create a TIF district, it actually helps us be able to keep residents that wouldn’t be able to afford to live in Chanhassen, to stay in Chanhassen. We’re going to, our plan is to own this long term. I’m really excited. This is one of the first times that as a developer, most of the time, I’m developing and selling and you don’t have any ownership into it because people just buy from you and in this case, we’re actually going to have a vested interest in making certain that number one, the building is a really, really fantastic building. We want to be able to bring this example of what we did in Chanhassen to other communities and we have a vested interest in making certain that it is successful. With that, I am open to questions from Staff, City Council, and just understanding where you guys are and just helping to make Chanhassen a better place. Mayor Ryan: Great. Thank you, Mr. Simning. Council, any questions for Mr. Simning? Councilman McDonald? McDonald: I have no questions but I do appreciate you trying to bring a product such as this to Chanhassen. You’re right. We do try to be a community for life and I think something like this could prove to be a benefit, especially for age group that you are looking to target this at. I don’t have any questions going forward. I understand where you are at and I guess where I am at is that so far that it looks okay to me. So thank you. Mayor Ryan: Thank you, Councilman McDonald. Councilwoman Rehm? Rehm: I would like to echo Councilman McDonald’s comment about how we are a community for life and I live the idea of more people being able to stay here in Chanhassen, as they get older. I think a building like this would be a good solution for that. I do have a question about like the amenities. I think the community garden sounds great. I’m curious about connections to Chanhassen City Council – January 25, 2020 34 trails and walking and also about the pickleball? I know that’s super popular right now. Is that something that 20 years from now can they use that space for other activities as well? Mayor Ryan: Ms. Aanenson? Aanenson: Sure. I admitted that the trail connection, that is a condition of approval. If you could put that PowerPoint on really quick? So there is a trail connection going across right here that is a condition of approval. That would take you over to the park so that would be a condition of approval. Then some internal connections, too. Sidewalks internally to connect it to the other ones so they are all part of the association. I would leave it up to the developer but as we know, a lot of these projects, their amenities change over time depending on what’s popular. We know that outdoor fire pits are popular right now and picnic areas. Mayor Ryan: Anything further, Councilwoman Rehm? Any follow-up questions or comments? Rehm: No, that’s it for now, thank you. That was a good presentation. Mayor Ryan: Thank you. Councilwoman Schubert? Schubert: Yeah. I will also echo, I know when I was campaigning, probably the most asked question was, had to do with senior housing and affordable housing and this kind of marks both of those so I’m excited to see that. I was a little concerned because I kept reading comments and whatnot on just the east side entrance and I have the map up, Google Maps right now, and it looks like building two and building three probably use that, because the curve was one concern but the other concern was just volume of traffic. But it looks to me like buildings two and three would use the west entrance more just based on where the garages comes out. Is that correct or have you guys ever done kind of a, what’s the work I am looking for, looked at the volume of traffic based on both entrances you have to the three buildings currently? Simning: Is that a question for the developer. Schubert: Yes. Simning: I wasn’t sure but no, we haven’t done a traffic study itself but the entrances for those other two buildings are further to the west and you do see a fair amount of traffic that actually moves that way. I think when people come from Chanhassen from the east, they do primarily come up the main road and kind of come through, but when they’re leaving, it seems as though they are leaving towards the west because it’s a shorter route out. But we have not done a traffic study itself. Schubert: Okay. That’s all. Mayor Ryan: Perfect. Thank you. Councilman Campion? Chanhassen City Council – January 25, 2020 35 Campion: I don’t have any more questions at this time and it does look like a very high-quality product that they’re designing here and I’m excited to see it go forward. Mayor Ryan: Okay. Thank you. I have one, well I have a couple comments. First, Mr. Simning, I appreciate this and while its not, and I agree I don’t think it needs to be condition necessarily, you know whenever you want to have a good healthy working relationship with the association that you are going to be a part or the neighboring buildings and so while maybe there are not major changes to the exit/entrance, maybe there’s some tweaking with alignment coming from building one and I just would encourage, Council did receive an email from the President of that association, and just being a good neighbor. I would just encourage you to connect with them and then work obviously with City staff to see if there are any solutions that don’t change the total complexity of the project but if there is some tweaking or articulating that can be done I would, I think Council would really appreciate it and show your good-neighbor spirit. I just wanted to make that comment and appreciation. I also just, you know from a personal standpoint, I’m extremely excited about this project for a couple of reasons. First, just kind of the formulation. This is really has been a grass-roots effort. It came about two years ago to me from a meeting that I had with some seniors at the Senior Center, that they love Chanhassen, they love being here, but they are near the end of living in their homes and they don’t know where to go. While we have a lot of great senior housing in Chanhassen the affordable component was something that was missing. So it was brought forward and something that I talked to the former City Manager, Mr. Gerhardt, about, with Ms. Aanenson about, this was something obviously in our comprehensive plan and just a real missing link in Chanhassen was senior affordable. About that same time two years ago Mr. Simning reached out to me and we went to coffee and he talked about wanting to do something in Chanhassen that would kind of leave his legacy as a long-time resident, a developer, he wanted to know what he could do as a legacy type project in Chanhassen and talked to him about the importance if senior affordable, and I just want to say, you know, thank you to Mr. Simning to kind of pushing this through and working with Ms. Aanenson and staff to find a way to get this done. I know there were some challenges early on finding the right way to make this happen and go about it and introducing it to Council. But I just think it’s really neat when you have a Chanhassen resident, senior residents, and everybody can come together to present a project which I know will be really high quality based on the work that Mr. Simning does. I’m just really excited to have this in Chanhassen and its not only a great project, but an affordable component for our seniors. I just want to more say thank you if this moves forward with Council support, I just want to extend my appreciation for everybody that was involved to continue this project and moving it through, so I just wanted to share that, share my thoughts on that. Next, I think we just need to have a better understanding of timeline? Aanenson: Yeah. So my preference would be is you make a motion on this and there is two other action items that I will just kind of briefly go throught. Mayor Ryan: So start with a motion on this and then we move to the other items? Okay. Council, is there any one that would like to make a motion please? Chanhassen City Council – January 25, 2020 36 Councilman Campion moved, Councilman McDonald seconded that the Chanhassen City Council approves the site plan for a 110-unit three-story apartment building with a variance for the building height to allow 42 feet to the midpoint of the roof, subject to the conditions of approval and adoption of the findings of fact. All voted in favor and the motion carried unanimously with a vote of 5-0. Aanenson: If Nick’s still on the line I would just like to take a minute and kind of go through the next steps because while it seems like we’re going to be moving along, because now things start picking up steam. We have been talking about this as you mentioned Mayor for a few months and so now we are on a timeline for the developer as there is incurring costs. The first thing I would like to go through is there is a schedule that Nick has put together regarding what needs to happen to put a tax increment district together. So he’s put together a calendar which was included in your packet. That was part of his presentation. Nick, did you want to just take a minute or two and maybe hit some of the high points of this? Anhut: Sure. So we envision that at the next Council meeting agenda on February there will be a formal resolution provided to set a public hearing for the TIF district in March. That public hearing we envision to be March 22. This will give us the time necessary to prepare the documentation and to also disclose those documents to the county and the school district. We plan on distributing that draft of the TIF plan document on February 19 to the county and the school district, consistent with the 30-day requirement. This item will also go before the Planning Commission, again the TIF plan itself, just to confirm that the proposed project that’s to be within the TIF district is in conformance with the actions that you have taken this evening to approve the land use. That will come before them on March 2. We will have potential for a workshop discussion with the EDA on the 8th to review that TIF plan document and to talk about the agreement with the developer. Then a notice of a public hearing will be published March 11 and the public hearing held at the Council on March 22 to go over the tax increment plan and then once the public hearing is closed, there will be a resolution for consideration by the City Council to approve the TIF plan document and establish the new TIF district. That is the gist of the schedule going forward. Aanenson: That’s the schedule we will be following. Thank you for that, Nick. I think that’s all we need him for at this point. I’ll relieve him. Mayor Ryan: Thank you, Nick. Thanks for the great presentation. That was fantastic. Anhut: Thank you all. Have a good evening. Mayor Ryan: You too, thank you. NEW BUSINESS: CARVER COUNTY CDA – COMMUNITY GROWTH PARTNERSHIP GRANT Chanhassen City Council – January 25, 2020 37 Aanenson: The final action that relates to this development is actually an opportunity to apply for a grant. With the Carver County CDA, they do two annual grant cycles so we always look to see what’s in process. This is the one project that we have that meets the criteria so we obviously are going to try to, especially since it’s for affordable housing, we are going to try to see if we can secure a grant. In your packet we put together a resolution for the City Council to say that they support the project. There has to be a lot of information so this is again where the developer has already got a lot effort put towards the project, so they put together their documentation, their pro forma of how they’re going to manage the project timeline, all of their overall costs or expenses and the like. But we are requesting funding for is for the storm water management. As we mentioned, that’s a complex part. We talked about that in the work session, too. Those are always some high expenses so we are putting in to help with the affordability to reduce some of their costs of $400,000 towards storm water. We are the ombudsman. The money comes to the city and then we pass it through to the developer so the project would have to go forward. There’s also a timing issue, too. The fact that these projects lined up, that if you would pass the support resolution and the project has been approved by you, that’s going to score more points as we compare with other cities because it is a competitive process for other cities in the county. Again, there’s different criteria so some of those also as Nick mentioned some of those are not only for affordable housing but also for economic development, salary, wages and the like which we have applied for and some of those we have been successful at getting. So this project will be going to the CDA in the first part of February. This would be your last meeting before that so the timing worked out well. What I’m looking for from the City Council is supporting the resolution that’s in your packet because the project does meet the growth initiative for the county and the city has the capacity to ensure the project will be administered through that and that it’s supporting affordable housing, that you would support the grant and we’re just asking for your support on that so we can include it with their completed application. Mayor Ryan: Great. Thanks, Ms. Aanenson. Council, any questions about the grant? Councilman McDonald? McDonald: No questions. Mayor Ryan: Great. Councilwoman Rehm? Rehm: No questions. Mayor Ryan: Councilwoman Schubert? Schubert: No questions. Mayor Ryan: Councilman Campion: Campion: No questions. Chanhassen City Council – January 25, 2020 38 Mayor Ryan: I don’t either. With no questions, I would entertain a motion? Resolution 2021-03: Councilman McDonald moved and Councilman Campion seconded that the City Council adopts a resolution approving a grant application for funding from the Carver County Community Development Agency for Lake Place, Powers Ridge Apartments Building C. All voted in favor and the motion carried unanimously with a vote of 5-0. Mayor Ryan: Thank you for taking care of that, Kate. I appreciate it. That was 2, 3 and 4. NEW BUSINESS: APPROVE A REQUEST FOR AN INTERIM USE PERMIT TO OPERATE A GOLF DRIVING RANGE ON PROPERTY LOCATED AT 825 FLYING CLOUD DRIVE (GOLF ZONE) Aanenson: This application also went to the Planning Commission on January 5. It did get unanimous support and the applicant, after reviewing the conditions of the approval, wanted some relief from one of those conditions. Otherwise, typically we would put these on Consent. The applicants are Brian and Keri Colvin with a request for an interim use for the golfing driving range on property zone A-2. This used to be the RSS [Rain, Snow & Shine]. I worked on this project a long time ago. It has been inoperable for a few years. It was approved in1998. Since that time, the update of 61, there’s a signal there. As you may or may not know, we looked at a different land use in the future. It may be a number of years before we get sewer and water down there so this provides reasonable use of the property and a great entertainment place for our community. Again, the history of 1998. Site plan was approved in 1999. They allowed a second story for the driving range and then they also allowed them to have 3.2 malt liquor. In 2006 they amended the site plan and granted variances to allow square foot addition so they could have some interior entertainment. In 2018, the driving range was closed and after six months the IUP (Interim Use Permit). Again, the interim use permit has a specific time to it and I’ll go through that in a minute because we do anticipate that when sewer and water becomes available that a higher and better use would go there. In short, they are planning to use the driving range how it was used. Use the existing facilities. They are not planning on grading or expanding or doing any other alterations. It does need the inspections from the Fire and Building Code so that will be accomplished, and planning on running on the business. Again, some context. Most of the property is in the 100-year flood plain. You can see the area. This is an old farmstead that the driving range is in the upland. Compliance with the code to make sure it is not detrimental to surrounding uses and, this is part of the interim use, that it meets the zoning requirements. It does. The goal is to create the performance standards for golf and driving ranges without negatively impacting the surrounding area. It will terminate 12 months after municipal services become available. That’s when sewer and water is in close proximity and that would be a discussion that would come back before the City Council. You have the ability review that. As I stated, they have to pass the fire inspection and septic compliance. It does have a septic system down there. And then no alterations beyond what was previously allowed, restore some of the Chanhassen City Council – January 25, 2020 39 rain gardens, and the landscaping plans, and then the driving range which we talked about and I’ll go through that in a little more detail. Then, pesticides and storage, the chemicals that are out there and any future operations do require a permit. The condition that the nets go up is the reason this is before you tonight. The applicant’s have stated that they cannot do the nets before spring so we agreed to a compromise. We are going to allow them to put them up by June 14 and then they will put an escrow in place. It is quite a ways out there and people think they don’t, but there’s a lot of people that like to see how far they can hit it out there. So you’re into the wetlands which is a discussion when this originally went up, we wanted to make sure the nets weren’t too low allowing for wildlife to travel back and forth. It is in a fly away plus the navigation for animals. I think we’re meeting both parties figuring out a way to make this work so we are excited that they are restoring it. We are very happy to have them here. I think they are on the line if they waited up this late, but we are recommending approval with those modifications. There they are! Mayor Ryan: Oh, there they are. You made it! You survived! Aanenson: So we are recommending approval with those changes. Mayor Ryan: So, just for clarification, when it came to the Planning Commission it got approved with the old requirements, and then since the Planning Commission you have worked with them and agreed that you will give them until June 14 to put up the nets and that’s what they were asking is they couldn’t do it with the snow and the conditions, correct? Aanenson: Correct. Mayor Ryan: Mr. and Mrs. Colvin, did you want to add anything? Brian Colvin: No, I just wanted to thank everybody. Thank you, Mayor, Council, Kate. I just wanted to start by saying, you know my wife and I, we had a pretty good idea that the surrounding community would be excited for the Golf Zone to reopen but the overwhelming response that we have had in the last couple of weeks, it’s really showed us how much the community has missed this place and right now we are on track with all of our inspections. We’ve been working diligently the last couple of months to really clean the inside up. Clean the outside up. The next step is just getting the doors open and getting established while we have a few peak revenue months. We just wanted to thank the City for working with us here on the nets and we are always willing to work with them, too. That being said, I’ll leave it to you. Mayor Ryan: Great. Thank you for those comments. With everybody working from home they can sneak out and hit a few balls. Colvin: That’s right! Chanhassen City Council – January 25, 2020 40 Mayor Ryan: I get the interest so that’s fantastic. Thank you for that and thank you for working with the applicant on meeting in the middle. I appreciate that. Colvin: Yep. We do, too. Mayor Ryan: Thank you for saying that. Council, any questions or a motion? The motion is on the screen. Councilman McDonald moved, Councilwoman Schubert seconded that the Chanhassen City Council approves an interim use permit for a golf driving range subject to the conditions of approval, adopts the attached findings of fact and recommendation, and amends Condition 9 to read “Driving range nets comply with previous recommendations from the DNR shall be installed by June 14, 2021. A $2,500 escrow shall be provided to ensure that the nets are installed and that all stray golf balls are collected from the flood plain.” All voted in favor and the motion carried unanimously with a vote of 5-0. Mayor Ryan: Congratulations! Thank you. And again staff thank you for making that work. I appreciate it. Good luck! Colvin: Thank you. Thank you so much. COUNCIL PRESENTATIONS – None ADMINISTRATIVE PRESENTATIONS – None CORRESPONDENCE DISCUSSION – None Mayor Ryan: With that, we will meet back in the Fountain Conference Room to continue our conversation about the city manager. With that, I would entertain a motion to adjourn. Councilman Campion moved, Councilwoman Schubert seconded to adjourn the meeting at 9:34 pm. All voted in favor and the motion carried unanimously with a vote of 5-0. Submitted by Heather Johnston Interim City Manager Prepared by Kim Meuwissen