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HomeMy WebLinkAbout08-19-2014 CCMLAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 1 of 8 CITY OF LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Mayor Pearson called the meeting to order at 7:00 pm. PRESENT: Mayor Mike Pearson and Council Members Wally Nelson, Anne Smith, and Justin Bloyer Absent: Council Member Mike Reeves Staff present: City Administrator Zuleger, City Attorney Snyder, City Engineer Jack Griffin, Finance Director Bendel, and Deputy Clerk Gumatz. PLEDGE OF ALLIGENCE APPROVAL OF AGENDA Council Member Smith asked about the Planning Commissioner interview from last week not being on the agenda. Mayor Pearson stated that it was not put on this agenda because he has not heard back from the interviewee. Council Member Nelson added Item 9.5: Updated Special Assessments-2015-2028 CM Properties- PID 34.029.21.44.0007 to the Finance Consent Agenda. Mayor Pearson requested that Item 9 be pulled from Consent for discussion. MOTION: Mayor Pearson moved TO APPROVE THE AUGUST 19, 2014 CITY COUNCIL AGENDA AS AMENDED. Council Member Bloyer seconded the motion. MOTION PASSED 4-0. ITEM 1: ACCEPT MINUTES THE JULY 15, 2014 CITY COUNCIL MINUTES WERE APPROVED BY CONSENSUS OF THE CITY COUNCIL. COUNCIL REPORTS: Mayor Pearson: will appoint Margo Sieleni as newest library board member. Attended library board meeting. They picked library director – Nate Deprey. Also attended Park Commission meeting this week where the talked about possible improvements to Tablyn Park, the volleyball courts that Council discussed at its last meeting, and he suggested they add the downtown baseball fields to their work plan. Also attended a meeting with Gateway Officials and Lake Elmo property owners regarding the BRT proposal. Council Member Smith: no report. Council Member Nelson: no report. Council Member Bloyer: was contacted by email from a resident who was promised some improvements to their development and has directed staff to look into it. Met with the Chair of the Library Board. Happy to hear things are moving forward with the Parks Commission. PUBLIC COMMENTS/INQUIRIES FINANCE CONSENT AGENDA 2. Approve Payment of Disbursements and Payroll 3. Accept Financial Report dated July 31, 2014 4. Accept Building Report dated July 31, 2014 5. Accept City Assessor Report dated July 31, 2014 6. Pumphouse No. 4 Improvements – Pay Request No. 3 7. 2014 Street Improvements – Pay Request No. 1 8. Lake Elmo Watermain Improvements – Pay Request No. 1 9. Purchasing Policy 9.5 Updated Special Assessments – 2015-2028 CM Properties – PID 34.029.21.44.0007 LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 2 of 8 MOTION: Council Member Nelson moved TO APPROVE THE FINANCE CONSENT AGENDA AS AMENDED. Mayor Pearson seconded the motion. MOTION PASSED 4-0. ITEM 9: PURCHASING POLICY. Mayor Pearson thanked the Finance Committee for their work on this item. There was one change he would like to make, striking the last sentence in the second paragraph. MOTION: Mayor Pearson moved TO APPROVE ITEM 9: UPDATED PURCHASING POLICY AS SUGGESTED BY THE FINANCE COMMITTEE STRIKING “CONSIDERATION OF MADE IN THE USA, ECONOMIC, ENVIRONMENTAL AND SOCIAL FACTORS SHOULD ALSO BE CONSIDERED.” Council member Nelson seconded the motion. Council Member Bloyer thanked Mayor Pearson for bringing this up. MOTION PASSED 4-0. REGULAR AGENDA ITEM 10: VILLAGE EAST TRUNK SANITARY SEWER: UP RAIL TO TH 5 – IMPROVEMENTS HEARING AND ORDER IMPROVEMENTS; RESOLUTION NO. 2014-62. City Engineer Jack Griffin gave a presentation on this item. This is closely related to Agenda Item #11 as both projects are being presented simultaneously, but are on a separate track. Mr. Griffin went over the three pieces of the project. After initiating the feasibility report and doing the Public Hearing for the 39th Street project, there were two property owners who requested that three parcels be included in the project and have their parcels be assessed for their part of the cost. The Feasibility Report has been completed for what that assessment amount would be. After bids were taken on July 10, the construction prices came in higher. On July 21, there was a stakeholder meeting with all property owners and consensus was to move forward. This requires the Feasibility Report to be amended tonight with the higher amounts. Mr. Griffin went over the updated cost and updated proposed assessment costs to the three parcels. All waivers have been collected securing the updated amount of $358,000. Mr. Griffin also laid out the remaining project schedule. Council Member Smith asked if all waivers have been secured. City Engineer Griffin responded that all waivers and easements have been received from the two property owners for the three parcels. Council Member Smith asked about the Schiltgen waiver. City Administrator Zuleger responded that there was a drainage easement with Easton Village that was needed. Both property owners were satisfied with it and Mr. Schiltgen signed the easement. Mayor Pearson asked if the Public Hearing was still needed. City Engineer Griffin responded that this meeting was set up to have a public hearing but since 100% of the waivers and easements were secured that does waive the formal process. City Attorney Snyder stated that it is still necessary to have a resolution by the Council ordering the improvement and ordering the assessments, so Council should hold the Public Hearing. MOTION: Council Member Nelson moved TO OPEN THE PUBLIC HEARING. Council Member Smith seconded the motion. MOTION PASSED 4-0. PUBLIC HEARING OPENED AT 7:15 PM. No public input. City Administrator Zuleger informed council, on behalf of the property owners affected, that Staff has received waivers of appeal for the assessments and the easements and there are no objections to the assessments as listed. He also noted that Staff did meet with all property owners where the difference between the two assessment amounts was explained and that it was the consensus of these two property owners that we should move ahead with the project this fall rather than wait until possibly the spring or re-bid it out. City Attorney Snyder noted that the motion should include a resolution to adopt and assess the properties as proposed by the City Engineer. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 3 of 8 Council Member Nelson offered a friendly amendment to add “ASSESS THE PROPERTIES AS PROPOSED BY THE CITY ENGINEER.” Council Member Smith seconded the friendly amendment. MOTION: Council Member Bloyer moved TO CLOSE THE PUBLIC HEARING. Mayor Pearson seconded the motion. MOTION PASSED 4-0. PUBLIC HEARING CLOSED AT 7:17 PM. MOTION: Council Member Bloyer moved TO ADOPT RESOLUTION NO. 2014-62, ACCEPTING THE AMENDED FEASIBILITY REPORT AND ORDERING THE VILLAGE EAST TRUNK SANITARY SEWER IMPROVEMENTS: TRUNK HIGHWAY 5 TO SOUTH OF THE UNION PACIFIC RAILROAD ADOPTING AND ASSESSING THE PROPERTY OWNERS PER THE CITY ENGINEER. Mayor Pearson seconded the motion. MOTION PASSED 4-0. ITEM 11: 39TH STREET NORTH: STREET AND SANITARY SEWER IMPROVEMENTS (VILLAGE EAST) – ACCEPT BIDS AND AWARD CONTRACT; RESOLUTION NO. 2014-63. City Engineer Jack Griffin presented on this item. This item now includes the Village East Trunk Sewer. Mr. Griffin reviewed the proposed improvements. There will be sidewalk put in on the south side of 39th Street and bituminous trail put in on the north side. There are 11 properties that are impacted and being assessed. Waiver of Appeal and Assessment Agreements were sought and received for the original amount. When the bids came in higher, amended Agreements were sent out. City Administrator Zuleger stated that we have 10 of 11 waiver agreement signs. Missing is one property owner who signed the original agreement, but would not sign the updated agreement. The increased price is $367. Council Member Nelson asked if that property owner will pay the original amount. City Engineer Griffin responded that he will still be assessed the full amount. The waiver agreement is to waive his right to appeal. The one property owner can still appeal on the $367. Council Member Bloyer asked if the property owner could appeal on the entire amount and what the entire amount was. City Administrator Zuleger responded that the property owner waived the first portion. He could still appeal the entire amount. City Engineer Griffin stated that the entire amount was roughly $2,300. It is now roughly $2,667. City Engineer Griffin touched on where the cost increases were. The City cost was previously $1,247,000. It is now $1,711,300. Mr. Griffin went over the breakdown of where the costs go to. Street and Storm Sewer saw an increase of $145,100. Eighty percent is assessable so the increased cost to the City is $29,020. For the Bituminous Trail there was a decrease of $8,300 coming out of the park funds. The Water System saw an increase of $120,300. Trunk Sanitary Sewer saw an increase of $207,200. The Village Trunk Sanitary Sewer Improvements total project cost is $412,600. City Administrator Zuleger stated that the City has already borrowed for this project at the previous estimate. Finance Director Bendel went over the spreadsheet that shows the differences. General fund would be impacted up to $29,000. Water fund would be impacted up to $120,000. Sewer fund would be impacted up to $163,000. The key shift was that some of the amount the City thought would be picked up by the developer shifted over to the assessed costs. Mayor Pearson asked about the total bonding increase. Finance Director Bendel responded that it would be $487,000 in total. Council Member Nelson asked if that would then be added to 2015 bonding. Finance Director Bendel answered yes. Council Member Nelson asked if the City had the cash to make up the amount coming from the general levy if the City would still need to bond for it. Finance Director Bendel responded if the City had the funds in reserve the City would propose withdrawing that amount. Same with the water fund. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 4 of 8 Council Member Nelson asked about the $174,000 number and where it comes from. Finance Director Bendel responded that it is an in and out, the money comes from the Assessment dollars to pay the debt. There was further discussion on this point. Council Member Bloyer asked about the initially proposed numbers vs what they came in at for the streets and trails portion. City Engineer Griffin stated that both of those numbers came in under the Feasibility Report so they went down. Council Member Nelson asked about the water component that got added and why it is there now. City Engineer Griffin responded that the watermain was added because as Public Works went out and as they were exercising the valves they found the valve covers were full of water. When this happens, it is anticipated that every valve will need to be inspected and see what kind of condition it is in. This project has an amount built in to replace all the valves but engineering will be looking at all the valves and deciding whether or not to keep them, replacing parts of them, or replacing the entire valve. The amount included for replacing valves is $55,000. There is also $45,000 for replacing five fire hydrants. There is also a cost of about $15,000 for providing temporary water to the buildings while construction is taking place. There is also a cost for restoration. Council Member Nelson asked if the City has enough cash flow in the sewer and water fund to carry until bonding next year. Finance Director Bendel answered that we do. Council Member Smith asked about the outstanding assessment and who is responsible if the property owner does not pay the $2,667. City Administrator Zuleger stated that the property owner has committed to the $2,300. Mayor Pearson asked City Attorney Snyder if the City would be on the hook for the amount. City Attorney Snyder stated that he does not think so. Council needs to adopt the Resolution ordering the assessments as put forth by the City Engineer. Council Member Smith asked about putting an assessment or a lien on the property when it goes to be sold. City Attorney Snyder stated that he believes so but Council needs to pass the resolution ordering the assessments. Council Member Smith stated that she would be more comfortable with this being done. MOTION: Mayor Pearson moved TO APPROVE RESOLUTION NO. 2014-63, ACCEPTING BIDS AND AWARDING A CONTRACT TO GEISLINGER & SONS, INC. IN THE AMOUNT OF $1,760,458.80 FOR THE 39TH STREET NORTH: STREET AND SANITARY SEWER IMPROVEMENTS INCLUDING ADD ALTERNATE NO. 1 AND ORDERING THE ASSESSMENT AS MODIFIED BY OUR ENGINEER. Council Member Nelson seconded the motion. Council Member Bloyer spoke about the project being over budget. Council Member Smith spoke about the how sidewalk benefiting all 1,200 new homes that will be coming to this area. She is also concerned about spending $1.7 million dollars and about what might happen in the future, but she also wants to do the project right if Council is going to approve it and that it is a good investment. There was further discussion on the sidewalk and maintenance issues. Mayor Pearson stated that he understands Council Member Bloyer’s concerns but that the property owners are paying for 80% and the City is picking up 20%. Most developments now are doing sidewalk like this. He also stated that there was no pushback from property owners on putting in sidewalk. Mayor Pearson stated that he also has concerns with the project but that it makes complete sense. Council Member Nelson stated that he agrees with both Council Member Bloyer and Mayor Pearson. He also has concerns about adding the sidewalk, and that it is something he feels could be added later,but it is something that is going to be done. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 5 of 8 Mayor Pearson stated that he believes the City is being as risk averse as it can. Council Member Bloyer stated that he believes this is a good project to start up development in this area and that a lot of good will come from it. Council Member Smith agreed. City Administrator Zuleger asked City Engineer Griffin to speak about how this project helps with the downtown area. City Engineer Griffin spoke about how we got to this project. That this sewer line is getting put in first helps to downsize the downtown project a little bit. It will save the City money on the sewer. He stated that this is a good project and that it sets the table for a lot of things to happen. Mayor Pearson stated that part of the public project is incumbent upon the private project from 30th Street to the railroad. He would like staff to consider that and let Council know at what point the private project should become compelled by the Council to become a public project. City Administrator Zuleger stated that staff will inform Council if that happens. MOTION PASSED 4-0. City Attorney Snyder thanked Council for all their work on this item. Mayor Pearson thanked staff as well for all their work. ITEM 12: INWOOD DEVELOMENT- HANS HAGEN HOMES AND INWOOD 10, LLC EAW, SPECIFY RGU AND AUTHORIZE FOR DISTRIBUTION City Administrator Dean Zuleger spoke on the EAW. Mr. Zuleger summarized this item in three main points; 1) The City has determined that an EAW is necessary for the development approval, the development is proposing 695 residential units. A mandatory EAW is triggered at 300 units, so the Council needs to establish that an EAW is necessary by motion. 2) Council need to establish the City of Lake Elmo as the Responsible Government Unit (RGU). The project is in the Lake Elmo jurisdiction so Council must establish the City as the RGU by motion. 3) Council needs to authorize the distribution of the EAW for public comment. This authorizes the publication of the EAW in the Environmental Quality Board publication “The Monitor” and once it is published starts the 30 day comment period. This is a procedural matter. There is no opposition from the developer on this item. MOTION: Council Member Bloyer moved TO DETERMINE THAT AN EAW IS REQUIRED, DESIGNATE THE CITY AS THE RGU, AND AUTHORIZE DISTRIBUTION OF THE DRAFT EAW FOR THE INWOOD MIXED-USE DEVELOPMENT PROJECT STARTING THE 30-DAY EAW PUBLIC COMMENT PERIOD. Council Member Nelson seconded the motion. Council Member Smith stated that she had a meeting with Mr. Hagen. This project is very different from any project she has ever seen and it will be very interesting to see it come forward. She would like to see the Council and Planning Commission go to the current development happening up in Blaine to see what the final project will look like. She was very impressed by the project. MOTION PASSED 4-0. ITEM 13: ENTER INTO A LEASE WITH LAKE ELMO ASSOCIATES, LLP FOR THE PURPOSE OF LEASING 2,461 SQUARE FEET OF OFFICE SPACE AT 3880 LAVERNE AVE N FOR THE PURPOSE OF OPERATING THE CITY OF LAKE ELMO City Administrator Zuleger presented on this item. He stated that the City is currently busting at the seams, and that the Annex is having some HVAC and leveling issues. The Annex also does may not meet the city’s building code. The City was trying to figure out how to accommodate some needs such as 1) more meeting space 2) privacy 3) larger work spaces for planning and the building inspector. Some space became available across the street in the Brookman Building. Mayor Pearson, Council Member Nelson, and John Thompson approached Mr. Zignego about possibly purchasing the building or what it might take to rent some space. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 6 of 8 They were able to come up with a 5 year lease for the space at the price of $12/sq ft for the first two years. The lease comes with electric, water, garbage, parking, bathrooms, and use of a common area. The only utilities the City is responsible for would be telephone and data lines going into the building. The space comes as is with fixtures, it has some working stations that would meet the City’s needs. The terms of the lease are $12/sq ft for the first two years, $13/sq ft for years three and four and $13.50/sq ft for the fifth year with a 90 day opt out clause. City Attorney Snyder reviewed the lease earlier today. Mr. Zuleger stated that they have also priced other office space in the area and there is not a lot that can accommodate the City’s needs, especially being so close to the current. Mr. Zuleger went over who would be officed out of which building. He also stated that time is of the essence on this issue because Mr. Zignego has offered to give the City a free month of rent for September so we could move in and get situated. Mr. Zuleger also stated that the City would be given first right of refusal to purchase the building. Mr. Zuleger spoke about running the lease by John Thompson, who is a premiere leasing agent, and he described it as a good deal. He thanked the Mayor, Council Member Nelson, and John Thompson for doing a lot of the work on this issue. Council Member Smith asked if this is more of a want or a need. She understands that down the road we will be adding more staff, but right now it seems like a lot of money to spend. Ms. Smith also asked if it would be more logical to move planning to the other building to be next to engineering and leave administration staff in the current building. Mayor Pearson responded that we need more space. He also spoke about the risk of waiting being that someone else may take the space. He and Council Member Nelson have looked at other spaces and they are more expensive and do not provide the convenience of this space. Mayor Pearson also spoke about being able to get rid of the Annex if we accept this lease. He thinks this lease is a good deal and it is a good time to move. Finance Director Bendel reminded Council that the net book value of the Annex at the end of 2014 is about $42,000. If it is demolished that amount will need to be expensed. The City has written off about $10,000 a year for it, so we planned on having the Annex for about four more years. The City paid close to $100,000 for the Annex. Council Member Smith spoke about when the Annex was first purchased. She asked if when sewer and water are put in, will the owners be able to raise the City’s rent in that building, or are we locked into this rent number. City Attorney Snyder responded that paragraph 1b of the lease responds to that. There was also some additional language that Counsel wants to suggest to the property owner. He asked Council if it is their direction to staff that the cost associated with assessments should not be borne by the City. Council responded yes. Mayor Pearson spoke about negotiating utility expenses if they go up dramatically from year to year. He believes that is fair. City Attorney Snyder stated that other than a few refining points, the lease is all there. Council Member Nelson asked a question regarding the top of page two of the lease. City Attorney Snyder responded that that is a part that needs clarification, as our percentage of the prorated share is not defined and the years are in need of adjustment. He also stated that one common way of dealing with unintended increases in CAM (Community Area Maintenance) costs is to put a cap on it, that they won’t increase year over year by “x percent” without consent of the tenant. City Attorney Snyder also noted that there are often other CAM costs in a lease that are paid by the tenant so this least is fairly tenant favorable. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 7 of 8 Mayor Pearson asked how to address those concerns in this motion. City Attorney Snyder responded that Council could approve the lease “subject to staff revision of CAM and other related costs.” Council Member Nelson asked about limiting the scope of staff review. City Attorney Snyder stated that staff would bring the lease back if they got to an issue that they couldn’t resolve. Council Member Smith was comfortable with that notion. MOTION: Mayor Pearson moved TO APPROVE THE FIVE YEAR LEASE WITH LAKE ELMO ASSOCIATES, LLP FOR CERTAIN RENTAL SPACE OF 2,461 SQUARE FEET IN A BUILDING LOCATED AT 3880 LAVERNE AVENUE NORTH FOR THE PURPOSES OF IMPROVING OFFICE EFFICIENCY FOR THE GENERAL ADMINISTRATION FOR THE CITY OF LAKE ELMO, SUBJECT TO STAFF REFINEMENT OF CAM RELATED CHARGES. Council Member Nelson seconded the motion. Council Member Bloyer spoke about bonding in 2005. The City bonded for a new City Hall, but one was never built. Finance Director Bendel stated that that bonding money was used to pay down the debt on the loan that was taken out in 2005. Mayor Pearson suggested that Council Member Bloyer work with Staff on this issue. City Administrator Zuleger stated that the needs the City has are for additional meeting space, more privacy, and more space for the building inspector to look at plans. Council Member Smith voiced her concerns about spending $30,000 a year right now while trying to have a zero based budget. Council Member Nelson understands that the City needs more space. He spoke about having some friends of his also look at the lease and they thought it was a good deal. He also stated that he has looked around the City for other places that may suite our needs and this is the best deal. He felt that leasing the space gives the City 5 years to make a decision about what to do about a new City Hall. Mayor Pearson spoke about the downsides of the Annex. He believes that the building next door would be better than using the Annex. His concern is that when the growth comes, if that space has been leased by someone else, then the City will really be in trouble as far as space goes and may have to do something reckless. Council Member Smith agreed that the five years gives us time. She asked if there was any way to keep the Annex and let Washington County use it rather than getting rid of it and have to pay it all off at once. City Administrator Zuleger responded that it could be used, but the HVAC has issues and it is an expensive building and it does not level well anymore. There are some structural integrity issues. Mayor Pearson reminded Council that they do not need to decide tonight about what to do with the Annex. He also stated that the Annex is a usable space but that there is an expense to keep using it. Council Member Smith would like to see a spreadsheet of the costs to keep using the Annex. MOTION PASSED 4-0. Council Member Bloyer spoke about paving the park aprons. He believes it needs to happen before fall. City Administrator Zuleger stated that with the late spring the City has fallen behind a bit. STAFF REPORTS AND ANNOUNCEMENTS City Administrator Zuleger: Finance Committee meeting tomorrow night. Handed out agenda for next week’s workshop. Working with developers on final touches, Ryland on construction of 50th Street and Lennar on their second addition plat. Working with Jack and Nick on downtown drainage solution. Did some code enforcement, and working on 5th street median design. LAKE ELMO CITY COUNCIL MINUTES AUGUST 19, 2014 Page 8 of 8 City Attorney Snyder: no update. City Engineer Griffin: did receive written agreement for site acquisition for the booster station. Lake Elmo Avenue Trunk Watermain project is under construction and City has received two requests from folks to hook up. Finance Director Bendel: working on budget. Deputy Clerk Gumatz: Primary Election was last week. Turnout at Precinct 1 was about 7% and Precinct 2 was about 10%. Mayor Pearson spoke on the agenda for the meeting next Tuesday. He would like to move forward with the Library discussion. Mayor Pearson adjourned meeting at 8:45 pm. LAKE ELMO CITY COUNCIL ATTEST: ______________________________ Mike Pearson, Mayor _______________________________ Beckie Gumatz, Deputy Clerk