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HomeMy WebLinkAboutAgenda Packets - 2005/02/07 CITY OF MOUNDS VIEW CITY COUNCIL WORK SESSION AGENDA Monday, February 7, 2005 7:00 p.m. (Work Session will Commence After Special City Council Meeting) ROLL CALL: Marty, Stigney, Gunn, Flaherty, Thomas PUBLIC COMMENT Citizens may speak to issues not on tonight’s agenda. Before speaking, please give your full name and address for the minutes. Also, please limit your comments to three minutes. Agenda Items Discussed by Consensus _______ 1. Review Meth Lab Abatement _______ 2. Review Potential Code Amendment Regarding Commercial Vehicles _______ 3. Community Survey Discussion _______ 4A. Storm Water Utility - Methodology of Assigning the Rates _______ 4B. Review Utility Rate Study ______ 5. Review Long Range Financial Plan ______ 6. Review Fire Station and Capital Improvement Bond ______ 7. Review Policy on Use of Eminent Domain ______ 8. Review Potential Acquisition of Donut Connection Next Council Work Session: Tuesday, February 22, 2005 Next City Council Meeting: Monday, February 14, 2005 Item No: 2 Meeting Date: February 7, 2005 Type of Business: Discussion Administrator Review: ____ City of Mounds View Staff Report To: Mounds View City Council From: Kristin Prososki, Planning Associate Item Title/Subject: Review Potential Code Amendment Regarding Commercial Vehicles; Special Planning Case SP-136-05 Introduction: Currently, Sections 607.06 and 802.04 of the Mounds View Municipal Code allow commercial vehicles to be parked on a public street for up to two (2) hours per day. This regulation can be difficult and time-consuming to enforce. Staff is seeking input from the Council as to whether or not an amendment to the regulation would be appropriate. Discussion: There are two areas of the Code that regulate outside parking. Section 607.06, Subdivision 2d of the Mounds View Municipal Code states: “No person owning, driving or in charge of any vehicle with a gross weight classification higher than “E” (6,001 – 9,000 pounds) as identified on the license plate and specified in Minnesota Statutes, may cause or permit that vehicle to be parked outside or stand continuously for more than two (2) hours on residential property or public street within a residential zone in the City.” Section 802.04, titled Oversize Vehicle Parking, states: “No person shall allow any recreational equipment, recreational vehicle or truck to remain parked on a public street or highway within Mounds View for a period of more than two (2) hours per day.” In Chapter 800, a truck is defined as, “A motor vehicle which exceeds a one ton chassis design”. It should be noted that recreational vehicles can be parked on residential property, as long as they are parked on an improved surface, such as a driveway. Currently, enforcing the two hour limit typically means responding to a complaint as soon as it is placed, marking the tires of the vehicle to show where it was parked and then coming back two hours later to check if the vehicle is gone. If the vehicle is still parked there, a ticket can then be issued. However, if the vehicle is gone within the two hour limit, but then returns later, the clock must start all over again because Staff would not know how long the vehicle had previously been parked at that location. Staff is suggesting that the code be amended to state that oversized/commercial vehicles shall not be parked on a public street or highway except for the purposes of loading, unloading or rendering a service. This would allow commercial vehicles to be present when needed and would eliminate the need for Staff to spend time checking on vehicles; if the commercial vehicle was there for the occasional need, such as for furniture deliver, then it would not be necessary to enforce the code, but if a commercial vehicle was there repeatedly and was causing a nuisance situation, Staff would have the ability to issue a ticket immediately, which would hopefully deter the driver of the commercial vehicle from returning with it. In most cases, the use of commercial vehicles is occasional and generally does not disrupt the neighborhood, however, when the vehicle is owned by a resident and used for business purposes (which is usually the case), it can be very disruptive. Staff has received complaints regarding commercial vehicles, specifically about the noise and vibration caused by the oversized vehicle. Recommendation: Staff is seeking input from the Council as to whether or not to proceed with a code amendment regarding commercial vehicles. If the Council feels it is appropriate, please direct Staff to begin writing a code amendment. Respectfully submitted, Kristin Prososki Planning Associate Item No. 4A Meeting Date: February 7, 2004 Type of Business: WK WK: Work Session; PH: Public Hearing; CA: Consent Agenda; CB: Council Business City Administrator Review _______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Greg Lee, Director of Public Works Item Title/Subject: Storm Water Utility Discuss the Methodology of Assigning the Rates Background: Since 1993, the City of Mounds View has operated a Storm Water Utility. A storm water utility is a method of funding the construction and maintenance of storm water drainage facilities. It is similar in nature to the water and sewer utilities operated by the City. Within the City of Mounds View, the need to control sediment and pollution entering our lakes and wetlands and to control storm water runoff has been increasing. PROGRAMS FUNDED BY THE UTILITY • Wetland enhancement and maintenance • Water quality modeling and monitoring • Water quality enhancement projects • Detention basin maintenance and construction • Storm sewer extensions • Drainage system maintenance and reconstruction • Removal of sediment from ponds and wetlands • Ditch and culvert maintenance On August 23 1993, City Council approved Ordinance No. 529 establishing a Storm Water Utility. This has since been included in the City Code as Chapter 908 (See attached). Discussion: The City’s Code, as it pertains to the establishment of the Storm Water Utility, was intended to ”be just and equitable, to assign responsibility for some or all of the future costs of operating, maintaining, and improving the system on the basis of the expected storm water runoff from the various parcels of land within the City during a standard one-year rainfall event.” Given that, fees were established. Staff believes that the methodology for assigning these rates, which have been employed since the early 1990’s, do not perform as intended. Some residents / property owners have also expressed a dissatisfaction with the current methodology for assigning these charges. ISSUES WITH THE CURRENT SYSTEM  Section 908.03, subdivision 2 of the City Code calls for “the surface water management fee for residential, town-homes/condominiums, apartments and mobile home parks will be determined on a per-household basis rather than a per acre basis”. The current adopted fee schedule assigns charges based on acreage for medium density and high density residential, as well as mobile home parks. These documents should be consistent.  The rates for all non-residential property including business, commercial, and industrial properties are adjusted with a “utility factor” (see section 908.03 subdivision 3.b. of the attached City Code). This methodology assumes that all properties with a particular land generate the same burden on the City’s Storm Water System. Staff contends that is not accurate and is an oversimplified way to assign storm water charges.  The current rate structure for all non-residential property uses the total gross area as a multiplier, regardless of what the land is. Example: the total area (in acres including wetlands, ponds, City ponding easement areas) is multiplied by the utility factor. Staff, and several property owners, believe that assigning storm water charges to property containing wetlands, ponds, or City ponding areas places an unjustified additional financial burden on these properties. This is especially true in cases where a wetland or pond that the City is utilizing and discharging storm water to is on private property. ILLUSTRATIVE EXAMPLES – Based on the Current System  A 10,000 square foot building on 2 acres will generate the same amount of storm water runoff regardless of whether its land use is a residential business or industrial. However, the residential business use will pay 28% more in storm water utility fees than the industrial use.  Two parcels eight-acres (8ac.) in size with the same land use will pay the same storm water utility charge. However one parcel maybe vacant or have a large wetland occupying most of the lot and generate very little storm water runoff whereas the other parcel may contain a large building with a large parking lot thus have a lot of impervious area, consequently generating more storm water runoff. POSSIBLE SOLUTION To meet the original intent of Ordinance No. 529 establishing a Storm Water Utility and making it ”just and equitable”, Staff is recommending that the City assign the Storm Water Utility based on the calculated storm water runoff for all properties. This would exclude low and medium density residential, which Staff recommends be assigned the utility on a per unit basis, or fraction thereof. The methodology with which Staff recommends this could be achieved is that storm water runoff be converted into a “Residential Equivalent Factor (REF)”. A Residential Equivalent Factor is the amount of storm water runoff a standard (1/4 acre) single family lot with a house, driveway, and other impervious areas generates. What this means is that the runoff for all properties, excluding low and medium density residential properties, would be calculated and a Residential Equivalent Factor (REF) assigned to it and the property be charged a storm water utility charge based on the number of REF’s it had. Single Family home properties would be assigned one (1) REF and other low density to medium residential properties are assigned a fraction of an REF (example: properties with 2 to 4 units pay 0.75 REF per unit, other medium density properties pay 0.50 REF per unit). CURRENT WORK STATUS Earlier this year the City Council approved Resolution No. 6280 approving a Temporary Data Entry Position. This person was hired and has been updating the City’s Commercial Parcel Database as well as collecting the necessary data to allow for storm water runoff calculations to be conducted for every commercial and high density site within the City. As an additional benefit, commercial site and construction plans have been re-organized and categorized. This work has been completed with great success. This concept of changing the methodology of calculating the Storm Water Utility Charge was presented to the City Council on December 6, 2004. Since then Staff has conducted a financial analysis to determine the impacts and revenue generated based on various REF values. This will be presented at the February 7, 2005 Work Session. Should the City Council wish to proceed with this proposed methodology of assigning the Storm Water Utility Charge, Staff will develop a proposed ordinance revision. This proposal could be presented to the City Council on February 14, 2005. Recommendation: It is recommended that the City Council direct Staff to proceed with exploring the possibility of making the City’s Storm Water Utility Charge be more just and equitable by developing and examining a methodology with which it is assigned. This methodology would be based on calculating the storm water runoff for each site and assigning a Residential Equivalent Factor (REF). Respectfully Submitted, Greg Lee, Director of Public Works 908.01 908.01 CHAPTER 908 SURFACE WATER MANAGEMENT UTILITY SECTION: 908.01: General Operation 908.02: Definitions 908.03: Surface Water Management Fee 908.04: Adjustments of Management Fees 908.05: Excluded Lands 908.06: Supplying Information 908.07: Estimated Charges 908.08: Billings and Collections 908.09: Use of Revenues 908.10: Penalties and Remedies for Delinquency or Default in Paying Bills 908.01: GENERAL OPERATION: Subd. 1. Title: The Municipal surface water system shall be operated as a public utility (hereinafter called the Surface Water Management Utility), pursuant to Minnesota Statutes, section 444.075, from which revenues will be derived subject to the provisions of this Chapter and Minnesota Statutes. The Mounds View Municipal Code is amended by adding Chapter 908 to be entitled, "Surface Water Management Utility". Subd. 2. Findings and Determinations: In providing for such charges, the findings and determinations are as follows: a. In the exercise of its governmental authority and in order to promote the public health, safety, convenience and general welfare, the City has constructed, operated and maintained a surface water system ("the system"). This Section is adopted in the further exercise and authority and for the same purpose. b. The system, as constructed, heretofore has been financed and paid for through the ad valorem taxes and assessments. Such financing methods were appropriate to the circumstances at the time they were used. It is now necessary and desirable to provide an alternative method of recovering some or all of the future costs of improving, maintaining and operating the system through the imposition of user charges. 908.01 908.03 c. In imposing charges, it is necessary to establish a methodology that undertakes to make them just and equitable. Taking into account the status of completion of the system, past methods of recovering system costs, the topography of the City and other relevant factors, it is determined that it would be just and equitable to assign responsibility for some or all of the future costs of operating, maintaining and improving the system on the basis of the expected storm water runoff from the various parcels of land within the City during a standard one-year rainfall event. d. Assigning costs and making charges based upon typical storm water runoff cannot be done with mathematical precision but can only be accomplished within reasonable and practical limits. The provisions of this Section undertake to establish a reasonable and practical methodology for making such charges. (Ord. 529, 8-23-93) 908.02: DEFINITIONS: Subd. 1. QUARTERLY SURFACE WATER MANAGEMENT REVENUE REQUIREMENT: The estimated quarterly expenditures for planning and inventories, capital expenditures, personnel, equipment and operation of the surface water utility, in accordance with established City policy. The quarterly surface water management revenue requirement and resulting surface water management fees shall be established for a period of time as set by City Council resolution. Subd. 2. SURFACE WATER MANAGEMENT FEE: The quarterly charge developed for each parcel of land pursuant to this Chapter. Subd. 3. UTILITY FACTOR: The utility factor is defined as the ratio of runoff volume, in inches, for a particular land use, to the runoff volume, in inches for an average single-family residential lot, assuming a two inch (2") rainfall and Soil Conservation Service (SCS) "Type B" soil conditions. (Ord. 529, 8-23-93) 908.03: SURFACE WATER MANAGEMENT FEE: Subd. 1. Determination: The surface water management fee shall be determined by first determining the percentage of total runoff in the City which is attributed to residential property. The total fee for all residential property in the City is computed by multiplying the runoff percentage by one-quarter (1/4) of the annual surface water management revenue requirement. The residential surface water management fee, per acre, is determined by dividing the total residential fee by the estimated total acres of residential land use in the City. 908.03 908.03 Subd. 2. Total Fee: The surface water management fee for residential, town- homes/condominiums, apartments and mobile home parks will be determined on a per-household basis rather than a per acre basis. The fee per household is determined by first determining the total fee for each land use. The total fee for each land use is determined by multiplying the total fee for all residential property by the appropriate utility factor based on land use. The total fee is then divided by the total number of households for the particular land use, resulting in cost per household. Subd. 3. Individual Parcels, Excluding Residential: The surface water management fee for all individual parcels, excluding residential, shall be defined as the product of 1) the residential surface water management fee (per acre); 2) the appropriate utility factor based on land use, and 3) the total acreage of the parcel. a. Credits: The Council may adopt policies, by resolution, for adjustment of the surface water management fees. Information to justify a fee adjustment must be supplied by the property owner. Such adjustments of fees shall not be retroactive unless provided within said resolution. Credits will be reviewed regularly by a staff committee. b. Surface Water Management Utility Factors: The utility factors for various land uses are as follows: Classification Land Use Utility Factor R1, R2 Single and Two-Family Residential 1.0 R-3 Medium Density Residential 2.68 R-4, R-5, R-0 High Density Residential, Mobile Homes, 3.26 Residential Office B-1, B-2, B-3, B-4 Neighborhood Business, Limited Business, 4.17 Highway Business, Regional Business 1-1 Industrial 3.26 PF Public Facilities 1.28 PUD Planned Unit Development 3.69 CRP Conservancy, Recreation and Presentation 0.46 School/Church Public/Private 1.5 908.03 908.09 c. Other Land Uses: Other land uses not listed in the foregoing table shall be classified by the City Administrator by assigning them to the classes most nearly like the listed uses, from the standpoint of probable hydrologic response. Appeals from the City Administrator's determination of the proper classifications may be made to the City Council in the same manner as other appeals from administrative determinations. (Ord. 529, 8-23-93) 908.04: ADJUSTMENTS OF MANAGEMENT FEES: The City Council may by resolution, from time to time, adopt policies providing for the adjustment of management fees for parcels or groups of parcels, based upon hydrologic data supplied by affected property owners, demonstrating an actual hydrologic response substantially different from the utility factor being used for the parcel or parcels. (Ord. 529, 8-23-93) 908.05: EXCLUDED LANDS: No management fee for system availability or service shall be made against land which is public street right of way. (Ord. 529, 8-23-93) 908.06: SUPPLYING INFORMATION: The owner, occupant or person in charge of any premises shall supply the City with such information as the City may reasonably request related to the use, development and area of the premises. Willful failure to provide such information or to falsify it is a violation of this Section. (Ord. 529, 8-23-93) 908.07: ESTIMATED CHARGES: If the owner, occupant or person in charge of any premises fails or refuses to provide information requested under Section 908.06 of this Chapter, the management fee for such premises shall be estimated and billed in accordance with such estimate, based upon information then available to the City. (Ord. 529, 8-23-93) 908.08: BILLINGS AND COLLECTIONS: Bills for surface water management fees for the use and availability of the system shall be rendered by the Finance Department in accordance with usual and customary practice in rendering of water and sanitary sewer service bills. Bills shall be rendered quarterly, shall be payable at the office of the City Finance Department and may be rendered in conjunction with billings for water or sanitary sewer service, or both. (Ord. 529, 8-23-93) 908.09: USE OF REVENUES: Revenues received from charges shall be placed in the surface water management utility account and shall be used to finance operational costs and improvements to and betterment of the system. (Ord. 529, 8-23-93) 908.09 908.10 908.10: PENALTIES AND REMEDIES FOR DELINQUENCY OR DEFAULT IN PAYING BILLS: Penalties and remedies for late payments or nonpayment of billings shall be the same as those applicable to billings rendered for water and sanitary sewer service. (Ord. 529, 8-23-93) Mounds View City Newsletter Article Fire Department Capital Improvement Plan Background: Over the past several months the Spring Lake Park-Blaine-Mounds View Fire Department (SBM) has been investing considerable time into the development of a short term/long range capital plan. The need for the plan emerged from several factors; aging of our equipment which is all beyond its half-life, dramatic increases in apparatus repair costs associated with the aging equipment, growth factors primarily in Blaine, increased training needs, specialized training needs, road improvement projects that will impact station access, and staffing requirements. Support from the community for the fire department was evident when more than 70% of voters approved a $4.4 million bond referendum in 1990 which allowed construction of Stations 1 and 2 and the purchase of four engines, two ladders and several other smaller utility vehicles. While the process will be slightly different this time, voters will still have a voice in the proposal via their elected officials and a public hearing process that includes a reverse referendum provision. Fire Department Background: It is important for readers and taxpayers to understand a little bit about the fire department that serves them, as it is somewhat unique in nature. The SBM Fire Department was founded in 1944 as a non-profit fire corporation and remains a non- profit today. One of only 80 in the state, the department is governed by a Board of Directors and managed by a CEO/Fire Chief. The department operates out of five stations to protect 44 square miles and 70,000 residents. Emergency response is provided via a combination of volunteers, full time fire department administrative staff that also serves as responders. Additionally, a number of city employees who, along with their administrative duties, have the primary responsibility of responding when an emergency call is received. Taxpayers of the cities enjoy the lowest per capita fire protection cost of any in the state for similar sized cities. The 2004 cost of just under $15 per capita compares to $49 per capita on a national level and $20 to $40 per capita for neighboring and adjoining communities. Sixty-three men and women comprise the “response corps” which services over 1,100 calls a year. Of these, 30% are crash-rescue personnel injury, 40% are non-emergency such as an alarm, smoke odor, or police assist. The remaining 30% are fires of some type; wildland, garbage, car or structure with about 15 to 20 serious fire calls a year. Capital Needs and Plan: The current plan is comprised of three components; a formal Capital Improvement Plan, Equipment Certificates, and ongoing yearly capital purchases. The first component is the one that the most time will be spent on. Equipment certificates are something regularly used by most cities to purchase large, expensive pieces of machinery such as fire trucks, snowplows, and other public works trucks. Capital purchases are also made every year by the fire department and other city departments via the annual capital budget. These items include such things as police vehicles, computers, personal protective equipment and so on. Since the plan covers a ten-year period, the combination of the three will be used to address the needs in the most efficient manner. It is proposed that the smaller items such as our chief’s vehicles, water rescue equipment and wildland fire fighting equipment be purchased through the annual capital budget. A schedule will be developed such that equipment will be purchased as needed but also with an effort to spread the purchases out on an even basis. The equipment certificates would not be used until after 2010 at which time some of our engines and ladders would be due for replacement. In effect, the debt on these bonds would be about ¼ of the original fire bonds and would follow on the heels of those. Taxpayers may recall that the average $120,000 home paid $14 per year for the 1990 fire bonds. Formal Capital Improvement Plan: Construction of a new station and the purchase of two engines and one command van comprise the formal Capital Improvement Plan (CIP). The 2003 Legislature passed a bill into law that allows cities to adopt a CIP specific for Police and Fire Stations, City Halls and specific other public buildings. The law requires the adoption by resolution of the plan, a public hearing, and within 30 days of the hearing, a reverse referendum provision whereby if 5% of the voters in the previous election file a petition, the issue has to go to referendum. New Fire Station: A new fire station is proposed to be constructed in the area of Highway 65 and 117th Avenue in Blaine. As part of this project Station Three on 109th and Buchanan and Station Five located at Paul Parkway and Ulysses Street would be sold. These two stations are less than one mile apart, do not have adequate garage bays or meeting space, and are both land locked making additional impossible. By consolidating Stations Three and Five into a single station the department and citizens will benefit from a more efficient operation. It will provide an opportunity for a reduction in the number of personnel as well as equipment. No reduction in service or response time will result given the close proximity of the three locations, proximity of a number of members to the 117th area, and increased number of career firefighter/administrative staff housed at the station. The new station will house much needed training space including an Incident Command Simulator. The Incident Commander (IC) is in charge of all resources at an emergency scene and must make like and death decisions in a highly dynamic and unpredictable environment. Thankfully, we do not experience a large number of serious events on a yearly basis; however, this lack of real like experiences, just increases the need to train more often. The decisions an IC makes in the first few minutes typically determine the actions of all individuals for the next few hours. Along with the training and apparatus by needs, the station will contain a work out facility for all police, fire and medic personnel who serve the city. Several small meeting rooms, open to public groups will be included along with office space for administrative personnel. Cost estimates for the station and land range from $4.5 to $6 million. Equipment: Engine 2 is a 1990 Pierce housed at Station Two located at 89th and Pierce Street in Blaine. Station Two provides primary protection to Spring Lake Park, and southern Blaine. Their secondary coverage area is Mounds View and central Blaine. Engine 1 is a 1992 Toyne housed at Station One located at Pleasant View and County Highway 10. Station One provides primary protection to Mounds View and Spring Lake Park. Their secondary coverage area is southern Blaine. A typical engine, fully equipped and operational cost about $450,000. A Command Van is best described as something analogous to a motor home at least in size and outward appearance. However, on the inside there is significant difference. Instead of the traditional bedroom, shower, bath, kitchen and eating areas, the interior is configured and equipped for communications and computer and electronic equipment. Maps of the cities infrastructure, underground utilities, and other critical information is stored on-board along with pre-plans for commercial, industrial and public assembly building that includes site plans and floor plans. A typical Command Van fully quipped and operations costs about $325,000. Future Station: In addition to all of the above, the fire department is looking forward ten and twenty years down the road when another station may be needed to serve the northeast portion of Blaine. While al long time off, the land in that area is in high demand and will only continue to escalate in value. As part of this plan, we will be looking at acquiring a one or two acre parcel to build a satellite station when needed. The most likely scenario is combining a fire facility with other public utility needs such as a pump house, water reservoir, or public works garage. Funding for this parcel has not been determined yet. Summary: The Fire Department Capital Place seeks more than $8 million in public dollars over the next decade to provide the volunteer responders and administrative staff with the tools and equipment to efficiently and effectively do their job. Major purchases include the construction of a new station, consolidating two older stations in the process and purchasing four engines, one ladder truck and one command van. Financing of the plan is accomplished via bond sales for the station, two engines and command van. Tax impacts for the sale of the bonds are as follows: HOME VALUE ANNUAL COST $150,000 $30 $200,000 $40 $250,000 $50 $275,000 $55 $300,000 $60 $350,000 $70 $400,000 $79 The remaining equipment will be purchased through the sale of equipment certificates and annual budget appropriations. If you have any questions, please contact Nyle Zikmund at 612-860-7442 day or evening. Detailed documents regarding the department’s history, background, administrative staff, operations, finances, services and the capital plan are all available upon request. Item No: 6 Meeting Date: February 7, 2005 Type of Business: Worksession Administrator Review : ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Charles Hansen, Finance Director Item Title/Subject: Review Fire Station and Capital Improvement Bond A public hearing is scheduled for 7:05pm on Monday, February 14, 2005, to consider approving an update to the Capital Improvement Plan and authorize the issuance of Capital Improvement Bonds for the construction of a fire station and purchase of fire trucks. This public hearing was originally scheduled for January 24, 2005, but had to be postponed due to a decision by the City’s legal newspaper to not publish an edition on January 5, 2005. Fire Chief Nyle Zikmund had arranged his schedule to be here on January 24th. He made an out of town commitment for February 14 that couldn’t be rescheduled after we learned of the postponement. Deputy Fire Chief Don Krueger will attend the February 14th meeting to answer any questions of the Council or public. The City Council will be asked to approve a number of actions and documents on February 14, 2005. These are summarized below and copies are attached. This work session is an opportunity for the City Council to become familiar with them prior to having to decide the issues and to alert staff to questions, so they may be answered on February 14th. Capital Improvement Plan The Capital Improvement Plan (CIP) is part of the Long Range Financial Plan (LRFP), which was approved by the City Council by Ordinance 751 on August 9, 2004. The CIP needs to be updated due to increases in cost estimates since last summer. Updating of the CIP will be done by resolution on February 14th. The 2005 LRFP will be approved by ordinance later this year. Changes in this version of the CIP include showing Mounds View’s share of the fire station at $1,200,000 instead of $750,000 and the fire trucks at $210,000 instead of $200,000. Public Works also made some changes to the CIP. These mostly consist of moving some storm water projects to later years to correspond to the time when street projects will be done. Capital Improvement Bonds Capital Improvement Bonds (CIB) are a fairly new financing tool offered to counties and cities by the State Legislature. Their use is specifically targeted to facilities such as city halls, public safety buildings, and public works buildings. The city must adopt a CIP covering at least five years and the proposed facility must be listed in the plan. The CIP must be approved by the City Council after a public hearing. The City must publish a notice of its intention to issue capital improvement bonds and the date and time of a public hearing on the matter. After the hearing, three-fifths of the members of the City Council must approve the issuance of the bonds. Citizens opposed to the bond issue then have 30 days during which to circulate a petition that would need to have signatures equal to 5% of the votes cast in the last general election. Such a petition would require a special election on the question of issuing the bonds. In the absence of a petition, the bonds can be issued after 30 days. The proposed bonds would be structured must like the Fire Bonds of 1991. The City of Blaine would actually issue the bonds on behalf of all three cities. They would be 20-year bonds totally no more than $8,400,000. Annual debt service payments would be allocated between the cities on the basis of the existing cost allocation formula using assessed value and the number of fire calls. Supplement to the Joint Powers Agreement The existing Joint Powers Agreement (JPA) for the operation of the fire department doesn’t adequately cover the situation arising from a major construction project such as a new fire station. The City Council will be asked to approve the attached JPA. The provisions of the Supplemental JPA are very comparable to the existing JPA. The only noteworthy item is that the revised agreement commits the City of Mounds View to debt service for the 20-year life of the bonds. Mounds View has been in the fire department for nearly 60 years and has found it to be a cost effective means of providing fire protection. In fact, the department has the lowest cost per person for fire protection of any department in the area. It’s highly likely that the relationship will continue at least for the next 20 years. Construction Control Process In addition to the Supplemental JPA, there is a need to a more detailed management plan for the construction process. Three plans are attached to individually cover the fire station construction, purchase of two fire trucks, and the purchase of a command vehicle. The premise of all the plans is that each of the three city councils would approve the most important decisions, the Blaine City Council would approve decisions that are of medium importance, and a management team would approve less important decisions. Resolution in Support of the Purchase of Land The Blaine EDA is in the process of purchasing the land needed for the fire station. Land prices in Blaine are escalating rapidly and it is important to tie up the land quickly to control costs. The Blaine EDA will sell the land to the three cities later at its cost. Final versions of all of the documents listed above will be prepared for the February 14, 2005 meeting. Respectfully Submitted, Charles Hansen Item No: 7 Meeting Date: February 7, 2005 Type of Business: Worksession Administrator Review : ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: James Ericson, Community Development Director Item Title/Subject: Review Policy on Use of Eminent Domain Introduction: At a recent City Council meeting, it was suggested that the Council review the City’s “policy” on the use of Eminent Domain—the power to condemn property. The City does not have a policy per se, however the Council has made various statements over the years with regard to the use of eminent domain. Given our two new Council members, this is a good opportunity to revisit the issue of eminent domain, first as a refresher as to what it is, and second, to ascertain when and under which conditions its use would generally be appropriate. Discussion: The laws concerning the use of eminent domain are quite extensive and depending upon the intended purpose of the acquisition, may be subject to different requirements. Kennedy & Graven provided me with a list of statutory references dealing with specific types of condemnation which is attached as Exhibit A. The general regulations relating to a city’s ability to condemn property are addressed in Minnesota Statutes, Chapter 117, attached as Exhibit B. Finally, a good summary on the eminent domain process is provided for the Council’s review in Exhibit C. The City Attorney advises against adopting any specific policy on the use of eminent domain but considers the discussion on the use of eminent domain beneficial on a general basis. Given that advice, the Council could discuss it’s position on the use of eminent domain both on an individual basis and collectively in a general sense. Such discussion will be helpful for staff as we respond to development projects brought to our attention or consider projects for the betterment of the community. Regardless, it should be reiterated that each case is unique and the Council will need to assess and determine whether the action would serve the public purpose, or in other words, be in the best interest of the community. The following generalized scenarios are intended simply to assess the Council’s tolerance for the use of eminent domain, keeping in mind that for each example, there would likely be extenuating circumstances beyond that identified. All of these assume that negotiation between the property owner and City have not been successful. 1. An abandoned building, repeated acts of vandalism Yes No 2. A blighted commercial building, declining property values Yes No 3. A vacant lot in the middle of a redevelopment proposal Yes No 4. Residential back yard areas for a stormwater pond Yes No 5. A blighted residential property, nuisance violations Yes No It may well be the case that the answer to each of these is “it depends”. Eminent Domain Report February 7, 2005 Page 2 Recommendation: Review the materials provided and consider the examples indicated above. No action is requested; the intent of the report is to inform and gain a better sense of the Council’s position regarding the use of eminent domain. Respectfully submitted, ________________________ James Ericson Community Development Director Exhibit A. The following is a list of statutory provisions authorizing cities to condemn property in various circumstances: Air navigation facilities 360.032 Airports and landing fields 360.032, 360.036, 360.042, 360.202 Building line easements 463.03, 463.04 Cable communications systems 238.25, 238.26 City development districts 469.126, 469.131 Controlled access highways 160.08 Courthouse and city hall buildings 374.11, 374.32 Damages 416.16 Docks, piers, and wharves, land for 458.46 Drainage systems 465.01 Forest lands 459.06 Generally 465.01 Great River Road, adjacent areas 161.142 Hazardous buildings 469.025 Hazardous buildings, authority to acquire 463.152 Home rule charter contents 410.07 Interstate bridges, acquisition 165.07 Land exempt from park assessments 465.16 Land for 441.48 Minimum-maintenance roads, limitations 160.095 Municipal state-aid streets 162.09 Navigable waters, land on 458.02 Nursing homes, real property 447.41 Park facilities, third class cities 459.14 Public buildings, land for 416.16 Public utilities, acquisition 216B.47 Road or street building materials 160.11 School buildings and grounds, land for 416.16 Sewers 444.075, 465.01 Special assessments, installments 435.17 Storm water control systems 444.075 Telephone companies, acquisition 237.19, 237.20 Toll bridges 165.09, 441.48 Toll facilities, rights of way 160.85 Trees and hedges, highways 160.22 Trunk highways, replacement of public lands 161.202 Urban renewal projects 469.012 Wastewater treatment facilities 444.075 Water supply 444.075 Wetlands preservation areas 103F.614 Specific references can be reviewed online by accessing the state’s website at: http://www.leg.state.mn.us/leg/statutes.asp and selecting retrieve a section. Exhibit C. Minnesota Statutes Chapter 117 – SUMMARY Minnesota Statutes Chapter 117 governs Eminent Domain Proceedings. The statute fulfills several functions. First, it creates a procedure whereby there is judicial supervision of a governmental finding of Public Purpose. Second, it creates a mechanism for official identification of the land to be taken and notification of interested parties. Third, it creates a mechanism for immediate acquisition and transfer of the property to the governmental authority, called Quick Take. Fourth, it creates a multi-tiered mechanism to establish the amount of just compensation to be paid to the landowner. In Minnesota, virtually all takings must be performed under Chapter 117. There are a few exceptions. Most notable are takings by watershed districts for Water Projects and by Drainage Authorities for drainage ditches. When a governmental authority takes property without compensation, the landowner may commence an inverse condemnation procedure to force the authority to pay compensation, or may seek injunctive relief to stop the taking unless eminent domain proceedings have first been commenced. Pre-Eminent Domain Negotiation. Most governmental authorities prefer to negotiate an acquisition. An agreement saves the authority attorneys fees, eliminates delays and makes for happier constituents. Sometimes an authority will approach a landowner with a very substantial and fair offer. Other times, the authority approaches the landowner with an offer which is way too low and unfair. Uniform Relocation Act. Minnesota follows the Uniform Relocation Act in condemnations. This act confers various rights upon the landowner. Pre-Taking Entry. In Minnesota, a governmental authority may enter upon the land to survey the land or in some cases to confirm whether the land has environmental problems. If there is a dispute regarding the right of entry, the governmental authority applies to the Court for an order. Commencement of Proceedings. An authority commences an eminent domain proceeding by serving a Summons and Petition upon all of the property owners. The authority should serve all persons with a property interest in the land. "Owner" under the Statute includes all persons interested in such property as proprietors, tenants, life estate holders, encumbrancers, or otherwise. The petition gives the owner 20 days notice of the initial court appearance. At this initial court appearance, the Court makes a public purpose and necessity determination and appoints three commissioners, private parties who make an initial just compensation. Public Purpose and Necessity. A court gives great deference to a governmental authority's determination that a taking serves a public purpose. Public purpose focuses on the nature of the project, not the particular land being taken. A court may overturn that determination if (a) the governmental authority failed to follow required statutory procedures in making the determination, (b) the project violates a statute, for example regulating the environment or otherwise prohibiting some aspect of the project itself, (c) the particular government authority lacks authority to conduct projects of this kind, (d) the project itself is Exhibit C Page 2 beyond the power of government, (e) the governmental authority seeks to take property from another governmental authority with a superior governmental purpose. A court may also overturn a project if the land being taken is not necessary for the public purpose. But the term necessary implies a higher standard than actually exists, for a court will not overturn a public necessity finding unless the governmental authority's determination is wholly without merit. In a recent case, for example, the Minnesota appellate courts refused to allow the University of Minnesota to take land to stockpile it for a future project remote in the future not yet approved. Quick-Take Usually the condemning authority gets title to the property after the filing of a commissioner's award. But if the condemning authority needs the property immediately, it may certify the property for quick-take by giving 90 days notice. Prior to taking title, it must deposit in court (or pay to the owner) an amount equal to the certified appraisal obtained by the governmental authority. If the owner is dissatisfied with this amount, it follows the regular procedure to establish the market value. Commissioners' Hearing The first step in the valuation process is to obtain a market valuation determination by Commissioners appointed by the Judge. The judge appoints three disinterested commissioners, and at least two alternates, residents of the county, to ascertain and report the amount of damages that will be sustained by the several owners on account of such taking. Either party may nominate commissioners to serve in this capacity. The Commissioners then conduct a hearing, or hearings. They listen to evidence, including appraisal evidence, presented by the condemning authority and the property owners. They then issue an award based upon the fair market value of the property. They may also award the landowner up to $500 for appraisal fees. Commissioners usually issue their award quite promptly, but by statute they must ordinarily make an award within 90s of their appointment. Appeal of Commissioners' Award The Condemnation statute provides for appeal to the court for a jury trial appeal de novo of the Commissioner's award. If an appeal is filed, the statute provides for partial payment of the Commissioner's award at once, so that the landowner will have at least partial compensation for the taking at once, since the governmental authority may take title upon issuance of the Commissioner's award. By trial de novo, we mean that the jury gets to decide the valuation all over again afresh. It may raise the award or lower it. The jury's ultimate verdict is likewise appealable to the Minnesota Court of Appeals. What Must the Landowner be Paid? The landowner is entitled to "just compensation," the fair market value of the property taken. What does this mean? Suppose for example that the condemning authority decides to take 40 acres of unimproved land. The compensation would be determined by the land's fair market value: the price that a willing buyer (that is under no special compulsion to buy would pay a willing seller (that is under no special compulsion to sell). This value is determined through an appraisal process in which the appraiser compares the condemned property to comparable properties which have been sold. The appraiser adjusts these comparable sales to account for differences between the condemned property and the comparables. Exhibit C Page 3 Highest and Best Use: The property is valued according to its highest and best use. For example, if good farmland is vacant and historically unplanted, the condemning authority would still have to pay the price that good farmland will bring on the market. Suppose the property contains a leased building which has a lease very favorable to the lessor. The condemning authority is not bound by the terms of the lease--it pays what the market will now bring for the property. If the landowner has paid way too much for the property, the condemning authority doesn't reimburse landowner's cost, it pays fair market value. Multiple Ownership. Suppose several owners have interests in the land. Each owner receives the fair market value for that owner's interest. Note that the sum of each owner's interest must equal exactly the total fair market value of the property. Let's use leased property as an example of how the process works. Imagine that the authority seeks to take a shopping center strip in which three tenants lease commercial space. In Minnesota, the fact finder first determines the fair market value of the property as a unit. Of course, the income produced by a comparable shopping center may help determine the fair selling price of the commercial strip. But the starting point is to determine the total value of the shopping mall. What do tenants receive? In the absence of a specific agreement between the landlord and tenant, the tenant receives the value of his interest. If the tenant's lease is at a below market rent, the tenant will receive something to reflect the "bonus value" of the lease. If the right of leasehold renewal has a net value, the tenant will receive that as well. The amounts payable to the tenant will be subtracted from the overall award to arrive at the landlord's share. In addition, if the tenant owns fixtures which cannot be removed, the tenant may receive compensation for those fixtures. Leasehold Condemnation Clauses. It is quite common for commercial leases to contain a clause which seeks to reserve the entire award exclusively to the landlord. These clauses are enforceable in Minnesota, although the tenant will still receive Uniform Relocation benefits. In Minnesota, a commercial lease which terminates upon condemnation effectively deprives the tenant of compensation for the value of its leasehold interest. Other states follow a somewhat different rule. What about lost profits. When a business property is taken, the owner loses business opportunity. It may surprise you to know that, at least in Minnesota, the owner does not receive compensation for lost profits or business opportunity. (There are a few exceptional cases in which this is not true). The theory behind this rule is that the owner receives enough money to find a comparable location, so that the owner should be able to relocate and continue receiving the same income and profits at the new location. Relocation benefits are designed to assist the owner with some of the expenses associated with the move. Severance Damages. Sometimes the condemning authority takes part, but not all, of the property. The property remaining may suffer damage, because it is no longer connected to, or part of, the land which has been taken. Generally, the owner of the property will be entitled to "severance damages" defined as the loss in market value inflicted on the land not taken. The right to severance damages arises only when some of the owner's land is being taken. If neighboring land is taken, then the owner is entitled to damages only if he can prove up the elements of an inverse condemnation. Severance damages may be awarded for land which is contiguous, but not named in the condemnation proceeding. In addition, in Exhibit C Page 4 Minnesota, a landowner may be entitled by special statute to damages to land which is not contiguous to the taking, if the landowner can show that the non-contiguous tract is so connected to the property taken that the taking from the one parcel damages the other. It is not enough, then, to show that the project itself damages the non-contiguous parcel: one must show a relationship between the parcel where the direct physical taking occurs and the non-contiguous parcel. Item No: 8 Meeting Date: February 7, 2005 Type of Business: Worksession Administrator Review : ____ City of Mounds View Staff Report To: Mounds View City Council From: James Ericson, Community Development Director Item Title/Subject: Review Possible Acquisition of the Donut Connection Site, 2394 County Road 10 Introduction: It was reported at the January 24, 2005 Council meeting that the Realtor representing the property owners of the Donut Connection located at 2394 County Road 10 approached staff regarding the sale of the property to the City. The Council was interested in exploring this acquisition, and consistent with state law, forwarded the matter on the Planning Commission to determine if the proposed acquisition would be consistent with the Comprehensive Plan. Discussion: Staff informed the Realtor of the City Council’s interest and that the Planning Commission would need to review the possible acquisition. The future land use map designation for the Donut Connection parcel and adjoining gas station land is HC, Highway Convenience. The zoning for both properties is B-3, Highway Business. The property area of the Donut Connection site is only 20,000 square feet, the lot carved from the former Fina Gas station parcel. As a stand-alone development, the Donut Connection property has limited value to the City. If however combined with the gas station parcel, a meaningful redevelopment could be achieved. The Planning Commission reviewed this at their meeting on February 2, 2005 and found the proposed acquisition consistent with the Comp Plan and a furthering of the articulated goals for the continued redevelopment of County Road 10 corridor. Proceeds for the acquisition would be derived from pooled tax increment finance dollars. This parcel and the adjoining gas station parcel is represented on the City’s official list of properties for potential acquisition. The Planning Commission’s resolution, adopted unanimously, is attached for the Council’s reference. The Comprehensive Plan goals and policies are intended to maintain a cohesive land use pattern that ensures compatibility and functional relationship between activities and uses. This statement is consistent with the community’s desire for coordinated and meaningful development and redevelopment along the County Road 10 corridor. Acquisition of the Donut Connection site would allow for more control over the potential reuse of the subject property while encouraging a more coordinated redevelopment that might not otherwise occur without City involvement. Another equally important goal articulated by the Comprehensive Plan is the desire to preserve and protect property values. Acquisition of this property voluntarily offered to the City will provide an opportunity to enhance the tax base while opening the door to a comprehensive redevelopment of this visible corner within the County Road 10 corridor. Donut Connection Report February 7, 2005 Page 2 Recommendation: If the City Council continues to support the acquisition of the Donut Connection site at 2394 County Road 10, staff would simply request that the Council direct staff to negotiate with the property owner and return to the Economic Development Authority on February 14, 2005 with a resolution authorizing the acquisition with terms as negotiated and agreed upon by the EDA. Acquisition would be contingent upon the property owner waiving rights to relocation benefits and other conditions as determined by the EDA. Respectfully submitted, ________________________ James Ericson Community Development Director Comprehensive Plan Future Land Use Map Donut Connection 2394 Co. Rd. 10 Gas Station Site 2390 Co. Rd. 10 Donut Connection MOUNDS VIEW PLANNING COMMISSION RESOLUTION NO. 782-05 CITY OF MOUNDS VIEW COUNTY OF RAMSEY STATE OF MINNESOTA RESOLUTION RECOMMENDING APPROVAL OF THE ACQUISITION OF THE DONUT CONNECTION PARCEL LOCATED AT 2394 COUNTY ROAD 10 WHEREAS, the Mounds View Planning Commission is required to review proposed acquisitions of real property within the City by the City; and, WHEREAS, the parcel located at 2394 County Road 10, improved with the “Donut Connection” bakery, has recently become available; and, WHEREAS, the Realtor representing the owners of the Donut Connection has approached the City with an offer to sell the 20,000 square foot parcel located at the southwest corner of County Road 10 and County Road H2; and, WHEREAS, the property is zoned B-3 (Highway Business) and has a Future Land Use Map designation of Neighborhood Commercial; and, WHEREAS , the purpose of the subject property acquisition would be to facilitate the redevelopment of this corner of the County Road H2/ County Road 10 intersection; and, WHEREAS, a broad goal of the Comprehensive Plan is to maintain a cohesive land use pattern that ensures compatibility and functional relationship between activities and uses. This statement is further consistent with the community’s desire for coordinated and meaningful development and redevelopment along the County Road 10 corridor. NOW, THEREFORE, BE IT RESOLVED that the Planning Commission of the City of Mounds View finds that the proposed acquisition of the property located at 2394 County Road 10 would be consistent with the Comprehensive Plan. BE IT FINALLY RESOLVED that the Planning Commission directs staff to forward this resolution to the City Council prior to approval of the minutes. Adopted this 2nd day of February, 2005. ____________________________________ Gary Stevenson, Chairperson ATTEST ____________________________________ James Ericson Community Development Director (SEAL)