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City Council - 09/06/2022 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY, SEPTEMBER 6, 2022 7:00 PM, CITY CENTER CITY COUNCIL Mayor Ron Case, Council Members Mark Freiberg, PG Narayanan, Kathy Nelson, and Lisa Toomey CITY STAFF City Manager Rick Getschow, Public Works Director Robert Ellis, Parks and Recreation Director Jay Lotthammer, City Planner Julie Klima, Police Chief Matt Sackett, Fire Chief Scott Gerber, and City Attorney Maggie Neuville I. CALL THE MEETING TO ORDER Mayor Case called the meeting to order at 7:00 PM. All Council Members were present. II. PLEDGE OF ALLEGIANCE III. OPEN PODIUM INVITATION IV. PROCLAMATIONS / PRESENTATIONS A. ACCEPT CONTRIBUTION FOR ARTS IN THE PARK FROM UPTIME ENERGY DRINKS (Resolution No. 2022-96) Lotthammer explained Arts in the Park is Eden Prairie’s annual art fair that welcomes local and regional artists and makers to beautiful Purgatory Creek Park where they can sell their artwork, homemade beauty products, artisan foods, unique clothing and more. There are many family-friendly events. Uptime Energy Drinks has given a donation to support the event. Case pointed out donations allow the City to further stretch tax dollars. MOTION: Toomey moved, seconded by Narayanan, to adopt the Resolution accepting the contribution in the amount of $500 for Arts in the Park from Uptime Energy Drinks. Motion carried 5-0. CITY COUNCIL MINUTES September 6, 2022 Page 2 V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS MOTION: Narayanan moved, seconded by Freiberg to approve the agenda as published. Motion carried 5-0. VI. MINUTES A. COUNCIL WORKSHOP HELD TUESDAY, AUGUST 16, 2022 B. CITY COUNCIL MEETING HELD TUESDAY, AUGUST 16, 2022 MOTION: Nelson moved, seconded by Narayanan to approve the minutes of the Council workshop held Tuesday, August 16, 2022, and the City Council meeting held Tuesday, August 16, 2022, as published. Motion carried 5-0. VII. REPORTS OF ADVISORY BOARDS AND COMMISSIONS VIII. CONSENT CALENDAR A. CLERK’S LIST B. ADOPT RESOLUTIONS 2022-97 AMENDING RESOLUTION 2022-64 AND ADOP RESOLUTION 2022-98 AMENDING RESOLUTION 2022- 66 EXTENDING DEADLINE RELATING TO PROJECT APPROVALS AND TIF APPROVALS FOR GTS HOUSING C. APPROVE AGREEMENT WITH EXCEL LAWN AND LANDSCAPE FOR SNOW AND ICE MANAGEMENT SERVICES D. APPROVE CHANGE ORDER NO. 3 WITH VALLEY PAVING, INC. FOR 2022 PAVEMENT MANAGEMENT PROJECT E. APPROVE CONTRACT WITH ROCHESTER CONCRETE PRODUCTS FOR SINGLETREE RETAINING WALL MATERIALS F. APPROVE AGREEMENT WITH BRAUN INTERTEC FOR PAVEMENT TESTING FOR 2023 PAVEMENT REHAB PROJECT MOTION: Toomey moved, seconded by Narayanan, to approve Items A-F on the Consent Calendar. Motion carried 5-0. IX. PUBLIC HEARINGS / MEETINGS A. CODE AMENDMENT FOR EXTERIOR BUILDING MATERIALS by CITY COUNCIL MINUTES September 6, 2022 Page 3 City of Eden Prairie. First Reading of Ordinance to Amend City Code Chapter 11 Relating to Exterior Building Materials (Ordinance) Klima explained City Code Section 11.03, Subd. 3 (K) establishes the City’s architectural standards. This section was most recently amended in 2016 in conjunction with the Council’s approval of the City’s Design Guidelines. Staff is proposing housekeeping amendments to the Code’s Architectural Standards Section to clarify provisions related to building materials, including fiber cement usage, painted brick, and class I material usage on single-story buildings. Klima stated in 2016, the Code was amended to allow fiver cement as a Class I material in R1-2.5 zoning district only. One piece of the proposed change includes the addition of language stating that fiber cement shall not be the most predominant material used on a façade. The intention is to communicate expectations to developers sooner, increase efficiency, and decrease costs. Case asked if a developer could do 49 percent fiber cement and 51 percent of another material. Klima stated it depends on the breakdown of the different elements on the façade. If brick was 50 percent of the building, then fiber cement would have to be less than 49 percent. Narayanan asked if the change would impact building cost. Klima explained it would save developers cost because there would be fewer plans submitted to the City. Case pointed out Narayanan was asking if fiber cement is a more affordable material as that could impact developers’ interest. He asked Narayanan had concerns about that. Narayanan explained he has heard frustration that the development costs in Eden Prairie are higher. Getschow stated fiber cement is a more affordable material, but Eden Prairie would have to compare the guidelines of various cities to see the impact of codes on the cost for development. He noted he doesn’t think it is significant. The cost of the land is the most expensive component of a development project. Case stated if the building cost is increased, it may deter developers from wanting to build in Eden Prairie. However, they still want high design standards. Freiberg asked if they are concerned about the appearance of fiber cement or the quality of the material. Klima stated the research was completed before the initial amendment to the code which confirmed fiber cement is a high-quality CITY COUNCIL MINUTES September 6, 2022 Page 4 material worthy of being considered a Class I material. Also, it is more affordable than glass and brick. However, there are other more affordable materials also on the list of Class I materials. Klima stated the other proposed amendment would permit fiber cement as Class I in all Commercial, TOD, and Town Center districts that permit multiple family dwellings. Klima added in 2016, language was added in code that prohibits painted brick. Allowing painted brick increases flexibility in design and aesthetics. Provisions in City Code exist to address any maintenance concerns. The proposed amendment strikes this language, which effectively would permit painted brick in the City. Case stated brick is mostly maintenance-free. However, the explanation is to allow for less maintenance. He asked if they want to introduce something that would need to be maintained instead of brick already not needing much maintenance. Klima agreed there is a maintenance aspect to painting brick. When previous requests have come in, Staff has requested materials and information about staining or painting and has guided the citizens to use the most low- maintenance option. Getschow noted all of the proposed amendments went through the Planning Commission. Klima stated the Planning Commission voted 7-0 to recommend approval of the changes. Klima stated the last part of the amendment relates to single-story buildings. Currently, Class I materials shall be used in the ground level of the building in certain areas. The draft amendment clarifies that this only applies to the base of a multi-story building in the districts. There is a direct reference made to the Design Guidelines policy document which includes the discussion about the requirement and the visual guideline. Case asked if Staff has looked at what other cities have done for the same issue. Klima explained Staff has reached out to several cities with similar development patterns and the proposed amendments are in line with the information received. There were no comments from the audience. MOTION: Toomey moved, seconded by Narayanan to close the public hearing, and to approve the 1st Reading of the Ordinance to Amend City Code CITY COUNCIL MINUTES September 6, 2022 Page 5 Chapter 11 relating to building material standards. Nelson asked if a building that can be seen from all four sides would require Class I materials to be used on all of the sides. Klima stated the split of materials is required on all four facades. Narayanan asked if 75 percent of the total façade must be Class I materials or if 75 percent of each side must be Class I materials. Klima stated each face must include 75 percent of Class I materials. VOTE ON THE MOTION: Motion carried 5-0. B. CODE AMENDMENT FOR INCIDENTAL SIGNS by City of Eden Prairie. First Reading of Ordinance to Amend City Code Chapter 11 Relating to Incidental Signs (Ordinance) Klima explained earlier this year, City Council approved a code amendment to make the sign code content neutral, removing all content references to sign regulations, and making general housekeeping edits. Inadvertently in this amendment process, the City’s regulations regarding directional signs were removed due to the content-based definitions and regulations but were never replaced. This proposed amendment seeks to reinstate the lost sign allowances through content neutral regulations while providing additional clarification within the sign code. Case noted the Supreme Court has required that local government does not treat political or non-political signs differently. Klima stated the amendment does not run afoul of any Supreme Court rulings, and it doesn’t impact campaign signs. There were no comments from the audience. MOTION: Narayanan moved, seconded by Nelson, to close the public hearing, and to approve the 1st Reading of the Ordinance to Amend City Code Chapter 11 relating to signs. Motion carried 5-0. C. CODE AMENDMENT FOR STORMWATER MANAGEMENT by City of Eden Prairie. First Reading of Ordinance to Amend City Code Chapter 11 Relating to Stormwater Management (Ordinance) Ellis explained Eden Prairie adopted the land alteration, tree preservation and stormwater management section of code, City Code Section 11.5, on February 16, 2006. This was, in part, in response to the U.S. Environmental Protection Agency in 1999 and the Minnesota Pollution Control Agency in 2005 CITY COUNCIL MINUTES September 6, 2022 Page 6 regulating stormwater discharges in small, urbanized areas like Eden Prairie. The City applied for its first National Pollutant Discharge Elimination System (NPDES) Phase II Municipal Separate Storm Sewer System (MS4) Stormwater Permit in 2005. Over the years, the Permit has been amended to impose new requirements on MS4s. This necessitates occasional changes in City Code to ensure compliance with Permit requirements. Also, it addresses some gray areas currently in the Code. There were no comments from the audience. MOTION: Nelson moved, seconded by Freiberg, to close the public hearing, and to approve the 1st Reading of the Ordinance to Amend City Code Chapter 11 relating to stormwater management. Motion carried 5-0. X. PAYMENT OF CLAIMS MOTION: Toomey moved, seconded by Narayanan to approve the payment of claims as submitted. Motion was approved on a roll call vote, with Freiberg, Narayanan, Nelson, Toomey and Case voting “aye.” XI. ORDINANCES AND RESOLUTIONS XII. PETITIONS, REQUESTS, AND COMMUNICATIONS XIII. APPOINTMENTS XIV. REPORTS A. REPORTS OF COUNCIL MEMBERS B. REPORT OF CITY MANAGER 1. Resolution No. 2022-99 Certifying Proposed 2023 Property Tax Levy, Accepting Proposed 2023 Budget, Setting Date for Public Hearing, and Consenting and Approving HRA Tax Levy Case explained the levy needs to be set as a ceiling in accordance with State guidelines. Getschow explained Minnesota Law and administration rules prescribe a detailed process for public notification and participation in setting taxes and budgets of local governments. Cities must adopt a proposed property tax levy and certify that amount to the county auditor on or before September 30, 2022. In addition, the City Council must accept a proposed budget for the coming CITY COUNCIL MINUTES September 6, 2022 Page 7 year. Getschow showed a slide with a timeline for the rest of the budget process. The City must announce at this Council meeting the future time and date of the regularly scheduled meetings at which the budget and tax levy will be discussed and public testimony taken. The Council must adopt a final tax levy and budget by December 28. Getschow noted the budget process is a two-year budget with multiple year preparation by Staff. They have engaged with the community to better inform the budget. Very little of what was proposed the previous year has changed. Getschow stated the proposed General Fund Revenue Budget has a proposed decrease since the previous year. Federal money related to COVID-19 has impacted the City and will continue to be used throughout the years to counteract lost revenues due to the pandemic. Getschow stated the General Fund Expenditure Budget has a proposed 3.4 percent increased. The numbers are below inflation. Public safety is above the cost of inflation because some positions have been added to the Police Department and Fire Department. Administration saw a decrease because there is not an upcoming election. Getschow showed a slide with a pie chart depicting the budget by category. He explained a large majority of expenditures are for wages and benefits. Getschow stated the general fund levy is proposed to go up 4.5 percent. The debt levy will not be increased at all. The City continues to see growth in commercial property. Taxes from the commercial property goes into a pool which impacts the levy due to fiscal disparities. Getschow stated the overall General Fund has a 3.4 percent increase with the total budget seeing a similar increase. He showed a slide with a list of 15 other cities and their proposed 2023 tax levies. Eden Prairie is the lowest. He noted the levies are currently only preliminary, but it would be hard for most cities to get down to the same 3.4 percent as Eden Prairie. Getschow noted Eden Prairie has seen a lot of increase in property values. Additionally, there has been a lot of investment in all sectors. The average home went up in value by 19 percent. This drops the tax rate to the lowest it has been in over a decade. The City Tax Rate is 28.95 percent for 2023, which is one of the lowest in the metro. Getschow explained the median value home in Eden Prairie was $430,400 in CITY COUNCIL MINUTES September 6, 2022 Page 8 2022 and is valued at $513,200 in 2023. If a resident’s home increased less than 10 percent, there will be a decrease in taxes. The tax increase or decrease depends on how much a home’s value changed. Any residences with a value increase of more than 25 percent would only see a City tax increase of $197. Case stated the Council wants to increase the tax base and manage the land development. When the tax base increases, people pay less taxes. Increasing the tax base has a positive impact on homeowners, renters, and others in Eden Prairie. It is a wonderful dynamic. Case added the State legislature may change the proportions of what different communities may pay such as apartments or single-family homes, or commercial properties. Getschow explained Eden Prairie has one of the lowest tax rates for a person that were to move into the State and look for a $500,000 home. The action in question is for the Council to set the ceiling levy. There will be other opportunities for the Council to provide input and discuss changes to the levy. Case explained the budget is a reflection of what the Council and the people of Eden Prairie prioritize. Toomey asked how Eden Prairie came in at the lowest. Getschow stated the City is doing a compensation study, and there has consistently been cushion built in to account for inflation. Several of the costs are spread out over a 10- year period, which helps to keep costs down. There are some upcoming capital projects that may need to be delayed based on inflation, but the finance team has created enough room to avoid making any last-minute changes to the budget. Getschow added other cities may be taking on brand new debt levies or adding Staff positions to catch up to necessary service levels. However, it was interesting that 14 of the comparison cities were above five percent. Case pointed out Eden Prairie has about 60 percent residence and 40 percent commercial. The City doesn’t rely on sales tax at all, similar to how Bloomington does. Bloomington was severely impacted during the pandemic for that reason. Narayanan stated Eden Prairie has nearly perfected the process of budgeting. In the past, Eden Prairie has been in fourth or fifth place for the lowest tax levy, but it has slowly moved to the lowest tax levy over time. Case noted the other cities may still have a decrease as the numbers are CITY COUNCIL MINUTES September 6, 2022 Page 9 preliminary. He added the residents have been responding well to surveys to help inform the levy and budget process. Narayanan agreed with Getschow that the long-term planning in Eden Prairie is very beneficial. For example, the tax levy was barely impacted by inflation. He asked if the residential and commercial tax rate are the same. Getschow stated a portion of commercial is taxed at a City rate while the other portion is taxed at a rate set by the metro to address fiscal disparities. Residences are taxed at the City rate. Nelson explained she was initially surprised that the levy is 4.5 percent because the City tends to keep the levy under four percent. However, considering the additions to the Police and Fire Departments, it is a very good levy. The City must continue to tax responsibly while keeping up with the services offered to the community. Freiberg noted one of the priorities of the Council is safety in the City, and slightly increasing the levy to better fund public safety is key. It is important that Eden Prairie has such a low levy while still prioritizing safety of its community. Case added the City has experienced a lot of savings due to sustainability choices it has made. Eden Prairie Staff has promoted a lot of innovation where other cities have copied their efforts. For example, the City created a method to address cracks in the roads. The Staff is very hardworking and efficient. Getschow noted employees have been innovative with street maintenance and snow plowing. The City has won awards for plowing and also is on the forefront of implementing technology and sustainable options. Nelson agreed Staff do what citizens need and want without cutting corners while saving money. Case pointed out several people want to work for the City, and they have several applicants whenever there is an opening. Toomey pointed out many Staff have been with the City for several years. MOTION: Narayanan moved, seconded by Toomey, to adopt the resolution that certifies the proposed 2023 property tax levy to be $44,909,284; and sets December 6, 2022, as the meeting which will include discussion of the budget and provide for public comment; and accepts the proposed 2023 budget of $57,395,407; and consents and approves the HRA tax levy of $205,000. Motion carried 5-0. CITY COUNCIL MINUTES September 6, 2022 Page 10 Case noted his appreciation of the various perspectives represented on the Council that also works well together. C. REPORT OF COMMUNITY DEVELOPMENT DIRECTOR D. REPORT OF PARKS AND RECREATION DIRECTOR E. REPORT OF PUBLIC WORKS DIRECTOR F. REPORT OF POLICE CHIEF G. REPORT OF FIRE CHIEF H. REPORT OF CITY ATTORNEY XV. OTHER BUSINESS XVI. ADJOURNMENT MOTION: Freiberg moved, seconded by Nelson, to adjourn the meeting. Motion carried 5-0. Mayor Case adjourned the meeting at 8:05 p.m. Respectfully submitted, ________________________ Katie O’Connor, Deputy City Clerk