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City Council - 11/15/2005 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL TUESDAY, NOVEMBER 15, 2005 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Nancy Tyra-Lukens, Councilmembers Brad Aho, Sherry Butcher, Ron Case, and Philip Young CITY STAFF: City Manager Scott Neal, Parks & Recreation Director Bob Lambert, Public Works Director Eugene Dietz, City Planner Michael Franzen, Community Development Director Janet Jeremiah, City Attorney Ric Rosow and Council Recorder Deb Sweeney I. ROLL CALL/CALL THE MEETING TO ORDER Mayor Tyra-Lukens called the meeting to order at 7:02 p.m. II. PLEDGE OF ALLEGIANCE III. COUNCIL FORUM INVITATION IV. RECOGNITION OF NEW CERT VOLUNTEERS Eden Prairie Fire Chief and Emergency Preparedness Director George Esbensen welcomed 20 new members of the Citizen Emergency Response Team(CERT): Linda Amundson, Vydehi Aravalli, Kathy Buchanan, Karen Dostal, John Duffy, Barb Freeman, Lisa Hahnfeldt, Ed Huler, Edite Izumi, Mike Klenner, Steve Kloeckner, Christopher Kramer, Judi Laurence, Lorene McWaters, Dipak Patel, Kathleen Porta, Dick Porth, Jon Stoltz, Bill Theobald, Sandee Williams, and Jennifer Zupancic. This brings the total number of CERT members to 69. The goal is 100. Esbensen noted grant funding has helped Eden Prairie develop one of the largest teams in the area. Tyra- Lukens thanked the volunteers for their service. V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS Neal added an item regarding a noise mitigation wall to the City's Managers Report. Case added a query about the Bent Creek Golf Course to Reports of Councilmembers. Tyra-Lukens removed a discussion of transportation funding from Reports of Councilmembers. MOTION: Aho moved, seconded by Butcher, to approve the agenda as published and amended. Motion carried 5-0. COUNCIL MINUTES November 15, 2005 Page 2 VI. MINUTES A. CITY COUNCIL WORKSHOP HELD TUESDAY, NOVEMBER 1, 2005 MOTION: Butcher moved, seconded by Case, to approve the Council Workshop minutes as published. Motion carried 5-0. B. CITY COUNCIL MEETING HELD TUESDAY, NOVEMBER 1, 2005 MOTION: Young moved, seconded by Aho, to approve the City Council minutes as published. Motion carried 5-0. VII. CONSENT CALENDAR A. ADOPT RESOLUTION NO. 2005-134 APPROVING FINAL PLAT OF THE POINTE ON LAKE RILEY B. AUTHORIZE ISSUANCE OF GRADING PERMIT TO JLM LANDSCAPE DESIGN FOR BACKYARD GRADING AND RETAINING WALL IMPROVEMENTS AT 11381 LANDING ROAD C. APPROVE TRAVEL POLICY FOR ELECTED OFFICIALS AND EMPLOYEES D. APPROVE PREPARATION OF A LAND EXCHANGE AGREEMENT WITH SCHOOL DISTRICT 272 E. APPROVE CONTRACT WITH SRF FOR DESIGN AND CONSTRUCTION SERVICES OF BOARDWALK OVERLOOK AND WALK CONNECTIONS AT PURGATORY CREEK RECREATION AREA F. ADOPT RESOLUTION NO. 2005-135 CANVASSING THE NOVEMBER 8, 2005, PARK REFERENDUM RESULTS G. ADOPT RESOLUTION NO. 2005-136 DECLARING PROPERTY AS "ABANDONED PROPERTY" MOTION: Butcher moved, seconded by Young, to approve Items A-H on the Consent Calendar. Motion carried 5-0. VIII. PUBLIC HEARINGS/MEETINGS IX. PAYMENT OF CLAIMS COUNCIL MINUTES November 15, 2005 Page 3 MOTION: Case moved, seconded by Aho, to approve Payment of Claims as submitted. The motion carried on a roll call vote with Aho, Butcher, Case, Young, and Tyra- Lukens voting "aye." X. ORDINANCES AND RESOLUTIONS XI. PETITIONS, REQUESTS AND COMMUNICATIONS XII. REPORTS OF ADVISORY BOARDS & COMMISSIONS XIII. APPOINTMENTS A. ARTS & CULTURE COMMISSION CHAIR & VICE CHAIR Neal said Susan Dickman, the appointed chair for the Arts and Culture Commission, resigned in September because of her personal and work schedule. Steve Mosow, the vice chair, has assumed the role of chairperson. Heather Olson, appointed to the Commission in April of 2004, will accept the position of Vice Chair. Staff recommends the appointments. MOTION: Butcher moved, seconded by Case, to appoint Steve Mosow as Chair and Heather Olson as Vice Chair of the Arts & Culture Commission. Motion carried 5-0. XIV. REPORTS OF OFFICERS A. REPORTS OF COUNCILMEMBERS 1. Liability Stacking for Joint Powers Agreements Tyra-Lukens said a recent court ruling might put the City at risk for liability stacking, where the City's liability could be "stacked" on top of that of the school district or other cities. Rosow said he has prepared amendments to five or six of the City's Joint Powers Agreements to negate the impact of the case. In the case of the Southwest Metro JPA, the City will recommend Chanhassen, Chaska, and Southwest Metro itself adopt the same language. The League of Minnesota Cities asked the court to reconsider, but its request was denied. The League will take the matter up at the next legislative session,but it is best for the City to act now by making the amendments. Tyra-Lukens asked Rosow to share background on the case. Rosow explained a North Dakota plumber was working on a school boiler in Minnesota when the boiler exploded. The city had a joint powers agreement, similar to Eden Prairie's, which allowed it to use district COUNCIL MINUTES November 15, 2005 Page 4 buildings for classes and events. Though the school had all responsibility for maintenance and operation, the court still found the city equally liable. Rosow said the League of Cities would pursue a legislative fix. It is not a constitutional issue so might be addressed next session. 2. Bent Creek Golf Course Case said although he is not a golfer, he has heard support over the years for a municipal golf course. The referendum to provide one failed, and the City also passed on the opportunity to acquire Olympic Hills. Case asked Staff to look at the possibility of acquiring Bent Creek, or possibly partnering with the Three Rivers Park District. He expressed concern that the situation might develop quickly. Tyra-Lukens agreed an 18-hole course ranks high on surveys. It would be helpful to know the cost and to see if there is still community interest. Aho asked Staff to look at operating costs as well as the cost of acquiring the property. B. REPORT OF CITY MANAGER 1. Flyins! Cloud Airport Commission Neal noted the Council expressed a desire to move forward with reestablishment of the Flying Cloud Airport Advisory Commission. He asked for a motion to develop the ordinance and charter, probably similar to the original establishing ordinance and amendments. Aho said he had spoken to previous Commission members and some did not see value in a new commission. Aho expressed reservations about restarting the Commission unless it had a clear purpose and intent. Young agreed and said the original charter was far too broad. It would also be critical to have a balanced group including business interests. Tyra- Lukens noted the Commission had always included business representatives. Case said the charter could be tightened but should stay flexible enough to cover future changes, for example the development of a jetport. The charter should focus on implementation of the City's agreement with MAC. Case said he had heard support for the Commission and noted MAC really favors the idea. Butcher noted the Commission would be advisory and favored a charter broad enough to include security as well as expansion. She suggested taking the MAC up on its offer to share the cost of the Commission. Aho asked Staff to clarify how costs would be shared so the Council could see the cost to the City before the final vote. Case COUNCIL MINUTES November 15, 2005 Page 5 asked Neal to present the old charter side by side with the new one to allow comparison. MOTION: Case moved, seconded by Butcher, to direct staff to prepare an ordinance to reestablish the Flying Cloud Airport Advisory Commission. Motion carried 5-0. 2. Letter of Support for Noise Mitigation Wall Neal reported he had met with representatives of a Beach Road neighborhood group and their consultant regarding their petition to MN- DOT for a noise mitigation wall. There are no details on height or materials as yet,but the consultant believes a letter from the City would be helpful. Neal emphasized the City would neither build nor maintain the wall—that is outside the City's scope. The letter is to show the DOT the wall would not be objectionable. MOTION: Aho moved, seconded by Butcher, to direct Staff to prepare a letter of support from the City of Eden Prairie for a noise mitigation wall on the east side of I-494 from Highway 62 south to the end of Beach Road with the following caveats: the City of Eden Prairie will not provide funding for the initial or subsequent construction of the proposed wall, and the City of Eden Prairie will not assume future maintenance responsibilities for the proposed wall. Motion carried 5-0. 3. Discussion of 2006 Budget Neal recommended Council focus on the tax levy amount rather than general fund spending, since the levy is what affects taxpayers. He directed Council's attention to his list of responses to Council's questions posed at the October 18a'meeting. The first spreadsheet reflects the original budget proposal used in the truth-in-taxation hearing, which had an adjusted levy increase of 8.6%. The second sheet shows the November 14t1i revised budget, with an adjusted levy increase of 4.8%. The reductions included $200,000 from the general fund; $290,000 in debt levy, since Fire Station#4 will not go forward this year; $250,000 from the CIP levy, and a transfer of$215,000 from excess budget stabilization funds (out of$980,000). The transfer would cover one-time purchases of furniture and police equipment. The total impact of these reductions would be to drive the levy increase down to 4.8%. However, this does not include the parks referendum. Neal said Staff recommends levying these funds in 2006 rather than 2007, because the City could expect to save $600,000 due to interest impacts. COUNCIL MINUTES November 15, 2005 Page 6 In terms of the impact of cuts on the budget, the original plan showed an 8.4% increase and the revised plan shows at 6.2% increase. There is a 9.4% increase when the parks referendum spending is included in the budget. Finally, Neal called attention to information on increases for comparable cities. Eden Prairie would be low among its peers in terms of increases. He introduced Staff for questions. Aho asked what would happen to the remaining portion of the excess budget stabilization fund not used this year($765,000). Neal said the plan would be to transfer another$215,000 in 2007 and roll the remaining $550,000 into the CIP. Young commented on the budget vs. levy issue. He noted it is easy to adjust a levy in the short term by manipulating funds,but long-term budget issues can remain. He asked Neal to identify which of the adjustments are reductions and which deferrals. Neal said the $200,000 from the general fund would be a reduction. The debt levy on the fire station would be a deferral. The CIP levy decrease would be a reduction and a second reduction is planned for 2007. Neal said that if the budget allowed,he would restore some of this funding since citizens support it. The impact of the CIP levy decrease would be to cut off full funding to the CIP three years earlier(2016 instead of 2019). The transfer from the excess budget stabilization fund would be an isolated transfer over the next two years. Aho asked where the general fund reductions were made. Neal said there was a reduction in the contingency fund, a small reduction in fire operating costs since there will not be a fourth fire station, and a change in the initiation of criminal diversion. There could be additional reductions from restructuring legal prosecution services,but the proposal from the prosecutor's office is still being reviewed. Young asked where the transfer from the excess budget stabilization fund appears in the budget. Neal said this is not a line item. Kotchevar explained the overall total is $215,000 less in the summary of the revised budget. Aho asked if$200,000 in general fund reductions was all that could be generated from Council suggestions at previous meetings. Neal confirmed this, with the caveat that there still could be savings in prosecution costs. In the area of criminal diversion, there were decreases in personnel cost and increases in fines and penalties. Neal said he had taken the suggestion COUNCIL MINUTES November 15, 2005 Page 7 to take down the contingency fund. These are the only operating costs reduced. Case noted the other areas suggested for reduction would come with cuts in service. He thought there might be another$150,000 to $200,000 to lower the levy by 3/a% or 1%. Case stated high taxes are difficult for residents to handle,but so are reductions in quality of life. For example, a 5% reduction in the police budget would mean losing four or five officers. Similarly, losing two community development staff would make the City less able to do due diligence on the Bent Creek golf course. Case said he would like to get the budget down to a 5% increase in the operating budget and a tax levy in the low 4% range. That would make Eden Prairie's the lowest increase in twenty-five cities. The state has opted out of paying certain expenses so there is more of a burden on cities throughout the state. Eden Prairie also had a 5% increase in population and a 4.6 increase in inflation. There is some limit on how much cutting the City can do under these circumstances. He suggested further cuts of$200,000. Neal said he would bring that budget and the service impacts if directed by the Council. Case said legal services would be an area for cuts. Neal noted diversion savings are already reflected in the revised budget. Bringing prosecution in-house might generate an extra $100,000 in savings, but the City still needs to review new information from the prosecutor's office to assess costs and quality of prosecution to protect victims. Aho asked when this option would be ready for review, and Neal said it should be ready for the meeting on November 291n Butcher supported gathering information in terms of legal services. She noted if the council adopted a 4.8% levy increase, it would be the lowest in the metro. The City does not exist in isolation. In addition, Eden Prairie is a star because the city has invested in the community. Chopping to the bone would be a change in direction. Butcher said the Council has been prudent over the last nine years, and cutting the budget to an arbitrary figure because someone asked for it is not appropriate. Tyra-Lukens agreed. Many citizens and groups have expressed their needs from the budget: arts, inspections, code violations, the Bent Creek Golf Course, human services, and parks support. Citizens will not be happy with a bare bones budget. Compared to other outer ring suburbs with similar populations and growth rates, Eden Prairie's levy increase is much lower. Aho reiterated while the levy increase is critical, so is the budget. The budget stabilization funds are a temporary fix. He was glad to see the reduction from an 8.4% increase to a 6.2% increase,but not sure it was COUNCIL MINUTES November 15, 2005 Page 8 enough. He thought there was more in the legal area and disputed the idea the budget is "bare bones." He asked to see what the impact would be if the increase is reduced to 3-5%. It would not likely be "across the board" as in Case's police officer example. Tyra-Lukens said this could take a year unless Staff are given direction. She asked what else besides legal services Staff should look at. Aho said he and Young had brought ideas to previous meetings, including facilities maintenance. Young said ultimately the question is what the Council's role is, and the tools Council receives to do its work. He noted he had spent a lot of time on line items,but ultimately his ability to determine specific cuts out of a department budget is limited. He suggested facilities maintenance, recreation programs, and historic preservation might be areas to reduce spending. He noted his suggestion to eliminate a human service position had not been addressed. Young stated while the increase in the city's levy might be smaller than other cities', the budget is significantly larger. It would be a helpful exercise to see what a 4% budget increase would look like. Only Staff can provide that data to move the process forward. Case said there would be time before the November 29 meeting to work out issues, and that it takes only three votes to pass the budget. There is some difference of opinion on the role and purpose of government. Case reiterated that due to 5% population growth, the City is serving 3,300 more people. A budget increase of 4.8% would be holding steady even without accounting for inflation. With the parks referendum, the citizens have just expressed support for amenities in the community. Case also supported the human services position,pointing out that it serves Eden Prairie's Somali community, over 1,500 people, and provides services the County does not. Butcher agreed the Council could talk philosophy all night. She said she was not willing to let an artificial budget number lead to deferred maintenance and deferred human services. In the interest of being prudent, she recommended looking at the human services position. Neal said budgeting is more art than science and the discussion had been helpful. He said he would prepare a second revised budget with a 5% increase in spending, accompanied by the operational impacts. Young asked for both a 5% and a 4% alternative and Neal assented. Young expressed a desire to get to the point of talking about the budget. He did not agree there is a linear relationship between the population and the budget. He also said the referendum's success does not absolve the Council of responsibility for the operational budget. COUNCIL MINUTES November 15, 2005 Page 9 Neal asked Council for confirmation that the parks levy should be done in 2006. Tyra-Lukens said yes; $600,000 is a sizable savings. People will also want to see prompt action on the amenities they supported. Aho agreed and asked where the savings would come from. Neal said it is investment income from issuing the bonds earlier, plus financial advisers expect interest rates to climb. The Council agreed to meet again on November 29"'to discuss the budget, and to reschedule December's budget vote so all Councilmembers could attend. C. REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR 1. Purchase Agreement for Sale of City-owned Site (Lot 1, Block 1, Wingate Hotel Addition) Jeremiah reported a purchase agreement has been drafted with Dove Capital, a real estate investment entity, to purchase the old police station site (2.3 acres) at the City's asking price of $1,400,000. The developer is proposing three buildings (a bank, a drugstore, and multi-tenant retail) stretching south to Lone Oak Road through an abutting 2.8-acre site. Plans are for a high level of finish and architectural continuity to add to the visual appeal of the site. The sale is expected to close in April if all City approvals are received. Aho asked where the proceeds would be applied if the sale goes forward. Jeremiah said these go to the economic development fund and could be used toward the MCA project. Aho asked if the Council would vote on the use of proceeds. Neal said yes, though the policy is to keep it in the economic development area. Young asked if this was a new policy, or long-established. Case said sale proceeds have gone into the CIP over the years. Proceeds would go to capital funds, not operating funds. Case noted that prior to the tenure of the current members, the Council used sale proceeds to take down operating costs. Current members have tried to avoid that situation. MOTION: Aho moved, seconded by Case, to authorize the Mayor and the City Manager to execute a Purchase Agreement and other documents including but not limited to a Warranty Deed and affidavits as are necessary to complete the sale of a 2.3-acre site owned by the City and legally described as Lot 1, Block 1, Wingate Hotel Addition, Hennepin County, Minnesota. Motion carried 5-0. COUNCIL MINUTES November 15, 2005 Page 10 2. MCA Update Jeremiah said she had gotten further feedback at a Chamber of Commerce luncheon. The final draft of the MCA plan will go before the Planning Commission on November 281h and could come before the Council as early as Dec. 5`h. The requested action would likely be for Council to approve the study as an advisory tool for later feasibility studies. 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: Case moved, seconded by Aho, to adjourn the meeting. Motion carried 5-0. The meeting adjourned at 8:44 p.m.