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City Council - 10/07/2008 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY, OCTOBER 7, 2008 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Sherry Butcher, Jon Duckstad and Kathy Nelson CITY STAFF: City Manager Scott Neal, Parks & Recreation Director Jay Lotthammer, Public Works Director Gene Dietz, Community Development Director Janet Jeremiah, City Attorney Ric Rosow and Council Recorder Jan Curielli I. ROLL CALL/CALL THE MEETING TO ORDER Mayor Young called the meeting to order at 7:00 PM. All Council Members were present. II. COLOR GUARD/PLEDGE OF ALLEGIANCE Young thanked Boy Scout Troop 597, chartered by St. Andrews Lutheran Church, for presenting the colors. He also thanked all of the high school students in the audience for attending tonight's meeting. III. OPEN PODIUM INVITATION IV. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS Neal noted there is a goldenrod sheet replacement for Item VIII.C. on the Consent Calendar, and the motion for the Consent Calendar should state Items A-G. He also added a couple of items under Item XIV.B. Young said he had a couple of items to add to Item XIV.A. MOTION: Duckstad moved, seconded by Butcher, to approve the agenda as published and amended. Motion carried 5-0. V. PROCLAMATIONS/PRESENTATIONS A. PROP UPDATE Anne Harnack, Executive Director of PROP, gave an update on the current activities of PROP. She said she appreciated the support given by the City and noted the community is very supportive. PROP's mission is to provide support to neighbors in need. She noted they have seen an increase in the needs of the community because of recent economic changes, and they are seeing three to five new households each month for food services. About 40% of those served are from the Somali community, and PROP must meet the needs of their special diet. There is a decreased availability of food on the shelves and an increased call for support with household utilities. There has been a large increase in the number of people in CITY COUNCIL MINUTES October 7, 2008 Page 2 the community who have lost their jobs and who have never used the PROP services before. She said they are partnering with the United Methodist Church to provide a coop food effort to help clientele which will help PROP reach their goal of self-sufficiency. Mayor Young thanked her for her report. VI. MINUTES A. COUNCIL WORKSHOP HELD TUESDAY, SEPTEMBER 16, 2008 MOTION: Aho moved, seconded by Butcher, to approve the minutes of the Council Workshop held Tuesday, September 16, 2008, as published. Motion carried 5-0. B. CITY COUNCIL MEETING HELD TUESDAY, SEPTEMBER 16, 2008 MOTION: Butcher moved, seconded by Duckstad, to approve the minutes of the City Council meeting held Tuesday, September 16, 2008, as published. Motion carried 5-0. VII. REPORTS OF ADVISORY BOARDS & COMMISSIONS VIII. CONSENT CALENDAR A. CLERK'S LICENSE LIST B. APPROVE SECOND READING OF ORDINANCE NO. 22-2008 AMENDING CITY CODE SECTION 2.22 RELATING TO BUDGET ADVISORY COMMISSION TERMS AND ADOPT RESOLUTION 2008-96 APPROVING SUMMARY FOR PUBLICATION C. ADOPT RESOLUTION NO. 2008-97 APPOINTING ELECTION JUDGES FOR 2008 GENERAL ELECTION D. APPROVE IDENTITY THEFT PREVENTION PROGRAM E. APPROVE CHANGE ORDER NO. 3 FOR THE CSAH 4 AND VALLEY VIEW ROAD INTERSECTION IMPROVEMENTS, I.C. 96-5405 F. APPROVE PLANS AND SPECIFICATIONS AND ORDER ADVERTISEMENT FOR BIDS FOR LOWER MINNESOTA RIVER WATERSHED DISTRICT EROSION STABILIZATION PROJECT FOR STUDY AREAS 1 & 2, I.C. 07-5698 G. AWARD CONTRACT FOR STUDY ARE FOR OF THE LOWER MINNESOTA RIVER WATERSHED DISTRICT EROSION STABILIZATION PROJECT TO MINNESOTA NATIVE LANDSCAPES, INC., I.C. 07-5698 MOTION: Duckstad moved, seconded by Aho, to approve Items A-G on the Consent Calendar. Motion carried 5-0. CITY COUNCIL MINUTES October 7, 2008 Page 3 IX. PUBLIC HEARINGS /MEETINGS A. APPROVE SENIOR MULTIFAMILY HOUSING DEVELOPMENT PROGRAM IN CITY OF BLOOMINGTON AND APPROVE ISSUANCE OF REVENUE OBLIGATIONS TO FINANCE THE REDEVELOPMENT (Resolution No. 2008-98) Neal said official notice of this public hearing was published in the September 18, 2008, Eden Prairie News. He noted the attorneys representing Bloomington Bethany Senior Housing, Inc., a Minnesota non-profit, approached City staff requesting help with financing a senior project in Bloomington. The project is for a 182 unit senior living community located at 6820 Auto Club Road in Bloomington. In order for the City of Eden Prairie to have authority to issue the debt, there must be a nexus of the project to Eden Prairie. The market research report shows the project will benefit City of Eden Prairie residents as a housing option. Presbyterian Homes is one of the investors in the project. The total bond issuance amount is $29,700,000, and the City of Eden Prairie debt issuance amount will be no more than $6,000,000. Other participants providing project financing include Hennepin County Housing and Redevelopment Authority, City of Burnsville, MN Economic Development Authority, the City of Bloomington, and MN Housing and Redevelopment Authority. Neal said we are talking about allowing the City of Bloomington to use some unused tax exempt bond capacity we have as a city. The City of Bloomington will issue and pay for the bonds, so this is not an obligation to Eden Prairie. There is a small charge we add on to the fees that cover our processing costs, and Bloomington pays all attorney and other fees. Young said he wanted to make sure this is not an obligation of the City. Neal said this is not an obligation of the City and we are not borrowing money and lending it to Bloomington. The City of Bloomington is issuing the bonds and has the obligation to repay it. Nelson said she has concerns that we have bonds coming up later in the agenda that we are letting ourselves. She thought being frugal with the use of bonds is important in order to obtain future bond funding. At this time she was not in favor of using our bond capacity for this. She noted we aren't trading with Bloomington, and we are about to add a significant amount of housing with Presbyterian Homes here in Eden Prairie. Young said he wanted to open it up for public comment before further City Council comments. There were no comments from the audience. MOTION: Aho moved, seconded by Nelson, to close the Public Hearing. Motion carried 5-0. Duckstad asked if this is an act by the City to be neighborly and to help out the City CITY COUNCIL MINUTES October 7, 2008 Page 4 of Bloomington. Neal said he would characterize it like that. Duckstad then asked if the City would be in no way obligated on the bonds and if they are just using our allotment of bonds. Neal said we have legal counsel for the project here to address those questions. Mr. John Utley, attorney with Kennedy and Graven, said they prepared the resolution and are working on the bond transaction. Although we are asking for the indebtedness of the City on the transactions, the sole source of payment is revenue from the project. The bondholders have access only to the project itself. The bonds are authorized by the legislature and have been used by cities for 50 years. These are bank-qualified bonds and each year a city can issue up to $10,000,000 of the bonds. This year the City of Eden Prairie is going to issue up to $5,000,000 of that. That authority goes away if it is not used. Aho asked if he was saying that even if we take the action tonight we are not encumbering the City to have to pay anything nor are we losing any ability for future periods to use the bond resource ourselves. Mr. Utley said the bonding authority we are using is the $10,000,000 bank-qualified amount for 2008. Beginning in January 2009 the City has another $10,000,000 available to use. Butcher asked if it would have an impact on our AAA bond rating. Mr. Utley said we have a long history of this type of bond issue, and this type of issue has absolutely no impact on the City's general bond rating,regardless of the success of the project. Neal said one of the reasons we are talking about this action at this time is that we are entering the fourth quarter and have a more precise understanding of our own borrowing needs. Young said he tended to support the request since he could see no downside to the City to do so. He thought it is important to promote and encourage economic development that is good for our regional economy. Aho said he also supports it. When a neighboring city comes to us for help in something that doesn't really affect us,he thought it is important to help them out. The proponent also has a large project coming up in our City. Duckstad said under the circumstances described he also supported the action. Butcher said she also supported it. MOTION: Butcher moved, seconded by Aho, to adopt Resolution No. 2008-98 approving a housing program relating to a senior multifamily housing development to be located in the City of Bloomington; to grant preliminary approval to the issuance of revenue obligations by the City to finance the senior multifamily housing redevelopment; and to approve authorizing certain related actions. Motion carried 5-0. CITY COUNCIL MINUTES October 7, 2008 Page 5 B. MENARDS Request for: Planned Unit Development Concept Review on 15.72 acres, Planned Unit Development District Review on 15.72 acres, Zoning District Amendment within the Commercial Regional Service Zoning District on 15.72 acres, and Site Plan Review on 15.72 acres. Location: 12600 Plaza Drive. (Resolution for PUD Concept Review; Ordinance for PUD District Review and Zoning District Amendment) Neal said official notice of this public hearing was published in the September 25, 2008, Eden Prairie News and sent to 17 property owners. He said Menard Inc. is requesting a continuance to the October 21, 2008 City Council meeting in order to work on the plan revisions, listed in the staff report to the Planning Commission. The Planning Commission voted 7-0 to recommend approval of the project to the City Council at the September 8, 2008 meeting. The 120-day review period expires on December 12, 2008. He noted staff supports the request for continuance. MOTION: Duckstad moved, seconded by Nelson, to continue the public hearing to the October 21, 2008, City Council meeting. Motion carried 5-0. X. PAYMENT OF CLAIMS MOTION: Nelson moved, seconded by Aho, to approve the Payment of Claims as submitted. The motion was approved on a roll call vote, with Aho, Butcher, Duckstad, Nelson and Young voting "aye." XI. ORDINANCES AND RESOLUTIONS XII. PETITIONS, REQUESTS AND COMMUNICATIONS XIII. APPOINTMENTS XIV. REPORTS A. REPORTS OF COUNCILMEMBERS 1. Assist Medical Equipment Grand Opening Young said he and Mr. Neal went to the grand opening of the new headquarters for Assist, a medical device company. He said they had outgrown their space and chose to stay in Eden Prairie. He thought it is important to attract and retain businesses like this one, and they could have gone anywhere when they were looking for property. 2. Liberty Property Trust Young said he wanted to extend the Council's congratulations to Liberty Property Trust on being declared to be the 2008 National Association of Industrial and Office Properties (NAIOP) developer of the year. He noted Liberty Property Trust owns more commercial real estate in Eden Prairie than anyone else and we enjoy good relations with them. CITY COUNCIL MINUTES October 7, 2008 Page 6 3. High Tech Association Awards Young said the High Tech Association will issue the "Technic Awards" towards the end of this month. Twelve of the 45 nominees have a relationship with Eden Prairie. He wished all of the finalists good luck. B. REPORT OF CITY MANAGER 1. Applications for Budget Advisory Commission (BAC) Neal passed out copies of the ten applications received for the two open positions on the BAC. The new term structure was approved tonight on the Consent Calendar. The applicants have been told the Council will conduct an interview, and he suggested a couple of dates for the interviews: Tuesday, October 21 at 4:00 PM prior to the Council Workshop, and Tuesday, October 28, at 5:00 or 6:00 PM. He said he will have Ms McWaters call Council Members tomorrow to see their preferences. 2. Joint Meeting with School Board Neal said the next workshop meeting is scheduled to be a joint meeting with the School Board. He is meeting with the Superintendent this Friday to talk about possible topics for the workshop. 3. November City Council Meeting Neal reminded Council Members that the only regular meeting for the month of November is scheduled for November 18 because the first Tuesday of November is Election Day. 4. Adopt Resolution No. 2008-99 Authorizing Issuance of$3,120,000 General Obligation Equipment Certificates, Series 2008A 5. Adopt Resolution No. 2008-100 Relating to $1,845,000 General Obligation Permanent Improvement Revolving Fund Bonds, Series 2008B Neal said he thought there should be some discussion of these items because of the state of the economy. He said Ms Kotchevar and Mr. Paul Donna of Northland Securities are present to discuss this item. Mr. Donna said bids were taken this morning for the issuance of$3.12 million in General Obligation Equipment certificates and $1.845 million in General Obligation Permanent Improvement Revolving Fund bonds. He said as is customary with the issuance of bonds, they sought a credit rating from Moody's Investment Services. He said they affirmed the City's AAA rating and he reviewed Moody's comments, including their expectation that CITY COUNCIL MINUTES October 7, 2008 Page 7 the City's financial position will remain strong due to our history of sound financial procedures. He noted only seven cities in Minnesota have an AAA credit rating. When they scheduled the bond sale in late August for this date, we had a relatively stable market to put projections together. With the events of the last few weeks we didn't know what would occur today,but the results compared very favorably with the estimates in August. He passed out the results of the bidding. Mr. Donna said there wasn't a bond market the past couple of weeks and there was a lack of interest in municipal bonds. Recent events had a positive affect on the bond market and general obligation bonds issued by a City with a superior AAA rating would be in high demand. There were six bids received for the Series A bond issue, and they are recommending the bid from Morgan Keegan be accepted. He said the low bid for the Series B bonds was from Wells Fargo at 4.22% and they anticipated 4.27% in August. They were quite pleased with that bidding and would recommend approval of the issuance as well. Nelson asked if Morgan Keegan is in good financial shape and is not on the brink of financial disaster. Mr. Donna said they have not shown up on any agency alert or review by major credit rating agencies, and they have no reason to assume they would not be able to create the issue. Nelson asked if the same was true for Wells Fargo Brokerage. Mr. Donna said we have no information that would point otherwise. Duckstad asked if the AAA bond rating means this is the most favorable instrument we can buy. Mr. Donna said the higher the rating the lower the cost of capital to the City, and this is the highest rating available. MOTION: Aho moved, seconded by Nelson, to adopt Resolution No. 2008-99 authorizing issuance of$3,120,000 General Obligation Equipment Certificates, Series 2008A. Motion carried 5-0. MOTION: Nelson moved, seconded by Butcher, to adopt Resolution No. 2008-100 relating to $1,845,000 General Obligation Permanent Improvement Revolving Fund Bonds, Series 2008B. Motion carried 5-0. 6. Approve Custody Agreement with U.S. Bank National Association Kotchevar said this agreement appoints US Bank National Association to provide custody services for the City investments. Currently, investments are usually held with the broker where the investment was purchased, either with Dain Rauscher or Wells Fargo. She said it is a much more efficient process to conduct an investment transaction at a trust. Brokers are not really set up to handle investments from other brokers. We will also have consolidated reporting of all of our investments, and this also provides the highest level of security for the investments because the investments will be held in trust at U.S. Bank. CITY COUNCIL MINUTES October 7, 2008 Page 8 Aho noted there is an estimated annual cost of$5,500 and asked if there are any other costs in transferring the funding and instruments to them above that fee. Kotchevar said there are none. Duckstad asked for an explanation of how this would provide the highest level of security for City investments. Kotchevar said the difference is they would be held in trust which is a separate trust entity. Only certain banks are allowed to have a trust department. It is a separate entity from U.S. Bank itself. Investments held at a brokerage would require a more involved process to get at the funds if the firm went out of business. Duckstad then asked why U.S. Bank National Association was chosen. Kotchevar replied we went out for bids, and U.S. Bank had the least cost. MOTION: Butcher moved, seconded by Aho, to approve the Custody Agreement with U.S. Bank National Association. Motion carried 5-0. C. REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR D. REPORT OF PARKS AND RECREATION DIRECTOR E. REPORT OF PUBLIC WORKS DIRECTOR 1. First Reading of an Ordinance Amending City Code Chapter 3 Relating to Watering of Another's Property Neal said we had an individual neighborhood situation where there was a dispute about one property owner who allowed sprinkling water to fall on another's property. This item came from a request to ban such unwanted watering. He noted that staff discussed this and determined they were not able to bring this to the Council with staff endorsement. It is a localized situation, and City staff is working with the two property owners to mediate. He recommended we don't go any further with the matter. Dietz said there are civil recourse actions that people can take for trespass. Staff chose to recommend we not pursue this. Young thought he agreed with staff. He said he has sympathy with the problem of the homeowner, but the proposed ordinance had such breadth it went way beyond solving the individual problem of the two neighbors. Neal said the mediations are having some success. Young asked if we need to do anything about this now. Rosow suggested a motion to table it indefinitely. MOTION: Duckstad moved, seconded by Nelson, to table indefinitely the First Reading of an Ordinance amending City Code Chapter 3 relating to watering of another's property. Motion carried 5-0. CITY COUNCIL MINUTES October 7, 2008 Page 9 F. REPORT OF POLICE CHIEF G. REPORT OF FIRE CHIEF H. REPORT OF CITY ATTORNEY XV. OTHER BUSINESS XVI. ADJOURNMENT MOTION: Butcher moved, seconded by Aho, to adjourn the meeting. Motion carried 5- 0. Mayor Young adjourned the meeting at 7:45 PM.