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City Council - 10/21/2008 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY, OCTOBER 21, 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 Cub Scout Pack 342, from Immanuel Lutheran Church, for presenting the colors. III. OPEN PODIUM INVITATION IV. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS Young said he had a couple of items to add to Item XIV.A. He said Items XIII.A. and B. should be removed from the agenda. He noted the Council will retire to a workshop session at the conclusion of the meeting tonight. Aho said he had an item to add to Item XIV.A. MOTION: Aho moved, seconded by Nelson, to approve the agenda as published and amended. Motion carried 5-0. V. PROCLAMATIONS/PRESENTATIONS A. VETERANS MEMORIAL COMMITTEE UPDATE Neal said Mr. Mallo will give an update on the status of the project and the affairs of the committee and will tell us about the upcoming event. John Mallo thanked the City Council for their support of the memorial and thanked the 20 people from the community who served on the Veterans Memorial Committee. He reviewed the fundraising efforts for the memorial which included money donations totaling $318,000 from 74 corporations,purchase of 250 plaques honoring veterans totaling $52,000, and 399 general donations totaling about CITY COUNCIL MINUTES October 21, 2008 Page 2 $19,000. He reviewed the 78 in-kind donations received that were valued at about $200,000. Mallo said everything for the memorial is on schedule. All the concrete work is done, and the granite is on site and is being installed. The sculpture should be there around November 5. He reviewed the plans for the dedication ceremony which will be held on Sunday, November 9. Young thanked Mr. Mallo for all the work he and the committee members have done. He was pleased with the progress made and was looking forward to the dedication ceremony in November. B. 20-40-15 PHASE II PROJECTS Neal said nearly all the projects for Phase 1 of 20/40/15 have been completed and we are taking a look at the next phase. He noted we work with McKinstry under a performance contract, which means the projects they are recommending must have an average Return on Investment(ROI) of 15 years or less to qualify for this program under the Minnesota statutes. The savings made have to go to paying off the administration of the project. Staff believes this is a great program and is pleased with the way Phase 1 has worked for us. Greg Ackerson, McKinstry Company, gave a PowerPoint presentation with an update for Phase 1 projects and an overview of items included for Phase 2. He said the line items proposed for Phase 2 will need the approval of the Council either as line items or as a package so they can move to the implementation phase. He noted the City's budget stays intact in a performance contract because savings from the improvement measures pay for those improvements. The City is sending less money to the utility companies and is investing the dollars saved back in the facilities. Ackerson said Phase 1 included upgrading all interior lighting and installing a pilot project for exterior LED lights in the City Center parking lot. The parking lot lights have been up and on line for three months. They have had nothing but positive feedback from that trial project so they have included installation of LED parking lot and wall pack lights at other facilities for Phase 2. The Phase 2 projects identified total $755,000, with a payback of 13.8 years. Ackerson said thermal solar collectors to heat the water at the Community Center pool are included in the proposed Phase 2 projects. He noted they were asked to find a way for the School District to leverage data on this item in the classroom, and the superintendent is very interested in doing that. He said the desuperheater in Rink 1 at the Community Center is not functioning now, and they need to rely on a boiler to put heat back under the rink slab. He reviewed other items proposed for Phase 2, including the Power Factor Correction at the maintenance facility, Water Efficiency in City facilities, Retro-Commissioning, and Bay Lighting retrofits at the water treatment facility and the Police Department. He reviewed the spreadsheet showing the cost of each item with the savings to be made and the pay- back time. CITY COUNCIL MINUTES October 21, 2008 Page 3 Young asked what the time period is for the payback for total metric tons of CO2 saved. Ackerson said it is one year. Aho asked if there is any breakdown on the $296,760 total cost for the exterior lighting that has a 20-year payback time. Ackerson said they looked at it as a whole in order to get better contractor pricing. They could go back and try to pick it up in pieces, but the prices would probably go up. Young asked what lights are included in the Phase 2 exterior lighting item. Ackerson said Phase 1 was the City Center parking lot only, and Phase 2 includes exterior parking lot lights in all the other City facilities as well as all wall packs. He said we will get energy efficiency in addition to dark sky compliance with these. Nelson asked why the payback period for the exterior lighting is so much longer on Phase 2 than on Phase 1. Ackerson said Phase 1 was the parking lot lights in only one area, and they now will have to install parking lot lights and wall packs in many other locations so the installation costs went up. Nelson asked if we would have to comply with the dark sky requirements anyway so we would have to upgrade the wall packs for that. She also asked if that was included in the savings. Ackerson said that issue was not included in the savings calculations. He said all new fixtures are included in the dark sky compliance, but he was not sure if existing lighting fixtures will be "grandfathered" in. He said he will check on that and get back to her. He said if you were to go through the replacements to meet the statutes those costs would not be incurred because they are included in the Phase 2 calculations. Aho asked if he had any idea of the break down of costs for wall packs versus parking lot lighting. Ackerson said the wall packs have a higher payback time because they don't have as much energy savings as the parking lot lights,but he didn't know precisely what the different was. Young said the only real outlying item is the pool thermal solar collector which has a cost of$150,000, a payback of 72 years, and a modest payback in terms of CO2. That was not something he would support; however,he could go either way on the desuperheater. Neal said the pool thermal solar collector provides a solar aspect to the project, and we wanted to present that. We realize that is a long ROI,but any solar project will be that long and probably will never stand on its own. We think that there is a community benefit by showing leadership in this area. He said there were some wind projects we looked at as well where the ROI's also were not appealing. He strongly recommended the desuperheater from an energy savings and maintenance standpoint because it is very important to keep the integrity of the slab under the ice sheet. If it were not included in the Phase 2 projects we might be talking about doing that out of the CIP,but we put it into this group because it seemed to fit here. CITY COUNCIL MINUTES October 21, 2008 Page 4 Young asked how the desuperheater was rated in the CIP. Paul Steicha, Facilities Manager, said he did not know how it was rated but about three years ago the City invested over$400,000 in the floor in Rink 1. We did not have the money to replace the desuperheater at that time. We put it in the CIP proposal each year,but there have been other more important projects because we can use the boiler to keep the frost out of the ground at the rink. We have shut down that rink for the past two summers,but it has now been decided that rink would be the best rink to run twelve months of the year. We have to either spend the money for boiler heat or replace the desuperheater. Aho said the rest of the project looks great except for the solar collector, and he could not support that one. For the benefit of viewers at home, Neal explained we would not be financing that item for 72 years,but rather the project would be paid back in the 13.8 year time frame. Duckstad said he would approve the contract but would except from the contract the pool thermal solar collector. Butcher said she could go either way on the solar collector. She understood pulling it out,but it still feels like it is something we might need to do. What bothered her more about it is that there isn't much CO2 savings from it. She asked if there is something else we should be doing that we are not or if there are any new technologies out there. Ackerson replied they are always looking at new renewable energy technologies. He noted that conservation is the easiest part of carbon reduction, but renewable energy is harder and requires incentives. Residents get a lot of incentives for investments in renewable energy,but municipalities don't get those same incentives and have to pay full price. Nelson said she knows solar is somewhat on the edge and there is a lot of work being done. She thought we may be a little further along with that in two to three years. She asked if there will be a Phase 3 of this. Ackerson replied as they continue to work with the City and identify other opportunities that are self- funding, they will recommend efforts as they uncover things and as new technology is advanced. He noted how big Phase 3 is will be entirely up to staff and the City Council. Nelson said she liked everything she saw here. The solar doesn't seem to have as much of a payback,but she was still interested in the City doing something with solar or wind. She asked if there is something we as a City should be lobbying for to help municipalities afford to go "greener." Ackerson said there is some work being done in the state legislature, and there is also work being done with the federal government to change the incentives. He said it would be worthwhile for Council Members to voice their interest and concerns. Nelson asked if he has information on that. Ackerson said he could get Council Members in contact with the right people to help carry the message forward. Nelson noted we save public dollars when we reduce energy costs,but it is difficult if you have to pay 100% of CITY COUNCIL MINUTES October 21, 2008 Page 5 the costs. She would like to see us ultimately get into wind and solar. Ackerson noted Eden Prairie will have a challenge with wind energy because of the location of the airport. MOTION: Duckstad moved, seconded by Butcher, to approve the contract with McKinstry to continue with Phase 2 of the City's 20/40/15 energy initiative on the condition that the pool thermal solar collectors be specifically omitted. Motion carried 5-0. VI. MINUTES A. COUNCIL WORKSHOP HELD TUESDAY, OCTOBER 7, 2008 MOTION: Butcher moved, seconded by Duckstad, to approve the minutes of the Council Workshop held Tuesday, October 7, 2008, as published. Motion carried 5- 0. B. CITY COUNCIL MEETING HELD TUESDAY, OCTOBER 7, 2008 MOTION: Duckstad moved, seconded by Aho, to approve the minutes of the City Council meeting held Tuesday, October 7, 2008, as published. Motion carried 5-0. VII. REPORTS OF ADVISORY BOARDS & COMMISSIONS VIII. CONSENT CALENDAR A. CLERK'S LICENSE LIST B. SURMODICS By SurModics, Inc. Second Reading of Ordinance 2008-101 for Planned Unit Development District Review and Zoning District Amendment within the I-2 Zoning District on 9.80 acres, Resolution 23-2008-PUD-12-2008 for Site Plan Review on 9.80 acres. Location: Northeast corner of 74"' Street West and Golden Triangle Drive. (Ordinance No. 2008-101 for PUD District Review and Zoning District Amendment; Resolution No. 23-2008-PUD-12-2008 for Site Plan Review) C. AWARD BID FOR NEW LINDEN & BUCKINGHAM DRIVE SIDEWALK CONSTRUCTION PROJECT TO CURB MASTERS INC. D. DECLARE OBSOLETE COMPUTER EQUIPMENT AS SURPLUS E. AUTHORIZE SUBMISSION OF COMMENT LETTER ON MET COUNCIL'S 2030 TRANSPORTATION POLICY PLAN REQUESTING THE SOUTHWEST TRANSITWAY BE GIVEN GREATER PRIORITY BASED ON COMPLETION OF THE SOUTHWEST TRASITWAY ALTERNATIVES ANALYSIS, HIGH RIDERSHIP ESTIMATES,AND CONSENSUS OF SUBURBAN CITIES ALONG THE PROPOSED TRANSITWAY CITY COUNCIL MINUTES October 21, 2008 Page 6 MOTION: Butcher moved, seconded by Duckstad, to approve Items A-E on the Consent Calendar. Motion carried 5-0. IX. PUBLIC HEARINGS /MEETINGS A. HEARING FOR 2008 SPECIAL ASSESSMENTS (Resolution No. 2008-102) Neal said official notice of this public hearing was published in the October 2, 2008 Eden Prairie News and sent to 17 property owners. Each year, the City Council holds a public hearing to consider levying the Special Assessments that have been identified over the previous 12 months. This year, the Council will address a list of projects and supplemental assessments for such things as trunk utility assessments and lateral utility assessments. He noted Exhibit A in the Council packets has a list of projects that the Council will be asked to approve for levying Special Assessments for collection with property taxes. The total amount proposed to be assessed in 2008 is $2,460,400.49. Dietz said the amount proposed is a rather small amount for special assessments compared to other years. He noted there is one assessment for Liberty Property for improvements to Flying Cloud Drive that costs $2,330,000, which is by far the largest project in the total. The remainder includes several smaller assessments, including $110,489 for trunk sewer and water improvements at The Enclave at Old Shady Oak. There were no comments from the audience. MOTION: Aho moved, seconded by Nelson, to close the public hearing for the approval of the 2008 Special Assessments, and to adopt Resolution No. 2008-102 approving all Special Assessments presented in the fall of 2008. Motion carried 5- 0. 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 No. 2008-103 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. The site plan shows construction of a new 2 story Menards retail building of 210,943 square feet and construction of a new warehouse building of 42,352 square feet. The exterior of the existing 23,760 square foot strip retail building will be remodeled. The existing Menards retail building and warehouse buildings will be removed. The site is located in Subarea 1 of the Major Center Area(MCA) Study. Subarea 1 is located north of Highway 5, west of I-494 and south of Valley View Drive. The current uses within Subarea 1 include retail with no forecasted significant increases in density or intensity. The MCA land use plan shows this site for big box retail. CITY COUNCIL MINUTES October 21, 2008 Page 7 The proposed use is an appropriate use for Subarea 1. Neal said at the October 7, 2008 City Council meeting Menard Inc. requested a continuance in order to work on plan revisions. Plans are revised according the recommendations of the staff report and the Planning Commission. The 120-day review period expires on December 12, 2008. The Planning Commission voted 7-0 to recommend approval of the project at the September 8, 2008 meeting. Jeremiah said staff agrees that this will be a major improvement to the site and said she would be happy to walk through the site plan and the improvements. Scott Nuttelman,representing Menards, said he was available for questions and noted this is the result of two years of work with staff. Tom Gianetti, owner of the Harley-Davidson store next to Menards, said he had heard something about closing one of the entrances to Menards and was concerned that it would be the main one because that is also the entrance to his store. He said at the time they closed the entrance to the body shop, they were told they would be given a legal easement and he wanted to be sure that was part of the plan. Jeremiah said there was a discussion about one of the entrances having poor sight distances, but staff approved some modifications and allowed the entrance to stay open. She was not familiar with the easement issue he mentioned. Gianetti said at the time the entrance was closed he was told that would be part of the staff's recommendation and would be in place when the plan was approved. Jeremiah said she will have someone check into that and get back to him on it. MOTION: Butcher moved, seconded by Nelson, to close the public hearing, to adopt Resolution No. 2008-103 for Planned Unit Development Concept Review on 15.72 acres, to approve 1 st Reading of the Ordinance for Planned Unit Development District Review with waivers, and Zoning District Amendment within the Commercial Regional Service Zoning District on 15.72 acres, and to direct Staff to prepare a Development Agreement incorporating Staff and Commission recommendations and Council conditions. Motion carried 5-0. X. PAYMENT OF CLAIMS MOTION: Duckstad moved, seconded by Nelson, 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 A. FIRST READING OF ORDINANCE AMENDING CITY CODE CHAPTER 3 RELATING TO REGULATION OF DISCHARGE FROM SUMP PUMPS AND OTHER SOURCES INTO THE SEWER SYSTEM Neal said, as discussed at the September 2nd workshop, staff has prepared an CITY COUNCIL MINUTES October 21, 2008 Page 8 ordinance that would prohibit property owners from discharging clear water into the sanitary sewer system. The ordinance calls for a $100-per month surcharge to be established for failure to comply with the ordinance once notification has been given that an inspection must be made of the premises to verify compliance. The City will make the inspection at no cost to the homeowner,but the ordinance does provide that a private contractor may be retained by the homeowner to certify compliance. If approved, staff will bring the second reading of the ordinance at a future time for final approval. After publication, we would expect our consultants to begin the inspection process. Neal said at Council request, staff has begun a public education campaign. There has been good coverage of the subject from the workshop meeting in the Eden Prairie News and information about infiltration/inflow has been posted on the City website. Communications staff included an excellent article in the "Life on the Prairie", and has prepared a tri-fold brochure that will be mailed to all utility customers within the City. The mailing should be in the public's hands in the period between the first and second reading of the ordinance. He said we may hold some kind of public hearing to get additional feedback and will share any of the feedback with the Council for consideration and possible incorporation into the ordinance in the future. Nelson thanked staff for the public education campaign and asked if the letters and video are on the website. Neal replied the video is not yet edited,but it will run on EPTV and will be available on the website. He said they will post all the printed material on the website. MOTION: Nelson moved, seconded by Butcher, to approve 1st Reading of an Ordinance amending City Code Chapter 3 relating to regulation of inflow and infiltration (clear water) into the sanitary sewer system. Motion carried 5-0. XII. PETITIONS, REQUESTS AND COMMUNICATIONS XIII. APPOINTMENTS XIV. REPORTS A. REPORTS OF COUNCILMEMBERS 1. Community Center Costs—Young Young said he wanted to comment on characterizations that have been made that the Community Center came in $10,000,000 over budget. He thought that was an unfair and not a true characterization. There was a referendum for $6,500,000 for the four square walls of the building,but the overage for that did not amount to $10,000,000. He said in any given year we approve a variety of park projects, and some years we have athletic associations who help us raise money for the additional amenities. We chose to add enhancements in the vicinity of the Community Center and the CITY COUNCIL MINUTES October 21, 2008 Page 9 cost of those projects was lumped with that of the four walls of the Community Center. 2. Smith-Douglas-More House - Young Young said we originally had a five year lease on the property which ended last year. We received a lease proposal last November from a sub-lessee which was substantially lower in dollar amounts than the first lease. It came at a time when the Council had few options, so we agreed to that lease. He raised the question in the summer months about the plan for getting increased rent from the tenant. The Council got a report back from staff that the tenant proposed renewing the lease on the same terms. The majority of the Council Members agreed to reject that as too low and directed staff to go out to see what other interest there was in the property. That process hasn't fully played itself out, and we will get one or two proposals in November both of which will be retail in scope. He didn't think the City Council contemplated that the Smith-Douglas-More house would be closed to the public or that it would be sold. He realized there is more to the property than just the rent. There is a public access piece to it. The two proposals we anticipate receiving in November will be for public use and will be at increased revenue terms to the City. This will at least present the Council with an option. 3. Smith-Douglas-More House - Aho Aho said he felt very strongly that we were just doing our fiduciary responsibility in looking at what the lease was bringing in. There was a commitment that it would be paid back through the use of rental revenue, and he wanted to keep with that commitment and open up the property and look at other options. He felt strongly it should be kept open to the public and have a similar use. It has a strong component for people to meet in there and be a place for people to gather. He thought there are a lot of misconceptions spread about this, and it has affected people that run the place. That was never intended and he felt badly about that. He said he has met with Ann Shuster, the proprietor, and we are working with her to find some solutions to enhance her business. We are continuing to look at that to try to help her out. Butcher thought it was a great testimony tonight when we saw a petition with 400 signatures. We recognize what it means to the community and what a business with a big heart has meant to the community. When we first started with the lease agreement seven years ago, we had no idea what was going to happen. Dunn Bros Corporation had a trend of putting coffee houses in historic buildings so it seemed like a wonderful fit. We didn't know what a business would pay and what they would be able to gain from revenues from that very unusual kind of place. She thought there are a lot of issues that this Council as the governing body needs to talk about before we go further, such as what does that place mean and do we need to keep it CITY COUNCIL MINUTES October 21, 2008 Page 10 open as a sort of community center. We need to have a dialogue and conversation before we go any further. Young said we recognize that the retail environment is different now than it was even three months ago and we may need to be clearer with Ms Shuster about what our expectations are. A lot of people enjoy the property but don't give her much business. B. REPORT OF CITY MANAGER 1. Set Date for Canvass of Election Results Neal said Minnesota law requires that within seven days after a municipal election, the governing body of a city shall act as the canvassing board, canvass the returns, and declare the results of the election. MOTION: Aho moved, seconded by Nelson, to set the date of the canvass of the results of the municipal election held on November 4, 2008, for Monday, November 10"' at 5:00 pm. Motion carried 5-0. 2. Smith-Douglas-More House Lease Update Neal said the Council asked staff to go out and see what the market might bring to that property. David Lindahl, Economic Development Manager, has handled that process. He advertised the property and we got some initial feedback pretty quickly. Those have trickled off, so we will probably take the sign down. Our plan was to get their firm proposals by 4:00 PM, Friday, November 7. That would give staff time to review the proposals and get them into the packet for the Council meeting on November 18. There will be a staff recommendation for that night. Nelson thought Ms Butcher was right that there is more to the current owner's operation and how they do business. She would like to know from each prospective tenant what types of community activities they plan if they lease with us. Young added what they have planned or would permit. Butcher thought that is why we need to have a dialogue about what our vision is for the use of this. We need to have a conversation about what we do with it, and she would like to suggest we put it on a workshop agenda. Neal said that would be difficult because there is no meeting between now and November 18. A joint meeting with the Budget Advisory Committee is scheduled for November 18 to discuss the CIP. Butcher asked if Council Members were interested in having another time to meet and talk about this. Young said he would like to see how many lease proposals come in and felt there is no urgency with it so we could have the discussion in conjunction with the lease proposals. CITY COUNCIL MINUTES October 21, 2008 Page 11 Butcher said there are so many aspects to this property and it was an experiment. She thought we need to decide if it is fair to have a business that is renting from us pay for an entire HVAC system. We need to look at some of the questions that have come up about what the role of the lessee is, what the City's role is, and what the vision is for the Smith-Douglas-More House. Nelson thought this could overlap with the Cummins-Grill reuse study. We have never set out how we want to make sure historic places stay open to the public. She thought the Smith-Douglas-More House seems to mean a lot to people, and they provide a service beyond what a typical lessee might do under different circumstances. It is a different kind of property to lease than any other place in Eden Prairie. Young thought that is clearly something we can talk about when we discuss the leases. We postponed acceptance of the reuse study for the Cummins- Grill House because of the delay in Pioneer Trail improvements and to give the Historical Society time to come up with a different proposal. We have space at the Council meeting set aside for discussion of the lease and could have this discussion at that time. Aho thought we should discuss it at the time it comes up and come to some agreement at that time. C. REPORT OF THE 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 At 8:10 PM the Council retired to a workshop session. The meeting was to be adjourned from the workshop AT 9:00 p.m.