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City Council - 12/07/2010 APPROVED MINUTES EDEN PRAIRIE CITY COUNCIL MEETING TUESDAY, DECEMBER 7, 2010 7:00 PM, CITY CENTER Council Chamber 8080 Mitchell Road CITY COUNCIL: Mayor Phil Young, Council Members Brad Aho, Ron Case, Jon Duckstad and Kathy Nelson CITY STAFF: Interim City Manager Jay Lotthammer, Public Works Director Gene Dietz, Community Development Director Janet Jeremiah, City Attorney Rick 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 III. OPEN PODIUM INVITATION IV. PROCLAMATIONS /PRESENTATIONS V. APPROVAL OF AGENDA AND OTHER ITEMS OF BUSINESS Nelson added Item XIV.A.1. Case added Item XIV.A.2. MOTION: Aho moved, seconded by Case, to approve the agenda as amended. Motion carried 5-0. VI. MINUTES A. COUNCIL WORKSHOP HELD TUESDAY, NOVEMBER 16, 2010 MOTION: Duckstad moved, seconded by Aho, to approve the minutes of the City Council workshop held Tuesday, November 16, 2010, as published. Motion carried 5-0. B. CITY COUNCIL MEETING HELD TUESDAY, NOVEMBER 16, 2010 MOTION: Nelson moved, seconded by Aho, to approve the minutes of the City Council meeting held Tuesday, November 16, 2010, as published. Motion carried 5-0. VII. REPORTS OF ADVISORY BOARDS & COMMISSIONS VIII. CONSENT CALENDAR CITY COUNCIL MINUTES December 7, 2010 Page 2 A. CLERK'S LICENSE LIST B. ADOPT RESOLUTION NO. 2010-80 APPROVING THE 2011 TO 2015 CAPITAL IMPROVEMENT PLAN C. APPROVE RENEWAL OF AGREEMENT FOR TOWING SERVICES BETWEEN THE CITY OF EDEN PRAIRIE AND MATT'S AUTO SERVICE FOR 2011 D. ADOPT RESOLUTION NO. 2010-87 APPROVING EXECUTE NEW JOINT POWERS AGREEMENT WHICH WILL ESTABLISH A RELATIONSHIP BETWEEN EDEN PRAIRIE AND THE BUREAU OF CRIMINAL APPREHENSION E. APPROVE CHANGE ORDER NO. 1, FOR WESTWIND AND WINDWARD CIRCLES' WATERMAIN REPLACEMENT PROJECT TO MACHETEMES CONSTRUCTION, INC. MOTION: Aho moved, seconded by Case, to approve Items A-E on the Consent Calendar. Motion carried 5-0. IX. PUBLIC HEARINGS/MEETINGS A. 2011 BUDGET Mayor Young reminded the audience there are two components to an individual's property tax. One component is the budget and the tax levy and that is what we are discussing tonight. The other part is the valuation of the property and that is not being discussed tonight. Lotthammer noted this is an opportunity to take public input and comment on the 2011 budget. Kotchevar gave an overview of the 2011 budget and noted other organizations such as the county and the school district also hold public meetings to discuss their budgets. She reviewed the impact of the City tax and the total property tax impact on residential, apartment and commercial properties. She explained a graph showing the distribution of property tax for the entities that receive the property tax revenue. She said the proposed budget has a levy increase of 1.6% with a zero increase in the budget. Richard Proops, 9408 Clubhouse Road, said he was confused because he thought we were going to look at a zero increase budget but there is a 2% wage increase in the budget. He said the 2% wage increase combined with the 2% decrease in FICA tax proposed today by the federal government would create a 4% increase in wages. He believes there is a need for a Budget Director to manage expenditures in the City budget as managing the budget is not just a part time job for the City Manager. He noted the severance pay fund is accumulating and totals $296,000 at this point. He said these payments result from an overly generous benefit program allowing annual bonuses to be accumulated. That fund should be reviewed and a cap put on CITY COUNCIL MINUTES December 7, 2010 Page 3 the accumulation. He said the volunteer fire pension program is the most expensive in the state and is a defined benefit plan that underwrites the payments and level of benefits. He noted we spend $923,000 for dispatch services,but the county also operates a dispatch service. He thought there may be opportunity to offer dispatch service to other cities. The Community Center operating loss was $1,000,000 in 2009, and he asked if there was a plan in place to reduce the costs of operating that facility. He said nobody questions the CIP projects like the $10,000,000 for road improvements. The Flying Cloud ball field improvements will cost$1,400,000 in 2011 simply because that is the amount left from the referendum of five years ago. The contract for infiltration and inflow study is $527,000 for 2011 and represents the cost of the contract to determine if sump pumps are discharging into the storm water system. Mr. Proops said the Budget Advisory Commission (BAC) was established in 2007 by ordinance to act in an advisory capacity to the City Council;however, the November and December meetings were cancelled with no explanation. He thought the BAC is ineffective and should be discontinued. The meeting agendas did not leave any time for budget discussions, and the City Manager refused permission to talk to the staff at the operating level. He said he joined the BAC to be of help to the City Council and City Managers,but no one wants to consider changes to plans for expanding or question the current ways of doing things when the taxpayers are footing the bill. Young noted a number of Council Members asked staff to provide budget alternatives after the last workshop held with the BAC. Dan Kitrell, 15731 Summit Drive, said effective budgets require critical examination of revenue and expenses. He thought it makes sense to focus most of the budget discussion on salary and benefits. We have continued to be generous with total compensation for employees. The 2% salary increase was recommended as well as the 2% decrease in social security withholding. He encouraged the Council to approve a flat budget that does not increase the tax burden on residents and businesses. He noted Council Member Nelson stated during her campaign that she would expect a tax increase of 1% or less. He said in light of recent rumors of a buyout of Super Valu, we must be prepared for a possible decrease in the tax base. We must get spending under control now. Donna Azarian, 9068 Waverly Court, said she lost her family's health benefits when she lost her job four years ago and has had to purchase those benefits on her own. As a taxpayer she was being asked to fund increased health insurance for City employees, and she didn't know why she should pay for City employees' health insurance as well as her own. Many private companies recently changed their plans and they aren't asking for taxes to help pay for those changes. MOTION: Case moved, seconded by Aho, to close the public hearing. Motion carried 5-0. MOTION: Duckstad moved to certify the 2011 tax levy to Hennepin County to be a zero increase tax levy and to adopt a 2011 entire budget for Eden Prairie equal to and no more than the exact budget for the current year 2010. CITY COUNCIL MINUTES December 7, 2010 Page 4 Motion died for lack of a second. Rosow said as a point of order the action on the budget comes under an item later in the agenda. The Council has the discretion to move the item up,but we should acknowledge what we are doing and Mr. Lotthammer should give any additional information he has before moving into it. Young noted the actual resolution certifying the tax levy is proposed to occur under the Report of the City Manager later this evening. B. THE POINTE ON LAKE RILEY-LEU RESCINDING APPROVALS by Karen Len and Jeffrey Leu. Request to rescind Resolution No. 2007-106 for Planned Unit Development Concept Review on 2 acres; rescind Ordinance No. 25- 2007-PUD-11-2007 for Planned Unit Development District Review with waivers and Zoning District Amendment in the R1-22 Zoning District on 2 acres;rescind Resolution No. 2007-107 for Preliminary Plat on 2 acres into one lot; rescind Resolution No. 2007-125 for Final Plat on 2 acres into one lot. Location: 9092, 9100 and 9108 Stephens Pointe. (Resolution No. 2010-81 rescinding PUD Concept Review, Ordinance rescinding PUD District Review with waivers and Zoning District Amendment, Resolution 2010-82 rescinding Preliminary Plat, Resolution No. 2010-83 rescinding Final Plat) Lotthammer said official notice of this public hearing was published in the November 25, 2010, Eden Prairie News and sent to 15 property owners. In 2007, the Leu's purchased three lots and asked the City to approve a subdivision that combined the three lots into one lot for the purpose of building one house. In December 2007 the City Council approved The Pointe on Lake Riley—Leu subdivision. The Leu's have recently decided not to build and would like to rescind the one lot subdivision so that the property may be sold as three individual lots, thus restoring the property to its zoning and subdivision status before the Development Agreement and all approvals were granted by the City. Since the 2007 subdivision was approved through a PUD zoning action, a public hearing and recommendation by the Planning Commission is required to rescind the approvals. Lotthammer said the Planning Commission voted 5-0 to recommend approval of rescinding The Pointe on Lake Riley-Leu project to the City Council at its November 8, 2010 meeting. The 2nd reading of the ordinance to rescind will take place under the Ordinances and Resolutions section of the agenda. There were no comments from the audience. MOTION: Aho moved, seconded by Nelson, to close the Public Hearing; to adopt Resolution No. 2010-81 rescinding Resolution No. 2007-106 which approved the Planned Unit Development Concept Review for one lot, approved by the City Council on October 2, 2007; to approve 1 st Reading of the Ordinance rescinding Ordinance No. 25-2007-PUD-11-2007 which adopted the Planned Unit Development District Review with waivers and Zoning District Amendment within the R1-22 Zoning District of The Pointe on Lake Riley-Leu for one lot, approved CITY COUNCIL MINUTES December 7, 2010 Page 5 by the City Council on December 3, 2007; to adopt Resolution 2010-82 rescinding Resolution No. 2007-107 which approved the Preliminary Plat of The Pointe on Lake Riley-Leu for one lot, approved by the City Council on October 2, 2007; and to adopt Resolution No. 2010-83 rescinding Resolution No. 2007-125 which approved the Final Plat of The Pointe on Lake Riley-Leu for one lot, approved by the City Council on December 3, 2007. Motion carried 5-0. C. FIRST READING OF ORDINANCE UPDATING FEE SCHEDULE FOR ADMINISTRATION OF OFFICIAL CONTROLS Lotthammer said official notice of this public hearing was published in the November 18, 2010, Eden Prairie News. This ordinance establishes a fee schedule for the City's costs in administering official controls pursuant to Minnesota Statutes Section 462.353, Subd. 4. Minnesota Statute allows a municipality to prescribe fees sufficient to defray the costs incurred by it in reviewing, investigating, and administering an application for an amendment to an official control or other approval required under an official control. Minnesota Statute defines an "official control" as ordinances or regulations which control the physical development of a city and implement the general objectives of the comprehensive plan. Official controls may include ordinances establishing zoning, subdivision controls, site plan regulations, sanitary codes, building codes and official maps. There were no comments from the audience. MOTION: Case moved, seconded by Aho, to close the public hearing and to approve first reading of the ordinance updating the fee schedule for administration of official controls. Motion carried 5-0. D. FEE RESOLUTION Lotthammer said official notice of this public hearing was published in the November 18, 2010, Eden Prairie News. This resolution establishes a fee schedule for the City's services not covered by ordinance. There were no comments from the audience. MOTION: Nelson moved, seconded by Case, to close the public hearing and to adopt Resolution No. 2010-84. Motion carried 5-0. X. PAYMENT OF CLAIMS MOTION: Duckstad moved, seconded by Nelson, to approve the payment of claims as submitted. Motion was approved on a roll call vote, with Aho, Case, Duckstad, Nelson and Young voting "aye." XI. ORDINANCES AND RESOLUTIONS A. THE POINTE ON LAKE RILEY-LEU RESCINDING APPROVALS by CITY COUNCIL MINUTES December 7, 2010 Page 6 Karen Len and Jeffrey Leu. Second Reading of Ordinance 18-2010 rescinding PUD District Review with waivers and Zoning Amendment in the R1-22 Zoning District on 2 acres. (Ordinance No. 18-2010 rescinding PUD District Review with waivers and Zoning District Amendment; Resolution No. 2010-85 approving 2nd Amendment to Development Agreement) Lotthammer said in 2007, the Leu's purchased three lots and asked the City to approve a subdivision that combined three lots into one lot for the purpose of building one house. In December 2007 the City Council approved the Pointe at Lake Riley—Leu subdivision. The Leu's have recently decided not to build and would like to rescind the one lot subdivision so that the property may be sold as three individual lots, thus restoring the property to its zoning and subdivision status before the Development Agreement and all approvals were granted by the City. Since the 2007 subdivision was approved through a PUD zoning action, a public hearing and recommendation by the Planning Commission is required to rescind the approvals. MOTION: Case moved, seconded by Nelson, to approve second reading of Ordinance No. 18-2010 rescinding Ordinance No. 25-2007-PUD-11-2007 which approved the Planned Unit Development District Review and Zoning District Amendment within the R1-22 Zoning District of The Pointe on Lake Riley-Leu for one lot, approved by the City Council on December 3, 2007; and to adopt Resolution No. 2010-85 approving second amendment to Development Agreement. Motion carried 5-0. B. SECOND READING OF ORDINANCE 19-2010 UPDATING FEE SCHEDULE FOR ADMINISTRATION OF OFFICIAL CONTROLS AND ADOPT RESOLUTION NO. 2010-88 APPROVING SUMMARY ORDINANCE Lotthammer said this ordinance establishes a fee schedule for the City's costs in administering official controls pursuant to Minnesota Statutes Section 462.353, Subd. 4. The first reading of this ordinance was approved earlier in this meeting. MOTION: Nelson moved, seconded by Aho, to approve second reading of Ordinance 19-2010 updating the fee schedule for administration of official controls and to adopt Resolution No. 2010-88 approving summary publication. Motion carried 5-0. XII. PETITIONS, REQUESTS AND COMMUNICATIONS XIII. APPOINTMENTS XIV. REPORTS A. REPORTS OF COUNCIL MEMBERS 1. Report on Wayfindins! Committee—Council Member Nelson CITY COUNCIL MINUTES December 7, 2010 Page 7 Nelson said she serves on the Joint Chamber of Commerce/City of Eden Prairie Wayfinding Committee. They have completed the first part of their discussions which involved the issue of getting people from the freeways to Eden Prairie Center and back out to the freeways. The Eden Prairie Center put signs up on mall property but they also wanted a few signs on the ring road that would point the way to the mall. She said General Growth has agreed to pay for the signs that will be put up by the City. There is a question about whether it will be done in time for the Christmas shopping season. 2. Phone Calls on Deer Hunting and Snowplowing— Council Member Case Case said he received phone calls the night they were shooting deer south of Riverview Road, and he didn't think the Council Members were notified of the deer reduction shoot. He did not think the Council should be the last to know that such things are taking place because we need information to be prepared for phone calls from residents. Case said he has also received calls about snowplowing and asked if there is a plan for how quickly we can get trucks out when there is an ice storm. He also wondered if there is something within the process that allows flexibility to change the plan if we hear one road is in particularly bad shape. Dietz said we have a process for both situations and during the winter time we have one person in the Street Division on stand-by. The Police Department has authority to call the Street Division manager. They would assess the situation and would resolve any localized complaints or call in additional staff. Any snow storm is always different, and we have a plan to change with the changing times. Case asked if a resident could call 911 if they had a question about a particular street. Dietz said that would work. B. REPORT OF CITY MANAGER 1. City Manager Search Timeline Lotthammer said on November 30, 2010, the Eden Prairie City Council, Mayor-Elect Nancy Tyra-Lukens and Council Member-Elect Sherry Butcher met with the City's search consultant, Greg Albrecht. Mr. Albrecht provided an overview of his executive search activities to date. Mr. Albrecht also presented resumes of 10 individuals for consideration by the City Council. The group reviewed the resumes and came to consensus on six candidates to interview. Mayor Young and Council Member Aho did not attend the meeting. Mr. Albrecht said he would contact them to get their input. The group discussed setting a date for the City Council Members to individually interview the six candidates, after which the CITY COUNCIL MINUTES December 7, 2010 Page 8 Council will meet as a group to select two or three candidates to proceed to the final interview process. The group agreed on setting the interviews for Saturday, January 8. There will be a public meeting at 1:00 PM that day with the City Council interviews occurring before the public meeting. He said setting this fulfills our public notification of the meeting. MOTION: Aho moved, seconded by Case, to schedule a special City Council meeting at 1:00 p.m. on January 8, 2010, for the City Council to discuss and select two or three City Manager candidates to proceed to the final interview process. Motion carried 5-0. 2. Resolution No. 2010-86 Certifying 2011 Property Tax Levy,Adopting The 2011 Budget, and Consenting and Approving the 2011 HRA Tax Levy Lotthammer said this item refocuses on the staff recommendation that was discussed in the workshop. He said there were some basic questions from the Council and we went through some of the scenarios to show the impact of the various levies and spending. He said staff was asked to look at a flat budget with a zero increase from 2010 to 2011. He reviewed the staff proposal and noted if the Council reaches a resolution tonight we would likely not have the Council meeting scheduled for December 21. Lotthammer noted the staff proposal has a 1.74% levy increase which gives an opportunity to make a reduction in the amount of the budget deficit. He said that levy amount would result in a$38 increase in taxes for a median value single family home. He said the proposal results in a budget deficit of $843,518 and includes employee wage and benefit changes with some budget reductions to make this a flat budget. He said the wage and benefit increases put us in a position to deliver services in a efficient and effective way and allows us to get more towards the market for employees. He reviewed a list of the possible reductions staff has identified to keep the budget flat. Nelson said one of the things that needs explaining is why the average home may go up more dollars than it appears in the 1.76% levy. City Assessor Steve Sinell said some houses may see a decrease in tax, and much of the change is due to some properties going down in value more than the typical house. He said about 30/% of properties had an overall tax decrease and about 70% went up. There was a little bit of change in commercial values that impacted the residential. Commercial rates went down a little more than did the residential rates. Nelson said even with a zero levy people could expect to pay a little more because of shifts. Case noted a zero percent levy increase causes residents to pay 2.81% more or$19 per year because of the formula shift. Aho said he would like to discuss the proposal Council Member Duckstad made earlier this evening for a zero % levy increase and a zero budget. One of the things we need to consider is what that does to our deficit and how CITY COUNCIL MINUTES December 7, 2010 Page 9 much we will need to spend out of the Budget Stabilization Fund (BSF). That is a critical aspect that we shouldn't ignore in our discussions. Duckstad asked what the current amount is in the BSF. Kotchevar said at the end of 2009 there was $5,500,000, and we expect it to be approximately the same at the end of 2010. Nelson said she accepted the fact that staff found decreases in the budget that could equal the employee 2% wage increase. She would like to throw out for consideration a 0.25% increase in the budget to start the duty crew in September. She said that would be about$3 more in taxes for the average homeowner and would be a very good investment to make. Case said he agreed with the concept of the duty crew he thought we may find our fee revenue is higher next September and he would rather not get it in the levy now. He didn't think we can decide to move on unless we deal with the salary increase piece first. He said Council Member Duckstad's proposal would mean we need to borrow $1,300,000 to cover the difference. The BSF was created to help us in the dips, but he was concerned that this may be a plateau, not a dip. Last year we borrowed one- time revenue and would have the same problem in 2012 if we do it again. We still have some cushion with the BSF. The City of Eden Prairie gave a zero increase to employees last year but the county did not nor did the federal government. He thought things are starting to improve slightly, and market salaries in cities around us are increasing 1-2% higher than ours. If we hold ours at zero, we are using our staff to balance our budget. He said he was leaning towards following the BAC and staff recommendation of pushing the 2% increase this year. In order to fund it he would go along with the cuts proposed, and he thought we can put off the two police officers and the duty crew for a year. We would still use $843,000 out of the BSF and we have to know we are complicating next year as well if we do that. If we are comfortable with taking $1,300,000 out of the BSF we can do this with a zero tax levy. We would keep the budget flat and encumber ourselves with a deficit, and we know we will have to get further funding next year. Aho said it is important to keep our staff at market levels. We have compensated our staff well in the past, and we have excellent staff members. He suggested we look at other options such as a 1% increase as a compromise instead of a 2% increase. He asked Ms Kotchevar what that would be in terms of dollars. Kotchevar said it would be a total of$173,000 including pension and FICA changes. Case said he was open to looking into that. He thought it is not okay to just assume our staff can keep taking a zero increase like they did last year. He said we have some amazing people and quality service is what we do. He said we got chosen out of thousands of cities by Money Magazine to be No. 1 and that didn't happen by accident. We need to keep quality employees CITY COUNCIL MINUTES December 7, 2010 Page 10 here, and it is important to be concerned as a Council about City staff morale. He would support some kind of a salary increase and would be open to how we would fund that. Duckstad said in the last couple years we haven't put in zero budgets because we wanted to be mean spirited but rather to be sensitive to the bad economy. People in our community haven't fully recovered, and they have had to tighten their belts. We as Council Members have an obligation to the taxpayers, and that is why he thought we should move for another zero levy and a zero budget. Case said he was not disagreeing that we could have a zero levy, but we are talking about whether the staff should get a raise or not. If we decide to go ahead with the increase, then we can talk about how to fund it. He thought these are two different pieces. Young said he didn't think anyone underestimates staff, and this is one of the hardest parts of the budget discussion; however the discussion is more complicated than that. We still pay above the average and there is no easy way to talk about having a flat budget or keeping taxes down without affecting our people. With regard to the pay increase, Nelson said when we met with the BAC she asked the question about having a 1.5% or 1.6% increase and not go to 2%. The Chair of the BAC had a good response that over the past two years this would barely keep things flat with inflation. She asked the Chamber about the percentage for businesses, and they said it was 2.9%. Given the budget reductions that add up to the same amount, she thought we can do the 2% and just argue about the deficit. She could see 1% over for the levy which would take us down to approximately what we have been able to make up for this year. Increased fees means more building is going on, and the economy is slowly starting to right itself. Lotthammer said staff had a good discussion about building permit fees and we conservatively went back to budgeting those at$1,200,000. From a confidence standpoint we haven't crafted this budget in a way that is risky but rather it is very conservative. Case said this raises the question of what the objective is. If the objective is to keep peoples' taxes flat, a zero levy will still raise taxes $19 so the levy would have to decrease in order to not raise taxes. He thought we could get at a compromise to have a 1 or 2% salary increase and do a 1% levy using the BSF. Aho said he liked the idea of a zero levy increase even though it does raise the average median home taxes by $19. We had planned to use the BSF in the last two budget cycles but we really didn't use that fund. There are some other areas of cost savings we may be able to take advantage of over the CITY COUNCIL MINUTES December 7, 2010 Page 11 year and with potential increases in our building fees, a zero % levy and a zero % budget that includes a 2% increase for employees probably would not result in a $1,300,000 deficit. That would be the worst case we would see, so he was comfortable supporting a zero % levy increase and a zero % budget increase. Case asked if that would take the difference in the deficit out of the BSF. Aho thought it would yield out less than that. We still have $5,500,000 in the BSF, and it hasn't decreased in the last two years. Duckstad said the staff recommendation was for an increase in the levy to 1.73% and he felt that was too high. He thought the zero levy increase was appropriate because that had been considered carefully by our BAC. Even if it does raise taxes a modest amount, it is appropriate that we reduce the levy from the amount proposed. Case said he came to the meeting thinking he would not be comfortable with the deficit spending piece but we learned our$700,000 deficit projected for the year will disappear. Permit fees are running $500,000 higher and the Community Center revenue is running higher. He thought a zero budget and a zero levy are okay because we talked about how we would fund that. It does create on paper a$1,343,518 deficit which would be funded out of the BSF. He noted we won't have these options in 2012 because at this rate the BSF fund is bankrupt by 2013 even if we continue to hold levies and budgets at zero. Nelson said she could go along with the zero/zero scenario but would rather propose the 0.25% increase to allow for the duty crew to start in September. She thought that is a very modest$3 increase, and we can't wait forever to start the duty crew. Case said that is about$75,000 and he thought we might find a way to fund that amount while keeping the levy increase at zero. We could work with the Fire Department and get some ownership of this from the public. Aho agreed the duty crew concept is important but we can do it in the future. MOTION: Duckstad moved, seconded by Aho, to adopt Resolution No. 2010-86 certifying the 2011 Property Tax levy to be $32,009,673, to approve the 2011 Budget of$40,414,931 as reviewed by the Council, and to consent and approve the HRA tax levy and budget of$200,000. Rosow asked if the numbers include the 2% wage increase. Duckstad said he thought that was implicit in what we were doing. VOTE ON THE MOTION: Motion carried 5-0. C. REPORT OF THE COMMUNITY DEVELOPMENT DIRECTOR 1. Approve New Lease Between the City of Eden Prairie and BE Investments LLC for a Complete Nutrition Retail Store at 8018 Den Road CITY COUNCIL MINUTES December 7, 2010 Page 12 Jeremiah said the liquor store property at Den Road had a vacancy earlier this year and the proposal presented to the Council in June 2010 was never signed. There is a new proposal for a Complete Nutrition store to lease 1,517 square feet for five years at$23.00 per square foot rent. For the option years the rent would increase at the end of the five years to $25.30 and to $27.83 at the end of ten years. Nelson noted renting this portion of the space leaves a second portion to be rented. Jeremiah said they anticipate there will be two more tenants and there has been a good deal of interest in the space. Nelson asked if there are doorways to the outside for all the spaces. Jeremiah said improvements made at this time will set the stage for future tenants. MOTION: Aho moved, seconded by Nelson, to approve a new lease between the City of Eden Prairie and BE Investments, LLC, for a Complete Nutrition retail store at a City owned property located at 8018 Den Road. Motion carried 5-0. 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 1. Memorandum of Understanding Rmardins! Certain Development Projects at Flyins! Cloud Airport Rosow said this is a Memorandum of Understanding (MOU) regarding development at the airport. As background, when we started discussions about the ball field leases, the Metropolitan Airports Commission (MAC) included a proposal they would develop certain properties that are part of the airport property and their process would be to solicit input from City staff as to the appropriateness of the uses. The MAC would convene a public meeting on the development and would incorporate City design concepts. They would direct the developer to work with the City on building permits and then ask the City to cooperate with infrastructure with them. He said this is different structurally from what we normally do. We had a dispute over whether the City had zoning authority over non- aeronautical uses. We looked for a way to meet the needs of both entities and honor the process we go through when we zone in and around the City. He proposed we use the site development process but change it to accommodate the MAC's need to know they will be able to develop the property. CITY COUNCIL MINUTES December 7, 2010 Page 13 Rosow said historically we have not pre-zoned property in the City prior to receiving a proposal in order to maintain significant control over the development. He proposed to staff and the MAC the City would undertake to pre-zone eight sites that the MAC has identified by first amending our City code to provide for airport commercial and airport office zoning districts. The uses in the airport office and airport commercial will be the same as the kind of uses in our regular office and commercial. One of the concerns was with respect to a gasoline service station. This ordinance provides for performance standards if one of the sites is developed for that purpose. We would go through a process that would include a public hearing, adopting the new zoning districts and looking at site plan approvals for each of the sites. We would consider the text amendment and if that was adopted, we would bring forward the actual rezoning of the eight parcels. He reviewed a list of the eight parcels and noted if the City rezones the properties the MAC agrees to not challenge the City's assertion of zoning authority over those parcels. Doing this without an actual project proposed enables the MAC to go to a developer and say they can talk to the City about what is allowed in the zone. Those matters would then come before the Council on a per case basis when they find a developer. Rosow said in connection with all this we worked out cooperation on infrastructure so the MAC pays their fair share of the costs. We are working out the details on the parcel next to the new ball fields to mesh with the work on the ball fields. Mr. Lotthammer and the MAC team are trying to refine those numbers to add a detailed description of how the cost of those parcels would be shared. We identified the type of improvements that would be contemplated and if the MAC would have to pay a share of the costs. He said the MOU has been attached to the proposed ordinance. By approving the MOU the Council does not commit to approving the ordinance because that would have to go through our process with a public hearing. If the text amendment is passed, we would be in a waiting mode until a developer wanted to develop one of the parcels. Either party may cancel the agreement. It provides for a dispute resolution process similar to that in the 2002 MOU. He said this is a good compromise that maintains our position that we have zoning authority over non-aeronautical uses and also provides certainty to the MAC they will be able to develop the parcels. They are looking at ways to increase their revenue, and this is important to them. Case said this feels pretty good. His concern was if a proposed gas station comes in and the neighborhood is up in arms, in the past we have been able to say "No"because we had the power with zoning. In this case we would be hard pressed to not approve it, so our hands are more tied with this process. Rosow said this is one of the compromises reached, but that is an example of why we included special provisions with respect to performance standards for gas stations and the MAC was comfortable with that. CITY COUNCIL MINUTES December 7, 2010 Page 14 Duckstad said he was a little leery about the whole thing. He asked what happens if the people along Pioneer Trail across from the parcel don't want a gas station there and are unhappy about it. Once we zone it commercial a developer can go ahead and put a gas station in. We just negotiated a lease with the MAC that had a cancellation clause of one year so he thought we have some leverage there. He would like someone to explain why we couldn't put in the MOU that when the commercial property is developed and the lease to the commercial developer grants more than one year notice for cancellation we should have a right to renegotiate our lease with the MAC so we are more protected. Rosow said he believed that is part of the entire process he described. We insisted from day one that we have a public hearing. The first opportunity for citizens to weigh in is when we bring forward a text amendment. The second opportunity for the citizens to weigh in is when the Council considers the rezoning of each of the parcels. Young asked if the action requested tonight will not change anyone's zoning. Rosow said that was correct. Nelson asked if none of the properties can be industrial. Rosow said that was correct. Nelson asked if we have guidelines for lighting and traffic. Rosow said the developments will drive infrastructure improvements and that was part of the matrix put together to identify the parcels that would require street improvements. Nelson asked if we will have any control over what kind or style of lighting used. Rosow said that is part of the performance standards. He noted the alternative is to not pass the MOU, not have an agreement on the appropriate use of the parcels, and the MAC deciding to go ahead with development. MOTION: Aho moved, seconded by Case, to approve the Memorandum of Understanding regarding certain development projects at Flying Cloud with the Metropolitan Airports Commission. Motion carried 5-0. XV. OTHER BUSINESS Aho said this may be our last meeting for the year, and he wanted to take the opportunity to thank Mayor Young for his many years of service on commissions, on the City Council and as mayor. He also wanted to thank Council Member Duckstad for his many years of service. Duckstad said he joined in commending Mayor Young on the effective way he has led the City Council in the last four years. He said it was a pleasure and a privilege to serve on the City Council, and he thought as a Council we have done some pretty good things. XVI. CLOSED SESSION TO CONSIDER LEGAL STRATEGY At 9:05 PM the Council moved to closed session to consider legal strategy. CITY COUNCIL MINUTES December 7, 2010 Page 15 XVII. ADJOURNMENT Mayor Young adjourned the meeting at 9:20 PM.