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HomeMy WebLinkAbout2001-11-20 MINUTES AGENDA COTTAGE GROVE CITY COUNCIL NOVEMBER 20, 2001 Persons wishing to address the Council during this meeting are asked to fill out a "Speaker Signup Form"and return the form to any Staff Member prior to the start of the meeting. Speaker Signup Forms are located on each audience chair in the Council Chamber. OPEN FORUM - 7:15 P.M. Persons may address the City Council on subjects that are not a part of the Regular Meeting agenda, but must limit remarks to two (2) minutes. Open forum will adjourn to the Regular Meeting promptly at 7:30 p.m. Open Forum and a portion of the Regular Meeting are televised LIVE, airing on Government Channel 16. REGULAR MEETING — 7:30 P.M. CALL TO ORDER— Mayor ROLL CALL— City Clerk 1. ADOPTION OF AGENDA 2. PRESENTATIONS A. Sergeant Appointment: Steve McCarthy. Staff Recommendation:Approve the appointmenf of Steve McCarthy to the position of Police Sergeant. Administer swearing-in ceremony. 3. APPROVAL OF MINUTES 4. CONSENT CALENDAR A. Accept and Place on File the Following Minutes: i. Parks, Recreation and Natural Resources Commission of August 13, September 10, and October 8, 2001. ii. Economic Development Authority of September 11, 2001 and October 9, 2001. iii. Public Works Commission of October 8, 2001. B. Receive legal opinion regarding condemnation process and conditional zoning. Staff Recommendation:Receive legal opinion. No action is recommended. C. Consider appointing Mike Wennen to the Economic Development Authority. Staff Recommendation:Approve the appointment. This appointment would fill an existing term ending December 31, 2003. D. Consider buy-out of 1995 and 1996 policy periods for Workers' Compensation Insurance with the League of Minnesota Cities Insurance Trust. Staff Recommendation:Buy out or close the 1995 and 1996 policy periods in the amount of$36,091. '`*E. Consider approving the 2001 —2003 labor agreement between the International Association of Firefighters Local 2570 and the City of Cottage Grove. Staff Recommendation:Approve the contract. 5. RESPONSE TO PREVIOUSLY RAISED OPEN FORUM ISSUES NOVEMBER 20, 2001 AGENDA Cottage Grove City Councii 6. PUBLIC HEARINGS 7. BID AWARDS **A. Consider accepting the proposal from Tower Cleaning Systems for City janitorial services to begin approximately January 1, 2002. Staff Recommendations:Accept the proposal. Tower Cleaning Systems submitted the lowest of nine bids received from commercial cleaning companies. 8. UNFINISHED AND NEW BUSINESS A. Consider approval of Comprehensive Plan Amendment to change the land-use designation from low-density residential to commercial and rezoning from UR—Urban Reserve and R-2—Residential Estate to B-2—Retail Business for the property at 7862 Harkness Avenue. Staff Recommendation:Adopt the resolution denying fhe Comprehensive Plan Amendment and Rezoning request based upon the listed findings of fact. B. Consider approval of Comprehensive Plan Amendment to change the land-use designation from low-density residential to commercial and rezoning from UR—Urban Reserve to B-2—Retail Business for the property at 7170 East Point Douglas Road. Staff Recommendation:Adopt the resolution denying the Comprehensive Plan Amendment and Rezoning request based upon the listed findings of fact. C. Consider approval of Comprehensive Plan Amendment to change the land-use designation from low-density residential to commercial and rezoning from R-2— Residential Estate to B-2—Retail Business for the property at 7848 Harkness Avenue. Staff Recommendation:Adopt the resolution denying the Comprehensive Plan Amendment and Rezoning request based upon the listed findings of fact. 9. RESPONSE TO PREVIOUSLY RAISED COUNCIL COMMENTS AND REQUESTS 10. COUNCIL COMMENTS AND REQUESTS 11. PAY BILLS A. Approve payment of check numbers 121334 to 121494 in the amount of$869,948.81. 12. WORKSHOP SESSION –OPEN TO PUBLIC A. Final Budget. '`"B. Utility Rates. 13. WORKSHOP SESSION – CLOSED TO PUBLIC ADJOURNMENT * Contains Supplemental Information ** Packet Item Submitted 11/19/01 , + REGULAR MEETING COTTAGE GROVE CITY COUNCIL November 20, 2001 OPEN FORUM —7:15 p.m. Open forum provides an opportunity for persons to inform the Council of a problem or to request information related to City business not scheduled for Council action and on the Agenda. Mayor Shiely encouraged persons to limit their remarks to finro (2) minutes per issue. Present: Mayor Sandy Shiely Council Member Cheryl Kohls Council Member Pat Rice Council Member Jim Wolcott Council Member Rod Hale Also Present: Ryan Schroeder, City Administrator Ron Hedberg, Finance Director John Mickelson, Director Public Safety Kim Lindquist, Community Development Director Les Burshten, Public Works Director Jerry Bourdon, City Engineer, BRAA Michelle Wolfe, Assistant City Administrator Corrine Thomson, City Attorney, Kennedy and Graven No one stepped forward to speak during Open Forum. CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota held a regular meeting on Tuesday, November 20, 2001, at the Cottage Grove City Hall, 7516 80th Street South. Mayor Shiely called the meeting to order at 7:30 p.m. ROLL CALL Present: Mayor Sandy Shiely Council Member Cheryl Kohls Council Member Pat Rice Council Member Jim Wolcott Council Member Rod Hale Also Present: Ryan Schroeder, City Administrator Ron Hedberg, Finance Director John Mickelson, Director Public Safety Jerry Bourdon, City Engineer, BRAA Les Burshten, Public Works Director Kim Lindquist, Community Development Director Michelle Wolfe, Assistant City Administrator Corrine Thomson, City Attorney, Kennedy and Graven Mayor Shiely presided over the meeting. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 2 ADOPTION OF AGENDA MOTION BY HALE, SECONDED BY WOLCOTT, TO APPROVE THE FINAL AGENDA. MOTION CARRIED 5-0. PRESENTATIONS A. Sergeant Appointment: Steve McCarthy Mayor Shiely stated that the City of Cottage Grove has the distinct honor of being present for the swearing in of Steve McCarthy to the position of Police Sergeant. She reviewed his work history with the Public Safety Department. MOTION BY KOHL, SECONDED BY RICE, TO APPROVE THE APPOINTMENT OF STEVE MCCARTHY TO THE POSITION OF POLICE SERGEANT EFFECTIVE WEDNESDAY, NOVEMBER 21, 2001. MOTION CARRIED 5-0. The City Council, City Administrator Schroeder, and Public Safety Director Mickelson came forward for the swearing in of Sergeant Steve McCarthy. City Administrator Schroeder administered the oath of office. Public Safety Director Mickelson noted that Sergeant McCarthy was the original manager for the Gold Rush in Cottage Grove. He stated that after a few years and getting to know the police, Steve decided to join the force. He reviewed his work history noting his dedication as a Police Officer. He invited his wife Karen to come forward and pin Sergeant McCarthy. Sergeant McCarthy thanked the Council and the residents of Cottage Grove for showing their support. He stated that he would do his best in serving the City of Cottage Grove. APPROVAL OF MINUTES NONE CONSENT CALENDAR MOTION BY HALE, SECONDED BY RICE, TO: A. ACCEPT AND PLACE ON FILE THE FOLLOWING MEETING MINUTES: i. PARKS, RECREATION AND NATURAL RESOURCES COMMISSION OF AUGUST 13, SEPTEMBER 10, AND OCTOBER 8, 2001. ii. ECONOMIC DEVELOPMENT AUTHORITY OF SEPTEMBER 11, 2001 AND OCTOBER 9, 2001. iii. PUBLIC WORKS COMMISSION OF OCTOBER 8, 2001. B. RECEIVE LEGAL OPINION REGARDING CONDEMNATION PROCESS AND CONDITIONAL ZONING. C. APPOINT MIKE WENNEN TO THE ECONOMIC DEVELOPMENT AUTHORITY FOR A TERM ENDING DECEMBER 31, 2003. D. APPROVE BUYOUT OF THE 1995 AND 1996 WORKER'S COMPENSATION POLICY PERIODS IN THE AMOUNT OF $36,091. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 3 E. APPROVE THE 2001-2003 LABOR AGREEMENT BETWEEN THE INTERNATIONAL ASSOCIATION OF FIREFIGHTERS LOCAL 2570 AND THE CITY OF COTTAGE GROVE. MOTION CARRIED 5-0. Mayor Shiely stated that if anyone is present for issues on the consent calendar all have been passed. RESPONSE TO PREVIOUSLY RAISED OPEN FORUM ISSUES NONE PUBLIC HEARINGS NONE BID AWARDS A. Consider Accepting the Proposal from Tower Cleaning Systems for City Janitorial Services to begin Approximately January 1, 2002. City Administrator Schroeder referenced the packets provided to Council for their review and explained the process they took to gather and review the proposals. He explained that this bid would result in cost savings of approximately $9,000. Council Member Hale asked for clarification on the process for background checks. He asked if the City is responsible for the background check or if it was guaranteed as part of the contract. Public Safety Director Mickelson stated that there are recent changes in the State laws and reviewed the changes with the Council. He further explained that the service would have to provide background checks done by the Police Department. MOTION BY KOHLS, SECONDED BY WOLCOTT, TO ACCEPT THE PROPOSAL FROM TOWER CLEANING SYSTEMS FOR CITY JANITORIAL SERVICES TO BEGIN APPROXIMATELY JANUARY 1, 2002. MOTION CARRIED 5-0. UNFINISHED AND NEW BUSINESS A. Consider Approval of Comprehensive Plan Amendment to Change the Land Use Designation from Low Density Residential to Commercial and Rezoning from UR, Urban Reserves and R- 2, Residential Estate to B-2 Retail Business for the Property at 7862 Harkness Avenue. Mayor Shiely stated that finro individuals have requested to speak on these items. Jim Yarosh, attorney representing Eugene and Joan Stoltz, referenced the minutes from the Planning Commission meeting stating that the property owners have agreed to combine their properties to maximize the advantage of development for Cottage Grove. He explained his understanding of the City's vision for this area noting that actions taken by the Council over the last finro years indicates that the direction is commercial development. He referenced the TIF District adopted in July 2001 and the Gateway Redevelopment project adding that all three of the properties are in this district. He stated that the TIF plan describes commercial development for this area and there is no mention in the TIF plan that would describe these properties as residential. He referenced a proposal within the Regular Meeting—November 20, 2001 Cottage Grove City Council Page 4 street project for the three-lane road proposed for this area stating that this is not compatible for residential use. He stated that there are four items on record indicating appropriate uses for these properties and they are all commercial. He explained that they are currently in negotiations with a commercial developer and they respectfully request the Council to review their vision for the use of this property and grant his clients their request. Garfield Clark, 250 South 2nd Avenue, Suite 20, Minneapolis, Minnesota, provided an information packet to the Council for their review. He read a statement by the property owners requesting the Council to approve their request for the rezoning of their properties. He reviewed the area and commercial intent for the Gateway Redevelopment District noting it as Exhibit A. He referenced the recent adoption of the TIF Districts that includes his client's properties. He referenced the City's intent to acquire the property by eminent domain stating that the current owners are committed to unite their properties for sale to any potential developer. He stated that they are requesting that the City purchase their properties at a residential rate and reviewed the request with the Council. He explained that they would prefer to direct the negotiation of the sale of their property with Kohls. He stated that the Planning Commission was not aware of this project. He said that this is an example of how things get out of hand stating that they are asking these three families to subsidize this plan with Kohls and stated t�at there is no reason why families located on this site should subsidize this developer. Council Member Rice asked Mr. Clark how long they have been paying residential taxes on these properties. Mr. Clark stated that they have been paying agricultural and standard tax rates noting that should they be rezoned commercial tax rates would be applied at that time. He stated that they are aware of this and would deal with it at that time. Council Member Hale asked for clarification regarding the request to purchase the property at residential prices. Mr. Clark explained the subsidy issue to the Council and provided an example based on the per square foot price. He stated that if the City prevents them from getting the price the property owners deserve, the difference is the subsidy of the developer. Council Member Hale stated that he does not recall a time where the City has made any money on the property that they have acquired. He referenced point number four in Mr. Clark's document and asked him to clarify what would be wrong with condemnation noting that they have willing individuals participating. He explained that the City uses this forum to determine a fair land price. He stated that generally it results in both parties being reasonably satisfied with the decision. Mr. Clark confirmed that he understood Council Member Hale's explanation and said that the use of eminent domain should be used as a last resort. He further stated that no communications or discussions have been held to determine what would be in the property owners' best interest. He acknowledged that the City has the power to condemn adding that it should be as a last resort. He referenced the appraisal process noting that they need to establish some values and reviewed the suggested process that would bring them to a reasonable residential price for the property. Council Member Hale clarified the condemnation process the City uses stating that they do this to be fair to both parties. He stated that the Council is considering the best interest for the general public also. He explained that when they use eminent domain each party selects an appraiser and then comes to an agreement based on the feedback. He referenced point five of Mr. Clark's document and asked Mr. Clark for clarification. He stated that this would not be fair to provide this type of authority because they do not represent the general public. He stated that he would not be in favor of a private party negotiation for commercial use without Council approval. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 5 Mayor Shiely asked if this rezoning would automatically guarantee the property owners a net price. Mr. Clark clarified his understanding and confirmed that it would provide that guarantee. Mayor Shiely clarified that the situation with Kohls is not definite. She referenced the TIF district and clarified that it is not their intent that every area within a TIF district would be commercial. She explained that having TIF designation does not mean that a piece of land would be developed as commercial. She clarified that they do not know if the Kohls project would be built. She stated that when the Council re-established the Redevelopment District they did not see that area as a part of the new downtown area. She stated that the Council looks at this as a land use issue and asked if they want that entire area to become commercial if Kohls does not come in. Mr. Clark clarified their intent and referenced the new State laws. He stated that the tax increment has a value to the developers and the difference in the State law is that it is available for municipalities to develop sites within their community. Mayor Shiely clarified that this would not need to be commercial. Mr. Clark explained that they have been directed by the property owners to locate another developer for the properties noting that it might be a potential site to zone to commercial. He noted that there is one developer in place and several others are interested. Mayor Shiely clarified that the City does not have a developer in place. Council Member Hale acknowledged that they could go ahead and direct the marketing of the property. He stated that the Council would like to know what is being proposed for the site before rezoning the properties. He explained that the Council prefers having some control and suggested that it would be best to have a proposal before the Council before requesting a rezoning of the properties. He stated that it is a great value to the City not to approve this request unless there is a proposal before them to be considered. He explained that a proposal would assist the City in considering the advantages for the general public and for the City. He further explained that this assists the City in making decisions in building the kind of City that is most useful to its' citizens. He stated that the Council would not support anything without a proposal before them. Mr. Clark stated that they do have a proposal before the Council and clarified the content of the proposal with Council, that being the Kohl's project. Bill Starr, Attorney, 208 Grain Exchange Building, Minneapolis stated that his wife owns the condominium near the project. He reviewed his background and familiarity with condemnation law with the Council. He stated that he and his wife are seniors and when they purchased the property it was with the intent that the rent received would be, and is, a substantial portion of their retirement. He stated that the condemnation would cost them considerably and explained that there is no amount of money that would replace the loss of their retirement income. He provided several examples to the Council noting that this is not an easy process and it is his hope that the Council does not choose this process. Council Member Kohls asked Staff if the land would remain residential if the money were spent for the realignment of Hardwood Avenue and it goes through their property. City Administrator Schroeder stated that if the Kohls project doesn't go forward that they would be revisiting the alignments. He stated that the proposals are asking for rezoning on the premise that they can work together on the Kohls project. He acknowledged that if the Kohls project does move forward that it would affect their properties in addition to other properties in the area that the applicants do not have control over. He stated that the realignment of Hardwood Avenue would affect Regu/ar Meeting—November 20, 2001 Cottage Grove City Council Page 6 the zoning and that they would revisit that issue at that time. He explained that the properties would remain in the current zoning until something comes along to determine a need to change the zoning. Council Member Kohls asked for clarification of the City's intent for any property that has been designated within the Gateway Redevelopment Project. She asked if the City would continue to pursue commercial development if Kohls does not happen or would they leave the properties alone. City Administrator Schroeder referenced the Hardwood Avenue realignment stating that the properties would definitely be affected and the City would address it at that time. Council Member Kohls clarified that Council Member Hale supports using eminent domain because the Council represents the public and because it allows the City to obtain a fair price. She acknowledged that the City would get a good price and stated that she represents the public and she is not convinced that the general public is in agreement with the City to take land identified for commercial use and that this is fair. She stated that it should be used for the public good adding that the only difference she sees from other areas within the Gateway Redevelopment is that these are residential homes and the rest has been zoned commercial. She stated that the majority of the acreage is commercial and they are discussing homeowners not developers. She further stated that the City bends over backward for business and developers and they do not do this for their residents. She read the statement made by the lawyers representing the residents and clarified that the City is clearly saying that this is potentially commercial property. Mayor Shiely asked if the Council has the power to pull properties out of the redevelopment areas. City Administrator Schroeder confirmed that they do have the power to remove properties from the redevelopment areas. Council Member Kohls asked if they are willing to pull these properties out of the redevelopment district and leave them alone if Kohls does not happen. Mayor Shiely stated that they are not prepared to discuss this issue now and suggested that they schedule a separate workshop for that discussion. She explained that she could not make land use decisions based on what has been presented so far. She stated that she is very concerned about the property owners but that she is also concerned about the rest of the citizens in Cottage Grove. She stated that they need to determine what would be best for everyone. Council Member Wolcott expressed his agreement with Council Member Hale. He clarified that not all of the area would be redeveloped adding that they did not know what would happen nor were they aware of any projects at the time of the district creation. He clarified that the intent was to expand the roads in the area. He stated that when the Hardwood project came forward they did a feasibility study noting that it has been discussed and it has been changed. He stated that at some point in the near future they would need to discuss this issue further. He referenced the road and current configuration stating that right now he cannot see commercial development in this area and he is not willing to rezone a property to commercial just to rezone. He stated that he appreciates the reasons for the request from the property owners but he wants to see a proposal before the Council before he would approve rezoning the area. Council Member Kohls acknowledged Council Member Wolcott's' position and comments and asked how they would be able to get a proposal for the property if it is not zoned commercial first. She stated that the property owners would not be here if they were not discussing commercial rezoning. She stated that she is very concerned about families dependent on the income from these properties and how this would affect their future. She stated that she would like further discussion. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 7 Mayor Shiely agreed that they do need to discuss this issue further in order to determine what should and should not be included. She referenced the public good noting that this could go before a judge to determine if this is for the good of the public. City Attorney Thomson clarified that this would be with respect to eminent domain. She clarified that this discussion does not involve eminent domain. She stated that the eminent domain issue has nothing to do with the rezoning and reguiding requests presently before the Council. Council Member Hale clarified to the public that the action the Council is taking is not unusual and reviewed the issues before them. He explained that they are all rezoning issues that would require presentation of a proposal to the Council before any decisions could be made. He clarified that they have had several discussions regarding rezoning and its affects on the property owners adding that they also need to consider the affects on all citizens in Cottage Grove. He stated that this has not been an easy decision for the Council. Council Member Kohls referenced City Attorney Thomson's statement that this is a land use issue not to discuss or consider the property values stating that she cannot put aside her sense of fairness with respect to asking a citizen to leave their home. She said that this definitely needs further discussion. City Administrator Schroeder explained that the City Council is in control of what purchase agreements are entered into for any property purchased for development. He stated that these agreements could be considered and it does not have to have any bearing on the zoning for the use of the land being purchased. He stated that if the Kohls project does proceed and Council feels the appraisals and subsequent offers are unfair, there is an opportunity, at any time, to change the offer. He explained that the offers would be based on the appraisals received for the property. He clarified that the City did ask for an appraisal of the property and that the City did not manipulate or direct the appraisal. Eugene Stoltz, 2963 Glader Boulevard, Lindstrom, stated that he owns the property located at 7170 East Point Douglas Road. He clarified his understanding of the TIF District explanation provided by Mayor Shiely and clarified that the Council is stating that if the Kohls plan does not happen, the property would not be used as commercial and would remain residential. He referenced the discussion with City Administrator Schroeder regarding the realignment of Hardwood Avenue and asked if this is something that the Council has intended all along. He expressed his concerns stating that he suspects a large percentage of the property use, in the minds of the Council, would be for commercial use. Mayor Shiely stated that this was not true stating that the Council had no idea that a place as large as Kohls would want that area. She stated that the Council does not view these properties as commercial adding that TIF does not imply commercial. City Administrator Schroeder clarified that if this were a flat piece of property, there would be a different explanation received. He stated that this property would be very difficult to develop and a discussion to revisit these issues is due to the fact that they are having a very difficult time with realignment of the road. Mr. Stoltz clarified that all they are asking is to treat them fairly by giving them a fair price based on the commercial value of the property. Mr. Clark referenced the "but for" concept noting it is used in tax increment financing and explained the process to the Council. He reviewed and clarified this concept with the Council. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 8 Council Member Wolcott referenced a commitment made to the Harkness Avenue residents that they would not open the traffic to a high commercial area. He stated that this is what opened the door to discussions regarding the Hardwood project. He asked Mr. Clark for his opinion regarding the current access. Mr. Clark clarified that their issues are with respect to access and size. He explained that the way it has been designed it is the right thing to do, noting that this is a large piece of property and desirable. He stated that with the way they create the 10-acre piece the access issues would be addressed and this is included in the plans. MOTION BY RICE, SECONDED BY WOLCOTT, TO ADOPT RESOLUTION NO. 01-180, A RESOLUTION DENYING A COMPREHENSIVE PLAN AMENDMENT TO CHANGE THE LAND USE FROM LOW DENSITY RESIDENTIAL TO COMMERCIAL AND A ZONING AMENDMENT TO CHANGE THE ZONING FROM UR, URBAN RESERVE AND R-2, RESIDENTIAL ESTATE, TO B-2 RETAIL BUSINESS FOR THE PROPERTY COMMONLY KNOWN AS 7862 HARKNESS AVENUE. MOTION CARRIED 4-1 (KOHLS). B. Consider Approval of Comprehensive Plan Amendment to Chanqe the Land Use Designation from Low Density Residential to Commercial and Rezoning from UR, Urban Reserve to B-2 Retail Business for the Property at 7170 East Point Douglas Road. MOTION BY WOLCOTT, SECONDED BY HALE, TO ADOPT RESOLUT/ON NO. 01-181, A RESOLUTION DENYING A COMPREHENSIVE PLAN AMENDMENT TO CHANGE THE LAND USE FROM LOW DENSITY RESIDENTIAL TO COMMERCIAL AND A ZONING AMENDMENT TO CHANGE THE ZONING FROM UR, URBAN RESERVE TO B-2 RETAIL BUSINESS FOR PROPERTY AT 7170 EAST POINT DOUGLAS ROAD. MOTION CARRIED 4-1 (KOHLS). C. Consider Approval of Comprehensive Plan Amendment to Change the Land Use Designation from Low Density Residential to Commercial and Rezoning from R-2, Residential Estate to B-2 Retail Business for the Property at 7848 Harkness Avenue. MOTION BY HALE, SECONDED BY RICE, TO ADOPT RESOLUTION NO. 01-182, A RESOLUTION DENYING A COMPREHENSIVE PLAN AMENDMENT TO CHANGE THE LAND USE FROM LOW DENSITY RESIDENTIAL TO COMMERCIAL AND A ZONING AMENDMENT TO CHANGE THE ZONING FROM R-2, RESIDENTIAL ESTATE TO B-2 RETAIL BUSINESS FOR PROPERTY AT 7848 HARKNESS AVENUE. MOTION CARRIED 4-1 (KOHLS). RESPONSE TO PREVIOUSLY RAISED COUNCIL COMMENTS AND QUESTIONS NONE COUNCIL COMMENTS AND REQUESTS Council Member Rice stated that at the last Planning Commission meeting the discussion for the last three motions went way beyond the charges of the Planning Commission. He stated that when it comes to the land use and values, it is not their charge but the City Council charge and they need to let them know they are to deal with zoning changes and the Comprehensive Plan and nothing more. He stated that it is nice to know that they are concerned for the property owners but it is the responsibility of the Council to make this type of decision. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 9 Mayor Shiely clarified that it would be entirely appropriate for the Planning Commission to review site plans and proposals if it were at that point. She stated that there is a blurring between what is known by the Council, the Economic Development Authority, and Planning Commission. Council Member Kohls acknowledged Council Member Rice's comments and expressed her agreement that the role of the Council and the Planning Commission is to review what is presented before them. She stated that she respects the Planning Commission for digging into the issues and asking for clarification adding that their intent is to deal with current zoning issues and the Comprehensive Plan. __ Council Member Hale referenced the appraisals received and clarified the need for a determination of a cost figure from a developer. He stated that in order to make decisions the City needs this information and presently they have to second-guess what people would sell their property for. He stated that it should be based on property value and a fair figure could be determined that would benefit the owner and the City. City Administrator Schroeder explained that in a situation like this an appraiser would provide an appraisal that would be at the highest value as the property sits right now. Council Member Hale asked if they could explain to an appraiser that this property is presently being considered for inclusion to a TIF district. He stated that he wants to pay fair value to the owner and the Council is obligated to be fair and honest with the property owner with respect to intent and value. City Attorney Thomson explained the appraisal process they have to use stating that the appraiser has to use their own independent judgment to determine the value of the property. She stated that they have to look at the legally permitted uses to determine value noting the changes in zoning that could be probable. She stated that they take all of this into consideration when making their determination. City Administrator Schroeder stated that it is not a "given" that if these properties were appraised at a commercial level, they would receive that much more for the value even if it were located in a TIF district. He referenced a property in the area that provides better access and less cost for development noting that it would be lower than the appraised value for the residential property in discussion on a per-square-foot basis. He explained that access, utilities provisioning, demolition and well issues are figured into the net value of the property. He clarified that it is their goal that the property owners are treated fairly and equitably. He stated that they could run development cost scenarios for evaluation purposes to determine the highest investment value. Council Member Hale stated that he would prefer to determine obligation and value before entering any negotiations with Kohls. Council Member Kohls stated that they need clarification as to what is considered extraordinary. She stated that clarification is necessary in order to get a full understanding of what is involved so that any decision would be fair to the residents. She stated that no one on the Council actually knows what would be considered extraordinary and it should be clarified and discussed before entering into any discussions with Kohls. City Attorney Thomson clarified the process and information used by the appraisers to determine fair value for a property. She explained that an appraiser has to disregard impacts on value that are caused by proposed project. She stated that if the road alignment is only for this project and it didn't proceed then the appraiser would have to take this information into account to discern what is related to the project and what is not related. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 10 Community Development Director Lindquist stated that she was involved with the majority of discussions with the appraiser. She explained that this is a fairly expensive road and there might have been a realignment of the road had Kohls not appeared. Mayor Shiely announced that Mike Jacoby became an Eagle Scout last Sunday. She referenced the Great Grove Get Together for next year stating that she attended a meeting for next year and they are looking for input from the Council on banners for the occasion. PAY BILLS MOTION BY KOHLS, SECONDED BY HALE, TO APPROVE PAYMENT OF CHECK NUMBERS 121334 TO 121494 TOTALING $868,948.81. MOTION CARRIED 5-0. Mayor Shiely called a 10-minute break at 9:25 p.m. Mayor Shiely called the meeting back to order at 9:40 p.m. WORKSHOP SESSION —OPEN A. Provide Direction to Staff Regarding the Final 2002 Budget and Property Tax Levy Finance Director Hedberg provided a background to the Council stating that the City adopted a Preliminary Property Tax Levy and Budget for 2002 in September. He stated that this preliminary levy may be reduced, but may not be increased, prior to adopting a final levy and budget in December. He explained that Staff s intent is to publish that the final levy would be adopted at a Regular City Council meeting on December 5, 2001. He further explained that a copy of the preliminary budget that was adopted in September and a copy of a budget memo, distributed at the same time, are included in the Council Packet for review. He reviewed items included in the memo with the Council. He stated that they are getting the remaining numbers for the Health Plan and need to determine where this would fit in addition to the hiring of another Building Inspector. He referenced the Economic Development noting that they need to review possible items that could be funded by the Economic Development Trust Fund. He stated that the EDA recommendation was to fund from this trust fund but not to reduce funding from 2002 levy. Mayor Shiely noted that the EDA concept to expand the uses of the fund had merit and needed to be reviewed. She stated that to review it between now and December 5th would create a crunch that they are not able to handle at this time. Council Member Wolcott stated that they should consider general items on a case-by-case basis. Council Member Hale stated it was not his intent to use this to reduce the levy. Finance Director Hedberg asked if there were any further items that the Council would want to consider. Mayor Shiely referenced the Building Inspector noting that it would be difficult to determine the economic impact befinreen now and December 5th. She stated that she would like to review this issue soon and suggested January. Council Member Kohls agreed with Mayor Shiely stating that there is not enough time and suggested that they consider scheduling a discussion soon in order to make a reasonable decision regarding the budget for 2002 and 2003. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 11 Mayor Shiely stated that she would like the Council to consider, as soon as possible, a Council goal setting session in the January or February timeframe. She stated that she would like to do this earlier than they did last year. Finance Director Hedberg clarified that it appears that there is a lot that needs to be discussed and a goal setting session would be a good means for discussion. Council Member Wolcott stated that he would like clear information provided for review prior to the discussion in order to consider everything that would affect the decisions. He referenced the Building Inspector position noting that he would like a detailed description of what this position would do adding that he would like the entire cost included. Council Member Kohls suggested providing Finance Director Hedberg with what the Council goals would be with respect to Engineering. Council Member Wolcott stated that they would also need to consider insurance liabilities noting that the costs could be extraordinary and he wants to see the whole picture. Mayor Shiely stated that part of the cost discussion would include responsibilities for RFP's. Finance Director Hedberg clarified that he is not sure how it would be quantified, as each year the projects are different and suggested this topic be included for discussion at the January session. Council Member Hale asked for clarification on the Health Benefit options. Finance Director Hedberg stated that based on the contracts the general fund share would be just under$36,000. He explained the process they took to determine how this funding would fit in with the Council. Finance Director Hedberg suggested fuel numbers as one item that could be removed from the funding numbers due to its continual changes in dollar amounts. Council Member Wolcott suggested that the City contract fuel for the next year or two and explained the process to the Council. Finance Director Hedberg stated that they would take a look at possible bids for fuel contracts. Mayor Shiely noted the lowering of the addition to the equipment fund. She stated that this would be a mistake adding that they have delayed too many things due to availability of dollars. She stated that she would be very uncomfortable with cutting this from the numbers. Council Member Wolcott expressed his agreement with Mayor Shiely and provided examples where they have held back on purchasing equipment that is needed. Finance Director Hedberg clarified changes in the process for the 2002 Preliminary Budget in comparison to the process taken in previous years with the Council. Mayor Shiely asked if they agreed to the first three items identified would this provide what is needed. Finance Director Hedberg confirmed that this would help considerably. Council Member Hale asked for clarification on where they would take the $30,000 to cover the expenses for the EDA. Finance Director Hedberg referenced page 37 of the information packet provided to the Council and reviewed the process for the $30,000 with Council. Council Member Hale clarified that the City would not get the $30,000 for other uses. Finance Director Hedberg clarified that they would reduce the EDA fund by $30,000 and increase the General Fund by $30,000 to Council Contingency. Regular Meeting—November 20, 2001 Cottage Grove City Council Page 12 Finance Director Hedberg clarified that the vote would occur at the December 5th Regular Council Meeting. He stated that an ad would be placed in the Bulletin and there would be an article in the Cottage Grove Reports prior to the meeting. Council Member Wolcott asked if they had received the final tax capacity numbers from the County. Finance Director Hedberg clarified that they did receive the numbers from the County and reviewed the numbers with the Council. Mayor Shiely referenced his report stating that Cottage Grove took the biggest hit in reduction to State aid in Washington County. B. Provide Direction to Staff Regarding the 2002 Utility Rates Mayor Shiely stated that she read through the information and she had a difficult time trying to follow the information. She asked if they want direction or if this is for preliminary discussion. Finance Director Hedberg referenced two changes regarding the numbers for water and sewer minimum consumption per quarter. He explained that if you don't use the allotted amount per quarter you still pay for the allotted amount. He suggested removing this item and paying based on consumption. He stated that this would encourage water conservation and lower the bill. He stated that this is one of the items they are requesting direction on from the Council. He stated that this issue would be brought back for discussion in December when they are ready to set the rates. He stated that the other item for discussion is the .05 per thousand gallons for consumption rates that would be for any consumption level. He explained the charge process to the Council. He stated that this would also encourage conservation. Mayor Shiely asked what this overall would mean for the City with respect to charges. Finance Director Hedberg clarified the costs to eliminate stating that the cost would be less than the additional revenue for use over 5000 gallons. City Administrator Schroeder clarified the impact to users as it was provided in the information packet and reviewed how the dollars would be affected. He referenced the comparisons to other cities to show where Cottage Grove sits based on usage and consumption. Council Member Hale asked what the average bill would be per quarter. Finance Director Hedberg clarified the average per quarter usage for the Council noting that it would not be a noticeable increase. Finance Director Hedberg clarified the conservation fee that is charged per user noting that it is separately identified on the bill. He asked the Council for feedback suggesting they eliminate it as a line item on the bill and include it as a part of the general usage fee. Council Member Hale noted that the penny entry was allocated for higher education. Finance Director Hedberg stated that the allocations would not change only where it would be included. Council Member Rice stated that this looks very fair and equitable. Council Member Wolcott asked about the radial reader devices. Finance Director Hedberg referenced a budget addition in the preliminary budget adding that it is not contemplated in this rate structure. He stated that the utility does want to continue the program but that they want to seek authorization to place the radio device at the time they are out there. He stated that in Hidden Valley . • Regular Meeting—November 20, 2001 Cottage Grove City Council Page 13 the newer homes are radio read noting that others are not. He stated that they are targeting it over a three-year period and existing staff would replace, as time would permit. Council Member Kohls asked if these are budgeted items. Council Member Wolcott clarified that it is not a general funding expenditure. Finance Director Hedberg stated that the billing for water use and actual water billed is up to a four to five month delay in billing for actual usage. Council Member Hale clarified the software used and asked if this would be the same if enterprise supported. Finance Director Hedberg confirmed this noting that he would like direction as to whether they should consider upgrading the software. He reviewed the data conversion and upgrade costs with the Council. He stated that they have reviewed several packages noting that the software presently in use was purchased in 1997. He stated that the utility billing module is the weakest module in use. He stated that the money would come from the utility ratepayers to cover the upgrade costs. Council agreed by consensus to review and research the software options. Council Member Wolcott suggested reviewing several cities and options available. Mayor Shiely stated that on behalf of the Council she would like to express their wishes to the City of Cottage Grove for a safe, happy and healthy Thanksgiving. WORKSHOP SESSION — CLOSED NONE ADJOURNMENT MOTION BY WOLCOTT, SECONDED BY HALE, TO ADJOURN THE MEETING AT 10:30 P.M. MOTION CARRIED 5-0. Respectfully submitted, Bonita Sullivan TimeSaver Off Site Secretarial, Inc.