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HomeMy WebLinkAbout2022-12-21 City Council Regular Meeting (Minutes) MINUTES COTTAGE GROVE CITY COUNCIL December 21, 2022 COUNCIL CHAMBER 12800 RAVINE PARKWAY SOUTH REGULAR MEETING - 7:00 P.M COUNCIL CHAMBER 1. CALL TO ORDER The City Council of the City of Cottage Grove, Washington County, Minnesota, held a regular meeting on December 21, 2022, at Cottage Grove City Hall, 12800 Ravine Parkway. Mayor Bailey called the meeting to order at 7:00 p.m. 2. PLEDGE OF ALLEGIANCE The audience, staff, and City Council Members stood and recited the Pledge of Allegiance. 3. ROLL CALL City Clerk Tammy Anderson called the roll: Mayor Bailey - Here; Council Member Dennis - Here; Council Member Khambata - Here; Council Member Olsen - Here; Council Member Thiede - Here. Also present: Jennifer Levitt, City Administrator; Korine Land, City Attorney-LeVander, Gillen & Miller, PA; Tammy Anderson, City Clerk; Ryan Burfeind, City Engineer/Public Works Director; Zac Dockter, Parks and Rec Director; Pete Koerner, Public Safety Director; Brenda Malinowski, Finance Director; Mike Mrosla, Senior Planner; Emily Schmitz, Senior Planner/Interim Community Development Director; Conner Jakes, Associate Planner: Eric Rigby, Communications Manager. 4. OPEN FORUM Mayor Bailey opened the Open Forum. He stated Mr. Olson signed up to speak on Consent Agenda Item 7L. Mayor Bailey asked him to state his name and address for the record. Dave Olson, 8627 Jorgensen Avenue South, stated he agreed with Parks and Rec Director Dockter’s recommendation to accept and place on file the Mississippi Dunes Natural Resources Management Plan, completed by Larissa Mottl, a Senior Ecologist CITY OF COTTAGE GROVE  12800 Ravine Parkway  Cottage Grove, Minnesota 55016 www.cottagegrovemn.gov  651-458-2800  Fax 651-458-2897  Equal Opportunity Employer City Council Meeting Minutes December 21, 2022 Page 2 with Stantec. He was especially happy to see references to climate change, which gives us some flexibility on this multi-year asset of ours, this new park, to be able to adjust as we must as that develops. He primarily wanted to talk about Page 10 from that report. During public hearings about the development just north of our park, he spoke directly to the developers about the importance of our park and the Scientific and Natural Area (SNA) that’s managed by the Minnesota DNR. He said that our expectations will be that those developers will do everything they can to protect these resources; they seemed to get it, but he wants to make sure we remind them of it whenever we have an opportunity. His concerns tonight is related more to homeowner behavior than risks during construction, which will be mitigated by regulations and our common sense, professional staff. How we discourage potential poor behavior by future homeowners, such as yard waste dumping, pet relief in our park and in our SNA, let’s ask the developers for help with this. As they complete grading and elevation management, there’s going to be a lot of it in this area if you’ve looked, they will direct stormwater flow, that’s what they can do to also protect the park. Let’s see what they can do to protect the park and the SNA; it’s on the perimeter of their development. Not just comply but be proactive in helping us protect this land and water resource, along with the plants and animals that live there and that are going to live there after we invest these funds and efforts in improving it. Director Dockter has stated his commitment to diligently manage our property line against encroachment, just as we do on all of our property lines; he recognizes our shared good fortune to have such a spectacular stretch of Mississippi riverfront and is enthusiastic for our role as protectors. Let’s give him all the room we can and all the support we can, as much as possible. He understands this isn’t our land he’s talking about tonight; there’s a limit to what we can insist on, but there’s no limit to what we can ask for. So, let’s do everything we can, including innovative approaches to property line management on the development side, not just the park side. Remember, too, we asked Washington County and Minnesota taxpayers to participate in this adventure. Let’s do everything we can to deserve the confidence they’ve already shown in us. As no one else wished to address the Council, Mayor Bailey closed the Open Forum. 5. ADOPTION OF AGENDA Council Member Dennis made a motion to adopt the agenda; second by Council Member Olsen. Motion carried: 5-0. 6. PRESENTATIONS A. Capture Cottage Grove Photo Contest Winners Staff Recommendation: Receive the presentation naming the 2022 Capture Cottage Grove photo contest winners. Eric Rigby, Communications Manager, stated the City of Cottage Grove has held an annual photo contest and believes this will be the 21st year. This year, we had a record City Council Meeting Minutes December 21, 2022 Page 3 number of submissions, over 120, in what has become a very popular contest for Cottage Grove residents and a great way to capture the beauty of this City. This year there were five categories: Nature; Celebrations and Events; Business; People or Wildlife; City Parks or Landmarks. All submissions were given to City staff with the names removed. Two people, Isaac Pavek and Julie Rowan, were the winners in all five categories. Isaac was the winner in Nature, Business, and Celebrations and Events; Julie was the winner in People and City Parks or Landmarks. Manager Rigby displayed Isaac’s winning photos: “Serenity” taken at Pine Tree Pond; “Warm Nights & Shiny Lights” taken at the Strawberry Festival at Kingston Park; and “Tis the Season” taken at the tree farms in the Cub Foods parking lot. He invited Isaac to step forward to accept his certificate. Mayor Bailey told Isaac that Council Member Thiede had commented that one photo looked like it had been taken with a drone; Isaac stated that all of the photos were taken with a drone. Mayor Bailey stated the winners get $75 per category and a certificate; Mayor Bailey read aloud the certificate given to Isaac. Mayor Bailey congratulated Isaac, everyone applauded, and he thanked Isaac for taking the photos, as did Manager Rigby. Manager Rigby stated Julie Rowan could not be here tonight but displayed her winning photos: “The Perfect Afternoon” was of her dog, taken at Hazen P. Mooers Park; and “Racing at Ravine” was of her son at Ravine Park. Manager Rigby thanked everyone who submitted photos for this year’s Capture Cottage Grove Photo Contest. It’s an exciting, fun contest that we’ll continue. Mayor Bailey stated the checks will be mailed to the winners; he also noted the city gets to use those photos in upcoming marketing elements within the city, so you’ll see them on newsletters, etc. 7. CONSENT AGENDA A. Approve the November 16, 2022, City Council Regular Meeting Minutes. B. Approve Resolution 2022-169 authorizing the renewal of business licenses for 2023. C. Approve the 2023 Council Meeting schedule. D. Approve the JPA with Washington County for elections administration. E. Adopt Resolution 2022-170 amending the Personnel Policy. F. Adopt Resolution 2022-171 approving the 2023 Non-Represented Pay Plan and approving Amanda Meyers as City Engineer. G. Adopt Resolution 2022-168 approving the 2023 Part-time Firefighters Pay Plan. H. Approve the 2023 Convention and Visitors Bureau budget. I. Approve appointment of Veeral Patel and Steve Hanson to the Cottage Grove Convention and Visitors Bureau Board of Directors for terms ending December 31, 2025. J. 1) Approve Resolution 2022-167 supporting the Predevelopment Finance Fund Grant submittal. 2) Approve the submittal of the application to the Washington County CDA Predevelopment Finance Fund. City Council Meeting Minutes December 21, 2022 Page 4 K. Receive and accept the HVS Hotel Market Study. L. Accept and place on file the Mississippi Dunes Natural Resources Management Plan. M. Approve the North Rink Naming Rights Agreement for the Cottage Grove Ice Arena with NP BGO Cottage Grove Logistics Park, LLC. N. Adopt Resolution 2022-173 approving the State of Minnesota Joint Powers Agreement with the City of Cottage Grove on behalf of its Police Department regarding the Minnesota Internet Crimes Against Children Task Force. O. Authorize the acceptance of the Helmsley Charitable Trust Grant of thirty- six (36) AEDs that cost $2,284 each (estimated value of grant $82,224). P. Adopt Resolution 2022-174 approving revised Purchasing Policy. Q. Adopt Resolution 2022-166 approving the Public Purpose Policy for 2023. R. Adopt Resolution 2022-177 awarding the Well No. 2 & Well No. 7 Interim Water Treatment Facilities Project to Rice Lake Construction Group in the amount of $2,792,700. S. 1) Approve the Memorandum of Understanding for Parcel 1, authorize execution of the Parcel 1 Temporary Easement for Construction Purposes by and between the Hopkins Family Real Estate Trust and the City for the East Point Douglas Road and Jamaica Avenue Reconstruction and Signal Project, and authorize payment of the settlement amount of $1,000,000. 2) Approve the Memorandum of Understanding for Parcel 13, authorize execution of the Parcel 13 Temporary Easement for Construction Purposes by and between 8621 East Point Douglas Road, LLC, and the city for the project, and authorize payment of the settlement amount of $4,000,000. T. Approve the issuance of rental licenses to the properties listed in the attached table. U. Approve City Administrator to sign the contractual agreement for the 2023 Tourism Marketing Grant with Explore Minnesota for up to $14,000 for the Cottage Grove Convention and Visitors Bureau. V. Adopt Resolution 2022-179 approving an increase in the benefit level for firefighters who are vested in the Statewide Volunteer Firefighter Plan to $9,100 per year of service effective January 1, 2023, if the PERA cost analysis supports that fund assets are sufficient to sustain the benefit level increase. Council Member Olsen wished to pull Item U, Explore Minnesota 2023 Grant, and Mayor Bailey wished to pull Item M, Ice Arena Naming Rights, and Item O, Helmsley Charitable Trust Grant Award for further comment and/or discussion. Council Member Olsen stated this item asks us to provide direction to our City Administrator to sign a contractual agreement for the Explore Minnesota 2023 Tourism Marketing Grant for up to $14,000, which would go to the Convention and Visitors Bureau, also known as Discover Cottage Grove. He acts as the Vice Chair on the City Council Meeting Minutes December 21, 2022 Page 5 Convention and Visitors Bureau Board, and Council Member Dennis is our Chair. He thanked Julie Prior-Miller, our Communications and Marketing Specialist, who helps us increase our profile for tourism in Cottage Grove. She’s the one who put this grant application together, and obviously did a very nice job because we’re receiving grant funding. The Convention and Visitors Bureau is really the offshoot of a larger Strategic Plan that the City has had for quite some time. Every January, City staff and the City Council meet to discuss what it is we really want to focus on with respect to a Strategic Plan for the calendar year. For the past few years, a key component to that plan has been making the City of Cottage Grove a tourism destination for things like baseball, softball, and hockey tournaments; things that would help us fill up our hotels and restaurants. We’ve had a great deal of success in the short time that the Convention and Visitors Bureau has existed with getting our name out there. We helped sponsor the Public Safety Golf Tournament, we sponsored a day at a Minnesota Saints game, did a lot with Strawberry Fest, and other activities here in the City, just to help people understand who we are. The main reason this grant is going to be so helpful is it will provide us necessary funding to not only continue to do the things that we’ve done, but expand our presence and help our businesses and hotels here thrive; frankly, to just have people come to Cottage Grove and understand what a great community this is. He asked his colleagues to approve it, as it’s something that we’ve been reaching for on the Convention and Visitors Bureau and will do a lot of good for us. He asked if Council Member Dennis, Chair of the Convention and Visitors Bureau, would like to add anything. Council Member Dennis stated he’s very proud of the work that everybody on the Convention and Visitors Bureau has done, including staff and great volunteers in the community. The funding that is mostly generated for this comes from a lodging tax, a user fee that is applied through the various lodging facilities that we have. That money is used to help promote our City and put Cottage Grove on the map for all kinds of different reasons. It’s been a slow start, as it was started when COVID was very active; this is an offshoot of the work that Mayor Bailey and I do, along with the EDA, when we go to Las Vegas to meet with investors. They’ve indicated that this is a tool that they would like to see us have. It’s a nice process that we’ve put together for the community, we’re proud of the work that’s been done. We’ve gotten great feedback from our local lodging investors, and we’ll just keep working on this to do everything we possibly can to bring good return home. Mayor Bailey stated regarding Item M, Ice Arena Naming Rights, the City of Cottage Grove has been looking at firms to do marketing for us for quite some time; if you go to sports venues around the Twin Cities, many of them have marketing logos, like HealthEast Sports Center or Schwan’s rinks. Our current group has done a great job with marketing elements on the boards and on the walls within the Ice Arena. We could either name the Ice Arena or maybe name the rinks within the Ice Arena. We had a conversation with NorthPoint, a new investor in our community, and NorthPoint wants the naming rights for the north rink, the original rink, for Cottage Grove. As part of the naming rights to that, they’ll be providing $800,000 over the next 10 years to have the right to have their name in that arena. That will reduce the tax impact on our citizens City Council Meeting Minutes December 21, 2022 Page 6 because that money is going to be reinvested in the needs of the Ice Arena, things on our Capital Improvement Plan. Earlier this evening, we had a virtual meeting with the development team of NorthPoint, and we thanked them. He also wanted to publicly thank them now, to say we appreciate the work that they’re doing within our community and the $800,000 investment for the naming rights for part of our Ice Arena. Mayor Bailey stated regarding Item O, Helmsley Charitable Trust Grant Award, this grant award will provide the City of Cottage Grove with 36 AEDs for every marked squad, unmarked squad, and specialty vehicle; that grant has a value of just over $82,000. The great thing about that is we already have one of the best response times in the state. We’ve seen a reduction in the number of heart attack deaths because we get there quicker, we have tools like this, and have trained those in the community to use them, so the opportunity to save lives grows immensely. We want to thank the Helmsley Charitable Trust for this generous donation of 36 AEDs. Council Member Dennis stated that’s an incredible donation. AED stands for Automatic External Defibrillator; it’s a device that can be hooked up to someone who’s having an arrhythmia, their heart has stopped, or there’s some other issue with their heartbeat. This will provide a shock to get people back into a rhythm that will sustain life. He has police officer friends at the Minneapolis and St. Paul Police, and as big as those departments are, they do not have those tools. So, this is a blessing for us to have this here in our community to assist people every time we can. Mayor Bailey stated this wouldn’t have happened if it weren’t for our Public Safety staff going after those grants. Staff in all departments are doing an amazing job working to get grant money to fund these kinds of things to serve the citizens of Cottage Grove. He thanked all staff for their efforts. Motion by Council Member Olsen to approve the Consent Agenda; second by Council Member Thiede. Motion carried: 5-0. 8. APPROVE DISBURSEMENTS A. Approve payments for the period of 12-02-2022 through 12-22-2022 in the amount of $5,880,986.71. Motion by Council Member Dennis to approve disbursements; second by Council Member Khambata. Motion carried: 5-0. 9. PUBLIC HEARINGS - None. 10. BID AWARDS A. Glacial Valley Park Bid Award Staff Recommendation: Authorize Resolution 2022-172 for awarding contracts for the Glacial Valley Park Building and assigning certain contracts to Kraus-Anderson. City Council Meeting Minutes December 21, 2022 Page 7 Parks and Recreation Director Zac Dockter stated Glacial Valley Park is our newest community park in Cottage Grove, the first in almost 20 years; we’re excited to bring this park to the northeast side of the community. He reviewed its sports features, ice rink, trails, landscaping, and parking. A cool feature is its connection to the Minnesota DNR and South Washington Watershed District open space and trails, this runs through their prairie and wetlands; they will also have a very large Interpretive Center to the north and to the west of this, so it will be a great connection to a lot of open space and great habitat. Building Design Objective To construct a unique park building that serves the present and future recreational facility needs for both residents of and visitors to Cottage Grove. Goals 1) Create a sophisticated design that inspires the community’s use and appreciation. 2) Create connections with park, nature, history, and art. 3) Create a sustainable design that meets the needs of generations of park users. We’re looking to build this facility for today, tomorrow, and generations of users. Building Floor Plan  Multipurpose Room: A key feature, about 1,500 square feet, for meetings, events, or programs.  Kitchenette/Furniture Storage Area: 500 square feet.  Classroom/Program Room: 955 square feet.  Commons/Warming Room: 600 square feet.  Storage Room: 440 square feet.  Outdoor Gathering/Support Spaces: Restrooms, vestibules, mechanical rooms, electrical rooms.  Large Outdoor Patio Area: Connects to the park. Also, picnic areas, rest areas, and even an outdoor firepit. Innovative Building Design Elements  Historic Land Connection, Glacier Element  Multiuse Design  Artistic Elements  Retractable Glass Wall  Geothermal Heating/Cooling  Solar Powered  Outdoor Connections Building Project Schedule December 2022: Bid Approval January-April 2023: Secure Materials/Schedule Coordination May 2023: Construction Begins October 2023: Construction Completion Project Bid Results Construction Manager (Kraus-Anderson) Estimate: $3,643,353 Total Value of All Bids Received: $3,688,487 (About 1.2% over Construction Manager’s Estimate) City Council Meeting Minutes December 21, 2022 Page 8 All bids were verified for accuracy, bid bond, certificate of insurance, and addendum recognition by Kraus-Anderson (Construction Manager). Director Dockter stated he’d take any questions from Council. Council Member Thiede stated we got some information that the $3.6 million isn’t the number any longer; is that true? Director Dockter replied to the number has been adjusted to the updated information in the Council packet. Council Member Thiede asked if the total project cost was now over $4 million. Director Dockter stated these are the value of the bids, what Council is authorizing tonight. The total project cost is $4,859,641.61, on the estimate provided in the packet. Council Member Thiede stated so based on the information that was provided to us earlier, the change is a $55,000 increase; how does that play into what we’re looking at here? Director Dockter stated we were originally under budget by about $15,000; because of the change on Friday, in the email updated report on Monday, that added $55,000. So, it’s an approximately $40,000 overage from the initial submittal. We had an electrical bid, and we were notified Friday night that the electrician was not able to fulfill their obligation on that bid because they’d not submitted labor for a particular part of the construction. They had asked if they could include that labor back into the package; once the bids are publicly opened, we can’t allow them to come back and add to the project. So, we eliminated them and went to the second lowest bidder, and that was a $55,000 difference. Mayor Bailey asked City Attorney Kori Land to comment on that. Attorney Land stated after a public bid is opened, a bidder cannot change their bid. So, if they made a mistake on it and they request to be withdrawn from the bidding process, they can do that if we determine it truly was a mistake, which it was. So, we allowed them to do that. But we are still getting the full value of what needed to be bid, so we’re paying for the project, for that portion of it. It was slightly higher than the lowest bid, but it wasn’t a significant difference between the two bids. Council Member Thiede asked if we decided that with some of the costs going down, inflation and the pricing of materials have been going down and coming back into line a little bit, do we can not accept any of these bids, legally? Attorney Land replied to the Council can choose to reject all bids. If you felt like you just weren’t getting the project that you wanted, certainly you could reject all bids; that’s the decision you’re making tonight is whether you want to move forward with the project. Staff is recommending that we approve them; again, even with the electrical bid, we’re getting $52,000 in value because that’s what the lowest bidder would have had to add to his bid. So, the difference between the two bids really is not significant, and we’re recommending approval of all of them. Council Member Thiede asked if we decided not to approve this tonight if we’d still be able to use the park and get the building bid and put that in later. Director Dockter stated that’s correct; the park would still be usable. We’d just have to grade out the spot that’s been set aside for the building so it’s safe, and then it could be used. He talked to our construction manager, and to rebid would be a minimum of 60 days, but also advised that rebidding 60 days later is not likely to change the results. So, they would not recommend rebidding within at least a calendar year or more. City Council Meeting Minutes December 21, 2022 Page 9 Council Member Dennis stated he sent Director Dockter an email response to the letter that he’d sent to us. We live in an imperfect world, and sometimes things happen. Ultimately, we want to be reasonable with what we do. He had no issue going with the second bid. As Director Dockter had pointed out in his materials, we have a contingency that we spec out for, and we’re still well within that range of what that contingency is. You just never know, there might be some other things that come up that affect us positively, and we can get a little bit of adjustment back. It’s just one of those things, what can you do. Council Member Olsen thanked Attorney Land for the explanation, as he had also quickly asked some questions about the change. The way he understood it is we had an entire project bid; then the subcontractor, who does the electrical work within the scope of that entire project bid, reached out to the general contractor, Kraus-Anderson, and said they made a mistake by forgetting to add in some labor costs in their bid. That additional $52,000 would have needed to be added to the project cost based on that error. However, legally, we cannot accept that initial bidder’s $52,000 change because all of the other bids had been opened. So, we had no choice but to go with the second lowest bidder. The second lowest bidder was a $55,000 difference versus the $52,000 difference that the first bidder wanted to add: so, net, it’s a $3,000 difference. He asked if that was correct, and Director Dockter confirmed that. Council Member Olsen stated Council Member Dennis mentioned contingency, which is something that gets built into every project like this that we do. He asked Director Dockter to speak momentarily about the reason for having contingency money as part of the overall project cost. Director Dockter stated contingencies are to protect us from the unknowns; so, we have over $300,000 in contingency for anything from when they start to dig, as you don’t always know what’s under the ground. When you hook up electrical, maybe there were things that had been missed or connections that had been missed in the design process. All the contingency funds are managed by the City; so, we control what gets expensed to that contingency fund. So, he vowed that we will always try to reduce the amount of contingency funds we use, to bring that back to the City. We must have it because there are so many unknowns with a project of this size; we must be prepared and to not have contingency funds would be foolish, to be unprepared for some of those unknowns. Council Member Olsen stated so we’re authorizing as part of this overall project cost a slush fund of $300,000 for any Change Orders or anything along the lines of, we had a delayed vendor with their materials, and it cost us an extra $10,000 for transportation of those materials. But at the end of the entire process, we’re going to have an actual product cost, an actual cost for this building. And if we can build it and not use all those contingency funds, you’re going to deliver a building that comes in under what we budgeted. He asked if that was accurate; Director Dockter replied that was correct. Mayor Bailey thanked Director Dockter and Wold, as we wanted to be as Net Zero as possible on this site. He’s very impressed and happy as we’d added in an opportunity for a bidding situation for artwork, trying to get the community artists to help us with City Council Meeting Minutes December 21, 2022 Page 10 some of the artwork and design on the inside of the building. This is a unique building and a unique area of our community. This is not going to be your typical warming house at a park; it’s much more extensive than that, he likes what he’s seeing, and he likes where they got us to at this point. He knows they will manage the dollars, and he supports us moving forward on this project. Council Member Thiede asked if we took care of the boiler room; right now, with the geothermal, it’s actually a smaller boiler, but if something should happen where we have to put in a regular size boiler to cover that building, the boiler room is not big enough. Did we do anything with that? Director Dockter replied it’s his understanding the shared wall can be moved into the storage facility to account for that. Council Member Thiede stated so that might be one of those things that Council Member Olsen calls our slush fund and confirmed that we’re prepared for that possibility. Motion by Council Member Dennis to authorize a resolution for awarding contracts for the Glacial Valley Park Building and assigning certain contracts to Kraus-Anderson, second by Council Member Olsen. Motion carried: 5-0. 11. REGULAR AGENDA A. City Code Recodification & 2023 Fee Table Staff Recommendation: 1) Adopt Ordinance Repealing and Replacing the Cottage Grove Official Zoning Map (requires 4/5ths vote). 2) Adopt Ordinance Repealing and Replacing the Cottage Grove City Code. 3) Adopt Ordinance amending the City Fee Table. Attorney Land stated this is the final chapter of the City Code Recodification project. She reviewed the history of this process from February 1, 2021 to tonight. The Planning Commission held its public hearing on Monday, December 19. The final adoption of all of the City Code, the Zoning Map, and the Zoning Ordinance amendments are before you tonight. If approved, the effective date will be January 1, 2023. While revising the City Code over the last two years, we did the following:  Confirmed all statutory citations were still relevant, still appropriate, and still in effect.  Updated all of the cross references, as we were moving parts within the Code; we had to make sure that the cross references within the Code were keeping up.  Ensured consistency on formatting of Sections, and with terminology and capitalization. As of this minute, this document is amazing.  Consolidated Sections moved them into the right places, and deleted unnecessary Sections.  Removed much statutory regurgitation that’s not needed in the Code.  Updated things for Best Practices. City Council Meeting Minutes December 21, 2022 Page 11  Cleaned up outdated language, unnecessary language, and introduced new ordinances.  Went through all of staff members’ to-do lists and did them, they’re all in this book.  Created a new Zoning Map because sometimes the Zoning Districts didn’t quite pan out as expected. Updated all the zoning sections to make sure that every single standard in there was appropriate for today.  Make this City Code more user friendly for staff, residents, businesses, and the Council so when its read, it will be easy to understand; it’s in English, not legalese, that was one of her main goals. So, that’s the product that we have before Council tonight. Attorney Land stated she’d briefly touch on all the Titles in the Code and review all of the Sections, though some they’d dive into a little bit deeper: Title 1-Administration: Added: General Penalty Section. When there’s a violation of the Code, you need to know who’s going to enforce it, and there’s a list of officers who can enforce it. Uniform Inspection Process: A minimum of 48 hours’ notice before the inspection, but staff can go above and beyond the minimum, up to a week’s notice. It must be done during business hours, and the right people need to do the inspections. Penalty: Violating a City Code is a misdemeanor, so that is clearly spelled out. New: Appeal Process: If there is a notice sent to a resident or a business owner for violating something in the Code, there’s an appeal process before it gets to a criminal citation. If somebody wants to challenge the notice, they can do that now. The person who has received the notice can file an objection with the City Clerk within 10 days; they must pay a $200 filing fee because there’s a cost for City staff to take time to investigate or the City Administrator to take time to hold the appeal hearing. Ultimately, it will either be with the City Administrator or her designee to hold the appeal hearing and give that person due process. New: Excessive Use of Public Safety Services Fee for these Violations: Public Nuisances, Animals, Noise, False Alarms, Disorderly Conduct. Sometimes certain properties or people tend to take a little bit more time than the rest of the community, so they need an incentive to do a self-correction, and sometimes hitting people with a fine is the way to do that. It must be the same person, the same property, and the same violation. If they receive two calls within a 12-month period, they will receive a letter saying if you do it again within 12 months, you will receive a fine. With the third call, they will get that fee. If not paid, it’ll be assessed against the property. It’s not intended to be revenue generating; it’s strictly cost recovery. Staff sometimes spends a ridiculous amount of time on these problem properties, so we’re trying to nudge people into self-correction. Title 2-Boards & Commissions: All now in one Section, including the Advisory Committee for Historic Preservation, which was previously buried in zoning. Title 3-Business and License Regulations: New: General Licensing Section for all licensing requirements to provide consistency and uniformity, including:  Application submission requirements  Insurance City Council Meeting Minutes December 21, 2022 Page 12  Fees (Refunds, late fees, prorated fees, installment fees)  Background investigations, when needed  Renewals  License term  License hearings for approval, denial, suspension, revocation New: Provisional License: City Council may approve a Provisional License or convert an existing license to a Provisional License if a business has generated more than three (3) City Code violations within the preceding 12 months. The Provisional License must include a mitigation plan to address the violations. New: Intoxicating CBD License (CBD with .3% THC): Effective January 1, 2023, any commercial business will require a license to sell Intoxicating CBD Products & Devices:  Products must be behind the counter or in a locked case.  No transient merchants (door to door), mobile business, home occupations, or delivery.  Permitted use in the B-3, P-B, and M-U Zoning Districts.  Signage for proof of age required (must be 21 to purchase or possess).  1,000’ from another CBD business, school, park, or playground.  Not allowed with an on-sale liquor license.  Adoption of ordinance will automatically terminate the moratorium on CBD sales.  License fee is $10,200. Title 4-Public Health and Safety: Code Enforcement for Nuisance Properties are addressed here:  Added more robust definition of Public Nuisance to be more inclusive of nuisance situations.  Providing alternative methods of Code Enforcement.  Allowing for swift corrective action.  Authorizing a more efficient process for City staff. Public Nuisance is any activity that is an annoyance to the public, including:  Failing to remove garbage.  Not maintaining property structures with detrimental impact to the neighborhood.  New: Unsheltered storage, including unsightly debris (e.g., household appliances) that have an adverse effect on the neighborhood. Abatement: Is the most effective tool to deal with any public nuisances. Code Enforcement Officer will inspect, identify the specific violation in a letter to the property owner, explain the Code Section that they’re violating, and provide a specific compliance deadline. Letter will state failure to correct will result in the city removing it for them. Code Enforcement will reinspect, and if it’s not cleaned up, they will order the abatement, which City staff will arrange. Invoice for the abatement is sent to the property owner; failure to pay results in an assessment against the property. Title 5-Police Regulations: No substantial changes, but added two new provisions: 1) Catalytic Converters: It will now be a misdemeanor in the City of Cottage Grove to possess a catalytic converter unless you have proof of purchase. City Council Meeting Minutes December 21, 2022 Page 13 2) Third-Party Gift Cards: Require the retailer to ask for proof of ID when someone is buying a gift card with a credit card (name on credit card must match purchaser’s ID). Title 6-Motor Vehicles and Traffic: Recreational & Other Electric/Motorized Personal Vehicles:  Recreational Vehicles: Allowed on streets if both vehicle and driver are licensed; prohibited in Cottage Grove on sidewalks and in public parks.  Motorized Foot Scooters and Electric Bikes: Allowed on streets (required by State law); prohibited in Cottage Grove on sidewalks and in public parks.  Electric personal assistive mobility devices for disabled allowed anywhere by law. Title 7-Public Ways and Property: Parks and Parades:  Eliminated the Special Event Permit.  Park Permit Process: Parks & Recreation staff will approve, deny, revoke, and refer to Public Safety if necessary.  Parades in the Right-of-Way require Public Safety approval. Title 8-Water and Sewer: No major changes. Title 9-Building Regulations: No major changes; all Building Sections moved here. Title 10-Subdivision Regulations: Coming in 2023. Title 11-Zoning Ordinance: Map Amendment Steps 1) In November 2022, Council initiated the rezoning by Adopting a Resolution to undertake a Citywide rezoning, which waived the mailed notice requirements. 2) Planning Commission held a public hearing on December 19, recommended approval. 3) City Council must pass the rezoning with a 4/5ths majority vote. Zoning Map For properties that will experience a Zoning District change: All Zoning Districts that existed when the use was created will continue and will be legal nonconforming. Legal nonconforming rights cease when: 1) Use is stopped for more than one (1) year; 2) Use is destroyed by fire/natural disaster, and no Building Permits are pulled within six (6) months. Residential Zoning Change Highlights  Combined R-2.5 and R-3 (kept most flexible standards).  R-3 no longer allows multifamily housing.  R-4 changed to Transitional District between low and high density (allowing single family and multifamily).  Removed R-2A-F. Current and new R-3 Development Standards: The Planning Commission had one area that they wanted the Council to discuss. In the R-3 side yard setback, currently we have a 10’ setback between the living area of the dwelling and the side yard; if it’s a garage, it’s a 5’ setback. The Planning Commission really wanted to see 15’ between dwellings; no matter what, they want to see 15’. Staff is still recommending 7.5’ from a dwelling and 5’ from a garage. Attorney Land asked Senior Planner Mike Mrosla to explain. City Council Meeting Minutes December 21, 2022 Page 14 Planner Mrosla stated since 2019, the City has approved about 1,100 units with those standards, so we want to continue that development trend with this new Code. We’re seeing a lot of requests for that, and that’s the intent behind it. Attorney Land stated we’re trying to mirror what is happening in the actual development world; we fully recognize and respect the fact that the Planning Commission would like to see 15’, but, that’s not what developers are asking for today. Council can always revisit this if standards change or development changes in the future, but we really feel that this is meeting what the developers are requesting and demanding in the market. So, we still stand by the 7.5’ recommendation for side yard from the living area of a dwelling. Council Member Thiede stated as the liaison to the Planning Commission, having been at their discussion, they did a conditional approval to support this with looking at the change of keeping it 10’ and 5’. The other discussion was: 1) If a developer wanted the 7.5’ and 5’, then they could put in a variance. 2) Commissioner Brittain pointed out if they want to do the 7.5’ and 5’, they could do that in an R-4 Zoning District, as R-4 is a place where that comes down together a little bit more. The concern in the Planning Commission discussion was you end up getting houses that could be 10’ apart. It was a 5-0 conditional approval, keeping it at the 10’ and 5’. Attorney Land said that’s up for Council discussion, whether you want to keep it 7.5’; as indicated, the 7.5’ is what developers have consistently been asking for in the last four years. It would be creating a lot of legal nonconforming setbacks if the Council chose to keep it at 10’, because we have allowed the 7.5’. She reviewed the current and new R-4 Development Standards, changes are again very similar, giving more flexible standards in some of the setbacks. We added a maximum lot coverage of impervious surface to make sure that people are not paving their entire yards with impervious surface. Business/Industrial Districts Commercial: Removed Neighborhood Business District. Cleaned up the Use Table but did not remove any uses that are still relevant. Industrial: Combined I-1 and I-2 to make I-1, General Industrial. Combined I-3 and I-5 to make I-2, Heavy Industrial. I-3 is Commercial Excavation. Cleaned up the Use Table but did not remove any uses that are still relevant. Signs Coming in 2023. Parking for Businesses We discovered that the old math used the gross floor area of the entire building, regardless of different uses in the building. The new math breaks it down, the different uses within a building are calculated, and then we apply the formula for those uses. Walmart is a perfect example: They have a 177,000 square-foot building, so if you do math on the gross floor area of the entire building, you’d need 889 parking stalls. Walmart is not just one giant retail building; they have a storage area, they have a clinic, they have a restaurant, and all of those have different formulas for parking. So, when you apply them individually to those different uses, based on the square footage of those uses, you end up with 170 less parking stalls; that’s a significant number and it’s probably more accurate. City Council Meeting Minutes December 21, 2022 Page 15 We learned that many businesses really know what they need for parking at their maximum time, so that’s how many stalls they’re going to want to have. So, we added a new provision of proof of parking. They can come in and prove to us that they don’t need 719 stalls, they only need 650, but they have a nice big green space over here that they can show proof of parking. So, if they do have parking problems, we can make them build it, and we’ll add that as a condition in their approval; if we determine that there is insufficient parking, they must build it. That proof of parking will satisfy their parking needs. Fee Table Update New Fees:  Excessive Use of Public Safety Services  Intoxicating CBD Sales  Appeals to the City Administrator Eliminated Fees:  Tree Service License  Lawn Care License  Special Event Permit Inflationary Fee Increases:  Ice Arena, River Oaks  Ambulance Fees  Area charges, Utility charges  Streetlights, Signs, Water Meters Every year the City adopts a new fee schedule just for inflationary increases. Again, the fee schedule is not where we’re trying to generate revenue; it’s cost recovery, and usually not all the costs are being recovered. We’re just trying to get back what we’re putting into it, if we can, by being reasonable with the community. So, we’re also asking Council to adopt the Fee Table. Attorney Land thanked the City staff; it’s been an amazing journey to take with them. She thanked them for their cooperation, their patience, their diligence, and for their unbelievable thoughtfulness and attention. Every time she’d say no, they would respond; if I said I needed something and needed it now, they would respond. They were an amazing group to work with. She can’t thank the Council enough for letting her work with them. She can’t thank their boss enough for giving them such great direction and leadership and allowing them the time that we took from their daily work. They had regular work that they needed to do, and yet they carved out time to devote to this project, and they were great to work with. A special thank you to Tammy, who jumped in to be City Clerk at the most inopportune time. This is a big project for a City Clerk to manage, and she has been wonderful and a quick study. Attorney Land stated she put Tammy through the ropes on Friday, as we were trying to get the packet together, and she can’t thank her enough for staying late, for going the extra mile. This has been a great project to work on, and she thanked the Council for their time and attention to it and their patience with it. She City Council Meeting Minutes December 21, 2022 Page 16 wished them all Merry Christmas; she said this is her Christmas present to you, a bright and shiny new City Code Book. Council Member Dennis stated this was an amazing project. Looking back a few years ago, some of us on the Council talked about different things that we had on the books, and some of the provisions and rules dated back to the 1970s. So, it was time that we become current and bring everything forward. It was a tremendously heavy lift, a lot of time was put in by everybody, very nice work done by our staff team, and everyone made a difference. A lot of this material can be dry, and he’s just amazed how Attorney Land brought so much enthusiasm to this presentation tonight; he didn’t know how she did it. He felt it was a very nice job by everyone working together. We now have something fantastic for the community to work with, hopefully for a long time to come. His recommendation is we just keep it a living document; as changes come, we incorporate those in real time, get it in front of the Planning Commission and Council to work to make it happen and keep everything consistent. Council Member Olsen stated Attorney Land’s use of the word amazing was an indicator that she gets fired up about this; he thanked her for bringing that to the table tonight. With respect to her comments about Tammy, if you know Tammy, that’s no surprise. She’s awesome, so he would even say amazing. His questions: 1) Council Member Thiede mentioned that the Planning Commission wanted to stick with what is currently in our Code. He’s curious as to why; why did they want to stick with that? Was there a specific reason they articulated? Emily Schmitz, Senior Planner, stated the Planning Commission was concerned about homes being too close together; it was plain and simple. That was the concern in looking at the proposed setbacks, that that was a little tight. That was their concern, which is why they proposed to leave it as is. Council Member Olsen asked if they were concerned about the homes being too close together just as a general aesthetic, or were they concerned because it might have some detrimental impact on Public Safety response, something like that? Planner Schmitz replied they didn’t make clear any of those specific concerns but noted Council Member Thiede might have something to add. Council Member Thiede stated one of the things that Commissioner Brittain brought up was depending on where these houses were built, if there was quite a grade, there were situations where that would potentially create very steep grades between some homes if they were trying to put 10’ between the structures. It was felt that it would be easier if the area wasn’t good for that type of space in between the houses, it would be easier to say, well, here’s the requirement with the 10’ and the 5’. And if they wanted to apply for a variance or we change it to an R-4 or something like that, that we’re still maintaining a safer type of distance between the homes and also in terms of access, etc. Council Member Thiede stated he would tend to agree with the Planning Commission and what they were saying, he’s not sure that there’s really a good enough reason, but that’s what the discussion was. Administrator Levitt stated we wanted to update the Zoning Map. One of the things Attorney Land referenced was all those shaded, hatched areas were Planned Development Overlays, or PUDs. We wanted to get away from that, so we wanted to City Council Meeting Minutes December 21, 2022 Page 17 have uniformity and a standard that we could match. As was stated, we’ve had over 1,100 units already constructed with this standard. So, we don’t want to get back into the habit of doing a PUD. A variance isn’t the right mechanism because it’s probably going to be hard to prove a hardship, so that wouldn’t be the effective tool for a variance on a new development. When you look at a lot of the safety issues, we addressed all of those when we looked at the side wall design, the soffits, related to fire. We have several developments that have that Fire Code applied to very successfully, and we’ve had no issues. We’re very competitive in the market with all the other metro cities. She would caution making that change because it will create a lot of legal nonconforming issues. Just the fact that we’re trying to get away from a Planned Development Overlay or PUD, she doesn’t believe that would be the right tool. Mayor Bailey stated he’s known Commissioner Brittain for many years, and we argue a little bit about development standards. He mentioned when you look at the early days of Cottage Grove, the side yard setbacks, the lot sizes, everything was significantly larger. As we develop and trends change, it’s not just what the builders want, it’s also what the homeowners want. Frankly, the developers would not build these homes if there weren’t people out there willing to buy them. Today’s families who are buying these homes don’t want these big lots anymore. They don’t even want to do maintenance; they want to do a lot of HOAs that take care of even the yards. So, there is a difference. We still will have the options for the bigger lots within our community, but we’re also going to have opportunities for these types of homes to be at the 7.5’, which is what we have already been doing. That’s the trend that’s out there. As a City, we have been following the trend since well before any of us were on the Council and him as Mayor. If we don’t make changes to continue to move our City towards what families who want to move into Cottage Grove want, then we won’t grow; we won’t be able to expand our opportunities within the community for other people to join us. He stated he personally wouldn’t want to live in a house so close to another, but there are many people who are and they’re buying those. At some point in time down the road, if trends change again and things got bigger, his guess is we’ll come back here another time and do another review of our ordinances, like what we just did here, to make it sufficient for wherever the trends are going. He thought this was more of a trend thing, based on what individuals currently buying homes want; that’s what the majority are doing, and the builders are following that trend. Council Member Olsen thanked everybody who answered his question. He recalled when we started down the path of decreasing the setbacks to help the developers put more units on the same piece of land. At that time, one concern we had was specifically related to fire suppression, and if fire would jump from one home to another home. He thanked Administrator Levitt for answering that. As everybody has mentioned, we’ve already been approving these for several years. Saying that is a bit of a double-edged sword because you could say why would you change it if there’s already a mechanism in place that has enabled us to approve these sorts of developments, even with the Code as it currently stands. On the flip side, to approve those, it took a lot of work on the part of the staff regarding the PUDs, which are really a pain; they’re not an easy tool to use, and many cities are getting away from those. In fact, there was a time when the State Legislature was talking about eliminating PUDs as a tool for communities in City Council Meeting Minutes December 21, 2022 Page 18 Minnesota, across the board. That didn’t pass; he’s glad it didn’t because it’s a local control issue. He thinks what he’s hearing is the current setback ordinance, while it allows for a developer to come before staff and Council to do the tighter setbacks, the current market is really leaning more towards those tighter setbacks. Hence, we want to evolve with the market. He asked if that was correct. Administrator Levitt stated she agreed with Council Member Olsen. If you were to ask the development community, it adds to the affordability. When you look at what’s happened in the market in the ordinance and changes from the energy code to sustainability to the stormwater act, to all these different code and regulations that have been placed on these developers, by adding this, you bring affordability back to the product in one way. She noted there are many changes that have happened in just setbacks over that same timeframe. Council Member Olsen stated there’s new Code, a lot of great stuff, Attorney Land is very excited about it, but how are we going to communicate this to our residents; even more specifically, to our business community that might be impacted by several of these changes. He asked if there was a rollout plan of some sort. Administrator Levitt stated clearly, we’ve been engaging already at the Chamber and at our Business Over Breakfast; so, we’ll continue to use the Chamber, our networks there, but really each department that touches different elements of the Code will have their own strategy. Public Safety will have their own rollout program for the credit card identification, and Public Works and Planning will each have a different way because it’s not a one size fits all. So, they’ll be rolling out their own mechanism in January. Council Member Olsen stated he appreciated hearing that, but of course there are going to be changes that get applied that some people simply won’t know about. As Council Member Dennis mentioned, this is extremely dry material. Some of us get excited about that, he happens to like this kind of stuff, but other people don’t. He’s certain that there are probably very few residents who will be sitting at home cracking the Code book. He just doesn’t think that’s going to happen. So, he wants to make sure that we’re proactive about communicating. It’s his opinion that one of the biggest wins in this Code update is the Nuisance Section. One thing discussed is we’ve made it easier and swifter for Code Enforcement to take place; he asked Attorney Land if that was accurate. Attorney Land replied yes, it is we laid out the process exactly in the Code as to what will happen when there’s a Code Enforcement violation. So, City staff knows the mechanism to follow, they can just follow the steps in the Code. Any resident can look at it and know we followed the steps in the Code, and it spells out exactly how it’s supposed to play out. Council Member Olsen stated the reason he thinks it’s such a huge win is he’s sure he’s not the only Council Member who gets phone calls, emails, etc. about a neighbor or something that’s going on in their neighborhood that they feel is a nuisance. We have a Code Enforcement Officer in our community, and she’s awesome, but she’s only one person. He’s thinking about the application of some of these Codes, specifically the Nuisances, and being more proactive than reactive because now it’s essentially, we deal with the complaint once we get it, versus us being out looking at various City Council Meeting Minutes December 21, 2022 Page 19 neighborhoods. It might be wise for us to think about the way in which we enforce this in a more proactive manner. Hopefully, not to create an environment where residents have to be so frustrated that they’re going to call the City or reach out to a Council Member, whatever the case might be, after it’s been weeks or months of frustration. He’d like us to think about at some point, as we’re looking at enforcing what we’re going to approve here tonight, that enforcement is a more proactive approach versus a reactive approach. That’s the reason he brought up the education piece because he sees that as being proactive versus reactive. Council Member Olsen stated great work, he loves it. He knows that the time we, as a Council, spent on this was probably a pittance compared to the time that staff spent on this, and we spent lots of time on this. He thanked all of them very much for all their hard work and effort. Attorney Land and her team were phenomenal to work with. Kudos to Tammy (who came in at the midpoint and had to get up to speed quickly) and the rest of the staff. He felt it’s much cleaner, much easier to understand, and hopefully, it will be much easier to enforce. Again, he thinks the proactive approach is the better approach. Council Member Khambata also commented on the side yard setback issue. In his professional capacity, he sits on the Housing Affordability Task Force for the St. Paul Association of Realtors. That has given him an opportunity to be a sounding board with BATC, the Building Association of the Twin Cities, and various other developers to hear their side of what the challenges are to affordable housing. They’ve identified two that the side yard setback addresses: 1) The administrative cost of the PUDs to both the cities and the developers. A small developer or one who doesn’t have a lot of staff ends up outsourcing these, and the cost becomes prohibitive. They’ll look at other cities where that’s not a barrier to entry. So, by streamlining and doing away with the PUD, to the point where the reason why the State Legislature almost passed that law is because the builders’ association felt so strongly about that PUD being a roadblock to their meeting the needs for affordable housing that they were lobbying the State to try to circumvent cities. Thankfully, the cities won, because again, it is a local control issue, but it also highlighted the point of how serious and the implication that it’s having on affordable housing. 2) Lot size, as land is exponentially more expensive than it used to be. A term that’s used in other parts of the country is a low maintenance lot, .12 acres. It was the standard for a long time in development, all the way back to the turn of the century. Really, larger lots with larger setbacks were market driven as we experienced urban sprawl, post-World War II. So, that’s where we saw those lot setbacks grow in width. There are many parts of St. Paul and first-ring suburbs where the minimum side yard setback is three feet; so, you get a total of six feet between houses. They all joke that you can hand your neighbor a cup of milk or sugar, and you probably could; that was the standard, and at that time, that was also market driven. As there’s downward pressure on pricing and what the market is looking for, we’re seeing builders’ kind of come back to this. In higher-end communities, you’re still seeing larger lots where the economics makes sense, they’re still building large lots. But there are people who also don’t want to mow a half-acre or third-acre lot; they can’t afford to, or there’s several metrics that drive that. In addition, some housing products that were introduced into City Council Meeting Minutes December 21, 2022 Page 20 Cottage Grove, one of a few cities in the entire State that had done so, were these smaller, entry-level homes on the smaller lots. That’s been a wildly successful product; he’s pretty sure that they are sold out. So, he must respectfully say that although he doesn’t personally agree with the 7.5’ setback, the market is demanding it. And if the market were to shift and demand more, we could pivot and revise this Code. He thinks the benefit of eliminating the PUD is helping, even though they on their own are not the singular tools that are going to improve housing affordability, they are two of the straws that are breaking the backs of builders in their attempt to build more affordable housing. And we’ve all identified as a Council that that’s one of our objectives for our City; so, he thought we would basically be kind of impeding our own progress by declining to approve that. Council Member Olsen thanked Council Member Khambata for his comments, as both a property owner and a real estate agent. He asked Council Member Khambata when he spoke about affordability and the amount of affordable housing that communities are asked to have, if it’s still the case that the Metropolitan Council dictates to communities that they need to have a certain amount of what they believe to be affordable housing for potential residents in that community? Council Member Khambata replied he doesn’t know the percentage but believes that the Metropolitan Council does require cities to have a certain percentage of affordable housing. He believes that Cottage Grove has struggled to meet that percentage. Council Member Olsen stated the information Council Member Khambata gave about what builders and developers need to try to stay within some sort of parameters relative to affordable housing would apply not just here but really to any of the metro communities that are asked to provide that sort of housing stock. Council Member Khambata stated one example would be a car side split level home; that has the door in the middle, 2 windows on each side, you walk in, and you immediately decide if you’re going to go upstairs or downstairs. It’s a very efficient floor plan, and it’s a very cheap home to build. There were a lot of them that were built with foundation sizes that were under 1,000 square feet; so, the entire gross living area of that home was under 2,000 square feet. He would challenge you to find any builder with the current Zoning Code that is building a home with 900 square feet of finished living space, a two-bedroom, one-bath starter home. That’s because the fixed costs of developing a lot don’t make that product economically viable. Council Member Olsen thanked Council Member Khambata for that, as it certainly helps add some color to the conversation from where he sits. In his view, it helps support the staff’s recommendation. Council Member Dennis thanked Council Member Khambata for that excellent display of information and wisdom. Previously, we held a housing symposium, and we invited in several key developers from the area. What they made sure to share was there are generally four cost factors: Land acquisition, land improvement, materials, and labor costs. Some of these things are controllable, some of them are market driven; what we can certainly do here, and he thought what we’ve been trying to do, is to do our part of listening to community needs and requests for more reasonably priced housing. We can do our part by following the staff recommendation on this. As was mentioned, City Council Meeting Minutes December 21, 2022 Page 21 this will make a difference relative to those four cost factors and how they impact the bottom line. Council Member Thiede stated obviously the evidence is sliding away from the recommendation of the Planning Commission. When he was on the Planning Commission in the early 2000s, we were fighting against lot sizes going less than 85 feet. We denied some of those things, and the developer was probably happy because that was right before the market crashed and they didn’t do their development at that time. He certainly thinks that we’re growing very fast; sometimes he wonders where all of the people are coming from. He doesn’t really like giving in to all the developers, as there are different ways that they could get different sized lots and affordability. He doesn’t think the different size in the lot really makes that much difference; they’ve got different choices of maximum house size, square footage, etc. that they can put on those different lots. To him, we would need to wait to see how much effect that really has; he doesn’t know if having a little bit of a slowdown in terms of the growth would be all that bad. So, he’ll probably stick with the recommendation of the Planning Commission. Mayor Bailey stated he thinks things have changed over the years, and we have evolved as a community. So, whether we’re looking at it from a cost prohibitive kind of situation for affordability, what is interesting is Cottage Grove at one time had more than enough affordability. As the value of homes has increased, including those homes that used to be affordable, that number has dropped dramatically because of the price structures that are out there right now, including existing homes. Mayor Bailey stated with this new Nuisance Ordinance, what had frustrated him the most was when he would constantly get calls from the same people about why nothing was happening on a specific property. In some cases, it literally went for years before we were able to deal with it. Out of everything that we did, that’s the big one for him because he really thinks it will help all of us and our citizens. When we get that phone call and there’s an issue, that we’ll now be able to deal with it more quickly. That will benefit our neighborhoods and make our neighborhoods better places to raise families. Motion by Council Member Olsen to Adopt Ordinance Repealing and Replacing the Cottage Grove Official Zoning Map; second by Council Member Thiede. Motion carried: 5-0. Motion by Council Member Olsen to Adopt Ordinance Repealing and Replacing the Cottage Grove City Code; second by Council Member Dennis. Council Member Thiede wanted to make a comment for the record that he agreed with about 95% of what staff has done; it’s fantastic and taken a lot of work, a very good job. He just feels that he’d rather see this zoning stay the same and change it if need be, if it really does affect anything; it doesn’t seem to have affected things up to this point. Motion carried: 4-1 (Nay vote by Council Member Thiede). Motion by Council Member Khambata to Adopt Ordinance amending the City Fee Table; second by Council Member Dennis. Motion carried: 5-0. City Council Meeting Minutes December 21, 2022 Page 22 Mayor Bailey thanked City staff and Attorney Land and her team for working through this for the last couple of years. B. Commission and Committee Appointments Staff Recommendation: Approve Mayor Bailey’s recommendations for various City Commission and Committee assignments for 2023. Mayor Bailey stated every year the Mayor is given the duty to assign commissions and liaisons within the different committees and advisory commissions that we have within the City. He read his selections for 2023: Mayor Pro Tem-Council Member Dennis Economic Development Authority-Mayor Bailey, President, and Council Member Dennis Historic Preservation Advisory Committee-Council Member Thiede Planning Commission-Council Member Khambata Parks, Recreation and Natural Resources Commission-Council Member Khambata Public Services Commission-Council Member Olsen Strawberry Festival-Council Member Thiede Investment Committee-Council Member Dennis and Council Member Khambata Red Rock Corridor Commission-Council Member Thiede South Washington County Telecommunications Commission-Council Member Olsen South Washington Watershed District-Council Member Olsen Holiday Train Committee-Mayor Bailey Beyond the Yellow Ribbon-Council Member Dennis and Council Member Olsen Great River Rail Commission-Council Member Thiede East Metro Strong-Council Member Thiede Cottage Grove Chamber of Commerce-Council Member Khambata Cottage Grove Convention and Visitors Bureau-Council Member Dennis Motion by Council Member Olsen to approve Mayor Bailey’s recommendations for various City Commissions and Committees; second by Council Member Khambata. Motion carried: 5-0. 12. COUNCIL COMMENTS AND REQUESTS Council Member Khambata stated this is our last meeting of the year. As he looks back on the year, he just must commend staff and all the volunteers who helped with some really amazing events this year, from the Strawberry Festival to the Holiday Train. Even with revising the City Code, there are a lot of dedicated people who make this City operate the way it does, and it’s really a grass roots effort. He wanted to personally thank everyone for all of their hard work this year. Council Member Dennis stated he agreed with Council Member Khambata; a lot of great work was done here by our staff team, volunteers, and commission members. It City Council Meeting Minutes December 21, 2022 Page 23 hasn’t been the easiest of years, but he thought we’ve posted tremendous accomplishments as a team of individuals working on behalf of the community. Council Member Dennis wished everyone a very safe, happy, and healthy holiday time, as we know there are still some challenges with the flu, COVID, etc. On behalf of him and his family, he wishes everyone the very best. Council Member Dennis wanted to recognize Council Member Olsen; he mentioned how grateful he is for all of the volunteers work that Council Member Olsen has done on behalf of the community in a very wide array of different opportunities and organizations. His work with the Lions Club, with Beyond the Yellow Ribbon, the work that he’s done with Discover Cottage Grove, and ringing the bell for the Salvation Army. He’s done all of those amazing things. All of us on the Council do things, but this year he took the cake by how much he’d done. He thanked Council Member Olsen on behalf of the Council and the entire community. Council Member Olsen replied that’s very kind of you, thank you very much. He does it because he loves his community, and he wants to give back. The community has given him far more than he will ever be able to give back in his lifetime, but it’s certainly a labor of love. Thank you. Council Member Thiede stated we’re requesting ideas for the logo and the theme for the 2023 Strawberry Fest. Go on Facebook, Cottage Grove Strawberry Fest, where we have pictures of the previous years’ buttons and themes. If you’ve got a creative vein, and even if you don’t, go on there, look; if you have a great idea, by all means go ahead and submit it to us. We’d love to see some good ideas, he’d appreciate that. Council Member Thiede wished everybody happy holidays. Over the last few years, besides being a Council that usually agrees with each other (and sometimes we don’t agree but we still work things out), one of our greatest accomplishments is our staff and the environment that has been created in the City of Cottage Grove with our employees. When he was first on the Council 12 years ago, it was a totally different environment; people would be talking about others or complaining about things. He thinks if you truly take a close enough look, you’ll find that people respect each other; there’s no competition or a fear that someone will throw them under the bus. In his opinion, it’s a working environment that has really developed and has really gone from good to great. We just need to keep that up, and he thinks we can; it’s a fantastic place to live, work, and play. Council Member Olsen stated it’s no surprise that we’re in the middle of winter in Minnesota, although today was officially the last day of Fall. We must all recognize the tremendous work that our Public Works Department does when they are out dealing with snow events and making sure that the sidewalks and the roads are safe. We have got an unbelievably proud group of folks who serve in Public Works, and that pride is really evident in the work that they do; they make sure roads are clean for our Public Safety staff to be able to respond to emergencies and for our residents to be able to get City Council Meeting Minutes December 21, 2022 Page 24 around town. When he says clean, he means you can see the pavement and it's from curb to curb. They make sure the sidewalks are cleaned up and safe so that people can enjoy getting out and taking their dog for a walk or taking a walk around town with their kids, finding their way to a local park to maybe go sledding and have some fun with the family. He asked Public Works Director Ryan Burfeind to please let his team know how grateful we are for all the hard work that they do, especially this time of year; during the holiday season, they’re out at 2:00 or 3:00 a.m., away from their families. They work long shifts, go home, take a nap, and come back and work some more. There’s already been a lot of snow this year, quite a bit more than last year, so please pass that along to them. Council Member Olsen thanked the residents of the City of Cottage Grove for letting him be a City Council Member. This is a job that he never gets tired of, that he really appreciates and enjoys. He really likes the work, and he loves the people that he works with, his Council colleagues, even when we disagree we do so without being disagreeable. We respect and like each other, our City staff, and everybody who volunteers at different events around town. It is really a joy to sit in this chair, and that doesn’t happen unless you get enough votes at the ballot box, whenever it’s our turn to run for office. Truly, the residents of this City need to hear how grateful he is and how much he appreciates this opportunity. He knows it’s not a forever opportunity, but it’s a wonderful opportunity, and he could not be more grateful for the chance to work with so many amazing people. Hopefully, he can make this City a little better by the time he’s done than it was when he started. He thanked Council Member Dennis for recognizing him earlier, as he appreciated that. This whole community is built on the power of volunteerism, and there are many people out there who put in so much time, energy, and effort into our community. He could spend a month of Sundays giving you a list of names, but let’s just talk about the fact that when there’s a need in the City, that need gets filled. It might be from the Lions, from the VFW, or from the Beyond the Yellow Ribbon team that Council Member Dennis and I are a part of. All of these various nonprofit groups, the Youth Service Bureau, of which Mayor Bailey is a part of; there are people out there who struggle, it’s just the way of the world. There are people who are struggling right now; when that struggle becomes something that we’re aware of, as a community we step up. A good example of that is the Holiday Train. We had a really great Holiday Train event; he stopped by the Friends in Need Food Shelf yesterday, and spoke to Michelle Rageth, Director of the food shelf. He thought the goal this year was in the $90,000 range, and as of yesterday, we were sitting at $162,000 raised for the Holiday Train this year. Michelle told me yesterday that there’s more money coming. He asked Director Koerner if knew what the updated number was; Director Koerner stated yesterday afternoon it was $169,500. Council Member Olsen stated $169,500 was raised by this community for people in need; if that doesn’t tell you that we are, as former County Commissioner Myra Peterson used to say, ‘the heart of Washington County,’ he doesn’t know what does. He wished everybody happy holidays, from his family to yours; he hopes it’s healthy, that you get to enjoy some quality time with your family, and just know that we all appreciate the fact that we have such a wonderful community to work in. If you’re struggling with something, please reach out; this time of City Council Meeting Minutes December 21, 2022 Page 25 year can be tough for some people, but there are people out there who are willing to help, and that’s what we do. So, thank you, again. Mayor Bailey stated we’re almost at $170,000 for the Holiday Train, which is an amazing outpouring of support. He had the honor of being able to ride on the train into Cottage Grove, and to see all the people lined up blew us away. Of all the stops that they’ve been doing, they said Cottage Grove completely blows everybody else away with the number of people that turn out for it and the amount of money we raise. A city to the south of us was celebrating $48,000 of donations to their area, and we’re nearing $170,000. He spoke with Committee Member Randy Bachman; he and Merchants Bank do something called 10 Days of Giving; they pick elementary schools and ask the kids to bring paper products in, and whichever school brings in the most gets to be the champion. He said year after year, it’s always been Pine Hill Elementary that’s brought in the most paper products. This year it was very close, but it was Armstrong Elementary. What Randy shared with him was other Merchants Banks do these drives, and he showed a photo that was sent to their corporate office; it was a small Hertz truck that had all the donations in it. Randy showed him the three semi-loads of product that were delivered to the Friends in Need Food Shelf from Cottage Grove and surrounding areas, which blew the executives at Merchants Bank away. So, that confirms the testament about this community being very much giving, no matter what the issue is. Kudos to the Holiday Train Committee, thank you to CP Rail, as that’s really what gets this going is all their focus and love for the communities. Mayor Bailey stated as we spoke earlier about City staff working on grants, another thing the City has been doing is actually working with our Federal and State legislators to try to get additional funding for infrastructure projects that we need in Cottage Grove. We previously received $3 million for what will be a future road project and infrastructure improvements for the Shoppes at Cottage View. We got a call from Representative Angie Craig and Senator Amy Klobuchar; they stated in the current bonding bill that’s making its way through the House and Senate and will go to the President, there is $5 million in there that we had asked for to help us take care of 80th Street. We want to finish 80th Street from Highway 61 all the way up to Ideal Avenue, which is the only part that’s left to be done. Instead of raising taxes for local taxpayers, this will be Federal money that will be coming in to help fund that project. That also helps us maybe move some funds to other pavement management or other projects within our community. He thanked Representative Angie Craig, who really spearheaded this, to help us with those projects; he spoke with her earlier this week. Mayor Bailey stated at our last Council Meeting, we had a Closed Workshop; legally, tonight he needs to report and share that the Closed Workshop was a performance review of our City Administrator. He shared that performance review went very well, and we’re very happy with our City Administrator’s performance. The Council was unanimous on that, with the support that we have for her, and the work that she is doing with all the staff on behalf of the citizens of Cottage Grove. City Council Meeting Minutes December 21, 2022 Page 26 Mayor Bailey stated tonight we have a workshop, open to the public; we will discuss Local Option Sales Tax. We’ll be getting more information on that to the public later; we’re looking at some different options for funding new parks, etc. So, we’ll be adjourning this meeting from the workshop. Mayor Bailey stated, on behalf of the Council and our City staff, have a very Merry Christmas and a very prosperous New Year. We’ll see you all in January. 13. WORKSHOPS - OPEN TO PUBLIC A. Local Option Sales Tax Workshop Director Dockter defined a Local Option Sales Tax (LOST):  A sales tax that can be used by local governments in Minnesota to fund up to five projects.  All of the projects must have regional significance, not just specific to a community or neighborhood. What we’re talking about today is a sales tax of 0.5% or $0.50 on every $100 spent by somebody in Cottage Grove. Since LOST is applicable within the boundaries of Cottage Grove, it essentially reduces the residents’ share of the cost of those improvements we’ll be discussing tonight, versus a standard City bonding process, which gets applied to the local property tax levy. The Process Should the City Council wish to move forward, on January 18, the Council would Adopt a Resolution proposing the Local Option Sales Tax. We could get that Adopted Resolution to the House and State Senate Tax Committees by January 31. Typically, the State Legislature then approves the Local Option Sales Tax that winter or spring. The City files local approval with the Secretary of State, and the City Council Adopts a Resolution accepting the Local Option Sales Tax, which moves it towards a referendum for the community. The community must vote on the Local Option Sales Tax. It takes a lot of work just to get that referendum processed; so, for this proposal we’re talking about the November 5, 2024 General Election. If the voters approve the Local Option Sales Tax, the Council passes an ordinance imposing the Local Option Sales Tax. Background  January 15, 2022: At the Strategic Planning Meeting, Council gave staff direction to determine some potential benefits to using the Local Option Sales Tax, study it more, and come back with some project ideas.  February 9, 2022: Workshop with Council, presented some of these potential projects.  April 5, 2022: Follow up to the February workshop and brainstormed with staff to try to sort out the different projects and put things together in a way that would bring it to the community to get their feedback on it.  Community Engagement: We did a broader public engagement campaign, called “Reimagining Recreation.” We had more than 2,100 online responses to the City Council Meeting Minutes December 21, 2022 Page 27 survey. We were at community events, including Strawberry Fest, Community Showcase, Discover Cottage Grove, many Parks and Recreation events, etc. Mayor Bailey and I did a middle school project; we got a lot of good feedback from them, how they would Master Plan different parks in Cottage Grove.  We sorted out the responses and compiled a report, which went to the City Council and the Parks and Recreation Commission. Projects Based on the feedback, we broke down that information and put it towards five projects: Hamlet Park, River Oaks Golf Course & Event Center, East Ravine Park, Still Ponds Park, and Mississippi Dunes Park. We started to build concept designs along with concept estimates. What really jumped out at us through this last refinement is we have to have regional significance, and we didn’t think two of the projects fit that bill. So, we dropped the future East Ravine Park, which is more of a community park, and we also dropped Still Ponds Park. We thought we’d focus primarily on three projects, as we knew there was a limit to what we could do with the budget: Hamlet Park, Mississippi Dunes Park, and River Oaks Golf Course and Event Center. Hamlet Park, Estimated Project Cost: $17 million. Our oldest, most historic, and largest park. It is more active with sports facilities and many recreational opportunities. It has the ball fields, but also has trails and ponds. This plan would improve all park elements, in the north, south, east, and west: Add a landscaped trail hub at the north entrance. Replace the existing skateboard park in the central part of the park with a concrete skateboard park. Upgrade the playground. Replace the building with a higher- end facility. Add a synthetic turf field in replacement of the current football-soccer field currently there, to expand usage into multiple seasons. Improve courts and rinks and add a Splashpad. Finalize the softball fields on the south. Add a parking lot. Many of those are already in our CIP, and we’re just pulling them into this project. Mississippi Dunes Park, Estimated Project Cost: $13 million. This is 40 acres of a combination of an active area and a much more passive recreational area with lots of trails, an Interpretive Center, outdoor educational options, playground, many water access activities, etc. We know this has regional significance to visitors and access to the Mississippi River. It’s also part of the National Park Service. River Oaks Golf Course and Event Center, Estimated Project Cost: $6 million. Trying to extend the offerings at River Oaks to different demographics and areas of the community. Add a winter mountain biking course around the driving range area. Add a Himalayan putting green to add a different, unique feature. Patio renovations and expansion, as the patio is a key selling feature. Add simulated golf programs. Brenda Malinowski, Finance Director, stated we briefly spoke with Ehlers, and they’re estimating that we could get annual sales tax of $1.2 million through this Local Option Sales Tax. Based on that, we could issue a 20-year bond of $14.6 million, and that is less than our identified projects of $36 million. We don’t know what is going to be coming into Cottage Grove in the next 5-to-15 years that could generate sales tax; so, that’s why we’re being suggested to have more projects in there than the bond that would be issued. City Council Meeting Minutes December 21, 2022 Page 28 Ehlers is saying 20-year bonds are easier to sell, but we’re seeing some other cities that are issuing 25-year bonds; so, we need a little bit of flexibility for that. As part of this, the University of Minnesota will help us do some financial analysis with a little bit more detail, how much sales tax will be generated locally versus regionally. They’ll be able to help us dial in a little bit more. Director Dockter stated we’ve already started working with the University of Minnesota for some of that information, so we hope to have that to you at the next workshop if Council wants to continue this process. Next Steps January 4, 2023: Council Workshop with Ehlers to review the Local Option Sales Tax financial analysis, get more detail on that. January 11, 2023: Council Meeting with local legislators to present Local Option Sales Tax proposal through the State Legislature; a lobbyist is probably also recommended. January 18, 2023: Council Resolution to approve Local Option Sales Tax initiative, Council approval of a lobbyist to promote project within State Legislature, Council approval of Local Option Sales Tax Analysis Report from the University of Minnesota. Director Dockter stated many communities are doing this, most seem to be for Community Centers, recreational assets, and some have even done Public Works facilities; he didn’t know how that fit the requirement for regional. We’re just looking for Council feedback at this point. Mayor Bailey stated when we had the Strategic Planning discussion, one of the thought processes was also to create a pot of money to purchase land. People were commenting about Mississippi Dunes, and we didn’t have the money to purchase additional land there without going out and trying to get bonds. We were also talking about the future park, which is beyond the ravine. He asked Administrator Levitt why that was not part of this. Administrator Levitt stated we’re not allowed to use this money for land acquisitions. We need to be looking at hard infrastructure and facilities. The other thing is there’s a limiting factor of how much Local Option Sales Tax we can generate. Right now, with today’s numbers, with what we have from business in our community, we’re generating about $14 million. With the hope that we grow our Business Park and maybe grow some of our retail center, we could generate more. So, we’re going to be limited by the dollars we can do. A lot of other cities that previously went for the Local Option Sales Tax didn’t account for inflation in their projects. For example, Oakdale received it for $35 million; the problem is they can’t go out for bid today because the projects now are more than $35 million. We’ve been trying to look at inflation as part of this, thinking we’re not going to be building until probably 2026; there may be some low-hanging fruit when you get in 2025, so we’re trying to add enough inflation to also account for that. Those are some of the challenges that we have. Regarding the timing, we were really advised to do this in a General Election, with a higher voter turnout, so that would be important. As you know, there were some bills that didn’t get signed, so there are a lot of cities sitting in the queue right now for Local City Council Meeting Minutes December 21, 2022 Page 29 Option Sales Tax that didn’t get approved last year. So, if we try this year and we’re not approved, we can still try in 2024. So, if we start now, hopefully we will be able to get it for November 2024. Council Member Olsen stated Director Malinowski talked about the funding opportunity. We have a revenue stream that we can essentially count on with the Local Option Sales Tax; he knows many communities are doing this because it creates a level of certainty that sometimes we don’t have. He asked if the intent would be to bond for a chunk over a 20-to-30-year bonding life, and then use that dedicated Local Option Sales Tax revenue stream as the year-to-year payment for the bonds; is that the goal? We talked a lot about various projects. One of them that never came online if it even needs to be considered, especially considering some of the news that we got from NorthPoint with funds for the Ice Arena is does the Ice Arena need to be considered. He knew we had to spend a lot of money on the refrigeration system a few years ago; are we good there, or do we need to be thinking about making sure that we have enough in our bank account should anything need to happen there? Administrator Levitt stated it’s maybe not necessarily about the needs of that facility, but what the voters can get behind. So, looking at our community engagement with the surveys and what people are looking at for recreational amenities, it seems as though these projects would hit a broader demographic than a very small amount who might use the Ice Arena. Council Member Olsen stated with River Oaks on there, River Oaks has recently had some wonderful years, and it’s a draw to the community. We all agree that some improvements with the patio, etc. would create a greatly enhanced experience for the end user. But we also get an awful lot of traffic through the Ice Arena, and we do the dry floor activities in the spring and summer. There are a lot of tournaments there, also. He wants to make sure if we’re thinking about this as an investment, we’re also thinking about it as some level of return. He noted during the budget conversation a year or two ago, he thought Council Member Dennis’ direction was we just need to tear the Band- Aid off and get that thing done, referring to Hamlet Park. Council Member Dennis agreed. It’s been dragging on forever. That’s another opportunity for additional tournaments, and it’s an amenity that we can be proud of for outstate teams, etc. Council Member Olsen asked if the conversation around Local Option Sales Tax would ever go to a place where we thought about a dome feature in the City? He knew that was part of our referendum that failed a couple years ago, but that seems to be something people have been talking about for quite a while. He just wonders if the dome was something that anybody considered. Director Dockter replied we talked about it early on, that’s partly why the synthetic turf field is on there because we know that appeals to all the sports. Obviously, that’s not year-round. The hardest part with the dome is space; we’d have to have land to put it somewhere, and that’s a challenge just because of the size of the facility. Council Member Olsen stated so there’s a land acquisition cost that goes along with that, that probably doesn’t sync up quite right with this sort of tool; he asked if that’s what he’s hearing, and Director Dockter confirmed that. City Council Meeting Minutes December 21, 2022 Page 30 Mayor Bailey stated the original cost for that dome was about $8 million, but that was three years ago; that whole project is probably more than $10 million now. Council Member Olsen stated he’s trying to think through the return on investment. The dome would not be something that our folks would use, but it would be a draw. There are people who drive an hour or more to take their kid to a practice at a domed facility because their community doesn’t have one. So, he asked who benefits, who really benefits? There’s always this push and pull between taxes and fees. You try to think about the benefits and how do you make it so that the people who benefit are the people who contribute; he thought that was part of the goal here with this Local Option Sales Tax. The people who will be paying that tax in large part are the people who are coming to the community for different events, some of the industrial users, their external customers, etc. It’s a good tool, otherwise many cities wouldn’t be using it, but he just keeps thinking through what gives us the most bang for our buck in terms of what would draw people to our community. He agrees Hamlet Park is a draw, especially if its fully built out. We already know River Oaks is a draw; look at their tournament schedule and their rounds of golf lately, and that can just continue to get better. But there are other things that could be draws, too. Council Member Thiede stated he’s not so sure about Mississippi Dunes. Council Member Olsen stated the only reason he’s not including Mississippi Dunes is previously parks were only funded through development. Director Dockter was always struggling to make ends meet, and then we got some water tower revenue from the antennas, which helped for a while. As costs have increased, especially with playground equipment and the replacement buildings, clearly that’s not enough anymore. Plus, technology has changed, so that antenna revenue source is kind of going away. Mississippi Dunes Park doesn’t even happen until the development happens; he asked if that was correct, which was confirmed, and there’s no development happening right now. Administrator Levitt stated we meet with the landowner tomorrow. Our hope is that we would be able to have him agree to a Purchase Agreement for the 19 acres, and we would plat that, the 12.3 for the DNR, and the other land that would have been part is the park dedication. That would give us, then, the right-of-way to access into it until a development happens. Council Member Olsen stated even if we do all that, we can’t really move forward with the park until the development starts; he asked if he was wrong about that. Administrator Levitt replied no, the road into, and the actual start of water and utilities, etc. would come after that. Council Member Olsen stated but we don’t know when that’s going to be; Administrator Levitt stated that’s correct. Council Member Thiede stated in terms of the regional draw, Hamlet Park and River Oaks are attracting people in for regional tournaments and get people into town to buy things. But with the Mississippi Dunes, what are we doing there; what will be there that will have that draw? Council Member Olsen stated he thinks that will draw once it’s done, because we’ll get access to the river. That’s his concern, when is it going to get done. City Council Meeting Minutes December 21, 2022 Page 31 Council Member Thiede asked if there was anything like water tournaments, like rowing, or are there other things like that that would make it a regional draw? Director Dockter stated the draw of that facility is going to be the river itself. Complements to that will be the Interpretive Center, which could be used for events, educational, maybe small weddings, things like that. There are also classrooms, but in the end, it’s the nature element of the river itself is the draw for that park. And it’s part of the National Park Service so it will be a regional destination. Hopefully, visitors will stop and get gas and go out to eat or stay in a hotel. Administrator Levitt stated we must demonstrate the regional significance on the legislative side of things, not on the financing side. Council Member Olsen said so not on the referendum side; Administrator Levitt replied that’s correct. We want it to appeal to a broad range, but when we talk about regional significance, it’s to the legislators that its regional to make sure it makes their test. As Director Dockter said, it’s an asset on the Mississippi River, and we don’t have a lot of access in our area to the river, we’re providing a unique amenity. But it doesn’t itself need to generate revenue from it to be defined as regional. Council Member Khambata asked with the Local Option Sales Tax and the associated bonding, we’re leveraging the future sales tax revenue as our leverage for the bonding. Does Ehlers, in their experience, when we’re issuing bonds and we’re using that as security, does that garner us a more favorable rate or the standard rate, or is it a riskier rate than other types of bonds? Where does the risk factor fall when they’re doing that financial analysis? Are we going to be paying more for interest on those bonds than other types of municipal bonds that we could issue? If we didn’t have the credit rating we did, for instance, we would pay a higher rate. So, if I’m an investor and I’m going to buy Cottage Grove’s municipal bonds to help fund this project, because it’s tied to a Local Option Sales Tax am I looking at this as a riskier investment, a less risky investment, or same as any other municipal bond? He didn’t expect Director Malinowski to have answers tonight. Mayor Bailey stated she’s going to bring that question to Ehlers; it’s a good question. Council Member Khambata stated if we’re going to be paying debt service on it, people are going to ask why the bonds and how much is it costing us? That’s why he’s just curious, trying to weigh the cost benefit of going down this road. His other question is with that test for regional benefit, is there anything that would exclude us from incorporating any fee-for-service type activities? Along Council Member Olsen’s line of thinking, we keep expanding our park system, but we’re not expanding our revenue sources for the parks. We’re taking the 10% and we’re getting the land, so does that mean as a policy down the road, as some of these other areas of our City develop, do we no longer encourage the developer to give us the land? Do we encourage the developer to give us the money in lieu of property to help fund our existing parks? Or is there a way to incorporate some types of passive income into these upgrades that will help fund our Parks Department in the long term? He really thinks if there’s an opportunity, especially with the golf course and its access to the highway and having access on the river for kayakers, when your only option is putting a kayak in right off the bridge there, it’s not a great spot to put in. He would pay a marginal amount of money to not have to do that. Are those violating the Local Option Sales Tax City Council Meeting Minutes December 21, 2022 Page 32 rules if we try to incorporate some of that? With winter biking, that’s something for which we could have a nominal fee; kind of like validated parking, you pay $5, and come into the clubhouse later and get a sandwich, with $5 off whatever you buy. Are there ways to incorporate some sort of compulsory fee on some of these upgrades to help make Director Dockter’s job easier in the long term? Director Dockter stated we’ll have to research it more, but he doesn’t think it prohibits that because ice arenas are funded, community centers are funded, and those are all fee-for-service. Council Member Khambata stated he loves what Director Dockter has done here, but he’d like to see if some of that is allowable to help kind of prop up the Parks and Recreation Division for the long term. Council Member Thiede stated we’re not just building it, we’re maintaining it; Council Member Khambata stated exactly, the legacy cost of these things is going to start to really eat into Director Dockter’s budget. It already has. Mayor Bailey stated maybe when Ehlers is here, let’s take it the other direction. Let’s say that we get a bunch of business in, and our sales tax revenue goes way up in 20 or 25 years; if it’s paid off early, is that an option with these kinds of things? Director Malinowski replied once the improvements that we identify are paid off, then we must stop the tax. Mayor Bailey asked if we’re careful on the front end with what we’re going to get for revenue, but more revenue comes in and the bond gets paid off sooner, then that sales tax drops off sooner. Director Malinowski stated it’s when the improvements are paid for. Administrator Levitt stated there’s kind of a game here because we could always reissue. So, that’s why we’re saying we must check out the legality. Let’s say we want to generate $30 million for our projects, and we say we want it for 30 years. But if right now we could issue bonds for $14 million, let’s say we issue them today. Let’s say it only takes you 12 years to pay that off; that’s what we’ve been trying to verify is if we could generate up to $30 million, can you then issue another set of bonds within the timeframe allotted by the legislation to be able to generate that? She stated that’s why we’re struggling, because we know today, we can only generate this, but in six years, let’s say we’re generating significant tax. You know, NorthPoint is building a bunch of stuff, and their end users have a lot of tax, so we could be getting a lot of that. The Shoppes at Cottage View with large retail centers, we want to be strategic. That’s what we need Ehlers and our attorney to verify. Administrator Levitt stated right now we’re limited by funds; obviously, the projects are going to be more expensive in 2026, 2027, and 2030. So, we know that’s going to be higher, too. We don’t want to shortchange ourselves on the dollar amount that we ask for from the legislature. Mayor Bailey asked if that was also the reason why we didn’t include the Ice Arena or something like a dome. Based on what we know right now, there’s not enough revenue to be able to cover five projects, so we narrowed it to the three, and we believe at this point that would be enough to cover. Council Member Olsen stated, and we want those three to have broad appeal, which Administrator Levitt confirmed. City Council Meeting Minutes December 21, 2022 Page 33 Council Member Khambata asked if there’s a possibility of making it a higher rate of inflation and then it would be more than likely these projects would come in under budget? Mayor Bailey stated he thinks that’s the goal. Council Member Olsen stated that’s what Ehlers would do for us. Council Member Khambata asked how do we address the surplus if there is a surplus? Once you’ve reached your limit, or through bonding these projects up front and paying for these in advance of the payoff, do we just end the tax as soon as the bonds are paid off? What triggers the tax to terminate? Director Malinowski replied when the projects are paid for. Council Member Khambata asked if we had the option of banking the money and not doing a bond? We can say we’re just going to see how the tax revenue comes in, and once we have it in our account, then we’ll spend it? Administrator Levitt replied she thought that was more of a political issue. If the voters say they want the improvements, they’re going to want it now, not later; that’s the only caveat. Mayor Bailey stated it goes back to the situation we spoke about earlier and we’re dealing with now, Glacial Valley Park. These new developments come in and we talk about these great parks, but we have to wait to get them, and we hear a lot of complaints about that. Council Member Olsen stated that’s why he asked the question about fees versus taxes and who benefits. Because if you’re going to market this idea effectively, there has to be the element of the people who are coming to town to play in a baseball tournament at Hamlet Park, those coming to town for a golf tournament at River Oaks Golf Course, those coming to town to put their kayak in the water at Mississippi Dunes park, those are the people who will bear the larger percentage of this Local Option Sales Tax. Those people and our business users, and they’re paying that in tons of communities across the country, so it’s not anything new to them. If you can’t justify what we’re doing, we’re not going to be able to do it, it’s not going to work. Administrator Levitt stated the study by the University of Minnesota will determine what that outside benefit is that’s paying; some cities have found it as high as 50% is subsidizing that. So, that’s a lot of money that our local taxpayers would never have to have on their taxes because 50% would be generated from outsiders. Council Member Olsen stated it makes perfect sense; we just need to have some of the details ironed out. Mayor Bailey stated the details on the financial side will be ironed out as we meet with Ehlers at our first meeting in January. So, the purpose of this Council workshop is to determine if you’re comfortable at this point with moving forward with having Ehlers come in and share the data with us? And are you also good with the three projects that were selected as part of the revenue? Council Member Khambata stated he’s comfortable, and Mayor Bailey stated he’s good. Council Member Olsen stated he’s a little on the fence about Mississippi Dunes, simply because he doesn’t know when it’s going to come online; the timing is the only issue. He doesn’t think it’s a bad idea in terms of the project itself, but when will we see City Council Meeting Minutes December 21, 2022 Page 34 the benefit of it? Because if that development doesn’t happen for five more years, that park doesn’t happen for five more years. It’s not like we’re going to do the park first. Mayor Bailey stated he agrees, but most of this really isn’t going to happen for up to five more years. Because we’re not even going to have the voters vote on the referendum until 2024. Council Member Olsen stated that’s a fair point; that development could be fully baked by that point in time. You’ll probably get an inkling of that when you meet with them tomorrow. He doesn’t think it’s a bad idea. He just doesn’t want it to be one of those things where we got everybody all excited about Mississippi Dunes Park, we made it part of a referendum, and then because development doesn’t happen due to market conditions or whatever, people start thinking that we’re playing the shell game on them. There needs to be an understanding that these projects need to come online if we’re going to do this, and that’s the appeal, is it not? He asked Director Dockter if he agreed, and Director Dockter did. Mayor Bailey asked staff if they got what they needed, and they confirmed they did. 14. WORKSHOPS – CLOSED TO PUBLIC - None. 15. ADJOURNMENT Motion by Council Member Olsen, second by Council Member Thiede, to adjourn the meeting at 9:49 p.m. Motion carried: 5-0. Minutes prepared by Judy Graf and reviewed by Tamara Anderson, City Clerk.