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HomeMy WebLinkAbout11-19-12-WS 'It �- l N HILLS Approved: January 28, 2013 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION MEETING NOVEMBER 19,2012 5:00 P.M. -ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor Grant called to order the City Council Work Session meeting at 5:03 p.m. Present: Mayor David Grant; Councilmembers Brenda Holden, Fran Holmes, Nick Tamble, and Ed Werner Absent: None Also present: City Administrator Patrick Klaers; Director of Finance and Administrative Services Sue Iverson; Public Works Director Terry Maurer; Community Development Director Jill Hutmacher; Finance Analyst Kyle Howard; and Deputy Clerk Amy Died 1. APPROVAL OF AGENDA The Council accepted the agenda as presented. 2. AGENDA ITEMS A. City—County Joint Powers Agreement for TCAAP City Administrator Klaers stated at the November 13, 2012, regular City Council meeting, Council discussion took place on the proposed City-County Joint Powers Agreement(JPA) for the TCAAP site. He commented this evening would be a continuation of that discussion. He noted a redlined version of the JPA was provided to Council based on previous Council comments. He indicated Mike Norton of Kennedy& Graven was present to help answers questions as they arise. Mayor Grant proceeded to review the JPA on a page by page basis asking for comments from the Council. Councilmember Holden asked if there would be any sales until there were market fee titles, as noted in Item B on Page 1. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 2 I Mike Norton, Kennedy & Graven explained that hot spots were subject to remediation. The idea was that fee title would be obtained once the County remediation was complete. The County would not be able to sell the property for development until the hot spots were cleaned. i Councilmember Holden questioned how someone could develop near County Road H, if the County did not have marketable fee title in this location. I City Administrator Klaers explained development would not be allowed because the area did not have utilities. He stated that no site would be able to be developed until marketable fee titles were obtained by the County and this would occur after the site was properly remediated. Councilmember Holden requested the word "significant"be removed from Item D on Page 1. Councilmember Holden inquired if the City would be responsible for any expense for improved County roads in TCAAP. She wanted to be assured the City would not be assuming any of these costs. I Mr. Norton stated that later in the agreement, off-site transportation expenses are addressed. He noted that off-site transportation issues and expenses would be the County's responsibility. Councilmember Holden asked how the City could avoid putting $4 million of public assets into the site up front. She expressed concern that the City would be liable for improvements if the County were to sell the land near County Road H. Public Works Director Maurer stated that money would be needed for trunk utilities and assessments could be established to assist with this expense, in addition to rate adjustments. Mr. Norton explained the City would still have the right to refuse utilities through the JPA language. He commented that the City was allowed to default back to the Master Plan, Zoning Code and Comprehensive Plan prior to approving any future development. Councilmember Holmes suggested the spine road be further addressed in the JPA and Master Plan. I Councilmember Holden requested further explanation on the definition of the "City's Investment". Mayor Grant noted that any expense arising in the AUAR which was defined as a public improvement was the City's responsibility and would be recoverable. Mr. Norton stated this section was not meant to define all expenses covered but rather assure that the City would be allowed to recover these expenses. Councilmember Holden asked who would be responsible for the wellhead monitoring. She wanted to be assured the City was not liable for the wells. i i ill ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 3 Community Development Director Hutmacher indicated that the cost of moving wells and related water lines was included in the remediation credit negotiated with the GSA. The U.S. Army will remain responsible for the operation of the ground water clean-up system. Councilmember Holmes suggested the word "addressing" be changed to "resolving" when addressing the remediation concerns in Section 1. She expressed concern with how the site would be properly remediated by the County. Mr. Norton indicated Staff would select another word. He commented the point was to have the County understand the necessity to clean the property to a certain standard based on the proposed use for the site. However, additional clean up may be required from a future developer. i I Community Development Director Hutmacher further discussed the cleanup levels required for residential standards and how the County, Army and future developer would be involved. She then described the VIC program in detail with the Council noting this could be added to the JPA. Councilmember Holden asked if parcels would be allowed to be developed next to contaminated areas. Mr. Norton stated this could conceivably happen and the developer may be forced to install improvements in this case. Mayor Grant commented a market study would greatly assist the developers in selling the site, as this would define which portion should be residential versus retail. Councilmember Holden requested clarification on the terms new development and public improvements. Mr. Norton explained he would work to clarify those terms. Councilmember Holden noted through the JPA language, the City would be responsible for the storm water retention ponds. She indicated this would be a large expense in the future. She recommended if this were to remain that it be added to the City's responsibility section. City Administrator Klaers recommended this be a developer driven improvement through the Master Plan process. Public Works Director Maurer stated there was less expense and liability in maintaining the storm water ponds than in installing a sanitary sewer system. Councilmember Holmes commented the City would then be responsible for any proposed water feature amenity. She encouraged the Council to consider how this would be financed up front and if bonding would be necessary. Public Works Director Maurer stated the Master Plan would lay out the surface water management for the property. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 4 Mayor Grant suggested the Council move to Item D on the agenda since members of the Financial Planning and Analysis Committee were present to discuss the utility rate study, and after which, discussion can return to the JPA. D. Utility Rate Study Mayor Grant thanked FPAC members James Ostlund, David Radziej and Arlene Mitchell for being present this evening. Finance Analyst Howard explained the Financial Planning and Analysis Committee (FPAC) has been reviewing the City's Utility Rates and Structure. Members of the committee were present this evening to discuss their recommendations with the Council. Staff then provided long-term forecast models to show the projected cash flows for the utility funds, along with scenarios the proposed changes will have on residential bills. Finance Analyst Howard discussed the current rate structure along with a proposed tiered rate in further detail. He reviewed the three goals of FPAC and noted the recommendation before the Council was to have the rates remain revenue neutral with 75% of fixed costs being covered by the meter charge. The other 25% of costs would be covered by variable expenses. This would assure that those with higher usage were paying their share. Staff commented that those residents with low water usage would benefit through the tiered rate structure. He noted that long-term expenditures were considered with the rate structure to assure that capital improvements would be funded. Councilmember Holmes questioned why the fund balances were projected to be so low in 2013. Director of Finance and Administrative Services Iverson explained this was due to projects scheduled for 2013 along with the decreasing profits from the current utility rate structure. Finance Analyst Howard further reviewed the proposed tiered rate structure with the Council. He stated this model would reward residents for low usage. Councilmember Holden asked how the tiers were established. Finance Analyst Howard stated all water usage was reviewed and some natural breaks were observed. A large group used 15,000 gallons or less. Another group used 35,000 gallons or less, and another group had water consumption of 35,000 gallons plus. Mayor Grant inquired the percentage of users in each tier. Ms. Mitchell explained that the first tier, users under 15,000 gallons made up half of the households in Arden Hills. She noted if the City were to select a "per gallon fixed fee" these users would pay only for the gallons used plus a fixed fee. Finance Analyst Howard commented the City could not account for 60,000,000 gallons in the system last year. This would continue to improve in the future as new meters were now in place. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 5 Mayor Grant summarized the options before the Council this evening. The first option would be to leave the rate structure as is. The second option would be to create a tiered rate structure, with the rates being 0-5,000 gallons, 5,000-35,000 gallons and 35,000+ gallons. The last option would be to create a tiered rate structure, with the rates being 0-15,000 gallons, 15,000-35,000 gallons and 35,000+ gallons. Ms. Mitchell encouraged the Council to consider how water conservation would be encouraged through the proposed rate structures. Councilmember Holden inquired how much Roseville would be raising their water rates to the City each year. Director of Finance and Administrative Services Iverson explained there would be a 6% increase. Finance Analyst Howard stated if the utility rates remained as is, the surface water management fund would show a negative fund balance in 2015. For this reason, a change should be made to the rates. Councilmember Holden supported the 75% fixed cost suggestion. Councilmember Holmes questioned why water rates for low users were going up instead of going down. She indicated she would have to continue to study the proposals. Director of Finance and Administrative Services Iverson explained the new rate structure would charge from gallon one and those users would no longer receive the 10,000 gallons rate. She noted the meter charge would be reduced to reflect this change. Mayor Grant requested staff to create a narrative on how the numbers were reached and report back to the Council on December 10th on how residents would be affected by the proposed tiered systems. Director of Finance and Administrative Services Iverson commented the current rate structure would remain in place until a decision was reached by the Council. A. City—County Joint Powers Agreement for TCAAP Mayor Grant requested the Council return to this item to provide staff with final comments on the JPA. The Council began on Page 6. Councilmember Holden asked if the Comprehensive Plan had a legend or definition for open space and green space. She recommended this category be added prior to completing the Master Plan. Community Development Director Hutmacher stated an Open Space District was proposed. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 6 Councilmember Holden asked if the reference to "co-terminus" in this section was too restrictive. Mayor Grant suggested the co-terminus be removed and that it be replaced with a two-year term. Councilmember Tamble asked what would be covered by"per diem". Mayor Grant stated this would cover mileage and meals and after the JPA was put into effect, the County would cover these expenses. Councilmember Holmes requested clarification on the differences between the JPA and JDA. Mr. Norton discussed this further with the Council. The revenues surrounding these agreements were also discussed. Community Development Director Hutmacher stated land use fees would be collected by the JDA. The City would collect building fees. She noted the City would also be completing all building inspections and collecting fees accordingly. Councilmember Holden asked if the financing of improvements should be further detailed. She questioned how often the City would receive payments from the County. i Director of Finance and Administrative Services Iverson explained this would be determined by the JDA Board. Further discussion ensured regarding the finances for this project. I Mayor Grant asked how excess funds in the JDA would be handled after the JDA was absolved. He wanted to be assured that all funds were put back into the TCAAP development. Councilmember Holden recommended any excess funds come back to the City. Mr. Norton indicated it would be difficult to forecast if there would be an excess and if there was, how to fairly divide the funds between all parties involved. Councilmember Holden questioned who would be responsible for land titles. Mr. Norton explained the JDA could impose this expense on the developer. He noted this was not an expense that would be assumed by the City. Councilmember Tamble stated the JDA could not levy funds for the development, but the entities involved could. Mr. Norton commented this was the case; the JDA could only expend what was approved in the budget. The parties involved could bond for additional monies to assist with potential future developments. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 7 Councilmember Holden asked if a special district could be established within TCAAP to cover the expense of future bonding. Director of Finance and Administrative Services Iverson explained that a special taxing district could be established. This would assure that the entire City was not paying for the improvements, but instead just the newly affected area. Councilmember Holmes stated bonding has not been used in the past and the Council would have to consider its use with this project. Councilmember Holden suggested the word "extensive" be removed from Section 2.3.9 as this could have various meanings. Councilmember Holden asked why there was an AUAR timeline and not a remediation timeline. Mr. Norton stated the County wants to make sure the City will be completing its work in a timely manner while they are working to remediate the property in three years. Councilmember Holden questioned if staff would have time to administer the AUAR and the B- 2 Zoning District. City Administrator Klaers stated the B-2 Zoning District redevelopment would be market driven and staff was prepared to manage both projects. Councilmember Holden asked if provision 3.1.1 would assure that the site would be developed from south to north. Mr. Norton stated the key would be the layout of the TCAAP Master Plan. He noted the City would have the right to say no to future developments that don't align with the Master Plan. He explained that if a developer was willing to cover the expenses of utilities, this would also have to be considered. Councilmember Holden inquired how the design standards would be addressed in Section 3.2.1. Community Development Director Hutmacher commented this would be clarified in the Master Plan. Councilmember Tamble questioned how much of the previous planning would be able to be reused (from the Ryan Development). Councilmember Holden suggested the TCAAP zoning be reviewed by the Council after the market study was completed to assure the planning was heading in the right direction. Councilmember Holden asked how dedication of land for public rights of way would be handled. She recommended this be further reviewed. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 8 Community Development Director Hutmacher stated this would be part of the Master Planning process. Councilmember Holden inquired if the County would be able to place special assessments on properties within TCAAP. Mr. Norton did not believe this would be possible. Councilmember Holden questioned who would be responsible for the developer RFP process. Mr. Norton commented that the JDA would be responsible for the developer RFP process. Councilmember Holden suggested the Master Plan be allowed to be amended on an annual basis. She also wanted to be assured that Comprehensive Plan Amendments were made in a cost efficient manner. Director of Finance and Administrative Services Iverson explained that Comprehensive Plan Amendments could be billed back to future developers to cover Staff's expense. She noted this could be written into the fee schedule. Councilmember Holden asked if the JDA could apply for grants. Community Development Director Hutmacher stated this would typically be done by the City, the EDA, or the County. i Councilmember Holden inquired why the City would be overseeing the final remediation of properties and suggested this remain with the County. i Mr. Norton recommended this remain as written as it would assure that developers have properly met all MPCA requirements prior to any development taking place. i Community Development Director Hutmacher explained this would not differ from the current process used by the City. Councilmember Holden asked why the City would be responsible for jointly requesting legislative bonding with the County. Councilmember Holmes was troubled by this language. Mr. Norton stated the County and the City were partners and the County wanted to be assured that the City was backing their requests. He indicated the largest expenses for this development would be the off-site transportation. Councilmember Holden suggested the "will"be changed to "may". Mr. Norton commented the intent would be to have the City lobby on behalf of the County to receive State or Federal bonding. i ARDLN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 9 City Administrator Klaers clarified that the lobbying would have to be agreed upon by both parties. Mayor Grant stated Section 3.7.2.3 does not state "the City shall recover". Mr. Norton indicated he would amend this section. Councilmember Holden asked if park dedication fees would be paid to the City or the JDA. Community Development Director Hutmacher commented this would be collected by the JDA and forwarded to the City to assist with park capital costs. Councilmember Holden questioned if the City should have to pay the fair market value on the property as noted in Section 5.6, if the County were to default. Mr. Norton stated the land would have more worth once remediated and utilities were installed. Councilmember Holmes did not anticipate the City would ever purchase any of this property. Councilmember Holden inquired who would have ownership of the AUAR and the Master Plan. Mr. Norton explained the City will draft the AUAR and the TCAAP Master Plan. The City and County would have joint ownership of the Master Plan. He noted this would be a public document and not a private document, as was the case with Ryan Development. Councilmember Holmes asked if binding mediation or arbitration should be mandated in the case of any disputes. She stated mediation was less expensive than taking the County to court. Mr. Norton recommended the language remain as is. Councilmember Holmes suggested that if one party were to act fraudulently that the other parry have their investment returned in full. Mr. Norton noted there was a section within the JPA covering defaults. Councilmember Holden questioned if a developer could purchase a 50 acre parcel and sit on the land. Public Works Director Maurer explained there would be huge holding costs as assessments would begin on the land as soon as it was sold. Councilmember Holden inquired if the properties sold within TCAAP would have deed restrictions. Mr. Norton stated deed restrictions would not be set on the parcels. He indicated through proper title review, the properties would have a Phase I completed in the future, prior to the resale of the properties. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 10 Councilmember Holmes asked if the City wanted to draft language into the Master Plan to assure the land was not purchased by other cities or other non-profits. Mr. Norton commented he would research this further. Community Development Director Hutmacher stated non-profit language was already written into the Comprehensive Plan. Councilmember Holmes questioned if the chair of the JDA should be further clarified. At this time, the language allowed for this position to be appointed as a non-elected member. Mr. Norton stated the language was drafted to allow for maximum flexibility and assumed a resident of Arden Hills would be selected. Councilmember Holden suggested language be added to assure that the chair of the JDA would be a current resident of the City of Arden Hills. i Councilmember Tamble and Councilmember Holmes agreed. i Mr. Norton explained he would revise the document based on the comments provided by the Council this evening and provide a copy for the Council to review internally. He anticipated the County would be considering the document next week. City Administrator Klaers stated the JPA would be coming back to the Council on November 26th for approval. B. 2013 Proposed Final Budget& Tax Levy Director of Finance and Administrative Services Iverson explained that after discussions in September, the preliminary tax levy was set at 3%. She noted this levy increase provides no opportunity to build fund balances in capital funds. It was noted the final budget includes the use of$20,453 in reserves to balance the budget. I Councilmember Holmes asked if the 2013 budget included anticipated consulting fees for TCAAP. Director of Finance and Administrative Services Iverson indicated there were funds set aside for TCAAP consulting fees in both the 2012 and 2013 budgets. I C. 2013-2017 CIP Director of Finance and Administrative Services Iverson explained that as part of the 2013 budget process, a five-year capital improvement plan is prepared. Staff requested the Council discuss the preliminary CIP and provide direction for Staff. Councilmember Holden questioned why gateway signs were at $50,000. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 11 Community Development Director Hutmacher stated this covered the expense of the signs, landscaping and lighting. She noted the signs proposed for 2013 would be located at County Road 96 and Lexington Avenue and on the triangle parcel. Councilmember Holden was in favor of reducing the gateway sign expense to $30,000 in 2013. Councilmember Holmes asked if assessments MSA funds, and g rants were written into the CIP to assist with funding the expense of major road reconstruction projects. Director of Finance and Administrative Services Iverson reviewed the location of these line items in detail with the Council. Councilmember Holmes requested further information on the County Road E project. Public Works Director Maurer discussed the County Road E project noting the project was divided into two projects and was reduced to $2 million. Councilmember Holden was in favor of removing $5,000 from the park bench fund as the City had an adequate amount of park benches. She also requested the Freeway Park landscaping be reduced to $5,000. Public Works Director Maurer stated he would be discussing this item with the PTRC as the proposed area to be landscaped was used for snow storage and he questioned if the proposed landscaping would survive. Councilmember Holden recommended that this item be removed from the CIP altogether until a recommendation comes forward from the PTRC. Mayor Grant requested information on Lift Station 411. Public Works Director Maurer commented the City was hoping to eliminate this lift station in the future. Councilmember Holden questioned which water tower would be improved first. Public Works Director Maurer stated the south water tower was in the worst condition, but would cost the most to renovate. The tower was proposed to be painted inside and out, along with minor structural improvements. He noted the other tower was set to be repainted in 2015. 3. COUNCIL COMMENTS AND STAFF UPDATES City Administrator Klaers commented the EDA would need to meet on November 26th to discuss several items. The Council was in favor of meeting prior to the Council meeting. City Administrator Klaers noted he and other staff members interviewed attorneys and would have a recommendation for the Council on November 26th. The Council requested the item appear on the Consent Agenda for approval. ARDEN HILLS CITY COUNCIL WORK SESSION—NOVEMBER 19, 2012 12 ADJOURN I Mayor Grant adjourned the City Council Work Session 7eng a Patrick Klaers David Grant City Administrator Mayor I I i I it