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HomeMy WebLinkAbout10-17-11CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 2011 Mayor Bellows called the meeting to order at 7:00 p.m. Webelo Pack 1 1 1 presented the colors and led the pledge of allegiance to the flag. Present: Mayor Mark Bellows Council Member Matt Little Council Member Colleen LaBeau Council Member Kerrin Swecker Council Member Laurie Rieb Also Present: Roger Knutson, City Attorney Steve Mielke, City Administrator Tom Vonhof,.Police Chief Zach Johnson, Acting City Engineer Dennis Feller, Finance Director Steve Michaud, Parks & Recreation Director Chris Petree, Operations & Maintenance Director Daryl Morey, Planning Director Charlene Friedges, City Clerk Citizens' Comments None Additional agenda information Mr. Mielke provided revised minutes of the September 26th Council work session and a revised delinquent utility certification list. Presentations /Introductions Fire Chief Mike Meyer introduced newly appointed Lieutenants Brian Kluck and Chad Ubl and administered the oath of office to the new lieutenants. Lieutenant Steve Glinski was unable to attend the Council meeting. Chief Meyer presented the Fire Department third quarter report. Steve Michaud introduced Brian Roseen, Lakeville Baseball Association Miracle League Director. Mr. Roseen recognized and introduced the major sponsors of the South Metro Miracle League Baseball Field. He thanked these major sponsors and the many other companies and individuals who helped make this project possible. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER,17, 2011 Page 2 Mr. Michaud introduced Dave Martinson, owner of Helm Electric, recognizing his many years of volunteer service and donations to the City of Lakeville. Helm Electric donates electrical service and equipment for many large community events and provides electrical and consulting services to the City's maintenance departments at no cost to the City. Mr. Michaud presented the September monthly report of the Parks & Recreation Department. Chief Vonhof presented the September Police Department monthly report. Mr. Olson requested the City Council proclaim October 24 -28 Minnesota Manufacturers Week. Council Member Rieb read the proclamation. Jim Emond, Sr. accepted the proclamation on behalf of the Economic Development Commission. Consent Agenda Council Member Little asked that Item 6i be removed from the consent agenda for discussion. 11.65 Motion was made by Rieb, seconded by Little to approve the consent agenda items as follows: a. Claims for payment. b. Minutes of the October 3, 2011 City Council meeting. C. Minutes of the September 26, 2011 Council work session. d. Resolution No. 11-109 accepting donations to the Heritage Center. e. Resolution No. 11 -110 calling public hearing to assess weed /grass removal. f. Resolution No. 1 1 -1 1 1 authorizing the sale of liquor store premiums and other city assets. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 2011 Page 3 g. Resolution No. 1 1 -1 12 approving the final plat of Crescent Ridge Second Addition; and Crescent Ridge Second Addition Escrow Agreement. h. Resolution No. 1 1 -113 approving the final plat of Spirit of Brandtjen Farm 8th Addition. (Removed from consent agenda.) j. Resolution No. 1 1 -1 14 calling public hearing on the imposition of a service charge in Special Service District No. 1. Roll call was taken on the motion. Ayes, unanimous. Item 6i - Electrical Inspection Services Council Member Little voiced his opposition to eliminating the City's electrical inspector position. He was concerned that a contracted inspector would not provide the high quality service that an in -house inspector provides. He stated he wished to obtain some feedback from other cities that have gone to a contracted electrical inspection service before issuing a Request for Proposals. 11.66 Motion was made by LaBeau, seconded by Swecker to authorize staff to issue a Request for Proposals for contracted electrical inspection services. Council Member Swecker pointed out that the City Council could go back to a staff inspector if it determined in the future that the contractual arrangement is not working. The City Attorney and City Administrator explained that a termination clause would be incorporated into the contract. Roll call was taken on the motion. Ayes, Bellows, Swecker, LaBeau, Rieb. Nay, Little. Item 7 - Certification of Delinquent Utilities Mayor Bellows opened the public hearing on the certification of unpaid water, sanitary sewer, storm sewer and street lighting charges. The City Clerk attested to legal notices being duly published and mailed. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 2011 Page 4 Mr. Feller presented the list of delinquent accounts. The total amount proposed to be assessed is $173,120. (Any credit card payments received on October 17th will be processed, and those accounts will be removed from the certification list before it is forwarded to Dakota County.) There were no public comments. 11.67 Motion was made by Rieb, seconded by Little to close the public hearing. Roll call was taken on the motion. Ayes, unanimous. 11.68 Motion was made by Swecker, seconded by Rieb to approve Resolution No. 1 1 -1 15 certifying unpaid water, sanitary sewer, storm sewer and street lighting charges to the County Treasurer /Auditor to be collected with other taxes on said property. Roll call was taken on the motion. Ayes, unanimous. Item 8 - Liquor Operations Economic Impact Study Liquor Director Brenda Visnovec introduced Shenehon Company President Bob Strachota and Vice President Scot Torkelson, who presented an executive summary of the Lakeville Liquors Economic Impact Study. He indicated that Shenehon Company was asked to study: 1. Economic impact on retail development from operation of municipal liquor stores in the city; 2. Financial impact comparison of Lakeville with municipal liquor operations to the alternative of licensed private liquor stores; and 3. Economic impact on Lakeville's revenue from liquidation of municipal liquor stores (real estate and businesses) and improved tax base with potential new development. Mr. Torkelson presented the results of their study, highlighting the following points: Of the 15 top retailers located in the Twin Cities Metro Area, seven were already located in Lakeville. Of the top 15 retailers, every one had retail locations in a city with municipal liquor. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 201 1 Page 5 Municipal liquor stores do not impact retailers locating in the city. The most important driver of retail locations is demographic. Lakeville has a higher per capita retail build -out space (19.1 square feet per capita) than other edge of MUSA cities, which average 16.7 square feet per capita. Municipal stores have a lower per capita square footage presence than private liquor stores and serve more people per store. Municipal stores tend to be located further from residential neighborhoods. In a private liquor store licensure scenario, it is likely that a majority of any new stores would locate in existing shopping centers. Private liquor stores generally operate smaller facilities with narrow margins, and any financial contributions or philanthropic endeavors by local liquor retailers tend to be limited. Municipal licensing should not be viewed as a significant source of revenue. In Minnesota, license fees must approximate the direct and indirect costs in issuing the license and policing the licensed activities. Considering the loss of municipal liquor store contribution of income to the city, the average residential property owner would pay approximately $46 more, and an average commercial - industrial property owner would pay approximately $223 more, in property taxes. The City of Lakeville's three stores provide annual cash flows estimated at $1,175,000. An amount equal to an estimated $112,000,000 of retail construction would be needed to replace these cash flows. The net proceeds on the sale of the three municipal liquor businesses and two buildings are estimated to be $6,490,339. Under rules governing city investments, the rate of return for the foreseeable future would be I%. This compares to the 18% rate of return achieved by the existing municipal liquor stores. Council Member Little asked Mr. Torkelson to address Costco and Trader Joe's. Mr. Torkelson explained that Costco siting criteria is very focused on super regional shopping centers. Costco has located in Eden Prairie, where municipal liquor stores preclude private off -sale liquor. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 201 1 Page 6 Trader Joe's tends to develop smaller neighborhood stores, ideally within communities of couples with no kids. Lakeville's demographics would not currently attract a Trader Joe's. In response to Council Member Little's question, Mr. Strachota stated Lakeville does not have the demographics to support an estimated $112 million in additional retail construction (20 to 40 large commercial developments) . Ms. Visnovec reported that the City's Finance Committee reviewed and recommended that the analysis was adequate and sufficient to reach the conclusions presented. Mayor Bellows stated he is strongly biased toward private sector versus public sector sale of liquor. He stated he doesn't feel the study addressed the questions regarding Costco; and he heard very recently that there is another big box retailer interested in the 1 -35 /CR 70 intersection and that the liquor issue is going to surface once again. He felt the study was short- sighted in that it did not address the viability of leasing buildings and entertaining lease options with major retailers. Tim Ross, 7770 — 202nd Street W., asked if communities with private liquor stores receive a percentage of the proceeds from liquor sales. Mr. Mielke responded that in a community that does not have municipal liquor, it is not legal to take a percentage of the profits. Council Member Swecker stated she felt the study was extremely thorough and that Shenehon Company was very well qualified. She stated the study confirms the profitability of Lakeville's liquor operation. Council Member LaBeau stated she is concerned with spending money for land to expand "the City's liquor operation and felt that the study did not address that issue. She also felt that the study should not have compared the value on the sale of the existing stores to a private liquor business. Council Member Little stated the City has very few options to replace the $1.1 million revenue that the liquor operation currently generates. The study reiterates his initial position that the liquor operation is profitable and reduces property taxes for Lakeville residents and businesses. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 201 1 Page 7 Council Member Rieb stated she felt the study was well done and made the bottom line very clear. She explained that while it is something the Council will need to discuss, it has not yet been determined what the next step in this process will be. 11.69 Motion was made by Swecker, seconded by Little to accept the Lakeville Liquor Economic Impact Study. Roll call was taken on the motion. Ayes, unanimous. Item 9 - Sale of Senior Center, 20732 Holt Avenue Mr. Olson presented a resolution authorizing the listing of the Lakeville Senior Center property, located at 20732 Holt Avenue, for sale. He explained that the property was appraised in March of this year. Based on that appraisal, staff recommends a listing price of $380,000. The City will advertise this property on several commercial real estate websites along with City newsletters and the City's website. Mayor Bellows asked if the sale would be contingent upon the Council's review of the bids for the Heritage Center construction project. Mr. Mielke stated the sale would be contingent upon the Council's approval of plans and specifications and an estimated project cost for Heritage Center. He explained that the bids will include alternates and contingency plans so that the project is flexible and remains within the budgeted amount. Council Member LaBeau asked if staff is planning to obtain another appraisal on the property, as the current appraisal is substantially less than what the City paid for the structure and seems low. Mr. Mielke stated staff is not considering obtaining another appraisal; however, staff is recommending a percentage on top of the current appraisal. 11.70 Motion was made by Rieb, seconded by Swecker to approve Resolution No. 1 1 -116 authorizing the listing of the Senior Center property, 20732 Holt Avenue, for sale. Roll call was taken on the motion. Ayes, Rieb, Swecker, Little, LaBeau. Nay, Bellows. Mayor Bellows stated his vote is consistent with his opposition to a project that he feels lacks vision for the community. CITY OF LAKEVILLE COUNCIL MEETING MINUTES OCTOBER 17, 2011 Page 8 Unfinished business None New business Council Member Rieb announced that she and Council Member Swecker have submitted a request for a special meeting of the City Council to discuss meeting decorum and processes. Staff will schedule a meeting for some time after October 31 St. Announcements - Haunted Forest, October 22nd at North Park Next regular City Council meeting, November 7th Council work session, October 24th Mayor Bellows adjourned the meeting at 8:45 p.m. Respectfully submitted, Charlene Friedges, Cf f y Clerk M ,k) i( Mark Bellows, Mayor