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HomeMy WebLinkAboutItem 06.c CITY OF LAKEVILLE CITY COUNCIL WORK SESSION MINUTES May 11, 2015 Mayor Little called the meeting to order at 6 p.m. in the Marion Conference Room at City Hall. Members Present: Mayor Little, Council Members Swecker, LaBeau, Anderson and Davis Staff present: Justin Miller, City Administrator; Allyn Kuennen, Assistant City Administrator; Char Friedges, City Clerk; Deputy Police Chief John Kornmann; David Olson, Community and Economic Development Director; Chris Petree, Public Works Director; Zach Johnson, City Engineer; Jerilyn Erickson, Finance Director; Julie Werner, Senior Accountant; Judi Hawkins, Deputy City Clerk 2. Citizen Comments: None 3. Discussion Items: a. Best Practices - Tobacco Deputy Police Chief John Kornmann stated that the Police Department and the City Clerk are recommending two changes to the tobacco ordinance. 1. When considering approval or denial of a tobacco license, the applicant’s prior convictions for narcotic and drug paraphernalia possession are currently not taken into consideration. Many items sold along with cigarettes are later connected to illegal narcotic use such as marijuana or crack pipes. Staff is recommending additional language to include prior narcotics convictions as a criteria for license denial. 2. There is currently no Best Practices Training for tobacco being administered by the Police Dept., as indicated in the ordinance. This voluntary program offered training and incentives to license holders; however, the police department does not have the resources to offer training for the 31 licensed establishments. Staff proposes to eliminate all language in the tobacco ordinance which refers to Best Practices and continue to conduct compliance checks, which have been shown to be a strong deterrent to selling to minors. Staff also is proposing a revised schedule of penalties for failed compliance checks within a 24-month period including tobacco products and e-cigarettes. Council Member Davis asked how fines are currently being assessed. Staff stated that fines are assessed based on the Best Practices schedule, even though there is no program. City Council Work Session May 11, 2015 Page -2 - Mayor Little asked if the Clean Indoor Air Act could be expanded in Lakeville to ban e-cigarettes. Other Council members agreed and directed staff to work with the City Attorney’s office to prepare a draft ordinance. Council members directed staff to prepare an ordinance for consideration that would eliminate Best Practices for tobacco; include expanded criteria for tobacco license denial; and extend the Clean Indoor Air Act to prohibit the use of electronic delivery devices in all public places in Lakeville. b. County Road Turn Lane Improvement Policy Dave Olson introduced Mark Krebsbach, Dakota County Transportation Engineer. Also in attendance were representatives of APPRO Development and NPL, which is currently expanding their business along CSAH 70. Dave Olson stated that both the FedEx Freight project and NPL are impacted by the County’s decision to require turn lane improvements on CSAH 70 as part of the County’s Access Permit requirements. The developers have expressed concerns about whether funding both right and left turn lane improvements is reasonable and equitable since both sides of the County road will benefit from the improvements. Mr. Krebsbach stated that the current county right of way ordinance authorizes the County Engineer under reasonable conditions to require accesses to be added to the highway system when necessary to protect the right of way and maintain the safety of the traveling public and to mitigate the impact of the new access. MnDOT standards require left turn lanes for commercial or industrial driveways or public residential streets with 10 or more homes. Access Permit applicants are required to build reasonable roadway improvements at their expense. At times a new access only requires removal of the median and addition of curb; however, occasionally another lane of pavement is required for the installation of right and left turn lanes. Turn lanes are necessary in high traffic areas and lower the crash rates considerably. The County recognizes that it is most cost effective to build left turn lanes at both the existing access point and the new access point at the same time. The County Board supports participating in the cost of the left turn lane for the existing access but not the access being necessitated by the new development. Because there is a turn lane being built on each side, the County is proposing to pay 55% of half of the left turn lane costs. The City is being asked to participate in the remaining 45% of half of the costs. The developer would pay the remaining costs. A JPA between the City and County would allow the transaction to take place. Due to the substantial costs for improvements and the burden on individual developers, the County believes this proposed policy change and cost sharing is fair and equitable for this City Council Work Session May 11, 2015 Page -3 - situation and for future similar circumstances county-wide. Participation costs would vary based on several factors and projects would be subject to the availability of safety management funds. Mr. Krebsbach briefly described each of the intersections in question. The FedEx project is currently under construction at CSAH 70 and Humboldt Court. This intersection also serves several residences. Left turn lane costs are estimated at $320K, making the county’s share approximately $88K based on the proposed policy. The NPL site has private access connection through the adjoining lot at CSAH 70 and Heath Avenue. The County anticipates including this project with one of the larger county projects to take advantage of more favorable pricing. The County’s cost is expected to be $60-80K. In future situations of two-lane rural undivided high-speed roadways where there are no existing accesses, a temporary bypass lane would be required. This would become half of the future left turn lane when the land across the county road is developed. Council Member Swecker asked if the amended participation policy would apply whether or not cities entered into a JPA with the county. Krebsbach stated that the JPA is for the purpose of the county contributing funds to an improvement project on a city-owned road. Whether the city wishes to contribute to the other 45% or require the developer to pay the cost would be up to the City. Mr. Krebsbach anticipates that similar project circumstances will occur in the future, but it is unlikely that two projects will come up simultaneously again. The County Board has approved funding for these two projects. Mayor Little believes required the improvements could be a disincentive for future development and believes the costs are not distributed fairly among the benefited property owners. Anderson doesn’t believe one developer should have to cover all the costs; he suggested more of the costs be borne by the County to help impact future economic development. Krebsbach stated that the policy is a way for the County to contribute financially through the cities with a goal of providing necessary left turn lanes for existing situations, not necessarily to encourage new development. Jack Matasosky from APPRO Development appreciates working with the County and City staff on these necessary safety improvements. The future NPL site is bearing a huge cost for the turn lanes even though the properties to the north also benefit. The NPL president stated that he realized there were some road improvements needed but was not aware that they would need to pay for them. Krebsbach estimated that the County’s 55% share of half would be $60-80,000 and the City’s share about $45-70,000. If the City were to pick up 45% of half of the project, the developer’s cost would be approximately $180-200,000. LaBeau asked if there is a way to shift some of the burden to other businesses that would utilize this improvement. Olson stated that only businesses with frontage can be charged for road improvements. City Council Work Session May 11, 2015 Page -4 - Swecker added that the purpose of the left turn lanes is not to improve the road but to improve safety. There is a long-term benefit to not only this company but employees of other businesses also. However, the improvements are not budgeted and she is concerned with funding. Krebsbach stated that the safety need is driven by the additional access onto CR 70 and the need to accommodate an additional leg of an intersection. Existing intersections with current traffic volumes function effectively. From Dodd Blvd. to the east, the roadway will function for several years and the proposed improvements will delay the need for a total upgrade of CR 70. Davis compared the FedEx 46-acre site and the amount of traffic that will be generated to the NPL 5-acre site; he is not comfortable with the fact that they are paying approximately the same for the turn lanes. NPL believes it is important for them to have a full intersection. Olson stated that the primary access for FedEx will be off of Dodd and 217th Street. Mayor Little believes the developer who spearheads or creates the need shouldn’t have to pay the entire amount of the intersection. He believes the City needs to adopt some parameters before encountering similar situations and entering into JPAs for 45% of the costs. He supports assisting with the cost of these two intersections but policy discussion is needed. Mr. Krebsbach apologized for the lateness of approaching the City with this proposal. Swecker stated that the three things to consider are: 1) whether the City is willing to participate in the cost share; 2) what the County Board determines will be their future policy; and 3) a funding source, since this is not part of the 2015 budget. Mr. Miller stated that if Council will participate then staff will present some funding options to Council. Swecker stated that she would support these projects and related JPAs but is not ready to make a long-term policy decision without a funding plan. Little stated that the County is willing to invest in Lakeville and it’s an opportunity to achieve improved roadway safety at a good value for the City’s dollar. LaBeau would like to distribute the project costs so that one business owner is not bearing such a large percentage of the costs. Anderson agrees that Council needs to adopt a policy on participating financially; there could be situations when the City provides even more than a 45% share. He is also concerned about the burden on the first developer who creates the need. Davis supports the 45/55% split policy and wishes to discuss the City’s participation in this situation with NPL. Possibly the agenda item regarding the 2015 bond issuance will offer insight on funding. Council members directed staff to place the JPA with Dakota County on a future Council agenda for consideration. City Council Work Session May 11, 2015 Page -5 - c. County Road 50 Economic Development Study Update Chris Petree stated that at Council’s direction Wilson Development Services has been contracted to assist with relocation and acquisition as part of this study. Staff will be meeting with the Wilson representatives later in the week and they will begin working with property owners shortly thereafter. Two acquisitions will be necessary to accomplish the backage road concept; both of those appraisals are complete as well as three of the four single-family homes. Wilson Development Services will begin negotiations with the property owners as soon as possible; staff will provide a progress update at the June work session. Anderson asked if Springsted had been brought into the economic development discussions. Olson stated that it will depend on some of the businesses’ decisions and the status of properties after negotiations. Anderson is concerned that businesses are anxious to learn their ultimate options and be able to move forward. Mr. Miller stated that the City has shared their drawings and property owners who have decided to expand as part of the backage road access have begun making plans with their own architects. Petree believes it is premature to work with Springsted until negotiations with the property owners are complete. Mayor Little stated that he has received many compliments on how well staff is handling the process. d. Springsted Bond Update Finance Director Jerilyn Erickson stated that the 2015 Street Reconstruction project is being broken into two phases for construction and for bonding. There are several additional projects in the works that will be funded by Water Trunk Fund and a subsequent bond issue with no property tax component. The 2015 Street Reconstruction project is approximately $17M. Erickson presented terms, impacts on debt service levy, overall levy and fund balance. Swecker requested that for clarity purposes the verbiage be changed from bond issue to bond issuance. Erickson provided clarification of how the proposed allocation of unencumbered funds would impact the bond offer. Anderson asked about the City’s credit rating and anticipated terms for the bond. He also asked about the 29-year payback option. Dave MacGillivray from Springsted stated that the City of Lakeville was last rated in 2013 and has an exceptionally high Moody’s General Obligation rating of AA1 which is the second-highest possible. About 60% of a city’s rating comes from socio- economics and internal financial status including GF fund balance, on which Lakeville scores very high. Other factors are governance and management, and debt which takes into account taxes from the school district and county. Lakeville scores high due to diversification of repayment sources, i.e., water utility, state aid, assessments, etc. MacGillivray anticipates that the City’s bond rating will remain stable. City Council Work Session May 11, 2015 Page -6 - Council Member LaBeau asked what Mr. MacGillivray believes is an appropriate general fund balance necessary to maintain the credit rating and be prepared for emergencies. MacGillivray stated that for the credit rating to remain at AA1 or possibly go to AAA he recommends 40-50%. Below 40% is detrimental to the credit rating and interest rates. Regarding the 29-year bond payback, MacGillivray stated that the percentage of property owners who chose that option is very small so the cost will be minimal. Ms. Erickson stated that only 23 property owners had chosen the 29-year bonds, which equates to a total of approximately $180,000. Erickson asked Council to consider the fund balance policy and in what area they would prefer flexibility for cash flow and unanticipated expenditures. The 2015 Budget includes an increase in the fund balance. Erickson recommends retaining reserves to cover unanticipated expenses, but funds could also be used to reduce the bond issue. Previous council direction was to allocate $50,000 in levy dollars and $100,000 from the 2014 unencumbered fund balance towards the 2015 street project. Staff recommends appropriating an additional $200,000 toward the 2015 bond issuance which would bring the fund balance to approximately 42.5%, and $200,000 to Phase II of the project in 2016. MacGillivray anticipates an interest rate of about 3.3% for the 2015 bond. Springsted will also be exploring opportunities for refinancing previous bonds. Council members directed staff to appropriate a total of $350,000 toward the 2015 Street Reconstruction Bonds. Staff will bring resolutions forward for Council consideration. One resolution is to approve a Declaration of Intent to Bond and will include details of all potential bonding options for this year. A second resolution will be attached to the CIP for the purpose of providing flexibility but no obligation to issue bonds, and transparency. A third resolution formally authorizing budget amendments and transfer of encumbered funds will also be brought forward for consideration. e. CVB Bylaw Changes During the board liaison appointment process Council discussed reducing the number of City representatives on the Convention and Visitors Bureau (CVB) Board from one elected official and one employee to just one Parks and Recreation Dept. employee. To formalize the change an amendment to the agreement between the City and the Chamber of Commerce is needed. Council members directed staff to prepare an amendment to the agreement for consideration. f. Four-year Mayoral Term At their March retreat, Council discussed possibly changing the mayoral term from two to four years. A change would require an ordinance amendment which would need to be done at least four weeks prior to the 2016 filing period. Mayor Little stated that the topic has been discussed City Council Work Session May 11, 2015 Page -7 - several times over the years and he does not support extending the term to four years. LaBeau stated that many people ask her why the term isn’t four years and she would be in favor of the change. Anderson stated that Lakeville is one of just a few cities who still have a two-year term and it makes sense from a learning curve aspect. He would be in favor of a four year term but would like the opportunity for public discussion. Little believes there are situations when an opportunity to change leadership in two years might be beneficial. Anderson believes it would be unusual for the residents to elect two new Council members and a new Mayor all at the same time. Swecker agreed that if the Mayor isn’t working out after two years the citizens can change; however, campaigning is a huge time commitment. Little believes that good work by the mayor as well as contact with the public should be an ongoing part of the position. Davis believes a two-year term could be a potential disincentive to run for the office. Swecker stated that the current structure has functioned well for a long time. Anderson stated that four-year terms also work for other cities, as two-year terms work for Lakeville. Council members directed staff to publicize that a citizen comment period will be held at the June 15, 2015 City Council meeting for the purpose of soliciting public opinion on whether to change the mayoral term from two years to four years. Council will then discuss the item again at a subsequent meeting prior to voting on the issue. 4. Adjourn The meeting adjourned at 8:22 p.m. Respectfully submitted, __________________________________ Judi Hawkins, Deputy City Clerk __________________________________ Matt Little, Mayor