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102708 CC WS AgPCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, OCTOBER 27, 2008 AGENDA 1. CONVENE CITY COUNCIL WORK SESSION A. Roll Call 2. 3. 4. 5. B. Review Agenda LEGAL SERVICES RFP (Administrator's memorandum) Mayor Lizee Woodruff Turgeon Bailey Wellens DISCUSSION RE: GOING OUT OF BUSINESS SALE ORDINANCE (Att. - Administrator's memorandum) CITY OWNED PROPERTY AT 5795 COUNTRY CLUB ROAD (Att. -Administrator's memorandum) ADJOURN 5735 COUNTRY CLUB ROAD SOUTHSHORE CENTER 6:00 P.M. CITY OE SHOREWOOD 5755 COUNTRY CLUB ROAD •SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us MEMORANDUM TO: City Council FROM: Brian Heck, City Administrator '•_..~-~` DATE: October 22, 2008 ~~~'' SUBJECT: Legal Services RFP The City Council directed staff to prepare a Request for Proposals for Legal Services. Staff completed the RFP and distributed the document to several firms as well as placed an announcement on the League of Minnesota Cities website. A total of twelve thirteen packets were sent and seven firms submitted proposals. I reviewed the proposals and sent each of the responding firms a request to clarify their fees to include a flat fee for general legal services at approximately 14 hours per month and hourly fees for litigation work, labor relations work, and other work not identified in the general legal, labor relations or litigation. I asked each the department director to review the proposals and provide their feedback and ranking of firms. The Department heads all agreed on the following firms, in no particular order, for the council to consider: LaVander, Gillen and Miller; Malkerson, Gilliland, and Martin; Kennedy and Graven; and Campbell and Knutson. Staff feel Johnson and Condon is too focused on litigation their area of focus, insurance and workers compensation, do not fit with the broad scope of services required by Shorewood. Furthermore, their contract price is significantly higher than the others. The firm of Couri, McArthur, and Ruppe we feel is too small and inexperienced in some of the areas Shorewood will need services and advice. Ratwick, Rozak, and Maloney did not respond to my request for clarification of fees. Further, staff feels this firm's focus is mainly litigation based and not in general practice. Attached is a comparison of the firms. Recommendation: staff recommends the city council interview representatives from the selected firms on Wednesday, November 5,'2008 following the canvassing board. The recommended firms to consider are: Malkerson, Gilliland, and Martin; LaVander, Gillen, and Miller; Kennedy and Graven; and Campbell and Knutson. ®s 7j®«' PRINTED ON RECYCLED PAPER 4 '~ CITY OF SHOREWOOD LEGAL SERVICES RFP OCTOBER 2008 RFP Components Malkerson Gilliland and Martin Johnson and Condon LeVander Gillen and Miller Kennedy and Graven Couri McArthur and Ruppe Campbell and Knutson Ratwik, Rozak and Maloney Years of Municipal Practice 12 ears 25 years 50 plus years 50 20 22 21 Area of primary practice Real estate, land use, eminent domain, and public law Insurance liability litigation and Worker's compensation See page 2 See page -1-3 General Municipal Law See pg 10 -11 See page l Percent revenue from municipal practice No Answer Less than one percent 39% municipal / 61% private 90% 95% 80+% 99% Partners I Shareholder 4 13 10 26 3 7 14 Associates 6 18 4 8 2 6 8 Paralegal 3 10 4 8 0 1 Support Staff yes 32 10 18 1.5 9 7 Cities represented 2 - see pg 1 No general municipal practice clients - see pg 8- 9 7 - see pg 10 28 -see page 12-13 13 -see page 7 21-see page 1 12 -see page 10. Primary Attorney Tim Keane - See pg 2-3 Shamus O'Meara See pg 4- 5 Jay Karlovich see pg 3-4 Mary Tietjen see page 8- 10 Robert Ruppe see pg 3 Andrea Poehler - see pg 1 Jay Squires - see pg 3 Secondary Attorney(s) Bruce Malkerson, primary see pg 3 Mark Condon primary - see pg 5. Others see pg 6-8 Timothy Kunz primary - see pg 5. Other attorneys see page 5-6 Sarah Sonsalla (primary back up) See page 10. Other support attorney's see page 11-12 Mike Couri see pg 5 Tom Scott (principal back up) pg 2 Roger Knutson pg 2; Soren Mattick pg 2 Joe Langel - pg 3; Margaret Skelton - pg 3. Malpractice Insurance Yes, $5,000,000 Yes, 5,000,000 Yes, $2,000,000 Yes, $5,000,000 Yes, $2,000,000 Amount not included Yes, 2,000,000 Malpractice/ Ethics complaints None None Two see page 3 One malpractice -see age 7 One see page 2 None No Malpractice; four ethics - a e 9 Description of Services General Legal Matters Pg 2 - 3 Tim Keane /Bruce Malkerson Shamus O'Meara pg 4; Mark Condon pg 5 Jay Karlovich see pg 6; Timoth Kuntz pg 6 Yes, see pg 3 Mary Tietjen Robert Ruppe See pg 6 Andrea Poehler see pg 5 Jay Squires Litigation Yes see g 3 Yes Yes see pg 7 Yes, see pg 5 Yes see 7 Yes see pg 7 Yes see 4 Zoning, platting, and land develo went Yes, see pg 3 Unknown Yes, see pg 8 Yes, see pg 4 Yes, see pg 6-7 Yes see pg 6 Yes see pg 5 Labor and Employment Day to day - in house -other issues referred out. See pg 4 Yes see pg 7 Yes see pg 7 Yes see pg 4 Andrew McArthur Yes see pg S Yes see pg 7 Municipal Finance N/A see g 4 N/A TIF yes see g 8 Yes, bonds, of see pg 5 Limited see pg 7 429 financing Limited see pg 6 Zoning and code enforcement Yes, see pg 4 Unknown Yes, see pg 4 Unknown Yes see pg 7 Unknown Other Condemnation see pg 4 Franchise see 9 See g 4-5 See pg 6-7 See pg 6-7 See pg 7-8 General Matters $2,000 month $2,750 month $1,500 month; $1,500 $2,175 $2,000 $155 Codellitigation $9,940 - $12,425 $11,005-15,975 $9,940 $10,295 - $11,715 $10,295 $10,650 $155 Land use and development $3,280 - $4,060 Developer $3,596 - $5,220 $2,900 $4,060 - $4,640 $3,596 $3,480 $155 pass through developer pass through Labor and Employment $3,360 - $4,800 Lenard, $2,976 - 4,320 $2,400 $2,496 - $2,784 $2,784 $2,880 $155 Street and Dinard Other $3,906 - $4,883 $4,325 - $6,278 $3,487 $4,045 - $4,604 $4,045 $4,185 Mileage Inc. except out ofstate -then IRS Rate IRS Rate excludes mileage IRS rate Attorney time port to port IRS Rate actual cost to and from city hall except for council meeting Copying Inc. except for exceptional .25 .20 BW / .49 color .20 BW / 1,00 Color ,10 litigation only .20 page .20 page costs Legal research Inc Actual Actual Westlaw cost $3,00 minute Westlaw n/a Westlaw Actual cost Other Inc Actual Filing fees etc. actual cost Fax - .20 page all other Actual Actual cost inc. postage Fax 1.00 all other actual over .50 actual cost Time increment billed .1 hr .1 hr .l hr .l hr. .25 hr ,2 Total estimated annual legal $44,486 - $50,168 $54,902 - $64,793 $36,727 $38,896 - $41,743 $46,820 $45,195 $53,785 cost -copies, mileage, etc not included. Notes: Tim is currently the city Mainly an insurance Committed to fee structure Retainer fixed through Does work for LMCIT, Mainly litigation based, attorney and has been for litigation firm, Little through 2011. 2009, Subject to Does work for LMCIT several years practice in the area of adjustment in 2010 and general legal matters for on actual hrs for basic cities. Does work for services. Served as LMCIT Shorewood City Attorney for a short time. Does work for LMCIT CITY OF 5755 COUNTRY CLUB ROAD • SHOREWOOD, MINNESOTA 55331-8927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us MEMORANDUM TO: Mayor and City Council FROM: Brad Nielsen DATE: 23 October 2008 RE: "Going Out of Business" Sales FILE NO. Chapter 307 (Going Out of Business Sales Councilmember Wellens has requested that the City look into our current regulations relative to "going out of business" sales (see his e-mail message -Exhibit A). This item has been included on the 27 October Work Session Agenda. Cc: Brian Heck ,t ®~ ~~~ PRINTED ON RECYCLED PAPER Page 1 of Brad Nielsen From: Brad Nielsen Sent: Wednesday, October 08, 2008 10:54 AM To: 'Martin Wellens' Cc: Brian Heck Subject: RE: New Reform Hi Marty, While this is not my area, I will check into it for you. I believe it was in response to a rash of "going out of business" businesses. People would set up shop, advertise that they were going under, then just keep adding inventory and never really go out of business. I am guessing that the City's regs came from some sort of model, perhaps put out by MNLOC. I will see what I can find. Brad From: Martin Wellens [mailto:m.wellens@mchsi.com] Sent: Tuesday, October 07, 2008 9:23 PM To: Planning Cc: Brian Heck Subject: New Reform Hi Brad, A local businessman has requested that I review our going-out-of-business ordinances. I have and generally agree with the businessman that the requirements are enormously taxing and with little benefit. Specifically would like you to review the inventory provisions that are mandated. They seem incredibly cumbersome, time consuming, costly -and to what benefit? Why is our city clerk reviewing all these details? To what end? Why do we care what was sold and how it was obtained? Does our clerk verify the source of purchase? Why? How does the public benefit by knowing the date something was purchased by a business? It seems to me we could delete some of the inventory requirements, while leaving in the other rules to prevent abuse. I have highlighted language for review below. I request your feedback. Thank you, Shorewood City Councilman Martin R. Wellens 4755 Lakeway Terrace Shorewood, MN 5531-9367 952/250-1658 m.wellens mchscom CHAPTER 307 GOING OUT OF BUSINESS SALES 307.05 APPLICATION FOR LICENSE. Subd. 1. Any person desiring to advertise and conduct any sale of the type defined in this chapter shall apply to the City Administrator/Clerk on forms prepared by the city. The application shall be in writing and shall be in the name of the true owner of the merchandise to be sold. The application shall truthfully state: a. The name and address of the applicant, together with the names and addresses of all individuals who are members of the partnership, association or firm making the application; Exhibit A 10/23/2008 Page 2 of b. The type of sale to be conducted and the reason for conducting the sale; c. The address at which the sale will be held; d. The nature of the occupancy of the premises where the sale is to be held, whether by lease or sublease, and the date of termination of the occupancy; e. Whether or not the applicant has held any sale, as defined in this chapter, at the premises referred to in the application within one year last past from the date of the application; £ The date of acquisition by the applicant of the business with respect to which the sale is to be held; g. The names and addresses of the individuals who will have charge of the sale; h. An inventory which shall contain: (1) A legible, orderly, detailed, complete and accurate descriptive list of the merchandise to be offered for sale which inventory shall include only merchandise owned by the applicant which applicant expects to include in the sale located on the premises where the sale is to be held and in warehouses. The inventory may include all goods which have been purchased by the applicant for resale on bona fide orders without cancellation privileges and shall not comprise goods purchased on consignment. The inventory shall not include goods ordered in contemplation of conducting a sale regulated hereunder. Any purchase or additions made within 90 days immediately prior to the filing of an application shall be deemed an unusual purchase or addition and made in contemplation of having a sale as regulated by the terms of this chapter; provided, however, that in determining the average monthly inventory seasonable purchases and inventories shall be considered and adjusted; (2) Insofar as reasonably possible on the basis of available record data regularly kept by the applicant, the dates of acquisition of the merchandise, the names and addresses of the persons from whom obtained and the manner of acquisition. The inventory shall contain the cost price of the merchandise to be sold and the regular price at which the merchandise was sold prior to the making of the application for license. Subd. 2. The application and the inventory shall be executed and verified in duplicate under oath by the individual making the application or by a member of the partnership making the application or by the general managing officer or agent of the association, joint enterprise, firm or corporation, making the application and shall be filed in duplicate with the City Administrator/Clerk. (1987 Code, § 307.05) 307.06 LIMITATIONS ON GRANTS OF LICENSES. Subd. 1. Any person who has not been the owner of a business described in the application for license for a period of at least six months prior to the date of application shall not be granted a license. Subd. 2. Any person who has held a sale as herein defined at the location designated in the application within one year last past from the date of the application shall not be granted a license. Subd. 3. When any person applying for a license operates more than one place of business the license issued shall apply to only the named store or branch specified in the application, and no other store or branch shall advertise or represent that it is cooperating with it or in any way participating in the licensed sale, nor shall the store or branch conducting the licensed sale advertise or represent that any other store or branch is cooperating with it or participating in any way in the licensed sale. (1987 Code, § 307.06) 307.08 TERM; RENEWALS AUTHORIZED. Licenses issued hereunder shall be for a period of not to exceed 45 days. Upon satisfactory proof that all of the merchandise listed in the inventory attached to the original application has not been disposed of and that no items ofinerchandise not listed in the inventory have been or are to be sold at the sale, the City Administrator/Clerk shall investigate the truthfulness of the application and the supporting data and shall then recommend to the City Council the granting or denial of the renewal of the license for an additional 15 days and the fee for the renewal as provided from time to time by ordinance. In the event a second renewal for 15 days is applied for under the terms and conditions hereinbefore stated for the first renewal, the fee for the renewal as provided from time to time by ordinance for each day of the sale to defray the cost of daily supervision by the City Administrator/Clerk during the period of the sale. (1987 Code, § 307.08) 10/23/2008 Page 3 ofd 307.09 PROOF REQUIRED FOR RENEWAL. Proof as required above shall be furnished on a form prepared by the city. It shall be accompanied by an inventory which shall contain a legible, orderly, detailed, complete and accurate descriptive list of the merchandise then on hand unsold. The renewal application and accompanying inventory shall be executed and verified under oath by the individual making the application, by a member of the partnership making the application or by the general managing officer or agent of the association, joint enterprise, firm or corporation making the application. (1987 Code, § 307.09) 307.10 DEADLINE FOR RENEWAL APPLICATION; NUMBER OF RENEWALS. All applications for renewals must be made not less than ten days prior to the expiration of the existing license, and no more than two renewals shall be granted for any sale for the sale location. (1987 Code, § 307.10) 307.11 CONDITIONS OF LICENSE. The licensee shall have the privilege of conducting a sale as defined in this chapter upon the following conditions. Subd. 1. The sale shall be conducted on the premises specified in the application during the period of the license and any renewals thereof and no longer. Subd. 2. No merchandise not described in the inventory shall be added to or included with that specified in the inventory furnished with the application and offered for sale at the sale. Each sale of merchandise not included in the inventory shall constitute a separate violation of this condition. Subd. 3. The sale shall be advertised and conducted in the name of the licensee only and no reference to the reasons for the sale shall be advertised unless the reasons shall be in conformity with those stated in the application and shall be applicable to the licensee at the time of the advertisement. Subd. 4. The license to conduct the sale shall be conspicuously displayed during the duration of the sale near the entrance to the premises where the sale is being held. Subd. 5. A duplicated original of the application and inventory pursuant to which the license was granted shall be available at the premises where the sale is being held to the City Administrator/Clerk, and the licensee shall permit him or her to examine all merchandise on the premises for comparison with the inventory. Subd. 6. At the close of business each day there shall be noted on the inventory attached to the duplicate original application the items disposed of during the day. Subd. 7. Suitable books and records shall be kept by the licensee and shall be available at all times to the officers and agents of the Department of Licenses and Consumer Services. Subd. 8. No advertisement shall contain any assertion, representation or statement of fact which shall be untrue, deceptive or misleading as to the ownership of the merchandise, the source from which it was obtained, the quantity, nature, condition or quality thereof or the value or price thereof or the savings or discounts offered with respect thereto, and, if any price comparisons or percentages of savings or discounts are quoted in any advertisement, the savings or discounts shall be computed upon the prices stated in the inventory with respect to the items referred to in the advertisement; provided, however, that no comparison in either general or specific terms shall be made in any advertisement with respect to either the regular wholesale or regular retail prices of any merchandise unless the regular wholesale or regular retail price of the merchandise so referred to is stated in the inventory attached to the application. Subd, 9, The licensee shall forthwith, at the conclusion of any sale, file with the City Administrator/Clerk a true inventory of all merchandise, if any, then remaining unsold. (1987 Code, § 307.11) 307.12 LICENSEE TO REFRAIN FROM SIMILAR BUSINESS FOR SIX MONTHS. No person who has conducted a sale under this chapter shall engage in the same type of business at a location within a distance of one-half mile measured from front entrance of previous place of business within a period of one year after the termination date of the sale licensed under this chapter. (1987 Code, § 307.12) 10/23/2008 CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD •SHOREWOOD, MINNESOTA 55331-$927 • (952) 474-3236 FAX (952) 474-0128 • www.ci.shorewood.mn.us • cityhall@ci.shorewood.mn.us MEMORANDUM TO: City Council ; i? FROM: Brian Heck, City Administrator ~, DATE: October 23, 2008 SUBJECT: 5795 Country Club Road The Council requested staff look in to the estimated value of the home and provide the information to council along .with a few options as to the disposition of the home and property. Staff asked the assessor to conduct an estimated market value of the property. Tom completed the process and estimates the value at $310,000 - $330,000. Staff contacted Howard Schwartz, leasing agent, to list and find tenants for the building on the same general terms as the prior agreement. BRIEF FLASHBACK The City acquired this property in June of 1986 for $124,000 in anticipation of a potential city hall project. When this project did not come to fruition, the City sold the property for $105,000 in February of 1988. In Apri12005, the city purchased it for $305,000 plus approximately $8,000 closing costs for a total of $313,000. During the interim discussions, the City arranged to rent the home to a family caught in the Katrina disaster. The end result was a disaster for the City and added expenses in repairs to the home and litigation with the individuals involved. The City then contacted with a leasing company to lease and manage the home on behalf of the city and the next tenant workout quite well. During this time, the Council chose to remodel the existing City Hall so the property is not longer needed for a new City Hall. The Council is now faced with the question of what to do with the property. There are a few options for the Council to consider. These are: - ~ ~. vs ~®~0 PRINTED ON RECYCLED PAPER - 2 - October 23, 2008 1. Keep the house and continue to rent using the current leasing agent. 2. Keep the land and sell the house with the requirement the purchaser move the structure off the property. 3. Keep the property and demo the structures and expand Badger Park. 4. Sell the property. Before any action is taken on the disposition of the property, we are carving out a piece of the property for storm water purposes. I spoke to Howard Schwartz and he is listing the property for rent on a few free sites and will move to some other services based on the outcome of the meeting. He recommends establishing an 18 month lease with a guarantee of nine (9) months and asixty-day (60) termination clause should the City choose to put the house on the market. He feels we will get a better tenant with these terms and it also puts the termination of the lease in the spring of 2010. RECOMMENDATION: staff recommends renting the house with an 18 month term and a 60 day termination clause should the Council choose to place the house on the market before the end of the lease. Staff further recommends placing the house on the market in 2010 at the market rate, approximately $330,000 - $340,000.