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062308 CC Reg MinCITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD CITY COUNCIL REGULAR MEETING COUNCIL CHAMBERS MONDAY, JUNE 23, 2008 7:00 P.M. MINUTES 1. CONVENE CITY COUNCIL REGULAR MEETING Mayor Lizee called the meeting to order at 7:00 P.M. A. Roll Call Present. Mayor Lizee; Councilmembers Bailey, Turgeon, Wellens and Woodruff; Attorney Keane; Acting Administrator/Director of Public Works Brown; Finance Director Burton; Planning Director Nielsen; and Engineer Landini Absent: None B. Review Agenda Wellens moved, Turgeon seconded, approving the agenda as presented. Motion passed 5/0. 2. APPROVAL OF MINUTES A. City Council Work Session Minutes, June 9, 2008 Woodruff moved, Turgeon seconded, Approving the City Council Work Session Minutes of June 9, 2008, as presented. Motion passed 5/0. B. City Council Regular Meeting Minutes, June 9, 2008 Turgeon moved, Woodruff seconded, Approving the City Council Regular Meeting Minutes of June 9, 2008, as presented. Motion passed 5/0. 3. CONSENT Mayor Lizee reviewed the items on the Consent Agenda. Wellens moved, Turgeon seconded, Approving the Motions Contained on the Consent Agenda and Adopting the Resolutions Therein. A. Approval of the Verified Claims List B. Hennepin County Joint Cooperation Agreement for Fiscal Year 2009-2011 CDBG (This was moved to Item 11.F under General/New Business.) C. Accept Storm Water Pollution Protection Program (SWPPP) Report and authorization to submit to the Minnesota Pollution Control Agency Motion passed 5/0. SHOREWOOD CITE' C®UNCIL REGULAR MEETING MINUTES June 23, 2008 Page 2 of 10 4. MATTERS FROM THE FLOOR Janet Sue Molin, stated on May 17, 2008, she received a Notice to Connect to Sanitary Sewer for property she owned Iocated at 4405 Enchanted Point; the order required her to connect to sanitary sewer within 90 days and to abandon the existing private sewage disposal system. She explained she had appealed the order at the June 9, 2008, City Council regular meeting; the appeal was continued for up to 60 days. She stated when the Council considers her appeal she expects Council to remember her grandfathered right to continue to use the private sewage disposal system on her properly (according to the ordinance in existence at the time the Notice to Connect was sent and at the time of her appeal). She explained the cabin on her property is a seasonal dwelling and there is minimal use of the sewer. The cabin is occupied less than 50 days during the year; it is never used for more than seven consecutive days at a time. The cabin is not insulated, it has no heat and it is not used for nine months of the year. She noted there is an item on the agenda this evening for Council to consider a proposed amendment to the Shorewood City Code Title 900, Chapter 904.06 Subd. 3.a, Connection to public sewer, abandonment of systems. Mayor Lizee stated Council will be discussing the proposed amendment to the City's sewer ordinance under Item 11.D on the agenda. 5. RECESS TO ECONOMIC DEVELOPMENT AUTHORITY MEETING Turgeon moved, Woodruff seconded, recessing the meeting to an Economic Development Authority Meeting at 7:05 P.M. Motion passed 5/0. 6. RECONVENE REGULAR CITY COUNCIL MEETING Mayor Lizee reconvened the City Council regular meeting at 7: 22 P.M. ~. REPORTS AND PRESENTATIONS A. Resolution Authorizing EDA to Sell Bonds for the City Hall Building Remodeling Project, Presented by Paul Donna, Northland Securities Acting Administrator Brown stated previous to this item the EDA Board adopted a resolution authorizing the EDA to sell bonds for the City Hali Building Remodeling Project. Turgeon moved, Wellens seconded, Adopting RESOLUTION NO. 08-048, "A Resolution Consenting to a Resolution by the Shorewood Economic Development Authority with Respect to Public Project Lease Revenue Bonds, Series 2008A (City of Shorewood, Minnesota Lease Obligation)"; the EDA resolution was amended by changing 1. (c) "in the approximate amount of to "a maximum principal amount of". Motion passed 5/0. 8. PUBLIC HEARING None. 9. PARKS A. Report on Park Commission Meeting Held June 10, 2008 SHOREWOOD CITY C®UNCIL REGULAR MEETING MINUTES June 23, 2008 Page 3 of 10 Commissioner Quinlan reported on matters considered and actions taken at the June 10, 2008, Park Commission meeting (as detailed in the minutes of that meeting). He clarified the Park Commission had not made any recommendation regarding the tennis courts at Cathcart Park although various options had been discussed; there had been a lot of reaction from residents to the rumor the courts would be eliminated. The City had received fifteen emails already requesting the tennis courts at Cathcart not be removed. Mayor Lizee commented the park tours the Park Commission conducts are beneficial. She stated it may be an appropriate time to consider a major update for some of the City's parks. The City has to seriously consider the cost to repair or rebuild the tennis courts knowing the budget constraints. She explained she had met with the Park Commission Chair about one year ago, and they discussed if the layout of Badger Park should be changed. She stated feedback about the City's parks could be obtained from residents through the City-wide survey or by conducting focus groups. Commissioner Quinlan stated because the Park Commission did not know how the residents used the parks it handicapped the Commission when it came to making recommendations. In response to a question from Councilmember Woodruff, Acting Administrator Brown stated the Park Commission has been discussing and refining its list of priority projects for the next two years. 10. PLANNING Chair Schmitt reported on matters considered and actions taken at the June 17, 2008, Planning Commission meeting (as detailed in the minutes of that meeting). A. Minor Subdivision Applicant: Ann and Jack Carter Location: 5725 and 5705 Smithtown Way Director Nielsen stated two years ago, Anne and Jack Carter purchased the properties located at 5725 and 5705 Smithtown Way. At that time the applicants proposed combining the two lots, and ultimately re- subdividing the combined lots into three lots (as explained in a Staff report dated 1 June 2006). He reviewed the existing site location map and the proposed site location map. He explained initially they propose to create only two lots (Parcel A and Parcel B/C), allowing them to live in the existing house on the property while they build a new house on the westerly lot (Parcel A). Once the new house is completed, they will demolish the existing house and subdivide the larger lot (Parcel B/C) into two lots (Parcel B and Parcel C). At its 6 June 2006 meeting the Planning Commission recommended approval of the Carter's request subject to Staff recommendations. The Carters withdrew their application before receiving City approval, but now wish to complete the process. Nielsen stated the analysis and recommendations in the 1 June 2006 Staff report remain valid. The Carter's have complied with all of the recommendations included in the 2006 staff report. Wellens moved, Turgeon seconded, Adopting RESOLUTION NO. 08-049, "A Resolution Approving Subdivision and Combination of Real Property for Anne and Jack Carter, 5725 and 5720 Smithtown Way." Motion passed 5/0. SHOREWOOD CITY COUNCIL REGULAR MEETING MINUTES June 23, 2008 Page 4 of 10 11. GENERAL/NEW BUSINESS A. Investment Policy Director Burton explained the City's Investment Policy was based on Minnesota State Statute and was adopted in 1996. The Policy formed the basis of the City's investment practices these past years. At its April 28, 2008, work session Council reviewed the policy and suggested certain parts of the policy be updated. Council had been provided with a revised investment policy in the meeting packet. The policy generally follows the format provided by the League of Minnesota Cities. She commented that the policies from the Cities of Aitkin, Deephaven and Victoria were studied closely for appropriate content and verbiage. Burton explained the revised policy is very specific regarding authorized investments. She noted the City's foremost objective is safety of principal, followed by liquidity and yield. The revised policy is also more restrictive regarding authorized investments; the list of authorized investments mirrors Aitkin's list. There have been times in the past when top grade commercial paper (A1P1) had been useful, mainly to fill a short gap between a maturing investment and the settlement of a new investment. Council has indicated discomfort with commercial paper as an investment. She questioned if Council would consider allowing top grade commercial paper investments if they were limited to no more than 2 - 3 percent of the portfolio. Councilmember Woodruff stated he could support investing up to 3% in top grade commercial paper. Further, he did not have a problem with the policy requiring a collateral level of 140% of the market value of the principal and accrued interest for pledged collateral consisting of notes secured by first mortgages. He questioned if Council was comfortable with 140% coverage. Director Burton stated 140% was standard today. In response to a question from Councilmember Wellens, Director Burton stated collateralization has not been problem in the past but it was difficult to predict the future. Director Burton stated it was important to ensure all the City's investments were FDIC protected, and if not by the FDIC then by collateral provided by Beacon Bank. She explained commercial paper was a slightly different investment vehicle. If the City limited commercial paper investments to a small percentage of its portfolio, it would allow the opportunity to get a slightly better yield without putting a large amount of money at risk. She noted the City had never had a loss on its portfolio. Councilmember Woodruff suggested Council be provided with a detailed report of all investments more than once a year, and he listed a number of attributes he would like included in the report. He would like to review the policy after the changes discussed this evening were made. Director Burton stated quarterly reporting would be manageable. She recommended Council adopt the revised policy tonight subject to the policy being updated to reflect the changes discussed. Councilmember Wellens stated he would support approving the report this evening, and he did not think the format for the report had to be included in the policy. Woodruff suggested all the reporting attributes identified in the policy be removed, and he questioned if Council was comfortable approving the policy before it had the opportunity to review the updated policy. Councilmember Bailey questioned why the City would think investing in general obligation (GO) securities of Minnesota municipalities would be better than, for example, California municipalities. He suggested the City not invest in other municipalities GO securities. Director Burton stated the City tries to invest in banks and brokers within the community, and the City has rarely invested in other SHOREWOOD CITY COUNCIL REGULAR MEETING MINUTES June 23, 2008 Page 5 of 10 mtmicipalities bonds. Bailey stated by allowing investments in money market mutual funds which are authorized instruments according to MN Statutes 1 ] 8A, the City would effectively be investing in things it was restricting itself from investing in. He understood the City needed to invest in money market funds for liquidity purposes. Burton stated the risk would be small. In response to a question from Bailey, Burton explained interest-bearing deposits should be collateralized if the City exceeded its FDIC amount or if it had a large sum of money it wanted to invest for a short time. Councilmember Bailey expressed concern about investing in securities with a 20-year mahirity. Burton explained some of the agency notes the City had been investing in have better rates further out; even though the City knew it was buying a 20-year note, it would likely hold it only three months until it was called. Bailey expressed concern that a future Finance Director could invest in things with a 20-year maturity without any callable opportunities; he thought the policy was vague enough to allow someone to invest short-term funds in things with a long maturity. Burton said agency notes could be sold on the secondary market. Bailey explained if the City invested in bonds with a 10-year maturity, a 1% drop in interest rate would reduce the value of the investment. Burton explained the diversification language regarding maturity was similar to that found in other policies. Bailey stated he would be comfortable if investment maturities on a bond were tied to a to-be-determined maturity timeframe for a very specific use. Councilmember Bailey recommended the City fully display its investment brokers in the investment reports. Burton explained the City's brokers are reported in a variety of ways. There was consensus to continue this item to the July 14, 2008, City Council regular meeting. B. City Administrator Appointment Acting Administrator Brown stated late this afternoon the City received the executed employment agreement for the City Administrator position from Brian Heck. He explained the City Council interviewed five candidates for the position on June 14, 2008, and unanimously selected Mr. Heck as the candidate of choice. He stated Mr. Heck was currently employed by the City of Lauderdale. Turgeon moved, Woodruff seconded, Adopting RESOLUTION N0.08-050, "A Resolution Making Appointment of Brian Heck to the Office of City Administrator." Councilmember Woodruff suggested Mayor Lizee ask Mr. Heck if he would be willing to consider an earlier start date or possible work part-time for the City to work through the budget process. Mayor Lizee stated she spoke with Sharon Klumpp, with Springsted Incorporated, who indicated Mr. Heck was going to make an arrangement with the Cities of Shorewood and Lauderdale to make it possible for him to work some amount of time for Shorewood prior to his formal full-time start date. Motion passed 5/0. C. Extending the Appointment of Jeffery Bailey, Ward 3 Councilmember Mayor Lizee stated when Council approved the appointment of Jeffery Bailey to the vacant Council seat for Ward 3, the term of his appointment was through the canvass of the November 4, 2008, election at which time the newly elected Ward 3 Councilmember would have resumed this office. With the return to at-large elections for 2008, this Ward 3 seat will be vacant after the November 4, 2008, election until SHOREWOOD CITE' COUNCIL REGULAR MEETING MINUTES June 23, 2008 Page 6 of 10 December 31, 2008. Council may consider leaving the seat vacant for that period of time; extending Councilmember Bailey's appointment through December 31, 2008; or revisit this item at a later date. Mayor Lizee asked Councilmember Bailey if he would be willing to remain in his capacity until the end of the calendar year. Councilmember Bailey stated he would. Turgeon moved, Wellens seconded, Adopting RESOLUTION NO. 08-051, "A Resolution Extending the Appointment of Jeffery V. Bailey, Council Member Ward 3." Motion passed 5/0. D. Sewer Ordinance Amendment Engineer Landini explained as part of the 2008 Comprehensive Plan update for the City, properties not connected to public sewer shall connect if service abuts the property or the City shall enact private sewage treatment ordinances and develop a private sewage inspection program. Letters were sent to the owners of properties that abut public sewer but were ilot connected. One property owner appealed and stated that the code allowed an existing private system that was in good condition to remain. Because the City does not have the resources to develop an inspection program for one properly, Council recommended the City Code be amended. Woodruff moved, Bailey seconded, Approving ORDINANCE NO. 450, "An Ordinance Amending Chapter 904 of the Shorewood City Code Relating to Private Sewage Disposal Systems." Councilmember Woodruff stated the amendment references Minnesota Rule § 6120.3400; he questioned what an administrative rule was. Attorney Keane explained Minnesota Rules, in almost all instances, are a fiirtherance of State Statute. The State Statute directs an agency to do something, and the agency is obligated to create the details for carrying out the legislative enactment. Minnesota Rule § 6120.3400 is adopted by the Department of Natural Resources as it relates to certain shoreland properties with septic systems. Not withstanding any other rule, Minnesota Rule § 6120.3400 states if a property is within a designated shoreland and sewer is available the property owner must hook up to the sewer. The City is not bound by Minnesota Rule § 6120.3400; the property owner is. The City is incorporating the Rule into the City Code to clarify there was an overlapping State Law requirement; the City was not changing it policy. The State could enforce the connection to sanitary sewer. The City has no authority to grandfather an exception for shoreland property. Mayor Lizee stated it was imperative the City update its Code to reference Minnesota Rule § 6120.3400. Janet Sue Molin, owner of the property located at 4405 Enchanted Point, stated it was her understanding Council was considering an amendment to the City Code Chapter 904.06 Subd. 3.a on which she based her appeal to a Notice to Connect to Sanitary Sewer. She is convinced she has a grandfathered right under the current ordinance to continue to use her private sanitary sewage system and not connect to the public sewer. Attorney Keane explained the amendment would remove any ambiguity in the City Code, if there is any, regarding preexisting conditions. The State policy with regard to shoreland property is if sewer is available the property owner shall connect to the sewer. SHOREWOOD CITE' COUNCIL REGiJLAR 1dIEETING MINU'T'ES June 23, 2008 Page 7 of 10 In response to a question, Director Burton stated she was not aware of any other shoreland properties with private sanitary sewage systems which abutted public sewer. Motion passed 5/0. E. Water Conservation Ordinance Amendment Engineer Landini stated the 2008 Goals and Priorities included a task to update the City's water conservation plan. The plan was updated and submitted to the Department of Natural Resources (DNR) for final review. The DNR would approve the plan as a permit based on ten-year water use if the City would make a stronger commitment to water conservation; or, it would approve the plan as submitted based on 2012 water use and the City would have to make annual amendments to the permit as needed. He noted Council had discussed this topic at its June 2, 2008, work session. Engineer Landini stated Jack Gleason, the DNR's Waters Area Hydrologist, was available to answer any questions Council may have. Acting Administrator Brown asked Mr. Gleason to discuss why atime-of--day watering restriction was more effective than an odd-even day-of--week watering restriction. Mr. Gleason stated the information he has on the restriction is from the Metropolitan Council, who the DNR partners with on water conservation plans. He explained the odd-even restriction isn't very effective in managing water use; if a person was used to watering every third day the odd-even restriction would likely encourage them to water every other day. This restriction could help to even out demand for water across the week. Watering during the hottest time of the day on hot days wastes water; most of the water evaporates. The time-of--day restriction allows watering when it is more effective. Many communities incorporate both atime-of--day and odd-even watering restrictions. Mayor Lizee stated the more logic there is behind a restriction the easier it is to enforce and understand. She commented most residents want to be responsible with the use of the precious water resource. Mr. Gleason explained how the DNR calculates a City's allocation for water consumption. A city reports metrics in its water supply plan; the primary ones considered are residential gallons per capita per day, and a peak demand ratio. The higher a city's peak demand ratio is over 2.6, the more pressure the DNR will place on a city to implement water conservation efforts. Councilmember Wellens clarified the time-of--day watering restriction applies to City-water only. Councilmember Woodruff stated the restriction would be in effect for May 1 through September 30 of any given year and it would prohibit sprinkling or irrigating during the hours of 11:00 A.M. and 4:30 P.M. He suggested the proposed ordinance regarding fees be amended to specify the fee for the first violation is $50, the second is $75, the third is $100, etc. Woodruff moved, Turgeon seconded, Approving ORDINANCE NO. 451, "An Ordinance Amending Chapter 903 of the Shorewood City Code Relating to Water Conservation Measures". In response to a question from Councilmember Bailey, Mr. Gleason stated the time-of--day restriction was reasonable. In response to another question, Mr. Gleason stated some cities apply the time-of--day restriction to both city water and private well water; it may be easier to enforce the restriction for both. SHOREWOOD CITE' COUNCIL REGULAR MEETING MINUTES June 23, 2008 Page 8 of 10 He commented a lot of the city water and private well water comes from the same aquifers. He heard one city recommend the State have such an ordinance. There was ensuing discussion regarding what the word "sprinkling" encompassed, and how to clarify that restriction. There was consensus to add a statement regarding an exception for attended sprinkling. The maker of the motion withdrew the motion. There was consensus to continue this item to the next City Council regular meeting scheduled for July 14, 2008. Mr. Gleason stated delaying approval of the ordinance amendments to a July 14, 2008, City Council meeting was not an issue. F. Hennepin County Joint Cooperation Agreement for Fiscal Year 2009-2011 CDBG This item was removed from the consent agenda at Councilmember Woodruffs request. Councilmember Woodruff stated he had no issue with adopting the resolution. He questioned what the City could do to be eligible for funds distributed through the Community Development Block Grant (CDBG) program. Acting Administrator Brown stated he had been informed that the Department of Housing and Urban Development (HUD) was under close scrutiny with regard to some of its actions. The focus of the CDGB program has been on housing. He explained the funds are sought competitively, and the City has not been able to take advantage of the program in the last ten years. Director Nielsen stated prior to that there were some rehab projects in the City that were able to take advantage of the program. Councilmember Woodruff stated he would like the City to promote the program with the City's residents and the City itself. Councilmember Wellens questioned if the City could partner with the Metropolitan Council on the Inflow and Infiltration program. Councilmember Bailey stated he would be reluctant to have Staff spend time on this if there was nothing to be gained. Woodruff moved, Wellens seconded, Adopting RESOLUTION NO. 08-047, "A Resolution Approving and Authorizing Execution of a Joint Cooperation Agreement between the City of Shorewood and Hennepin County for Participation in the Urban Hennepin County Community Development Block Grant Program in Fiscal Years 2009 - 2011." Motion passed 5/0. 12. ENGINEERING/PUBLIC WORKS A. Accepting Low Estimate and Awarding Contract to Successful Low Estimator for the Skate Park Well Abandonment Engineer Landini explained the Skate Park well had been identified as a potential aquifer contamination site, and it was suggested it be abandoned properly. The Park Commission thought it was the appropriate SHOREWOOI) CITY COUNCIL REGULAR lO~IEETING MINUTES June 23, 2008 Page 9 of 10 thing to do, and it thought it should be funded out of the Water Fund. The project is not included in the 2008 Water Enterprise Budget. Neither t11e City nor the State of Minnesota Ilas any records on the Skate Park; therefore, the depth of the well is not known. Keys Well Drilling Company estimated the cost to abandon at $4,420 and it is based on visual surface investigation; final costs will not be known until the depth of the well can be determined. He stated Staff recommends awarding the contract for the Skate Park well abandonment to Keys Well Drilling Company for $4,420.00. Because the dept of the well is not known, there was consensus to amend the resolution to include anot- to-exceed amount of $5,500. Woodruff moved, Turgeon seconded, Adopting RESOLUTION NO. OS-052, ~°A Resolution Accepting an Estimate and Awarding Contract for Well Abandonment of the Skate Park Well" subject to an amendment to include anot-to-exceed amount of $5,500. Motion Passed 5/0. Acting Administrator Brown stated there were enough reserves in the Water Fund to fund the project. 13. STAFF AND COUNCIL REPORTS A. Administrator & Staff Acting Administrator Brown stated there had been apre-bid meeting for the City Hall renovation project. There is a special SLMPD Coordinating Committee meeting scheduled for June 25`x' and a special EFD Board meeting scheduled for June 26"'. There had been an Emergency Management exercise on June 20`x' regarding the water systems in the community. Early that day one of the three legs of power from Excel energy to Amesbury Well was lost likely causing damage to the well. The interconnection to the SE Area well kept it from being a more serious problem. A well contractor will begin investigating the extent of the damages on June 25"'. A power issue at the Christmas Lake Point lift station was being investigated. Acting Administrator Brown provided a report on the 2008 spring clean-up. Expenses were approximately $11,800 and revenues were approximately $5,600; the variance will be funded out of the Recycling Fund. There were 15.22 tons of general refuge collected and one 40-cubic-yard dumpster of electronics collected. He thought the tonnage was higher than last year. He stated employees were paid overtime and the employees working the effort were provided with lunch because they were not able to take a lunch break. He stated he would research if the $5 charge for dropping off electronics covered the costs for the City. Brown stated a kickoff meeting was held on June 23`d for the County Road 19 Trail project. The Cities of Orono, Shorewood and Tonka Bay had received a grant from Hennepin County to conduct a feasibility study on extending a trail from the LRT Trail crossing at County Road 19 to the old Dakota Rail line in Orono. Orono Mayor White is championing the cause. There is a desire to form a public task force comprised of three people per city (possibly one councilmember or park commissioner and two residents). Mayor Lizee recommended the City put something on its website about this initiative. Three Rivers Park District and Hennepin County are involved in the effort, and the hope was to get the Metropolitan Council and bicycle enthusiasts involved. Director Burton stated the conversion to the new utility billing system was in process. SHOREWOOD CITY COUNCIL REGULAR MEETING MINUTES June 23, 2008 Page 10 of 10 Engineer Landini stated the City had held two seminars to help homeowners and landscape/lawn care business work toward developing a low impact lawn and landscape. Approximately 50 people attended each of the seminars. He noted all 75 rain barrels received are spoken for. B. Mayor & City Council Councilmember Woodruff stated he had asked Acting Administrator Brown earlier in the day about the status on the lease of the City-owned house. Acting Administrator Brown stated he will get Council that information. Councilmember Turgeon suggested Deputy Clerk Panchyshyn update the progress on the Goals and Priorities, and identify housekeeping items on the list that can be completed without a great deal of staff time. Mayor Lizee stated Council had been provided with an amended 2009 Lake Minnetonka Conservation District Budget. She stated the City's representative to the LMCD, Rich Siakel, received the document on Apri120t~' when he was out of town. Council directed Mr. Siakel to convey to the LMCD Board that the City wanted the increase to be no greater than the 3.9% levy limit. Mayor Lizee stated volunteers were needed for the Fourth of July Celebration in Excelsior, and there is a coffee with the Mayor session scheduled for July 12; 2008. 14. ADJOURN Woodruff moved, Turgeon seconded, Adjourning the City Council Regular Meeting of June 23, 2008, at 9:10 P.M. RESPECTFULLY SUBMITTED, Christine Freeman, Recorder ~ m ~, Christine Lizee, Mayor ATTEST: Lawrence A. Brown, Acting City Administrator/Clerk