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05-09-11 CC WS Mtg MinCITY OF SHOREWOOD CITY COUNCIL WORK SESSION MONDAY, MAY 9, 2011 MINUTES CONVENE CITY COUNCIL WORK SESSION Mayor Liz6e called the meeting to order at 6:00 P.M 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 6:00 P.M. A. Roll Call Present. Mayor Liz6e; Councilmembers Hotvet, Siakel, Woodruff and Zerby; Administrator Heck; Finance Director De.long; Planning Director Nielsen (arrived at 6:05 P.M.); Director of Public Works Brown; Engineer Landini; and City Building Official Pazandak Absent: None B. Review Agenda Siakel moved, Zerby seconded, approving the agenda as presented. Motion passed 510. 2. RENTAL HOUSING LICENSE PROGRAM Mayor Liz6e noted the City Building Official is present this evening. Administrator Heck stated a tenant has expressed concern to his landlord about the level of arsenic in the water in the rental unit. When things were not resolved to the tenant's satisfaction the tenant approached the City asking if there is anything the City can to regulate the quality of water for rental properties. That could potentially be accomplished by requiring drinking water testing and correction in the requirements for a rental license. He noted that three of the Councilmembers requested that Council discuss this at a work session. He stated Building Official Pazandak did some research on this. Pazandak found out that the Minnesota Department of Health's and the Minnesota Environment Protection Agency's drinking water rules on acceptable levels of arsenic do not apply to private wells. They only apply to municipal water supplies. Heck then stated Staff has reservations about tying drinking water testing to a rental license for the following reasons. There is the question of how to set the drinking water standard. There is the question as to whether or not there should be standards for water contaminants in addition to arsenic. There is the question as to whether or not other environmental issues such as radon, mold, lead and so forth should also be regulated. He noted that was not the intent of the rental license when it was originally put in place. It was intended to make sure the physical structure of the dwelling was safe. Building Official Pazandak stated he has spoken to staff at a number of cities and has concluded that cities with municipal water are more likely to have rental license programs. The City of Chaska is using its fire department to do the inspections and its building inspector is a backup inspector for that. Other cities he has spoken with have rental license programs similar to the City's; they inspect the physical structure. It's his understanding the City's rental license inspection program was intended to deal with the physical structure. He then stated he thinks people try to interpret the code beyond what it's intended to mean. He noted that as far as he is aware other cities are not moving in the direction of regulating CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 2 of 7 environmental concerns. They are staying with the fundamentals of physical safety, working doors and windows, smoke detectors, working water, a working heating system and so forth. Councilmember Hotvet stated she is one of the Councilmembers who asked that this be discussed. She expressed her appreciation for Building Official Pazandak researching what other cities are doing. She recommended the City's rental license policy be revisited because things have changed over the last 10 — 15 years in the City's rental market. She stated she doesn't know a lot about the City's policy and she questioned if it is current with the times. She commented the water quality issue is just the tip of the iceberg when it comes to environmental issues. She stated she thought having safe drinking water is extremely important. She commented that she assumes the City will have more rental properties in the future. She stated she thought revisiting the rental license policy could benefit rental property owners and the City as well. Councilmember Siakel stated rather than having water quality standards be part of the City Code she suggested that as part of the rental license application process the applicant be required to disclose the quality of their well water at that property to a potential renter. A potential renter can then decide if the water quality is acceptable for them. She then stated water quality is a health and safety issue. She asked if the requirement for disclosure could be part of the rental license process. Director Nielsen stated Staff suggests the City develop a handout for tenants explaining what the current City Code is and is not intended to do. The brochure could include information about known environmental issues (e.g. arsenic) including testing and correction measures. He noted arsenic is an issue in the City and how large of an issue it is varies throughout the City. He asked where you draw the line on what does or doesn't have to be tested. He questioned if the City will set itself up to be liable for other potentially harmful contaminants if it establishes standards for some subset of contaminants. He stated the City could help a potential renter understand that they have a responsibility to have the water tested to ensure the water quality is acceptable to them. The renter could test for other potentially harmful contaminants as well. He then stated the list of potentially harmful contaminants in a rental property is endless. Councilmember Zerby asked why the City wouldn't have the same water standards for private wells on rental property that the State has for municipal water. Director Nielsen stated doing that would require a higher standard than the standard for a private well for a non - rental property (there is no standard). Zerby stated as a home owner he has the choice about the quality of water coming from his private well. Nielsen stated a renter has a choice also and a renter can install a purification system. Zerby stated based on his experience as a renter making an improvement to the water system would require permission from the landlord. Nielsen noted that the landlord for the property discussed earlier told the tenant he would install a drinking water purification system. Director Brown noted that City's water has to comply with the standards in the Federal Safe Drinking Water Act (SDWA). Mayor LizBe stated Council has to decide what is reasonable to expect from a landlord. She then stated that changing the City's rental policy to establish a drinking water standard for arsenic will open the door to other environmental concerns (e.g., lead, radon, etc.). She questioned if the City really wants to be a responsible agency for being aware of arsenic levels, developing a policy that will address arsenic issues, inspect for the presence of arsenic annually, and be responsible for any occurrences. Or, should that responsibility lie with the property owner. CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 3 of 7 Councilmember Hotvet stated from her perspective it's the property owner's responsibility to ensure arsenic level standards are met. She noted that there are properties with other environmental issues that should be addressed. Mayor Liz €e asked if it's reasonable to assume that the City should take responsibility for monitoring the condition of rental properties for environmental concerns. In response to a question from Councilmember Zerby, Director Nielsen explained a rental property owner has to renew their rental license every three years. Zerby asked why the City shouldn't require the property owner to provide proof that the well water has been tested and meets the SDWA standards. Councilmember Siakel noted that about one half of the houses in the City get their water from private wells and the SDWA regulations do not extend to them. Councilmember Zerby stated he's talking about requiring rental properties with private wells to comply with SDWA standards. He stated the new requirement he is proposing would require a rental property owner to prove their well water complies with SDWA standards in order to get their rental license. Director Brown noted there are 20 —30 contaminants on the SDWA standards list Councilmember Siakel stated it's her understanding that those standards can't be applied to a private well. That is why she suggested the City require disclosure of test results to the potential renter. Councilmember Zerby stated if the only thing the City requires is disclosure then there is the issue of enforcing that the arsenic level is safe. He then stated from his vantage point it's easier to enforce compliance with a standard. He noted that he has not decided if the City should require rental property owners to have a safe level of arsenic in drinking water. Building Official Pazandak stated the more frequent problem brought up when he does inspections is mold. People periodically ask about that. He commented there has been an instance where someone asked how well a property owner sanitized a plumbing leak. He stated if the City wants to begin enforcing drinking water standards for rental property well water there is going to be a cost to doing that and there will be push back from rental property owners. He then stated Staff needs direction from Council on what the scope of rental inspection program should encompass. Councilmember Woodruff stated from his vantage point when the City issues a rental license it's tacitly implying it's approved the safety of the dwelling from the renter's perspective. He then stated 10 — 15 years ago people were not as well aware that there were arsenic issues in some areas of the City. He went on to state that Council is basically discussing if being able to drink water out of a tap is less important than having a hand rail. The City has the option to require rental property owners to provide evidence that their well water complies with the SDWA standards when they apply for a rental license. The City also has to option to provide potential renters with a brochure which includes information about known environmental issues (e.g. arsenic) including testing and correction measures. The City Code could be amended to allow a renter to break a lease if after signing the tease the renter finds out the water is undrinkable. Today the renter can't do that. He commented that he did not think handing out a brochure would be effective. He stated renters expect things to be safe when they rent a property. He noted that lie thinks the City should address the issue of arsenic in rental property well water. The City should not ignore it just because the State doesn't impose any arsenic level standards. In response to a question from Mayor Lizee, Director Brown explained the City tests its wells annually and the results are published in the Consumer Confidence Report from the Minnesota Department of CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 4 of 7 Health. The City's results will be published in the City's official newspaper in July and they will be accessible from a link on the City's website. Councilmember Woodruff stated he did not think it would be a burden on a landlord to provide proof when submitting a rental license application (renewals are submitted every three years) that the well water on their rental property is safe to drink. Director Nielsen stated there is a cost to test for 20 contaminants with one of the contaminants being fluoride. Director Brown clarified fluoride is not one of the contaminants included in the SDWA standards. Brown explained there is a measurement for fluoride but it's not the same fluoride level the City adds to its water. Fluoride is a naturally occurring element. A sample for fluoride is taken before the City adds chlorine and fluoride. Brown noted that although fluoride is tested, it's a secondary contaminant and therefore there is not a standard for it in the SDWA. He explained the City has to meet the Minnesota Department of Health standards for chlorine and fluoride, noting the City's well water is tested monthly. Mayor Liz& asked how many of the rental properties have City water. Director Nielsen responded he will find that out. Councilmember Siakel asked how many rental properties there are in the City. Director Nielsen responded there are about 60 — 70 now and at the high point there were about 100. Councilmember Siakel stated there's probably some legal aspect to regulating drinking water quality. Mayor Lizee suggested Council take into consideration what is reasonable. Councilmember Woodruff stated that from his vantage point the City has no responsibility in this process other than to require proof that the well water was tested and it's proven to be in compliance with the SDWA standards when a rental application is submitted. If it becomes unsafe it's the same as any other rental license violation and the City could be called upon to enforce it. Enforcement after the license is issued would be complaint driven. Councilmember Hotvet asked how the City enforces current rental license regulations. Building Official Pazandak explained when a property owner applies for a rental license he checks to see if the property is located in a zoning district that allows rentals. The property owner then arranges for him to inspect the property to ensure the physical property is reasonably compliant with rental license regulations to make sure the dwelling is reasonably safe. He noted that safety is somewhat subjective; it's not absolute. He stated he then informs the property owner of things that must be fixed prior to them getting a license. In response to another question from Hotvet, Pazandak stated a rental license is not transferable if there is a change in ownership of the property. When the rental license comes up for renewal the property is inspected again. During the three year period if the City receives a complaint from a tenant the City responds to the complaint. Hotvet asked what happens when the City receives complaints from residents on neighboring properties. Pazandak responded the complaints are treated like a complaint about a non - rental residential piece of property. Councilmember Woodruff asked if it's accurate to say that once the tenant moves into a rental property they are required to comply with the City Code regulations relating to occupying the dwelling. Building Official Pazandak responded there is no discrimination between who uses the property. Woodruff then asked Pazandak if there have been instances when he has had to go out to respond to a complaint and found the property to no longer be in compliance. Pazandak responded the majority of the time when a complaint is received the tenant and the landlord were parting ways and they were trying to get the City CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 5 of 7 involved. Pazandak explained that the rental license program stipulates the City is supposed to abstain from becoming an arbitrator other than if there is an issue with the license requirements. For example, a tenant may not have been pleased with how a property owner cleaned up their property after there had been a plumbing problem but the City doesn't get involved with that. Councilmember Hotvet asked how the City responds to calls about troublesome rental properties in the City. Building Official Pazandak stated sometimes the City doesn't know the dwelling is being rented until the tenant and property owner try and get the City involved to resolve a dispute. If the complaint is a police issue the callers are told to call the police department. If the complaint is about a zoning issue the zoning issue is treated the same as a zoning issue for a non - rental residential property. He noted the property owner is ultimately responsible for their property, but the City would likely contact the tenant and property owner at the same time. Councihnember Siakel asked what type of call would trigger a response by the City. Building Official Pazandak responded it's quite often a complaint. Pazandak stated when he conducts a rental inspection he will also cite zoning issues. Administrator Heck stated that based on this discussion, it sounds like Council would like to consider having the applicant provide proof that their well water has been tested along with the rental license application. He recommended he speak to the City Attorney about what authority the City has to address a complaint from a tenant who thinks that the level of contaminant(s) in the water is too high. The City may not have the legislative authority to impose a water quality standard requirement. He stated he thought the City could require a rental license applicant to disclose that the water was tested. He wondered if the City could create a database of basic information for all of the rental properties in the City and for those properties with private wells the water quality test results provided by the property owner could also be included. He stated he wasn't sure if legally the City could do that. Councilmember Zerby stated the City can withhold issuing a rental license if the test results indicate the level of arsenic is not within the acceptable level identified in the SDWA standards. He then stated he doesn't care how the property owner goes about providing safe drinking water to the property. Building Official Pazandak stated it's his understanding that in the situation that was the impetus for this discussion there had been discussion about how much of the water would get treated. The landlord offered to treat the drinking water and cooking water. The tenant did not think that was enough; they wanted all of the water coming into the dwelling to be treated. He then stated if Council wants Staff to look into this further he suggested one of the rental license requirements could be to have the water test results posted in a somewhat obvious place in the dwelling. Councilmember Zerby reiterated he wants a rental property owner with a private well to have to adhere to the same SWDA standards as the City's wells. All of the water coming into the dwelling would have to be treated. Mayor Lizde expressed reservations about doing that. Lizee stated water quality is just one of many environmental concerns. There is also air quality, radon, lead paint, mold and so forth. She asked where the City would draw the line. She questioned if testing of residential well water every three years is adequate if the City has to do it annually. Councilmember Zerby stated if there was a federal mandate for testing radon then maybe the City should consider imposing such a standard. In this case Council is only discussing water quality for rental properties that get their water from private wells. Mayor LizBe stated the City has a rental ordinance and it issues rental licenses, but the City doesn't own or maintain or work on private residential properties. Councilmember Zerby stated the City applies the CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 6 of 7 same building codes to rental properties as it does to non- rental residential properties so he sees this as being the same. Councilmember Woodruff stated he can draw a direct parallel between requiring a rental property to have a toilet that flushes and a functioning furnace with having safe drinking water. The City doesn't maintain furnaces. The City doesn't require property owners who live in their own dwelling to provide the City with evidence that their furnaces work, but it does require that of rental property owners. He asked why it would not be appropriate for the City to require rental property owners to provide proof that their well water is safe. He stated he didn't think it would be necessary to test the water annually. He thought tying it to when a property owner applies for a rental license would be sufficient. The tenant could after the fact let the City know if the water quality has become unsafe and the City could then revoke the license if the problem isn't corrected. He agreed that the focus at this time should be on water quality and not other environmental concerns. Councilmember Zerby suggested the first thing that should be done is to find out what, if any, type of legislative authority the City has when it comes to regulating water quality. Once that's known Council can discuss what it wants to do. Administrator Heck stated if Council decides to require a rental property owner to submit proof that their well water has been tested at the time they apply for a rental license he asked if then there is a desire to also have some type of enforcement mechanism. Director Brown stated he understands Council, at a minimum, wants disclosure and that will be relatively easy for the City to enforce as part of the rental license process. Staff would like to know if Council also wants to include remedy as part of the enforcement process. Councilmember Woodruff stated he wants to have remedy as part of the enforcement process, and if the water quality issue is not addressed either the license should not be issued or the current license should be revoked. Councilmember Siakel agreed with getting a legal opinion first. She stated she agreed a tenant should expect their water to be safe. Councilmember Hotvet stated the City Code defines safety as "the condition of being reasonably free from danger and hazards which may cause accidents or disease ". She then stated that definition applies to water. She also stated she wanted remedy included if that's legally possible. Director DeJong stated as long as Council is discussing the rental license program he wanted to bring up an item that is tangentially related. He explained that each year when the City certifies delinquent utility charges in December some rental property owner complains to the City that the delinquent charge is the tenant's responsibility. A number of cities have changed their rental housing ordinance to require the property, for utility billing purposes, to remain in the property owner's name. The utility bill would then be sent to both the tenant and the property owner and both would be noticed at the same time if there were an issue with payments. The property owner would be kept abreast of delinquent utility payments. He stated doing that would also save staff time because they would not have to be generating multiple bills when there was a change in tenants. There was Council consensus to bring something back for Council to consider 3. ADJOURN CITY OF SHOREWOOD WORK SESSION MEETING MINUTES May 9, 2011 Page 7 of 7 Zerby moved, Woodruff seconded, Adjourning the City Council Work Session of May 9, 2011, at 6:53 P.M. Motion passed 510. RESPECTFULLY SUBMITTED Christine Freeman, Recorder Q hristine Liz6e, Mayor