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06-26-23 CC Reg Mtg MinutesCITY OF SHOREWOOD CITY COUNCIL REGULAR MEETING MONDAY, JUNE 26, 2023 MINUTES 1. CONVENE CITY COUNCIL REGULAR MEETING 5755 COUNTRY CLUB ROAD COUNCIL CHAMBERS 7:00 P.M. Mayor Labadie called the meeting to order at 7:00 P.M. A. Pledge of Allegiance B. Roll Call Present. Mayor Labadie; Councilmembers Johnson, Callies, Maddy, and Sanschagrin; City Attorney Shepherd; City Administrator Nevinski; City Clerk/HR Director Thone; Finance Director Rigdon; Planning Director Darling; Park and Recreation Director Crossfield; Director of Public Works Morreim; and, City Engineer Budde Absent: None C. Review Agenda Sanschagrin moved, Maddy seconded, approving the agenda as presented. All in favor, motion passed. 2. CONSENT AGENDA Mayor Labadie reviewed the items on the Consent Agenda. Maddy moved, Sanschagrin seconded, Approving the Motions Contained on the Consent Agenda and Adopting the Resolutions Therein. A. City Council Work Session Minutes of June 12, 2023 B. City Council Regular Meeting Minutes of June 12, 2023 C. Approval of the Verified Claims List D. Approve Seasonal Public Works Hire All in favor, motion passed. 3. MATTERS FROM THE FLOOR Alan Yelsey, 26335 Peach Circle, noted that he had reviewed the City's letter to him and explained that he wanted to make some comments in response. He explained that he sees the current Council and staff as imperious and authoritarian. He stated that he felt not allowing Zoom to be used at meetings other than the Council was a suppression of democracy. He noted that the City frequently defends their actions by mentioning the League of Minnesota Cities but stated that group was just a lobbyist for a government and also suppresses democracy. He stated that he CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 2 of 11 finds the three minute speaking rule and the Councils unwillingness to have a conversation with residents to be outrageous and disrespectful. He stated that the City is also refusing to take his request to do something about mosquitos throughout the City. He referenced the fees that the City charges for data and explained that it took nine months for him to get data from the City Clerk and noted that the State statute gives citizens the option for free inspection of electronic data. Mayor Labadie noted that the City Council phone numbers and a -mails are listed on the City website so residents can get in touch and have conversations. She noted that agenda item 9.A.2. will address the response Mr. Yelsey referenced to his past Matters from the Floor comments. 4. REPORTS AND PRESENTATIONS A. Tim Litfin, Minnetonka Community Ed — Tour de Tonka Update Tim Litfin, ,Minnetonka Community Education, stated that this is the Tour de Tonka's eighteenth year. He noted that this years' ride would be in memory of long-time volunteer Ron Kamps. He shared some statistics from their various rides and the major sponsors for 2023. He thanked the City for their partnership throughout the years for this event. He noted that there will be a medallion hunt this year where the finders will receive one free ride, he noted that there are still five medallions left to be found. Councilmember Sanschagrin asked how many volunteers the event needed. Mr. Litfin stated that they have about 600 volunteers involved every year. He noted that if anyone was interested in volunteering to get in touch via www.tourdetonka.orq 5. PARKS A. Report by Commissioner Hirner on May and June Park Commission Meeting/Park Tours Mayor Labadie noted that Commissioner Hirner was not present tonight and asked Park and Recreation Director Crossfield if she could pass along any pertinent information to the Council. Park and Recreation Director Crossfield gave an overview of the recent Park Tours and some of the items that they noticed needed attention. 6. PLANNING A. Report by Commissioner Eggenberger on June 6, 2023 Planning Commission Meeting Planning Commissioner Eggenberger gave an overview of the June 6, 2023 Planning Commission meeting. He noted that he also wanted to share with the Council how much the Planning Commission appreciates the work done by Planning Director Darling. He explained that she provides information, but also expertise on every item that comes before them and is quick to correct them if they are traveling down the wrong path. He stated that in the times when the Planning Commission has disagreed with staff's recommendation, she has made the decision to humble herself and get behind their recommendation. He explained that he just wanted the Council and staff to hear how much they appreciate Planning Director Darling. B. Variance to Setback from Side Yard Abutting a Public Street CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 3 of 11 Location: 4805 Rustic Way Applicant: John and Amanda Lhotka Planning Director Darling gave an overview of the request for a variance to the side yard setback to allow a two-story home addition to be constructed. She reviewed the recommendation from staff and the different recommendation from the Commission which was to approve the variance, as requested. She noted that staff had received six a -mails in support of this request. She noted that there is one typographical error that was found within the resolution where it should state `an addition' and not `a new home'. Councilmember Maddy stated that he had attended the Planning Commission where this item was discussed and agreed with the discussion related to practical difficulties because the way this is set up, this home essentially has three front yards so the boiler plate zoning code does not really reflect those kind of challenges. He stated that he would support this variance request. Maddy moved, Sanschagrin seconded, Adopting RESOLUTION NO. 23-062, "A Resolution Approving a Variance for a Setback from Side -Yard Abutting a Public Street for Property Located at 4805 Rustic Way." All in favor, motion passed. 7. ENGINEERING/PUBLIC WORKS A. Approve Pavement Management Software Public Works Director Morreim reviewed the main goals of having pavement management software including the ability to reduce or eliminate visual and subjective inspections. He stated that he and City Engineer Budde had reviewed many options and are recommending moving froward with a Vaisala system. He reviewed the benefits of having pavement management software and reviewed the proposed pricing and annual renewal for the software. Mayor Labadie noted that she feels this may be a very useful tool that can assist the City make informed decisions and help residents understand the process better as well. Councilmember Sanschagrin asked what factors had knocked out the competing products in their analysis. Public Works Director Morreim stated that the other product had separate staff conducting the inspections, which still added a `human' element rather than the Al technology that removes from the subjectivity. Councilmember Callies asked if the smart phone gathering pictures and data was constant or would just happen on an annual basis. Public Works Director Morreim explained that the pricing is based on the size of the network and noted that they could potentially do it three to four times per year. He explained that he was not sure if they would actually be doing it that frequently, but could, for example do it in spring and the fall or align it with certain projects and run it before and after in the area to pick up all the pertinent data. Councilmember Callies asked who would be monitoring the `control room' with all the data that will be coming into the City. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 4 of 11 Public Works Director Morreim explained that it will be hosted on Vaisala's system, but the City can export the data. Councilmember Maddy asked how staff is proposing that this data be used with scheduled of long-term capital projects. Public Works Director Morreim stated that this system will detect things like rutting and alligator cracking which is essentially road failure and when the City would want to start looking at reconstruction rather than mill and overlay. Sanschagrin moved, Labadie seconded, Approving the contract for Vaisala Road Al and the one-time purchase of the compatible mobile device, as presented All in favor, motion passed. 8. GENERAL/NEW BUSINESS A. Appointment to Fill Council Vacancy City Administrator Nevinski reviewed the interview process for filling the vacant Council seat. He explained that the intent is for the Council to make a selection tonight and for this individual to be sworn in on July 10, 2023. Mayor Labadie explained that the Council had interviewed seven candidates and expressed her gratitude to everyone that applied to serve the City in this fashion. She stated that she feels all seven candidates were extremely qualified and encouraged those that are not selected for this appointment to consider applying for future openings on various Commissions. Councilmember Sanschagrin suggested that the Council each select their top three candidates and see if there is any overlap in their choices. The Council discussed various ways to share their thoughts on which direction they were leaning with the candidates. Councilmember Callies stated that her top three candidates were: Scott Zerby; Nat Gorham; and Jason Allerding. Mayor Labadie stated that her top three candidates were: Scott Zerby; Nat Gorham; and Jason Allerding. Councilmember Maddy stated that he was only going to choose two candidates because he volunteered for many years with two of them: Nat Gorham and Scott Zerby. Councilmember Sanschagrin stated his top three candidates were: Sarah St. Louis; Michelle DeGrutollo; and Nat Gorham. Mayor Labadie reviewed the top choices with Scott Zerby — receiving three votes and Nat Gorham receiving four votes. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 5 of 11 The Council shared their reasons behind which candidate they would like to support and those that they would not support. Callies moved, Maddy seconded, Adopting RESOLUTION NO. 23-063, "A Resolution appointing Scott Zerby to Fill the Council Vacancy." B. Review Council Assignments City Administrator Nevinski reviewed the vacancies that exist now that former Councilmember Johnson has left the City. Councilmember Maddy noted that he is happy to continuing serving on the Excelsior Fire Board. Councilmember Callies suggested that incoming Councilmember Zerby could serve as the Park Commission liaison. Mayor Labadie asked Councilmember Sanschagrin if he was willing to serve as the alternate for the Excelsior Fire Board. Councilmember Sanschagrin shared that he would be happy to serve in that capacity. Callies moved, Sanschagrin seconded, Adopting RESOLUTION NO.23-064, "A Resolution Revising and Designating 2023 Annual Appointments to Certain Offices and Positions within the City of Shorewood, as discussed with Councilmember Maddy serving on the Excelsior Fire Board, Councilmember Sanschagrin as alternate, and incoming Councilmember Zerby as the Park Commission liaison." All in favor, motion passed. C. Approve Proposed SLMPD JPA City Administrator Nevinski stated that the JPA that governs the SLMPID is set to expire at the end of 2023. He reviewed the potential changes to the JPA that have been discussed. Councilmember Sanschagrin asked if it was premature for the Council to vote on this before Excelsior takes any action. Mayor Labadie stated that each city runs independently and believes they need to move ahead and take a vote. City Administrator Nevinski noted that there needs to be unanimity from the cities for the JPA and explained that the reason that they had included' language related to `non -substantive' changes was because of the concern raised by Councilmember Sanschagrin. Councilmember Maddy confirmed that approval of the JPA just needed to be the majority of the council in each member city. He asked how the new formula would effect the City's proposed budget. He asked if the City would pay less or pay more. City Administrator Nevinski explained that he believed the City would be spending about a percentage point more under the new formula. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 6 of 11 Mayor Labadie stated that she believed it was correct that the City would be spending a little bit more and explained that there was a working group that consisted of the four mayors as well as a councilmember from each city that have worked on this JPA. City Administrator Nevinski pointed out Section 7.B. on the JPA and noted that it spells out that the next adjustment would come in 2026 for the 2027, 2028, and 2029 budgets which means that for the coming year the City would still be operating under the current formula. Maddy moved, Sanschagrin seconded, Adopting RESOLUTION NO.23-065, "A Resolution Approving a Revised Joint Powers Agreement Governing the South Lake Minnetonka Police Department." All in favor, motion passed. D. Approve the South Lake Minnetonka Police Dept. 2024 Budget City Administrator Nevinski gave a brief overview of the proposed 2024 SLMPD budget options and explained that staff is recommending approval of option one. He explained the difficulty in approving a budget for the Police Department before the City has begun their own budget discussions. Police Chief Tholen gave a presentation outlining details of the proposed 2024 budget for the Department. He reviewed details of the proposed increases and decreases within the budget, including a proposed 8% wage increase. He outlined proposed increases in insurance costs and training/education. He reviewed the Public Safety Bill Funding from SF 2416/HF 1938 and the expected amounts for each city which were based on population. Mayor Labadie expressed her appreciation to Police Chief Tholen and Senator Morrison for their advocacy in getting the State to include JPAs and smaller cities in this bill for available funding. Police Chief Tholen reviewed the eligible uses and restrictions for use of the Public Safety Bill funding. He reviewed his proposed budget and explained the 6.3% increase over last year. Councilmember Maddy asked if there was a time restriction on when the City could dispense the Public Safety funding from the State. Police Chief Tholen stated that they have not found one, so they do not think there is a restriction. He shared various examples of ways that cities may be able to use some of the Public Safety bill funds to offset the proposed budget increase. Councilmember Callies noted that the amount of money dedicated to uniforms seems high to her. Police Chief Tholen reviewed the expenses involved in outfitting a police officer and noted that it is more than a uniform top and bottom and includes other accessories. He noted that he is hoping that this amount will decrease as they retain officers because outfitting a brand-new officer is more expensive than maintaining a uniform for an existing officer. City Administrator Nevinski reiterated that the Council will have the opportunity to decide how to support this budget amount at a later time which means the decision on using levy funds or the Public Safety Bill funds does not need to be made tonight. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 7 of 11 Councilmember Callies noted that she was comfortable supporting option one, with an increase in the budget of 6.3%, as proposed. Councilmember Sanschagrin stated that he would also support this proposed increase. Mayor Labadie stated that she also supported the increase and pointed out that the Police Department is fully staffed. Councilmember Maddy stated that having this one time money from the State come in at the same time, makes this choice much easier, but noted that Shorewood supports the Police Department, so he would also concur with support for option one. Labadie moved, Maddy seconded, Adopting RESOLUTION NO. 23-066, "A Resolution Approving the 2024 Annual Operating Budget of the South Lake Minnetonka Police Department." All in favor, motion passed. E. Bond Sale Results Shannon Sweeney, David Drown Associates, explained that in order to finance the Birch Bluff Road and rehabilitation of Lift Station #11, there was a bond sale scheduled for June 26, 2023. He noted that Standard and Poors reaffirmed the City's AA+ rating with a stable outlook. He explained that the City had received six bids earlier today for the sale of the City's bonds with the low bid submitted by Robert W. Baird and Company and gave a brief overview of the spread of the bids, which he would describe as narrow. He stated that they are recommending that the City approve the awards resolution that awards the sale of the bonds to Robert W. Baird and Company. Councilmember Sanschagrin thanked Mr. Sweeney and City staff for putting in the work that helped get a good rate and to keep the City's cost of debt low. He explained that he planned to abstain from voting on this item because he is concerned about the level of debt the City is taking on. He stated that he does not want to vote no, but does not think this is a good use of taxpayer funds. Mayor Labadie asked for an explanation from City Attorney Shepherd on what abstaining to vote meant, when there was not a conflict of interest. City Attorney Shepherd explained that Councilmember Sanschagrin can abstain from this vote, but noted that even though it was not a `no' vote, it would basically be counted in the `no' column because the Council needs three affirmative votes in order for this to pass. Callies moved, Maddy seconded, Adopting RESOLUTION NO. 23-067, "A Resolution Providing for the Issuance and Sale of $5,645,000 General Obligation Street Reconstruction and Utility Revenue Bonds, Series 2023A, Pledging for the Security Thereof Net Revenues and Levying a Tax for the Payment Thereof to Robert W. Baird and Company." Councilmember Maddy stated that these spending decisions happened before he was on the Council but explained that this was easy for him to support because the City owes the money and this is the most cost effective manner in which to do that. He stated that Shorewood is paying their bills and finishing up what was already started. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 8 of 11 Motion passed 3-0-1 (Sanschagrin abstained). F. Approve New Retail Liquor License — Red's Savoy Pizza at 19215 State Highway 7 City Clerk/HR Director Thone gave an overview of the request by Red's Savoy Pizza for a new Retail Liquor License. She noted that the applicant had passed the background check, submitted all the licensing fees, and met the insurance liability requirements and staff is recommending approval. Reed Daniels, applicant, shared that he was excited to be able to be part of the City and noted that this has been in the works for a long time. Sanschagrin moved, Maddy seconded, Adopting RESOLUTION NO. 23-068, "A Resolution for Red's Savoy Pizza Wine/3.2 Percent Malt Liquor License." Councilmember Maddy stated that the applicant is a childhood friend of his, but noted that he did not have a conflict of interest. All in favor, motion passed. G. Adult use Cannabis Discussion City Administrator Nevinski gave a general overview of the legislation that has been passed allowing for adult use cannabis. He noted that the City is no where near ready to establish regulations or make changes in zoning, but staff is looking for some general direction from Council on how they would like to proceed. He introduced McKaia Dykema, Campbell Knutson, and explained that she and City Attorney Shepherd would help guide the Council through this discussion. McKaia Dykema, Campbell Knutson, gave a presentation that outlined the history and background of the newly enacted legislation that legalizes cannabis. She explained that there are still lots of practical details that need to be worked out by the regulators. She gave a high- level explanation of the timeline and the use that this legislation actually authorized and noted that there is still no change to federal laws. She noted that a city may adopt an ordinance that makes use of cannabis in public as a petty misdemeanor. She explained some of the exemptions for legal use by City employees and reviewed some of the commercial regulation details regarding categories and classifications by potency. She noted that cannabis businesses are subject to general business regulations, such as zoning. She noted that for retail sales the businesses will be subject to State licensing and regulations and noted that some home growing is allowed. She explained that a city cannot set up another separate license which means the licensing will only take place through the State process. She stated that the State is creating a new regulatory agency called Office of Cannabis Management and explained that under this new legislation, cities may not ban use, possession, or transportation or prohibit businesses from operating if they are licensed by the State. City Attorney Shepherd reminded the Council that this is simply the first discussion on this topic and the Council would not be asked to make any decisions tonight. He explained that local registration of these businesses are required and noted that the City can choose which zoning CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 9 of 11 districts will allow cannabis businesses, but cautioned that the City cannot ban them. He reviewed the parameters surrounding hours when sales are allowed. He noted that the City can adopt a moratorium on high potency cannabis businesses until January 1, 2025. He noted that the Office of Cannabis Management has indicated that they will not offer licenses until the first quarter of 2025 anyway, so a moratorium may not serve much of a practical purpose. He reviewed the local registration requirements, enforcement, and compliance and reviewed the options available for the City to consider. Councilmember Callies asked if the City could extend the current moratorium. City Attorney Shepherd stated that the City cannot extend the moratorium on hemp derived THC products. Councilmember Callies stated that if the City can limit this type of business by only allowing one and controlling that with a zoning requirement, she does not think this is worth spending a ton of time on. She noted that Shorewood does not have a lot of commercial businesses and would not imagine that this will end up bringing in cannabis stores everywhere. Mayor Labadie asked if the same restrictions for things like distance from a school would apply to the low -potency products. She asked if the language school/tutoring center in the Holiday strip mail counted as a school and noted that it is just a few doors down from the tobacco shop. City Attorney Shepherd stated that he was not sure and they would have to look into that more closely. Mayor Labadie asked if there was a certain amount of land or acreage needed in order for someone to cultivate or grow cannabis. City Attorney Shepherd stated that the Office of Cannabis Management will make the decision on whether someone qualifies as a grower or cultivator. Councilmember Callies noted that it appears as though the only thing the City can regulate is with zoning and the moratorium would not be all that helpful. Mayor Labadie stated that she believes from the presentation that the City needs to at least allow one of this type of business and asked if the City could cut it off after that one which would essentially make it a first come, first served scenario. City Attorney Shepherd stated that was correct because of the City's population size. Councilmember Sanschagrin noted that Police Chief Tholen prefers harmonized regulations across the cities they serve and suggested that the City may want to work with the SLMPD and the other member cities. City Administrator Nevinski explained that one thing he heard at the League of Minnesota Cities conference was that eighty percent of the taxes derived from these sales will go to the State, ten percent to the County, and ten percent to the City. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 10 of 11 The Council discussed allowing the moratorium to expire, the possibility of a short-term licensing scheme, the number of businesses that will be interested in these products, and ways to regulate this via zoning decisions. City Attorney Shepherd suggested that staff bring this back for additional discussion in August or September with some thoughts of ways to regulate these sales via zoning. Mayor Labadie asked how difficult it will be, after the moratorium expires, and the hemp derived THC products are allowed to be sold in the City, to stop a business from selling these products and asked if that would be based on violations. City Attorney Shepherd explained that these businesses will be licensed by the State so the City's ability to control it will be almost non-existent. There was consensus of the Council to direct staff to look at ways to restrict the sale of high potency cannabis via zoning and potentially just allow one business per 12,500 residents. Mayor Labadie asked them to bring back more information about the definition of what constitutes a `school' for the next discussion as well. 9. STAFF AND COUNCIL REPORTS A. Staff Spring Clean-Up/Shred Event Update Mayor Labadie stated that she believes the staff memo was self-explanatory. 2. Matters from the Floor — Response to Alan Yelsey City Administrator Nevinski stated that Mr. Yelsey had asked a number of questions at the last City Council meeting that he had responded to in the memo. Mayor Labadie stated that she felt it was a well prepared memo. Other Park and Recreation Director Crossfield noted that Commissioner Levy had submitted her resignation from the Parks Commission because she is moving out of the City. She stated that the Silverwood Park grand opening took place on June 20, 2023 and was well received. She noted that coming up they have the Concert in the Park, Movie in the Park, Tai Chi in the Park and Safety Camp events. She noted that there are flyers for all of the events available in the lobby and also information available online. Mayor Labadie suggested that when staff informs the candidates about the Council's appointment to fill the Council seat that they mention the opening on the Parks Commission and invite them to apply. CITY OF SHOREWOOD REGULAR COUNCIL MEETING MINUTES JUNE 26, 2023 Page 11 of 11 City Engineer Budde stated that the trail has been paved for the Smithtown Pond project so the final item will just be some clean-up/restoration. He stated that on Wednesday, at the intersection of Strawberry Lane and Smithtown Road, they will be restricting traffic down to one lane in order to do some utility work in preparation for a watermain connection. Planning Director Darling stated that she is expecting to hear the decision on the outdoor recreation grant through the DNR by the end of June. She stated that the City submitted an item for the Governor's capital budget bonding bill but will not hear about that decision until closer to the end of the year. City Attorney Shepherd noted that he will be going on vacation beginning tomorrow through July 8, 2023, but explained that City staff is aware of who should be contacted at his office while he is gone. City Administrator Nevinski noted that he had attended the League of Minnesota Cities conference and noted that the discussion covered the many legislative changes that have come out of this session. B. Mayor and City Council Councilmember Maddy asked if the City had heard back from Tonka Bay about the development approval for where the chocolate shop is now. Planning Director Darling stated that it was not unanimous, but Tonka Bay did approve the project. Mayor Labadie stated that she had attended the Silverwood Park Grand Re -opening event and wanted to commend the Public Works Department for getting the park cleaned up and Park and Recreation Director Crossfield and her staff for their work on this event. She stated that it was well attended and noted that the balloon guy was a big hit. 10. ADJOURN Maddy moved, Sanschagrin seconded, Adjourning the City Council Regular Meeting of June 26, 2023, at 10:01 P.M. Motion passed. ATTEST: Paula Callies, ng Mayor andie Thone, City Clerk