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City Council Minutes 11-22-2004MINUTES REGULAR MEETING - MONTICELLO CITY COUNCIL Monday, November 22, 2004 - 7 p.m. Members Present: Roger Carlson, Glen Posusta, Robbie Smith, Brian Stumpf and Bruce Thielen Members Absent: None 1. Call to Order and Pledge of Allegiance. Mayor Thielen called the meeting to order at 7 p.m. and declared a quorum present. The Pledge of Allegiance was said. 2. Consideration of approving minutes of the November 8, 2004 regular Council meeting. Glen Posusta stated that on the public hearing for the TH 25 signal he felt the geographic area that was being assessed for the signal should be reduced not the assessment amount and asked that the minutes be changed to reflect that. BRIAN STUMPF MOVED TO APPROVE THE MINUTES OF THE NOVEMBER 8, 2004 REGULAR COUNCIL MEETING WITH THE CHANGE NOTED. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. 3. Consideration of adding items to the agenda. City Administrator, Rick Wolfsteller added an update on the Kramer house. 4. Citizen comments/petitions, requests and complaints. Mayor Thielen explained the purpose of the citizens comments portion of the meeting. No one spoke under citizens comment. 5. Consent agenda. A. Consideration of ratifying new hires and departures. Recommendation: Approve new hires and departures for the MCC and Public Works as identified. B. Consideration of accepting feasibility report for 2005 Street Reconstruction Project and setting a public hearing date for December 13, 2004. Recommendation: Adopt a resolution accepting the feasibility report and setting a public hearing for December 13, 2004 at 7 p.m. for the 2005 Core Street Reconstruction Project. C. Consideration of an appeal of Planning Commission's denial of variance to the 30 foot rear yard setback for an attached 4 -unit townhome complex in an R-2 District. Recommendation: Continue public hearing on the appeal to December 13, 2004. Council Minutes - 11/22/04 Mayor Thielen noted at the workshop the Core Street project was discussed and it was suggested to table action on accepting the feasibility report and setting a public hearing until the December 13, 2004 meeting. Brian Stumpf requested that agenda item #10 be added to the consent agenda. BRIAN STUMPF MOVED TO APPROVE THE CONSENT AGENDA WITH AGENDA ITEM #10 ADDED TO THE CONSENT AGENDA AND ITEM #513 TABLED. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. 6. Consideration of items removed from the consent agenda for discussion. None. 7. Consideration of analysis of alternative sites within the Jefferson Commons plat for water tower location. Public Works Director, John Simola stated at the last Council meeting staff was directed to do a cost analysis for an alternative water tower site within the plat of Jefferson Commons. John Simola showed a sketch of the proposed tower location. The original tower site that was proposed was 300 feet south of the Groveland Addition. At the last meeting sites #2 and #4 were discussed but because they were also adjacent to residential properties they were not studied further. Site #3 was the site selected for further study. Site 3 is located in Outlot C north of the ponding area. Several site layouts were considered with this option. Under Option 41 the tower would be approximately 60 feet from the right of way of School Boulevard. This would allow for a building and parking for 28 vehicles. Option #2 gives more room for parking and access in and out of the building. Bret Weiss stated the original tower site was 2.3 acres, Option #1 on site #3 was 2.12 acres and Option #2 on site #3 was 2.8 acres. A cost of $6/sq. ft. was used for the parcel cost for all sites. Land cost alone would make Option 2 higher in cost since it is the largest parcel. The cost to extend the watermain the full width of the lot would be approximately $24,000 but a good portion of this cost would be recovered upon development of the site. Other issues considered were the cost of a shared driveway with Muller Theatre which is estimated at $26,000 and is a cost that would not required if the original site was used. The total estimated costs for the original parcel was $672,228; for Option #1 $672,862; and for Option #2 $888,763. Bret Weiss stated the Council did not ask them to study the parcel south of the power line. John Simola stated they did not have the modeling done for the site adjacent to Kj ellberg. Robbie Smith asked about the altitude valve. Although it has not been determined if an altitude valve is needed, because the sites are hydraulically the same it would make no difference. If it is determined to be needed in one site, it would be needed at all the sites. John Simola stated that by waiting to see how the property develops, it will determine whether the City would utilize Option # 1 or #2 on site #3. He added if the City is considering a fire hall, then Option #2 would be a better site. Brian Stumpf felt with the comments made at the last meeting site #4 was not an option. 2 Council Minutes - 11/22/04 BRIAN STUMPF MOVED TO APPROVE THE NEW LOCATION FOR THE WATER TOWER BASED UPON THE SITE ASSESSMENT/FEASIBILITY STUDY WHICH SHOWS OPTION #1 TO BE EQUIVALENT IN COST AND OPERATION TO THE ORIGINAL SITE AND MR.MIKE MULLER THE ADJACENT PROPERTY OWNER INDICATES THAT THE TOWER WOULD HAVE NO NEGATIVE IMPACT ON HIS THEATER PROJECT AND THIS SITE IS SET BACK A REASONABLE DISTANCE FROM ALL EXISTING OR PROPOSED RESIDENTIAL PROPERTY. ROBBIE SMITH SECONDED THE MOTION. MOTION CARRIED WITH GLEN POSUSTA VOTING IN OPPOSITION. Glen Posusta noted his opposition was because he felt site #4 was the best site for the water tower based on economic considerations. He noted that the mobile home park is not a permanent entity. With property values going up it may not be feasible to continue operation as a mobile home park. 8. Consideration of preliminary and final plat for Otter Creek Crossing, a proposed commercial and industrial subdivision. - Applicant: Otter Creek LLC. City Planner, Steve Grittman provided background information on the plat of Otter Creek Crossing noting the Planning Commission had recommended approval of the plat. At the Planning Commission meeting there was considerable discussion on the extension of the right of way for future road access. The applicant has indicated they are not in favor of proceeding with the right of way dedication at this time. City staff feels it is reasonable to forego the dedication at this time. Staff was recommending approval of the plan with certain conditions exclusive of the right of way dedication. These conditions include: 1) Storm drainage easement across Outlot D; 2) Storm drainage easement across Outlot F; 3) Future replatting of the outlots; 4) A conditional use permit would need to be submitted for the development of Lot 1, Block l; 5) The plat would be filed and the closing date for the 120 acres would be set for December 7. Glen Posusta asked if the easement across Outlot F was part of the purchase agreement. Bret Weiss replied that easement across Outlot F was an existing temporary easement which the City had for some time but had not filed. Bret Weiss stated that the easement document had been in place since 2000. John Chadwick, applicant, indicated that they could work out the storm sewer easement but he is requesting that the right of way easement be dealt with later. ROBBIE SMITH MOVED TO APPROVE THE PRELIMINARY AND FINAL PLAT OF OTTER CREEK CROSSING BASED ON A FINDING THAT THE LAND USE PATTERN IS CONSISTENT WITH THE CITY'S COMPREHENSIVE PLAN AND THAT THE PLAT PROVIDES ADEQUATE EASEMENTS AND RIGHT OF WAY TO ENSURE PROPER PUBLIC SERVICES SUBJECT TO THE FOLLOWING CONDITIONS: 1) THE APPLICANT ENTERS INTO AN AGREEMENT WITH THE CITY REGARDING THE RELOCATION OF THE SANITARY SEWER EASEMENT ACROSS OUTLOT D; 2) THE APPLICANT ENTERS INTO AN AGREEMENT WITH THE CITY REGARDING NECESSARY REVISIONS TO THE EXISTING TEMPORARY STORM DRAINAGE EASEMENT ACROSS OUTLOT F; 3) AS FUTURE USES BECOME APPARENT, THE OUTLOTS WILL NEED TO BE REPLATTED; 4) PRIOR TO DEVELOPMENT OF LOT 1, BLOCK 1, A CONDITIONAL USE PERMIT APPLICATION MUST BE SUBMITTED ACCORDING TO THE CITY'S STANDARD 3 Council Minutes - 11/22/04 DEVELOPMENT PROCESS AND 5) THE PLAT BE FILED AND THE CLOSING OF THE 120 ACRES TAKES PLACE BY DECEMBER 7, 2004. ROGER CARLSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. 9. Consideration of selection of a letter of intent to purchase property within the Jefferson Commons plat. City Administrator, Rick Wolfsteller provided background information. Two letters of intent were received for the purchase of 2.7 acres of City owned land along TH 25. At the last meeting the Council directed staff to do an analysis of the two offers and report back to the Council. Since that time Cory Kingbay had indicated that he was withdrawing his offer. However today he had submitted another letter indicating his renewed interest in the property. Mike Krutzig submitted a purchase agreement that covered all items as requested by the City and included an earnest money check in the amount of $201000. The City was again in the same position of having two offers to consider for the same parcel of land. Glen Posusta pointed out that in the Krutzig offer he is requesting 24 months to complete a building which Glen Posusta felt was a big change from the original letter of intent. Mike Krutzig addressed the issue stating that although he does have parties interested in the site, he does not have signed tenants. He felt it was realistic to allow 24 months for this project to be constructed. Glen Posusta said that if the City was going to wait two years to have a building up, they could wait two years to sell the land. Glen Posusta pointed out that the Kingbay letter of intent provided for construction within six months which would put the property on the tax rolls much sooner. Fred Patch stated that Cory Kingbay did not supply the information the City requested. Brian Stumpf asked about the provision for the City's approval of the architectural design which Fred Patch reviewed. Rick Wolfsteller noted that the City was in the same situation as the last meeting with two offers but with the roles reversed. Mike Krutzig said his goal is to start in the spring and complete it in the fall. He noted he has some interested parties but has not worked out details with them. Although he believes work would be done before the 24 month time period, he also felt this was a realistic time frame for construction and lining up tenants. Mike Krutzig stated he would close on the property within 180 days but construction could not begin until May so six months of the 24 months would already be used. Cory Kingbay spoke regarding his interest in the property. He plans a 15,000 sq. ft. retail space and the possibility of a restaurant or commercial use in the remaining area. He stated he has 3-4 tenants who are very interested in the property. Cory Kingbay indicated his intent was to begin construction within 6 months. Robbie Smith asked about his change of mind in the property. Mr. Kingbay indicated that he had done a more thorough study of the site and the restaurant was also doing a feasibility study on the site. Bruce Thielen asked if he would be changing his mind again. Mr. Kingbay indicated no. Glen Posusta felt the big issue was the tax base and the Kingbay offer would be putting a structure .19 Council Minutes - 11/22/04 in place first. Robbie Smith pointed out that Mr. Krutzig's intent was to start the project as soon as he had tenants lined up which could be in less than 24 months he was requesting. Bruce Thielen expressed his concern that Mr. Kingbay did not submit his offer at the specified date as requested by the City. Mike Krutzig stated that he had an interest in the property for some time and had been told that the City would not be marketing it until the appraisal was done. He was not notified when the appraisal was completed otherwise he would have submitted his offer then. When he was aware the City was considering offers he submitted his letter of intent. Mike Krutzig stated that he has developed projects in the City so the City is aware of his track record. Glen Posusta asked Mike Krutzig if he had occupants for his existing building. Mr. Krutzig responded that all but 3,000 sq. ft. has been leased and it is a little difficult finding a tenant who needs exactly that square footage. Glen Posusta said a building in six months was a big consideration for him. Roger Carlson questioned whether the City was evaluating the same thing since one was a letter of intent and one was a purchase agreement. Robbie Smith felt that the Krutzig proposal met all the conditions the City had requested and Mr. Krutzig has shown what he had done in the City and for him that goes a long way. ROBBIE SMITH MOVED TO SELL THE 2.7 ACRE PARCEL OWNED BY THE CITY, REFERRED TO AS OUTLOT C JEFFERSON COMMONS TO MICHAEL KRUTZIG ACCORDING TO THE TERMS OF THE PURCHASE AGREEMENT PRESENTED MICHAEL KRUTZIG SUBJECT TO REVIEW OF THE PURCHASE AGREEMENT BY THE CITY ATTORNEY. BRIAN STUMPF SECONDED THE MOTION. Roger Carlson asked for comment from the City Attorney. Tom Scott noted that Michael Krutzig had submitted a purchase agreement and earnest money subject to review by the City Attorney. The letter of intent submitted by Cory Kingbay meant there was interest in the property and this could be negotiated into a purchase agreement which would have to come back before the City Council. Tom Scott stated that the City Attorney's review would not be looking at economic terms but rather legal aspects so before the Council's approve it they need to agree to the economic terms. BRIAN STUMPF MOVED TO AMEND HIS MOTION TO CHANGE #8 FROM 24 MONTHS TO 12 MONTHS. Robbie Smith questioned the City's changing the terms of the purchase agreement. Tomm Scott said the City could accept the purchase agreement with the amendment if Mike Krutzig was agreeable to the amendment. Mike Krutzig indicated he would be agreeable to 18 months. Glen Posusta felt that since Mike Krutzig changed the original agreement from 1 year to 2 years that means the agreement should be taken off the table. Tom Scott said the City could approve the purchase agreement with the change from 24 months to 18 months and subject to review by the City Attorney. ROBBIE SMITH AGREED TO THE AMENDED MOTION TO APPROVE THE PURCHASE AGREEMENT SUBMITTED BY MICHAEL KRUTZIG WITH THE CHANGE FROM 24 MONTHS TO 18 MONTHS FOR CONSTRUCTION TIME WITH THE DOCUMENTS k, Council Minutes - 11/22/04 SUBJECT TO REVIEW BY THE CITY ATTORNEY. BRIAN STUMPF SECONDED THE AMENDED MOTION. MOTION CARRIED UNANIMOUSLY. 10 Consideration of reaffirming direction to the City Engineer to continue with engineering work supporting preparation of engineering data necessary to keep interchange project on schedule Council is also asked to consider directing the CitEngineer to prepare a formal feasibility study for the purpose of compliance with the Chapter 429 improvement process. Approved as part of the consent agenda to direct the City Engineer to continue with engineering work supporting preparation of engineering data necessary to keep the interchange project on schedule and to authorize the preparation of a feasibility report on the CSAH 18/I-94 Interchange. 11. Consideration of authorizing staff to investigate viability of Swan River Montessori Charter School proposal to purchase church building and property. Jeff O'Neill provided background information on the relocation of the church building and the efforts to come up with financing for the charter school. Isabelle Olson, Michell Twardy and Chris Cooper, representing the Swan River Montessori Charter School were present to discuss financing issues with the Council. Prior to the discussion of finance issues, Chris Cooper had a number of individuals speak in support of the locating the charter school in Monticello. Michele Uecker, a Monticello resident, Katie Curtis from Rogers and Susan Strempke from Rice all spoke in support of the school. The charter school is proposing: 1) Sale of the site and building to them for $200,000 or the actual appraisal price whichever is less on a contract for deed for 20 years at 6% interest. The contract for deed would be subordinate to a bank first mortgage lien. 2) City funding of renovations by use of remaining Sunny Fresh funds estimated at $100,000 with further renovations to be overseen by a contractor hired by the school; 3) City pre -payment of rent or usage fees in an amount of $400,000 less the remaining Sunny Fresh funds; 4) Lease/use agreement of space in the Community Center for the school's physical education program and other related programs. Isabella Olson estimated this leasing of the Community Center space to run between $50,000-$63,000. Jeff O'Neill asked about the days and times the church facility would be available for use. Isabelle Olson indicated that they are only proposing to utilize the church area as a lunchroom so the space would be available at all other times. It was noted that the Community Center has a demand for meeting space during the days and that the Community Center staff would handle scheduling for the church facility as well. Jeff O'Neill asked about the maintenance of the facility. Isabelle Olson indicated they would be a shared use agreement. While she felt that utilization of the space for meetings would not generate a heavy cleaning demand, the scheduling of weddings and certain other events would and in those cases they would expect the Community Center to be responsible for cleaning. The Council discussed the risks for the City. Should the school default on the contract for deed for the land and building, the building and land would go to the bank who holds the first mortgage. G Council Minutes - 11/22/04 Isabelle Olson stated that building is constructed as a multiple use building and could be utilized for office space should the school fail. Their revenue is based on enrollment and their revenue comes from the state. Glen Posusta questioned why the principals involved did not provide their own funding. Isabelle Olson said as a non-profit corporation it would be a conflict of interest.. Brian Stumpf stated that one of his concerns would be the residents reaction to the City subsidizing a private school. He also indicated that he thought the initial proposal was set up where upon if the building ceases being used as a school, the land and building would revert back to the City. Brian Stumpf felt the financing plan needed to be analyzed further. Isabelle Olson said with the rents the school would be paying to the Community Center, the City would be getting ample revenue from the school over the next 20 years. Building Official, Fred Patch was asked for an explanation of how the funds from Sunny Fresh had been used. Fred Patch explained that the $200,000 grant from Sunny Fresh was for the moving and restoration of the church only. Fred Patch reviewed the expenditures to date noting expenditures had been approved by Sunny Fresh and any unused funds when the project was completed would be turned over to Sunny Fresh. Fred Patch also reviewed some of the work remaining to be done and the estimated cost. Glen Posusta asked why temporary heating had been installed. Fred Patch indicated it was done to keep the foundation warm so the backfilling could be done. Jeff O'Neill stated that since they didn't get this proposal until Thursday staff didn't have an opportunity to do a detailed analysis of the proposal and the City would like to have another two weeks to study this. Robbie Smith questioned how the charter school could say they were not in competition with the school district. Isabelle Olson stated that Mike Benedetto of the school district said there would be some impact to the school district but he felt it was time for other systems to come into town. The charter school is a public school just like District 882. Isabelle Olson said if the school is located somewhere else the Monticello School District would be obligated to pay bussing costs which could be very costly for the school district. She also felt the charter school was bringing students back into the public schools that are currently enrolled in private schools or are in home schooling. Robbie Smith questioned the appropriateness of the City funding a school. Isabelle Olson stated the charter school would be maintaining the building and land for 20 years with no further funding cost to the City. She stated that the $200,000 given by Sunny Fresh was not meant for the building but for the use by the school. Glen Posusta felt the establishment of the charter school was a worthwhile project and would bring people to Monticello. He asked why the City would question the funding for this project when they didn't question the City participating up to $5,000,000 in costs for an interchange project that would benefit some Fortune 500 companies. Bruce Thielen stated when the charter school project was initiated it was suppose to be at little or no risk to the City but that has changed and the City needs to evaluate the amount of risk. Isabelle Olson said time is of the essence and if the Council doesn't approve the project the school would have to move away from this project. Michelle Twardy stated that one of the points that was being 7 Council Minutes - 11/22/04 missed is that for money being contributed by the City the City would be getting funds back. Glen Posusta felt that the Community Center costs the taxpayers money and the revenues from the school leasing community center space would relieve some of the burden the taxpayers pick up. Brian Stumpf felt that the property when it is no longer used as a school should come back to the City. Tome Scott noted that one option that has not been looked at is entering in a long term lease instead of a contract for deed. Although the contract for deed would be subordinate to the bank loan, there was discussion on whether the prepaid rent would also be subordinate to the bank loan. Tom Scott felt that it would take 4-6 weeks to get the deal together. Roger Carlson asked about the time frame of the school. Isabelle Olson said the Council would have to move tonight for them to proceed. GLEN POSUSTA MOVED TO GRANT PRELIMINARY CONCEPT APPROVAL AND AUTHORIZE STAFF TO WORK OUT DETAILS RELATING TO THE PROPOSAL WITH DOCUMENTATION RELATING TO THE PROPOSAL TO BE PLACED ON A FUTURE COUNCIL AGENDA. BRUCE THIELEN SECONDED THE MOTION. MOTION CARRIED WITH BRIAN STUMPF AND ROBBIE SMITH VOTING IN OPPOSITION. Fred Patch asked for clarification from the Council on using the remaining funds from the Sunny Fresh grant to continue with the work remaining. The consensus of the Council was to continue with the work remaining. 12. Consideration of a request for a conditional use permit for a 10 -unit residential concept stage planned unit development and a request for rezoning from PZM (Performance Zone - Mixed) to R-2 (Single and Two Family Residential) Applicant: Jen -Tor Construction. Steve Grittman reviewed the request for a conditional use permit for 10 unit residential concept stage planned unit development for the area of 4t' Street and Palm Street. It was noted that the applicant is proposing to build in the right of way of the unconstructed Palm Street. Steve Grittman showed a sketch of the proposed development pointing out the easement along the south side of the property. According to the sketch the buildings would encroach into the easement. Currently the property is zoned PZM but the applicant would be requesting rezoning to R-2 at development stage. Glen Posusta questioned a comment in the staff report that two story homes have higher value Because of the adjacent single family structures the design was for a two story home with attached garages. Instead of a solid wall there would be undulating roof lines. Brian Stumpf noted there were some concerns about drainage in the area. Steve Grittman stated they were brought up at the concept stage discussion and would be resolved at the development stage review. ROGER CARLSON MOVED TO APPROVE THE 10 UNIT TOWNHOUSE CONCEPT STAGE PLANNED UNIT DEVELOPMENT FOR JEN-TOR CONSTRUCTION BASED ON A FINDING THAT THE LAND USE AND SITE PLAN APPEAR TO MEET THE INTENT OF THE CITY'S PUD ORDINANCE, WITH THE CONDITION THAT DEVELOPMENT STAGE No Council Minutes - 11/22/04 PUD PLANS PROVIDE ADDITIONAL LANDSCAPING CONSISTENT WITH THE COMMENTS IN THE AGENDA REPORT AND WITH THE CONDITION THAT THE HOUSING STYLE IS RE -DESIGNED TO PROVIDE FOR A MORE TRADITIONAL HOUSING STYLE RATHER THAN THE SPLIT -ENTRY CONCEPT SHOWN IN THIS APPLICATION. IN ADDITION THE APPLICANT NEEDS TO VERIFY ACCESS TO UTILITY LINES THAT EXIST TO THE SOUTH OF THE PROPERTY. GLEN POSUSTA SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Added Item. - Rick Wolfsteller updated the Council on the fire damage at the Kramer house and the insurance claim. He asked if the Council wanted to consider any kind of proposal or whether they wanted to pursue costs based on the coverage amount or on actual costs. 13. Approve payment of bills for November. Glen Posusta had questions on a number of bills including the relocation costs. It was indicated that when the City acquired the Rask property this covered the cost for relocating the tenant on the property. It is a federal requirement. GLEN POSUSTA MOVED TO APPROVE PAYMENT OF THE BILLS. BRIAN STUMPF SECONDED THE MOTION. MOTION CARRIED UNANIMOUS. 14. Adjourn. BRIAN STUMPF MOVED TO ADJOURN AT 9:55 P.M. ROGER CARLSON SECONDED THE MOTION. MOTION CARRIED UNANIMOUSLY. Recording Secretary 9