2023-10-10 CC Meeting MinutesMOUND CITY COUNCIL MINUTES
October 10, 2023
The City Council of the City of Mound, Hennepin County, Minnesota, met in regular session on
Tuesday, October 10, 2023 at 7:00 p.m. in the Council Chambers in the Centennial Building.
Members present: Mayor Jason Holt, Council Members, Sherrie Pugh, Paula Larson, Kathy
McEnaney and Kevin Castellano.
Members absent: None
Others present: City Manager Eric Hoversten, Deputy City Manager Maggie Reisdorf, City
Clerk Kevin Kelly, Finance Director Noah Iverson, City Attorney Scott Landman, and Jeff
Magnuson.
Consent agenda: All items listed under the Consent Agenda are considered to be routine in
nature by the Council. There will be no separate discussion on these items unless a
Councilmember or citizen so requests, in which event it will be removed from the Consent
Agenda and considered in normal sequence.
1. Open meeting
Mayor Holt called the meeting to order at 7:00 p.m.
2. Pledge of Allegiance
3. Approve agenda
MOTION by Larson, seconded by McEnaney, to approve the agenda. All voted in favor. Motion
carried.
4. Consent agenda
MOTION by McEnaney, seconded by Castellano, to approve the consent agenda. Upon roll call
vote, all voted in favor. Motion carried.
A. Approve payment of claims in the amount of $583,887.86.
B. Approve minutes: 09-26-23 Regular Meeting
C. Resolution No. 23-87: Approving Termination Agreement to cancel Purchase
Agreement with Old Shoreline, LLC.
D. Resolution No. 23-88: Authorizing submittal to the Metropolitan Council of the
2023 Comprehensive Plan Amendment to the 2040 Comprehensive Plan to clarify
future mixed use land use planning to the Metropolitan Council PW 23-08
E. Approve Pay Request #1 in the amount of $199,215.00 to Minger Construction for the
2023 Lift Station Improvement Project; PW 23-03
F. Approve Pay Request #1 in the amount of $207,277.84 to Create Construction for the
2023 Downtown Paver Sidewalks Replacement Project — Group 3;
PW 23-08
Mound City Council Minutes — October 10, 2023
5. Comments and suggestions from citizens present on any item not on the agenda.
None were offered.
6. Orono Police Department with the September Activity Report
Orono Police staff were not present.
Pugh said yesterday (October 9, 2023) was the first official Indigenous Peoples Day and
suggested over the next year the City pass a land acknowledgement statement. Push said this
statement would acknowledge that the City's land is indigenous land and would acknowledge
their culture. Pugh said that Mound is built on sacred ground which include indigenous burial
places of multiple tribes. Pugh said this would be a good thing for the City to work with the
Historical Society on this statement.
7. Public Hearings:
Reisdorf requested action on two public hearings related to assessments. Reisdorf said under State
statute, cities are allowed to recoup unpaid service costs provided to property owners by the city by
assessing the unpaid charges to the property taxes of those property owners. Reisdorf said the
property owners were provided notification of the unpaid fees and assessment process. Reisdorf said
the notice was also published in the local newspaper, the Laker. Reisdorf said the Council must hold a
public hearing and then approve certification before the assessment can be sent to the County for
processing.
Reisdorf said property owners have until November 15t" to pay off their expenses. Reisdorf said after
that date, staff will direct Hennepin County to assess these expenses to property taxes. Reisdorf said
there is an additional 5% interest charge that will accrue on the expenses starting from the date of the
adoption of the two resolutions before the Council. Reisdorf said that any accounts that are paid on or
before November 15t" will not accrue interest. Reisdorf said that staff recommended holding the public
hearings and approving the assessments.
Mayor Holt opened the public hearing for miscellaneous expenses at 7:08. Holt closed the public
hearing at 7:08
A. Action on Resolution Adopting Assessment for Miscellaneous Expenses and Certifying
to the County Auditor at 5% Interest — Levy # 24073
Mayor Holt opened the public hearing for delinquent utility bills at 7:10. Holt closed the public hearing at
7:12.
MOTION by Larson, seconded by Castellano, to approve the following resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 23-89: ADOPTING ASSESSMENT FOR MISCELLANEOUS EXPENSES
AND CERTIFYING TO THE COUNTY AUDITOR AT 5% INTEREST - LEVY # 24073
B. Action on Resolution Adopting Assessment for Delinquent Municipal Utility Bills and Certifying
to the County Auditor at 5% Interest — Levy # 24074
MOTION by Castellano, seconded by McEnaney, to approve the following resolution. All voted in favor.
Motion carried.
Mound City Council Minutes — October 10, 2023
RESOLUTION NO. 23-90: ADOPTING ASSESSMENT FOR DELINQUENT UTILITY BILLS
AND CERTIFYING TO THE COUNTY AUDITOR AT 5% INTEREST - LEVY # 24074
8. Deputy City Manager Maggie Reisdorf requesting action on approval of LMHS lease
Amendment to modify and extend the existing agreement
Reisdorf presented the lease agreement amendment for the Lake Minnetonka Historical Society
(LMHS) which was formally established on October 1st, 2023. Reisdorf said the initial lease began in
2013 with the Westonka Historical Society (WHS) and through the years had four amendments.
Reisdorf said the current lease with WHS ended on September 30, 2023 with the proposed lease
amendment set to be retroactive to October 1, 2023. Reisdorf said this lease amendment agreement is
based on the original contract with WHS and will give LMHS a year to figure out its long-term space
needs plans and other plans. Reisdorf said the expectation was for a completely new agreement with
the LMHS after this amendment expires.
Reisdorf said this fifth amendment to the original lease is focused on the organizational name change
and the absorption of the lease agreement from WHS. Reisdorf added the amendment also focuses on
rental space reduction. Reisdorf said it has been reviewed by Staff, the City Attorney and the board of
the LMHS.
Jeff Magnuson, 6311 Bay Ridge Road, former President of the WHS and now a Member of the Board
of Directors of the LMHS, addressed the Council by saying the LMHS was created from the
combination of four area historical societies; the Excelsior and Wayzata Depot Museums, the
Steamboat Minnehaha Floating Museum and the WHS.
Magnuson also provided an update on the reconfigured museum displays in the Centennial Building
which includes the Tonka Toys exhibit being moved downstairs thus creating a more open and inviting
space. Magnuson said the WHS dissolved and the assets were transferred to LMHS. Magnuson said
the museum location in Mound will retain the Westonka name and identity. Magnuson said the
Excelsior and Wayzata depots and the floating museums will maintain their names as well.
Magnuson said the WHS archives will be moved to the Wayzata Public Library and the contents will be
available to the public for research. Magnuson said all materials are expected to be stored at the
Wayzata Public Library.
Magnuson said he will be the LMHS designated representative for the museum.
MOTION by Larson, seconded by Castellano, to approve the fifth amendment to the lease agreement
between the City and the LMHS. Motion carried.
9. City Manager Eric Hoversten requesting action on approval of T-Mobile Antenna Array
Chateau Water Tower Lease Amendment to extend the existing arrangement
Hoversten said there is a three sector antennae array on the Chateau Water Tower. Hoversten said
the lease runs for five-year option periods and goes through December of 2024. Hoversten said the
lease is structured with a monthly lease rate with a 3% increase per year.
Hoversten said the new agreement allows for use of the tower and the use of space for
telecommunication room. Hoversten said the agreement will extend the lease for another five, five-year
options with a 3% escalation.
Mound City Council Minutes — October 10, 2023
Hoversten said the annual $31,200.00 revenue fee is in the range of current market rates. Hoversten
said the T-Mobile geometry of service sets the antennae array placement in order for T-Mobile to not
have dead spots.
Holt said the 25-year average is 2.5% and the 3% interest feels to be a fair amount. Landsman said a
4% rate is generally for infrastructure which is along interstate corridors and the City held the T-Mobile
agreement to 3%. Hoversten said the agreement would run for a total of 25 years. Hoversten said the
City could give a written termination notice and T-Mobile can terminate every five years.
MOTION by Larson, seconded by Castellano, to approve the following resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 23-91: APPROVING AMENDMENT NO.3 TO SITE LEASE AGREEMENT
10. Stacie Kvilvang from Ehlers providing discussion on franchise fee adjustment options
and outcomes for instructions to staff on manner to proceed before final Budget/Levy Approval
Stacie Kvilvang presented franchise fee adjustment options with asked for instructions on how to
proceed. Kvilvang said Kyle Sawyer from Ehlers is also in attendance.
Kvilvang said the City is looking at a significant levy increase next year and the Council is looking at
savings and additional revenue diversification. Kvilvang said every $75K in additional franchise fee
revenue is the equivalent to about 1 % of the City Levy for 2024.
Kvilvang listed potential options and opportunities for the City to diversify revenue:
Funding areas:
• Property Taxes
• Utility Fees
Franchise Fees
Kvilvang listed the areas the Council listed as 2024 Priorities:
• Communication
• "Right Sizing" Staffing
• Code Enforcement
• Water Fund and Water Treatment Issues
Kvilvang said the City currently charges every user the same $2.75 a month utility franchise fee per
utility. Kvilvang added that Mound is made up of primarily residential properties with a smaller number
of commercial/industrial (C/1) properties which also pay $2.75 a month. Kvilvang said the residential
portion of these fees come from residential properties.
Kvilvang presented two options for raising franchise fees.
Option 1: Flat Franchise Fees
Kvilvang said if the City decided to go with flat fees across all properties that an increase of $.50 per
user would raise $50K in additional revenue. Kvilvang said this increase would be about $12 a year for
residents.
Kvilvang said a flat fee increase to $4.00 in franchise fees would raise $132K which would be a $30.00
a year increase for all properties in Mound.
Mound City Council Minutes — October 10, 2023
Kvilvang described flat fee increases by percentage of the levy increase:
• A $3.46 franchise fee would be equivalent to 1 % of the tax levy
• A $4.20 franchise fee would be equivalent to 2% of the tax levy
Kvilvang said $4.00 is the average franchise fee charged by other neighboring cities for residential
properties.
Kvilvang said another option for the City is to have Tiered Franchise Fees where C/I properties pay a
higher rate than residential properties. Kvilvang said the rationale for larger C/I rates is those
properties use public infrastructure more intensely due to their commercial activity.
Kvilvang said Ehlers used the average rates charged for various users in Hennepin County for the
projections.
Option 2 — Tiered Flat Rate by User Type:
• Residential Rates stay at $2.75
• A tiered rate for differing C/I would raise $140K
Adding in increases to residential:
• Adds $50K in revenue at a $3.25 residential rate to a total of $190K
• Adds $124K in revenue at a $4.00 residential rate to a total of $264K
Kvilvang said she is looking for the preference of the Council on how rates should be structured.
Kvilvang asked if the Council preferred a flat rate for all users, increasing residential rates or leaving
them at $2.75. Kvilvang asked what the target revenue increase the Council is seeking from franchise
fees.
Holt said he would like to change the $2.75 rate as it hasn't changed in many years. Holt said the
Council can decide if franchise fees can offset the tax levy or leave the tax levy to catch up on capital
resources.
Hoversten said a diversified portfolio of revenue sources could lower the levy rate. Hoversten said staff
are looking for mid -course feedback from the Council to give Ehlers information to bring back to the
Council.
Kvilvang said large C/I users are convenience stores, schools and churches with industrial businesses
involved in manufacturing. Hoversten said the tiered rates is an attempt to be equitable. Hoversten
said schools are not providing tax revenue through property taxes even though they still place demands
on systems within the City.
Castellano and Kvilvang spoke to the average for small and large C/I that Ehlers provided in their
presentation material for Hennepin County.
Holt said he was in favor of a higher rate for C/I. Kvilvang said Ehlers is looking for a policy directive
from the Council as to whether franchise fees are flat or tiered for commercial users. Kvilvang said C/I
use more services. Kvilvang said the Council needs to provide direction on how franchise fees would
be used in regards to reduce the tax levy or not.
Castellano said these franchise fee decisions will be a future long-term benefit. Hoversten said that if
the City chooses to do the average rate for HC franchise fees, it would equate to about 2% of the tax
levy. Hoversten said the City Council could shoot for an even higher percentage if they wanted to
relieve the tax levy side of the equation even more.
Mound City Council Minutes — October 10, 2023
Castellano said there is not a need for a lower average rate for the City and he would like to move the
residential from $2.75 to $4.00 with the C/I at the average rate in HC.
Kvilvang said she will negotiate with the utilities regarding C/I and look at their rate tolerance.
Holt said he was in favor of the increase to $4.00 for residential and to not go too far with C/I rates but
to increase C/I rates incrementally. Kvilvang said the Council can reassess rates annually. Kvilvang
said she would need revenue targets from the Council in order to provide the Council scenarios to
diversify revenue targets.
Pugh and Hoversten spoke to C/I property tax values which haven't increased as much as residential
values lately. Pugh said she would like to see C/I rates be increased for small and large C/I over three
years to get to average rates in HC. McEnaney and Larson agreed to C/I fees being increased
incrementally.
Kvilvang said Ehlers will come back with the rate scenarios and after a decision is made by the Council
there would need to be an ordinance approval and a communication plan explaining the change to
residents and businesses.
Larson said she received calls from constituents regarding the 15% preliminary tax levy. Larson said
she discussed with residents the rates and explained to them the City Bond Rating could be affected if
not maintained and the increase isn't that much money per property. Larson said she had a pleasant
experience discussing these tax scenarios with residents.
Discussion ensued on next steps of the discussion on fees and the tax levy and how to communicate
this information to residents. Discussion continued on the risks of not levying appropriately and not
addressing City needs or to plan for financing to meet future problems. Discussion included meeting as
a whole Council to discuss the budget and to fund for meeting the staffing needs of the City, particularly
the PW Department.
Holt said the City is one of the indebted municipalities in the state. Discussion ensued about meeting
City needs now rather than putting off infrastructure and organizational staffing needs.
11. Consultinq Interim Public Works Director option discussion
Holt said the City is losing its Public Works (PW) Director and City Manager when Hoversten leaves
and that the City would like the new City Manager to pick the new PW Director.
Holt said he received a proposal from Brian Simmons from Bolton and Menk (BM) with hourly rates
provided on the cost to provide interim PW Director Services.
Hoversten said the City had used this service from BM in the past prior to his hiring, and while it is a
good short-term option, wouldn't recommend for this service for the long-term. Hoversten said for
financial purposes that the City could set the limit to billable time and materials at a not to exceed
number. Hoversten said the City will need a Full-time PW Director to supervise the City's consulting
engineers and to be monitor cost controls. Hoversten said short-term this will work but if it turned into a
long-term need, that it would be prudent to go to another contractor for checks and balance.
Hoversten said BM staff Simmons, Bauman and Stanley would be the assigned staff from BM as they
all have familiarity with the City which is an added value. Hoversten said this is a good arrangement for
the present but PW Superintendent Ryan Prich needs to be able to have his position covered by
another staff member so he can take time away from the City and not be on call at all times.
Mound City Council Minutes — October 10, 2023
Discussion ensued about the work load and responsibilities of PW Superintendent Prich and a Council
orientation to the City PW system.
Castellano asked about the budget for 2024 PW position and what would be added to contain PW cost.
Castellano asked if is there should be a not to exceed clause in the contract with BM. Holt said this
agreement is for per hour of service. Hoversten said he will get City Attorney input and the contract will
come before the Council for review before being approved and the Capital investment plan will be a
part of this schedule. Hoversten said the agreement will be fairly detailed and invoices will give an after
the fact control. Castellano said a "not to exceed clause" will be an important variable. Hoversten said
there also is a need for flexibility in the event of an emergency or another difficult situation which can't
be met solely by the City PW team.
Holt said Hoversten will go back to BM to work out details and bring the contract back to the Council.
Hoversten said the City Manager job search interview meeting previously scheduled for November 20th
and November 21 conflicts with a Planning Commission (PC) meeting. Hoversten said there have
been 20 candidate applications for the City Manager position which have come forward so far.
Hoversten said the PC meeting will be interviewing for a new PC Commission member and the City is
recruiting for one or possibly two additional PC commission members. Discussion ensued about PC
attendance and the process for commissioners who do not regularly attend meetings.
Hoversten said the Council should look at save the dates for City Manager interviews the week after
Thanksgiving on November 291h and 30th at 6:00 p.m. Hoversten said there is a City Council Meeting
on Tuesday, November 28th. Hoversten went through the hiring process which includes assessments
and a video interview.
12. Comments/Reports from Council Members:
Council Member Pugh — Pugh said she received an economic development award and attended a
State Legislative Hearing on Aging. Pugh said she would like to reactivate the City Economic
Development Committee. Holt said he is 100% in favor of the idea. The Council asked Hoversten for a
fact sheet on the activity of an Economic Development Committee. Pugh would like to leverage other
agencies to provide funds for economic development in Mound.
Council Member Larson — Larson attended the Mound Fire Department Open House which was
impressive. Larson said Mound children participated in many activities and thanked the staff and
volunteers for putting on a wonderful experience.
Council Member McEnaney — Planning Commission meeting has been rescheduled to next Tuesday.
Council Member Castellano - Nothing
Mayor Holt — Communication sub -committee meeting tomorrow.
13. Information/Miscellaneous
A. Comments/reports from Council members/City Manager:
• City Manager Reports will be forthcoming.
• October 12 - WeCan Open House
• October 30 - City Hall winter hours begin
• November 18 - Tree Lighting Event
• November 10, 23, 24 - City Hall closed for Veteran's Day and Thanksgiving
B. Reports: Harbor Wine and Spirits — September 2023
Mound City Council Minutes — October 10, 2023
C. Minutes: March 16, 2023 — Docks and Commons Commission
D. Correspondence:
14. Adjourn
MOTION by Larson, seconded by Castellano, to adjourn at 9:11 p.m. All voted in favor. Motion
carried.
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Mayor Jason R. Holt
Attest':'Nevin Kelly, Clerk