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2022-12-13 CC Meeting MinutesMOUND CITY COUNCIL MINUTES December 13, 2022 The City Council of the City of Mound, Hennepin County, Minnesota, met in regular session on Tuesday, December 13, 2022 at 7:00 p.m. in the Council Chambers in the Centennial Building. Members present: Mayor Ray Salazar; Council Members, Paula Larson and Sherrie Pugh, Phil Velsor and Jason Holt Members absent: None Others present: City Manager Eric Hoversten, Administrative Services Director Catherine Pausche, City Engineer Brian Simmons, Engineer Robert Bean, Tom Notch, Cindy Notch, Joe Bruns, James Vettel, Karl Weisenhorn, Julie Weisenhorn, Kathy McEnaney, Angela Saystrom, Mary Davis, Jerry Jerome, Kim Blievernicht, Barry Blievernicht, Erin Wombacher, Peter Mayer, Claudia Lacy. 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 Salazar called the meeting to order at 7:00 p.m. 2. Pledae of Allegiance 3. Approve agenda MOTION by Velsor, seconded by Larson, to approve the agenda. All voted in favor. Motion carried. 4. Consent agenda Mayor Salazar requested Item 4J be pulled for discussion. MOTION by Larson, seconded by Pugh, to approve the consent agenda as amended. Upon roll call vote, all voted in favor. Motion carried. A. Approve payment of claims in the amount of $875,815.59. B. Approve minutes: 11-22-22 Regular Meeting C. Approve appointments to the Docks and Commons Commission: 1. James Vettel (Abutter) appointment to a 3-year term 2. Jesse Jensen (Abutter) appointment to a 1-year term 3. Derrick Hentz (Non -Abutter) appointment to a 3-year term D. Approve appointments to the Planning Commission: 1. Derek Archambault appointment to a 3-year term 2. Jake Staystrom reappointment to a 3-year term 3. Jon Ciatti reappointment to a 3-year term Mound City Council Minutes — December 13, 2022 E. RESOLUTION NO. 22-104: RESOLUTION APPROVING CONTRIBUTIONS FOR 2022 F. Approve FIN-014 Policy: Utility Billing for Properties Returned to Vacant Land G. Approve Public Works Pay Requests: 1. Pay request #5 and final in the amount of $5,113.28 to R & R Excavation for the 2021 Lift Station Improvement Project, PW 21-03 2. Pay request #2 in the amount of $1,933.25 to R & R Widmer Construction Inc. for the 2022 Lynwood Watermain Improvements Phase 2, Project PW 22-01 3. Pay request #1 and final in the amount of $106,445.00 to Floorcoat Midwest, LLC for the 2022 Manhole Rehabilitation Project PW 22-04 4. Pay request #1 in the amount of $29,824.02 to Pipe Services for the 2022 Sewer Televising Contract PW 22-04 5. Pay request #2 in the amount of $88,676.36 to Valley Paving Inc. for the 2022 Surfside Park Depot Area improvements PW 22-09 H. RESOLUTION NO. 22-105: RESOLUTION DESIGNATING POLLING PLACES I. RESOLUTION NO. 22-106: RESOLUTION APPROVING PERMITS FOR 2023 POLAR PLUNGE ON LAKE MINNETONKA ON SATURDAY, JANUARY 28, 2023 AND REDUCED FEE J. (PULLED) 4J. (Pulled) Approve Resolution Approving Liquor License Mayor Salazar said he wanted to provide an update on Scotty B's as this liquor license is for the establishment that will be moving in to the Scotty B's location. Salazar said Scotty is retiring after many years of service and dedication to our community. Salazar said Scotty found a buyer and he has spoken to the new owner who intends to open a Mexican restaurant called Casa Amigo, noting the owner has opened five restaurants and has been in business for eight years. Salazar thanked Scotty for being such an asset to our community and wished him well. Larson asked if the street address needed to be on the resolution as the liquor license is site specific. MOTION by Salazar, seconded by Holt, to approve the following resolution, with the addition of the physical address added to a whereas statement. All voted in favor. Motion carried. RESOLUTION NO: 22-107: RESOLUTION APPROVING LIQUOR LICENSE 5. Comments and suggestions from citizens present on any item not on the agenda. None were offered. 6. Orono Police Sergeant Matt Siltala with the November Activity Report Officer Siltala said there were 135 calls for service. Siltala gave a recap of the speeds signs set up eastbound and westbound by Bluebird Lane on Three Points. Siltala said the data wasn't very user Mound City Council Minutes — December 13, 2022 friendly the way it was formatted, but that the OPD divided the sum of speeds by number of cars and the average speed was 27-28 mph with a few 31-33, noting occasionally there was a high flyer, but even then the peak speeds were in the mid-30's. The sign recorded one 86 mph but it appears to be an anomaly and they suspect the system added two speeds together. Siltala noted Sgt. Sonnek and a few other officers also parked and physically monitored traffic and found similar patterns, noting no driver warranted a ticket, but the department will continue to maintain a presence. Council thanked the OPD for the effort and said it appears to be good news. Velsor asked about the technology. Siltala said they get mounted on a speed sign pole vs. the speed trailers which produce more user friendly data but tend to slow vehicles down. Siltala said the pole mounted radars are thought to be a truer reflection of actual speed. Salazar said it sounds like it averaged between 27 — 32 mph but noted it tends to feel faster. Siltala said winter parking restrictions seem to be adhered to although he noted some vehicles were impounded last year. Pugh asked about personal care calls (wellness or lift) and asked if there are any demographics to understand who is needing the help. Siltala said falls and lifts are generally elderly but mental health calls are across the board demographically and he reiterated the imbedded social worker is helping to reduce call volumes with certain individuals. Velsor noted MFD tracks. Siltala said they still get calls to assist with falls in assisted living facilities. 7. Hennepin County Assessor Joshua R Hoogland, presenting overview of the property taxable market valuation process and the Pay 2023 Assessment Josh Hoogland, Hennepin County Assessor, said he is here to present an overview of the 2022 PAY 2023 property tax assessment, noting the Assessor's office determines valuations, cities and counties determine the total levy dollar amount, and then the County Auditor assesses the property taxes. Hoogland said property tax assessments are governed by state statutes and overseen by the MN Department of Revenue (DOR), noting statute requires every property be evaluated every 5 years based on sales ratios with a goal of taxable market value being 95% of total value. Hoogland noted the range set by statute is 90 to 105% of total value. Hoogland said there are five major property type classifications — residential, agricultural, commercial/industrial/utilities, apartments 4+ units, and unmined iron ore/all else. Hoogland said the County publishes annual report of county wide trends each March on their website. Hoogland said growth by category in 2020 was consistent across categories, in 2021 there was variation due to pandemic with year over year residential and industrial growing and commercial lagging. Hoogland said Mound specifically showed significant changes particularly in residential from 2020- 2021-2022. Velsor noted there is no vacant land so he struggles to understand where the 28% growth in residential can come from. Hoogland said there was $8M improvements in the 177 single family properties which can include tear downs but was also driven by sales data. Salazar mentioned past similar growth in the early 2000's before the 2008 recession. Hoogland displayed a heat map that showed Minneapolis yellowish/lower growth with growth intensified in the Mound City Council Minutes — December 13, 2022 suburbs — particularly around Lake Minnetonka. Hoogland showed the single family growth rate and median value single family homes in Lake Minnetonka communities, of which Mound was second only to Greenwood. Hoogland explained the residential tax classification rate with values <= $500K at 1.0% and > $500K at 1.25% is used to determine tax capacity per State Statute. Hoogland explained the Homestead Market Value Exclusion (HMVE) equation for owner occupied homes with values between $76000 and $413800 (on a sliding scale) can also impact the individual tax burden, noting the HMVE in Mound decreased from 2.448% of the estimated market value to 1.198% due to the increase in values. Mayor Salazar thanked Hoogland for the presentation 8. 2023 Final Budget and Levy Discussion/Approval Pausche said she asked Josh Hoogland to attend to help differentiate the tax assessment and the corresponding impact on property taxes vs. the City's levy. Pausche said 30% growth for Mound is significant as we don't have the new development other cities have like Minnetrista's Woodland Cove, and because Mound's tax base is so diverse, the impacts can be very different based on property type. Pausche noted that Mound's total market value is much lower than neighboring lake cities due to the diversity of the tax base and relative affordability. Pausche highlighted the 30% increase in taxable market value and the 5% preliminary levy increase results in a reduction in the tax rate from 40.2% to 32.4%, noting while that may sound good, it resulted in our Local Government Aid allocation being cut in half by $144K or the equivalent of 2% of the levy. Pausche said capital reserve funding had to be reduced as a result and that the capital reserves were established in 2018 with the goal to fund utility fund deficits and moderate increases to the utility rates and to reduce future reliance on bonding and special assessments. Pausche noted utility revenue bonds are for 20 years vs the street improvement portion are for 15 years, and in 2018 the Council agreed that as the debt matures, those funds should be diverted to the reserve funds for future street improvements which are slated to begin again in 2025. Pausche noted Staff recommends a 3% increase to both water and sewer that will raise the average bill 2.8%, or $108 per month from $105 for 5K gallons. Pausche noted the Capital Improvement Plan calls for $8.9M in spending for 2023 — 2025, not including any water treatment improvements. Pausche showed slides that depicted the Council's effort to manage tax and utility rates over the years in an attempt to fairly distribute the cost of running the City. Pausche noted the tax rate peaked in 2014 at 57% and efforts were made to respond and attempt to get to stable and reasonable increases. Pausche noted full-time staff has been reduced by over 25% since 2008 and that payroll and benefits were higher in 2008 than 2023, not counting cost of living increases. Pausche said this informs what level of service is realistic for our current capacity as many employees wear multiple hats compared to our counterparts in other cities. Pausche said the utility revenues account for approximately 37% of total revenue and the tax levy 48% and over 50% of the utility revenues fund debt service and capital improvements. Pausche noted the incentive to eliminate special assessments was a result of past experience where assessments varied significantly based on the year the project was done, the density of housing in the area, and market factors/cost of construction. Pausche said in 2018 the Council agreed it would be more equitable to fund reserves and not charge special assessments for future projects. Pausche said over $100M in capital investments have been made since 2000 with $40M in bonds still outstanding and the question is at what rate will we continue to incur debt and how will we pay for it. Mound City Council Minutes — December 13, 2022 Pausche showed summary slides for the 2023 proposed final levy and general fund revenues and expenditures. Mayor Salazar invited the public to provide any feedback on the budget and levy but no one came forward. MOTION by Velsor, seconded by Holt, to approve the following resolution. All voted in favor. Motion carried. A. RESOLUTION NO 22-108: RESOLUTION ADOPTING FEE SCHEDULE FOR 2023 MOTION by Velsor, seconded by Larson, to approve the following resolution. All voted in favor. Motion carried. B. RESOLUTION NO 22-109: RESOLUTION APPROVING THE 2023 FINAL GENERAL FUND BUDGET IN THE AMOUNT OF $6,399,501; SETTING THE FINAL LEVY AT $6,935,621; AND APPROVING THE FINAL OVERALL BUDGET FOR 2023 MOTION by Larson, seconded by Pugh, to approve the following resolution. All voted in favor. Motion carried. C. RESOLUTION NO 22-110: RESOLUTION APPROVING A LEVY OF $250,000 FOR THE PURPOSE OF DEFRAYING OF THE COST OF OPERATION PURSUANT TO THE PROVISIONS OF MSA 469 OF THE HOUSING AND REDEVELOPMENT AUTHORITY OF, AND FOR, THE CITY OF MOUND FOR THE YEAR 2023 9. City Engineers providing a Report of Findings on Harrison Bay stormwater management facilities and practices Brian Simmons, City Engineer Bolton & Menk said he and Bob Bean, Water Resources Engineer, will go through the presentation and then take questions from the Council and then the Council can invite the public to speak and decide whether it should be interactive or have the engineers return after the discussion. Bob Bean said the Council authorized an investigation on whether the city's outfall is contributing to sediment in Harrison's Bay. Bean summarized the investigation methods and parameters, including field investigation, review of the hydrology model that can predict flow rates, review of the history of the City's drainage improvements since 2011, and also noted Bolton & Menk has a strong collaboration and understanding of the other government partners/agencies. Bean said the investigation focused on eutrophication and the likely contributors and other potential issues. Bean showed a diagram of natural vs. unnatural eutrophication, noting all waterbodies experience eutrophication where they fill in gradually with sediment, the pace of which is determined by the depth of the water body. Bean said Harrison Bay has 16 storm sewer outfalls, 11 street surface outfalls and 200 residential lots so there is a lot of human contribution to eutrophication. Bean showed aerials that demonstrated the level of excavation since the 1950s. Bean said the likely contributors are as follows: primary one is historical P-Laden sediment which was a result of 7 different wastewater treatment facilities emptying into Lake Minnetonka up until 1986. Bean said the discharge resulted in millions of pounds of phosphorus being released into the lake resulting in algae, noting the phosphorus remains in the Mound City Council Minutes — December 13, 2022 sediment and anything that disrupts it (i.e., geese, carp, recreational watercraft, lawn -management treatment) continues to contribute to algae blooms. Bean said the watershed of Harrisons Bay is 473 acres, with 243 acres of land and 230 acres of open water noting the majority of phosphorus is generated from residential areas. Bean said the culvert on Commerce Blvd. is for a 22.8-acre watershed and is removing more sediment than the formulas predict so it is doing its job. Bean said treatment opportunities are minimized due to elevation, private shoreline, minimal drainage area and return on investment (ROI). Bean said a Commerce Blvd pond would increase the removal from 60% to 80% if it was a %2 acre or 1 acre in size, which would take up part of the MCWD land and require massive excavation and tree removal. Bean said MCWD indicated it is not interested as the property serves as a conservation area for a historical Maple Basswood Forest. Bean said because there was not room for a .5 to 1 acre pond on City controlled land, the culvert solution was selected in 2007. Bean said a recreational 10hp motor can impact up to 6 feet and a 50hp motor can impact up to 50 feet in depth. Bean also noted the change in precipitation patterns with higher peak flow rates, in addition to low water levels contributing to a higher concentration of phosphorus, lack of navigability, and make it easier to stir up sediment. Bean said there was also a claim winter road management is contributing to the degradation of the retaining walls along the shoreline and the investigation indicated the 8 gage steel lake wall has a 25+ years useful life and that this wall was installed prior to 1989, making it past its useful life. Bean said the City and Hennepin County use smart salting technology within the state requirements. Foam, sheen and fish kill are other factors which comes from tree canopy, bacteria feeding on decaying organic material and not necessarily boat petroleum. Bean concluded by saying eutrophication is a natural process and Harrisons Bay has a history of private alterations evidenced by the aerial photography. Bean said current water levels are exacerbating conditions but the City is meeting the MS4 requirements for sediment removal and outfall maintenance. Bean said ultimately many of the contributing factors are outside of the city's control or jurisdiction and additional investigation would be required but would be of limited value to the City. Bean said dredging is not required for the MS4 permit requirements and would strictly be a policy decision at the City's discretion. Holt asked how often the Commerce treatment structure is checked. Bean said the sump is cleaned every year at a minimum and since it is easy to reach it receives additional attention. Hoversten said it was cleaned twice including the swale in 2022 but this was a bad example because of the rain patterns. Bean said the structure was designed to take on the first .5 inches of rainfall which should capture 60% of events. Simmons said it is designed to grab the dirt and debris from the road and then the swales are there for the rest which should be clearer. Bean said there are fewer little events and more recently there are fewer more extreme events so the swale may need more maintenance. Bean said swales should last 20 years and this one has only been there for 15. Salazar said some vegetation had to be removed to prevent flooding to nearby properties. Velsor said swales need to have vegetation to work, noting if you take a hose to your lawn you are going to get dirt to come up and that is the impact these larger events are having. Velsor said he did not see a silt issue caused by the wooded area when he inspected the site. Velsor noted with new developments the water retention ponds initially fill with silt during construction and have to be cleaned out but then they tend to fill with water and drain and the silt doesn't come into play long-term. Mayor Salazar invited the public to come forward. Mound City Council Minutes — December 13, 2022 Sherry Wallace, 2135 Overland Lane and Chair of the Harrisons Bay Association, said they got the report from Eric earlier this week but noted the September 27 Council action directed staff to conduct a multi -agency study with Minnetrista, Watershed, County and City to look at alternatives. Wallace said neighbors are saying more silt is coming through than was modeled, noting Bob Bean said more silt was taken out that was modeled. Wallace said silt was the point of the investigation, not phosphorus, noting she specifically asked that the neighbors were part of the investigation to feel heard, involved, and considered so they could see the data. Wallace said it sounds like a modeled investigation but the neighbors are basing it on what they are seeing and would like a more collaborative process to see if it is working as designed. Velsor mentioned the different types of rain falls (100-year events) and it seems there are more `bigger' events. Velsor said if everything was designed for 100-year events we would be over engineered at great expense. Simmons said the entire town would be culverts, catch basins and storage ponds. Bean said models typically are based on a 10-year design from a risk assessment perspective but due to elevation challenges in Mound we can't always build to that level so smaller pipe for a 5-year event is used. Bean said based on the 2014 rain events, statistical probabilities have been changed to increase intensity, but Simmons noted a lot of storm infrastructure was pre-2014. Hoversten said historically only the inches of water in a year were considered but after 2014 the focus changed to incorporate intensity and volume as we began seeing more deluges vs all day 2" rains. Hoversten said in 2022, there was only 8" of rainfall all year long that came mainly in 5 events of 35 minutes to 1.5 hours with only one all -day event. Bean said energy dissipation tactics can help prevent culverts from rushing over the swale flushing into public water. Simmons said solution include rip rap or energy dissipaters inside the pipe. Bean said with the low water level made it easy to inspect outfalls and there were no visible issues/plumes. Salazar asked if the shallowness of the lagoon is exasperating the situation and Bean agreed noting the lake level is down 2 feet. Simmons said the outfalls are built based on the OHW and Bean noted they are supposed to be submerged which would help dissipate. Bean said the investigation focused on what is at city's control and whether there is a potential for collaboration, noting once again there are strong relationships with those partners. Bean said his investigation concluded the City is meeting its responsibility and that it should end there but if the City wanted to pursue other avenues that would be the time to seek collaboration once again noting they were told by other agencies they are not interested. Bean said that as for collaborating with residents during the investigation, Bean said he has 30 years of water engineering experience and a strong knowledge of the City's infrastructure, and again he thought the opportunity for collaboration would be if the City decided to pursue other avenues beyond its basic responsibilities. Sherry Wallace said the residents felt they could have brought more information and video evidence to all the partners, including the Watershed. Wallace said the problem is the brown water that is coming through the swale at a high rate. Wallace agreed there is a need to dissipate, but that there is more opportunities to do so before the culvert as well to prevent the scouring and brown water that happens before it hits the lake. Wallace said they wanted James Wisker and his engineers in a room to educate them and there is also a need to bring the residents into the conversation and educate them. Bean said he talked to Wisker offline and there is not interest in a project as the land was bought to preserve the forest. Hoversten said he asked Bolton & Menk to determine whether or not we have an `ask' to bring to these agencies which is the first step to seeking collaboration. Hoversten said Hennepin County noted using less salt means you need to be willing to tolerate more car accidents. Hoversten said it is a world of Mound City Council Minutes — December 13, 2022 trade-offs and if we want to slow water flow we have to store it upland and whose land are we going to flood. Hoversten said this is 1/3 of a mile of Hennepin County's 100's of miles of roadway, noting just past Hardscrabble on CR 44 there is an unrepaired, unresolved mud slide. Hoversten said asking them to come to contribute to an area with infrastructure already in place puts us lower on their priority list. Velsor said there was a comment about Harrison Bay Sr Living adding to the problem and he evaluated the grading/drainage plan and approximately 90% of the surface water goes to Dutch Lake. Velsor said it probably produces less run-off when it was vacant land. Pugh said she was the one who made the motion for a collaborative process and she understands the rationale behind the engineers and staff's conclusions, but she is concerned with equity, and she said she thinks the City needs to formalize their positions and force the government entities to indicate what they will and what they will not do. Pugh said Hennepin County, Three Rivers Park District, and Minnehaha Creek Watershed to speak for themselves and not require the City to speak on their behalf. Salazar said everything is being done according to engineering standards and the hydrodynamic separator is doing its job and the vegetative swale is filtering water, noting it was cleaned out/repaired so it did not impede upon neighboring properties. Salazar said the City's responsibility is health and public safety, including police, fire, water, and streets and that the responsibility ends at the 929.4 OHW which beyond that is the responsibility of the LMCD, DNR, and MCWD. Salazar noted Harrisons Bay has always been shallow since the 1950's with dredged starting in the 1980s for the townhomes which was not what Mother Nature created. Salazar said it this was an exhaustive study of what contributes to eutrophication and he respects the engineering and scientific standards used. Salazar said the bottom line is the City is doing everything it can and its responsibility ends at 929.4 OHW and that for the City to assume any responsibility beyond that would be a misuse of taxpayer dollars. Wallace said residents are researching dredging but they are just concerned whether the flow will refill it in. Velsor recommended that if there is another high velocity rain event, the water will be brown, but he could not detect any silt in the highlighted area from the gas station on down so his guess is there is not brown water going into culvert from road. Velsor said swale is going to be brown water. Velsor said this summer can't count because there was construction going on all summer long. Velsor said he did not see anywhere brown water could be coming from besides the swale so the video of the swale was not really relevant. Velsor said folks at previous meetings talked about dredging being the City's responsibility and Wallace said she understood that is not the City's policy. Wallace said she agreed with Pugh to let the agencies go on record on what they are willing to do. Hoversten said there is an offline storage basin on the west side of the road but the problem is the elevation and that it would require a retention pond that MCWD said they are not willing to entertain. Hoversten said he struggles to make an 'ask' without a specific defect to base it on. 10. City Manager Eric Hoversten requesting action on an Amendment to ADMIN-011: City Participation in Lake Management Projects Salazar said he requested the policy previously approved be updated to clarify the responsibilities of the City with regard to MS4 permit and that the City's responsibilities end at 929.4 OHW. MOTION by Salazar, seconded by Pugh, to approve the update to ADMIN-011 Policy: City Participation in Lake Management Projects. All voted in favor. Motion carried. Mound City Council Minutes — December 13, 2022 ADMIN-011 Policy: City Participation in Lake Management Projects 11. Harrison Bay Association Rain Barrel Project Presentation Angela Saystrom, 5525 Sherwood Drive, said the Harrisons Bay Association (HBA) has come together since the bay was classified as impaired. Saystrom said there are actions that can be taken as a community with landscaping and rain gardens to help filter water flowing into lake and she is here to talk about Rain Barrel Project based on an established program sponsored by the Recycling Association of MN (RAM). Saystrom said RAM offers group orders of about $100 per barrel which is below retail, noting RAM handles payment, education and delivery to a central site. Saystrom said most cities and counties patriciate in making a contribution to reduce the price. Saystrom gave an overview of storm water contaminants and the benefits of using a rain barrel to capture roof run-off, noting a typical roof can capture 1,300 gallons annually which can reduce run-off, city water usage and the non -treated water is better for plants. Saystrom said Julie, an expert with UM extension services, will provide education on rain barrels and other options. Saystrom said she spoke to the POSC last week about a community based event, noting the order needs to be place by December 231. Saystrom suggested using the Lost Lake area/parking deck for distribution coupled with a demonstration project at farmers market, preferably on a Saturday in May. Saystrom said the groups specific ask is that the HBA will manage communications and distribution with RAM and develop, staff and deliver the training materials and the demonstration project, including treats. The group asks that the City help with unloading the rain barrels off of a truck to a place where they can be stored securely at no charge, and assist with promotion via the newsletter, utility mailing, website, etc. Saystrom said the group also requests the City make a financial contribution, noting a $20 discount is the most common and with the minimum order of 72 barrels would equate to approximately $1500. Saystrom said the barrels are 55 gallon drums made of recycled milk jugs with a screen on top which do not require winterization besides being emptied. Saystrom said storm water run-off, because of development, doesn't have the chance to be absorbed by the ground and become purified instead of becoming storm water. Hoversten said it gets people thinking and talking about what they can do, noting 75% of the Harrisons Bay watershed is privately owned residential lots. Salazar said he uses catch basins and drain tile that seems similar. Pausche said the 72 barrels and $20 seems doable and is similar to the City subsidizing the organics pails and demonstrates the City is behind an activity like this and wants to encourage water conservation. Hoversten said this will be solidified in the form of a public gathering permit but the authorization to subsidize has to be made tonight. MOTION by Pugh, seconded by Holt, for the City to partner with the Harrison Bay Association in sponsoring a community event to distribute rain barrels in 2023 as discussed. All voted in favor. Motion carried. Simmons offered the services of Bolton & Menk (BM I) to help with education on a pro-bono basis based on the City's authorization. MOTION by Salazar, seconded by Larson, to authorize BMI to also partner in the education process outside of billable hours with City. All voted in favor. Motion carried. Mound City Council Minutes — December 13, 2022 12. Mayor Salazar providing an update on Northland Real Estate Group Purchase Agreement Salazar read the memo that was included in the agenda packet stating that Northland has waived its right and the city obtained 2 legal opinions and both said the Purchase Agreement (PA) is binding and both recommended selling the property to avoid being sued for performance and potential damages, noting the City retains land use regulatory authority. Salazar said he is recommending that the City proceed to closing based on the attorney opinions to preclude possible litigation and that in that event, no further Council action is required. Larson asked why it does not require a vote by the Council and whether or not Salazar will ask the Council for their opinion on the matter. Salazar said he will do so but he is clarifying his recommendation based on the attorney opinions. Salazar invited the audience to speak. Claudia Lacy, owner of 2529 Commerce Boulevard, said this looks like a mistake in the contract and asked if this is the fault of the City attorney. Salazar said the PA was provided by the buyer's attorney and reviewed by the City attorney. Salazar said the PA left the decision of the last right of refusal to the buyer. Salazar said he has directed staff to look at soliciting proposals from other legal firms to represent the City going forward. Lacy said she can't understand why developer still wants it. Salazar reiterated the City retains land use regulatory authority. Cindy Notch, 1250 Morning View Drive, Minnetrista, thanked Ray Salazar for his service, and noted how poorly served the Council was by staff and the City Attorney as in January they assured the Council they won't have to sell the land if the development falls through. Notch said at that time she asked why the land was not offered to abutting property owners and staff and the developer said why the City would want to sell to non -tax paying entity. Notch noted OLL gave land to Common Bond to build Westonka Estates in the 1980's and rebuilt the food shelf and Penny Wise. Notch said the food shelf distributes 1 million pounds of food a year, OLL educates children and employs people who pay taxes and noted from an equity perspective this constitutes religious and financial discrimination and does not recognize what OLL contributes to the community. Notch also noted the developer knew what was in the contract and did not contradict the statements that it would be null if the development was not approved. Kathy McEnaney, 6049 Ridgewood Road, said she accepts the purchase agreement is valid, but to use an excuse that we were too innocent when Kennedy and Graven was here and should have represented us is not understandable. Salazar said he has asked the question at the April 26 and September 8 meeting and the attorney assured him it will naturally expire on its own. Discussion ensued about how best to hold attorney accountable and whether more research is needed and whether establishing the facts would make a difference. Salazar said he had another attorney concur with the recommendation. McEnaney said she never received an answer from the developer as to what he would do if he owns the property and doesn't get approval of the development. Mary Davis, 3021 Inverness Lane, noted the City Attorney did not have the Council act on the last resolution in April. Davis thanked Mayor Salazar for letting them contribute to the conversation. Tom Notch, 1250 Morning View Drive, said he was in Florida but listened to the January meeting and noted that the intent is in the minutes and that should constitute a contract, too. Notch said the developer is the only employee in the firm and that he had a development fail in Lindstrom. Notch noted other examples of Northland's development outcomes. Notch noted City policy ADM IN-010: Evaluation of Requests to Consider Sale of City Owned Properties. Notch noted per the policy Staff would be directed to work with the City Attorney so why did we rely on an instrument from the 10 Mound City Council Minutes — December 13, 2022 developer. Velsor said Hoversten is not an attorney nor is anybody on the City Council and that Staff has the same reliance on the City Attorney. Notch asked what the big deal is if the City is sued. Hoversten said the City's insurer will cover us if we are sued for damages, but not for performance and that we have been issued a letter of default with a 30-day cure so it is difficult to advise the Council to gamble. Velsor said if Farrell sues the city and the judge forces the sale, the City can also be compelled to pay damages. Joe Bruns, 2630 Setter Circle, said to show the judge all of the meeting footage. Discussion ensued about what recourse there is with the City Attorney vs. real estate contract law. Salazar said based on the legal opinions it leaves us no choice but to go through with the closing while knowing that we retain regulatory land use authority. Salazar asked the Council for their opinions. Holt said he went backed and watched some of the videos and in January Eric said we only considering disposal for this specific project, not speculation. Holt said he would never have voted for the purchase agreement otherwise. Holt said he agrees with soliciting proposals for legal services as he feels it is incomprehensible that this happened. Larson said she commented on a legal document and was criticized for questioning our city attorney in the past and that inhibits her from questioning. Larson asked each of the Council members whether they understood if they would have to sell the land if the land use approvals did not go through. Pugh said she said she did not like the process as she was used to a letter of intent instead of a binding contract and did not like that this decision was being made prior to the Planning Commission being able to weigh in. Holt said he did not as the purchase agreement said it was contingent upon the land use approvals and Salazar and Velsor agreed. Larson says she thinks the City has some standing and that she spoke with her attorney who agreed with the legal opinions and the validity of the purchase agreement but noted the only potential exception could be MSS 462.356 if the Council approved the agreement without its first being reviewed by the Planning Commission. Larson said she does not know what the City is afraid of and noted the developer has not gone through with buying the Meisel lots. Larson said the Purchase Agreement was initially declined on January 11 2022 and then was approved at the January 25, 2022 meeting with three affirmative votes and Pugh abstaining. Larson read an excerpt from the minutes stating Hoversten said these parcels are unbuildable on their own and assembled only with the abutting properties. Salazar that is practice not policy. Larson said the minutes don't always capture the entire conversation. Larson said the Staff memo in the agenda packet said there is a due diligence period for the developer and assured the City attorney reviewed it and finds it suitable to address any city risk, noting the requirement to purchase the abutting properties. Holt said that is what he relied on but now when he reads the last sentence `at buyer's discretion' he sees the problem which should have been caught by city attorney. Salazar said Council and staff relied on the City attorney and reiterated his frustration, but said the contact itself is black and white. Larson described a personal lawsuit and one with a business both of which are examples of being told one thing and the contract saying something different, or a `classic bait and switch.' Larson said don't be afraid of being sued and the Council has to stop having the fox guarding the hen house. Larson read additional excerpts from the minutes and Larson said the Council should not assume this is the only lawsuit forthcoming related to this matter. Mary Davis, 3029 Inverness Lane, said she thinks it was all intentional and could be fraud ifl Mound City Council Minutes — December 13, 2022 Larson said there is a risk in everything we do in life. Salazar said the Council's job is to limit that risk and he doesn't want to have to pay damages in addition to being forced to sell. Larson said the staff and planners never brought forward ADMIN-003 Policy: Vacation of public lands leading to public waters from November 2015. Pausche said that policy is relevant to the dock program and right of way and not redevelopment districts, like this area and the Harbor District. Larson said the Planning Commission was not given all the information and we can't just give in. Velsor asked if the plan is to go to closing and then change attorneys, whether the closing could be delayed if we are in the process of changing attorneys. Salazar said his attorney concurred we were not represented correctly but the contract was binding. Larson said maybe we can hire an expert on just this process and not the dedicated law firm that will take time to secure. Larson asked if Purchase Agreement was filed and staff said they do not believe filing was required. Salazar conducted an informal poll: Pugh said she is going to try to be consistent and would like us to stand firm. Holt said he wants to stand firm and he wants Kennedy and Graven to defend us and say what transpired and also see if negligence was involved. Larson said she thinks we can sue Kennedy & Graven. Holt said if Northland pursues it we need to counter with what was intended. Velsor said he is in the development business and his boss said real estate contracts are binding. Velsor doesn't know if any of the other information is relevant and he doesn't see a win so he would say go to closing. Salazar said he is always up for a fight and he is well aware of what the attorneys have said and he doesn't like those answers. Salazar said all three attorneys agreed and concurred that contract real estate law is biding but at the same time there are three council members that feel the extenuating circumstances warrant fighting it. Salazar said he will go with the majority and he wishes he was here to fight. Hoversten said we are currently in default with a 30-day cure period and no further formal action is necessary. Hoversten said at some point we can anticipate being served a claim of default and then we will need to determine what legal firm should be hired to represent the City. Salazar questioned whether Kennedy and Graven will really do a good job in representing us and whether there is any impact on our ability to hold them liable for damages if we continue using them. Hoversten said if we find another outside council who can find a defensible recourse for us then we should retain them instead of using Kennedy & Graven. Hoversten said the worst case is to remain in default with a judge making a summary judgement which forces us to close. Discussion ensued on whether the Planning Commission is the deciding body on whether a project is consistent with the Comp Plan and what specialized attorney is needed, contract law or real estate law. Larson said we need an impartial staff that releases all of the relevant documents to both the Council and Planning Commission. 13. Information/Miscellaneous A. Comments/reports from Council members/City Manager: Hoversten highlighted the dates: Polar Plunge January 28th, City Hall closures 12/23/22 and 12/26/22 and 12/30/22 and 1/2/23 for holidays. Discussion ensued on Williams Store and ADA access, including on what is being done with the fagade and whether the encroachment on the sidewalk is allowed or could help expedite the 12 Mound City Council Minutes — December 13, 2022 project. Hoversten said 48" is sufficient for ADA and Velsor said to let him know if MNSpect needs help with that inspection. Salazar showed pictures of the tree lighting event and thanked Public Works for helping and WCC for sponsoring the event. Salazar thanked the City for the opportunity of serving for the last 14 years, 10 on the Council and 4 as Mayor. Salazar said Artessa will be breaking ground in 2023 in conjunction with the new downtown park. Salazar thanked the Council and staff. B. Reports: Liquor Store — November 2022 C. Minutes: D. Correspondence: Mound Press Release 11-29-22 — City Council Applicants Sought 15. Adjourn ACTION by Velsor, seconded by Holt, to adjourn at 11:36 p.m. All voted in favor. Motion carried. Attest: vin Kelly, Cle k Mayor Raymond J. Salazar 13