2021-06-22 CC Meeting MinutesMOUND CITY COUNCIL MINUTES
June 22, 2021
The City Council of the City of Mound, Hennepin County, Minnesota, met in regular session on
Tuesday, June 22, 2021 at 7:00 p.m. in the Council Chambers in the Centennial Building.
Members present: Mayor Ray Salazar; Council members Phil Velsor, Paula Larson, Sherrie
Pugh, and Jason Holt
Members absent: None
Others present: City Manager Eric Hoversten, City Clerk Kevin Kelly, Community Development
Director Sarah Smith, Finance Director Catherine Pausche, City Engineer Brian Simmons,
Steve McDonald, Orono Police Department Sergeant Tim Sonnek, T Cody Turnquist, Steve
Schwanke, Ben Brandt.
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 Alleaiance
3. Approve agenda
Hoversten added a text change to Item 4B to edit resolution title to Brighton Blvd.; additional
Consent agenda item 4J, Resolution to approve the City 2021-22 Liquor Licenses; and an edit
to page 1529 of the Development Agreement to Inland Development Partners LLC.
MOTION by Velsor, seconded by Larson, to approve the agenda as amended. All voted in
favor. Motion carried.
4. Consent agenda
MOTION by Larson, seconded by Pugh, to approve the consent agenda. Upon roll call vote, all
voted in favor. Motion carried.
A. Approve payment of claims in the amount of $1,222,715.52.
B. Approve minutes: 6-08-21 regular meeting
C. Approve pay request #1 in the amount of $332,589.28 to Widmer Construction
for the 2021 Lynwood Watermain Replacement Project (Ph 1) PW 21-01
D. Approve Pay Request #2 in the amount of $17,886.48 to Widmer Construction
for the 2020 Lift Station Replacement Project (J-1) PW 20-05
Mound City Council Minutes — June 22, 2021
E. RESOLUTION NO. 21-60: RESOLUTION TO FORMALLY ACCEPT A CENTERPOINT
ENERGY COMMUNITY PARTNERSHIP GRANT IN THE AMOUNDT OF $2,400 TO
PARTIALLY FUND THE PURCHASE OF PAGERS
F. RESOLUTION NO. 21-61: RESOLUTION AMENDING RESOLUTION NO 20-124
ADOPTING FEE SCHEDULE FOR 2021
G. Approve FIN-003 Purchasing Policy (Original Adoption: 07-14-15, Revised 06-22-21)
H. RESOLUTION NO. 21-62: RESOLUTION AUTHORIZING APPLICATION FOR AND
ACCEPTANCE OF THE 2021 CORRONAVIRUS LOCAL FISCAL RECOVERY FUNDS
ESTABLISHED UDER THE AMERICAN RESCUR PLAN ACT
RESOLUTION NO. 21-63: RESOLUTION APPROVING PUBLIC GATHERING
PERMIT AND OUTDOOR MUSIC PERMIT FOR NO NONSENSE SPECIAL EVENT AT
SURFSIDE PARK AND BEACH ON JULY 31, 2021
J. (ADDED) RESOLUTION NO. 21-64: RESOLUTION APPROVING LIQUOR LICENSE
RENEWALS FOR 2021 - 2022
5. Comments and suggestions from citizens present on any item not on the agenda.
None were offered.
6. Orono Police Sergeant Tim Sonnek presenting the May 2021 Mound monthly activity
report
Sonnek addressed the Council with the May activity report stats, including 326 incidents, eight
accidents, 11 alarms, six animal complaints, 11 burglaries and/or thefts, two criminal damage to
property, 13 disturbances, 8 domestics, two fights, four fire related calls, three harassment
reports, 46 medical calls, 10 mental health issues, 23 parking issues, two warrants, 14
suspicious activity report, 29 welfare checks and 42 traffic stops, noting the 326 incidents was
the same number as in May 2020.
Sonnek said Orono Police Department (OPD) is getting ready for the Spirit of the Lakes Festival
with six reserves from outside agencies to assist. Sonnek said the drone program is up and
running with four operators and is utilized more often helping other agencies, the e-bike patrol is
out in the City and there are two new reserves on board. Sonnek added that the Skate Park
has been pretty quiet and the OPD has been engaged in traffic control as traffic has increased
and people are driving more aggressively. Sonnek said the OPD has focused on Shoreline
Drive to respond to distracted driving, noting in 2.5 hours they made 27 stops 23 of which were
educational/warnings and four of which were cited.
Velsor said he has been getting contacts from residents about the high rates of speed and
asked if the OPD will sit in neighborhoods when there are complaints and Sonnek said officers
will monitor those areas and engage in more stops and give more tickets.
Larson asked about the 326 incidents in May and whether traffic stops are included in those
stats. Sonnek said the statistics he presented are generated from officer reports and the data
base includes all incidents which are created which include traffic stops and alarms when an
officer report isn't generated.
Mound City Council Minutes — June 22, 2021
7. Steve McDonald from Abdo, Eick and Meyers LLP presenting the 2020 City Annual Financial
Report and requesting action receiving same.
McDonald from Abdo, Eick and Meyers, LLP (AEM) presented highlights from the 2020 City Annual
Financial Report (CAFR)/audit.
McDonald said the City's numbers are materially correct and supported with appropriate disclosures
and AEM gives the City a Modified Opinion because the City has not adopted pension accounting
standards which are very involved and don't provide a great cost benefit to the City. McDonald said
outside of the pension area everything audited was documented and clean.
McDonald said one major change was that the City received CARES act funds which triggered the
need for a federal `Single Audit'. McDonald said a special audit report based on those standards also
resulted in a clean, unqualified opinion.
McDonald said another area of the audit was in regards to legal compliance with statutes around
bidding, bonding, claims and disbursements, noting no findings.
McDonald summarized the City General Fund over a five-year period, noting the City consistently
exceeded the 20% reserve benchmark which is set to ensure reserves to cover the first 6 months of
expenditures as recommended by the Office of the State Auditor (OSA). McDonald said the overall
fund balance increased by $84,000.00, primarily due to the CARES act funding.
McDonald said expenditures were lower in 2020 and the three-year history of expenditures and
revenues variances were positive.
McDonald then addressed Special Revenue Funds and Capital Project funds and said the City does
have decent reserves outside of the General Fund, noting the Governmental Debt Service Funds have
$20M in outstanding debt with sufficient reserves to provide for repayment of the bonds.
McDonald said the Covid-19 pandemic benefitted liquor operations including the Mound Liquor Fund
which increased gross profits from 26.9% to 28.1%. McDonald said the Liquor Fund is at 11.5%
operating margin which outperforms the 8% state average for municipal off -sale liquor stores.
McDonald highlighted the utility funds, noting water and storm need to borrow from other funds to cover
negative cash. McDonald said the sewer fund received bond proceeds to improve cash flow and the
Recycling Fund is break even with a good cash balance.
McDonald said total cash balance increased to $12M partially due to unspent bond proceeds, adding
the performance indicators from rating agencies look at the city tax rates and Mound's 40.5% for 2020
is consistent with other Hennepin County cities. McDonald added the tax per capita increase slightly
from 2019 and the debt per capita decreased. McDonald said current expenditures per capita
increased from 2019 but are fairly consistent over the recent three-year history. McDonald said the City
has good fund reserves and has the financial planning in place to deal with fund planning for future
needs.
Holt asked McDonald if there is one really good thing the City is doing and one thing the City could do
better. McDonald said the City's strong long-term financial planning is good, noting the amount of debt
is always a challenge for small/fully developed cities, but is necessary to maintain infrastructure.
Mound City Council Minutes — June 22, 2021
MOTION by Holt, seconded by Pugh, to accept the 2020 City Annual Financial Report. All voted in
favor. Motion carried
8. Consideration/action on Major Subdivision — Final Plat of Villages of Island Park for 18-Unit
Townhome Project
Smith said the request for action is for an 18-unit Villages of Island Park development which is
proposed for the intersection of Wilshire and Tuxedo. Smith said the preliminary plat and CUP were
approved by the Council in March. Smith said the next steps include Council approval of the Final Plat,
Developer Agreement and rescinding of an old recorded CUP as requested by the developer. Smith
said staff found the Final Plat consistent with the Preliminary Plat and noted the City Attorney gave a
title opinion on which City easements are being accommodated in the developer's drainage and
easement plan, noting the developer satisfied the easement requirements.
Smith noted a change in the landscape plan as a result of Xcel Energy's removal of trees in the NW
corner. Smith said the change was approved by staff to get this work done prior to construction, noting
the developer notified the neighbors in advance and to inform them there will be tree replacement.
Smith said that Steve Schwanke and T Cody Turnquist from Inland Development Partners are in
attendance.
Velsor asked if the units will have one address and Smith said that decision is made further in the
process. Velsor asked if the property would have streets within the project which Smith said no. Velsor
added is the property being subdivided by unit or is it one property and Smith said it is one property.
Larson asked what the CUP rescindment relates to and Smith said it was for commercial parking from
when it was a restaurant.
Steve Schwanke from Inland Development Partners addressed the Council and said staff were
wonderful to work with.
A. Action on Resolution Approving Major Subdivision -Final Plat of Villages of Island Park
MOTION by Holt, seconded by Velsor, to approve the following resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 21-65: RESOLUTION APPROVING THE MAJOR SUBDIVISION — FINAL
PLAT OF VILLAGES OF ISLAND PARK PLANNING CASE NO. 21-01
B. Action on Resolution Approving Development Agreement by and between the City of Mound
and Inland Development Partners LLC
MOTION by Holt, seconded by Velsor, to approve the following resolution. All voted in favor. Motion
carried.
RESOLUTION NO. 21-66: RESOLUTION APPROVING DEVELOPMENT AGREEMENT BY
AND BETWEEN THE CITY OF MOUND AND INLAND DEVELOPMENT PARTNERS LLC
C. Action on Resolution Rescinding Resolution No. 93-155 for Conditional Use Permit filed
March 18, 1994, as Document No. 2493531
Mound City Council Minutes — June 22, 2021
MOTION by Holt, seconded by Larson, to approve the following resolution. All voted in favor. Motion
carried.
RESOLUTION NO. 21-67: RESOLUTION RESCINDING RESOLUTION NO. 93-155 FOR
CONDITIONAL USE PERMIT FILED MARCH 18, 1994 AS DOCUMENT NO. 2493531
9 City Engineer Brian Simmons providing presentation of Water Treatment Feasibility Study
and requesting approval of a Resolution Receiving Water Treatment Study Considering Water
Treatment Improvements
Simmons presented the results of a feasibility study of a water treatment plant to address the
manganese problem in the water supply and to bring the levels below the state's advisory standards.
Simmons said the purpose of the presentation is to provide the City and Council with information to
make a decision, to document the process in the interest of transparency ensuring compliance with
standards and to request funding from outside sources.
Simmons presented tables from the Feasibility Study which note that the City has drilled multiple wells
in the past and only Wells No. 3 and 8 are active. Simmons said well No. 3 was drilled in 1947 and
No.'s 4 and 7 can't be used due to arsenic being present in the water in those wells.
Simmons stated the two City water towers store up to 750,000 gallons water and are there to fight fires
and be ready to use for other emergencies. Simmons added that the life expectancy of a water tower is
typically 65 to 75 years with the Evergreen Tower being 51 years old and the Chateau Tower being 15
years old. Simmons stated the City does treat city water with fluoridation and chlorination and tests
regularly for Iron and Manganese (since 2020). Simmons added that the water in No. 3 and No. 8
exceeds the secondary contaminant limit for Iron and Manganese and exceeds the health advisory
secondary limit for manganese for infants. Simmons said because of the City's hard water, the
discussion is a finishing and nuisance issue and whether water softening should be managed by the
City or in the homes.
Simmons presented two Water Treatment alternatives: No. 1; An Iron and manganese filtration
treatment facility and No. 2; the construction of a lime softening and filtration treatment facility
Simmons said there were other alternatives removed from consideration to the two presented.
Simmons said those are to do nothing, wait and see, or to do Iron and Manganese sequestration which
does not totally solve the Manganese problem.
Simmons presented alternative No. 1, which the study showed there is not enough space for two
treatment plants in the city so the proposal is for one filtration treatment plant at Evergreen at the back
of Sorbo Park on City owned property. Simmons said No. 1 would be a build out of one new 1500
gallons per minute well which will be located near the filtration facility and to seal wells No. 3, 4 and 7.
Simons showed a slide of the proposed well and plant site at City owned property behind Sorbo Park.
Velsor said how do we know that this well wouldn't have the same issues as the other wells which are
proposed to be shut down. Simmons said it is possible to have issues as there are no guarantees
though there are known aquafers below the City.
Holt asked about saving trees at the site and Simmons said some trees will be kept in place to screen
the Plant.
Holt was concerned about noise in the plant which Simmons said the Plant will not create much noise
Mound City Council Minutes — June 22, 2021
Holt asked about how construction vehicles and future vehicles to the plant would happen. Simmons
said there is going to be on -going needs for access as City staff need to test the water on a daily basis.
Hoversten said the building out of the project will be big but the City can give Simmons instruction to
come up with a functional project including the costs to repair alterations of land and landscape.
Simmons said those kind of details will be worked out in the more detailed planning phase.
Simmons said alternative No. 1 construction costs would be $24.8M which includes $4.51M to upsize
watermains along Commerce Blvd. Simmons said the water main replacement for Commerce makes
sense because improvements haven't happened there like the replacement of Bartlett water main over
time. Simmons said if there isn't outside funding support for this project, an additional $680K would be
need for additional watermains to meet the 1,000 gallon minimum level of water service to a hydrant.
Velsor asked if the water pressure was adequate to fight the apartment fire last year. Hoversten said
there is no reason for the City to accept a lower level of service and the City shouldn't cut corners when
advocating for outside funds. Hoversten said decisions should also consider the opportunity and social
costs of each option. Hoversten said the City has been working on getting water flow improved all
around the City.
Salazar said doing the minimum with the primary function of local government which is to care for the
health and safety of residents is not the right way to go, noting the City has worked hard on the delivery
of water to homes and to hydrants. Salazar said the right thing to do is to not cut corners and do it
right.
Velsor said does it make sense to go from Sorbo Park to Westedge Blvd. to which Simmons said it is
shorter to go east and Hoversten said the costs are nearly the same to break up the old Commerce
pipe versus the newer Bartlett pipe.
Hoversten said water capacity needs to be balanced to fill both water towers which Simmons worked
through scenarios to arrive at sizing choices and where to run new water mains.
Simmons added that the costs in alternative No. 1 include a 15% contingency plan and a 20%
contingency for administrative, engineering and legal costs also figured in.
Hoversten said the City hopes to be on funding lists with costs which have taken in all the risk
management and is at a number which doesn't leave the City with a potential funding shortfall.
Simmons went through the Pros and Cons of alternative No. 1; the pros are a design which provides for
redundancy in the treatment and allows for economic and flexible future expansion operations and
reliable Iron and Manganese removal and the removal of the iron color in the water.
The Cons are the higher operational and high capital costs and the need for a higher level of operator
license than existing currently.
Hoversten said the new water service system integration is going to cause changes to the water system
such as the taste of the water and the breaking off of deposits within the water mains which are 60
years old.
Holt asked about the backwash tank and if this water would go to the lake. Simmons said no, this
water would go to the sewage treatment plant in Shakopee.
Mound City Council Minutes — June 22, 2021
Simmons presented alternative No. 2 which would add costs to a total of $35.2 million, $11 M more than
alternative No. 1, as this option allows for City-wide water softening in order to treat for Manganese of
the water supply.
Simmons said No. 1 is recommended by staff as it will provide the city clean water that meets drinking
water standards. Simmons said the annual costs would be $1.5 million if the city goes it alone without
outside funding. Hoversten said this is why the City is looking to find outside funding sources and
engagement with elected officials is important in order to lessen the financial impact on the City.
Simmons and Hoversten offered the billing rate impact to Mound consumers which would include a
monthly increase of $33 which would be about $450 a year increase to the water customer. Hoversten
said there are variables in the costs and the $35 million is the worst case scenario which doesn't
include better borrowing rates at longer terms. Hoversten said social economic demographics of
Mound could have an impact on borrowing and getting forgivable loans due to the impact of rates on
lower income water consumers in the city.
Simmons said the timeline of the project is to get the report and letter requesting funds out this summer
as the PFA funding list is published in August or September of 2021, which would allow for plans and
bids in 2022. Hoversten said the July 2024 completion of construction date is a best case scenario,
noting a year or two longer is more realistic as delays may occur if approved for funding from other
governments.
Hoversten said collaboration with other agencies is important and Salazar said there have been
conversations with Congressman Phillips and Salazar said he wants to get the message out to
Mound residents and let them know the City is working on the Manganese problem.
Salazar asked if Mound treated water could be shared with other cities and Hoversten said
there is risk in offering water to neighboring cities who don't have the infrastructure to be served
by this water supply. Hoversten said there had been discussions with Spring Park in the past to
provide water and there are emergency agreements in place with neighboring cities but not for
continuous water service.
Hoversten said this presentation will be placed on City website so it is available for residents to
study and ask questions.
Salazar said he has spoken to State Senator Osmek who is going to look into this problem and
Salazar will be meeting with State Representative Kelly Morrison on Monday. Salazar said he
and staff had a video meeting last week with Congressman Phillips.
MOTION by Holt, seconded by Larson, to approve the following resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 21-68: RESOLUTION RECEIVING WATER TREATMENT STUDY
CONSIDERING WATER TREATMENT IMPROVEMENTS
10. Award Crack Seal and Seal Coat project contracts for 2021
Simmons addressed the Council and said the crack seal is needed to keep pavement maintained and
five contractors responded with bid quotes. Simmons said MP Asphalt Maintenance was the low bidder
and a reputable contractor.
Mound City Council Minutes — June 22, 2021
A. Approve a Resolution Accepting Bid for the 2021 Crack Repair Project (PW 21-06)
MOTION by Velsor, seconded by Holt, to approve the following resolution. All voted in favor. Motion
carried.
RESOLUTION NO. 21-69: RESOLUTION ACCEPTING BID FOR THE 2021 CRACK REPAIR
PROJECT (PW-21-06)
B. Approve a Resolution Awarding Contract for 2021 Bituminous Seal Coat
Improvement Project (PW-21-07)
Simmons said Allied Blacktop was the low bidder and City has worked with this reputable
vendor in the past.
MOTION by Velsor, seconded by Pugh, to approve the following resolution. All voted in favor.
Motion carried.
RESOLUTION NO. 21-70: RESOLUTION AWARDING CONTRACT FOR 2021 BITUMINOUS
SEAL COAT IMPROVEMENT PROJECT (PW-21-07)
11. Ben Brandt; Mound Representative to Lake Minnetonka Conservation District Board
of Directors providing presentation and discussion of LMCD 2022 Preliminary Budget
Proposal
Brandt presented to the Council the LMCD budget proposal. Brandt said the levy allocation is
based on the net tax capacity of the cities served. Brandt said the $569K budget is an increase
of $64K from 2020, but noted there is a City levy decrease of $75K, the gap of which is covered
by a transfer of reserve funds.
Brandt said Mound is the 8th highest rate payer at $20K, noting that is a $4K or 17% reduction
from last year.
Brandt said the LMCD will not to administer an AIS levy as the LMCD harvesting program has
been eliminated for 2021-2022 as the Board develops a strategy for AIS response. Brandt said
the Board decision to use transfers from reserves was due to the reserves being over 100% of
the operating budget. Brandt said the transfers from reserves will also be used to respond to
AIS issues on the lake.
Brandt added the LMCD's Save the Lake fund and Save the Lake reserves are being used to
increase the Hennepin County Water patrol on the lake. Brandt said the LMCD is funding this
effort as it directly adds to the patrol of the lake which is different from a Hennepin County
funded patrol which could be pulled from Minnetonka to another lake or area in the County.
Pugh asked Brandt about the lack of the cleanup of weed growth on the lake until 2022 and
whether the harvesting program will be reinstated. Brandt said the harvesting program was
suspended in January 2019 and will not be reinstated so the harvesters were sold this year.
Brandt said the harvesters were a challenge to maintain, collected both AIS and native plants
and fragmented lake weeds potentially may cause further spread. Brandt said the goal of the
LMCD is to respond to AIS and not native weeds.
Mound City Council Minutes — June 22, 2021
Brandt said the winter and weather conditions and lower water levels have made growth and
nuisance weeds more prominent this year. Brandt said management and control of lake weeds
can be done through contractor harvesting and that the LMCD Board is taking this year to study
the problem but, noting an in-house harvesting program is not seen as a viable option.
Brandt said the new emphasis will be on the prevention of AIS spread through communication,
inspections, cleaning, draining boat holds and detection and a rapid response to problem areas.
Brandt said the rapid response would be from the DNR and closure of access sites in an
attempt to control spread if caught early.
Brandt said historically speaking, the harvesters were purchased to respond to Eurasian milfoil
thirty years ago, noting there was both equal support and criticism of the program.
Velsor said he fears what will happen to the lake community next year and wonders if the AIS
and weeds are going to be worse. Velsor wondered if there are going to be areas of the lake
which can't be used.
Brandt said the option for response is the coordination of efforts to address AIS on the lake
which could include both herbicide treatments and private weed harvesting especially of
navigational areas and public use areas which were harvested by the LMCD harvester.
Salazar asked why the harvesters were sold based on a 50/50% view of harvesting from
surveys and if the harvesters were used to remove weeds in navigational areas.
Velsor asked about age of the former LMCD harvesters. Brandt said maintenance and upkeep
were a factor in selling, noting it was not a quick decision by the LMCD Board, but took place
over the past 2 '/2 years of study.
Hoversten said the budget adjustments make sense but eliminating the tools to respond to the
AIS without a plan in place doesn't make sense. Hoversten said the feedback from residents is
to take care of the weeds and there is a level of service response to the weed matting which is
now missing. Brandt said the newly formed AIS committee is tasked with responding to
problems and will use this to plan how to respond with input from the LMCD technology advisory
committee which consists of lake organizations, marina owners and the U of M.
Salazar and Velsor cautioned Brandt and the LMCD from using up fund reserves.
Pugh said the LMCD is responsible for taking care of the lake and urged them to keep their
reserves until a concrete plan is in place to respond to AIS.
Hoversten said he has looked at the LMCD budget line items and noted that funding from grants
and rebates in the LMCD budget have decreased to nothing. Brandt said the DNR grant giving
has been reduced.
Salazar asked Council members their feeling about harvesting and all agreed that selling the
harvesters was not a good idea when there was no alternative weed control approach in place.
Holt asked what are the top LCMD activities? Brandt said other duties include dock licensing,
maintaining code and rules about activity on the lake, administering the Save the Lake fund for
boater safety and training, installing navigational buoys on the lake and responding on dock and
Mound City Council Minutes — June 22, 2021
watercraft questions from lake users and property owners. Hoversten said the LMCD provides
staffing and administrative support from a lake -wide perspective.
12. Information/Miscellaneous
A. Comments/reports from Council members/City Manager: Salazar said Commerce Place
was sold in April to a real estate investor who intends to fix up the property and recruit new
tenants.
Hoversten said Council meetings will continue to be scheduled at the Council Chambers in the
Centennial Building. Hoversten said there are community events on -going such as the Farmers
Market and future events like the Spirit of the Lakes Festival in July and the August 7th Tour de
Tonka. Hoversten said City Hall will be closed for the July 4th holiday on Monday July 5th
Velsor asked for an update on the Lifestyle Communities project in the Harbor District.
Hoversten said the final plat is being reviewed and staff is working on the closing. Salazar said
Lifestyle Communities is going to have a sales office in Mound.
Velsor commended staff on the successful audit report and asked for an update on the recycling
contract. Hoversten said there are two Recycling business players in the area, including Waste
Management and Republic Services. Hoversten said there will be an increase in fees of $1.50 a
month most likely and residents will continue to use the same recycling carts and replace them
as needed in order to save money. Hoversten said the new contract will go into effect on
January 1, 2022 and will be part of the budget discussions.
B. Reports: Fire Department — May 2021
Finance Department — May 2021
C. Minutes:
D. Correspondence:
10. Adjourn
MOTION by Velsor, seconded by Holt, to adjourn at 10:00 p.m. All voted in favor. Motion
carried.
/,(- - - ,- / 0, e,
Attest: Kevin Kelly, ler
in
Mayor Raymond J. Salazar