City Council Minutes

Pursuant to due call and posted notice thereof, the regular meeting of the Victoria City Council was called to order at 7:03 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Members Present: Mayor: Mary Hershberger Thun; Councilmembers: Tim Amundsen, Jim Paulsen, Kim Roden, and Rick Tieden.

Absent: None

Staff Present: David Urbia, Interim City Administrator; Cara Geheren, City Engineer; Mike Norton, City Attorney; Jylan Johnson, Finance Director; and Holly Kreft, City Planner.

Others Present: Mark Kaltsas; Unsie Zuege, Chanhassen Villager; and Sue Orsen, The Victoria Gazette; and others.
 

Councilmember Amundsen asked if there will be a closed session to discuss potential litigation for the Field House. Mr. Norton asked if there is pending or threatened action. Councilmember Amundsen stated he is talking about the City bringing action.

Mr. Norton advised that a discussion of holding a closed session can be added to the agenda and then the Council can determine whether a closed session should be held.

The Council agreed to add Item 8D, Discuss Potential Litigation brought by the City regarding the Field House.

A motion was made by Councilmember Roden, seconded by Councilmember Paulsen to adopt the Agenda as revised above. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

Mayor Hershberger Thun read aloud the items to be considered under the Consent Agenda.

The Consent items were as follows:

Minutes of the April 12, 2007 City Council Meeting
Minutes of the April 12, 2007 City Council Workshop
Minutes of the April 12, 2007 Board of Appeal and Equalization Meeting
Minutes of the April 10, 2007 Planning Commission Meeting
Sheriff’s Reports for March 2007
Payment of Bills $201,591.86

-A- $1,000 Donation from U.S. Charitable Trust for the Concerts in the Park Series

1. Agenda Statement No. 07-137
2. Resolution No. 07-63

-B- Request approval to Hire Staff for Parks and Recreation

1. Agenda Statement No. 07-138

-C- Lions Park Baseball Field Renovation Project – Gate Installation

1. Agenda Statement No. 07-139
2. Exhibits

-D- Fire Department’s request for Approval to Apply for a U.S. Department of Homeland Security Assistance to Firefighters Grant for the purchase of a Quint Ladder Truck and Extrication Tools (Jaws of Life)

1. Agenda Statement No. 07-140
2. Exhibits
3. Resolution No. 07-64

-E- Approval of Advertisement Sale for Kiosk at the Victoria Field House

1. Agenda Statement No. 07-141
2. Exhibits
3. Resolution No. 07-65

-F- Request approval to Hire a Building Supervisor for the Field House

1. Agenda Statement No. 07-142

-G- Banyon Data Systems, Inc. Software Upgrades

1. Agenda Statement No. 07-143
2. Exhibits

Councilmember Roden removed Item 3-B and 3-D from the Consent Agenda.

Councilmember Amundsen removed Item 3-F from the Consent Agenda.

Mayor Hershberger Thun removed Item 3-C from the Consent Agenda.

A motion was made by Councilmember Roden, seconded by Councilmember Tieden, to adopt the Consent Agenda as presented. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

The Council discussed whether an employee should be hired with the expectation of having a job with the City and then getting very few hours.

Mr. Urbia recommended the Park Supervisor have the opportunity to try it this year utilizing the part-time individual. In addition, it would make sense for the City to do it this year and use up the Field House supplies.

A motion was made by Mayor Hershberger Thun, seconded by Councilmember Paulsen, to approve the hiring of Jessica Krautbauer, Sara Smith, Laura Anderson, and Kathryn Narem for employment with the City of Victoria. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

The Council discussed concern that some people may be locked out of the fields.

Mr. Urbia stated the gate could be installed and then staff control times when it is locked, perhaps when needed for crowd control.

A motion was made by Councilmember Amundsen, seconded by Councilmember Tieden, to approve the quote of Peckels Fence for $2,105. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ladder Co-Captain Doug Jurek introduced EMS/Rescue Lieutenant Andrew Heger and explained that this will be the fourth year they have applied for the grant for the Jaws of Life. The Fire Department has not received the grant the last three years. This year, they can apply for a piece of apparatus and extraction tools. If they get the grant for the ladder truck, it would pay for the truck with the City’s match being 5 percent. With the Jaws of Life grant, it pays for $45,000 and the City would pay for 5 percent of the cost.

Mr. Heger stated the ladder truck and Jaws of Life are the next two items on the capital improvement plan. If the grant is received, it will cut their costs in 2009 to buy the truck. If the grant is received and the truck is speced out, it will be a 2009 or 2010 purchase anyway.

The Council discussed concern with funding even 50 percent of the Quint Ladder cost and their desire to resolve issues related to the Field House before committing to this level of funding. Discussion was also held about making application for a grant when you don’t intend to accept it if awarded.

A motion was made by Councilmember Paulsen, seconded by Councilmember Roden, to respectfully and regretfully deny the request of the Fire Department to apply to the US Department of Homeland Security Assistance Firefighters Grant for the purchase of a Quint Ladder Truck, as referenced in Agenda Statement No. 07-140. With three members voting in favor, the motion carried. Vote: 3 Ayes, 2 Nays (Amundsen and Tieden).

A motion was made by Mayor Hershberger Thun, seconded by Councilmember Roden, to approve the request of the Fire Department to apply to the U.S. Department of Homeland Security Assistance to Firefighters Grant for the purchase of a Jaws of Life tool in amount of $8,000. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

The Council discussed the need to assure the cleanliness of this facility and its equipment.

A motion was made by Councilmember Amundsen, seconded by Councilmember Roden, to approve hiring Chad Storley for employment at the Victoria Field House. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

(4) VISITORS PRESENTATION:

Andrew Berg, Abdo, Eick & Meyers, LLC, complemented staff on the financial statements, which are in a different format this year, and for receiving the Certificate of Achievement in Financial Reporting. He presented and reviewed the letter to management, stating they found no deficiencies or material weaknesses.

Councilmember Roden discussed her concerns with the City’s outstanding bonds and the debt to assets ratio, which is significantly higher in Victoria, by one-third, when compared to a peer group.

Councilmember Paulsen stated that metrics would help the Council understand where they are at in the "infrastructure battle" given the City’s growth and taxable base. He stated he wants to make sure that the City has the best metrics possible, and not just a compilation of ratios.

Councilmember Roden noted Victoria’s bonded debt per capita is twice as high as the peer group. Mr. Burr stated the Council also needs to consider the trends. Councilmember Roden stated when she looks at the ratios, it shows Victoria is an outlier on per capita tax when compared to its peers, above average on debt and tax. Mr. Burr stated that is correct based on this analysis.

Mr. Burr noted the capital asset percentage. Councilmember Paulsen stated the City has a lot of new capital assets but he is looking for more than a "snapshot." He stated he wants to understand where Victoria is at in the life cycle of a city.

Councilmember Roden asked if the City has over reached and commented on the need to achieve a balance, especially should there be a continued housing slowdown when the City is counting on fee income.

Councilmember Amundsen stated there is not a member on the Council or audience who is qualified to predict a housing slowdown but indicators were present.

Councilmember Roden offered the analysis that when a company makes an error, the shareholders pay but with a city, it is different because taxpayers don’t make decisions based on risk. They rely on the Council to make good decisions based on risk assessment.

Councilmember Amundsen stated that is not different than in the public sector because if the analysis on the Field House was incorrect then as a body it is incumbent upon the citizens to assure the proper amount of retribution or accountability is done for that information. The same is true with water revenues and building a water treatment facility ahead of its time.

Councilmember Roden discussed the possible impact on the City’s bond rating. Mr. Burr stated bond rating companies will look at the general fund and management of the general fund balance because that is where the Field House is being funded.

Councilmember Roden commented on the impact of aggressive evaluations on homes. She explained she is trying to be informed about what to expect from bond houses on transfers as it impacts the general fund. Councilmember Roden stated she feels strongly the City may not see the general fund continue to grow as it has in the past three years, which will then impact the overall financial position and how to pay for assets and debt. She stated she thinks the City can no longer afford to make aggressive assumptions and she supports a defensive position and to be "wrong on the right side."

Mr. Burr stated looking to future planning is important because things change each year. Thus, different scenarios need to be considered. He stated the bond houses will also ask the City what they have done for general fund planning and future predictions.

Councilmember Tieden stated his feeling that Victoria is on the edge of a commercial explosion that will bring in a lot of opportunity and taxes. Mr. Burr stated he is not informed about commercial development in Victoria.

Councilmember Tieden stated there are advanced models showing that when the residential market is on the decline, the commercial market is on the incline. He stated he is concerned with property values but believes there are other factors related to the overall taxation of the State. Mr. Burr agreed that all of those issues need to be factored in and the City should have a good idea of how they will bring in commercial, which will have an impact on the City’s finances.

Councilmember Tieden stated he is glad the City supported the water treatment plant and other infrastructure that will be needed for the future growth of Victoria. He stated Victoria is prosperous, growing, and he believes on the edge of an explosion of growth. He asked if this will be easy to turn around. Mr. Burr stated the City will not run into problems if they conduct proper planning.

Councilmember Roden asked what percentage of the land in Victoria is zoned commercial. Ms. Kreft stated it is less than two percent. Councilmember Roden asserted it would not be an explosive impact if commercial developed since there is not an explosive amount of commercial property in Victoria. Ms. Kreft advised that the Comp Plan Task Force is looking at zoning and diversifying the tax base.

Councilmember Tieden asked about the City’ ability to charge a tax if an exclusive boutique hotel is built. Ms. Kreft stated the City has the opportunity to place a 3% hotel tax. Councilmember Tieden asked how much money that will result in. Mayor Hershberger Thun stated one figure discussed was $300,000, which may have been at full occupancy. Mr. Urbia advised the lodging tax can only be used for marketing, not the general fund.

Ms. Johnson commented on the 2006 year financial report and audit, focusing on the cash reserves, deficit fund balances, and debt service.

Mayor Hershberger Thun asked Ms. Johnson to place her recommendations in proper form so they can be considered by the Finance Committee.

Councilmember Paulsen thanked Ms. Johnson for her hard work and asked her to continue to focus on the 12-month cash projections.

A motion was made by Mayor Hershberger Thun, seconded by Councilmember Amundsen, to approve the Audited Financial Report for the year-ended December 31, 2006. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Carver County Commissioner Randy Maluchnik introduced Bill Weckman, Assistant Carver County Engineer, who is in attendance to present their summer construction projects.

Bill Weckman, Assistant Carver County Engineer, presented the 2007 Carver County road construction projects related to County or State projects.

Mayor Hershberger Thun thanked Mr. Weckman for his presentation.
 

(5) OPEN FORUM:

None.
 

None.
 

Ms. Johnson stated Mayor Hershberger Thun asked for this item to be on the agenda accompanied by her memorandum answering questions that were asked.

Mayor Hershberger Thun stated there has been significant discussion about this issue and she wanted to be sure the Council agreed with what should be done because residents are saying they do not use the minimum amount and wanted a change in the fee.

A motion was made by Councilmember Paulsen, seconded by Councilmember Roden, to adopt Finance Director recommendation to 1) collect the key inputs as outlined in findings, to be completed second quarter 2007; 2) contract with an outside consultant to perform a rate study, to be completed third quarter 2007; 3) present a draft of the utility rate-change options to the City Council in October; and 4) final draft of utility rate changes and hearings in November/December, with the rate changes to be effective January 1, 2008. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ms. Kreft presented the staff report.

Mayor Hershberger Thun noted the City of Waconia will be paying for the engineering work. Ms. Kreft stated that is correct and reviewed the process that will be followed to send out RFPs, award and negotiate the bid, and have a letter of commitment to Mn/DOT followed by the contract starting with the cities all committed to start the Phase 1 study. Ms. Kreft advised that one of the negotiation tools with Mn/DOT is to provide in kind services to bring down the cost of consulting services.

Mayor Hershberger Thun reported on her work with the Southwest Corridor Group and that due to the involvement of the mayors along the corridor, (including Chanhassen, Victoria, Waconia, and Norwood Young America and others) they have gotten their attention as well as that of area senators and legislators. She stated she wants the Council to agree that City staff can attend meetings and follow this project.

The Council discussed the cash commitment and importance of the Highway 5 corridor to the downtown design, noting that once it is known you can integrate TKDA into the system and determine how it will figure out.

Councilmember Paulsen stated he is anxious about the one-quarter mile stoplights that stack up traffic. He asked that agreement on the stoplights be received very early in the process.

Mayor Hershberger Thun stated this is intended as an update and a motion is not needed.

Ms. Kreft presented the staff report, advising the Park and Recreation Commission recommends approval with comments.

Councilmember Roden stated she talked to some Commission members and they seemed to be willing to approve this with the changes requested by the development community. She stated her support to move forward.

A motion was made by Councilmember Roden, seconded by Mayor Hershberger Thun, to approve Ordinance No. 347, with revisions, and that the Summary Publication be approved for publication.

Councilmember Paulsen stated he will go along with it for now but has questions about the impact on the books.

With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

Ms. Kreft presented the staff report and advised that the Planning Commission recommends approval with the conditions noted.

A motion was made by Councilmember Paulsen, seconded by Councilmember Roden, to approve Resolution No. 07-66, Approving the request for a Conditional Use Permit permitting Outdoor Storage for the Property located at 2015 Arboretum Boulevard, with the conditions recommended by staff and the Planning Commission.

The Council discussed the offset of access points. Ms. Kreft stated staff supports consolidating as many access points as possible. The plan was provided to Mn/DOT but comments have not yet been received.

With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ms. Kreft presented the staff report and advised the Planning Commission recommended approval with staff’s six recommended conditions and two additional conditions.

Councilmember Paulsen advised of a resident who had several sheep on his property and the City has now told him that he must get rid of them. Mr. Urbia explained that a complaint was received so staff reviewed the ordinances, found it was not allowed, so a letter was mailed. The Code does not allow animals to be grandfathered. Councilmember Paulsen stated texture and diversity are important to a community and he does not think people who have been here for 30 years should be treated this way.

A motion was made by Councilmember Roden, seconded by Councilmember Paulsen, to approve Resolution No. 07-67 Approving the request for a Conditional Use Permit permitting the use of an Animal Clinic for the property located at 2160 Arboretum Boulevard, with eight conditions. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Mayor Hershberger Thun thanked residents for providing input before the Planning Commission on this matter.

Ms. Kreft presented the staff report, advising staff researched ordinances of other cities and drafted an ordinance to limit the number of vehicles to four per dwelling unit for storage out of doors.

Councilmember Amundsen stated he wants to make sure this does not "trump" covenants in certain residential areas that deal with storage. Ms. Kreft explained the City cannot enforce those covenants but can enforce the Code. Mr. Norton stated he will work with the Planning Director to address that issue.

The Council directed staff to move this ordinance forward.

Councilmember Amundsen stated he asked that this item be added to the agenda because there is a lot of emotion involved with the Field House. He stated the people who approved the Field House did not go into it haphazardly, but had information. That information provided was based on a study and the parties were listed in the study. Councilmember Amundsen stated he would like the Council to determine whether the information provided was accurate, fair, and reasonable. If those parties in any shape or form had knowledge of other facts or misrepresented things, it is important for the City to look at options for action.

Councilmember Paulsen stated he has talked with a lawyer who is good at collecting money, noting there is $270,000 to collect plus $80,000 that the hockey association has not contributed. He stated it seems hard for the Hockey Association to repudiate the contract since they also administered the contracts. Also the City has the Springsted, Inc. report, which seems to rely on people who had a secondary interest. In addition, there is a statute of limitation of six years and the reports were written in 2002. Councilmember Paulsen stated this is all an outgrowth of questions anticipated to be asked at the Town Meeting and he does not want to be caught without anticipating those questions.

Mayor Hershberger Thun stated she is intrigued by this idea and would like to know if, at some point, the Council made any exceptions to the contracts officially or unofficially that could take away the power of this particular case.

Mr. Norton explained that it appears there were political decisions on how to implement and enforce the ice contracts and that may have impact on the City’s ability to collect, depending on the specifics of each situation.

Councilmember Amundsen stated he would like to know more of those facts because it is a lot of money entered into with legal and binding contracts that were acknowledged by all parties.

Mr. Norton stated the Council could decide as a body it does not care what happened in the past with how the contracts were formally or informally administered, that there is a debt owned to the City, and try to collect it. Mr. Norton advised that there are actions short of litigation, such as telephoning to make a demand or sending a letter.

The Council supported an attorney-to-attorney discussion.

Councilmember Paulsen noted that a youth hockey association with ice time to sell managed the City’s facility from the sale standpoint, which seems to be in conflict.

Councilmember Amundsen stated that no matter which way the City goes with the Field House, this is a matter that needs to be addressed. He explained that he only raised the issue of litigation to make it clear that all options are open and on the table before this body.

Mayor Hershberger Thun stated she was on the Field House Operating Board and there is information that will need to be discovered. She stated she would like the two attorneys to talk and unless the other attorney is doing it for free, the Council would need to approve the arrangement.

Councilmember Paulsen stated he thinks the Council can get a favorable agreement in a bracket that will meet the Council’s approval and scrutiny.

Mayor Hershberger Thun asked Councilmembers Amundsen and Paulsen to contact that attorney. She stated the Springsted, Inc. study needs to be discussed separately.

Councilmember Amundsen stated there is one element in the study that talks about who was consulted and he leaves it to Mr. Norton to look at that information and advise the Council whether it is prudent to look at the ramifications or any approach that should be taken.

Mayor Hershberger Thun stated with the ice contracts, Mr. Norton should look at any agreement made between Victoria and a possible competing source and how that may play out. She stated Council’s understanding that both attorneys will dial each other up and talk about both issues.

Councilmember Amundsen stated he appreciates not having to talk to Holy Family about their ice contract and payments because they have paid their bill to the City and are a "jewel" in Victoria. Mayor Hershberger Thun concurred and noted that they have even paid their bill early on occasion.

Councilmember Roden stated her appreciation for the work of Councilmembers Amundsen and Paulsen and the positive direction this matter is taking.

Mr. Norton stated he has sufficient direction on those two items. Mayor Hershberger Thun asked for the Council to be updated as appropriate.
 

Councilmember Amundsen reported on his attendance at the Business Development meeting last night. They were in agreement that a review process of plans and/or businesses would be beneficial and would like to provide their comments and be actively involved to complement the Planning Commission and other committees.

Councilmember Roden asked for an update on the liquor licenses information. Mr. Urbia stated research was done by staff and it will be scheduled for the May 10 or 24, 2007 Council meeting.
 

Mayor Hershberger Thun asked Mr. Urbia if he would request a closed session for his quarterly review. Mr. Urbia answered in the affirmative.

A motion was made by Councilmember Amundsen, seconded by Councilmember Roden, to hold a Closed Session to discuss the City Administrator’s Quarterly Review and Potential Field House Litigation. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Mayor Hershberger Thun recessed the regular Council meeting at 9:46 p.m. to hold a Closed Session to discuss the City Administrator’s Quarterly Review and Discussion of Field House Proposals.

Mayor Hershberger Thun called the regular Council meeting back to order at 11:10 p.m.
 

Councilmember Roden stated she has received a request by a number of the citizens who want a pre-briefing, informational session by Ms. Johnson held prior to the May 8, 2007 town meeting. Ms. Johnson would walk them through the Field House economics. Councilmember Roden stated she told the citizens that she would have to ask the Council about conducting such a pre-briefing.

Mayor Hershberger Thun stated she received the same request and she also felt it had to go before the Council. She asked if the briefing would be to only a select number of people or should it be given to all people.

The Council discussed the most appropriate format for the Public Meeting and agreed the 2007 budget will be made available because it provides historical numbers.

Councilmember Roden stated a group who wants to save the Field House will present a petition at the Town Meeting.

The Council agreed there will be a 10-minute staff presentation and then the meeting will be opened for the public to speak to the Council. Once the public input is completed, the meeting be closed for further public comment and the Council can then speak for three to five minutes, at their option. Note cards will be available for the public to write out their questions. They will then be compiled and answers, not opinion, posted on the City’s website with the facts. The meeting will only be to obtain input from the public and Field House offers will not be presented or discussed. This information will be posted on the City’s website.

Mayor Hershberger Thun stated she will include the meeting format in her newspaper article.
 

Mr. Urbia stated the dual track is in a holding pattern until further Council direction.
 

A motion was made by Councilmember Roden, seconded by Councilmember Amundsen to adjourn the meeting at 11:32 p.m. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Respectfully submitted,

Carla Wirth
TimeSaver Off Site Secretarial, Inc.