City Council Minutes

Pursuant to due call and posted notice thereof, the regular meeting of the Victoria City Council was called to order at 6:30 p.m. by Mayor Hershberger Thun in the Council Chambers at 7951 Rose.

Members Present: Mayor Mary Hershberger Thun; Councilmembers: Tim Amundsen, Tom O'Connor, Kim Roden and Jim Paulsen.

Absent: None.

Staff Present: Don Uram, City Administrator; Holly Kreft, Community Development Director; Jylan Johnson, Finance Director; Cara Geheren, City Engineer; Ann Mahnke, Public Works/Parks Recreation Director, and Mike Norton, City Attorney.

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

A motion was made by Councilmember Roden, to adopt the Agenda. The motion was seconded. With all members voting in favor, the motion carried. Vote: 4 Ayes, 0 Nays.
 

(3) OPEN FORUM:

None.
 

(4) VISITORS PRESENTATION:

Ms. Johnson said the City's auditor, Aaron Nielsen will be presenting the summarized outcome of the management report.

Councilmember Amundsen arrived at 6:32 p.m.

Mr. Nielsen said the past couple years the city received the GFOA's Certificate of Excellence in Financial Reporting award and hopefully this will be the third year in a row.

Mr. Nielsen noted that he met with the Finance Committee to review the management report. He said in page 1 is the audit opinion and findings. He stated an unqualified opinion has been issued and that there were no findings to the seven various areas within the legal compliance manual.

Mr. Nielsen reviewed the audit standards. He referred to page 4 and 5, where there are graphs with the taxable market value and the result in local tax capacity. He stated the city was able to manage the City's tax rate.

Mr. Nielsen said the general fund is the primary operating fund for the city. The month to month balances for the past three fiscal years have been consistent. He noted the taxes for 2009 represent about 83% of the general fund sources. Mr. Nielsen reviewed page 11 which shows a graph of the various functions. He stated the overall fund balance for the general fund was about $48,000 more than anticipated.

Mr. Nielsen reviewed the utility funds. The primary expense incurred in the sewer enterprise fund for the Metropolitan Council's Environmental Services sewer charges.

Councilmember Roden referred to page 3 and asked for comments on the legislature funding. Ms. Johnson said they haven't received LGA since 2002. She explained that when LGA and the Market Value Homestead credit were cut in 2002 totaling approximately $47,000 the city has not budgeted to receive that amount since. Councilmember Roden clarified the city is not relying on the State of Minnesota to pay bills.

Councilmember Roden commented on the actual versus budget of expenditures chart on page 10 and questioned what the right balance is. She asked if this is similar with other cities being audited. Mr. Nielsen said he is finding in general there is a heightened awareness of budget constraints. He noted he doesn't have an overall percent. Councilmember Roden recommended the Finance Committee determine if they are budgeting correctly.

Councilmember Roden commented on the tax valuation changes and said for 2011 there may be a reduction of about $157,000 in the tax revenue. She asked if that reduction is something the city should be concerned about. He said all cities are having a challenging time.

Councilmember Roden commented on reducing the total debt by 6 million dollars and asked what that does for the overall financial picture. Ms. Johnson said these were refunding bonds for the Victoria Recreation Center. She said that will not have any affect on the taxes.

Councilmember Paulsen stated he thinks there should be a reference to the Long Term Financial Plan.

Councilmember Paulsen referred to page 10 and asked Mr. Nielsen if he has ever seen a government entity that has had budgets exceed expenditures by an average of 30% in a year. Mr. Nielsen said he has not.

Councilmember Roden commended staff on the clean audit.

A motion was made by Councilmember O'Connor, to Approve the Audited Financial Report for the year-ended December 31, 2009. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Mr. Uram introduced Jeff Nordeen from the Fire Relief Association.

Mr. Nordeen, Secretary of the Victoria Fire Relief, said the return improved since the numbers were put together from last month.

Mr. Nordeen reviewed the summary balance and said the balance as of 1/1/2009 was $549,324.

Mr. Nordeen talked about the returns by category and said the total return on assets was 27.2% or $140,888.

Mr. Nordeen said the comparative benchmarks equity portfolio was 31.18%.

Mr. Nordeen showed the historical view graph and said significant improvements were made from 2003 up through 2007.

Mr. Nordeen said there will be two firefighters taking benefit checks in 2010 which totals $45,419. He noted there are four active firefighters that could retire which totals $209,400. He said the total immediate exposure as of today is about $254,819. Mr. Nordeen said the total active plus deferred members who are eligible for pension is about $893,321. He noted there are 10 active members with less than 5 years experience.

Mr. Nordeen said the 2010 audit is ahead of schedule and they will be coming back to present that in May or early June.

Councilmember Roden commented on the unfunded pension liabilities and asked if there is a number they are trying to get to. Mr. Uram said he would always suggest they be at 100% or above funded. He said the challenge is to manage the level of pension benefit and the number of firefighters. Mr. Nordeen noted the gap doesn't need to be paid out now.

Councilmember Roden said it would help to have metrics on who will retire when. Mr. Nordeen said when they can come back they could bring a chart back. Councilmember Paulsen said they want a maturity schedule.

Councilmember Paulsen asked if the council is comfortable with the 75/25 split.

Councilmember O'Connor asked who makes the decisions on the investments. Mr. Nordeen said they did not have much in the aggressive growth and they were more in the 40/60 range. He noted 95% of the growth came from equities. He said they have a good advisor and they aren't too concerned about the amount of growth in equities.

Mr. Uram said he thinks they need to stay invested to secure some returns.

Councilmember Roden said she would be more comfortable with 80 and not letting it drop below that. Mr. Nordeen reiterated the equities are more at 60/40.
 

Councilmember O'Connor removed I. Parks and Recreation Youth Scholarship Program.

Mayor Hershberger Thun removed F. Approve Inter-fund Transfer from the 2009 Street Reconstruct Project Fund to the General Fund.

Councilmember Paulsen removed H. City of Shorewood request for support of Safety at LRT Trail and its Roadway Intersections

A motion was made by Councilmember O'Connor, to Approve the amended Consent Agenda. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Mayor Hershberger Thun stated this is an additional $55,000 that will now go in the general fund. She noted these were for infrastructure improvements and the money should go into the fund where further infrastructure improvements are done. Ms. Johnson said these funds are coming out of the capital project funds. Mayor Hershberger Thun said they have already budgeted for all the repairs and this money should be put away and not put in the general fund. Mr. Uram suggested that the funds could be transferred in to the permanent improvement revolving fund.

A motion was made by Mayor Hershberger Thun, to Approve the Inter-fund Transfer of $55,168.60 from the 2009 Street Reconstruct Project Fund to the PIR fund. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Councilmember Paulsen said he is concerned with the lack of definition in terms of what they are doing. Ms. Kreft explained the recommendation is to have the crossings be standardized along the entire trail from Victoria to Hopkins.

A motion was made by Councilmember Paulsen, to Approve Resolution 10-42 as drafted. The motion was seconded.

Councilmember Amundsen asked why this wasn't brought to the Park and Recreation Committee. He said in the future to ask the Park and Recreation Committee's opinion.

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

Councilmember O'Connor said he is fully in support of this program but had a couple of questions. He asked what the criteria is. He questioned why it is necessary to solicit family income. Ms. Mahnke said they looked more at the individual and family as a whole receiving up to $100 per year and $350 per family. She said they wanted to keep it simple and have some flexibility. She said she could take it back to the Park and Recreation Committee to come up with some additional criteria. Councilmember O'Connor said additional criteria would help make it clearer.

Councilmember Amundsen commented on the discussion and said asking for household income is a routine and typical standard which would be an indicator of the need. He said it wasn't about the income but about the need and they didn't want to exclude anybody.

Mayor Hershberger Thun said the motion should be to table the parks and recreation youth scholarship program.

Councilmember Roden asked if there would be impacts if this was tabled. Ms. Mahnke said they did have a request and there could be a delay.

Mayor Hershberger Thun said her concern with not having specific criteria in the future was to make sure it is equal throughout all the applicants.

Councilmember Amundsen said the questions are if they agree on the program, agree to the funding that has been allocated and the matter of which it would be distributed.

Councilmember O'Connor removed his motion to table.

Mayor Hershberger Thun said she would like to see in the criteria how much will be funded with the gambling money. Councilmember Amundsen said the $1,500 is the dedicated amount of money from the Lions Club that could be utilized by the park and recreation staff.

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

A motion was made by Mayor Hershberger Thun, to Approve the March 22, 2010 Claims Roster in the amount of $258,345.41. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Ms. Johnson stated that the quarterly utility billing report is included with the month-end financials.

Mayor Hershberger Thun said materials were included with the utility bill on water conservation.

Councilmember O'Connor said about 10% is 90 days past due. Ms. Johnson said that amount is really past due since the third quarter 2009. She said the past due amounts are certified to the property taxes each year. The overall delinquencies that are certified at the end of the year is about half a percent of the overall revenues. Councilmember O'Connor asked if this report will be done quarterly or monthly. Ms. Johnson responded quarterly.

Councilmember Roden said when the outsourcing of the water billing was approved they talked about shifting the water billing schedule. Ms. Johnson said they are still working in that direction. She said they need to get the process as automated as possible in order to go to monthly billing.

Councilmember Amundsen stated he would like to see an insert with the next bill regarding the removal of grass clippings from the storm water curbs. He said that is an offense to the ordinance. He said there should also be a comparison with how Victoria rates compare with other municipalities and why they are different.
 

-A- Accept Donations

A motion was made by Councilmember Roden, to Approve Resolution No. 10-43; A Resolution Accepting Donations. motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

Mayor Hershberger Thun explained that they will be doing the new business first for the space and then the liquor license.

Councilmember Amundsen questioned why the public hearing is necessary. Mr. Norton said the ordinance provides for a public hearing on liquor. Councilmember Amundsen commented on having a choice in this matter and said they have to act on it.
 

Ms. Kreft said she will start with the conditional use permit section of the request. She showed the aerial photo which shows the previous configuration since updated photos have not been done.

Ms. Kreft said that in 2005 the city received a request for a second liquor license which prompted an ordinance amendment requiring a conditional use permit for off-sale liquor sales. She stated the City of Victoria is the only city in Carver County that requires the conditional use permit process. She noted there is currently one exclusive off-sale liquor license.

Ms. Kreft said included in the staff reports are the number of liquor licenses in the surrounding communities.

Ms. Kreft explained that this is a request from Crossroads Liquor to occupy the space at 7999 Victoria Drive, the north end of the Fresh Seasons Market building. She said a detailed layout is included in the packet. She said a new entrance would be constructed to the south of the existing entrance per requirements of the State Liquor Commission. Ms. Kreft noted the existing entrance would be used for product display.

Ms. Kreft stated that when the city approved Victoria City Center LLC the proposal was for a 28,050 square foot building and the parking analysis was done for the entire space being utilized as retail. Based on that square footage and that use the required parking stalls was 51 and there are currently 71 parking stalls included in the parking lot. She noted that 15 spaces are in a long term lease with the owner of the Clock Tower building.

Ms. Kreft showed the proposed signage. The signage is proposed for the east and west elevations as well as the south elevation. She noted that the Planning Commission recommended the signage be white, not red which was shown on some of the plans at the Planning Commission meeting. She noted that all of the proposed and existing signage meets the requirements.

Ms. Kreft said information is in the packet regarding the city's assistance. She noted a contract for private development was executed in 2008 with Victoria City Center LLC and the City and the maximum assistance was capped at $863,465.

Ms. Kreft stated the conditional use findings are specific to the four criteria in the staff report.

Ms. Kreft said the Planning Commission held the public hearing last week and there were tenants in adjacent buildings that spoke in favor of the liquor store. The owner of the existing off-sale store that spoke against the proposed conditional use permit. She said the vote was 4-1 to recommend approval of the conditional use permit with the four conditions recommended by staff as well as two additional conditions; one that the wall signage shall be white and two that the use shall not be permitted to expand beyond the existing square footage.

Ms. Kreft said staff is recommending approval with the conditions as noted.

Mr. Uram gave a brief presentation on the liquor license. He said the applicant has been in business in the City of Shakopee for 11 years. He explained that there are 7 conditions listed within the city ordinance that dictate the granting of a liquor license application. He stated the background investigation has been completed with no findings.

Councilmember Amundsen asked if the applicant wanted red signs. Ms. Kreft said the samples shown to the Planning Commission showed red. Mayor Hershberger Thun stated the red sign was concept only and the applicant wanted white.

Councilmember Amundsen asked what the handicap ratio needs to be. Ms. Kreft said when the building was approved it was considering the space so they need to meet the handicap parking for the entire building which included the vacant space. Councilmember Amundsen asked about handicap requirements on the 15 leased spaces. Tom Gray, Building Official, pointed out the elevations of the building and said the ramp will be accessible and 3 is the total handicap stalls required for the entire building.

Councilmember Amundsen asked if the new proposed entrance is required. Ms. Kreft showed the proposed entrance and said they have to have two doors per the State Liquor Commission.

Councilmember Roden clarified when they voted to give TIF to the building owner they didn't give TIF to any particular business it was given to the developer. Mr. Uram said that is correct. Councilmember Roden said at the time they approved that the concept was to have a grocer and a pharmacy. Mr. Uram stated that is correct and the applicant initially indicated the preference would be for a drugstore and after significant efforts they had to look to other alternatives.

Councilmember Roden asked if there have been any other uses proposed for that vacant space. Mr. Uram said not that he is aware of.

Councilmember Roden commented on the pharmacy business and said she is not surprised there is not a drugstore.

Councilmember Roden clarified that they are not providing TIF to a liquor store. Mr. Uram said that is correct.

Councilmember Roden asked if they have heard from the community that they would like additional liquor stores. Mr. Uram said he can not personally say. He said it is not unusual for a city the size of Victoria to have more than one liquor store.

Councilmember Roden asked if existing liquor store owner was offered the opportunity to use the space that is currently being proposed for the new liquor store. Mr. Uram said there were discussions of relocating to the Clock Tower expansion area. He said in his understanding that option was turned down.

Councilmember Roden asked if the pharmacy will still be pursued. Mr. Uram said they will always be pursuing a pharmacy as well as senior housing and other uses that the City lacks.

Councilmember Roden asked how full the Hartman building is. Ms. Kreft said there is one space available on the second floor and 600 square feet on the first floor.

Councilmember Amundsen commented on the pharmacy business and how some pharmacies are moving to medical facilities.

Councilmember Paulsen asked about the 2,400 square foot limitation being enforceable. Mr. Norton said under this application it is enforceable and the applicant agrees to that. Councilmember Amundsen asked if this would be better in the resolution under number 6. Mr. Norton said they would also have to come back for a review of the liquor license for an expansion. Councilmember Paulsen clarified that if the existing liquor store wanted to expand they would have to come to the City Council. Mr. Norton said yes. Councilmember Paulsen said he is focused on future competition. Councilmember Roden clarified that if either a new or an existing liquor store wanted to expand they would have to come back to the City Council.

Mr. Uram asked if the existing liquor store has a conditional use permit. Ms. Kreft said they do not and it is a legal non-conforming use. She noted that if the use wanted to expand they would need a conditional use permit.

Mr. Uram commented on his experience in the liquor business and said 2,400 square feet is small for a liquor store. He reiterated that any kind of expansion would require them to come back. He said it would be very expensive to change anything. Mr. Uram stated based on the requirements for the conditional use permit and the liquor license application the square footage limitation is not necessary in this case and that it is his recommendation that it be removed.

Mayor Hershberger Thun called for a recess at 8:18 p.m.

Mayor Hershberger Thun reconvened the meeting at 8:24 p.m.

Mayor Hershberger Thun opened the public hearing at 8:25 p.m.

Councilmember Amundsen asked if there are conditions for denial of the conditional use permit. Ms. Kreft said if the City Council finds all the criteria are met then that is recommending approval of the resolution. If the City Council finds conditions that are not met staff recommended developing a resolution with findings.

Deep Baveja, said he wants to plead his case as he is the only affected party. He said he came to the City of Victoria in 2001 when he bought Hi-5 Liquors with the help of bank funding and personal investment. He said he bought his house in Victoria in 2004. Mr. Baveja said he invested his money in another business in Victoria. He said in 2007 with the help of some TIF funding the Notermann building was revived and two more retailers came to town; Mackenthuns Deli and Parker Tannin's Liquor who left the city in 2008. Mr. Baveja said in 2008 they finally found a grocery store and land was donated, grants were given, signage was approved, zoning requirements were altered and in April of 2009 there was a grocery store. He noted that missing from the picture was a pharmacy because Snyder's had backed out of the project. He said the city invested roughly $850,000 to the project from the resident's tax money. Mr. Baveja said $250,000 was TIF money and the land was donated for $1. He said that Mackenthuns was affected by this project because the owner thought she could not compete with a grocery store. Mr. Baveja stated that bringing new business to town at the cost of existing business is not growing the city.

Mr. Baveja said he found out that Subway was pulling out of the town and made a deal with them to buy the franchise. He said he called the city office and asked if there were any funding options to keep the business in town and no was the answer because it was not a substandard building. He said he made another mistake investing more money in the City of Victoria to keep something in town.

Mr. Baveja asked the council members if all the city investment and funding in the grocery store project is to run small businesses out of town. He said the city was not big enough to support a grocery store and the city is not big enough to support another liquor store. He stated there will be winners and losers, but there will not be two winners. Mr. Baveja commented on the 13 acres and questioned the future if a new grocery store comes in if that would be looked at as growth opportunity or new business coming in at an expense of another.

Mr. Baveja said he has put everything he has in to the City of Victoria. He asked that an equal opportunity be given to him to expand his liquor store so he can compete with the new store. He said he would like to expand to around 3,000 square feet in which he would request funding. He said in future planning he does want to work on the parking lot and the store front to bring it to the city's looks so it looks better, but everything requires time and money.

Paul Schindler, 634 Carver Bluffs Parkway, Carver, introduced himself and Bob and Cindy Poppitz as the owners of Crossroads Liquor in Shakopee. He said they have been in business for 11 years. He said they are very excited to have the opportunity to come to Victoria. Mr. Schindler said they are looking to offer a full service liquor store that has a wide variety of beer, wine, liquor and where customer service is number one. He stated they want to be very competitive in pricing and offer discounts and coupons to the customers. He said they believe that owners of a small business need to be there and part of the community. Mr. Schindler said developing relationships with the customers is a very important part of a successful business. He said they truly believe there is room for more than one store in town and two can survive. He noted that Shakopee currently has nine liquor stores. Mr. Schindler said they are very enthusiastic and excited to be here.

Dale Riley, Fresh Seasons Market, addressed a couple of points that were brought up earlier. He said with regards to the pharmacy they were desperately trying to bring a new drugstore to town. He said unfortunately the deal with Snyder's fell through. He said they had an in store pharmacy for four years in the Glen Lake store that closed because it was challenging to make a go of it. He said they would still welcome an in store pharmacy and if there was a willing operator they would find a way to put it in the store. Mr. Riley said that in the event the post office would leave they would bring a substation in to the store as a convenience for the customers. He said he respects the job Mr. Baveja has done and being a small business owner is tough regardless of the type of operation. Mr. Riley said as he listens to the customers a lot of them are going outside of Victoria to make purchases particularly for wine. He said he wants to see that stopped. He said they need to prevent anyone from driving outside of Victoria for any type of service or product. He said it will be a different shopping experience. Mr. Riley stated he is in support of this because they need another tenant for the entire downtown to keep it growing. He reiterated they are not giving up hope for someday having an in store pharmacy.

Councilmember Roden commented on the projections for the grocery store and said she would hate to see a liquor store and no grocer. Mr. Riley said they are doing everything they possibly can to grow the business. He talked about all of the studies and surveys and said customers wanted to see what the specials are on a weekly basis, so they listened. He said everyone has a value equation and price is one component. He said they are now producing an item and price ad. Mr. Riley said in addition to finding a tenant they are working to look at other goods and services that people are in need of. Mr. Riley said other than Crossroad Liquor coming forward there has been no interest in that space in the last year. He said they are absolutely committed to the City of Victoria and don't see shutting down. He said they are looking at other services to bring in the store that they think would be very attractive.

Councilmember Roden asked what the projection might be on the grocery store if the liquor store opens. Mr. Riley said it will be beneficial and his guess would be 10-15% increase in sales.

Councilmember Amundsen asked about the percentage of the business demographically. Mr. Riley said he does have that information and what they learned from the last customer spotting was that they were amazed at the draw they have. He said once you are discovered you become a destination because of the in store experience.

Councilmember Amundsen commented on a competitor who is redesigning and the concern with competition. He said he is also concerned with the reconstruction of the bridge and the drop in front of HEI for the retailers and city businesses. He noted the projections for increased traffic work in everybody's favor. Mr. Riley said they are concerned and that is why they are involved with the Victoria Business Owners Association. Mr. Riley said with regards to Rainbow they are not afraid to compete. He said that because the sales have fallen short of expectations their employees who are all union employees all voted in support for a pay and benefit reduction to help them get through this tough period. He said the agreement is to restore paying benefits as soon as they can. He stated they have provided a place of employment they want to be at.

Councilmember O'Connor said it has been suggested that the store has benefited from the financial deal and asked Mr. Riley to comment on that in terms of competition. Mr. Riley explained that Tom Wartman is Victoria City Center LLC who worked with the city and was granted the TIF financing. He said that Mr. Wartman and he are partners in Fresh Seasons Market. He said Fresh Seasons Market did not benefit.

Joy Majeres, Majeres Graphic Design, said she has an office in the Clock Tower Building and has been there for close to three years. She stated she is in support of a liquor store. She said she is one of the consumers who leaves the city to go buy wine. She noted that she did use the other wine store when it was there but the price point was a bit high. Ms. Majeres said a lot of consumers will be missed if something like this isn't brought in.

Steve Delich stated that originally proposed was the pharmacy and a grocery store with the TIF money that was given. He said he was under the impression before he got here tonight that the liquor store was going to be funded with TIF money. He said he still has concern and would hate to lose the liquor store they already have. He questioned what 2,400 square feet could do to Fresh Seasons Market's bottom line.

Chris Johnson, Power of Life Chiropractic, stated he is in full support of the liquor store coming in. He said the new businesses have helped all of the existing businesses. He said to stand in the way would be a big mistake.

Mayor Hershberger Thun closed the public hearing at 8:55 p.m.

Mayor Hershberger Thun clarified that back in 2003 the city purchased 7970 Quamoclit for $195,000 and 7984 Quamoclit was purchased for $202,000 and in the same month 7956 Quamoclit was purchased for $235,000. She noted that 7956 Quamoclit was not taken for the grocery store it was retained for right-of-way. Mayor Hershberger Thun stated the developer, not Fresh Seasons Market, purchased CH Carpenter property for $830,000. She said the DEED grant of $164,000 came from the state and was given because of Fresh Seasons Market coming in. She commented on the TIF fund of $235,000 and said the developer must continue to pay taxes until the cap is reached. She reiterated that all of this is done by the developer. Mayor Hershberger Thun said the total amount if the TIF is included is $698,000 to the developer. She explained that the developer puts the building up and makes a contract with the grocer, so the grocer now pays the rent charged and gets no benefit from the TIF and no benefit from the land and a little benefit from the DEED grant because it was used to do the roads. Mayor Hershberger Thun asked how big Fresh Seasons Market is. Mr. Riley responded 26,000 square feet. Mayor Hershberger Thun said the developer still has 2,400 square feet that he wishes to rent out. She reiterated that a pharmacy was wanted but they were not able to find one. She stated that none of the money is being given to Fresh Seasons Market or Crossroads Liquor, it is going to the developer. Mr. Uram explained that in order for the developer to meet the debt service requirements the majority of the funds are going towards the construction cost of the building. Mr. Uram explained the tax increment financing and said it is pay as you go financing. The only money Victoria City Center LLC gets back is money that they are paying the county in taxes, a portion of which is being returned to them. He commented on the tax capacity and said the only reason it is down slightly is because they added $2.5 million in market value. He said the DEED grant provided a benefit to all of downtown. Mr. Uram said from an overall perspective the investment of $450,000 to the downtown based on the benefits that have been received and will be received are substantial.

Councilmember Roden said they had an abandoned lumber yard at that site and the only proposal other than the Victoria City Center LLC for that location was a liquor store.

Councilmember Amundsen clarified that Victoria City Center LLC is Tom Wartman and Fresh Seasons Market is Dale Riley and Tom Wartman. He said there is a dual partnership in that one entity.

Councilmember Amundsen commented on the three questions that need to be answered. He said the challenge he has is with the term neighborhood or community. He commented on the liquor license application and fulfilling the needs of the community. He noted that Mr. Baveja's liquor store is 2,450 square feet so both of the liquor stores would add up to one store in Eden Prairie.

Councilmember Amundsen clarified that staff has said this will not have an adverse impact on parking, traffic and law enforcement.

Councilmember Amundsen commented on extending Tower Boulevard the way it was drawn on the map so that people can have access and there is a more central business district but the challenge is money.

Councilmember Amundsen asked if he is limited to conditions for denial of the liquor license. Mr. Norton said the decision made on the conditional use permit will form the decision on the liquor license application.

Councilmember Paulsen commented on the parking lot and questioned if the parking lot will still work if the store really starts to hop.

Councilmember Paulsen said they also need to realize there will be new competition. He stated he wants to make sure there is a level playing field. He commented on the competitor having a lower cost basis, visibility of Highway 5, and a right in and right out parking lot and probably signage that will be superior.

Councilmember O'Connor stated he thinks fundamentally there is room for two liquor stores. He said he was intrigued with Mr. Baveja's desire to expand his operation. He said they can't afford to have the grocery store not succeed.

Councilmember Amundsen commented on the communication and letters implying favoritism and requested they imply or state that directly to the council members. He said this has never been an issue of favoritism it is an issue of fairness. Councilmember Amundsen stated as they move this forward it is extremely important to review and be fair to other business members. He said he is interested in finding out the city's role and focus in the request to expand a parcel to help a business.

Councilmember Paulsen asked if there should be an addition to condition 6 regarding the use not being permitted to expand. Ms. Kreft said if a new liquor license would be needed the conditional use permit would need to be amended.

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

A motion was made by Councilmember O'Connor, to Approve Resolution No. 10-44; A Resolution approving an Exclusive Off-Sale Liquor License for Crossroads Liquor of Victoria, LLC to be located at 7999 Victoria Drive Suite A. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Mayor Hershberger Thun called for a five minute recess at 9:26 p.m.

Mayor Hershberger Thun reconvened the meeting at 9:30 p.m.

Ms. Kreft explained the request is by Klein Bank to move the existing monument sign. She showed an aerial photo of the sign on the southwest corner and said they are proposing to move it to the southeast corner given the visibility along Highway 5. She noted the existing sign is a "v" configuration and the proposed sign is back to back. Ms. Kreft said the proposed layout is in the packet. She noted this is a slightly smaller sign than what is currently in place.

Ms. Kreft said the Planning Commission reviewed the request at the public hearing last Tuesday. She said the variance findings were that the request was reasonable, unique and fit with the character of the area.

Ms. Kreft explained the reason for the request is because of the change in right-of-way along Highway 5. She said there are no impacts anticipated with the Highway 5 corridor study. She stated this request was reviewed by Mn/DOT and they said a permit would be needed if there is any work done in the right-of-way. Ms. Kreft said staff is recommending the site be surveyed so the property line is known.

Ms. Kreft said the Planning Commission discussed the LED signage. She showed the signage that was originally approved in 1997. She explained the technology used in the current sign was with individual bulbs for the message and the proposed signage would use an LED monochromatic. Ms. Kreft said the Planning Commission recommended approval unanimously.

Councilmember Paulsen clarified there would be a 0 setback. Ms. Kreft said correct. Councilmember Paulsen said his concern is with others asking for 0 setbacks in the area. Councilmember Amundsen asked what the setback is for the existing sign. Ms. Kreft said the setback is most likely right at 10 feet. Ms. Kreft said it is unique because of the shift in right-of-way. Councilmember Amundsen asked why 10 feet is so problematic. Derek Nelson, CD Products, Waconia, said the current placement of the Klein Bank signage has encountered some visual stipulations due to the new grocery store building. He said the current sign from the tip of the base to the base is 11 feet and they are looking to stay with that dimension in the length of the sign, but reduce the height of the sign because there is a gradual increase in the berm. Mr. Nelson said the reason for encroaching as close to Highway 5 as they can is for the visibility. He said that 10 feet is important. He noted there is also a parking lot they have to deal with.

A motion was made by Councilmember Paulsen, to Approve Resolution No. 10-46; Approving a variance for a monument sign for Klein Bank. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

A motion was made by Councilmember Amundsen, to Table the Business Exterior Improvement Loan Program with regard to some of the information heard tonight on fairness. The motion was seconded.

Councilmember Amundsen said he would like a workshop to talk more about the program.

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

Councilmember Amundsen commented on the business exterior and the signage. He said he never anticipated the things that are existing in the windows and would like to discuss that at the workshop as well.
 

None.
 

Mr. Uram said a draft letter responding to questions was sent to the City Council. He said based on his review of the final there haven't been any changes. He asked for some direction on proceeding. He noted that staff is spending a significant amount of time and money on this.

Mr. Uram stated significant progress has been made on the rules.

Councilmember Amundsen asked if they really answered the questions that were sent to them.

Councilmember O'Connor asked about the land acquisition program. Mr. Uram said he would look at it from an investment standpoint. He said that land development opportunities are coming back which would lead him to believe that Lennar may be asking if this is a piece they want to keep. He said in his understanding the land costs were far apart. Mr. Uram said he is speculating there is no deal on the table but that is clarification they need to get.

Councilmember O'Connor commented on getting nowhere.

Councilmember Paulsen clarified that the letter of response was brought to the board and there was no conversation or debate. Ms. Kreft said it was originally on the agenda as a discussion item and moved to the consent agenda.

Councilmember Paulsen said he thinks there needs to be other actions. He questioned if they have any oversight and if Hennepin County could share the correspondence on the budgets. Councilmember Paulsen said they need to do what Minnetonka has done and become a local governing unit. Mr. Uram said he did ask the question about the budgets and they are subject to the same requirements that the City of Victoria is. He said there is no actual approval of the budgets by other government entities. Councilmember Paulsen asked staff to evaluate what the options are to be a local governing unit. Mr. Uram said part of that study would be the costs associated with that.

Mr. Uram said they need to focus some of the efforts on the land conservation program. He said they need to have conversations soon and often about what the MCWD plans are in the City of Victoria.

Mr. Uram said they have attended a lot of meetings with the surrounding communities and with the efforts put in by staff they are better informed than any other community.

Councilmember Roden said once an item is on the agenda that is considered notice. She said she doesn't want to waste any more time.

Councilmember O'Connor asked if there is a way to enhance the ability to control the 111 acres. Mr. Uram said he will send them a letter back thanking them for the responses and asking for an official response on the parcels.

Councilmember Amundsen asked if the increase in the legal and planning fees were related to the land conservation.

Councilmember Roden said she needs to understand the cost benefit to becoming a local governing unit.

Mayor Hershberger Thun said to quote them in the letter about working together.

The City Council discussed having staff do an LGU study. Mayor Hershberger Thun asked how long it would take staff to get some information. Mr. Uram said a couple weeks. Mr. Norton said he can talk to the City Attorney from Minnetonka and see how successful they have been.

Councilmember Paulsen said they want to know if a neighboring county with an LGU has the ability to levy Hennepin County just as Hennepin County levies Carver County.

Councilmember Amundsen said they should not ignore certain areas that need direct action.
 

Mayor Hershberger Thun reported that Linda McNulty was appointed to be the Chairperson of District 112 Community Education Advisory Committee which begins in September.

Mayor Hershberger Thun said they owe thanks to State Representative Joe Hoppe and Senator Ortman. She said there was a letter that went from Randy Maluchnik to Peter Bell and Senator Franken has now submitted a request for $2.4 million for the Highway 212 expansion and $800,000 for Highway 5 safety improvements. She noted this is not something they have for sure gotten.

Councilmember Roden reported on transportation improvements and said there are a series of public hearings. She said they are looking at doing small improvements going forward rather than large improvements. Mayor Hershberger Thun and Mr. Uram will provide an update at the next meeting.

Councilmember Amundsen asked to meet with the Business Development Committee when they have the workshop on the business exterior improvement loan program. He said they need to talk about partnering together to increase retail visibility.
 

None.
 

Mr. Norton said the closed session is to discuss some updated information on the status of the potential acquisitions strategy.

A motion was made by Councilmember O'Connor, to close the session to discuss the property acquisition at 10:05 p.m. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.
 

A motion was made by Councilmember Paulsen, to adjourn the meeting at 10:32 p.m. The motion was seconded. With all members voting in favor, the motion carried. Vote: 5 Ayes, 0 Nays.

Respectfully submitted,

Tanya Schmieg
TimeSaver Off Site Secretarial, Inc.