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06-20-2023 MeetingJune 20, 2023 A regular meeting of the Scandia City Council was held on the above date in the Council Chambers. The meeting was conducted in -person and over an electronic platform. All participants who joined the meeting remotely could hear each other and contribute to discussions. Mayor Maefsky called the meeting to order at 7:04 p.m. Following the Pledge of Allegiance, roll call was taken. The following were in attendance: Council members Heather Benson, Jerry Cusick, Steve Kronmiller, Mike Lubke, and Mayor Christine Maefsky. Staff present: City Administrator Kyle Morell, City Attorney Eric Larson, City Planner TJ Hofer, City Engineer Ryan Goodman, Deputy Zach Boesel, Fire Chief Mike Hinz, Public Works Director Charles Fischer, and City Clerk Brenda Eklund. APPROVAL OF AGENDA Benson, second by Lubke, moved to approve the agenda as presented. Motion carried 5-0. LAW ENFORCEMENT REPORT Deputy Boesel reported on the several recent vehicle accidents resulting in life threatening injuries and a fatality. Boesel said County deputies are taking more active roles to being visible on the highways. The DARE graduation was held at the end of the school year. Boesel said he appreciated the City's support of this program at Scandia Elementary. PUBLIC FORUM Scandia Good Neighbor Proclamation —Julie Hull Mayor Maefsky presented Scandia Elementary Principal Julie Hull with a Scandia Good Neighbor Proclamation for her kindness and dedication to students and families. Employee Service Awards Mayor Maefsky presented service awards to Treasurer Colleen Firkus (25 years), City Clerk Brenda Eklund (15 years), Maintenance Worker Michael Egelkraut (15 years), and Maintenance Worker Jeffrey Anderson (10 years). There were no public comments, and the Public Forum was closed. CONSENT AGENDA The following Consent Agenda was presented: a) Minutes 1) May 16, 2023 Regular Meeting 2) June 7, 2023 Work Session b) Treasurer's Report c) Payment of Vouchers d) Approve Special Event Permit for Bridge the Valley Bicycle Rally, August 13, 2023 e) Approve Excluded Raffle Permit — Gammelgarden Museum Running of the Meatballs, September 9, 2023 June 20, 2023 Scandia City Council Page 2 of 8 Kronmiller, second by Cusick, moved to approve the Consent Agenda as presented. Motion carried 5-0. PARK AND RECREATION COMMITTEE Park and Recreation Committee minutes from the June 5th meeting were in the meeting packet. PLANNING COMMISSION Rezone a property from Agricultural Preserve to Agricultural Core, and a Minor Subdivision to be known as Froiland Addition at Property Identification Number: 24.032.20.34.0008 (County Road 52/0akhill Road North): Ordinance No. 2023-04; Resolution Nos. 06-20-23- 0](Findings of Fact) and 06-20-23-02 (Minor Subdivision) Planner Hofer presented a recommendation from the Planning Commission to approve a request from Daniel Froiland for rezoning three properties from Agricultural Preserves to Agricultural Core, and for a Minor Subdivision to subdivide off a single 4.99-acre parcel to be known as Froiland Addition. The property is located along Oakhill Road (County Road) and had expired from the Ag Preserves program on June 1, 2023. Hofer explained the process to result in the creation of Lot 1, Block 1 of Froiland Addition (4.99- acre parcel), and the subsequent reconfiguration of the remaining 85.77 acres for Parcel B (57.13-acres) and Parcel C (28.64-acres), not proposed for development at this time. Hofer reviewed the comments from other agencies. The ordinance to rezone the property and a resolution to approve findings of fact for the rezoning ordinance, and a resolution to approve the minor subdivision were prepared. Conditions of approval for the minor subdivision include payment of a park fee as cash -in -lieu of land, certification from Washington County showing the land can support a sewer treatment system, and the access to Parcel B is revised to meet compliance with Washington County standards. Applicant Dan Froiland appeared before the Council and stated there is a natural division for the 4.99-acre lot, which will be built on soon. Council member Lubke questioned the driveway placement on Lot 1. Planner Hofer explained that the existing driveway is infringing on a wetland and will need to be realigned to meet the wetland setback. Kronmiller, second by Cusick, moved to adopt Ordinance No. 2023-04, Amending the Official Zoning Map to Rezone Parcel IDs 24.032.20.34.0008, 24.032.20.43.0001, and 24.032.20.42.0001 from Agricultural Preserve to Agricultural Core. Motion carried 5-0. Kronmiller, second by Cusick, moved to adopt Resolution No. 06-20-23-01, Approving Findings of Fact for Rezoning Parcel IDs 24.032.20.34.0008, 24.032.20.43.0001, and 24.032.20.42.0001. Motion carried 5-0. Kronmiller, second by Cusick, moved to adopt Resolution No. 06-20-23-02, Approving a Minor Subdivision for Froiland Addition located at Parcel ID 24.032.20.34.0008. Motion carried 5-0. June 20, 2023 Scandia City Council Page 3 of 8 SCANDIA INTERNET ACTION COMMITTEE Scandia Internet Action Committee Chair Bob Wilmers reported on the June 151h meeting. A Midco representative attended virtually. The Big Marine Lake project is expected to begin in late 2023 or 2024. Approximately 80 households in Scandia applied to the state's line extension program to connect properties with long driveways; three households are now serviceable, with three to be connected later this year. The remaining are not currently able to be served as they are outside Midco's service area. Midco is examining their projects, and the remaining addresses may be funneled into a larger future project with state or federal funding. Midco said they are dedicated to finishing this expansion project in Scandia, with 400 remaining households to connect to broadband. Wilmers said this is excellent news. A Frontier representative also participated in the meeting. Frontier would like to engage with the city on a project, saying the City will need to enter into a non -disclosure agreement with Frontier before moving forward. Wilmers reported that East Central Energy is beginning a fiber project for all their electrical service customers, affecting approximately 25 Scandia households, but this area could be up to 5 years away. The next IAC meeting is on July 20th. Midco Day will be held on August 23rd TOURISM COMMITTEE Minutes from the May 23rd meeting were in the packet. City Administrator Morell reported that the Committee discussed banners for the community wide garage sale and on continuing the EDA business breakfasts. WASTEWATER COMMITTEE The Wastewater Committee did not meet in May. CAPITAL INVESTMENT COMMITTEE Council member Kronmiller announced that the CIC will meet on Thursday, June 22" d. A large focus of discussion will be on the road fund. BUILDING OFFICIAL The May building activity report was in the meeting packet. In May, 31 building permits were issued at a valuation of $1,356,500.00. FIRE DEPARTMENT Fire Chief Hinz reported on the fire department's May activity. Last month the department responded to 19 calls; 5 fire, and 14 medicals. Hinz noted the severe traffic accidents the department has responded to this past month, requiring three helicopter assists. The department conducted a live fire training burn at the Lindgren property a few weeks ago. Four new recruits have started with the department this month. CITY ENGINEER Engineering Updates City Engineer Goodman provided a report on engineering activities. Tii Gavo Phase 2 development will be getting started soon; equipment on the site is being mobilized. June 20, 2023 Scandia City Council Page 4 of 8 2023 Crack Filling and Seal Coat Project — Contractor's Request for Payment No. I Kronmiller, second by Lubke, moved to approve the Contractor's Request for Payment No. 1 and pay $150,824.37 to Allied Blacktop Company. Motion carried 5-0. 2023 Street Improvement Project — Contractor's Request for Payment No. 1 Benson, second by Cusick, moved to approve the Contractor's Request for Payment No. 1 and pay $144,708.91 to Asphalt Surface Technologies Corporation. Motion carried 5-0. CITY PLANNER Rural -Commercial Design Standards Planner Hofer explained that an error was recently identified in the Unified Development Code (UDC) that should be addressed by the City. Currently, the character area standards for the Rural -Commercial base zoning district are not included within the UDC. Staff believes these were omitted in error when the UDC was adopted last September. The previous zoning ordinance required compliance with the Architectural Design Guideline (ARG) for some aspects of design and uses. The UDC requires compliance with the character area standards regardless of use; however, the standards for the R-C zoning district are missing within the UDC. Planner Hofer presented draft ordinance language to correct the omission in the UDC and to restructure the language in the Character Area: Village Districts to meet the goals of the chapter. In addition, Hofer requested the Council provide guidance on whether to allow the City to approve other building materials that are not directly identified within the allowed materials and to have the ability to enforce the standards established in the Architectural Design Guidelines. Planner Hofer said allowing other materials may set a standard the city does not desire. As well, the UDC as written does not provide the City the power to enforce compliance with the Architectural Design Guidelines. Hofer asked if it should require conformance. The City Council addressed staff s concerns. City Administrator Morell said staff noticed just recently that the design standards were missing from the UDC in the Rural Commercial district and have expected that they should be included. Mayor Maefsky said yes, we need to make sure the standards are in the UDC. Council agreed with Planner Hofer's recommendation that agricultural use buildings in the R-C district shall comply with the standards for ag buildings in the ARG. Council was in consensus to remove "#7. Other materials" from the list of finished building materials permitted in the R-C zoning district, and to replace language to require applications be consistent with the Architectural Design Guidelines. Staff will prepare the ordinance amendments for a public hearing with the next meeting of the Planning Commission. Density Inconsistences in Comp Plan and UDC Planner Hofer explained that staff has identified a conflict between the 2040 Comprehensive Plan and the Unified Development Code (UDC) that sets inconsistent density standards in the Village Neighborhood (V-N) Base Zoning District, and asked Council to provide direction to June 20, 2023 Scandia City Council Page 5 of 8 correct the conflict. Hofer stated that this was brought to staff s attention when the City received an application for a Concept Review for Laurel Ridge Development which includes a rezoning to the Village Neighborhood base zoning district and development at a level that is consistent with the Comprehensive Plan, but not the UDC. The UDC allows one dwelling per 40 acres in the Village Neighborhood when community sewer and water are not available, whereas the Comprehensive Plan allows one dwelling unit per 2.5 acres. Hofer said the Comp Plan is the ruling document for density and allows 16 units per 40- acre. Hofer recommended the City Council address the inconsistences between 2040 Comp Plan and the UDC so that staff can draft the appropriate amendments. Council Kronmiller said the intent to allow higher density if lots have community sewer and water was inadvertently left out of the Comp Plan. Mayor Maefsky noted that the Future Land Use map in the Comp Plan is incorrect, in that the Village Neighborhood should only extend west to Novak Avenue, but the map goes beyond Novak. Maefsky said she is unsure how or why this happened and needs to be corrected. Planner Hofer explained that Comp Plan amendments must be processed through the local approval process and approved by the Metropolitan Council which will take time. The changes won't affect the application received for Laurel Ridge however, as anything in yellow on the Future Land Use map currently in effect can be 2.5-acre lots. The Council gave direction to proceed with changes to the Comp Plan with the map and the text amendments to reflect the standards in the UDC. Kirsten Libby, resident on 205th Street adjacent to the proposed development, said this situation is unfortunate given all the work to get the zoning code right. Libby said the City needs to look at this development carefully, as it will be a huge change for the character of the street which lacks infrastructure. Libby said this was a mistake and would like to see the application pulled. Planner Hofer said the application is for a concept plan at this point, and will need to go through the review process for preliminary and final platting. Attorney Larson offered a conclusion that there is a discrepancy with the code and Comp Plan which raises serious questions of the conflict with respect to this application and the density. Can the City do a pause? Larson said this is a question to study given the direction from the council. Council member Kronmiller said the intent of the UDC is clear, but what can be done preemptively until this gets figured out? Can there be a moratorium on future development? Mayor Maefsky said there is good reason for a moratorium given the inconsistency and to allow time to study a solution. Planner Hofer said the lowered density encompasses the Village Historic Core, Village Center and Village Neighborhood districts. June 20, 2023 Scandia City Council Page 6 of 8 Benson, second by Kronmiller, moved to establish a moratorium for any further subdivision of land in the three Village districts for anything less than 4 per 40 density until the inconsistency between the UDC and the Comp Plan is resolved to the extent as allowed by law. Planner Hofer noted that PUDs allow for flexibility from lot standards but does not increase density per the UDC; however an Open Space PUD does allow bonus density when meeting certain criteria. Hofer said the intent should also be cleared up in the Comp Plan amendments as density can be increased with CUPs and PUDs as now written. Council voted 5-0 voted on the moratorium. Planner Hofer said he will draft Comprehensive Plan amendments to go to the Planning Commission for action. DIRECTOR OF PUBLIC WORKS Public Works Director Fischer reported on department activities, with an update that Bluhm Construction has completed the majority of road repairs since his report was written last week. To highlight the hiring process for the Maintenance Worker position, Fischer reported that ten applications were received, four finalists will be interviewed on June 26th, with a recommendation to hire proposed for the Council's July 5th Work Session. CITY ATTORNEY Cannabis Legislation and possible Moratorium City Attorney Larson summarized his memo on recent legislation legalizing the use and possession of cannabis in the State of Minnesota effective August 1, 2023. The city may limit the cannabis business' location and the number of cannabis businesses in the city by adoption of reasonable restrictions. Cities cannot prohibit retail sales, but can set limits on place of sales. Larson explained that as cities are evaluating the impacts and how to control businesses given the new cannabis law, cities may adopt an interim moratorium prohibiting the sale, manufacturing, or distribution of adult -use cannabis. The interim moratorium may not extend beyond January 1, 2025. Attorney Larson recommended that the city authorize staff to begin the process of implementing an Interim Moratorium Ordinance as soon as practical in August in order to assess and adopt reasonable city ordinances pertaining to the operations of cannabis businesses. Larson said a model ordinance for municipalities for land use zoning will be provided by the soon to be formed Office of Cannabis Management. Maefsky, second by Kronmiller, moved to direct staff to implement an interim moratorium ordinance prohibiting the sale, manufacturing, or distribution of adult -use cannabis in order to assess and adopt reasonable city ordinances pertaining to the operations of cannabis businesses. Motion carried 5-0. Attorney Larson said the study and assessment can include the sales of edibles with THC. June 20, 2023 Scandia City Council Page 7 of 8 CITY ADMINISTRATOR City Administrator Morell reported that a revised Master Parks Plan recommendation from the Parks Committee will be presented to the City Council on July 5th, then move on to the Met Council for the necessary Comp Plan amendment. Morell is communicating with Washington County regarding City Center Study, and confirmed that the western boundary of the study will include the elementary school. Morell is also working with the County on updating the city's trash ordinance. Johnson's Request to waive variance fees City Administrator Morell presented a petition from Cindy and Harold Johnson to streamline their variance request to build a garage on their property which they had previously paid fees in 2020 but were denied. The development code has since been amended to allow them to build on their lot across the street, but it has been determined that the placement of the garage will require a variance from a wetland setback on a property to the north of their parcel. The Johnson's wrote that applying for a variance and paying fees again was not the Council's direction when they directed the Commission to correct the code. City Administrator Morell explained that the wetland setback was not brought up in 2020 as it was determined that the non-contiguous parcel could not have a garage, and its placement wasn't considered at the time. Council member Kronmiller said they didn't look at the issues of the lot, but expected staff could issue an administrative permit once the UDC was adopted. The Council had told staff it should be done, but now a wetland has been identified. Kronmiller said the Johnsons tried to do what was asked of them; now here it is three years later with another variance. Kronmiller questioned why should the cost and the variance be a question again? At the time, the Council said the proposed garage makes sense, and the ordinance was changed in order to issue a permit. Kronmiller said the wetland should have been looked at 2 years ago. Administrator Morell added that a sewer line on the property prohibits moving the garage over to a location that does meet the wetland setback. Cindy Johnson, Layton Avenue, said they applied for a variance to build a garage across the street in August 2020, and paid the fees and escrows only to be denied. It was a lengthy discussion from the Council to make it happen the following year, but adoption of the new UDC took until October 2022. Johnson said they have talked with the Watershed who said they can work with whatever setback the city requires. The garage cannot meet the 50' setback due to the sewer line, but can meet a 20' setback. Johnson said they are asking to not require a variance. Council discussed the request and determined a variance will be needed but the fees should be waived. Maefsky, second by Benson, moved to allow the Johnson's to pay no fees or additional costs for a variance. Motion carried 5-0. PRESENTATION BY SCHLENNER WENNER & COMPANY ON THE 2022 AUDITED FINANCIAL STATEMENT Ryan Schmidt, Schlenner Wenner CPA, was virtually present to discuss the final audit of the 2022 financial statements for the City. June 20, 2023 Scandia City Council Page 8 of 8 The firm gave an unmodified (clean opinion) and found nothing unusual in the audit process. Revenues exceeded the 2022 budget by $30,700, while expenditures exceeded the budget by $57,300. The year ended with a fund balance $1.35 million, equal to a healthy 71% of the total annual General Fund operating expenditures. The Road Improvement Fund was described with a cash analysis downward trend. At year-end, the Fund had a cash balance of $932,798. The fund balance decreased by $355,810 primarily due to capital expenditures for street reconstruction projects exceeding the revenue sources for the fund. Expenses exceeded revenue in the sewer enterprise funds, but still maintained healthy balances in both. The Debt Service Fund remains steady until 2033, at which point the bond will be paid off. Schmidt concluded with a description of updates to GASB accounting standards going into effect this year. Benson, second by Kronmiller, moved to accept the audit results. Motion carried 5-0. ADJOURNMENT Benson, second by Kronmiller, moved to adjourn the meeting. Motion carried 5-0. The meeting adjourned at 9:40 p.m. Respectfully submitted, Brenda Eklund City Clerk