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06.a1 Draft minutes 09-17-2024 Meeting September 17, 2024 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. Acting Mayor Jerry Cusick called the meeting to order at 7:00 p.m. Following the Pledge of Allegiance, roll call was taken. The following were in attendance: Council members Jerry Cusick, Steve Kronmiller, Mike Lubke. Absent: Mayor Christine Maefsky. Staff present: City Administrator Kyle Morell, City Attorney Eric Larson, City Planner TJ Hofer, City Engineer Isiah Bubany, Fire Chief Mike Hinz, Public Works Director Charles Fischer, and City Clerk Brenda Eklund. APPROVAL OF AGENDA Cusick, seconded by Lubke, moved to approve the agenda as presented. Motion carried 3- 0. LAW ENFORCEMENT REPORT Deputy Booth provided a summer recap. Extra patrols at Log House Landing were conducted for potential parking issues due to the temporary river landing closure at William O’Brien State Park; incidents were few but citations were written when necessary. Complaints regarding a vacation rental on 228th Street became nonexistent once changes were made by the owner. National Night Out was very successful and well attended. There were no reported incidences the entire weekend of Taco Daze. Extra patrols are being directed near Scandia Elementary with school now in session. In August,15 suspicious activity reports were made, mostly the result of solicitor activity. Booth recommended the city consider a solicitor ordinance to mandate licensing to solicit, which could allow enforcement and help curb the complaints. PUBLIC FORUM Patricia Brannan, 21455 Pomroy Avenue, said she is a long-time Scandia resident of 46 years. Brannan said the Council approved a variance in 2022 for Susan Rodsjo at 21450 Pomroy Avenue, to add a dwelling to their property to be used for family. Brannan stated that 12 dump trucks brought in fill for a wetland on the property, and the owner now runs a business to rent out the cabin, as well as her home. Trees were cut down, making the structure visible from my property; proper screening is not being met. Why raise taxes when people are running vacation rentals in Scandia – use a lodging tax to offset property taxes. My taxes went up 10% in 2024; not easy for a senior citizen. Brannan said you continue to allow building where it shouldn’t be allowed. Brannan said there are residents from Pomroy in attendance, and they are tired of the constantly increasing taxes in Scandia. Bob Lushanko, Mayberry. Said he is a 52-year resident of Scandia; pays over a $1,000 a month in property taxes. Said he is upset to be working in my 80s in order to pay my taxes. Everything keeps going up to be unaffordable. Scandia City Council September 17, 2024 Page 2 of 8 CONSENT AGENDA The following Consent Agenda was presented: a) Minutes 1) August 20, 2024 Regular Meeting 2) September 4, 2024 Work Session b) Treasurer’s Report c) Payment of Vouchers d) Approve contract for safety training services with SafeAssure Consultants, Inc e) Approve Special Event Permit for Meisters Bar & Grill Booya Fundraiser – October 10, 2024 f) Approve Hiring Seasonal Program Instructors, Assistants & Winter Recreational Programs g) Authorize Hiring for Public Works and Parks Winter Seasonal Employees h) Accept Donation from the Scandia Fire Relief Association – Resolution No. 09-17-24-01 Kronmiller, seconded by Lubke, moved to approve the Consent Agenda as presented. Motion carried 3-0. PUBLIC HEARINGS Certifying the maximum tax levy for 2025 – Resolution No. 09-17-24-02 City Administrator Morell presented the 2025 preliminary budget, and explained that the council will adopt the maximum tax levy tonight. The budget was prepared with recommendations from the Capital Investment Committee and over several budget work sessions. The CIC recommended increasing the road improvement levy and to adopt additional development fees. The Capital 401 Fund is scheduled for 6 projects in 2025 and will use some of the levy, but largely use fund balance to get the projects completed. Transfers from the 401 Fund and excess fund balance is being used to pay for the tennis court project, to be finished next spring. The Equipment Replacement Fund will purchase a new fire tanker and a new public works dump truck. No ARPA money has been assigned for these purchases, and Morell said the Council can continue to discuss using ARPA funds along with issuance of equipment certificates. One street project up to $700,000 is proposed for next year. A 1.5% increase to the General Fund is proposed for next year. Expenses reflect a 3.5% wage increase, and fire department wages increase of 23% to accurately budget what is being paid. Insurance premiums are estimated to increase 10% but the rates are not definitive yet. Morell provided a levy summary, with debt service levy as the largest due to this year’s road project. Because the road project came in under budget, an additional $100,000 is allocated to pay off debt service in next year’s budget. A total net levy of $3,156,480 is proposed as a not to exceed number. Morell said the final number will be less when the budget and levy are adopted in December. The tax rate is higher than last year, but rates will come down to 28.14% due to the road project savings. Morell provided a historical tax rate summary from 2017 to current. Morell said staff will continue looking for ways to reduce the budget, with discussion at the next work session on October 2. Scandia City Council September 17, 2024 Page 3 of 8 A resolution to certify the preliminary levy and set the Truth in Taxation public hearing on Dec 4th was prepared for Council adoption. Terry Frogner, Oldfield Avenue, asked what do the numbers mean to the taxpayers? Administrator Morell referred to the tax impact worksheet in the budget presentation, showing the 2024 actual property tax levy and the 2025 proposed with taxes payable based on property value. The city’s portion of property taxes is estimated to increase around 10%. Morell said he anticipates final numbers less than this but there will be some increase; equipment and project debt has to be paid for. Frogner questioned a pickleball court survey, saying only 38 were in favor of more courts. Morell stated that the Parks survey had closer to 400 respondents, where 38 asked for more courts. Morell said the project to redo the tennis court had a cost of $300,000, and adding more pickleball courts is being done for an extra $100,000. Frogner said we are all struggling with taxes. You are spending my money where I don’t want it spent, and we are paying for the extra things we don’t want. Frogner said she wants the Board to get smarter about spending our money – it’s too much. Kim Williams, Nolan Avenue, said she is disgusted with increases year after year. My home value is going up, every year larger taxes are collected. The Council is focused on wants versus needs. We don’t want to pay for someone’s hobby. It’s absurd to pay $400,000 for the courts for 0.1% of the Scandia population. How can you justify increases? It’s not what the people want. Shaun Collier, Maxwill Avenue, said she is almost done paying these costs, and she had no idea about the courts. Said she agrees it’s good for the community, but she was under the assumption that the city had the money to do that. Administrator Morell clarified that taxes are not going up to pay for the tennis court project, but rather excess fund balance over the years is being used. Collier said property values are going up, so you will still have more money coming in; it’s coming to a point where elderly can’t afford to pay their taxes. You are managing the money, which can’t continue at this level. Patti Ray, Melanie Trail, said the council should consider keeping the tax rate level. People need a break – put off equipment purchases being done in the same year, and consider taking a break from a road project. Ray asked if Martin Marietta offered assistance to the tennis court project as they did with the new playground. Administrator Morell replied no, but staff will look into it. Don Frogner, Oldfield Avenue, said in township days things worked. Once Scandia became a city, public works has exploded and there are too many people. The city can tighten up and still get jobs done. When the city overspends, we pay for it – you need to tighten up spending. Administrator Morell explained that the tax rate went down in earlier years, and has historically gone down. Property values are going up based on the assessor. Morell said there is an appeals meeting every April to challenge property values; the city can only respond to those who make statements. Scandia City Council September 17, 2024 Page 4 of 8 Administrator Morell explained the ARPA funding the city was awarded in 2021. The current balance of the ARPA funding is $466,422.00. Rule changes now allow use of the funds for any government expense through the end of 2024, such as equipment or to reduce debt balance. The funds cannot build fund balance and must be spent. The city had talked about using ARPA funds for the future Bliss Sewer project, but the funds need to be obligated by year end. Morell reported that some money can be allocated to pay for engineering work for the sewer project, but it’s up to the council on how to spend it. Morell described various options to allocate the funds. Dan Ritchie, 182nd Street, said when my private septic goes down, the city will not pay for my expenses; this is a disparity to subsidize the Bliss Sewer. Acting Mayor Cusick explained that the city owns the Big Marine Sewer System, and didn’t ask for it; the County turned it over to the township. It’s been discovered that it needs required upgrades, which can’t be paid for by all the users. The city has the money now. Administrator Morell stated that the city is also looking for other grant funds. Mr. Ritchie said there should be assessments for septic systems. Cusick stated that because of mandatory upgrades, we need to repair the system that the city owns. Mr. Ritchie said the tax increases are unattainable; be mindful of some projects that shouldn’t be shared with the whole community. Council member Kronmiller said with the rule changes, we have flexibility where to spend the ARPA funds, such as putting it towards the equipment fund to avoid issuing certificates with interest. Kronmiller said we had successful lobbying efforts this year, and we should continue to push for state grants. Kronmiller said he would like to allocate to what has been spent, and towards other projects we would need to borrow money against. Administrator Morell said at the next meeting, the Council can see what the budget could look like using ARPA for equipment in 2025, as the purchases all meet the obligate requirement and could reduce the 2025 levy for equipment. If buying down the debt with ARPA, this coming year would be best. The levy may not get to a point that there is no increase, but it can be lowered and get closer to a number the residents find appropriate. This is not the final levy number; there will be more budget meetings to the end of the year. Patricia Brannan, Pomroy Avenue, asked if the city is looking at a lodging or tourist tax in 2025? Brannan said businesses are operating in residential neighborhoods; the city could also charge an admission for the pickleball courts. Brannan said she would like the council to consider this. Administrator Morell said there is no lodging tax being considered and that there are limitations in this. The tax money collected has to be used for promotion of the city as a tourist destination and cannot to go to the general fund. A lodging tax would not reduce the levy, and would result in more staff time. Morell said the city does not license vacation rentals, which could require more legal action against the owners, thereby increasing legal fees paid by the city. Morell explained that when the Unified Development Code was adopted, the zoning requirements for rentals was removed. Fire Chief Hinz explained replacement of the fire truck, now 25 years old. Having aged equipment, the fire department could lose its favorable ISO rating which will in turn increase Scandia City Council September 17, 2024 Page 5 of 8 home insurance rates. The purchase next year is replacing the engine that no longer qualifies. Hinz said fire engines have a 25-year life span. Acting Mayor Cusick called for a vote on the resolution to adopt a preliminary 2025 tax levy. Kronmiller, seconded by Lubke, moved to adopt Resolution No. 09-17-24-02, Adopting the 2024 Maximum Tax Levy, Payable in 2025. Motion carried 3-0. PARK & RECREATION COMMITTEE Park & Rec Committee Chair Terry Gorham was not present. Administrator Morell summarized the September 5th meeting, where the PRC discussed Taco Daze preparations, the City Center Study report to PRC, recapped National Night Out and Midco Community Day in August, and began Vinterfest planning. PLANNING COMMISSION The Planning Commission did not meet in September. The Commission will meet next on October 1, 2024. SCANDIA INTERNET ACTION COMMITTEE Internet Action Committee Vice-Chair Patti Ray said they are waiting on a Border-to-Border grant announcement from the state. By the end of this year, 274 additional homes will be built out for high-speed internet. Ray asked the Council to consider using ARPA money for future project costs. Ray stated that the committee will be discussing charter revisions at their next meeting. Ray explained the purpose of the charter, to be used as a work product white paper to share with Midco and area communities as a model as to what works for our community – how Scandia successfully built out broadband internet. TOURISM COMMITTEE The Tourism Committee did not meet in August. BUILDING OFFICIAL The August building activity report was in the meeting packet. In August, 28 building permits were issued at a valuation of $1,605,867. FIRE DEPARTMENT Fire Chief Hinz reported on the Fire Department’s August activity. Last month the department responded to 38 calls; 13 fire, 24 medicals and 1 dive call. Hinz stated that the busy month included a structure fire in Scandia, and mutual aid for a fire in Forest Lake. Last month’s storms created power line tree issues. CITY PLANNER Water-Oriented Accessory Structures and Facilities in the Shoreland District City Planner Hofer introduced staff recommended amendments to the shoreland management ordinance, and explained that the city’s ordinance is more restrictive than the DNR model ordinance for placement of water-oriented accessory structures within the lake setbacks. Hofer stated that in the past year, the city has received multiple requests for variances to allow for Scandia City Council September 17, 2024 Page 6 of 8 structures or facilities within the setback of the ordinary high-water level (OHWL) as well as a number of violations of these types of structures and facilities illegally existing. Hofer presented a draft ordinance update which reflects the model ordinance for standards for water-oriented accessory structures within the shoreland setbacks. Hofer proposed no changes from the definition in the DNR model ordinance: Definition 2.562 Water-oriented accessory structure or facility. A small, above ground building or other improvement, except stairways, fences, docks, and retaining walls, which, because of the relationship of its use to surface water, reasonably needs to be located closer to public waters than the normal structure setback. Examples of such structures and facilities include, watercraft and watercraft equipment storage structures, gazebos, screen houses, fish houses, pump houses, patios, and detached decks. Boathouses and boat storage structures given the meaning under Minnesota Statutes, Section 103G.245 are not a water-oriented accessory structures. Performance standards within the model ordinance allow for one structure or facility under 10 feet in height, setback from OHWL at least 10 feet and having low visibility. Hofer explained that a facility within the definition includes patios and decks that do not require a building permit. These would not be considered structures, so the facility allows for features outside structures. Hofer proposed the following: 7.3 Water-oriented Accessory Structures or Facilities. Each residential lot may have one water-oriented accessory structure or and one water-oriented facility if it complies with the following provisions: 7.31 No water-oriented accessory structure or facility shall be constructed until an Administrative Permit has been issued. Hofer explained the restriction of one structure or facility was considered to be potentially unnecessary if the City could set limits on total square footage. Staff proposed that the language in the standards include that WOAS cannot occupy an area greater than 250 square feet in total between all water-oriented accessory structures. An administrative permit will be required to oversee they are being compliant with the shoreland ordinance and zoning standards. The model ordinance allows a setback for WOAS of 10 ft. from the OHWL. Hofer reported that staff is unsure if allowing WOAS within 10 ft. of the OHWL would be consistent with the existing character of shorelines and traditionally, encroachments for structures of facilities have been required to be minimized. Hofer provided other options for discussion of setbacks, such as to allow a consistent 50 ft. setback regardless of lake classification. A standard to require screening language for any permanent aspects, through a vegetative buffer, was modified from the model ordinance. Hofer concluded that staff believes changes will allow greater use of property, reduce variance requests, and increase screening around lakeshore. Scandia City Council September 17, 2024 Page 7 of 8 The Council discussed the amendments, and concluded that public input will more clearly help define the standards, including setbacks of the WOAS. The Council directed the Planning Commission to hold a public hearing on amendments to the shoreland ordinance, and to include comments from the lake associations. Staff will schedule a public hearing for the November 12, 2024 meeting of the Planning Commission. CITY ENGINEER Engineer Bubany reported that this year’s crack fill and seal coat project is complete. Construction of the tennis court project began last week. A change order is needed for removing unforeseen bituminous pavement below the aggregate base layer. Regarding the Bliss Drainfield Project, Bubany presented a draft letter to be formally sent by the City to the MPCA which explains the situation and all steps that have been taken (and are continuing to be taken) to try and obtain funding to complete this required project. The letter also requested a modification to the permit schedule which would extend the timeline to construct from 2025 to 2026 with the assumption that a bonding bill will be passed which funds PSIG and allows Scandia a future path to obtain this funding. Bubany reported on public meetings being held for MnDOT construction projects proposed for Highway 8 in Chisago County and Highway 97 between County Roads 5 and 61 in Forest Lake. Lubke, seconded by Kronmiller, moved to approve a letter to the MPCA to request an extension and modification to the program schedule for the Bliss Drainfield Project. Motion carried 3-0. 2024 Street Improvement Project – Contractor’s Request for Payment No. 5 Engineer Bubany recommended approval of Pay Request No. 5 from Asphalt Surface Technologies Corporation for work to complete shouldering, driveway tie-ins, cleaning pipe culverts, and striping on Phase 2 and 3 streets. This request includes withholding 5% retainage. Kronmiller, seconded by Lubke, moved to approve Pay Request No. 5 and pay $154,604.53 to Asphalt Surface Technologies Corporation. Motion carried 3-0. DIRECTOR OF PUBLIC WORKS Public Works Director Fischer reported on department activities. Fischer commended his staff who spent an entire week to clear 40 trees off roadways from strong storms last month. As a cost savings for the tennis court project, public works cleared trees to prep the site. CITY ATTORNEY Attorney Eric Larson had no verbal report. CITY ADMINISTRATOR City Administrator Morell reported that staff is working on 60% plans for the Gateway Trail Project and locating appropriate sites for trail crossings. The Water Tower Barn Project was Scandia City Council September 17, 2024 Page 8 of 8 approved for LCCMR funding, moving forward for formal legislative approval next year. Staff continues working on a cannabis ordinance, scheduled for further review at the October 2nd Council work session. CINNAMON BUN DAY FUNDING REQUEST Administrator Morell read a proclamation prepared by the organizer, declaring October 4, 2024 as Cinnamon Bun Day in Scandia. The group requested funding of $350 towards the purchase of the rolls, which will be handed out by volunteers to motorists at the corner of Oakhill Road and Olinda Trail on the morning of October 4th. Organizer Patti Ray stated that Gammelgarden Museum will also be hosting a fika from 8:30 a.m. to 10:30 a.m. Lubke, seconded by Kronmiller, moved to approve a funding request of $350 for Cinnamon Bun Day in Scandia. Motion carried 3-0. COUNCILMEMBER HEATHER BENSON’S RESIGNATION FROM CITY COUNCIL Administrator Morell reported that Council member Benson was recently appointed as a judge in Sherburne County, requiring her to resign from her City Council term. Benson’s 4-year term was ending at the end of this year. Morell explained that the Council has options to appoint a replacement or leave the seat open. Council concluded that it may not be worth the effort to fill Benson’s seat, but rather leave the seat vacant until a newly elected council member is sworn in next January. More discussion on filling the term will be held at the October 2nd Council work session. ADJOURNMENT Kronmiller, seconded by Lubke, moved to adjourn the meeting. Motion carried 3-0. The meeting adjourned at 8:53 p.m. Respectfully submitted, Brenda Eklund City Clerk