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06/18/1996 - City Council Special MINUTES OF A SPECIAL MEETING OF THE -t4- • EAGAN CITY COUNCIL Eagan, Minnesota June 18, 1996 A special meeting of the Eagan City Council was held on Tuesday, June 18, 1996 at 5:00 p.m. at the Eagan Municipal Center. Present were Mayor Egan and Councilmembers Wachter, Masin, Awada and Hunter. Also present were City Administrator Tom Hedges, Assistant Engineer Mike Foertsch, Chief Building Official Doug Reid, Senior Planner Lisa Freese and Recreation Director Ken Vraa. WESCOTT ROAD EXTENSION Administrator Hedges gave an overview. He stated that staff has encouraged Mr. Home to look at the Wescott Road/Pilot Knob Road intersection as the main access rather than what was approved by Fish Lake on Pilot Knob Road. He added that with their willingness to change, questions have arisen regarding displacement and modifications that have to be made to the intersection in regard to the Fire Department and the parking lot and who will bear the cost. Assistant Engineer Foertsch stated that options were outlined for the Council's consideration. Mr. Crawford, attorney for Mr. Home, stated that two questions remain. He indicated it needs to be decided what the design of the entrance will be and how the costs will be allocated between Home Development Corporation and the City. He further noted that all of the construction takes place on City property. He stated there are two design issues they are most interested in. The first one is the center island concept. He added that he understands staff feels this is not necessary, but stated it would add character. The second design element is the proper berming and planting which would give separation of the entrance to the public parking lot. He mentioned that the Engineering Department has prepared a cost breakout and that the total costs without the center island would come to about $108,000. He went on to say that of the $108,000 total, $14,600 is being allocated to the parking lot relocation and $57,200 is being allocated to move the signal, as well as other issues related to right-of-way width. He stated that the remaining $46,000 would be allocated to the roadway portion of the cost. He noted that a normal entrance would have costs around $15,000 - $16,000, including the construction of the center island. He added that they feel they should pay the equivalent costs of a normal entrance. He added they would like to see the design as shown and see the City pick up the additional costs. Councilmember Hunter asked about the cost of the feasibility report and who would pay for this in the event the improvement does not take place. • Councilmember Wachter said he is concerned about the parking and whether snow and salt would be a factor in maintaining the center median. Mayor Egan stated he feels it is premature to be discussing the allocation of costs. Councilmember Awada noted that she liked the proposed center median and added that the cost issue should be addressed in the feasibility report. Discussion continued regarding the pros and cons. Foertsch stated that if City property is removed along with the signal, the developer would have to extend his residential street out and feels the developer should pay that cost and also any costs associated with the center median. Councilmember Hunter asked about the form where the developer waived his rights to a public hearing. He did not feel they should do this. Crawford stated they do not have a problem either way. Councilmember Hunter felt the form should include the cost of the preparation of the feasibility report and designate the developer to pay this in case the project does not go forward. He also felt the petition should be re-executed with the second part stricken regarding waiving their rights, but adding the clause about covering the cost of the feasibility report. Crawford stated they are willing to pay for the preparation of the • feasibility report. It was directed to prepare the feasibility report once the new petition is signed. EAGAN SPECIAL CITY COUNCIL MINUTES;JUNE 18, 1996 • PAGE 2 PROPOSED ORDINANCE - ON SITE INDIVIDUAL SEWAGE TREATMENT SYSTEMS Hedges gave an overview on the draft ordinance. He stated that public hearing notices should be sent out to the 280 residents who have private wells and a neighborhood meeting should be held. Mayor Egan noted that the number of private wells will decrease in Eagan. Building Official Reid indicated they are working with Dakota County to devise one uniform ordinance. He stated that the wording in Dakota County's ordinance is somewhat different than what was agreed to. He added that residents would not be required to install on-site individual sewage treatment systems until their old system fails. Mayor Egan asked why there is not a County wide ordinance. Reid stated they are proposing an ordinance similar to Eagan's, but their ordinance will state that if a system is not up to standards, it will be deemed a failure. In comparison, in Eagan, the system will be allowed to stay in place as long as it is operating and once the system fails, it will need to be replaced. Councilmember Awada agreed with the City of Eagan's position. Mayor Egan asked what the source of the proposed draft ordinance was. Reid stated that sources came from meetings held with Dakota County and Metropolitan Council representatives as well as looking at the County's ordinance. Reid noted that there is a question in regard to the cost of implementing this program. He stated that after one year, the costs should be known. Hedges stated that they should go ahead and schedule the necessary neighborhood meetings and the public hearing. Councilmember Masin asked if the property owners would have to pay for the inspection. Reid addressed that issue. Councilmember Awada asked if it was excessive for the Metropolitan Council to require an inspection every two years. Reid stated that the Minnesota Pollution Control Agency is suggesting inspections take place every three years. He added that this issue is still being addressed. • Hedges thanked Reid and the Inspection Department for their excellent public relations in regard to the clean up of the storm damage. Reid added that most of the comments received from residents were positive and that residents appreciated the fact that the City paid the cost for the pick up of debris and waived the permit fees. He added that they have met with both property management companies of Diffley Commons, the insurance adjusters and the contractor to get a resolution in regard to repair of the damage. REDEVELOPMENT OF WESCOTT TRAIL RENTAL HOUSING UNITS Hedges noted that several members of the HRA staff were present at the meeting. He stated that several months ago the City Council gave consideration to the Youth Coordinator position and whether the City should continue renting or acquire the 949 Wescott Trail housing unit to be used for the program activities. He also added that at the time of the Metropolitan Livable Communities adoption there was an amendment that suggested projects or housing developments within the City be looked at that could be refurbished and renovated as opposed to building new construction. He stated that staff is looking for a general policy that the Council would like staff to continue working on. He added that he appreciates Senior Planner Freese's memo and her good work. Freese stated that over the past couple of years, the City has been approached by various groups and owners regarding potential City and County assistance for rehabilitation of buildings. She added that most recently they were approached by Jeff Johnson, whose company manages a large share of the Wescott units. He had asked the City and the HRA about the possibility of a consolidation of ownership under a public buyout option. As a result, City staff met with HRA staff to put together the pro formas. She pointed out that the key thing to keep in mind is that there will be a significant public investment if a buyout is considered. She added that the City contribution would be higher than the 25%figure used in her memo. • She also clarified that the policy referenced on page 30 of the staff report was a City policy and not a County policy. : .7' EAGAN SPECIAL CITY COUNCIL MINUTES;JUNE 18, 1996 • PAGE 3 Councilmember Awada questioned scenario five, page 24 of the packet (Purchase One Building), and asked if the other three units would qualify under the Metropolitan Council's Low Income Housing guidelines. Freese stated it depended on which scenario was followed in terms of purchasing. She added that they were looking at having a market rate alternative where there would be a City subsidy to enable that buyout and the other alternative would be transitional housing. She went on to say that transitional housing would qualify by providing housing for people under the Livable Communities Act. Ulfers, representative of the HRA, stated that scenario five would involve participation with the transitional housing program and would meet the Livable Communities Act requirements, but if a market rate rent approach was used it would not meet the Livable Communities Act. He further added that the Livable Communities Act states that rent, including utilities, cannot be more than$683 per month to be considered an affordable unit. The market rates the units are being rented at are averaging $750, so they would be above that threshold. Mayor Egan asked in regard to scenario five how many units would qualify under the Livable Communities Act. Ulfers stated that scenario five, to acquire the four unit building that the City service center is presently located in, would leave three housing units. Mayor Egan asked about scenario two and if the buildings were the Johnson owned units and if they would qualify. Ulfers stated Johnson does control these units and believes they would fall within the $683 threshold. Mayor Egan stated that another 34 units could be added in addition to the existing 16 units. He added that scenario 2 appears to be the best option. He also asked what changes would be made to these units. Ulfers stated that their Rehabilitation Specialist was sent out to the development to prepare a cost estimate. He referenced the cost breakout on page 43 of the packet. Ulfers noted that the original construction was not exemplary and maintenance has been deferred for a long time, which has resulted in the need for significant rehabilitation. 111 Councilmember Awada asked why the purchase price for the buildings was so high. Mayor Egan asked if an appraisal had been done on these units. Ulfers stated that one had not been conducted. Superintendent of Recreation Peterson, stated that the estimated purchase price of the service center was between $33,000 and $36,000. Egan asked if the City and the HRA's financial obligation would be to try and upgrade these units to the cost shown on page 43 and then buy them down. Ulfers suggested they could be purchased at the price being requested and $22,000 per unit put into rehabilitation. He added that some units should be torn down to make the project more manageable. He stated this project has all three bedroom units and they would like to create a mix of one and two bedrooms units. Wachter questioned all the things that need to be replaced. Ulfers stated they had also talked with relocation experts who estimate the cost to be between $8,000 to $9,000 per unit for renter relocation, as per the Uniform Relocation and Acquisition Act. It was noted that there is a gap of$182,000 that the City has to come up with. Discussion continued regarding the costs involved with the project. Councilmember Awada stated that the three units in the 949 building should not be used for transitional housing. Ulfers said the units could be rented out as an option, but the rents would not qualify under the Livable Communities Act, but added the units would be self supporting at $780 per month. Councilmember Awada stated that the goal in the future would be to convert the whole building. Mayor Egan asked about the financial tools the HRA had come up with last fall. He stated that the Council would not want to get involved with something that would not accomplish any goal. He asked what tools are available now. Ulfers stated that some of the tools had been used in some of the scenarios presented to the Council. He added that some sources are available but it depends on the objective. Ulfers stated that the equity gap is large and it's hard to fill that gap, even with creative financing. Mayor Egan stated it is the Council's priority to finance the second wing of the life cycle housing. . Hedges stated that he could look at the residual amount in the single family housing bond issue of 1980. He noted that the Council has been consistent in earmarking that money for senior housing. O. .. 3 EAGAN SPECIAL CITY COUNCIL MINUTES;JUNE 18, 1996 • PAGE 4 Councilmember Awada stated that the purchase price is unrealistic. Ulfers concurred with Councilmember Awada. Hedges commended Ulfers on his effective negotiation skills. Ulfers stated the HRA would like to be part of solving the challenges presented at Wescott, but they do not want to purchase these buildings at an unreasonable price. Reid added that complaints have been received from the tenants regarding the buildings, but he indicated the tenants are hard on the units too. Mayor Egan stated that the Council is interested in exploring the possibility of refurbishing other cluster homes if this project does not move forward. He added the Director of Adult and Community Education for District 196 is interested in developing a GED program for some of the tenants who live in the buildings. Councilmember Awada stated that other problem areas should be addressed and those problems solved too. Mayor Egan stated there are opportunities that already exist in Eagan and the Council should consider option four and wait for the owners to come down in the purchase price. It was noted that option two should not be explored. Councilmember Masin asked what the impact on the other units is in regard to the having the service center in the one unit. Director of Parks & Recreation Vraa stated that the tenants like having the service center there doing something positive. Ulfers congratulated the City regarding the Wescott Park improvements and he added that police service calls have been reduced as a result of the service center being located in the one unit. UPDATE/RICHARD HOLZ PROPERTY/ROAD ACCESS NEGOTIATIONS City Administrator Hedges stated that efforts have been made to negotiate a driveway access to • Holz Farm from Cliff Road through the Richard Holz property, and as an alternative, through the Roger Weierke parcel immediately to the west of the Richard Holz property. Director of Parks and Recreation Vraa stated that Ed McMenomy,the realtor representing Richard and Irene Holz, informed the City that they are not interested in selling any road right-of-way to the City from their parcel. He further stated that Mr. Weierke is not interested in selling only a portion of his property. After further discussion, there was a consensus by the City Council that action be taken at the regular City Council meeting of June 18 to approve the purchase of the Richard Holz property for $120,000 with the understanding that the item will be returned to the APRNRC for the purpose of locating the driveway access and parking lot and that direction be given to the resale of the house by subdividing the property. The meeting adjourned at 6:30 p.m. to the regular Council meeting. MLK June 18, 1996 / I• Date City Clerk •