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HomeMy WebLinkAbout1994/07/05 - ADMIN - Minutes - City Council - Regular MINUTES CITY COUNCIL MEETING ST. LOUIS PARK, MINNESOTA July 5, 1994 1 . Call to order Mayor Hanks called the meeting to order at 7 : 30 . p.m. 2 . Presentations Police Chief Mancel Mitchell introduced Reynaldo G . Wycoco , Baguio community-based police project , from Baguio City, Philippines . Chief Wycoco was present to thank the St . Louis Police Department for working with them on community-based policing. He presented medals and plaques to the three officers who visited the Philippines : Pat Collins, Jim ,'ezierski and Bryan Fraser. 3 . Roll call The following Councilmembers were present at roll call : George Haun, Allen Friedman, Ron Latz , Robert Young, Gail Dorfman and Lyle Hanks . Also present were the City Manager (Mr. Meyer) ; City Attorney (Mr. Steilen) ; Planning Coordinator (Mr. Rye) ; Director of Public Works (Mr . Grube) ; Finance Director (Ms . McBride) ; and Asst . to the City Manager (Mr. Larson) . 4 . Approval of minutes It was moved by Councilmember Friedman, seconded by Councilmember Haun, to approve the minutes of the June 20 , 1994 City Council with the following addition: Item 9h, add "Councilmember Dorfman amended the motion to include that the City notify the School District of the action it had taken and encourage them to consider placing crossing guards at that intersection. " The motion passed 6-0 . 5 . Approval of agenda It was moved by Councilmember Haun, seconded by Councilmember Friedman, to approve the consent agenda. The motion passed 6-0 . It was moved by Councilmember Dorfman, seconded by Councilmember Young, to approve the agenda. The motion passed 6-0 . PUBLIC HEARINGS 6a. Cable TV: Transfer of control to KBLCOM Resolution 94-78 110 City Council meeting minutes July 5, 1994 Brian Grogan, attorney for the City in this cable transfer, spoke to Council . He briefly described the companies involved in this proposed transfer as well as the elements involved to bring forth a successful transfer. There being no one wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date. Councilmember Dorfman asked at what point, after the transfer is accomplished, can the City and its Cable Commission begin negotiating about various service points . Mr. Grogan said once the transaction is concluded, the City would be working with Nortel just as in the past but would probably be dealing with the new KBLCOM staff . Actual approval of the transfer will occur on or after July 11 . Subscribers will use the same phone numbers as in the past until so informed differently. Councilmember Friedman asked for clarification of the organizational chart in the report and the entities involved. Mr. Grogan explained that Houston Industries through their subsidiary KBLCOM, Inc . will be 100% in control of the operating entity in St . Louis Park. It was moved by Councilmember Haun, seconded by Councilmember Latz, to adopt Resolution 94-78 entitled "Recommending approval of the transfer of control of Countryside Investments, Inc . and Nortel Cable Corporation. " The motion passed 6-0 . 6b. Monterey Co-Housing Community Conditional use permit Resolution 94-79 Glenn Olsen, 5416 10th Ave. So. , Minneapolis, spoke on behalf of the Monterey Co-Housing Community. There being no one wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date. Councilmember Friedman was impressed with, the cooperation of the neighborhood in seeing this project come together as well as the attractiveness of this development . It was moved by Councilmember Friedman, seconded by Councilmember Haun, to adopt Resolution 94-79 entitled "A resolution granting Conditional Use Permit under Section 14 : 5-4 . 5 (d) (1) of the St . Louis Park Ordinance Code relating to zoning to permit a multiple family dwelling development of 24 townhouse and apartment units for property zoned R-4 , Multiple Family Residence District City 111 Council meeting minutes July 5, 1994 located at 2925 Monterey Ave. " The motion passed 6-0 . 6c . Enterprise Rent-A-Car Conditional Use Permit Resolution 94-80 Pat Kleinman was present to answer questions . There being no one further wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date . It was moved by Councilmember Young, seconded by Councilmember Friedman, to adopt Resolution 94 -80 entitled "A resolution granting Conditional Use Permit under Section 14-5-5 . 3 (D) (2) of the St . Louis Park Ordinance Code relating to zoning to permit additional overnight parking for rental cars for property zoned C-2, Commercial, located at 6801 Wayzata Blvd. " The motion passed 6-0 . 6d. Comprehensive Plan Amendment St . Louis Park Schools to Resolution 94-81 change land use from Park and Open Space to Commercial Tom Stringer, District 283 , was present to briefly explain the plan to expand the small outdoor storage garage to enable them to get equipment stored inside . There being no one further wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it to a future date. It was moved by Councilmember Latz , seconded by Councilmember Haun, to adopt Resolution 94-81 entitled "A resolution approving an amendment to the Comprehensive Plan 1980 to the year 2000 for the City of St . Louis Park under Minnesota Statutes 462 . 351 to 462 . 364 . " The motion passed 6-0 . 6e . Zoning Map amendment St . Louis Park Schools, R-2 Single Family Residential to C-2 Commercial Nancy Lapakko,, 3371 Brownlow, said the reason Ron had not heard from anyone in the neighborhood was because only one resident got notice . Some questions had not been answered : access from the street, will their neighborhood zoning be changed. Mr. Stringer showed a map of where the expansion is planned. Mr. 112 City Council meeting minutes July 5, 1994 Rye addressed the other concerns . He said the rezoning does not affect the neighborhood residences . Councilmember Friedman asked what was the normal procedure of notification for a public hearing. Mr. Rye said notification for a change to the Comprehensive Plan is 500 ft . and was surprised that only one neighbor received notification. In answer to a question from Councilmember Latz , Mr . Rye explained the notification procedure . Councilmember Latz recommended that in the future if this kind of process comes up in a neighborhood that is organized, that notice be given to the president or designee of the organization so it can be passed along to the members . There being no one further wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date . It was moved by Councilmember Latz , seconded by Councilmember Friedman, to approve first reading, set second for July 18 and authorize summary publication. Councilmember Friedman wondered if letters on matters such as this going to residents could not be stamped with something like "Important City Information" to flag it to the resident, or any important letters from the City. Councilmember Young suggested that an occasional random check be done to see if all neighborhood names are on the County' s list . The motion passed 6-0 . 6f . Cedar Trails Condo Assoc. Conditional Use Permit Resolution 94-82 There being no one wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date . It was moved by Councilmember Friedman, seconded by Councilmember Dorfman, to adopt Resolution 94 - 82 entitled "A resolution granting Conditional Use Permit under Section 14 : 6-45 . 2 of the St . Louis Park Ordinance Code relating to zoning to permit additional garages, install exterior lighting in parking area, permit additional landscape materials and construct a 2400 sq. ft . community building for property zoned R-4 , Multiple Family Residential District, located at 4400-4636 Cedar Lake Rd. " The motion passed 6-0 . 113 City Council meeting minutes July 5, 1994 6g. Final plat : Apex Addition Resolution 94-89 There being no one wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date. It was moved by Councilmember Haun, seconded by Councilmember Friedman, to adopt Resolution 94-89 entitled "Resolution giving approval for final plat of Apex Addition. " The motion passed 6-0 . 6h. Easement reduction 2036 Flag Ave . Ordinance 94-2000 Brian Trygstad was available to answer questions . It was moved by Councilmember Young, seconded by Councilmember Friedman, to adopt Ordinance 94 -2000 entitled "An ordinance vacating a portion of the utility easement on Lot 26 South Crestview addition and vitiating an indemnification agreement (2036 Flag Ave . ) . The motion passed 6-0 . 6i . Prolect 94-20 Sidewalk along Parkdale Dr. - 111 Resolution 94-83 There being no one wishing to speak, the Mayor closed the hearing with the right of Council to thereafter reopen and continue it at a future date . It was moved by Councilmember Friedman, seconded by Councilmember Haun, to adopt Resolution 94 -83 entitled "Resolution ordering Improvement Project 94-20, approving plans and specifications and authorizing receipt of bids for construction of sidewalk along Parkdale Dr. " The motion passed 6-0 . REQUESTS, PETITIONS, COMMUNICATIONS None . RESOLUTIONS AND ORDINANCES None . REPORTS FROM OFFICERS, BOARDS, COMMITTEES 9a. Honeywell/City partnership proposal Because of the complexity and details of this issue, the minutes are provided verbatim. 114 City Council meeting minutes July 5, 1994 Councilmember Friedman said he had formulated a number of questions after reviewing both the staff and Honeywell reports . He was not sure that everything has been answered and that the111 City' s best interests have been addressed in either report . He read from his list of questions : How did Honeywell figure the savings on all items other than the electric gas and fuel? Is Honeywell paying out of their fee all labor saving lamp and ballast items? What exactly does Honeywell guarantee and how are all items, other than the first one above, computed? How is the audit done and what are staff requirements re the audit? How does the staff compute true savings? Will the equipment replacement now save the City in the operations or debt service of the future? Do we care if $60, 000 of savings is credited to Honeywell - - even if you subtract the $60 , 000 you come up with $603 , 000 worth of savings to the City . Do we care if the burner savings is not enough and it goes against the water utility savings? I understand bidding processes but certainly the City has much to gain if they don' t get into the retrofitting business and I don ' t understand why that becomes a problem if someone guarantees our savings . The fact that Honeywell is a for-profit organization is wonderful . I think that we deal with many profit- making organizations - - every contractor we give a bid to, everybody who deals with the City, sans other governmental units, is out to make a buck and that ' s what makes the world go round. So I don ' t think that ' s a negative that Honeywell is going to make a profit as long as we make a profit and that ' s what I can' t get a handle on. Under the Honeywell plan with NSP zero-interest loan, doesn' t the system have to meet NSP requirements anyway. I 'd like some more discussion from the staff as to the provisions the Honeywell contract will contain. I ' d like to see a sample contract, one that would actually be between St . Louis Park and Honeywell . It isn' t enough to say that staff can come up with the same thing --- I think staff probably can and they do an excellent job. But the fact that we didn ' t is not against us . The fact that our staff is probably overworked, underpaid and does a great job anyway doesn' t mean that they can get to everything we have done. Consequently, so what if somebody else came in and did it . I didn' t have enough time to call , although I ' d like the time, to call other municipalities or school districts and find out why they are with the program -- are they finding the savings to be true . If so, why shouldn' t we go with it it it ' s working out someplace else . What does the Honeywell maintenance program encompass and what is the added City responsibility in the partnership. What I 'm getting at in some of these questions is maybe we have a greater responsibility, greater time and greater money that reduces the profit to us, but you've got to go a long way before it reduces $600, 000 -- I think it ' s the 11th year that we realize this . Has staff done any cost analysis to determine the cost savings to the City with the partnership or the City by itself? And if such an analysis is done, is the guarantee of savings by Honeywell and has staff been correct in present and 115 City Council meeting July 5, 1994 past analysis we 've done in these areas . These are some of the questions I have and sans answers at this point , I certainly would not want to throw the baby out with the bath water tonight . Councilmember Haun said after reading staff ' s report and the Honeywell report , he felt staff did a pretty good job of answering most of the questions he had. Councilmember Friedman has some good questions and if we ' re going to have answers to all those questions, we ' re certainly not going to get them tonight . He felt there were some situations as he expressed before that the City is going to encompass in quite a capital improvements or capital outlay program to make this function . He personally didn' t believe the savings, guaranteed or not, are necessarily over an 11 year period. It ' s going to cost money to save money. He was not sure the City could, under the present program that staff has outlined, do that . He said he talked to a couple of communities that are in the program and although he did not want to go into much detail, it was not all positive . We ' re probably never going to have all the answers to all the questions . But we have to look at the total project scope to see what it ' s going to do for the City. Councilmember Dorfman had some concerns about the timing of considering the long- term proposal . We have a task force currently working and looking at ways the City can encourage minority-owned and women-owned businesses to participate more in the bidding and contracting processes . We have a long-term strategic planning process with task forces about to form to look at issues . She felt it more appropriate to finish those two issues before implementing something of a long-term nature such as this contract . Councilmember Latz first wanted to commend staff in light of the burden of many projects on the front burner on the report it prepared as to what more specifically their concerns are. It has raised a couple of questions . I 'm going to suggest that we defer for now at least so that some of the questions Councilmember Friedman raised are answered. I think the real bottom line for me is that we ' re getting two main advantages being proposed by Honeywell : (1) this is a method for financing significant capital changes or improvements in the City ' s infrastructure in the heating and other controls in buildings that the City owns and runs , money which we don ' t have in our hands right now which would presumably pay for itself at some point . In fact the savings would be guaranteed ; (2 ) we would get Honeywell ' s expertise in dealing with these kinds of issues . After we take away -- if in fact we should be taking the way the $380, 000 from the water utility plan which I understand we were planning to do anyway under our Capital Improvements Program - - it leaves us with $220, 000 presumably in true savings . My real question is : do we have a better source of financing for those improvements . We know that NSP has money available at a zero-percent loan and I 116 City Council meeting minutes July 5, 1994 can' t tell from what I 've got here if there is an interest rate attached to the Honeywell proposal separate from the 4 1/2% 111 escalator to account for inflation. I did see a reference to a 6 1/2-7% interest rate from Honeywell . The second thing is whether or not we , as a city, are able to finance via some other mechanism these improvements ourselves although it may not come immediately, but will come over time . Are we really getting the savings and do we really need to go with program. Brenda Powell, Honeywell representative, spoke. I appreciate the opportunity to respond to some of the questions . It is true that the benefits you have mentioned , Councilmember Latz , are hopefully just to do that - - to provide the front financing necessary to implement the improvements now and also as well to supplement the all ready capable staff that ' s on board. When we come into developing program offerings such as this, Honeywell never comes aboard as the expert . We really come forward in a partnership spirit . Our objective is to work to support the current staff in whatever manner is appropriate . I don' t know if you paid attention, but even the maintenance we ' re proposing is really minimal and only enough so that Honeywell can ensure that the guarantees that we ' re proposing will actually occur. We have to have some minimal involvement in order to provide those guarantees . The reason we did that is because the staff here in the City is capable and sufficient enough to handle and take care of the mechanical maintenance on a larger scale. Councilmember Latz asked if the financing for this as it ' s amortized over the payback period factors in a 6 1/2 or 7% interest in addition to the inflation escalator. Ms . Powell said correct, this is based on a 6 1/2% ; however, again that is based on Honeywell financing it as opposed to the City doing an internal financing. Councilmember Latz asked if Honeywell would still be interested in doing this if the City financed it internally or if NSP were to provide zero percent interest . Ms . Powell said yes , Honeywell was incorporating that zero percent financing from NSP . The issue of who finances it is really a non-issue for Honeywell; it ' s really an added service in terms of providing a turnkey type of program that we provide whether the City chooses to internally finance or not . Councilmember Latz had no problem with Honeywell making a profit but it ' s got to come out somewhere . If not out of the financing, does it come out of the service contract . Ms . Powell said first of all the retrofits or upgrades/improvements Honeywell is recommending -- any Honeywell equipment , obviously there is a profit and then secondly, it is 117 City Council meeting minutes July 5, 1994 the ongoing maintenance program that we implement . Obviously, if 11/ Honeywell doesn ' t have to on an ongoing basis chase down maintenance contracts, that significantly reduces overhead. Councilmember Latz asked if those were services which the City could provide or acquire at less of a cost to the City and still have a reasonable likelihood of achieving the same kind of savings . If the City were to go out and do competitive bidding and seek the kind of equipment changes , Honeywell would be encouraged to submit proposals for that kind of thing. Another part of the question is do we get a better price for the equipment from Honeywell in a competitive bidding environment than as part of the package; also whether or not the City needs to pay the $30, 700 per year with the inflation escalator in there for maintenance contracts or whether some other maintenance arrangement which would be less costly to the City. Certainly the advantages to this kind of proposal are the proposed guaranteed savings to the extent they exist, but I think we have to balance as public policy makers whether we really need that guarantee, whether we ' re willing to take the 70% likelihood we ' re going to achieve those savings at less expenditure . Ms . Powell said that was something the City would have to evaluate but first of all, typically when we pull together these program offerings, we look at 10% of whatever the total retrofit costs for the maintenance portion . And obviously if you can compute a $30 , 000 maintenance program, that is significantly less . We have tried to be extremely sensitive to the fact that in the City of St . Louis Park, the maintenance requirements were not as significant as in some other cities , and we have already adjusted our own internal policies accordingly. We feel it is very competitive, first of all , and whether or not it would be we have already tried to customize this to the City and developed a program that is responsive to the expertise that you already have in the City. Councilmember Latz said another thing to be weighed is that Honeywell brings a package and to some cities that is a big advantage . This City has a significant staff and expertise in- house which you already recognize and we have to balance if we have enough in-house to accomplish most, if not all, the goals you bring to us . It may or may not be a good fit for our City where it would be a better fit for a city that doesn' t have the in-house capabilities we have . Appreciate your' re being here and answering questions . Mayor Hanks noted an audit of the city had been done and in order to tentatively get into the savings area everything in the audit would have to be done even though it would not necessarily be done , we would have to move things forward on the equipment replacement schedule to be done in the first year. 118 City Council meeting minutes July 5, 1994 1 Ms . Powell said the insulation is done within six months of the final approval of the contract . 111 Mayor Hanks asked if there was concern whether or not that needs to be done, who is the negotiator. This is the concern he has heard from other city/Honeywell partnerships that Honeywell comes in dictating what has to be done and in some instances the cities felt they didn' t really need to be replaced. For example, in the water utility and the potential savings built therein which over the years projects to be almost aslmuch as the contract . He said the City has been very energy conscious and questioned the need for a full package . Some communities he talked to felt it was a great thing because they didn' t have the ability to do it; others questioned doing it or doing it in their regular replacement schedule which St . Louis Park has. Ms . Powell said when the program offerings were put together, they were put together with the input and guidance of the staffs in the cities . Hopefully, Honeywell can act as consultants as well and they come forward with their recommendations and mesh with the cities, the object being the city and Honeywell feeling good about the mesh in terms of being able to support the guarantees Honeywell is going to be providing to the city. Mayor Hanks asked how Honeywell lets the contracts . Ms . Powell said they had subcontractor partners they work with, and sometimes if recommended by cities, they work with local contractors as appropriate. They do not put out for bid. Councilmember Friedman questioned the realization of the savings and the understanding of the guarantee -- which is why he asked for a contract or agreement that would be illustrative of what would be used. He was concerned that enough concerns have been raised that he would like not to throw this out tonight . It was moved by Councilmember Friedman, seconded by Councilmember Dorfman, to defer for 60 days during which time any members of the Council could contact other partnerships to ask questions, to ask questions of City staff as to the efficacy of the proposal and then come back and see if Council can' t get a firmer hold. Mayor Hanks had a fundamental question: He said he could throw numbers around forever, but it seemed that at his home if he could get money at 6 1/2% or get it at 0%, he didn ' t see how there could be any realization of savings at the 6 1/2% He needed to have that question answered. Mr . Meyer said relative to deferral with which he had no objection and maybe backing into Councilmember Latz ' s question about the bidding process, in answer to his question there is no answer : which would be cheaper, do this through the normalIII 119 Council meeting minutes July 5, 1994 competitive bidding process in which we would normally seek City vendors to provide this equipment and services or to do it via a series of contractors that Honeywell has as partners . There is no answer to that . It is illustrative of the process that has been gone through since the Fall of 1993 when first talking with Honeywell about the potential for a partnership. There gets to a point where you understand the relationship better and reach a point at which questions such as that don ' t seem to have an answer anymore, at least it would require extensive digging and research to get an answer that may not lead one to proceed further. We are now looking at an animal of different sorts, and that ' s why it has taken so many months . We don' t normally enter into a partnership with a for-profit organization of this nature . We had to look very closely at the matter of competitive bidding because it is very different from what we normally do . The financing is another issue . Was it to our advantage to have Honeywell finance this . We found through the process -- and NSP came into it sort of in the middle of the process , which presented an option we didn ' t have - - that there were other options , that going out at 6 1/2% or the current market rate . probably wouldn' t make sense for us . We weren' t necessarily in a position to internally finance a million and a quarter, but after NSP was taken out -- or the portion they were willing to provide - - then we might have been in a position to do some internal financing . There were issues relative to the separations Councilmember Friedman talked about : is it an arbitrary distinction to talk about the water utility vs . the general fund and to an extent, there are different users that pay for those services , so different people should benefit from whatever savings there are. These are questions which came out as we went through the proposal . We did do a survey of other cities and school districts who have worked with Honeywell and have gotten some feedback from them. Some of that is built into the context of the report . But we had reached a point at which we felt that we needed to let the City Council know from staff ' s standpoint that we didn' t think it was in our best interest any longer to continue to invest staff time in pursuing this proposal . We felt it was not the right proposal for St . Louis Park at this point in time, and we didn' t want to spend either City staff or Honeywell time if we didn ' t feel comfortable saying this was the recommendation to go forward. We can certainly invest the time in answering those questions . We had reached the point, for us, that additional work it took to get additional answers didn' t seem to be profitable any longer . Many of the questions asked by Councilmember Friedman and others are some that we can readily answer and we 'd be happy to do that . Councilmember Friedman asked the Finance Director what the City earns on its investments on average . Ms . McBride said the rates had been going up and a recent 90-day CD is up to about 5 1/2% The last bond issue was the tax increment refunding bonds in January and the net interest cost on those was under 5% . She said 120 1 1 City Council meeting minutes July 5, 1994 she spoke with people at Stringsted, Ellers & Assoc. as well as the people in Edina. As best as she could determine, financing through Honeywell was probably the least favorable option to the111 City. That financing is handled by Honeywell through underwriters privately negotiated and after a quick look at some of them, they have been running about a percent higher than what a comparable capital note issue would run. She never seriously considered recommending Honeywell financing at any point . Councilmember Friedman said with zero percent financing from NSP and internal financing which is apparently better than Honeywell ' s, and that Honeywell has 'no objection if we internally finance it or they finance it, then it would seem if the savings are still the same after we internally finance and get some $400 , 000-$500 , 000 zero percent financing, we still have some $600 , 000 savings . The point is whether they do it or we do it, the savings seems to be there or we actually get more savings if you want to take 1% out of that cost which is built into your proposal as I understand it . So we can go up above that . I think it ' s worth us having an opportunityIto receive a few more answers to my questions and impose on the staff for their time. Councilmember Friedman moved and Councilmember Dorfman called the question which failed 2-4 (Friedman, Dorfman in favor; Haun, Latz, Young, Hanks opposed. Councilmember Young said the reason he was opposed as that he hadn' t had a chance to speak. After, spending many hours pouring over these documents, it struck him a lot of work has been put into the proposal by everyone from Honeywell, NSP, staff . Staff ' s report is very extensive and comprehensive . Staff had a lot of good points, the Honeywell proposalIhas a lot of good points and their rebuttal as well . Three groupsI are involved: Honeywell, NSP and City staff, all of whom could put together a good proposal . Granted, some things should be pulled out of the Honeywell proposal -- the water utility activity doesn' t seem appropriate, it ' s something the City has already started on; however there are a number of things Honeywell is much! more expert at . A lot of the improvements are ones the City didn' t seem to be planning to do even over and above the ones they were going to do . As an example, is we just have a brand new police station next door. There is quite an extensive list of improvements that can be done there . I would think they would have been done before the building was finished if the City had planned on all these energy savings being done . That ' s just an example of where Honeywell would have someone who could bring in expertise and structure to see to it that we go into sensors and so forth that we haven' t gotten very involved in. - The CO2 sensors that tell you whether or not someone is in a room and if not, shut things down. I don' t see a lot of evidence that we were' planning to do that in the next 10 years in a capital improvement plans or in the police station. So that ' s an example of where Honeywell could help us to 121 City Council meeting minutes July 5, 1994 do things we might well not otherwise do and yield significant savings over time. NSP' s aspect of the program -- they sound like they' re ready to come in and provide zero percent financing so there ' s a plus by using NSP. And of course, City staff ' s existing expertise and capital improvement programs they've already put in place have some valid considerations . Examples being if there are burners that don ' t need to be replaced and a good case can be made for that, then let ' s not replace them. There are some things staff did not believe would yield savings over the time and I think we make a good case in those instances . It seems to me what it could come down to, what my druthers would be, is rather than as staff recommends - - termination of the relationship with Honeywell -- that we get representatives from Honeywell, from NSP and City staff in a room and work out some common ground with the understanding about financing and City staff wants things pulled out such as the water utility, I think there ' s a lot of room for agreement and I think we could come up with a combined proposal from these 3 groups that would get us a guarantee program which is one of the highest elements here . Honeywell is the only one guaranteeing the savings and working together can probably get some costs down because maintenance will be covering less projects and take care of staff ' s concerns about making some changes sooner than need be such as burner replacement . I think if we got these folks in a room, closed the door, we could probably come up with a proposal that we could all support . That would be my suggested approach rather than delay it for 60 days and simply return to the issues again. Councilmember Latz commented that some of what Councilmember Young has identified are services which we could achieve just by hiring Honeywell as an energy consultant, to do an audit of all facilities and say here ' s what you need to do. As it turns out, in anticipation of their proposal, they did this for us . I don' t know if the proposal is going to work out for us but I don' t know if the rest of the package is necessarily something we ' re going to need as a city. Maybe the most valuable thing Honeywell could have given to the City was a comprehensive energy audit of our facilities which staff may not have the time or expertise to have done themselves . One of the things that concerns me about this is that some of the equipment that is proposed to be replaced has not yet reached the end of its useful life . At some point when that equipment was first purchased and installed, we amortized costs, we projected useful life and figured out whether or not it was a valuable investment and worthwhile expenditure . We could lose up to 10 years of useful life on some of this equipment depending on when it was planned for replacement . Maybe that ' s another question to toss into the hopper to see how that has been factored in to the numbers we ' re being presented with. I 'm not sure we need to sit here and say "we want package . " I only want a package if it ' s going to be good for the City, if we ' re going to realize a net savings - - net meaning something we couldn ' t accomplish on our own, perhaps even with guidance on a consultant 122 basis with the experts at Honeywell -- and at some point we ought to balance staff time on this . I 'm not sure where we 've reached the maximum investment of time to finally make a decision. I would think in the 60 days when I would support the motion to defer this, that in that time if staff/Honeywell/NSP can find enough common ground with the considerations Council has111 expressed, the questions raised, the modifications involved perhaps even with the lack of competitive bidding that ' s proposed, that they can come to us with a package, and if not, in 60 days we ' ll make a decision whether the package presented is good enough for the City to go forward. Ms . Powell said Honeywell would welcome the opportunity to look at a rescoping of whatever is a more comfortable fit for the City. When they talk about entering into a partnership, we do want it to be something that the City is comfortable with and we are open to that suggestion. Also, the NSP portion in terms of what you get zero financing on is very restricted in terms of what you can apply that to, so I just wanted to make the point that is a financing tool and zero percent financing is obviously excellent but there are some pretty strict caveats to what you can apply that zero percent finlancing to . And it doesn ' t encompass the whole program. Councilmember Friedman amended his motion for 60-day deferral to incorporate the remarks of Councilmember Young and Latz so that Honeywell/NSP/staff get togetherlwith direction to work out something together giving them 60 days or sooner to do it . Councilmember Dorfman concurred. Mayor Hanks said if it looks like it won' t go, that a lot of time is not wasted. He came tonight not in support of Honeywell ' s position and would not support the original proposal . So there are going to have to be changes. Councilmember Haun asked for clarification. There was a proposal in front of Council tonight to look at and vote on. He didn ' t disagree with his colleagues, but are wrong in terminating the proceedings with Honeywell and opening a new process or are we continuing the old process . Mayor Hanks asked if staff in discussions with Honeywell has tried to put this together before. 1 1 Mr. Meyer said he would suggest thellast couple of meetings with Honeywell more or less centered on the idea of rescoping. There have been concerns raised by staff consistently over the last weeks . Certainly to recognize Honeywell ' s position, if City staff takes out a lot of the significantlitems, specifically some of the water utility items, Honeywell raised the concern there would not be enough overall savings in thel whole project to be able to cover some of the items that had a longer payback period. So all have focused on the type of discussion we ' re talking about in Oterms of rescoping this so that staff could be satisfied that we can incorporate the best of what NSP has to offer and still City 123 Council meeting minutes July 5, 1994 proceed with the partnership. If the Council wishes, staff would be willing to go at that again, but he would not want to leave the impression they've tried to do that . Ms . Powell said Honeywell was willing to relook at it . Basically, when Honeywell comes in and makes these program offerings, they try to give the cities as much as possible. We look at including improvements that may not have a very good payback on them but using savings from other areas such as water savings to fund some of those . What I see before us now is a situation that says maybe some of those longer paybacks not be included and then take a look at what we ' re left with at that point . Yes, we are very open to revisiting that . Councilmember Haun said he didn ' t have a problem, but if two separate issues are being discussed . . . we ' re talking about entering into a contract with Honeywell or we weren' t going to enter into a contract . Now we ' re talking about going another 60 days . . . are we talking about going another 60 days to keep continuance of a contract with Honeywell and bringing in other people, NSP. What I 'm hearing here generally is a meeting of the minds of all you people and coming up with a different version of this . I will support that , but I will not support the continuation of what we 've been doing, coming back with answers to these questions and still dealing with a contract that is not flexible . One of my main concerns is the capital improvement process our investment in equipment . The motion for deferral passed 6-0 . 9b. Minutes : Planning Commission June 15 9c . Minutes : Human Rights Commission June 15 9d. Void 9e. 1993 commission annual reports By consent, items 9b-9e ordered filed UNFINISHED BUSINESS 10a. Boards and commissions No business 10b. Pulltabs at Gippers Academy of Family Mediators Councilmember Friedman said a Councilmember will have to reopen this discussion. Councilmember Young said the interpretation he received was that anybody could put it on the agenda but it would require one of the two people on the favorable side to actually make the motion. 124 City Council meeting minutes July 5, 1994 He asked for the City Attorney' s opinion. Mr . Meyer said what Councilmember Young was saying would beIII correct on the same night as when !the item was considered, but according to the City' s Code, if it is considered at a subsequent meeting , it can be any member of Council requesting reconsideration. It was moved by Councilmember Friedman, seconded by Councilmember Haun, to reconsider this item. The motion passed 5-1 (Councilmember Young opposed) . It was moved by Councilmember Haun, seconded by Councilmember Dorfman, to approve the premises permit for the Academy of Family Mediators at Gipper' s . Councilmember Young said what wast being dealt with was a new premises permit, not an existing ,one, because there is a new organization. Mr. Meyer said the definition of new vs . existing premises permit is one that comes out of the State Gambling Board. If either the premises are changing or the organization providing a pulltab operation at the premises, it wouldlrequire a new premises permit application. So this is being treated as a new premises permit application. I Councilmember Dorfman said the debate over this over the past several weeks has raised concerns as to how the City deals with these applications . She said it appears there are no legal grounds upon which to deny the application. She said the subject is something which should be revisited in a study session and what Council can do in the future td avoid this . Mayor Hanks said the City had goneIto the State Legislature to try to get out of this business with no success . He also received no support when bringing it before the League of MN Cities as cities he talked to wanted to control issuance of permits . Councilmember Latz said he recalled 'concern was expressed was the number of premises permits issuedlto one organization in the City. He asked as long as the City is in the business, how far do we want to go in utilizing our authority to regulate by City Ordinance what we do . Do we wantito add an ordinance which restricts the number of premises permits that can be issued to I one organization. Councilmember Young said there was aisuggestion there is no basis for denying this . In the ordinance he had been given, there are some specific requirements in the ordinance that he was not satisfied had been met . Specifically parking requirements -- he ' d I 125i 1 1 I 1 like to be assured it is met under the new ordinance . Mr. Meyer did not believe there was anything in the new ordinance which would change existing parking requirements . Mr. Young believed any new premises permit must adhere to new parking requirements under the new ordinance . His second concern was a new premises permit cannot be within 350 ft . of a residence , apartment building, synagogue or church. He said a way to satisfy this requirement is to get signatures from 750 of the affected people in the area. Linda Wilkerson, Academy of Family Mediators , said they did circulate a petition for the Classic . They were informed a similar requirement for Gippers was waived. Councilmember Latz asked if Councilmember Young was asking if this location complies with applicable zoning ordinance requirements . Councilmember Young said correct . Councilmember Latz said he came prepared to support the request, but now was asking for the City Attorney' s opinion as to whether or not there is compliance with City ordinances in these 2 areas . If not , he was prepared to move for deferral to allow the organization to acquire or not acquire the necessary signatures . City Attorney Steilen said he couldn ' t answer this question tonight and that the ordinance needs to be reviewed as to whether the parking is legal vs . does the parking comply with the parking ordinance -- 2 separate questions . He was not prepared to address the grandfathering issue . Mr. Meyer explained the process when an application is received. With regard to the petition, Councilmember Young suggested looking at the form. If it said "gambling at one of those couple of locations, " it might satisfy the requirement . If it specified the first (Classic) and didn' t mention the other (Gippers) , it didn' t sound like it complied. Councilmembers Haun and Latz were concerned that the applicants had been brought back when apparently all was not in order. Councilmember Dorfman felt if there was some staff oversight, the applicants ought not to be penalized which reiterated her earlier comment that Council needs to look in depth at this whole matter. Councilmember Friedman said it was no secret how he would vote as it was consistent with his record but agreed with Councilmember Dorfman; however, he didn' t believe Council could break laws it passed . There have been oversights in the past which were corrected and this one could too. Mary Berman, applicant, said they followed all the procedures as requested and there was never any question. 126 Councilmember Latz said he 'd like to offer a substitute motion to defer this matter for 60 days to enable the City Attorney to provide a legal opinion as to whether or not the current application is in compliance with zoning requirements and if not, to enable Academy of Family Mediators to do what is necessary to come into compliance. Or come back sooner if possible . Councilmember Dorfman seconded. Councilmember Friedman asked if the Council could approve this contingent on all applicable codes and requirements being met . Mr. Steilen said it could. Councilmember Latz said to make it easier, he would move to amend Councilmember Haun' s original motion to approve the application subject to legal opinion that the application is in full compliance with City ordinances and! if they' re not, that it come back before Council after such time as the applicant has had an opportunity to come into compliance or find out they' ll not be able to do so. - Mr. Steilen asked if Council was strictly talking about zoning ordinances or building codes . HeHaid he understood the two issues raised by Councilmember Young but that Councilmember Latz said compliance with all applicable codes . Would he have to review the entire zoning code or only those two issues as brought up by Councilmember Young. Councilmember Latz said his intent was just the two issues raised by Councilmember Young. Councilmember Young reiterated his understand was that code requirements were only for new applicants and that existing operations in the City were not in jeopardy under the current zoning ordinance . It was Council consensus that this whole matter needs to be looked at in more detail . The motion passed 5-1 (CouncilmemberFriedmanopposed) . NEW BUSINESS lla. Air handling system City Hall Resolution 94-85 WasCouncilmember Friedman asked what was the original estimate of the cost of this improvement . He recalled stating that if this Mr. Meyer said it was anticipated that it would come within the estimate. Once staff got into the reconstruction this was the one item that proved to be in need of greater expense and involvement than originally planned. Councilmember Friedman asked if bids were sent out to places 127 ' other than Faircon. Mr. Grube referenced his report and said bid documents were sent to the National Assoc . of Minority Contractors of MN and the Dodge Report , but only Faircon responded. 11 It was moved by Councilmember Dorfman, seconded by Councilmember Haun, to adopt Resolution 94-85 entitled "Resolution accepting bid and authorizing execution of a contract with Faircon Service for upgrade of the air handling system in City Hall under Improvement Project No . MB-90-21 and that the budget for the project be increased to $213 , 000 . The motion passed 5-1 (Councilmember Friedman opposed) . lib. Ward 1 and 2 boundary change Councilmember Friedman said that at a study session Councilmembers Friedman and Haun, representing the First and Second Wards respectively, were asked to get together to make changes as requested by residents living in the area. The concern is that residents living south of 28th St . and north of Minnetonka Blvd. over to Hwy. 100 believe they' are in the First Ward. He gets calls all the time from people who think he is their representative . They have looked at two proposals : running the boundary line down Hwy. 7 and running it down Minnetonka Blvd. to Hwy. 100 from France . Based on their research, they felt it would be beneficial to all to change the boundary so that the First Ward would run from W. 28th St . south to Minnetonka Blvd. 111 and Minnetonka Blvd. west to Hwy. 100 . Councilmember Haun felt the current configuration works against what the City is trying to do with neighborhood associations and the proposal is only being done to bring about constituent satisfaction. It was moved by Councilmember Friedman, seconded by Councilmember Haun, to set a public hearing for August 1, prepare an ordinance revising Ward 1 and 2 lines and adding an additional precinct to Ward 1 . Mayor Hanks asked about public notification. Councilmember Friedman said if the City wanted to send out notices, it was fine with him and added that to his motion. Councilmember Dorfman asked if this would take effect for the upcoming election. Mr. Meyer said it would take effect at the next City Council election in the Fall of 1995 . Mayor Hanks had concerns that Wards were unbalanced and that the whole City needed to be looked at . The motion passed 6-0 . MISCELLANEOUS 128 12a. Damage claim Cathy Mazurek By consent, claim referred to City Clerk and City Manager. 12b. Communications from the Mayor111 Mayor Hanks said the Party in the Park celebration was great . Councilmember Young extended his thanks to all on staff for their work. I 12c . Communications from the City Manager Mr. Meyer noted a temporary closure of the northbound ramp onto Hwy. 100 . He said study sessions would be held on July 11 and July 25 with a joint meeting with the Human Rights Commission scheduled for July 18 CLAIMS, APPROPRIATIONS, CONTRACT PAYMENTS 13a. Vendor claims By consent, approve the list of claims prepared by the Director of Finance dated July 5 , 1994 and authorize distribution of checks in the following amounts : Verified claims : $318 , 735 . 23 and payroll claims $29, 622 .46 . 13b. Contract payments 1 . Final payment : Egan-McKy Electrical Contractors . Emergency Vehicle pre-emption system. Amount $12, 121 . 0311/ 2 . Final payment : Egan-McKay Electrical Contractors . Traffic signal system. Amount : $5, 954 . 68 3 . Final : Midwest Asphalt Corp. Grading, bituminous paving, concrete curb/futter. Amount : $1,453 . 51 By consent, adopt Resolutions 94-86, 94-87 and 94-88 approving final payments 1, 2 and 3 , respectively. 4 . Partial : Midwest Asphalt . Grading, bituminous paving, concrete, curb/gutter. Amount $39, 382 . 73 By consent, approve and authorize payment . 14 . Adjournment The meeting adjourned at 10 :30 p.m. Ma r Lyle Hanks 'ecording Secretary 129