MONDAY, December 5, 2005

7:00 P.M.

Page 1


1.         CALL TO ORDER:     Mayor Anderson called the meeting to order at 7:00 p.m.


PRESENT:       Mayor Tom Anderson, Councilmembers Kim Crockett, Keith Kask, Paul Skrede and John Wheaton


STAFF:            City Administrator Dana Young, Police Chief Virgil Gustafson and Zoning Coordinator Gus Karpas




Motion by Councilmember Skrede to approve the consent agenda, which consists of the minutes of November 21, 2005, verified accounts and approving the hiring of warming house attendants for the 2005-2006 season.  Councilmember Wheaton seconded.  Motion carried 5-0.


Councilmember Crockett asked that the rink attendants be required to shovel a path from the parking lot to the warming houses and from the warming house to the rinks.


3.                  MATTERS FROM THE FLOOR


Mayor Anderson opened the Matters from the Floor portion of the meeting.


John Mariani, 3945 Hillcrest Way, said he has several concerns regarding the Fire District.  He is concerned that the response time for the city exceeds the goal of eight and a half minutes set by the Fire Board.  He said it appears that about ninety percent of the calls since October well exceed the eight and a half minute threshold.  Councilmember Skrede said that he has reviewed the response times shown on the report and some have now been re-classified as non-fire calls.  Mr. Mariani feels the Council should pass a resolution requesting an explanation.


Mr. Mariani questioned the use of the funds collected by the Fire District from the City of Orono contract.  He feels there needs to be some supervision over the funds due to questionable use of those funds, which have been approved by the Fire Board.


Mr. Mariani discussed the proposed emergency flashers or signage for the Fire District’s West Side Station and questioned if it was necessary.


In closing, Mr. Mariani asked that Deephaven crime statistics be reported to the public through the local newspaper.  He feels this would be a proactive step to educate and alert citizens to what is happening in the city.  He believes it will help the Police Department and serve as a deterrent.


Councilmember Skrede commented that a report is sent to the paper and he does not understand why it is not published.  Mayor Anderson assured Mr. Mariani that staff would look into the issue.

Hearing no further comment, the Matters from the Floor portion of the meeting was closed.




A.                 Truth in Taxation Hearing


City Administrator Young discussed the proposed revenues and expenditures contained in the 2006 budget.  He said that the city was looking to adopt a 5.5% increase in the levy over what was set in 2005.  He noted that Deephaven had the 34th lowest tax rate in the State of Minnesota. 


He said the major sources of revenue came from General Fund Revenues from property taxes and existing contracts for services with the cities of Greenwood and Woodland.  The greatest increase in expenditures stem from cost of living increases on employee salaries and increases in the Police and Fire service budgets.


He said the 2006 budget would formally be adopted at the December 19th City Council meeting.


Ed Oliver, 20230 Cottagewood Road, asked if there would be a change in the recycling rates.  Administrator Young said there was no increase in the 2005 garbage and recycling rates and that the recycling fees are tied into the garbage rates.  Mr. Oliver said taxes are very complex and thanked the Council for their work in keeping the rate down and commented that city services are very good.


Dick Brown, 19115 Azure Road, said tax capacity in this city would increase if the system were changed to tax at the price a property was purchased rather than the assessed value.


Jim Beardsly, 19740 Lakeview Avenue, questioned why the city has a ninety percent reserve rate.  Mayor Anderson said it is recommended that cities keep at least sixty percent of its budgeted amount in reserves in case of an unforeseen emergency.  He said Deephaven’s rate of reserve is so high because its be built over a long period of time by previous Councils.


Mr. Beardsly asked about the use of the city’s water truck and whether the city could lease it out to other cities as a form of revenue.  Administrator Young said the truck is used year around, most heavily in the winter to flood the ice rinks.  He said other cities have access to city water and would have very little use for our truck.  He also noted it is kept filled to assist the fire department and to flush lift stations if necessary.


The Council will hold a public hearing on the 2006 Budget on December 19th.


B.                 Variance – Mark Rose, 20590 Linden Road (R-3, 20,000).  A request to alter a non-conforming accessory structure by replacing a flat roof with a pitched roof which would encroach within the required front yard setback.  The requested variance is for twenty-nine feet of the required thirty-five foot front yard setback.


Mark Rose presented the request.  He said he purchased the property two years ago and at that time the garage had a handrail which deterred access to the roof.  Since that time the rail has deteriorated and he is unable to re-install it without creating a situation which would worsen the water damage to the structure.  He said he’s had an engineer review the structure who recommended the structure be reinforced, which is currently underway.  The proposed roof alteration will remove the concern for future water damage.


Mr. Rose noted that the garage is used year around, especially in the winter.


Councilmember Crockett read the Planning Commission report.  The Planning Commission recommended unanimously that the City Council approve the request.  The Commission found a hardship in the need to repair the structure.


Councilmember Wheaton asked how far the overhang would extend from the foundation.  Mr. Rose said about twenty-four inches.  Councilmember Wheaton understands the relevance of Mr. Rose’s concern about access to the roof and asked if access could still be gained once the alteration is complete.  Mr. Rose said anyone could get onto the roof if they really wanted to.  He explained that they have dug out behind the garage to lessen the pressure on the walls, which creates a small gap between the hill and the garage.


Mayor Anderson asked if anyone from the public would like to comment on the request.  Hearing no comment he asked for Council comments.


Motion by Councilmember Kask to approve the variance request to encroach twenty-nine feet into the required front yard setback for the proposed alteration, as presented, at 20590 Linden Road, per the Planning Commission’s recommendation.  A hardship has been demonstrated in the need for maintenance of the structure.  The motion is conditioned that the roof pitch not exceed the four and a half twelve pitch as shown on the plan.  A practical difficulty exists in the placement of the structure on the lot.  Councilmember Crockett seconded.  Motion carried 5-0.


C.                 Home Occupation Permit – Steve Erickson, 3449 Hamilton Avenue (R-3, 20,000).  A request to operate a home occupation within a residential district.


Steve Erickson presented the request.  He said his business has been in operation since 1993 and has grown in size to the point where a city permit is needed.


Councilmember Crockett read the Planning Commission report.  The Planning Commission voted unanimously to recommend the Council approve the request for a Home Occupation Permit.  They felt the business did not alter the residential character of the neighborhood, though they noted the growing nature of the business warrants city scrutiny through an annual review of the permit.


Councilmember Kask confirmed that the city would be issuing a permit that provided for annual review.  Zoning Coordinator Karpas said the request is for a Home Occupation Permit which must be renewed on an annual basis and that, much like a regular Special Use Permit, the applicant can be called before the Council at any time if issues arise.


Mayor Anderson asked how frequently the consultants would be on site.  Mr. Erickson explained that his company is a “virtual company” operating out of two locations.  He said his lead consultant is in the office about twenty percent of the time and his newly hired consultant is present about eighty percent of the time.  He said it takes about a year to train a new consultant and once that is done, they will not need to be on site as often.  He said the only other employee who spends time on site doubles as the family’s nanny and is there in a business capacity about fifty percent of the time.


Mayor Anderson asked about the parking situation.  Mr. Erickson discussed photographs included in the Council’s packet, noting that he has a driveway, which is rather long and able to accommodate the parking needs of the business.  He noted that the primary use of the property is for residential purposes and that employees do not show up on the site until 8:30 a.m. or later.


Mayor Anderson asked the applicant his opinion on what he felt was too large to continue operating the business out of his residence.  Mr. Erickson said there is only seven hundred square feet dedicated to the business and that he can only accommodate seating for four employees.  He said he plans to add one additional employee in the next two years, but any more than that and he would have to seek commercial space to house the business because operating the business out of his house would become unreasonable.


Mayor Anderson asked if there were any members of the community who would like to comment on the request.


John Sirjord, 3300 Shaver’s Lake Road, asked when the employees left the site at the end of the day and whether the additional traffic interfered with bus traffic or snow plowing.  Mr. Erickson said the impact was minimal.  He noted there would be no interference with plowing since all the parking was off street.  He said his employees don’t have a set schedule but are usually gone by five p.m.  He said they are paid on performance and not total hours.


Hearing no further comment, Mayor Anderson asked for Council comments.


Councilmember Crockett said the Planning Commission was comfortable with the request and assumed the neighborhood was supportive since they received no public comment on the request.  She feels the permit should be reviewed in a year to see if the situation is the same as it is today, noting that the use of the space may be reasonable now, but could rapidly change.  She thinks the business is pushing the envelope and that she is close to her discomfort level.


Mr. Erickson said his business met the spirit and intent of the ordinance and noted it met all seventeen requirements outlined in the ordinance for permitted home occupations.  He said the ordinance language, as it pertained to the number of employees, was kind of gray, but that his business complied with the requirement.  He said his business does not alter the residential character of the neighborhood and that one would not know of its existence by looking at the property.


Councilmember Wheaton said that the city has to assume neighborhood support until it receives complaints.  He feels the business does not infringe on the residential use of the property.  He doesn’t believe there needs to be an annual review of the permit, in the sense that the applicant must appear before the Council.


Councilmember Kask agreed.  He said the catch phrase of the ordinance is residential character.  He takes this to mean no retail sales or signage.  He said there is very little on the property to suggest there is a business operating out of the home.  He thinks the Council can take comfort knowing the business is operating under a permit, which is subject to review per Council request.


Councilmember Skrede said he has spoken in depth about the business with Mr. Erickson.  He thinks the applicant is aware that commercial space will be necessary as the business grows.


Mayor Anderson said he has no issues with the business as it currently exists.  He noted that commercial space may be necessary as the business grows.


Motion by Councilmember Crockett to approve the home occupation permit to operate a business at 3449 Hamilton Avenue, as it was presented to the Planning Commission and Council. The business has been in operation for a number of years within the parameters of the ordinance and has not caused any undue disturbances to the surrounding neighborhood.  The approval is subject to the permit’s annual review by the city.  Councilmember Skrede seconded.  Motion carried 5-0.




A.                 Request for Reinstatement on Waiting List (Jeff Kuzara)


Jeff Kuzara, 20425 Linwood Road, said he and his wife placed their names on the dock waiting list in 1993.  He said they somehow fell off in 1996, but were on the list again in 1999.  He said in 2004 they got a canoe rack and they assumed they were still on the dock list.  When he recently checked the list he found that he was not on it.  He would like to be placed back on the list where they were in 1999.


Councilmember Crockett questioned why the Council was still hearing appeals.  Administrator Young said there is nothing in the ordinance which precludes a resident from approaching the Council.


Mayor Anderson said the ordinance requires appeals to be heard by a specific date, in order to prevent ongoing requests.  Councilmember Crockett thought the Council had already addressed the issue of when appeals would be heard.  She said that an open ended appeal process is not good since evidence becomes stale.


Mr. Kuzara said he was not aware that they fell off the list until recently.


Councilmember Wheaton said it should be clear whether the Kuzaras paid the fees to remain on the list.  There should be a cancelled check or a receipt.  Councilmember Crockett questioned how last year seven others found out they were no longer on the list.  Councilmember Skrede said a letter was sent out.


Administrator Young said this situation was different in that it has been over a year since payment was due.  Mr. Kuzara said his application was in on time.


Mayor Anderson said that it sounded like Mr. Kuzara thinks there was something done wrong in the handling of the paperwork.  If that is the case, staff can research the incident and make a recommendation to the Council.


Councilmember Skrede pointed out that staff has already researched the situation and has found no evidence of payment.  Administrator Young said there was nothing on file and that the files are typically complete, not saying a mistake couldn’t have been made.


Councilmember Skrede said he has difficulty believing there was an error made by the employee who signed Mr. Kuzara’s application.  He noted it was signed after the deadline for the fee to be paid.  Mayor Anderson said he doesn’t doubt the employee, but wants to defer to staff’s recommendation since the Council doesn’t have the time to play detective.


Councilmember Kask said the Boat Committee reviewed Mr. Kuzara’s request and voted to deny his request to be placed back on the list at his 1999 position.  The fee was due in March of 2004 and the city has an application signed in June of 2004.  He feels it’s an extraordinarily late point in time to raise the issue.  He feels that given the deliberation of this issue by the Boat Committee and research done by staff the request should be denied.


Motion by Councilmember Kask to deny the request by Jeff and Doreen to be reinstated on the dock waiting list at their 1999 position.  There has been no evidence provided showing that the fee was paid on time or that an error was made by city staff warranting placement on the list.  Councilmember Crockett seconded.  Motion carried 4-1.  On a motion to deny the request, Councilmembers Crockett, Kask, Skrede and Wheaton voted aye.  Mayor Anderson voted nay.


B.                 Review Variance Requests from the 90-day Rule


Mayor Anderson said there were two residents who did not meet the 90 day usage rule for boats on docks.  He noted neither resident was in attendance at the meeting even though they were notified.


Administrator Young said that no action was necessary on the request since neither resident submitted an appeal.


Councilmember Crockett noted that the ordinance language in subsection (a) did not clearly provide for an appeals process from the 90 day rule and that the process is provided in subsection (c)  in the ordinance, and that subsection requires a written appeal.  Councilmember Crockett asked Administrator Young to clean up the ordinance language so the section is clearer.  She questioned why this item was on the agenda if staff did not receive a written appeal from the residents after they received a courtesy notice from the city and noted further that neighter resident was present to appear the revocation of the permit.


The Council directed staff to no longer place similar items on the agenda unless a written request for appeal is submitted for review per the ordinance.  Mayor Anderson observed that if an appeal is not applied for and granted, the resident loses their slip.


C.                 Order Abatement of Public Nuisance at 5000 Highcrest Drive


Administrator Young noted the letter included in the Council packet requesting that the property at 5000 Highcrest Drive be brought into compliance with the city’s ordinances.  The property owners did not clean up the property by the required December 5th deadline and staff is requesting approval to abate the nuisance.


Motion by Councilmember Wheaton to direct city staff to bring the property at 5000 Highcrest Drive into compliance with the city ordinances as outlined in the letter dated November 21, 2005.  Councilmember Crockett seconded.  Motion carried 5-0.


D.                2006-2015 Capital Improvement Plan


Mayor Anderson asked if there were any comments on the proposed 2006-2015 Capital Improvement Plan.  The Council thanked Administrator Young for his excellent work.


No Council action was necessary on this agenda item.


E.                 Select Date for Council Worksession


The Council agreed to hold a worksession at 6 p.m., December 19th to review city goals and priorities.


Councilmember Wheaton noted he would be out of town and unable to attend the meeting.  However, he would communicate his views electronically to the Council prior to the meeting.


F.                  Adopt Resolution No. 49-05, Adopting Flexible Benefits Plan


Administrator Young told the Council the resolution before them was the final draft of the Flexible Benefits plan previously discussed.  He said the benefits outlined in the plan with be in effect beginning January 1, 2006.


Motion by Councilmember Skrede to adopt Resolution No. 49-05 as presented.  Councilmember Kask seconded.  The motion carried 5-0.  Resolution 49-05 was adopted.


6.                  NEW BUSINESS


A.                 Discuss Alternate Dates for 2006 Council Meeting


Administrator Young said there were four dates that conflicted with regularly scheduled Council meetings due to holidays in 2006.  He said the regular meeting dates for January 2nd and 16th, February 20th and September 4th must be rescheduled.  He noted that typically there is only one meeting in January and February due to a lack of agenda items, so the Council may not want to reschedule the January 16th and February 20th meetings.  Administrator Young suggested that the January 2nd meeting be changed to Thursday, January 5th and that the September 4th meeting be rescheduled to Thursday, September 7th.


Councilmembers agreed to hold only one meeting in January and February and to accept the alternate dates presented by the Administrator.  In addition, they agreed to schedule a worksession in either January or February to discuss 2006 goals.


Motion by Councilmember Kask to hold one meeting in January and February as discussed and to reschedule the September 4th meeting to Thursday, September 7th.  Councilmember Wheaton seconded the motion.  The motion carried 5-0.


B.                 Discuss Legal Services for Tower Lease Agreement


Administrator Young explained that outside legal services may be necessary to protect the interests of the city as they related to the placement of a cell tower in the community.  He said the city has received a draft lease agreement from the League of Minnesota Cities.  The question is whether to fashion the draft agreement to meet the city’s needs or use another document provided by an outside agency.  He said that Councilmember Skrede has been in contact with Leonard, Street and Deinard law firm based on a recommendation of an associate.


Councilmember Crockett had no issue with going with an outside law firm provided they don’t reinvent the wheel, i.e. draft a new lease agreement at the expense of the city, instead of using existing templates.  She thinks they should have a template on file that can be tweaked to fit the city.  She would like to see only one person at the firm working on the document instead of numerous clerks and associates.


Councilmember Skrede said he has emailed his contact a copy of the city’s ordinance and the lease template provided by the LMC.  He does not believe they will be starting from the ground level.  He said their only function is to review any language submitted by the wireless carrier to verify it is in the best interest of the city.


Mayor Anderson asked why the city wouldn’t send the template and proposed language changes at the same time.  Councilmember Skrede said it would all be done at once, but without a specific request, we don’t have all the required information.


Councilmember Crockett expressed apprehension about the LMC document.  She said their document might not necessarily serve the interests of Deephaven because they are usually drafted for larger communities.


Councilmember Kask noted that the city has not received a request at this point, but assumes it is imminent.


Councilmember Skrede said that Leonard, Street and Deinard is versed in these types of issues and has represented both cities and carriers in drafting lease agreements.  He feels they will approach this with common sense with the city’s interests in mind.


Mayor Anderson said it would be prudent to wait until the city has a request before it commits to attorney services.  He said once a request is received, the Council could sit down with the attorneys and make its desires known.





A.                 Police Department/Toys for Tots Program


Police Chief Gustafson informed the Council that the Police Department is once again a drop off point for the Toys for Tots program.  He said that the department has partnered with Deephaven Elementary School on this program.  Councilmember Skrede noted that Officer Case was interviewed by the LMCC to promote the program, since the Deephaven Police Department was one of the only non-commercial businesses participating in the program.


Councilmember Crockett informed the Chief that her son is enjoying his participation in the CounterAct program with Officer Joyce.


Mayor Anderson asked if the Police Report was available for review by Councilmembers.  Councilmember Crockett said she would like the Police Report included in the packet as it once was.  She said it is helpful to be aware of the criminal activity in the city in general and noted that residents have asked her about specific incidents.


B.                 Excelsior Fire District


Councilmember Skrede said he requested to be placed on the agenda to discuss a number of items regarding the Excelsior Fire District.


Councilmember Skrede clarified the concerns raised by Mr. Mariani about response time.  He said of the ninety-five calls Deephaven received by the Fire District, seventy-one calls were either cancelled, repsonded to by a Duty Officer or were considered Routine and therefore only twenty four were used to determine whether the District met the goal of an eight and a half minute response time.


Councilmember Skrede said the Fire Board recently discussed a situation where some expense codes were changed resulting in construction costs for the west side station to be drawn from the surplus on the east side.  He said the Fire District Chief paid the bills out of the general operating fund by charging accounts receivable and then sending the invoices to the Shorewood EDA for reimbursement.  He said those coding must be reversed so they are accurately charged to the west side station.  He said the current amount of this reversal is about forty nine thousand dollars.


Mayor Anderson asked who is in charge of the EDA.  Councilmember Skrede said it is compromised of the Shorewood City Administrator and the Shorewood City Council.  Additionally, Councilmember Skrede feels the EDA acted outside the parameters of their duties by paying the forty-nine thousand dollars of expenditures that should have been shared equally by the west side station and the South Lake Minnetonka Police Department.  When the Fire Board discussed this, Mr. Skrede was told he should not send an invoice to the SLMPD, rather he should ask for a donation for the SLMPD portion.  Councilmember Skrede stated he disagreed with that proposal.  He was then told by the EDA that the west side station and SLMPD do not have the funds to repay the monies used in error.


Councilmember Skrede again said the EDA overstepped its authority by spending money on the west side station based on a re-coding letter from the Fire Chief that ws not approve by the Governing Board.  He said the expense coding was changed in June or July and was not brought to the Fire Board’s attention until August of this year.


Mayor Anderson noted that the east side station’s construction costs fell one hundred and ninety-four thousand dollars under budget and said the Chief does not have to authority to authorize use of that money for expenses not incurred by the east station.


Councilmember Skrede said the General Condition construction costs on the west side station ran over by approximately seventy-five thousand dollars and some people assumed those costs would be covered by the remaining funds from the east side.  He said a review of the meeting minutes and tapes showed that assumption to be incorrect.  Mayor Anderson asked how the process is going to go from here considering the seventy-five thousand dollars must be accounted for.


Councilmember Skrede said the Fire Board met to come up with a formula using the money from the Orono contract.  He said the contract was worth about four hundred and thirty-seven thousand dollars but some funds and have been used over the past three years.  He said of the original money, two hundred thousand dollars was to go to the Firefighter’s Relief Fund.  Of the remaining amount, justifiable expenses would be removed and the remainder would be split between the member cities and firefighter requests.  Approximately ninety seven thousand has been spent on the Capital Equipment Plan, on items in Operating budgets and to pay an un-funded liability for the Relief Association.  He said there is now an argument whether that amount should be taken from the total amount or the remaining amount to be split by the cities and firefighters.


Councilmember Skrede said he brought this information to the Council for their opinion.  He feels the remaining amount left over from the east side construction account should be used to pay down outstanding bonds.  Mayor Anderson agrees it would be best to pay down the bonds.  Councilmember Crockett said she thought it had been concluded that the entire district would benefit, through the paying down of the bonds with the money saved on the east side.


Councilmember Wheaton expressed concern that the EDA would act outside its authority.  Councilmember Crockett said steps should be taken to clear this situation up and to ensure it doesn’t happen in the future.  Mr. Skrede said he would work with the Fire Board for a resolution.


C.                 Public Works


City Administrator Young discussed the monthly report of activities.  He said that ice rink maintenance has begun and most winter activities are in full swing.


D.                Administration


City Administrator Young informed the Council that the city has trapped twenty-three deer to date, that he will be sending in Truth in Taxation and pay equity reports into the State, invited them to an open house sponsored by the Park Committee on December 19th and that Nextel Communications has reviewed three sites for a potential cell tower.  He said space has been made to store the zamboni and that the quarterly newsletter is near completion.


8.         ADJOURNMENT


Motion by Councilmember Anderson to adjourn the meeting.  Councilmember Crockett seconded. The meeting adjourned at 9:55 p.m.


Respectively submitted,



Gus Karpas

Zoning Coordinator