meeting. Does anyone have any questions, additions, or changes to the agenda as presented? >> I'll make a motion that we approve the agenda. >> Okay, I'll second that. So, I got a motion by Sean Ryan, second by Chuck Nikolai to approve the agenda as presented. There's no other questions. All in favor say I. >> I. >> I. Any opposition? Okay, >> general business. Josh, I assume you're going to take this. >> Yeah, I can certainly take this. So, it wasn't too long ago, it was uh brought to my attention as we were working through some things that uh Ski Acres still had some outstanding items. As you know, um Tulski Acres has been in the works for 20 plus years at this point. Um we have a development agreement dating back to 2005. >> You make it, Sean, or >> Yeah, I swallowed. I'm sorry. >> Do you need a cough drop? >> Nope. I have some gum. I'm >> listening though. >> Oh, no worries. Um, >> some vodka. >> So, I did I did lay out in the menu or the menu memo the uh the various items that are still outstanding. Namely, there is the acceptance of the improvements. Technically, the city has not accepted any of the roadways, any of the um utilities under the roadways, storm water, that sort of thing. Um, and the developer has submitted a request for the city to accept those. Uh the parkland dedication is still outstanding. Uh according to the agreement, the developer will owe or does owe 4.25 acres of parkland to the city or pay a fee in lie of $212,500. Um neither of those things has happened, so the item technically remains open. Um it there's also an easement for a future water tower um that the city has had a drafted easement long ago on that, but it remains unsigned at this point. by the developer and then the the item that kind of triggered all of this is the uh CASA 29 improvements. So according to the agreement the developer will pay a portion of the project costs for the CASA 29 improvements that were triggered um due to the development of Tokulski acres. Uh previously 10th Avenue Southeast did not extend all the way to uh CASA 29 and so when Takulski Acres went in, it triggered the improvements of Casaw 29 to an urban section um which it does at this point by basically if you walk that trail there there is a curb curb line along there and then uh yeah so with that the city did build or the county build the city $179,98349 um which was the amount that was ultimately agreed to that would be owed by the city and or the developer. Um, of this, the city was responsible for about 10,000 of that 179 just due to the upsizing of pipes that we do with most developments. So, if a development requires a 10-in pipe and we ask them to put a 15 in, we will pay the difference um so that they're only paying the portion that affects their development. So, that is the $10,000 difference. Ultimately, we did bill um Mr. Randy Kubish, who is here uh the developer for the $169,153.84. Um and Mr. Kubish is stating basically that he does not feel he needs to pay that. So that is that is currently why we are here. most kind of to start ultimately the goal would be to hopefully wrap all four of these up, but to certainly start talking about um 7.14, which is the CASA 29 improvements on your tables tonight. Um Mr. Kubish did submit a number of documents that he had concerning this uh that he provided to me this morning, which is why they're on your desk. I obviously you have not had time to read them kind of as as I've gone through them quickly as there are a number of pages. A lot of it kind of revolves around that first page um which is Mr. Kubish Kubish's reason for stating that he does not feel he needs to pay the $169,000 and then just kind of emails back and forth regarding um the various states of the project uh and past discussions on cost and uh reasonings for how the project ended up. Um so I will say to this point my Mr. my conversations with Mr. Kubish have been that he feels the road should have been lowered further than it ultimately was lowered. Um and I guess I would say this is a county project and I know that they adjusted the road for line of sight at that point. Um an urban section was certainly installed though I know that Mr. Kubish also what's the word I'm looking for? Um does not feel like the an appropriate urban section I guess was put in place. he doesn't feel like the ditch is appropriate for an urban urban section. Um though in my recollection and I think Ken andor Matt can certainly um tell me if I'm wrong generally an urban section involves more of your curbon gutter sidewalk type situation and boulevards of varying difference. Some of them have a little bit of a dip like a ditch, others do not. So, um I guess that is why we are here tonight about kind of discussions on that invoice and then what are some possible solutions as to um recouping that $169,15384. And I guess um Scott Riggs is here tonight as well as a city attorney to certainly give input and I don't know if there's anything that you think I've missed at this point. >> So, I'll stand for questions at this point. My first question is there a statute of limitations on any of this? >> It would be if there if we'd performed and this is done but this has never been completed. You have an outstanding agreement with obligations that have not been performed at this point in time. So yeah, if we were going after and trying to collect on something that had been paid years and years ago, that's possible. But keep in mind, the city just paid these dollars. They're now due. There have been conversations as you'll see in that packet I think that Randy provided um over the years uh going back and forth with previous administrators, things like that. I know uh we we've talked about that a little bit, but the reality is I think it's very hard to say there is because there's performance items out, Chuck, that are are still outstanding. Haven't been completed, haven't been done, and in fact the road hasn't even been accepted by the city at this point in time. So, who ultimately was responsible to lower the grade of County Road 29? It was the county. >> It was a county project. Yes. >> Okay. And the county was not a party to this agreement in any way. >> This is an older agreement, different from what we use now. um more detail in agreements that that we do use now obviously many years later but it's it's a valid agreement been in place uh that was used on other projects over the years very similar to this uh with no issues. Um you do have a provision in the agreement as well that says you can place a lean on any property uh to effectuate the payments here. However, as Josh points out that doesn't deal with some of the other aspects that are in the agreement that are not yet performed as well. So did they so somehow did the escrow get closed >> actually. So I don't I think Ken's more aware of that. >> Yeah. So what happened was during kind of the financial crisis of you know when all the banking institutions everything went bad that letter of credit along with a few other letters of credit that we had for developments were repudiated by the FDIC. uh I believe it was with uh community security bank at the time and that folded and we lost our letter of credit and had no recourse and no financial security at that point going forward. That was just something that happened. We were actually probably better off than a lot of cities where developments were half constructed and things like that. I'm sure Scott dealt with that at that time. But yeah, that that went away and unfortunately we had nothing financial. >> Yeah. And technically under the agreement, we're still due and owing uh a an obligation like that from Randy at this point in time. That's supposed to be part of the agreement. So when that went away, it was supposed to be replaced. >> So the letter credit was terminated by the bank because they went out of business, correct? >> And which ultimately the funds went back to Randy. >> Don't know what happened. That's not our doing. Um, don't know what he had on deposit there. >> Okay. >> We typically say and have said for some time, we don't want letters of credit anymore because of this reason. We go for for bonds, performance and payment bonds. >> Okay. >> Most cities do that as well at this point. >> It was a big learning lesson for a lot of folks back in the late 2008, 910 era. So, help me understand lowering the grade of County Road 29. Uh, you know, clearly this this was before my time on the council. Yep. >> Um, so I don't understand what was expected and what was done. >> So, according to Mr. Kubish um and obviously is he is here but this is not a public hearing. So that would be up to you guys as to whether you would want to ask him directly. Um from what he informed me that there was an agreement that it would be lowered from at that time what its current current height was for 29 going over. So that way the roadway would be lower than the level of the houses it sounded like. So that way the houses built along 29 would look either almost look more down onto 29 instead of now where they are looking straight at it um right around in there. I have not been out there to stand on someone's deck to see exactly what that sight line is whether you're straight at it slightly up or slightly down. Um but uh apparently yes, the agreement was when all these improvements were going in that the county was going to redo this section and part of that would be lowering the road. And if you do look in the agreement, it does it does mention lowering. It doesn't mention which sections will be lowered. It doesn't there's as as Scott's not a ton of detail in there. It just says lower the road. Um >> and and was it lowered? >> I I would guess that there were probably certain sections that were lowered and according to Mr. Kubish. There may even been sections that were slightly raised um on portions of it, but >> the county provide any documentation. >> I'm sure we could dig into documentation with the county. I know they probably would have lowered it certainly closer to 10 or 10th Avenue there because they're trying to increase sight lines and you can't see coming down a hill. So that their idea of it likely was we going to lower this to increase that sight line as much as possible without just taking out the entire hill if that makes sense. So there's not a lot of specificity in >> within the agreement there is not specificity a specificity as to what exactly lowering 29 means >> and so at that time 10th was that was not a county road >> 10th was not a county road 10th didn't even connect two >> right so when >> so how many I mean was it a block two blocks three blocks >> about 150 ft short that 10th Avenue stopped until this county road project was done. So you used to be able to drive down 10th and basically you could exit to the left or to the east on Tekkowski Street and you could not go any further south until again the county because they had concerns about sight distance and that's ultimately why they we mentioned in here because the project hadn't been designed yet for that site distance that is why we mentioned it that way. Okay. So if the agreement says that the county will lower it and they lowered >> portions >> portions >> then what's what's the the legal binding to the agreement to pay for those the money the hundome thousand >> 16915 >> I mean it says in the last sentence, the developer will pay a portion of that those dollars. Yeah. >> All right. So, there's no there's not really a lot of wiggle room based on the agreement. >> Pretty plain language there. >> Yeah. >> Yeah. Yeah. I would agree. >> How many of those lots are unsold >> along 29? I think maybe one, Randy. Three. And that's part of your argument is that it's unsalable because it's or you're having difficulty selling them because of the height of the road >> closest >> that Yeah, I mean that that I guess that'd be up to Chuck as to >> Yeah, you can come forward, Randy, and and answer questions directed to you. And just to clarify, >> uh, Randy Kubish, um, the whole project was tainted by the the fact that the road didn't get lowered. When uh I went out to the site with Renee and Daryl, Renee Christensen from the city and Daryl from the county, we walked uh the whole stretch of that road. Uh we went from uh over the hill to the east and we're standing in the field area looking back to the west. And as we were walking back up the hill, I said, "How how low will this road be?" And Daryl had said that it would be as low low as the ditch is now. So then your lots would flow, you know, off of their yards, get to a curb, and then drop onto the road, and then the water would go away. So now it clearly doesn't do that. There's a ditch between the houses and the road, and the curb is up 5t higher than the walking path. So there's no chance that the water is going to ever go into the street. So um so that's where the heartburn is, you know, because it really affected the value of all the lots that were along the road, you know, and this was a conversation that we had, you know, earlier than the project was completed. Um and um so there was a feasibility study that was done and um that was done by Bolton and Mink and that showed the lowering of the grade as an option. They had two different options and um the option that was being preferred was lowering the grade you know substantially and then what got produced was something that was lowering the grade just a little bit. So the hill used to go like this and then they just curved the hill on the on the on the west side of the top of the hill. So they just curved it a little bit. So they lowered it a little bit there, but then right in the driveway area of the farmhouse to the to the south, they raised the grade roughly 4 in. And uh the only time that I ever got notified that this grade was getting raised is uh we had a homeowner that had bought one of the one of the lots and um he called me and he said um yeah they're grading behind my house now and and I went and I talked to someone that's working there and I I was asking him when are you going to start cutting this hill down and he goes well it's not getting cut down. The grade is actually going up 4 in. you know, so that's the first time that I was made aware that this grade wasn't changing. So, uh, but the conversations before that is that the city and the county were working together to, uh, approve this project and that they knew that there was this issue about lowering the grade, but they they never had brought a plan in front of myself or, um, I never was made aware of it until uh, this homeowner had contacted me and then I started asking questions. And then um um I had sent a letter to uh Mike Johnson on the the nine in '09 uh talking about um you know my concerns of paying the bill and um we had some conversations after that but then the conversations just ceased and um I had asked for the project to be taken over back in I think 08 or 09 you because all of the improvements were done, but I never had heard anything about getting on agenda or not getting on the agenda for that and otherwise this project would have been taken over a long long long time ago, you know, and then I was notified just recently that uh we need to deal with it again. So there was a gap for a long long period of time where Mike Johnson could have been pursuing this further, pressing it harder. I the I I was under the impression that this was a dead issue and I won't be hearing about it anymore. So So that's regarding the land or the um obviously the road. What about these other issues that were in the development agreement that didn't get fulfilled? >> Yeah. Well, Mike Johnson and I, the conversation we had is that since part of the developers agreement wasn't adhered to, that was the most valuable to me, I didn't feel like I would be responsible for paying anything. So, >> anything on the road or >> the road or developers fees or a park fees or giving a easement and the conversations at the beginning of all of this, they talked about an easement and they talked about giving dollar amount for that. So, when they handed me the easement to sign, I said, "Well, where's the the compensation for it?" And that's why that never got signed and never went any further. So what are the proposed next steps? Where do we go from here? >> It's up to which council wants to do and direct staff to do. I mean you have the right under the agreement uh section 5.6 to uh to effectuate leans. You also have state statutory authority to do as well. You have the ability to enforce the agreement and by other means if you need to or want to uh which is what staff has asked about. We've talked about having a close session to have that discussion as well. I don't think that's necessary. Um you can direct us to look further at that and bring it back to you. Uh you've got the quite a bit of a gamut here to figure out. You can also direct staff and you know one of the council members to sit down with Randy and negotiate something short of what's in the agreement but at least making everybody as whole as possible. You have that ability as well. So it's it's fairly wide open. >> Okay. What's uh what's everyone's opinion or what's >> Well, I haven't obviously read any of this and I don't know if it's germanine to what we're talking about or not. So, and uh >> it's a historical perspective. There's also a letter in there from Mike Johnson that says no, it's it's still an obligation that's due, >> right? That sounds like the cliff notes and I'm not sure if there's more documentation besides this that we haven't seen or if there's other issues either, but I guess I'm more interested then in fully understanding what are all the alternatives which include all the things you've said that so I'm more of a case that to digest where we're at and then come back to this issue later. >> Yeah, that makes sense. >> Is there a possibility for arbitration? just >> you always have that ability. Sure. >> Sure. It's not part of the agreement. Um you typically don't do arbitration. You do mediation sort. >> Yep. >> Yeah. >> Yeah. Arbitration is legally binding. Mediation is more of >> someone trying to get both parties to agree. >> Yeah. If a lawsuit came about, you'd be forced into mediation at first no matter what. >> That's reality. >> Okay. Are you coming to us with a recommendation, Josh, or are you >> I guess at this point some of it was just this conversation for you guys to know that it was out here and that we are dealing with it. Um, as as Scott said, there's certainly a wider range of options as to how short or far the city council would like to take this. I guess I'm much newer on this issue than maybe my predecessor who it sounds like dealt with it for a while. And I guess I I would still recommend I mean we are there is a development agreement here and I do think that we should try to fulfill as closely as possible to the terms of that development agreement. Um when when the when Tulski acres got built there was kind of an understanding that we would have some park land that could service those people down there. Um, I guess technically within the development agreement, it even talks about the parkland being on the south side of uh 29 there. It talks about the future water tower as New Prey grows being on the south side of 29 there. And I do think at some point I mean the city is going to need both of those things. And so is it is it fair to the residents now that we would have to go out and somehow acquire those through other means when it should have been done with this development agreement? So, I guess it would be my recommendation at this point to direct staff to um work with Scott and try to figure out ways of trying to make the city as whole as possible. >> So, it seems as if the sole argument here is county road 29. >> That that that would be my in take on the situation as well. So why are these other items affected because of County Road 29? We take County Road 29 as a separate item, parkland, the easement for the water tower. Those should just be a given based on the contract, the agreement. >> I think that's a fair assessment. >> So I do think it's worth noting um Mr. Kubish has submitted a request for acceptance of improvements at this point. Um, I am not sure where and how that stands. Uh, with I guess what's your take, Scott, on should the city sit on that acceptance for a minute? >> Yeah, I wouldn't do it tonight. Uh, obviously I'd start out and figure out where you could go with this. The reality is I don't think the acceptance of the rightway diminishes the contract contractual relationship here. Doesn't change that. Uh, it shows that it everything still was outstanding. That's the reality of what's going on here. Um, which that's to the mayor's question, is there a statute of limitations? Well, sure, but this is an unperformed contract. It' be one thing if we were trying to sue under a contract that everything had been performed. That's not happened yet. Contract is still there. It's still in place. It still will be in place for years to come. That affects those lots until it's removed from the title. So, the reality is the contract's out there and there are still obligations that have not been performed at this point in time. It's up to the council to say. In fact, like all your other development agreements, you have similar provisions like this, whether they're parkland dedication, whether the payment for certain parts of rightway, um, uh, dedication of easements. You'd have to take an action to undo those. If you were going to say, well, we're just washing our hands and walking away. You'll have to do that. You've got what, you know, 20 other contracts we've had over the years that you didn't do that with. So, let's be honest, that's what you have. You're asking for an extraordinary kind of remedy here. Just forget all this stuff. >> No. And I'm not willing to do that. >> Scott, does um are any of the property owners in this development affected by the the the agreement not being >> the agreement should attach to every one of the lots in the development at this point in time? Yes. >> I mean, but are they affected in the ability to resell their homes? Uh, arguably if somebody looked carefully at title, they would say this is a title defect. Yes, I I I would say that in many cases now when you have a subdivision when the development agreement is performed, a new owner or a subsequent owner buying into title will say we want that removed from our title and many cities will do that. You can't do that right now. It's not performed. And then do is the city have any liability to residential owners the fact that they the agreement called for these things Parkland as an example. >> That's why I say you you kind of have an obligation to move forward with something here because this would be treated very differently than every other subdivision and how other taxpayers in the city have been treated. That's why I think Josh was training we got to get this before the council so you can understand that you've got a little bit of unique situation here but not really. It's just the time is unique here, not so much the agreement. The agreement is similar to what we had back at that time. Um, we have different agreements now that are a little more detailed and I think more helpful, but the reality is yeah, I think you have an obligation to do something. >> Yeah, I guess that's why I'm uh wanting or a little more a better >> meeting or something to understand the >> No, and again, we were just trying to get this before you and answer what we can. Yeah. >> Uh yeah. >> To fully understand, do we have liability if we if we negotiate something less than the agreement >> for the current owners? And this is something maybe we could get answers to later to fully understand, but >> I'm well aware of title defects and problems how that works. >> Yep. And uh >> from a liability standpoint, my quick answer would be is >> at some point in time, this has to be programmed into the city's maintenance schedule. You haven't accepted these. I don't know what's been going on there at this point in time. But you need to do that because you've got a road that's couple decades old at this point in time. That's just a reality. That's Do you have liability for that? No, you don't. You actually don't. Um, do you have the ability to go back and assess every one of these parcels in that subdivision based on this agreement? Yes, you do. I'm not recommending that. I don't think you should do that at this point in time. Um, so that would not be my recommendation. Um, as to the point that Ken raised of development or or this agreement having issues in there for further development, whether it's water tower, parks, and things like that. If you don't go through this agreement and fulfill those or or make the developer fulfill those obligations, that comes out of your taxpayer coffers for from whatever else to get a park there, to get a a water tower there and things like that. So, while maybe not liability, there there certainly are detriments to other taxpayers in the community because of that. Clearly, at some point, somebody's going to have to pay for those amenities. and it was called for in this agreement. >> No, I I I get that. I just wanted to make sure I understood from a legal standpoint what are the ramifications or liability that the city has. >> Yeah, I I think you've got discretion to have negotiations and to do something different than the agreement, but it'll require you to take an action to say somehow we're changing this agreement to do that. Um, again, that just has ramifications from a dollar standpoint of what you use other resources for to fulfill these obligations. I don't think it's truly a liability. It's more of it's a cost for the community. So, like I said, I guess at this point to again answer your question, Bruce, my recommendation would be to direct staff to kind of work with Scott on what exactly are options for all of these things and gather you guys to come back with the the if if you would like to pursue these, these are the options that are certainly before you for trying to make the city whole at this point. Well, I think we're obligated to pursue it and I would like to understand what we can do um to make the city whole and to finally close out this agreement. >> I'd agree with that. >> Okay. >> A general agreement, I guess. >> I think so. Yes. >> Yep. >> Okay. Marching orders legally. >> I I think so. Yeah. I I I we're going to have to bring something back to you and say here are your alternatives. You know, do we collect? Do you put leans on properties? Because you can lean any property, not only here, anywhere in the state that the developer owns, anywhere. Keep that in mind. That's what the statute allows. So, it's a fairly draconian provision and fairly strong provision at that, but it doesn't address those other issues which are needed for development around that area in the city. And so, I I think there has to be some discourse with the developer, you know, whether that's through, you know, Josh, Ken, and and myself and a council person that could help with that. I think you need to start that as well. But the reality is, yes, you have an agreement that's there. The agreement's in place. The agreement has not been fulfilled, nor have the the uh the dedications that are being made in this plat been accepted by the city. That's where you are right now. >> So legally, should we have not been plowing the streets? And >> Yep. >> That's an argument. I I think that's an unfair situation, but that is what many times you would be told from the city attorney from a standpoint and your insurer, the League of Minnesota cities, you have not accepted these dedications, you shouldn't be following it. I'm not telling you to go back on that, but that's the reality of what you would hear. >> Yes. All right. Well, I think >> the development was requested to you know, be dedicated to the city and taken over in a timely fashion. It just never had gotten taken over. I I don't know why they never pursued having it come in front of the council to be accepted. It should have been. Um, and like I said, I had conversations with Mike Johnson. Um, there was never much conversations at all since 09 about this subject. I mean, we're 17 years later. >> I mean, that's a long time, right, >> for them to say that, okay, now I'm supposed to warranty a project 20 years later, >> you know? I mean, uh, no one gave me any of the tax money to and I and and I'm I don't know exactly where they're there where we're heading with this subject, you know, but um uh the road wasn't lowered. uh there was mechanisms in in place for the city and the county to work together to communicate back with us so we would have known what was going on. >> Um yeah, it's a very unfortunate situation. >> Mhm. >> Okay. So, I guess it sounds like Chuck's direction from council at this point is for me to get with Scott and we can kind of come with a game plan. Uh, bring you guys alternatives back of ways moving forward and then maybe even I guess to uh Scott's point like is there someone among you who would be willing to sit in in kind of a um discussion group for the parkland dedication and easement of f easement for the future water tower to start having those discussions with Mr. Kubish. Anyone willing to do that? >> I I'd be happy to. >> Okay. Thank you, Maggie. >> Okay. So, uh I guess miscellaneous, we don't have anything else to discuss tonight. All right. I guess I'll make a motion to adjurnn. >> So moved. Second. >> Okay. I got a motion by Maggie, second by Sean. All in favor say I. I. >> I. Any opposition? Okay. Special meeting. Special council meeting is closed. is done.