This transcript is from a Lakeville City Council work session on July 22, 2024. Based on the context provided and the dialogue, here is the speaker-identified transcript. [0:00] **Mayor Luke Hellier**: can you do that yeah yeah what I do that we'll figure how to get it from me okay all right so console July 22nd uh moving on action items we're going to remove that item that's not ready for prime time um so moving on to item 4A franchise fees and I'll turn it over to Mr Kennan for an update you may um [0:21] **Allyn Kuennen**: this is a I think the third or fourth time that c has reviewed the concept of uh starting to assess franchise fees for uh public utility gas electric in the city's RightWay and um we'll go to the final recommendation here for city council consideration so just a little bit of background State Statute does allow [0:47] cities to um charge a fee to utilities for the use of the Cities RightWay we've got two gas providers and two electric providers in Lakeville and Center Point Energy in Minnesota Energy is the two gas and Excel and Dakota are two electric uh this map just shows the general surface areas of both of those utilities so in taking a look at the structure how to structure franchise fees there's two two different ways the city found that uh this can be done one is just a fixed fee that's just a fixed fee across all users the other is what most people what most cities have adopted which is um a tiered approach uh it's for tiered approach because of residential commercial industrial uh [1:34] customers consumptions very greatly and the tiered approach allows for it to be more uh equitably uh distributed across those users so as we do when we're looking at all of our changes or ordinances um we take a look at our comparable cities and this list uh just shows how we compare to those and um it gives us an idea of if our proposal is within the ballpark of the of our comparable cities this again is for both electric and gas franchises so we've settled on the $6 um for gas is $6 for uh electric that's starting at the residential rate and then as you see here it's different for the tiered system for commercial and the [2:19] usage for those commercial uses for both again Gas and Electric um that creates a total revenue of a little over $5 million and we'll we'll show you how uh we settle on that $6 doll rate so this graphic kind of indicates that um as you as we work through the upcoming uh projects the public safety facility as well as the fire station remodels and and extensions of our fire stations as we work through those we see that um as we get into those costs as compared to um as as as we look at the Timeline uh that 5 million would be able to cover um [3:06] those annual Levy requirements uh through the franchise fees uh as opposed to having the levy increase [3:16] **Councilmember Michelle Volk**: I a quick question yeah so we collect more than what is on the required does it go on a special account not hold and roll over [3:24] **Allyn Kuennen**: yes we'll create a special account you can either use it to pay down the debt early or for another reason see [3:31] **Councilmember Michelle Volk**: okay I just was curious how that fund work [3:34] **Allyn Kuennen**: yeah as you can see in 28 we where we really start hitting the amount that we need to start collecting the 5 million at but as you submit for the bonding the boundary cross always follow when they come into play or when the when you have to start paying them so if [3:51] you do the bond in 25 26 is when the payments started and and so on so 27 28 would be the payments would start so as we get in the franchises start pulling up those accounts those will come into play with that uh the funding targets as I mentioned first Training Center um we're looking at Construction in April with opening that in uh July of 26 um we currently the cost is at 24 million and the breakout is what we have right now is for 17 million uh Gap there right now the fire station remodeling um this is a general schedule for the construction of those or remodeling of those fire stations and it just gives you an idea of the overall cost right [4:38] now is about 64 million for each of those phases um as we compare the levy versus the franchise fees um and what that means as an impact on an individual property owner you can see that just for example in 2025 we if we took those costs for fire and police facilities they would be at the $115 per household versus franchise fee which would be at the 12 [4:53] **Mayor Luke Hellier**: and Allan it escalates because the property valuation we're assuming continues to increase right [5:12] **Allyn Kuennen**: no it increases because you're adding more debt in those future years [5:15] **Mayor Luke Hellier**: oh we're not using all the debt got it okay got it but the franchise Fe sticks flat okay [5:24] yeah that's what I'm saying as opposed to franchise Fe right okay so this is based on [5:38] um so there's some exemptions in the rate classes so if uh cities can exempt like for for our example would be public Street lighting Excel and Dakota County Municipal pumping um or on Excel only and then civil def defense sirens on Excel and Dakota as well and then this multicolored chart just shows you different um ways the fees could be um broken out depending upon how people have their accounts set up majority of them are going to be in the blue which would be a one count maybe one or two meters if they have a separate meter for say irrigation and then it would be one V assessed so just kind of gives an example of different scenarios depending upon usage and type of account and how many meters they have and how they're structured [6:26] **Councilmember Michelle Volk**: one more question so when you came up with the um total amounts were you using mostly were you using a blue a yellow I mean which one of [6:37] **Allyn Kuennen**: we used the we were given the account information number of accounts from the [6:55] [Music] [7:10] **Councilmember Michelle Volk**: as if they do they um win a let school with El um when they bill out to their customer and if the customer has more than one meter is it still on one bill and only one Fe [7:22] **Allyn Kuennen**: it depends that's what it's all based on account all based on account for example the city has several different accounts so depending on now most some of those accounts are street lights some are City operations so each account will have a fee my house for example I have two mirers I get one fee okay so you get one bill one fee [7:44] that that's what I was wondering [7:46] **Allyn Kuennen**: for a commercial business it all depends on how it's set up so like we've heard from for example like brackets they have multiple accounts you know it might be the clubhouse it might be irrigation it might be the um the bank depends how their bills are set up so they have multiple accounts so each account will have the fee [7:56] **Councilmember John Bermel**: So to that point and I when I talk to them they're going to talk to their provider to roll it into one account so part of this in my opinion should be education to businesses to say make sure you consolidate with your utility for one account if you have different meters [8:15] **Allyn Kuennen**: milon so yeah will be R [8:31] except I would say I don't know the exact amount I'm going to guess 85 90% of the feed is going to be driven by Residential Properties which are almost all one account [8:44] **Councilmember John Bermel**: okay and so even if you had because you get my head around meters versus accounts even if you have multiple accounts and somebody goes well I'm just going to have them combined when you're still going to pay you're probably gonna are you just going to pay the one fee or you going to pay the fees that you would have paid [9:11] **Allyn Kuennen**: one yeah so if you let's say you have a an EV charger that's a meter and you have uh pool heater that's a meter but it's all one parent account or household whatever you want [9:17] to call [9:18] **Councilmember John Bermel**: I've gone around onlyon I'm answerers I've gone around about this a lot because it's the question that I get from businesses consistently is is that clarification because there's a lot of confus confusion about the one difference is is if you like the green and the pink there if you have one account but you have different rate classifications within that account like let's say you have a meter that's for your office um that's under one use account you might have another meter that's under a different rate because it might be the production facility or something like that that's when it's charged at the largest the rate the largest rate possible there and those are that's [10:02] established by the utilities that's not established by us [10:14] **Councilmember Michelle Volk**: and do we sense that the utilities but like you said to consolidate those bills is that their Standard Process [10:24] **Councilmember John Bermel**: I have not talked to the utility but the businesses I've talked to said that that's they are in contact with their representative at the company to do that [10:30] the businesses yeah they said they're just working through the process [10:35] **Allyn Kuennen**: yeah so what what what it sounds like in the one case brackets they've expanded over the years it sounds like instead of just adding meters to their account whoever set it up just added a new account number even though it's not a separate entity so like in that case I don't I can't say for all the businesses that have M counts but in and in their case we had heard from schmidi and Sons but it turns out the one we're concerned about is not in the city it's in the township so they just have the one account for instance [11:13] **Councilmember John Bermel**: I have not I just [11:18] figured that's the one I have that's the one I have not talked to them about so I don't know how they're set up [11:30] I'm sure they' be on they're going to be in the [11:40] commercial okay yeah goad unless anybody else have questions okay um so the steps in implementing the franchise agreement is we have to amend the agreements with each of the utilities Gas and Electric um Council would have to adopt an ordinance um um to enact the fee and we notify the Public Utilities Commission um and then of course the revenues begin to be collected after that there's a lot of public input that or public um information that will have to be done throughout this process as well which um in your packet we've included um a marketing and information plan to get the information distributed out to businesses and all property owners and M so the timeline uh is uh uh the next [12:29] step is the draft notice is utility companies uh and then in August September we've got the communications and and information will be sent out to residences and businesses the public hearing would be held in in November and then we'd have another round of communications out the residents November December January and February and then March 1 would be the effective date of the ordinance to uh start collecting the franchise fees that's all okay okay yeah [13:08] **Councilmember Michelle Volk**: um I tried toe6 didn't I don't know if they're ready yet I don't think they're ready okay I was just curious what their input [13:15] was um on the communication strategy and how that got rolled into the document that was provided to us I don't know [13:21] **Allyn Kuennen**: well um we we ran short of time at the meeting to discuss this fully but there were some points that the members um put in that they wanted to make sure that the communication was put out there and that there was opportunity the public hearing portion so that input on this um but as far as formal minutes haven't had a chance to [14:00] [14:01] **Councilmember Michelle Volk**: well here there I just for me when I something comes on the agenda I tend to try to go look at what was done in a committee so if that is you know obviously the easiest one is the video of a Planning Commission meeting you know to watch it to I like to just be able to understand what the questions were I only have a key brain so I can't think as well as you know other people sometimes to be able to come up with all the right questions I thought that um TI's outline was really good I I especially like the fact that August September and October um gave residents a chance to [14:49] weigh in on um this new new change that'll probably take place before a public hearing you know and obviously to alert him to a public too so I thought three months was good and I liked her idea of having a place which I hope that the council would have access to to be able to see the comments or is she just going to summarize them do you know I I didn't quite understand that [15:23] **Allyn Kuennen**: we can do it either way [15:25] **Councilmember Michelle Volk**: I'd like to just get a feel for what the concerns are if there are any um publicly wise and then my other question to you guys is [15:35] um do we have any leeway on what um let's call it a business that gets put into a certain category so my thought process was like a church um you know they don't they don't necessarily I get that would be a big um so we couldn't say that a church is residential [16:03] **Allyn Kuennen**: we have to go by what the utility classifies [16:11] them so that includes a nonprofit most nonprofits are going to be in your office settings though they're not going to have as high the demand you think of a commercial [16:32] **Councilmember Michelle Volk**: well it's not demand is the fee they're going to be they're going to be in one of those categories that um so for the $6 so my guess is that then they're looking at $32 a month that's what you're saying they would most likely be least that would that would be my guess [16:58] there office set the exception to be a school um or something like that technically a nonpr [17:20] **Councilmember Joshua Lee**: Joshua looking at our Revenue Target are we is the proposal or potential rates we're looking at the one highlighted in that gold order um and is that what we're discussing today too or is that later in this process [17:34] **Allyn Kuennen**: that's what we're recommending that's recommend [17:36] **Councilmember Joshua Lee**: okay so then um my question then um lies in the rates because I was looking at our comparison cities and looking at how their rate [17:44] increases were set up um in each column between residential to commercial um and then you for example small commercial is the same rate for a and columns um in Eden Prairie minona WB the commercial a rate is similar to the residential rate um and there are other examples too where the the uh gas franchise fee side of things the small volume is either the same or similar to the residential rate I think the reason why that comes to mind some of these smaller businesses [18:31] and you know what percentage of an increase is this going to happen their bill so just putting a little bit more of a magnifying glass on what is what do the tier increase and should we be considering a lower a rate but I also don't quite know which businesses fall in that [18:59] when you even some of the folks who own properties of small retail businesses they don't have access to their business utility accounts so that was hard to get but I guess that's my my biggest question when I was looking for this package was the rate change between residential in that first tier [19:26] **Mayor Luke Hellier**: electricity is complicated because they have demand and non-demand and so there's depending on the time of day they could be charged differently so that's why the utility sets it the way it does and that's why there's such a disparity between demand and non-demand so think about uh like Schmitty gets a [19:46] discount to charge an electric bus at night because there's just less people using electricity at night so that's one of the main differences not what said but just the difference between non-demand and demand electricity for instance yeah [20:07] **Councilmember Joshua Lee**: and I think that that tier difference makes sense so you're saying between the on the demand small and large I'm actually looking more between resal then small commercial [20:25] **Allyn Kuennen**: so we can change this however is if you make a change you have if you decrease one you have to increase the other to get the same amount of right [20:30] **Councilmember Dan Wolter**: so that's the policy question [20:31] **Councilmember Joshua Lee**: so the but there is there probably is a [20:32] substantial use difference between a typical home and a non-demand small commercial [20:47] **Councilmember Dan Wolter**: I would guess's business M [20:51] **Councilmember Joshua Lee**: I think philosophically we're getting close to what these num should be I just when looking at other cities the residential and small n in many cities was more closely matched look at the averages at the bottom roow that's I mean those are averages of that whole column so that's kind of close of what we were you know a to get close to yeah when you look at the averages there's a bigger spread than the individual cities that [21:28] **Councilmember Michelle Volk**: so I'm still confused about the I get the non-demand demand so are the non-demand numbers just businesses that [21:38] only are open at night [21:40] **Allyn Kuennen**: no they probably aren't High users oh okay so it's overall it's probably like you know an insurance agency so that you weren't running your AER at a c time residential yes commercial though you don't really get 200 and something yeah 17700 on electric and sometimes it also it could be as absurd as just the demand for the water heater if it's electric or it can be um your air [22:25] conditioner runs for this many minutes and stops for this many minutes and runs or else if you're a larger place and you have a generator that on really high demand days you're able to go to your generat [22:30] **Mayor Luke Hellier**: that probably would be a small business I mean my my thought on it is we can come up with a whole bunch of scenarios and without having more you know kind of setting okay we want to do the staff recommended in having these public input sessions that then more encouragement to find out I think directly CU I've heard from Golf Course Transportation I've heard from strip malls I've heard from industrial so I've but I haven't heard from like you know Mr insurance agent in [23:13] his little strip M what's a big impact going to be for [23:22] instance yeah is okay is there anybody from the audience that wanted to weigh in on franchise Fe stuff before we get too far down okay so I'm I'm comfortable with the communications plan and public input plan I think the other thing that we continually or I continue to hear about is transparency I think what's laid out I don't know how you could be more transparent about it I mean other than knocking on every door to make sure people and I feel very good about the communications plan I guess so make sure we're getting feedback it is helpful to have a proposal to talk about yeah [24:00] **Councilmember Dan Wolter**: yeah [24:18] **Councilmember John Bermel**: can you go back to the time on so just I I just want to be clear here um so August 20th draft notices to you tell these companies that's going to be based on an action by the council [24:34] **Allyn Kuennen**: right down we notify the no we notify utility companies we give them 90 days notice but we picked August 20th I believe because that's 90 days from November whatever because we have a meeting on the 19th council meeting I have to double check anyway we're going to be as we're going to send a notice with this structure is what I'm [25:03] saying unless unless we hear otherwise right [25:12] **Councilmember John Bermel**: there is a point where we have to kind of yeah and go so yeah [25:15] **Allyn Kuennen**: but I mean that we still don't adopt in order [25:21] **Councilmember John Bermel**: still no we don't adopt until [25:26] November [25:31] **Councilmember Michelle Volk**: open toest that we have a work session had our work session in October that'll be at the end of October that we um discuss this topic again just to get the feel of what the communications was coming back um to the council and um I get let me clarify one thing if you put it in proposed ordinance can it be changed between October and November for the public hearing is in the proposed ordinance is the fees laid out like you have here [26:13] [26:14] **Allyn Kuennen**: yes if they were to change to less is that it that would be we'd have to check and see I think webly might might have to check we might have to restart the process on the notice to the Pu I think specific or to not to DC what to D and the utilities well [26:41] **Councilmember Michelle Volk**: okay I guess it depends on the input from the public but how to put this it almost makes it like a done deal then I don't know why we're asking for the input if we can't change anything before the public he because you don't have to adopt it [27:01] **Justin Miller**: you could always restart the process [27:06] okay that's always the option to not approve it and then do it again and we can either bring it to you at the October work session or it'll be part of the meeting materials at the public hearing on November 18th there's nothing that says that the public hearing you have to vote for it I mean it's it's an action by the council to move forward is that up is that the normal coun [27:42] **Councilmember John Bermel**: guess that's up I guess that's up to we could also we could also see how much input we get and just I mean by the time October work session comes around excuse me so to me one of the and [27:45] I I heard the input about the multiple accounts I think that's from the feedback I'm hearing those are that's really what's bothering people is am I going to get d five or six times so I think I would also like to see something written verified that yes we can turn these into like one bill that won't just reflect all of the uh all of the charges because some can't they have to well that's what I'm saying something in there it says the utilities have said and I don't know if electric is the same as gas in terms of how they can build those out or how they're willing to build those out um I think that's a big question uh that you know I've I've [28:30] heard a couple different things I've heard that no they have to be separate but then I'm hearing that well no people are working with their utility companies to make them one um I would like to know that with a fair amount of certainty before we got too far too far down the line [28:57] **Councilmember Dan Wolter**: it's reasonable my assumption is considering all the other cities under Dakota Electric that do I would be surprised they don't I would be very surprised if companies in Rosemont and Burnsville and Egan are paying two and three for franchise [29:10] **Allyn Kuennen**: we'll ask I mean we can ask I wouldn't be surprised if the answer comes back it depends yeah right I don't know if they'll be able to say yes for everybody or there might just be some differences on account that they just can't for reasons that we don't [29:17] know but we can def because if we're going to communicate this and get the feedback and everything have people weigh in that's that's going to be a question ask um so that's that's one piece and it's interesting because and and I haven't gotten a ton of feedback but I've gotten some feedback um that people would just ass soon not do a franchise Fe but I'd like to hear what the greater public is is saying there too um so the the task is going to be to get as much input as possible from as many different kinds of customers as possible I think um you know I've said before I I think it's a unique funding source I think it's a know serves as an ability to to address [30:04] some of our costs not my favorite thing uh but for a specific purpose I I can see that um but I think definitely people are going to want to know how this works uh for the billing and um we they've seen what the difference between the levy and the uh and the rate is so it's like [30:45] **Councilmember John Bermel**: I agree with you mayor I we've been transparent has gotten any information out and I think that's G to be the biggest question probably um the other question because this has been um talked about as for a particular purpose what are our thoughts on being able to create a term uh ending yeah that requires the council then to [30:52] readdress it if there were going to be changes in the future I think we talked about that we want [31:07] **Councilmember Joshua Lee**: yeah we did so does that me based on our Revenue targets what is that 20 20 years [31:13] **Councilmember John Bermel**: so that can be put into our proposed ordinance I believe it has to be [31:16] **Mayor Luke Hellier**: I think it does too because I think some of our neighboring cities are now coming up on it that's why they're increasing them [31:22] **Councilmember John Bermel**: gotta [31:25] **Councilmember Joshua Lee**: and is that Sunset language so this ends at 20 years not it will be renewed at 20 years because I think that makes a difference [31:33] **Councilmember Michelle Volk**: so we have to renew the franch ches every 20 years is that right [31:36] **Allyn Kuennen**: so each time that franchise comes up you have [31:42] **Councilmember Joshua Lee**: I agree with what John's point was I think for me the most of um the feedback has been really the the the need for information but not knowing what it means I think everybody of course goes to the highest column assum as that's what's going to impact them um [32:11] **Councilmember Joshua Lee**: one question I've got is I somebody did mention as it pertains to the nonprofits that um many have the option to do payment and R services or something like that and that they do do we have any data on that [32:21] **Justin Miller**: I've never seen that I don't know I mean liquid Shores do um but they're not profit but that thing um do you know the top of your head how many we get how many uh pays how many payments [32:26] and L taxes do we not that it's not something we can budget for entities you know um affordable housing kind of things that's what they're in that special C I believe that's how that's set up um it's not the churches it's not the schools [32:58] [33:04] **Councilmember Michelle Volk**: okay other questions or comments otherwise I think I guess my only comment is yep there's not a lot of difference uh it's pretty substantial yeah but that's how the levy it is somewhat up to us too as far as we're doing the whole budg back is I guess the thing that I would hate to see happen is because if we were to Market this that eventually it's cheaper than a ly the fees well not [33:44] [Music] [33:51] necessarily [33:52] **Justin Miller**: anyway right the challenge with that is that we're bonding for something so it's going to it's committed fund instead of just pulling in the money for the general fund for paying for whatever right [34:11] **Mayor Luke Hellier**: because we're tying the franchise payment to the bond it's that's going to be in our Levy right [34:25] **Councilmember Joshua Lee**: the other talking point folks is that it's consistency it's not [34:27] High one year 30% lower the next so in terms of just what am I paying for how is I being used very clear cut to me and I think that is what is game or garnering support for it is consistency you know exactly what we're paying for so [34:49] **Councilmember Michelle Volk**: I don't know I guess you know somebody brought up the point that in some ways they're paying tce they pay so let's say the school district so now the school district's costs go up their lovey amounts going to go up a bit so the resident is now paying twice not only is it their franchise fee now they're paying for the school district's franchise fee so that makes sense [35:15] whereas or their Church's franchise fee you know now they're going to have to donate more to the church to make sure that I I realize that you know it doesn't sound like a lot at $2 a month but it is you know to anything really small and and then obviously the school districts is going they're going to be in the biggest category in all those schools so the residents paying twice [35:34] **Mayor Luke Hellier**: I would say it's exactly twice because it's also part of a user kind of demand based on who's using retail commercial you we're we've got folks from outside of the city using business Community here in the city and [36:01] they're going to end up having a piece of that be with what they're using you know if I if a burn person comes and and eats a pizza here in Lakeville they're contributing to the demand for that service and why we are putting this out there in the first place and that profit is what that business owner is using to pay for [36:31] **Justin Miller**: I think her point is if you're if city of Lakeville resident in 194 she's saying you pay it through your fee and then the school district is going to increase their Levy to cover that I think that was your point oh specifically for the SCH dist [36:51] **Councilmember Dan Wolter**: but on the flip side there are people in credit river that will be paying through [36:48] 194 but not [37:05] **Justin Miller**: and you could also the argument and you're totally right that's a valid point the counters side of that it wasn't my point it was somebody else's but yeah and we've heard that the Counterpoint is that taxpayers are subsidizing City operations for people who aren't paying it right now already so you can play that both ways there's 4% of the tax base in in the city that's not paying taxes for totally legitimate reasons don't want to argue that and I think that's the reason why so far the council has said they want to put this toward um Public Safety as opposed to Street improvements or some other things that other cities have done because it can be argued that everybody benit from [37:35] public oh absolutely yeah [37:37] **Mayor Luke Hellier**: but it sounds like though we're ready we're okay with staff we're going to do utilities on that $6 residential the one sorry whatever the other ones I don't know if [37:57] plan [38:00] **Councilmember John Bermel**: I think to that point though I mean this is a process and right now we've done this is what our third or fourth meeting but with the third meeting with it um there you know it's kind of an introduction hey where do we want to end up how do we want to use this um but there's significant public feedback so I this is a process I I would hesitate to say at any point in any of our decision making that it's a done deal until we Tak the vote um so I'm willing to to move forward in the process and I'm open to it um and I want to see though what the what the public comment does there has been a couple misinformation points out there about that's costing thousands of dollars for [38:44] folks and I just don't see that in the numbers and I just seeing your head shake so I believe that's true but there's no situation here where any business owner or resident is paying for this [39:15] **Justin Miller**: well the yearly cost for 4 million commercial industrial is 2,800 for for the four that fall in therea Amazon [39:19] **Councilmember John Bermel**: well no there's more than that [39:21] **Justin Miller**: there's 180 of [39:21] them but those are going to be your large the ones I've heard from churches and things like that that's by far not the case and and those are not the users that have come to me with concerns about it's really more well what's the percentage of [39:41] **Councilmember John Bermel**: I think you mentioned justtin earlier perc [39:43] **Justin Miller**: well I just just on electric 93% of the accounts are residential which is6 I didn't do the math gas but I'm uh $144 [40:11] % could Beal yeah [40:15] **Councilmember John Bermel**: other comments [40:17] **Mayor Luke Hellier**: okay thank you all right moving on to Quarter Two financial report Miss stall um I'll just move my computer now a little bit so I can get your audio there [40:48] yep [40:48] **Julie Stahl**: so originally I think I was given 10 minutes to do all of this I can get you don't have to take all have grief is good so uh second quarter we're looking at um if you're looking at a general fund uh and revenues we're right on par about 50% it looks a little lower because for general property taxes we get 80% of our first half property taxes in June they give it or 80 yeah 70% they give us the remaining 30% of our June payment in July so that's why the property taxes it's a little low at 45% um collections seem to be on par and it probably will be the 50% when we [41:34] factor in that July 5th payment that came in um basically for the general fund everybody is doing pretty just right in line with budgets uh legal council is about 3% over their um appropriated budget right now insurance is at is 5% over their 50% allocation engineering and construction services are both well under the um 50% Mark a lot of that is to do with staff shortages that comes up next I think yeah thank you I'll love if you'll if you'll run that for me after I get done with it there's this what you're yeah there's no slides for I'm going over the general fund quarter first um sorry about that so I think [42:21] that's how they were ordered yeah um Art Center excuse me art center is bit over their budget at 65% that's a timing of the the programs and in that um so overall if we're looking at the general fund Personnel Services are 46% of budget which we know is the largest pieces of of our budget so um general fund is doing just fine um a lot of the narrative talked about the salt storage we're we're filled up with our or salt um intake and so there's not going to be any more expenditures for that um pretty much yeah all the other comments in the uh financial highlights uh pretty straightforward just highlighting a couple um police Personnel Services are [43:07] within their budget but um with those staff additions it's 673 th000 more than 2023 budget so or same same time frame in 202 fire um is under budget and again with the addition of the Staffing it's higher than the 2023 at the same time by 2 45,000 so um expected those are you know those are expected cost increases that we're realizing now so um with that that's pretty much the the general fund in a nutshell um we did include the other uh funds the liquor funds and the Enterprise funds did anybody have any questions on any of that information all very straightforward no [43:56] **Councilmember Joshua Lee**: I don't know if this is in later on but um between this is [43:56] maybe a question for Ina the zero on apartments is glaring as we budget uh 240 and that was kind of a missing piece in our our permit fee probably we have any sense of that we're going to hit two apartment buildings this year or what are 240 units [44:23] **Tina Goodroad**: well we're gonna the um in terms of EST story is going to be pulling their permit the senior Co-op [44:30] **Councilmember Joshua Lee**: okay so they are okay that's good I didn't know you know the 200 whatever number from last year that was Authentics no what was our adopted budget this year though with the number of units [44:42] **Tina Goodroad**: yeah didn't we have didn't we 243 units of [44:42] apartment so two apartment complexes with a total of 243 units [44:53] **Councilmember Joshua Lee**: okay [45:01] **Tina Goodroad**: yeah we've had a couple go on hold yeah the te Miller building on 179 conceder and the uh adult um or the um active living adult apartment building on that same block y um both went on hold [45:18] **Councilmember Joshua Lee**: okay so interest rates are killing yeah I just want to make sure it's so then my other question about aoria they're Co-op are they taxed individually each or is it the building tax you don't have to answer just put that write that down find me answer later doesn't matter but just curious that's a good question [45:28] **Councilmember Michelle Volk**: curious about the fire number being lower [45:33] **Julie Stahl**: they started in April I believe it was March or April the full because the the timing [45:41] **Councilmember Michelle Volk**: yeah so it's like one quarter wor is that later than expected [45:46] **Julie Stahl**: that's what we budgeted [45:51] **Councilmember Michelle Volk**: because I you also made a note about um also fluctuating because of calls and I know there are fewer calls being page because of fulltime so I didn't know if that lower percentage was because of that or or that we just had fewer calls because I mean they were just [46:04] **Julie Stahl**: I think it's that we've had fewer calls just fewer being paged because they're being handled by the the full-time or the duty grp because that's a significant uh change at 36% of the budget so I'll be curious how how much lower [46:16] it's how much less it's paying because of a fewer pages in the future [46:21] **Mayor Luke Hellier**: I wouldn't count on a windfall yeah we still need more than a couple firefighters to go on the rig so there's always going to be the duty crws also as you know right we still need that supplemented by the pay on [46:44] call [46:45] **Mayor Luke Hellier**: any have the questions on the second quarter Financial reports okay [46:53] **Julie Stahl**: then we'll move to the uh this is our first half 2024 finance department what's been um going on there so and I'll let you start so we did receive the certificate of excellence again for our financial report and that would have been our 2022 annual report um that was the 35th year so in a row since 1988 um we did complete our 2023 audit successfully the so the city the Fire Relief Association Dakota 911 and the Arenas um all went really well there weren't any findings and um so that was were very positive the um we have we've completed [47:32] the 2025 budget for Dakota 911 we've also been assisting them in some fixed asset funding scenarios to give to Dakota County as Dakota County figures out how much they want to maybe or may not um contribute more toward the capital [48:02] **Councilmember Michelle Volk**: so as a reminder just for me again that's because we're their Fiscal Agent [48:07] **Julie Stahl**: correct okay yep and same with the Arenas because we're the I knew ARA in the 2025 budget is completed as well um so next we did just have the bond sale for the 2024a the 21.5 million um there's a piece of that with Street reconstruction projects and then the last piece of the park referendum funding and that was the majority so that was 15 million roughly we did maintain our triaa bond grading [48:17] with Moody I think you've all heard we're currently working through the 2025 budgets um we've started budget meetings with a the department heads staff and finance staff and Justin and Allen so we're in the midst of those and and still um getting those set up we are also can you go back on sorry just make sure and also working on the CIP um so there's a lot of pieces that finances is uh working with staff on to get those all ready for the August work session so um now you can go for there you go so um what else we're working on we are buried in our uh [49:04] Erp preparations um it's hard to believe but over a year ago we signed the contract with bsna to do this them we signed the time in attendance and um uh time off software with Andrew's technology in February in the same time frame uh Laura Miller from the finance department is our city project manager she's been doing a phenomenal job keep everybody on task make sure we're meeing all our deadlines um we still have our scheduled go live date September is when we will do the financial module payroll HR all of those pieces in October we do the go live for our Utility Billing so those are and we are on target to meet those go live dates as long as everybody keeps um meeting their data requests um [49:51] we've had uh three three successful data extractions um so that's where they're pulling our data from our different softwares that we're currently using and making sure that they they're capturing all of it to what we'll go into bsna our discovery meetings were we were finding out okay and meeting with them with bsna saying this is how we currently process here's all our stuff that we touch and all of our data and here's how it goes in so they can make sure that they're getting it developed um set up the right way to capture all of that data um and going over those configurations so those are ongoing through the next month or two we also um uh just did the delinquent certifications are in the process of that for the spring [50:37] certifications so um again adding with that was the tree preservations that we just started putting those in last fall um helping to minimize the amount of manual processes that um staff are doing so eliminating those uh tree removal agreements is what was going what was happening in the past fast so um and then we just got some statistics because you know that's what Finance is about is numbers so the number of utility accounts in the last 10 years um has gone up 29% so we're up at over 24,000 utility accounts and um next slide when we're looking at the utility payment methods so um you'll see a dramatic change here so the purple was in checks and cash in 2014 and how that [51:25] um started going down 2017 we implemented a new new payment processor PSN which help get some of those electronic payments in so that's why you see the red bars going up in these more recent years so we are taking in a lot more electronic payments um credit cards of course has continued to grow as well because of those electronic payment options so um [51:56] **Councilmember Joshua Lee**: have we thought about any incentives to push Fe people on to the AC to avoid credit card fees [52:03] **Julie Stahl**: well that will happen with the new implementation because the preferred vendor for bsma is invoice cloud and part of that contract is we will be um the pay it will be a payer paid fees so people paying them [52:12] with when do tabs now for the state [52:15] **Councilmember Joshua Lee**: yep [52:16] **Julie Stahl**: so people paying with credit cards are the ones paying the fee the city will no longer absorb those fees but the city will continue to absorb the AC and EFT fees and those payments are always out there and that's what we're going to be encouraging people to do great [52:33] **Councilmember Joshua Lee**: it's nice to see the set increase I know it started slow [52:35] **Julie Stahl**: yeah because as we all know credit card fees are are continue to go up and it's not fair to those people who don't pay with credit cards that we build it into our fee structure to cover what the city's paying in those credit card fees so um that's just one of the reasons [52:50] **Councilmember Michelle Volk**: but did we put that in writing that we weren't going to charge fees low on credit cards [52:57] **Julie Stahl**: you actually approved that at your last meeting with the contract and it was in the report I believe that said that okay in 2017 when you went to PSN right you said then the city will just will just absorb all your credit card fees right okay and that's where and you see a mix of it and it's all over the board as far as what other cities are doing a lot of them are trying to get away from that to because it's so to make sure that that it was all covered [53:23] **Councilmember Michelle Volk**: a switch yes [53:30] **Councilmember Michelle Volk**: I just can't believe that it was just 10 years ago over 55% of our accounts were being paid with cash and check it's a lot of switch a lot of drops in the box with the yeah I said automatic [53:43] withdraw [53:44] **Julie Stahl**: think about it it's best way so um when we looking at the counts of our utility customers um at this point in time right now we got 88,200 that are signed up for E bills which helps on those printing costs so you know up a substantial amount from the same time last year and it's continuing to grow which is and we think with the more communication we're putting out with the invoice Cloud that we'll get more people signing up for the E statements um then when you go to the next slide and you can see um how many people are signing up for the auto pay that's increasing too um and there's actually there's more customers signed up for autopay versus how many are e statements so what that's just saying is that you there's about [54:29] 200 accounts that are autopay but are still getting a paper statement so the more we can communicate and share with people hey you're going to help save the money save money if if we can reduce our printing costs and all that in our rates so trying to just keep everything as tree friendly and as um as low cost as we possibly can so and then we've got um just showing here just the number of accounts moving in and out of move in and a move out counts as one so you can see as the growth of the city and any movement around within the city and how that grew up through 2021 and with the change in interest rates and the um the pandemic and everything else how that's dropped and um slowed [55:16] our growth as well our growth slowing and of course then just half a year um 810 accounts so I imagine that we'll be up again around that 15 00 Mark for the total for 2024 and we're looking at accounts payable and how much is processing through that group of Staff um continuing to our electronic payments are continuing to grow they're still not where I would like them to be I would like them to be a lot more so we're going to be pushing that message again some more coming up here with our conversion as well um it's interesting out learning all the limitations of the existing software and just trying to get some data for this and and how hard it is and like oh I can't wait till we can pull a report out of bsna and say how [56:01] many people are signed up for a agent who's not signed up and how can we get to them you know how can we get the message out um and then just the number of AP payments that are issued as you can see too 2014 we didn't do any electronic payments 2014 so 7,000 checks issued and how that's continued to drop over the years um and again as we sign up more people for a that red will just keep growing on the right so and then just to give you an idea how much um paper is flowing through the airwaves because we we've gone pretty much electronic with all of our invoice processing um things are emailed to us they gone through they go into laser feish so um we've gotten a lot of our [56:46] remstar storage and all the other boxes of storage of paper invoices is um dwindled extremely but just to give you an idea so we're processing over 20,000 invoices a year um again since we're at half a year we're just under 10,000 they a lot more invoices in the fall with construction and stuff so I imagine it'll be up there again at 20,000 so any questions with all the numbers so much fun paper free by 33 [57:15] **Mayor Luke Hellier**: um we're pretty close [57:18] **Julie Stahl**: actually [57:22] **Councilmember Joshua Lee**: I actually have a question for you it's a curiosity so you had uh 24,000 utilties the accounts and my saying is we have roughly 28,000 some uh like residential [57:34] households in town is some of that like multi housing obviously bus [57:42] **Julie Stahl**: depends how it's structured you know so if you have a and I'm not even sure how they're all grouped but like an apartment building you may have one utility bill that is spread or you know it's it's one apartment complex and um yeah or you or actually I'm trying to think how that goes from opposite the apartments would have individual bills or could be the way the main meter is set up you know that it's one main account and the HOA pays it you know those kind of situations too and if somebody own multiple properties in town those would be separate accounts right [58:17] **Councilmember Joshua Lee**: depends [58:18] **Julie Stahl**: but I'm not sure how the account is figured on in on ours um that would [58:20] be again data to be pulled out of a new system that would be able to tell us yet these are here's our multiple um location accounts or whatever yeah so I'm sorry I don't have a better answer [58:21] **Councilmember Michelle Volk**: oh no that's fine that's so it just makes me think of what happened on Friday um when uh where is our data stored so if we completely go down for days because of some other software update from some company you know Etc where's our data stored so that we can retrieve it when we get back up [58:53] **Julie Stahl**: I'm probably not the best person to [59:06] answer because I just know where Finance [59:10] **Justin Miller**: yeah we've got it stored in two different actually three different places we've got it here at City Hall our backup is at PD and in the cloud and depending on which software application you're talking because there's some applications that PD maybe has that's out in the cloud or what we got with Lis is um is system system [59:40] **Councilmember Michelle Volk**: I you know and I don't understand all all of that you know because like I I'm the type of G that just turns on her computer and it's supposed to work so and and I don't want to learn but what I but what scares me is the fact that as a society we become so dependent we keep moving and moving more towards electronic and we say oh [59:52] isn't it great to be paperless and the scary part to me is as if we go down for so long do you know I mean things are still moving how do we operate so um and that's just a comment I don't need an answer but I it's something we should really think about because things are keep happening nationally and globally and it seems to be ramping up and I just want to make sure we're prepared as city of lakeo to be able to um overcome some of those obstacles [1:00:25] **Julie Stahl**: was if have from bed they ever were to hit us and and that is one of the exciting things about this bsna implementations it will be in the cloud for all of that [1:00:38] and that's really important because there's a lot of cies that use the premise on premise version of the FN so that means it's on their servers so then those cities have to be concerned about how do we protect our servers because that's where all our financial data is and then that's where they got all those backups and place [1:01:05] **Justin Miller**: I share your fear on this and I've talked with um with Trevor about it we've gone through some not like tabletop exercise but he's talk we've talked about which of our systems we back up how often those kind of things I'm confident that if something were to happen we have backups it's not going to be instantaneous you know some might take longer it might be a two day delay it might be one um but um I'm confident that we we have systems in place that we [1:01:24] do have backups [1:01:25] **Councilmember Michelle Volk**: I you know I just you know look at the businesses that got hit on Friday and suddenly they're they're not they're hardly able to operate you know when they got hit so and we were hit too in in a couple instances nothing that took us down or else you would have heard about it so okay [1:02:00] **Councilmember Joshua Lee**: two quick things um one I just looked at a fellow co-op in another part of the county and it looks like it's it's taxed as one parcel okay so then they just pay the association Le that's how it appears to me um second if you remember we um went with our own finance software as opposed to going with the the Lo system that is proving to be a very wise decision um there's [1:02:09] their um attempt is crashing the um menona I believe was the first city they tested it out they're about halfway through and now they're looking at lawsuits with the company and um stuff like that having to start over so um it's looking like we made a good decision [1:02:26] **Councilmember Michelle Volk**: that that's good I mean we thought so beforehand but even more so now talking switch to bsna [1:02:35] **Julie Stahl**: yes [1:02:38] **Councilmember Michelle Volk**: we switched to bsna when I was in the city of Dayton it was excellent much smaller City but same systems and their training was amazing and that is so important for the likes of me and everybody else that doesn't touch it every day like you do and I I can't say it enough um we are Beyond excited about this we know that the next two months are going to be crazy and [1:02:56] we're trying to keep our sanity through it all but we know at the end of the game we're going to be so much better off and the efficiencies that are going to be there I think are going to be enormous fin night people are fun of parties they get excited about that's what I want to see beyond it's like wow anything else on the quarter report um [1:03:13] **Mayor Luke Hellier**: we'll now turn over the Dunham property discussion thank you [1:03:15] **Tina Goodroad**: mayor members of the council we have three individuals here that I'll introduce and then they can come up and speak I'm just going to provide some introductory comments based on my memo we have Bob Dunham Mike Grant um their engineer and Bob domac also associated [1:03:42] with the denim businesses but if you had a chance to review my um staff memo I just want to highlight just to set the stage um and then turn it over to Bob dun Bob Dunham and Mike to just talk about the businesses how they operate and then um The Proposal um for the new site plant um but as you know the property um that they own on the north side of 215th Street is almost 80 acres they have farmed it historically they operate a metal recycling business and Wood Recycling business that North 79 acres is Zone op Office Park District they also own another close to 40 acres immediately to the South um of 215th Street about 40 acres and that is z i1 um they have had um their businesses [1:04:30] in place and they've evolved over the years and we've seen that um lots of folks have noticed um some of the expanding outdoor storage um and some of the um businesses both recyc um mainly the recycling of the wood waste has really grown to meet their customer needs and Bob can go into more detail about that um but as these businesses have grown they haven't necessarily grown necessarily straighten conformance with the zoning and so um I was able to meet with Bob last fall um I had a whole tour and really took the time to understand exactly what was going on on the sites and the the different types of businesses and really the market that they're serving and so from that meeting um we Dee you know agreed to figure out [1:05:16] a plan to see if there's a way to allow these businesses to continue to exist but in a conforming way and so um with my encouragement um Bob is able to hire Mike Grant with Kim Ley horn and just kind of start these conversations and it's taken time um as they've work through some site plans but just a couple of the primary businesses that's going on is first is the wood recycling they take local and Regional um wood um pallets Etc um from businesses who simply need to find a place to dispose of this prod cannot go to landfill anymore and so they have a business where they grind the material down and turned into product and Bob can talk about those different products some of those project products um spec you know [1:06:03] benefit our local businesses they also um end up with a residual product that needs to further decompose and so they want to be able to have a licensed area where they can allow the remaining wood to decompose and turn into additional product and that's something that would be improved through the county the county needs us to support it through some kind of an inuse permit for it to happen um the second is a newer business that's taking place on site and they can kind of talk through um the site plan that was in your packet is a food basically a food waste or food packaging business and so they have a machine that [1:06:48] [Music] depackaging food Etc that also should not be going to the landfill they depack it they turn that food into an animal um feed product that too has some residual product that could also benefit the overall composting and that is not operating under any city permits or County permits I talked to the county the county is aware that this operation is happening and they've in a sense of honestly in a conversation we had turned a blind eye from because of the recycling benefits of it and they've in they' also made the comment to me that they operate the best depackaging system and Equipment the county has ever seen so in looking at the second screen [1:07:34] and then I'll have you flip back to the first one when they come up is they have a vision for how they want to utilize these two businesses on the south property so utilize those 40 acres and shift um up in the upper corner um the wood recycling business first utilize a couple of hoop sheds try and get that wood product um stored inside and be able to fully recycle um wood for these different businesses and then that would be something they would look towards um spring of 2025 secondly um the majority of the site they would propose constructing a building to handle three deack iner systems and so with that um it's a much larger building um obviously a road [1:08:21] Network around it um but with that they would like to have a larger compost site and Mike Brant with Kinley horn has created these kinds of sites there is an enormous amount of Regulation both the county and the state level that would have to be followed and so this is going to take a lot more time is a lot more intense in terms of getting the approvals um but that is what they would like to discuss tonight with you um this Southern site is honestly a little challenge the pipeline that runs through it that's that angled line that's just being left alone and then there is the creek so with the creek you have the Shoreland setback flood plane and so forth so that monopolize quite a bit of the site in the end really what we're looking for is some conversation with [1:09:09] you as to whether you can see for yourself a vision for these uses continuing on this property and if you can see that um could you consider the two uses the wood recycling um as well as the food depackaging on the North End just under an iup as a temporary um with a strict timeline while we work on Zoning for the South um we need to get that Southern Property into the Musa um there's quite a few different approvals that are going to go along with this and so it's going to take a little bit of effort to get that zoning in place and so they're really looking to kind of continue what they're doing um so that that business can operate re generate Revenue to then expand to the south in the end um I've been ConEd there are a [1:09:55] lot of regional benefits um from the standpoint of just taking these products um serving our local businesses where they have nowhere else to turn for a lot of this um need for recycling so I'll turn over Bob and his team um it might be I don't know if you want to stand in front stand you like to um take it away [1:10:19] **Bob Dunham**: all right well I guess just an overall history of what we do there um started in the 80s we were looking for a product for our own animals our own pigs and whatever we were raising at the time so we started out with a shavings product that came out of bfo and we would get that used at our animals and a lot of the neighbors around would say really like it too can [1:10:42] you get some for me so that's where it started I was a pretty little guy at the time it grew into a situation where we were giving more of it selling more of it to the neighbors than we were consuming ourselves so rather than ship it all way from there by rail car and go through all the work on loading it we found a more local company to get the material from that was going to work better for the need and that was Anderson window so in the early 80s we started hauling out of side Anderson window bringing it back at that time we didn't really have any infrastructure there whatsoever at all we didn't have any warehouses we didn't have anything we didn't know what we were doing we're just Farmers it's pretty much the end of it we created a building it's still the building that we have today for our Marine Warehouse um that building is 90 by 100 it's 9,000 Square fet um at that particular time and that [1:11:30] building is right here and that building was created in the in the early 80s 9,000 square fet and that was amazing for us right because we could get two semi loads of material from Anders in a day store them in there all week long and sell small portions of it if we ever got that building full we thought we were set for a year I mean it'be we'd be all set times change more people we haven't done any advertising no marketing no salesman um it's just Word of Mouth over since 1984 we lost the contract in 1984 to Holiday Anderson we had to duplicate it ourselves we started duplicating it ourselves in this building right here with two very small machines that we hauled home in the back will pick up and that's where that [1:12:16] started so at our daily thing when we were already hauling from Anderson we were hauling somewhere in the neighborhood of between the two semi loads that were smaller trailers we would haul about 15 ton per load so it would be about 30 ton a day 5 days a week we were only selling a small portion of that we weren't selling that much material but that was the bid of Anderson that we had to accomplish when we lost it we had to duplicate it so we went on to duplicate that we started out by making about six ton a day is what we were doing 6 to8 ton a day is what we started with and then we would take that material out of this building and transfer back to that building by truck we would sell a lot of it in bags to the local horses you know people that have five 10 horses there whatever it might [1:13:01] be we sold a lot of it in bags some vit and ball we did that time we were selling quite a bit to the University of Minnesota um we would take stuff up there since uh go forward you know 30 almost 40 years at this point now we uh we work out of this building right here this is where our production line is this is where we bring the material in we still store in this building as opposed to then and now right now we are approximately encroaching on that 180 ton a day Mark um so we we are able to bring in truckloads of material um dick sanitation is a local hauler that comes in um Hill hul from all over in town you know FedEx or [1:13:49] whatever the complexes might be we go all with larger containers and try to go a little further so Anderson window cumins up in Fridley um we handle almost every pallet shop right now in the Twin City area um and there's quite a few of them so we handle all their scrap for them so we can take care of that and we do a lot of work with other guys that we don't necessarily want to crou on every market so we work with other markets to feed the the turkey industry um we don't dabble in that we do mainly horses and dairy cattle um we work with a couple other gentlemen to do the turkey IND indry about 50 ton a day right now goes to biofuel which goes over to Cod energy and they create electricity with it they mainly burn old Halls which it's offsite [1:14:35] from this but we store all the old halls for them too so we can work in conjunction with them to get them the proper amount of storage that they need for their old halls and plus Supply them with the type of wood that they need for their um plant to make it run right they have to have a certain mixture whether it's a 7030 Blend or whatever it is wood so that's pretty much what we're doing there and over all those years when we started with small and added and tried to do all this stuff you see a lot more there than what needs to be there I guess is what we get at and it's kind of interesting sit in your meetings and listen to your the whole thing you're doing with your financial stuff and how it'll how I look at this the exact same way so I can take all of this stuff that [1:15:22] I have right here and I can condense this down to what we want to put across the street um that gets done with instead of using skid loaders use pay loaders instead of using small trucks use big trucks um it's it makes everything so much easier to be able to get into a building uh the size of the hoop sheds that we want to use that aren't restricted by small doorways and things like that that we can really use big equipment to work more efficiently and get the work done faster and then haul it out on a bigger container instead of driving these little trucks all over the place so that's that's what we're shooting for for the wood recycling part of it now of course all these things have morphed all the time I mean you're recycling wood wood has nails and we're recycling metal and you get into some of this stuff well [1:16:09] then there's Farmers that need feed we're already hauling saus to them and then we start in by some of the the feed Lots or the stores and things like that that are saying well I got watermelon or cantaloupe lettuce tomatoes onions all these things I just got to throw them in the landfill and like gosh you really don't need do that we can we can feed them to Beef Cattle and different things and we've got the connections to do that found out very early you can't feed them straight onions can't feed them straight water so we have to have a site where we take uh whole load of tomatoes and we take a whole load of onions and we take a whole load of lettuce and we put them all together mix them all up put them back out on trucks to go out to the sell it Sal go out to the go out to the farmers and um all these things like I [1:16:54] said they just all kind of grew off of each other because they all basically serve the same thing in my opinion so that's where we've started with all that stuff that's where we want to take it in the future and of course the compost site and all that we do some of it uh right now we have to in order to recycle wood there's a small percentage of everything that you take in that can't be burned at an electric plant it can't be sold for wood chips that's a very little bit of what we do but it's not decorative it doesn't look nice can't make a bing product because it's just too old there's no absorption Factor there's no odor that's any good for it so it needs to be composted so can compost wood but wood by itself takes forever to compost so we need to put that with some other things and that's what we're hoping to accomplish um by [1:17:41] doing some of these transitional things and getting some of these permits so we can take in some of the yard waste some of the other things that we need to fuel the fire for the compost and in turn keep our wood business going and all the other businesses is function the way we want them to [1:18:22] **Bob Dunham**: then anything think you'd sell compost yeah Scots had already told us they'll buy everything we got Scots is a their company right there they want to do everything local they want to buy us from as many local vendors as they can so Scots is our number one target [1:18:26] **Mayor Luke Hellier**: so one of the thing is it questions one of the things that I people have asked me after seeing the proposal on it is can you talk about the Odor Control for compost and food because I think that's a major concern is you can imagine is and as when we [1:18:26] were talking about Minnesota bio energy which now is on the shelf that was a major concern of the council about how the odor stuff is controlled because there's obviously there's I'd love to hear from you you know about that [1:18:50] **Mike Grant**: yeah I can talk about if we want to switch to the next slide in the new site plan because you hear food and composting I get it people get very nervous and the one thing that's very different about the setup and the way the D are doing it is that they're not really composting food there's a small byproduct of food that would contain a little bit of food they're not doing meat they're not doing Dairy they're not doing fast food restaurant waste some of the stuff that [1:19:11] I've worked on with these composting facilities are literally going to the restaurants and taking that waste and composting that's where you run the high risk of smell and the biggest way to get rid of smell in composting is you need a carbon Source in wood chips what are the Dunhams really doing they got all the wood chips in the world already coming in because they're making their own so that helps and that's how you combine with the odor but what they're doing with the food depackaging is they're taking the spoiled vegetables and fruit from the grocery stores in the bad strawberry packages to the bad canned foods they're taking the solid product making it a food product for the animals the liquid is what they're [1:19:57] really using to help speed up the compost because you need to keep proper moisture and you need to keep that food to mass ratio balanced leaves grass and Wood Products that's how you accelerate it to get it into the compost that you need so [1:20:11] **Councilmember Michelle Volk**: is the compost open air or [1:20:13] **Mike Grant**: it's open air on a pile it's a technology of irration yeah so you're similar to what the smsc used at the midw tribe they had more or less air injection through the sides and now we have the the Le the pro we don't have the problem that they did where they didn't have enough wood and and those really what you think about it [1:20:43] is [1:20:43] **Bob Dunham**: I look at it as analogy like a grain bin grain bins use air to flow through the bin to keep the grain cooler so it doesn't heat up because the worst thing that happens in a grain B is get a little bit of wet grain and you start spoiling the whole bin see they farmers use air to dry that's what you would lay out in the compost as they build the piles there would be a section of tubes laid out with hands it would help put that air flow to keep that smell down and the odor down you start watching temperatures on that and you monitor the temperatures and then you use wood to cover that pile this submerge the odors in and then you properly turn it as you keep that [1:21:29] mixture going and you monitor it all by temperature you mix it periodically add more wood to the top and that's how it decomposes quicker and then you move it on after it's a certain time the these are outdoor piles is this a year round operation [1:21:44] **Bob Dunham**: yes and you're smell in in a decomposing State your smell comes from that routing state right and that's a small period in time you're GNA you're going to pile the piles up you're going to smell anything right away and then you're going to hit this period of time where it's rotting it's decaying and that's the smell that you smell that obviously you'd mask with wood chips to start with but with the Iration you speed up that by three to four times at least that decomposing rate so now instead of it sitting there [1:22:14] rotting for 10 days or 14 days it's rotting for four days [1:22:30] **Councilmember Michelle Volk**: what about things like flies flies and that [1:22:33] **Mike Grant**: without a large portion of food in there with normal Gras know really I look at this as it's like a lot of municipals have as their yard waste disposal this is how it h this is kind of the same workings of it it's the same principles it's the same everything it's just that they have a liquid byproduct of food that they're using instead of just waiting for natural range fly control in that it's very minimal in these settings if operated correctly and that's the key with all composting is to operate it correctly and where I've seen [1:22:59] most of the issues is when they bring in the other restaurant waste or the the meat the cheese the dairy type products that gets out of hand really quickly you really have to sit there and really monitor it quickly uh the decomposing process taking four or five days you're really not going to be smelling that process because it's accelerated and as they're watching the temperature you mix it up and keep it going [1:23:26] **Mayor Luke Hellier**: guys talk a little bit about the process they you go through for permitting from PCA [1:23:36] **Mike Grant**: PCA process um PCA process is a long process because they only look at this and that's the one thing we want to clarify with you is [1:23:44] the PCA has one category well they have two it's either yard waste or it's what they called Municipal Solid Source separated Municipal Solid Waste so it sounds like oh boy you can compost everything but as you do the permit it's very restricted of okay here's only the products we're going to take here's all we W compost and that's laid out so we no meat no Dairy so yeah so you couldn't get a permit and then in five years say oh we're gonna without going through another permit process you got to redo that and it's pretty much like doing a full Environmental to go through the process with them uh the compost pad will be on [1:24:30] asphalt it will be protecting groundw uh all the runoff water from the compost area will be collected and held until it can be tested to get rid of or reused on site one of the two uh it's very regul [1:24:52] **Bob Dunham**: the reason why we can't take the meats and the dairies also is some of this actually gets fed to the last and because of the M million protein issues from the FP you don't want the Mad Cow and we we don't want to be starting that stuff so there's some high regulations that we have to follow and because the compost is going to Scots with using yard waste and wood chips it's much easier to meet the [1:25:15] criteria for it otherwise you pretty much have to do a pasteurization process on it afterwards if you introduce much more than yard waste because when you really think about what they're doing it's no more than a resident what they would do with their vegetable garden of the excess vegetables in the in the back corner of the garden [1:25:22] **Councilmember Michelle Volk**: the processing and the food to packaging that's inside though the boy packaging [1:25:31] **Bob Dunham**: is all inside is C is currently inside in the other building or the new one would be also I guess new one would also be in much larger right now right now we're on a smaller building smaller scale so on the larger building what we'd do is we would actually be getting truckloads [1:26:00] of product in on palets is usually what happens is then we have the pallets at the end that we have to find a home for there we go um and then those pallets will be set into staging areas and then we will actually do a blend based on the type of material that we'll need [1:26:40] **Councilmember Michelle Volk**: how many people work here or will I mean are we going to add jobs [1:26:46] **Bob Dunham**: well I sure we're going to add jobs we used to only run about six people there right now we're up to almost 30 [1:26:54] **Councilmember Michelle Volk**: are the nails and paging Plastics and all that REM cool [1:26:58] **Bob Dunham**: so depending depending upon what job which which place you're talking about in the wood recycling um obviously [1:26:48] everything we come in pallets all got Nails in them so the machines take care of all that they'll run through the first machine that one will catch probably about 90 95% of the nails and then we cross it over two more magnets before it gets to the Hammer M to catch the other 5% um the food to packaging and on the wood side if we get debris in there that we don't want whether it be plastic anything like that I have a group of guys there's three guys that handle everything on the intake side so they go through every load that gets dropped off there with skid loaders and grapples and they'll go through it basically using this grapple on the machine like it's their hand um and grab everything and move it and touch it and look at it to make sure if there's anything in there that's not supposed to be there and I have a couple guys on site that are just labor and then they'll pick it all out [1:27:34] and throw in the garbage so right there on the wood recycling side of things we're probably really close to about a 955 percentage on recycling so we'll recycle 95% of everything we dump off there in a day and we could dump off close to 200 tons of wood in a day and 5% of that will be or less will be thrown and then a landf now if you're familiar with the state hierarchy and the level of what they're doing a master plan by 20 2030 we're supposed to recycle up to 70% all of this would have been landfilled okay and if we're at 95 to 98% we're recycling the wood we're recycling the metal recycling the food waste the little residual that we have we have had invitations now for someone [1:28:20] to actually use it as a fuel to burn for energy and cardboard too we see a lot of card and the cardboard there we go sorry [1:28:43] **Councilmember Dan Wolter**: are you restricted to pallets or if someone was remodeling a deck or had Emerald ashb need to chop down a tree I mean are there other wood products that you would be able to throw into this process [1:28:58] **Bob Dunham**: you know as far as the deck thing it then goes into the stain how much stain has been on it all that kind of stuff that's something that we would just kind of look at and judge by ey old green treated lumber it's got too many things in it from mahide different things like that we don't we can't grind any of that turn into animal vetting um the newer green treated lumber and [1:29:05] apples probably got more from Malahide in it than the 2x4 that's 8 feet long to be honest with you so they do they have a much better process on a green treated board now than they used to have um so whenever we get into those older things older decks older fences older things like that some of it unfortunately it just has to be landfill um there just isn't anything else you can do with it there's not another thing for it but that's the nice position that we're in is we have relationships with all these places equipment that goes to all these places so somebody can come to our place if they drove 15 miles to get there and they're like oh shoot I really needed to get this out of here well I can still take care of it it just might not be a bag of saus the worse might not be laying on it later but I can still [1:29:52] accommodate to beat that's what a permit's for a permit's going to Define based on the npca of what we want to take and what we can take we have the abundance of all this good wood the bad wood let the landfills take that um just because we don't want that we we want don't want to make the the horses and the cows and have you sick we want to deal with the Good Wood um but a lot of things people might not know the difference and that's why rather than somebody look at an old cater fence right you look at an old seater fence and it's like yeah this thing looks terrible you never treated it you never did anything to it and when I break it open it's still nice I mean I can use that even if it wasn't going to make bedding I could use it for compost so rather than somebody that's not educated [1:30:37] in it make the choice and say well I'm just going to haul to the landfill because this fence looks like crap that's not true I would rather you brought it to me so I could look at it and I can tell you it's got to go to the landfill by all means I'll take it there but it's a last resor if I can use it for anything else I mean if it's just exterior of it that looks stained or rotted and I break it open it's cleaning the inside we're going to use it for bedding and we're going to use it for boiler fuel those are the two main things if I can't use it for that then it'll go to the compost line but anything going to the landfill is the absolute Last Resort where a lot of times the average homeowner might not know you know they might they might not know what to do with it by looking at it and there's not a lot of literature out there and there's not a lot of specifics and there's not a lot of people that do what I do so better out being in a position where they come to me so I can get that [1:31:26] **Mayor Luke Hellier**: so does does this project help the county meet its waste reduction goals like do we get credit how does that work [1:31:40] **Bob Dunham**: they're waiting for you I don't know how that works for the score part of it and all that but I that is something to ask the county all I know is they're very excited to to get things going I owe I owe Tina a um application that we've actually submitted to the county for the interim use to bring some yard waste in so we can handle a little bit so we can get the stuff we have right now on the land to Scots that's part of what we're cuz we we had some right we brought in some material we had our wood we had our old trees and different things that we gr up we got a few different Grinders and we took in some grass clippings leaves paper bags that kind of stuff we [1:32:13] didn't have the permit for it so we got our hand slap pretty hard but in that structure we created a compost that Scott tested tested it as wanted to use it all we took it all down there to them we ran through that whole product that we had with the grass and leaves mixed with it and now we were only forced with our our sawdust our wood mixture um some of the other you know leftover liquids and other things that we had but we didn't have the grass and leaves it's too dense took that down to them and it doesn't work [1:32:38] **Tina Goodroad**: I would say Mar that is something that we would include as part of the IEP application to help get more support from count and show you with that [1:32:48] **Councilmember Michelle Volk**: well You'make a lot of resin happy with yard waste because there's nowhere to bring trees you know [1:33:02] I mean other than going toan [1:33:05] **Bob Dunham**: you can in a composting type facility because when you grind those trees up and you compost them it Cooks all that out of there there's very specific timing on all that when and my son Max has actually handled a lot of that with Scots as far as the timing the temperature how long flip it how long and that will kill everything that's in it and you know just don't quote me on the numbers but I'm pretty sure from what he's told me it's 131 degrees for over four days so that would be helpful know [1:33:45] **Mayor Luke Hellier**: because we actually had a guy at our last meeting ask how to get rid of [1:33:47] his operated well these compost piles in the winter won't have St yeah I believe that [1:33:51] **Mayor Luke Hellier**: so what's been asked today basically is to give them a permit for two years with the assumption that this other project is going to move forward but that other project I want to make sure that it's got public hearings we're getting neighbor feedback and all that stuff because it's not it doesn't it's not a cart launch approval [1:34:16] **Tina Goodroad**: right what I'm seeing is text Amendment you can't issue an i for something that's not listening so we need a text amend wild is in the i1 as an intern use both the composting as well as the food packaging [1:34:32] because that's just you know unless we qualify that as processing of a product it's a little bit of a stretch in my mind have those two under iups for the north then work through detailed site plans plating of this property and everything that it's going to take to develop the South and so have that I tied to entice them to move quickly for the property on sou that's how I'm doing it so I didn't want to have them spend more money than this site plan and go down the road if this wasn't if you didn't have an appetite for figuring out how these uses could continue to exist in a new way but we do need to get them under some City [1:35:17] regulation on the North side for them to be able to I want to get them just some legal standing North Side so they can go and get the County permits [1:35:36] **Mayor Luke Hellier**: is the South Side in the township or the city [1:35:40] **Tina Goodroad**: it's in the city but it's not in the m so that would be a a staging change that we could do as well [1:35:48] **Councilmember Joshua Lee**: what would be your time frame for building out on the south side [1:35:54] **Bob Dunham**: we're hoping to start next spring for the wood recycling portion of it that's that is the part where we are exploding with what we're doing right now compared to what we started with I can tell that is the part that we can when I drove by the other day but that is the part where where we can benefit the most from restructure from different buildings different equipment um to get everything [1:36:05] inside which helps us you guys don't got to look at it I don't got to hear about you guys looking at it and I get to keep it under from ring so it's beneficial for everybody that that building's going to handle that exess volume 10 10 so that that would be our goal is that we sure to develop that [1:36:31] **Councilmember Michelle Volk**: I think that's all Do Me by that I live across the street so I just I can I notice the influx in pet from [1:36:50] **Bob Dunham**: so what's really interesting about all of that is that there isn't anybody that's processing that and um Anderson Windows has more that they want to bring us but we don't want you know we're we're just we want to get through this process [1:37:07] **Councilmember Joshua Lee**: does any company just recycle a pallet to use it again or is it's all they're all built [1:37:16] **Bob Dunham**: almost every almost every pallet shop in the Twin Cities recycles pallets so they will fix all pallets there's probably only two facilities in in the metro area that'll build a new pallet but they're very picky on the size and where it comes from okay [1:37:37] **Councilmember Joshua Lee**: so my only thought though about this whole plan because I think from a macro level benefits I think are great in a lot of different ways um it's just more so fully transitioned is this the the right transition from an OP use to this industrial use right next door and is that going to create issues in the future with an office building across the street [1:38:09] **Tina Goodroad**: yeah um you know we have a office building that's uh probably going across on the nor side in full view of the pallets so we've got a company looking I don't have a map that zooms out further but if you can imagine County Road 70 the angle juner triangle pieces probably the next couple ofs [1:38:20] **Councilmember Joshua Lee**: is that Trinity's property sou of trity [1:38:22] **Tina Goodroad**: South I don't think it is a big impediment um I think a lot of folks that are going to do my goal and Bob [1:38:24] knows this is my goal is all of this gets moved and he sells at North it's Prime real estate we've had he's had multiple offers but he cannot accept those offers because he has so many viable businesses that he needs to move go back to the other side that um and so I believe that if things are more controlled from an outdoor storage standpoint that distribution facilities or other indust uses on the north side of 25 aren't going to be it's not going to hamper that development so whether this is just a concept but we've gone through like 20 Concepts to try to make this work with a Little Help from Bob um but you'll you'll have this burned all the way around we're going to have an area for actually people to drop off wood and to pick up hardscapes so we're we're going to make this a very nice clean everything that you see for the most part that looks like parking is going to be asphalt so it it's it's going to be pristine [1:39:41] **Councilmember Joshua Lee**: going be asphalt [1:39:42] **Tina Goodroad**: but the other benefit is it will all be screen and the Grandeur will be inside um right now they're somewhat inside somewhat outside um that was some of the regulations on the buildings when we were doing that as we couldn't have them in a Clos structure um since then technology there's been this creation of hoop sheds so this will allow us to house the wood and the grinder into the same thing we've also learned plenty of stuff over the years and dust collection and other systems that we can put into place with the adequate placement of the buildings and the Grinders and everything else rather than trying to build off of what we've been building off of for 40 years [1:40:24] **Councilmember Joshua Lee**: can you anticipate how 215 would be used or changed in terms of TR traffic access truckloads coming in and then potential op users [1:40:37] **Tina Goodroad**: because right now I think there's an access right to 7 well we know the County's not giving anybody more any more access [Music] I we've already talked to these gentlemen um for both sides of this street as well as ol Holdings in the property um to the West about um working with the city on a special assessment 215th Street has to be completely rebuilt sewer and water has to be expanded so that is part of the story with this movement and the development of this 40 acres um in hopefully these Property Owners coming into agreement and enter into that special assessment some as development occurs on this site will have to be paid and that payment can be spread across um once he sells the north 70 that assessment would be paid off with that um so all of that is part of this story I just didn't want to overly complicate the specific ask today but there's a lot of benefit if we can um work with these gentlemen on moving these businesses um to the greater area of 215 street [1:41:43] **Mayor Luke Hellier**: so I'm hearing no okay that's good that's what we needed so gentlemen I'll be in touch figure out the next thank [1:41:58] everybody [1:41:59] **Mayor Luke Hellier**: all right let's talk about pot [1:42:10] compis cannabis [1:42:12] **Tina Goodroad**: yeah yes we literally did yes is that how you're gonna end the meeting yeah yeah stay add another we got a whole bunch of sampling for our or low do sales y all right um [1:42:13] **Tina Goodroad**: thank you mayor members of council I just wanted to Circle back on this topic um for a couple of reasons um as you know legalization happened last May um during this last legislative session there was additional changes that um pre-approval for um certain social Equity applicants um are going to be made this summer and out of that um some of those licenses including the micro business business cultivator retailer wholesaler [1:42:56] transporter testing and delivery service those licenses are going to be issued based on a certain number um that the state has for each of those different categories so we may or may not have interest from somebody wanting to operate one of these businesses in L them the only actual activity that can get started before next year would be the cultivation and the reason why they're doing that is product that sold in a dispensary in Minnesota has to be grown in Minnesota so they really need to um get that growing of the plant started and so we need to then as a city start getting this implemented into our zoning ordinances so we all know that ocm will be responsible for the actual licensing we're responsible for the registration and state statute requires that a city issue one registration per 12,500 people and that amounts to six um of the retail registrations that's our minimum um in Lake though and one of the things that I want to talk to you about tonight is whether or not you want to cap that so have six or have nine or have 10 but do you want to consider any kind of a cap on those licenses um so let's step back for one second I mentioned um a couple of the different license types and I just want to define those a little bit more [1:44:27] because I want you to think about that in terms of the discussion on the cap the micro business this is a unique one this license allows cultivation and allows someone to turn that into a product sell that product and even use that product on the site so when you think of a micro business think of a brewery it's the same kind of an experience you would have at a brewery and it is become the most popular of the pre-application screening it was the most popular of the application types because from a startup standpoint it's one of the most affordable and then end generate Revenue generating for somebody so think about that so a micro [1:45:13] business can basically [1:45:30] **Mayor Luke Hellier**: yeah but would that take up one of our six retails [1:45:33] **Tina Goodroad**: does that's bring it up so m can have one retail license the meso business is is strictly cultivation and creating or manufacturing the product but a license holder of a meso business license is also allowed three retail licenses [1:45:49] **Mayor Luke Hellier**: like like other locations [1:45:51] **Tina Goodroad**: yes those three retail licenses may not occur in leville okay they may have one in Lakeville and two somewhere else so when you of a cap what some cities are doing is if you have like a cap of six like we have allowing five or six of the true [1:46:00] retail dispensary type and then two or three of the micro so that we're not flooding ourselves with potential licenses and in a sense overdoing it in Lakeville but we are considering both the true traditional dispensary and the micro business because we might end up with a couple of those it might making sense you [1:46:25] **Councilmember Michelle Volk**: question is it still true that uh my inter saying before was like Dakota County has a certain number of licenses and once Dakota County reached their number we cut it off then we weren't eligible [1:46:38] **Tina Goodroad**: so it's by City And by count yep so we have to at least at the start have our minimum which we know is six but one of [1:46:45] the things that a lot of committees are starting now that we have to get this ordinance working in the books starting to have that conversation about we want to have some kind of a c and so that's why I wanted to make sure you understood those different license types Egan has been a little bit ahead of us in this conversation I talked to somebody um who's been talk you know kind of assisting a lot of communities and they are doing five or six of the true dispensary and you know three or four of the micro they're playing around with those numbers for a cap so that's something that we should talk about tonight the other thing is we talked in January about the distance limitations and if you could put the map up um at the conclusion of that conversation we decide you decided you were most [1:47:32] interested in limiting it meaning not having broad limits we don't on our liquor store and that was kind of the conversational logic but you did suggest 500 feet from schools and so this is that map it was shared after the meeting I just wanted to bring this back and find out if you still wanted to have some kind of limitation what statute allows just to remind you is 1,000 feet from a school 500 feet from a daycare Residential Treatment Facility or a traction within a public park that attracts minors at the end of it you wanted to go with 500 feet from a school so that's the second thing I would like some confirmation on and then finally zoning we have to figure out um with all the different license types can you go [1:48:18] back to the table um how we want to Zone those and then if we want them to be a permitted or conditional use so when we so on the left hand side are all the different license types straight on statute that we have to Grapple with and so if you look at the top we've got cannabis U micro and Mezo I'm proposing this is just staff proposal is looking at those in the industrial district like any other processing of a product and as a permitted use the question mark that I have is that op District do we want to allow these kinds of businesses in the op District so again that's that purple area there only maping here that's around the denim property um the area [1:49:04] has shrunk I will say that enough ordinance Amendments have happened in the op District that it does mirror pretty closely to i1 in terms of uses the only difference in the op district is really design standards so in my mind processing in our product is inside is no different whether it's sweet Harvest honey or whether it's canis so I propose permitted across the board in those districts for anything that is related to the growing um the manufacturing the creation of the product um so we can start there and just kind of deal with the industrial ones all right [1:49:46] **Mayor Luke Hellier**: can I back up the so yeah I don't want to forget this I'm not as Keen about op because [1:49:50] there's I feel like I remember earlier on Council like the land next to King Park is an op and then we rezoned it for residential and daycare something and I wouldn't want a uh cannabis business right there coruption police station you know it's probably the best place to have one right but that's just an example at top of my mind where I'd say nope that's not a permitted use in that spot um especially if we're not going to have limits within Parks so I'd have to know way more information about the op zoning the other uh thing and we can have this discussion [1:50:30] **Mayor Luke Hellier**: I don't think that I want to have six retail and then four micro whatever I just say we'll have six retail and it doesn't matter if it's a micro or true dispensary whatever fills [1:50:38] up the six that's that's the six and would you propose a cap then [1:50:46] **Tina Goodroad**: yep [1:50:47] **Mayor Luke Hellier**: with that mindset a cap on six [1:51:09] **Councilmember Michelle Volk**: I I want what is our purpose for liting and not letting the market limit itself exactly because I already think that um you know I I think about how close we are to Scot County for instance you think about Credit River and Prior Lake you know they each Prior Lake has to have two credit River has to have one that's a pretty close market so do we really need to have nine within those three cities [1:51:23] probably not either fail or I mean you know I guess I look at it is the [1:52:10] **Mayor Luke Hellier**: two things I mean the city in 1934 decided to be a municipal City for liquor so we do regulate the amount of licenses [1:52:17] **Councilmember Michelle Volk**: I also I don't really drink liquor so I've never at a liquor store but I would never limit the number of liquid stores as long as the business could uh sustain itself right and I and that's ofate I'm not going to participate I'm not going to be going to a cannabis bar because that's just not me but I but that's it's not my call because of my values to determine whether or not somebody should operate a business that doesn't match my them [1:53:05] **Councilmember Dan Wolter**: and the other is all of our neighboring cities Burnsville has a maximum for sure [1:53:08] **Councilmember Michelle Volk**: I think I'm just I remember there was a big fight about minona because towan wanted to buy mgm's liquor license or something so a lot of cities limit liquor license for liquor stores maybe it wasn't a very good example for own our own lior but let's just go to the point of yeah you know it's just it's the point of I don't we don't you're right we don't limit the number of bars that are um retail establishments they don't Li [1:52:56] limit the number of restaurants as long as it fits in the area [1:53:23] **Councilmember Joshua Lee**: that right we don't tell what the restaurant what food Des serve but we don't [1:53:26] **Councilmember Dan Wolter**: so for the meso micro business for instance my assumption is you can retail and take it off site it doesn't have to be consumed there we don't allow off sale for liquor stores in Lakeville so you can't walk into babes and buy a sixpack but you could sometime could right but you could go into a micro cannabis business so basically to me it's just a way for to get you know that's why I'm [1:54:10] **Justin Miller**: do we have the ability to limit other specific kinds of businesses indirectly Authority in law on this we [1:54:15] do uh we limit the number of waste dolls some cities do limit the number of Li that that aren't Municipal liquor some cities do that had a space like a distance I think they but some cities have a hard cap number as well [1:54:34] **Tina Goodroad**: did you say Egan is the only one that's addressan has had is one city near us that has started to have that conversation on creating a cap higher than their minimum and spreading that cap out so having you know distinguishing between the two retail dispensary and the micro I don't know what other cities have done um we're all scrambling right [1:54:55] everybody [1:55:04] **Councilmember John Bermel**: well I have to say I Michelle I generally agree philosophically with where you're at on that I my concern is this is a new law um and I mean I'm really concerned with some of their licensing that they're giving preference to people with drug offenses and things like that that I I think are going to be challenges so I I mean I I would cap is something that's Revisited [1:55:40] **Mayor Luke Hellier**: well there's nothing yeah there's nothing to say if we have demand for four extra businesses there's nothing for us to say we can lift the cap down the road this is I'm just I'm at a point you know and I I didn't advocate for um the total ban when the low do stuff came out because I figured we could license it but I don't feel like that the legislature knows what [1:55:17] they got into when they wrote the Bill last year which is why they had so many fixes this year that I think I would like to exert as much oversight as we can now and then we learn some of the next two to four years we can relax it if we need to be [1:56:01] **Councilmember Michelle Volk**: What's happen somebody's contact City there already let's say the cap six and they already six whatever they are they're going to contact the City of Lake L say we have a cap and we're at six and then they're so you're never going to know what the demand is because staff is going to say we're at our cut off so lifting the cap because of demand we're not going to hear it staff's going to have the [1:56:03] directive to say they [1:56:06] **Mayor Luke Hellier**: I think we would know I mean if sure somebody in Tina's office yeah we had six people reach out to us or whatever I mean we [1:56:15] **Councilmember Joshua Lee**: what is the the other part that I don't understand fully is the state lottery system so it sounds like they're restricting right liting them so there's UHS yeah there uh the the lottery and then you get points on the Lotter you have to you have to meet all these thresholds to get into the lottery I guess is [1:56:39] **Tina Goodroad**: these application process for the Lotter opening through August across all these different license types again only those [1:56:48] related to Growing can really start and the reason for that again is because of product they'll be operating under medical cultivation rules because ocm is still completing the rules so until ocm has all of the rules completed for all of the other license types they're not going to be actually issuing and allowing somebody to open up know and so our ordinance you know as the mayor kind of said this is going to get revised the reason reason why cities are feeling you know under the gun is you know we may have someone who wants to open a cultivation facility we have to have the Zoning for that and so that is why we're doing this now but I'm [1:57:35] going to guess we're probably going to edit this thing you know by probably summer next year once all the em rules come out so this is kind of a type of ordinance that we're going to be picking at a couple of times before we have a right [1:58:04] **Mayor Luke Hellier**: that makes sense [1:58:15] **Councilmember John Bermel**: John here yeah I I just I agreed with the general concept of the free market I say that all the time but the problem is this the state's already messed with the market they've said you've got to allow this they've got all these I mean I'm Tina how you have strained this out in your head I'm impressed [1:58:36] **Tina Goodroad**: well I read the whole statute yeah [1:58:38] **Councilmember John Bermel**: talk to a lot of people yeah but what I'm saying is is there's there's a lot of incentives um there's a lot of [1:58:23] political pushing for a certain market so I don't think this is a free market thing right now um so if it were just a totally open free market like Hey we're legalizing marijuana we have these different types of licenses have at it I'd be going yeah why put a restriction but right now I I think that there I think that there's just so much that's not answered that I would just suggest going with the recommendation of what the state says and capping that um and in letting I'm open to if there's a demand let's let's look at that and and do more but I I don't think the free market's at play here at all quite honestly [1:59:15] **Councilmember Joshua Lee**: I think the uh I think this [1:59:11] is um something that there's just a lot of regulations where um it isn't just an open free market [1:59:34] **Mayor Luke Hellier**: can you go back to the zoning man it's the distance map or the distance map sorry I mean okay why is there shading around mixed up [1:59:45] **Tina Goodroad**: it's UCA oh that's UCA yeah um [1:59:52] **Tina Goodroad**: so one of the the questions you had on here we can go back to the the max I guess I don't know if we I guess are the three of us to say that we only want to have six I guess I don't [1:59:56] really [1:59:58] **Mayor Luke Hellier**: I would supportx begin yeah [2:00:03] **Councilmember John Bermel**: okay I I'm there [2:00:06] **Councilmember Dan Wolter**: that's not my ultimate and Y I get it I'm open to letting this in but I would support [2:00:13] **Mayor Luke Hellier**: okay um this M1 and two the the 35 and [2:00:27] **Councilmember Dan Wolter**: is that is that um CMU is that where you when you say M1 is that quarter mixed use [2:00:36] **Tina Goodroad**: yeah um so if we do a cup what is our ability to just not allow it because I mean there's just so much chance on what's going to be developed in these areas because it's so broad with the residential and [2:00:41] Commercial like [2:00:46] **Justin Miller**: so what if it's a se you can't prohibit it right you'd have to specifically say that in the Z right not [2:00:54] **Mayor Luke Hellier**: so again I'm less I'm less interested in opening up just because we we we developed that in the mind of trying to accelerate some commercial with residential and I don't know how excited an apartment um developer is going to be with having a cannabis business next door yeah and I'm just throwing it out there because it's one of the districts that allows retail but we don't I'm not pushing no I get I I see the question mark I'm just saying to be M1 or again that's a thing we could learn down the road maybe I'm completely a fdy dudy in [2:01:28] five years it's going to be just like dog washes in apartments they're going to have pod dispensers I have no idea [2:01:43] **Tina Goodroad**: what about the thought going back to the use table um of the cultivation the manufacturing the wholesaling of that in i1 and I2 as permitted use [2:01:55] **Mayor Luke Hellier**: I'm okay with i1 and I2 I just I'm I'm cautious about the op okay um both indoor and outdoor with yeah [2:02:13] **Tina Goodroad**: any thought I haven't been asked yet I've been dealing with one company so far that's been expressed interest in cultivation [2:02:13] interior [2:02:22] **Councilmember Dan Wolter**: what do you think of exterior it's allowed up to two acres I've talked to uh like a half a dozen people who are entrepreneurs in the space and there's just they say there's way too many um variables with outdoor [2:02:44] **Councilmember Michelle Volk**: I was wondering if we could would we be able to require a certain amount of fencing or something there [2:02:49] **Tina Goodroad**: I think there is in state law right yeah that's part of state law La yeah ules and state law are going to include that we don't have to because they have to go through all that licensing and Pro that before they get the license [2:03:01] **Tina Goodroad**: is the security um Odor Control when you're talking about um retail store or a [2:03:01] manufacturing facility um all of that is going to be built into the rules as well as statute [2:03:15] **Councilmember Michelle Volk**: is there this the outdoor and you're is there a smell to it [2:03:19] **Tina Goodroad**: oh yeah [2:03:20] **Justin Miller**: oh yeah [2:03:22] **Councilmember Michelle Volk**: okay sorry [2:03:25] **Justin Miller**: all stages yeah [2:03:27] **Mayor Luke Hellier**: so we can limit outdoor or we can't just where it is or [2:03:31] **Tina Goodroad**: we do not have to allow outoor [2:03:40] **Councilmember Dan Wolter**: I'd say then I wouldn't do it I don't know how you do the Odor Control I just I don't know how it [2:03:50] happened for that to [Music] Growing growing Outdoors to me some in a sense yes [2:04:12] **Justin Miller**: yes what is is Paul's are they inside or outside do we know I don't think they're in the city they're in the township but they're not in the city but I just I've never been to their site so I don't know how they I don't know but I think I think about baldi's also in the township but I think his facilities out said so maybe people are doing it I don't know but [2:04:16] **Councilmember John Bermel**: just seems like way too many variables to have yeah I I'm okay with the no outdoor [2:04:35] cultivation [2:04:36] **Tina Goodroad**: I'm not ready for that yet and then the retail portion do you see that being a cup or a permitted use our tobacco stores are liquor stores are all considered just retail they fall under retail um as a permitted use [2:04:55] **Mayor Luke Hellier**: when we talked about this in January the direction was for cup so I'm just bringing that back and determining where you see this my take is and I welcome other people I would at least for in the early stages to have it just so then we're knowing I can't tell how many times people are like oh did you know this business switch I'm like well no we don't if it's a permitted use they don't like notify the city that it's not Camping World now it's Keystone like [2:05:21] just shows up and so because I think there's just so much Unknown about cannabis I think I would really like to know that it's coming in ahead of time [2:05:32] **Tina Goodroad**: so the C JIS they have to come back for instead of if it was just pered use they' be allowed to S it to and [2:05:43] **Justin Miller**: this part either way they would have to renew the get a new license okay and go through the state and then part of the state process is contacting us [2:05:54] **Tina Goodroad**: we give the nod that yep it would conform we' need a cup that'd have to go through that process first and then in the end we register [2:06:06] **Mayor Luke Hellier**: so then the so there [2:06:06] is knowledge tracking along and remember a cup does run with the land so once it's approved it runs with the land so that so it could switch and we wouldn't we would know because the state would because they had to go through the state LIC okay well then less concerned I guess and the reason why I'm asking all these questions these are good yeah um [2:06:54] **Tina Goodroad**: ultimately what we need to do and I'm gonna attempt to have the public hearing for the zoning portion in on August 22nd and then what will come to you in September will obviously be that zone [2:06:51] section that will you know list all the different districts and all license types but then also the city code portion that will handle the registration and so that model has been developed by ocm um so City we're all reviewing that EDI it as it fits our code but like we have a section in the city code for liquor license and we already do right now for the hemp products We'll add to that City Cod portion this model ordinance the model ordinance will cover them everything related to the registration there'll be some zoning language in there basically stating which district so that if someone just looks at that portion of the code and doesn't look in zoning they'll see where [2:07:36] it's allowed but we have to piggyback that and put it all into the zoning or so you'll end up seeing two different sections um before you in September the Planning Commission will just deal with the city the zoning code portion [2:08:08] **Councilmember Dan Wolter**: I also don't think I would have a problem with the Canabis delivery service in an OP there's a question [2:08:16] **Tina Goodroad**: there's a question mark on that one not wait no [2:08:20] **Justin Miller**: uh it's like uh Uber for pot yeah [2:08:23] **Mayor Luke Hellier**: you get an app and you say I want pot delivered to my house and they will drive to from one facility pick it up [2:08:23] and [2:08:24] **Councilmember Joshua Lee**: Uber Eats I guess is better [2:08:26] **Justin Miller**: so the the pot Dash or whatever call yeah pot Dash [2:09:12] **Councilmember Dan Wolter**: so the business would be in the op business would be in op and and they have to meet Odor Control on their state license and stuff so we wouldn't it wouldn't it's just a warehouse It's a warehouse with you know it's an Amazon of cars coming and going yeah right [2:09:27] **Mayor Luke Hellier**: so that one i' be fine with only one you would like micro correct [2:09:32] **Tina Goodroad**: for the same reasons I just don't the manufacturing is probably okay [2:09:37] **Councilmember Dan Wolter**: I'd say the manufacturing is [2:09:09] probably okay in the op it's just the the the micro business and meso [2:09:44] **Tina Goodroad**: well meso I guess Meo is basically is it on site though is retail license [2:09:50] **Justin Miller**: but is a retail license on site then [2:09:53] **Mayor Luke Hellier**: meso I probably am fine with it's the micro and now because that's on-site right like I guess [2:09:55] **Councilmember Dan Wolter**: yeah Dan's point is non customer facing businesses I'm comfortable [Music] with onsite that's the differ [2:10:07] **Justin Miller**: Mees mes has three [2:10:10] **Mayor Luke Hellier**: yeah but somewhere [2:09:55] else so you could actually have the meeso yeah kind of think of your meso maybe as your headquarters [2:10:17] **Councilmember Dan Wolter**: sure yeah and maybe some growing operation there yeah [2:10:21] **Justin Miller**: meso is growing in manufacturing and can't sell it on site yep okay got it it's the big dock that's the big [2:10:37] **Tina Goodroad**: you that's the big and that's when we agreed to indor yeah [2:10:41] **Tina Goodroad**: think of that as your sweet Harvest [2:10:44] **Justin Miller**: yeah they're growing at their their crect they're just not selling oper right they can have free license to sell it elsewhere elsewhere or here they're moving it to their stores it's and do we not have low potency in any op now I'm just find that very hard to believe that [2:10:41] that's really [2:10:57] **Tina Goodroad**: so we don't have any like vape shops or anything that are in the op we don't allow much retail on that op at all okay stat [2:11:06] **Tina Goodroad**: I did learn a little bit more about growing today um One retail store can support 3,000 square feet of canopy so you see how the micro mzo and cultivator all have limits on the amount of plant canopy um so one store supports about 3,000 square feet of canopy crops turn over about [2:11:24] **Councilmember John Bermel**: canopy is that a [2:11:26] **Tina Goodroad**: means the plants so imagine tables filled with plants it's that canopy coverage limit that you're under with these different [2:11:26] license types and then the plant product the buds um or flowers you call them they get about five crops a year so if a cultivation facility opens up and they have 30,000 square fet of plant canopy they're turning that over for five crops of you to then Supply or either create manufactured product themselves or sell their plant product to other businesses to manufacture [2:11:58] **Councilmember Joshua Lee**: so outdoors in it's a very fast gr plant [2:12:02] **Tina Goodroad**: what else do they I've learned a lot we I've been doing this I've been doing this for 30 years and I honestly tell you I never thought I'd [2:12:13] beting cannabis ordinances [2:12:44] **Councilmember Dan Wolter**: based on our customer facing thing then also the Cannabis combo business would not be permitted in customer face got [2:12:54] **Tina Goodroad**: do you all op or retail I mean obviously they have customers but retail I think that answers only my questions [2:13:04] **Mayor Luke Hellier**: where did we land on the distance 500 from schools right [2:13:08] **Tina Goodroad**: the only thing that's not on that map I don't think it has any impact but Southeast corner Depon High School order [2:13:17] **Councilmember Joshua Lee**: I don't think it gets into that [2:12:59] commercial Corridor [2:13:21] **Mayor Luke Hellier**: oh that C2 area I don't think it does even [2:13:25] **Tina Goodroad**: double check it no it won't [2:13:28] **Mayor Luke Hellier**: but then there's also that school church so this is just schools and not dayc carees [2:13:33] **Tina Goodroad**: right [2:13:34] **Councilmember Joshua Lee**: right because we thought the daycare is could be too transitory yeah [2:13:38] **Tina Goodroad**: we do have and what about um I you know the one that is uh mcaps on here by Behind Green Mill is that considered a school [2:13:54] **Justin Miller**: yeah oh the district office [2:13:57] **Mayor Luke Hellier**: no Maps is like to [2:14:00] **Justin Miller**: yeah there's a office building over by a hardware that houses which a joint they still there [2:13:44] there [2:14:09] **Tina Goodroad**: yeah we're Lakeville is not in it but it's just probibly Lake in Ros Maybe office yeah [2:14:13] **Tina Goodroad**: okay yeah it's it's I'll upate that okay thank you [2:14:15] **Councilmember Dan Wolter**: okay thank you [2:14:18] **Mayor Luke Hellier**: was the questions was [Music] it it just this time there'll be more [2:14:15] **Councilmember Dan Wolter**: the state's material was actually really good I thought they local government they're getting there [2:14:24] **Justin Miller**: it's been so I would have suspected that [2:14:26] **Tina Goodroad**: yeah the Minnesota um APA Minnesota Planning Association is who actually drafted the model ordinance because they were the ocm was beside themselves they had people in charge had never written any kind of Municipal ordinance or document [2:14:31] before so we we the planners as planner Geeks were able to um we had their attorney at our B part of that at our um what was that Metro cities or whatever mlc and [2:14:49] **Councilmember Dan Wolter**: I think she came from like Department of Education or something [2:14:53] **Tina Goodroad**: director is on the zoom with she just looks like she's she really doesn't want to be there this long I don't think so okay [2:15:10] **Mayor Luke Hellier**: items for future discussion I just had one uh I may have mentioned this I may have not I've had some businesses approach me about having the idea of Lakeville pursuing as part of our legislative priorities the social District which allows allowing for basically beer gardens in commercial spaces and so we'd have to we'd have to get approval from the state to allow it and then we'd have to have a tough conversation about where and all those type of things yeah well it's by it's by geography it's geography yeah but and I don't know if you know and I I don't know if it's like oh do we try it and do it just like ppro art festival Taste of Lakeville and see how it goes was before like opening the floodgates kind of thing so but we do have to get legislative approval to do it so what you call social call social District there's three CI their second and then still in sh [2:16:06] special legislation I think sh has it in two areas around Canary and downtown so you define once you get the legis you define your area and then come up with rules so then like the businesses who were selling be out of their front patio this year could actually legally do it instead of just be doing it at P but the way a lot of I mean I know you you buy a certain glass ltic cup and then you can go walk around that toown and you know there's probably a couple of businesses that don't want you in there with your drink but the majority do and downtown has a very very F very thriving retail area but you can't take your beer if you buy it in the tap room and then go sit at the patio of another participating place because they want you buying a drink sure so it's more of a benefit for the wondering around um Anoka is also on The Rum River you have a lot of trails you can walk on the trails I mean there's some benefit when they have outdoor concerts but you know I I don't know Krist and I talked about it when it started in an NOA I get it for the special events but on a daily basis I don't see a lot of people wandering around if they're drink I mean it kind of loses its appeal after but for events it certainly has benefits yeah holiday on Main I mean the [2:17:34] **Councilmember Dan Wolter**: like [2:17:38] **Mayor Luke Hellier**: so that was the only thing I so at some point we'll have to have that conversation if we want to pursue that [2:17:39] **Councilmember John Bermel**: I don't know if you any more thought to the about TR concerns they have we could have more conversation about it um I asked him to come back with me with companies that uh don't operate in Leal but would be willing to I I mean this is a conversation we had a couple councils ago and you know part of the reason we tried to narrow it to just the three days of service is to deal with that when I did talk to him he also said that um he thinks that he might have been incorrect on how many days it was in his neighborhood exactly think there was rules on there it's only two days in the neighborhood we usually hear about it if they don't we let them know and they they fix [2:18:24] **Councilmember Dan Wolter**: I think it was because of the fourth there [2:18:25] was like they get you know you get that extra data [2:18:29] **Councilmember Michelle Volk**: well I think the only other part that I I would need to verify these rates myself but companies charging less than half other cities I you know what I think I think the problem is is that he doesn't realize that over the last couple years all these rules and regulations have come into play and my garbage bill went from $35 a month to almost that 70 rate just because of all the you know rules on having to pick up recycling every weekly [2:19:11] having you know on fuel sear charges fuel [2:19:17] **Justin Miller**: exactly so I I don't think um it was any if you were to C contact his neighbor old neighbors and the old and wherever he lived he's going to find out their when up too because State and County rules [2:19:35] **Councilmember Joshua Lee**: do an intern that can do some research [2:19:38] **Mayor Luke Hellier**: I mean [2:19:42] **Councilmember Dan Wolter**: I I I say I shot mine own and I switch companies because now I can get a bigger yard waste can for the same price I mean recently all out they're all pry close like you said some offer better yard was some offer better else they all know each other charges [2:20:09] [2:20:09] **Councilmember Michelle Volk**: yeah um I was just wondering if we could do just a little bit a little bit different configuration in this roomy I really don't the reason I don't sit over there because I really don't want my back to the audience okay and so sometimes you know if I'm not even paying attention um you guys wouldn't know that some you know maybe they had a question or something if we could just angle it so that the mayor whever he sits or if we decide as a council to sit down here more in a you or something like that so that the council can actually see the people yeah that's confused and then maybe they can hear us better because when you guys have your backs to them [2:20:54] this is my observation only I could be wrong it seems to me that they're stretching themselves to hear sometimes what it is that you're saying because your voice is going in different direction [2:21:02] **Mayor Luke Hellier**: fair enough yeah we can experiment [2:21:05] **Mayor Luke Hellier**: any committee sit administrator updates [2:21:09] **Mayor Luke Hellier**: um the only thing I I had Regional Council of Mayors last month it was the joint mayor superintendent meeting um had some really good conversations about how um cities and school districts should think about if there's some potential overlap on legislative priorities so we'll kind of think through on if [2:21:41] there's a place where it makes sense for us to support theirs and and it really it came from organically last session when school districts uh supported cities when it came to housing stuff because it impacted them too and so I'll keep that in mind we tried they're still [2:22:11] trying as a school board we would have a meeting with them maybe once a year not always but there was never an official document that was given to them but it doesn't mean that that's changed but it also is good to be able to get their input on what we put together the other thing that the superintendent's asked for and I think we do a pretty good job of this but uh try to push harder um to let young people know about career opportunities in cities and not only just like to come in as like an Arenas person but thinking about finance and all this stuff like you can so I thought that was that was smart I think we do a lot of that but we could we can always do better at it I guess [2:22:56] **Mayor Luke Hellier**: uh with that I will take a motion to adjourn [2:23:02] all those in favor say I post we're thank you guys