Based on the context provided, here is the formatted transcript with speaker identifications. **Note:** Since the original text did not include timestamps for every line, placeholders have been used. Phonetic names from the raw transcript (e.g., "Kraus," "Jraich," "Stoa") have been corrected to match the provided official list where applicable. *** [00:00:00] **Mayor Charles Cadenhead:** All right. So, I'm going to open tonight's uh city council workshop, Wednesday, November 12th. And um I think our first agenda item is Highway 36 Lake Elmo Avenue project update with Mr. Andrew Gieson, Washington County Highway Department. [00:00:15] **Andrew Gieson (Washington County):** Well, good evening, mayor, uh, council members. My name is Andrew Gieson. I'm a project manager for Washington County. And as you indicated, tonight, uh, we will be presenting an update on the Highway 36 and Lake Avenue intersection improvement project. Um, I did want to note that we do have a couple members from the project team from MnDOT here, Dimitri and Matt. Um they're here um or they're also here tonight to help answer any questions. Um and we also have our county commissioner Bethany Cox and a couple other members um from the county. [00:00:45] **Andrew Gieson:** So during our presentation, we will provide an overview of the project background and need, review the project schedule, provide a quick overview of the engagement that occurred on the project, review the preferred alternative and project funding, and recap previous council updates. Um the main discussion item for today's workshop will be to discuss Keats Avenue. So we will spend some time talking about that area. Uh we will also begin discussions related to allowable working hours and close with next steps. [00:01:15] **Andrew Gieson:** So as most folks know this project is located at the intersection of Lake Elmo Avenue in trunk highway 36 located along the border of the city of Lake Elmo in the city of Grant. This intersection has an extensive crash history with about one crash seen here every two weeks. And since the opening of the new bridge that connects Minnesota to Wisconsin back in 2017, traffic volumes on 36 have continued to grow, leading to increased congestion and delays seen at this intersection. [00:01:45] **Andrew Gieson:** So touching briefly on the project schedule, this project kicked off in 2021. The project team has completed the intersection study and environmental document phase. Final engineering and property acquisition is well underway and construction of this project will last two full construction [clears throat] seasons kicking off in 2026 and is anticipated to wrap up in the fall of 2027. [00:02:15] **Andrew Gieson:** So moving on to the engagement portion of our effort uh which included five formal engagement events. The first event was an elected official goal setting meeting that brought together policy makers from the city of Lake Elmo, city of Grant, Washington County, and MnDOT. This meeting gave us a great understanding of our partner agency's goals and needs at we as we kicked off the project. Next, a formal purpose and need statement was drafted and shared with the public. Once we formally identified and gained community support of the project's purpose and need, we then started the alternative evaluation process. This was a detailed three-step multi-year process that considered all possible alternatives that could meet the project purpose and need. And through this three-step process, we held a series of public open houses to gather feedback on alternatives being considered. And based off a combination of input from the public, feedback from our project partners in our technical analysis, a preferred alternative was determined. [00:03:00] **Andrew Gieson:** So, this preferred alternative includes Highway 36 being raised over Lake Elmo Avenue and grade separated with bridge structures. This project includes a new frontage road to be constructed on the south side of 36. And there will be direct access to Highway 36 from the frontage road with ramps that include full uh full length deceleration and acceleration lanes. Now, I did want to take the opportunity to provide an update on the proposed full acquisition of River Valley Church, uh, which this preferred design would require. Through state statutes, this church has certain protections that we need to meet. In working with our project partners in the county board, we have made a full final offer to the church, which the church has received positively. We are working through the final terms of a purchase agreement. So this sale is not finalized but we are optimistic that a purchase agreement will be executed soon. [00:03:45] **Andrew Gieson:** So moving on to uh project funding. Overall the project is funded from a combination of state bonds federal grants and funding from MnDOT, Washington County and the city of Lake Elmo. The city of Lake Elmo through your CIP has programmed $5 million for this project. The total costs of the project are estimated at roughly $50 million, which includes all in cost for design, right-of-way acquisition, and construction. The majority of Lake Elmo's cost share of this project is from the new frontage road on the south side of 36. And the total cost of Lake Elmo's work is estimated to be roughly $12 million. After we apply the three million of MnDOT funding to cover the additional costs associated with the south frontage road extension and closure of Keats and after we apply outside funding, we estimate the city's remaining cost share will be reduced from 12 million to somewhere between four and four and a quarter million—below the budgeted city amounts, which should be good news for the city. You will notice that based on the budgeted funding and estimated project costs, we are showing an existing funding gap of roughly four million and Washington County and MnDOT are working hard to close that funding gap. [00:04:30] **Andrew Gieson:** So recapping past formal city council updates, when this project kicked off in 2021, we did have held that elected official goal setting meeting. Once the preferred design was identified, we presented an update to city council in May of 2024 and requested and received a resolution of support of the preferred design. And at that time, the design did not include the south frontage road extension in Keats or to Keats or the closure of that intersection. So over the winter of 2024-2025, the design was updated to include that extension of the South Frontage Road to Keats in the closure of the intersection. And then in February of this year, the project team updated city council with this design update and shared that this would be a city-owned roadway and MnDOT would cover the additional cost associated with this work. [00:05:15] **Andrew Gieson:** So jumping into access at Keats Avenue uh and starting with background for this area. So MnDOT did have a separate project programmed at Keats and through our project uh engagement effort, we did hear from many folks uh from the community about safety concerns at this intersection. This led to the opportunity to streamline improvements to both interceptions with one project. The project team explored what it would mean to combine projects. We reviewed this from an environmental, financial, property impacts, traffic analysis, and constructibility front. And through our review, we did recommend that the two projects be combined to help streamline costs um and construction impacts to the traveling public. And again, uh this was shared with the council in February of this year once all the details were worked out. [00:06:00] **Andrew Gieson:** Therefore, the project team's recommendation is to continue to move forward with this design that includes the frontage road extension and closure of Keats Avenue. If the city council is concerned with the proposed work at Keats, an alternative option to consider is to revert back to the 2024 layout, which includes a cul-de-sac frontage road and would leave Keats Avenue as is. The additional MnDOT funding to cover the cost of this frontage road extension would go away and we we would anticipate that the city's cost share of the project would stay similar. So, we do want to open this up for discussion uh with the council as we are seeking feedback and direction from the council on this aspect of the project uh before we move on to the next topic. So, with that, I will open it up for discussion. Yeah, Council Member Kragness. [00:06:45] **Council Member Nick Kragness:** So, for the existing [clears throat] funding gap of $4 million, um is there a contingency plan if this does not get funded? [00:06:55] **Andrew Gieson:** Um, yep, mayor, council member. Um, yeah, we are working to close that that funding gap. Um, we have a few alternatives that we're considering. Um, so we anticipate that we will close that, but as it stands right now, we still have that existing funding gap. [00:07:10] **Council Member Nick Kragness:** Okay. And how—I mean I don't know how much you can say on this—but how close are we to closing with the church on that sale? [00:07:20] **Andrew Gieson:** Yeah. Um so as I indicated um we have made our full final offer. The church um did receive that positively. Um and we're just working for the final details of the uh purchase agreement. So the purchase agreement is not executed, but we're optimistic and likely within the next month we will have that executed purchase agreement. [00:07:35] **Council Member Nick Kragness:** Got it. Okay. [00:07:40] **Mayor Charles Cadenhead:** Church. Well, thank you for putting this together. I appreciate it. Uh, Mr. Gieson, would you mind going back to your slide uh given the Keats intersection please? All right. Can you explain to us what the separate project for Keats was? [00:07:55] **Andrew Gieson:** Yeah. Um I know well MnDOT may be will be able to come up here and uh answer that better but I know at one point there was a separate project programmed at Keats. I think the scope was fairly vague. Um I don't think there was an identified scope but you know options that probably were going to be considered was um do you close at center median? Do you look at closing the intersection fully and extending the South Frontage Road or do you look at adding acceleration and deceleration lanes at that intersection? [00:08:15] **Mayor Charles Cadenhead:** Does Mr. Tomasovich want to talk to us specifically? [00:08:20] **Matt Tomasovich (MnDOT):** Sure. Sure. Can just provide a quick update your answer, Mayor. Thank you, council members. Uh the separate project that was planned uh several years out was to look at an acceleration lane at Keats. [00:08:35] **Mayor Charles Cadenhead:** Were you closing the crossing in the middle at that time? [00:08:40] **Matt Tomasovich:** At that time we were not. [00:08:45] **Mayor Charles Cadenhead:** You okay? What did you have budgeted for that acceleration lane? [00:08:50] **Matt Tomasovich:** Uh, mayor, I would have to go back and review our budget value for the specifically for the acceleration lane. Um, I'd have to check that value, but it's definitely under a million dollars. [00:09:00] **Mayor Charles Cadenhead:** Yeah. I think at the time when you guys were doing resurfacing, I had mentioned to your previous area manager that could probably be included for about $500,000 at the time added to that and I was told that was a no-go. So, could you pull that sheet back up again? I don't know who's in charge of the screen right now. [00:09:15] **Andrew Gieson:** Mayor, which slide would you— [00:09:20] **Mayor Charles Cadenhead:** Never mind. I'll pull it up on my own. So, you presented this to us a couple years ago and then you came back in February and presented us with a full closure at Keats, at which time [snorts] um at least myself and I think a couple other council members received feedback from people that live well south of this uh intersection uh fully not understanding the—and just to give you Mr. Tomasovich, a little background on my history of this project. At the time that this was brought up, uh, one of the preferred alternatives was a tight diamond, at which case that was city of Lake Elmo's preferred alternative because certainly I don't believe that button hooks are a long-term solution to highway speed interaction conflict points when your speeds are hitting 70 mph even with acceleration deceleration lanes. [00:10:00] **Mayor Charles Cadenhead:** However, that was not acceptable to the city of Grant. And so, uh, the city of Lake Elmo, understanding that the seriousness of this intersection was needed to be addressed, we acquiesced that and then we said okay to that uh button hook option. At which point we had no idea that the state wanted to close down Keats, which makes sense. It's not a very good intersection, but nobody, at least in my knowledge, maybe conferred with the city engineer about the closure of Keats and the uh access from eastbound 36 to southbound Keats being closed. [00:10:30] **Mayor Charles Cadenhead:** So, when this was shown, I got several comments from residents, some here, expressing that disappointment. Do you have any crash data that shows any uh instances from that southbound turn lane off of 36 to Keats having any crashes? [00:10:45] **Andrew Gieson:** Mayor, not specific to the right turn lane. We we have some general crash data at Keats, um but not specific to just the right turn lane. I would imagine that those are more related to backups from Lake Elmo Avenue in the evening when traffic backs up or more specifically probably in the winter when people aren't expecting it and hit the brakes. Um I I haven't found any crash incidents from that right turn lane from 36 east to southbound Keats. [00:11:15] **Mayor Charles Cadenhead:** Secondly, when the button hooks were involved, I did ask Mr. Gieson to do a traffic analysis at the Button Hooks to see what the what the traffic would act like. And I was told that 20 years out—what'd you end up at? Traffic level C? We're talking A through F level C, maybe a little worse on the north side if I remember correctly. [00:11:35] **Andrew Gieson:** Yep, I believe that's correct. [00:11:40] **Mayor Charles Cadenhead:** So, what I asked was that we maintain a movement from 36 eastbound to southbound Keats. And I just made that aware to the other council members that haven't been in those meetings to avoid open meeting law violations so that they're aware of what the request was. Request is still there. I don't understand why you would eliminate the frontage road while maintaining that um because it it doesn't show any crash data. It's not any harm to that intersection other than past experiences that the state has had and where they have eliminated that right turn lane in different instances, not here specifically where I have a lot of residents that use Keats southbound off of 36 to access their residence. And it goes much further all the way down to 47th where they access in neighborhoods even in the Lake Jane area. [00:12:15] **Mayor Charles Cadenhead:** Furthermore, that access would allow the continued it would decrease the number of conflicts that would happen at the button hook for people that would have to double back to Keats to go southbound. So, you're eliminating potential conflicts at an intersection that will increase with traffic as time goes on, whether it's people going eastbound or westbound or coming off 36 from the frontage road to 36. I think that's pretty clear. Another alternative—you've had two alternatives. I'd like to offer a third alternative. Third alternative being that you keep the right turn lane to southbound Keats, but have a performance measure in there. If it doesn't cause any problems, fine, you've solved it. If it does cause problems and it is an issue, then we close it and move down to the button hook. If we're at a disagreement where we think one is better than the other, I think that if we have some performance measures in there to justify either it being left alone or being taken away seems like a logical answer to me and I would ask that MnDOT would contemplate that or at least review that and see if that's something that's acceptable to them. [00:13:00] **Matt Tomasovich:** Um, mayor, I should address a couple of your questions. Um, one was specific to at the time of the pavement preservation project. Um, I don't believe we had any funds programmed uh for Keats at that time, which is why it wasn't installed with the pavement preservation. However, the concern that was raised at that time triggered the look at Keats and the opportunity for an improvement. And that's one of the reasons the acceleration funding was programmed as an independent project. [00:13:30] **Matt Tomasovich:** Um big picture, there's a couple of things considerations. First of all, Highway 36 is a high-speed um over 50,000 ADT traffic roadway. Keats Avenue is about 1,200 ADT. Um and really it's it's more important to take a step back as to um through that extensive public outreach with the Lake Elmo project. We've heard a lot about additional concerns at Keats and at the time as I mentioned there's only just the acceleration lane planned. So we really looked ahead and what is that long-term solution? Keats at some point it's already experiencing the volume on 36 that's giving it issues and functioning today and the opportunity of the Lake Elmo project provided the opportunity for something more long-term. [00:14:15] **Matt Tomasovich:** Washington County is—so looking ahead—MnDOT looked under its cost participation policy for the opportunity to pay and provide funding for the extension. Under the cost participation policy, improvement is funded where MnDOT will participate in local frontage cost, including right-of-way costs, when access to the trunk highway is being eliminated. The improvements provide safety and operational improvement benefit to the trunk highway. So that's directly out of the cost participation policy, meaning we can participate in a local frontage road construction and pay for those improvements with the elimination of an access point. [00:15:00] **Matt Tomasovich:** Also, the new interchange construction at Lake Elmo will provide that good reasonable access. The reason there's direct access from Keats to 36 today is there's no alternate reasonable access. With the opportunity of 36 on Lake Elmo, there will be that reasonable and convenient access. Again, it's consistent with the highway design of this type of facility and speed, meaning when other interchange projects are constructed, we look at opportunities for direct access closure along Highway 36. [00:15:30] **Matt Tomasovich:** Really this is one of the first opportunities to be proactive—not wait until there's a major issue at Keats. And with regards to Keats today versus the frontage road, while it may appear that the existing right turn Keats functions similarly to Lake Elmo, there's certainly several key differences. Perception of low crash frequency today doesn't reflect the future condition risk. Something important to note is that the traffic signal of Lake Elmo will be removed. Highway 36 traffic will be flowing and there will be no more stopping compared to the condition today. Vehicles traveling will be at higher speeds and traffic volumes will only continue to increase. [00:16:15] **Matt Tomasovich:** Keats Avenue lacks the geometry, storage space and design controls necessary for a safe and consistent operation particularly as speeds and volumes increase. There's no design that will prevent direct access to Highway 36. And then the short intersection spacing between the two interchanges is less than one mile outside of the typical spacing we would have. I would also anticipate unintended consequences of highway traffic on residential roadways. There's also some snow and maintenance considerations with a one-way right turn lane. [00:16:45] **Matt Tomasovich:** The geometry there at Lake Elmo is designed to accommodate modern traffic and volume and the speeds. They safely separate turning traffic from high-speed roadway and it really just puts the local trips on the local frontage road and improves that emergency services access. The closure aligns with MnDOT's cost participation policy. The funding for the frontage road is contingent upon the Keats closure. It aligns with access management guidelines and really safety first goal on the project. This is a chance to proactively prevent crashes rather than waiting for them to happen. Bottom line, MnDOT can participate in the local south frontage construction because of the full closure access at Keats. This is opportunity to deliver a safer and more efficient corridor with a full state funding and no city cost participation. [00:17:30] **Mayor Charles Cadenhead:** That's all well and good. I know that was a scripted comment. Um, this is a MnDOT corridor. Washington County is doing the design. They're doing the heavy lifting. I see that time and time again where MnDOT's taking a backseat and letting the locals pick up the lift. You saying, "Well, MnDOT's going to pay for the frontage road." Well, they should pay. It's their corridor. You want to talk about wetland mitigation, they should pay. It's their corridor. We all pay state taxes. We pay gas tax. We pay wheelage tax. All those things go into it. So all these things you're saying we're benefiting from should be done on MnDOT's corridor. [00:18:00] **Mayor Charles Cadenhead:** Access is reasonable, consistent, and proactive. Mr. Tomasovich, last time we met, you did say "reasonable" several times and I mentioned to you that to my constituents that live in that area is probably not reasonable. And you mentioned there's many people that go beyond their exit to double back. Well, many of those people haven't had to do that for umpteen years. This is not a high turnover area of apartments. This is long-term living residences that use that road consistently. You mentioned that there's no design to prevent access to Highway 36. I'd like to think in my 30 plus years of experience, I've seen engineers do some amazing things with design to make sure that things don't happen a certain way. [00:18:30] **Mayor Charles Cadenhead:** So, the alternative is to cul-de-sac the frontage road, at which case you're going to leave the access on to 36 from Keats. You can't put an acceleration lane on at that point because you run into the deceleration lane for the button hook. So then you're just going to leave something that absolutely won't work. And you say "improves emergency access"—taking away an access to southbound directly. I don't know how that improves emergency access off of 36 to southbound Keats for those residents. That doesn't make sense to me. So, I brought up a third option. What I heard you just say without taking that back and maybe conversing with other people in MnDOT is that that's not an option. I would suggest maybe that you do take that back to MnDOT. Have a conversation before you say that's not an option. [00:19:00] **Matt Tomasovich:** Thanks, Mayor. I appreciate the feedback and I will do that. [00:19:05] **Mayor Charles Cadenhead:** Thank you. That's all I have to say. Council Member Dragisich. [00:19:10] **Council Member Nick Dragisich:** I have a question looking. So this intersection is constructed in the city of Lake Elmo, in the city of Grant, and the state highway. So why does Grant have no financial commitment to the project, but Lake Elmo's 5 million in? [00:19:25] **Andrew Gieson:** Yeah, mayor, council member. Um so the the majority of city of Lake Elmo's cost is for the new frontage road on the south side of 36. Um, since city of Grant does not own or maintain the frontage road on the north side today, um, and they don't have any costs. There's no like added elements along County Highway 17 that would trigger cost participation from our county cost policy. They don't have costs in the project. Bottom line is they don't have infrastructure that they own and maintain in this area. [00:19:50] **Council Member Nick Dragisich:** Is it a matter of population or the size—is MnDOT owning that frontage road still on the north side of 36? [00:19:55] **Andrew Gieson:** That comes into play. Yeah. Um just with Grant being a smaller um city with with less resources. But um the majority of it is just the new frontage road being added. That's where city costs are coming in for the city of Lake Elmo. [00:20:10] **Council Member Nick Dragisich:** So what is the total cost of the frontage road? [00:20:15] **Andrew Gieson:** Uh 12 million. [00:20:20] **Council Member Nick Dragisich:** Just the frontage road is 12 million? [00:20:25] **Andrew Gieson:** Yeah. For that one and a half mile frontage road. [00:20:30] **Council Member Nick Dragisich:** I don't have anything further. I mean, absent of having additional feedback from MnDOT based upon the mayor's insights, which I fully concur with, I don't know if I have additional feedback for you, Andrew. I fully agree there's no discernible data to show there's a safety issue going eastbound to south. I see no reason for any tax dollars from a state, county, or city level to be used to eliminate something when the number one goal of this project is safety. I cannot explain to a constituent, to a resident that that is rational. I find it hard to be told we need to close this for a safety reason when the safety issue is the one that we are fixing down the road. This is not where the safety issue is. We just had a person lose their leg a couple weeks ago. So that's our first priority. [00:21:00] **Mayor Charles Cadenhead:** Do you have some other things you want to talk about? Allowable working hours, things of that nature. [00:21:10] **Andrew Gieson:** Yeah. So, I'll move on to the allowable working hours. So, city code allows construction Monday through Friday, 7:00 to 7:00 and then Saturdays from 8:00 a.m. to 6:00 p.m. So, uh really to help ensure that this project gets completed by 2027 and does not continue into 2028. We are requesting an extension in allowable working hours for this project. Um, so I do want to note that if council ultimately approves extending working hours, it does not mean crews will be in this area every Sunday. By extending hours, it simply creates flexibility for extended hours or weekends as needed. Really just to help ensure um the project is completed on time. So you can see the hours on the screen there that we're requesting. [00:22:00] **Mayor Charles Cadenhead:** Has your consultant done an analysis with a like a P6 schedule to say that those hours are needed and probably use some rain delays and weather related things to say that Sundays are needed? That's kind of an atypical request. Saturdays are pretty normal. Sundays are a little atypical in my experience. [00:22:15] **Andrew Gieson:** Yeah, mayor. Uh we have done that analysis and really the first year of construction is a little tighter um just with the project schedule that we have. How the staging is on this project is we need to get um that eastbound bridge completed in the first year of construction. Um, and so again, having maybe even some Sundays available during that first year would help. [00:22:45] **Mayor Charles Cadenhead:** Has the county considered putting something in the proposal that allows X number of Sundays throughout the construction season as opposed to every Sunday? [00:22:55] **Andrew Gieson:** We would be open to that. [00:23:00] **Mayor Charles Cadenhead:** Because I think that gets a little more complicated, but where you can even have the contractor "rent" Sundays for schedule expediency or have 10 total Sundays or eight Sundays during a given period. I know MnDOT's used lane rentals and things of that nature um to help benefit traffic as it moves through areas of high congestion. [00:23:15] **Andrew Gieson:** Yeah, we're definitely open to that creativity on that contract language. So looking at next steps... we'll follow up on the Keats Avenue discussion for that request for the eastbound right turn lane. We'll come back to the city with that. We likely would come back in the December or January time frame on both for the agreements and for the allowable working hours. And then we plan to advertise the construction bid package this spring. Construction is anticipated to begin next year. [00:24:00] **Mayor Charles Cadenhead:** So, do you have a better idea of when the county is planning on putting this out for bid? [00:24:05] **Andrew Gieson:** Yeah. So, our current schedule, we're looking at advertising this project in March, opening bids in April, and then awarding the contract in May. [00:24:15] **Mayor Charles Cadenhead:** That's all I had. How will that work for the hours? Because this isn't a development agreement. It's a city code. We're not being asked to alter our city code for one project? We would have to make an exception. The only thing that's really going to be what I would consider a noise nuisance is the pile driving. [00:24:45] **Andrew Gieson:** We do a piling retaining wall on the north side of the project. [00:24:50] **Mayor Charles Cadenhead:** So that's the primary driver of noise, right? I don't have an issue with the hour changes, it's just the curiosity of the city ordinance. [00:25:00] **Nicole Miller (City Administrator):** We can be creative and work a way around it if we need to. I believe in the city code the city administrator has the authority to kind of grant variances to the allowable working hours. It's just um my ability to grant it can't exceed three days. So we'd have to alter this for a long term. [00:25:20] **Mayor Charles Cadenhead:** Um, guess my only request would be to see if we could somehow maybe limit the Sunday amount just because we do have a fairly sizable church still in that location. Um, I want to be cognizant of them and their services on Sundays. But other than that, I don't see a major issue from my point of view. [00:25:40] **Council Member Nick Kragness:** Yeah, [clears throat] I don't see an issue with it either. Um I think limiting the amount of Sundays as well would be beneficial. [00:26:00] **Mayor Charles Cadenhead:** Thank you much, Mr. Gieson, and thank you much, Mr. Tomasovich, for coming tonight. Very much appreciated all your efforts and work thus far. Next on the agenda is short-term rental discussion. Mr. Stoa. [00:26:15] **Mr. Stoa (Planning/Staff):** All right. Good evening. We're here today to talk about short-term rentals in the workshop. Um just a quick overview. We introduced short-term rentals um through a text amendment um earlier through housekeeping. Currently, we have bed and breakfasts that are allowed, but they have to be owner occupied. We do get requests from time to time from people that want to essentially apply for a bed and breakfast, but they don't want to live there, right? So the issue before the council is: should the zoning code be updated to allow short-term rentals? If you do believe so, then where should they be located? [00:27:00] **Mr. Stoa:** We brought up also should they be regulated as an R1 or R3 occupancy? The building code basically pushes all the short-term rentals into hotel classifications that require R1 occupancy. Stillwater, for example, requires someone to convert from an R3 to an R1, but that means they have to ADA it. It's a high cost. [00:28:00] **Mr. Stoa:** Washington County requirements meet the definition of a hotel motel per state statute. If you follow state fire code, it could be treated like a typical house unless it has more than six guest rooms. Stillwater adopted their short-term rentals in 2017. They have a "three strikes you're out" policy. Woodbury and Hugo have bed and breakfast ordinances but not short-term rental ordinances. Currently in Lake Elmo, short-term rentals are prohibited. [00:30:00] **Mayor Charles Cadenhead:** But we have some in the city? [00:30:05] **Council Member Jeff Holtz:** I looked on Airbnb and there's 11. [00:30:10] **Mayor Charles Cadenhead:** Do we have a list of those that have the licenses for bed and breakfast? [00:30:15] **Mr. Stoa:** We do. And are they owner occupied? We don't check that. This was something that we pretty much discovered and started looking at. What do you guys think? [00:30:30] **Council Member Nick Dragisich:** I'm—I do not support any change. I think we should avoid short-term rentals as much as we can. We're a quiet residential community. That's part of our character. And I don't see what we get from benefit from short-term rentals as a community. [00:30:45] **Council Member Jeff Holtz:** I'd be curious to know as a data point for the ones that do exist what the level of compliance is. I personally don't have an issue itself with short-term rentals. On the flip side, do I want the city then investing in time and labor to ensure those rules are being obeyed? That's the harder question. [00:31:30] **Mayor Charles Cadenhead:** So, essentially, we have 11 short-term rentals operating that are prohibited? [00:31:35] **Mr. Stoa:** That's correct. We usually respond to complaints and we haven't received complaints. [00:31:45] **Council Member Jeff Holtz:** I know that they exist, right? I know that there's one behind where I live. I personally don't have a problem with it unless it became a noise nuisance or there were large gatherings and parties. I kind of like to have some guard rails on it. [00:32:15] **Council Member Nick Kragness:** Yeah, I think people should have the right to do with their property that they want, but like you were saying, Mayor, there needs to be guard rails on it. [00:32:45] **Council Member Jeff Holtz:** If you were to go and say, "Look, this is now in violation," what powers does the city have currently? [00:33:00] **Mr. Stoa:** It's the same thing as if you're not following the use chart for any other use. If someone is operating a business in single family residential, it would be processed like that. [00:33:45] **Council Member Nick Dragisich:** How's this different than running a business? Business is a business. That's why you have residential zoning. I bought a residential home in a residential district for residential uses. It rubs me the wrong way. [00:35:00] **Council Member Jeff Holtz:** I mean, help me to clarify. To me, a short-term rental is literally a bed and breakfast without the owner occupied requirement. I have no issue just simply eliminating the owner occupied aspect. [00:36:30] **Mayor Charles Cadenhead:** I think most HOA documents probably prohibit that from happening anyway. [00:37:00] **Council Member Nick Dragisich:** How do you prevent where you get these corporations come in and buy up these and they're absentee owners? You got an owner who lives in Tuscaloosa, Alabama and owns five short-term rentals in Lake Elmo. Nowhere around to be found when there's a problem. [00:37:45] **Mr. Stoa:** Well, the plan is to take this to the planning commission. [00:38:00] **Council Member Nick Dragisich:** If we have an ordinance that we choose not to enforce, let's get rid of the ordinances. How do you have a book of ordinance say, "Well, we're going to enforce A, but we're not going to enforce C." [00:39:15] **Mayor Charles Cadenhead:** Thank you. And because our next discussion is about finance, I was going to suggest that if these current ones are operating, and they're not paying as an appropriate permit fee, will you send a finance director to collect it? [00:39:30] **Clarissa Hadler (Finance Director):** Sure. Uh, finance director Hadler. [00:39:40] **Mayor Charles Cadenhead:** Do you need a chair for this discussion? [00:39:45] **Clarissa Hadler:** I might. So this is um our initial touch point on our strategic financial plan. The idea is to look at city finances holistically. I like to describe this process as a puzzle. We've got expenses in streets, administration, or parks. We have revenues like taxes and fees, debt, and infrastructure projects. [00:41:00] **Clarissa Hadler:** Our existing city policies include our CIP—a 10-year plan—and our vehicle and equipment replacement policy. We have staffing and service level assumptions. As you guys are well aware the city has been growing very quickly in the last decade. We will also be taking department head input. [00:42:30] **Clarissa Hadler:** We've had a lot of discussion about decreasing our debt moving forward. We're sitting at about $60 million right now. I want the city to be sustainable 25 years, 50 years from now. I created some scenarios. Scenario 1, 2, and 3. I took engineering's CIP and played around with some various funding. I assumed starting the 409 levy at 250,000 and increasing it by 10% per year. [00:46:00] **Clarissa Hadler:** We are currently building this model in Excel. My concern is really more for any type of staff turnover. There is a solution called Yuna—it's a $10,000 per year investment. Another investment we could make is the streets inventory for $18,000 to give us a better idea about those long-term investments beyond that 10-year plan. [00:48:00] **Clarissa Hadler:** Our debt per capita is going to decrease drastically as we grow. My question for you is: are there any concerns with those foundational assumptions? [00:49:15] **Council Member Nick Dragisich:** On the development side generally you're looking at how's our operating costs and revenues affected by new development. It's very complicated. [00:50:30] **Council Member Jeff Holtz:** One thing to consider... whatever you can do as kind of an easy guide or easy resource to help on the incoming council members to say look this is where we're at, this is the 20-year picture. So then at least conversations where there is disagreement can be a bit more informed. [00:52:15] **Clarissa Hadler:** Final question... do we want to change the 26 infrastructure levy at all before I present the levy to be adopted in December? [00:52:30] **Council Member Nick Dragisich:** Not for me. [00:52:35] **Council Member Jeff Holtz:** Same for me. [00:52:40] **Council Member Nick Kragness:** I voted against it. [00:53:00] **Mayor Charles Cadenhead:** Last item on tonight's agenda is CIP future project discussion. [00:53:15] **Nicole Miller:** Yeah, mayor and council. I've just added this um as another opportunity for discussion prior to adoption of the CIP in December. There has been some prior council discussions about adjusting the next five years of our CIP specific street projects. [00:53:45] **Mayor Charles Cadenhead:** I think you know when we talked about that the first three years have a fairly solid stature. Once you get out in that five-year beyond, it's kind of a best guess. [00:54:15] **Jack (Engineering Consultant/Staff):** Yeah, I I think I can just maybe um add a little more specificity. In your particular CIP as it stands right now, the city has been playing catch-up. Your current CIP is a 10-year CIP. The first five years are already neighborhoods that need reconstruction as they stand today. That second set of five years really was looking at the age of pavements and trying to guess that deterioration curve. [00:55:15] **Mayor Charles Cadenhead:** I just think Council Member Hirn was saying can we slow it down a little to bring a little less financial pressure. [00:56:00] **Council Member Jeff Holtz:** My two cents were just that if it is developer paid for that we're obviously not considering that in any of the CIP costs. [00:56:30] **Mayor Charles Cadenhead:** All right. So, next week regular agenda items, we have the ULI presentation on the 180 acres. And then we have approving municipal consent for Highway 36 Lake Elmo Avenue improvements. I urge you to look at the Lake Elmo website. With that, we'll adjourn this evening's meeting at 8:22.