This transcript features the Rosemount City Council meeting from June 20, 2023. Based on the context provided, here is the formatted transcript with speaker names. [0:01] **[Music]** [0:26] **Jeff Weisensel, Mayor:** I'd like to call the regular city council meeting for Tuesday, June 20th, 2023, to order. Please rise and join me in the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Good evening, everyone, and welcome those that are watching. Is there any additions or corrections to the agenda? [1:05] **Logan Martin, City Administrator:** No, sir. [1:06] **Jeff Weisensel, Mayor:** Seeing none, I'll move the approval of the agenda. Is there a second? [1:09] **Tami Klimpel, Councilmember:** Second. [1:10] **Jeff Weisensel, Mayor:** Motion's been made and a second. On the agenda, all in favor signify by saying aye. **Council Members:** Aye. [1:14] **Jeff Weisensel, Mayor:** Oppose? The agenda's approved. First item up is presentations, proclamations, and acknowledgments. The first is our 2022 management and annual comprehensive financial report. Miss Malecha, our Finance Director. [1:29] **Teah Malecha, Administrative Services Director:** Good evening, Mr. Mayor, members of the city council. We're here this evening with once again—here at the city’s financial statements are audited by the firm MMKR. They completed our '22 audit this year. The goal is to provide reasonable assurance that the city's financial statements are free of material misstatement. Based upon their audit, they concluded there was a reasonable basis for rendering an unmodified opinion. The city's statements are fairly presented in conformity with generally accepted accounting principles. Aaron Nielsen, a partner with MMKR, is here this evening to provide more information regarding the audit. So Aaron, I will turn it over to you. [2:19] **Aaron Nielsen (MMKR Auditor):** Looks good. You got it there, there it is. Thank you. Well, good evening. I appreciate the opportunity to be here this evening to present the results of our audit for this past year. We have three documents in the packets for you this evening: the financial statements, the special purpose reports, and the management reports. So your financial statement is prepared to allow you to submit it to the Government Financial Officers Association for their certificate of excellence that you did receive for your audit for the year end of December 31st, 2021, and we believe you have prepared it to allow you to get the award again for 2022. So you will be submitting it for the purpose of obtaining the award again, and we'll see what the results are with that completion of that review. As I mentioned, we've also issued our special purpose reports that give us the results of our audit testing and compliance and internal controls, and then we have the management report which we use to provide the summary of our audit and facilitate the presentation tonight. So I do have a PowerPoint that I'm using really to keep the camera off my face and keep us on the same page as I go through the materials. For the financial statements, I'll make my way through the presentation and then if there's any questions, I'd be happy to try to answer them. So with that, as mentioned, we are independent auditors. Our role is to provide that opinion on the financial statements, also to issue our reports on internal control and compliance. So we have the financial statement audit as well as the Office of the State Auditor's of Minnesota legal compliance manual. Get right to our audit results: as previously mentioned, we have issued what is known as an unmodified or a clean opinion on the basic financial statements. So exactly what you're looking for—that those financial statements are fairly stated as of December 31st, 2022, and the results of operations for the year then ended. You'll notice there are some changes within the report this year. You were required to implement a new Governmental Accounting Standard Board statement with GASB 87 this year, and changes in how leases are reporting and incorporating that into financial statements. With regard to the internal control and compliance for the financial statement audit—and we've noted it's within the special purpose report document—we're pleased to report we had no material weaknesses or instances of non-compliance with our testing this past year. Ongoing with that theme for the Minnesota legal compliance manual, there's seven broad categories that we test with many individual tests inside of that, and we're pleased to report we have just one comment within statutes. You're required to have some subcontractor language and payment to some contractors be included in the original agreements or the signed contracts, and for one of the contracts we tested, that language was missing in the contract. It's really just standard language, just making sure it's incorporated in the document. So we had just the one comment this year with legal compliance testing. As I move through the rest of the slides, we try to share some of the financial results comparisons to prior years. I'll start with looking at the governmental funds. So I'm not including your utility operations or business-type operations as they're referred to. We've got your governmental funds, so it's capturing the general fund, capital project fund, debt service fund, special revenue funds. As you can see, when we do a comparison to prior year, there was an overall increase of about 3.8 million dollars this past year on a fund-based governmental fund-based modified accrual presentation. That is broken down on the table we have before you by the components of fund balance: non-spendable, restricted, assigned. And you can see the largest change was in that assigned category because the change was largely a new capital project fund, and those fund balances have to be assigned for the purpose of that capital project fund. My next few slides look at the general fund financial position. So the general fund is the primary operating fund for the city. When we look at the general fund financial position for the past five years—and you can see we've provided a fund balance, a cash balance, and then the revenues as the size of the operation to provide that gauge—you can see the city has had a stable financial position over all of the five years we presented here. You can see there's been a couple of blips and increases in the revenue reported in 2020 and in 2022, and really that is presenting the use and availability of one-time federal funds that came through related to the coronavirus pandemic. Another slide on the general fund revenues, so diving in a little deeper, showing that breakdown of the total revenues for this past year. Revenues for your general fund amounted to about 18.4 million dollars in 2022, coming in over budget and an increase over the prior years the previous graph also provided. And you can see it's largely in that intergovernmental category for the federal resources this past year. I kind of overlooked it, or I did with my previous comments on compliance with those federal funds. This year you were also subject to an additional requirement testing compliance engagement that the federal government allowed. We did also complete that testing with the audit this year and are pleased to report there were no comments or requirements that we had to report with regard to that additional testing for that additional engagement in 2022. The other component I share with this slide often is you can see the primary sources of your general fund revenue: so the reliance of property taxes to finance the expenditures of the general fund. So you can see the property taxes by far making up the majority of the revenues in the general fund. And then I believe it's my last slide for the general fund looking at the expenditures. So similar to expenses, but we're only capturing current expenditures. So our expenses—we call them expenditures with that modified accrual basis of accounting. You can see the change from the prior year. In 2022, general fund spending amounted to about 15.7 million dollars, coming in slightly over budget and then with an increase over the prior year largely as anticipated. You can see again we talk about and include the concentration in public safety spending for the general fund operation, which is common with what we see with other cities that we work with—the primary function of spending within the general fund operation. I have a slide for your enterprise fund. So this would capture your utility operations. You can see in the lower half we look at the total fund balance, or the I should say net position for enterprise funds. When we look at those by fund: water, sewer, storm water, street light, and your arena utility or enterprise operations, you can see there was an overall increase of about 18.5 million dollars in 2022. On the top half of the table, you can see that breakdown by a net position component, so that net investment in capital assets—so it's capturing the infrastructure assets of the city and then offsetting those with any debt obligations that may exist or capital-related payables against the net investment in capital assets. So as you can see, enterprise operations tend to be very capital intensive, and the focus of equity with net investment and capital assets is a big component. The increase this past year with your city as a growing city is the developer contributions with expansion and growth in the city—additional streets and infrastructure that have been added to the city and donated from developers as those developments have been completed. Another component of that is also the connection fees that are also involved in that process. And then I'll move pretty quickly here—there's more information and details within the financial statements as well as the management report—but as we look at the water fund over the past five years here, you can see that operation, the change in cash balance, net position, and operating revenues. I think I've made a comment: the increase in consumption with the growing size of the community and rate adjustments contributing to that change in the overall operating revenues in 2022. The sewer fund graphs tend to look very similar because of the size and scale of the equity components or that net position. As I mentioned, all of these funds largely being capital intensive, nearly the same for each one of these utility operations. Again for the storm water fund, changes this past year, like the previous two: capital heavy, significant capital contributions in 2022. The arena fund operates a little differently. This one I would say is not quite as capital intensive, but also in relation, you can see the net position, the change. You can see the dip in 2020 in revenues with the impact of the pandemic and returning back to kind of the pre-pandemic levels in the activity within the arena fund. And then my last slide that I've shared with you tonight here—we kind of saved the toughest for last, I guess I'm warming up as we go through the presentation. So to this point, I've tried to stress the difference in the presentation, the dual perspective that the government reporting model provides you. For governmental funds, the focus is on current available resources and how you're able to use those funds to invest in the community or use them to provide those services. What that doesn't capture is a long-term perspective on governmental funds. So we get that with the statement of net position, the entity-wide where we consolidate all of the governmental funds and then incorporate the capital assets and the long-term obligations. You'll notice I won't spend a lot of time talking about business-type activities because the bottom half here shows that same 18.5 million dollar increase, because the utility funds are on that same basis of accounting. Utility funds are meant to run like a business and capture all the costs associated with those. So there is not any change for your city between the business-type activities and the enterprise funds consolidated. The difference you can see when we talked about the increase in the governmental funds and then we compare it to the increase in governmental activities total net position—you can see there was an increase of about 1.6 million dollars this past year. The changes that we noted and accounted for with the audit this past year: that net investment in capital assets capturing depreciation on your street infrastructure this past year; really that restricted category maintaining a similar level to the prior year; and then the unrestricted components seeing an increase this past year with some of the impact of the state pension plans as well as the changes for federal grants that you were able to capture and utilize this past year accounting for the change in the unrestricted component. So with that, I know I went through a lot of information—I joked before there's about 120 pages in your annual comprehensive report that we could go through—but I'll leave that to you to go through page by page, and if there's any comments I'd be happy to try to answer them. Thank you very much. [14:15] **Jeff Weisensel, Mayor:** Open up the floor to Council. Any questions, comments? [14:21] **Paul Theisen, Councilmember:** First of all, the fact that Teah survived GASB 87, that's awesome. The equivalent on the private side, the ASC 842 lease implementation—I literally know people, I know a CFO who retired early because she didn't want to have to deal with the implementation of it. So you're still here, so that's awesome. I have no questions. **[Laughter]** I'm not going to reference any code or statute. [14:55] **Jeff Weisensel, Mayor:** No, just one comment. I think for our audience that are watching, you noted that there are some dollars that came through, there was a special audit on the government funds that we had received from the federal government. Those are kind of elevating ours, but we would expect to see those drop here over the next year or two as well, correct? [15:26] **Aaron Nielsen:** I would agree. So the federal government would normally require a single audit with these federal dollars. Because there were so many, they did allow for alternative agreements—they call it the audit examination of those funds. So that was completed this past year and they've kind of streamlined the testing of that because there are many cities that don't require a single audit, so they wanted to focus just on that grant. So it allowed an opportunity to provide that ACE audit. You completed that, we don't have any findings to report. Before that, we will submit that to the federal government. They'll have their opportunity also if they would want to dig further, but I wouldn't anticipate that given how many audits there are and federal funds they'd be going through, but it is always open, they are public documents. And we're pleased to report that we do follow up on prior year findings. I think we had one comment last year, I noted in the management report. We're pleased we did not issue that finding again this year. So an important part of our process: how do you respond to comments when we give them, whether you take them seriously and react to them? And we're pleased that that finding was cleared. [16:53] **Jeff Weisensel, Mayor:** Awesome. Certainly appreciate the findings, the audit, and certainly appreciation to your staff, Miss Malecha, for everything that goes into it. How many staff you got doing this helping you? But that also includes our utility staff. So yeah, so certainly take back a well-founded thank you for the efforts that go into this from Council. [17:28] **Teah Malecha:** Absolutely, thank you. [17:34] **Jeff Weisensel, Mayor:** Yeah, so with that, would someone like to entertain a motion to accept the 2022 Financial reports? [17:41] **Paul Theisen, Councilmember:** Yeah, I can make a motion to accept the 2022 Financial reports. [17:45] **Paul Essler, Councilmember:** Second. [17:46] **Jeff Weisensel, Mayor:** Motion by Theisen, second by Essler. Roll please. [17:51] **Erin Fasbender, City Clerk:** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** Klimpel? **[Klimpel: Aye.]** Freske? **[Freske: Aye.]** [17:58] **Jeff Weisensel, Mayor:** And the financial reports are accepted, thank you. With that we'll move on to item number four: public comment. Anyone wishing to come before Council with any questions, comments, other than information that's already on the agenda may do so at this time. Please state your name, your address, and limit your comments if you can or questions to three minutes or less. And the floor of the podium is open. **[Music]** Anyone? Seeing no one making a move towards a mad dash to the podium, we'll close the public comment and move on to a response to coming public comment. Turn to—we have Mr. Schultz, I think, had a quick—Mr. Schultz? [18:49] **Dan Schultz, Parks and Recreation Director:** Mayor, city council members, this is in response to the questions and some comments that Terence Yorchuk from the Rosemount Area Seniors had made at the last council meeting. And so really it was kind of three main topics that Mr. Yorchuk had brought up. The first one was the air conditioning at the Steeple Center. I think all of us in our daily lives realize that comfort levels are always sometimes a challenge to meet for everyone. And so we have talked with our staff and with the seniors and trying to kind of find that happy medium level to keep everyone comfortable when they're in the Steeple Center. Oftentimes people who sit by the windows are a little warm, people who sit near the vents are a little cool, and the people in the middle of the room are just right. So we always encourage the seniors to remember to bring a sweater or a light shirt or jacket with them when they come to the building in case they're in one of those spots that might be a little bit cooler than others, but we do work with the seniors on a regular basis on this topic, so we'll continue to do that. The second item that Mr. Yorchuk brought up was a proposed service agreement. We currently do not have a service agreement with the senior organization in Rosemount. We have several service agreements with other organizations. We have been talking to them about the possibility of a service agreement with the seniors, but there is not one in place right now. And so I know he had some questions about the language "independent contractor" and about liability insurance, and those are the things that are usually pretty standard in a service agreement. We'll continue to work with them and our City Attorney on that if we ever get to a point where we do have a service agreement. Right now, it's just been something that's been proposed. The seniors have approached park and rec staff about possibly taking over some programs that they currently run just because it's a little bit easier for us to handle registrations and take payment, things like that, and the seniors don't really have that access to technology. So we're looking at some of those things. Should we get a service agreement, that will come before you at a work session and then to a regular meeting in the future if that were to happen. And then the final thing was there was a comment about the Rosemount Area Senior money. They have their own bank accounts; they have, I think, some CDs, some savings accounts, and checking accounts. Just to be very clear on this, we have no interest in their money. Their money is their money. They have their own board. Terence Yorchuk is the treasurer for the organization. We've made this very clear to them on several occasions that should we take over some programs that they're currently running that they want us to do, that we still would not need or want their money. Their money will stay with their organization where they can do with it what they would like. And so just to be very clear on that, that's not our intention, it never has been. We've got money that we have in our own budget that we can operate efficiently and make things work. So that is the final thing, but I did talk to Terence personally on the phone, and we—I asked him if he had any other questions to feel free to stop down and see me at the community center or let me know and I would meet him at the Steeple Center. And so he was more than willing to do that in the future if need be. [22:20] **Jeff Weisensel, Mayor:** Great. Any questions or comments from Council? Otherwise, no? Thank you very much. [22:24] **Dan Schultz:** Alright, thank you. [22:25] **Jeff Weisensel, Mayor:** Appreciate that. With that, that closes response to public comment. Item five, we'll move on to consent agenda, item six. We have a series of items, so I'll run through these quickly: Bills Listing; Minutes for our regular and work session on June 6th; Performance Measures; a Donation Acceptance from Joel Walsh; Accept Public Streets and Utilities Emerald Isle Second Edition; Approval of a Final Plat for Rosecott Place Apartments; Declaring a Crash Attenuator a Surplus Property; Approval of Council Travel; and Temporary On-Sale Liquor License for Celts. With that, is there anyone—any items Council would like to pull for any reason? [23:21] **Council Members:** No. [23:25] **Jeff Weisensel, Mayor:** I am going to pull Performance Measures, item D. So with that, I would look to someone to approve the consent agenda with item D removed. [23:42] **Paul Essler, Councilmember:** I'll make a motion to approve the consent agenda with item 6D removed. [23:46] **Heidi Freske, Councilmember:** Second. [23:48] **Jeff Weisensel, Mayor:** Motion by Essler, second by Freske to approve the consent agenda's items A through J with D removed. Roll please. [23:56] **Erin Fasbender, City Clerk:** Klimpel? **[Klimpel: Aye.]** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** [24:04] **Jeff Weisensel, Mayor:** The consent agenda is approved. The item 6D, which I'm going to call up Miss Malecha to talk about—I pulled this a little bit for recognition here on how we kind of operate the city here and what these performance measures mean. [24:22] **Teah Malecha, Administrative Services Director:** Mr. Mayor. So the city council in 2010, the legislature created the Council on Local Results and Innovation, which in turn created the comprehensive performance measurement system for cities and counties. Cities and counties can voluntarily participate in this. We began last year; we were one of the 38 cities and 28 counties that participated in the program. We did receive just over three thousand dollars as per participation in it. There are 29 performance measures; we currently report on over 10 in our annual budget book, so it was not a lot of extra work for the staff. It was just making sure that we reported that to the State Auditor’s office. We did add a couple. We did have one this year—one of them was the nuisance code enforcement cases, and they wanted it reported per thousand residents; it's 2.38. So that's their new measure for this year. We report our bond rating every year, so hopefully that stays the same tomorrow. Exciting. We had previously reported Part 1 and 2 crime rates. There has been a change in the reporting and how that's done; the State Auditor's office has not updated their requirements yet, so we added some other measures just to make sure that we cover the 10. So our staff has been doing a great job providing these measures and all of my many, many questions to get this information back so that we can report and ensure that we continue to do a great job we're doing. [25:41] **Jeff Weisensel, Mayor:** I just wanted to call out that in—we have some of these performance measures listed on our website. Residents can take a look at it, and just calling out that as an organization we do use performance measures to help us manage the city's operations. So appreciate that, thank you. Any questions on any of the performance measures? With that, then, I'll go ahead and move the adoption of the resolution approving the 2022 performance measures. Is there a second? [26:22] **Tami Klimpel, Councilmember:** Second. [26:24] **Jeff Weisensel, Mayor:** Motion by Weisensel, second by Klimpel. Roll please. [26:29] **Erin Fasbender, City Clerk:** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** Klimpel? **[Klimpel: Aye.]** [26:45] **Jeff Weisensel, Mayor:** And that is approved, 6D. Now we'll get into some of the meat of tonight. We have a fair number of hearings and new business. So first up, 7A. First is 2023 Neighborhood Infrastructure—it's the improvement project. Mr. Erickson, our City Engineer, please. [27:07] **Brian Erickson, City Engineer:** Thank you, Mr. Mayor. We have this evening—this is the assessment hearing for this project, and I have what I will attempt to make a brief presentation yet get the information out there as needed for everybody. So, I'm going to skip that because we don't really need to see the calendar. Here's the project location again. I know Council is familiar with this as we've talked about that. Again, just quick comment: we're doing surface reconstruction on the roads. There is some curb and gutter based on what is currently existing. We’ll also extend sanitary sewer and water main throughout the project area. We are also constructing a path—a multi-purpose trail—along the east side of Bacardi. There will be no internal sidewalks constructed as part of the project. Then we do have some improvements for the drainage and stormwater in the area. Just to note, I wanted to mention that the feasibility report showed a much wider street along Bacardi. We're narrowing that down just—there was in an effort to save both cost on the road as well as realizing that traffic is not going to be the same as it is further south on Bacardi. The big part of tonight's assessment hearing is it is required by statute for the city to be able to levy assessments on the property owners that are abutting the project. The city council is required to hear and consider all objections to the proposed assessments. I did want to note that the property owners can challenge the assessments. The objections must be raised at or before the assessment hearing. As of today, I had not received anything, and I neglected to check with the City Clerk if she had seen anything. [29:08] **Erin Fasbender, City Clerk:** None received. [29:09] **Brian Erickson:** Thank you. And then they have to be in writing and signed, but again since we haven't seen any of those, I don't believe there will be any challenges. And again, there may be options for assessment deferrals, but those—the plan is not to address those at this meeting. So if any of the residents would like to check on the deferrals for that, they're welcome to contact the staff and we can point them in the proper direction on that. Just a discussion real quick on how we generally calculate assessments: it's based on 35 percent of the surface cost. Collector roads like Bacardi are generally—we reduce that down to what a local street width would be. So in this case, that 30-foot road is reduced down to roughly a 24-foot wide pavement, which is what is in the neighborhood. We do take the assessment calculations based on per unit—in other words, each of the taxable parcels based on what the county has as tax records currently. And then any of the remaining costs on the project is unfunded via either CIP funds or the utility core funds. This one does also have state aid funding from MnDOT as well. I did want to call out a few of the changes that we made in particular on this project—and again this was discussed at the work session earlier. We extended the payback timeline from 10 years to 15 to try to reduce those annual payments for the owners that will have—will allow their assessment to be certified to the county taxes. We're also allowing a partial prepayment of assessment. So in the past, that was not generally allowed; it was the all-or-nothing: you pay the whole assessment or it will get certified to the county taxes. And then we did—we did reduce that assessment amount based on our general policy from 35 percent. It’s 24, but it really works out to be ten thousand dollars per parcel. And I did want to mention—I mentioned in the Council report, but just to call that out—we're proposing that the property owners be allowed to have an additional special assessment to cover the connection charges. But that would be for any of the property owners that would be installing a new—or excuse me, connecting to the new system with a permit by September of this year, and then the work of course would need to be completed as soon as possible. Part of the reason is that we realize that connection charge is another large amount. Every other property within the city has done that, so every new home that's been built for a long time—I'll put it that way—have paid those connection charges. So that's their buy into the system, if you will. So that would require a separate agreement, and that would be a 10-year payback for those property owners. Then I did also want to note that we've put a number of different links for resources and assistance for the homeowners on the city's website. Just to kind of run through the project cost: total project cost, as you can see, we got our feasibility report back earlier this year. The final engineers' estimate—so the feasibility report was almost five million dollars. The engineers' detailed estimate after that was almost—well, a little over 5.6. And then ultimately the low bid came in at just a little over 4 million. So the bidding climate has been kind of a little goofy this year, so you'll note the numbers are all over the board there. I'm just glad that the last column is the lowest number, as I think probably everybody is. I did want to run through just the funding portion. So the important columns are the far right column and then the one next to it. So that shows the adjustment that was made as discussed at the work session. Had there been no adjustment and used the city's standard policy, those assessments in the bottom line there would have been about a little over fourteen thousand dollars—you know, getting closer to 15. Because of how the adjustments were made, that assessment dropped down to 10. I did include the feasibility report number just to show that, you know, initially those numbers were much worse, if you will. Then finally this is just a map again showing which parcels are being assessed, and that ten thousand dollar again—like I mentioned earlier—it's based on the county tax records. And with that, I will conclude my presentation and do my best to answer any questions at Council. [34:25] **Jeff Weisensel, Mayor:** Floor's open to the Council. [34:27] **Heidi Freske, Councilmember:** Yeah, you'd mentioned you'd put information on the website for the residents, but I think you also sent all of the residents a mailer as well, right? Same information? [34:39] **Brian Erickson:** We did, we did. Thank you for mentioning that. We did put that—was in a letter. There was sort of an infographic that Lee [Stoffel] was really helpful in putting together, taking the "engineer side" of that and making it much more user-friendly instead of having engineers do that. She did a great job and hopefully everybody understood what was in there much better than if I was explaining it. [35:05] **Tami Klimpel, Councilmember:** And I understand you also took some one-on-one meetings with some homeowners? [35:08] **Brian Erickson:** We did, yes. We had a neighborhood meeting. We met with—about Jeff Pearson, who is the WSB project manager on this and he also provides assistance to the engineer services. We met with 22 of the property owners. Number of questions: when does the project start? How do the connection works? What's the assessment cost, and how do I pay that? Generally, those meetings went really well. There was a lot of very good questions from the property owners. [35:45] **Jeff Weisensel, Mayor:** And this way, just as a follow-up, just to share kind of with some of those that may be watching that didn't come in tonight, what is the tentative schedule for the work? [35:55] **Brian Erickson:** So we have—we actually have a pre-construction conference this week. So the contract was awarded. I would anticipate construction will start probably within—probably by the end of the month is my guess. But we're still—I'll know better after our meeting on Thursday to find that out. But it'll be—it'll be this summer, so late June hopefully, and then it should finish up by the end of October. [36:26] **Jeff Weisensel, Mayor:** And how will residents know when, other than a truckload of workers and equipment show up on their street, how will they know? [36:34] **Brian Erickson:** Well, we have another mailer that will need to go out in very short order just with some additional information. Should city council see that—allowing that additional assessment to be done for the connection charges, we'll put some information in that. I do want to wait till after the pre-construction meeting just so that we can provide that additional information as well as to when that will work. We will pass out the information as well. It will have an inspector on site as part of this with WSB. He connects with all the residents on site; he will pass his phone—I believe his name is on the website. If it's not, I'll make sure that we get that on there. And there will be—I don't know, I wouldn't say daily, but maybe weekly updates. We will have weekly updates as well on the website. [37:25] **Paul Theisen, Councilmember:** The only thing I was just going to call out—if this is an appropriate time—I just want to thank you, Brian, Nick, and the city staff, and Logan and everybody for taking all the feedback that we got from a lot of the information sessions and a lot of the public feedback and you know, kind of doing what's best for everybody here. Making these corrections, making this adjustment to the city and the infrastructure, but then doing it in a way that is a good partnership with everybody. So just want to say thank you to staff for helping out with that process. [38:05] **Brian Erickson:** Thank you. [38:08] **Jeff Weisensel, Mayor:** Alrighty. Well, at this time, there's no other questions. I'll move the floor to be open for the public hearing on assessments. Anyone wishing to come forward may do so at this time. Please state your name, your address, and if you can, limit your comments or questions to three minutes or less. [38:37] **Terry Kramer:** I'm Terry Kramer. I live at 2075 128th. It's pretty simple question. I just want to make sure I'm on the same page with everybody. When the assessments go through—the street—are they going to be stubbed into the property if we don't hook up right away and or we decide to hook up at a later date? I'm assuming that—I think I was told once that those improvements would be stubbed into your property, is that correct? [39:13] **Jeff Weisensel, Mayor:** We'll take that comment and then try to collect the comments and then respond. [39:17] **Terry Kramer:** That's all I have, thank you. [39:20] **Jeff Weisensel, Mayor:** Thanks. [39:21] **Diane Lindo:** Thank you, Mr. Mayor and the council members for having us do a little comment. My name is Diane Lindo. I live at 2193 130th Way in Rosemount. And I got the letter and I just had a couple quick questions for clarification purposes. First off, it was talking in there about no interest being paid within 30 days of an adoption. Is this different than confirmation of assessment? Because that's also listed down at the bottom with another date of October 31st. So I was a little bit confused by that verbiage. So I don't know if that's the same thing or if that's a different thing. And then it also stated after it said 30 days of adoption, what does that 30 days begin for the no-interest payments? Is it 30 days from tonight when you say, "Yep, we're going to do these assessments"? And then it goes on to state you can pay up through October 31st with zero interest. So it's kind of confusing. Was it in July when we have to pay it? Is it by October when we have to pay it? That was very confusing and vague. And then I know you had noted that the hardship assessment deferrals should be directed towards the city. Who do I need to direct that to? Because again, that's vague as well. The statute actually states that you should get forms from the county auditor, which I don't know who that is. I did send something out to the public records because I do want to get on that because that also is a 30-day time clicker. So is it 30 days from the adoption? Is it 30 days from the confirmation? And that's important to me because I share a home with my mom and she is 85 and it will create a hardship for us. So that's very important to me. So if I don't get it from the county and I have to get it from the city—because it also mentions I can get it from the city clerk toward the end of the letter—so that's also very confusing. So I would like that to be addressed as well. And I think I have that—I think that's all I wanted, thank you. [41:33] **Jackie Young:** Hello, my name is Jackie Young. I live at 12895 Bengal Avenue. And I also had the same question as Diane about: is it 30 days from today or is it October 31st for the payment? Another question I had was really about the objection. So if you object to it, what—what do you object to? Yes, I object to having to pay ten thousand dollars. I also kind of object to the fact that there's an additional six thousand hookup for water and sewer. So it's like you pay this plus you pay this plus you pay all of your own costs to take care of the systems that you have. So I—I just want to know what—what can you object to and what does that do? [42:37] **Jeff Weisensel, Mayor:** Okay. Could—could staff put up the—one objection slide? We can have people pull it up. Is there anyone else? Yeah, that's the one. All right, before I close public hearing, I'll look to—probably look to Nick maybe? Okay, we can do that. So I'll move to close the public hearing, seeing that no one else is coming forward. Is there a second? [44:11] **Council Member:** Second. [44:13] **Jeff Weisensel, Mayor:** All in favor? **[Council: Aye.]** Hearing is closed. All right, questions. The things that I heard—and I'll open up to either of you that can speak to it. So on one, I did hear how where that connection is going to be left once the work is completed up into—and what is it that they're actually leaving there? Is it a closed connection, open, how is it? [44:42] **Brian Erickson:** So the services will be extended to either the edge of the right-of-way—so the property line—or they will be 10 feet past the edge of pavement. There are some—there's a couple unusual situations in this particular neighborhood just because of how the roads were constructed and the actual boundaries. So we will extend the services to at least 10 feet past the edge of pavement. We'll put a curb stop in for the water, so it'll be a—there will be a valve on that. And then the sanitary sewer will be capped at that point as well. [45:15] **Jeff Weisensel, Mayor:** Okay. Is there a diagram or a picture that would help the resident understand? They're not going to really see it, but it'll be underground or what they're going to see above ground? [45:22] **Brian Erickson:** Yeah, so I mean generally we'll—we'll have some information on that, and what we do our best to coordinate with the property owners as well. So, I know there are a couple of residents that I talked to at the neighborhood meeting that their preference would be to relocate to a different side of the driveway, for example, just because based on where their well was—we didn't have all the information on where every well was, where the septic systems were at. The one—the one key point is that the water and sewer stubs would be in a single trench. [45:51] **Jeff Weisensel, Mayor:** So then I would suggest that if you haven't talked with Mr. Kramer specifically about that, that he gets follow-up on that. [45:56] **Brian Erickson:** Yes, we will do that. [45:58] **Paul Essler, Councilmember:** Hey, can I just ask a follow-up question on the one on that before we move on? The 10 feet from the pavement or to the property line? Again, without knowing, is there—is there situations where that 10 feet from the pavement does not get them to the property line and then it would go to the property line? [46:13] **Brian Erickson:** No, there's—there's a few situations where because of how the road was constructed and it's not actually in the right-of-way—so they had to, after it was platted, they had to secure some additional easement in several locations. So if we put it to the edge of the right-of-way, the edge of the right-of-way is actually in the road. So we want to bring it at least 10 feet past the edge of the road. So it may go quite a few feet into the property potentially. [46:38] **Paul Essler, Councilmember:** And it would be—for the most part, it'll be in an easement at that point? [46:42] **Brian Erickson:** So, okay. So the 10 foot could be—if it's literally on the edge, you could go 10 feet into the property. That's correct, yeah. [46:48] **Jeff Weisensel, Mayor:** Okay, thanks. Right. I also heard clarification on dates. Should Council make a motion and approve tonight's resolution, the 30-day clock would start as of today. So June 20th would be the start of that 30-day clock. And then I heard two different comments: one was in—just the day of adoption, which is what you're saying now? [47:19] **Brian Erickson:** Correct. And then the day of confirmation—it's actually a certification, so it gets certified to the county and that's roughly that last—October 31st. It may not be that day if it's a Saturday; it would be the last business day. It is generally the last business day in October, and that's when Finance needs all that information so that they can make their calculations and get that information to the county in sufficient time. [47:50] **Jeff Weisensel, Mayor:** So to be clear: the 30-day clock starts today, or tomorrow essentially, if we approve the assessment. [47:57] **Brian Erickson:** That's correct. [47:58] **Jeff Weisensel, Mayor:** And then the difference of the other is confirmation or certification of the cost to the county. [48:02] **Brian Erickson:** That's correct. [48:03] **Paul Theisen, Councilmember:** Mayor, I think the important question for the resident was interest-free until October 31. So pay whatever you'd like between now and October 31 up to the full 10,000, and it's interest-free off your property taxes. [48:21] **Jeff Weisensel, Mayor:** Okay, I—I'm less clear on that and I think Teah and I need to look into that maybe, but so we can get a more direct answer on that. But yep, so that one's on the deferral. All right, and then I heard if you were wanting to object: before the end of this meeting, you need to be in writing and signed and submitted to the clerk that you're objecting. And I guess I look to—is there anything in particular that they should be putting in there if they're objecting to something? [49:04] **Brian Erickson:** It’s just—you just can't put "I object." No, that's fine. Yeah, a handwritten note would—just to get your name in the file would be just fine. [49:11] **Logan Martin, City Administrator:** If I could, Mayor, council members. I—I think there was part of the question was: what would they be objecting to if they filed it? It would be strictly only the special assessment for the street project. The connection fees that could optionally be added to the assessment are not a special assessment. That is a financing tool for the resident; that is a fee that anyone who's connecting into the public system must pay. That's not objectionable. Those are connections into our system. [49:45] **Jeff Weisensel, Mayor:** Correct. Any new house, any old house, anybody connecting to our system are paying those fees. [49:50] **Brian Erickson:** Well, it would generally be just a new house or new connection into this. So if you—you know, if you were to tear the house down and reconstruct something new, there will be no new connection charges at that point. [50:06] **Jeff Weisensel, Mayor:** And that amount’s not part of the assessment? It's strictly at the option of the homeowner if they wish to opt into that portion of the assessment. [50:14] **Brian Erickson:** That's correct. Correct. And that would be via a separate agreement. And so essentially, that's what the property owner is doing—is waiving an assessment hearing and they're agreeing to that cost. But again, that option is only for anybody who would plan to make that connection this year. [50:33] **Jeff Weisensel, Mayor:** Okay. And can you explain the difference here? So tonight they can raise their objection, and then—this third bullet point here: "To appeal to District Court, a person must serve a notice of appeal on the Mayor within 30 days of adoptions of the assessment." That's—that's correct. So we—we get told tonight if that's the case, and then what's the follow-up? We tell them "Yes, you're still getting assessed," and then they go to District Court? [50:59] **Brian Erickson:** Yeah, so there's a couple options. The Council could say, "Well, let's—let's take a step back and look at the assessments again," because generally that there is going to be benefit to the property. So essentially what is being objected to is the amount of the assessment, and so that's—that's really where the push is. So as you know, the Council could say, "Well, let's take another look at this," and should the assessments be changed—should Council say, "No, we're going to move forward, we're going to pass the resolution and adopt them," that objection of the property owner allows them to take it the step further to the District Court. [51:41] **Jeff Weisensel, Mayor:** Okay. Yeah, so you have to be on record tonight if you want to take it to that next step. [51:46] **Brian Erickson:** That's correct. And so in that—the requirement of course, you know, they would need to—they'd likely have to talk with an attorney and do that exactly. [52:00] **Logan Martin, City Administrator:** If I—if I could, Mayor, that would only be for that individual's assessment. That's the only room, you know, it's strictly for that property owner, not on the whole, I guess. [52:12] **Jeff Weisensel, Mayor:** Right. Okay. Look to Council if there was anything you heard that I didn't follow up on. All right. And could we make sure that maybe those things are reiterated in the letter that goes out? Hopefully make a couple of those things clear. All right, so with that we have a resolution. Anyone wishing to move forward on that resolution may do so now. [52:41] **Paul Essler, Councilmember:** I'll make a motion to adopt a resolution approving the assessment roll for the 2023 Neighborhood Infrastructure Improvement Project, city project 2023-04. [52:49] **Paul Theisen, Councilmember:** Second. [52:50] **Jeff Weisensel, Mayor:** Motion by Essler, second by Theisen. Roll please. [52:53] **Erin Fasbender, City Clerk:** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** Freske? **[Freske: Aye.]** Klimpel? **[Klimpel: Aye.]** [53:01] **Jeff Weisensel, Mayor:** That completes item number seven A, the adoption of that resolution. Moving on to next item 7B: Public Hearing for proposed tax abatement. Mr. Van Oss, Development Coordinator. [53:13] **Eric Van Oss, Economic Development Manager:** Thank you, Mr. Mayor. So today we have a resolution on behalf of Gymnast LLC for a potential tax abatement regarding their proposed technology campus at the UMore parcel of 280 acres. As the Council may be aware, Gymnast LLC submitted a PUD Master Development Plan in December that was approved by the Planning Commission and then approved by the Council in March. It would be for several buildings as part of a technology campus for the applicant, Gymnast LLC. A part of this project included a potential property tax abatement. It was brought to the Council initially in January; however, staff is working on some of the details of the agreement and how it would work functionally, and it was tabled in March and it is brought back before the Council now. So as part of this potential abatement, we have a representative from Ehlers here to discuss both tax abatement and then the specifics of this project and how it would kick in, and then we also have a representative from Gymnast LLC to discuss the project and answer any questions from the Council. And with that, I'll turn it over to Ehlers. [54:33] **Rebecca Kurtz (Ehlers Financial Advisor):** Thank you. Good evening, Mr. Mayor, members of the Council. Rebecca Kurtz from Ehlers. And thank you. And as mentioned, I'm going to give a high-level overview of abatement. For those of you that have heard me talk about tax increment before, you're going to see that there are a lot of similarities. So I'm happy to answer any questions; feel free to interrupt. But I also don't want to spend a lot of time on something that you may already be familiar with. And then at the end, I will touch on the highlights of how Project Gymnast and the abatement would be working together. So I'm going to take a step back just again—that reminder: why would the city or any public entity even consider providing assistance for a project? And really it's looking at that overall economic development strategy for the community and the specific goals that your community may have, whether it is creating jobs, redevelopment, cleaning up pollution, constructing affordable housing. In the case of Gymnast, we're looking a lot at increasing the tax base and creating some jobs, and then that overall changing the community's market conditions or helping facilitate something that is not happening or may not happen on its own. So when we talk about tax abatement, this definition here—the working definition—is capturing all or a portion of local property tax revenues from specific parcels for a specific period of time. And one of the big differences from tax increment is that each taxing jurisdiction that will participate in the abatement gets the option to hold a public hearing and then take a vote on whether or not their portion of the taxes would be subject to the abatement. And so the city council will vote only on its portion of the taxes. We have reached out to the county and the school district; both have declined, but they would have had the opportunity to vote on their specific portion. So with that, as we look at again how tax abatement works—this you'll see is probably a good reminder of what we went through with tax increment. This tax abatement is being set up so the base tax capacity—or the taxes from city, county, and school district—would continue to go to the taxing jurisdictions. Now in this specific project, we recognize the property is currently tax-exempt. When it is sold and becomes sold to the private property or the private entity, there will be a small amount of tax revenue that will come to all taxing jurisdictions. The city will—with the way this is structured—the city would retain that. I will say it is very minimal and probably will not make a big difference for you, but it is set up that way in the case of Gymnast. Then as I mentioned, the county and the school—we have been in communications, reached out to them; they have declined, so they will not be participating in the abatement. So if this moves forward, they will continue to retain their taxes and see that increase or that benefit from new development and see that immediately. The piece that we're going to talk about this evening is the city portion of the taxes, and I'll go into the details of that a further. In many cases with abatement, if the city chose to approve the abatement, the city then would see a delay in when they would receive that benefit. So the new project would happen, the taxes would be paid; those taxes likely would be directed to the project, and then at the end of the abatement, the city would see the benefit of that increase in tax base. So again, prior to the abatement, those properties have that base value. In the case of this project, we have worked with the county, and again today that base value is very minimal because it is tax-exempt. The market value is estimated to be about 10 million dollars; however, with it being tax-exempt, it's zero today. The base will be based on that 10 million dollars when the property is sold. Again, we will find that out from the county assessor at the time of sale. So again, taxes today are zero because it's tax-exempt. With the future market value, we've worked with the—with Gymnast and the county to get an estimate of what that new value will be when those five buildings are completed. Because there are a lot of unknowns and it is a very large project that is being proposed, the assessor has given us a range between 68.4 million to 84.9 million for a completed market value. The example and the numbers I'm going to walk through today do assume that 84.9 million. With that then, what we are estimating based on a market value completed with the five buildings of 84.9 million is that the city portion of the taxes will be about 412—almost 413,000 annually when the project is fully constructed. I'm gonna pause here, remind us of the notice, and then we'll talk about the deal points for this specific project. So with tax abatement, I know that we had gone through the public hearing; there had been some delays, and so we have republished and with that there is a notice requirement of 10 days or no more—10 days or more prior to the hearing. That has been completed, and those requirements of identifying Gymnast, the properties that are going to be abated or the property that is being developed has been identified in that along with an estimated total amount. We are here then tonight where the Council after this will hold a public hearing and then consider the resolution that has been included that would approve the abatement including a maximum term. There are some benefits and findings and then if the abatement is in the public interest, and these are required by Minnesota statutes. So you can see there are many options of why this project might be in the public interest. Based again on the information that we have learned and been working on, we believe it's increasing or preserving the tax base and then providing employment opportunities. **[Music]** So again, we've gone through the process from gathering the information, documents have been drafted, we're at the public hearing, and then there will be that opportunity to consider the resolution. For this specific project, the terms of the abatement are a little unique from what we maybe have seen on other projects. After discussions, it was negotiated or determined that Gymnast did want the city to receive some of the benefit from the new development, but also depending on where that market value ended up over the 20-year term of the abatement, wanted that opportunity to be able to receive a reimbursement if the tax level got to a certain point. The proposed abatement that you're considering this evening is with the city retaining the first million dollars of tax increment revenue from the project, and that when I say million dollars, it is focusing on the city portion of the taxes—so city taxes from this development. The first million dollars would be retained by the city; anything that was generated on an annual basis in excess of a million dollars—or paid in excess of that million dollars—would be the abatement that would then be reimbursed to Gymnast if you did decide to move forward with approval of this. Again, that assessor estimate for the project is between that 68 and almost 85 million. We did run some scenarios to see: what would it really take to get to that million for the abatement to even kick in? And so again, based on your current tax rate, the project would need to be valued at 85 million from Year One and have an increase at six percent annually for 20 years to reach that point of generating a million dollars in city-only taxes. And you know, this is a calculation based on what we know today, but I think the point that I do want to make is we are not anticipating that this abatement would kick in anytime in the immediate future. In my opinion—it is my opinion—it likely may not ever kick in, the abatement. But if it will, it will not be immediately for you. As I mentioned, school and county are not participating, so we are only looking at the city portion of this. With that, I am happy to answer any questions. I know you've talked about this many times and heard these presentations multiple times, but if there's questions, happy to answer them. [1:04:57] **Jeff Weisensel, Mayor:** Could you put up the last slide just for reference there? Okay. Any questions? [1:05:04] **Paul Essler, Councilmember:** Yeah, so I understand the school and county are not participating and obviously this is a stop-gap measure from the developer to limit their tax liability in case it does grow, right? But what—what was their response or reaction? I guess—I mean because we're kind of—we're taking all the risk in terms of, you know, they're using the abatement dollars to subsidize potentially subsidize the project or at least limit their risk, but the school and county aren't participating at all. I—I maybe can understand that the school maybe not participating, but I'm surprised that the county wouldn't be participating in a potential abatement, especially when you're looking at the—the dollars we're talking about here and the unlikeliness of ever hitting that. I'm just surprised that the county is unwilling to not—not also ante up a little bit. [1:05:57] **Rebecca Kurtz:** Right, right. There were—there were discussions with the school and ultimately it is my—and I was not part of them—but ultimately it is my understanding that Gymnast chose to not push the school for their participation, again just because of some of the school funding and not wanting to—to take that. So my understanding is that was a decision that was kind of a mutual agreement between the school but Gymnast had—was supportive of that decision too. [1:06:33] **Paul Essler, Councilmember:** That makes sense. From the county—and I would again—I was not a participant in those meetings so I would look to people that were to speak more directly on their response. [1:06:42] **Logan Martin, City Administrator:** Yeah, Mr. Mayor and council members. To my knowledge, the county hasn't done an abatement for an economic development project—and I say, you know, recent or memorable history. We have been continuing to work with them on partnerships for other infrastructure improvements that would be owned and controlled by the—the county. So while they aren't—or they've declined to financially participate through an abatement, we continue to work with them on those other pieces that are critical to the development of this project. [1:07:05] **Paul Essler, Councilmember:** Again, I'm still disappointed. I mean given the magnitude of what this project is and what it brings to the—I mean if assuming we know what it—I mean assuming we have an idea what it is, it just kind of—it's going to put it up—it's put Dakota County on the map, put Rosemount on the map, and the fact that they're unwilling and again, there's a pretty low probability of risk here. I'm just really surprised and disappointed that they're not willing to participate. Okay, thank you. [1:07:33] **Jeff Weisensel, Mayor:** Other questions? [1:07:34] **Heidi Freske, Councilmember:** I would just ask, and I don't know if anything could be, but for viewers at home who are watching this, this is all very, you know, code names, etc., etc., which I totally understand. But do we have any timeline of when some of the information will—can be unveiled to our residents? [1:08:00] **Logan Martin, City Administrator:** I'll have the applicant step up and speak to that. That'd be great, thank you. [1:08:07] **Dan Burns (Attorney for Gymnast LLC):** Thank you. Eric—Mayor, City Council Members, my name is Dan Burns. I'm an attorney from Taft Law Firm and I'm here as a representative of the company and the project tonight. And I'll go through a few points and then address some of the questions and hopefully be able to clarify some points with you this evening. The company and I have been working with staff at the city for many months. I really appreciate the collaboration and the support in this effort. Your—your team's phenomenal; it's just—it’s great, going great. This project is very exciting. The company is working on a nationwide site selection effort and has identified the UMore Park site as a potential candidate to build a high-tech campus consisting of office space, warehouse space, and data halls, which would contain networked computer servers. These servers will be used for remote storage, processing, and distribution of large amounts of data. The facility will be for the company's own use—the will not be leasing the space to any other companies. As this is still a highly competitive process, the company cannot divulge its identity at the time, which is why I'm here today. However, I can share that Gymnast LLC is a project entity representing a Fortune 500 company that is truly a great community partner in the locations in which they operate. My client has also been working directly with the Minnesota Department of Employment and Economic Development and Greater MSP, and both organizations are very supportive of the project. As has been shared, this exciting development would involve significant investment from the company yielding a substantial increase in the tax base and would spur economic development in the area. And so before you we have the public hearing and their quest to approve a tax abatement program and the tax abatement agreement, as these are crucial milestones to help enable the project to move forward. So going back to some of the points specifically: there's a concern about the school district and the county participation. I'd just like to add a little bit—for the school district non-participation, one of the things actually in the statute for granting a tax abatement: it allows for a certain duration of years, but if one of the taxing—jurisdictions declines participation, it actually increases the amount of years to the full 20 years. So otherwise it would have only been 15 years, but by the school district denying or declining to participate, it allowed it to move forward to 20 years, which gave a little bit more level of certainty. And again, just for my client's sensitivity to sort of tweaking funding with school districts, we really don't want to do that. The county, as—as Nick did a great job of jumping in—the county at this time, my client is in active conversation with the county to see how the county can support and show its support for the project. And right now with the city staff's help, that's going to be focused on discussing infrastructure with—with the road improvement street improvements around the site. As far as a timeline, this is an ever-moving ball and can kicked a little bit here and there. But I—my current understanding is there is a point at which the negotiations with the current property owner would force sort of the—the name to—to come out. But—but my client wishes to, again because of the competitive nature of the site selection, we want to make sure all the ducks are in a row, everything's a go for the project, before divulging the identity, and appreciate everybody's cooperation, response, and—and respect of that. Thank you. [1:12:08] **Eric Van Oss, Economic Development Manager:** I would just add as well—they will come forward for other planning approvals to the PC and City Council. So this is just one step among many. You'll be seeing applications for site plans and everything else again in the near future I think, the project moves forward, and then they'll reveal themselves at the time. [1:12:30] **Jeff Weisensel, Mayor:** I have a few questions to walk me down this. How many acres are we talking about right now? [1:12:35] **Dan Burns:** Approximately 280. [1:12:43] **Jeff Weisensel, Mayor:** And how many buildings on that 280 are—are we talking with this abatement? Anything and everything that gets built on the 280 or we talked about an office building and some ancillary and—? [1:12:50] **Logan Martin, City Administrator:** Yeah, so Mr. Mayor, I'll probably point to one of the documents in the—the Council packet under the tax abatement agreement. The way that this deal is—is structured—and Dan, certainly feel free to—to jump in if—if I mischaracterize a part of this here—part of the—the negotiation or the dialogue between the city and the company was understanding that that base and then how we get to what they can maximize on the property so that we're all at the same level of understanding about how and when this could kick in based on the evaluation that Rebecca walked through during the financial analysis part of it. So there's a section there which defines "Project" that would be included under this abatement not exceeding a million square feet, whether that's amongst the number of buildings noted within there or if they choose to reconfigure the site to a certain extent. That was the mechanism that both our attorney as well as the attorney here representing the project came to an agreement—that was an appropriate way to really cap what they can do so that there was no, say, mischaracterization of the city agreeing to something and then they build something that's significantly larger therefore immediately triggering some benefit that we weren't anticipating. [1:14:09] **Jeff Weisensel, Mayor:** And that one million square feet translates to somewhere between 68 and 85 million? [1:14:15] **Logan Martin, City Administrator:** Yes, correct. [1:14:16] **Jeff Weisensel, Mayor:** And then if they were to choose to be beyond that, then my understanding is then that abatement doesn't go with—let's say over a million square feet, they would be just normal tax? [1:14:28] **Logan Martin, City Administrator:** That is correct. It's meant to allow the company to expand beyond the initial proposed footprint on that project if—if they so choose. [1:14:38] **Paul Essler, Councilmember:** Okay. Paul? Yep. So thanks for coming and presenting a little bit. Just to follow up to your comment about the county: what—I know they're not participating in the abatement, but you mentioned that they are in conversations with other infrastructure. Any indication of whether they really are serious or likely going to participate in that or what—what—what's your—what's your gauge there? [1:15:07] **Dan Burns:** Well, my client certainly hopes so. I—I think they had conversations as recent as a couple of weeks ago, and—and there was momentum during that conversation. We talked about potentially being involved in their CIP process this year and including certain improvements—road construction, traffic light, things like that, just kind of tossing out ideas and what can be included in their CIP and they and they assist with that. And I believe there's some potential funding as well for those coming from some of the state agencies. All very preliminary at this point in time, but we are excited about the momentum that that conversation had. [1:16:03] **Paul Essler, Councilmember:** Okay. All right, thank you. [1:16:05] **Paul Theisen, Councilmember:** Other questions, comments? I just want to make sure I understand this, too. Even though we're using the word tax abatement, that abatement doesn't kick in until after a million dollars? [1:16:21] **Rebecca Kurtz:** That's correct. Full valuation annually. City’s portion of their entire— [1:16:32] **Paul Theisen, Councilmember:** Right. And I would just add that one million is not static. There's an inflationary measure on it that will increase every year. So the million is the base that will eventually grow. [1:16:47] **Paul Theisen, Councilmember:** That's helpful. Well, that's helpful, yeah for sure. Yeah, that further protects—protects the risk as well. Yeah, thanks for that clarification. [1:17:01] **Jeff Weisensel, Mayor:** All right. If there's no other questions, we'll move to public hearing. The floor is open. Anyone wishing to speak on this may come before the podium. State your name and address and limit your comments to three minutes or less, if you please. Noting that we have staff and consultants and lawyers and everybody else here and no one else to come forward—is there anyone else that would like to come? Anyone? Last time. I'll move to close the public hearing, seeing that there was no public comment that was made. Is there a second? [1:17:39] **Council Member:** Second. [1:17:41] **Jeff Weisensel, Mayor:** All in favor? **[Council: Aye.]** Public hearing is closed. [1:17:45] **Heidi Freske, Councilmember:** And I'd like to make a motion to approve the proposed abatement resolution. [1:17:50] **Paul Theisen, Councilmember:** I'll second. [1:17:51] **Jeff Weisensel, Mayor:** Motion been made and seconded. Motion by Freske, second by Theisen. Roll please. [1:17:55] **Erin Fasbender, City Clerk:** Theisen? **[Theisen: Aye.]** Klimpel? **[Klimpel: Aye.]** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** [1:18:03] **Jeff Weisensel, Mayor:** That approves public hearing proposed tax abatement item 7B is completed. Okay, next public hearing: vacation of certain easements of the Prestwick Place 23rd Edition plat area. Mr. Nemcek's not here. Mr. Kienberger, you get the easy one maybe? [1:18:32] **Adam Kienberger, Community Development Director:** Find the start slideshow. All right, thank you Mr. Mayor, City Council members. Probably heard me say these a couple of times the past couple of Council meetings, but this is a request or a process initiated by the city for a vacation of certain easements in the Prestwick Place 23rd Edition plat area, also known as the area where Lifetime and the city is partnering to construct a recreation facility. And I'll go over to the map here just to familiarize everybody, especially those that may be watching this meeting: the northeast corner of Akron Avenue and County Road 42. Here are a couple of the graphical displays of the easement vacations as described in the packet as well as identified in the attached resolution. And the reason that we're doing this is that it's primarily a matter of cleanup to add both clarity both during the title process for future transfers of the land within the subdivision, which is Prestwick Place 23rd Edition plat area, and then also when development occurs in the outlots of Prestwick Place 23rd Edition. Again, there's the plat identifying those areas and then those easements that are recorded along with the recently approved final plat from the City Council on March 7th of 2023 of this year. So with those shown there, the motion or the recommended action is to make a motion to adopt a resolution approving the vacation of certain easements within the Prestwick Place 23rd Edition plat subject to the inclusion of new easements on the recorded plat as shown on the previous slide. Mr. Mayor, I can stand for any questions or take them after. [1:20:43] **Jeff Weisensel, Mayor:** And then just for information and clarity: where will the Lifetime project be? [1:20:48] **Adam Kienberger:** The Lifetime is generally to be constructed on Lot One, Block One. [1:20:53] **Jeff Weisensel, Mayor:** Okay, thank you. Any questions from Council? No? Seeing none, then I'll move to open up the floor for public hearing on the vacation easements. Anyone wishing to speak on this may do so at this time. Please come forward to the podium, state your name and address, limit your comments to three minutes or less. And anyone may do so at this time. And again, seeing just staff and consultants. Anyone? [1:21:40] **Jeff Weisensel, Mayor:** Motion to close the public hearing. Is there a second? [1:21:42] **Council Member:** Second. [1:21:44] **Jeff Weisensel, Mayor:** All in favor signify by saying aye. **[Council: Aye.]** Opposed? The hearing is closed. Now I'll accept a motion. [1:21:51] **Tami Klimpel, Councilmember:** Now I will move to adopt a resolution approving the vacation of certain easements within the Prestwick Place 23rd Edition plat subject to the inclusion of new easements on the recorded plat. [1:22:04] **Paul Essler, Councilmember:** Second. [1:22:06] **Jeff Weisensel, Mayor:** Motion by Klimpel, second by Essler. Roll please. [1:22:09] **Erin Fasbender, City Clerk:** Essler? **[Essler: Aye.]** Klimpel? **[Klimpel: Aye.]** Freske? **[Freske: Aye.]** Theisen? **[Theisen: Aye.]** Weisensel? **[Weisensel: Aye.]** [1:22:23] **Jeff Weisensel, Mayor:** And that closes with approval 7C. Long meeting already. There is no unfinished business. We'll move on to nine: authorizing the sale of General Obligation bonds. Miss Malecha, our Financial Director. You've seen me a lot this evening. [1:22:48] **Teah Malecha, Administrative Services Director:** Not normal. So this evening forward toward the construction of the new police department and public works campus, which I am sure everyone is excited about, along with the 2023 street improvement project which was discussed this evening, and then the extension of Akron Avenue. We're here this evening to move forward with the bond sale that will be used to fund these three projects. Doug Green is here from Baker Tilly with more information regarding the bond structuring and sale process. [1:23:14] **Doug Green (Baker Tilly Financial Advisor):** Welcome. Thank you, Mr. Mayor, members the Council. I apologize—you’re looking forward to your riveting—and I apologize for my voice, I feel a lot better than I sound. So, well let's see—let’s just go to the second part of that presentation. There we go. All right. Just like before the Port Authority, the purpose of an authorizing resolution is to set the date and time of the sale. Authorize us to move forward with the preparation of official statement. It approves the terms of the proposal that really outlines the principal maturities, which is a culmination of all the bond structuring and planning that we've been doing. The bidding parameters and the key terms for the potential underwriters. It says that we'll bring the results to the City Council at seven o'clock on July the 11th. And just so everyone is aware, if something crazy happens in the world, this doesn't say you are going to sell bonds on this state at this time—we can always make adjustments up into the day of the sale if we want to or need to. What you have in front of you here is rather confusing, but there's a point to it, and it's one that we've talked about before: that we're combining not only multiple projects with three projects, but multiple funding plans, financing plans into one bond issuance. Again, the potential purchasers don't really care what we're doing on this, but this is really a culmination. It shows all the different components: what we're borrowing money for, the portions that we're paying cash for. You can just go down the line; there's four different funding sources for the police department/public works, and for the two street projects we're borrowing for three of them. The levy portion, street portion, water sewer storm is paying cash—you see that down there, that equity contribution, that's City cash—and then the portion is paid for by municipal state aid as well. So a lot of different funding sources, but we're able to take advantage of the economies of scale putting this all together. Bond issuances really are more marketable the larger they are—it’s not a reason to sell more bonds, but they are more marketable. I have two examples today that really proved that. Again, looking at the annual debt service by purpose: this is debt service total principal and interest. Again, these are estimates here. With the police department/public works, we're ramping up that levy portion just slightly over time, doing level debt service for water sewer storm, and then for the two street projects we're amortizing those over 15 years. So just because we're going out 29 years on the police department/public works, we could amortize the street projects over any number of years we wanted to—for in our planning, we landed on 15 years. And so hopefully, there is about 30 basis points (0.3 percent) fudge factor in here. So hopefully over the next month interest rates will cooperate and either stay the same or go down. Looking at where we are in the market: you know, we have this idea that, oh my goodness, we're in really vastly different interest rate environment than we have been since well since 2006. And that is true to an extent, but when you look out that years of maturity, anything after 10 years out to 29 years, we're still in that three-to-four range. It's that short end of the curve that it's vastly different than what we've become accustomed to over the last few years. And I mean, well, that's certainly real money, it's in those longer ends where you're paying where you're accruing that interest over time—over 5, 10, 15, 20, 29 years—that's where the cost really comes in. It's not so much in those early years. So you know, we are in a higher interest rate environment, but it's thankfully at the longer end—what I call the longer end is anything over seven years out to 30—is historically still not too bad. And what you have here is last year (that dark purple line), and then two months, two weeks, and a week ago. So again, hopefully over the next month we'll see that come down a little bit. Looking ahead: already gone through the public hearing processes. Tonight we're adopting a resolution authorizing the bond sale. Tomorrow morning—it's a big morning—you have a credit rating presentation. I think it will go great. Take bids on the 11th and then bring them to your consideration that evening, and then we'll have a relatively quick close on August 1st. So with that, I'll be happy to take any questions. [1:29:20] **Jeff Weisensel, Mayor:** Questions from Council? That shows the totals by project on—more—I think for viewers or just for residents, having an understanding of what is the total amount of the bonds we're taking out, and what is the total of that amount—what total are they going to be taxed for? Because we know that many of those funds are going to be paid for by Lifetime or other funds internally, right? Can you help summarize that? [1:29:56] **Doug Green:** I certainly can, and maybe others can if I miss it. So these two—these two slides would really work in tandem. So these: the sources/uses of funds and that top line "par amount of the bonds," that's what we're borrowing. And then those additional three lines: the city equity contribution, the used portion, and then the developer portion—that's obviously cash that is going to these projects. And on top the levy, that obviously will fall to the property tax levy. Water sewer water going water rights sewer—so sewer rates and storm so on. Then I'll go to the next slide and looking with the police department/public works facility: the financing plan right now, or the funding plan right now, is for SKB fees to pay for that. So the way we have it that levy line structured there, there will—oh I'm sorry, I'm on Lifetime. Sorry, sorry. So what we have structured here is we have structured these bonds to result in these debt service payments will result in: on an average size home, there will be a fifty-dollar increase in the first four years and then it will then it will level off for the next 10 years after that. You really can't determine because we don't know what the overall tax base of the city is going to be, but we can get a pretty good estimate within the first five years. And within that first five years, on an average size home, it's going to be a 50 dollar increase in year one, another 50 dollar year increase in year two, year three and year four up to a total of 200, and then it stays flat. So that is the levy portion—that’s the tax impact for the police department/public works facility. If we're looking at the two street projects, you see the levy portion and assessments really cancel each other out. There will be an impact—this is a heavily sewer project, that's going to affect the sewer utility more. So for those those street projects, the levy and assessments for the rest of the tax base, there won't be a tax impact on them. It will affect their water and sewer rates but not—not the levy portion. Anything to add there? [1:32:19] **Logan Martin, City Administrator:** I just would say, Doug, the logic behind that to the Council was just as we were going out in the marketplace to do this—this borrowing, and as we look at the large-scale projects that we've got going on in the city, there was a—the street CIP was an underfunded fund right now. And so I think on Doug's recommendation and talking with Teah, you know, we decided that let's let's use this opportunity to to replenish the street CIP with some with some of these large projects that are coming down the pipe. So that's why both the J. Simons project which you just approved and then Akron are are lumped into this debt issuance. It is the sense that incrementally it's not very much, but it just presents a a little bit bigger package for the bond buyers to accept. [1:33:14] **Doug Green:** Mr. Mayor, members of Council, that's absolutely correct. And I'll give you the example that I just came from today: City of Delano at 18 went out 18 million—they're double-A and you know, we had eight bids and Morgan Stanley was the winning bidder. City of Excelsior, AAA rated, six and a half million, and there was four bidders and all from regional underwriters. So you get above even—I hate to say it, I've been joking, even this together, 50 million to 150—it’s not a lot for the market to absorb, but even when you get at that amount you get some bigger players to come in and you know, get more bids and hopefully they're more aggressive. So every little bit helps, and there's also advantages to time financing costs—less of our time, less of the bond counsel's time and everything else. [1:34:03] **Paul Theisen, Councilmember:** Other questions? Yeah, I know we've talked about this before, but I think for anybody who's listening on—on YouTube or wherever. The school district levy because we're saying it's 50 a month up to 200 after four years on average? [1:34:28] **Logan Martin, City Administrator:** For the average home in Rosemount, what was that per year immediately? I was told twenty dollars a month—so 240? [1:34:40] **Paul Theisen, Councilmember:** 240. So it's the equivalent in your—I mean that's capping at 200, not 250, just—so 50 times four, but yeah. So they're at 240 that's going to hit, and this will be 50 of what a taxpayer [pays] for the course of four years—50 every year for four years, right? And then you know, we've talked about this with Council during work sessions that you know the city—the 50 you know kind of sits aside and the growth that the city just sees—cost of living, health insurance, hiring—is going to be a separate bucket that we just, you know, it's impossible to really control, right? But yeah, fifty dollars—school district was improved, that's—that's in the neighborhood of 240 is what—what we've been showing. [1:35:28] **Jeff Weisensel, Mayor:** Okay. And then tomorrow is the bond rating call, correct? When will we get results on what the new rating is, and is that before we sell on—on July 11th? [1:35:43] **Doug Green:** Yes. Credit rating presentation—good question. The market requires us to get a new credit rating every time we go out to—every time we sell new bonds. And so we'll get those results next Tuesday or Wednesday. [1:35:58] **Jeff Weisensel, Mayor:** So within a week. [1:36:00] **Doug Green:** Within a week, okay. [1:36:01] **Paul Essler, Councilmember:** All right, thank you. I've got a question probably more for—for Teah. Obviously, and I saw it somewhere in the financial statements, but this is a lot of—it feels like a lot of new debt to be taking on as a taxpayer in the city of Rosemount, right? But I think I saw that there are some other bond obligations that will be maturing in the next few years as well, is that correct? [1:36:26] **Teah Malecha, Administrative Services Director:** We have one that is dropping off I think this year is the final payment year—it’s 183,000 that's the final payment dropping off. And then there are a couple others, and you'll see those in the budget; I have comments in there of—the final pay years, so they're in the comment section. So you'll be able to see that, and then that prints in the budget book too, so I can't tell you off the top of my head but yeah. [1:36:51] **Paul Essler, Councilmember:** The current bond debt we have is what—5 million? [1:36:55] **Teah Malecha:** It’s about that. It’s very low—five million, yes. [1:36:59] **Logan Martin, City Administrator:** Yeah, I think that's been part of the problem, right, that we've talked about with Council quite a bit through this—we really, you know, have never done anything like this. As a city, we've been kind of waiting for this opportunity for a long time. We essentially have what other cities would call just about no debt, right? And so it's—it’s a good—good time certainly for the capital expense that we're putting in for a new facility like PD/PW. That's—I wouldn't say one—well certainly for us maybe once in a lifetime, but for the city it's—it’s an evolution for the community. [1:37:31] **Jeff Weisensel, Mayor:** Anything else? Would anybody like to move the adoption of the resolution? [1:37:36] **Paul Essler, Councilmember:** I'll make a motion to adopt a resolution providing for the competitive negotiated sale of 64,865,000 General Obligation street reconstruction and capital improvement plan bonds series 2023-A. [1:37:54] **Tami Klimpel, Councilmember:** Second. [1:37:55] **Jeff Weisensel, Mayor:** Second by Klimpel. Roll please. [1:38:01] **Erin Fasbender, City Clerk:** Klimpel? **[Klimpel: Aye.]** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** [1:38:10] **Jeff Weisensel, Mayor:** And that approves the resolution for the bond sale. Completes item 9A. We'll move on to 9B: contract awards for Lifetime fitness facility. Mr. Schultz, Director. [1:38:23] **Dan Schultz, Parks and Recreation Director:** Mayor and council members. So this evening we have again some bids for the Lifetime facility project. This evening we have seven different specialty areas that have been bid out and they are recommended to be awarded this evening. The construction manager for the project has included a letter for each of the bid areas explaining the the estimated price and the the bid price that we did receive. And so tonight we're looking at the bids for Landscaping, Doors and Miscellaneous Openings, Drywall Carpentry Fireproofing and Painting, Flooring, Signage, Athletic Equipment, and Mechanical. And so also in the packet is a Lifetime Rosemount bid summary and budget sheet with a side-by-side comparison that shows the bid amounts; it shows the apparent low, and then it also shows what the target budget was on this. Now just to clarify one thing that I know might—might be a question for some of you: if you look at the second page of that side-by-side, you'll see that once you throw in everything—including the commissioning and the contingencies and things like that—we're looking at about, you know, anywhere from 45 to 44 million dollars in budget with a target budget of 43. So in part of this, in that earthwork utilities and paving, there will be a reimbursable that we will get. You know, Lifetime has to pay a portion of that cost on that 60/40 split. So that will bring that price down once they give us the reimbursable; that'll bring the cost down to 43 million, which is the target for what we are moving forward on. [1:40:34] **Paul Theisen, Councilmember:** I got a spreadsheet, but I didn't get the letters—it looks after each one—right. [1:40:40] **Dan Schultz:** I have the letters in the packet, but I don't have the spreadsheet. [1:40:47] **Logan Martin, City Administrator:** Yeah, for anybody that may have downloaded the packet before earlier today, the spreadsheets just got added. So if you go to the city's website and jump to page 416 in the packet, you'll see the spreadsheet which we just got hot off the presses from Lifetime this morning. Page 416—if you just go to the the city's website there, you should be able to see that. [1:41:20] **Paul Essler, Councilmember:** So you were saying, Dan, the difference between the subtotal with contingency versus the target budget would be monies that would be reimbursed to the city from Lifetime as part of our development or as part of the original agreement where they're paying a portion of the infrastructure and they're paying, you know, a portion of the paving and utilities and things like that? So that brings us back into the 43—43 million? [1:41:51] **Dan Schultz:** Yep. [1:41:54] **Paul Essler, Councilmember:** Everybody's seeing that? No? Wow, I like the pretty colors. Any—any other questions? [1:42:08] **Jeff Weisensel, Mayor:** Hold on, I haven't got to it yet. Yeah, as I was looking through the letters today, it looked like they were looking pretty good until we got to a pretty bigger—a bigger variance like roughly 10 percent on the mechanical. Can you explain what maybe happened? [1:42:43] **Dan Schultz:** Yeah, so let me—it’s not in here, just pull that one... flooring and mechanical... plumbing and heating combined mechanical 23-A. Is that Plumbing Heating and sprinkler scope? Nope. fire—oh yeah I see what you're saying, yes. So, plumbing and heating: the low bid—we were looking at the estimated costs would be closer to six million dollars. The low bid was 6.2. They were non-responsive in their bid with missing information and missing documentation, so we had to go to the next bid which was Hardy, who has been recommended to be approved, and theirs was a little bit more. I think as we look at—you know, once you go through and look at all of these in combined, there's some that are over, some that are under, and at the end of the day we're going to hit our target of of 43. [1:43:31] **Paul Essler, Councilmember:** Okay. Did you get in there, Paul? [1:43:33] **Paul Theisen, Councilmember:** Yep, I'm looking at it right now. [1:43:40] **Jeff Weisensel, Mayor:** All right. We'll just take a few more minutes. Any other questions or comments? [1:43:46] **Paul Essler, Councilmember:** Just offhand, I'm—it’s—I’m drawing a blank. Look for the legislative recommendation... okay, yep. [1:44:03] **Dan Schultz:** The one thing I will comment also on is we are still missing one item. You'll see on here the exterior athletic is being rebid, and then also the millwork—we have not gotten a bid on that yet. We—we just—we thought we had a couple bidders lined up and for some reason, whatever it was, they ended up not bidding. So we are reevaluating how to move forward on that, but we—we feel like we'll be back in the near future with a solution for that. [1:44:48] **Jeff Weisensel, Mayor:** And so are those dollars coming out of the contingency, or are they—have they been removed from the budget analysis? [1:44:55] **Dan Schultz:** They are as part of the budget analysis as—as an estimate at this point. So they'll be coming out of the contingency dollars potentially, yeah. [1:45:07] **Jeff Weisensel, Mayor:** Okay. So as of right now, though, we are over the 43 million target budget? [1:45:15] **Dan Schultz:** Correct. So—so through the bidding process we are, but Lifetime—there are some FF&E with some of the aquatics that will be reimbursed because that is a Lifetime expense, and then also for the site improvements, they are responsible for a portion of that which will cut that down by at least—roughly one and a half million dollars, which would get us to that 43 million. [1:45:51] **Jeff Weisensel, Mayor:** So going forward, I know because we got we just got a couple open scopes left here—but going can we see that next time we approve the final? Just so we can see the net number. [1:45:58] **Dan Schultz:** Yep, exactly. [1:46:01] **Logan Martin, City Administrator:** Yeah, and the it's the development—like developable acres where they're doing the installment of the utilities and stuff like that as we discussed kind of before. They have their bid total and then whatever package of stuff that they're responsible—should—yeah, total is across the entire site, right? And then we got to pull out the Lifetime Club parcel. [1:46:25] **Paul Essler, Councilmember:** And how much of the earthwork is their responsibility? [1:46:30] **Logan Martin, City Administrator:** 1.5 approximately. [1:46:33] **Paul Essler, Councilmember:** Well, that would be more than 1.5 then? [1:46:37] **Logan Martin, City Administrator:** Oh, I guess the bid came in at 3.2 versus the budget was 5.1? [1:46:42] **Dan Schultz:** Yeah, the budget—the estimated amount was 5.1. SM Henches and Sons was a little over 3.2, so they'll be on the hook for roughly one and a half. [1:46:58] **Paul Essler, Councilmember:** It's a huge savings from budget. [1:47:00] **Dan Schultz:** Yeah. So that's why when council member Theisen was asking about some of these that have gone over, we've also had one like this in the earthwork which has come in under quite a bit. But—but I think the point is is that there should be another line there that shows things that they are responsible—that really takes—and I can put that in there. [1:47:33] **Jeff Weisensel, Mayor:** Or have them presumably we would be under the 43 million at this point. [1:47:40] **Logan Martin, City Administrator:** Yeah, and then just for the total project cost perspective—because just getting kind of back to the the birth of the deal, right? It was 48 million 60/40 split. So there's a number of millions that are not shown in this; it's just a straight Lifetime FF&E contributions. Just to remind Council and folks that have been watching this deal closely at home that the number that you're seeing here tonight is not all-encompassing of the project in terms of what they're bringing, let alone construction. They're acting as our construction manager, architect, engineer on record—all those types of things, right? [1:48:22] **Jeff Weisensel, Mayor:** All right. If there's no other questions, would anyone like to move the recommended action? [1:48:27] **Heidi Freske, Councilmember:** I'll make a motion to recommend the City Council accept the bids and award contracts to the lowest responsible bidder as described in the letters of recommendation for the following specialty areas: Landscaping, Doors and Miscellaneous Openings, Drywall Carpentry Fireproofing and Painting, Flooring, Signage, Athletic Equipment, and Mechanical. [1:48:51] **Paul Theisen, Councilmember:** I'll second. [1:48:52] **Jeff Weisensel, Mayor:** Motion by Freske, second by Theisen. Roll please. [1:48:55] **Erin Fasbender, City Clerk:** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Klimpel? **[Klimpel: Aye.]** [1:49:03] **Jeff Weisensel, Mayor:** Motion approved 5-0. Completes 9B. We'll move on to 9C: Authorization Declaration on site development agreement with Lifetime fitness facility. Mr. Martin. [1:49:12] **Logan Martin, City Administrator:** Thank you, Mayor, members of the Council. The Port Authority saw and acted upon this exact same action item at their meeting tonight. It was approved unanimously five to zero by the Port Authority. So in front of you tonight is for the City Council to also authorize the Declaration of Covenants and Easements and then a Site Development Agreement between the city and Lifetime Inc. And so just to reiterate what we discussed at the Port Authority meeting: two separate documents in front of you tonight. The first is the Declaration of Easements and Covenants, which really establishes easement boundaries across the property—utility easements, so those things of that nature—as well as property use covenants that will be placed upon the developable portion that will be developed by Lifetime Incorporated acting as a developer. And so as we discussed at the Port Authority meeting, this document is a document that cities are not often a party to, but because we are the landowner of the club parcel and have a vested interest in the entire site, we are signatory to the Declaration of Covenants. As Council has reviewed and Port Authority reviewed, it does place some limitations on the use of the remainder of the property—limits some items that Lifetime as a developer would not intend to see or sell the property to. And by and large, those are—the logic behind those covenants and those limitations is really twofold: one is a kind of a brand protection move from Lifetime to ensure that like-minded uses and not competing uses would go next to Lifetime, and they have a real purposeful effort as to what their brand would appear as it enters into a development area. And then so those are things like fast food, things that run a bit contrary—tobacco shop, things that run a bit contrary to the healthy lifestyle of that Lifetime supports. And then also—and probably more importantly and more directly—are operations and offerings that the Lifetime club parcel itself will offer: so chiropractor, salon, nail salon, spa, Cycle Bar fitness, OrangeTheory Fitness, right? All those things exist inside of Lifetime. And so they of course, as a wise developer, would not allow or want a competitor to be right outside the front door. So that's really what lives inside the Declaration of Easements and Covenants. Important to note, Lifetime as the developer has the ability to sell to who they wish, and if they end up making a change someday and have a different opinion about somebody who presented a development opportunity to them, they can certainly make a different decision and and change this document and come back for an amendment to this document. So there's a brief explanation of the Declaration. Secondly—and probably a more lengthy document—is the Development Agreement. Pretty typical development tool that we see often as we enter into developments with private parties that really establishes the roles and responsibilities of the city in the development deal and the developer in the development deal. Who's paying for the installation of utilities, how are we splitting those costs, etc.? In this deal, like we just discussed with how we're splitting apart the earthwork on the construction project, the Lifetime portion and the developable portion is about a 50/50 split across the acreage. The net developable acreage is about a 50/50 split. So utility installation, private roadway—the spine road to the middle of the road is a private road. They're going to build a little roundabout in the middle; that's all private, not city-owned. So maintained, plowed by the private developer and their management company if they choose to hire one someday. But we as the developer of Lifetime (the club) own a portion of that project, right? And so that kind of lives on our side of the ledger as we do the 21 million dollar cost split that we just discussed with the bond counsel also. So 50/50 split really on utilities and installation of infrastructure. And then importantly, the development deal also discusses Aspen Avenue, which is the eastern boundary road connecting Highway 42 up to Connemara. Lifetime will be assessed and they will have the ability to spread it across their developable parcels an assessment for the southern portion of Aspen Avenue up to that spine road. North of the spine road, the city will own an assessment on the west side of the road; developer or owner on the east side of the road would own an assessment on that side. And so Aspen Avenue becomes a fairly traditional development assessment agreement, and Lifetime has agreed to receive an assessment of some nature on the southern portion, western half. And there's a lot of reasons why we want to get that project done. Lifetime certainly needs it up to the spine road to feed folks into the development, but we really see that as a long-term kind of planning tool. It's a—it's a traffic reliever off the stress that's placed on Connemara and Akron, and that intersection has had a lot of conversation lately as we've seen a number of of apartment complexes, single-family homes being constructed out there. The construction of Aspen and the connection of Aspen between 42 and Connemara really will serve as a reliever on that property. If you're a person living east of Aspen Avenue, you need to get to Apple Valley; you can likely take Aspen Avenue down, hang a right on 42, and start going full highway speed over to Apple Valley, avoiding the stoplight, avoiding potential traffic at Connemara and Akron. Doesn't take away the fact that we're currently under a traffic study for the entire area and would like to see a traffic change, if supported by the study, at Connemara and Akron. But Aspen will be an important road. And so I just—I just wanted to spend a moment chatting about Aspen and just for the public at home to know that that is going to be a help, I think, as Connemara continues to eventually in a not-so-distant future connect all the way to Blaine Avenue. So those are the two documents in front of you tonight, and would happily answer any questions. [1:54:47] **Jeff Weisensel, Mayor:** Floor is open for Council. Any questions, comments? Seeing none, someone like to move the recommended action? [1:54:55] **Heidi Freske, Councilmember:** I'll make a motion to recommend that the City Council authorize execution of the various agreements related to the Lifetime project. [1:55:04] **Paul Essler, Councilmember:** Second. [1:55:05] **Jeff Weisensel, Mayor:** Motion by Freske, second by Essler. Roll please. [1:55:08] **Erin Fasbender, City Clerk:** Theisen? **[Theisen: Aye.]** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Klimpel? **[Klimpel: Aye.]** Weisensel? **[Weisensel: Aye.]** [1:55:18] **Jeff Weisensel, Mayor:** Completes 9C with a 5-0 approval. Going on 9D. Hang in there, folks. Mr. Martin. [1:55:23] **Logan Martin, City Administrator:** Thank you, Mayor, members of the Council. I'll try to make this one quick and certainly could have lived on the consent agenda, but really wanted to have this item on your lengthy agenda tonight just to call out a really great partnership here to support the construction of our police and public works campus. And so the action in front of you tonight is to receive a land donation from Flint Hills Resources to facilitate the construction of the police and public works facility. And so just to give folks at home maybe a bit of background on this project or what's in front of the City Council tonight: the city has received the 20-acre parcel at Biscayne Avenue upon which the police and public works campus sits. We'll be receiving that property from the National Guard and the State of Minnesota at no cost. That's a significant cost savings to the city; using generally, kind of estimated real estate transaction figures on a 20-acre parcel, that's probably a 1.5 to 2 million dollar cost savings to the project. And so as we discussed earlier, it's not—it’s not a small project, not a cheap project, but to save two million dollars in land cost is a really big deal. And so to get that deal through with the National Guard, their mission and philosophy is that they cannot forego or lose acreage in the Twin Cities Metropolitan region just because that is where the majority of their soldiers and their folks come from. They want to doubly invest in armories and locations inside of the Twin Cities. And so they said that they would be willing to give us the property on Biscayne north of their maintenance facility if we could find them a replacement 20 acres of property. And so we don't sit on 20 acres all the time; we don't have a bank of acreage. And so we went to our partners at Flint Hills who do have quite a significant land holding to see if they'd be able to find a 20-acre excess parcel for them that they'd be willing to give to the National Guard for a potential long-term use as an armory. And they were gracious enough to find a 20-acre parcel on Akron Avenue, generally speaking north of the Flint Hills Soccer Complex. That's a nice parcel that could be built with good access someday onto Akron Avenue for a—I’ll reiterate again—potential long-term armory. This is 30, 40, 50 years is what I've been told down the road, if they were to need a second armory in Rosemount; they just needed to have land upon which they could potentially place that. So Flint Hills is donating to the city at no cost. We have run some title work on the property, will then go through the legal process to then give it to the National Guard, and then that will facilitate and complete this kind of three-way land swap. And so again, huge thank you to the National Guard, State of Minnesota—this required legislative actions, so Representative Hewitt, Senator Maye Quade helped us get this through the state legislature this year. Flint Hills and all the team out there took care of their side of it—had to bring it down to Wichita to get approval down there. So a lot of time this has been worked on, since probably 2017 when I first got here with Police Chief Mitch Scott back in the day. And so it's—it’s fun to see it come to a finish, and we really appreciate the support. [1:58:34] **Jeff Weisensel, Mayor:** And just echoing from me, from myself and Council: thank you for your staff's ability to shepherd this with our partners. Any questions or comments from rest Council? Seeing none, would someone like to move the motion for the land donation? [1:58:53] **Paul Essler, Councilmember:** I'll make a motion to receive a land donation from Flint Hills Resources and authorize the Mayor and City Clerk to execute necessary agreements. [1:58:57] **Tami Klimpel, Councilmember:** Second. [1:59:04] **Jeff Weisensel, Mayor:** Motion by Essler, second by Klimpel. Roll please. [1:59:06] **Erin Fasbender, City Clerk:** Freske? **[Freske: Aye.]** Essler? **[Essler: Aye.]** Klimpel? **[Klimpel: Aye.]** Weisensel? **[Weisensel: Aye.]** Theisen? **[Theisen: Aye.]** [1:59:09] **Jeff Weisensel, Mayor:** That completes 9D 5-0. **[Music]** Move on to announcements. City staff updates. Mr. Martin. [1:59:16] **Logan Martin, City Administrator:** Mayor, I have none tonight. I can give my time back to you. [1:59:22] **Jeff Weisensel, Mayor:** Great. We'll get this done before nine... well, yeah, maybe. With that, I'm going to yield the floor to council members, particularly those that had a probably relatives associated with some of our local sports youth. These young men and women, I think, did an outstanding year, and I'll turn it over to whoever wants to take it first. [1:59:35] **Heidi Freske, Councilmember:** Sure. Sorry if I get emotional, but—don’t be too—I'm gonna recognize the girls' state champs, the softball team. They had a perfect season, 26-0. They won the state tournament and they ended up ranked five in the nation after the season ended. Many, many of the players are graduating, many of them are going on to play D1, and then one of the—Jessa Snippes, one of our ace pitchers, is also the Metro Player of the Year. So I've been sort of striking emotional—I apologize—but I've watched these girls since they were 8U growing up, but it's just been wonderful. So shout out to them. [2:00:19] **Paul Essler, Councilmember:** Turn it over to you. Lest we do those tears, no. I would just like to take this time to recognize the Rosemount boys' baseball team. Came up a little short but took second in state—first time in 15 years that the Rosemount boys' baseball team has been to state, and came up, like I said, a little short. Great baseball, 1-0. We got to play three games at CHS Field, and just congratulations to all the boys and all the coaches for all the—a lot of years of being at the ballpark and having early games on weekends, and to finishing second state. It's—it’s quite a—not quite emotional, but it's—it’s pretty—it’s pretty cool to see all the hard work paying off. So congratulations. [2:01:08] **Paul Theisen, Councilmember:** And the—the other group of spring athletes that had an exceptional season was also the track program. Both—both the boys' and the girls' track program. On the girls' side, they got third place in the state in the True Team meet, and on the boys' side they got second—slight second by five and a half points behind Wayzata in the True Team on the boys' side. And then the Minnesota State High School League track meet, they were the state champs. So once again, the track program continues to excel and do amazing things, and this year was no different. And one of the competitors on the boys' side, Hayden Bills, was announced to be the state of Minnesota boys' track and field athlete of the year. So just an incredible, incredible year and career for Hayden Bills. [2:02:15] **Jeff Weisensel, Mayor:** Just a great shout out to the youth of our community, our local school here in Rosemount. Well, appreciate the time and effort that both the young men and women put into as well as their parents, coaches, everyone that stands behind them for their success. Reflects really well on Rosemount and gives us that hometown feel, particularly when they're state champions. Right on. With that, we'll move to the upcoming community calendar. See if I can get through this fairly well. So I did have one question on Farmers' Market—is there truly one on the fourth? Okay. All right. So coming up here on multiple Thursdays—the first one here this week is June 22nd, also the 29th and July 6th—I believe is kids music in the park running from 10 a.m. to 11 a.m. at Central Park. On June 26th, we'll have the Park and Rec regular meeting from seven to eight here at City Hall. The Planning Commission is on June 27th from 6:30 to 7:30 here at City Hall. The Public Safety in the Park, June 29th from 5 to 8 p.m. at Central Park. As part of this week and through Sunday, June 25th, we have the Art Blast activities happening within the city, various places—Steeple Center, Central Park. Go out to rosemontarts.com/artblast2023 for a full listing of those. City offices will be closed for Independence Day on July 4th. Utility Commission regular meeting has been moved to July 10th from 5:30 to 6:30. And following up on our next get-together: Joint City Council and Planning Commission work session will be on July 11th from 5 to 6 p.m. And our next city council meeting has been moved to July 11, 2023, from seven to eight due to the 4th of July holidays. And with that, if there's no other business to come before Council, I move to adjourn. Is there a second? [2:04:47] **Council Member:** Second. [2:04:49] **Jeff Weisensel, Mayor:** All in favor signify by saying aye. **[Council: Aye.]** Opposed? We are adjourned, thank you. [2:05:14] **[Music]** thank you **[Music]**