[0:00] [Music] [0:15] Mayor Clint Hooppaw: Good evening. We'll call this meeting to order for the May 25th, 2023, Apple Valley City Council meeting. I'd like to welcome everyone this evening. For any members who have signed up to speak, when your name is called, please come forward to the podium and address the Council. First item on our agenda is the Pledge of Allegiance, and I would ask everyone to rise and join us in the pledge. [1:04] All: I pledge allegiance... [Music] [1:17] Mayor Clint Hooppaw: Next item on our agenda is to approve the agenda for this evening. Tom, are there any changes? [1:28] City Administrator Tom Lawell: Good evening, Mr. Mayor, members of the Council. We have two items to suggest acknowledgment on your agenda. First one would be under the regular agenda, which is 5B, ordinances related to short-term rentals. We did receive some emails from individuals here over the afternoon, so I just wanted to make certain that those were made put into the record as part of this evening's discussion. So you should have those in front of you. And then also we have an updated calendar of upcoming events; that's item number seven on your agenda. [1:55] Mayor Clint Hooppaw: Great. So it would take a motion to approve the agenda as updated. [2:05] Councilmember Tom Melander: Motion. [2:06] Councilmember Ruth Grendahl: Second. [2:07] Mayor Clint Hooppaw: Motion from Councilmember Melander and a second from Councilmember Grendahl. All those in favor indicate by saying aye. [2:11] Councilmembers: Aye. [2:12] Mayor Clint Hooppaw: Opposed? The agenda passes. Next item on our agenda is the audience participation portion of our meeting. This is for items that are not on the agenda. As I walked in, I didn't see anyone sign up, but I know some people drifted in after that. So do we have anybody who would like to speak to this portion? Again, this is for items not on the agenda elsewhere. [2:42] Mayor Clint Hooppaw: Seeing none, we will move on to the consent agenda. These items are considered routine and will be enacted with a single motion unless a council member or citizen requests to pull an item. Council members, are there any items you would like to pull from consent? For our citizens in the room, are there any items you would like to pull? [2:51] Councilmember John Bergman: Motion to approve. [2:52] Councilmember Ruth Grendahl: Second. [2:53] Mayor Clint Hooppaw: We have a motion to approve from Councilmember Bergman and a second from Councilmember Grendahl. All those in favor indicate by saying aye. [2:57] Councilmembers: Aye. [2:58] Mayor Clint Hooppaw: Opposed? The consent agenda is passed. We will move on to our regular agenda starting with 5A. This is the Apple Valley Pizza Karma LLC at 15265 Galaxy Avenue, and Pam is going to walk us through this item. [3:09] Pam (City Staff): Thank you, Mr. Mayor, members of the Council. Apple Valley Pizza Karma LLC, doing business as Pizza Karma, applied for an on-sale wine and 3.2% malt liquor license. That license is for a premise located at 15265 Galaxy Avenue, Suite 200. Plans show the restaurant seats approximately 45 people. If approved, the license would be effective beginning July 1st. The restaurant opened in March of this year. The application indicates the officers and owners are Sriniwasu Kajuluri, Naga Abutiru, Mala Raju, and Karunakar. [4:07] Pam (City Staff): Section 111.24 of the city code requires all applicants for on-sale wine and malt liquor to have a public hearing prior to the issuance of the license. On April 27th, the City Council set this evening for a public hearing. Proper notice was posted and published in the city's official newspaper, and that affidavit of publication is on file. No comments have been received from the public to date. The Police Department and Fire Departments have completed the necessary background and site investigations and find no reason the licenses cannot be authorized at this time. There are two items before the City Council this evening: first, the public hearing; and second, pending any comments from the public or questions from the Council, action on the resolution authorizing issuance of the on-sale wine and 3.2% malt liquor licenses effective July 1st, subject to receipt of the necessary documents. There are three representatives from Pizza Karma here this evening, and I'm happy to answer any questions you may have. [4:55] Mayor Clint Hooppaw: Thank you, Pam. Are there any questions for Pam from Council? [5:10] Councilmember John Bergman: Did she read those names again? [5:13] Mayor Clint Hooppaw: All right, we will go ahead and open the public hearing on this item. Is there anyone who would like to speak to the on-sale wine and 3.2% malt liquor license item? Second opportunity for anyone who would like to speak to this item. A final opportunity. We'll go ahead and close the public hearing. We would look for a motion to adopt the resolution issuing the on-sale wine and 3.2% malt liquor license. [5:41] Councilmember Tom Melander: Motion. [5:42] Councilmember John Bergman: Second. [5:43] Mayor Clint Hooppaw: A motion from Councilmember Melander, a second from Councilmember Bergman. All those in favor indicate by saying aye. [5:48] Councilmembers: Aye. [5:49] Mayor Clint Hooppaw: Opposed? We do have a couple representatives from the business, so you guys want to come up and just say a word? You've been open for a little bit. If you want to come up and say a word or two, feel free. Good evening, everyone. Yeah, we opened the Pizza Karma... I want everyone who's watching from home to be able to see us, so come on up here and use the microphone. Look the other way at the cameras. You guys are just fine. [6:27] Business Representative: Good evening everyone. We opened Pizza Karma on Galaxy like two months ago. We have a blend of fusion pizza; basically, it's a blend of Indian spices and we make dough very special from regular or any other pizzas that you usually taste. I'm sure it's going to be a different experience for whoever wants to try it out. We opened free deliveries also for a two to three miles radius within our Apple Valley and Lakeville nearby cities. Thank you for having us here today. [7:03] Mayor Clint Hooppaw: Thank you. The food's good; we've enjoyed it when we've been there. So, look forward to adding this to your menu. [7:12] Business Representative: Yeah, thank you. Thank you again. [7:13] Mayor Clint Hooppaw: All right, the next item on our agenda is 5B, which is to review ordinances regulating short-term rentals. This is the first reading this evening. So Tim, I'll turn it over to you. You guys are fine if you want to duck out; you're welcome to stay, but you won't offend us if you take off. Thank you guys. [7:28] Community Development Director Tim Benetti: Thank you, Mr. Mayor, members of Council. Before you tonight, you have two ordinances in your packet for review. This first ordinance refers to an amendment to Chapter 122 of the city code specifically regarding rental registration regulations. The second amendment affects Chapter 155 of the code regarding short-term rental of residential properties. Proposed limits to city code sections 155.003, 382, and 363, which we'll get into very quickly here. There's also a separate section amendment to Section 122.03, which is at rental property registration. Now, as you are fully aware, the city code does not allow for short-term rental of residential homes currently. I believe this opinion was confirmed a few years ago around the Super Bowl time and Final Four coming to the Twin Cities metro area, that short-term rentals were not allowed by our ordinance because they were viewed as commercial lodging. Because of that, the dwelling no longer serves as a single-family residential use. So as a commercial lodging in the residential zone, it just wasn't a good fit. [8:45] Tim Benetti: Our amendments tonight are to clarify some of the existing code language on dwellings, home occupations, accessory dwelling units, and also for residential districts. Under 155.003, highlighted here on your screen, the yellow underline is the new language: "residence purposes means inhabiting a building or any portion thereof as the occupant's home or household for a period of not less than 30 consecutive days. Dwelling does not include rooms and hotels, motels, nursing homes, boarding houses, recreational vehicles, or tents." Under home occupations, we are adding the line: "rental of a dwelling or any portion thereof for a period of not less than 30 consecutive days." Our residential districts will now include dwellings which are inhabited and occupied exclusively as the occupant's home or household which will not be less than 30 days, except in the case of a family home health care or care of mentally or physically handicapped which are licensed by the state. We also added LDF, which is low density flex. No accessory unit shall be used or allowed to be used as a rental unit for a period of not less than 30 consecutive days. And then again, we are adding specifically a statement under 155.363: "no dwelling or portion thereof shall be used or allowed to be used as a rental unit for any period less than 30 consecutive days." [11:04] Tim Benetti: How we got here: prior to this March 15th, you may recall staff presented some preliminary information. We were given direction to start working on this with our city attorneys. On March 15th, we presented our first iteration of drafts to our Planning Commission, which conducted a public hearing. We got some good comments both for and against at that time. They held off on a decision that night. On April 5th, they came back, reopened the amendment, and allowed for additional public comments. After all the discussion, a motion was made to approve the ordinance, but that failed on a 3-3 vote. We also provided you with this update at a May 11th review. A further motion was made to further study; however, the Council at that informal meeting on May 11th said we'd like to forego that study at this time but leave it open in case we want to in the future. So before you tonight is a planning staff report with recommendations, asking for a review of the ordinance Chapter 122 amendments and Chapter 155. This is a request for consideration for both ordinances on first reading only. We will have the second reading brought back if you so choose at the next available meeting. With that, I will stand for any questions. [12:35] Mayor Clint Hooppaw: Are there any initial questions for Tim from Council? [12:39] Councilmember Tom Melander: Yes, Mayor. When we talked about this before, one of the reasons this issue came up is we had people that were doing weekend rentals and that kind of thing. If I remember, one of the reasons that came up is we had a number of neighborhood complaints. The one I remember the most is one of the homes rented it out and suddenly the whole cul-de-sac was full of cars—nine or ten cars for the entire week. I don't know how that happened because, first of all, we don't have on-street parking. Is that how you recall it? [13:52] Tim Benetti: Mayor, members of Council, so the four homes that we have under observation right now were due to a direct complaint from a neighbor or neighbors. Upon investigation on some websites, we determined that there were three operating Airbnbs, so to speak, or short-term rentals. Those homeowners were notified, and we've held off on any final action or code action on them until this ordinance was adopted. [14:38] Councilmember John Bergman: Thanks, Mayor. Tim, as we consider both ordinances for the first reading only, I understand that, but does it come back to us right away or does it go to planning first? [14:48] Tim Benetti: I think that's an action we could take would be to send it back to planning if Council chose, but we've already had the review. [14:55] Mayor Clint Hooppaw: We have a few members of the public who like to speak on this. Since we have a first reading and an opportunity to do that, I'd like to open that up. We don't have a big audience; I would ask to keep the comments short and on point. We want to open up for comments. Please come forward, state your name and address for the record. [15:39] Brian Eichhoff: Good evening Council. My name is Brian Eichhoff. I'm a resident at 13140 Doyle's Court. I attended all of the previous planning council meetings on this topic of short-term rentals and I'm here again tonight just to voice my support of the changes to prohibit short-term rentals in our city. After hearing discussion at previous meetings, I believe there is some misconception about living next to short-term rentals because most people have only experienced them from the consumer perspective. I, however, have the experience of living next to one of these non-compliant short-term rentals in Apple Valley today. I can tell you that for surrounding residents, it undermines many of the benefits of living in a well-established neighborhood. This is completely lost when a home is converted to a short-term rental; it's no longer a home, it's a house. Who here would trade their permanent next-door neighbor for a short-term rental? I might not even be here tonight if I myself wasn't in close proximity to a short-term rental. It's like having a perpetual "for sale" sign next door, never knowing who may pull into the driveway. For families with young children, short-term rentals introduce unique circumstances; there's no opportunity to build lasting trust. It takes a village to raise a child, and short-term rentals severely erode that village. I would urge you to please take action to maintain the integrity of our residential neighborhoods. Thank you. [19:30] Terence Cater: My name is Terence Cater. I live across the street from a short-term rental and it's just like a revolving door. There's always somebody new every weekend, some during the week; you just never know who's going to be over there. You don't leave your garage door open because you don't know who's coming. We had a lot of cars parked in the cul-de-sac a couple times. It's a gathering point for people to get together. It's not a family circle anymore. The other neighbor, he's out at his cabin, but he would be here today otherwise too. I'm not in favor of it. [21:02] Mayor Clint Hooppaw: Thank you. Anyone else who would like to speak to this one? I think the intent tonight was to take comments as they come in. One of the reasons this is before us is clarifying our current ordinance. While planning staff and the City Attorney might think it's clear that commercial use means short-term rental, the average person reading our ordinance now might say somebody's living and sleeping in a dwelling that looks residential. Being clear in our ordinance is what residents deserve. I do like the Planning Commission suggestion to study not just this, but all of our rental ordinances. One problem is property condition—if someone doesn't mow their lawn, we have to go to court to abate that. It's a frustrating process. I'd like us to talk about how we can use rental ordinances to improve conditions without needing to go to court for every citation. [23:08] Councilmember Tom Melander: Mr. Mayor, Tim, just to be clear: if somebody wanted to rent a house out for 30 days or more, that would be okay with this? [23:20] Tim Benetti: Mr. Mayor, members of Council, that is correct. They can rent that property through the registration program, and as long as it's 30-plus days, they are within their rights. [23:36] Councilmember Tom Melander: I don't see the crying need that would be addressed by allowing less than 30-day rentals. A few folks could benefit, perhaps to the detriment of a lot of other folks. [24:08] Councilmember Ruth Grendahl: Thank you, Mayor. I agree with your statement totally. I'm not too worried about the folks over 30 days because when somebody rents, they usually rent for a year or so. As the mayor said, we still have a lot of problems in some of those houses owned by big organizations, but that's a side issue from people coming and going on the weekends. I don't have a problem with the over 30 days; it's the under 30 days that I have the real problem with. [25:00] Mayor Clint Hooppaw: We appreciate the comments. We will bring this back at a future meeting for a second reading and a decision. [25:13] Councilmember John Bergman: What’s the "future meeting"? [25:15] Mayor Clint Hooppaw: I was thinking it will come back in two weeks. [25:22] City Administrator Tom Lawell: Mr. Mayor, members of the Council, if there are no other things that you would like staff to look into, we will bring it back in two weeks and you can conduct your second reading at that time. [25:42] Mayor Clint Hooppaw: Let’s make that plan. I’d like to alleviate the problems some of the people who spoke tonight are dealing with. Tim, thank you. Next item is staff and Council communications. Tom, any updates? [26:12] City Administrator Tom Lawell: Just a reminder that city offices will be closed on Memorial Day this Monday. For those who wish to help honor U.S. military members, there will be an honor guard service at Lebanon Cemetery on May 29th at 9:00 A.M., followed by a memorial ceremony at the Apple Valley American Legion Post 1776 at 11:00 o'clock. [27:03] Mayor Clint Hooppaw: Thank you. I would also add that it is Public Works Week. Tom and I were out at CMF today with a hosted lunch for our staff. As I mentioned out there, I started my morning with a glass of water and it came out clean, and when I hit the flush lever on the toilet, it neatly went away. We have streets that are not perfect after a hard winter, but much better than other communities. Thank you to everyone in our Public Works group. Council, any other comments? [27:43] Mayor Clint Hooppaw: Our calendar of upcoming events: our next informal meeting is Thursday, June 8th at 5:30; our next regular meeting is Thursday, June 8th at 7:00. City offices are closed Monday, May 29th. Do we have a motion to approve the calendar? [27:56] Councilmember John Bergman: Motion. [27:57] Councilmember Ruth Grendahl: Second. [27:58] Mayor Clint Hooppaw: All those in favor indicate by saying aye. [28:00] Councilmembers: Aye. [28:01] Mayor Clint Hooppaw: Do we have a motion to adjourn? [28:02] Councilmember Ruth Grendahl: So moved. [28:03] Councilmember John Bergman: Second. [28:04] Mayor Clint Hooppaw: All those in favor indicate by saying aye. [28:06] Councilmembers: Aye. [28:07] Mayor Clint Hooppaw: All right, thank you. We're adjourned. [28:10] [Music]