MINUTES OF THE REGULAR MEETING OF
THE MINNEHAHA CREEK WATERSHED DISTRICT
BOARD OF MANAGERS

September 22, 2011

CALL TO ORDER

The regular meeting of the Minnehaha Creek Watershed District Board of Managers was called to order by President James Calkins at 6:45 p.m. at the Minnetonka City Hall Community Center, Minnetonka, Minnesota. 

Manager Calkins recessed the meeting and announced that the meeting will be reconvened at 7 p.m. at the District offices, 18202 Minnetonka Boulevard, Deephaven, Minnesota.  Manager Calkins recessed the meeting.

(Managers Miller and Casale arrived at this time, 7:10 p.m.)

The regular meeting of the District Board of Managers was reconvened by President Calkins at 7:10 p.m. at the District offices.

MANAGERS PRESENT

James Calkins, Brian Shekleton, Richard Miller, Lee Keeley, Pamela Blixt and Jeffrey Casale.

MANAGER ABSENT

William Olson. 

OTHERS PRESENT

Eric Evenson, District Administrator; David Mandt, Operations Manager; James Wisker, Program Coordinator/Planner; Steve Christopher, Regulatory Program Manager; Renae Clark, Project Manager; Matt Norton, Land Conservationist; Telly Mamayek, District Communications Manager; Michael Panzer, District Consulting Engineer; Michael Welch, Assistant District Counsel.

MATTERS FROM THE FLOOR

Jack Amdal and Kristin Eide-Tollefson, members of the Bushaway Road Task Force appeared before the Board, and Mr. Amdal stated that the task force has sent a memo to the Board of Managers with the task force’s response to Barr Engineering’s ecological assessment of the proposed design for Bushaway Road. Mr. Amdal then highlighted several of the comments on the report in the memo to the District and stated that county project staff will come before the task force on September 29 at 7 a.m.  The managers discussed the idea of a causeway as part of the redevelopment of the road. In response to a question from Manager Calkins, Mr. Christopher explained that the county’s permit application for the road is in the pre-application review state, and the application will come before the Board for discussion.  The managers further discussed the time frame for the redevelopment of Bushaway Road and heard from Ms. Eide-Tollefson on the finding that the railroad tracks at McGinty Road can be lowered.  Mr. Evenson said that District staff will want to review the revised design showing the lowered railroad crossing. 

Peter Rechelbacher appeared before the Board and introduced himself, stating that he will be attending the District meetings at the request of the City of Medina City Council.  The managers welcomed Mr. Rechelbacher.

APPROVAL OF AGENDA

Manager Miller moved, seconded by Manager Keeley, to approve the agenda.  Upon vote, the motion carried.

CONSENT AGENDA

Manager Calkins reviewed the items on the consent agenda and explained that the Board of Manager heard reports from staff and others on these items and discussed them at prior workshop meetings.  He stated that the items are now before the Board after revisions as may have been requested by managers for approval.  Manager Shekleton moved, seconded by Manager Miller, to approve the consent agenda, consisting of:

Approval of the minutes of the September 8, 2011, meeting of the Board of Managers, and approval of the petty cash, surety and checking registers, the last including voided check 31032 and checks 31062 to 31137 for a total of $221,774.06.

Adoption of resolution 11-077, Minnehaha Creek Reach 14 Project Ordering/Authorization to Solicit Proposals for Design Services.

NOW, THEREFORE, BE IT RESOLVED, that pursuant to Minnesota Statutes § 103B.251

and the WMP, the MCWD Board of Managers orders the Project, with a total estimated cost

including design, construction, and construction oversight of $345,000 and authorizes the

solicitation of proposals for design services.  

Adoption of resolution 11-078, 09-LL-3 (Langdon Lake Infiltration LL-3) authorization to Order Project and solicit proposals for design/engineering/construction observation services for project implementation.

THEREFORE BE IT RESOLVED, that pursuant to Minnesota Statutes § 103B.251

and the WMP, the project is ordered, with a total estimated project cost (including

design, construction, construction oversight and a portion of land acquisition)

of $36,000.00.

Adoption of resolution 11-079, El Colegio Charter School LID Cost Share.

NOW THEREFORE BE IT RESOLVED that the Board of Managers approves a grant

to the applicant of 50 percent of the total costs associated with stormwater improvements not to exceed $124,362 under the MCWD’s Low Impact Development Program in accordance with the terms of the proposed final funding agreement, for the

incorporation of a stormwater quality treatment structure for stormwater management

benefits in excess of District regulatory requirements; authorizes the Board President,

on advice of counsel, to sign the funding agreement and all other documentation

required to implement the grant award; and authorizes the MCWD administrator to

take all other steps necessary to implement the funding agreement in accordance with

its terms.

Adoption of resolution 11-080, approval of Local Water Management Plan for City of Long

 Lake

NOW, THEREFORE, BE IT RESOLVED, that the MCWD Board of Managers hereby

Approves the City of Long Lake Local Water Management Plan.

Adoption of resolution 11-081, approval of MCWD/MWMO Joint Watershed Research Proposal to study area of infiltration that influences Minnehaha Creek baseflow.

NOW, THEREFORE, BE IT RESOLVED that the Minnehaha Creek Watershed

District  Board of Managers approves the research grant proposal to study the effects

of infiltration on summer baseflow in Minnehaha Creek.

Adoption of resolution 11-082, authorization to begin the Major Plan Amendment Process for the Draft Aquatic Invasive Species Plan Amendment

THEREFORE, BE IT RESOLVED, the Minnehaha Creek Watershed District Board

of Managers authorizes the District Administrator to begin the Major Plan Amendment

Process for the Draft Aquatic Invasive Species Plan Amendment.

BE IT FURTHER RESOLVED, that the Minnehaha Creek Watershed Board of

Managers  authorizes staff to advertise for and hire an Aquatic Invasive Species

Specialist.

Adoption of resolution 11-083, approval of Minnehaha Creek Watershed District Drug and Alcohol Abuse Policy

NOW, THEREFORE, BE IT RESOLVED that the Minnehaha Creek Watershed

District  Board of Managers approves the Drug and Alcohol Abuse Policy.

Adoption of resolution 11-084, approval of Minnehaha Creek Watershed District Criminal Conviction Policy

NOW, THEREFORE, BE IT RESOLVED that the Minnehaha Creek Watershed

District Board of Managers approves the Criminal Conviction Policy.

Upon vote, the motion carried.

REGULAR AGENDA

Board, Committee and Task Force Reports

Mr. Evenson reported on the Minnesota Waters lake night event, which involved presentations on water quality issues and invasive species, as well as a boat tour of Lake Minnetonka.  Manager Keeley said the event was very worthwhile. 

Manager Keeley reported that 12 members were present for the most recent meeting of the Citizens’ Advisory Committee and they asked a number of questions on aquatic invasive species and reviewed a number of applications for the cost-share program.

Manager Calkins said the most recent meeting of the Hydrodata Committee included discussion of the Christmas Lake weevils project, management of flowering rush, and the District’s ecosystem-based approach to watershed management.  He stated the committee also discussed a proposed audit, from HDR Engineering, of the District’s monitoring  and lake-grading program. 

Ms. Clark appeared before the Board and said that the District will be holding a meeting in Plymouth with community representatives on September 29 at the Black Box Theater to discuss the Chelsea Woods project.  She said that staff will be presenting preliminary designs, which will be reviewed by the Board in early October. 

Mr. Evenson reported on the Hennepin County watershed governance analysis project.  He said the committee is winding down its work and it appears that the final recommendation will involve either keeping a structure similar to what exists now in Hennepin County but consolidating to four watersheds in the county or creating an overarching agency that would oversee watershed management in the county.  He said that there is consensus that the county should take on groundwater management.  In response to questions from the managers, Mr. Evenson reported that it is unclear whether the Hennepin County Commission will order a legislative effort to achieve the committee recommendations.  Mr. Evenson added that it is unclear that there will be any opportunity for general public input into the recommendations.

Mr. Evenson stated that he, Manager Olson and Renae Clark met with the Three Rivers Park District and the City of Orono recently to discuss erosion problems on Big Island.  Staff from the park district will bring maintenance issues to the park district board for discussion and development of a plan. 

Manager Calkins reviewed the schedule of upcoming committee and task force meetings.  Mr. Evenson stated that the Legislative Committee is planning on a September 29 meeting at noon at a location to be determined.

BOARD ACTION ITEMS

Manager Blixt noted the number of attendees at the meeting and after identifying a member of the public interested in the Halverson conservation concept plan, she suggested that item be moved to the top of the action items agenda.  Manager Shekleton moved, seconded by Manager Blixt, to move the adoption of a concept plan for the Halverson property to the top of the Board Action Items agenda.  Upon vote, the motion carried.

Concept Plan for Conservation and Residential Development of 7901 & 8015 Halstead Drive, Minnetrista

Mr. Norton appeared before the Board and presented the proposal for the development of a concept plan for conservation and residential development of the Halverson property that the District recently purchased in Minnetrista.  Mr. Norton stated that the Board reviewed the plan for the properties at a prior meeting.  He said there is a revised proposed resolution for the matter, and Mr. Welch read the revised resolution. 

Mr. Norton presented slides showing the concept plan for the restoration and partial development of the properties, which the District purchased from the Halverson family.  Mr. Norton described trail plans and the development concept, noting that the District has developed an extensive education and outreach plan, which will be implemented in collaboration with the City of Minnetrista.  Mr. Norton explained that the concept is for development of three residential lots, but staff is asking the Board for authorization to develop concepts for residential redevelopment of a portion of the property.

Mandy Braun, 3765 North Home Drive, Minnetrista, appeared before the Board and stated that she lives directly adjacent to the Halverson property and has supported the District’s purchase of the property for conservation purposes.  She is concerned that the District may explore development of a portion of the property.  Ms. Braun stated that the District, having purchased the property with public funds that it raises through its levy, should not diminish its conservation objectives by developing a portion of the property.  She also noted that she is concerned about the effect on the value of her home and others in the area.  In response to a question from Mr. Evenson, Mr. Norton explained that the District has not yet engaged a realtor or an appraiser to assess the potential net income from the sale of three lots on the Halverson property for development.  Mr. Norton stated that he understands concerns neighbors might have about the plan, but he underscored that the overall District plan will be for restoration and conservation of the natural resources on the Halverson property and that any development plans will undergo city zoning and planning review. 

In response to a question from Manager Blixt, Mr. Norton explained that restoration of the property will be complete in 2012, though the trail planning may be done sooner.  Mr. Norton added that it likely will be several years before the District would attempt to sell any lots for development.  After further discussion, Mr. Evenson encouraged Ms. Braun to be involved in the city’s review of plans as they come forward for the property.

Manager Blixt moved, seconded by Manager Keeley, to adopt resolution 11-090, authorizing the development of concept plans for conservation and residential development of 7901 and 8015 Halsted Drive Minnetrista.  Upon vote, the motion carried.

Mr. Evenson noted that the District staff is working with the City of Minnetrista on the concepts for the property. Mr. Ten Eyck appeared before the Board and stated that it is possible that the city will forward a request for a regional trail connection on the property to the District.

Public Hearing: Purchase of and Financing for the Purchase of the Cold Storage Property, Hopkins

Manager Calkins and Mr. Wisker outlined the process for the District’s review of and conduct of a public hearing on the District’s possible purchase of 325 Blake Road in Hopkins, known as the Cold Storage property.  Mr. Wisker explained that there are two resolutions before the Board: the first to authorize the District administrator to take the steps necessary to purchase the property, and the second to authorize the issuance by Wells Fargo Bank of bonds to finance the purchase.  Mr. Wisker explained that the resolution for the purchase has been updated to include authorization of the administrator to exercise the authority necessary to manage the property for 90 days while a long-term property management plan can be developed.  Mr. Wisker introduced the members of the District’s consulting team helping to present the matter to the Board.  Mr. Wisker explained that following presentation of the overall structure and some details on the plans for the property, Manager Calkins will open a public hearing and the District will hear all comments from all interested parties.

Mr. Wisker explained that the purchase of the Cold Storage property follows from the District’s comprehensive plan goals and the work it has undertaken in the Minnehaha Creek corridor in this area to develop a long-term vision for restoration of the creek.  He noted that the District has pursued this vision in cooperation and partnership with the cities of Hopkins and St. Louis Park.  Mr. Wisker said the purchase complements the St. Louis Park remeander of the creek, the wetland restoration and associated redevelopment and restoration at the Methodist Hospital property and the purchase and redevelopment of the Cottageville Park area in Hopkins.  Mr. Wisker explained that the Cold Storage site offers a unique opportunity for the District to purchase a nearly 17-acre property with 1,000 feet of shoreline, providing an opportunity to improve stormwater management in the area and the quality of runoff to the creek.  Mr. Wisker introduced Tom LaSalle, the District’s real estate consultant, for a presentation of the purchase agreement that has been negotiated with the present owners, Blake Road Partners LLC. 

Mr. LaSalle noted that the District initially endeavored to purchase an easement on this property along the creek, but that proved unworkable because it would have obstructed vehicle movements necessary to the cold storage operations. The proposed agreement therefore is for the purchase of fee title. There are really no contingencies in the proposed purchase agreement, he said, other than the completion of the financing.  Mr. LaSalle explained the due diligence the District has undertaken, most notably the phase I environmental assessment just completed by Joe Otte of Wenck Engineering.  Mr. LaSalle said the phase I found some of the typical urban contaminants, such as petroleum and polycyclic aromatic hydrocarbons, but nothing surprising and nothing that had not previously been found on the property.  The existing property owners have a no-association letter from the Minnesota Pollution Control Agency that is transferrable to the District, Mr. LaSalle reported.  He stated that the District nonetheless plans to obtain its own no-association letter from the agency.  Then, as plans are developed for redevelopment of the property, the District will have those plans reviewed and approved by, and secure the appropriate liability-assurance letter from the agency.  Mr. LaSalle said there will be some demolition and disposal cost associated with the redevelopment of the property.  He stated that title and survey work have been completed and introduced no issues.  Mr. LaSalle also noted that Laura Graf, the District’s real estate counsel from Barnes and Thornburg, drafted the purchase agreement and is available to answer any questions. 

Mr. Wisker introduced Bob Strachota, who prepared the appraisal of the property for the District.  Mr. Strachota stated that the property was purchased in 2007 for almost $7 million and assessed at that time for $5.4 million. His appraisal is $16 million to $20 million.  He explained that the viability of the property as a large urban property along transit corridors providing opportunity for significant light industrial or commercial development weighed heavily in the appraisal.  Mr. Strachota also reviewed the tenant history and noted the associated business value influence on the appraisal.  Mr. Strachota offered information on a recent sale of a much smaller property directly across the street from the Cold Storage parcel, which also supported the $16 to $20 million appraisal. 

Mr. Wisker introduced Barry Fick from the Springsted Group, who reviewed the proposed financing for the project.  Mr. Fick stated that the District elected to finance this project itself rather than seeking financing through Hennepin County after meeting with the county.  The county is currently undertaking the environmental review for the Southwest Light Rail Corridor, which runs near the Cold Storage property, prompting the county to decline to be involved in the financing of the project.  In turn the District decided to finance the project privately to avoid the higher cost of public auction and underwriting, and issued a request for proposals.  Wells Fargo presented the most advantageous financing structure to the District.  Mr. Fick noted that the initial three years of financing costs will be significantly offset by income from the leases from the tenants on the Cold Storage property.  He added that the placement of this debt also will not burden the District’s finances as to render it at risk of being overleveraged. 

Mr. Fisk turned to Mr. LaSalle, who continued with a review of the current operations at the property.  He explained that tenant operations on the property will continue under District ownership to provide a continued source of income to mitigate the District’s risk by covering some of the debt service.  Mr. LaSalle reviewed the leases and tenants on the property and the basic property management responsibility parameters.  He explained that the net revenue from the properties will be $300,000 a year under the current leases and the debt service annually would be roughly $500,000 a year for the first three years.

Mr. Wisker explained that if Board approves the resolutions on the agenda, the District next will execute the purchase agreement and obtain the financing as described, then close on the purchase and develop a basic operations plan and strategy with Mr. LaSalle to bring back to the Board for approval.  The District will work closely with the City of Hopkins on communications.

Chair Calkins opened the public hearing on the project.  Mr. Gene Maxwell, mayor of Hopkins, appeared, along with Councilmember Kristi Halverson and Kersten Elverum, the city’s director of economic development and planning.  Mayor Maxwell thanked the Board for its partnership on this project and expressed his tremendous excitement about the redevelopment opportunities and opportunity to improve stormwater management and runoff to the creek.  The project also ties in well with the park redevelopment that the District and city have been working on nearby.  Ms. Elverum noted that the partnership opportunities for redevelopment of this property are very significant and she is excited about pursuing them.

Mr. Wisker noted that the District received no formal comments in writing prior to the public hearing.  Manager Calkins asked for comments from anyone else on the matter before the Board.  Seeing none, he closed the public hearing.  Manager Keeley moved, seconded by Manager Shekleton, to adopt resolution 11-085 authorizing the District administrator to take the necessary steps to purchase the Cold Storage property at 325 Blake Road in Hopkins.  Upon vote, the motion carried.

Mr. Wisker reviewed the resolution for the placement of the bond issuance with Wells Fargo, which was prepared by District bond counsel. Mr. Wisker stated that the revised resolution awarding the sale of $15 million in conservation program notes is in the Board packet for the meeting.  Manager Shekleton moved, seconded by Manager Blixt, to approve resolution 11-086, authorizing the sale by Wells Fargo of $15 million in conservation program notes for the purchase of the Cold Storage property.  Upon vote, the motion carried.

Plan Amendment – Taft-Legion Improvement Project, Richfield,

Mr. Wisker presented an update on the development of water-quality improvement projects at Taft and Legion lakes in Richfield.  Mr. Wisker explained that the projects, which have been proposed by the City of Richfield and will be pursued in partnership with the city, include infiltration trenches, buffers replacing turf on wetlands, pretreatment basins, grit chambers, an irrigation system and flocculation systems to improve the quality of stormwater flowing to Lake Nokomis and the creek.  Mr. Wisker explained that the project will dramatically reduce phosphorus and sediment loading to Taft Lake. 

Mr. Wisker said the city will finance the $2.7 million capital project cost by issuing bonds, then the District will include a portion of the project cost in its capital levy over a number of years to offset the initial expenditure.  Mr. Wisker explained that the request for board action and resolution propose initiation of the major plan amendment process to add the project to the District’s capital improvement program.  He said that at the completion of the plan-amendment process, staff will come back before the Board with a proposal to order the project.  Mr. Wisker added that a significant aspect of the project is that the City of Richfield is looking for the water-quality and -volume treatment capacity to be used to offset regulation under the District rules in the city as it redevelops.  Mr. Wisker explained that the proposed project will achieve greater water-quality improvements than would be achieved by application of the District’s stormwater rule in the area of the city draining to the project.  He explained, though, that the District would still require incorporation of site-specific BMPs at individual redevelopment sites.  Mr. Wisker said that a cooperative agreement will be developed between the city and the District that will include all such details.

Mr. Panzer reviewed the results of his analysis of the proposed project.  He said that the project would achieve 130 to 280 acre feet of volume reduction per year, along with 187 to 482 pounds of phosphorus removed per year from runoff.  He showed a map of the various project elements.  He said at the anticipated cost of the project, the phosphorus-removal cost would be roughly $600 per pound over the life of the project.  Mr. Panzer explained that while the District would cover the capital cost for the improvements, the city would cover operations and maintenance, expected to be $3 to $3.6 million over the 20-year life of the project.  Mr. Panzer stated that he was very comfortable with the benefits gained through this project versus the cost. 

The managers discussed the plan to remove some houses in order to facilitate the removal of an access road that winds around Taft Lake in favor of a direct route from the neighborhood to the shopping area along Highway 62.  Mr. Wisker explained that the city is working with the homeowners whose properties would be purchased for this aspect of the project and that these costs are not a part of the funding that the District would provide.  Mike Eastling, the engineer for the city, appeared before the Board and explained that the homeowners near the shopping area are in negotiation with the city to negotiate purchase of their properties.  Manager Miller moved, seconded by Manager Keeley to adopt resolution 11-087, authorizing the District administrator to initiate the major plan amendment process for the Taft-Legion Lake improvement project in Richfield.

Manager Calkins queried as to how the irrigation system proposed by Richfield will provide volume reduction during wet periods.  Mr. Panzer explained that the irrigation system will create additional capacity for storage in the system.  The managers also discussed whether Legion Lake is an impaired public water.  Mr. Wisker explained that while Legion has not been identified as impaired by the state, it’s almost a type 3 wetland, rather than a lake, and would be impaired if it had been analyzed.  Mr. Panzer and Mr. Wisker also explained, in response to questions from Manager Calkins, that flocculation would not be suitable for Legion Lake because it is too shallow and it is unlikely that such a system would produce measurable gain in water quality.

(Manager Casale left at this time, 9:40 p.m.) 

Manager Calkins questioned the proposed substitution of the project in lieu of compliance with the District stormwater rule. In response to questions from Manager Blixt, Mr. Panzer explained that in certain dry years there will be a reduction in flow to Lake Nokomis from the project and that the project will not result in a water-quality improvement for the entire region.  Mr. Wisker emphasized that the proposed system will be operated according to and will adapt to accommodate weather conditions.  Upon vote, the motion carried.

Dutch Lake Filtration Project

Ms. Clark appeared before the Board and presented the assisted-infiltration project planned for the Dutch Lake watershed.  She explained that the owners of the property on which the project is proposed, Sarah and Elroy Kuglin, are in attendance, and another aspect of the matter before the Board is authorization to acquire an easement on the Kuglins’ property for the project.  Ms. Clark added that the managers will review the permit application for the project in October.  Ms. Clark explained the proposed sand-iron system for reducing phosphorus.  In response to queries from the managers, Mr. Panzer and Ms. Clark explained the operation of the system.  Ms. Clark added that the proposed price for the easement is $2,000. Staff also is seeking approval of the design for the project.  Manager Miller moved, seconded by Manager Blixt, to adopt resolution 11-088, approving the design for the Dutch Lake infiltration project and authorizing the necessary steps and expenditure to acquire an easement from the Kuglins.  In response to a question from Manager Miller, Ms. Clark explained that the system will treat water that is routed to it, not naturally flowing.  She explained that the system has roughly a 10-year life span before the sand-iron mixture will need to be replaced.  In response to a question from Manager Blixt, Ms. Clark and Mr. Panzer emphasized that the system will be monitored for effectiveness and maintenance needs.  In response to a question from Manager Calkins, Mr. Panzer explained that the surface of the system would be vegetated.  Upon vote, the motion carried.

Watershed Hero Awards Recipients

Ms. Mamayek appeared before the Board and presented the proposed award winners of this year’s Watershed Heroes Awards.  Ms. Mamayek noted that the proposed winners are listed in the draft resolution for Board review.  In response to a question from Manager Shekleton, Ms. Mamayek confirmed that there is no proposed lifetime stewardship award winner this year as the committee could not agree on a suitable recipient.  Manager Keeley noted that the program will, however, recognize the contributions to watershed of Marion Bender, the recently departed executive director of Minnesota Waters.  Manager Blixt moved, seconded by Manager Keeley, to adopt resolution 11-089, approving the 2011 Watershed Heroes Award recipients.  Upon vote, the motion carried.

ADJOURNMENT

There being no further business, the regular meeting of the Minnehaha Creek Watershed District Board of Managers was adjourned at 10:33 p.m.

Respectfully submitted,

Lee Keeley, Secretary