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The City Council of the City of Burnsville met for a Worksession at the Burnsville City Hall, 100 Civic Center Parkway, Burnsville, Minnesota on the 14th day of July, 2009. The meeting was called to order at 6:30 p.m. by Mayor Kautz. Council Present: Council Absent: Staff Present: Others Present: C. Crichton, D. Gustafson, E. Kautz, M. Sherry D. Kealey C. Ebeling, T. Omdal, M. Brooks,T. Hansen, J. Faulkner, D. Garros, J. Ryan, S. Nienhaus, T. Schultz J. Gessner, S. Briggs, E. Delmoro, W. Huelskoetter, N. Linden, R. Swanson, W. Larson, S. Peters, D. Spiro, B. Flackney, M. Soderholm, J. Klinglehutz, D. Porkorney

ITEM 1. OUTDOOR PATIO FOR HOOTERS - SKETCH PLAN REVIEW Jenni Faulkner, Community Development Director, reviewed the sketch plan for Hooters Restaurant, 12950 Aldrich Avenue South, to construct an outdoor seating area for customers to utilize during the warm weather months as well as catering to customers that would like a place to smoke. The initial 2004 PUD application requested an outdoor seating patio for 60 seats in the front of the building however the owner withdrew the request. In 2005, a separate application proposed a seasonal outdoor seating area for 24 patrons, but was not supported due to parking concerns for the site and surrounding neighborhood. Since opening in 2004, customer and traffic flow to the restaurant has leveled off. The site is not experiencing the volume of business as when it opened and therefore would like to pursue outdoor seating. There are currently 90 parking stalls as required by the ordinance. The outdoor seating would normally require the addition of 8 parking stalls. The applicant would be willing to negotiate for employee parking easements at neighboring businesses. A Conditional Use Permit is required when outdoor seating is requested by a business next to a residential area. Council discussed parking issues, the need to provide an outdoor smoking area due to the new nosmoking regulations, and the need to help businesses during this recession. Council voiced concerns regarding residential neighbors. Council consensus was supportive of the proposal and directed staff and the applicant to work with the neighboring property owners to alleviate parking and noise concerns. ITEM 2. PROPOSED SPORTS DOME – SKETCH PLAN REVIEW Jenni Faulkner, Community Development Director, and JJ Ryan, Superintendent of Recreation, reviewed the sketch plan to construct a 76,000 sq ft sports dome as proposed by the Burnsville Sports Dome Task Force, a group consisting of representatives from the individual sports in the Burnsville Athletic Club and Community Facility Partners (CFP), a Minnesota non-profit corporation designed to assist in the financing, construction and management of domes. The submitted proposal indicates that CFP would apply to the City of Burnsville for the issuance of Tax Exempt Revenue Bonds to provide long-term, fixed rate financing for this project. It also indicates Cliff Fen Park as the preferred location for this project, however other sites may exist. The concept proposes the city provide a location at no cost to the project. The primary users of this facility would include all of the sports in the Burnsville Athletic Club and the School District and City recreation department programs would also have access to the facility.



Staff noted some issues for Council discussion:  Management of the facility  Land use restrictions – how the city acquired the land (title issues), screening, parking, traffic, restroom facilities  Building materials  Bond issuance – the park land itself would have to serve as collateral for the bonds  Public/private partnership – role of the city, budgetary impacts, community impacts, needs, timing, etc.  Providing a site (parkland) at no cost - Cliff Fen or Sue Fischer Memorial Park?  Seasonal or permanent year round use Council discussed concerns with the legal issues of the proposal, including the need to collateralize City park property for the bonding. This proposed partnership would also create a competitive disadvantage for private enterprises, such as Soccer Blast. Comments also included eventual conveyance of the dome to the city 20 years later which may be at the end of the useful life of the structure. The City would ultimately be held responsible for the building and for the entire operation if the applicant did not succeed. While Council was open to the concept, there are too many significant issues to support the sports dome proposal as presented. ITEM 3. NICOLLET PLAZA TOWNHOMES – SKETCH PLAN REVIEW Jenni Faulkner, Community Development Director, reviewed a sketch plan and the EDA Contract for Private Redevelopment with KSH Development, LLC for Nicollet Plaza Townhomes. The EDA Contract called for a completion date of December 31, 2009, to date only 8 of the 30 townhomes have been constructed. The applicant is now proposing to finish the townhome construction on the pad facing West Travelers Trail, which would complete the row of single family detached homes (zero lot line) abutting Travelers Trail, and provide the planned screening of the shopping plaza. In lieu of constructing the remaining nineteen townhomes, the applicant is proposing the construction of nine single story zero lot line homes. It is anticipated that they would sell for approximately $235,000. The applicant feels their ability to market this type of dwelling in today‟s market is stronger than the original proposal. The applicant has been made aware of the fact that this proposal would result in less TIF funding for the project. Issues to consider are related to land-use and zoning and the contract. Both council and the EDA would need to approve an amendment to the development contract for the applicant to proceed. A PUD Amendment would also be required to change the land-use and site plan. Land Use Issues Single Family is not permitted in HOC, must be multi-family attached.  Building Materials need to be improved. 60% brick, stone, or glass required. No horizontal siding as proposed. 30% secondary materials of block, stucco, or vertical hardi-board.  Building Height does not meet the minimum (35‟ for townhomes, 30‟ for apartments/condos).  Density may not be met- minimum 8 units per acre required. The approved townhome plan has a density of 12 units/acre. If we include the 11 Townhomes on Travelers Trail with the proposed 9 single family homes then overall density is at 8 units/acre. On their own, the single family density would not meet the ordinance.  Does not meet the intent of HOC-policy decision.  Market conditions may result in longer period of no development if this concept is not permitted, however whatever is built will be there permanently.



Additionally, KSH has submitted a request to extend the commencement and construction dates of the townhomes and Phase 2, which will be considered separately and brought to the EDA within the next 60 days. KSH Development LLC representatives (John Klinglehutz and Dave Porkorney) noted that common wall units are not as marketable today and the proposed single family patio homes fit well with the neighboring Meadowwood development. This proposal would enable them to finish the development of this area within a reasonable time frame. The existing townhomes on Travelers Trail are now being sold below cost because of declining market values. The proposed units would need to sell under $250,000. Council discussed the following related issues:  There are not many single floor homes in the city. The proposed units would also have an option of additional bedrooms upstairs.  The precedent is already set, in that the townhomes on Travelers Trail were intended to buffer the strip center and would also buffer the proposed single floor units. Also similar deviations for CDA handicapped units across the street and similar deviations for the Nicollet Plaza Strip Center.  The quality of the products proposed should meet the HOC design standards.  The last pad on Travelers Trail will still need to be at 3 story height to frame and buffer the area. o Timing of this last pad construction will be dictated in the revised contract, however it is not imperative when construction on those units starts, but when they are completed. Council consensus to support the proposal and directed the applicant to work with staff on product quality and construction timing of the last pad of townhomes along Travelers Trail.

ITEM 4. REVIEW OF PERFORMING ARTS CENTER ENTERPRISE FUND Craig Ebeling, City Manager and Steve Peters, VenuWorks, presented an update on the Financial Performance of the Burnsville Performing Arts Center. Introduction  Overall City Budget o BPAC is one of six different enterprise funds the City operates o City‟s overall total budget for 2009 is $78 million  Management Company for BPAC o VenuWorks is the management company hired under contract by the City to operate the facility o VenuWorks receives reimbursement of operating expenses incurred up to the agreed to budgeted amounts o VenuWorks receives a management fee and has the potential for a variable incentive fee if revenue expectations are exceeded o VenuWorks does not retain any revenue generated by the facility o Venuworks initial two-year contract term expires in 2010 and the contract is then subject to annual review and renewal Original Projections  Revenue and Expense Managed by VenuWorks on Behalf of the City o Original pro forma anticipated a year one operating loss of $386,218, not including an estimated $40,000 from revenue from sponsorships and donations






Final operating deficit figure of $320,477 was adopted for the 2009 budget  Operating revenue is earned from rental of the facility, collection of fees, sale of food and beverages and merchandise, and other rental related revenue in the amount of $578,098  Operating expense allowance for payment of VenuWorks employees at the facility and non-labor costs incurred for operating (utilities, insurance, maintenance) and marketing of the facility in the amount of $898,575 Revenue and Expense Managed Directly by the City o In addition to the revenue and expense managed by VenuWorks on behalf of the City, the City manages directly the following: o Non-operating revenue  Donations and sponsorships  Receipt of solid waste host fees  Transfer in of revenue from the Economic Development Authority Fund o Operating expense for lease payments and other incidental costs (not included in original projections) o Non-operating expense for transfers related to debt service expense Inter-fund Loan o The adopted 2009 budget anticipated the need for an inter-fund loan to cover the negative cash position of the BPAC through year 2013 o Updated projections support the need for this inter-fund loan beginning in year 2009 and ending in year 2013, as planned o The amount of the inter-fund loan for year-end 2009 is anticipated to be $158,000 greater than what was estimated in the adopted 2009 budget, estimated at $335,000 o The City‟s cash position at the end of 2008 was $66,246,971, the anticipated 2009 cash loan to the BPAC represents about 0.5% of this total Conditions in 2009 o BPAC opened in mid-winter – later than planned with lingering construction finalization items o Planned-for additional tenants backed out – lost rent opportunity o Period of drastic economic recession – even non-entertainment events are being curtailed o Arts and entertainment industry was “hit” just as the rest of the economy – fewer artists touring o Summer months typically very slow for these venues in the north o Lack of orchestra shell may have impeded three or four events

Updated Projections  Operating Revenue o Total operating revenue projected to be at 83% of the budget , $479,382 compared to $578,098  40% projected to be earned during the months of Oct-Dec based on in-place contracts  Majority of the revenue comes from the rental of the facility o VenuWorks is presently not permitted by contract to have the “building” participate in the promotion of events due to the financial risk doing so would present to the City – while it may result in more revenue it could also result in greater loss o VenuWorks will market/advertise the building in order to attract promoters and performers to rent the facility  Non-Operating Revenue o Total non-operating revenue projected to be at 73% of the budget estimate, $711,600 compared to $975,250 o Non-operating revenue includes:  Host fee revenue from the landfill  Transfer-in from the EDA Fund (tax levy)  Transfer-in from the General Fund (beginning in Yr2011)  Sponsorships and donations



Host free revenue is down significantly due to the economy and the impact of volume at the landfill ($280,000 versus $510,000) Donation and sponsorship activity has been focused on capital for the building, that will evolve to be for operations



Operating Expense o Total operating expense projected to be greater than budget (8.9%), mostly due to start-up costs incurred in 2009 versus 2008 (if Council approves) o Other Spending in 2008 was less than anticipated due to the facility not opening until January 2009 o A budget amendment is suggested for the Council to authorize the carryover Non-Operating Expense o Total non-operating expense projected to be less than budget, if the Council decides to utilize unspent cash projected in the BPAC Construction Fund for debt service expense o Construction Fund is anticipated to have excess cash, estimated at $370,000, at final close-out o This cash could be transferred to the BPAC Debt Service Fund for payment of debt thereby reducing the amount of cash the BPAC Enterprise Fund will need to contribute towards payment of debt o Transfer to the General Fund from the BPAC Enterprise Fund will be at the amount budgeted this transfer will end in 2010 to coincide with the decertification of TIF District No. 1 (Southcross Industrial Area) Projected Annual Change in Fund Balance for the BPAC 2009 2010 2011 2012 2013 As Projected in November 2008 (480,936) (350,412) 214,103 242,331 273,296 As Projected in July 2009 (616,877) (371,712) 192,803 221,031 251,996 Projected Year End Fund Balance for the BPAC 2009 2010 2011 As Projected in November 2008 (198,542) (548,954) (334,851) As Projected in July 2009 (356,603) (728,315) (535,512) 2012 (92,520) (314,481) 2013 180,776 (62,485)



What is being done? o Increased promotion for weddings, banquets and corporate events o VenuWorks has contacted over 50 organizations across the country who promote events – 39 have visited – 20 booked o Bridal Fair is being planned for winter 2010 o Private “angel fund” will be created to underwrite (share potential risk and rewards) new shows in 2010 o New color brochure and web page promoting new fall season – 12+ local and regional arts organizations presentations, series promoted by national promoter, the “angel series”, 3+ holiday events

VenuWorks Update – 2009 Mid-Year Review  Three Types of Performing Arts Centers o Producing o Presenting o Rental (BPAC)  Prime tenants  Commercial promoters  Local arts groups  Educational institutions  Meetings and social functions

July 14, 2009 ITEM 4. REVIEW OF PERFORMING ARTS CENTER ENTERPRISE FUND (continued)  Events – Year to Date o Bill Engvall o Melissa Manchester o Talents of Burnsville o Church Basement Ladies o Vanities o Dakota Valley Symphony o Ralphie May o Lorie Line o Gallery Exhibitions o Chameleon Theatre Circle Number of Events Budgeted Main Stage Black Box Gallery Lobby, Meeting Rooms, and Rehearsal Studio  80 85 104 136 Forecast 103 105 Attendance Budgeted 36,000 6,900 1,800 6,600 Forecast 38,525 7,434 1,749 5,819





BPAC Sponsorships/Contributions o 2007-2008 $87,000 o 2009 Original Estimate $40,000 o 2009 Forecast Total $90,000 o In addition, the Friends of Burnsville Performing Arts Center raised over $50,000 in their “Sponsor-A-Seat” campaign BPAC On-going Marketing and Sales o New collateral piece in development o New enhancements on deck for web site o Season brochure o Booking Targets  Arts organizations  Commercial promoters  Community and civic organizations  Institutional event planners  Corporate meeting planners  Social functions / wedding receptions o (Bridal show being planned) BPAC Programming – Looking forward o Arts organizations and promoters contacted: 50 o Those that sent a representative to BPAC: 39 o Those that booked events in the BPAC: 20 BPAC Art Gallery o Cultural Perspectives: an Exhibit to Accompany the International Festival of Burnsville o Graphic: Commercial to Personal o Minnesota Valley Photography Club Exhibit

July 14, 2009 ITEM 4. REVIEW OF PERFORMING ARTS CENTER ENTERPRISE FUND (continued)  BPAC 2009-2010 Season o Chameleon Theatre Circle – 12th Season  Paper Dolls  Reefer Madness  Sylvia  Eurydice  The Underpants  Suburb o Regional and National Dance Recitals / Competitions o Miss Minnesota USA and Teen USA Pageants o Holiday Events o Envision Academy of the Arts o Celebrities, Stars, and Attractions  National and regional promoters  Angel underwriters for BPAC in-house presentations


What if Economy Doesn‟t Recover Soon and / or BPAC Performance Doesn‟t Improve?  Underperforming non-operating host fee revenue will recover at some point – revenue will come, the question is when  Quarterly reports will continue - Direction has already been given to staff to provide simple quarterly updates to the Council– the next update will be in October  2010 budget process will continue the evaluation of performance  If operating revenue does not recover as anticipated, decisions regarding General Fund support will be necessary Considerations for Future Actions  Consider a 12-month evaluation period before deciding on any fundamental changes in direction (this will coincide with the 2011 budget process – 17- 18 months of operational data will be available as opposed to 5-6 months of data now available  Consider an amendment to the adopted 2009 budget to recognize opening expenses incurred in 2009 which were originally planned to be incurred in 2008  Consider a transfer of unspent cash from the Construction Fund to the Debt Service Fund – reduced debt payment \could be utilized - to improve cash flow and reduce the time until a positive fund balance is reached; or to increase facility promotion; or to acquire additional capital equipment to enhance the ability of the facility to attract events Wayne Huelskoetter, Friends of the Burnsville Performing Arts Center (FOBPAC) chair, reported that there are three objectives for their organization: to raise funds for capital enhancements, programming, and operating expenses/losses. So far they have focused strictly on capital enhancements and raised approximately $460,000 in cash and in-kind donations. Now they plan to switch their focus to programming. In addition, Mr. Huelskoetter also wanted to report that the two Burnsville Rotary events held this year at the PAC were very successful – Wine Tasting event in February and Concert for Caring in May. Both events will be booked again for next year: Wine Tasting event will be January 21, 2009 and Concert for Caring will be April 24, 2009. Council discussed concerns related to customer service issues and working with the Convention & Visitors Bureau to allow tours of the facility. There has been some progress in this area and Mr. Peters reported that all customer service issues are taken seriously and to contact them with any and all complaints.



Councilmember Crichton voiced concern that the financial figures were projected estimates (based on bookings) and not actual month by month detailed figures. Councilmember Crichton left the meeting. Direction to Staff  Is incorporating a longer evaluation period an acceptable strategy or is a more immediate course of action appropriate and if so what direction would the Council like to take? o Council discussed the need for detailed financial information and directed staff to forward year-to-date actual figures as well as year-end estimates to the Council on a quarterly basis.  Should the approved 2009 expenditure budget be revised to reflect the first-cost expenses incurred in 2009 which were envisioned in 2008? o Yes, Council consensus was have the expenditure budget revised to reflect that the opening expenses were incurred in 2009.  What planning should be made for the balance that will be in place at the closure of the PAC Construction Fund? o Council consensus that the remaining construction funds should be used improve the marketability of the building. Council directed staff to secure bids for an orchestra shell and audio/visual equipment first. Council discussed that a piano would also be nice to have but not as necessary as the other equipment. Mr. Peters reported that even though the summer season is typically slow, the Sweeney Todd musical will begin on July 16, 2009.

ITEM 5. REVIEW RESIDENTIAL AND COMMERCIAL WIND ENERGY This item was continued to the August 11, 2009 Worksession. ITEM 6. REVIEW COUNCIL’S OPERATIONAL BUDGET INCLUDING TRAVEL BUDGET Craig Ebeling, City Manager, reviewed Council budget information and updated the Council on recent legislation allowing for a temporary reduction Council salaries. The Council has already chosen to modify its usage of the recently enacted per-meeting compensation, which City Attorney feels is a payment functions more like a per diem or expense reimbursement than a salary and that it could be temporarily suspended, even before the recent legislation. Mr. Ebeling reported the following budget line items: Council training – $3,000; tuition and fees – $8,990; travel – $8,300; and lodging and meals – $15,900. This all relates to Council conferences and training – out of town. The Council has adopted a policy to provide guidance of when it is appropriate and how reimbursements will be given. The policy recognizes that it is beneficial in some instances for the Council to travel. Over the years the Council has been very conservative in the usage of this budget. Dues and subscriptions is a sizable number $73,500. This relates to City memberships – National League of Cities, League of Minnesota Cities, Metro Cities, US Conference of Mayors, Suburban Rate Authority etc. Council has already given guidance that the City will be dropping the Suburban Rate Authority and the Transportation Alliance so there have already been some cuts there.



Mr. Ebeling presented a wide continuum of options to consider regarding conferences and training: A. No travel or lodging outside of the metropolitan area. B. No travel or lodging outside of the state C. Establishment of a travel and lodging allowance for each council member not to exceed an agreed-upon dollar amount. D. Provision for travel and lodging for any meetings for which outside agencies reimburse the City for at least 75% of the costs. E. Provision for travel and lodging for meetings of organizations to which the City belongs when a council member serves in an official capacity, beyond basic membership, for the organization. F. Provision for travel and lodging for meetings at which it is critical that the City provide oral testimony as to City Legislative Agenda or to otherwise advocate the City‟s position on policy matters in person. G. No curtailments Council discussed the recent budget cuts and the need for the Council to cut back as well. Council salaries were not increased last year and „per-meeting‟ pay has been suspended. Council also discussed how giving a voice to cities of our size can make a difference at the national level. Council consensus to move forward with Options E & F above and directed staff to prepare a temporary appendix to Policy No. 1.165 for approval at a future Council meeting.

ITEM 7. PARK SAFETY UPDATE Tom Hansen, Deputy City Manager, and Eric Gieseke, Police Captain, provided an update on safety in the City‟s park system generally and in North River Hills Park (NRHP) specifically. This park safety review was initiated by a report to Councilmember Kealey that men in their early twenties were using the park facilities and making other park users, including children, feel uncomfortable. Further, it was reported, that a Burnsville officer advised a citizen having recently attended a soccer game at NRHP to avoid it because it was not safe and to have her children find another park. And, finally, the officer is reported to have said that these young men carry firearms and may use them. Staff responded to the concern with the following four actions: (1) gathered statistical data on police calls; (2) directed additional patrols at NRHP to observe any unusual conditions; (3) interviewed area officers responsible for the NRHP area and other parks in the city; and (4) Chief Hawkins spoke at length with the citizen who raised the issue with Councilmember Kealey. Here is what we found:  Statistical o Statistical data shows no police calls to NRHP involving weapons in 2008 or 2009 o Total police calls (excluding the extra patrols we directed because of this concern) for NRHP through the first half of 2009 are slightly less than the 2008 rate o Total police calls for the entire parks system (excluding extra patrols) are at the same rate as 2008 o Total weapons related police calls for the City‟s parks in 2009 is two (one incident involving a paintball gun and another involving an orange tipped toy gun) Additional Patrols o Three dozen additional assignments involving officers, Park Service Officers and Community Resource Officers were directed to NRHP since June 9. The purpose was to observe, log and react to any unsafe activities. No unusual activity was detected.


July 14, 2009 ITEM 7. PARK SAFETY UPDATE (continued) 


Officer Interviews o Area officers report no additional or unusual activities in NRHP or throughout the Park System generally. It is a “business as usual” summer so far. o Officers door-knocked homes around NRHP to determine if neighbors have noticed any unusual or suspicious activities in the park. None was reported. Citizen Interview o Chief Hawkins spoke at length to the resident who had expressed the NRHP safety concern. He was very impressed with her sincerity and passion for Burnsville. He believes there may have been some miscommunication involved in the telling and retelling of the concern but does not doubt for a second the veracity of the resident or her support for the safety of our park safety.


Mr. Hansen summarized that there is crime in Burnsville and crime in our parks just as there is crime in any city, but there is nothing significant going on in our parks system that we can detect from a law enforcement point of view. We believe this is a safe city and our police department is very responsive to all complaints. Mr. Hansen encouraged everyone to call 9-1-1 right away if they see anything unusual or dangerous. Council thanked staff for a very thorough follow-up report. Council discussed the Citizens Academy and how helpful and informative it has been for the Councilmembers. Councilmember Sherry voiced an interest in participating.

ITEM 8. ROUNDTABLE  Parks & Natural Resources Commission Vacancy Council has received a resignation from the Parks & Natural Resources Commission which creates on Regular Member vacancy. Council directed staff to provide application copies of recent applicants that have been interviewed but not yet appointed at the individual 1x1 meetings and place the item on a future regular Council meeting agenda for appointment.  Reports on Advisory Boards and External Organizations Councilmember Sherry  LMC Policy Committee – Improving Local Economics o Meets Tuesday, July 21st  Burnsville Community Foundation o Not meeting in July or August  BV Convention & Visitors Bureau Advisory Board o Meeting on Thursday, July 16th o Excited about new promotional materials  LACA Board of Directors o Meets Monday, July 20th  Burnsville Medical Alliance o Pushing forward and attracting new business o Vital Signs is closing

July 14, 2009 ITEM 8. ROUNDTABLE (continued) Dan Gustafson  I-35W Solutions Alliance o Out of town  Metropolitan Transportation Advisory Board (TAB) o No meeting this month Mayor Kautz  Minnesota Valley Transit Authority o Groundbreaking in Eagan – transit station is moving along in Cedar Grove area o Adopted contracts to move forward on the corridor with UPA  Municipal Legislative Commission o Meets quarterly – next meeting in August  Suburban Transit Authority o Meets Thursday, July 16th  Regional Council of Mayors o New partner – Itasca o Mostly made up of CEO‟s from major regional corporations o Focusing on branding and economic vitality o ULI – evaluated housing stock in five communities  Cedar Avenue Corridor Advisory Committee o Just an update o Finalizing their concept and funding sources  Dakota Communication Center Board of Directors o Quarterly meetings now o Adopted budget last time  The GARAGE Advisory Committee o Also meeting quarterly now o First Quinceanera event on Friday, July 17th  International Festival Board o Very successful o More participants and good cash flow o Next meeting to wrap up on Wednesday, July 15th


The meeting was adjourned at 9:07 p.m.

Respectfully submitted,

_________________________________________ Macheal Brooks, Deputy City Clerk Approved by the City Council of the City of Burnsville this 21st day of July, 2009.

__________________________________________ Elizabeth B. Kautz, Mayor

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