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HomeMy WebLinkAbout8A Fee to Trust Report Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 CITY COUNCIL AGENDA REPORT MEETING DATE: DECEMBER 14, 2015 AGENDA #: 8A PREPARED BY: FRANK BOYLES, CITY MANAGER PRESENTED BY: VARIOUS AGENDA ITEM: CONSIDER APPROVAL OF A LETTER TO BE SUBMITTED TO THE BUREAU OF INDIAN AFFAIRS WITH RESPECT TO THE FEE TO TRUST APPLICATION BY THE SMSC FOR THE MEADOWS DISCUSSION: Introduction At the November 23, 2015 meeting the city council considered this subject including the four topics enumerated below: 1. Approve as submitted or revise a letter to the Bureau of Indian Affairs with respect to the Meadows Fee to Trust Application. 2. Authorize retaining special counsel Don Baur, Perkins Coie to assist the city in preparing a response to the BIA regarding the ICO (Menden Property et al) Fee to Trust Application. 3. Authorize the staff to prepare an amendment with respect to the city’s Comprehensive Plan regarding SMSC land owned within the corporate limits of Prior Lake. 4. Direct the Fee to Trust Work Group to initiate discussions with the newly elected SMSC Business Council before initiating compensable work with Perkins Coie. As the attached draft minutes show the city council took action on three of the four topics. Because not all council members were present, the letter to the BIA with respect to the Meadows Fee to Trust Application was not acted upon but instead deferred to this meeting. History The Shakopee Mdewakanton Sioux Community owns a total of 1886 acres land in Prior Lake of which 960 acres is in trust. The land presently held in fee as well as any future land purchased will be converted to trust and as a matter of SMSC policy and practice. Land held in fee by the SMSC is treated like property owned by private citizens or businesses. Land held in trust for the SMSC by the Federal Government is subject to fewer state and local laws, receives most if not all services from the SMSC and is not subject to city zoning laws, comprehensive plan or state property tax laws. Fee land is placed into trust to assure the tribal community that it will remain in their ownership in perpetuity. Current Circumstances 2 The City Council became aware that the SMSC would be submitting applications to the Bureau of Indian Affairs (BIA) regarding various properties. They have already done so with respect to the former 80 acre YMCA property. The city submitted a letter to the BIA which expressed concerns but was neutral regarding the fee to trust request. The YMCA property was approved for trust. Two properties remaining for BIA action are the 249 acre Meadows property and the 219 acre ICO property. This agenda item addresses the one remaining issue with respect to the Meadows application—the letter to the BIA. The issues below have been identified by Mayor Hedberg and Councilor Keeney who together comprise your fee to trust work group. I did not have the opportunity to review this packet with the work group prior to distribution by Dropbox. Letter to the BIA Regarding the Meadows Fee to Trust Application The city has until December 19, 2015 to send comments to the BIA regarding the Meadows application. To provide adequate time before submission is due the Fee to Trust Work Group is submitting a draft letter for City Council input and direction. The proposed letter (Attachment 1) follows the format which was established for the YMCA request. It was understood that this format would be a template for future letters. Two changes have been made to the draft letter since the city council saw it on November 23. On page 2, the line indicating that the city opposes the fee to trust application has been removed in acknowledgement that the following paragraphs are self-explanatory and explain the city’s concerns. On page 4 of the letter, Don Bauer has suggested additional language with respect to NEPA and cumulative impact argument. The council should discuss the contents of the draft letter and provide direction with respect to desired modifications. Assuming the letter is adopted tonight, it would be mailed no later than December 18, 2015. ISSUES: The Fee to Trust Work group is aware of and has discussed the collaborative activities that the SMSC and city staff are engaged in. The wholesale water purchase agreement between the city and SMSC has been effective in securing water for the city. Wells have been added by the SMSC since the agreement was executed. Under the terms of the water agreement the city staff would like to increase the gallons we can purchase to avoid the estimated $1 million cost for well 10. Similarly we continue to work with the SMSC toward a joint water treatment plant to serve future water needs both for the city and SMSC. A joint plant could 3 save the city approximately $14 million in capital expenses. This year would normally be a year where our local government aid from the SMSC would be increased. No such discussions have taken place on this topic to date. Attached is a memo I sent to all city council members on these topics. FINANCIAL IMPACT: Unknown at this time. ALTERNATIVES: 1. Provide feedback and direction on the contents of the Meadows BIA letter and approve its distribution. 2. Take no action, request additional information and schedule a special meeting by December 18 to further discuss the letter. 3. Elect to make no comment with respect to this fee to trust request. RECOMMENDED As determined by the City Council. Attachment 1 Phone 952.447.9800 / Fax 952.447.4245 / www.cityofpriorlake.com 4646 Dakota Street SE Prior Lake, MN 55372 December 18, 2015 United States Department of the Interior Bureau of Indian Affairs Midwest Regional Office Attn: Regional Director 5600 West American Boulevard, Suite 500 Bloomington, Minnesota 55437 Re: Shakopee Mdewakanton Sioux Community Fee to Trust Application - Meadows Dear Ms. Rosen: Pursuant to the Notice of Non-Gaming Land Acquisition Application (“Application”) for the Meadows Parcels dated October 13, 2015 and the 30 day extension invoked by the City on November 19, 2015, the City of Prior Lake submits the following response no later than December 19, 2015: I. INFORMATION REQUESTED BY BIA: In answer to specific questions asked by the BIA in the notice dated October 13, 2015: a. Property Taxes. Of the 249.879 acres requested for Trust States, 104.891 acres are within the city of Prior Lake corporate boundaries. This includes the following parcels: Meadows Prior Lake Parcels PID Total Tax Prior Lake Tax 253010010 $992 $108 253010020 $36,360 $3,991 253010030 $102 $11 255120010 $13,026 $1,928 255120020 $8,654 $2,239 259320083 $1,560 $169 Total $60,694 $8,446 b. Assessments. There are no existing assessments on these Properties. c. Services. The City approves annual Beverage Cart Liquor service. In addition, the City provides all police services and joint powers assistance for fire services to this property. Regional Director, Midwest Regional Office U.S. Dept. of the Interior, Bureau of Indian Affairs ____________________________ Page 2 d. Zoning. The land is guided in our 2030 Comprehensive Plan as R-RD which means rural residential. This is the guiding typically used for land which does not and may never be served by public utilities. The zoning for all parcels is agricultural. II. POSITION WITH RESPECT TO THIS APPLICATION: The City objects to the transfer of this Property into trust for the following reasons: a. Need for Property. The Property proposed to be transferred into trust which is located in the City of Prior Lake consists of a golf course, one house, and open land. The SMSC cites several reasons the Property is needed: self-determination; economic development; housing; cultural restoration; and wetland. The City recognizes that there are uses which are needed by the tribe and thus are appropriate for transfer into trust such as the Pow Wow grounds which are part of this application but are located in the City of Shakopee. However, the SMSC has not established that the Property in Prior Lake satisfies needs that make it appropriate for transfer. The house is one house located on the golf course. It does not provide self-determination or economic development or a significant source of housing. The golf course has been successfully operated by the SMSC in fee status since 2005, already creating the economic diversity the SMSC seeks. The wetlands and natural areas are a benefit not just to the SMSC but to the entire area and are currently protected by both State and local law. The SMSC indicates that it intends to continue to operate the Property as it is currently operated, as such transferring the Property into trust is actually a detriment to the SMSC. The State wetland regulations and the City zoning and land use regulations ensure that the Property will continue to be used as wetlands and a golf course. A change in use of the Property while in fee status would require significant public process and input. However, if the Property is transferred into trust there are no safeguards to ensure that the Property remains a golf course and a wetland since it is no longer subject to city zoning ordinance and the comprehensive plan. In addition, allowing the SMSC to transfer a golf course into trust establishes an unfair economic advantage. The SMSC is one of the most economically successful tribes in the Country and has already shown that it is able to operate a successful golf course. If the SMSC is permitted to transfer the golf course into trust it will no longer be required to pay property taxes or comply with State or local regulations. The transfer of the golf course into trust improves the SMSC’s competitive position and raises the competitive disadvantages of similarly situated private enterprises. b. Impact on City. The removal of the Property from the City tax rolls is significant. Each time the SMSC transfers property to trust the tax burden is shifted from the SMSC onto the other residents of the City. This is despite the fact that the SMSC continues to benefit from many of the services provided by the City including roads, emergency Regional Director, Midwest Regional Office U.S. Dept. of the Interior, Bureau of Indian Affairs ____________________________ Page 3 services, and parks. This transfer does not reduce the services the City must provide but does transfer the burden onto other residents. c. Jurisdictional Problems. The transfer of the Property into trust also creates jurisdictional problems. The SMSC itself notes that one of the advantages to the transfer will be to avoid State and local regulations relating to improvements. This means that the SMSC would be able to avoid the health and safety regulations that exist for the protection of all residents. In addition, the City of Prior Lake is under the jurisdiction of the Metropolitan Council in regards to land use planning and sewer and water provision. The regulations imposed by the Metropolitan Council are meant to ensure safe and healthy development. The Metropolitan Council imposes regulations relating to land use density, requiring that the City ensure certain population densities are met. The Metropolitan Council also imposes sewer and water regulations, requiring the City to serve certain areas of the City by certain dates. In addition, the Metropolitan Council has the authority to approve or reject the City’s comprehensive plan. The property owned by the SMSC issued by the Metropolitan Council to establish such regulations. Transferring the Property into trust will make it practically impossible for the City to comply with the regional regulations. d. NEPA and Trust Land Impacts Under Part 151-Cumulative Impact. The SMSC has actively been purchasing land within and surrounding the City of Prior Lake and transferring that property to trust. In addition, the SMSC has expressed an intent to continue transferring all of the property it owns into trust. The cumulative effect of multiple transfers of property within and surrounding the City into trust is significant. The SMSC has indicated that it currently owns approximately 4122 acres in the Prior Lake / Shakopee area and that 1844 of those acres are held in trust. It is clear that one day all 4000 acres (or more) are likely to will be held in trust. In Prior Lake, the amount is 1886 total acres owned of which 1047 acres are in trust.The addition of the Meadows property will be the total to 1151.891 d. The numerous transfers have created a significant impact on the City in regards to several of the factors to be considered for fee to trust transfers. The transfers have had a significant impact on the City’s tax base, shifting the tax burden onto other residents. In addition, the extent of the trust land the extensiveness of the transfers is creating jurisdictional conflicts in which the City is unable to comply with regional regulations and unable to ensure safe and orderly development. The continuation of trust transfers includes a substantial amount of property and will have an extensive impact on the City’s planning, land use, tax revenue, operations and ability to provide necessary services. Formatted: Font: +Headings (Cambria), 12 pt Formatted: Font: +Headings (Cambria), 12 pt Formatted: No underline Formatted: Font: +Headings (Cambria), 12 pt Formatted: Font: +Headings (Cambria) Formatted: Normal, Indent: Left: 0.25", No bullets or numbering Formatted: Indent: Left: 0.5", No bullets or numbering Formatted: Font: +Headings (Cambria), 12 pt Formatted: Font: +Headings (Cambria), 12 pt Regional Director, Midwest Regional Office U.S. Dept. of the Interior, Bureau of Indian Affairs ____________________________ Page 4 NEPA requires the consideration of multiple actions in a single EIS if they are connected, cumulative, or similar. See 40 C.F.R § 1508.25(a)(1)-(3). Such joint consideration is necessary to prevent a coordinated course of action from being dividing into multiple, separate actions, each of which individually has an insignificant environmental impact, but which collectively have a substantial impact. Whether viewed as connected, cumulative, or similar, all of the SMSC fee to trust requests are related, and much be discussed in a single EIS. In addition, there is no question that additional fee to trust requests that the BIA consider the full extent of the SMSC’s plans for its current land holdings and future acquisistions, and consider the combined impacts of all pending and reasonably foreseeable trust transfers on the City of Prior Lake. The City requests that the BIA consider the cumulative impact of trust transfers on the City of Prior Lake as shown below: The City appreciates the BIA’s consideration of these matters and encourages the BIA to contact the City if it has additional questions. Respectfully submitted, Kenneth L. Hedberg Mayor, City of Prior Lake cc: Charlie Vig, Chair, SMSC Trust Request Date / Name Total Acres Owned (PL) Total Acres in Trust (PL) Total Acres this Request Total Acres in Trust if this Request Approved (PL) 01/20/2015 YMCA 1886 960 87 1047 10/13/2015 Meadows 1886 1047 104.891 1151.891 Formatted: Font: +Headings (Cambria), 12 pt 1 4646 Dakota Street SE Prior Lake, MN 55372 EXCERPT REGULAR CITY COUNCIL MEETING MINUTES November 23, 2015 9D Consider Approval of a Report from the Fee to Trust Work Group Mayor Hedberg reviewed the agenda report on this topic dated November 23, 2015. Keeney: Stated that the most recent email from Attorney Don Baur with Perkins Coie referenced he wanted to have input sooner and it was unclear as to if Baur wanted to have input on this let- ter. Schwarzhoff: Concurred with Keeney that that letter was not exactly clear. Baur mentioned two things that he stated should be in the letter and they are, therefore it is unclear what he was imply- ing. She mentioned the City can send the letter to Baur but she was not sure how much review he would be willing to do and at what cost. Hedberg: Commented that Baur indicated holding up the Meadows was not going to happen. Morton: Stated that the community at large would have a larger opinion. She mentioned a couple hours of attorney’s time would be beneficial. Hedberg: Responded from his perspective it is about being behind Federal law and Federal pol- icy so if the City challenges this it would waste tax payer’s money because it might go straight to court since it is over 200 acres; however the work group needs to better understand this course of action. Schwarzhoff: Clarified that there are two applications out there. Meadows is one and the 30 day notice is out then there is the ICO applications which we have not received a 30 day notice on yet. MOTION BY KEENEY, SECOND BY THOMPSON TO TABLE THE APPROVAL OF THE LET- TER WITH DIRECT TO THE STAFF TO FOLLOW UP WITH BAUR TO CLARIFY THE SCOPE OF THIS LETTER VOTE Hedberg Keeney McGuire Morton Thompson Aye ☐ ☒ ☐ ☒ ☒ Nay ☒ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☒ ☐ ☐ The motion carried. Hedberg: Commented the City should not authorize Perkins Coie to spend any funds until there has been an opportunity to speak with the newly appointed Business Council unless the City re- ceives the 30 day notice of the ICO at which time a special meeting would be called. Thompson: Asked what kind of negotiations would be going on with the new Business Council? Hedberg: Answered the negotiations would include concerns on the framing of our comment let- ter and the potential concerns of the already constructed infrastructure. Thompson: Stated the City is back to negotiations with the tribe. Hedberg: Replied that would be the ideal circumstance; the other way would be for the county negotiation and the SMSC for the roadway installation and utility use. Thompson: Stated that it still does not address the issue of making an agreement that is enforce- able. Keeney: Stated the first part of the agreement is to build the road, secondly buying land in the an- nexation part is where this is complicated. Excerpt 11 23 15 City Council Meeting Minutes 2 Schwarzhoff: Commented that any portion of the agreement could be revisited. Those are ques- tions the City discussed the first time the agreement went through and those would be questions to the new council about the enforcement mechanisms and easement exists as a permanent road easement. That would ease many of the City's issues because it would ensure it is a permanent road with the utilities. MOTION BY HEDBERG, SECOND BY KEENEY APPROVAL TO ENGAGE PERKINS COIE AF- TER THE NEGOTIATING GROUP AS AN OPPORTUNITY TO MEET WITH THE NEWLY ELECTED BUSINESS COUNCIL WITH THE EXCEPTION THAT IF WE RECEIVE OUR 30 DAY NOTICE PRIOR TO THAT TIME THAT WE CALL A SPECIAL MEETING ON THE CITY COUN- CIL TO ENGAGE PERKINS COIE IMMEDIATELY VOTE Hedberg Keeney McGuire Morton Thompson Aye ☒ ☒ ☐ ☒ ☒ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☒ ☐ ☐ The motion carried. Boyles: Stated that the Met Council suggested that the City wait until the 2040 Comprehensive Plan prior to making our amendments which is contrary to what has been done in the past. It would be more logical to change the 2030 Comprehensive Plan. Hedberg: Commented amending the 2030 Comprehensive Plan gives a good foundation for the 2040 plan so there is proper research and foundation in place. Keeney: Added those acres cannot be part of the normal plan or that land needs to be excluded for the 2040 plan. Hedberg: Stated that the SCMC owns about 2,000 acres and 1,300 to 1,500 acres that were part of the 2030 plan but now it would not be in the 2040 plan. MOTION BY KEENEY, SECOND BY THOMPSON TO SUBMIT A 2030 COMPREHENSIVE PLAN AMENDMENT TO EXCLUDE SMSC PROPERTY. VOTE Hedberg Keeney McGuire Morton Thompson Aye ☒ ☒ ☐ ☒ ☒ Nay ☐ ☐ ☐ ☐ ☐ Abstain ☐ ☐ ☐ ☐ ☐ Absent ☐ ☐ ☒ ☐ ☐ The motion carried.