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CITY OF MUSKEGON CITY COMMISSION MEETING October 8, 2024 @ 5:30 PM MUSKEGON CITY COMMISSION CHAMBERS 933 TERRACE STREET, MUSKEGON, MI 49440 MINUTES The Regular Commission Meeting of the City of Muskegon was held at City Hall, 933 Terrace Street, Muskegon, Michigan at 5:30 p.m., Tuesday, October 8, 2024. Pastor Jeremy Lenertz, from First Wesleyan Church, opened the meeting with prayer, after which the Commission and public recited the Pledge of Allegiance to the Flag. ROLL CALL Present: Mayor Ken Johnson, Vice Mayor Rebecca St.Clair, Commissioners Jay Kilgo, Destinee Keener, Willie German, Jr., Rachel Gorman, and Katrina Kochin, City Manager Jonathan Seyferth, City Attorney John Schrier, and City Clerk Ann Marie Meisch PUBLIC COMMENT ON AGENDA ITEMS Public comments received. 2024-83 CONSENT AGENDA A. Approval of Minutes City Clerk To approve minutes of the September 24, 2024, City Commission Meeting. STAFF RECOMMENDATION: Approval of the minutes. B. Regional Transit Authority Articles of Incorporation Manager's Office Staff is seeking approval of the proposed Articles of Incorporation for the new regional transit authority and appointment of the Deputy City Manager as the City's representative Director on the authority board. In November 2023, the City Commission approved a resolution of intent to join other municipalities in forming a regional transit authority. The first formal step for the group is to establish Articles of Incorporation. These articles outline the Page 1 of 14 members, district served, purposes and power of the authority, details of the Board of Directors, how the work will be funded, how future amendments are made and approved, and methods for members to be released from the authority. The legislative body of each member agency will need to approve the articles for the authority to proceed forward with developing bylaws and seeking alternate funding. Each legislative body will also need to appoint its representative director, and alternate, to the authority board. After discussion with the board of one of the member communities, some minor changes were made to the Articles of Incorporation. In Article IV, Section 2, additional options for appointment to the Board of Directors have been given for both the Director and Alternate. The articles allow for a Council member of the Member legislative body to be appointed to each position. STAFF RECOMMENDATION: To approve the Articles of Incorporation for the Muskegon Area Transit System, to appoint LeighAnn Mikesell, Deputy City Manager, as the City's director to the authority's board, and to appoint Jonathan Seyferth, City Manager, as the City's alternate director to the authority's board. D. SURF Broadband METRO Act Permit Public Works Staff requests approval of a permit from SURF Internet to access and use the public right-of-way within portions of the City. Staff requests approval of a permit from Surf Internet to access and use the public right-of-way within portions of the City. The purpose of the access is to construct a fiber optic network extension that will service certain properties in the city. The expansion will affect the following city right-of-way areas in the northeast portion of the City: • Quarterline Road, Wesley to Marquette • The Shady Lane subdivision (Roblane, Suelane, & Marlane Streets) The application and maps are included in the packet. Staff recommends approval of the permit. Surf Internet will return to the City Engineering Office for individual permits at the time of construction, which will be approved at the staff level. STAFF RECOMMENDATION: Move to approve the permit from Surf Internet to access and use the public right-of-way within portions of the City. F. Sale of 1435 Hoyt Planning Staff is requesting approval of a purchase agreement for 1435 Hoyt for $136,354. 1435 Hoyt was constructed through the agreement with Dave Dusendang to construct infill housing with ARPA funding. The offer is over the full listing price ($136,354) with the seller paying $6,000 in concessions. Page 2 of 14 STAFF RECOMMENDATION: To approve the Purchase Agreement for 1435 Hoyt for $136,354 and authorize the Code Coordinator, Samantha Pulos, to sign. H. Amendment to the Zoning Ordinance - Cat Cafe Definition SECOND READING Planning To add a definition for cat cafés to Article II (Definitions) of the zoning ordinance. Definition - Cat café: a restaurant or café, which also houses adoptable or therapeutic cats for clientele to interact with, and which may incorporate cat adoption services in addition to the restaurant services. The Planning Commission unanimously recommended approval of the ordinance amendment at their September 12 meeting. STAFF RECOMMENDATION: I move to approve the request to amend the zoning ordinance to add a definition for cat cafés. J. Parks E/V Polaris Ranger Purchase - US DOE Rebate Voucher Program DPW- Parks Staff requests authorization to accept the Energy Efficiency & Conservation Block Grant award and purchase vehicles and equipment from Babbitt’s Powersports in the amount of $106,500. In 2023, the U.S. Department of Energy announced the City of Muskegon was eligible to receive an Energy Efficiency and Conservation Block Grant (EECBG) in the amount of $76,450. The grant program is a $550M grant program funded through the Bipartisan Infrastructure Law. It is designed to assist states, local governments, and Tribes in implementing strategies to reduce energy use, to reduce fossil fuel emissions, and to improve energy efficiency. Under this grant program, the City applied and received approval for an Equipment Rebate voucher to use the funds towards the purchase of two Polaris Ranger XP Kinetic EV side-by-side utility vehicles for use by the Parks Department. These vehicles have a range of 80 miles and are fully electric vehicles. The parks department plans to use them in a variety of ways to help us become more efficient and sustainable as a department. These vehicles are also very effective in the sand and will be used at our beaches during the summer as part of the park ranger program. The purchase will be made locally through Babbitt’s Powersports. The Parks Capital improvement plan budgeted $30k for a park ranger utility vehicle which is being supplanted by one of the EV Rangers, and the offsetting costs will allow us to equip these vehicles with a full cab, plow, salt spreaders and several other upgrades to help with maintenance around the City of Muskegon. The vehicles will come with some equipment provided by Babbitt’s; staff is including $16,500 Page 3 of 14 in additional equipment costs to be obtained using standard purchasing policies once the vehicles arrive and needs are determined (caution lights, decals, additional attachments, etc.). The expense is budget-neutral, however a budget amendment is necessary to accept and spend the grant funds. STAFF RECOMMENDATION: Authorize staff to accept the Energy Efficiency & Conservation Block Grant award and purchase vehicles and equipment from Babbitt’s Powersports in the amount of $106,500. K. Contract Award - First Street DPW- Engineering Staff is requesting authorization to enter into a contact with McCormick Sand, Inc, in the amount of $325,999.00 for the reconstruction of First Street from Hamilton to Apple. Bids were solicited for a construction project to reconstruct and install sanitary sewer within First Street; from Hamilton to Apple. The project is necessary to prepare for future sanitary sewer work within Apple, which will take place in 2026. McCormick Sand provided the low bid. STAFF RECOMMENDATION: Move to authorize staff to enter into a contract with McCormick Sand, Inc in the amount of $325,999.00 for the reconstruction of First Street; Hamilton to Apple. M. Sale of 209 Merrill, 502 & 561 Mary, 845, 982, & 1003 Ducey, 1007 Albert, 1542 Adams, 320 & 346 Wood, 425 Octavius, 436 Charles, 907 Orchard, and 877 Amity. Planning Staff is seeking authorization to sell the City-owned vacant lots at 209 Merrill, 502 & 561 Mary, 845, 982, & 1003 Ducey, 1007 Albert, 1542 Adams, 320 & 346 Wood, 425 Octavius, 436 Charles, 907 Orchard, and 877 Amity to Stephen Benedict, Stephens Home and Investments LLC, for the amount of $56,175. Stephen Benedict would like to purchase the City-owned buildable lots at 209 Merrill, 502 & 561 Mary, 845, 982, & 1003 Ducey, 1007 Albert, 1542 Adams, 320 & 346 Wood, 425 Octavius, 436 Charles, 907 Orchard, and 877 Amity to build single family homes. 209 Merrill, 502 Mary, 845, 982, & 1003 Ducey, and 1007 Albert will be split into additional buildable lots. 346 Wood will have a new address on Leonard. STAFF RECOMMENDATION: To authorize the Code Coordinator to complete the sale of 209 Merrill, 502 & 561 Mary, 845, 982, & 1003 Ducey, 1007 Albert, 1542 Adams, 320 & 346 Wood, 425 Octavius, 436 Charles, 907 Orchard, and 877 Amity, as described in the purchase agreement and to have the Mayor and Clerk sign the purchase agreement. N. Brunswick Sewer Repair Public Works Page 4 of 14 Staff is requesting authorization to accept the proposal from Terra Contractors to repair the sewer lateral at Brunswick on Laketon Ave. City staff were recently called to address a problem with the sewer service at Brunswick on Laketon Ave. An investigation of the sewer lateral revealed a blockage and indicated additional damage that would need to be repaired. The repair would be complicated by the depth and location of the sewer main. Since the sewer main was located underneath the middle of Laketon Avenue, a complete closure of the roadway was required to safely excavate to the main. In order to minimize the time that Laketon Avenue was completely closed, and to safely and efficiently excavate to the depths required for this project, staff recommended bringing in a contractor to complete the repair. Staff solicited bids from three contractors. Terra Contractors provided the lowest bid and was selected to complete this repair. This work was authorized by the City Manager on September 6, 2024 under the Emergency Procurement provision of the Purchasing Policy. The Director of Public Works informed the City Commission of this work at the September 10, 2024 meeting. This work has now been completed and staff seeks retroactive approval. Staff anticipates this cost will be borne by the owner of the Brunswick facility based on their ownership of the lateral as detailed in the City ordinance. STAFF RECOMMENDATION: I move to authorize staff to sign the proposal with Terra Contractors to repair the Brunswick sewer lateral for $91,185.00. O. Concur with CRC Recommendations to Accept Resignations and Make Appointment City Clerk To concur with the Community Relations Committee recommendation to accept the resignation of Derek Edlund from the Lakeside Business Improvement District and to accept the resignation of Jonathan Witmer from the Zoning Board of Appeals and to appoint Jordan Hite as a resident. STAFF RECOMMENDATION: To accept the resignation of Derek Edlund from the Lakeside Business Improvement District and to accept the resignation of Jonathan Witmer from the Zoning Board of Appeals and to appoint Jordan Hite as a resident. Motion by Commissioner German, second by Commissioner Kilgo, to adopt the Consent Agenda as presented minus items C, E, G, I, and L. ROLL VOTE: Ayes: St.Clair, Johnson, Kilgo, Keener, German, Gorman, and Kochin Page 5 of 14 Nays: None MOTION PASSES 2024-84 ITEMS REMOVED FROM THE CONSENT AGENDA C. 880 First St. Demolition Bid Economic Development Staff is requesting authorization to contract with Asbestos Abatement Incorporated for the demolition of the structure at 880 First St. The City of Muskegon solicited bids from qualified contractors for the demolition of the building located at 880 First St., Muskegon, MI 49440. The scope of work includes complete demolition and removal of the structure, including all foundations and footings, backfilling the site, hydroseeding, and asbestos abatement. The primary objective is to eliminate blight, improve the area's aesthetic appeal, and encourage economic development by preparing the site for future opportunities. The request for bids was posted on July 29, 2024, with a submission deadline of Tuesday, September 3rd at 2:00 PM. A request to adjust bids in order to reflect prevailing wages was made. The City Clerk received six bids from the following companies: • Asbestos Abatement Incorporated • Dore & Associates, Inc. • Melching Inc. • Pro-Tech Environmental Inc. • Pitsch Companies • Bolle Contracting Based on qualifications staff recommends awarding the contract to Asbestos Abatement Incorporated. STAFF RECOMMENDATION: Authorize staff to contract with Asbestos Abatement Incorporated in the amount of $211,200 for the 880 First St Demolition Project. Motion by Commissioner Keener, second by Commissioner Gorman, to authorize staff to contract with Asbestos Abatement Incorporated in the amount of $211,200 for the 880 First St Demolition Project. ROLL VOTE: Ayes: Kochin, St.Clair, Johnson, Kilgo, Keener, German, and Gorman Nays: None MOTION PASSES Page 6 of 14 E. Opioid Settlement Funding & Management Agreement Manager's Office Staff requests approval to enter into a Funding and Management Agreement with the County of Muskegon to allocate the City’s Opioid Settlement Funds to help fund the county’s existing opioid grant program. In 2021, a $26 billion nationwide settlement was reached to resolve all opioid litigation brought by states and local units of governments against various pharmaceutical distributors. The State of Michigan is estimated to receive approximately $1.6 billion, by 2040. Settlement funds are distributed to state and local governments (county, city, townships). A state-subdivision agreement between the State of Michigan and local government directs how opioid settlement funds are distributed. Payments are based on a national allocation formula which considers opioid overdose fatalities, prevalence of opioid use disorder and distribution of opioids. Fifty percent of funds go to county, city, and township governments. The estimated local government share is $725 million. Fifty percent of funds go to the state’s designated fund, The Michigan Opioid Healing and Recovery Fund. The estimated state share is $887 million. Local governments can combine funds with counties, cities, townships and municipalities. Payment amounts will differ among the various settlements and may not be received annually. The City expects to receive approximately $605,256.92 through 2040. Since February 2023, the City has received $171,244.19. Settlement funds are intended to serve those most profoundly impacted by the drug overdose crisis, with allowable uses focusing on prevention, harm reduction, treatment and recovery. The City's Settlement Funds would help fund the County's Opioid Settlement Fund grant program, established in 2023. An Opioid Settlement Funding and Management Agreement would exist between the City and County. Terms of the Agreement would stipulate that - - City-contributed funds would be for the benefit of city residents, only; - The City participates in the review and approval of applicants providing services to City residents; - The City annually reviews, with the County, the Agreement as well as the Grant Program; - Funds would be used for activities that meet the definition of opioid remediation, be evidence-based strategies or promising practices and align with approved uses; - 5% of funds to be used for administrative expenses, including any reporting Page 7 of 14 requirements. - The City would receive an annual accounting report of the grant program, including total funds awarded, name of the grantee, category of assistance, target audience, project summary and amounts approved., STAFF RECOMMENDATION: To approve the Opioid Settlement Funding and Management Agreement between the City of Muskegon and County of Muskegon, and authorize the Mayor and Clerk to sign. Motion by Commissioner German, second by Vice Mayor St.Clair, to approve the Opioid Settlement Funding and Management Agreement between the City of Muskegon and County of Muskegon, and authorize the Mayor and Clerk to sign. ROLL VOTE: Ayes: German, Gorman, Kochin, St.Clair, Johnson, Kilgo, and Keener Nays: None MOTION PASSES G. Amendment to the Zoning Ordinance - Cat Cafés in Commercial Zones SECOND READING Planning Staff-initiated request to amend the zoning ordinance to allow cat cafés as a special use permitted in all commercial districts excluding B-1. This would include the following zoning districts: B-2; B-4; FBC, DT; FBC, MS; FBC, NC; LFBC, LC; and LFBC, MR. Staff has been receiving many calls regarding the desire to open a cat café in Muskegon. These types of businesses are becoming more popular throughout the state. A specific ordinance allowing these uses is necessary because any property housing more than four cats is considered a commercial kennel. The Planning Commission unanimously recommended approval of the ordinance amendment. STAFF RECOMMENDATION: I move to amend the zoning ordinance to allow cat cafés as a special use permitted in the following zoning districts: B-2; B-4; FBC, DT; FBC, MS; FBC, NC; LFBC, LC; and LFBC, MR. Motion by Commissioner Gorman, second by Vice Mayor St.Clair, to amend the zoning ordinance to allow cat cafés as a special use permitted in the zones as presented. ROLL VOTE: Ayes: Keener, German, Gorman, Kochin, St.Clair, Johnson, and Kilgo Nays: None MOTION PASSES Page 8 of 14 I. Apple Avenue Resolution Public Works Staff requests adoption of a resolution supporting MDOT's preliminary designs for Apple Avenue, including lane reductions and non-motorized facilities. As presented and discussed October 7th, MDOT is progressing with the design of Apple Avenue. In accordance with public input that supports slower speeds, improved safety and upgraded facilities for pedestrians and bicyclists, MDOT is investigating reducing the number of lanes. In particular, as Apple Avenue approaches the downtown area, the street may be overbuilt for the amount of traffic. Reducing the number of lanes provide the opportunity to increase green space and potentially provide parking areas, again both thing supported by public feedback and focus groups. In order to proceed with the studies necessary to support the lane reduction, MDOT needs a formal resolution from the City Commission. The resolution provides that and expresses the City's support for the project. Additional agreements, including a potential turnback agreement as discussed last night, will be presented as MDOT moves through the design process. STAFF RECOMMENDATION: Adopt the resolution supporting MDOT's preliminary designs for Apple Avenue including lane reductions and non-motorized facilities. Motion by Commissioner Kilgo, second by Commissioner German, to adopt the resolution supporting MDOT's preliminary designs for Apple Avenue including lane reductions and non-motorized facilities. ROLL VOTE: Ayes: Keener, German, Gorman, Kochin, St.Clair, and Johnson Nays: Kilgo MOTION PASSES L. Resolution Honoring NAACP Muskegon Branch 3147-B for 105 Years of Service Manager's Office A resolution honoring the NAACP Muskegon Branch 3147-B for 105 years of service. STAFF RECOMMENDATION: To adopt the resolution honoring the NAACP Muskegon Branch 3147-B for 105 Years of Service. Motion by Commissioner German, second by Commissioner Keener, to adopt the resolution honoring the NAACP Muskegon Branch 3147-B for 105 Years of Service. ROLL VOTE: Ayes: Johnson, Kilgo, Keener, German, Gorman, Kochin, and Page 9 of 14 St.Clair Nays: None MOTION PASSES 2024-85 NEW BUSINESS B. Creation of a short-term rental ordinance Planning Staff-initiated request to amend Section 2314 of the zoning ordinance to create a short-term rental ordinance. The ordinance uses an overlay district approach, splitting the City up into 11 different zones. These zones match the City of Muskegon census tracts. Census tract information was used to determine the number of housing units in each zone. Each zone would be allowed up to 4% of the housing units as short-term rentals. Areas within the Downtown Development Authority and Lakeside Business Improvement District/Corridor Improvement Authority boundaries would be exempt from the cap on the number of units. There would be no limit to the amount of short-term rentals in these areas. Please see the Short-Term Renal Chart that depicts the number of units and short-term rentals in each zone. At 4% of the units, Zone 1 would be over the limit by 39 short-term rentals. No new short-term rentals would be allowed in Zone 1 until the number of short-term rentals dropped below 34. The Planning Commission held a public hearing on this request at a special meeting on Thursday, September 26. The Planning Commission unanimously (5- 0, with 4 members absent) voted to recommend approval of the short-term rental ordinance, with the following conditions: 1. Amend Section 1(c) - exemptions - to also include the Lakeside Corridor Improvement Authority along with the Lakeside Business Improvement District. 2. Remove Section 4 that would allow the transferring of licenses. These conditions have been reflected in the ordinance. The redline version depicts the changes that the Planning Commission have requested. STAFF RECOMMENDATION: I move to approve the request to amend Section 2314 of the zoning ordinance to create a short-term rental ordinance as presented. Motion by Commissioner Keener, second by Commissioner German, to approve the request to amend Section 2314 of the zoning ordinance to create a short-term rental ordinance as presented. Page 10 of 14 Motion amended by Commissioner Keener, second by Commissioner Kochin to add Section 4, Transferring of Licenses. ROLL VOTE ON FIRST AMENDMENT: ROLL VOTE: Ayes: Kochin, St.Clair, Johnson, Kilgo, Keener Nays: German, Gorman MOTION PASSES Motion amended by Vice Mayor St.Clair, second by Commissioner Kilgo, to add Section 5, Expiration of Exemption Granted During Moratorium. ROLL VOTE ON SECOND AMENDMENT: ROLL VOTE: Ayes: Gorman, Kochin, St.Clair, Johnson, Kilgo, Keener, and German Nays: None MOTION PASSES ROLL VOTE ON ORIGINAL MOTION: ROLL VOTE: Ayes: St.Clair, Johnson, Kilgo, Keener, and Kochin Nays: Gorman and German MOTION PASSES (REQUIRES SECOND READING) C. Amendment to the zoning ordinance - definition of short-term rental Planning A definition for short-term rental in the zoning ordinance is necessary for the creation of a short-term rental ordinance. Proposed definition: Short-Term Rental - A property in which a tenant is allowed to lease the dwelling unit, without a host, for periods of less than 28 days but more than 24 hours in return for remuneration. A rental in which the host resides on premises shall not be considered a short-term rental, but shall still register with the City. The Planning Commission unanimously (5-0, with 4 members absent) voted to recommend approval of the definition of short-term rental. STAFF RECOMMENDATION: I move to approve the request to amend Article II of the zoning ordinance to create a definition for short term rental as proposed. Motion by Vice Mayor St.Clair, second by Commissioner Keener to approve the request to amend Article II of the zoning ordinance to create a definition for short term rental as proposed. Page 11 of 14 ROLL VOTE: Ayes: Gorman, Kochin, St.Clair, Johnson, Kilgo, and Keener Nays: German MOTION PASSES (REQUIRES SECOND READING) A. FY25 Drinking Water State Revolving Fund (DWSRF) Engineering Services Public Works Staff requests authorization to enter into two contracts with Prein & Newhof in the total amount of $1,113,600 for design and construction engineering services related to the FY25 Drinking Water State Revolving Fund (DWSRF) program, associated projects and service line replacements. The City is again fortunate to have been offered loans, grants and principal forgiveness through the FY25 Drinking Water Revolving Fund (DWRF) program through the State of Michigan Department of Environment, Great Lakes & Energy (EGLE). Specifically, the City has been offered a combination of grants and principal forgiveness totaling 20% funding, with the remaining 80% eligible for a 20- or 30-year loan at a 2% interest rate which is well below market. Due to scoring requirements, several projects were included in the City's application and must be completed under the program in order to take advantage of the principle forgiveness (which is specifically associated with the lead service line replacement work). The overall budget for the projects is $15,591,000. $13,985,000 is for water mains, lead service lines and other work eligible for and included in the DWSRF program (the remainder will be paid from sewer and road funds on hand). Specifically, the program includes: • $10,000,000 for lead service line replacements, including $2,797,000 in principle forgiveness • $392,000 for looping projects at Yuba and Wood and at Wildwood Lane and Dowd • $488,000 for recoating the interior of the Marshall Street Elevated Storage Tank (water tower) • $3,105,000 for the replacement of water main and lead service lines in Catherine Avenue from Irwin to Wood • $1,606,000 of ineligible costs for the Catherine Avenue project to be paid for with local street and sewer funds on hand Depending on bid prices, it is anticipated the FY25 program will replace up to 1,400 lead service lines. The debt service fee the DWSRF-eligible portion of the program is expected to add to the water bill is estimated at $3.45 per month for a residential account, and would begin impacting customer's bills in FY27 or FY28. Portions of the engineering work required for these projects are included in Page 12 of 14 the 24/25 budget and should they move forward, the projects will continue to have allocations included in the 25/26 and 26/27 fiscal year budgets. The engineering costs are eligible for the principle forgiveness and bond at the same cost split as the construction work. A qualifications-based process was used in 2019 that shortlisted Prein & Newhof along with two other firms to provide engineering services for these projects. Staff solicited proposals from Prein & Newhof which totaled $1,113,600, split into one contract for the lead service line replacements and a second contract for the remainder of the projects. The staff has reviewed the proposals and feels Prein & Newhof are best suited to handle these projects based on their experience and their intimate familiarity with our water system, the DWSRF program, and their history of exemplary performance on similar projects over the past several years. STAFF RECOMMENDATION: Authorize staff to enter into two contracts with Prein & Newhof in the total amount of $1,113,600 for design and construction engineering services related to the FY25 Drinking Water State Revolving Fund (DWSRF) program, associated projects and service line replacements. Motion by Commissioner Kochin, second by Vice Mayor St.Clair, to authorize staff to enter into two contracts with Prein & Newhof in the total amount of $1,113,600 for design and construction engineering services related to the FY25 Drinking Water State Revolving Fund (DWSRF) program, associated projects and service line replacements. ROLL VOTE: Ayes: Keener, German, Gorman, Kochin, St.Clair, Johnson, and Kilgo Nays: None MOTION PASSES 2024-86 ANY OTHER BUSINESS Motion by Commissioner Keener, second by Vice Mayor St.Clair, to extend the short term rental moratorium until the ordinance is in effect. ROLL VOTE: Ayes: Keener, Kochin, St.Clair, and Johnson Nays: Kilgo, German, and Gorman MOTION PASSES PUBLIC COMMENT ON NON-AGENDA ITEMS Public comments received. ADJOURNMENT Page 13 of 14 The City Commission Meeting adjourned at 9:07 p.m. Respectfully Submitted, Ann Marie Meisch, MMC City Clerk Page 14 of 14
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