[Music] meeting right at 7 o'clock. Call the meeting to order. Julie, can we get a roll call? Council members Ericson here. Larson here. Miller here. Council member Valento is absent tonight and Mayor Roberts here. If you're able, please stand for the pledgece to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Great. Um, can get a motion to approve tonight's agenda. So moved. Second. Second. All in favor? I. Motion carries. All right. We uh have a new item on the agenda that we're going to do periodically when when it's warranted and that is to recognize people in the community or that have done great work community service and contributed in this case contribute to a city commission. So um I am going to make a motion that we approve resol resolution 04142501 recognizing Diane Hofflin. And I have a just a resolution I want to read publicly. Whereas the city council of force lake wishes to recognize individuals who have made significant contributions to the well-being, growth, and quality of life in our community. And whereas Diane Halflin was dedicated and passionate volunteer who serve who selflessly served the city of Forest Lake as a value member of the cable commission for 10 years. And where is during her tender on the tender on the cable commission Diane brought in insight integrity and commitment ensuring that public access and communications remains tr sub transparent accessible and community focused. Whereas beyond her role in the cable commission Diane was actively involved in numerous volunteer efforts throughout the city always offering her time energy skills and help and others to enhance the community programs incentives. And whereas Diane's dedication, warmth, civic spirit left a lasting impression on all who had privilege working with her, she served as an inspiration to many throughout her tireless advocacy and genuine care for her neighbors and city. And whereas the city of Forest Lake and its residents mourn the loss of Diane and extend deepest sympathies to her family, friends, and those who all knew and loved her. Therefore, is resolved that the city of Forest Lake, city council of the city of Forest Lake, that we hereby recognize and honor the life legacy of Diane Hen and express her sincere appreciation for her many years of dedication, public service, and her countless contributions to our community. So, I have a motion. Is there a second? Second, I sir. All right. All in favor? I I opposed. Motion carries. And I just would like to add uh it's people like this that really make this community special and we're so grateful for her service and again condolences to her loved ones. Right. Open forum. This is an opportunity for the public to speak uh any city matter. Please come uh to the podium name and address and uh no one on it was just Mr. Miller. So Okay. All right. Okay, we have a consent agenda in front of us. Uh, anyone willing to make a motion to accept the consent agenda? I'll make a motion to approve consent agenda items 7A through 7Q. Right. Do we have a second? Second it. Any discussion? All in favor? I opposed. Motion carries. Our first item on the regular agenda is uh lot one block one Deonti third edition first right refusal and Abby. Thank you Mayor Roberts. Uh members of the council as the council's aware staff has been in discussions with Gan Companies um for their potential acquisition of parcels of land in the airport business park. So, as a reminder, the city owns two parcels still located along Fenway Avenue um in the area where we had had quite a number of um business park parcels that the city had marketed over time over some time. Um the parcel that's in question with this first right of refusal is the southern of the two parcels and um essentially gone has indicated that they have an interest in purchasing this parcel, but not right at this moment. Uh given the fact that we've had recent ownership changes with adjacent land use um or adjacent land owners, we've reached out to them to talk about some kind of small area planning for this to not only meet potential city needs of commercial development, but also the potential recreation needs in the area of the athletic complex. Ghana understands this and so there would like um to enter into a first right of refusal with the city that would essentially allow them at no cost to have kind of a a a chance at making the exact same offer if we receive an offer during this kind of time period in which we're trying to do some planning. Um, this isn't necessarily as customary, but because we have been in these long-term negotiations, we have seen concept plans for this property and we do believe that it can develop in a commercial fashion by gone or others, but we really need that time right now more than anything to work with the neighbors on it to kind of figure out what do we really want there. So tonight for your consideration is um a first right of refusal agreement for lot one block one Deonti third edition and staff would recommend that we enter into that agreement with Gone Development LLC any questions any questions council any any thoughts or No I think as I read through this I mean we we had a number of discussions at the EDA level about you know there's some things we might want to do with just understanding the planned usage around that. And so this is going to protect those interests of the cities. Correct. Correct. Um essentially it's going to kind of uh we're not actively marketing it. If we got an offer in this time period, it would allow gone to match that offer. But essentially, it's told the only interested party right now, hold up. Give us a second. We need to plan a few things here. Um they're well aware of all of the conversations that are happening. the land potential land use changes that could happen through here and um are very respectful of that and understand that that's something that the city may not um anticipate selling quite yet or in the near future. So perfect. Thank you. Kind of goes handinhand with the next application or the next item on the agenda too. Okay. But two separate motions. Two separate motions. If there's no other uh discussion, is anyone interested in making a motion? I'll make a motion that we accept the enclosed first shred refusal agreement for lot one block one to panty third edition uh with Gone Properties LLC. Is there a second? Second it. Any further discussion? All in favor? I opposed. Motion carries. Next item. Uh lot one block two Deonte first edition option agreement. Abby. Thank you. Um, again, as the council's aware, the staff has been in discussions with Gone Development LLC for a number of years about their potential acquisition of the northern parcel that still remains, the lot one, block one, Deponti first edition. Um, most recently, the city has negotiated the enclosed option agreement with Gan Development LLC. Essentially, what the option agreement allows them to do is market the property for industrial, business, service, office, and or commercial recreation users. and then enter into good faith negotiations on a purchase agreement for the properties. It gives them one year and for a cost um of it was $15,000. Yep, I did include that in the memo for you. Um included in the option agreement is a little bit of precursor though for that pre purchase agreement. Essentially, it locks in the purchase price of $353,500. It also indicates that GAN will design and plan for a 30,000 minimum 30,000 square foot structure or structures depending on kind of what that development plan looks like and that they would have a finished valuation of $1.73 a square foot that based on our county assessor is kind of the going rate for um nice um nice development on that site. And then lastly, there would also be in the purchase agreement a deed restriction that would uh allow for the reversion of the property back to the public. So back to us if gone fails to develop exactly as we kind of negotiate in that future purchase agreement. There would be a sunset period on that and a time to give them ample time to be able to develop. We're not there quite yet, but some of those things are outlined right now. Just putting them on notice that those are things that we're going to expect in a purchase agreement in the future. gone completely in agreement. So tonight for your consideration is an option agreement for lot one block two deonte first edition and I'd recommend you approve it or accept it approve it. Any additional questions for Abby or discussion? All right. Uh anyone willing to make a motion then on that? I'll make a motion for lot one block two Deonte first edition option agreement with Gone Properties LLC. A second. Second. Any further discussion? Uh those I I in favor. Yeah. Opposed. Sorry. Motion carries. All right, moving right along here. Um cryptocurrency kiosk. Amanda's gonna walk us through this. They start in five minutes. Okay, five minutes. You got five minutes, Amanda. Got it. I can do it. It just said to restart in five minutes on my on the computer screen. Uh thank you, your honor council. Uh so tonight we will be discussing the crypto kiosk registration ordinance in your packet. Just a note, I know we've had a work session about this. Some of this material is going to be repetitive for you, but it's important that I get it onto the public record. So, I will do a quick summary of the cryptocurrency kiosks, how they are being used in these fraud schemes, and then the proposed ordinance. As a reminder, these cryptocurrency kiosks are machines that allow consumers to buy and or sell cryptocurrency through an ATM type machine. Uh, these are often found in gas stations, uh, grocery stores, andarmacies. Uh typically the cryptocurrency kiosks allow uh consumer to come in and purchase cryptocurrency but not sell cryptocurrency. Uh often these uh machines are mar these machines mark up the cryptocurrency between 20 to 30%. Meaning that if you were to purchase the cryptocurrency online you would be paying you know typically it's between one cent and$1 per transaction. If you do it at the machine, you're going to be paying whatever the value is of that cryptocurrency plus a 20 to 30% markup that goes to the kiosk operator. These are new uh to the marketplace. 5 years ago, these machines did not exist. Right now, in the uh in the regulation world for these kiosks, there is a little bit of federal regulation. Kiosk operators are required to register with the US uh Treasury Department as a money service business. Uh but the kiosks themselves are not tracked or or regulated in any way. State regulations. Uh this last year, Minnesota legislature in the 2024 uh cycle did add some new legislation that requires kiosk operators to obtain a license with the Department of Commerce. This the statute also requires some disclosure requirements. In other words, some disclosures that the kiosk operator needs to provide to customers that would be coming to the kiosk. It provides a daily limit for new customers and fraud protections for new customers. These state regulations define a new customer as someone who has been transacting with that kiosk for 72 hours or less. It's important to understand that the way that criminals use these kiosks, there isn't a new customer because the the criminal is giving the the victim the criminals account essentially through a QR code. So, under state law, no new customer is really involved in these transactions. According to the FBI, uh in 2023, 5.6 billion dollars was lost to cryptocurrency fraud. $189 million of that was via kiosks. It's important to note that this is what's been reported. Uh typically law enforcement um estimates that about onethird of fraud cases go reported. Um in locally in Forest Lake 2023 through 2024, we saw $300,000 worth of fraud just through our kiosks located that in our city alone. White Bear Lake had 125,000 in reported fraud. And in Woodbury from 2021 to 2024, $6.6 million dollars in losses related to cryptocurrency fraud. That's both online and in the kiosks located in Woodbury. Uh Woodbury was actually um hired a lobbyist last year that was part of um the that was instrumental in the state legislation that was passed. So, just quickly as a reminder, how criminals use these kiosks. Uh, typically what they're going to do is they're going to to impersonate law enforcement or uh occasionally they will um, you know, be an investment type scheme and they overwhelmingly prey on older and vulnerable populations, particularly widows or widowers. uh they will reach out to the victim to an example of this would be they reach out claiming that they have uh like an outstanding warrant for a failure to show up for jury duty, right? That's not true, but it sounds true enough. Um, oftentimes what will happen is they will hang up during that first call and then call back from a fake, you know, um, caller ID line that looks similar to a a law enforcement phone number or law enforcement ID, but is not actually a law enforcement ID. They will keep their victim on the phone if they can for the entire transaction. And what I mean by the entire transaction is I mean often they will if Oh no, sorry. Uh if these individuals Do you want me to pull my grab my computer? I'm gonna bring mine up there. Give me one sec while I close everything else. Um so these individuals um they'll if they don't have access to a large amount of cash, you know, at their residence at that time, they will stay on the phone with them while they have them go to uh a bank and withdraw cash. they will stay on the phone with them while they are interacting with the teller so that they can communicate here's what I want you to say to the teller if they ask you questions about why you're withdrawing this money that sort of a thing and then they will stay on the phone with them while they go to these kiosks and deposit uh deposit the money tried sorry Is your screen now? There we go. Okay. I think I went through all of kind of the the process of how they um confuse and manipulate their victim uh during the scam. So, they put the money into the account. As I mentioned, it's not going to be in an account that the actual victim owns. it's going to be in an account that the perpetrator owns and of course, you know, within minutes it's it's gone. Um the the the nature of the cryptocurrency kiosk and the cryptocurrency world is such that once gone, it's almost impossible. It's not impossible, but it's almost impossible to, you know, get these funds back because it's transacted and the way that that cryptocurrency works, it's they don't um have like a wire, you know, transfer tra uh kind of system that we can go back and look through. So, just a reminder, this came before the council on the March 17th work session. Um, at that work session, the council was provided with three options. We could do nothing. We could ban the kiosks. Um and or sorry, we could register the kiosks. Um council uh based on the council feedback, it was to move forward with the registration ordinance and then to beef up some of the conditions of that registration. So just um quickly, registration ordinances, registering uh businesses or regulating uses is not a new thing to cities. We have broad authority under the statutes to do exactly this. We do this in lots of areas. Tobacco, alcohol, cannabis, massage therapists, tattoo parlors. Basically, if you're a business that has an obvious public health or safety component, we have a a right to have regulation around your business. These kiosks are no different. with the amount of fraud that is running through these machines. In fact, the um the the Iowa Attorney General uh did a study and determined that in the machines that they were looking at, 98% of the transactions were fraudulent transactions. So when we're talking about fraud on that scale plus the fact that we know people are bringing large amounts of cash to these machines. So there is a safety component simply with the traveling with that amount of cash. Um these machines are are clearly something that the city can regulate. The registration ordinance that is in your packet tonight is going to really um deal with the property owner, also known as the hosting business in the ordinance. And that is because the kiosk operator, those businesses could be anywhere. They could be local, they could be national, they could be international. It's difficult to regulate an entity that you can't find. But the hosting business, the holiday gas station, the Cub Foods, the Walgreens, they're here. They are clearly in our city. So, the hosting business is the entity that's required to register the kiosk. A kiosk can only be registered with the city if it conforms to the following. It needs to have the application filled out. It needs to pay a $2,000 registration fee. That is an annual fee. That fee will cover our costs related to the regist to the registration, excuse me, and enforcement. So PD has to go out there and do an inspection to make sure that they meet the rest of these requirements I'll talk through in a second. And then they're also going to be doing compliance checks throughout the year to ensure that they're continuing to stay in compliance. Uh the PD has to do a background check to make sure that they don't have these outstanding instances of fraud and a few other things. That is why for this particular registration the fee is so high as compared to other um uses. They need to provide a copy of their valid state license for the kiosk operator. They need to provide a copy of their lease or rental agreement between the hosting business and the kiosk operator. And this is because what we have discovered is that a lot of times the hosting business gets a percentage of the money that runs through the kiosk. And so it's important to understand how they're related. uh they have to provide us with a copy of any additional information that they would need to provide the state for the state license. They need written confirmation from the Forest Lake Police Department that the kiosk operator has had no more than two instances of substantiated fraud as determined by the police department by any kiosk that would be owned or operated by that kiosk operator within the city within the past six months. So, let me break that down just a little bit. What that means is that the police department will look through the fraud reports that they have. At this point, we have one kiosk that has never had a report of fraud through the machine. Uh we have three other machines. They have all had many instances of fraud. So, the three machines that have had many instances of verified fraud as determined by the police department, which is where they're going to look at the complaint, they're going to look at the information provided by, you know, the victim who comes in and determine is this substantiated? Is there enough evidence here to substantiate this as a a fraudulent transaction? And the reason that that is the test versus some sort of a criminal conviction is, as I mentioned, the individuals involved in this are not here. They are not really somebody that's able to be found by the Forest Lake Police Department and charged with a crime. So the mechanism here is substantiated instances of fraud. This matches some things that the state statute is doing. So the city is in a in good company in terms of sort of the measures that we're using to determine um you know why somebody would be operating illegally um or excuse me why somebody would be allowing fraud through their machines. Um and then when we met at the council level initially it was three instances within 12 months but as directed by council that has been narrowed down they get two within six months. Uh the kiosk operator also needs to post a sign that the city will provide warning about the dangers related to fraud and scams. They need to have a dedicated closed circuit camera on that kiosk um in a position or however the Forest Lake Police Department would like it to be. They need to provide video footage to the Forest Lake within 48 hours of request. So if there's some sort of incident there that PD would need to review. Um, as I mentioned, past compliance checks by uh, Forest Lake PD. So, those are the things that the hosting business has to provide proof of, although obviously they're going to be working with the kiosk operator to obtain a lot of that information. In addition, if the hosting business, so the Holiday Gas station, the Walgreens, the Cub Foods, has had a previous registration that's been denied, suspended, or revoked, they do not get to have a new registration for 24 months. So basically they're in timeout for 24 months. Um the goal of this ordinance is really to balance the protection of the community. It's clear this is a problem. $300,000 worth of fraud in our community in a year and a half is outrageous. Um but we're also trying to balance that with not instituting a full ban on the kiosks. And if there is some sort of legitimate purpose uh for these kiosks, they can continue to operate as long as they uh you know create protections for consumers. I would note that since we've met both Oak Park Heights and Woodbury are now considering this exact same ordinance as well. And um also one note is uh Senator Karen How'sley is aware of this issue. She's been in conversation actually with the mayor of Stillwater. So if it's something that members of the council or members of the public would like to reach out to um a legislature, you know, legislator to let them know, she might be a good first stop as she's already learning about the problems that cities are facing related to these kiosks. So that is the end of my presentation. I have two proposed I have I'm available for questions, comments, and then I do have two proposed motions. One would be for the ordinance itself and then one is the resolution to allow summary publication. Great. Thank you. Uh council, any any questions or concerns or discussion where we're where we're headed here tonight? No, I think it was a great summary of our conversation from the workshop. You implemented some of the changes that we had recommended. So, I appreciate that and I think it's a badly needed um step forward. Yeah. Uh Chief, any any additional thoughts on the police department's side of things? No, I think this is a fantastic um step in the right direction. I want to thank Andrew Fer work on this and definitely Detective uh Nathan Olstead. Um so, yeah, no questions. Uh no concerns. I would I would second that. Uh, Detective Olstead coming forward to you and, you know, has got us to where we're at tonight. And, uh, thank you for your work on this. It's it's crazy to think about the the crime or the fraud that's going on out there. And so, um, you know, this is a good step without going too restrictive and and like some cities are contemplating. So, um, I think this is great. So, thank you. With that, is anyone want to make a motion? I would make the motion to approve ordinance 750 enacting city code title 9 chapter 121 virtual currency ks registration including the three attachments motion to second second. Any other discussion? All in favor? I opposed. Motion carries. Anyone to make a motion on the second? Yeah, I'll make a motion for approve resolution 04142503 authorizing the summary publication of ordinance 750. Great. We have a motion and a second. I'll second it. Any other discussion? All in favor? I motion carries. Great. Thank you again. Thank you. Right. Uh so item regular agenda item 8D ATV UTV operation golf cart operations. Uh so we've gone we've had a couple workshops on this. Uh work through this a lot of different moving parts here different ways that we could uh do this. And so today we've realized that there might be a little bit more work that we want to do on this. And so to get this right, u I make I'm moving that we table this till the April 28th meeting to allow staff some additional time to research possible per uh permitting alternatives on the ATV and the UTV operation. I'll second that. Second. Do we have any discussion or any additional thoughts on this? I think this is the right as much as I think we would like to get this thing approved and I think we will eventually get there. Uh just taking this pause for two weeks to make sure we have it right is great. So all in favor opposed. We'll table this discussion. Uh item nine. It doesn't look like we have anything listed there. So we'll go right into staff updates. And Jolene, we'll start with you. No updates this evening. Abby. Um I have two updates. Our city planner, Ken Roberts, has put in his resignation. He's accepted a position as the development director with the city of North St. Paul. His last day is next Friday. So, we'll be meeting with Bolton and Bank's planning division to look at bringing in some temporary planning services to help us through this um this time period until we are able to fill some positions in the community development department. Wanted to let you know that we thank Ken for his service here and his time here. He's been a wonderful asset really helping us kind of re reignite a division that was lost for a decade. Um and then the only other thing I wanted to let the council know I have been asked and accepted to speak at a sensible land use coalition um meeting next next week the week after the 23rd. They are hosting a twin cities development roundup where they will have four panel presentations of the four quadrants of the metro area and each of the panels will be four cities in that quadrant. So I'll be speaking with Blaine, Hugo, Lake Elmo about Forest Lake and just our development opportunities, development plans, lot inventory. Um already they have uh attendance that they anticipate greater than some of their normal monthly sessions. The last I heard that over half of the participants that appeared to had some interest in real estate and the development community. Typically they're kind of garnered more for planners, developers, engineers. So it should be a good time to at least just showcase what we're doing here in Forest Lake and the opportunity that's available in the development community. Great. Chief Pearson. Uh yeah, just one update for you. Um today, um our two new officers, Tyler Carpenter and Hunter McBride, started with us. They got a tour of uh the entire facility here and got to meet a lot of the the staff that they'll be working with. I think it's a little overwhelming when you're a new employee, a new police officer coming in. So, I'm sure they'll get through those jitters in the next few weeks, but a lot of training uh that's going to be going on the uh first two weeks and then they'll be starting their through uh field training. So, we welcome them. Welcome. And Captain Handcraft, as long as you're here, anything to add tonight? No, sir. Okay, great. Ryan, uh Mayor, City Council, a few things. Uh just let you know if you haven't driven down Broadway. Uh Washington County started that project today with uh setting up the traffic control. That project's anticipated to go through June 15th. Obviously, between now and that time frame, there's going to be some traffic control changes. So, uh, during the pre-construction meeting, they reiterated they wanted to get that westbound lane closure open up as fast as possible. So, they'll focus on that as that project proceeds. Uh, if people are starting to ask, there's some stuff being kind of brought out to Highway 97. That project's anticipated to start June 3rd. Uh, and then this week, we have two bid openings that will include Northshore Trail and the Local Street Project and the South Water Tower Rehab. Great. Thank you. us for us tonight. Mark, just a couple quick ones. Mr. Mayor, um just want to remind folks that um especially local folks, community in our surrounding area, we do have a number of open positions uh posted. Our finance director position being maybe sort of the highlight there, but we have a number of open positions on the website and we'll continue to be adding um and we approved another one tonight. So, there's a number of different opportunities to work with us here at the city. We hope people take advantage of that. Um, also some opening open positions on our commissions, that kind of thing, too. So, plenty of opportunities for people to get involved. Um, and I think that's all I needed to highlight. Nothing for me. Council member Larson, nothing to add. Thank you. No updates tonight. I don't have I have one update. I last uh week attended a couple days the emergency management training down at Washington County. Uh Doug Borglan who uh Berglin who is a was a previous firefighter here for the uh Forest Lake did a great job. Uh we went through a number of activities. One of them was a staged uh the concern now as you have you have you heard in the media what happened in uh New Orleans where you know they're using vehicles to you know cause harm to people. So we went through a full out full day uh practice on how that we would handle that. This particular one happened at a Memorial Day parade in Afton. So, it was quite fascinating and uh it does, you know, bring more concerns and some angst to be honest with you, but I know that we've got uh great uh people in place both at the county and uh local here in Forest Lake. I would like maybe to invite uh Mr. Berlin up to a workshop to just talk that through with the council. Uh and I know that uh Councilman Ericson and Larson came to a training that was kind of abbreviated that back in December which brought you know opened our eyes to a lot of of things. So I appreciate that in invitation and uh Chief Newman attended that as well. So other than that that's all I have uh without any other business coming. Is there a motion to adjurnn? So moved. Second. Second. All in favor? I. We'rejourned. [Music]