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08/27/2007 - 00029179CITY COUNCIL MEETING CITY OF FRIDLEY AUGUST 27, 2007 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:33 p.m. PLEDGE OF ALLEGIANCE: Mayor Lund led the Council and audience in the Pledge of Allegiance to the flag. ROLL CALL: MEMBERS PRESENT: Mayor Lund Councilmember-at-Large Barnette Councilmember Varichak Councilmember Saefke Councilmember Bolkcom OTHERS PRESENT: William Burns, City Manager Richard Pribyl, Finance Director/Treasurer Fritz Knaak, City Attorney Chief Berg, Public Safety Director Pam Reynolds, 1241 Norton Avenue NE Joan Zmuda, 6051 Fourth Street NE Anoka County Commissioner Jim Kordiak Tim Yantos NORTHSTAR CORRIDOR COMMUTER RAIL: Tim Yantos, Executive Director of the Northstar Corridor Commuter Rail Project, presented an update. The Northstar Project has been in development for 10 years and under construction over the last two months. The project is 40 miles of commuter rail and four blocks of light rail with five stations. The partners include the Federal Transit Administration (FTA), Met Council, Burlington Northern Santa Fe Railway (BNSF), MnDOT, Minnesota Twins and Northstar Corridor Development Authority (NCDA). The two aspects in the project are the light rail piece that will e�tend from the current Nicollet stop to the ballpark and the maintenance facility under construction where the trains will be stored and maintained. The funds needed for this project are $320 million. Mary Richardson, Executive Director of Legal and Inter-Government Affairs for the Northstar Project, presented the BNSF agreements for purchase and sale, joint use and service. The purchase and sale agreement include the perpetual easement for the price of $107.5 million, the right to operate six round trips on weekdays and three round trips on weekends plus special events transit. This agreement was executed in March of 2007. The joint use agreement is also a perpetual agreement that sets up the terms and conditions for the use of the tracks. BNSF owns the railroad and will be responsible for all operations of the track This agreement would provide FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 2 services such as dispatching, track maintenance, signal and switch maintenance and regular inspections. Northstar would maintain the rolling stock, maintain the stations and platforms, provide pass section, set the fare, do the marketing, and collect and establish the fares. The service agreement is for a 10-year term meaning that we will use BNSF for the crews and trains. At the end of 10 years, the agreement can be renewed or another service provider can be selected. The joint use and service agreements were executed in May of 2007. Ms. Richardson stated there are a number of property agreements that were executed in May of 2007 that allows the construction of the rail. This includes five platform lease agreements, two track leases and agreements, two track agreements and two overpass agreements. These agreements are 100-year renewable agreements. Ms. Richardson stated a Fridley master agreement would include an underpass construction agreement to be constructed by BNSF(must be exercised by November 1, 2007), an underpass easement agreement which is the right to occupy the land (must be exercised within four years of the construction of the tunnel), and a platform agreement (can be exercised at any time). Mayor Lund asked if the $107M easement agreement included the 10-year maintenance agreement or if other fees would be added over and above that amount. Ms. Richardson answered there would be annual charges under the joint use and service contract. Fifty percent of the operating costs of the commuter service would be paid by the Met Council and fifty percent would be split between Anoka, Sherburne and Hennepin counties. Paul Danielson, Project Manager for the Northstar Corridor Commuter Rail project presented the proposal for the Fridley station at East River Road and Main Street. This location is close to Northtown and is an issue for BNSF because the platform will be located in the middle of the tracks. This station would offer parking on each side with an attaching tunnel to bring riders to the platform in the middle of the tracks. Elevators and stairs would bring commuters up and down to the tunnel. A decision would need to be made before November 1, 2007, and BNSF would need to come back to Council with a cost estimate for the tunnel. BNSF would like to do the construction of the tunnel. This station is on the railroad's main line and they would need to do the construction during light freight traffic times. Burlington is estimating the construction would take 20 to 30 hours and could be completed during a three-day weekend. A decision to construct the tunnel would need to be made by November 1, 2007, in order to get the construction lined up and completed in a timely manner. Councilmember Barnette stated the Fridley station is essential to the metro transit line and Fridley would like to be part of the Northstar Corridor Commuter Rail project. Councilmember Bolkcom asked when construction of the tunnel would start and where the funds would come from for this project and if a station would be built in Fridley. Mr. Yantos said a decision will need to be made by November 1, 2007, if the Fridley station project is to go forward. The cost would be between $800,000 and $1.SM The funds for this station are not in the budget at this time and funds are being sought for a station in Fridley. No FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 3 money is available today and BNSF would build the tunnel if Council authorizes construction by November 1, 2007. Councilmember Barnette asked if Fridley could fund the money for the tunnel project with an agreement to get paid back at a later date. Mr. Yantos said that option has been discussed but he is not sure if the discussion is still going on. Councilmember Bolkcom asked if any of the Federal funds could be used for the construction of the tunnel. She felt BNSF was pressuring Council by requesting a decision by November 1, 2007. It is hard to pay $1. SM to build a tunnel with no guarantee a rail station will even be built in Fridley. Mr. Yantos agreed that this is a very challenging decision to ask for Fridley to pay the funds up front. The Fridley station is a difficult station to build. A tunnel can be built at a later date, but it would cost more money. Councilmember Bolkcom said the City would more likely agree to fund the tunnel if Northstar would write the Fridley station in their agreement to build the station in the future. Mr. Yantos said he only represents one of 6/7 partners and no partners have the funds to build a Fridley station. There will be discussions at this year's legislative session, but that does not mean there will be additional funds. Mayor Lund said that a similar discussion was held with the Fridley HRA and they also agreed that it is a gamble to fund the money. It would cost less now, but the City is getting no guarantee for a Fridley station. Councilmember Barnette asked if Paul Bolin had any comments. Paul Bolin, Assistant Executive Director of the Fridley HRA, said the HRA shared the same concerns as Council. $1. SM is a lot of money to come up with by November 1, 2007. Fridley would just need to make the commitment by that date. Dr. Burns is looking for creative ways to identify means for collateral if we move forward with this investment. The City could recover some of the costs. The NCDA and Hennepin and Anoka Counties advanced $70M to get the ball rolling on this project assuming that Federal funding would be coming. It is a tough decision to make. Councilmember Bolkcom said that she appreciated that Fridley is being kept in the mix and all the work that has been done. Jim Kordiak, Anoka County Commissioner, said that he has been involved in this process for five years and it will benefit the metropolitan area. It is a positive endeavor and '/z of the funds have been federally supported. It has taken years to get Minnesota support. In the beginning the estimate cost to build the rail was $320M. Today, the estimate is still $320M. It gets harder to FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 4 get the project done at that cost with each passing year. The Fridley station is a difficult and expensive process and is currently not affordable. Although we are anxious to see it happen to benefit the area, it is unfortunate that the Fridley station is so expensive. Stations cost between $1M and $3M to build and the Fridley station will cost $lOM The funds have to come from somewhere and there is not enough in the current funds for the Fridley station. Meetings have been held to see how the Fridley station can be put together. As stations are built and the system grows and e�tends, Fridley will get done sometime in the future. Building the tunnel will assist in the process and Fridley should do this for their own benefit. It would connect the east and west sides of the tracks and connect to the bike trails. If the construction of the tunnel is not done now, the cost will not get any cheaper in the future. He suggested constructing the tunnel now for Fridley's benefit to encourage a station in Fridley in the future. Mayor Lund asked if there were any other options available for the funding. Mr. Yantos said that there may be a special session, but this is an opportunity to move forward, and it is the most cost-effective option. No other funds are readily accessible. Dr. Burns asked when the FUFCA would be approved. Mr. Yantos answered in the ne�t couple of months. He said there are 400 pages in the application to go over thoroughly and it takes time. The application will then go to the Federal government and then Congress. CONSENT AGENDA City Council Meeting of August 13, 2007. APPROVED. NEW BUSINESS 1. Approve Extension Request for the Second Reading of the Ordinance for Rezoning Request, ZOA #05-03, by JLT Group, Inc., for the Property Generally Located at the Northeast Corner of I-694 and East River Road (Ward 3). William Burns, City Manager, stated that this e�tension would enable 7LT to have more time to address City staff's concerns regarding the redevelopment of their 25-acre site. Staff recommends Council's approval of a six-month e�tension of the time limit associated with the second reading of the rezoning. THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON THE REGULAR AGENDA. 2. Resolution Authorizing Changes in Appropriations for the 2007 Budget for January through July, 2007. FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 5 William Burns, City Manager, stated that the changes include $1,031,038 in General Fund revenue adjustments and $49,911 in General Fund expenditure adjustments. The largest revenue adjustment relates to the transfer of $981,127 that was not used for the 2005 street reconstruction project. All of the other adjustments relate to reimbursements, grants and donations. The largest expenditure adjustment relates to the $26,505 for security at Cub Foods. All of the expenditures are directly offset by e�ernal revenue sources. Dr. Burns stated in addition to General Fund re-appropriations, this resolution also covers Capital Improvement Fund re-appropriations. The largest was a$58,000 expenditure for the new generator at the Municipal Center. The other Capital Improvement Fund re-appropriation is for $51,600 in costs and revenues associated with traffic signal improvements at the 81st Avenue and University Avenue intersection. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2007-40. 3. Approve Letter of Understanding Amendment to the 1996 Agreement between the City of Fridley and School District 14 for the Fridley Community Center (Ward 1). William Burns, City Manager, said the letter establishes that the City will, at its sole cost, build a parking lot expansion at the Fridley Community Center. The expansion will provide for forty- six additional parking spaces, two additional lighting standards, and restoration of turf. The estimated cost of the work is $30,000. The item has been budgeted as part of the 2007 Parks Capital Improvement budget. The new parking spaces will serve the Senior Center and other recreation program needs. Staff recommends Council's approval. APPROVED. 4. Approve School Resource Officer Agreement between the City of Fridley and Fridley School District #14. William Burns, City Manager, said this is a renewal of an agreement whereby the City provides two School Resource Officers (one for the Fridley Middle School and one for Fridley High School) between September and June. In exchange for the services of the two officers, School District 14 pays for one-half of the officers' salaries and benefits. The agreement for 2007/2008 provides for a 3% adjustment in these costs. The increase brings the District's contribution from $62,602 for 2006/2007 to $64,480 for 2007/2008. There are no other changes in this agreement. Staff recommends Council's approval. APPROVED. 5. Claims (133090 — 133281). APPROVED 6. Licenses. FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 6 APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. 7. Estimates. APPROVED THE FOLLOWING ESTIMATE: Standard Sidewalk 10841 Mankato Street N.E. Blaine, NIN 55434 2007 Miscellaneous Concrete Repairs #370 Estimate No. 2 — CORRECTED ... ... ... ... ... ... ... ... ... ... ... ..... $ 37,645.94 Councilmember Bolkcom asked to remove Item 1 from the consent agenda and place it on the regular agenda. MOTION by Councilmember Barnette to approve the Consent Agenda with the removal of Item 1. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY ADOPTION OF AGENDA MOTION by Councilmember Bolkcom to adopt the agenda with the addition of Item 1. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY OPEN FORUM (VISITORS): Joan Zumuda, 6051 Fourth Street NE, said she was not in favor of the light rail station in Fridley. She questioned what Fridley would get back from the rail and why we needed the station. She also questioned the $1.13M that will be spent on the bike trail. She expressed that after the I35W bridge collapse, the money could be used more wisely. She asked where the money is coming from. Councilmember Bolkcom said the commuter rail redevelopment would encourage redevelopment close by the rail. Housing around the commuter rail values would increase. It would help businesses and provide transportation for people who do not have cars. It will also help with the traffic congestion we are experiencing in the area and decrease noise and air pollution. FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 7 Councilmember Barnette said that 8 to 9 years ago people thought their home values would go down but all studies show that it is the opposite. The home values would increase if we got a station in Fridley and there are many other positive aspects for a rail station. Mayor Lund said that Medtronic has agreed to use part of their campus they are not currently using for a park and ride site to help commuters affected by the I35W bridge collapse. Ms. Zmuda said that she has taken the bus to work for 20 years downtown and does not shop in the area where she works. She did not think that people who take the rail would shop at businesses by the rail. Councilmember Barnette said there was an initial objection to the rail but now many do not see this as a problem. Councilmember Bolkcom said that real estate close to the rail would increase substantially. If you look at any major city with a rail system, people want to live on the rail sites for convenience. Mayor Lund added that in the 2005 survey, 63% were in favor of a rail site in Fridley. Ms. Zmuda asked about the $1.13M the City plans to spend on the bike trail. Mayor Lund answered that the bike path funds are not coming from the General Fund. Ms. Zmuda asked if the $1.13 could be used for the construction of the tunnel. Mayor Lund answered unfortunately the funds had restrictions. Councilmember Bolkcom said a lot of residents walk along 85th Avenue and it is not safe. A bike path is necessary. Mayor Lund said the cost of this path is a little higher because the construction has to go through wetlands. NEW BUSINESS: 8. First Reading of an Ordinance Amending Chapter 11 of the Fridley City Code Pertaining to General Provisions and Fees. (Rental License Fees) John Berg, Fire Chief, said the inspection fees for rental and dwelling housing have had two increases since 1995. In 2001, there was a 10% increase and in 2004 a 50% increase. The revenue is estimated to be about 61% of the total budget expenditure. Given a minimal fee increase in 2008 and 3% increase for the ne�t two years, it is estimated that by the year 2010, the revenue would be at an estimate of 58% of the budget expenditure. The 15% increase in 2008 would bring the estimated revenue to 70% of the budget expenditure. This would be FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 8 approximately a$6.25 increase on a single dwelling family and a$44.75 increase on a 12-unit building. Staff recommends Council's approval. Councilmember Bolkcom asked what a housing inspection is and why it is needed. Chief Berg said that there are three full-time firefighters who inspect buildings every four years. Exterior and common areas are checked every other year. They are looking for general maintenance of property and e�terior grounds, checking for safety and making sure the building is up to the fire code. Councilmember Bolkcom asked if the buildings need to be re-inspected and if the same firefighters respond to complaints from residents. Chief Berg answered that the City could receive 30 to 40 complaints a year. Fridley has a large amount of buildings and each unit needs to be inspected every four years. This does not include re-inspections, correction orders; follow up inspections or buildings that are not in compliance. Councilmember Bolkcom asked when a building changes ownership if the information is transferred or an initial inspection is needed. Chief Berg answered that in a transferred ownership, the documents are transferred and they do an inspection of the property. There is an initial inspection for a new license too. Councilmember Bolkcom asked if these numbers included rental homes. Chief Berg answered yes. He said they inspect about 1,000 units every year not including re- inspections or other inspections which amount to about 500 per year. Councilmember Barnette asked how the City knows if a home is a rental unit. Chief Berg said it is tough, but they receive information from neighbors and work with staff and see which properties are homestead properties. Mayor Lund questioned if the increase would be enough to recover 100% of the actual cost of the inspections. Chief Berg said that staff looked at this issue. There are three full-time firefighters working on inspections but they also respond to other needs. Mayor Lund said he was okay with the increase. The inspectors are needed for the safety of the residents. Councilmember Bolkcom asked if there was still a rental coalition group. Chief Berg answered that there is a coalition of cities, but he was not sure if it was still active. FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 9 Councilmember Saefke stated that the rental owners should be 100% responsible for the inspection charges, as the City does the inspections to protect the health and welfare of citizens and landlords. Chief Berg said that the inspections can be time consuming and staff can spend a lot of time on the inspections. Mayor Lund said he was okay with the 15% but did not want the department coming back a year from now looking at the same costs and raising them substantially. Councilmember Bolkcom said that this is just the first reading and they could come back at the second reading and change the percent if necessary. Mayor Lund asked if fees were charged for annual renewal. Chief Berg answered yes. Councilmember Bolkcom said that the rent might go up to cover increased fees. Mayor Lund asked Chief Berg to bring true costs to the second reading. Richard Pribyl, Finance Director, said that few cities set their rates at 100%. Staff will compare Fridley rates to other cities and come up with a fee that is fair. MOTION by Councilmember Bolkcom to waive the reading of the ordinance and approve the ordinance on first reading. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 9. Resolution Certifying Proposed Tax Levy Requirements for 2008 to the County of Anoka. Richard Pribyl, Finance Director, said the State Department of Revenue requires this to be presented and the proposal complies with both State law and City Charter requirements. The total proposed levy for 2008 is $9,527,433. This includes $549,861 for the general obligation debt for the 2005, 2006 and 2007 street projects. The inflationary increase associated with the City Charter levy is 1.6%. The levy increase over 2007 measures 1.6% without the street debt levy. With the total levy, it appears with very preliminary numbers we have from Anoka County that City taxes should remain the same as they were for the average value home of $216,000. Anoka County is still assembling the numbers. Mr. Pribyl stated this is a proposed levy and is required to be presented to the County by September 15 and since the increase in levy is below the State of Minnesota's Implicit Price Deflator, the truth in taxation process is being complied with on a voluntary basis. The City Charter restricts any further increase in the levy, but in order to become subject to the truth in FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 10 taxation process the City would need to increase their levy. Our levy is below the state threshold. Staff recommends Council's approval. William Burns, City Manager, said the property tax rate is counterproductive because the City does not get any local government aid from the State of Minnesota. By being conservative with the property taxes, we end up with a disadvantage on the LGA formula. Fridley gets a big tax break because of the commercial and industrial properties. If the property tax rate is down overall, Fridley does not capture enough of the tax base to compare favorably in ability to pay with other communities. Richard Pribyl, Finance Director, said that Fridley is the only municipality in Anoka County that is classified as a net loser in the formula. MOTION by Councilmember Barnette to adopt Resolution No. 2007-41. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 10. Resolution Adopting the Proposed Budget for the Fiscal year 2008. Richard Pribyl, Finance Director, presented the budget for fiscal year 2008. The proposed budget must be before the County Auditor before September 15 in accordance with the truth in taxation process. The 2008 budget increase is under the levy threshold that triggers the City to comply with the truth in taxation process. The City continues to follow all the requirements of this process to ensure that it remains an open process for public comment. Having this item on the agenda this evening complies with Section 7.05 of the City Charter which requires that it be the principal item of business at the last regular meeting of August. Mr. Pribyl said for 2008 the economy continues to play a role in the difficulty of developing department budgets that continue to provide the same level of service as provided in the current year's budget. The major issue is the loss of local government aid. The City has made many budget cuts yet continues to provide the same level of service with the help of drawing from reserves to fill that revenue need. The 2008 proposed budget is being presented to you along with a resolution to approve it as the proposed budget of 2008. As in the past, the City Manager will provide you an in-depth version of the budget at the December 3 meeting in the form of a public hearing. The main steps in the budgeting process are as follows: public hearing on the budget on December 3, resolution to approve the final tax levy on December 3, and resolution to approve the 2008 budget on December 3. Should a continuation be needed, it would be held on December 10. The estimated revenues and appropriations total $18,365,859. The total overall increase from 2007 is 2.87%. The budget before you could be viewed as a proposed budget with the final budget to be adopted after the public hearing on December 3, 2007. Staff recommends Council's approval. Mayor Lund said that this is a proposed budget and on December 3 it can be lowered but not raised. FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 11 William Burns, City Manager, said that there is a budget work session planned on October 15 to discuss any issues. Mayor Lund asked about the interest on investments and said it was lower than previous years. He asked if there was a way to pull reserves together to get what we used to get. Mr. Pribyl answered that the economy is different and so are the interest rates. MOTION by Councilmember Bolkcom to adopt Resolution No. 2007-42. Seconded by Councilmember Barnette. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY 1. Approve Extension Request for the Second Reading of the Ordinance for Rezoning Request, ZOA #05-03, by JLT Group, Inc., for the Property Generally Located at the Northeast Corner of I-694 and East River Road (Ward 3). Councilmember Bolkcom stated that this reading is a long time from the first reading and is different from the past, because it was not to exceed six months. She asked what the plans were to meet the new e�tension. Chris Simmons, Welsh Company, said taking down the building on property this size takes a long time. They are working with the recommendations from staff and are not ready to submit a plan but should be ready shortly. They will work with staff on time lines. Councilmember Bolkcom asked if they would be able to present a product in six months. Mr. Simmons answered yes. They plan to meet with staff within the new time frame and a product may be submitted sooner than six months. William Burns, City Manager, said it is to the City's advantage to wait on this and have an opportunity to work with the developer. Mayor Lund commented that in 2005 they knew this project would be a lengthy process. MOTION by Councilmember Bolkcom to approve the e�tension request for the second reading of the ordinance for Rezoning Request, ZOA #OS-03, by 7LT Group, Inc., for the property generally located at the northeast corner of I-604 and East River Road. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY Pam Reynolds, 1241 Norton Avenue NE, said that the minutes of September 12 stated that if the stipulations were not met within 24 months the request would be null and void. The new FRIDLEY CITY COUNCIL MEETING OF AUGUST 27, 2007 PAGE 12 developments may be great for Fridley but the process has changed, things are being altered and it is not null and void but e�tended for another six months. Councilmember Bolkcom said that this has not been rezoned yet and it is to Fridley's advantage to grant an e�tension. This will be a good development. Mayor Lund asked why Ms. Reynolds does not want the extension approved. Ms. Reynolds answered that when Council passes an action item, they should just stick to the plan. Mayor Lund commented that with real estate not doing well, this is not an unreasonable request. Changing the property to commercial use rather than industry will be great. Councilmember Bolkcom said the main concern is retail vs. industry. The product is close to a final plan and the end result will increase the tax base for Fridley. Staff feels they can work with the developer to create a great end product. 11. Informal Status Reports. Councilmember Bolkcom said that on September 6 there will be a University Avenue Corridor meeting at 7:00 p.m. in the Community Center. Councilmember Bolkcom thanked the Fridley Police Department, First Responders and other individuals for helping with the I-35W bridge collapse. Mayor Lund said that Stan Kowalski from the VFW will continue with a Patriot Day event on Saturday, September 15 at 8:00 p.m. at the Spring Lake Park High School football stadium. On September 6, Mediation Services will be holding a fundraiser at Lyric Arts Theater. Councilmember Varichak said on Saturday, August 25, 2007, she attended a ribbon cutting ceremony at the Al-Amal School. ADJOURN. MOTION by Councilmember Barnette to adjourn. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY AND THE MEETING ADJOURNED AT 9:35 P.M. Respectfully submitted by, Krista Monsrud Scott J. Lund Recording Secretary Mayor