07/12/2010 - 29310CITY COUNCIL MEETING
CITY OF FRIDLEY
JULY 12, 2010
The City Council meeting for the City of Fridley was called to order by Mayor Lund at 7:33 p.m.
ROLL CALL:
MEMBERS PRESENT: Mayor Lund
Councilmember-at-Large Barnette
Councilmember Saefke
Councilmember Varichak
Councilmember Bolkcom
OTHERS PRESENT: William Burns, City Manager
Fritz Knaak, City Attorney
Scott Hickok, Community Development Director
Richard Pribyl, Finance Director
PROCLAMATION:
Parks & Recreation Month — July, 2010
Mayor Lund presented the proclamation to Margo Prasek, Recreation Program Supervisor.
APPROVAL OF PROPOSED CONSENT AGENDA:
APPROVAL OF MINUTES:
City Council Meeting of June 28, 2010.
APPROVED AS CORRECTED.
NEW BUSINESS:
1. Resolution Appointing Election Judges for the 2010 Primary and General Elections.
William Burns, City Manager, stated election judges are being appointed without precinct
assignments to allow for great flexibility. Appointments are for two-year terms. The judges are
paid at the rate of $8.75 an hour for regular judges and $9.25 an hour for the chairperson of the
Election Board. Judges are selected based on past service, lists provided by political parties, and
from other applications the City received. Staff recommends Council's approval.
ADOPTED RESOLUTION NO. 2010-39.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 2
2. Resolution Providing for the Issuance and Sale of $2,810,000 General Obligation
Utility Revenue Bonds, Series 2010A, Pledging for the Security New Revenue.
William Burns, City Manager, said the bond proceeds will be used to provide funding for the
water, sewer, and storm water projects identified in the 2010 and 2011 capital improvement
budgets. The term of the bond is 10 years. The debt service on the bond is funded by revenues
by the three utilities; hence, they are called revenue bonds. As part of the bond sale process, the
City has undergone a financial review by Moody's Investor Service and after writing a very
complimentary review for the City, Moody's has determined the City's credit rating for the
bonds is Aal. They felt very positive about the City's efforts to maintain its cash balances and to
maintain cash flow. These positive points of view did a lot to generate the great bond rating as
well as to generate some very, very positive savings on the interest rates for the bonds.
Dr. Burns stated the City opened bids from six financial institutions today at 12 p.m. The
institution offering the lowest true interest cost was Wells Fargo at the rate of 2.9997 percent
which was well below the estimated rate of 3.89877 percent. Staff recommends the bonds be
awarded to Wells Fargo at a true interest cost of 2.9997 percent.
Dr. Burns stated the bond rating applies to all of these funds.
THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON
THE REGULAR AGENDA.
3. Resolution Providing for the Issuance and Sale of $550,000 General Obligation
Equipment Certificates, Series 2010B, and Levying a Tax for the Payment Thereof.
William Burns, City Manager, said the amount of the bond was reduced by a$25,000 premium
offering by the lowest bidder. His understanding is the lowest bidder had actually sought the
sale of these bonds prior to submitting the bid. The interest rate for things is very, very volatile.
It changes almost hourly, at least daily. The interest rate they had offered to the public prior to
the finalization of the bid was different from the interest rate that was offered at the time the
bidding process occurred. As a result of the difference, the City was given a$25,000 premium.
In other words, it gets $25,000 up front because of the interest difference; and, instead of
$575,000, we are now paying debt service on $550,000 over ten years. In an effort to preserve
cash, like most other cities, Fridley is planning the use of general obligation debt to pay its
general fund capital outlay items for 2010 and 2011. Total proceeds for capital purchases are
$546,515. Our total underwriter's discount is $8,625. Cost of the issuance is $18,000 and
rounding is $1,860, bringing us up to amount of issue at $550,000.
Dr. Burns stated the $550,000 levy will be spread over ten years. The debt service on these
bonds will cost the owner of an average Fridley home approximately $4. The City opened bids
from four financial institutions at 12 p.m. today. The institution offering the lowest true interest
cost was Cronin & Co. Inc. at a true interest cost of 2.4298 percent which was well below the
estimated rate of 3.37 percent. Staff recommends that the equipment certificates be awarded to
Cronin & Co. Inc. at a true interest cost of 2.4298 percent.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 3
THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON
THE REGULAR AGENDA.
4. Resolution Providing for the Issuance and Sale of $1,215,000 General Obligation
Improvement Bonds, Series 2010C, Pledging for the Security Thereof Special
Assessments and Levying a Tax for Payment Thereof.
William Burns, City Manager, stated the amount of the issue was reduced because of the bidder
offering a premium on the bonds. This issue provides funding for the property owners' share of
the 2009 and 2010 street improvement projects. The City will retire these bonds over ten years
through assessments to property owners. Bids from six financial institutions were opened today
at 12 p.m. The bidder with the lowest true interest cost was the firm known as Baird at a rate of
2.3864 percent. Once again, this was lower than the estimated rate of 3.4167 percent. Staff
recommends Council award the sale of the bonds to Baird at a true interest cost of 2.3864
percent. The savings for the street improvement project is $96,000; the savings on the utility
bonds is $151,000; and the savings for the equipment certificate is $44,000.
THIS ITEM WAS REMOVED FROM THE CONSENT AGENDA AND PLACED ON
THE REGULAR AGENDA.
5. Set a Public Hearing Date for July 26, 2010, to Consider the Demolition of a Home
Located at 1280 — 52"d Avenue N.E. (Ward 1).
William Burns, City Manager, stated the property was seriously damaged by a fire that started
on a three-season porch on May 28, 2010. The City's Chief Building Official has determined the
house is structurally unsound and is a threat to the health and safety of those who enter it. Since
the owners of the home have failed to respond to staff in a timely manner, staff is asking Council
for authority to remove the home. By this action tonight, Council will be establishing a public
hearing. The public hearing is scheduled for July 26, 2010. The agenda for that evening will
also include a resolution authorizing the demolition of the structure. Staff recommends Council
approval.
APPROVED.
6. Claims (146751— 146916).
APPROVED.
7. Licenses.
APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 4
8. Estimates:
Valley Paving, Inc.
8800 — 13th Avenue East
Shakopee, MN 55379
2010 Street Rehabilitation
Project No. ST2010-01
Estimate No. 1 ...............................................................................$ 168,330.27
Northwest Asphalt, Inc.
1451 Stagecoach Road
Shakopee, MN 55379
61st Avenue Street Rehabilitation
Project No. ST2009-02
Estimate No. 2 ................................................................................ $ 99,140.96
APPROVED.
APPROVAL OF PROPOSED CONSENT AGENDA:
Councilmember Bolkcom said she would like to make some comments about the minutes from
the City Council meeting of June 28, 2010, and would like to remove Item Nos. 2, 3, and 4 from
the consent agenda.
Councilmember Bolkcom said on Page 5, third paragraph from the bottom, she believed
Council asked the City Manager and staff to come back with a recommendation for further
discussion in October. She thought the minutes should be changed to say "the recommendation
from the City Council was that the City Manager and staff should come back with a
recommendation related to the police officers at the ne�t budget session in October."
Councilmember Bolkcom stated, on Page 6, in the third paragraph from the bottom, the City
manager stated he was aware of "three positions" that were vacant. There are actually four right
now.
Dr. Burns replied that is correct.
Councilmember Bolkcom on Page 7, Detective Volk mentioned that in the last five years the
City has ranked in the top five cities for highest numbers of calls for officers. During their pre-
meeting they were informed that the City has that rank far as crime rates but not the number of
calls per officer.
Dr. Burns said the City is fairly average in terms of calls per officer.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 5
MOTION by Councilmember Barnette to approve the consent agenda with the change to the
minutes and the removal of Item Nos. 2, 3 and 4. Seconded by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
ADOPTION OF THE AGENDA:
MOTION by Councilmember Bolkcom to approve the agenda with the addition of Item Nos. 2,
3, and 4. Seconded by Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
OPEN FORUM:
No one from the audience spoke.
NEW BUSINESS:
2. Resolution Providing for the Issuance and Sale of $2,810,000 General Obligation
Utility Revenue Bonds, Series 2010A, Pledging for the Security New Revenue.
Councilmember Bolkcom asked if they would be filling in the blanks that are in the resolution.
Richard D. Pribyl, Finance Director/Treasurer, stated actually as part of the final process, all the
numbers will be filled in. The resolution is not available in resolution format with all the blanks
filled in because the bids were just opened today. What they are approving is what Dr. Burns
actually identified. They do have the final sales report that identifies those numbers. The
numbers will be filled in by the bond counsel in final form. Shelly Ellers is here from Ellers to
attest to the bid opening if there are any questions.
Councilmember Bolkcom stated since this is new to them she just wanted to make sure. She
asked the City Attorney if this was okay.
Fritz Knaak, City Attorney, replied, the information has been given to them, and they are basing
their approval on that information. The formal documents have to be done in a certain way, and
that is the reason why that is being done after the fact. They are going to be approving the
format and the information.
Councilmember Bolkcom asked, again, if issues were such that ne�t year something else comes
up as far as in the utilities that they need to do and something happens where there is something
in one of our public utilities that need to be replaced, this is only obligating the money, it is not
obligating the money to each piece of equipment or capital improvements they are doing,
correct?
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 6
Mr. Pribyl replied, correct. What they have done tonight is to actually create a bond issue for
each one of those utilities. They have actually identified assets that right now the best
information they have indicates these are the assets that need to be replaced in our infrastructure.
Should there be a higher priority, certainly that can actually be substituted in lieu thereof as long
as the characteristics are that it still falls within that same utility and the same general type of
asset that is being replaced.
Dr. Burns stated a good example is the water tanker tank That was not budgeted for 2010, but
it is an emergency that you cannot avoid. They substituted it with the turf sweeper that was
budgeted for this year.
Councilmember Bolkcom asked if the Moody's Investor Service document they received
before the meeting needs to be part of the public record.
Dr. Burns stated he thinks it is optional for them if they want to receive it.
Mr. Pribyl stated there is no requirement that any action be taken. Certainly it is there for the
Council's information. It is very good news in light of the current economic conditions. They
have definitely given the City a pat on the back for its leadership during stress times and, as such,
it is a good thing to be aware of.
MOTION by Councilmember Bolkcom to receive a four-page document from Moody's
Investors Service related to the revenue bonds and the City's rating and how the rating was
arrived at. Seconded by Councilmember Varichak.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
MOTION by Councilmember Saefke to adopt Resolution No. 2010-40. Seconded by
Councilmember Bolkcom.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
3. Resolution Providing for the Issuance and Sale of $550,000 General Obligation
Equipment Certificates, Series 2010B, and Levying a Tax for the Payment Thereof.
Councilmember Bolkcom said with respect to the equipment, is the City still going to try and
replace the hoist in 2010 because it is a safety issue?
Dr. Burns said it may not actually happen until the end of the year; but it is his intent to get it
done as quickly as they can get it done.
MOTION by Councilmember Bolkcom to adopt Resolution No. 2010-41. Seconded by
Councilmember Saefke.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 7
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
4. Resolution Providing for the Issuance and Sale of $1,215,000 General Obligation
Improvement Bonds, Series 2010C, Pledging for the Security Thereof Special
Assessments and Levying a Tax for Payment Thereof.
Councilmember Bolkcom asked about the funding.
Dr. Burns said this would finances the property owners' share of the project until the City gets
paid back.
Councilmember Bolkcom said she wanted to make sure the public knows the City is not
changing our street improvement process other than this bond is out there.
Dr. Burns stated at one time they used cash to pay up front for the property owners' share of the
projects, but the City can no longer afford to do that because of its cash flow situation.
Councilmember Bolkcom said so this is like any other street improvement project. There will
be a hearing and then an assessment, which is when the money gets paid back by the owners of
the property.
Dr. Burns stated that is correct. The City is doing this every two years, rather than on an annual
basis to save on the cost of selling bonds.
Mayor Lund stated this is something new for the City. In the past, the City has had reserves to
pay these things in cash and then it was reimbursed by the assessment. It is not unique to many
other cities, but it is to Fridley because of its past strong reserves, the very low interest on our
diminished reserves, the loss of our government aid, the uncertainty of the State's budget, and
our Charter restriction which is quite unique as well. This step is not a way of raising new or
additional taxes, but it is a way for the City to continue funding the work that needs to be
completed here in Fridley.
MOTION by Councilmember Bolkcom to adopt Resolution No. 2010-42. Seconded by
Councilmember Saefke.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MOTION CARRIED UNANIMOUSLY.
NEW BUSINESS:
9. Informal Status Reports
Councilmember Bolkcom stated after Detective Volk was at our last City Council meeting, she
asked Mayor Lund to briefly talk about how the Director of Public Safety has met with his
officers and a summary of the issues that were brought up.
FRIDLEY CITY COUNCIL MEETING OF JULY 12, 2010 PAGE 8
William Burns, City Manager, stated he did discuss the issues and the comments made by the
officer at the Council meeting. He has also taken an opportunity to correct some of the
comments that were made. He thinks they have a much higher level of understanding on both
sides than they had before.
Councilmember Bolkcom stated one of the other things the detective asked was when those
vacancies would no longer be vacancies. They really do not know, correct?
Dr. Burns replied, correct. It really is difficult to give a definite date. The City is facing some
major challenges in terms of what the State is doing. It is very difficult to pledge that the City
will fill those vacancies on timetable until we see how the financial crisis works out in 2011.
Mayor Lund stated there may have been several things the officers and staff have seen, such as
the recent hiring of the annual seasonal employees the City uses for grass cutting and other types
of seasonal projects. They may have seen the job opening for additional part-time, paid, on-call
firefighters. Speaking on behalf of the City Council and staff, they do recognize the importance
of our Police Department. It takes up about a third of the City budget. The City would like to
fill a school resource officer position. The City will make adjustments as quickly as possible, but
a lot of that hinges on what happens at the ne�t State legislative session.
Dr. Burns stated although they do not know for sure since the economic environment is
constantly changing, because of the moves we have made, the City may have bought itself three
or four years of additional operating leeway it would not have had had it not made the many,
many adjustments it did.
ADJOURN.
MOTION by Councilmember Barnette, seconded by Varichak, to adjourn.
UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE
MEETING ADJOURNED AT 8:14 P.M.
Respectfully submitted by,
Denise M. Johnson Scott J. Lund
Recording Secretary Mayor