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12/13/2010 - 29326CITY COUNCIL MEETING CITY OF FRIDLEY DECEMBER 13, 2010 The City Council meeting for the City of Fridley was called to order by Mayor Lund at 730 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 Darin Nelson, Finance Director/Treasurer James Kosluchar, Public Works Director Paul Bolin, HRA Executive Assistant Director APPROVAL OF PROPOSED CONSENT AGENDA: NEW BUSINESS: 1. Resolution Approving Deed of Outlol Applebaum, Shorewood Plaza, Generally (Ward 2) C, Shorewood Plaza Revised to George Located at 1001 East Moore Lake Drive N.E. William Burns, City Manager, said with the completion of the Shorewood Plaza Revised Plat, Council is being asked to reaffirm the transfer of Outlot C(located along Highway 65 on the north side of Moore Lake Plaza). With this approval, the deed will be filed with the plat at Anoka County. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2010-91. 2. Resolution Authorizing Signing an Employment Agreement between Certain Employees Represented by Local No. 1986 William Burns, City Manager, said staff has recently completed negotiation of the 2010 through 2011 contract with the firefighters. It provides for a 1.3% market rate adjustment effective November 6, 2010. This is the same adjustment included in the new two-year contract with our police patrol. The contract also provides for a$50 increase in the uniform allowance, bringing the total allowance for both years to $500. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 2 The cost of the contract is $792.68 for 2010 and $4,270.47 for 2011. These costs have not been included in either the 2010 or 2011 budget. Staff recommends Council's approval. ADOPTED RESOLUTION NO. 2010-92. 3. Approve 2011 Animal Control Contract between the City of Fridley and Brighton Veterinary Hospital. William Burns, City Manager, said Brighton has agreed to a$1,500 per month contract for animal impound services. Since we are very satisfied with their services, we are recommending Council's approval of the 2011 contract. APPROVED. 4. Claims (148923 —149018). APPROVED. 5. Licenses. APPROVED THE LICENSES AS SUBMITTED AND AS ON FILE. 6. Expenses. APPROVED. ADOPTION OF AGENDA: Mayor Lund said under the expenses there was a reimbursement to him for a conference he attended. He requested to remove this from the claims. MOTION by Councilmember Varichak to approve the consent agenda as presented. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to adopt the agenda. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. OPEN FORUM: Councilmember Bolkcom asked for an update on the snow plowing. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 3 Jim Kosluchar, Public Works Director, said the crew did a great job. There were a few areas that were difficult to pass with cars in the street and some concerns with mailboxes. It is important for residents to clean out in front of the mailbox and also make way for garbage cans. The corners will be pushed back later this week and when this is done, the crew will try their best not to disturb the plowed driveways. OLD BUSINESS: 7. Consideration of Payment of Estimate for Valley Paving for the 2010 Street Rehabilitation Project No. ST2010-01 (Tabled December 6, 2010). MOTION by Councilmember Bolkcom to remove this item from the table. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Jim Kosluchar, Public Works Director, said staff has worked with the contractor but there are still details to be worked out. The contractor has committed to perform seal coat repair on four street segments that residents were concerned about the street finish. The cost of resurfacing to correct the problem is $35,000. Staff recommends Council approve the revised estimate. Mayor Lund asked about the liquidated damages and said Council is aware the contractor did not perform in a timely manner. He recommended retaining 5% plus the $35,000 estimated to redo the work in addition to holding back for the liquidated damages. He was not sure if that hold back would come out of the bond or be an additional hold back. Mr. Kosluchar said the liquidated damages that are held back give the City the ability to pay the larger portion of the estimate and retain dollars needed if the City has to redo any of the work. Mayor Lund said it has been almost two months and the City still has not received any type of written agreement from the contractor. Maybe if more payment is withheld, the contractor may perform. The contractor has had enough time to deal with this issue. He said he was ready to hold back the entire payment. Councilmember Bolkcom said she was confused with the memo as it is asking for approval of $115,000; is this for all the work that has been completed or for work that is yet to be done. Mr. Kosluchar said it is for work that is already completed. Councilmember Bolkcom asked if the $35,000 is to sealcoat the areas that needed to be corrected and if everything else is complete. Mr. Kosluchar said that not everything is done. The contractor did some small corrections but the $35,000 would cover what is left to be done. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 4 Councilmember Bolkcom asked if this included items brought forth by people in the area. Mr. Kosluchar answered yes. The '/4 inch edge rise in the gutter line in some areas have been knocked down in driveways, heated and rolled out. Councilmember Bolkcom said she understands there is just a small amount, $35,000, which will fix everything else. She asked if this includes the area where the road is higher on one side than the other. Mr. Kosluchar said the contractor heated those areas and rolled it out, so that is complete. Councilmember Bolkcom said this project ended way beyond when it should have and if the contractor is paid, she is concerned that once spring comes it will be difficult to get anything else corrected by the contractor. She said the memo is not signed and asked why the contractor has not submitted a written agreement. Mr. Kosluchar said he received a letter from Valley Paving but they were asking the City to forgo the liquid damages and the City will not do that. The work they performed includes work that was not substandard. In order to correct what is substandard; $35,000 will take care of the repair cost from an outside contractor if necessary. Councilmember Bolkcom asked if an outside contractor would come and work on someone else's project. Mr. Kosluchar answered yes. Councilmember Bolkcom said there was no letter in the packet that the contractor agrees to this and they do not agree with liquidated damages. The City is carrying this expense by not accessing people because they were not satisfied with the work. Councilmember Varichak asked if staff has touched base with all the residents that emailed or came to the public hearing with concerns to see if they are satisfied with the corrections. Mr. Kosluchar said not since the corrections were done. William Burns, City Manager, said the valley gutter that was discussed in the public hearing will not be fixed as it was a solution to fix a serious drainage issue. Councilmember Varichak said she heard from one person that they were satisfied with what happened. She did not hear from anyone else and is hesitant to approve payment because she does not know if people are satisfied. Also, the contractor has not provided an acceptable plan. Mayor Lund said for leverage purposes the City should have something in writing so there are no adversarial relationships. It seems Council has come to a mutual agreement; wait till spring, get repairs done and talk about the liquidated damages. He is apt to forego some of it and the longer this drags out the less likely he is willing to forego the liquidated damages. The areas that FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 5 were heated up, melted, and scraped left a mess, which will not be acceptable. Maybe after the seal coat is done it will be okay. Councilmember Bolkcom said the biggest issue is that the contractor is not agreeing to liquidated damages. If the City pays, we agree and there is nothing from the contractor on what they plan to da MnDOT was agreeing with City staff that some of the things were not standard. This is not taken care of to our satisfaction and she moved to table this until something in writing is received from the contractor. MOTION by Councilmember Varichak to table the consideration for payment of the estimate for Valley Paving for the 2010 Street Rehabilitation Project No. ST2010-01 until January 24, 2011. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DELCARED THE MOTION CARRIED UNANIMOUSLY. NEW BUSINESS: 8. Resolution Certifying Final Tax Levy Requirements for 2011 to the County of Anoka. Darin Nelson, Finance Director, said this proposed levy complies with both state law and with the City Charter limitation requirement. For taxes payable 2011, the State Legislature passed §275.75 that allows a levy limit charter exemption for previously lost LGA and MVHC. The State Statute does not allow the City to be proactive and levy for 2011 LGA that will likely be cut. Mr. Nelson said the City is certified to receive almost $1.9 million in LGA for 2011. In reality, we are expecting and budgeting for zero. The City passed a"proposed" levy in August, in the amount of $11,430, 818, which was a 12.95% increase over the 20101evy of $10,120,162. Upon last minute notification from the DOR, the City's preliminary levy request is being reduced by $921,501 to $10,509,317. This equates to a$389,155 or 3.85% increase over the 20101evy. Mr. Nelson said this reduction will affect the average home valued at $175,200 within Fridley as the City's portion of the property taxes were originally calculated to increase from $602 to $666. With the levy reduction, property taxes will remain almost constant from 2010 to 2011. The tax levy is increasing to 3.85% and the City's portion for residential taxes will remain constant. Commercial and industrial values decreased at a lower rate than did residential values. This caused the tax burden to shift more towards C&I and away from Residential properties. Mr. Nelson said the tax levy is being recommended by staff for Council's approval. This final levy is $10,509,317 or $921,501 less than what was presented in the 2011 Budget Presentation made during the Public Meeting held on December 6. Staff recommends approval of the resolution to levy taxes for the 2011 budget year. Councilmember Barnette asked if residents received the statement of taxes for 2011 in the mail and if the final tax statement would reflect a lower tax rate. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 6 Mr. Nelson answered yes. MOTION by Councilmember Bolkcom to move into record the revised budget information. Seconded by Councilmember Varichak. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. Councilmember Bolkcom asked why the LGA funds were not in the budget for next year. William Burns, City Manager, said it is unlikely LGA funds will be received with the $6.2B state deficit. Councilmember Bolkcom said the City is working with less money and asked what can be done to help protect fund balances. Dr. Burns said a cash flow analysis has not been done, but there is enough to get through year 2016, but the City doesn't want to reduce cash balances to a dangerous low point. MOTION by Councilmember Bolkcom to adopt Resolution 2010-93. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 9. Resolution Adopting the 2011 Final Budget. Darin Nelson, Finance Director/Treasurer, said at the City Council meeting on December 6, the City Manager delivered the 2011 Budget Message during the Public Meeting held for public comment. This resolution adopting the 2011 Budget will finalize the budget process. Again this year, the City of Fridley was not required to hold a"Truth in Taxation Hearing," but did hold the required "Public Meeting" for public comment. The certification of the "Final Budget" must be to the County Auditor by December 28. Mr. Nelson said the City has complied with appropriate sections of the City Charter that require certain formats and information be contained within the budget document. Should anyone have any additional questions that relate to the 2011 Budget, information can be obtained as follows: ■ The Anoka County Library will receive copies of the final City of Fridley 2011 Budget after the production of these documents. ■ Copies of the budget can be obtained by contacting Darin Nelson at 763-572-3520. ■ The City Manager's Budget Message is on the City's Website located at www. ci.fridlev.mn.us. ■ The 2011 Budget will be placed on the Website as soon as the final document has been printed. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 7 Mr. Nelson said the reduction in the levy will be absorbed by internal fund transfers of $600,000 and the use of fund balance within the General Fund for the remainder. No further expenditure reductions are planned at this time. Since there are no further open issues to resolve as a result of the Public Meeting on the Budget, Staff is presenting the Budget Resolution for 2011 for your approval. Councilmember Bolkcom asked if there were any changes from the original budget message. Mr. Nelson said no. MOTION by Councilmember Saefke to adopt Resolution No. 2010-94. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 10. Resolution Providing for Sewer Rate Change. Darin Nelson, Finance Director/Treasurer, said as part of the 2011 Budget setting process, staff and council review the operations of each of the utility funds. The Sanitary Sewer fund, upon review of the 5-year pro forma, requires a 15% increase to achieve its breakeven point for 2011. Given the current economic climate, a determination was made to limit utility rate increases to a modest 5%. This increase will result in a net loss of approximately $394,000 and will reduce cash reserves by $321,000. Mr. Nelson said the Metropolitan Council Environmental Services (MCES) portion of the Budget represents approximately 75% of the operating costs. MCES treatment charges for 2011 are expected to increase over 5%, which is in addition to a 9.5% increase in 2010. Part of the MCES increase is attributed to infrastructure outlay that was expected to be financed by new development within the metro. With new development at a virtual standstill, MCES has the authority to spread these infrastructure costs out to its e�sting customer base, which has led to substantial increases over the past two years. Mr. Nelson said that the proposed increase would change the charges as follows- Fixed Charge- ■ From $7.75/Quarter to $8.15/Quarter Volume Charge- ■ From $3.30/1,000 gallons to $3.47/1,000 gallons Mr. Nelson said staff has provided this information as part of the 2011 budgeting process. This information was provided during the Public Meeting that was conducted on December 6. Staff recommends Council's approval of the resolution. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 8 Councilmember Bolkcom asked if the City is still trying to catch up from the Charter amendment and getting fund balances where they were at. Mr. Nelson said it looks like we are playing catch up a little. William Burns, City Manager, said that is true more with the water rates than sewer rates. Mayor Lund said rates need to be raised to break even and not lose reserves. The City has not been raising rates but now the reserve is going in the red. Councilmember Saefke said the City has been criticized for not running enterprise funds as a business, but we are willing to dip into reserves to keep costs down for residents. People have to understand that these rates are a result of providing a service like Minnegasco or NSP. The City does not have the luxury to price water above its cost to produce, and is trying to use fiscal restraint. It is important residents understand Council is taking their job seriously and recognize that rates cannot and should not increase beyond people's means. MOTION by Councilmember Saefke to adopt Resolution No. 2010-95. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 11. Resolution Providing for a Storm Water Drainage Rate Increase. Darin Nelson, Finance Director/Treasurer, said as part of the 2011 Budget setting process, staff and council review the operations of each of the utility funds. Upon review of the 5-year pro forma, the Storm Water Fund requires a substantial increase to achieve its breakeven point for 2011. Given the current economic climate, a determination was made to limit utility rate increases to a modest 5%. Mr. Nelson said this increase will result in a net loss of approximately $117,700 and will reduce cash reserves by $134,800. The 5% increase is required to ensure the Storm Water Fund remains viable and does not fall into disrepair. In addition, future annual increases will be needed to maintain the long-term solvency of the Storm Water fund. Expenses increased primarily due to the redistribution of personnel from Streets and Engineering to the Storm Water fund. Mr. Nelson said the proposed rate change would increase the Residential Equivalency Factor (REF) from $10.35 to $10.89 per quarter. You may recall that a residential lot is defined to be 1/3 of an REF acre. Thus the quarterly cost for Storm Water would be $3.63 per quarter for a residential lot. This information was also provided during the Public Meeting that was conducted on December 6. Staff recommends Council's approval of the resolution. MOTION by Councilmember Barnette to adopt Resolution No. 2010-96. Seconded by Councilmember Saefke. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 9 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 12. Resolution Providing for Water Rate Change. Darin Nelson, Finance Director/Treasurer, said as part of the 2011 Budget setting process, staff and council review the operations of each of the utility funds. The Water Fund, upon review of the 5-year pro forma, requires a 10.5% increase to achieve its breakeven point. Given the current economic climate a determination was made to limit utility rate increases to a modest 5%. Mr. Nelson said this increase will result in a net loss of approximately $126,000 and will reduce cash reserves by $668,000. The 5% increase is required to ensure the Water Fund remains viable and does not fall into disrepair. In addition, future annual increases will be needed to maintain the long-term solvency of the Water fund. Staff has provided this information as part of the 2011 Budgeting process. This information was provided during the Public Meeting that was conducted on December 6. Staff recommends Council's approval of the resolution. Councilmember Bolkcom asked if the City is still trying to catch up because of the charter restriction. Mr. Nelson said yes. The rate increase does not get to point where the City is building a reserve. The goal is to have one year reserve in utility and the City is still multiple years out. William Burns, City Manager, said another factor is water usage has reduced from users but the operating costs are still the same. Councilmember Bolkcom said for several years the City did not do any type of water improvements. She asked what the total increase for an average user per quarter would be. Mr. Nelson did not have that information but said that the average utility bill would increase 5% or $3 and some change. Councilmember Bolkcom said if residents looked at their last utility bill and took a 5% increase that is what the bill would be in the first quarter of next year. Mr. Nelson said that there will also be recycling charges added to their bill. Councilmember Saefke asked how Fridley's rates compare to that of surrounding cities. Mr. Nelson said the 2009 study shows Fridley as the second lowest of cities in surrounding areas. MOTION by Councilmember Saefke to adopt Resolution No. 2010-97. Seconded by Councilmember Bolkcom. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 10 UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 13. Resolution Providing an As-Needed Schedule for the Brandes Place Advisory Committee, Rather than a Set Schedule, for Brandes Place, Generally Located at 6124 fifth Street (Ward 1) Scott Hickok, Community Development Director, said the Brandes Place Advisory Committee would like to hold meetings on an as-needed schedule. Originally they were to meet to make sure citizens who had concerns would not go unnoticed and make sure issues were taken care of. A group was formed to meet on regular basis. They have continued to meet but there are not many issues to discuss. They are asking to meet on an as-needed basis and will meet if an item arises. Staff thought it would be best for Council to have a resolution as the City has asked for these meetings to take place. The group is saying that quarterly meetings are not necessary. Councilmember Saefke said he is one of the members representing the City on this committee. Originally the group met on a monthly basis for the first few years and during the first few years there were perceived problems that never materialized. The group then decided to go from monthly meetings to quarterly meetings. Over the years, the meetings were not needed so all agreed if something arose in regards to this place, like a change of management, it would be necessary to meet. Management has responded to problems accordingly. Results have shown no need for public safety, city staff has not received complaints, and transitional housing has not been an issue. Therefore, the group does not see a real need to meet on a regular basis. Mayor Lund asked if there was basic structure to the advisory committee as far as membership Councilmember Saefke answered yes, but some institutions are no longer in existence. Mayor Lund said he thought it would be a good idea to know what would trigger the need for a meeting. Councilmember Saefke said that Sarah calls the meeting and is full- time on the committee. She is available and has everyone's email addresses. It would take something major to call a meeting like change in management or if there was a public safety issue like a fire or major crime. Councilmember Barnette asked what percent of residents have school age children and what percent are seniors. Councilmember Saefke said there are some kids but many go to private schools because there are a number of Muslim families. About 80% have children. Mayor Lund said he is not against not meeting but what happens if they do not meet for 2 or 3 years. He thought the group should meet at least annually and more often if needed. Councilmember Bolkcom said if there are issues somebody would make sure a meeting is held. FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 11 Mayor Lund said that there should be some kind of formal structure. Councilmember Saefke said if something comes up the group does not wait for a meeting. The problem is rectified right away. Councilmember Bolkcom thought something should be added to the resolution related to the representatives. Councilmember Varichak asked if there was an issue on how quickly the group gets together to meet. Councilmember Saefke said the members are notified via email or phone and a meeting is organized as soon as people can get together. William Burns, City Manager, recommended changing the wording in the "therefore" section to read as follows: If there is a change in community members, contact the Community Development Director. Council does understand the committee will meet if any member requests a meeting. Council also understands that the City's Community Development Director will be advised of any change in membership. MOTION by Councilmember Saefke to adopt Resolution No. 2010-98. Seconded by Councilmember Bolkcom. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. MOTION by Councilmember Bolkcom to amend resolution to read: "Council does understand the committee will meet if any member requests a meeting. Council also understands that the City's Community Development Director will be advised of any change in membership." Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 14. Resolution approving and Adopting a Restated housing Replacement District Plan for Housing Replacement District No. 1 Including Phases I-IV and Approving and Adopting Phase V for Housing Replacement District No. 1 Paul Bolin, HRA Executive Assistant Director, said Special Legislation reauthorized the HR Program. This was originally established in 1995. Phase II in 1997, Phase III in 2001, and Phase IV in 2004 added parcels. This allows the HRA to purchase up to 78 more properties to demolish/rehab and place into a multi-phased scattered site TI District. The Market Rate housing program will be used and homes can be constructed or improved up to 150% of the average home value. The Restated and Amended Plan will streamline addition of future parcels FRIDLEY CITY COUNCIL MEETING OF DECEMBER 13, 2010 PAGE 12 to the program. HRA approved a resolution adopting the amended plan and adding Phase V on December 2. HRA staff recommends Council's approval of the resolution. Councilmember Bolkcom asked about restrictions on what kind of homes will be built there and the value. Mr. Bolin said the way HRA has sold properties in the past is they have not sold to builders. The parties involved are participating from the beginning, making sure the style fits in the neighborhood. The property needs to be owner-occupied. The response from neighbors has been positive and they are glad to see these homes come down. MOTION by Councilmember Bolkcom to adopt Resolution No. 99-2010. Seconded by Councilmember Saefke. UPON A VOICE VOTE, ALL VOTING AYE, MAYOR LUND DECLARED THE MOTION CARRIED UNANIMOUSLY. 15. Informational Status Reports. NONE. 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 9:15 P.M. Respectfully Submitted, Krista Monsrud Scott J. Lund Recording Secretary Mayor